What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 97 added, 85 removed, 159 unchanged (53% of the section changed)

48 unchanged sentences

In evaluating our financial condition and operating performance, we primarily focus on revenue and cash flows from operations.

For the three and six months ended June 30, 2025, as compared to the same period in 2024:

Three months ended June 30, 2025:

• Revenue decreased by $1.6 million, or 1.8%, from $87.3 million in 2024 to $85.7 million in 2025.

For the three and nine months ended September 30, 2025, as compared to the same period in 2024:

Three months ended September 30, 2025:

• Revenue increased by $1.2 million, or 1.4%, from $86.1 million in 2024 to $87.3 million in 2025.

• Recurring revenues increased by $3.6 million, or 4.4% from $82.7 million in 2024 to $86.3 million in 2025.

• Non-recurring revenues decreased by $2.4 million, or 70.6% from $3.4 million in 2024 to $1.0 million in 2025.

• Cash provided by operating activities decreased slightly by $0.4 million, or 1.5% from $23.5 million in 2024 to $23.1 million in 2025.

• We made $11.1 million in principal payments towards our term loan, bringing the outstanding balance to $458.9 million as of June 30, 2025.

Six months ended June 30, 2025:

• Cash provided by operating activities increased by $3.5 million, or 24.5% from $14.3 million in 2024 to $17.8 million in 2025.

• We made $11.1 million in principal payments towards our term loan, bringing the outstanding balance to $447.8 million as of September 30, 2025.

Nine months ended September 30, 2025:

• Revenue increased by $3.8 million, or 1.5%, from $256.9 million in 2024 to $260.7 million in 2025.

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• We completed another repricing of our term loan in January 2025, further reducing our interest rate by 50 basis points.

• We made $28.2 million in principal payments towards our term loan, bringing the outstanding balance to $458.9 million as of June 30, 2025.

• We made $39.3 million in principal payments towards our term loan, bringing the outstanding balance to $447.8 million as of September 30, 2025.

• We repurchased $10.0 million of our common stock in the first quarter of 2025.

Results of Operations

We derive the majority of our revenue from the licensing of our IP rights to customers.

We derive the majority of our revenue from the licensing of our IP rights to our customers.

For our revenue recognition policy, including descriptions of revenue-generating activities, refer to “Note 3 – Revenue ” of the Notes to Condensed Consolidated Financial Statements.

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Operating expenses:

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Other income and expense, net

Loss on debt extinguishment

Income before income taxes

Provision for (benefit from) income taxes

The following table sets forth our revenue for the three and six months ended June 30, 2025 and 2024 (in thousands, except for percentages):

The following table sets forth our revenue for the three and nine months ended September 30, 2025 and 2024 (in thousands, except for percentages):

Three Months Ended

Six Months Ended

The decrease in revenue during the three months ended June 30, 2025, as compared to the same period in 2024, was primarily attributable to the execution of the settlement agreement and multi-year renewal with X Corp.

in the second quarter of 2024, which resulted in non-recurring revenue in that quarter that did not recur in 2025.

Recurring revenue for the three months ended June 30, 2025 and 2024 were $85.1 million and $82.3 million, respectively.

The increase of $2.8 million was driven primarily by the execution of license agreements with new customers in the second half of 2024 and the first half of 2025, partially offset by declines in royalty revenue from certain Pay-TV customers.

Non-recurring revenues for the three months ended June 30, 2025 and 2024 were $5.1 million and $0.6 million, respectively.

The decrease of $4.4 million was primarily attributable to the execution of the settlement agreement and multi-year renewal with X Corp.

in the second quarter of 2024, which resulted in non-recurring revenue in that quarter that did not recur in 2025.

The increase in revenue during the six months ended June 30, 2025, as compared to the same period in 2024, was primarily attributable to the execution of license agreements with new customers in the second half of 2024 and the first half of 2025.

Increases were partially offset by the execution of the settlement agreement and multi-year renewal with X Corp.

in the second quarter of 2024.

Recurring revenue for the six months ended June 30, 2025 and 2024 were $169.5 million and $165.0 million, respectively.

The increase of $4.5 million was primarily driven by the execution of license agreements with new customers in the second half of 2024 and the first half of 2025, partially offset by declines in royalty revenue from certain Pay-TV customers.

