Intapp Inc.

10/27/2026 | Press release | Distributed by Public on 10/27/2026 14:42

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Notes Regarding Forward-Looking Statements
The following discussion and analysis of our financial condition and results of operations should be read together with our unaudited condensed consolidated financial statements and related notes and other financial information included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026 filed with the Securities and Exchange Commission (the "SEC") on August 14, 2026. The following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K, particularly in the section titled "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors". Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Unless otherwise noted, any reference to a year preceded by the word "fiscal" refers to the fiscal year ended June 30 of that year.
Overview
Intapp is a leading global provider of AI-powered solutions for professional firms in highly regulated industries. Intapp's vertically tailored solutions are purpose-built for the specialized workflows, complex relationship networks, and professional compliance requirements of accounting, consulting, investment banking, legal, private capital, and real assets firms. By applying Firm AI to core processes and data, Intapp helps partners, dealmakers, and advisors drive firm growth, manage compliance, and improve profitability.
Highlights for the three months ended September 30, 2026
During the three months ended September 30, 2026, we generated total revenues of $161.3 million with a gross margin of 78%. Our operating cash flow was $28.4 million and we repurchased approximately 0.6 million shares of our common stock for $25.0 million. Total cash and cash equivalents as of September 30, 2026 were $147.7 million. Our remaining performance obligations, which represent all future revenue under contract yet to be recognized, were $799.4 million as of September 30, 2026.
How We Generate Revenue
We generate revenues primarily from the sale of our solutions, typically with one-year or multi-year contract terms. We sell our solutions through a direct sales model, which targets clients based on end market, geography, firm size, and business need. We recognize revenues from cloud subscriptions ratably over the contract term. We recognize revenues related to term license fees at a point in time when control of the term software application is transferred to the client, which generally occurs at the time of delivery or upon commencement of the renewal term. We recognize revenues related to support ratably over the term of the support contract which corresponds to the underlying term license agreement.
We expect the vast majority of our new ARR (as defined below) growth in the future to be from the sale of cloud subscriptions.
We generate service revenues primarily from professional services. Our clients utilize these services to configure and implement one or more of our industry products and solutions, integrate those industry products and solutions with the existing platform and with other core systems in their IT environment, upgrade their existing deployment, and provide training for their employees. Other professional services include strategic consulting and advisory work, which are generally provided on a standalone basis.
Key Factors Affecting Our Performance
Market Adoption of our AI Platform. Our future growth depends on our ability to win new accounting, consulting, investment banking, legal, private capital, and real assets clients and expand within our existing client base, primarily through the continued acceptance of our business. Our cloud business has historically grown faster than our overall business and represents an increasing proportion of our annual recurring revenues. We must demonstrate to new and existing clients the benefits of selecting our platform, and support those deployments once live with reliable and secure service. From a sales perspective, our ability to add new clients and expand within existing accounts depends upon a number of factors, including the rate at which professional firms accept AI-performed work as a substitute for human labor, regulatory and professional liability frameworks that govern AI use in legal, accounting, and advisory contexts, the competitive landscape for AI platforms in professional services, the quality and effectiveness of our sales personnel and marketing efforts, and our ability to convince key decision makers within the professional firms to embrace our vertical solutions over internally developed and horizontal solutions. If our clients do not continue to see the ability of our platform to generate return on investment relative to other software alternatives, net revenue retention could suffer and our operating results may be adversely affected.
Continued Investment in Innovation and Growth. We have made substantial investments in research and development and sales and marketing to achieve a leadership position in our market and grow our revenues and client base. We intend to continue to invest in research and development to build new capabilities and maintain the core technology underpinning our differentiated platform. In addition, we expect to invest in sales and marketing to broaden our reach with new clients in the U.S. and abroad, and to deepen our penetration with existing clients. With our revenue growth objectives, we expect to continue to make such investments for the foreseeable future. We intend to continue to gradually increase our general and administrative spending to support our growing operational needs.
We have a track record of successfully identifying, acquiring, and integrating complementary businesses within the accounting, consulting, investment banking, legal, private capital, and real assets industries. To complement our organic investment in innovation and accelerate our growth, we will continue to evaluate acquisition opportunities that help us extend our platform, broaden and deepen our market leadership, and add new clients.
