What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-04 compared with 2026-05-11 · 146 added, 84 removed, 133 unchanged (63% of the section changed)

8 unchanged sentences

Our real estate agents and brokers affiliate their real estate licenses with us and operate their businesses utilizing our cloud-based technology platform to enhance their real estate businesses and optimize efficiencies.

On May 6, 2026, we expanded our portfolio through the acquisition of NextHome, representing our initial entry into the franchised real estate brokerage model.

Through NextHome, we now also serve independent real estate professionals and brokerages who operate under the NextHome franchise system, broadening the range of affiliation models through which agents and brokers can access our ecosystem of services and support.

In May 2026, we acquired NextHome, a franchised real estate brokerage.

Through NextHome, we now serve independent real estate professionals and brokerages who operate under the NextHome franchise system, broadening the range of affiliation models through which agents and brokers can access our ecosystem of services and support.

Our enabling and innovative technology platform is a robust suite of cloud-based applications and software services tailored for our real estate agents, brokers, and professionals and targets business operations such as customer relationship management, marketing, client services, and brokerage functionalities.

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Regulatory developments, geopolitical events, and shifts in consumer sentiment can also affect housing demand.

In the first quarter of 2026, U.S.

home sales declined 1% compared to the first quarter of 2025, and home sales prices increased 1.4%, according to the National Association of Realtors (“NAR”).

Inventory levels remain constrained, at 4.1 months of supply, consistent with inventory levels in March 2025.

These conditions may continue to limit transaction volumes in the near term.

Despite these challenges, we believe the Company is positioned for growth with a strong base of agents, an efficient cloud-based operating model, and low fixed costs.

This structure allows us to adapt quickly to market changes while supporting long-term productivity and retention.

Legal & Regulatory Environment

See Part II, Item 1 of this Quarterly Report for a discussion of the current legal environment and how such environment could potentially impact our business, results of operations, cash flows or financial condition.

In the first six months of 2026, U.S.

home sales increased 2.8% compared to the same period in 2025, and home sales prices increased 1.8%, according to the National Association of Realtors (“NAR”).

Inventory levels remain constrained, at 4.6 months of supply, consistent with inventory levels in June 2025.

Our forecasting models continue to reflect minimal growth, informed by historical trends, seasonality and the current macroeconomic conditions.

In this environment, we believe the Company is positioned for growth with a strong base of agents, an efficient cloud-based operating model, and low fixed costs.

Legal Environment

KEY BUSINESS METRICS

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The following table outlines the key business metrics that we periodically review to track the Company’s performance:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Real estate sales transactions

Real estate sales volume

$ 101,227,566

Other real estate transactions

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GAAP financial measure.

For a definition, reconciliation to net income (loss), and discussion of why management believes this measure is useful, see “Non-U.S.

For a definition, reconciliation to net income (loss), and discussion of why management believes this measure is useful to investors, see “Non-U.S.

GAAP Financial Measures”.

Agent net promoter score (“aNPS”)

The Company utilizes aNPS as a key metric to measure agent satisfaction.

The Company utilizes aNPS as a metric to measure agent satisfaction.

aNPS is calculated based on responses to a periodic survey in which agents are asked, on a scale of 0 to 10, how likely they are to recommend our company to a fellow real estate professional.

We believe an aNPS above 50 is indicative of excellent agent satisfaction.

For the three months ended March 31, 2026, our aNPS was 67, compared to 78 for the same period in 2025.

We remain committed to our agent-centric model by enhancing productivity and maintaining high levels of engagement across our global networks.

For both the three and six months ended June 30, 2026, our aNPS was 69, compared to 77 and 78, respectively, for the same periods in 2025.

We believe our ability to attract and retain a diverse and professional agent base is a key driver of our long-term success.

While our total agent count has experienced recent declines amidst a challenging macroeconomic environment, we remain deeply focused on the retention and support of our agents and teams across all levels of production.

While our organic agent base has experienced continued pressure amidst a challenging macroeconomic environment , we remain deeply focused on the retention and support of our agents and teams across all levels of production.

The scale of our agent base remains subject to factors beyond our control, including elevated mortgage rates, suppressed transaction volumes, and evolving industry practices.

Despite these headwinds, we continue to prioritize a comprehensive value proposition that supports agent productivity, operational efficiency, and long-term professional growth for our entire network.

The number of agents increased in the first three months of 2026, compared to the same period in 2025.

The number of agents increased in the first six months of 2026, compared to the same period in 2025, primarily due to the addition of agents in connection with the NextHome acquisition completed during the second quarter of 2026.

We remain committed to retaining our agents in the U.S., Canada, and internationally through the execution of our growth strategies and the end-to-end suite of services we offer our agents.

Real estate sales transactions and volume

Real estate sales transactions are based on the side (buyer or seller) of each real estate transaction and are recorded when our agents and brokers represent buyers or sellers in the purchase or sale, respectively, of a home.

The number of real estate transactions is a key driver of our revenue and profitability.

Real estate sales transactions are based on the side (buyer or seller) of each real estate transaction and are recorded upon the closing of a purchase or sale of a home in which our agents and brokers represented the buyer or seller, respectively.

Transaction volume represents the total sales value for all transactions and is influenced by several market factors, including, but not limited to, the pricing and quality of our services and market conditions that affect home sales, such as macroeconomic factors, economic growth, or contraction, local inventory levels, mortgage interest rates, and seasonality.

The number of real estate transactions and volume are key drivers of our revenue and profitability.

Our real estate sales transactions and volume typically fluctuate with changes in the market’s existing home sales transactions as reported by NAR;

however, company-specific initiatives influence the transaction volume and productivity

of our agents.

For the three months ended March 31, 2026, compared to the same period in 2025, our real estate sales transactions increased 2.2%.

For the three months ended March 31, 2026, compared to the same period in 2025, transaction volume increased 5.5%.

however, company-specific initiatives influence the transaction volume and productivity of our agents.

For the three and six months ended June 30, 2026, compared to the same periods in 2025, our real estate sales transactions increased 12% and 8%, respectively.

For the three and six months ended June 30, 2026, compared to the same periods in 2025, transaction volume increased 15% and 11%, respectively.

The improvements in transactions and volume are due to increased agent productivity and increased home sale prices.

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Other real estate transactions are recorded for leases, rentals and referrals that are undertaken by our agents and brokers.

The increase in other real estate transactions for the three months ended March 31, 2026 compared to the same period in 2025.

Other real estate transactions for the three and six months ended June 30, 2026 increased compared to the same periods in 2025.

Other real estate transactions reflect the full breadth of services that our agents and brokers generate beyond traditional home sales transactions.

Real estate per transaction cost

Real estate per transaction cost is measured as selling, general and administrative, sales and marketing and technology and development expenses resulting from our services that directly support our agents and brokers, divided by total transactions (real estate sales and other).

Real estate per transaction cost decreased (5)% for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to operational efficiency gains from higher transaction units and reduced personnel expenses, employee stock compensation, and marketing expenses.

Revenues represent the commission revenue earned by the Company for closed brokerage real estate transactions.

The Company’s revenues increased 5% for the three months ended March 31, 2026, compared to same period in 2025, primarily due to higher home sales prices in North America, increased international production, and improved productivity in North America for the first quarter of 2026.

Gross profit in the first quarter of 2026 was $75.3 million compared to $76.1 million in the first quarter of 2025.

Gross profit decreased in 2026 due to increased agent commissions, productivity awards, and other agent-related costs due to sales commission capping and lower fees from the reduced number of agents.

Real estate per transaction cost is measured as general and administrative, sales and marketing, and technology and development expenses resulting from our services that directly support our agents and brokers, divided by total transactions (real estate sales and other).

Real estate per transaction cost decreased 15% and 11% for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, primarily due to operational efficiency gains from higher real estate transactions and reduced personnel expenses, employee stock-based compensation expenses, and marketing expenses.

We believe real estate per transaction cost provides useful information to investors because it measures the operating efficiency and scalability of our platform on a per-transaction basis.

Revenues substantially represent the commission revenue earned by and the Company for closed brokerage real estate transactions in addition to fees paid to the Company by agents.

The Company’s revenues increased 11% and 8% for the three and six months ended June 30, 2026, respectively, compared to same periods in 2025, primarily due to higher home sales prices in North America, increased international production, and improved productivity in North America.

Gross profit increased to $98.8 million and $174.1 million in the three and six months ended June 30, 2026, respectively.

Gross profit increased in 2026 due to increased revenues, partially offset by increased agent commissions, productivity awards, and other agent-related costs due to agent commission capping.

Operating Income (Loss)

Operating loss in the first quarter of 2026 was ($8.8) million compared to ($10.4) million in the first quarter of 2025.

The decrease in the operating loss in 2026 reflects actions taken to reduce operating costs in the second half of 2025, partially offset by increased legal expenses in connection with the Company’s ongoing efforts to resolve legacy litigation matters, including the NAR settlement and other claims.

Operating income (loss), in the three and six months ended June 30, 2026, improved when compared to the same periods in 2025.

The improvements reflect increased revenues and actions taken to reduce operating costs in the second half of 2025, partially offset by increased legal expenses and accruals in connection with the Company’s ongoing efforts to resolve litigation matters, including the NAR settlement and other claims.

Consolidated Adjusted EBITDA

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GAAP financial measure, to understand and evaluate our core operating performance.

For the three months ended March 31, 2026, consolidated adjusted EBITDA increased by $1.9 million, compared to the same period in 2025.

The increase in consolidated adjusted EBITDA reflects an improvement in operating results related to actions taken to reduce operating costs in 2025, which offset increased agent capping and lower agent fees.

For the three and six months ended June 30, 2026, consolidated adjusted EBITDA increased by $14.5 million and $16.4 million, respectively, compared to the same periods in 2025.

The increases in consolidated adjusted EBITDA reflect improvements in operating results related to actions taken to reduce operating costs in 2025, which offset increased agent commission capping.

RESULTS OF OPERATIONS

The following table reflects the results of each of our operations during the three months ended March 31, 2026 and 2025:

The following table reflects the results of each of our operations during the three and six months ended June 30, 2026 and 2025:

Three Months Ended

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

Statement of Operations Data:

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Sales and marketing expenses

Litigation contingency

Total operating expenses

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Net income (loss)

Six Months Ended

June 30, 2026

June 30, 2025

Statement of Operations Data:

Commissions and other agent-related costs

For the three months ended March 31, 2026 and 2025, commissions and other agent-related costs increased primarily due to increased sales commissions capping and lower agent fees from the lower number of agents.

Operating expenses

General and administrative expenses

Technology and development expenses

Sales and marketing expenses

Litigation contingency

Total operating expenses

Operating income (loss)

Other (income) expense

Other (income) expense, net

Equity in (income) losses of unconsolidated affiliates

Total other (income) expense, net

Income (loss) before income tax expense

Income tax (benefit) expense

Net income (loss)

Commissions and Other Agent-Related Costs

For the three and six months ended June 30, 2026, commissions and other agent-related costs increased compared to the same periods in 2025, primarily due to increased agent commission capping.

Commissions and other agent-related costs include sales commissions, revenue share and stock-based compensation paid to our agents.

General and Administrative Expenses

For the three months ended March 31, 2026, general and administrative expenses decreased compared to the same period in 2025, due to decreased employee-related expenses, partially offset by increased litigation expenses.

For the three and six months ended June 30, 2026, general and administrative expenses decreased compared to the same periods in 2025, due to decreased employee-related expenses, partially offset by increased litigation expenses.

General and administrative expenses include costs related to wages, employee stock-based compensation, and other general overhead expenses.

Technology and Development Expenses

For the three months ended March 31, 2026, technology and development expenses increased compared to the same period in 2025, primarily due to increased technology expenses related to agent support.

For the three and six months ended June 30, 2026, technology and development expenses increased compared to the same periods in 2025, primarily due to increased technology expenses related to agent support.

These expenses include employee-related costs and other expenses for the maintenance and development of the technology used by both our agents and our employees.

Sales and Marketing Expenses

For the three months ended March 31, 2026, sales and marketing expenses decreased compared to the same period in 2025 due to efficiencies gained from our CRM of choice program in the U.S.

For the three and six months ended June 30, 2026, sales and marketing expenses decreased compared to the same periods in 2025, due to efficiencies gained from our CRM of choice program in the U.S.

and Canada residential real estate market.

Litigation Contingency

For the three and six months ended June 30, 2026, we recorded a litigation contingency expense reflecting a new accrual recorded in connection with the Tuccori Settlement based on the preliminary court approval granted in May 2026.

Litigation contingency expense represents accruals for probable and estimable losses related to ongoing legal matters.

See Note 11 – Commitments and Contingencies to the unaudited condensed consolidated financial statements for additional information regarding the Tuccori Settlement

Legal Costs non-recurring

For both the three months and six months ended June 30, 2026, we incurred legal costs of $4,485 driven by non-recurring costs incurred in connection with strategic corporate development initiatives.

These costs are non-recurring in nature and not reflective of ongoing core operations and we did not incur such costs in 2025.

Other (Income) Expense, Net

For the three months ended March 31, 2026, total other (income) expense, net decreased primarily due to decreased interest income when compared to the same period in 2025.

For the three months ended June 30, 2026, total other (income) expense, net increased primarily due to lower losses in equity investments compared to the same period in 2025.

For the six months ended June 30, 2026, total other (income) expense, net decreased primarily due to lower interest income when compared to the same period in 2025.

Total other (income) expense, net includes interest income earned on cash and cash equivalents, and (earnings) losses related to equity investments.

Income Tax (Benefit) Expense

The Company’s provision for income taxes was a benefit of $(3.6) million and an expense of $1.7 million for the three months ended March 31, 2026 and 2025, respectively.

The benefit for the three months ended March 31, 2026 was primarily driven by the pre-tax loss for the quarter, partially offset by stock-based compensation shortfalls and non-deductible executive compensation.

The Company’s provision for income taxes was an expense of $5.0 million and an expense of $0.5 million for the three months ended June 30, 2026 and 2025, respectively, which represented effective tax rates of 217% and (26%), respectively.

The expense for the three months ended June 30, 2026 was primarily driven by the pre-tax income for the period, stock-based compensation shortfalls and non-deductible executive compensation.

The Company’s provision for income tax expense (benefit) amounted to $1.4 million and $2.1 million for the six months ended June 30, 2026 and 2025, respectively, which represented effective tax rates of (23%) and (19%), respectively.

The effective tax rate differs from our statutory rates in both periods primarily due to foreign and domestic mix of earnings, and stock-based compensation.

BUSINESS SEGMENT DISCLOSURES

Management evaluates segment performance based on revenue, segment adjusted EBITDA, and operating income (loss).

See Note 7 – Segment Information to the unaudited condensed consolidated financial statements for additional information regarding our business segments.

The following table reflects the results of each of our reportable segments during the three months ended March 31, 2026 and 2025:

March 31, 2026

March 31, 2025

Change 2026 vs.

The following table reflects the results of each of our reportable segments during the three and six months ended June 30, 2026 and 2025:

Three Months Ended

June 30, 2026

June 30, 2025

Statement of Operations Data:

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GAAP financial measure.

Management evaluates segment performance based on revenue, segment adjusted EBITDA, and operating income (loss).

For a definition, reconciliation to net income (loss), and discussion of why management believes this measure is useful, see “Non-U.S.

For a definition, reconciliation to net income (loss), and discussion of why management believes this measure is useful to investors, see “Non-U.S.

GAAP Financial Measures”.

North American Realty revenue increased 5% in the first quarter of 2026 compared to the same period in 2025, primarily due to an increase in agent productivity and home sale prices in the U.S.

and partially offset by lower transactions in Canada.

North American Realty adjusted EBITDA as well as operating income (loss) improved in the first quarter of 2026 compared to the same period 2025 due to increased revenues, and lower operating costs, which offset increased commissions and other agent-related costs as a result of increased capping and lower agent fees.

International Realty revenue increased 27% in the first quarter of 2026 compared to the same period in 2025, primarily due to increased real estate transactions driven by increased productivity in previously launched markets, as well as the strategic launch of several new markets during 2025.

International Realty adjusted EBITDA and operating income (loss) decreased by 50% and 57%, respectively, in the first quarter of 2026 compared to the same period in 2025 primarily due to higher costs of entering new countries and increased costs to support the continued growth.

Other Affiliated Services revenue increased 4% in the first quarter of 2026 compared to the same period in 2025, due to increased SUCCESS ® Magazine revenues.

