Exhibit
No. |
Description
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WalkMe Ltd.
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Date: November 14, 2023
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By:
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/s/ Hagit Ynon
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Hagit Ynon
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Chief Financial Officer
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● |
Achieved a record Non-GAAP operating income ahead of plan of $1.6M compared to a loss of ($12.5M) last year and GAAP operating loss of ($11.6M) compared to ($26.4M) last year.
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● |
Non-GAAP Net income Per Share of $0.04 and GAAP Net Loss Per Share of ($0.10).
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● |
Continued positive Free Cash Flow of $6.2M and 9% FCF margin.
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● |
Revenue: Total revenue was $67.0 million, an increase of 6% year-over-year. Subscription revenue was $62.3 million, an increase of 10% year-over-year.
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● |
Gross Margin: GAAP Gross margin was 85% compared to 79% in the third quarter of 2022 and Non-GAAP Gross margin was 85% compared to 80% in the third quarter of 2022.
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● |
GAAP Operating Loss: was $11.6 million, or 17% of total revenue, compared to $26.4 million, or 42% in the third
quarter of 2022.
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● |
Non-GAAP Operating Income: was $1.6 million or 2% of total revenue, compared to a loss of ($12.5) million, or (20%) in the third quarter of 2022.
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● |
Earnings Per Share: Non-GAAP Net Income Per Share of $0.04 and GAAP Net Loss Per Share of ($0.10) compared to a loss of ($0.14) and ($0.27) in the third quarter of 2022 respectively.
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● |
Operating Cash Flow: Net cash provided by operating activity was $7.4 million, or 11% of total revenue, compared to ($9.7) million used in operating activity
or (15%) in the third quarter of 2022.
|
● |
Free Cash Flow: was a positive $6.2 million or 9% of total revenue, compared to negative ($11.2) million, or (18%) in
the third quarter of 2022.
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● |
Cash, Cash Equivalents, Short-term Deposits and Long-Term Marketable Securities: were $311.5 million as of September 30, 2023.
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● |
Added 11 net new Enterprise-Wide DAP customers during the third quarter for a total of 194 DAP customers as of September 30, 2023, representing DAP customer count growth of 25% year-over-year.
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● |
Customers with over $1 million in ARR grew 11% year-over-year to 39. Customers with over $100,000 in ARR grew 5% year-over-year to 539 customers as of the quarter end.
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● |
WalkMe Discovery and Data AI solutions showed continued momentum with the number of employees covered growing 85% quarter over quarter.
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● |
Launched Propel, a program that provides partners the foundation to unlock enterprise-scale revenue streams by enhancing enablement and speeding go to market
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● |
Hosted Realize, the premier Digital Adoption Customer and Partner event with presentations from Nestlé, Cisco, Gap Inc., ServiceNow, and Deloitte Consulting LLP, among others
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● |
Launched its first ever ESG Report highlighting WalkMe’s commitment to the environment, a diverse and inclusive workforce, and governance best practices
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● |
Revenue of $67 to $68 million, representing a growth rate of 3% to 5% year-over-year
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● |
Non-GAAP Operating income of $1.3 to $2.3 million
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● |
Revenue of $266.1 to $267.1 million, representing a growth rate of 9% year-over-year
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● |
Non-GAAP Operating Loss of $8.3 to $7.3 million
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WalkMe Ltd.
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|
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Condensed Consolidated Statements of Operations
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|
|
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|
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|
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|
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(in thousands, except share and per share data; unaudited)
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|
|
|
|
|
|
|
|
|
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Three months ended
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Nine months ended
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||||||||||||||
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September 30,
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September 30,
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||||||||||||||
|
2023
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2022
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2023
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2022
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||||||||||||
Revenues
|
||||||||||||||||
Subscription
|
$
|
62,340
|
$
|
56,681
|
$
|
184,364
|
$
|
162,270
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||||||||
Professional services
|
4,675
|
6,672
|
14,701
|
17,873
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||||||||||||
Total revenues
|
67,015
|
63,353
|
199,065
|
180,143
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||||||||||||
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||||||||||||||||
Cost of revenues
|
||||||||||||||||
Subscription(1)(2)(3)
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6,110
|
6,481
|
18,957
|
20,052
|
||||||||||||
Professional services(1)(3)
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4,231
|
7,096
|
15,431
|
21,383
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||||||||||||
Total cost of revenues
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10,341
|
13,577
|
34,388
|
41,435
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||||||||||||
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||||||||||||||||
Gross profit
|
56,674
|
49,776
|
164,677
|
138,708
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||||||||||||
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||||||||||||||||
Operating expenses
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||||||||||||||||
Research and development(1)(3)
|
13,259
|
13,909
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41,743
|
45,504
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||||||||||||
Sales and marketing(1)(3)
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39,118
|
45,801
|
123,035
|
130,993
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||||||||||||
General and administrative(1)(2)(3)
|
15,865
|
16,483
|
53,086
|
49,501
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||||||||||||
Total operating expenses
|
68,242
|
76,193
|
217,864
|
225,998
|
||||||||||||
Operating loss
|
(11,568
|
)
|
(26,417
|
)
|
(53,187
|
)
|
(87,290
|
)
|
||||||||
Financial income, net
|
3,609
|
1,241
|
10,098
|
2,368
|
||||||||||||
Loss before income taxes
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(7,959
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)
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(25,176
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)
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(43,089
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)
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(84,922
|
)
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||||||||
Income taxes
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(1,420
|
)
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(942
|
)
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(3,917
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)
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(2,100
|
)
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||||||||
Net loss
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(9,379
|
)
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(26,118
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)
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(47,006
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)
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(87,022
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)
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||||||||
Net loss attributable to non-controlling interest
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(50
|
)
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(18
|
)
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(197
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)
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(367
|
)
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||||||||
Adjustment attributable to non-controlling interest
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(567
|
)
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(3,010
|
)
|
1,680
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(12,642
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)
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|||||||||
Net loss attributable to WalkMe Ltd.
