TLS Telos Corporation

Telos Corporation (NASDAQ: TLS), a leading provider of cyber, cloud and enterprise security solutions for the world’s most security-conscious organizations, today announced financial results for the third quarter 2023.

“We executed well in the third quarter, delivering results above the high end of our guidance ranges on all key metrics, expanding gross margin 303 basis points compared to the third quarter of 2022 and returning to positive cash flow from operations,” said John B. Wood, chairman and CEO, Telos. “I am also pleased that we achieved the formal launch of our TSA PreCheck program. Our performance and risk reduction year-to-date, as well as an improved outlook on key programs across the portfolio, have enabled us to again raise our full-year outlook on all metrics.”     

Third Quarter 2023 Financial Highlights
	3Q 2023				3Q 2022
	(in millions, except per share data)
Revenue	$	36.2			$	63.6
Gross Profit	$	13.0			$	20.9
Gross Margin		36.0	%			32.9	%
Non-GAAP Gross Profit 1	$	15.0			$	22.1
Non-GAAP Gross Margin 1		41.5	%			34.7	%
GAAP Net Loss	$	(8.7	)		$	(8.5	)
Adjusted Net (Loss)/Income 1	$	(4.7	)		$	6.9
EBITDA1	$	(6.5	)		$	(7.3	)
Adjusted EBITDA1	$	(1.3	)		$	8.6
Adjusted EBITDA Margin1		(3.5	%)			13.5	%
GAAP EPS	$	(0.12	)		$	(0.13	)
Adjusted EPS 1	$	(0.07	)		$	0.10
Weighted-average Shares of Common Stock Outstanding		69.6				67.5
Cash Flow from Operations	$	0.8			$	12.0
Free Cash Flow 1	$	(3.0	)		$	8.4

1 Non-GAAP Gross Profit, Non-GAAP Gross Margin, Adjusted Net (Loss)/Income, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EPS, and Free Cash Flow are non-GAAP financial measures. Refer to "Non-GAAP Financial Measures" below.

Selected Third Quarter Business Highlights:

• Achieved formal launch of the TSA PreCheck program.
  • https://tsaprecheckbytelos.tsa.dhs.gov/
• Awarded Xacta® renewals with key government and commercial customers:
  • Government clients include the National Geospatial-Intelligence Agency, Federal Bureau of Investigation, U.S. State Department, Defense Intelligence Agency, U.S. Social Security Administration, U.S. Environmental Protection Agency, and a classified customer.
  • Commercial customers include Zscaler, EY, stackArmor, and a large confidential customer in the technology sector.
• Achieved renewals for cyber services at the Defense Health Agency, General Services Administration, and U.S. Department of Homeland Security.
• Received a new award for the Telos Automated Message Handling System with the Joint Cryptologic Mission Simulation program through the National Security Agency.
• Received a new contract award in Secure Networks for a new network installation with the U.S. Air Force.

Financial Outlook:
	4Q 2023		Full Year 2023
			Prior		Updated
Revenue	$30 - $34 Million		$122 - $137 Million		$134 - $138 Million
YoY Growth	(37%) - (28%)		(44%) - (37%)		(38%) - (36%)
Adjusted EBITDA1	($6.5) - ($4.5) Million		($19) - ($14) Million		($9) - ($7) Million

1Adjusted EBITDA is a non-GAAP financial measure. Refer to "Non-GAAP Financial Measures" below.

This guidance consists of forward-looking statements and actual results may differ materially. Refer to the Forward-Looking Statements section below for information on the factors that could cause the Company’s actual results to differ materially from these forward-looking statements. Adjusted EBITDA is a non-GAAP financial measure. The Company has not provided the most directly comparable GAAP measure to this forward-looking non-GAAP financial measure because certain items are out of the Company’s control or cannot be reasonably predicted. Accordingly, a reconciliation for forward-looking Adjusted EBITDA is not available without unreasonable effort.