Non-recurring revenues for the six months ended June 30, 2025 and 2024 were $3.9 million and $5.7 million, respectively.

The decrease of $1.8 million was primarily attributable to the execution of the settlement agreement and multi-year renewal with X Corp.

in the second quarter of 2024, partially offset by the execution of license agreements with new customers in the first half of 2025, for which a portion of revenue was recognized up-front in such period.

September 30,

Nine Months Ended

September 30,

The increase in revenue during the three months ended September 30, 2025, as compared to the same period in 2024, was primarily attributable the execution of license agreements with new customers and increased royalty revenue from certain semiconductor customers, partially offset by declines in royalty revenue from certain Pay-TV customers.

Recurring revenue for the three months ended September 30, 2025 and 2024 were $86.3 million and $82.7 million, respectively.

The increase of $3.6 million was driven primarily by the execution of license agreements with new customers in 2024 and 2025, and increased royalty revenue from certain semiconductor customers, partially offset by declines in royalty revenue from certain Pay-TV customers.

Non-recurring revenues for the three months ended September 30, 2025 and 2024 were $1.0 million and $3.4 million, respectively.

The decrease of $2.4 million was primarily attributable to the execution of license agreements with certain customers in the third quarter of 2024, which resulted in an increase in non-recurring revenue in that quarter than as compared to the third quarter of 2025.

The increase in revenue during the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily attributable to the execution of license agreements with new customers, partially offset by declines in royalty revenue from certain Pay-TV customers.

Recurring revenue for the nine months ended September 30, 2025 and 2024 were $255.8 million and $249.8 million, respectively.

The increase of $6.0 million was primarily driven by the execution of license agreements with new customers, partially offset by declines in royalty revenue from certain Pay-TV customers.

Non-recurring revenues for the nine months ended September 30, 2025 and 2024 were $4.9 million and $7.0 million, respectively.

The decrease of $2.1 million was primarily attributable to the execution of license agreements with customers in the second and third quarters of 2024, partially offset by the execution of license agreements with new customers in 2025.

Research and Development (in thousands, except for percentages):

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All R&D expense is expensed as incurred.

We intend to make a continued investment in our R&D efforts because we believe they are essential to grow our patent portfolios to maintain and improve our competitiveness.

We intend to make a continued investment in our R&D efforts because we believe they are essential to grow our patent portfolios to secure new customers and renew agreements with existing customers.

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

The increase in R&D expense during the three and six months ended June 30, 2025, as compared to the same period in 2024, was primarily due to an increase in patent portfolio expenses, patent technical support expenses, and an increase in personnel related costs as a result of increased headcount.

The increase in R&D expense during the three and nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in patent portfolio expenses, patent technical support expenses, and an increase in personnel related costs as a result of increased headcount.

Selling, General and Administrative (in thousands, except for percentages):

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Selling, general and administrative

The increase in SG&A expense during the three months ended June 30, 2025, as compared to the same period in 2024, was primarily due to increases in personnel related costs as a result of increased headcount and advertising expense, partially offset by decreases in outside services.

The increase in SG&A expense during the six months ended June 30, 2025, as compared to the same period in 2024, was primarily due to increases in personnel related costs as a result of increased headcount, advertising expense, and certain administrative costs associated with the repricing of our credit facility in the first quarter of 2025, partially offset by a decrease in outside services.

The decrease in SG&A expense during the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to decreases in advertising expense and outside services, partially offset by increases in personnel related costs as a result of increased headcount.

The increase in SG&A expense during the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to increases in personnel related costs as a result of increased headcount and advertising expense, partially offset by decreases in outside services.

Amortization Expense (in thousands, except for percentages):

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Amortization expense

The decrease in amortization expense during the three and six months ended June 30, 2025, as compared to the same periods in 2024, was primarily due to certain intangible assets becoming fully amortized during 2024.

The increase in amortization expense during the three months ended September 30, 2025, as compared to the same period in 2024, was primarily due to purchases of patent portfolios and the resulting amortization of those assets.

The decrease in amortization expense during the nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to certain intangible assets becoming fully amortized during 2024.

The decrease was partially offset by an increase in amortization expense as a result of patents acquired in the second half of 2024 and first half of 2025.

