Update xx

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2022~~2023


☐	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: 001-39709

CVENT HOLDING CORP.

(Exact Name of Registrant as Specified in its Charter)


Delaware	98-1560055
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1765 Greensboro Station Place, 7th Floor Tysons, VA	22102
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (703) 226-3500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.0001 per share

CVT

The Nasdaq Global Market

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. Yes ☒ No ☐

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). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
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~~May 281, ~~2022~~2023, the registrant had ~~484~~491,~~647~~620,~~072~~840 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	21
	Condensed Consolidated Balance Sheets	21
	Condensed Consolidated Statements of Operations and Comprehensive Loss	32
	Condensed Consolidated Statements of Changes in Stockholders' Equity	43
	Condensed Consolidated Statements of Cash Flows	54
	Notes to Unaudited Condensed Consolidated Financial Statements	65
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1816
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3529
Item 4.	Controls and Procedures	3529
PART II.	OTHER INFORMATION	3630
Item 1.	Legal Proceedings	3630
Item 1A.	Risk Factors	3630
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3630
Item 3.	Defaults Upon Senior Securities	3630
Item 4.	Mine Safety Disclosures	3630
Item 5.	Other Information	3630
Item 6.	Exhibits	3630
Signatures		3832

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

CVENT HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	September 30, 2022			December 31, 2021
	March 31, 2023			December 31, 2022
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	~~107~~102,~~708~~220		$	~~126~~99,~~526~~108
Restricted cash		2,~~787~~535			~~103~~815
Short-term investments		253,~~854~~872			~~538~~40,925
Accounts receivable, net of allowance of $1.9 million and $4.5 million, respectively		76,000			112,251
Accounts receivable, net of allowance of $1.8 million and $2.6 million, respectively		97,018			120,362
Capitalized commission, net		2227,~~649~~473			2526,~~393~~685
Prepaid expenses and other current assets		2124,~~038~~759			2017,~~376~~819
Total current assets		~~233~~307,~~036~~877			~~285~~305,~~187~~714
Property and equipment, net		14,~~617~~577			15,~~334~~250
Capitalized software development costs, net		~~100~~92,~~293~~759			~~108~~96,~~851~~959
Intangible assets, net		~~184~~161,~~841~~076			~~221~~172,~~371~~781
Goodwill		1,620,~~597~~270			1,~~617~~620,~~880~~312
Operating lease-right-of-use assets		2228,~~124~~453			2820,~~370~~398
Capitalized commission, non-current, net		2123,~~489~~828			2223,~~999~~477
Deferred tax assets, non-current		2,~~279~~440			2,~~403~~425
Other assets, non-current, net		5,~~941~~493			38,~~684~~617
Total assets	$	2,~~205~~256,~~217~~773		$	2,~~306~~265,~~079~~933
Liabilities and stockholders’ equity
Current liabilities:
Current portion of long-term debt	$	-		$	-
Accounts payable		42,~~146~~804			2,~~675~~147
Accrued expenses and other current liabilities		7588,~~370~~993			7982,~~827~~249
Fees payable to customers		6463,~~501~~589			2438,~~982~~379
Operating lease liabilities, current		11,~~170~~121			11,~~290~~070
Deferred revenue		~~246~~302,~~239~~216			~~239~~267,~~843~~882
Total current liabilities		~~401~~468,~~426~~723			~~358~~401,~~617~~727
Deferred tax liabilities, non-current		1618,~~717~~126			1618,~~695~~103
Long-term debt, net		~~165~~138,000			~~262~~208,~~302~~000
Operating lease liabilities, non-current		2226,~~191~~790			3019,~~809~~712
Other liabilities, non-current		86,~~097~~413			87,~~200~~526
Total liabilities		~~613~~658,~~431~~052			~~676~~655,~~623~~068
Commitments and contingencies (Note 13)
Commitments and contingencies (Note 12)
Stockholders’ equity:
Common stock, $0.0001 par value, 1,500,000,000 shares authorized at September 30, 2022 and December 31, 2021; 484,488,616 and 481,121,695 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively		48			48
Common stock, $0.0001 par value, 1,500,000,000 shares authorized at March 31, 2023 and December 31, 2022, respectively; 491,358,090 and 488,296,792 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		49			49
Additional paid-in capital		2,~~538~~591,~~829~~042			2,~~483~~571,~~761~~424
Accumulated other comprehensive loss		(147,~~362~~850	)		(28,~~746~~731	)
Accumulated deficit		(~~932~~984,~~729~~520	)		(~~851~~951,~~607~~877	)
Total stockholders’ equity		1,~~591~~598,~~786~~721			1,~~629~~610,~~456~~865
Total liabilities and stockholders’ equity	$	2,~~205~~256,~~217~~773		$	2,~~306~~265,~~079~~933

See accompanying notes to the unaudited condensed consolidated financial statements

CVENT HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2022			2021			2022			2021
	2023			2022
Revenue	$	~~161~~166,~~321~~205		$	~~134~~137,~~058~~356		$	~~459,639~~		$	~~374,159~~
Cost of revenue		6360,~~011~~691			5056,~~635~~200			~~184,772~~			~~140,479~~
Gross profit		98105,~~310~~514			8381,~~423~~156			~~274,867~~			~~233,680~~
Operating expenses:
Sales and marketing		4244,~~869~~960			3740,~~161~~091			~~131,787~~			~~99,069~~
Research and development		3435,~~232~~973			2531,~~685~~406			~~98,766~~			~~72,016~~
General and administrative		2439,~~685~~768			2524,~~358~~951			~~75,633~~			~~63,711~~
Intangible asset amortization, exclusive of amounts included in cost of revenue		1211,~~170~~713			12,~~757~~154			~~36,484~~			~~38,721~~
Total operating expenses		~~113~~132,~~956~~414			~~100~~108,~~961~~602			~~342,670~~			~~273,517~~
Loss from operations		(1526,~~646~~900	)		(1727,~~538~~446	)		~~(67,803~~	)		~~(39,837~~	)
Interest expense		(12,~~857~~647	)		(72,~~546~~592	)		~~(7,054~~	)		~~(22,717~~	)
Amortization of deferred financing costs and debt discount		(~~157~~158	)		(~~938~~320	)		~~(734~~	)		~~(2,823~~	)
Loss on extinguishment of debt		-			-			(3,219	)		-
Other income, net		1,169			260
Other income, net		1,094			1,864			1,979			6,135
Loss before income taxes		(28,536	)		(30,098	)
Loss before income taxes		(16,566	)		(24,158	)		(76,831	)		(59,242	)
Provision for income taxes		4,107			1,291
Provision for income taxes		1,667			1,968			4,292			5,294
Net loss	$	(32,643	)	$	(31,389	)
Net loss	$	(18,233	)	$	(26,126	)	$	(81,123	)	$	(64,536	)
Other comprehensive income:
Other comprehensive loss:
Other comprehensive income		881			131
Foreign currency translation loss		(6,513	)		(2,001	)		(11,617	)		(2,347	)
Comprehensive loss	$	(31,762	)	$	(31,258	)
Comprehensive loss	$	(24,746	)	$	(28,127	)	$	(92,740	)	$	(66,883	)
Basic and diluted net loss per common share	$	(0.07	)	$	(0.07	)
Basic and diluted net loss per common share	$	(0.04	)	$	(0.06	)	$	(0.17	)	$	(0.15	)
Basic and diluted weighted-average common shares outstanding		488,983,183			481,144,118
Basic and diluted weighted-average common shares outstanding		483,591,690			416,483,028			482,128,762			416,428,569

See accompanying notes to the unaudited condensed consolidated financial statements

CVENT HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)

	Common Stock				Amount					Accumulated
	Shares		Amount		Additional paid-in capital		Accumulated deficit			other comprehensive income / (loss)			Total stockholders’ equity
Balance as of December 31, 2021		481,121,695	$	48	$	2,483,761	$	(851,607	)	$	(2,746	)	$	1,629,456
Balance as of December 31, 2022		488,296,792	$	49	$	2,571,424	$	(951,877	)	$	(8,731	)	$	1,610,865
Stock-based compensation expense		-		-		914,~~768~~574		-			-			914,~~768~~574
Net loss		-		-		-		(3132,~~389~~643	)		-			(3132,~~389~~643	)
Common stock issued under share-based compensation plans		~~144~~3,~~701~~061,298		-		~~443~~5,044		-			-			~~443~~5,044
Foreign currency translation loss		-		-		-		-			131			131
Other comprehensive income		-		-		-		-			881			881
Balance as of March 31, 2022		481,266,396	$	48	$	2,493,972	$	(882,996	)	$	(2,615	)	$	1,608,409
Balance as of March 31, 2023		491,358,090	$	49	$	2,591,042	$	(984,520	)	$	(7,850	)	$	1,598,721
Stock-based compensation expense		-		-		17,440		-			-			17,440
Net loss		-		-		-		(31,500	)		-			(31,500	)
Common stock issued under share-based compensation plans		1,412,804		-		631		-			-			631
Foreign currency translation loss		-		-		-		-			(5,234	)		(5,234	)
Balance as of June 30, 2022		482,679,200	$	48	$	2,512,043	$	(914,496	)	$	(7,849	)	$	1,589,746
Stock-based compensation expense		-		-		19,831		-			-			19,831
Net loss		-		-		-		(18,233	)		-			(18,233	)
Common stock issued under share-based compensation plans		1,809,416		-		6,955		-			-			6,955
Foreign currency translation loss		-		-		-		-			(6,513	)		(6,513	)
Balance as of September 30, 2022		484,488,616	$	48	$	2,538,829	$	(932,729	)	$	(14,362	)	$	1,591,786

	Common Stock					Amount						Accumulated
	Shares			Amount		Additional paid-in capital			Accumulated deficit			other comprehensive income / (loss)			Total stockholders’ equity
Balance as of December 31, 2020		416,303,325		$	42	$	1,936,406		$	(765,528	)	$	(69	)	$	1,170,851
Balance as of December 31, 2021		481,121,695		$	48	$	2,483,761		$	(851,607	)	$	(2,746	)	$	1,629,456
Stock-based compensation expense		-			-		~~608~~9,768			-			-			~~608~~9,768
Net loss		-			-		-			(1631,~~561~~389	)		-			(1631,~~561~~389	)
Common stock issued under share-based compensation plans		~~221~~144,~~001~~701			-		~~319~~443			-			-			~~319~~443
Common stock repurchased		(123,435	)		-		(122	)		-			-			(122	)
Other comprehensive income		-			-		-			-			131			131
Foreign currency translation loss		-			-		-			-			(621	)		(621	)
Balance as of March 31, 2022		481,266,396		$	48	$	2,493,972		$	(882,996	)	$	(2,615	)	$	1,608,409
Balance as of March 31, 2021		416,400,891		$	42	$	1,937,211		$	(782,089	)	$	(690	)	$	1,154,474
Stock-based compensation expense		-			-		7,815			-			-			7,815
Net loss		-			-		-			(21,847	)		-			(21,847	)
Common stock issued under share-based compensation plans		82,137			-		200			-			-			200
Foreign currency translation loss		-			-		-			-			276			276
Balance as of June 30, 2021		416,483,028		$	42	$	1,945,226		$	(803,936	)	$	(414	)	$	1,140,918
Stock-based compensation expense		-			-		8,387			-			-			8,387
Net loss		-			-		-			(26,126	)		-			(26,126	)
Foreign currency translation loss		-			-		-			-			(2,001	)		(2,001	)
Balance as of September 30, 2021		416,483,028		$	42	$	1,953,613		$	(830,062	)	$	(2,415	)	$	1,121,178

See accompanying notes to the unaudited condensed consolidated financial statements

CVENT HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2022			2021
	2023			2022
Operating activities:
Net loss	$	(8132,~~123~~643	)	$	(6431,~~536~~389	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		9130,~~211~~582			9330,~~142~~187
Amortization of the right-of-use assets		52,~~940~~231			62,~~817~~077
Allowance for expected credit losses, net		~~378~~(462	)		~~5,549~~279
Amortization of deferred financing costs and debt discount		~~734~~158			~~2,823~~320
Amortization of capitalized commission		238,~~751~~924			217,~~568~~948
Unrealized foreign currency transaction loss		640			19
Unrealized foreign currency transaction (gain)/loss		(1,020	)		287
Loss on extinguishment of debt		3,219			—
Stock-based compensation		14,556			9,768
Stock-based compensation		46,008			16,811
Change in deferred taxes		7			2
Change in deferred taxes		(8	)		1,313
Change in operating assets and liabilities
Change in operating assets and liabilities, net of business combinations:
Accounts receivable		23,932			18,968
Accounts receivable		34,210			52,611
Prepaid expenses and other assets		(17,840	)		(7,021	)
Prepaid expenses and other assets		(923	)		(6,064	)
Capitalized commission, net		(13,700	)		(13,581	)
Capitalized commission, net		(27,724	)		(26,706	)
Accounts payable, accrued expenses and other liabilities		47,168			16,783
Accounts payable, accrued expenses and other liabilities		45,611			8,999
Operating lease liability		(3,158	)		(2,864	)
Operating lease liability		(8,429	)		(9,666	)
Deferred revenue		33,790			48,160
Deferred revenue		7,659			18,878
Net cash provided by operating activities		92,525			79,924
Net cash provided by operating activities		141,154			121,558
Investing activities:
Purchase of property and equipment		(52,~~705~~356	)		(21,~~768~~375	)
Capitalized software development costs		(3812,~~413~~725	)		(3011,~~272~~891	)
Purchase of short-term investments		(45,164	)		(31,435	)
Purchase of investments		(56,051	)		(21,238	)
Maturities of short-term investments		42,848			28,739
Maturities of investments		46,127			16,824
Proceeds from divestiture		135			122
Net cash used in investing activities		(25,005	)		(17,680	)
Acquisitions, net of cash acquired		(3,552	)		(14,769	)
Net cash used in investing activities		(49,851	)		(50,383	)
Financing activities:
Principal repayments on first lien term loan		(265,696	)		(5,951	)
Principal repayments of revolving credit facility		(115,000	)		—
Principal repayments of revolving credit facility		(120,000	)		(13,400	)
Proceeds from revolving credit facility		45,000			—
Proceeds from revolving credit facility		285,000			—
Proceeds from exercise of stock options		5,127			510
Payment of debt issuance costs		(3,141	)		—
Net cash (used in) provided by financing activities		(64,873	)		510
Proceeds from exercise of stock options		7,822			522
Effect of exchange rate changes on cash, cash equivalents and restricted cash		2,185			(1,209	)
Repurchase of common stock		—			(57	)
Change in cash, cash equivalents, and restricted cash		4,832			61,545
Payments of tax withholdings on vesting of restricted stock units		(31	)		—
Cash, cash equivalents, and restricted cash, beginning of period		99,923			126,629
Net cash used in financing activities		(96,046	)		(18,886	)
Cash, cash equivalents, and restricted cash, end of period	$	104,755		$	188,174
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(11,391	)		(2,250	)
Change in cash, cash equivalents, and restricted cash		(16,134	)		50,039
Cash, cash equivalents, and restricted cash, beginning of period		126,629			65,470
Cash, cash equivalents, and restricted cash, end of period	$	110,495		$	115,509
Supplemental cash flow information:
Interest paid	$	62,~~955~~448		$	222,~~721~~584
Income taxes paid	$	~~5,177~~455		$	41,~~655~~743
Supplemental disclosure of non-cash investing and financing activities:
Outstanding payments for purchase of property and equipment at period end	$	~~327~~153		$	~~331~~382
Outstanding payments for capitalized software development costs at period end	$	~~983~~883		$	~~513~~887

See accompanying notes to the unaudited condensed consolidated financial statements

CVENT HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Description of Business

Cvent Holding Corp. (together with its subsidiaries, the “Company”) is the indirect parent company of Cvent, Inc. (“Cvent”).

The Company provides a cloud-based platform of enterprise event marketing and management and hospitality solutions with capabilities for both sides of the meetings and events ecosystem: (i) for marketers and meeting and event planners, through its Event Cloud offering and (ii) for hoteliers and venues, through its Hospitality Cloud. The Company’s integrated event marketing and management platform powers the event lifecycle by enabling marketers and event planners to automate and streamline the process of creating, promoting, managing, and measuring events for organizations of all sizes. Cvent solutions empower customers to deliver and maximize engagement across their event programs helping to forge deeper relationships with attendees, build brand advocacy and increase demand for their products and services. It also helps organizations more efficiently manage critical event processes, control spend and reduce meetings costs. The Company’s Hospitality Cloud provides hoteliers and venues with an integrated platform that enables properties to increase group and business transient revenue through a combination of cloud-based software products and targeted advertising to organizations that run events while they are in the process of sourcing their events. Hospitality Cloud solutions also improve purchasing intelligence through innovative demand management and business intelligence. By connecting event organizers to venues, the Company powers an entire ecosystem that increases Cvent’s “stickiness” and drives sales of its software offerings across its Event and Hospitality Cloud businesses.

~~On December 8, 2021 (the “Closing Date”), Dragoneer Growth Opportunities Corp. II (“Dragoneer”), a special purpose acquisition company, consummated the Business Combination~~ Agreement ~~(the “Business Combination Agreement”) dated July 23, 2021, by~~ and ~~among~~Plan ~~Dragoneer,~~of ~~Redwood Opportunity~~ Merger Sub, Inc., a Delaware corporation (“Merger Sub I”), Redwood Merger Sub LLC, a Delaware limited liability company (“Merger Sub II”) and Papay Topco, Inc., a Delaware corporation (“Legacy Cvent”).

