Arteris Inc

Previous wording

As of March 31, 2024, we had 255 full-time employees and offices in eight locations in the United States, France, China, South Korea and Japan. For the three months ended March 31, 2024, we generated revenue of $12.9 million, net loss of $9.4 million, and net loss per share, basic and diluted of $0.25. As of March 31, 2024, we had Annual Contract Value (as defined below) of $53.5 million. During the three months ended March 31, 2024, we had 21 Confirmed Design Starts (as defined below).

Current wording

As of June 30, 2024, we had 252 full-time employees and offices in eight locations in the United States, France, China, South Korea, and Japan. As of June 30, 2024, we are taking steps to establish anoffice in Poland. For the three months ended June 30, 2024, we generated revenue of $14.6 million, net loss of $8.3 million, and net loss per share, basic and diluted of $0.22. As of June 30, 2024, we had Annual Contract Value (as defined below) of $56.1 million. During the three months ended June 30, 2024, we had 21 Confirmed Design Starts (as defined below).

Previous wording

Our ability to generate revenue from new license agreements, and the timing of such revenue, is subject to a number of factors, risks and contingencies. For new products, the time from initial development until we generate license revenue can be lengthy, typically between one and three years. In addition, because the selection process by our customers is typically lengthy and market requirements and alternative solutions available to customers for IP-based products change rapidly, we may be required to incur significant research and development expenditures in pursuit of new products over extended, multiyear periods of time with no assurance that our solutions will be successfully developed or ultimately selected by our customers. While we make efforts to observe market demand and market need trends, we cannot be certain that our investment in developing and testing new products will generate an adequate rate of return in the form of fees, royalties or other revenues, or any revenues. Moreover, the customer acquisition process has a typical duration of six to nine months; following this, a customer’s chip design cycle is typically between one to three years and may be delayed due to factors beyond our control, which may result in our customer’s product not reaching the market until long after we entered into a contract with such customer. Customers typically start shipping their products using our interconnect IP solutions between one to five years following completion of their product design, known as mass production, at which point we start to receive royalties; this lasts for up to seven years depending on the market segment. Any significant delay in the ramp-up of volume production of the customer’s products into which our product is designed could adversely affect our business due to delayed or significantly reduced revenues. Further, because the average selling prices of our products may decline over time, we consider new license agreements and new product launches to be critical to our future success and anticipate that for our newer products, we are and will remain highly dependent on market demand timing and revenue from new license agreements.

Current wording

Our ability to generate revenue from new license agreements, and the timing of such revenue, is subject to a number of factors, risks and contingencies. For new products, the time from initial development until we generate license revenue can be lengthy, typically between one and three years. In addition, because the selection process by our customers is typically lengthy and market requirements and alternative solutions available to customers for IP-based products change rapidly, we may be required to incur significant research and development expenditures in pursuit of new products over extended, multiyear periods of time with no assurance that our solutions will be successfully developed or ultimately selected by our customers. While we make efforts to observe market demand and market need trends, we cannot be certain that our investment in developing and testing new products will generate an adequate rate of return in the form of fees, royalties or other revenues, or any revenues. Moreover, the customer acquisition process has a typical duration of six to nine months; following this, a customer’s chip design cycle is typically between one to three years and may be delayed due to factors beyond our control, which may result in our customer’s product not reaching the market until long after we entered into a contract with such customer. Customers typically start shipping their products using our interconnect IP solutions between one to five years following completion of their product design, known as mass production, at which point we start to receive royalties; this typically lasts for up to seven years depending on the market segment. Any significant delay in the ramp-up of volume production of the customer’s products into which our product is designed could adversely affect our business due to delayed or significantly reduced revenues. Further, because the average selling prices of our products may decline over time, we consider new license agreements and new product launches to be critical to our future success and anticipate that for our newer products, we are and will remain highly dependent on market demand timing and revenue from new license agreements.

