UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer
Identification Number)
(Address of Principal Executive Offices)
(Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
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Trading Symbol |
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Name of Each Exchange on which Registered |
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Indicate by check mark whether the registrant,: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of October 21, 2024, the registrant had
MICROSTRATEGY INCORPORATED
FORM 10-Q
TABLE OF CONTENTS
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Page |
PART I. |
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1 |
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Item 1. |
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1 |
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Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 |
1 |
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2 |
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3 |
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Consolidated Statements of Stockholders’ Equity (Deficit) as of September 30, 2024 |
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Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 |
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6 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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45 |
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Item 4. |
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45 |
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PART II. |
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46 |
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Item 1. |
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46 |
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Item 1A. |
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46 |
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Item 2. |
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Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities |
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Item 5. |
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73 |
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Item 6. |
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73 |
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MICROSTRATEGY INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
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September 30, |
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December 31, |
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2024 |
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2023 |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Digital assets |
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Property and equipment, net |
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Right-of-use assets |
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Deposits and other assets |
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Deferred tax assets, net |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable, accrued expenses, and operating lease liabilities |
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$ |
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$ |
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Accrued compensation and employee benefits |
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Accrued interest |
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Current portion of long-term debt, net |
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Deferred revenue and advance payments |
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Total current liabilities |
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Long-term debt, net |
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Deferred revenue and advance payments |
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Operating lease liabilities |
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Other long-term liabilities |
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Deferred tax liabilities |
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Total liabilities |
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Stockholders’ Equity |
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Preferred stock undesignated, $ |
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Class A common stock, $ |
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Class B convertible common stock, $ |
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Additional paid-in capital |
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Treasury stock, at cost; |
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( |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these Consolidated Financial Statements.
1
MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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(unaudited) |
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(unaudited) |
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(unaudited) |
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(unaudited) |
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Revenues: |
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Product licenses |
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$ |
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$ |
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$ |
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$ |
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Subscription services |
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Total product licenses and subscription services |
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Product support |
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Other services |
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Total revenues |
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Cost of revenues: |
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Product licenses |
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Subscription services |
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Total product licenses and subscription services |
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Product support |
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Other services |
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Total cost of revenues |
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Gross profit |
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Operating expenses: |
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Sales and marketing |
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Research and development |
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General and administrative |
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Digital asset impairment losses |
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Total operating expenses |
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Loss from operations |
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Interest expense, net |
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(Loss) gain on debt extinguishment |
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Other (expense) income, net |
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Loss before income taxes |
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(Benefit from) provision for income taxes |
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Net (loss) income |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Basic (loss) earnings per share (1) |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Weighted average shares outstanding used in computing basic (loss) earnings per share |
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Diluted (loss) earnings per share (1) |
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$ |
( |
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$ |
( |
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$ |
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$ |
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Weighted average shares outstanding used in computing diluted (loss) earnings per share |
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(1)
The accompanying notes are an integral part of these Consolidated Financial Statements.
2
MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands)
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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(unaudited) |
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(unaudited) |
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(unaudited) |
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(unaudited) |
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Net (loss) income |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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Other comprehensive income (loss), net of applicable taxes: |
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Foreign currency translation adjustment |
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( |
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Total other comprehensive income (loss) |
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( |
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( |
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Comprehensive (loss) income |
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$ |
( |
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$ |
( |
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$ |
( |
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$ |
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The accompanying notes are an integral part of these Consolidated Financial Statements.
3
MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands, unaudited)
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Class A |
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Class B Convertible |
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Additional |
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Accumulated Other |
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Common Stock |
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Common Stock |
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Paid-in |
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Treasury Stock |
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Comprehensive |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Shares |
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Amount |
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Loss |
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Deficit |
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Balance at January 1, 2023 |
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$ |
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$ |
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$ |
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$ |
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( |
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$ |
( |
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$ |
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Net income |
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Other comprehensive income |
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Issuance of class A common stock upon exercise of stock options |
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Issuance of class A common stock under employee stock purchase plan |
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Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes |
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( |
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Issuance of class A common stock under public offerings, net of issuance costs |
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Share-based compensation expense |
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Balance at March 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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( |
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$ |
( |
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$ |
( |
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$ |
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Net income |
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Other comprehensive loss |
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( |
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( |
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Issuance of class A common stock upon exercise of stock options |
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Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes |
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( |
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( |
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Issuance of class A common stock under public offerings, net of issuance costs |
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Share-based compensation expense |
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Balance at June 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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( |
) |
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$ |
( |
) |
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$ |
( |
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$ |
( |
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Net loss |
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( |
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( |
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Other comprehensive loss |
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( |
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( |
) |
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Issuance of class A common stock upon exercise of stock options |
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Issuance of class A common stock under employee stock purchase plan |
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Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes |
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( |
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( |
) |
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Issuance of class A common stock under public offerings, net of issuance costs |
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Share-based compensation expense |
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Balance at September 30, 2023 |
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$ |
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$ |
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$ |
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$ |
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( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
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Net income |
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Other comprehensive income |
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Issuance of class A common stock upon exercise of stock options |