~~Pursuant~~On toMarch ~~the~~14, ~~terms~~2023, of the ~~Business~~Company ~~Combination~~entered ~~Agreement,~~into aan ~~reverse~~Agreement ~~recapitalization between Dragoneer~~ and ~~Legacy~~Plan ~~Cvent~~of ~~was consummated, whereby (i)~~ Merger ~~Sub I merged with and into Legacy Cvent~~ (the “~~First~~ Merger Agreement”) ~~the~~with ~~time~~Capstone ~~the~~Borrower, ~~First~~Inc. ~~Merger becomes effective being referred to as the~~ (“~~First~~Capstone ~~Effective Time~~Parent”), and ~~the~~Capstone ~~separate corporate existence of~~ Merger Sub, IInc., ~~ceased~~a ~~and~~wholly ~~Legacy~~owned ~~Cvent~~subsidiary ~~became~~of ~~the~~Capstone ~~surviving~~Parent ~~corporation and~~ (ii“Merger Sub”). ~~promptly~~Capstone ~~following~~Parent ~~the First Effective Time, Legacy Cvent merged with~~ and ~~into~~ Merger Sub IIare ~~(the~~affiliates ~~“Second~~of ~~Merger”~~investment ~~and,~~funds ~~together~~affiliated with ~~the~~or ~~First~~managed ~~Merger,~~by ~~the~~affiliates ~~“Mergers”;~~of ~~the~~Blackstone ~~Mergers~~Inc. ~~together~~Pursuant ~~with~~to the ~~other~~Merger ~~transactions~~Agreement ~~contemplated~~and bysubject to the ~~Business~~satisfaction ~~Combination~~of ~~Agreement,~~customary ~~collectively,~~closing ~~the “Reverse Recapitalization Transaction”)~~conditions, ~~with~~ Merger Sub IIwill asbe ~~the~~merged ~~surviving~~with ~~company~~and ininto the ~~Second Merger and~~Company, ~~after~~with ~~giving effect to~~ the ~~Mergers,~~Company ~~Merger~~surviving ~~Sub~~as ~~II becoming~~ a wholly- owned subsidiary of ~~Dragoneer~~Capstone Parent (the ~~time~~“Merger”). ~~that~~If the ~~Second~~ Merger ~~becomes~~is ~~effective~~consummated, ~~being~~the ~~referred~~Company’s tocommon asstock (the “~~Second~~Company ~~Effective~~Common ~~Time~~Stock”). ~~Upon~~will ~~the~~be ~~closing~~delisted ~~of,~~from ~~and~~the inNasdaq ~~connection~~Global ~~with,~~Market ~~the~~and ~~Reverse~~deregistered ~~Recapitalization~~under ~~Transaction,~~the ~~Dragoneer~~Securities ~~became~~Exchange aAct ~~Delaware~~of ~~corporation~~1934, ~~and~~as ~~changed~~amended ~~its~~(the ~~name to~~ “~~Cvent~~Exchange ~~Holding Corp.~~Act”).

~~Macroeconomic~~The ~~Conditions~~Merger Agreement provides, among other things, that upon the terms and ~~COVID-19~~subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of Company Common Stock that is issued and outstanding as of immediately prior to the Effective Time (other than any shares of Company Common Stock that may be held by the Company as treasury stock or that are owned by Capstone Parent, Merger Sub or any other subsidiaries thereof, or any shares of common stock as to which appraisal rights have been properly exercised in accordance with Delaware law), will be automatically cancelled, extinguished and converted into the right to receive $8.50 per share, without interest thereon.

~~Global~~In ~~events,~~connection ~~such~~with asthe ~~recent geopolitical instability~~Merger, ~~inflation and~~ the ~~COVID-19~~Company ~~pandemic,~~expects ~~have created or contributed~~ to ~~uncertainty~~incur insignificant macroeconomic conditions, including changes in interest rates, supply chain disruptions, labor shortages and increased labor costs, which, in turn, could decrease overall economic activity, hinder economic growth or cause a recession in the United States or in the global economyexpenses. ~~Negative~~An ~~macroeconomic~~estimate ~~conditions may affect the businesses~~ of ~~the~~those ~~Company's~~expenses ~~clients,~~cannot ~~which~~be ~~could~~made ~~result~~at inthis ~~reduced~~time. ~~demand~~During ~~for~~ the ~~Company's~~three ~~services~~months orended ~~cancellations,~~March ~~increased demands for pricing accommodations or higher rates of delays in collection of~~31, ~~or losses on~~2023, the ~~Company's~~company ~~accounts~~incurred ~~receivable,~~$13.5 ~~which~~million ~~could adversely affect its results~~ of ~~operations.~~expenses Ifrelated ~~the Company is unable~~ to ~~offset~~the ~~any decrease in revenue by increasing sales to new or existing customers~~Merger, ~~its~~which ~~revenues~~are ~~may~~recorded ~~decline~~as orpart ~~grow at lower rates. The extent~~ of ~~the~~general ~~impact of ongoing macroeconomic conditions on the Company’s operational~~ and ~~financial~~administrative ~~performance~~expenses ~~is uncertain and will depend~~ on ~~political, social, economic and regulatory factors that are outside of~~ the Company's control, including but not limited to the incidence and severity of additional COVID-19 virus variants and actions that may be taken by regulators and businesses (including customers) in response to macroeconomic uncertainty. The Company considered the impact of the current economic environment and COVID-19 on its estimates and assumptions and determined that there were no material adverse impacts on the unaudited condensed consolidated financial statements ~~as of September 30, 2022 and for the three and nine months ended September 30, 2022~~. ~~As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods.~~

6The closing of the proposed Merger is subject to certain conditions, including the adoption of the Merger Agreement by stockholders representing a majority of the outstanding shares of Company Common Stock and the receipt of applicable regulatory approvals. The proposed Merger is expected to close mid-year 2023.

Trends and Economic Conditions

Global events, such as recent geopolitical instability, inflation and the COVID-19 pandemic have created or contributed to uncertainty in macroeconomic conditions, including changes in interest rates, supply chain disruptions, labor shortages and increased labor costs, which, in turn, could decrease overall economic activity, hinder economic growth or cause a recession in the United States or in the global economy. Negative macroeconomic conditions may affect the businesses of the Company's clients, which could result in reduced demand for the Company's services or cancellations, increased demands for pricing accommodations or higher rates of delays in collection of, or losses on, the Company's accounts receivable, which could adversely affect its results of operations. If the Company is unable to offset any decrease in revenue by increasing sales to new or existing customers, or offset higher costs through price increases, its revenues may decline or grow at lower rates. The extent of the impact of ongoing macroeconomic conditions on the Company’s operational and financial performance is uncertain and will depend on political, social, economic and regulatory factors that are outside of the Company's control, including but not limited to the incidence and severity of additional COVID-19 virus variants and actions that may be taken by regulators and businesses (including customers) in response to macroeconomic uncertainty. The Company considered the impact of the current economic environment and COVID-19 on its estimates and assumptions and determined that there were no material adverse impacts on the consolidated financial statements as of March 31, 2023 and

December 31, 2022 and for the three months ended March 31, 2023 and 2022, respectively. As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods.

2. Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim condensed consolidated financial statements as of ~~September~~March 3031, ~~2022~~2023 and for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022 include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. These unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting primarily of normal recurring accruals, necessary for a fair statement of the financial position as of ~~September~~March 3031, ~~2022~~2023, the results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, and cash flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022. The condensed consolidated balance sheet at December 31, ~~2021~~2022 was derived from audited annual financial statements and does not contain all of the footnote disclosures from the annual financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022.

Restricted Cash

Restricted cash represents amounts required to be held as collateral in a money market account for treasury management service agreements as well as payroll deductions from employees associated with the 2021 Employee Stock Purchase Plan (see Note 10). The Company held $2.85 million and $0.18 million of restricted cash as of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, respectively.

The following table presents the Company’s cash, cash equivalents and restricted cash by category in the Company’s condensed consolidated balance sheets (in thousands):

	September 30, 2022		December 31, 2021
	March 31, 2023		December 31, 2022
Cash and cash equivalents	$	~~107~~102,~~708~~220	$	~~126~~99,~~526~~108
Restricted cash		2,~~787~~535		~~103~~815
Cash, cash equivalents, and restricted cash	$	~~110~~104,~~495~~755	$	~~126~~99,~~629~~923

Revenue Recognition

The Company derives revenue from two primary sources: Event Cloud subscription-based solutions and Hospitality Cloud marketing and subscription-based solutions. Subscription services revenue consists primarily of fees to provide the Company’s customers with access to its cloud-based platform. Subscription service contracts do not provide customers with the right to take possession of the software, are non-cancellable, and do not contain rights of return. Hospitality Cloud marketing solutions primarily relate to digital advertising on the Company’s hosted venue sourcing networks. Revenue is recognized when control of these services is transferred to a customer. A time-elapsed method is used to measure progress for subscription contracts because control is transferred evenly over the contract term. For the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, the Company recognized approximately 8081.91% of its revenue from services transferred to the customer over time, with the remaining 1918.19% of revenue recognized at a point in time upon delivery, generally when an event occurred. The Company’s services are generally provided under annual and multi-year contracts with invoicing occurring in annual or quarterly installments at the beginning of each year, or quarter, as applicable, in the contract period. Revenue is presented net of sales and other taxes the Company collects on behalf of governmental authorities.

Certain contracts may include multiple distinct performance obligations which may consist of some or all of subscription services, marketing packages, and professional services. When an arrangement includes multiple performance obligations relating to SaaS subscriptions, which are concurrently delivered and have the same pattern of transfer to the customer (the services transfer to the customer ratably over the contract period), the entire contract value is recognized on a straight-line basis over the contract term. When an arrangement includes multiple performance obligations that do not have the same pattern of transfer to the customer, revenue is recognized at each performance obligation’s respective standalone selling price (“SSP”), when the performance obligations are satisfied. The SSP is the price at which the Company would sell a promised good or service separately to a customer. The Company estimates SSP based on internal margin analysis, competitor data, and other industry standards for SaaS-based companies.

Segment and Geographic Data

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in

one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

Property and equipment outside North America geographic locations represented 33.7% and 33.4% of total property and equipment, net as of September 30, 2022 and December 31, 2021, respectively, and are located primarily in India. The composition of the Company’s property and equipment between North America and locations outside of North America is set forth below (in thousands):

	September 30, 2022		December 31, 2021
North America	$	9,691	$	10,205
Outside North America		4,926		5,129
Total	$	14,617	$	15,334

Net Loss per Share of Common Stock

Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per share adjusts basic earnings per share for the potentially dilutive impact of stock options. As the Company has reported losses for all periods presented, all potentially dilutive securities, including stock options, are antidilutive and accordingly not considered, therefore basic net loss per share equals diluted net loss per share.

For the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, 5248,~~570~~782,~~335~~589 and 5155,~~718~~354,~~612~~536 stock options, respectively, were excluded from the computation of diluted net loss per share of common stock because including them would have been antidilutive.

~~Recently~~Operating ~~Adopted~~segments ~~Accounting~~are ~~Pronouncements~~defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer. The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance.

InProperty ~~October 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets~~ and ~~Contract~~equipment ~~Liabilities~~outside ~~from~~North ~~Contracts~~America ~~with~~geographic ~~Customers~~locations ~~(“ASU~~represented ~~2021-08”)~~32.9% ~~ASU 2021-08 will require companies to apply the definition of a performance obligation under Accounting Standards Codification (“ASC”) Topic 606 to recognize~~ and ~~measure contract assets and contract liabilities (i~~35.~~e.,~~5% ~~deferred~~of ~~revenue)~~total ~~relating~~property ~~to contracts with customers that are acquired in a business combination. Under current U.S. GAAP, an acquirer generally recognizes assets acquired~~ and ~~liabilities assumed in a business combination~~equipment, ~~including~~net ~~contract~~as ~~assets~~of ~~and~~March ~~contract liabilities arising from revenue contracts with customers~~31, at2023 ~~fair value on the acquisition date. ASU 2021-08 will result in the acquirer recording acquired contract assets~~ and ~~liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606. ASU 2021-08 is effective for fiscal years beginning after~~ December 1531, 2022, ~~with early adoption permitted. The Company adopted ASU 2021-08 on January 1~~respectively, ~~2022~~ and ~~will~~are ~~apply~~located ~~the~~primarily ~~provisions~~in ~~on a prospective basis~~India. The ~~adoption~~composition of ~~ASU~~the ~~2021-08~~Company’s ~~had~~property noand ~~impact~~equipment onbetween ~~the~~North ~~Company's~~America ~~operating~~and ~~results~~locations ~~for~~outside ~~the~~of ~~three~~North ~~and~~America ~~nine~~is ~~months~~set ~~ended~~forth ~~September~~below ~~30,~~(in ~~2022.~~ thousands):

In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance (“ASU 2021-10”). ASU 2021-10 requires additional disclosures regarding the nature of government assistance, the related accounting policy used to account for assistance, the affected line items and applicable amounts within the consolidated financial position and results of operations, and significant terms and conditions related to the assistance. Government assistance within the scope of ASC Topic 832 includes assistance that is administered by domestic, foreign, local, state, national governments, as well as departments, independent agencies and intergovernmental organizations. The updated guidance increases transparency of government assistance including 1) the type of assistance, 2) the entity's accounting for assistance, and 3) the effect of assistance on the entity's financial statements. The Company adopted ASU 2021-10 on January 1, 2022 and will apply the provisions on a prospective basis. During the three and nine months ended September 30, 2022, the Company received $0.7 million and $2.4 million, respectively, in government wage and rent subsidies, which are recorded as contra-expenses included in its cost of revenue and operating expenses on its unaudited interim condensed consolidated statement of operations and comprehensive loss.


	March 31, 2023		December 31, 2022
North America	$	9,785	$	9,829
Outside North America		4,792		5,421
Total	$	14,577	$	15,250

3. Revenue

Disaggregation of Revenue

The Company derives revenue from two primary sources: Event Cloud subscription-based solutions and Hospitality Cloud marketing and subscription-based solutions. They are principally generated from North America, which comprises the United States and Canada, with Canada representing ~~and~~ 2.~~2% and 2.1% of total revenue for each of the three months ended September 30, 2022 and 2021, respectively, and 2.~~3% and 2.4% of total revenue for ~~each of~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. Revenue from sources outside North America represented 1213.7% and ~~13.9% of total revenue for the three months ended September 30, 2022 and 2021, respectively, and~~ 12.0% ~~and 13.6%~~ of total revenue for ~~the~~three ~~nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. The Company’s disaggregation of revenue by primary geographic region is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2022		2021		2022		2021
	2023		2022
North America	$	~~140~~143,~~895~~364	$	~~115~~120,~~407~~823	$	~~404,401~~	$	~~323,154~~
Outside North America		2022,~~426~~841		1816,~~651~~533		~~55,238~~		~~51,005~~
Revenue	$	~~161~~166,~~321~~205	$	~~134~~137,~~058~~356	$	~~459,639~~	$	~~374,159~~

The Company’s disaggregation of revenue by major business activity is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended March 31,
	2022		2021		2022		2021
	2023		2022
Event Cloud	$	~~112~~114,~~895~~686	$	9294,~~484~~988	$	~~320,517~~	$	~~259,207~~
Hospitality Cloud		4851,~~426~~519		4142,~~574~~368		~~139,122~~		~~114,952~~
Revenue	$	~~161~~166,~~321~~205	$	~~134~~137,~~058~~356	$	~~459,639~~	$	~~374,159~~

Deferred Revenue

Deferred revenue represents billings under signed contracts before the related products or services are transferred to customers. The portion of deferred revenue that is expected to be recognized as revenue during the subsequent 12-month period is recorded as deferred revenue in current liabilities and the remaining portion is recorded as other liabilities, non-current, which is not material. Deferred revenue was $~~246~~302.2 million and $~~239~~267.89 million as of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, respectively. During the three ~~and nine months ended September 30, 2022, the Company recognized $52.2 million and $208.1 million of revenue, respectively, that was included in the deferred revenue balance at the beginning of 2022.~~

months ended March 31, 2023, the Company recognized $108.5 million of revenue that was included in the deferred revenue balance at the beginning of 2023.

Remaining Performance Obligations

For multiple-year agreements for either Event Cloud or Hospitality Cloud, the Company typically invoices the amount for the first year of the contract at signing followed by subsequent annual invoices at the anniversary of each year. Since the Company bills most of its customers in advance, there can be amounts that contractually the Company is not yet able to invoice. Until such time as these amounts are invoiced or recognized in revenue, they are considered by the Company to be unbilled contract value, and together with deferred revenue, remaining performance obligations. As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, the Company's total current deferred revenue was $~~246~~302.2 million and $~~239~~267.89 million, respectively, which amount does not include unbilled contract value for contracts of approximately $~~508~~532.71 million and $~~573~~539.47 million, respectively. The Company expects that the amount of unbilled contract value relative to the total value of ~~its~~our contracts will change from year to year for several reasons, including the amount of cash collected early in the contract term, the specific timing and duration of customer agreements, varying invoicing cycles of agreements, the specific timing of customer renewals, changes in customer financial circumstances and foreign currency fluctuations. The Company expects to recognize 7271.75% of ~~its~~our remaining performance obligations as revenue over the subsequent 24 months, and the remainder thereafter.

