Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2024, on file with the Securities and Exchange Commission. The following discussion and analysis 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, elsewhere in this Quarterly Report on Form 10-Q, particularly in Item 1A. Risk Factors, and in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

We operate a leading online marketplace for insurance shopping, connecting consumers with insurance provider customers, which includes both carriers and agents. Our vision is to be the leading growth partner for P&C insurance providers. Our results-driven marketplace, powered by our proprietary data and technology platform, is improving the way insurance providers attract and connect with consumers shopping for insurance.

We operate a marketplace to connect insurance providers to a large volume of high-intent, pre-validated consumer referrals that match the insurers' specific underwriting and profitability requirements. The transparency of our marketplace, as well as the campaign management tools we offer, are designed to make it easy for insurance carriers and third-party agents to evaluate the performance of their marketing spend on our platform and manage their own return on investment. We present consumers with a single starting point for a comprehensive insurance shopping experience where consumers can engage with insurance carriers through multiple channels based on their preferences. Our marketplace enables consumers to choose to visit an insurance provider's website to purchase a policy or engage with a carrier or agent by phone or submit their data to insurance providers to receive quotes. Our services are free for consumers, and we derive our revenue principally from consumer inquires sold as referrals to insurance providers.

In the three months ended September 30, 2025 and 2024, our total revenue was $173.9 million and $144.5 million, respectively, representing a year-over-year increase of 20.3%. We had net income of $18.9 million and $11.6 million for the three months ended September 30, 2025 and 2024, respectively, and had $25.1 million and $18.8 million in adjusted EBITDA for the three months ended September 30, 2025 and 2024, respectively. In the nine months ended September 30, 2025 and 2024, our total revenue was $497.2 million and $352.7 million, respectively, representing a year-over-year increase of 41.0%. We had net income of $41.6 million and $19.9 million for the nine months ended September 30, 2025 and 2024, respectively, and had $69.5 million and $39.3 million in adjusted EBITDA for the nine months ended September 30, 2025 and 2024, respectively. See the section titled "-Non-GAAP Financial Measure" for information regarding our use of adjusted EBITDA and its reconciliation to net income (loss) determined in accordance with generally accepted accounting principles in the United States, or GAAP.

Factors Affecting Our Performance

We believe that our performance and future growth depend on a number of factors that present opportunities for us but also pose risks and challenges, including those discussed below, elsewhere in this Quarterly Report on Form 10-Q, particularly in Item 1A. Risk Factors, and in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

Auto insurance industry risk

For the nine months ended September 30, 2025 and 2024, we derived 90% and 88%, respectively, of our revenue from auto insurance providers and our financial results depend on the performance of the auto insurance industry. Furthermore, total revenue from our two largest auto insurance carrier customers was 37% and 11%, respectively, of our revenue for the nine months ended September 30, 2025. In 2023 and 2022, the auto insurance industry experienced deteriorated underwriting performance due to a rise in claims, inflation, and inadequate policy premiums. This deteriorated underwriting performance caused our insurance carrier customers to reduce spending on new customer acquisition, which had a negative impact on the pricing and demand for consumer referrals in our marketplace throughout 2023. The state of the auto insurance market remains volatile, and while we have seen improvements in spending patterns, including from our larger carrier customers, not all of our carrier customers have increased their spend in a proportional or significant manner, and a full recovery could be prolonged by further cost inflation, including the impact of increased tariffs; increased claim severity and frequency; or insufficient policy premium increases.

Expanding consumer traffic

Our success depends in part on the growth of our consumer traffic. We have historically increased consumer traffic to our marketplace by expanding existing advertising channels and adding new channels such as by engaging with consumers through our verified partner network. Over the long term, we plan to increase consumer traffic by leveraging the features and growing the data assets of our platform. While we plan to grow consumer traffic, we have the ability to decrease advertising spend when the revenue associated with such consumer traffic does not result in incremental profit to our business or in response to lower demand for consumer referrals. Further, our profitability will be impacted by our ability to acquire quote requests in significant volume, at prices that are attractive, and that represent high-intent shoppers for which insurance providers will purchase referrals.

Increasing the number of insurance providers and their respective spend in our marketplace

Our success also depends on our ability to retain and grow our insurance provider network. Historically, we have generally expanded both the number of insurance providers and the spend per provider on our platform. However, we have also experienced periods of decreasing carrier spend in the automotive insurance vertical as described above.