Key Business Metrics
We review a number of operating and financial metrics, including the following key metrics, to help us evaluate our business, measure our performance and the effectiveness of our sales and marketing efforts, identify trends affecting our business, formulate business plans and budgets, and make strategic decisions.
Annual Recurring Revenues ("ARR")
ARR represents the annualized recurring value of all active subscription and on-premise license contracts at the end of a reporting period. Contracts with a term other than one year are annualized by taking the committed contract value for the current period divided by number of days in that period then multiplying by 365. As a metric, ARR mitigates fluctuations in revenue recognition due to certain factors, including contract term and the sales mix of subscription contracts and licenses. ARR does not have any standardized meaning and may not be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenues and deferred revenues and is not intended to be combined with or to replace either of those elements of our financial statements. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our clients.
ARR was $607.1 million and $504.1 million as of September 30, 2026 and 2025, respectively, an increase of 20%.
Cloud ARR
Cloud ARR is the portion of our ARR which represents the annualized recurring value of our active subscription contracts. We believe Cloud ARR provides important information about our ability to sell new cloud subscriptions to existing clients and to acquire new subscription clients.
Cloud ARR was $515.3 million and $401.4 million as of September 30, 2026 and 2025, respectively, an increase of 28%, and represented 85% and 80% of ARR as of September 30, 2026 and 2025, respectively.
Cloud Net Revenue Retention ("NRR")
Cloud NRR is the portion of our NRR which represents the net revenue retention of our subscription contracts. We calculate Cloud NRR by starting with the Cloud ARR from the cohort of all clients as of the twelve months prior to the applicable fiscal period, or prior period Cloud ARR. We then calculate the Cloud ARR from these same clients as of the current fiscal period, or current period Cloud ARR. We then divide the current period Cloud ARR by the prior period Cloud ARR to calculate the Cloud NRR.
This metric accounts for changes in our cloud recurring revenue base from cross-sell (additional solution capabilities sold), upsell (additional seats sold), cloud migrations, price changes, and client attrition (including contraction of solution capabilities, contraction of seats and client churn). Our trailing twelve months Cloud NRR as of September 30, 2026 and 2025 was 123% and 121%, respectively.
Number of Clients
Our client base includes some of the largest and most reputable accounting, consulting, investment banking, legal, private capital, and real assets firms globally. These clients have the financial and operating resources needed to purchase, deploy, and successfully use the full capabilities of our software platform, and as such, we believe our ability to increase the number of enterprise clients on our platform is a key indicator of the growth of our business and our future business opportunities. We define an enterprise client at the end of any reporting period as an entity with at least one active subscription as of the measurement date with contracts greater than $50,000 of ARR. We believe the number of our enterprise clients with contracts greater than $50,000 of ARR and the number of our enterprise clients with contracts greater than $100,000 of ARR are important metrics for highlighting our progress on the path to full adoption of our platform by our accounting, consulting, investment banking, legal, private capital, and real assets clients. As of September 30, 2026 and 2025, we had more than 1,400 and 1,300 enterprise clients, respectively, with contracts greater than $50,000 of ARR, representing an 8% increase. As of September 30, 2026 and 2025, we had 908 and 813 enterprise clients, respectively, with contracts greater than $100,000 of ARR, representing a 12% increase.
With our scalable, modular cloud-based platform, we believe we are well positioned to continue our growth. Our most significant opportunity lies with the largest firms, where we see substantial expansion potential as firms continue to consolidate. We pursue growth in the number of enterprise clients greater than $50,000 and $100,000 of ARR, but our biggest drivers are the assets under management and revenue growth of our clients as well as growth in the total number of professionals they employ.
Components of Our Results of Operations
Certain prior period amounts reported in our unaudited condensed consolidated financial statements and notes thereto have been renamed to conform to the current year presentation. Effective July 1, 2026, we adjusted the naming of "SaaS revenues" to be "subscription revenues" on our unaudited condensed consolidated statements of operations. The presentation of cost of revenues has been conformed to reflect the changes related to the presentation of revenues. Such changes related to the presentation of revenues and cost of revenues did not affect total revenues, operating loss, or net loss. There was no change to our revenue recognition policy, except for the change in naming noted herein.