Sales Commission

The current portion of capitalized commissions, net was $2227.65 million and $2526.47 million ~~as of September 30, 2022~~ and ~~December~~the ~~31, 2021, respectively. The~~ noncurrent portion of capitalized commissions, net was $2123.58 million and $23.05 million as of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, respectively. During the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, $78.9 million and $7.49 million of capitalized commissions, respectively, were amortized to sales and marketing expense in the accompanying condensed consolidated statements of operations and comprehensive loss. ~~For the nine months ended September 30, 2022 and 2021,~~

$23.8 million and $21.6 million, respectively, of capitalized commissions were amortized to sales and marketing expense in the accompanying condensed consolidated statements of operations and comprehensive loss.

Allowance for Expected Credit Losses

The change in the Company’s allowance for expected credit losses is as follows (in thousands):

	September 30, 2022			December 31, 2021
	March 31, 2023			December 31, 2022
Allowance for expected credit losses, beginning of period	$	42,~~547~~644		$	34,~~287~~547
Credit loss expense		378			8,316
Credit loss (recovery)/expense		(461	)		1,316
Write-offs and adjustments		(~~3,028~~336	)		(73,~~056~~219	)
Allowance for expected credit losses, end of period	$	1,~~897~~847		$	42,~~547~~644

4. ~~Business~~Property ~~Combinations~~and Equipment

During the quarter ended June 30, 2022, the Company completed a business combination which was not material to its consolidated financial statements. The Company has included the financial results of this business combination in the condensed consolidated financial statements from the respective date of acquisition, which were not material.

Shoflo

On May 24, 2021, the Company acquired Shoflo, LLC (“Shoflo”) for total consideration of $17.1 million. Shoflo provides cloud-based studio production tools that are essential to virtual and hybrid events. The Company completed this acquisition for strategic and competitive advantage. The acquisition was accounted for as a business combination.

The $17.1 million purchase price was allocated to the assets and liabilities assumed based upon their estimated fair value at the time of close. The table below outlines the allocation of the purchase price between the net assets assumed and intangible asset (in thousands):

Allocation of purchase price:
Cash and cash equivalents	$	176
Other current assets		86
Non-current assets		84
Current liabilities		(821	)
Non-current liabilities		(38	)
Trademarks		401
Developed technology		4,933
Goodwill		12,251
Total purchase consideration	$	17,072

The fair values of intangible assets were primarily determined through discounted cash flow analyses. Trademarks represent the estimated fair value of Shoflo’s existing trademarks. Developed technology represents the estimated fair value of Shoflo’s developed studio production tools. The following table summarizes the identifiable intangible assets acquired as of the acquisition date and their useful lives (in thousands, except for useful life):

	Fair value		Useful life
	acquired		(years)
Trademarks	$	401	2
Developed technology		4,933	3
Total intangible assets	$	5,334

The intangible asset is deductible for tax purposes; accordingly, no deferred tax asset or liability been established for the identified intangible asset.

Acquisition-related costs of $0.7 million, including transaction costs such as legal and accounting fees, were expensed as incurred and have been included in the general and administrative expenses in the consolidated statements of operations.

The financial results of Shoflo are included in the Company’s consolidated financial statements from the date of acquisition. The Shoflo acquisition did not have a material impact on the Company’s condensed consolidated statements of operations and comprehensive loss for each of the three and nine months ended September 30, 2022 and 2021.

Pro forma revenue and earnings amounts on a combined basis have not been presented as they are not material to the Company's pre-acquisition consolidated financial statements.

5. Property and Equipment

Property and equipment are summarized as follows (in thousands):

	September 30, 2022			December 31, 2021
	March 31,			December 31,
Computer equipment, purchased software and software developed for internal-use	$	22,904		$	22,517
	2023			2022
Leasehold improvements		22,059			22,747
Computer equipment, purchased software and software developed for internal-use	$	20,100		$	18,190
Furniture and equipment		8,621			9,087
Leasehold improvements		21,954			21,906
Rentable onsite solutions equipment		7,546			6,324
Furniture and equipment		8,213			8,048
Other		244			511
Rentable onsite solutions equipment		6,531			6,531
Property and equipment, gross		61,374			61,186
Other		349			1,231
Less accumulated depreciation		(46,757	)		(45,852	)
Property and equipment, gross		57,147			55,906
Property and equipment, net	$	14,617		$	15,334
Less accumulated depreciation		(42,570	)		(40,656	)
Property and equipment, net	$	14,577		$	15,250

Depreciation of property and equipment was $1.98 million and $2.50 million ~~during~~for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively, and $5.7 million and $8.5 million during the nine months ended September 30,~~ 2022 ~~and 2021~~, respectively.

65. Capitalized Software Development Costs

Capitalized software for the Company’s software platforms was developed either internally or was acquired through acquisitions. Capitalized software development costs and acquired software technology are summarized as follows (in thousands):

	September 30, 2022			December 31, 2021
	March 31, 2023			December 31, 2022
Capitalized software development costs, gross	$	~~429~~398,~~905~~644		$	385,~~384~~717
Less, accumulated amortization		(~~329~~305,~~612~~885	)		(~~276~~288,~~533~~758	)
Capitalized software development costs, net	$	~~100~~92,~~293~~759		$	~~108~~96,~~851~~959

Amortization of capitalized software development costs, recorded as cost of revenue, was $1617.50 million and $1516.50 million during the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively, and $49.2 million and $45.9 million during the nine months ended September 30,~~ 2022 ~~and 2021~~, respectively.

76. Goodwill and Intangible Assets

The change in carrying amount of goodwill is summarized as follows (in thousands):

Goodwill as of January 1, 2022	$	1,617,880
Goodwill as of January 1, 2023	$	1,620,312
Foreign currency translation adjustments		~~(912~~67	)
Addition from acquisition		3,629
Measurement period adjustments		(109	)
Goodwill as of September 30, 2022	$	1,620,597
Goodwill as of March 31, 2023	$	1,620,270

Intangible assets are amortized based on a pattern in which the asset’s economic benefits are consumed, or if not reliably determined, amortized on a straight-line basis over their estimated useful lives between two and fifteen years.

Intangible assets consisted of the following as of ~~September~~March 3031, ~~2022~~2023 (in thousands):

	Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net		~~Weighted-average~~Weightedaverageremaininglife ~~remaining~~as ~~life~~ofMarch ~~(in~~31, ~~years)~~2023
Customer relationships	$	~~437~~433,~~328~~832	$	(~~286~~302,~~482~~540	)	$	~~150~~131,~~846~~292	3.62 years
Trademarks		9682,~~956~~235		(6352,~~023~~513	)		3329,~~933~~722	3.45 years
Non-compete agreements		588		(588	)		-
Intangible assets subject to amortization		516,067		(355,053	)		161,014
Intangible assets subject to amortization		534,872		(350,093	)		184,779
Indefinite-lived assets		62		-			62
Intangible assets, net	$	~~534~~516,~~934~~129	$	(~~350~~355,~~093~~053	)	$	~~184~~161,~~841~~076

Intangible assets consisted of the following as of December 31, ~~2021~~2022 (in thousands):

	Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net		~~Weighted-average~~Weightedaverageremaininglife ~~remaining~~as ~~life~~ofDecember31, ~~(in years)~~2022
Customer relationships	$	~~438~~433,~~002~~825	$	(~~256~~292,~~885~~935	)	$	~~181~~140,~~117~~890	43.64 years
Trademarks		9682,~~902~~234		(5650,~~710~~405	)		4031,~~192~~829	43.28 years
Non-compete agreements		588		(588	)		-
Intangible assets subject to amortization		516,059		(343,340	)		172,719
Intangible assets subject to amortization		535,492		(314,183	)		221,309
Indefinite-lived assets		62		-			62
Intangible assets, net	$	~~535~~516,~~554~~121	$	(~~314~~343,~~183~~340	)	$	~~221~~172,~~371~~781

The total amount of amortization expense related to intangible assets, recorded as intangible asset amortization, exclusive of amounts included in cost of revenue, was $1211.27 million and $12.82 million during the three months ended ~~September~~March 3031, ~~2022~~2023 and 2021, respectively. The total amount of amortization expense related to intangible assets, recorded as intangible asset amortization, exclusive of amounts included in cost of revenue, was $36.5 million and $38.7 million during the nine months ended September 30, 2022 ~~and 2021~~, respectively. The intangible asset balance remaining as of ~~September~~March 3031, ~~2022~~2023 will be amortized into expense in future years as follows (in thousands):

2022 (remaining three months)	$	12,149
2023 (remaining nine months)	$	35,017
2023		46,698
2024		45,164
2024		45,142
2025		39,322
2025		39,300
2026		35,540
2026		35,525
2027		3,997
2027 and thereafter		5,965
2028 and thereafter		1,974
Total amortization expense related to acquired intangible assets	$	~~184~~161,~~779~~014

87. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of accrued compensation, such as bonuses, commissions, and payroll taxes, sales and other tax liabilities. The following table summarizes the Company’s accrued expenses and other current liabilities as of the dates indicated (in thousands):

	September 30, 2022		December 31, 2021
	March 31, 2023		December 31, 2022
Accrued compensation	$	4339,~~880~~482	$	49,~~015~~219
Sales and other tax liabilities		913,~~951~~960		1011,~~774~~877
Other		2135,~~539~~551		2021,~~038~~153
Accrued expenses and other current liabilities	$	7588,~~370~~993	$	7982,~~827~~249

98. Income Taxes

The effective tax rate for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022 was (1014.0639%) and (84.1529%), respectively. The difference between the Company’s effective tax ~~rate~~rates for the ~~nine~~2023 ~~months~~and ~~ended~~2022 ~~September~~periods ~~30,~~and ~~2022~~the ~~and~~U.S. ~~2021~~statutory ~~was~~tax ~~(5.59~~rate of 21%) ~~and~~related (8primarily to U.~~94%)~~S. taxes on foreign earnings, ~~respectively.~~foreign ~~The~~tax ~~difference~~rate differentials, and valuation allowance.

12The Company evaluates its tax positions on a quarterly basis. There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three months ended March 31, 2023 and 2022.

~~between~~9. ~~the Company~~Stockholders’s ~~effective tax rates for the 2022 and 2021 periods and the U.S. statutory tax rate of 21.0% related primarily to U.S. taxes on foreign earnings, foreign tax rate differentials, and valuation allowance.~~Equity

The Company’s ~~evaluates~~Certificate ~~its~~of ~~tax~~Incorporation ~~positions~~authorizes on1,500,000,000 ashares ~~quarterly~~of ~~basis~~common stock and 1,000,000 of preferred stock, each $0.0001 ~~There~~par value per share. As of March 31, 2023 and 2022, 491,358,090 and 481,266,396 shares of common stock were outstanding, respectively, and no ~~material~~shares ~~changes~~of topreferred stock were outstanding. The holders of the ~~Company’s~~common ~~uncertain~~stock ~~tax~~are ~~positions,~~entitled ~~interest,~~to ordividends ~~penalties~~only ~~during~~when declared by the ~~three~~Board ~~and~~of ~~nine~~Directors ~~months~~ratably ~~ended~~on ~~September~~a ~~30,~~per ~~2022~~share ~~and~~basis. ~~2021~~Each share of common stock has one vote under the Company’s Certificate of Incorporation.

On August 16, 2022, President Biden signed the Inflation Reduction Act (“IRA”) into law. The IRA enacted a 15.0% corporate minimum tax effective in 2022, a 1% tax on share repurchases after December 31, 2022, and created and extended certain tax-related energy incentives. The Company currently does not expect the tax-related provisions of the IRA to have a material impact on its financial results.

10. Stockholders’ Equity

The Company’s Certificate of Incorporation authorizes 1,500,000,000 shares of common stock and 1,000,000 of preferred stock, each $0.0001 par value per share. As of September 30, 2022 and December 31, 2021, 484,488,616 and 481,121,695 shares of common stock were outstanding, respectively, and no shares of preferred stock were outstanding. The holders of the common stock are entitled to dividends only when declared by the Board of Directors ratably on a per share basis. Each share of common stock has one vote under the Company’s Certificate of Incorporation.

Stock-based Compensation

The weighted-average assumptions used in the valuation of stock option awards granted under the Black-Scholes model are summarized as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	Three Months Ended March 31,
	2022	2021		2022			2021
	2023	2022
Dividend yield	N/A	~~N/A~~	0.0	%	~~0.0~~	%		~~0.0~~	%
Volatility	N/A	~~N/A~~	45.30	%	~~45.30~~	%		~~44.98~~	%
Expected term (years)	N/A	~~N/A~~5.92		~~5.92~~			~~5.82~~
Risk-free interest rate	N/A	~~N/A~~	1.85	%	~~1.85~~	%		~~1.30~~	%

____________________________

N/A - Not Applicable

Stock Option Activity Rollforward

Stock options	Number of shares subject to option			Weighted average exercise price per share		Weighted average remaining contractual term (years)		Aggregate intrinsic value (in thousands)		Unrecognized compensation expense (in thousands)
Balance as of January 1, 2022		51,646,456		$	4.13		6.29	$	208,614	$	40,337
Balance as of December 31, 2022		50,013,426		$	4.45		5.61	$	58,326	$	19,997
Granted		4,129,380			8.05
Exercised		(140,970	)		3.80
Forfeited		(280,330	)		5.07
Expired		-			-
Balance as of March 31, 2022		55,354,536		$	4.42		6.32	$	153,377	$	47,586
Granted		-			-
Exercised		(~~118~~1,181,835	)		34.8535
Forfeited		(~~657~~49,~~507~~002	)		57.0683
Expired		-			-
Balance as of June 30, 2022		54,578,848		$	4.41		5.71	$	33,055	$	36,727
Balance as of March 31, 2023		48,782,589		$	4.45		5.35	$	190,657	$	13,043
Granted		-			-
Vested and exercisable as of December 31, 2022		35,321,479		$	3.85		4.42	$	54,842
Exercised		(1,809,416	)		3.84
Vested and exercisable as of March 31, 2023		43,963,138		$	4.11		4.97	$	186,839
Forfeited		(199,097	)		5.13
Expired		-			-
Balance as of September 30, 2022		52,570,335		$	4.42		5.63	$	55,120	$	28,332
Vested and exercisable as of January 1, 2022		43,842,127		$	3.71		5.47	$	195,710	$	-
Vested and exercisable as of September 30, 2022		37,758,188		$	3.84		4.41	$	53,189	$	-

13The Company did not grant any options during the three months ended March 31, 2023.

~~During~~The ~~the~~total ~~three~~intrinsic ~~months~~value ~~ended~~of ~~September~~options ~~30,~~that ~~2022,~~were ~~the~~exercised ~~Company~~during ~~did~~the ~~not~~three ~~grant~~months ~~any~~ended ~~stock~~March ~~options~~31, ~~and~~2023 ~~during~~was $3.9 million. During the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, ~~the Company granted 4~~1,~~129~~181,~~380~~835 ~~stock~~ options were exercised.

~~The~~As ~~weighted-average~~of ~~grant~~March ~~date~~31, ~~fair~~2023, ~~value~~the of$13.0 ~~options~~million ~~granted~~in ~~during~~unrecognized ~~the~~compensation ~~nine~~cost ~~months~~related ~~ended~~to ~~September~~stock ~~30,~~options ~~2022~~will ~~was~~be ~~$8.05~~recognized ~~per~~over ~~share~~a weighted-average period of 1.83 years.

The ~~total~~following ~~intrinsic~~table ~~value~~summarizes ofRSU ~~options~~activity ~~that~~for ~~were exercised during~~ the three ~~and nine~~ months ended ~~September~~March 3031, ~~2022 was $4~~2023.0 ~~million and $4.7 million, respectively. During the nine months ended September 30, 2022, 2,068,567 options were exercised.~~

As of September 30, 2022, the $28.3 million in unrecognized compensation cost related to stock options will be recognized over a weighted-average period of 1.46 years.


Restricted Stock Units	Number of shares			Weighted Average Grant Date Fair Value
Balance at December 31, 2022		13,685,748		$	7.56
Granted		-
Vested		(1,879,277	)		7.28
Forfeited		(169,765	)		7.74
Balance at March 31, 2023		11,636,706		$	7.61

~~Restricted~~The ~~Stock~~Company ~~Units~~did not grant any RSUs during the three months ended March 31, 2023.

~~During~~As ~~the~~of ~~nine~~March ~~months ended September 30~~31, ~~2022~~2023, ~~the~~$73.2 ~~Company~~million ~~granted~~in ~~16,093,103~~unrecognized ~~service-based~~compensation ~~restricted~~cost ~~stock~~related ~~units~~to (“RSUs~~”),~~ ~~1,302,856~~will ofbe ~~which~~recognized ~~had~~over ~~vested~~a asweighted-average period of ~~September 30, 2022~~1.88 ~~The outstanding RSUs vest on various dates through September 2026 as measured from the grant date~~years.

As of September 30, 2022, $94.2 million in unrecognized compensation cost related to RSUs will be recognized over a weighted-average period of 2.03 years.

Stock-based Compensation Expense

Stock-based compensation expense for equity and liability classified awards is recognized using the straight-line attribution method. In addition, the Company ensures that it has fully recognized expense for at least the option and RSU tranches that have fully vested in the period in which they vest.

