Astera Labs Inc

Previous wording

Building on years of experience with a singular focus on addressing connectivity challenges in data-centric systems, we have developed and deployed our leading Intelligent Connectivity Platform built from the ground up for cloud and AI infrastructure. Our Intelligent Connectivity Platform is comprised of semiconductor-based, high-speed, mixed-signal connectivity products that integrate a matrix of microcontrollers and sensors, and COSMOS, our software suite, which is embedded in our connectivity products and integrated into our customers’ systems.

Current wording

Building on years of experience with a singular focus on addressing connectivity challenges in data-centric systems, we have developed and deployed our Intelligent Connectivity Platform built from the ground up for cloud and AI infrastructure. Our Intelligent Connectivity Platform is comprised of semiconductor-based, high-speed, mixed-signal connectivity products that integrate a matrix of microcontrollers and sensors, and COSMOS, our software suite, which is embedded in our connectivity products and integrated into our customers’ systems.

Previous wording

Our patented software-defined platform approach delivers critical connectivity performance, enables flexibility and customization, and supports observability and predictive analytics. This approach efficiently addresses the data, network, and memory bottlenecks, scalability, and other unique infrastructure requirements of our hyperscaler and system OEM customers.

Current wording

Our patented software-defined platform approach delivers critical connectivity performance, enables flexibility and customization, and supports observability and predictive analytics. This approach is designed toefficiently address the data, network, and memory bottlenecks, scalability, and other unique infrastructure requirements of our hyperscaler and system OEM customers.

Previous wording

Today, our connectivity solutions are at the heart of major AI platforms deployed worldwide featuring both commercially available Graphic Processing Units (“GPUs”) and proprietary AI accelerators. In the last four years, we have successfully introduced three revenue-generating product families across multiple form factors including ICs, boards, and modules, shipping millions of devices across all of the major hyperscalers. Our products, which include Aries PCIe®/CXL™Smart DSP Retimers, Taurus Ethernet Smart Cable Modules™, and Leo CXL Memory Connectivity Controllers, leverage our ICs which are built upon industry standard connectivity protocols such as Peripherals Component Interconnect Express (“PCIe”), Ethernet, and Computer Express Link (“CXL”), to address the growing demand for purpose-built connectivity solutions that solve critical data, network, and memory bottlenecks inherent in cloud and AI infrastructure.

Current wording

Today, our connectivity solutions are at the heart of major AI platforms deployed worldwide featuring both commercially available Graphic Processing Units (“GPUs”) and proprietary AI accelerators. We offer our customers four product families across multiple form factors including ICs, boards, and modules, shipping millions of devices across all of the major hyperscalers. Our products, which include Aries PCIe®/CXL®Smart DSP Retimers, Taurus Ethernet Smart Cable Modules™, Leo CXL Memory Connectivity Controllers, and Scorpio Smart Fabric Switches, are built upon industry standard connectivity protocols such as Peripherals Component Interconnect Express (“PCIe”), Ethernet, and Computer Express Link (“CXL”), to address the growing demand for purpose-built connectivity solutions that solve critical data, network, and memory bottlenecks inherent in cloud and AI infrastructure.

Previous wording

Since our inception, we have created and commercialized first-to-market PCIe, Ethernet, and CXL products. We have become a trusted partner and a proven supplier to our hyperscaler and system OEM customers. We have experienced strong growth since our founding in October 2017, and particularly since the commercial launch of Aries in 2020. Our revenue grew from $34.8 million in 2021 and $79.9 million in 2022 to $115.8 million in 2023, driven by a sizable increase in demand for our products. We have made significant investments in the design and development of new products and platform enhancements, and, as a result, we have not yet achieved profitability on an annual basis. Our revenue was $76.9 million and$10.7 million for the three months ended June 30, 2024 and 2023, respectively, and $142.1 million and$28.4 million for the six months ended June 30, 2024 and 2023, respectively. Ourgross profit was$59.9 million and $8.4 million for the three months ended June 30, 2024 and 2023, respectively, and $110.4 million and $12.7 million for the six months ended June 30, 2024 and 2023, respectively. We incurred net losses of$7.5 million and $20.0 million for the three months ended June 30, 2024 and 2023, respectively, and$100.5 million and $37.5 million for the six months ended June 30, 2024 and 2023, respectively.