Previous wording

Demand for our interconnect IP solutions and associated royalty revenue is highly dependent on market conditions in the end markets in which our customers operate. These end markets, which include the automotive, enterprise computing, communications, consumer electronics, and industrial markets, are subject to a number of factors including end-product acceptance and sales, competitive pressures, supply chain issues and general market conditions. For example, our revenue has been supported by the increased need for more complex SoCs to enable sophisticated automated driving. If the demand in this market continues to grow, we anticipate it will continue to have a positive impact on our revenue. In contrast, if general market conditions deteriorate or other factors occur such as supply chain issues resulting in fewer semiconductors utilizing our IP solutions being available for sale, our revenue would be adversely affected.

Current wording

Demand for our interconnect IP solutions and associated royalty revenue is highly dependent on market conditions in the end markets in which our customers operate. These end markets, which include the automotive, enterprise computing, communications, artificial intelligence and machine learning, consumer electronics, and industrial markets, are subject to a number of factors including end-product acceptance and sales, competitive pressures, supply chain issues and general market conditions. For example, our revenue has been supported by the increased need for more complex SoCs to enable sophisticated automated driving. If the demand in this market continues to grow, we anticipate it will continue to have a positive impact on our revenue. In contrast, if general market conditions deteriorate or other factors occur, such as supply chain issues and global trade restrictions resulting in fewer semiconductors utilizing our IP solutions being available for sale, our revenue would be adversely affected.

Previous wording

Our revenue from period to period can be impacted by the terms of the agreements we enter into with our customers. For example, in recent periods we have made certain changes to SIA agreements that result in the ratable recognition of the related license revenue over the contract term. As a result of how these contracts are structured and the revenue is recognized, our revenue in thethree months ended March 31, 2024 may not be comparable to future periods if we do not enter into similar contractual agreements. Further, a meaningful percentage of our revenue is generated through royalty payments. Because the time between a new license agreement win and the customer’s end product being sold can be substantial, with sales of the end product being subject to a number of factors outside our control, our revenue from royalties is difficult to predict. As a result of the foregoing, revenue may fluctuate significantly from period to period and any increase or decrease in such revenue may not be indicative of future period-to-period increases or decreases.

Current wording

Our revenue from period to period can be impacted by the terms of the agreements we enter into with our customers. For example, in 2023, we made certain changes to SIA agreements that result in the ratable recognition of the related license revenue over the contract term. As a result of how these contracts are structured and the revenue is recognized, our revenue in thethree and six months ended June 30, 2024 may not be comparable to future periods if we do not enter into similar contractual agreements. Further, a meaningful percentage of our revenue is generated through royalty payments. Because the time between a new license agreement win and the customer’s end product being sold can be substantial, with sales of the end product being subject to a number of factors outside our control, our revenue from royalties is difficult to predict. As a result of the foregoing, revenue may fluctuate significantly from period to period and any increase or decrease in such revenue may not be indicative of future period-to-period increases or decreases.

Previous wording

In order to address technological developments such as the above and expand our offerings, we have invested significantly in our research and development efforts. These investments, which included growth in engineering headcount, have resulted in substantially increased research and development expenses in recent periods. As we continue to invest in our technology and new product design efforts, we anticipate research and development expense will increase on an absolute basis and as a percentage of revenue in the near term. In the medium to longer term, however, while we expect to increase our research and development expense on an absolute basis, we expect this expense to reduce as a percentage of revenue.

Current wording

In order to address technological developments such as the above and expand our offerings, we have invested significantly in our research and development efforts. These investments, which continue to include growth in engineering headcount, have resulted in substantially increased research and development expenses in recent periods. As we continue to invest in our technology and new product design efforts, we anticipate research and development expense will continue to increase on an absolute basis and as a percentage of revenue in the near term. In the medium to longer term, however, while we expect to increase our research and development expense on an absolute basis, we expect this expense to reduce as a percentage of revenue.