Stock-based compensation expense is summarized as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2022

2021

2022

2021

2023

2022

Cost of revenue

21,~~234~~231

~~456~~590

~~4,758~~

~~950~~

Sales and marketing

64,~~398~~938

2,~~578~~980

~~15,559~~

~~5,371~~

Research and development

53,~~280~~829

2,~~183~~588

~~11,789~~

~~4,321~~

General and administrative

54,~~376~~557

3,~~170~~610

~~13,902~~

~~6,169~~

Total stock-based compensation

1914,~~288~~555

89,~~387~~768

~~46,008~~

~~16,811~~

2021 Employee Stock Purchase Plan

The Cvent Holding Corp. 2021 Employee Stock Purchase Plan (the “ESPP”) permits employees to purchase common stock through payroll deductions during biannual offering periods, or during such other offering periods as the Board of Directors may determine. Participants may authorize payroll deductions of a specific percentage of compensation not to exceed 15%, with such deductions being accumulated for biannual purchase periods beginning on the first business day of each offering period and ending on the last business day of each offering period.

The ESPP provides that 11,500,000 shares of common stock may be made available for sale under the ESPP (the “ESPP Reserve”). The ESPP Reserve automatically increases on each January 1 of each year, by an amount equal to 1% of the total number of shares of the Company’s common stock outstanding on December 31 of the preceding calendar year, or a lesser number as may be determined by the Board of Directors. The Board of Directors waived the automatic increase that would have taken effect on January 1, 2022 under the ESPP. Under the terms of the ESPP, the purchase price per share will equal 85% of the fair market value of a share of common stock on the first day of an offering period or the last date of an offering period, whichever is lower, although the Board of Directors has discretion to change the purchase price with respect to future offering periods. An employee may not purchase more than $25,000 of stock during any calendar year. Payroll deductions from employees related to the ESPP are classified as restricted cash on the condensed consolidated balance sheets.

At ~~September~~March 3031, ~~2022~~2023, there were 1115,~~500~~060,~~000~~931 shares available for issuance under the ESPP. ~~The first ESPP offering period began on June 1, 2022, and $2.1 million and $2.7 million in contributions were made by employees during the three and nine months ended September 30, 2022.~~ As of ~~September~~March 3031, ~~2022~~2023, the Company had $0.52 million of unrecognized compensation cost related to the offering period beginning on ~~June~~December 1, 2022. The last date for the current offering period is ~~November~~May 3031, ~~2022~~2023.

~~2017~~10. ~~Long-Term Incentive Plan~~Debt

The Company recorded no expense for outstanding cash bonus awards previously granted under the 2017 Long-Term Incentive Plan (the “2017 LTI Plan”) during the three and nine months ended September 30, 2022 and 2021 because the incentive remained unvested and the Company was liable to make the 2017 LTI Plan cash bonus payments only upon a sale of the Company, or other Qualified Event, as defined in the 2017 LTI Plan, which was not determined to be probable. On February 28, 2022, the Compensation and Nominating Committee of the Board of Directors approved a program that allowed employees to convert their awards (the “Legacy Cvent LTIP Awards”) granted under the 2017 LTI Plan to an aggregate of approximately 3.7 million RSUs in exchange for cancellation of such employees’ outstanding Legacy Cvent LTIP Awards. The RSUs are subject to varying vesting periods ranging from April 2022 to October 2024. The RSUs were granted effective as of April 15, 2022 to employees who elected to participate in such exchange. Substantially all of the Company's employees who held Legacy Cvent LTIP Awards have participated in the exchange.

11. Debt

The outstanding principal amount and related unamortized debt issuance costs, net, are summarized as follows (in thousands):

	September 30, 2022			December 31, 2021
	March 31, 2023			December 31, 2022
Term Loan Facility	$	—		$	265,696
Senior Secured Revolving Credit Facility	$	138,000		$	208,000
Senior Secured Revolving Credit Facility		165,000			—
Less: unamortized deferred financing costs		(2,609	)		(2,766	)
Less: original issue discount		—			(438	)
Total principal amount and related unamortized debt issuance costs, net	$	135,391		$	205,234
Less: unamortized deferred financing costs		(2,923	)		(2,956	)
Total principal amount and related unamortized debt issuance costs, net	$	162,077		$	262,302

a) Senior Secured Revolving Credit Facility

On May 27, 2022, Cvent, as borrower, entered into a ~~new~~ five-year $500.0 million senior secured revolving credit facility (the “Revolving Credit Facility”) pursuant to the Credit Agreement, dated as of May 27, 2022, by and among Cvent, Holdings (as defined below) and the other loan parties party thereto, the lenders party thereto, and PNC Bank, National Association, as administrative agent (the “Credit Agreement”).

A portion of the Revolving Credit Facility, not to exceed $35.0 million, will be available for the issuance of letters of credit, and Cvent has the option to increase borrowing capacity under the Revolving Credit Facility or to incur incremental term loans, subject to certain provisions outlined in the Credit Agreement. The Revolving Credit Facility has a maturity date of May 27, 2027.

~~At closing, Cvent borrowed $265.0 million under the Revolving Credit Facility.~~ The borrowings were used, together with cash on hand of Cvent, to repay all outstanding obligations under the Amended and Restated Credit Agreement, dated as of November 30, 2017 (the “Prior Credit Agreement”), including aggregate principal and accrued interest ~~under the variable~~ rate first lien loan, and to pay certain costs and fees associated with the closing of the Credit Agreement. The Prior Credit Agreement was terminated as a result of the repayment. Additionally, the Company capitalized approximately $3.1 million in deferred financing costs, presented within other assets on the consolidated balance sheet, which will be amortized on a straight-line basis through the maturity date. Debt issuance costs under the Prior Credit Agreement were presented as contra-liabilities within long term debt, net on the consolidated balance sheet. Borrowings under the Revolving Credit Facility bear interest based on a net leverage ratio using the Secured Overnight Financing Rate (“SOFR”), as outlined in the Credit Agreement. The interest rate on outstanding borrowings under the Revolving Credit Facility was 46.5647% as of ~~September~~March 3031, ~~2022~~2023. The carrying value of variable rate debt approximates fair value due to the short-term nature of the Company's interest rate elections.

~~The~~As ~~Revolving~~of ~~Credit~~March ~~Facility~~31, ~~includes~~2023, athe ~~maximum~~Company ~~total~~had ~~net~~$138.0 ~~leverage~~million ~~ratio~~outstanding ~~covenant~~borrowings ~~set~~under atthe 4Revolving Credit Facility.~~00:1.00;~~ ~~provided~~The ~~that~~Company ~~following~~had ~~the~~$362.0 ~~consummation~~million ofavailable afor ~~qualified~~borrowing ~~acquisition,~~under ~~Cvent~~the ~~may~~Revolving ~~elect~~Credit toFacility ~~increase~~based on the ~~total~~outstanding ~~net~~balance ~~leverage~~as ~~ratio~~of toMarch 431, 2023.~~50:1:00~~ ~~for~~The ~~the~~Company ~~fiscal~~is ~~quarter~~ in ~~which~~compliance ~~such~~with ~~qualified~~all ~~acquisition~~covenants ~~was~~outlined ~~consummated~~in ~~and~~the ~~for~~Credit ~~the~~Agreement ~~next~~as ~~three~~of ~~consecutive~~March ~~fiscal~~31, ~~quarters~~2023 ~~thereafter.~~and ~~Such~~currently ~~step~~has ~~ups~~no inrequired ~~connection~~prepayments with ~~qualified~~respect ~~acquisitions~~to ~~are~~borrowings ~~limited~~made tounder ~~two~~the ~~times~~Revolving ~~during~~Credit ~~the~~Facility ~~term~~prior ofto the ~~Revolving~~maturity ~~Credit~~date ~~Facility~~of May 27, 2027.

~~All obligations under the Credit Agreement are unconditionally guaranteed by Papay Holdco, LLC, Cvent’s direct holding company (“Holdings”), and certain of its U~~11.S. ~~subsidiaries. The obligations under the Credit Agreement are secured by a first priority security interest in substantially all assets of Cvent and the guarantors.~~Leases

The Credit Agreement contains customary representations and warranties, affirmative and negative covenants and events of default. The affirmative and negative covenants limit the ability of Holdings, Cvent and Cvent’s restricted subsidiaries to, among other things: incur additional debt or issue preferred stock; create liens; create restrictions on Cvent’s subsidiaries’ ability to make payments to Cvent or its direct or indirect holding companies; pay dividends and make other distributions in respect of Holdings’, Cvent’s and its restricted subsidiaries’ capital stock; redeem or repurchase Holdings’, Cvent’s and its restricted subsidiaries’ capital stock or prepay

subordinated indebtedness; make certain investments or certain other restricted payments; guarantee indebtedness; designate unrestricted subsidiaries; sell certain kinds of assets; enter into certain types of transactions with affiliates; and effect mergers or consolidations. These covenants are subject to certain exceptions and qualifications set forth in the Credit Agreement.

As of September 30, 2022, the Company had $165.0 million outstanding borrowings under the Revolving Credit Facility. The Company had $335.0 million available for borrowing under the Revolving Credit Facility based on the outstanding balance as of September 30, 2022. The Company is in compliance with all covenants outlined in the Credit Agreement as of September 30, 2022 and currently has no required prepayments with respect to borrowings made under the Revolving Credit Facility prior to the maturity date of May 27, 2027.

As a result of the repayment of all outstanding obligations under the Prior Credit Agreement, the Company recognized a loss on extinguishment of debt related to unamortized debt issuance costs presented on the condensed consolidated statement of operations, of $3.2 million for the nine months ended September 30, 2022.

12. Leases

The Company enters into lease arrangements for office facilities under non-cancellable operating leases with various expiration dates.

As of ~~September~~March 3031, ~~2022~~2023, the Company’s right-of-use (“ROU”) assets and total operating lease liabilities were $2228.15 million and $3337.49 million, respectively. As of December 31, ~~2021~~2022, the Company’s ROU assets and total operating lease liabilities were $2820.4 million and $4230.18 million, respectively. During the three months ended ~~September~~March 3031, ~~2022~~2023, ~~and~~$10.1 ~~2021,~~million noof ROU assets were obtained in exchange for new operating lease liabilities. ~~During~~related ~~the~~to ~~nine~~a ~~months~~new ~~ended~~office ~~September~~lease ~~30,~~in ~~2022~~Australia ~~and~~as ~~2021,~~well ~~$0.2~~as ~~million~~the renewal and $0expansion of certain office leases in India.1 ~~million~~During ofthe ~~ROU~~three ~~assets~~months ended March 31, ~~respectively~~2022, no ROU assets were obtained in exchange for new operating lease liabilities.

~~During~~12. ~~July~~Commitments ~~2022,~~and ~~the Company entered into an agreement to sublease a floor of its headquarters to a third party beginning on November 1, 2022 through July 25, 2025.~~ Contingencies

~~13.~~Legal ~~Commitments~~Proceedings, Regulatory Matters and Other Contingencies

a) Legal Proceedings, Regulatory Matters and Other Contingencies

The Company is, and from time to time may become, involved in legal proceedings, regulatory matters or other contingencies in the ordinary course of its business. In its opinion, the Company is not presently involved in any legal proceeding, regulatory matter or other contingency that, if determined adversely to it, would individually or in the aggregate have a material adverse effect on its business, operating results, financial condition or cash flows.

b) Purchase Commitments

In the ordinary course of business, the Company enters into various purchase commitments primarily related to third-party cloud hosting, technology operations and data services. Total non-cancellable purchase commitments as of ~~September~~March 3031, ~~2022~~2023 were approximately $6831.71 million expiring at various dates through 2026.

1413. Related-Party Transactions

The Company ~~incurred~~did ~~$0.1~~not ~~million~~incur ~~for~~any consulting fees from Vista Equity Partners Management, LLC (“Vista”) ~~for~~during ~~both~~ the three months ended March 31, 2023 and ~~nine~~incurred less than $0.1 million for consulting fees from Vista the three months ended ~~September~~March 3031, 2022, ~~and 2021~~ which ~~are~~is recorded in general and administrative expenses. As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021~~2022, respectively, less than $0.1 million was included in accrued expenses in the condensed consolidated balance sheet.

The Company also entered into transactions during the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022 to sell services to other Vista- controlled entities. The Company recognized $0.74 million and $0.42 million in revenue related to these transactions for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively. The Company recognized $1.9 million and $0.7 million in revenue related to these transactions for the nine months ended September 30,~~ 2022 ~~and 2021~~, respectively. ~~The~~Cvent ~~Company~~ also purchased software subscription and other services from Vista affiliates. The Company recognized $0.67 million and $0.56 million in expenses related to these transactions for the three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021, respectively, and $1.7 million and $1.4 million in expenses related to these transactions for the nine months ended September 30,~~ 2022 ~~and 2021~~, respectively.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” ~~for~~as defined in the ~~purposes~~Private ofSecurities ~~federal~~Litigation ~~securities~~Reform ~~laws~~Act of 1995. ~~Such~~All ~~forward-looking~~statements other than statements ~~include,~~of ~~but~~historical ~~are~~facts ~~not~~contained ~~limited~~in tothis Quarterly Report, including, statements that reflect our current views with respect to future events and financial performance, business strategies, and expectations for our business; ~~and~~ statements regarding our or our management’s expectations, hopes, beliefs, intentions, plans or strategies regarding the future. Inand ~~addition, any~~ statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “can,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “ongoing,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would,” “will,” “approximately,” “likely,” “shall” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

In this Quarterly Report, the terms the “Company,” “Cvent,” “we,” “us,” and “our” refer to Cvent Holding Corp. and its subsidiaries, unless the context indicates otherwise.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Some factors that could cause actual results to differ include, but are not limited to:

•

~~the~~our ~~effects~~proposed acquisition by an affiliate of ~~geopolitical,~~Blackstone ~~economic~~Capital ~~and~~Partners ~~market~~VIII ~~conditions~~L.P. (“Blackstone”), including ~~heightened~~the ~~inflation,~~occurrence ~~slower~~of ~~growth~~any ~~or recession~~event, ~~changes~~change toor ~~fiscal~~other ~~and~~circumstance ~~monetary~~that ~~policy,~~could ~~higher~~give ~~interest~~rise ~~rates,~~to ~~currency~~our ~~fluctuations,~~right or the ~~impact~~right of ~~the~~Blackstone ~~COVID-19~~or ~~pandemic,~~both ~~and~~of ~~challenges~~us into terminate the ~~supply~~Merger ~~chain~~Agreement, onincluding ~~our~~circumstances ~~operations,~~requiring ~~customer~~us ~~demand~~to ~~and~~pay ~~our~~Blackstone ~~suppliers’~~a ~~ability~~termination fee pursuant to ~~meet~~the ~~our~~Merger ~~needs~~Agreement;

•

the ~~Company’s~~risk ~~ability~~that the acquisition may not close in the anticipated timeframe or at all due to ~~attract~~one ~~and~~or ~~retain~~more ~~new~~of ~~customers~~the closing conditions to the acquisition not being satisfied or, to the extent permitted by applicable law, waived, including due to the failure to obtain applicable regulatory approvals or the approval of our stockholders in a timely manner or otherwise;

•

the ~~Company’s~~risk ~~ability~~that tothe ~~maintain~~proposed ~~and~~acquisition ~~expand~~disrupts ~~relationships~~our ~~with~~current ~~hotels~~plans and ~~venues~~operations;

•

the ~~impact~~risk ofthat athere ~~data~~may ~~breach~~be orunexpected ~~other~~costs, ~~security~~charges ~~incident involving the Company~~ or ~~its~~expenses ~~customers’~~resulting ~~confidential~~from orthe ~~personal~~proposed ~~information stored in our or our third-party service providers’ systems~~acquisition;

•

risks ~~associated~~related ~~with~~to ~~indemnity~~disruption ~~provisions~~of inmanagement's ~~some~~time ofand attention from ongoing business operations due to the ~~Company’s~~proposed ~~agreements~~acquisition;

•

the ~~competitiveness~~risk ofthat ~~the~~any ~~market~~announcements inrelated ~~which~~to the ~~Company~~proposed ~~operates~~acquisition could have adverse effects on our ability to retain and hire key personnel and to maintain relationships with business partners, suppliers and customers and on our operating results and business generally;

•

the ~~impact~~risk ofthat acertain ~~disruption~~restrictions ofduring the ~~Company’s~~pendency ~~operations, infrastructure or systems, or disruption~~ of the ~~operations,~~proposed ~~infrastructure~~acquisition ormay ~~systems~~impact ofour ~~the~~ability ~~third~~to ~~parties~~pursue oncertain ~~which~~business ~~the~~opportunities ~~Company~~or ~~relies~~strategic transactions;

•

the ~~Company’s~~risk ~~ability~~of tolitigation ~~sell~~and/or ~~additional~~regulatory ~~solutions~~actions related to ~~its~~the ~~customers~~proposed acquisition, including the effects of any outcomes related thereto;

•

the ~~Company’s~~impact ~~ability~~of tothe ~~maintain~~global ~~access~~COVID-19 pandemic and other geopolitical, macroeconomic and market conditions on our industry, business and customers, and our susceptibility to ~~third-party~~declines ~~licenses~~or disruptions in the demand for meetings and events;

•

~~the~~our ~~Company’s~~ ability to ~~comply~~sell ~~with~~additional ~~its~~solutions ~~obligations~~to ~~under~~our ~~license or technology agreements with third parties~~customers;

•

~~the~~our ~~Company’s~~ ability to ~~manage~~retain ~~its~~our ~~growth~~existing ~~effectively~~customer base and to attract and retain new customers;

•

~~the~~our ~~Company’s~~ ability to maintain and expand ~~its~~relationships ~~sales~~with ~~force~~hotels and venues;