Current wording

Since our inception, we have created and commercialized first-to-market PCIe, Ethernet, and CXL products. We have become a trusted partner and a proven supplier to our hyperscaler and system OEM customers. We have experienced strong growth since the commercial launch of Aries in 2020. Our revenue grew from $34.8 million in 2021, $79.9 million in 2022, and$115.8 million in 2023 to$255.2 million for the nine months ended September 30, 2024, driven by a sizable increase in demand for our products. We have made significant investments in the design and development of new products and platform enhancements, and, as a result, we have not yet achieved profitability on an annual basis.

Previous wording

Our revenue for the three months ended June 30, 2024 increased by 619% compared tothe three months ended June 30, 2023, primarily due to an increase in overall shipments driven by higher demand for our Aries products. Gross margin decreased by 110 basis points (“bps”) to 77.9% for the three months ended June 30, 2024 from 79.0% for the three months ended June 30, 2023, primarily driven by inventory write-downs partially offset by the higher gross margin as a result of the product mix.

Current wording

Our revenue for the three months ended September 30, 2024 increased by 206% compared tothe three months ended September 30, 2023, primarily due to an increase in overall unit shipments driven by higher demand for our Aries products. Gross margin increased by 160 basis points (“bps”) to 77.7% for the three months ended September 30, 2024 from 76.1% for the three months ended September 30, 2023, primarily driven by an increase in product mix and lower average unit cost.

Previous wording

Our revenue for the six months ended June 30, 2024, increased by 401% compared tothe six months ended June 30, 2023, primarily driven by higher demand for our Aries products. Gross margin increased 3,290 bps to 77.7%for the six months ended June 30, 2024 from 44.8% for the sixmonths ended June 30, 2023, primarily driven by an increase in overall shipments, product mix, and an $8.2 million decrease from inventory write-downs. The inventory write-downs during the six months ended June 30, 2023 were due primarily to inventory inexcess of our sales forecast for a legacy customer product.

Current wording

Our revenue for the nine months ended September 30, 2024, increased by 291% compared tothe nine months ended September 30, 2023, primarily due to an increase in overall unit shipments driven by higher demand for our Aries products. Gross margin increased 1,520 bps to 77.7%for the nine months ended September 30, 2024 from 62.5% for the nine months ended September 30, 2023, primarily driven by an increase in product mix, lower average unit cost, and a $9.2 million decrease from inventory write-downs. The inventory write-downs during the nine months ended September 30, 2023 were due primarily to inventory inexcess of our sales forecast for a legacy customer product.

Previous wording

Operating expenses increased by $58.1 million, or 223%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by an increase of $40.3 million in non-cash stock-based compensation expense resulting from the time-based vesting and settlement of restricted stock units (“RSUs”), and a $10.3 million higher in personnel-related expenses as a result of a 55%increase in headcount.

Current wording

Operating expenses increased by $66.7 million, or 222%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily driven by an increase of $42.7 million in non-cash stock-based compensation expense resulting from the time-based vesting of restricted stock units (“RSUs”) after the liquidity event condition was satisfied in connection with our IPO, and a $11.5 million higher in personnel-related expenses as a result of a 71%increase in headcount.

Previous wording

The vast majority of our revenue consists of product sales and a small portion is currently derived from engineering services. Product sales consists primarily of shipments of our Intelligent Connectivity Platform solution. Engineering services revenue consists of engineering fees associated with customer-defined engineering services for some of our products. Engineering services revenue accounted for a small percentage of total revenue for each of the six months ended June 30, 2024 and 2023.