Previous wording

We believe our products’ global footprint provides us with the opportunity to enter new markets and accelerate our growth. For thethree months ended March 31, 2024, 65.7% of our revenue was derived from sales to customers outside of the United States and 30.5% of our revenue was derived from customers located in China, respectively. For 2023, 65.4% of our revenue was derived from sales to customers outside of the United States and 31.1% of our revenue was derived from customers located in China. While we believe operating internationally has beneficially impacted our results of operations, we are subject to inherent risks attributed to operating in a global economy. Further, our international operations have been, and may in the future continue to be, subject to restrictive government regulations. For example, U.S. export regulations, including regulations announced October 7, 2022 and further amended effective November 17, 2023, that impose broad end-use and other restrictions on doing business with certain customers and facilities in China that develop or produce semiconductor chips or manufacturing equipment, may limit or adversely impact our ability to license or support our products to entities in or doing business with certain advanced AI or “supercomputer” design companies, foundries and manufacturers of assemblies and components in China. As a result of these restrictions, our customers may experience changes to or delays in their design projects, and we may face challenges to maintain our revenue and/or our revenue may decrease.

Current wording

We believe our products’ global footprint provides us with the opportunity to enter new markets and accelerate our growth. For thesix months ended June 30, 2024, 64.7% of our revenue was derived from sales to customers outside of the United States and 30.1% of our revenue was derived from customers located in China, respectively. For 2023, 65.4% of our revenue was derived from sales to customers outside of the United States and 31.1% of our revenue was derived from customers located in China. While we believe operating internationally has beneficially impacted our results of operations, we are subject to inherent risks attributed to operating in a global economy. Further, our international operations have been, and may in the future continue to be, subject to restrictive government regulations. For example, U.S. export regulations, including regulations announced October 7, 2022 and further amended effective November 17, 2023, that impose broad end-use and other restrictions on doing business with certain customers and facilities in China that develop or produce semiconductor chips or manufacturing equipment, may limit or adversely impact our ability to license or support our products to entities in or doing business with certain advanced AI or “supercomputer” design companies, foundries and manufacturers of assemblies and components in China. As a result of these restrictions, our customers may experience changes to or delays in their design projects, and we may face challenges to maintain our revenue and/or our revenue may decrease.

Previous wording

The semiconductor industry in which our customers operate is highly cyclical and is characterized by increasingly rapid technological change, product obsolescence, competitive pricing pressures, evolving standards, short product life cycles, and fluctuations in product supply and demand. New technology may result in sudden changes in system designs or platform changes that may render some of our IP solutions obsolete and require us to devote significant research and development resources to compete effectively. Periods of rapid growth and capacity expansion are occasionally followed by significant market corrections in which our customers’ sales decline, inventories accumulate, and facilities go underutilized. During an expansion cycle, we may increase research and development hiring to add to our product offerings or spend more on sales and marketing to acquire new customers, such as during the recent cycle of expansion in which we increased the number of our engineers significantly. During periods of slower growth or industry contractions, our sales generally suffer due to a decrease in customers’ Confirmed Design Starts or in sales of our customers’ products.

Current wording

The semiconductor industry in which our customers operate is highly cyclical and is characterized by increasingly rapid technological change, product obsolescence, competitive pricing pressures, evolving standards, short product life cycles, and fluctuations in product supply and demand. New technology may result in sudden changes in system designs or platform changes that may render some of our IP solutions obsolete and require us to devote significant research and development resources to compete effectively. Periods of rapid growth and capacity expansion are occasionally followed by significant market corrections in which our customers’ sales decline, inventories accumulate, and facilities go underutilized. During an expansion cycle, we may increase research and development hiring to add to our product offerings or spend more on sales and marketing to acquire new customers. During periods of slower growth or industry contractions, our sales generally suffer due to a decrease in customers’ Confirmed Design Starts or in sales of our customers’ products.

Previous wording

We define Annual Contract Value (ACV) for an individual customer agreement as the total fixed fees under the agreement divided by the number of years in the agreement term. Our total ACV is the aggregate ACVs for all our customers as measured at a given point in time. Total fixed fees include licensing, support and maintenance and other fixed fees under IP licensing or software licensing agreements but exclude variable revenue derived from licensing agreements with customers, particularly royalties. ACV was $53.5 million and $51.4 million as of March 31, 2024 and 2023, respectively. In addition, total ACV and trailing-twelve-months variable royalties and other revenue was $58.2 million and $54.8 million as of March 31, 2024 and March 31, 2023, respectively. We monitor ACV to measure our success and believe the increase in the number shows our progress in expanding our customers’ adoption of our platform. We believe ACV provides investors with useful information to assess the strength and trajectory of our business as growth demonstrates the expansion of customer adoption of our platform. ACV fluctuates due to a number of factors, including the timing, duration and dollar amount of customer contracts.