Webcast Information

Telos will host a live webcast to discuss its third quarter 2023 financial results at 8:30 a.m. Eastern Time today, November 9, 2023. To access the webcast, visit https://register.vevent.com/register/BIa3c1c9fa2f8f4d45a304c1f14550f273. Related presentation materials will be made available on the Investors section of the Company’s website at https://investors.telos.com. In addition, an archived webcast will be available approximately two hours after the conclusion of the live event on the Investors section of the Company’s website.

Forward-Looking Statements

This press release contains forward-looking statements which are made under the safe harbor provisions of the federal securities laws. These statements are based on the Company’s management’s current beliefs, expectations and assumptions about future events, conditions, and results and on information currently available to them. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Company believes that these risks and uncertainties include, but are not limited to, those described under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth from time to time in the Company’s filings and reports with the U.S. Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2022 and its Quarterly Reports on Form 10-Q, as well as future filings and reports by the Company, copies of which are available at https://investors.telos.com and on the SEC’s website at www.sec.gov.

Although the Company bases these forward-looking statements on assumptions that its management believes are reasonable when made, the Company cautions the reader that forward-looking statements are not guarantees of future performance and that the Company’s actual results of operations, financial condition and liquidity, and industry developments may differ materially from statements made in or suggested by the forward-looking statements contained in this release. Given these risks, uncertainties, and other factors, many of which are beyond its control, the Company cautions the reader not to place undue reliance on these forward-looking statements. Any forward-looking statement speaks only as of the date of such statement and, except as required by law, the Company undertakes no obligation to update any forward-looking statement publicly, or to revise any forward-looking statement to reflect events or developments occurring after the date of the statement, even if new information becomes available in the future. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.

Non-GAAP Financial Measures

In addition to Telos' results determined in accordance with U.S. GAAP, Telos believes the non-GAAP financial measures of EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Adjusted Net Income/(Loss), Adjusted Earnings Per Share ("EPS"), Non-GAAP Gross Profit, Non-GAAP Gross Margin, and Free Cash Flow are useful in evaluating operating performance. Telos believes that this non-GAAP financial information, when taken collectively with GAAP results, may be helpful to readers of the financial statements because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP financial information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, 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 of these non-GAAP financial measures to the most directly comparable financial measure stated in accordance with GAAP.

Telos believes that EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net(Loss)/Income and Adjusted EPS provide the Board, management and investors with a clear representation of the Company’s core operating performance and trends, provide greater visibility into the long-term financial performance of the Company, and eliminate the impact of items that do not relate to the ongoing operating performance of the business. Further, Adjusted EBITDA and Adjusted EBITDA Margin are used by the Board and management to prepare and approve the Company’s annual budget, and to evaluate the performance of certain management personnel when determining incentive compensation. Non-GAAP Gross Profit and Non-GAAP Gross Margin provide management and investors a clear representation of the core economics of gross profit and gross margin without the impact of non-cash expenses and sunk costs expended. Telos uses Free Cash Flow to understand the cash flows that directly correspond with our operations and the investments the Company must make in those operations, using a methodology that combines operating cash flows and capital expenditures. Further, Free Cash Flow may be useful to management and investors in evaluating the Company's operating performance and liquidity. Telos believes these non-GAAP financial measures facilitate the comparison of the Company’s operating performance on a consistent basis between periods by excluding certain items that may, or could, have a disproportionately positive or negative impact on the Company’s results of operations in any particular period. When viewed in combination with the Company’s results prepared in accordance with GAAP, these non-GAAP financial measures help provide a broader picture of factors and trends affecting the Company’s results of operations.

EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Adjusted Net Income/(Loss), Adjusted EPS, Non-GAAP Gross Profit, Non-GAAP Gross Margin, and Free Cash Flow are supplemental measures of operating performance that are not made under GAAP and do not represent, and should not be considered as an alternative to, Net Income/(Loss), Net Income/(Loss) Margin, Earnings per Share, Gross Profit, Gross Margin, or Net Cash Flows provided by/(used in) operating activities, as determined by GAAP.