•

the impact of a data breach or other security incident involving our or our customers’ confidential or personal information stored in our or our third-party service providers’ systems;

•

risks associated with indemnity provisions in some of our agreements;

•

the competitiveness of the market in which we operate;

•

the impact of a disruption of our operations, infrastructure or systems, or disruption of the operations, infrastructure or systems of the third parties on which we rely;

•

our ability to maintain access to third-party licenses and comply with our obligations under license or technology agreements with third parties;

•

our ability to expand our sales force;

•

risks and uncertainties associated with potential and completed acquisitions and divestitures;

•

~~the~~our ~~Company’s~~ ability to operate offices located outside of the United States, including India;

•

the impact of declines or disruptions in the demand for events and meetings;

•

the impact of any significant reduction in spending by advertisers on ~~the~~our ~~Company’s~~ platforms;

•

~~risks~~our ~~associated~~history ~~with~~of ~~the~~losses ~~Company’s reliance on third-party mobile application platforms such as the Apple App Store~~ and ~~the~~ability ~~Google Play Store~~ to ~~distribute~~achieve ~~its~~profitability ~~mobile~~in ~~applications~~the future;

•

~~the~~our ~~Company’s~~ability ~~history~~to ofdevelop, ~~losses~~introduce and ~~ability~~market new and enhanced versions of our solutions to ~~achieve~~meet ~~profitability~~customer inneeds ~~the~~and ~~future~~expectations;

•

the ~~Company’s~~impact ~~ability~~of todelays ~~develop,~~in ~~introduce~~product and ~~market~~service ~~new~~development, ~~and~~including ~~enhanced~~delays ~~versions~~beyond ofour ~~its solutions to meet customer needs and expectations~~control;

•

~~the~~our ~~impact~~ability ofto ~~the~~fund ~~Company’s~~our ~~lengthy~~research and ~~unpredictable~~development ~~sales cycle~~efforts;

•

the ~~Company’s~~impact ~~ability~~of toour ~~retain,~~lengthy ~~hire~~ and ~~integrate~~unpredictable ~~skilled~~sales ~~personnel, including its senior management team~~cycle;

•

17our ability to retain, hire and integrate skilled personnel, including our senior management team;

•

the ~~Company’s~~fluctuations ~~ability~~due to ~~fund~~seasonality ~~its~~of ~~research~~our sales, billings, cash flow, operating expenses and ~~development~~operating ~~efforts~~results;

•

~~the~~our ~~fluctuations~~ability ~~due~~ to ~~seasonality~~offer ofhigh-quality ~~the~~customer ~~Company’s sales, billings, cash flow, operating expenses and operating results~~support;

•

the ~~Company’s~~impact ~~ability~~of tocontractual ~~offer~~disputes ~~high-quality~~with ~~customer~~our ~~support~~customers;

•

~~the~~our ~~impact~~ability ofto ~~contractual~~maintain, ~~disputes~~enhance ~~with~~and ~~the~~protect ~~Company’s~~our ~~customers~~brand;

•

~~the~~our ~~Company’s~~ ability to maintain, ~~enhance~~ and ~~protect~~develop ~~its~~the ~~brand~~compatibility of our solutions with third-party applications;

•

~~the~~risks ~~impact~~related to incorrect or improper use of ~~delays~~our insolutions ~~product~~or ~~and~~our ~~service~~failure ~~development,~~to ~~including~~properly ~~delays~~train ~~beyond~~customers ~~the~~on ~~Company’s~~how ~~control~~to utilize our solutions;

•

the ~~Company’s~~impact ~~ability~~of toour ~~maintain~~reliance ~~and~~on ~~develop~~data ~~the~~provided ~~compatibility~~by ~~of its solutions with~~ third~~-party~~ ~~applications~~parties;

•

risks related to incorrect or improper use of the Company’s solutions or its failure to properly train customers on how to utilize its solutions;

the impact of the Company’s reliance on data provided by third parties;

risks associated with privacy concerns and end users’ acceptance of Internet behavior tracking;

•

~~the~~our ~~Company’s~~ ability to maintain ~~its~~our corporate culture as itwe ~~grows~~grow;

•

~~the~~our ~~Company’s~~ ability to comply with legal requirements, contractual obligations and industry standards relating to security, data protection and privacy;

•

~~the~~our ~~Company’s~~ ability to comply with the rules and regulations adopted by the payment card networks;

•

~~the~~our ~~Company’s~~ ability to obtain, maintain, protect and enforce ~~its~~our intellectual property and proprietary rights;

•

risks associated with lawsuits by third parties for alleged infringement, misappropriation or other violation of their intellectual property and proprietary rights;

•

risks associated with ~~the~~our ~~Company’s~~ use of open source software in certain of ~~its~~our solutions;

•

risks associated with changes in tax laws;

•

the impact of third-party or government claims, including regulatory claims or claims regarding the content and advertising distributed by ~~the~~our ~~Company’s~~ customers through ~~its~~our service;

•

risks associated with changes in financial accounting standards;

•

risks associated with fluctuations in currency exchange rates;

•

~~the~~our ~~Company’s~~ ability to raise additional capital or generate cash flows necessary to expand ~~its~~our operations, consummate acquisitions and invest in new technologies in the future;

•

~~the~~our ~~Company’s~~ ability to ~~develop and~~ maintain proper and effective internal control over financial reporting;

•

changes in applicable laws or regulations;

~~the ability of the Company to expand or maintain its existing customer base;~~15

•

other factors discussed in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 and included elsewhere in this Quarterly Report; and

•

other factors beyond our control.

We caution you that the foregoing list of important factors may not contain all of the material factors that are important to you. In addition, in light of these ~~risk~~risks and uncertainties, the matters referred to in the forward-looking statements contained in this Quarterly Report may not, in fact, occur. Moreover, we operate in a rapidly changing and competitive environment. New risk factors emerge from time to time, and it is not possible for management to predict all such risk factors. Accordingly, you should not place undue reliance on those statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law. You should read this Quarterly Report completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

1816

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Overview

The Company was founded in 1999 in the Washington, D.C. metro area as a provider of event registration software to meeting and event organizers. Since that time, we have continually innovated to develop a comprehensive platform of event marketing and management solutions and hospitality solutions. We believe that since inception, we have demonstrated an entrepreneurial spirit, culture of teamwork and sense of resilience, particularly in moments of crisis. This is best evidenced by the Company’s continued progress and innovation in the midst of challenges like the recessions of 2001 and 2008 and the global COVID-19 pandemic.

The Company is a leading cloud-based platform of enterprise event marketing and management and hospitality solutions. We power the marketing and management of meetings and events through our Event Cloud and Hospitality Cloud solutions. Our Event Cloud consists of tools to enable event organizers to manage the entire event lifecycle and deliver engaging experiences across every type of event and all event ~~delivery models~~formats: in-person, virtual and hybrid. Event Cloud serves as the system of record for event and engagement data collected across an organization’s total event program, which comprises every internal and external event an organization hosts or attends (its “Total Event Program”). Our Hospitality Cloud offers a marketplace that connects event organizers looking for the appropriate event space for their in-person and hybrid events with hoteliers and venue operators through a vertical search engine built on our proprietary database of detailed event space information. In addition, our Hospitality Cloud provides marketing and software solutions that hotels and venues leverage to digitally showcase their event space to attract valuable leads and grow their businesses. This combination of ~~the~~our ~~Cvent~~ Event Cloud and Hospitality Cloud offerings results in aan ~~cohesive~~integrated ~~platform that we believe generates powerful network effects and attracts more event organizers and hotels and venues~~solution.

~~Macroeconomic~~Proposed ~~Conditions and COVID-19~~Merger

~~Global~~On ~~events~~March 14, ~~such as recent geopolitical instability~~2023, ~~inflation and~~ the ~~COVID-19~~Company ~~pandemic,~~entered ~~have~~into ~~created~~an orAgreement ~~contributed~~and toPlan ~~uncertainty~~of inMerger ~~macroeconomic~~(the ~~conditions,~~“Merger ~~including~~Agreement”) ~~changes~~with inCapstone ~~interest rates~~Borrower, ~~supply~~Inc. ~~chain~~(“Capstone ~~disruptions~~Parent”), ~~labor shortages~~ and ~~increased~~Capstone ~~labor~~Merger ~~costs~~Sub, ~~which~~Inc., ~~in turn, could decrease overall economic activity, hinder economic growth or cause~~ a ~~recession~~wholly inowned ~~the~~subsidiary ~~United~~of ~~States~~Capstone orParent in(“Merger ~~the global economy~~Sub”). ~~Negative~~Capstone ~~macroeconomic~~Parent ~~conditions~~and ~~may~~Merger ~~affect~~Sub ~~our~~are ~~clients’~~affiliates ~~businesses, which could result in reduced demand for our services or cancellations, increased demands for pricing accommodations or higher rates~~ of ~~delays~~investment infunds ~~collection~~affiliated ~~of,~~with or ~~losses~~managed ~~on,~~by ~~our~~affiliates ~~accounts receivable, which could adversely affect our results~~ of ~~operations~~Blackstone Inc. IfPursuant ~~we are unable~~ to ~~offset~~the ~~any~~Merger ~~decrease~~Agreement inand ~~revenue~~subject ~~by increasing sales~~ to ~~new or existing customers, our revenues may decline or grow at lower rates. The extent of~~ the ~~impact~~satisfaction of ~~ongoing~~customary ~~macroeconomic~~closing conditions, onMerger ~~our~~Sub ~~operational and financial performance is uncertain and~~ will ~~depend~~be onmerged ~~political,~~with ~~social, economic~~ and ~~regulatory~~into ~~factors~~the ~~that are outside of our control~~Company, ~~including~~with ~~but~~the ~~not~~Company ~~limited~~surviving toas ~~the~~a ~~incidence~~wholly ~~and~~owned ~~severity~~subsidiary of ~~additional~~Capstone ~~COVID-19~~Parent ~~virus variants and actions that may be taken by regulators and businesses~~ (~~including~~the ~~customers~~“Merger”) ~~in response to macroeconomic uncertainty~~. WeIf ~~considered~~ the ~~impact~~Merger ofis consummated, the ~~current~~Company’s ~~economic~~common ~~environment~~stock ~~and~~(the ~~COVID-19~~“Company onCommon ~~our~~Stock”) ~~estimates~~will ~~and~~be ~~assumptions~~delisted ~~and~~from ~~determined~~the ~~that~~Nasdaq ~~there~~Global ~~were~~Market noand ~~material~~deregistered ~~adverse~~under ~~impacts on~~ the ~~unaudited~~Securities ~~condensed~~Exchange ~~consolidated~~Act ~~financial statements as~~ of ~~September 30~~1934, ~~2022~~as ~~and~~amended ~~for~~ (the ~~three~~“Exchange ~~and nine months ended September 30, 2022~~Act”). ~~As events continue to evolve and additional information becomes available, our estimates and assumptions may change materially in future periods.~~

The closing of the proposed Merger is subject to certain conditions, including the adoption of the Merger Agreement by stockholders representing a majority of the outstanding shares of Company Common Stock and the receipt of applicable regulatory approvals. The proposed Merger is expected to close mid-year 2023.

Trends and Economic Conditions

Global events, such as recent geopolitical instability, inflation and the COVID-19 pandemic, have created or contributed to uncertainty in macroeconomic conditions, including changes in interest rates, supply chain disruptions, labor shortages and increased labor costs, which, in turn, could decrease overall economic activity, hinder economic growth or cause a recession in the United States or in the global economy. Negative macroeconomic conditions may affect our clients’ businesses, which could result in reduced demand for our services or cancellations, increased demands for pricing accommodations or higher rates of delays in collection of, or losses on, our accounts receivable, which could adversely affect our results of operations. If we are unable to offset any decrease in revenue by increasing sales to new or existing customers, or otherwise offset higher costs through price increases, our revenues may decline or grow at lower rates. The extent of the impact of ongoing macroeconomic conditions on our operational and financial performance is uncertain and will depend on political, social, economic and regulatory factors that are outside of our control, including but not limited to the incidence and severity of additional COVID-19 virus variants and actions that may be taken by regulators and businesses (including customers) in response to macroeconomic uncertainty. We considered the impact of the current economic environment and COVID-19 on our estimates and assumptions and determined that there were no material adverse impacts on the consolidated financial statements as of March 31, 2023. As events continue to evolve and additional information becomes available, our estimates and assumptions may change materially in future periods.

Key Business Metric

In addition to our GAAP financial information ~~determined in accordance with generally accepted accounting principles in the U.S. (“GAAP”)~~, we review the following key business metric to measure our performance, identify trends, formulate business plans and make strategic decisions.

Net Dollar Retention Rate

To evaluate the efficacy of our land and expand model, we examine the rate at which our customers increase their spend with us for our solutions. Our net dollar retention rate measures our ability to retain and increase spend across our existing customer base through expanded use of our platform, offset by customers who choose to stop using our solutions or spend less with us.

We calculate our net dollar retention rate as a quotient of the following:

•

Denominator: Revenue from customers whose revenue existed in the twelve months ending on the day twelve months prior to the date as of which the retention rate is being reported.

•

Numerator: Revenue in the last twelve months from the customers whose revenue is reflected in the denominator.

In the Event Cloud, we define a customer as a party who has entered into an active subscription contract with us. The majority of our customers are parties who are separate organizations. In certain instances, separate business units of an organization that have each entered into separate subscription agreements with us are considered separate customers. In the Hospitality Cloud, we define a customer as an entity with an active account with the Company, where the customer pays for the account or the account has been paid for by the customer’s parent company. For example, a corporate brand’s individual hotel properties whose accounts are paid for by that property’s corporate brand would be considered separate customers.

The calculation excludes transactional revenue, ~~revenue~~ associated with our Cvent CONNECT client conference and revenue associated with acquisitions ~~where~~whereby ~~by-~~client revenue is not available. This revenue comprised 41.47% ~~of revenue for each of the three months ended September 30, 2022~~ and ~~2021, respectively, and 4.4% and~~ 3.16% of revenue for ~~the~~three ~~nine~~ months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively.

We believe our ability to not only retain, but upsell and cross-sell additional features and products to, our existing customers will continue to support our net dollar retention rate. As of ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, our net dollar retention rate was ~~116~~115.1% and 90108.07%, respectively. The year-over-year increase in our net dollar retention rate is primarily due to the lessening impact of the global COVID-19 pandemic in ~~2021~~2022 and ~~2022~~2023 on both the Event Cloud and Hospitality ~~Clouds~~Cloud, resulting in increased spend on products supporting in-person events, in addition to the adoption of ~~our~~Attendee ~~virtual~~Hub, our solution, ~~Attendee~~for ~~Hub~~ongoing engagement and virtual events. With in-person meetings and events continuing to quickly return, our net dollar retention rate currently exceeds pre-pandemic levels. In the near-term, we believe our net dollar retention rate will return to pre-pandemic levels as the rate of growth of in-person meetings and events continues to normalize. Longer-term, we believe our net dollar retention rate may exceed pre-pandemic levels as a result of the market opportunity created by virtual and hybrid events and the accelerated digitization of the meetings and events industry.

Our net dollar retention rate may fluctuate as a result of a number of factors, including the growing level of our revenue base, the level of penetration within our customer base, expansion of products and features, our ability to retain our customers and our ability to upsell and cross-sell to our customers. Our calculation of net dollar retention rate may differ from similarly titled metrics presented by other companies.

Components of Operating Results

Revenue

We generate revenue from two primary sources: Event Cloud subscription-based solutions and Hospitality Cloud marketing-based and subscription-based solutions. Subscription-based solution revenue consists primarily of fees to provide our customers with access to our cloud-based software platform. Marketing-based solution revenue consists primarily of fees for digital advertising on the Cvent Supplier Network (“CSN”) or one of our other online advertising platforms.

Event Cloud

We generate the majority of our Event Cloud revenue from subscriptions for our event marketing and management software solution. Subscription revenue is driven primarily by the number of registrations purchased and the number and complexity of mobile applications, onsite events and virtual events purchased in addition to additional modules that enhance the functionality of the software solution. In some cases, the subscription price is based on the number of subscriptions being purchased by the customer.

The terms of our Event Cloud contracts are typically non-cancellable, have annual or multi-year terms, and are billed in advance on an annual or quarterly basis, as applicable. In the case of multi-year agreements, the agreement sometimes includes annual price increases over the contract term. Our agreements are sum-certain and not pay-as-you-go. Generally, if a customer exceeds their purchased number of registrations, the customer will incur an overage fee. We recognize revenue associated with Event Cloud subscription agreements ratably over the term of the contract. Certain revenue associated with Onsite Solutions and Attendee Hub products is recognized at a point in time as the services are performed and the performance obligations are satisfied. Amounts that have been contractually invoiced are initially recorded as deferred revenue and are recognized as revenue ratably over the subscription period. We refer to contractual amounts that have not been invoiced as unbilled contract value, and together with deferred revenue, remaining performance obligations. Unbilled contract value is not reflected in our consolidated financial statements.

2018

subscription agreements ratably over the term of the contract. Certain revenue associated with Onsite Solutions and Attendee Hub products is recognized at a point in time as the services are performed and the performance obligations are satisfied.