Current wording

We define Annual Contract Value (ACV) for an individual customer agreement as the total fixed fees under the agreement divided by the number of years in the agreement term. Our total ACV is the aggregate ACVs for all our customers as measured at a given point in time. Total fixed fees include licensing, support and maintenance and other fixed fees under IP licensing or software licensing agreements but exclude variable revenue derived from licensing agreements with customers, particularly royalties. ACV was $56.1 million and $53.6 million as of June 30, 2024 and 2023, respectively. In addition, total ACV and trailing-twelve-months variable royalties and other revenue was $60.1 million and $58.2 million as of June 30, 2024 and 2023, respectively. We monitor ACV to measure our success and believe the increase in the number shows our progress in expanding our customers’ adoption of our platform. We believe ACV provides investors with useful information to assess the strength and trajectory of our business as growth demonstrates the expansion of customer adoption of our platform. ACV fluctuates due to a number of factors, including the timing, duration and dollar amount of customer contracts.

Previous wording

We define Active Customers as customers who have entered into a license agreement with us that remains in effect. The retention and expansion of our relationships with existing customers are key indicators of our revenue potential. We added one and six net new Active Customers during the three months ended March 31, 2024 and 2023, respectively.

Current wording

We define Active Customers as customers who have entered into a license agreement with us that remains in effect. The retention and expansion of our relationships with existing customers are key indicators of our revenue potential. We added six and 12 net new Active Customers during the three months ended June 30, 2024 and 2023, respectively.

Previous wording

The RPO amount is intended to provide visibility into future revenue streams. We expect RPO to fluctuate up or down from period to period for several reasons, including amounts, timing, and duration of customer contracts, as well as the timing of billing cycles for each contract. Our RPO was $74.7 million and $57.3 million as of March 31, 2024 and 2023, respectively.

Current wording

The RPO amount is intended to provide visibility into future revenue streams. We expect RPO to fluctuate up or down from period to period for several reasons, including amounts, timing, and duration of customer contracts, as well as the timing of billing cycles for each contract. Our RPO was $77.5 million and $65.1 million as of June 30, 2024 and 2023, respectively.

Previous wording

Revenue: Our revenue is primarily derived from licensing intellectual property, licensing software, support and maintenance services, professional services, training services, and royalties. Our agreements often include other service elements including training and professional services which were immaterial for thethree months ended March 31, 2024 and 2023, respectively.

Current wording

Revenue: Our revenue is primarily derived from licensing intellectual property, licensing software, support and maintenance services, professional services, training services, and royalties. Our agreements often include other service elements including training and professional services which were immaterial for thethree and six months ended June 30, 2024 and 2023, respectively.

Previous wording

Application Engineer Support Services are integral and fundamental to the customer’s ability to derive its intended benefit from the IP. CAEs are part of the product development team providing detailed requirements for engineering projects, working very closely with a customer’s chief technology officer and the marketing department, and performing quality assurance testing of customer products prior to shipment to their customers. FAEs provide assistance to the customer’s engineering team in translating their desired SoC architecture into inputs for NoC IP configuration, assistance in optimizing the NoC configuration, answer to customer questions by the online support system or phone, constructive reviews of the progress achieved by the customer’s development team and provision of advice on how to best use the licensed IP, performance of design reviews before customer project RTL freeze and tape-out to ensure the customer used the licensed IP configuration tooling as intended so that the RTL output meets customer requirements and expectations. FAE reviews of the customer’s design are mandatory and consist of an understanding of the customer requirements and analysis of the adequacy of the contemplated IP considering the customer’s desired architecture and design goals and objectives, taking into consideration bandwidth, coherence/non-coherence, latency, clock and timing, areas, and any and all constraints, as identified and specific to the design under review.