Regulation

Our revenue and earnings may fluctuate from time to time as a result of changes to federal, state, and industry-based laws and regulations, or changes to standards concerning the enforcement thereof. Our business could be affected directly because we operate websites, conduct telephonic and email marketing, and collect, store, share, and use consumer information and other data. Our business also could be affected indirectly if our customers were to adjust their operations as a result of regulatory changes and enforcement activity. For example, on January 26, 2024, the Federal Communications Commission, or FCC, published regulations which, among other things, would have amended the consent requirements of the Telephone Consumer Protection Act, or TCPA, by requiring "one-to-one consent" for outbound telemarketing calls or texts made using an automatic telephone dialing system or pre-recorded or artificial voice messages to wireless or residential numbers. On January 24, 2025, the United States Court of Appeals for the Eleventh Circuit vacated these amended regulations, which were scheduled to go into effect on January 27, 2025. Also, on June 20, 2025, the Supreme Court of the United States held that the Hobbs Act does not bind district courts in civil enforcement proceedings to an agency's interpretation of a statute, including the FCC's interpretation of the TCPA. It remains unclear whether or how government agencies or legislatures will revisit telephone call consent issues.

In addition, a number of states have enacted (and others are considering) broad data privacy laws that could affect our business. Although it remains unclear how these new privacy laws may be modified or interpreted, their effects could have an impact on our business, and may require us to modify our data use practices and policies and incur compliance-related costs and expenses.

Key Business Metrics

We regularly review a number of metrics, including GAAP operating results and the key metrics listed below, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make operating and strategic decisions. Some of these metrics are non-financial metrics or are financial metrics that are not defined by GAAP.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss), adjusted to exclude: stock-based compensation expense, depreciation and amortization expense, legal settlement expense, interest income and income taxes. Adjusted EBITDA is a non-GAAP financial measure that we present in this Quarterly Report on Form 10-Q to supplement the financial information we present on a GAAP basis. We monitor and present Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. Adjusted EBITDA should not be considered in isolation from, or as an alternative to, measures prepared in accordance with GAAP. Adjusted EBITDA should be considered together with other operating and financial performance measures presented in accordance with GAAP. Also, Adjusted EBITDA may not necessarily be comparable to similarly titled measures presented by other companies. For further explanation of the uses and limitations of this measure and a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income (loss), please see "-Non-GAAP Financial Measure".

Variable Marketing Dollars and Margin

We define variable marketing dollars, or VMD, as revenue, as reported in our consolidated statements of operations and comprehensive income, less advertising costs (a component of sales and marketing expense, as reported in our consolidated statements of operations and comprehensive income). We define variable marketing margin, or VMM, as VMD divided by revenue.

We use VMD and VMM to measure the efficiency of individual advertising and consumer acquisition sources and to make trade-off decisions to manage our return on advertising. We do not use VMD or VMM as a measure of profitability.

Key Components of Our Results of Operations

Revenue

We generate our revenue primarily from consumer inquiries sold as referrals to insurance provider customers, consisting of carriers and agents, as well as to indirect distributors. To simplify the quoting process for the consumer and improve performance for the provider, we are able to provide consumer-submitted quote request data along with each referral. We recognize revenue from consumer referrals at the time of delivery. We support three secure consumer referral formats:

For the periods presented, our total revenue consisted of revenue generated within our insurance verticals as follows:

We expect an overall increase in revenue in 2025 as compared to 2024, driven by our automotive and home and renters verticals, as we anticipate increased spending from our carrier partners. We expect revenue from our other insurance verticals to be insignificant in 2025 as a result of our focus on the P&C market.

Cost and Operating Expenses

Our cost and operating expenses consist of cost of revenue, sales and marketing, research and development, general and administrative, and legal settlement expense.

We allocate certain overhead expenses, such as rent, utilities, office supplies and depreciation and amortization of general office assets, to cost of revenue and operating expense categories based on headcount. As a result, an overhead expense allocation is reflected in cost of revenue, sales and marketing, research and development and general and administrative expenses. Personnel-related costs included in cost of revenue and operating expense categories include wages, fringe benefit costs and stock-based compensation expense.