Revenues
We generate revenues from the sale of our subscription solutions and premium support services. License revenues are derived from our term software applications and related support services. Professional services revenues are earned by delivering professional services for the configuration, implementation and upgrades of our solutions.
Subscription
Subscription revenues include fees from clients accessing our cloud solutions, premium support services related to subscriptions, and updates, if any, to the subscribed service during the subscription term. We recognize subscription revenues ratably over the contract term beginning on the commencement date of each contract, which is the date when the service is provisioned and made available to our clients. The initial term of our subscription contracts is generally one to three years in duration.
License
License revenues include on-premise fees from providing clients with the right to functional intellectual property where clients can benefit from the subscription licenses on their own and support services related to the licenses, which entitles clients to receive technical support and software updates, on a when and if available basis. We recognize license revenues related to subscription fees at a point in time when control of our term software application is transferred to the client, which generally occurs at the time of delivery or upon commencement of the renewal term. License fees are generally payable in advance on an annual basis over the term of the license arrangement, which is typically non-cancelable. We recognize license revenues related to support ratably over the term of the support contract which corresponds to the underlying license agreement. As clients approach cloud migrations, we expect contract durations for our existing license clients to shorten, leading to a decline in revenue recognized at a point in time. From time to time, there may be cumulative catch ups in revenue as a result of compliance uplift contracts. However, over time as we focus on new sales of our cloud solutions and encourage existing license clients to migrate to cloud solutions, we expect revenues from license to decrease as a percentage of total revenues.
Professional Services
Our professional services revenues primarily consist of implementation, configuration, and upgrade services provided to clients and others. These engagements are billed to clients either on a time and materials or milestone basis; revenues are recognized as invoiced or in proportion to the work performed, respectively. We expect the demand for our professional services to remain relatively flat, with modest increases due to client growth and the need for implementation, upgrade, and migration services for new and existing clients. This demand will be affected by the mix of professional services that are provided by us versus provided by our third-party implementation partners, reflecting our strategy to de-emphasize professional services revenue. This shift will enhance partner involvement, support co-selling efforts, and drive partner-led deal origination.
Cost of Revenues
Our cost of revenues consists primarily of expenses related to providing subscription solutions, premium support services related to subscription, support services related to license and professional services to our clients, including personnel costs (salaries, bonuses, benefits and stock-based compensation) and related expenses for client support and services personnel, as well as cloud infrastructure costs, third-party expenses, depreciation of fixed assets, amortization of capitalized internal-use software costs and acquired intangible assets, and allocated overhead costs. We expect our cost of revenues to increase in absolute dollars as we expand our subscription client base over time as this will result in increased cloud infrastructure costs and increased costs for additional personnel to provide technical support services to our growing client base.
Cost of Subscription
Our cost of subscription revenues comprises the direct costs to deliver and support our subscription solutions and premium support services related to subscription, including personnel costs, allocated overhead costs, third-party hosting fees related to cloud infrastructure, amortization of capitalized internal-use software costs, amortization of acquired intangible assets, and depreciation of fixed assets. We expect the cost of subscription revenues to increase in absolute dollars as we continue to increase usage of third-party hosting and AI product costs to support our growing client base.
Cost of License
Our cost of license revenues comprises the direct costs to support our license, including personnel costs, and allocated overhead costs.
Cost of Professional Services
Our cost of professional services revenues comprises the personnel-related costs for our professional services employees and contractors responsible for delivering implementation, upgrade and migration services to our clients. This includes personnel costs and allocated overhead costs. We expect the cost of professional services revenues to increase in absolute dollars as we continue to hire personnel and engage contractors to provide implementation, upgrade and migration services to our growing client base.
Operating Expenses
Research and Development
Our research and development expenses consist primarily of personnel costs for engineering and product development employees, costs of third-party services, cloud infrastructure costs and allocated overhead costs. We expect our research and development expenses to continue to increase in absolute dollars for the foreseeable future as we continue to dedicate substantial internal resources to develop, improve and expand the functionality of our solutions.