Current wording

Application Engineer Support Services are integral and fundamental to the customer’s ability to derive its intended benefit from the IP. CAEs are part of the product development team providing detailed requirements for engineering projects, working very closely with a customer’s chief technology officer and the marketing department, and performing quality assurance testing of customer products prior to shipment to their customers. FAEs provide assistance to the customer’s engineering team in translating their desired SoC architecture into inputs for NoC IP configuration, assistance in optimizing the NoC configuration, answer to customer questions by the online support system or phone, constructive reviews of the progress achieved by the customer’s development team and provision of advice on how to best use the licensed IP, performance of design reviews before customer project RTL freeze and tape-out to ensure the customer used the licensed IP configuration tooling as intended so that the RTL output meets customer requirements and expectations. FAE reviews of the customer’s design typically are mandatory and consist of an understanding of the customer requirements and analysis of the adequacy of the contemplated IP considering the customer’s desired architecture and design goals and objectives, taking into consideration bandwidth, coherence/non-coherence, latency, clock and timing, areas, and any and all constraints, as identified and specific to the design under review.

Previous wording

Cost of revenue increased $0.3 million or 31%, to $1.5 million for the three months ended March 31, 2024 from $1.1 million for the three months ended March 31, 2023. The increase in cost of revenue during the three months ended March 31, 2024 was primarily due to higher FAE employee-related expenses.

Current wording

Cost of revenue increased $0.2 million or 19%, to $1.5 million for the three months ended June 30, 2024 from $1.2 million for the three months ended June 30, 2023. The increase in cost of revenue during the three months ended June 30, 2024 was primarily due to higher FAE employee-related expenses.

Previous wording

R&D expenses decreased, $0.5 million, or 5%, to $10.8 million for the three months ended March 31, 2024 from $11.4 million for the three months ended March 31, 2023. The decrease in R&D expenses was primarily due to $0.4 million of grants to our subsidiary in France for R&D projects.

Current wording

R&D expenses decreased, $1.4 million, or 11%, to $10.7 million for the three months ended June 30, 2024 from $12.1 million for the three months ended June 30, 2023. The decrease in R&D expenses was primarily due to lower stock-based compensation expense of $0.7 million, predominantly related to the modification of certain performance stock unit awards in 2023 and $0.4 million of grants received by our subsidiary in France for R&D projects.

Previous wording

S&M expenses increased, $0.5 million, or 9%, to $5.5 million for the three months ended March 31, 2024 from $5.0 million for the three months ended March 31, 2023. The increase in S&M expenses was primarily due to higher employee-related costs of $0.4 million mainly driven by increased headcount to support growth of our business. We also incurred company-wide event costs of $0.3 million primarily due to an in-person sales event that was held in the second quarter of 2023, partially offset by a decrease in professional fees of $0.1 million.

Current wording

S&M expenses decreased, $0.6 million, or 10%, to $5.0 million for the three months ended June 30, 2024 from $5.6 million for the three months ended June 30, 2023. The decrease in S&M expenses was primarily due to a decrease in company-wide event costs of $0.2 million related to an in-person sales event that was held in the second quarter of 2023 versus the first quarter of 2024 and a decrease in professional fees of $0.1 million.

Previous wording

Interest expense remained relatively flat for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

Interest expense remained relatively flat for the three months ended June 30, 2024 when compared to the three months ended June 30, 2023.

Previous wording

Other income (expense), net remained relatively flat for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

Other income (expense), net remained relatively flat for the three months ended June 30, 2024 when compared to the three months ended June 30, 2023.

Previous wording

Loss from equity method investment remained relatively flat for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Such losses are expected to continue in the near future.

Current wording

Loss from equity method investment remained relatively flat for the three months ended June 30, 2024 when compared to the three months ended June 30, 2023. Such losses are expected to continue in the near future.

