| (1) | The three months ended September 30, 2023, includes $4.8 million of interest income, a $3.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $2.8 million currency losses on acquisition-related intercompany loans. The three months ended September 30, 2022, includes $6.8 million currency losses on acquisition-related intercompany loans, a $2.2 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $1.7 million of interest income. The nine months ended September 30, 2023, includes $11.7 million of interest income, a $4.5 million loss from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $0.3 million currency gains on acquisition-related intercompany loans. The nine months ended September 30, 2022, includes $16.6 million expense on repurchase of convertible senior notes, $13.7 million currency losses on acquisition-related intercompany loans, a $7.5 million gain from the mark-to-market adjustment of contingent consideration associated with the World Programming acquisition, and $2.0 million of interest income. |
The following table provides a reconciliation of Free Cash Flow to net cash provided by operating activities, the most comparable GAAP financial measure:
| (Unaudited) | |||||||||||||||
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, | ||||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Net cash provided by operating activities(1) | $ | 16,427 | $ | 8,493 | $ | 105,656 | $ | 26,534 | |||||||
| Capital expenditures | (1,698 | ) | (3,264 | ) | (7,882 | ) | (6,721 | ) | |||||||
| Free cash flow(1) | $ | 14,729 | $ | 5,229 | $ | 97,774 | $ | 19,813 | |||||||
| (1) | The nine months ended September 30, 2022, includes a $65.9 million payment in January 2022 for a damages judgement assumed as part of an acquisition in December 2021. |
The following table provides a reconciliation of Non-GAAP gross profit to gross profit, the most comparable GAAP financial measure, and a comparison of Non-GAAP gross margin (Non-GAAP gross profit as a percentage of total revenue) to gross margin (gross profit as a percentage of total revenue), the most comparable GAAP financial measure:
| (Unaudited) | |||||||||||||||
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, | ||||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Gross profit | $ | 104,917 | $ | 91,442 | $ | 348,580 | $ | 322,753 | |||||||
| Stock-based compensation expense | 2,468 | 2,332 | 7,792 | 6,265 | |||||||||||
| Non-GAAP gross profit | $ | 107,385 | $ | 93,774 | $ | 356,372 | $ | 329,018 | |||||||
| Gross profit margin | 78.3 | % | 76.6 | % | 79.0 | % | 78.4 | % | |||||||
| Non-GAAP gross margin | 80.1 | % | 78.6 | % | 80.8 | % | 79.9 | % | |||||||