The Company defines EBITDA as net (loss)/income, adjusted for non-operating (income)/expense, interest expense, provision for/(benefit from) income taxes, and depreciation and amortization. The Company defines Adjusted EBITDA as EBITDA, adjusted for stock-based compensation expense and restructuring expenses. The Company defines EBITDA Margin, as EBITDA as a percentage of total revenue. The Company defines Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of total revenue. The Company defines Adjusted Net Income/(Loss) as net income/(loss), adjusted for non-operating (income)/expense, stock-based compensation expense and restructuring expenses. The Company defines Adjusted EPS as Adjusted Net Income/(Loss) divided by the weighted-average number of common shares outstanding for the period. The Company defines Non-GAAP Gross Profit as gross profit, adjusted for stock-based compensation expense and depreciation and amortization charged under cost of sales. The Company defines Non-GAAP Gross Margin as Non-GAAP Gross Profit as a percentage of total revenue. Free Cash Flow is defined as net cash provided by/(used in) operating activities, less purchases of property and equipment, and capitalized software development costs.

EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Adjusted Net Income/(Loss), Adjusted EPS, Non-GAAP Gross Profit, Non-GAAP Gross Margin, and Free Cash Flow each has limitations as an analytical tool, and you should not consider any of them in isolation, or as a substitute for analysis of results as reported under GAAP. Among other limitations, EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Adjusted Net Income/(Loss), Adjusted EPS, Non-GAAP Gross Profit, Non-GAAP Gross Margin, and Free Cash Flow each does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments, does not reflect the impact of certain cash and non-cash charges resulting from matters considered not to be indicative of ongoing operations, and does not reflect income tax expense or benefit. Other companies in the Company’s industry may calculate Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income/(Loss), Adjusted EPS, Non-GAAP Gross Profit, Non-GAAP Gross Margin, and Free Cash Flow differently than Telos does, which limits its usefulness as a comparative measure. Because of these limitations, neither EBITDA, Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Adjusted Net Income/(Loss), Adjusted EPS, Non-GAAP Gross Profit, Non-GAAP Gross Margin nor Free Cash Flow should be considered as a replacement for Gross Profit, Gross Margin, Net Income/ (Loss), Net Income/(Loss) Margin, Earnings per Share, or Net Cash Flows Provided by Operating Activities, as determined by GAAP, or as a measure of profitability. Telos compensates for these limitations by relying primarily on the Company’s GAAP results and using non-GAAP measures only for supplemental purposes.

About Telos Corporation

Telos Corporation (NASDAQ: TLS) empowers and protects the world’s most security-conscious organizations with solutions for continuous security assurance of individuals, systems, and information. Telos’ offerings include cybersecurity solutions for IT risk management and information security; cloud security solutions to protect cloud-based assets and enable continuous compliance with industry and government security standards; and enterprise security solutions for identity and access management, secure mobility, organizational messaging, and network management and defense. The Company serves commercial enterprises, regulated industries and government customers around the world.

Media:

media@telos.com

Investors:

InvestorRelations@telos.com

TELOS CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

	For the Three Months Ended								For the Nine Months Ended
	September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
	(in thousands, except per share amounts)
Revenue – services	$	34,385			$	55,305			$	94,866			$	153,683
Revenue – products		1,801			$	8,288				9,453				15,861
Total revenue		36,186				63,593				104,319				169,544
Cost of sales – services (exclusive of depreciation and amortization shown separately below)		20,683				36,555				58,613				97,311
Cost of sales – products (exclusive of depreciation and amortization shown separately below)		545				5,902				4,561				10,886
Depreciation and amortization		1,945				191				2,291				602
Total cost of sales		23,173				42,648				65,465				108,799
Gross profit		13,013				20,945				38,854				60,745
Selling, general and administrative expenses
Sales and marketing		1,728				3,042				5,164				13,035
Research and development		3,154				3,981				8,633				13,900
General and administrative		17,824				22,706				57,187				72,997
Total selling, general and administrative expenses		22,706				29,729				70,984				99,932
Operating loss		(9,693	)			(8,784	)			(32,130	)			(39,187	)
Other income		1,222				518				5,367				648
Interest expense		(178	)			(181	)			(611	)			(558	)
Loss before income taxes		(8,649	)			(8,447	)			(27,374	)			(39,097	)
Provision for income taxes		(23	)			(8	)			(68	)			(133	)
Net loss	$	(8,672	)		$	(8,455	)		$	(27,442	)		$	(39,230	)
Net loss per share:
Basic	$	(0.12	)		$	(0.13	)		$	(0.40	)		$	(0.58	)
Diluted	$	(0.12	)		$	(0.13	)		$	(0.40	)		$	(0.58	)
Weighted-average shares outstanding:
Basic		69,571				67,493				69,062				67,641
Diluted		69,571				67,493				69,062				67,641