1 unchanged sentence

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Litigation expense

The increase in litigation expense during the three and six months ended June 30, 2025, as compared to the same periods in 2024, was primarily due to increased activity in current litigation matters.

The increase in litigation expense during the three and nine months ended September 30, 2025, as compared to the same periods in 2024, was primarily due to increased activity in current litigation matters.

See Part II, Item 1 – Legal Proceedings for additional information regarding these matters.

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Interest expense

The decrease in interest expense during the three and six months ended June 30, 2025, as compared to the same periods in 2024, was primarily due to lower debt balance, the reduction of the interest rate margin resulting from the repricing of our Term Loan B during the second quarter of 2024 and the first quarter of 2025, and the Federal Reserve interest rate cut during the third quarter of 2024.

The decrease in interest expense during the three and nine months ended September 30, 2025, as compared to the same periods in 2024, was primarily due to lower debt balances, the reduction of the interest rate margin resulting from the repricing of our Term Loan B during the second quarter of 2024 and the first quarter of 2025, and the Federal Reserve interest rate cut during 2024.

Other Income and Expense, Net (in thousands, except for percentages):

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Other income and expense, net

The increase in other income and expense, net during the three and six months ended June 30, 2025, as compared to the same period in 2024, was primarily due to an increase in interest income from significant financing components from certain revenue contracts.

The increase in other income and expense, net during the three and nine months ended September 30, 2025, as compared to the same period in 2024, was primarily due to an increase in interest income from significant financing components from certain revenue contracts.

Loss on Debt Extinguishment

During the three and six months ended June 30, 2024, we recognized $0.5 million associated with the repricing of our Term Loan B.

During the nine months ended September 30, 2024, we recognized $0.5 million associated with the repricing of our Term Loan B.

There were no such costs in 2025.

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Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Provision for (benefit from) income taxes

Our income tax provision for interim periods is based on the estimated annual effective tax rate adjusted for discrete items during the period.

For the three months ended June 30, 2025, we recorded an income tax benefit of $9.1 million on pretax income of $7.6 million, and for the six months ended June 30, 2025, we recorded an income tax benefit of $7.0 million on pretax income of $21.5 million, which resulted in effective tax rates of (119.4)% and (32.6)%, respectively, for the three and six months ended June 30, 2025.

For the three months ended September 30, 2025, we recorded an income tax expense of $9.6 million on pretax income of $18.4 million, and for the nine months ended September 30, 2025, we recorded an income tax expense of $2.6 million on pretax income of $40.0 million, which resulted in effective tax rates of 52.1% and 6.5%, respectively, for the three and nine months ended September 30, 2025.

The effective tax rate varies from the 21% U.S.

federal tax rate primarily due to unrealized benefits associated with South Korea withholding tax refund claims.

For the three months ended June 30, 2024, we recorded income tax expense of $2.9 million on pretax income of $11.3 million, and for the six months ended June 30, 2024, we recorded an income tax expense of $8.6 million on pretax income of $17.9 million, which resulted in effective tax rates of 26.0% and 48.2%, respectively, for the three and six months ended June 30, 2024.

The decrease in income tax expense for the three and six months ended June 30, 2025, as compared to the same periods in the prior year was primarily due to unrealized benefits associated with South Korea withholding tax refund claims.

federal tax rate primarily due to unrealized foreign exchange gain or loss associated with South Korea withholding tax refund claims.

For the three months ended September 30, 2024, we recorded income tax benefit of $(2.5) million on pretax income of $16.8 million, and for the nine months ended September 30, 2024, we recorded an income tax expense of $6.1 million on pretax income of $34.7 million, which resulted in effective tax rates of (14.9)% and 17.6%, respectively, for the three and nine months ended September 30, 2024.

The increase in income tax expense for the three months ended September 30, 2025, as compared to the same period in the prior year was primarily due to unrealized foreign exchange loss associated with South Korea withholding tax refund claims.

The decrease in income tax expense for the nine months ended September 30, 2025, as compared to the same period in the prior year was primarily due to unrealized foreign exchange gain associated with South Korea withholding tax refund claims.

We periodically evaluate the realizability of our net deferred tax assets based on all available evidence, both positive and negative.

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Liquidity and Capital Resources

The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents for the six months ended June 30, 2025 and 2024.