Sales and Marketing
Our sales and marketing expenses consist primarily of costs incurred for personnel costs for our sales and marketing employees as well as sales commissions and benefits, costs of marketing events and online advertising, allocated overhead costs, and travel and entertainment expenses. We capitalize client acquisition costs (principally commissions paid to sales personnel) and subsequently amortize these costs over the expected period of benefits. In the medium term, we expect to see an increase in sales and marketing expenses as we continue to expand our direct sales force to take advantage of opportunities for growth and increase in in-person meetings, conferences, and attendance at trade shows, as we accelerate delivery of AI-powered solutions, including Intapp Celeste. Over the longer term, we expect sales and marketing expenses to decrease as a percentage of revenue.
General and Administrative
Our general and administrative expenses consist primarily of personnel costs as well as professional services and facilities costs related to our executive, finance, human resources, information technology, and legal functions. As a public company, we expect to continue to incur significant accounting and legal costs related to compliance with rules and regulations enacted by the SEC, including the costs of maintaining compliance with the Sarbanes-Oxley Act, as well as insurance, investor relations, and other costs associated with being a public company. In the medium term, we expect general and administrative expenses may decrease as a percentage of revenues as we continue to invest in various process efficiency initiatives.
Interest and Other Income, Net
Our interest and other income, net consists primarily of interest income from our cash and cash equivalents, gains and losses from foreign currency transactions, remeasurement, a foreign currency impact from dissolution of subsidiary, and non-cash interest expense related to the amortization of deferred financing costs.
Income Tax Expense
Our income tax expense consists of an estimate of federal, state, and foreign income taxes based on enacted federal, state, and foreign tax rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws. We maintain a full valuation allowance on our federal and state deferred tax assets as we have concluded that it is more likely than not that the deferred tax assets will not be realized.
Results of Operations
The following tables set forth our results of operations for the periods presented, expressed in total U.S. dollar terms and as a percentage of our total revenues (percentages may not add up due to rounding):
Three Months Ended September 30,
2026 2025
(in thousands, except for percentages)
Revenues:
Subscription
$ 125,488 78 % $ 97,524 70 %
License 23,030 14 29,187 21
Professional services 12,744 8 12,316 9
Total revenues 161,262 100 139,027 100
Cost of revenues (1):
Subscription
19,604 12 17,860 13
License 1,158 1 1,568 1
Professional services 14,894 9 15,768 11
Total cost of revenues 35,656 22 35,196 25
Gross profit 125,606 78 103,831 75
Operating expenses (1):
Research and development 40,823 25 40,934 29
Sales and marketing 57,783 36 48,786 35
General and administrative 28,062 17 28,566 21
Total operating expenses 126,668 78 118,286 85
Operating loss (1,062) - (14,455) (10)
Interest and other income, net 843 1 1,059 1
Net loss before income taxes (219) 1 (13,396) (9)
Income tax expense (1,087) (1) (957) (1)
Net loss $ (1,306) - % $ (14,353) (10) %
(1)Amounts include stock-based compensation expense as follows:
Three Months Ended September 30,
2026 2025
Cost of subscription $ 1,259 1 % $ 786 1 %
Cost of license 168 - 177 -
Cost of professional services 1,593 1 1,425 1
Research and development 9,191 6 7,987 6
Sales and marketing 10,996 7 7,893 6
General and administrative 9,873 6 9,019 6
Total stock-based compensation $ 33,080 21 % $ 27,287 20 %
Comparison of the Three Months Ended September 30, 2026 and 2025
Revenues
Three Months Ended
September 30, 		Change
2026 2025 Amount %
(in thousands, except for percentages)
Revenues:
Subscription
$ 125,488 $ 97,524 $ 27,964 29 %
License 23,030 29,187 (6,157) (21 %)
Professional services 12,744 12,316 428 3 %
Total revenues $ 161,262 $ 139,027 $ 22,235 16 %
Subscription
Subscription revenues increased by $28.0 million, or 29%, in the three months ended September 30, 2026 compared to the same period in the prior year, due to sales to new clients and expansion of existing clients from both cross-selling and upselling sales motions. The continuation of clients migrating from using our on-premise license solutions to our cloud solutions also contributed to the growth.
