What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-11-06 · 80 added, 124 removed, 132 unchanged (61% of the section changed)

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uncertainty as to the long-term value of the Company’s common stock;

legislative, regulatory and economic developments affecting the Company’s business;

the Company’s ability to pay dividends on a consistent basis or at all;

legislative, regulatory, geopolitical and economic developments affecting the Company’s business;

general economic and market developments and conditions;

the Company’s ability to grow and expand its patent portfolios;

the Company’s ability to grow and expand its patent portfolios and expand into additional addressable markets;

changes in technology and development of new technology in the industries in which the Company operates;

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unforeseen liabilities and expenses;

the Company’s ability to carry out its share repurchase program and the timing of any such repurchases;

risks associated with the Company’s indebtedness;

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Business Overview

(“Adeia”, “we”) is a leading IP licensing platform in the consumer and entertainment space, with a diverse portfolio of media and semiconductor intellectual property and more than 13,000 patents and patent applications worldwide.

In order to serve an increasingly connected world, we invent, develop, and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment.

Our inventions are key enabling technologies that drive how consumers interact with entertainment and devices at home and on the go around the world.

Our foundational technologies help elevate content and improve how audiences connect with it in a way that is more intelligent, immersive and personal.

Our innovative solutions help power smart devices, entertainment experiences and more, and have created a unified ecosystem that reaches highly-engaged consumers and uncovered new business opportunities.

Headquartered in Silicon Valley with more than 35 years of operating experience, we have approximately 150 employees, with substantially all of our employees located in the U.S.

(formerly known as Xperi Holding Corporation) (“Adeia”, “we”) is a technology company and an innovation incubator.

We have spent decades investing in advanced research and development to create market-leading technologies for the entertainment, media, consumer electronics, and semiconductor industries.

Our innovative solutions support practically every aspect of consumers’ day-to-day interaction with media, consumer electronics and entertainment, enabling our customers to build customized, next-generation solutions for users around the globe.

We believe our commitment to and investment in innovation has resulted in a leading IP licensing platform in these industries, with an extensive portfolio of media and semiconductor IP and approximately 13,750 media and semiconductor patent assets worldwide.

In order to serve an increasingly connected world, we invent, develop, acquire and license fundamental innovations that enhance billions of devices and shape the way millions of people explore and experience entertainment and technology across a variety of platforms.

Our innovations address one of the biggest consumer trends in entertainment today – the massive proliferation of entertainment content and the rapidly changing habits of how consumers are finding, engaging with and enjoying entertainment and evolving technology, such as artificial intelligence (“AI”).

Headquartered in Silicon Valley with more than 35 years of operating experience, we have approximately 150 full-time employees, with substantially all of our employees located in the U.S.

Macroeconomic Conditions

Macroeconomic conditions due to inflation, geopolitical instability and global health events had in the past, and may in the future have, an adverse impact on our business.

Macroeconomic conditions due to inflation, geopolitical instability and global health events have in the past, and may in the future have, an adverse impact on our business.

For example, such conditions may cause volatility in the markets we serve, particularly the broad consumer electronics market.

Impacts from adverse macroeconomic conditions may negatively impact our financial condition and results of operations, which could result in an impairment of our long-lived assets, including goodwill, and increased credit losses.

Although a significant portion of our revenue is derived from fixed-fee and minimum-guarantee arrangements from large, well-capitalized customers, our per-unit and variable-fee based revenue will continue to be susceptible to direct or indirect effects from macroeconomic events, such as armed conflict, geopolitical factors, tariffs, market volatility, labor shortages, supply chain disruptions, microchip shortages, changes in demand for semiconductors, market and industry downturns, global health concerns, outbreaks and pandemics.

In addition, to the extent that our customers experience significant, adverse impacts from such macroeconomic events, such events may affect their financial health and our ability to continue receiving revenues from these customers.

Although a significant portion of our revenue is derived from fixed-fee and minimum-guarantee arrangements from large, well-capitalized customers, our per-unit and variable-fee based revenue will continue to be susceptible to global health concerns, outbreaks, pandemics, armed conflict, geopolitical factors, trade regulations and tariffs, market volatility, labor shortages, supply chain disruptions, microchip shortages, changes in demand for semiconductors and market downturns.

Reportable Segments

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

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

Three months ended September 30, 2025:

For the three months ended March 31, 2026, as compared to the same period in 2025:

• Revenue increased by $17.1 million, or 19.5%, from $87.7 million in 2025 to $104.8 million in 2026.

• 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.

• Recurring revenues decreased by $18.1 million, or 21.4% from $84.4 million in 2025 to $66.3 million in 2026.

• Non-recurring revenues increased by $35.2 million, or 1067.0% from $3.3 million in 2025 to $38.5 million in 2026.

• Cash provided by operating activities increased by $1.4 million, or 2.5% from $57.1 million in 2025 to $58.5 million in 2026.

• 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.

• Recurring revenues increased by $6.0 million, or 2.4% from $249.8 million in 2024 to $255.8 million in 2025.

• Non-recurring revenues decreased by $2.1 million, or 29.7% from $7.0 million in 2024 to $4.9 million in 2025.

• Cash provided by operating activities decreased by $6.9 million, or 6.6% from $105.0 million in 2024 to $98.1 million in 2025.

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

• 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.

• We made $28.1 million in principal payments towards our term loan, bringing the outstanding balance to $398.6 million as of March 31, 2026.

• We repurchased $10.0 million of our common stock in 2026.

Results of Operations

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

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

September 30,

Nine Months Ended

September 30,

Operating expenses:

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Income before income taxes

Provision for (benefit from) income taxes

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

Provision for income taxes

The following table sets forth our revenue for the three months ended March 31, 2026 and 2025 (in thousands, except for percentages):

Three Months Ended

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.

The increase in revenue during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily attributable to the execution of two new multi-year license agreements with AMD and Microsoft in 2026;

partially offset by declines in royalty revenue from certain Pay-TV customers.

Recurring revenue for the three months ended March 31, 2026 and 2025 were $66.3 million and $84.4 million, respectively.

The decrease of $18.1 million was driven primarily by declines in royalty revenue from certain Pay-TV customers;

partially offset by the execution of license agreements with new customers from April 1, 2025 to March 31, 2026.

Non-recurring revenues for the three months ended March 31, 2026 and 2025 were $38.5 million and $3.3 million, respectively.

The increase of $35.2 million was primarily attributable to the execution of three new license agreements in the first quarter of 2026, including AMD and another new customer for access to our semiconductor IP portfolio, and Microsoft for access to our media portfolio.

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

Research and development expense (“R&D expense”) consists primarily of personnel costs, stock-based compensation, outside engineering consulting expenses associated with new IP development, as well as costs related to patent applications and examinations, reverse engineering, materials, supplies and an allocation of facilities costs.

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 secure new customers and renew agreements with existing customers.

Research and development (“R&D”) costs consist primarily of personnel costs, stock-based compensation, outside engineering consulting expenses associated with new IP development, as well as costs related to patent applications and examinations, reverse engineering, materials, supplies and an allocation of facilities costs.

All R&D costs are 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.

Three Months Ended

September 30,

Nine Months Ended

September 30,

Research and development

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.

The increase in R&D costs during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in patent portfolio 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

September 30,

Nine Months Ended

September 30,

Selling, general and administrative

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.

The increase in SG&A expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to an increase in personnel related costs as a result of increased headcount and an increase in advertising expense, partially offset by lower outside services.

Amortization Expense (in thousands, except for percentages):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Amortization expense

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.

The increase in amortization expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to patents acquired in 2025, partially offset by certain intangible assets becoming fully amortized during 2025.

Litigation Expense (in thousands, except for percentages):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Litigation expense

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.

Our litigation expense for the three months ended March 31, 2026, was relatively consistent with the same period in 2025.

Higher expenses driven by increased activity in certain matters that have settled were offset by expenses associated with new litigation matters.

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

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Three Months Ended

September 30,

Nine Months Ended

September 30,

Interest expense

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.

The decrease in interest expense during the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to lower debt balance and lower variable interest rates.

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

Three 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 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 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.

Refer to discussion below for further detail on the repricing of our Term Loan B.

Other income and expense, net during the three months ended March 31, 2026, as compared to the same period in 2025, was relatively consistent.

Provision for Income Taxes (in thousands, except for percentages):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Provision for (benefit from) income taxes

Provision for 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 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.

For the three months ended March 31, 2026, we recorded income tax expense of $5.2 million on pretax income of $28.0 million, which resulted in an effective tax rate of 18.6%.

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

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.

federal tax rate primarily due to excess tax benefits related to stock-based compensation.

For the three months ended March 31, 2025, we recorded income tax expense of $2.1 million on pretax income of $13.9 million, which resulted in an effective tax rate of 15.0%.

The increase in income tax expense for the three months ended March 31, 2026, as compared to the same period in the prior year was primarily due to an increase to pretax income.

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 nine months ended September 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 as of and for the three months ended March 31, 2026 and 2025:

(in thousands)

September 30, 2025

March 31, 2026

December 31, 2025

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Total cash, cash equivalents and marketable securities

Nine Months Ended September 30,

Three Months Ended March 31,

Net cash provided by operating activities

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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 $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.

Cash, cash equivalents and marketable securities were $115.8 million at March 31, 2026, a decrease of $21.0 million from $136.7 million at December 31, 2025.

This decrease primarily resulted from $58.5 million of cash generated from operations, partially offset by $28.1 million in repayment of our long-term debt, $29.8 million in repurchases of common stock associated with tax withholdings on equity awards, $10.0 million in repurchases of common stock, $5.5 million in dividends paid, and $5.5 million in purchases of intangible assets.

The primary objectives of our investment activities are to preserve principal and to maintain liquidity, while at the same time capturing a market rate of return.

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Our marketable debt securities are classified as available-for-sale (“AFS”) with credit losses recognized as a credit loss expense and non-credit related unrealized gains and losses, net of tax, recorded in accumulated other comprehensive income or loss

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 $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.

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, 2025.

Other than the principal payments of $28.1 million made by us under the existing Term Loan B during the three months ended March 31, 2026, our cash requirements have not materially changed since December 31, 2025.

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

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Quarterly Dividends

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.

In March 2026 and 2025, we paid a quarterly dividend of $0.05 per share.

In April 2026, our Board authorized payment of a quarterly cash dividend of $0.05 per share, to be paid in June 2026.

Stock Repurchase Plan

In October 2024, our Board approved an increase of the existing share repurchase authorization up to a total of $200.0 million.

In October 2024, our Board of Directors approved an increase to the existing share repurchase authorization up to a total of $200.0 million.

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 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.

The amount and timing of any repurchases under the Plan depend on a number of factors, including, but not limited to, the trading price, volume and availability of our common shares.

There is no guarantee that such repurchases under the Plan will enhance the value of our common stock.

During the three months ended March 31, 2026, we repurchased a total of approximately 0.4 million shares of common stock, at an average price of $22.45 per share for a total cost of $10.0 million.

During the three months ended March 31, 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.

As of March 31, 2026, the total remaining amount available for repurchase under this plan was $150.0 million.

We may continue to execute authorized repurchases from time to time under our existing stock repurchase plan.

The amount and timing of any repurchases under the stock repurchase plan depend on a number of factors, including, but not limited to, the trading price, volume and availability of our common shares.

There is no guarantee that such repurchases under the stock repurchase plan will enhance the value of our common stock.

Cash Flows from Operating Activities

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 provided by operations were $58.5 million for the three months ended March 31, 2026, primarily due to our net income of $22.8 million being adjusted for non-cash items of amortization of intangible assets of $15.9 million, stock-based compensation expense of $8.8 million, and $11.8 million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2025.

Cash flows provided by operations were $57.1 million for the three months ended March 31, 2025, primarily due to our net income of $11.8 million being adjusted for non-cash items of amortization of intangible assets of $14.1 million, stock-based compensation expense of $8.2 million, and $25.8 million in changes in operating assets and liabilities including payment during the period of employee bonuses earned in 2024.

Cash Flows from Investing Activities

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.

Net cash used in investing activities was $4.9 million for the three months ended March 31, 2026, primarily due to purchases of short-term investments in marketable securities of $9.0 million, purchases of intangible assets of $5.5 million, and proceeds from maturities of marketable securities of $10.1 million.

Net cash used in investing activities was $6.2 million for the three months ended March 31, 2025, primarily due to purchases of short-term investments in marketable securities of $7.2 million, purchases of intangible assets of $5.4 million, and proceeds from maturities of marketable securities of $6.6 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 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.

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

During the three months ended March 31, 2026 and 2025, we spent $0.4 million and $0.2 million on capital expenditures, respectively.

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

During the three months ended March 31, 2026 and 2025, we spent $5.5 million and $5.4 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 $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.

Net cash used in financing activities was $73.4 million for the three months ended March 31, 2026, primarily due to $28.1 million in repayment of indebtedness, $5.5 million in dividends paid, $29.8 million in repurchases of common stock for tax withholdings on equity awards, and $10.0 million in repurchases of common stock.

Net cash used in financing activities was $45.6 million for the three months ended March 31, 2025, primarily due to $17.1 million in repayment of indebtedness, $5.4 million in dividends paid, $12.0 million in repurchases of common stock for tax withholdings on equity awards, and $10.0 million in repurchases of common stock.

Long-term Debt

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3 (“Amendment No.

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

3”) to the 2020 Credit Agreement, which provided for a repricing of the entire outstanding aggregate principal amount of $561.1 million.

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.

3 also reduced interest margins (50 basis points) 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.

3 lowered the excess cash flow mandatory payment thresholds and credit spread adjustment provision.

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

4 (“Amendment No.

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

4”) to the 2020 Credit Agreement, which provided for a repricing of the entire outstanding aggregate 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.

4 further reduced the interest margins (50 basis points) 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.

As of March 31, 2026, $398.6 million was outstanding under the term loan B facility.

In addition, we had $7.4 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 7.3% 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.

Under the existing loan agreement, we have future minimum principal payments for our debt of $18.3 million in the remainder of 2026, $24.4 million in 2027, with the remaining principal balance of $356.0 million due June 8, 2028.

The 2020 Credit Agreement, as amended, also requires that we continue to make cash payments on an annual basis based on certain leverage ratios and excess cash flow generated for the immediately preceding fiscal year.

1 unchanged sentence

Based on certain leverage ratios and the voluntary prepayments we made during the year ended December 31, 2025, no excess cash flow payment is required in 2026.

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

The term loan B facility contains customary covenants, and as of March 31, 2026, we were in full compliance with such covenants.

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.

During the three months ended March 31, 2026, 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.

5 unchanged sentences

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