Previous wording

The provision for income taxes was $0.4 million for the three months ended March 31, 2024 compared to $0.3 million for the three months ended March 31, 2023. The increase in our income tax expense was due to a change in the forecasted geographic mix of worldwide earnings which are taxed at different statutory tax rates, the impact of losses in jurisdictions which have full valuation allowances, and changes in current year foreign withholding taxes. Foreign withholding taxes are generally assessed on gross revenue generated, rather than pre-tax income, in certain countries in which the Company does not file an income tax return.

Current wording

The provision for income taxes was $1.0 million for the three months ended June 30, 2024 compared to $0.6 million for the three months ended June 30, 2023. The increase in our income tax expense was due to a change in the forecasted geographic mix of worldwide earnings which are taxed at different statutory tax rates, the impact of losses in jurisdictions which have full valuation allowances, and changes in current year foreign withholding taxes. Foreign withholding taxes are generally assessed on gross revenue generated, rather than pre-tax income, in certain countries in which the Company does not file an income tax return.

Previous wording

Revenue from licensing, support and maintenance remained relatively flat for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The change in variable royalty revenue was due to a temporary decrease in volume from a certain large customer in the first quarter of 2024. Other revenue increased due to timing of completion of professional services.

Current wording

Revenue from licensing, support and maintenance remained relatively flat for the six months ended June 30, 2024 when compared to the six months ended June 30, 2023. The change in variable royalty revenue was due to a temporary decrease in volume from a certain large customer in the first quarter of 2024 as well as fixed and up-front royalties from certain customers in the second quarter of 2023. Other revenue increased due to timing of completion of professional services.

Previous wording

G&A expenses remained relatively flat for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.

Current wording

G&A expenses remained relatively flat for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

Previous wording

Since inception, we have financed operations primarily from payments received from our customers, the net proceeds from the sale of our common stock in the IPO as well as the net proceeds from the private issuance of our convertible preferred stock and common stock. As of March 31, 2024, we had$44.8 million in cash and cash equivalents and short-term investments of which $1.9 million was held by our foreign subsidiaries.

Current wording

Since inception, we have financed operations primarily from payments received from our customers, the net proceeds from the sale of our common stock in the IPO as well as the net proceeds from the private issuance of our convertible preferred stock and common stock. As of June 30, 2024, we had$45.8 million in cash and cash equivalents and short-term investments of which $1.5 million was held by our foreign subsidiaries. In addition, as of June 30, 2024, we also had$8.1 million in long-term investments.

Previous wording

We believe our cash and cash equivalents, short-term investments, and cash provided by sales of our products will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments and other liquidity requirements associated with our existing operations for at least the next 12 months. If these resources are not sufficient to satisfy our liquidity requirements, we may be required to seek additional financing. If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Debt financing, if available, may contain covenants that significantly restrict our operations or our ability to obtain additional debt financing in the future. Any additional financing that we raise may contain terms that are not favorable to us or our stockholders. We cannot assure you that we would be able to obtain additional financing on terms favorable to us or our existing stockholders, or at all. See “Risk Factors —Risks Related to Our Business and Industry—Our ability to raise capital in the future may be limited and could prevent us from executing our growth strategy” for additional information.

Current wording

We believe our cash and cash equivalents, investments and cash provided by sales of our products will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments and other liquidity requirements associated with our existing operations for at least the next 12 months. If these resources are not sufficient to satisfy our liquidity requirements, we may be required to seek additional financing. If we raise additional funds by issuing equity securities, our stockholders will experience dilution. Debt financing, if available, may contain covenants that significantly restrict our operations or our ability to obtain additional debt financing in the future. Any additional financing that we raise may contain terms that are not favorable to us or our stockholders. We cannot assure you that we would be able to obtain additional financing on terms favorable to us or our existing stockholders, or at all. See “Risk Factors —Risks Related to Our Business and Industry—Our ability to raise capital in the future may be limited and could prevent us from executing our growth strategy” for additional information.