TELOS CORPORATIONCONSOLIDATED BALANCE SHEETS(Unaudited)

	September 30, 2023				December 31, 2022
	(in thousands, except per share and share data)
Assets:
Cash and cash equivalents	$	99,953			$	119,305
Accounts receivable, net		25,424				40,069
Inventories, net		984				2,877
Prepaid expenses		8,102				4,819
Other current assets		1,750				893
Total current assets		136,213				167,963
Property and equipment, net		3,390				4,787
Finance lease right-of-use assets, net		6,917				7,832
Operating lease right-of-use assets, net		274				341
Goodwill		17,922				17,922
Intangible assets, net		38,984				37,415
Other assets		1,038				1,137
Total assets	$	204,738			$	237,397
Liabilities and Stockholders' Equity:
Liabilities:
Accounts payable and other accrued liabilities	$	7,457			$	22,551
Accrued compensation and benefits		12,593				8,388
Contract liabilities		5,775				6,444
Finance lease obligations – current portion		1,695				1,592
Operating lease obligations – current portion		224				361
Other financing obligations – current portion		—				1,247
Other current liabilities		1,839				4,919
Total current liabilities		29,583				45,502
Finance lease obligations – non-current portion		9,965				11,248
Operating lease liabilities – non-current portion		65				27
Other financing obligations – non-current portion		—				7,211
Deferred income taxes		795				758
Other liabilities		309				297
Total liabilities		40,717				65,043
Stockholders’ equity:
Common stock, $0.001 par value, 250,000,000 shares authorized, 69,623,209 shares and 67,431,632 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		108				106
Additional paid-in capital		431,784				412,708
Accumulated other comprehensive income		(24	)			(55	)
Accumulated deficit		(267,847	)			(240,405	)
Total stockholders’ equity		164,021				172,354
Total liabilities and stockholders’ equity	$	204,738			$	237,397

TELOS CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

	For the Three Months Ended								For the Nine Months Ended
	September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
	(in thousands)
Cash flows from operating activities:
Net loss	$	(8,672	)		$	(8,455	)		$	(27,442	)		$	(39,230	)
Adjustments to reconcile net loss to cash flows from operations:
Stock-based compensation		5,218				15,836				22,462				48,843
Depreciation and amortization		3,215				1,517				6,336				4,427
Deferred income tax provision		13				—				37				25
Accretion of discount in acquisition holdback		—				13				2				36
Loss on disposal of fixed assets		—				1				1				2
Provision for doubtful accounts		11				31				128				97
Amortization of debt issuance costs		16				—				51				—
Gain on early extinguishment of other financing obligations		—				—				(1,427	)			—
Changes in other operating assets and liabilities:
Accounts receivable		8,855				(339	)			14,517				8,763
Inventories		782				(1,046	)			1,893				(3,429	)
Prepaid expenses, other current assets, other assets		(661	)			838				(4,106	)			(2,486	)
Accounts payable and other accrued payables		(8,687	)			2,068				(14,942	)			2,635
Accrued compensation and benefits		2,731				(48	)			2,496				371
Contract liabilities		(363	)			2,153				(670	)			571
Other current liabilities		(1,612	)			(583	)			(2,703	)			(507	)
Net cash provided by/(used in) operating activities		846				11,986				(3,367	)			20,118
Cash flows from investing activities:
Capitalized software development costs		(3,762	)			(3,446	)			(11,960	)			(8,580	)
Purchases of property and equipment		(80	)			(174	)			(350	)			(815	)
Net cash used in investing activities		(3,842	)			(3,620	)			(12,310	)			(9,395	)
Cash flows from financing activities:
Payments under finance lease obligations		(405	)			(373	)			(1,180	)			(1,083	)
Payment of tax withholding related to net share settlement of equity awards		(92	)			(249	)			(1,676	)			(3,135	)
Repurchase of common stock		—				(5,000	)			(139	)			(7,603	)
Payment of DFT holdback amount		—				—				(564	)			—
Payments for debt issuance costs		—				—				(114	)			—
Net cash used in financing activities		(497	)			(5,622	)			(3,673	)			(11,821	)
Net change in cash, cash equivalents, and restricted cash		(3,493	)			2,744				(19,350	)			(1,098	)
Cash, cash equivalents, and restricted cash, beginning of period		103,581				122,720				119,438				126,562
Cash, cash equivalents, and restricted cash, end of period	$	100,088			$	125,464			$	100,088			$	125,464