Current wording

The vast majority of our revenue consists of product sales and a small portion is derived from engineering services. Product sales consists primarily of shipments of our Intelligent Connectivity Platform solutions. Engineering services revenue consists of engineering fees associated with customer-defined engineering services. Engineering services revenue accounted for an immaterial percentage of total revenue for each of the nine months ended September 30, 2024 and 2023.

Previous wording

While amortization of capitalized production masks has not been historically material, we expect to incur more significant costs in the future as we continue to increase the number of additional products.

Current wording

While amortization of capitalized production masks has historically not been material, we expect to incur significant amortization costs in the future as we continue to increase the number of additional products.

Previous wording

Pre-production engineering mask costs are expensed. We capitalize the costs of production masks with alternative future use. To determine if a production mask has alternative future use or benefits, we evaluate risks associated with developing new technologies and capabilities, and the related risks associated with entering new markets. Production masks that do not meet the criteria for capitalization will be expensed as research and development costs.

Current wording

Pre-production engineering mask costs are expensed. We capitalize the costs of production masks with alternative future use and amortize these costs on a straight line basis over the useful lives. To determine if a production mask has alternative future use or benefits, we evaluate risks associated with developing new technologies and capabilities, and the related risks associated with entering new markets. Production masks that do not meet the criteria for capitalization are expensed as research and development costs.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Comparison of the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Total revenue increased $66.2 million, or 619%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to a 555% increase in overall shipments driven by higher demand for our Aries products. The increase in revenue was also attributable to overall average selling prices driven by an increased mix of our second-generation Aries retimers, which have a higher average selling price than our first-generation.

Current wording

Total revenue increased $76.2 million, or 206%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a 197% increase in overall unit shipments driven by higher demand for our Aries products. The increase in revenue was also attributable to higher overall average selling prices resulting from an increased mix of our second-generation Aries retimers, which have a higher average selling price than our first-generation products.

Previous wording

Total revenue increased $113.8 million, or 401%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily due to a 399% increase in overall shipments driven by higher demand for our Aries products. The increase in revenue was also attributable to overall average selling prices driven by an increased mix of our second-generation Aries retimers, which have a higher average selling price than our first-generation.

Current wording

Total revenue increased $189.9 million, or 291%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to a 285% increase in overall unit shipments driven by higher demand for our Aries products. The increase in revenue was also attributable to higher overall average selling prices resulting from an increased mix of our second-generation Aries retimers, which have a higher average selling price than our first-generation products.

Previous wording

Total cost of revenue increased $14.7 million, or 656%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to a 555% increase in overall shipments and inventory write-downs, partially offset by lower average unit cost.

Current wording

Total cost of revenue increased $16.4 million, or 186%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to a 197% increase in overall unit shipments, partially offset by lower average unit cost.

Previous wording

Total cost of revenue increased $16.1 million, or 103%, for the six months ended June 30, 2024 compared to the sixmonths ended June 30, 2023, primarily due to a 399% increase in overall shipments partially offset by lower average unit cost andan$8.2 million decrease in inventory write-downs. The inventory write-downs during the six months ended June 30, 2023 were primarily due to inventory in excess of our sales forecast for a legacy customer product.

Current wording

Total cost of revenue increased $32.5 million, or 133%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily due to a 285% increase in overall unit shipments, partially offset by lower average unit cost anda$9.2 million decrease in inventory write-downs. The inventory write-downs during the nine months ended September 30, 2023 were primarily due to inventory in excess of our sales forecast for a legacy customer product.

Previous wording

Gross margin increased 3,290 bpsto 77.7% for the six months ended June 30, 2024 compared to 44.8% for the three months ended June 30, 2023. The increasewas primarily driven by an increase in overall shipments, product mix, and a net decrease of $8.2 million in inventory write-downs.

Current wording

Gross margin increased 1,520 bps to 77.7% for the nine months ended September 30, 2024 compared to 62.5% for the three months ended September 30, 2023. The increasewas primarily driven by an increase in overall product mix, lower average unit cost, and a net decrease of $9.2 million in inventory write-downs.