Cost of Revenue

Cost of revenue is comprised primarily of the costs of operating our marketplace and delivering consumer referrals to our customers. These costs consist primarily of technology service costs including hosting, software, data services, and third-party call center costs. In addition, cost of revenue includes depreciation and amortization of our platform technology assets and personnel-related costs.

Sales and Marketing

Sales and marketing expense consists primarily of advertising and marketing expenditures as well as personnel-related costs for employees engaged in sales, marketing, data analytics and consumer acquisition functions and amortization of sales and marketing-related intangible assets. Advertising expenditures consist of variable costs that are related to attracting consumers to our marketplace, generating consumer quote requests, including the cost of quote requests we acquire from our verified partner network, and promoting our marketplace to carriers and agents. Advertising costs are expensed as incurred. Marketing costs consist primarily of content and creative development, public relations, memberships, and event costs. We expect our sales and marketing expense will increase as we expect increased carrier spend for referrals, which will impact our advertising expenditures.

Research and Development

Research and development expense consists primarily of personnel-related costs for software development and product management. We have focused our research and development efforts on improving ease of use and functionality of our existing marketplace platform and developing new offerings and internal tools. We primarily expense research and development costs. Direct development costs related to software enhancements that add functionality are capitalized and amortized as a component of cost of revenue. We expect that research and development expense will increase modestly in 2025 as compared to 2024, primarily due to personnel-related costs.

General and Administrative

General and administrative expense consists of personnel-related costs and related expenses for executive, finance, legal, human resources, technical support and administrative personnel as well as the costs associated with professional fees for external legal, accounting and other consulting services, insurance premiums and payment processing and billing costs. We expect that general and administrative expense will increase in 2025 as compared to 2024, primarily due to personnel-related costs.

Legal settlement

Legal settlement includes costs associated with the settlement of our litigation with the former owners of certain entities acquired in 2021 (see Note 8 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q).

Non-GAAP Financial Measure

To supplement our consolidated financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we present in this Quarterly Report on Form 10-Q adjusted EBITDA as a non-GAAP financial measure. Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies.

Adjusted EBITDA. We define adjusted EBITDA as our net income (loss), excluding the impact of stock-based compensation expense, depreciation and amortization expense, legal settlement expense, interest income and income taxes. The most directly comparable GAAP measure to adjusted EBITDA is net income (loss). We monitor and present in this Quarterly Report on Form 10-Q adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In particular, we believe that excluding the impact of these items in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.

We use adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. We believe adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculation of adjusted EBITDA. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.

Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of adjusted EBITDA rather than net income (loss), which is the most directly comparable financial measure calculated and presented in accordance with GAAP. Some of these limitations are:

In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of adjusted EBITDA as a tool for comparison.

The following table reconciles adjusted EBITDA to net income (loss), the most directly comparable financial measures calculated and presented in accordance with GAAP.

Reconciliation of Net Income to Adjusted EBITDA:

Results of Operations

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

The following tables set forth our results of operations for the periods shown:

(1)  Comprised of revenue from the following distribution channels:

(2) Includes stock-based compensation expense as follows:

(3) See "-Non-GAAP Financial Measure" for information regarding our use of adjusted EBITDA as a non-GAAP financial measure and a reconciliation of adjusted EBITDA to its comparable GAAP financial measure.

Revenue

Revenue increased by $29.4 million from $144.5 million for the three months ended September 30, 2024 to $173.9 million for the three months ended September 30, 2025. The increase in revenue was primarily due to an increase of $27.6 million in our automotive vertical, due to an increase in carrier spend for referrals, primarily from two of our larger customers. Revenue also increased in our home and renters vertical by $2.1 million due to an increase in carrier spend for referrals.

Revenue increased by $144.5 million from $352.7 million for the nine months ended September 30, 2024 to $497.2 million for the nine months ended September 30, 2025. The increase in revenue was primarily due to an increase of $139.8 million in our automotive vertical, due to an increase in carrier spend for referrals, primarily from three of our larger customers. Revenue also increased in our home and renters vertical by $6.5 million due to an increase in carrier spend for referrals.