NON-GAAP FINANCIAL MEASURES (Unaudited)

Reconciliation of Net Loss to EBITDA, Adjusted EBITDA, EBITDA Margin and Adjusted EBITDA Margin
	For the Three Months Ended														For the Nine Months Ended
	September 30, 2023							September 30, 2022							September 30, 2023							September 30, 2022
	Amount				Margin			Amount				Margin			Amount				Margin			Amount				Margin
	(dollars in thousands)
Net loss	$	(8,672	)		(24.0)%			$	(8,455	)		(13.3)%			$	(27,442	)		(26.3)%			$	(39,230	)		(23.1)%
Other income		(1,222	)		(3.4)%				(518	)		(0.8)%				(5,367	)		(5.1)%				(648	)		(0.4)%
Interest expense		178			0.5	%			181			0.3	%			611			0.6	%			558			0.3	%
Provision for income taxes		23			0.1	%			8			—	%			68			0.1	%			133			0.1	%
Depreciation and amortization		3,215			8.9	%			1,517			2.4	%			6,336			6.0	%			4,427			2.6	%
EBITDA (Non-GAAP)		(6,478	)		(17.9) %				(7,267	)		(11.4)%				(25,794	)		(24.7)%				(34,760	)		(20.5)%
Stock-based compensation expense (1)		5,218			14.4	%			15,836			24.9	%			22,462			21.5	%			48,843			28.8	%
Restructuring expenses (2)		—			—	%			—			—	%			1,197			1.2	%			—			—	%
Adjusted EBITDA (Non-GAAP)	$	(1,260	)		(3.5)%			$	8,569			13.5	%		$	(2,135	)		(2.0)%			$	14,083			8.3	%

(1) The stock-based compensation adjustment to EBITDA is made up of stock-based compensation expense for the awarded restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”) and stock options, and other sources. Stock-based compensation expense for the awarded RSUs, PSUs and stock options was $5.2 million and $18.6 million for the three and nine months ended September 30, 2023, respectively, and $16.1 million and $46.8 million for the three and nine months ended September 30, 2022, respectively. No stock-based compensation from other sources was recorded for the three months ended September 30, 2023, while $3.8 million was recorded for the nine months ended September 30, 2023. Stock-based compensation (adjustment)/expense from other sources was $(0.3) million and $2.0 million for the three and nine months ended September 30, 2022, respectively. The other sources of stock-based compensation consist of accrued compensation, which the Company intends to settle in shares of the Company's common stock. However, it is the Company’s discretion whether this compensation will ultimately be paid in stock or cash. The Company has the right to dictate the form of these payments up until the date at which they are paid. Any change to the expected payment form would result in out-of-quarter adjustments to this add back to Adjusted EBITDA.

(2) The restructuring expenses to EBITDA include severance and other related benefit costs (including outplacement services and continuing health insurance coverage), external consulting and advisory fees related to implementing the restructuring plan.