Previous wording

Research and development expense increased $22.2 million, or 124%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily due to a$11.3 million increase in non-cash stock-based compensation expense resulting from the time-based vesting of RSUs after the liquidity event vesting condition was satisfied in connection with our IPO, a $6.4 million higher in personnel-related expenses as a result of a 54%increase in headcount, and a $5.5 million increase in cost of software licenses and cloud hosting services related to our development projects.

Current wording

Research and development expense increased $30.0 million, or 146%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to a$12.9 million increase in non-cash stock-based compensation expense resulting from the time-based vesting of RSUs after the liquidity event vesting condition was satisfied in connection with our IPO, a $7.3 million increase in personnel-related expenses as a result of a 70%increase in headcount, and a $8.5 million increase in software licenses and cloud hosting services related to our development projects.

Previous wording

Research and development expense increased $60.5 million, or 183%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was attributable to a$39.6 million increase in non-cash stock-based compensation expense primarily due to the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO. Additionally, there was a $12.2 million higher in personnel-related expenses as a result of a 47%increase in headcount and a $8.4 million increase in cost of software licenses and cloud hosting services related to our development projects.

Current wording

Research and development expense increased $90.6 million, or 168%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was attributable to a$52.6 million increase in non-cash stock-based compensation expense primarily due to both RSUs that had previously met the time-based and liquidity event vesting conditions in connection with our IPO as well as RSUs with time-based vesting after the liquidity event. Additionally, there was a $19.6 million higher in personnel-related expenses as a result of a 54%increase in headcount and a $16.9 million increase in software licenses and cloud hosting services related to our development projects.

Previous wording

Sales and marketing expense increased $17.0 million, or 333%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Theincrease was primarily due to a$15.1 million increase in non-cash stock-based compensation expense resulting from the time-based vesting of RSUs after the liquidity event vesting condition was satisfied in connection with our IPO, and a $1.6 million higher in personnel-related expenses as a result of a 32% increase in headcount.

Current wording

Sales and marketing expense increased $17.7 million, or 322%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Theincrease was primarily due to a$15.5 million increase in non-cash stock-based compensation expense resulting from the time-based vesting of RSUs after the liquidity event vesting condition was satisfied in connection with our IPO, and a $1.7 million higher in personnel-related expenses as a result of a 52% increase in headcount.

Previous wording

Sales and marketing expense increased $68.1 million, or 718%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Theincr ease was attributable to a$64.3 million increase in non-cash stock-based compensation expense primarily due to the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO, and a $3.2 million higher in personnel-related expenses as a result of a 17% increase in headcount.

Current wording

Sales and marketing expense increased $85.8 million, or 572%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Theincr ease was attributable to a$79.8 million increase in non-cash stock-based compensation expense primarily due to both RSUs that had previously met the time-based and liquidity event vesting conditions in connection with our IPO as well as RSUs with time-based vesting after the liquidity event, and a $4.8 million increase in personnel-related expenses as a result of a 25% increase in headcount.

Previous wording

General and administrative expense increased $18.9 million, or 612%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily due to a$14.0 million increase in non-cash stock-based compensation expense resulting from the time-based vesting of RSUs after the liquidity event vesting condition was satisfied in connection with our IPO, and a $2.3 million higher in personnel-related expenses as a result of a 108%increase in headcount.

Current wording

General and administrative expense increased $18.9 million, or 479%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily due to a$14.3 million increase in non-cash stock-based compensation expense resulting from the time-based vesting of RSUs after the liquidity event vesting condition was satisfied in connection with our IPO, and a $2.5 million increase in personnel-related expenses as a result of a 107%increase in headcount, and a $1.0 million increase in professional services fees as we build out our public company infrastructure.

Previous wording

General and administrative expense increased $39.8 million, or 602%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was attributable to a$31.6 million increase in non-cash stock-based compensation expense primarily due to the time-based vesting and settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO, a $4.2 million higher in personnel-related expenses as a result of a 72%increase in headcount, and a $1.8 million increase in professional services fees as we building out our public company infrastructure.