License
License revenues decreased by $6.2 million, or 21%, in the three months ended September 30, 2026 compared to the same period in the prior year, due to clients migrating to our cloud solutions.
Professional Services
Professional services revenues increased by $0.4 million, or 3%, in the three months ended September 30, 2026 compared to the same period in the prior year, due to a continuation demand for implementation, upgrade and migration services consistent with our revenue growth.
Cost of Revenues and Gross Profit
Three Months Ended
September 30, 		Change
2026 2025 Amount %
(in thousands, except for percentages)
Cost of revenues:
Subscription
$ 19,604 $ 17,860 $ 1,744 10 %
License 1,158 1,568 (410) (26 %)
Professional services 14,894 15,768 (874) (6 %)
Total cost of revenues 35,656 35,196 460 1 %
Gross profit:
Subscription 105,884 79,664 26,220 33 %
License 21,872 27,619 (5,747) (21 %)
Professional services (2,150) (3,452) 1,302 38 %
Gross profit $ 125,606 $ 103,831 $ 21,775 21 %
Cost of Subscription
Cost of subscription revenues increased by $1.7 million, or 10%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This was primarily driven by increases in cloud hosting costs and AI product cost of $2.0 million, royalty expenses of $0.5 million and $0.4 million stock-based compensation expense mainly due to an increase in stock awards granted, partially offset by a decrease in amortization of acquired intangible assets costs of $0.6 million and a decrease in personnel-related costs of $0.6 million.
Cost of License
Cost of license revenues decreased by $0.4 million, or 26%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 due to a decrease in personnel-related costs of $0.3 million.
Cost of Professional Services
Cost of professional services revenues decreased by $0.9 million, or 6%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 due to a decrease in contractor costs of $0.9 million.
Gross Profit
Gross profit increased by $21.8 million, or 21%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Of this increase, $26.2 million was attributable to growth in subscription revenues, partially offset by a $5.7 million decrease related to license revenues as clients migrated to subscription solutions.
Operating Expenses
Three Months Ended
September 30, 		Change
2026 2025 Amount %
(in thousands, except for percentages)
Operating expenses:
Research and development $ 40,823 $ 40,934 $ (111) - %
Sales and marketing 57,783 48,786 8,997 18 %
General and administrative 28,062 28,566 (504) (2 %)
Total operating expenses $ 126,668 $ 118,286 $ 8,382 7 %
Research and Development
Research and development expenses decreased by $0.1 million, or less than 1%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This was primarily driven by a decrease in personnel-related costs of $1.4 million due to decreased headcount and deferred consideration accruals of $1.1 million related to prior acquisitions, partially offset by an increase in stock-based compensation expense of $1.2 million primarily due to an increase in stock awards granted, and technology costs of $1.2 million due to increased usage of third-party hosting and AI product costs.
Sales and Marketing
Sales and marketing expenses increased by $9.0 million, or 18%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This was primarily driven by increases in personnel-related costs of $3.1 million due to annual salary increases and increased headcount, stock-based compensation expense of $3.1 million primarily due to an increase in stock awards granted, commissions expense of $1.5 million due to higher amortization of capitalized commissions exceeding current period capitalization as a result of seasonality, marketing events and related travel expenses of $0.8 million, and advertising costs of $0.4 million.
General and Administrative
General and administrative expenses decreased by $0.5 million, or 2%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This was driven by decreases of $1.4 million in cloud computing implementation impairments related to our digital transformation initiative in the prior year, partially offset by increases in stock-based compensation expense of $0.9 million primarily due to an increase in stock awards granted.
Interest and Other Income, Net
Three Months Ended
September 30, 		Change
2026 2025 Amount %
(in thousands, except for percentages)
Interest and other income, net $ 843 $ 1,059 $ (216) (20 %)
Interest and other income, net, decreased by $0.2 million or 20%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. This was primarily driven by a $1.6 million decrease in interest income as a result of a reduction in cash held in money market funds and an increase of $0.1 million expense related to debt financing cost, partially offset by a $0.8 million change from a foreign currency impact from dissolution of subsidiary in the prior year and a $0.7 million change from foreign currency transactions and remeasurement.