Reconciliation of Net Loss to Non-GAAP Adjusted Net (Loss)/Income and Adjusted EPS
	For the Three Months Ended																For the Nine Months Ended
	September 30, 2023								September 30, 2022								September 30, 2023								September 30, 2022
	Amount				Earnings Per Share				Amount				Earnings Per Share				Amount				Earnings Per Share				Amount				Earnings Per Share
	(in thousands, except per share data)
Net loss	$	(8,672	)		$	(0.12	)		$	(8,455	)		$	(0.13	)		$	(27,442	)		$	(0.40	)		$	(39,230	)		$	(0.58	)
Adjustments:
Other income		(1,222	)			(0.02	)			(518	)			(0.01	)			(5,367	)			(0.08	)			(648	)			(0.01	)
Stock-based compensation expense(1)		5,218				0.07				15,836				0.24				22,462				0.33				48,843				0.72
Restructuring expenses(2)		—				—				—				—				1,197				0.02				—				—
Adjusted net (loss)/income, Adjusted EPS (Non-GAAP)	$	(4,676	)		$	(0.07	)		$	6,863			$	0.10			$	(9,150	)		$	(0.13	)		$	8,965			$	0.13
Weighted-average shares of common stock outstanding, basic		69,571								67,493								69,062								67,641

(1) The stock-based compensation adjustment to net (loss)/income is made up of stock-based compensation expense for the awarded RSUs, PSUs and stock options, and other sources. Stock-based compensation expense for the awarded RSUs, PSUs and stock options was $5.2 million and $18.6 million for the three and nine months ended September 30, 2023, respectively, and $16.1 million and $46.8 million for the three and nine months ended September 30, 2022, respectively. No stock-based compensation from other sources was recorded for the three months ended September 30, 2023, while $3.8 million was recorded for the nine months ended September 30, 2023. Stock-based compensation/(adjustment)/expense from other sources was $(0.3) million and $2.0 million for the three and nine months ended September 30, 2022, respectively. The other sources of stock-based compensation consist of accrued compensation, which the Company intends to settle in shares of the Company's common stock. However, it is the Company’s discretion whether this compensation will ultimately be paid in stock or cash. The Company has the right to dictate the form of these payments up until the date at which they are paid. Any change to the expected payment form would result in out-of-quarter adjustments to this add back to Adjusted Net (Loss)/Income.

(2) The restructuring expenses to net loss include severance and other related benefit costs (including outplacement services and continuing health insurance coverage), external consulting and advisory fees related to implementing the restructuring plan.

Reconciliation of Gross Profit to Non-GAAP Gross Profit; Gross Margin to Non-GAAP Gross Margin
	For the Three Months Ended												For the Nine Months Ended
	September 30, 2023						September 30, 2022						September 30, 2023						September 30, 2022
	Amount			Margin			Amount			Margin			Amount			Margin			Amount			Margin
	(dollars in thousands)
Gross profit	$	13,013		36.0	%		$	20,945		32.9	%		$	38,854		37.2	%		$	60,745		35.8	%
Adjustments:
Stock-based compensation expense — cost of sales		73		0.2	%			929		1.5	%			624		0.6	%			2,798		1.6	%
Depreciation and amortization — cost of sales		1,945		5.3	%			191		0.3	%			2,291		2.2	%			602		0.4	%
Non-GAAP gross profit	$	15,031		41.5	%		$	22,065		34.7	%		$	41,769		40.0	%		$	64,145		37.8	%

Free Cash Flow
	For the Three Months Ended								For the Nine Months Ended
	September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
	(in thousands)
Net cash provided by/(used in) operating activities	$	846			$	11,986			$	(3,367	)		$	20,118
Adjustments:
Purchases of property and equipment		(80	)			(174	)			(350	)			(815	)
Capitalized software development costs		(3,762	)			(3,446	)			(11,960	)			(8,580	)
Free cash flow (Non-GAAP)	$	(2,996	)		$	8,366			$	(15,677	)		$	10,723