Current wording

General and administrative expense increased $58.8 million, or 556%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was attributable to a$45.9 million increase in non-cash stock-based compensation expense primarily due to both RSUs that had previously met the time-based and liquidity event vesting conditions in connection with our IPO as well as RSUs with time-based vesting after the IPO, a $6.8 million higher in personnel-related expenses as a result of a 81%increase in headcount, and a $2.8 million increase in professional services fees as we build out our public company infrastructure.

Previous wording

For the three and six months ended June 30, 2024, interest income increased $8.7 million, or 560%, and $9.7 million, or 307%, compared to the three and six months ended June 30, 2023, respectively. The increase was primarily due to higher average short-term investments and cash equivalents balances primarily as a result of our IPO and higher interest rates.

Current wording

For the three and nine months ended September 30, 2024, interest income increased $9.2 million, or 533%, and $18.9 million, or 387%, compared to the three and nine months ended September 30, 2023, respectively. The increase was primarily due to higher average short-term investments and cash equivalents balances primarily as a result of our IPO.

Previous wording

Income tax (benefit) provision decreased $10.5 million, or 266%, for the three months ended June 30, 2024 compared tothree months ended June 30, 2023, primarily due to an increase in excess tax benefits related to exercised stock options, a foreign derived intangible income deduction, and U.S. research and development credits.

Current wording

Income tax provision increased $6.7 million, or 235%, for the three months ended September 30, 2024 compared tothree months ended September 30, 2023, primarily due to an increase in taxable income partially offset by excess tax benefits from the foreign-derived intangible income deduction, a significant increase in stock-based compensation tax deduction, and the U.S. research and development credits.

Previous wording

We define non-GAAP gross profit as gross profit presented in accordance with GAAP, adjusted to exclude stock-based compensation expenses. The non-GAAP gross margin is non-GAAP gross profit divided by revenue. We have presented non-GAAP gross profit because we consider non-GAAP gross profit to be a useful metric for investors and other users of our financial information in evaluating our operating performance asit excludes the impact of stock-based compensation, acharge that can vary from period to period for reasons that are unrelated to our core operating performance. This metric also provides investors and other users of our financial information with an additional tool to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Current wording

We define non-GAAP gross profit as gross profit presented in accordance with GAAP, adjusted to exclude stock-based compensation expenses. The non-GAAP gross margin is non-GAAP gross profit divided by revenue. We have presented non-GAAP gross profit because we consider non-GAAP gross profit to be a useful metric for investors and other users of our financial information in evaluating our operating performance asit excludes the impact of stock-based compensation, acharge that can vary from period to period for reasons that are unrelated to our core operating performance. This metric also provides investors and other users of our financial information with an additional tool to eliminate the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Previous wording

We define non-GAAP operating income (loss) as operating loss presented in accordance with GAAP, adjusted to exclude stock-based compensation expenses and employer payroll taxes related to the time-based vesting and net settlement of RSUs with a liquidity event-based vesting condition that was satisfied in connection with the IPO. We have presented non-GAAP operating income(loss) because we consider non-GAAP operating income (loss) to be a useful metric for investors and other users of our financial information in evaluating our operating performance as it excludes the impact of stock-based compensation expense and employer payroll taxes related to the time-based vesting and net settlement of restricted stock units in connection with our IPO, a charge that can vary from period to period for reasons that are unrelated to our core operating performance. This metric also provides investors and other users of our financial information with an additional tool to compare business performance across companies and periods, while eliminating the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Current wording

We define non-GAAP operating income (loss) as operating loss presented in accordance with GAAP, adjusted to exclude stock-based compensation expenses and employer payroll taxes related to the time-based vesting and net settlement of RSUs with a liquidity event-based vesting condition that was satisfied in connection with the IPO. We have presented non-GAAP operating income(loss) because we consider non-GAAP operating income (loss) to be a useful metric for investors and other users of our financial information in evaluating our operating performance as it excludes the impact of stock-based compensation expense and employer payroll taxes related to the time-based vesting and net settlement of restricted stock units in connection with our IPO, a charge that can vary from period to period for reasons that are unrelated to our core operating performance. This metric also provides investors and other users of our financial information with an additional toolto eliminate the effects of items that may vary for different companies for reasons unrelated to core operating performance.