Cost of Revenue

Cost of revenue decreased by $0.7 million from $5.5 million for the three months ended September 30, 2024 to $4.7 million for the three months ended September 30, 2025 due primarily to a decrease in amortization expense and to a lesser extent, decreases in lead verification costs and personnel-related costs. The decrease in amortization expense was primarily due to certain assets being fully depreciated in the third quarter of 2024.

Cost of revenue decreased by $0.6 million from $15.5 million for the nine months ended September 30, 2024 to $14.9 million for the nine months ended September 30, 2025. Decreases in personnel-related costs of $0.6 million related primarily to decreased headcount in our call center were partially offset by increases of $0.4 million in third-party call center costs due to a net increase in call volume and increased usage of the third-party call center. Amortization expense also decreased primarily due to certain assets being fully depreciated in the third quarter of 2024. Additionally, an increase in technology costs was fully offset by decreases in lead verification services and office and occupancy costs due to lower rent expense.

Sales and Marketing

Sales and marketing expense increased by $23.6 million from $111.8 million for the three months ended September 30, 2024 to $135.4 million for the three months ended September 30, 2025. The increase in sales and marketing expense was primarily due to an increase in advertising costs of $23.2 million due to an increase in carrier spend and an increase in consulting services of $0.9 million, partially offset by a decrease in office and occupancy costs of $0.5 million due primarily to lower rent expense and a decrease in amortization of $0.4 million due to the sale of acquired intangible assets in May 2025 as part of the settlement of litigation.

Sales and marketing expense increased by $112.4 million from $273.5 million for the nine months ended September 30, 2024 to $385.8 million for the nine months ended September 30, 2025. The increase in sales and marketing expense was primarily due to an increase in advertising costs of $113.2 million due to an increase in carrier spend and an increase in consulting services of $1.1 million, partially offset by a decrease in office and occupancy costs due of $1.2 million due primarily to lower rent expense and a decrease in amortization of $0.8 million due to the sale of acquired intangible assets in May 2025 as part of the settlement of litigation.

Research and Development

Research and development expense decreased by $0.1 million from $8.0 million for the three months ended September 30, 2024 to $7.9 million for the three months ended September 30, 2025. The decrease in research and development expense was primarily driven by the decrease in office and occupancy costs due primarily to lower rent expense.

Research and development expense increased by $1.3 million from $21.9 million for the nine months ended September 30, 2024 to $23.2 million for the nine months ended September 30, 2025. The increase in research and development expense was primarily due to an increase in personnel-related costs due to increased headcount and increased consulting expense.

General and Administrative

General and administrative expenses increased by $0.8 million from $7.6 million for the three months ended September 30, 2024 to $8.4 million for the three months ended September 30, 2025. The increase in general and administrative expenses was primarily due to an increase in personnel-related costs of $0.4 million due to increased stock-based compensation and to a lesser extent, increases in consulting services and bank service fees.

General and administrative expenses increased by $3.2 million from $22.1 million for the nine months ended September 30, 2024 to $25.3 million for the nine months ended September 30, 2025. The increase in general and administrative expenses was primarily due to an increase in personnel-related costs of $1.8 million due to increased stock-based compensation of $2.0 million. Consulting fees, legal fees and bank service fees also increased by $0.6 million, $0.5 million, and $0.4 million, respectively.

Legal Settlement

There was no legal settlement expense for the three months ended September 30, 2025. Legal settlement expense was $8.2 million for the nine months ended September 30, 2025. Legal settlement expense for the nine months ended September 30, 2025 consisted of costs to settle the litigation of $7.8 million and legal expense related to the settlement of $0.4 million. For additional information, see Note 8 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Other Income (Expense)

Interest income increased by $0.4 million and $1.2 million in the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively, due to an increase in interest earned on our cash balances. Other income (expense), net was not significant for any periods presented.

Income Tax Benefit (Expense)

For the three and nine months ended September 30, 2025, we recorded an income tax benefit of $0.3 million and an income tax expense of $0.7 million, respectively. We recorded an income tax benefit for the three months ended September 30, 2025 due to the favorable impact of changes to domestic research expensing for tax purposes under the OBBBA. Income tax expense of $0.7 million for the nine months ended September 30, 2025 consisted primarily of state income taxes as well as federal income taxes for the portion of our taxable income that was not offset by net operating loss and tax credit carryforwards.