The following table presents selected financial information related to our liquidity and significant sources and uses of cash and cash equivalents for the nine months ended September 30, 2025 and 2024.

(in thousands)

June 30, 2025

September 30, 2025

December 31, 2024

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Total cash, cash equivalents and marketable securities

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash provided by operating activities

2 unchanged sentences

Our primary sources of liquidity and capital resources are our operating cash flows and our short-term investments in marketable securities.

Cash, cash equivalents and marketable securities were $116.5 million at June 30, 2025, an increase of $6.1 million from $110.4 million at December 31, 2024.

Cash, cash equivalents and marketable securities were $115.1 million at September 30, 2025, an increase of $4.7 million from $110.4 million at December 31, 2024.

This increase primarily resulted from $98.1 million of cash generated from operations, partially offset by $39.3 million in repayment of our long-term debt, $20.9 million in repurchases of common stock associated with tax withholdings on equity awards, $11.3 million in repurchases of common stock, $16.3 million in dividends paid, and $6.1 million in purchases of intangible assets.

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For information about our material cash requirements, see “Liquidity and Capital Resources” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.

Other than the principal payments of $28.2 million made by us under the existing Term Loan B during the six months ended June 30, 2025, our cash requirements have not materially changed since December 31, 2024.

Other than the principal payments of $39.3 million made by us under the existing Term Loan B during the nine months ended September 30, 2025, our cash requirements have not materially changed since December 31, 2024.

We expect to continue to make additional payments on our existing debt from cash generated from operations.

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Quarterly Dividends

In June 2025, we paid quarterly cash dividends of $0.05 per share of common stock.

In July 2025, our Board authorized payment of a quarterly cash dividend of $0.05 per share, to be paid in September 2025.

In 2025 and 2024, we paid quarterly dividends of $0.05 per share in each of the March, June, September and December quarterly periods, respectively.

In October 2025, our Board authorized payment of a quarterly cash dividend of $0.05 per share, to be paid in December 2025.

Stock Repurchase Plan

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The stock repurchases may be made from time to time, through solicited or unsolicited transactions in the open market, in privately negotiated transactions, or pursuant to a Rule 10b5-1 plan.

During the six months ended June 30, 2025, we repurchased a total of approximately 0.8 million shares of common stock, at an average price of $13.19 per share for a total cost of $10.0 million.

These purchases occurred during the three months ended March 31, 2025 and no repurchases were made during the three months ended June 30, 2025.

We did not repurchase any shares during the six months ended June 30, 2024.

As of June 30, 2025, the total remaining amount available for repurchase under this plan was $170.0 million.

During the nine months ended September 30, 2025, we repurchased a total of approximately 0.8 million shares of common stock, at an average price of $13.18 per share for a total cost of $10.0 million.

These purchases occurred during the three months ended March 31, 2025.

No repurchases were made from April 1 through September 30, 2025.

We did not repurchase any shares during the nine months ended September 30, 2024.

As of September 30, 2025, the total remaining amount available for repurchase under this plan was $170.0 million.

We may continue to execute authorized repurchases from time to time under the Plan.

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Cash Flows from Operating Activities

Cash flows provided by operations were $80.3 million for the six months ended June 30, 2025, primarily due to our net income of $28.5 million being adjusted for non-cash items of amortization of intangible assets of $28.3 million, stock-based compensation expense of $16.9 million, and $9.0 million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2024.

Cash flows provided by operations were $90.7 million for the six months ended June 30, 2024, primarily due to our net income of $9.3 million being adjusted for non-cash items of amortization of intangible assets of $43.2 million, amortization of debt issuance costs of $1.6 million, stock-based compensation expense of $11.7 million, depreciation of property and equipment of $1.0 million and $24.5 million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2023.

Cash flows provided by operations were $98.1 million for the nine months ended September 30, 2025, primarily due to our net income of $37.4 million being adjusted for non-cash items of amortization of intangible assets of $42.4 million, stock-based compensation expense of $25.6 million, and $(13.2) million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2024.

Cash flows provided by operations were $105.0 million for the nine months ended September 30, 2024, primarily due to our net income of $28.6 million being adjusted for non-cash items of amortization of intangible assets of $56.8 million, stock-based compensation expense of $19.2 million and $(0.7) million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2023.