Hospitality Cloud

We generate our Hospitality Cloud revenue from marketing and subscription-based software solutions. Marketing solutions revenue is primarily driven by the number of advertisements purchased on CSN. The advertisement price is primarily determined by the term, targeted geography, market tier, number and prominence of the advertising placement. Subscription revenue is driven primarily by the number of licenses purchased for our lead scoring solution to prioritize group RFPs, three-dimensional hotel tours, event diagramming to collaborate with event organizers on designing optimal event layouts and viewing three-dimensional renderings, room block management to enable event attendees to reserve hotel rooms, business transient solutions and business intelligence solutions to benchmark against internal and targeted competitive metrics. In some cases, the subscription price is based on the number of subscriptions being purchased by the customer.

The terms of our subscription and marketing contracts are typically non-cancellable, annual or multi-year terms, and are typically billed in advance on an annual or quarterly basis, as applicable. In the case of multi-year agreements, the agreement sometimes includes annual price increases over the contract term. Our agreements are typically sum-certain and not based on usage. We recognize revenue associated with these agreements ratably over the term of the subscription or advertising period. ~~Amounts~~For both Event Cloud and Hospitality Cloud, amounts that have been contractually invoiced are initially recorded as deferred revenue and are recognized as revenue ratably over the subscription or advertising period. We refer to contractual amounts that have not been invoiced as unbilled contract value, and together with deferred revenue, remaining performance obligations. Unbilled contract value is not reflected in our consolidated financial statements. See “Key Factors Affecting Our Performance —Seasonality” included in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for the effects of seasonality on our Hospitality Cloud ~~Revenue~~revenue.

For multi-year agreements for either Event Cloud or Hospitality Cloud solutions, we typically invoice the amount for the first year of the contract at signing, followed by subsequent annual invoices at the anniversary of each year. Since we bill most of our customers in advance, there can be amounts that we have not yet been contractually able to invoice. Until such time as these amounts are invoiced or recognized in revenue, they are considered by us to be unbilled contract value, and together with deferred revenue, remaining performance obligations. As of ~~September~~March 3031, ~~2022~~2023 and December 31, ~~2021,~~2022 our total current deferred revenue was $~~246~~302.2 million and $~~239~~267.89 million, ~~respectively,~~ which amounts do not include unbilled contract value for contracts not yet billed of $~~508~~532.71 million and $~~573~~539.47 million, respectively. We expect that the amount of unbilled contract value relative to the total value of our contracts will change from year to year for several reasons, including the amount of cash collected early in the contract term, the specific timing and duration of customer agreements, varying invoicing cycles of agreements, the specific timing of customer renewals, changes in customer financial circumstances and foreign currency fluctuations. We expect to recognize approximately 7271.75% of our remaining performance obligations as revenue over the subsequent 24 months, and the remainder thereafter.

Cost of ~~revenue~~Revenue

Cost of revenue primarily consists of employee-related expenses, such as salaries, benefits, bonuses and stock-based compensation, related to providing support and hosting our solutions, costs of cloud-based data center capacity, software license fees, costs to support our onsite, virtual and hybrid solutions, interchange fees related to merchant services and amortization expense associated with capitalized software. In addition, we allocate a portion of overhead, such as rent and depreciation and amortization to cost of revenue based on headcount.

Although ~~the~~we ~~Company~~break ~~breaks~~ out revenue by ~~cloud~~solution, we do not track or manage the business by cost of revenue by ~~cloud~~solution. Rather, we manage cost of revenue by type of direct cost, and a significant portion of these direct costs are shared costs to support both Event Cloud and Hospitality Cloud solutions. This is consistent with ~~the~~our ~~Company’s~~ approach to management of the business as one comprehensive solution for the entire event management lifecycle.

We are invested in our customers’ success and as such, we will continue to invest in providing support, expanding our capacity to support our growth and developing new features to support virtual, hybrid and in-person events and enhance our existing products, which in the near-term is expected to result in higher cost of revenue in absolute dollars.

~~Gross profit and gross margin~~19

Gross Profit and Gross Margin

Gross profit is total revenue less total cost of revenue. Gross margin is gross profit expressed as a percentage of total revenue. We expect that our gross margin may fluctuate from period to period as a result of seasonality related to our onsite, virtual and hybrid solutions and merchant services products in the near-term, and additional costs associated with potential future acquisitions.

Operating ~~expenses~~Expenses

Our operating expenses include selling and marketing expenses, research and development expenses, general and administrative expenses and intangible asset amortization, exclusive of amounts included in cost of revenue.

Sales and ~~marketing~~Marketing

Sales and marketing expenses primarily consist of personnel and related expenses for our sales and marketing staff, including salaries, benefits, bonuses, commissions and stock-based compensation. We capitalize commissions when they are earned by staff, which is when the customer contract is signed. We amortize capitalized commissions over the average historic customer contract life. In addition to staff costs, our cost of marketing includes product marketing and other brand-building and lead generation tactics such as webinars, trade shows, product seminars, content marketing, digital marketing, third-party content distribution and our annual client conference, Cvent CONNECT. In addition, we also allocate a portion of overhead, such as rent and depreciation to sales and marketing based on headcount.

We intend to continue to invest in sales and marketing and expect ~~spending~~expenses ~~in these areas~~ to increase in absolute dollars in the near-term as we continue to expand our business both domestically and internationally and take advantage of the growing need for virtual and hybrid events. WeAlthough we expect sales and marketing expenses to continue to be among the most significant components of our operating expenses, we expect sales and marketing expenses as a percentage of revenue to decrease in the near-term.

Research and ~~development~~Development

Research and development expenses consist primarily of personnel and related expenses for our research and development staff, including salaries, benefits, bonuses and stock-based compensation and the cost of third-party contractors. Research and development expenses, other than software development costs that qualify for capitalization, are expensed as incurred. In addition, we allocate a portion of overhead, such as rent and depreciation to research and development based on headcount.

With the exception of software developed by companies we have acquired, we maintain a unified software code base for our entire platform, which we believe improves the efficiency of our research and development activities. We expect research and development expenses to increase in absolute dollars in the near-term as we continue to expand our product offerings, including our virtual and hybrid event functionality, and integrate and support potential future acquired businesses and technologies. However, we expect research and development expenses as a percentage of revenue to decrease in the near-term.

General and ~~administrative~~Administrative

General and administrative expenses consist primarily of personnel and related expenses for administrative, internal information technology operations, finance, legal, corporate development, strategy and human resource staff, including salaries, benefits, bonuses and stock-based compensation, as well as professional fees, insurance premiums and other corporate expenses, including expenses associated with the Merger. In addition, we allocate a portion of overhead, such as rent and depreciation to general and administrative based on headcount.

We expect our general and administrative expenses to increase in absolute dollars in the near-term ~~as we continue to expand our operations. Additionally~~, weprimarily ~~expect~~due to ~~incur~~ incremental ~~general and administrative~~ expenses toin ~~comply~~connection with the ~~requirements of being a public company~~Merger.

Intangible ~~asset~~Asset ~~amortization~~Amortization, ~~exclusive~~Exclusive of ~~amounts~~Amounts ~~included~~Included in ~~cost~~Cost of ~~revenue~~Revenue

Intangible asset amortization, exclusive of amounts included in cost of revenue, consists entirely of amortization expenses related to acquired customer relationship and trademark intangible assets. This line item excludes intangible asset amortization related to cost of revenue, which is defined as acquired developed technology and capitalized software intangible asset amortization.

We expect to continue to pursue strategic acquisition opportunities, subject to any restrictions under the Merger Agreement, and if successful, we expect that our intangible asset amortization expenses will increase in absolute dollars.

Other

Our other income/expense items include interest expense, amortization of deferred financing costs and debt discount, ~~loss on extinguishment of debt, net~~ and other income, net.

Interest expense

Interest expense relates primarily to interest payments on our outstanding borrowings under our credit facilities as further described in Note 11. “Debt” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly

Report. As of September 30, 2022, the Company had outstanding borrowings of $165.0 million under its five-year, $500.0 million senior secured revolving credit facility (the “Revolving Credit Facility”).

Amortization of deferred financing costs and debt discount

Amortization of deferred financing costs and debt discount consists of the amortization of up-front fees paid at the inception of our credit facilities.

Loss on extinguishment of debt

Loss on extinguishment of debt consists of the write-off of unamortized deferred financing costs associated with the repayment and termination of the Term Loan Facility (as defined in Note 11. “Debt” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report).

Other income, net

Other income, net consists primarily of interest income, foreign currency gains or losses, and import tax credits.

Provision for income taxes

Provision for income taxes consists primarily of income taxes related to U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we conduct business.

Results of Operations

Comparison of the Three Months Ended September 30, 2022 and 2021

The following table sets forth our consolidated statement of operations for the periods indicated:

	Three Months Ended September 30,
	2022			2021
	(in thousands)
Consolidated Statement of Operations Data:
Revenue:
Event Cloud	$	112,895		$	92,484
Hospitality Cloud		48,426			41,574
Total revenue		161,321			134,058
Cost of revenue		63,011			50,635
Gross profit		98,310			83,423
Operating expenses:
Sales and marketing		42,869			37,161
Research and development		34,232			25,685
General and administrative		24,685			25,358
Intangible asset amortization, exclusive of amounts included in cost of revenue		12,170			12,757
Total operating expenses		113,956			100,961
Loss from operations		(15,646	)		(17,538	)
Interest expense		(1,857	)		(7,546	)
Amortization of deferred financial costs and debt discount		(157	)		(938	)
Other income, net		1,094			1,864
Loss before income taxes		(16,566	)		(24,158	)
Provision for income taxes		1,667			1,968
Net loss	$	(18,233	)	$	(26,126	)

The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue for the periods indicated:

	Three Months Ended September 30,
	2022			2021
Consolidated Statement of Operations Data:
Revenue:
Event Cloud		70.0	%		69.0	%
Hospitality Cloud		30.0	%		31.0	%
Total revenue		100.0	%		100.0	%
Cost of revenue		39.1	%		37.8	%
Gross profit		60.9	%		62.2	%
Operating expenses:
Sales and marketing		26.6	%		27.7	%
Research and development		21.2	%		19.2	%
General and administrative		15.3	%		18.9	%
Intangible asset amortization, exclusive of amounts included in cost of revenue		7.5	%		9.5	%
Total operating expenses		70.6	%		75.3	%
Loss from operations		(9.7	%)		(13.1	%)
Interest expense		(1.2	%)		(5.6	%)
Amortization of deferred financial costs and debt discount		(0.1	%)		(0.7	%)
Other income, net		0.7	%		1.4	%
Loss before income taxes		(10.3	%)		(18.0	%)
Provision for income taxes		1.0	%		1.5	%
Net loss		(11.3	%)		(19.5	%)

Revenue

	Three Months EndedSeptember 30,
	2022		2021		$ Change		% Change
	(in thousands)
Revenue:
Event Cloud	$	112,895	$	92,484	$	20,411		22.1	%
Hospitality Cloud		48,426		41,574		6,852		16.5	%
Total revenue	$	161,321	$	134,058	$	27,263		20.3	%

Total revenue for the three months ended September 30, 2022 was $161.3 million, an increase of $27.3 million, or 20.3% compared to the three months ended September 30, 2021. Event Cloud revenue accounted for $112.9 million, or 70.0% of total revenue, and Hospitality Cloud revenue accounted for $48.4 million, or 30.0% of total revenue, for the three months ended September 30, 2022.

Event Cloud revenue increased $20.4 million, or 22.1%, during the three months ended September 30, 2022 compared to the prior year. The increase was due to the strong performance of products that support in-person meetings as there is sustained momentum in the return of in-person meetings. While revenue associated with virtual meetings is still one of our top Event Cloud revenue drivers, the return of in-person meetings has caused a revenue mix shift towards products that support in-person and hybrid meetings. These increases were partially offset by the timing of revenue associated with our client conference, Cvent CONNECT, which was held in the second quarter of 2022 compared to the third quarter of 2021, and represented $1.2 million of revenue in the third quarter of 2021.

Hospitality Cloud revenue increased $6.9 million, or 16.5%, during the three months ended September 30, 2022 compared to the prior year primarily due to increased demand of our advertising and software solutions driven by the sustained momentum in the return of in-person meetings and events. These increases were partially offset by the timing of revenue associated with our client conference, Cvent CONNECT, which was held in the second quarter of 2022 compared to the third quarter of 2021, and represented $1.6 million of revenue in the third quarter of 2021.

We generate the majority of our revenue from North America. Revenue from outside North America accounted for 12.7% and 13.9% of total revenue for the three months ended September 30, 2022 and 2021, respectively. In the near-term, in absolute dollars, we expect that total revenue from outside North America will increase at the same rate as the rest of our business, and as such, we expect that total revenue from outside of North America as a proportion of total revenue will not substantially change.

Cost of Revenue

	Three Months EndedSeptember 30,
	2022		2021		$ Change		% Change
	(in thousands)
Cost of revenue	$	63,011	$	50,635	$	12,376		24.4	%

Cost of revenue for the three months ended September 30, 2022 was $63.0 million, an increase of $12.4 million, or 24.4%, compared to the three months ended September 30, 2021. This increase was primarily driven by a $4.4 million increase in employee expense due to a 24.7% increase in average headcount, a $1.8 million increase in stock-based compensation, a $1.3 million increase in hosting expense and a $1.0 million increase in amortization of capitalized software development costs. Additionally, third-party costs related to supporting virtual, in-person, and hybrid events increased $3.1 million and credit card interchange fees related to our merchant services business increased $1.8 million primarily driven by the sustained momentum in the return of in-person meetings and events. These increases were partially offset by the timing of costs associated with our client conference, Cvent CONNECT, which was held in the second quarter of 2022 compared to the third quarter of 2021, and represented $0.9 million of costs in the third quarter of 2021.

Operating Expenses

	Three Months EndedSeptember 30,
	2022		2021		$ Change			% Change
	(in thousands)
Sales and marketing	$	42,869	$	37,161	$	5,708			15.4	%
Research and development		34,232		25,685		8,547			33.3	%
General and administrative		24,685		25,358		(673	)		-2.7	%
Intangible asset amortization, exclusive of amounts included in cost of revenue		12,170		12,757		(587	)		(4.6	%)
Total operating expenses	$	113,956	$	100,961	$	12,995			12.9	%

Sales and Marketing. Sales and marketing expenses for the three months ended September 30, 2022 were $42.9 million, an increase of $5.7 million, or 15.4%, compared to the three months ended September 30, 2021. This increase was primarily driven by a $4.6 million increase in employee expense due to a 15.3% increase in average headcount, a $3.8 million increase in stock-based compensation, and a $0.9 million increase in marketing program spend. These increases were partially offset by the timing of costs associated with our client conference, Cvent CONNECT, which was held in the second quarter of 2022 compared to the third quarter of 2021, and represented $3.6 million of costs in the third quarter of 2021.

Research and Development. Research and development expenses for the three months ended September 30, 2022 were $34.2 million, an increase of $8.5 million, or 33.3%, compared to the three months ended September 30, 2021. This increase was primarily driven by a $6.4 million increase in employee expense due to a 17.1% increase in average headcount and a $3.1 million increase in stock-based compensation.

General and Administrative. General and administrative expenses for the three months ended September 30, 2022 were $24.7 million, a decrease of $0.7 million, or 2.7%, compared to the three months ended September 30, 2021. This decrease was primarily driven by a $4.1 million decrease in bad debt expense. This decrease was partially offset by a $2.2 million increase in stock-based compensation, a $1.9 million increase in employee expense due to a 18.7% increase in average headcount, and a $0.9 million increase in corporate insurance related to public company directors' and officers' insurance.

Intangible Asset Amortization, Exclusive of Amounts Included in Cost of Revenue. Intangible asset amortization, exclusive of amounts included in cost of revenue for the three months ended September 30, 2022 was $12.2 million, a decrease of $0.6 million, or 4.6%, compared to the three months ended September 30, 2021. This decrease was driven primarily by the scheduled decline in the amortization of intangible assets acquired in past years and no significant business acquisitions occurring in 2022.

Interest Expense

	Three Months EndedSeptember 30,
	2022			2021			$ Change		% Change
	(in thousands)
Interest expense	$	(1,857	)	$	(7,546	)	$	5,689		(75.4	%)

Interest expense relates primarily to interest payments on our outstanding borrowings under our credit facilities as further described in Note 10. “Debt” to the consolidated financial statements included in Part I, Item 1 of this Quarterly Report. As of March 31, 2023, we had outstanding borrowings of $138.0 million under our five-year, $500.0 million senior secured revolving credit facility (the “Revolving Credit Facility”).

Interest expense for the three months ended September 30, 2022 was $1.9 million, a decrease of $5.7 million, or 75.4%, compared to the three months ended September 30, 2021. This decrease was driven primarily by a significantly lower principal amount on our outstanding long-term debt as a result of the $500.0 million partial repayment of the Company’s Term Loan Facility in December 2021. Additionally, the Company made partial repayments totaling $50.0 million under the Company’s Revolving Credit Facility during the three months ended September 30, 2022, partially offset by additional borrowings of $20.0 million.

Amortization of Deferred Financing Costs and Debt Discount

	Three Months EndedSeptember 30,
	2022			2021			$ Change		% Change
	(in thousands)
Amortization of deferred financing costs and debt discount	$	(157	)	$	(938	)	$	781		(83.3	%)

Amortization of deferred financing costs and debt discount consists of the amortization of up-front fees paid at the inception of our credit facilities.

Amortization of deferred financing costs and debt discount for the three months ended September 30, 2022 was $0.2 million, a decrease of $0.8 million, or 83.3%, compared to the three months ended September 30, 2021 due to the acceleration of amortization of

deferred financing costs and debt discount associated with the prepayment of the outstanding principal balance under the Term Loan Facility.