For the three and nine months ended September 30, 2024, we recorded an income tax expense of $0.7 million and $1.4 million, respectively, consisting primarily of state income taxes as well as federal income taxes for the portion of our taxable income that was not offset by net operating loss and tax credit carryforwards.

At September 30, 2025 and December 31, 2024, we maintained a valuation allowance on our net deferred tax asset as it was deemed more likely than not the net deferred tax asset will not be realized. At each reporting period we evaluate the realizability of our net deferred tax assets. Based on our recent trend of pre-tax income, it is possible that in the near future, which could be as early as the fourth quarter of 2025, there may be sufficient positive evidence to release a portion or all of our valuation allowance. Release of any amount of valuation allowance would result in a benefit to income taxes for the period the release is recorded, which could have a material impact on net income. Release of the valuation allowance is subject to management judgment.

Variable Marketing Dollars and Margin

The increase in variable marketing dollars in the three and nine months ended September 30, 2025 was due primarily to increased carrier spend. The decrease in variable marketing margin for the same periods was due to competitive pricing for advertising spend and the relative mix of referral types.

Liquidity and Capital Resources

As of September 30, 2025, our principal sources of liquidity were cash and cash equivalents of $145.8 million and up to $60.0 million of availability under our revolving line of credit. As of September 30, 2025, we had no amounts outstanding under the revolving line of credit.

On August 1, 2025, we entered into a credit agreement, or the Credit Agreement, providing for a senior secured revolving credit facility, or the Revolving Facility, among us, as borrower, Western Alliance Bank, as administrative agent and collateral agent for the lenders, or the Agent, and as a lender itself, and the other lenders party thereto, or collectively, the Lenders. The Credit Agreement provides for a $60.0 million senior secured revolving line of credit. Subject to customary terms and conditions (including the absence of any default or event of default under the Credit Agreement), we shall have the right, from time to time, to request incremental revolving commitments in an aggregate amount not to exceed up to $25.0 million during the term of the Credit Agreement. Availability under the Credit Agreement will terminate on August 1, 2028, or the Revolving Commitment Period, and all outstanding

revolving loans must be paid on or before such date. We will pay a commitment fee of 0.075% per annum on the average daily unused portion of commitments under the Credit Agreement during the Revolving Commitment Period.

Pursuant to the Credit Agreement, borrowings under the Revolving Facility cannot exceed 85% of eligible accounts receivable balances. Outstanding borrowings under the Revolving Facility bear interest, at our election, at a per annum rate equal to (i) an adjusted term secured overnight financing rate for a one-month tenor, or the Term SOFR, plus 2.10% or (ii) the higher of the "prime rate" quoted in The Wall Street Journal, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System plus 0.50%, or Term SOFR plus 1.00%, or the ABR, plus 1.10%. We may elect, from time to time, to convert all or any part of our Term SOFR loans to ABR loans or to convert all or any part of the ABR loans to Term SOFR loans. In an event of default, as defined in the Credit Agreement, and until such event is no longer continuing, the annual interest rate to be charged will be the annual rate otherwise applicable to borrowings at such time plus 2.00%.

Borrowings are collateralized by substantially all of our assets and property. Under the Credit Agreement, we have agreed to certain affirmative and negative covenants, reporting requirements and other customary requirements to which we will remain subject until maturity. The covenants include limitations on our ability to incur additional indebtedness and engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses. In addition, under the Credit Agreement and through the maturity date, for any period we do not maintain a minimum Adjusted Quick Ratio of 1.30 to 1.00, defined as the ratio of (1) the sum of (x) unrestricted cash and cash equivalents held at the Lenders plus (y) net accounts receivable reflected on our balance sheet (excluding accounts receivable that are more than 90 days past due, intercompany receivables, and receivables subject to dispute) to (2) current liabilities, including all borrowings outstanding under Credit Agreement, but excluding the current portion of deferred revenue (in each case determined substantially in accordance with GAAP), the Agent shall have the ability to use our cash receipts to repay outstanding obligations until such time as the Adjusted Quick Ratio is equal to or greater than 1.30 to 1.00 for two consecutive months.

On July 22, 2025, our board of directors authorized a share repurchase program for up to $50.0 million of our Class A common stock for one year from the board approval date. Share repurchases under the $50.0 million program may be made from time to time on the open market, pursuant to Rule 10b5-1 trading plans, or by other legally permissible means. The share repurchase program does not obligate us to acquire a specific number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on market conditions and other factors. Repurchases under the program are expected to be funded from a combination of existing cash balances and future cash flow. In August 2025, we repurchased $21.0 million of Class A shares from an entity affiliated with funds advised by our board chairman and co-founder and other affiliated entities of this individual, and as of September 30, 2025, $29.0 million remained available for stock repurchases pursuant to the board authorization.

We believe our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of the consolidated financial statements, without considering the borrowing availability under the Credit Agreement. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our revenue, the timing and extent of spending on business initiatives, purchases of common stock under our share repurchase program, purchases of capital equipment to support our growth, sales and marketing activities, expansion of our business through acquisitions or our investments in complementary offerings, technologies or businesses, market acceptance of our platform and overall economic conditions. If we do not achieve our revenue goals as planned, we believe that we can reduce our operating costs. If we need additional funds and are unable to obtain funding on a timely basis, we may need to significantly curtail our operations in an effort to provide sufficient funds to continue our operations, which could adversely affect our business prospects.

Cash Flows

The following table shows a summary of our cash flows for the nine months ended September 30, 2025 and 2024:

Net cash provided by operating activities

Operating activities provided $68.4 million in cash during the nine months ended September 30, 2025, primarily resulting from our net income of $41.6 million and adjusting for net non-cash charges of $29.6 million, including a litigation accrual of $7.8 million, partially offset by net cash used by changes in our operating assets and liabilities of $2.8 million. Net cash used by changes in our operating assets and liabilities consisted primarily of a $6.8 million increase in accounts receivable and a $4.7 million increase in prepaid expenses, partially offset by a $7.2 million increase in accounts payable and accrued expenses and other current liabilities and a decrease of $1.9 million in commission receivable. Operating activities provided $46.4 million in cash during the nine months ended September 30, 2024, primarily resulting from our net income of $19.9 million and adjusting for net non-cash charges of $19.5 million and net cash provided by changes in our operating assets liabilities of $7.1 million. Net cash provided by changes in our operating assets and liabilities consisted primarily of a $30.8 million increase in accounts payable and accrued expenses and other current liabilities and a $3.7 million decrease in commissions receivable, partially offset by an increase in accounts receivable of $27.1 million.

Changes in accounts receivable, accounts payable and accrued expenses and other current liabilities were generally due to changes in our business and timing of customer and vendor invoicing and payments.

Net cash used in investing activities

Net cash used in investing activities of $3.9 million and $3.1 million for the nine months ended September 30, 2025 and 2024, respectively, was attributable to the acquisition of property and equipment, which included the capitalization of certain software development costs. During the nine months ended September 30, 2025 and 2024, we capitalized $3.4 million and $2.2 million, respectively, of software development costs.

Net cash provided by (used in) financing activities

During the nine months ended September 30, 2025, net cash used in financing activities was $20.8 million primarily due to $21.0 million used to repurchase common stock under our share repurchase program from Link Ventures, which is an entity affiliated with funds advised by David Blundin, the Company's chairman of the board of directors and co-founder, and other affiliated entities of Mr. Blundin. Cash proceeds during the nine months ended September 30, 2025 included proceeds received from the exercise of common stock options, partially offset by tax withholding payments relating to net share settlements. During the nine months ended September 30, 2024, net cash provided by financing activities was $1.6 million, consisting of proceeds received from the exercise of common stock options, partially offset by tax withholding payments relating to net share settlements.

Contractual Obligations and Commitments

Our cash flows are dependent on a number of factors in addition to our operational expenditures, including our share repurchase program and our contractual and other obligations. As a result, our liquidity and capital resources in future periods should be analyzed in conjunction with such factors.

In June 2025, we entered into a five-year, $18.5 million purchase commitment, in the ordinary course of business, for advertising with specified annual minimum payment amounts through July 2029. The remaining purchase commitment as of September 30, 2025 was $15.5 million, of which $3.5 million relates to the next twelve months. There have been no other material changes to the contractual obligations reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies from those disclosed in our financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2024, on file with the Securities and Exchange Commission. For further disclosure, refer to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in our Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.