Cash Flows from Investing Activities

Net cash used in investing activities was $6.2 million for the six months ended June 30, 2025, primarily due to purchases of short-term investments in marketable securities of $13.0 million, purchases of intangible assets of $5.4 million, and proceeds from maturities of marketable securities of $12.6 million.

Net cash used in investing activities was $8.2 million for the six months ended June 30, 2024, primarily due to purchases of short-term investments of $18.7 million, purchases of property and equipment of $1.2 million, purchases of intangible assets of $8.5 million, and proceeds from maturities of investments of $20.2 million.

Net cash used in investing activities was $34.4 million for the nine months ended September 30, 2025, primarily due to purchases of short-term investments in marketable securities of $46.3 million, purchases of intangible assets of $6.1 million, partially offset by proceeds from maturities of marketable securities of $18.2 million.

Net cash used in investing activities was $8.4 million for the nine months ended September 30, 2024, primarily due to purchases of short-term investments of $25.1 million, purchases of intangible assets of $8.5 million, partially offset by proceeds from maturities of investments of $26.5 million.

Capital Expenditures

Our capital expenditures for property and equipment consist primarily of leasehold improvements, purchases of computer hardware and software, information systems, and semiconductor production and test equipment.

During the six months ended June 30, 2025 and 2024, we spent $0.4 million and $1.2 million on capital expenditures, respectively.

Our capital expenditures for intangible assets consists primarily of acquired patents.

During the six months ended June 30, 2025 and 2024, we spent $5.4 million and $8.5 million on purchases of intangible assets, respectively.

During the nine months ended September 30, 2025 and 2024, we spent $1.2 million and $1.3 million on capital expenditures, respectively.

Our capital expenditures for intangible assets consists of acquired patents.

During the nine months ended September 30, 2025 and 2024, we spent $6.1 million and $8.5 million on purchases of intangible assets, respectively.

There can be no assurance that current expectations will be realized, and plans are subject to change upon further review of our capital expenditure needs.

Cash Flows from Financing Activities

Net cash used in financing activities was $68.7 million for the six months ended June 30, 2025 due to $28.2 million in repayment of indebtedness, $10.9 million in dividends paid, $19.7 million in repurchases of common stock for tax withholdings on equity awards, and $11.3 million in repurchases of common stock.

Net cash used in financing activities was $70.5 million for the six months ended June 30, 2024 due to $52.1 million in repayment of indebtedness, $10.9 million in dividends paid, $9.1 million in repurchases of common stock for tax withholdings on equity awards, partially offset by $1.6 million in proceeds from purchases through our employee stock purchase program and exercise of stock options.

Net cash used in financing activities was $86.4 million for the nine months ended September 30, 2025, primarily due to $39.3 million in repayment of indebtedness, $16.3 million in dividends paid, $20.9 million in repurchases of common stock for tax withholdings on equity awards, and $11.3 million in repurchases of common stock.

Net cash used in financing activities was $90.5 million for the nine months ended September 30, 2024, primarily due to $64.2 million in repayment of indebtedness, $16.3 million in dividends paid, $11.6 million in repurchases of common stock for tax withholdings on equity awards.

Long-term Debt

On June 8, 2021, we entered into Amendment No.

1 (“Amendment No.

1”) to that certain Credit Agreement dated June 1, 2020 by and among us, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent (the “2020 Credit Agreement”).

The 2020 Credit Agreement initially provided for a five-year senior secured term loan B facility in an aggregate principal amount of $1,050 million (the “2020 Term Loan B Facility”).

Amendment No.

1 provided for, among other things, (i) a new tranche of term loans (the “2021 Refinanced Term Loan B”) in an aggregate principal amount of $810.0 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of base rate loans, 2.50% per annum and (y) in the case of Eurodollar loans, LIBOR plus a margin of 3.50% per annum, (iii) a prepayment premium of 1.00% in connection with any repricing transaction with respect to the 2021 Refinanced Term Loan B within six months of the closing date of Amendment No.

1, (iv) an extension of the maturity to June 8, 2028, and (v) certain additional amendments, including amendments to provide us with additional flexibility under the covenant governing restricted payments.

The 2020 Credit Agreement dated June 1, 2020 (the “2020 Credit Agreement”), provides for a senior secured term loan B facility (the “Term Loan B”) with maturity on June 8, 2028.