Previous wording

For the three months ended March 31, 2024, net cash provided by operating activities was $0.5 million, primarily due to our net loss of $9.4 million, adjusted for non-cash charges of $4.8 million and $5.1 million changes in operating assets and liabilities. Non-cash charges primarily consisted of stock-based compensation of $3.7 million, loss from our equity method investment of $0.8 million and depreciation and amortization of $0.8 million, partially offset by amortization of deferred income of $0.3 million and net accretion of discounts on available-for-sale securities of $0.2 million. The drivers of the changes in operating assets and liabilities were a $0.3 million increase in accounts receivable, partially offset by a $3.4 million increase in deferred revenue, a $0.9 million increase in accrued expenses and other liabilities, a $0.5 million increase in accounts payable and a $0.5 million decrease in prepaid expense and other current assets.

Current wording

For the six months ended June 30, 2024, net cash provided by operating activities was $0.8 million, primarily due to our net loss of $17.7 million, adjusted for non-cash charges of $9.6 million and $8.9 million changes in operating assets and liabilities. Non-cash charges primarily consisted of stock-based compensation of $7.4 million, depreciation and amortization of $1.6 million and loss from our equity method investment of $1.5 million, partially offset by amortization of deferred income of $0.6 million and net accretion of discounts on available-for-sale securities of $0.3 million. The drivers of the changes in operating assets and liabilities were a $4.7 million increase in deferred revenue, a $3.1 million decrease in accounts receivable, a $0.9 million decrease in prepaid expense and other assets, a $0.2 million increase in accounts payable and a $0.1 million increase in accrued expenses and other liabilities.

Previous wording

For the three months ended March 31, 2023, net cash used in operating activities was $8.4 million, primarily due to our net loss of $9.0 million, adjusted for non-cash charges of $3.9 million and $3.3 million changes in operating assets and liabilities. Non-cash charges primarily consisted of stock-based compensation of $3.0 million, loss from our equity method investment of $0.8 million and depreciation and amortization of $0.6 million, partially offset by amortization of deferred income of $0.3 million and net accretion of discounts on available-for-sale securities of $0.3 million. The drivers of the changes in operating assets and liabilities were a $0.6 million increase in accounts payable and a $0.4 million decrease in prepaid expense and other current assets, partially offset by a $2.6 million increase in accounts receivable, a $1.0 million decrease in accrued expenses and other current liabilities and a $0.6 million decrease in deferred revenue.

Current wording

For the six months ended June 30, 2023, net cash used in operating activities was $9.9 million primarily due to our net loss of $18.2 million, adjusted for non-cash charges of $9.0 million and $0.8 million changes in operating assets and liabilities. Non-cash charges primarily consisted of stock-based compensation of $7.3 million, loss from our equity method investment of $1.6 million and depreciation and amortization of $1.3 million, partially offset by amortization of deferred income of $0.6 million and net accretion of discounts on available-for-sale securities of $0.5 million. The drivers of the changes in operating assets and liabilities were a $2.7 million increase in deferred revenue, partially offset by a $2.4 million increase in accounts receivable, a $0.7 million increase in prepaid expense and other current assets and a $0.4 million decrease in accounts payable.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2024 was $11.9 million, primarily attributable to proceeds from maturities of available-for-sale securities and certificate of deposit, partially offset by purchases of available-for-sale securities and property and equipment.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2024 was $7.5 million, primarily attributable to proceeds from maturities of available-for-sale securities and certificate of deposit, partially offset by purchases of available-for-sale securities and property and equipment.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2023 was $0.4 million, primarily attributable to purchases of property and equipment and available-for-sale securities, partially offset by proceeds from maturities of available-for-sale securities.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2023 was $0.4 million, primarily attributable to proceeds from maturities of available-for-sale securities, partially offset by purchases of property and equipment and available-for-sale securities.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024 was less than $0.1 million, primarily attributable proceeds from exercise of stock options, primarily offset by principal payments under vendor financing arrangements.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2024 was $0.1 million, primarily attributable proceeds from exercise of stock options, primarily offset by principal payments under vendor financing arrangements.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2023 was $1.0 million, primarily attributable to payments of contingent consideration for business combination of $1.0 million.

Current wording

Net cash used in financing activities for the six months ended June 30, 2023 was $1.1 million, primarily attributable to payments of contingent consideration for business combination of $1.0 million.