Previous wording

(3) The non-GAAP tax rate is calculated based on the tax laws in the jurisdictions in which we operate and excludes the impact of stock-based compensation expense and associated employer payroll taxes relate to stock-based compensation from our IPO. For boththe three and six months ended June 30, 2024, the non-GAAP tax rate was approximately 23%. Tax adjustments for the three and six months ended June 30, 2023 were not material.

Current wording

(3) The non-GAAP tax rate is calculated based on the tax laws in the jurisdictions in which we operate and excludes the impact of stock-based compensation expense, employer payroll taxes relate to stock-based compensation from our IPO, and one-off discrete tax adjustments that are unrelated to our core operating performance. Forthe three and nine months ended September 30, 2024, the non-GAAP tax rate was approximately 15% and 19%, respectively. Tax adjustments for the three and nine months ended September 30, 2023 were not material.

Previous wording

Since our inception, we have financed our operations primarily through proceeds from theissuance of our redeemable convertible preferred stock, our IPO, and cash generated from the sale of our products. As of June 30, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $831.0 million and working capital of $827.2 million. Our principal use of cash is to fund our operations, invest in research and development, fund production mask capital expenditures and to support our overall growth.

Current wording

Since our inception, we have financed our operations primarily through proceeds from theissuance of our redeemable convertible preferred stock, our IPO, and cash generated from the sale of our products. As of September 30, 2024, our principal sources of liquidity were cash, cash equivalents, and marketable securities of $886.8 million and working capital of $857.5 million. Our principal use of cash is to fund our operations, invest in research and development, fund production mask capital expenditures and to support our overall growth.

Previous wording

We have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $225.9 millionas of June 30, 2024. We believe that our current cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least the next 12 months and beyond. Our future capital requirements, however, will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, capital expenditures for production masks, the continuing market acceptance of our products, and the use of cash to fund potential mergers or acquisitions. In the event that additional financing is required from outside sources, we may seek to raise additional funds through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition could be adversely affected.

Current wording

We have generated significant losses from operations and negative cash flows from operating activities in the past as reflected in our accumulated deficit of $233.5 millionas of September 30, 2024. We believe that our current cash, cash equivalents, and marketable securities will be sufficient to fund our operations for at least the next 12 months and beyond. Our future capital requirements, however, will depend on many factors, including our growth rate, the timing and extent of our sales and marketing and research and development expenditures, capital expenditures for production masks, the continuing market acceptance of our products, and the use of cash to fund potential mergers or acquisitions. In the event that additional financing is required from outside sources, we may seek to raise additional funds through equity, equity-linked arrangements, and debt. If we are unable to raise additional capital when desired and at reasonable rates, our business, results of operations, and financial condition could be adversely affected.