Other Income, Net

	Three Months EndedSeptember 30,
	2022		2021		$ Change			% Change
	(in thousands)
Other income, net	$	1,094	$	1,864	$	(770	)		(41.3	%)

Other income, net consists primarily of interest income and foreign currency gains or losses.

Other income, net for the three months ended September 30, 2022 was $1.1 million, a decrease of $0.8 million, or 41.3%, as compared to the three months ended September 30, 2021. The decrease in other income for the three months ended September 30, 2022 resulted primarily from lower foreign currency gains.

Provision for Income Taxes

	Three Months EndedSeptember 30,
	2022		2021		$ Change			% Change
	(in thousands)
Provision for income taxes	$	1,667	$	1,968	$	(301	)		(15.3	%)

Provision for income taxes consists primarily of income taxes related to U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we conduct business.

Provision for income taxes for the three months ended September 30, 2022 was $1.7 million, a decrease of $0.3 million, or 15.3%, compared to the three months ended September 30, 2021. The decrease primarily resulted from the recording of lower pre-tax book income in high tax foreign jurisdictions.21

27Results of Operations

Comparison of the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022

The following table sets forth our consolidated statement of operations for the periods indicated:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2022			2021
	2023			2022
	(in thousands)
Consolidated Statement of Operations Data:
Revenue:
Event Cloud	$	~~320~~114,~~517~~686		$	~~259~~94,~~207~~988
Hospitality Cloud		~~139~~51,~~122~~519			~~114~~42,~~952~~368
Total revenue		~~459~~166,~~639~~205			~~374~~137,~~159~~356
Cost of revenue		~~184~~60,~~772~~691			~~140~~56,~~479~~200
Gross profit		~~274~~105,~~867~~514			~~233~~81,~~680~~156
Operating expenses:
Sales and marketing		~~131~~44,~~787~~960			9940,~~069~~091
Research and development		9835,~~766~~973			7231,~~016~~406
General and administrative		7539,~~633~~768			6324,~~711~~951
Intangible asset amortization, exclusive of amounts included in cost of revenue		3611,~~484~~713			3812,~~721~~154
Total operating expenses		~~342~~132,~~670~~414			~~273~~108,~~517~~602
Loss from operations		(6726,~~803~~900	)		(3927,~~837~~446	)
Interest expense		(72,~~054~~647	)		(222,~~717~~592	)
Amortization of deferred financial costs and debt discount		(~~734~~158	)		(~~2,823~~320	)
Loss on extinguishment of debt		(3,219	)		-
Other income, net		1,169			260
Other income, net		1,979			6,135
Loss before income taxes		(28,536	)		(30,098	)
Loss before income taxes		(76,831	)		(59,242	)
Provision for income taxes		4,107			1,291
Provision for income taxes		4,292			5,294
Net loss	$	(32,643	)	$	(31,389	)
Net loss	$	(81,123	)	$	(64,536	)

The following table sets forth our consolidated statements of operations data expressed as a percentage of total revenue for the periods indicated:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2022			2021
	2023			2022
Consolidated Statement of Operations Data:
Revenue:
Event Cloud		69.70	%		69.32	%
Hospitality Cloud		3031.30	%		30.78	%
Total revenue		100.0	%		100.0	%
Cost of revenue		4036.25	%		3740.59	%
Gross profit		5963.85	%		6259.51	%
Operating expenses:
Sales and marketing		2827.71	%		2629.52	%
Research and development		21.56	%		1922.29	%
General and administrative		1623.59	%		1718.02	%
Intangible asset amortization, exclusive of amounts included in cost of revenue		7.90	%		108.38	%
Total operating expenses		7479.67	%		7379.1	%
Loss from operations		(1416.82	%)		(1020.60	%)
Interest expense		(1.56	%)		(6.1.9	%)
Amortization of deferred financial costs and debt discount		(0.21	%)		(0.82	%)
Loss on extinguishment of debt		(0.7	%)		0.0	%
Other income, net		0.7	%		0.2	%
Other income, net		0.4	%		1.6	%
Loss before income taxes		(17.2	%)		(21.9	%)
Loss before income taxes		(16.7	%)		(15.8	%)
Provision for income taxes		2.5	%		0.9	%
Provision for income taxes		0.9	%		1.4	%
Net loss		(19.6	%)		(22.9	%)
Net loss		(17.6	%)		(17.2	%)

2822

Revenue

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022		2021		$ Change		% Change
	2023		2022		$ Change		% Change
	(in thousands)
Revenue:
Event Cloud	$	~~320~~114,~~517~~686	$	~~259~~94,~~207~~988	$	6119,~~310~~698		2320.7	%
Hospitality Cloud		~~139~~51,~~122~~519		~~114~~42,~~952~~368		249,~~170~~151		21.06	%
Total revenue	$	~~459~~166,~~639~~205	$	~~374~~137,~~159~~356	$	8528,~~480~~849		2221.80	%

Total revenue for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 was $~~459~~166.62 million, an increase of $8528.58 million, or 2221.80%, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. Event Cloud revenue accounted for $~~320~~114.57 million, or 69.70% of total revenue, and Hospitality Cloud revenue accounted for $~~139~~51.15 million, or 3031.30% of total revenue, for ~~the~~three ~~nine~~ months ended ~~September~~March 3031, ~~2022~~2023.

Event Cloud revenue ~~increased~~for the three months ended March 31, 2023 was $61114.37 million, an increase of $19.7 million, or 2320.7%, ~~during~~compared to the ~~nine~~three months ended ~~September~~March 3031, 2022 ~~compared to the prior year~~. The increase was due to the strong performance of products that support in-person meetings asand ~~there~~events isbecause ~~sustained~~of ~~momentum in~~ the ~~return~~lessening ofimpact ~~in-person meetings. While revenue associated with virtual meetings is still one~~ of ~~our top Event Cloud revenue drivers,~~ the ~~return~~global ~~of in~~COVID-~~person~~19 ~~meetings~~pandemic ~~has~~between ~~caused~~the afirst ~~revenue~~quarter ~~mix~~of ~~shift~~2022 ~~towards~~and ~~products~~the ~~that~~first ~~support~~quarter ~~in-person~~of ~~and hybrid meetings~~2023.

Hospitality Cloud revenue ~~increased~~for the three months ended March 31, 2023 was $2451.5 million, an increase of $9.2 million, or 21.06%, ~~during~~compared to the ~~nine~~three months ended ~~September~~March 3031, 2022. ~~compared~~The toincrease ~~the~~was ~~prior year~~ primarily due to increased demand of our advertising and software solutions driven by the sustained ~~momentum in the~~ return of in-person meetings ~~and events~~.

We generate the majority of our revenue from North America. Revenue from outside North America accounted for 1213.07% and 1312.60% of total revenue for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022, respectively. In the near-term, in absolute dollars, we expect that total revenue from outside North America will increase at the same rate as the rest of our business, and as such, we expect ~~that~~ total revenue from outside of North America as a proportion of total revenue will not substantially change.

Cost of Revenue

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022		2021		$ Change		% Change
	2023		2022		$ Change		% Change
	(in thousands)
Cost of revenue	$	~~184~~60,~~772~~691	$	~~140~~56,~~479~~200	$	444,~~293~~491		318.50	%

Cost of revenue for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 was $~~184~~60.87 million, an increase of $444.35 million, or 318.50%, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. This increase was primarily driven by a $132.30 million increase in employee expense due to aan 308.62% increase in average headcount, a $61.80 million increase in ~~hosting expense, a $3.8 million increase in stock-based compensation, a $2.8 million increase in~~ amortization of capitalized software development costs, and a $10.16 million increase in ~~costs~~stock-based ~~associated with our client conference, Cvent CONNECT~~compensation. Additionally, third-party costs related to supporting virtual, in-person, and hybrid events increased $101.06 million, and credit card interchange fees related to our merchant services business increased $51.45 million, ~~both of which were~~ primarily driven by the sustained ~~momentum in the~~ return of in-person meetings and events. These cost increases were partially offset by a $1.7 million decrease in hosting expense related to cost optimization and higher credits received in the first quarter of 2023 compared to the first quarter of 2022.

Operating Expenses

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022		2021		$ Change			% Change
	2023		2022		$ Change			% Change
	(in thousands)
Sales and marketing	$	~~131~~44,~~787~~960	$	9940,~~069~~091	$	324,~~718~~869			3312.01	%
Research and development		9835,~~766~~973		7231,~~016~~406		264,~~750~~567			3714.15	%
General and administrative		7539,~~633~~768		6324,~~711~~951		1114,~~922~~817			1859.74	%
Intangible asset amortization, exclusive of amounts included in cost of revenue		3611,~~484~~713		3812,~~721~~154		(~~2,237~~441	)		(53.86	%)
Total operating expenses	$	~~342~~132,~~670~~414	$	~~273~~108,~~517~~602	$	6923,~~153~~812			2521.39	%

2923

Sales and Marketing. Sales and marketing expenses for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 were $~~131~~45.80 million, an increase of $324.79 million, or 3312.01%, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. This increase was primarily driven by ana $163.16 million increase in employee expense due to a 1510.74% increase in average headcount, and a $~~10.~~2.0 million increase in stock-based compensation~~, a $5~~.1 ~~million~~These ~~increase~~increases inwere ~~marketing~~partially ~~program~~offset ~~spend,~~by ~~and a~~ $0.79 million ~~increase~~ in ~~travel~~lower ~~related~~marketing ~~expense.~~program ~~Additionally, costs associated with our client conference, Cvent CONNECT, increased $1~~spend.~~1 million.~~

Research and Development. Research and development expenses for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 were $9836.80 million, an increase of $264.86 million, or 3714.15%, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. This increase was primarily driven by ana $183.61 million increase in employee expense due to a 1511.72% increase in average headcount, and a $71.52 million increase in stock-based compensation~~, and a $1~~.9 million decrease in wage subsidies received pursuant to the Canada Emergency Wage Subsidy program in 2022 compared to 2021. These increases were partially offset by a $0.8 million decrease in depreciation expense.

General and Administrative. General and administrative expenses for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 were $7539.68 million, an increase of $1114.98 million, or 1859.74%, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. This increase was ~~primarily~~ driven by a $713.75 million ~~increase~~ in ~~stock-based~~transaction ~~compensation,~~costs ~~a $6.0 million increase in employee expense due to a 22.4% increase in average headcount, a $2.8 million increase in corporate insurance~~ related to ~~public~~the ~~company directors' and officers' insurance~~Merger, a $10.69 million increase in ~~contracted~~stock-based ~~services~~compensation, and a $10.37 million increase in ~~licenses~~travel ~~and fees. A portion of these cost increases are~~ related ~~to additional costs incurred as a publicly traded company~~expense. These increases were partially offset by a $50.27 million decrease in bad debt expense ~~and a $0~~.~~9 million decrease in legal costs associated with prosecuting a trade secret misappropriation claim.~~

Intangible Asset Amortization, Exclusive of Amounts Included in Cost of Revenue. Intangible asset amortization, exclusive of amounts included in cost of revenue for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 was $3611.57 million, a decrease of $20.24 million, or, 53.86%, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. This decrease was driven primarily by the scheduled decline in the amortization of intangible assets acquired in past years and no ~~significant~~ business acquisitions occurring in ~~2022~~the first quarter of 2023.

Interest Expense

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022			2021			$ Change			% Change
	2023			2022			$ Change			% Change
	(in thousands)
Interest expense	$	(72,~~054~~647	)	$	(222,~~717~~592	)	$	~~15,663~~(55	)		~~(68~~2.91	%)

Interest expense for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 was $72.16 million, aan ~~decrease~~increase of $150.71 million, or 682.91%, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. This ~~decrease~~increase was driven ~~primarily~~ by ahigher ~~significantly~~interest ~~lower~~rates ~~principal~~in ~~amount~~the onthree ~~our~~months ~~outstanding~~ended ~~long-term~~March ~~debt~~31, 2023 as acompared ~~result~~to of the ~~$500.0~~same ~~million~~period ~~partial repayment of the Company’s Term Loan Facility~~ in ~~December 2021. Additionally~~2022, ~~the~~partially ~~Company~~offset ~~made~~by ~~partial~~lower ~~repayments~~long-term ~~totaling~~debt ~~$120.0~~balances ~~million of the Company’s Revolving Credit Facility~~ during the ~~nine~~three months ended ~~September~~March 3031, ~~2022,~~2023 ~~partially~~as ~~offset~~compared byto ~~additional~~prior ~~borrowings of $20~~year.0 ~~million.~~

Amortization of Deferred Financing Costs and Debt Discount

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022			2021			$ Change		% Change
	2023			2022			$ Change		% Change
	(in thousands)
Amortization of deferred financing costs and debt discount	$	(~~734~~158	)	$	(~~2,823~~320	)	$	~~2,089~~162		(7450.06	%)

Amortization of deferred financing costs and debt discount for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 was $0.72 million, a decrease of $20.12 million, or 7450.06%, compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022 due to the acceleration of amortization of deferred financing costs and debt discount associated with the prepayment of the outstanding principal balance under the ~~Term~~Company's ~~Loan~~variable ~~Facility~~rate first lien loan in May 2022.

Loss on Extinguishment of Debt

	Nine Months EndedSeptember 30,
	2022			2021		$ Change			% Change
	(in thousands)
Loss on extinguishment of debt	$	(3,219	)	$	-	$	(3,219	)		100.0	%

Loss on extinguishment of debt for the nine months ended September 30, 2022 was $3.2 million, which is due to the acceleration of debt issuance costs amortization associated with repayment of the outstanding principal balance under the Term Loan Facility.

Other Income, Net

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022		2021		$ Change			% Change
	2023		2022		$ Change			% Change
	(in thousands)
Other income, net	$	1,~~979~~169	$	~~6,135~~260	$	~~(4,156~~909	)		~~(67~~349.76	%)

Other income, net for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 was $21.02 million, aan ~~decrease~~increase of $40.29 million, or 67349.76%, as compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. ~~The~~Other ~~decrease in other~~ income for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022 ~~resulted~~consisted primarily ~~from~~of ~~lower~~interest ~~foreign~~income ~~currency~~of ~~gains~~$0.8 million in each period from short-term investments.

Provision for Income Taxes

	Nine Months EndedSeptember 30,
	Three Months EndedMarch 31,
	2022		2021		$ Change			% Change
	2023		2022		$ Change			% Change
	(in thousands)
Provision for income taxes	$	4,~~292~~107	$	51,~~294~~291	$	(12,~~002~~816	)		~~(18~~218.91	%)

Provision for income taxes for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 was $4.31 million, aan ~~decrease~~increase of $12.08 million, or 18218.91% , compared to the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022. The ~~decrease~~increase primarily resulted from the recording of ~~lower~~higher pre-tax book income in high tax foreign jurisdictions and an increase in state tax expense due to the prior year utilization of net operating losses in certain states.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the non-GAAP measures of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow and Adjusted ~~EBITDA~~Free Cash Flow margin are useful in evaluating our operating performance. We believe that non-GAAP financial information, when considered collectively with the corresponding GAAP measures, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA margin are supplemental measures of operating performance monitored by management that are not defined under GAAP and that do not represent, and should not be considered as, an alternative to net loss or net loss margin, as determined by GAAP. We define Adjusted EBITDA as net loss adjusted for interest expense, amortization of deferred financing costs and debt discount, gain/(loss) on extinguishment of debt, gain/(loss) on divestitures, net, other income/(expense), net, provision for/(benefit from) income taxes, depreciation, amortization of software development costs, intangible asset amortization, stock-based compensation expense, restructuring expense, cost related to acquisitions, and other items. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue. We use Adjusted EBITDA and Adjusted EBITDA margin to understand and evaluate our core operating performance and trends. We believe Adjusted EBITDA and Adjusted EBITDA margin are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods.

Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider either in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, you should consider Adjusted EBITDA and Adjusted EBITDA margin alongside other financial performance measures, including net loss, net loss margin and our other GAAP results. In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA and Adjusted EBITDA margin are not a presentation made in accordance with GAAP and the use of the terms may vary from others in our industry.

3225

A reconciliation of Adjusted EBITDA to net loss and of Adjusted EBITDA margin to net loss margin (defined as net loss divided by revenue), the most directly comparable GAAP measure, respectively, ~~for the three and nine months ended September 30, 2022 and 2021,~~ is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	Three Months Ended March 31,
	2022			2021			2022			2021
	2023			2022
	(in thousands)						~~(in thousands)~~
Adjusted EBITDA:
Net loss	$	(1832,~~233~~643	)	$	(2631,~~126~~389	)	$	~~(81,123~~	)	$	~~(64,536~~	)
Adjustments:
Adjustments
Interest expense		12,~~857~~647			72,~~546~~592			~~7,054~~			~~22,717~~
Amortization of deferred financing costs and debt discount		~~157~~158			~~938~~320			~~734~~			~~2,823~~
Loss on extinguishment of debt		—			—			3,219			—
Other income, net		(1,169	)		(260	)
Other income, net		(1,094	)		(1,864	)		(1,979	)		(6,135	)
Provision for income taxes		4,107			1,291
Provision for income taxes		1,667			1,968			4,292			5,294
Depreciation		1,816			2,038
Depreciation		1,817			2,493			5,740			8,478
Amortization of software development costs		17,008			15,961
Amortization of software development costs		16,459			15,508			49,181			45,917
Intangible asset amortization		11,713			12,154
Intangible asset amortization		12,170			12,757			36,484			38,721
Stock-based compensation expense		14,556			9,768
Stock-based compensation expense		19,288			8,387			46,008			16,811
Restructuring (income) expense (1)		(4	)		277
Restructuring expense (1)		224			1,212			760			1,777
Cost related to acquisitions (2)		13,585			187
Cost related to acquisitions (2)		(141	)		60			676			1,245
Other items (3)		660			(180	)
Other items (3)		(427	)		547			(1,182	)		(2,255	)
Adjusted EBITDA	$	32,434		$	12,759
Adjusted EBITDA	$	33,744		$	23,426		$	69,864		$	70,857
Adjusted EBITDA Margin:
Adjusted EBITDA Margin:
Revenue	$	166,205		$	137,356
Revenue	$	161,321		$	134,058		$	459,639		$	374,159
Net loss margin (4)		(19.6	%)		(22.9	%)
Net loss margin (4)		(11.3	%)		(19.5	%)		(17.6	%)		(17.2	%)
Adjusted EBITDA margin (4)		19.5	%		9.3	%
Adjusted EBITDA margin (4)		20.9	%		17.5	%		15.2	%		18.9	%

(1)

Restructuring expense includes retention bonuses ~~paid~~ to employees of acquired entities and costs to discontinue use of a back-office system and closing of office space.