Income Tax Expense
Three Months Ended
September 30, 		Change
2026 2025 Amount %
(in thousands, except for percentages)
Income tax expense $ (1,087) $ (957) $ (130) 14 %
Our income tax expense during the three months ended September 30, 2026 and 2025 was primarily attributable to income tax expense in foreign jurisdictions and a number of U.S. state jurisdictions.
Liquidity and Capital Resources
Sources and Uses of Liquidity
As of September 30, 2026, we had cash and cash equivalents of $147.7 million. We finance our liquidity needs primarily through collections from clients, where we generally bill and collect from our clients annually in advance. Our billings are subject to seasonality with billings in the fourth quarter higher than in the other quarters.
Operating losses could continue in the future as we continue to invest in the growth of our business. We believe our existing cash and cash equivalents as of September 30, 2026, along with our UBS Credit Facility described below, will be sufficient to meet our working capital and capital expenditure needs for the next twelve months and beyond.
On July 7, 2026, we entered into a Credit Agreement (the "UBS Credit Agreement") with a group of lenders led by UBS AG, Stamford Branch ("UBS"). The UBS Credit Agreement provides for a five-year, senior secured revolving credit facility of $150.0 million with a sub-facility for letters of credit in the aggregate amount of up to $10.0 million (the "UBS Revolving Credit Facility"). As of September 30, 2026, no amounts have been borrowed under the UBS Revolving Credit Facility. Concurrently with our entry into the UBS Credit Agreement, we terminated our existing credit agreement and related security agreement with a group of lenders led by JPMorgan Chase Bank, N.A. ("JPMorgan"). See Note 9. "Debt" to our unaudited condensed consolidated financial statements for additional information.
Our primary uses of cash include personnel-related expenses, third-party cloud infrastructure expenses, research and development, sales and marketing expenses, overhead costs and acquisitions, or share repurchases we may make from time to time. We may also use cash to pay employee payroll tax withholding on the vested stock awards through net share settlement from time to time. Our future capital requirements will depend on many factors, including, but not limited to, our ability to grow our revenues and the timing and extent of investment across our organization necessary to support growth in our business. In addition, we may in the future enter into arrangements to acquire or invest in complementary businesses or technologies. We may need to seek additional equity or debt financing in order to meet these future capital requirements. If we are unable to raise additional capital when desired, or on terms that are acceptable to us, our business, financial condition and results of operations could be adversely affected.
Cash Flows
The following table summarizes our cash flows from operating, investing and financing activities for the periods presented (in thousands):
Three Months Ended
September 30,
2026 2025
Net cash provided by operating activities $ 28,419 $ 13,795
Net cash used in investing activities (2,318) (5,851)
Net cash used in financing activities (41,353) (47,220)
Effect of foreign currency exchange rate changes on cash and cash equivalents 133 (396)
Net decrease in cash, cash equivalents and restricted cash $ (15,119) $ (39,672)
Operating Activities
During the three months ended September 30, 2026, net cash provided by operating activities was $28.4 million, as our net loss of $1.3 million was reduced by $29.7 million of adjustments. These adjustments consisted of $38.8 million of non-cash charges (principally comprising of stock-based compensation, depreciation and amortization, and amortization of operating lease right-of-use assets) and a net cash outflow of $9.0 million from net changes in operating assets and liabilities. The net cash outflow from changes in operating assets and liabilities was primarily driven by a $27.9 million decrease in accounts payable and accrued liabilities primarily due to timing of payments, a decrease in deferred revenue of $27.3 million due to the timing of invoicing our clients, a $1.9 million decrease in operating lease liabilities due to timing of lease payments, and a $1.6 million decrease in other liabilities due to timing of payments, partially offset by a decrease in accounts receivable of $47.1 million due to timing of billing and collections on our outstanding receivables, a $1.7 million decrease in deferred commissions due to decreased sales, and a decrease in unbilled receivables of $0.5 million due to the timing of invoicing to our clients.