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$
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(8,762
|
)
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$
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(23,090
|
)
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$
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(48,489
|
)
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$
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(74,013
|
)
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Net loss per share attributable to WalkMe Ltd. basic and diluted
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$
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(0.10
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)
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$
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(0.27
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)
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$
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(0.55
|
)
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$
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(0.87
|
)
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||||
Weighted-average shares used in computing net loss per share attributable to ordinary shareholders, basic and diluted
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89,374,207
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85,508,974
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88,429,867
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84,739,275
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(1) Includes share-based compensation expense as follows:
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Three months ended
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Nine months ended
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||||||||||||||
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September 30,
|
September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Cost of subscription revenues
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$
|
183
|
$
|
293
|
$
|
782
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$
|
832
|
||||||||
Cost of professional services
|
306
|
782
|
1,279
|
2,054
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||||||||||||
Research and development
|
3,030
|
1,756
|
7,948
|
5,396
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||||||||||||
Sales and marketing
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4,578
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5,478
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13,133
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13,935
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||||||||||||
General and administrative
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4,992
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5,505
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18,817
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15,891
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||||||||||||
Total share-based compensation expense
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$
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13,089
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$
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13,814
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$
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41,959
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$
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38,108
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(2) Includes amortization and impairment of acquired intangibles as follows:
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Three months ended
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Nine months ended
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||||||||||||||
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September 30,
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September 30,
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||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Cost of revenues
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$
|
68
|
$
|
68
|
$
|
204
|
$
|
420
|
||||||||
General and administrative
|
-
|
-
|
-
|
979
|
||||||||||||
Total amortization and impairment
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$
|
68
|
$
|
68
|
$
|
204
|
$
|
1,399
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(3) Includes restructuring expense as follows:
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|
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Three months ended
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Nine months ended
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||||||||||||||
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September 30,
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September 30,
|
||||||||||||||
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Cost of subscription revenues
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$
|
-
|
$
|
-
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$
|
40
|
$
|
-
|
||||||||
Cost of professional services
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-
|
-
|
223
|
-
|
||||||||||||
Research and development
|
-
|
-
|
86
|
-
|
||||||||||||
Sales and marketing
|
-
|
-
|
964
|
-
|
||||||||||||
General and administrative
|
-
|
-
|
160
|
-
|
||||||||||||
Total restructuring expense
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$
|
-
|
$
|
-
|
$
|
1,473
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$
|
-
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WalkMe Ltd.
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Condensed Consolidated Balance Sheets
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(in thousands; unaudited)
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|
September 30,
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December 31,
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||||||
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2023
|
2022
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||||||
Assets
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||||||||
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||||||||
Current assets:
|
||||||||
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||||||||
Cash and cash equivalents
|
$
|
192,500
|
$
|
94,105
|
||||
Short-term deposits
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31,496
|
125,231
|
||||||
Short-term marketable securities
|
33,796
|
42,187
|
||||||
Trade receivables, net
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38,242
|
45,024
|
||||||
Deferred contract acquisition costs
|
26,518
|
26,287
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||||||
Prepaid expenses and other current assets
|
8,553
|
6,243
|
||||||
Total current assets
|
331,105
|
339,077
|
||||||
|
||||||||
Non-current assets:
|
||||||||
|
||||||||
Long-term marketable securities
|
53,747
|
43,334
|
||||||
Deferred contract acquisition costs
|
31,764
|
40,110
|
||||||
Other assets
|
486
|
584
|
||||||
Property and equipment, net
|
12,503
|
13,268
|
||||||
Operating lease right-of-use assets
|
13,180
|
7,003
|
||||||
Goodwill and Intangible assets, net
|
1,628
|
1,830
|
||||||
Total non-current assets
|
113,308
|
106,129
|
||||||
|
||||||||
Total assets
|
$
|
444,413
|
$
|
445,206
|
||||
|
||||||||
Liabilities, redeemable non-controlling interest and shareholders’ equity
|
||||||||
|
||||||||
Current liabilities:
|
||||||||
|
||||||||
Trade payables
|
$
|
3,888
|
$
|
5,957
|
||||
Accrued expenses and other current liabilities
|
42,235
|
53,414
|
||||||
Deferred revenues
|
112,722
|
108,097
|
||||||
Total current liabilities
|
158,845
|
167,468
|
||||||
|
||||||||
Long-term liabilities:
|
||||||||
|
||||||||
Deferred revenues
|
1,448
|
1,613
|
||||||
Other long-term liabilities
|
12,916
|
10,038
|
||||||
Operating lease liabilities
|
8,340
|
3,833
|
||||||
Total long-term liabilities
|
22,704
|
15,484
|
||||||
Total liabilities
|
181,549
|
182,952
|
||||||
|
||||||||
Redeemable non-controlling interest
|
9,517
|
8,080
|
||||||
Shareholders’ equity:
|
||||||||
Share capital and additional paid-in capital
|
735,733
|
688,636
|
||||||
Other comprehensive loss
|
(2,932
|
)
|
(1,817
|
)
|
||||
Accumulated deficit
|
(479,454
|
)
|
(432,645
|
)
|
||||
Total shareholders’ equity
|
253,347
|
254,174
|
||||||
Total Liabilities, redeemable non-controlling interest and shareholders’ equity
|
$
|
444,413
|
$
|
445,206
|