(2)

Represents costs incurred in association with acquisition activity, including due diligence and post-acquisition earn out payments, and costs incurred in relation to the Merger.

(3)

Includes other costs associated with prosecuting a trade secret misappropriation claim, private equity management fees, and credit facility fees, net of the gain from government subsidies related to the global COVID-19 pandemic.

(4)

Net loss margin represents net loss divided by revenue, and Adjusted EBITDA margin represents Adjusted EBITDA divided by revenue.

Liquidity and Capital Resources

Our principal sources of liquidity are cash and cash equivalents, on-going collection of our accounts receivable and borrowings under our Revolving Credit Facility (see Note 1110. “Debt” to the ~~unaudited condensed~~ consolidated financial statements included in Part II1, Item 1 of this Quarterly Report). Outstanding borrowings under the Revolving Credit Facility may fluctuate on a quarterly basis due to the seasonality of the Company’s operating cash flows, and the Company’s desire to minimize interest expense. Cash and cash equivalents may include holdings in bank demand deposits, money market instruments and certificates of deposit. We also periodically invest a portion of our excess cash in short-term investments with stated maturity dates between three months and one year from the purchase date.

WeOur ~~believe~~U.S. ~~that~~entities ~~existing~~held ~~cash~~$33.3 ~~and~~million ~~cash equivalents~~ and ~~short-term~~$40.2 ~~investments~~million ~~held~~in ~~by us,~~ cash and cash equivalents ~~anticipated to be generated by us~~ and ~~borrowing~~short-term ~~capacity~~investments ~~under~~as ~~our~~of ~~Revolving~~March ~~Credit~~31, ~~Facility~~2023 ~~are~~and ~~sufficient~~December ~~to meet working capital requirements~~31, ~~anticipated capital expenditures~~2022, ~~and contractual obligations for at least 12 months and beyond~~respectively. WeOur ~~also believe that these financial resources will continue to allow us to manage the ongoing impact of macroeconomic conditions, including COVID~~non-~~19,~~U.S. onentities ~~our~~held ~~business~~$122.8 ~~operations~~million ~~for the foreseeable future, including mitigating potential reductions in revenue~~ and ~~delays in payments from our customers and partners~~$99.9 ~~Our~~million ~~future~~in ~~capital~~cash requirements will depend on several factors, including but not limited to our obligation to repay any amounts outstanding under our Revolving Credit Facility, our subscription growth rate, subscription renewal activity, billing frequency, the timing and ~~extent~~cash ofequivalents ~~spending to support development efforts, the expansion of sales~~ and ~~marketing~~short-term ~~activities,~~investments ~~the~~as ~~introduction~~ of ~~new~~March ~~and enhanced solutions~~31, ~~the~~2023 ~~continuing market adoption of our platform~~ and ~~our~~December ~~level of acquisition activity or other strategic transactions. In the future~~31, ~~we may enter into arrangements to acquire or invest in complementary businesses~~2022, ~~services and technologies, including intellectual property rights~~respectively.

33We believe that existing cash and cash equivalents and short-term investments held by us, cash and cash equivalents anticipated to be generated by us and borrowing capacity under our Revolving Credit Facility are sufficient to meet working capital requirements, anticipated capital expenditures, and contractual obligations for at least the next 12 months and beyond. Our future capital requirements will depend on several factors, including but not limited to our obligation to repay any amounts outstanding under our Revolving Credit Facility, our subscription growth rate, subscription renewal activity, billing frequency, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced solutions, the continuing market adoption of our platform and our level of acquisition activity or other strategic transactions. In the future, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights.

We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our results of operations.

Cash Flows

The following table presents a summary of our consolidated cash flows from operating, investing and financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2022			2021
	2023			2022
	(in thousands)
Net cash provided by operating activities	$	~~141~~92,~~154~~525		$	~~121~~79,~~558~~924
Net cash used in investing activities		(4925,~~851~~005	)		(5017,~~383~~680	)
Net cash used in financing activities		(96,046	)		(18,886	)
Net cash (used in) provided by financing activities		(64,873	)		510
Effect of exchange rate changes on cash, cash equivalents and restricted cash		~~(11~~2,~~391~~185	)		(21,~~250~~209	)
Change in cash, cash equivalents, and restricted cash		~~(16~~4,~~134~~832	)		5061,~~039~~545
Cash, cash equivalents, and restricted cash at beginning of year		126,629			65,470
Cash, cash equivalents, and restricted cash at beginning of period		99,923			126,629
Cash, cash equivalents, and restricted cash at September 30, 2022	$	110,495		$	115,509
Cash, cash equivalents, and restricted cash at end of period	$	104,755		$	188,174
Cash paid for interest	$	62,~~955~~448		$	222,~~721~~584

Operating Activities

Net cash provided by operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business and the amount and timing of customer payments. Cash provided by operations in the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023 and ~~2021~~2022 is primarily attributable to net loss adjusted for non-cash items. Cash provided by operations is also attributable to the change in accounts receivable and deferred revenue, which is driven by the seasonality of our business ~~as a result of higher levels of invoicing in the first~~ and ~~fourth quarters and~~ our collections process. Our cash flows from operating activities are generally reflective of our ability to invoice annual subscription fees upfront with payments due 30 days after the customer’s receipt of the invoice. We experience seasonality in our accounts receivable. The first and fourth quarters historically include a higher level of cash collections, which is a result of higher levels of invoicing in the first and fourth quarters.

For the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, net cash provided by operating activities was $~~141~~92.25 million, which was primarily driven by ~~an $81.1 million~~ net loss adjusted for non-cash items, ~~including~~increased ~~$91.2~~fees ~~million~~payable into ~~depreciation~~customers ~~and~~related ~~amortization,~~to ~~$46.0~~registration ~~million~~fees incollected ~~stock-based~~on ~~compensation,~~behalf ~~and $23.8 million in amortization~~ of ~~capitalized~~our ~~commission,~~customers asfor ~~well~~meetings asand ~~other~~events ~~working~~in ~~capital~~the ~~components~~future, ~~including~~and acash ~~$45.6~~collections ~~million~~and ~~increase~~increased indeferred ~~accounts~~revenue ~~payable,~~related ~~accrued~~to ~~expenses~~calendar ~~and~~year ~~other liabilities~~contracts, apartially ~~$34.2~~offset ~~million~~by ~~decrease in accounts receivable, and~~ a ~~$7.7~~right-of-use ~~million~~asset ~~increase~~associated inwith ~~deferred revenue, partially offset by~~ a ~~$27.7~~lease ~~million~~we ~~increase~~renewed infor ~~capitalized~~our ~~commissions,~~India ~~net~~office. For the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, net cash provided by operating activities was $~~121~~79.69 million, which was primarily driven by ~~a $64.5 million~~ net loss adjusted for non-cash items, ~~including~~increased ~~$93.1~~fees ~~million~~payable into ~~depreciation~~customers ~~and~~related ~~amortization,~~to ~~$21.6~~registration ~~million~~fees incollected ~~amortization~~on behalf of ~~capitalized~~our ~~commissions,~~customers ~~and~~for ~~$16.8~~meetings ~~million~~and inevents ~~stock-based compensation, as well as other working capital components, including a $52.6 million decrease~~ in ~~accounts~~the ~~receivable~~future, ~~partially~~and ~~offset~~cash bycollections aand ~~$26.7~~increased ~~million~~deferred ~~increase~~revenue inrelated ~~capitalized~~to ~~commissions,~~calendar ~~net,~~year ~~and an $18~~contracts.9 ~~million increase in deferred revenue.~~

Investing Activities

Our investing activities have consisted primarily of costs related to software developed for internal use, purchases of computer equipment and leasehold improvements, purchases and sales of ~~short-term~~ investments and business acquisitions. ~~During~~Investments ~~2021~~in ~~and~~software ~~2022,~~developed ~~the~~for ~~impact~~internal ofuse, ~~the~~computer ~~pandemic~~equipment ~~lessened,~~and leasehold improvements and asbusiness ~~these~~acquisitions ~~effects~~are ~~continue~~intended to ~~lessen~~enable ~~and~~sales asgrowth ~~our~~in ~~business~~new, ~~grows~~existing, weand ~~expect~~expanding ~~our~~markets, ~~capital~~help ~~expenditures~~us meet product demand, and increase our ~~investment~~product ~~activity~~offerings toacross ~~continue~~multiple platforms, while the purchases of investments are intended to ~~increase~~maximize returns from our existing cash balances.

For the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, net cash used in investing activities was $4925.90 million, reflecting $3812.47 million in capitalized software development, $29.39 million in net purchases of short-term investments, ~~$3.6 million in acquisitions, net of cash acquired,~~ and $52.74 million in purchases of property and equipment. For the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, net cash used in investing activities was $5017.47 million, reflecting $3011.39 million in capitalized software development, $144.84 million ~~for~~in ~~the~~net ~~acquisition~~purchases of ~~Shoflo,~~short-term ~~LLC,~~investments ~~net~~and ~~of maturities,~~ $21.84 million ofin purchases of property and equipment~~, and $2~~.~~7 million of purchases of short-term investments.~~

Financing Activities

Our financing activities have consisted primarily of proceeds from and principal payments on the ~~Term~~Company’s ~~Loan Facility, partially offset by net borrowings under the~~ Revolving Credit Facility and proceeds from the exercise of stock options. Our practice has been to minimize interest expense while maintaining reasonable liquidity. For the ~~nine~~three months ended ~~September~~March 3031, ~~2022~~2023, net cash used in financing activities was $9664.09 million, consisting ~~primarily of the repayment of $265.7 million~~

3427

inprimarily ~~the~~of ~~Company's Term Loan, as well as~~ $~~120~~115.0 million inof principal repayments ~~under~~on the Company's Revolving Credit Facility, partially offset by $~~285~~45.0 million in ~~borrowings~~proceeds ~~under~~from the Company's Revolving Credit Facility and $75.81 million inof proceeds from the exercise of stock options. For the ~~nine~~three months ended ~~September~~March 3031, ~~2021~~2022, net cash ~~used~~provided inby financing activities was $180.95 million, consisting of ~~$13.4~~proceeds ~~million~~from ~~in repayments on~~ the ~~Company’s~~exercise ~~prior $40.0 million Revolving Credit Facility and $6.0 million~~ of ~~scheduled~~stock ~~principal payments on the Company’s Term Loan Facility~~options.

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin

Adjusted Free Cash Flow and Adjusted Free Cash Flow margin are supplemental measures of operating performance monitored by management that are not defined under GAAP and that do not represent, and should not be considered as, an alternative to our consolidated cash flow statement, as determined by GAAP. We define Adjusted Free Cash Flow as our net cash provided by operating activities adjusted to: (i) include purchases of property and equipment, (ii) include capitalized software development costs, (iii) include the changes in fees payable to customers, and (iv) exclude cash payments for interest. Adjusted Free Cash Flow margin represents Adjusted Free Cash Flow divided by revenue. We use Adjusted Free Cash Flow and Adjusted Free Cash Flow margin to understand and evaluate our core operating performance and trends. We believe Adjusted Free Cash Flow and Adjusted Free Cash Flow margin are helpful to investors, analysts, and other interested parties because they can assist in providing a more consistent and comparable overview of our operations across our historical financial periods.

Adjusted Free Cash Flow and Adjusted Free Cash Flow margin have limitations as analytical tools, and you should not consider either in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, you should consider Adjusted Free Cash Flow and Adjusted Free Cash Flow margin alongside other financial performance measures, including operating cash flows, investing cash flows and our other GAAP results. In evaluating Adjusted Free Cash Flow and Adjusted Free Cash Flow margin, you should be aware that in the future we may incur cash flow activities that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted Free Cash Flow and Adjusted Free Cash Flow margin should not be construed to imply that our future results will be unaffected by the types of items excluded from the calculation of Adjusted Free Cash Flow and Adjusted Free Cash Flow margin. Adjusted Free Cash Flow and Adjusted Free Cash Flow margin are not a presentation made in accordance with GAAP and the use of the terms may vary from others in our industry.

The following table presents a summary of our Adjusted Free Cash Flow for each of the three months ended March 31, 2023 and 2022:


	Three Months Ended March 31,
	2023			2022
	(in thousands)
Adjusted Free Cash Flow:
Net cash provided by operating activities:	$	92,525		$	79,924
Adjustments
Purchase of property and equipment		(2,356	)		(1,375	)
Capitalized software development costs		(12,725	)		(11,891	)
Change in fees payable to customers		(25,210	)		(24,493	)
Interest paid		2,448			2,584
Adjusted Free Cash Flow	$	54,682		$	44,749

Adjusted Free Cash Flow margin:
Revenue	$	166,205		$	137,356
Adjusted Free Cash Flow margin		32.9	%		32.6	%

Adjusted Free Cash Flow for the three months ended March 31, 2023 increased $9.9 million compared to the three months ended March 31, 2022 primarily as a result of an increase in cash provided by operating activities driven by increased fees payable to customers in the first quarter of 2023 as in-person meetings and events continue to return, net of decreased deferred revenue due to the timing of contract renewals and a right-of-use asset created in the first quarter of 2023.

Commitments and Contingencies

See the information set forth in Note 1312. “Commitments and Contingencies” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.

Indemnification Agreements

In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses related to breach of confidentiality and claims by third parties of intellectual property infringement, misappropriation or other violation. See Part I, Item 1A. “Risk Factors—We have indemnity provisions under our contracts with our customers, channel partners and other third parties, which could have a material adverse effect on our business” in our Annual Report on Form 10-K for the year ended December 31, 2021. In addition, we ~~enter~~have entered into indemnification agreements with each of our directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. There are no indemnification claims that we are currently aware of that could have a material adverse effect on our consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows.

Critical Accounting Estimates

The preparation of financial statements and related disclosures in conformity with U.S. ~~GAAP~~generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2. “Summary of Significant Accounting Policies” to the ~~unaudited~~ condensed consolidated Financial Statements in Part I, Item 1 of this Quarterly Report and in the Notes to Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily a result of fluctuations in foreign currency rates, although we also have some exposure due to potential changes in inflation or interest rates. We do not hold financial instruments for trading purposes.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) or Rule 15d-15(e) under the ~~Securities~~ Exchange Act ~~of 1934,~~ as ~~amended (the “Exchange Act”)) as~~ of the end of the period covered by this report. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis, information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, and that information is accumulated and communicated to the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely discussions regarding required disclosure.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting during the period ended ~~September~~March 3031, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3529

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, ~~the~~we ~~Company~~are is involved in legal proceedings, regulatory matters or other contingencies arising in the ordinary course of ~~its~~our business. InWe ~~its~~are ~~opinion, the Company is~~ not presently involved in any legal proceeding, regulatory matter or other contingency that, if determined adversely to itthe Company, in our opinion, would individually or in the aggregate have a material adverse effect on ~~its~~our business, operating results, or financial condition.

Item 1A. Risk Factors.

~~There~~The ~~have~~risks ~~been no material changes to the risk factors~~ described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022, which was filed with the Securities and Exchange Commission (the “SEC”) on March 714, ~~2022~~2023, remain current in all material respects. Those risk factors do not identify all risks that we face; our operations could also be affected by factors that are not presently known to us or that we currently consider to be immaterial to our operations. If any of the identified risks or others not specified in our SEC filings materialize, our business, financial condition or results of operations could be materially adversely affected. In these circumstances, the market price of our common stock could decline.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

The exhibits listed on the Exhibit Index attached hereto are filed or incorporated by reference (as stated therein) as part of this Quarterly Report.

3630

EXHIBIT INDEX

ExhibitNumber		Description
10.1*		Cvent Holding Corp. 2021 Omnibus Incentive Plan Form of Option Award Agreement.
2.1		Agreement and Plan of Merger, by and among the Company, Capstone Borrower, Inc. and Capstone Merger Sub, Inc., dated as of March 14, 2023 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on March 14, 2023).
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Filed herewith. ** Furnished herewith.

37** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CVENT HOLDING CORP.
Date: November 3, 2022	By:	/s/ William J. Newman, III
Date: May 5, 2023	By:	/s/ William J. Newman, III
		William J. Newman, III
		SVP and Chief Financial Officer

3832

Filing Compare · CVENT HOLDING CORP.