Previous wording

Net cash provided by operating activities for the six months ended June 30, 2024 of $33.5 million included a net loss of $100.5 million, partially offset by non-cash charges of $143.6 million primarily related to $140.8 million in stock-based compensation expense, a $10.9 million increase in accrued expenses and other liabilities primarily due to accrued customer deposits and timing of payments, and a $5.8 million increase in accounts payable primarily due to timing of payments. These net cash flows provided by operating activities were partially offset by an increase of $13.9 million in accounts receivable due to higher product sales and timing of customer payments, a $6.0 million increase in inventory for anticipated future demand, and a $5.4 million increase in prepaid expenses and other assets primarily related to accrued interest receivable on our short-term investments.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2024 of $97.0 million resulted primarily from non-cash charges of $187.3 million primarily related to $186.4 million in stock-based compensation expense and cash provided by operating assets and liabilities of $17.8 million offset by a net loss of $108.1 million. Cash provided by operating assets and liabilities during the period was primarily from $31.1 million increase in accrued expenses and other liabilities primarily due to accrued customer deposits and timing of payments, and a $11.7 million increase in accounts payable primarily due to timing of payments. The net cash flow provided by operating assets and liabilities were partially offset by an increase of $17.1 million in accounts receivable due to higher product sales and timing of customer payments, a $5.0 million increase in prepaid expenses and other assets primarily related to accrued interest receivable on our short-term investments, $1.7 million decrease in operating lease liability, and a $1.3 million increase in inventory.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2023 of $26.8 million included a net loss of $37.5 million, a $7.7 million decrease in accounts payable primarily due to timing of payments, and a $6.8 million decrease in accrued expense and other liabilities primarily due to timing of payments. These cash flow uses were partially offset by non-cash charges of $15.2 million primarily consisting of inventory write-downs and stock-based compensation expense, and a $9.1 million decrease in accounts receivable due to timing of customer payments.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2023 of$27.1 million resulted primarily a net loss of $40.6 million and cash used in operating assets and liabilities of $5.6 million offset by non-cash charges of $19.1 million. Cash used in operating assets and liabilities during the period was primarily from a $6.5 million increase in accounts receivable due to timing of customer payments and $1.0 million of lower operating lease liabilities due to timing. These cash flow uses were partially offset by a $2.2 million increase accrued expenses and other liabilities related to growth in our operations.

Previous wording

Net cash used in investing activities for the six months ended June 30, 2024 of $306.7 millionwas the result of $345.8 millionin purchases of marketable securities and $2.1 millionin purchases of property and equipment, partially offset by$20.8 millionin maturities of marketable securities and$20.4 million in proceeds from sales of marketable securities.

Current wording

Net cash used ininvesting activities for the nine months ended September 30, 2024 of $666.1 millionwas the result of $724.9 millionin purchases of marketable securities and $18.8 millionin purchases of property and equipment, partially offset by$77.6 million in proceeds from sales and maturities of marketable securities.

Previous wording

Net cash provided by investing activities for the six months ended June 30, 2023 of$44.5 million was the result of$54.7 million in proceeds from sales of marketable securities and$18.0 million in maturities of marketable securities. This was partially offset by$27.3 million in purchases of marketable securities and$1.0 million in purchases of property and equipment.

Current wording

Net cash used in investing activities for the nine months ended September 30, 2023 of$11.8 million was the result of$102.8 million in purchases of marketable securities and$1.8 million in purchases of property and equipment. This was partially offset by$92.8 million in proceeds from sales and maturities of marketable securities.

Previous wording

Net cash provided by financing activities for the six months ended June 30, 2024 of $649.2 million was the result of $672.2 million in proceeds from our IPO, net of underwriting discounts and commissions, and $1.9 million in proceeds from the exercise of stock options net of repurchases. This was partially offset by $20.1 million in tax withholding related to net share settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO, and $4.8 million in payments of deferred offering costs.

Current wording

Net cash provided by financing activities for the nine months ended September 30, 2024 of $650.2 million was the result of $672.2 million in proceeds from our IPO, net of underwriting discounts and commissions, and $2.9 million in proceeds from exercises of stock options net of repurchases. This was partially offset by $20.1 million in tax withholding related to net share settlement of RSUs that had previously met the time-based vesting condition and for which the liquidity event vesting condition was satisfied in connection with our IPO, and $4.8 million in payments of deferred offering costs.

Previous wording

Our condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of condensed consolidated financial statements in accordance with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the period presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected.

Current wording

Our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q are prepared in accordance with GAAP. The preparation of unaudited condensed consolidated financial statements in accordance with GAAP requires us to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the period presented. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations, and cash flows could be affected.

Previous wording

For more information, see Note 1 to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Current wording

For more information, see Note 1 to our Unaudited Condensed Consolidated Financial Statementsset forth in Part I, Item 1 of this Quarterly Report on Form 10-Q.