During the three months ended September 30, 2025, net cash provided by operating activities was $13.8 million, as our net loss of $14.4 million was reduced by $28.1 million of adjustments. These adjustments consisted of $36.3 million of non-cash charges (principally comprising of stock-based compensation, depreciation and amortization, amortization of operating lease right-of-use assets and asset impairments) and a net cash outflow of $8.1 million from net changes in operating assets and liabilities. The net cash outflow from changes in operating assets and liabilities was primarily driven by a $21.9 million decrease in accounts payable and accrued liabilities primarily due to payments made within the period, a decrease in deferred revenue of $19.8 million due to the timing of invoicing our clients and a $1.3 million decrease in operating lease liabilities due to lease payments, offset by a decrease in accounts receivable of $28.6 million due to the timing of billing and collections on our outstanding receivables, a $3.2 million increase in other liabilities due to timing of payments, a decrease in unbilled receivables of $1.9 million due to the timing of invoicing to our clients, a $0.7 million decrease in prepaid expenses and other assets.
Investing Activities
During the three months ended September 30, 2026, net cash used in investing activities was $2.3 million, due to capitalized internal-use software costs of $2.0 million and capital expenditures of $0.3 million on property and equipment.
During the three months ended September 30, 2025, net cash used in investing activities was $5.9 million, due to a strategic investment purchase of $3.0 million, capitalized internal-use software costs of $2.3 million, and capital expenditures of $0.6 million on property and equipment largely of computer equipment.
Financing Activities
During the three months ended September 30, 2026, net cash used in financing activities was $41.4 million, comprised of $25.0 million in payments for the repurchases of common stock, $16.8 million of payments related to employee payroll tax withholding on vested equity awards through net share settlement and $1.1 million in payments for debt transaction costs, partially offset by $1.6 million of proceeds from stock option exercises.
During the three months ended September 30, 2025, net cash used in financing activities was $47.2 million, comprised of $50.0 million in payments for the repurchases of common stock, partially offset by $2.8 million of proceeds from stock option exercises.
Stock Repurchase Programs
On January 29, 2026, our Board of Directors authorized a new common stock repurchase program of up to $200.0 million. During the three months ended September 30, 2026, we repurchased $25.0 million of our common stock under this program and $50.0 million remains available for repurchase under this repurchase authorization limit. The repurchased shares of common stock were retired.
For further information refer to Note 13. "Stockholders' Equity" to our unaudited condensed consolidated financial statements.
Material Cash Commitments
There have been no significant changes in our material cash requirements from those disclosed in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, filed with the SEC on August 14, 2026.
Indebtedness
On July 7, 2026, the Company entered into the UBS Credit Agreement among the Company, the guarantors party thereto, the lenders party thereto and UBS AG, Stamford Branch, as Administrative Agent. The UBS Credit Agreement provides for a five-year, senior secured revolving credit facility of $150 million with a subfacility for letters of credit in the aggregate amount of up to $10 million. The UBS Credit Agreement also provides that the Company may seek additional revolving credit commitments in an aggregate amount not to exceed $75 million; provided, however, that subject to certain conditions set forth in the UBS Credit Agreement, the Company may seek additional incremental commitments, including term loan commitments (each as defined in the UBS Credit Agreement), in excess of such amount. We were in compliance with all of the covenants as of September 30, 2026.
As of September 30, 2026, there were no outstanding borrowings under the UBS Credit Agreement. Upon entering into the UBS Credit Agreement, the Company terminated the existing credit agreement with a group of lenders led by JPMorgan.
Critical Accounting Policies and Estimates
The process of preparing our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. These estimates and judgments are based on historical experience, future expectations and other factors and assumptions we believe to be reasonable under the circumstances. Significant estimates and judgments are reviewed on an ongoing basis and are revised when necessary. Actual amounts may differ from these estimates and judgments.
There have been no material changes to our critical accounting policies or estimates from those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
Recent Accounting Pronouncements
See Note 2. "Summary of Significant Accounting Policies" to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for more information regarding recent accounting pronouncements and our assessment of their impact.
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