On May 20 2024, we entered into Amendment No.

3 (“Amendment No.

2”) to the 2020 Credit Agreement to replace the reference to LIBOR as the base rate with the reference to the Secured Overnight Financing Rate “SOFR” as administered by the Federal Reserve Bank of New York.

On May 20, 2024, we entered into Amendment No.

3”) to the 2020 Credit Agreement, and executed a repricing of the outstanding amount of $561.1 million.

Amendment No.

3”) to the 2020 Credit Agreement, which provided for, among other things, (i) a repricing of the 2020 Term Loan B Facility through a refinancing of the entire amount of the 2021 Refinanced Term Loan B with a new tranche of term loans (the “2024 Term Loan B”) in an aggregate principal amount of $561.1 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of SOFR loans, SOFR plus a margin of 3.00% per annum and (y) in the case of base rate loans, 2.00% per annum, (iii) a reduction in the excess cash flow mandatory payment thresholds and (iv) a prepayment premium of 1.00% in connection with any repricing transaction with respect to the 2024 Term Loan B within six months of the closing date of Amendment No.

The 2024 Term Loan B will mature on June 8, 2028, the same date upon which the 2021 Refinanced Term Loan B matured prior to giving effect to Amendment No.

On January 30, 2025, the Company entered into Amendment No.

3 reduced interest margins from SOFR plus a margin of 3.50% to SOFR plus a margin of 3.00% per annum or base rate plus a margin of 2.00% per annum.

In addition, Amendment No.

3 lowered the excess cash flow mandatory payment thresholds.

On January 30, 2025, we entered into Amendment No.

4 (“Amendment No.

4”) to the 2020 Credit Agreement, which provided for, among other things, (i) a repricing of the 2020 Term Loan B Facility through a refinancing of the entire amount of the 2024 Term Loan B (the “2025 Term Loan B”) in an aggregate principal amount of $487.1 million, (ii) a reduction of the interest rate margin applicable to such loans to (x) in the case of SOFR loans, 2.50% per annum and (y) in the case of base rate loans, 1.50% per annum and (iii) a prepayment premium of 1.00% in connection with any repricing transaction with respect to the 2025 Term Loan B within six months of the closing date of Amendment No.

The 2025 Term Loan B will mature on June 8, 2028, the same date upon which the 2024 Term Loan B matured prior to giving effect to Amendment No.

As of June 30, 2025, $458.9 million was outstanding under the term loan B facility with an interest rate, including unamortized debt discount and issuance costs of $10.0 million.

Interest is payable monthly.

4”) to the 2020 Credit Agreement, and executed a repricing of the outstanding principal amount of $487.1 million.

Amendment No.

4 further reduced the interest margins to SOFR plus a margin of 2.50% per annum or base rate plus a margin of 1.50% per annum.

The obligations under the 2020 Credit Agreement, as amended, continue to be guaranteed by our wholly-owned material domestic subsidiaries (collectively, the “Guarantors”) and continue to be secured by a lien on substantially all our assets and those of the Guarantors.

As of September 30, 2025, $447.8 million was outstanding under the term loan B facility.

Additionally, we had $9.1 million of unamortized debt discount and issuance costs recorded as a reduction from the carrying amount of the debt.

The interest rate on the Term Loan B, including the amortization of debt discount and issuance costs, was 7.8% and interest is payable monthly.

Under the existing loan agreement, we have future minimum principal payments for our debt of $6.1 million in the remainder of 2025, $24.4 million each year from 2026 through 2027, with the remaining principal balance of $393.0 million due in 2028.

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Based on certain leverage ratios and the voluntary prepayments we made during the year ended December 31, 2024, no excess cash flow payment is required in 2025.

The term loan B facility contains customary covenants, and as of June 30, 2025, we were in full compliance with such covenants.

The term loan B facility contains customary covenants, and as of September 30, 2025, we were in full compliance with such covenants.

Critical Accounting Policies and Estimates

During the six months ended June 30, 2025, there were no significant changes in our critical accounting policies and estimates.

During the nine months ended September 30, 2025, there were no significant changes in our critical accounting policies and estimates.

See “Note 2 – Summary of Significant Accounting Policies ” of Notes to Condensed Consolidated Financial Statements for additional detail.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis