Financial Analysis

Business Combinations Asset purchase On April 7, 2025, the Company acquired the intellectual property assets and assembled workforce of a technology company for $14.0 million in cash. The technology company acquired offers an AI-based visual design and motion design platform for image editing. The acquisition was accounted for as a business combination under ASC 805, Business Combinations , and the allocation of the purchase consideration resulted in the recognition of acquired net assets of $4.8 million and goodwill of $9.2 million. The goodwill is primarily attributed to the value of the assembled workforce and i s deductible for income tax purposes and will be amortized over 15 years. Acquisition On April 17, 2025, the Company acquired all outstanding equity interests of a technology company that is a self-hosted headless content management system and application framework, pursuant to an agreement and plan of merger. The purchase consideration of $10.4 million, consisted of cash and shares of the Companys Class A common stock. The merger was accounted for as a business combination under ASC 805, Business Combinations, and the allocation of the purchase consideration resulted in the recognition of acquired net assets of $6.5 million and goodwill of $3.9 million. The goodwill is primarily attributed to the value of the assembled workforce and is not deductible for tax purposes. In addition to the total purchase consideration described above, the Company issued approximately …

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Commitments and Contingencies Hosting commitments On May 31, 2025, the Company renewed its cloud hosting agreement with a third-party provider, which replaced a previous agreement. Under the terms of the non-cancelable agreement, the Company committed to purchase a minimum of $545.0 million in cloud hosting services over the next five years. The agreement runs through May 31, 2030 and the Company expects to utilize the remaining purchase commitments under this agreement over the remaining term of the agreement. As of June 30, 2025, the future minimum payment obligations related to the Companys hosting agreements were $535.8 million. Lease commitments Future minimum lease payments as of June 30, 2025 were as follows: Amount Remainder of 2025 $ 8,522 2026 13,973 2027 13,974 2028 13,632 2029 8,014 Thereafter 30,216 Total undiscounted future minimum lease payments 88,331 Less: present value discount (15,134) Total discounted future minimum lease payments 73,197 Less: prepaid rent (1,359) Less: tenant improvement allowances (7,140) Total operating lease liabilities $ 64,698 Letters of credit As of June 30, 2025 the Company had a total of $9.8 million in unsecured letters of credit outstanding, respectively, related to leased office spaces. The letters of credit renew annually and mature in 2026. Legal matters From time to time, the Company may become a party to a variety of claims, lawsuits, and proceedings which arise in the ordinary course of business, including claims of allege …

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Revolving Credit Facility On June 27, 2025, the Company entered into a new credit agreement (the Revolving Credit Agreement) which provides for a revolving credit facility (the Revolving Credit Facility) of up to $500.0 million and a subfacility of up to $150.0 million for letters of credit. Pursuant to the terms of the Revolving Credit Facility, loans under the Revolving Credit Facility will incur interest at a rate per annum equal to either (i) a base rate determined by reference to the highest of (x) the prime rate, (y) the federal funds effective rate plus 0.5%, and (z) the one month term SOFR plus 1.0% or (ii) term SOFR plus 1.0%. Additionally, the Company is required to pay commitment fees of 0.15% per annum on the undrawn portion of the commitments under the Revolving Credit Facility, which decreases to 0.1% per annum upon achievement of an enhanced debt to EBITDA ratio. The Revolving Credit Agreement contains customary affirmative and negative covenants and customary events of default. The obligations under the Revolving Credit Facility are secured by liens on substantially all of the Companys assets. The Revolving Credit Facility matures on June 27, 2030. As of June 30, 2025, the Company had no amounts or letters of credit issued and outstanding under the Revolving Credit Facility. The Companys total available borrowing capacity under the Revolving Credit Facility was $500.0 million as of June 30, 2025. As of June 30, 2025, the Company was in compliance with all cove …

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Fair Value Measurements The following table provides the financial instruments measured at fair value on a recurring basis, within the fair value hierarchy as of June 30, 2025 and December 31, 2024: As of June 30, 2025 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 217,674 $ $ $ 217,674 Commercial paper 119,895 119,895 Corporate bonds 207 207 U.S. agency securities 982 982 U.S. treasury securities 17,421 17,421 Total cash equivalents $ 217,674 $ 138,505 $ $ 356,179 Marketable securities: U.S. agency securities $ $ 81,149 $ $ 81,149 U.S. treasury securities 450,237 450,237 Commercial paper 72,615 72,615 Corporate bonds 276,925 276,925 Bitcoin exchange traded fund 90,793 90,793 Total marketable securities $ 90,793 $ 880,926 $ $ 971,719 Digital assets $ 30,136 $ $ $ 30,136 As of December 31, 2024 Level 1 Level 2 Level 3 Total Cash equivalents: Money market funds $ 1,865 $ $ $ 1,865 Commercial paper 86,179 86,179 Total cash equivalents $ 1,865 $ 86,179 $ $ 88,044 Marketable securities: U.S. agency securities $ $ 101,060 $ $ 101,060 U.S. treasury securities 371,924 371,924 Commercial paper 190,155 190,155 Corporate bonds 228,953 228,953 Bitcoin exchange traded fund 78,791 78,791 Total marketable securities $ 78,791 $ 892,092 $ $ 970,883 The Company had no transfers between levels of the fair value hierarchy during any period presented. The Company classifies its highly liquid money market funds, Bitcoin exchange traded fund and digital assets within Level 1 o …

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Goodwill and Intangible Assets, Net Intangible assets, net consisted of the following: June 30, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-average remaining useful life Assembled workforce in asset acquisitions $ 725 $ (144) $ 581 2.4 Licenses, domain names and other 474 (247) 227 1.7 Customer relationships 1,000 (101) 899 1.8 Developed technology 13,710 (2,190) 11,520 2.1 Total intangible assets $ 15,909 $ (2,682) $ 13,227 December 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-average remaining useful life Assembled workforce in asset acquisitions $ 725 $ (24) $ 701 2.9 Licenses, domain names and other 474 (170) 304 2.2 Developed technology 1,810 (304) 1,506 2.5 Total intangible assets $ 3,009 $ (498) $ 2,511 Amortization expense was not material for each of the three and six months ended June 30, 2025 and 2024. As of June 30, 2025, future amortization expense by year is expected to be as follows: Amount 2025 $ 4,336 2026 5,114 2027 3,074 2028 703 Total $ 13,227 Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. The changes in the carrying amounts of goodwill were as follows: December 31, 2024 $ 11,398 Additions during the period (Note 6) 13,143 June 30, 2025 $ 24,541 Goodwill is not amortized, but rather is tested for impairment at least annually in the fourth quarter or more frequently if events or changes in circumstances wou …

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Income Taxes The Company computed the income tax provision by applying the estimated effective tax rate to the year-to-date pre-tax income and adjusted for discrete tax items in the period. The Companys effective tax rates were as follows for each respective period presented: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Effective tax rate 27.7 % 6.3 % 15.1 % 4.7 % The difference between the U.S. statutory rate and the Companys effective tax rate for all periods presented was primarily due to the valuation allowances on the Companys deferred tax assets. The Company maintained a full valuation allowance against its deferred tax assets in the United States, including all U.S. state jurisdictions, and foreign jurisdictions as of June 30, 2025, as it is not more likely than not that they will be realized. The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. The realization of net deferred tax assets is dependent on the Company's ability to generate sufficient future taxable income during periods prior to the expiration of tax attributes to fully utilize these assets. The Company is subject to income tax audits in the U.S. and foreign jurisdictions. The Company records liabilities related to uncertain tax positions and believes that it has provided adequate reserves for income tax uncertainties in all open tax years. …

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Recently issued accounting standards not yet adopted In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement (Topic 220): Reporting Comprehensive Income Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses , to expand expense disclosures by requiring disaggregated disclosure of certain income statement line items, including those that contain purchases of inventory, employee compensation, depreciation, and amortization. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments should be applied prospectively. The Company is currently evaluating the impact of this standard on the Companys consolidated financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to enhance income tax disclosures primarily through changes in rate reconciliation and income taxes paid disclosures. The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. This change requires application on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of this standard on the Companys consolidated financial statement disclosures. …

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Revenue Deferred revenue The changes in deferred revenue were as follows for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Balance, beginning of period $ 406,636 $ 269,399 $ 381,363 $ 253,635 Billings and other (1) 276,151 212,959 529,623 384,952 Revenue (249,640) (177,198) (477,839) (333,427) Balance, end of period $ 433,147 $ 305,160 $ 433,147 $ 305,160 __________________ (1) Other primarily includes amounts for which the Company had a contractual right to bill and receive payment from the customer. Approximately 70% of revenue recognized during the three months ended June 30, 2025 was from the deferred revenue balance as of March 31, 2025, and 67% of revenue recognized during the three months ended June 30, 2024 was from the deferred revenue balance as of March 31, 2024. Approximately 58% of revenue recognized during the six months ended June 30, 2025 was from the deferred revenue balance as of December 31, 2024 and 55% of revenue recognized during the six months ended June 30, 2024 was from the deferred revenue balance as of December 31, 2023. Remaining performance obligations As of June 30, 2025, the aggregate balance of remaining performance obligations that were unsatisfied or partially unsatisfied was $448.8 million. The substantial majority of the remaining performance obligations will be satisfied over the twelve months following June 30, 2025, with the balance to be recognized as revenue thereafter.

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Segment and Geographic Information Segment information The Companys chief operating decision maker (CODM) is the CEO. The Company manages its operations and allocates resources as a single operating segment at the consolidated level. Accordingly, the CODM uses consolidated net income (loss), as reported on the condensed consolidated statements of operations, to assess performance of the Company and to allocate resources as part of the annual reporting process and to assess the performance of the Companys single reportable segment, primarily by monitoring actual results versus the actual plan. The significant expenses reviewed by the CODM are consolidated operating expenses and stock-based compensation, as presented in the condensed consolidated statement of operations. Consolidated operating expenses include research and development, sales and marketing, and general and administrative expenses. Research and development, sales and marketing, and general and administrative expenses include depreciation and amortization expense. Other segment items consist of other income, net and provision for (benefit from) income taxes, as presented in the condensed consolidated statement of operations. The CODM does not evaluate segment performance using balance sheet information. Geographic areas Long-lived assets and revenue by geographic region, based on the physical location of the operations recording the asset or the sale, are as follows: Long-lived assets The following table sets fort …

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Stockholders Equity Class A and Class B common stock As of June 30, 2025, the Company was authorized to issue 615.5 million shares of Class A common stock and 147.9 million shares of Class B common stock, each at a par value of $0.00001, of which 138.5 million shares of Class A common stock and 78.2 million shares of Class B common stock were issued and outstanding. Included in the total number of shares outstanding as of June 30, 2025 are 0.7 million shares of Class A common stock subject to vesting, which are not considered outstanding for accounting purposes. As of December 31, 2024, the Company was authorized to issue 571.0 million shares of Class A common stock and 119.0 million shares of Class B common stock, each at a par value of $0.00001 per share, of which 124.2 million shares of Class A common stock and 90.7 million shares of Class B common stock were issued and outstanding. Included in the total number of shares of Class A common stock outstanding as of December 31, 2024 are 0.1 million shares of Class A common stock subject to vesting, which are not considered outstanding for accounting purposes. Holders of the Companys common stock are entitled to dividends, if and when declared by the Companys Board of Directors (the Board of Directors) and after any convertible preferred stock dividends are fully paid. As of June 30, 2025, no dividends were declared. As of June 30, 2025 and December 31, 2024, the Company had reserved shares of common stock for future issuance, …

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Subsequent Events One Big Beautiful Bill Act On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently assessing its impact on the consolidated financial statements. RSU grants In July 2025, the Board of Directors granted 9.1 million RSUs. The Company currently estimates that the total stock-based compensation expense related to these RSUs will be approximately $289.8 million. These RSUs will vest upon satisfaction of service-based vesting conditions and the corresponding stock-based compensation expense will be recognized over the respective requisite service period, which is typically four years. Revolving Credit Facility On July 30, 2025, the Company drew approximately $330.5 million on the Revolving Credit Facility in order to pay a portion of the Companys anticipated withholding and remittance obligations related to the vesting and settlement of RSUs for which the performance-based vesting condition had been satisfied in connection with the IPO. The Company repaid amounts borrowed on the Revolving Credit Facility in full on August 1, 2025. Ac …

SubsequentEventsTextBlock · excerpt; the full note is in the filing