Other Affiliated Services adjusted EBITDA and operating loss improved in the first quarter of 2026 compared to the same period in 2025 due to increased revenues and lower costs.

Six Months Ended

June 30, 2026

June 30, 2025

Statement of Operations Data:

North American Realty

International Realty

Other Affiliated Services

Corporate expenses and other

Total Consolidated Revenues

Segment Adjusted EBITDA (1)

North American Realty

International Realty

Other Affiliated Services

Corporate expenses and other

Total Segment Adjusted EBITDA (1)

Operating Income (Loss)

North American Realty

International Realty

Other Affiliated Services

Corporate expenses and other

Total Consolidated Operating Income (Loss)

(1) Segment adjusted EBITDA is a non-U.S.

GAAP financial measure.

For a definition, reconciliation to net income (loss), and discussion of why management believes this measure is useful to investors, see “Non-U.S.

GAAP Financial Measures”.

North American Realty revenues increased 10% and 8% in the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, primarily due to increases in agent productivity and home sale prices in the U.S., partially offset by lower real estate transactions in Canada.

North American Realty adjusted EBITDA as well as operating income (loss) improved in the three and six months ended June 30, 2026 compared to the same periods of 2025 due to increased revenues, and lower operating costs, which offset increased commissions and other agent-related costs as a result of increased agent commission capping.

International Realty revenue increased 44% and 35% in the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, primarily due to increased real estate transactions driven by increased productivity in previously launched markets.

International Realty adjusted EBITDA and operating income (loss) improved in the three and six months ended June 30, 2026, compared to the same periods in 2025, primarily due to increased revenues and continued expense management.

Other Affiliated Services revenue decreased 3% and increased 1% in the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025.

Other Affiliated Services adjusted EBITDA and operating loss improved in the three and six months ended June 30, 2026, compared to the same periods in 2025, due to lower employee-related costs.

Corporate expenses and other contain the costs incurred to operate the Company.

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GAAP financial measures, to understand and evaluate our core operating performance.

These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S.

We define consolidated adjusted EBITDA as net income, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges, stock-based compensation expense, stock option expense, and other items not core to the operating activities of the Company.

Segment adjusted EBITDA is defined consistently, excluding depreciation and amortization, interest expense, income taxes, stock compensation expense, stock option expense, and other non-core items.

These non-U.S.

GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S.

We define consolidated adjusted EBITDA as net income (loss), excluding other income (expense), net, income tax benefit (expense), depreciation, amortization, impairment charges (as applicable), litigation contingency, legal costs non-recurring, stock-based compensation expense, stock option expense, and other items that are not core to the operating activities of the Company.

Segment adjusted EBITDA is defined consistently, excluding other income (expense), income tax benefit (expense), depreciation, amortization, impairment charges (as applicable), litigation contingency, legal costs non-recurring, stock-based compensation expense, stock option expense, and other non-core items.

We believe these measures provide useful information about our financial performance, help identify underlying trends that could otherwise be masked by excluded expenses, and allow for greater transparency with respect to key metrics used by management for financial and operational decision-making.

In particular, we believe the exclusion of stock and stock option expenses provides a useful supplemental measure in evaluating the performance of our underlying operations.

Consolidated adjusted EBITDA and segment adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with U.S.

Limitations of these measures compared to net income include:

Limitations of these measures compared to net income (loss), the most directly comparable U.S.

GAAP measure include:

● Consolidated adjusted EBITDA and segment adjusted EBITDA exclude stock-based compensation expenses related to our agent growth incentive program and stock option expense, which have been and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy;

● Consolidated adjusted EBITDA and segment adjusted EBITDA exclude certain recurring, non-cash charges such as depreciation of fixed assets, amortization of intangible assets and impairment charges related to these long-lived assets and, although these are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future.

The following table presents a reconciliation of consolidated adjusted EBITDA to net income (loss), the most comparable U.S.

GAAP financial measure, for each of the periods presented:

Three Months Ended March 31,

● Consolidated adjusted EBITDA and segment adjusted EBITDA exclude certain recurring, non-cash charges such as depreciation of fixed assets, amortization of intangible assets and impairment charges related to these long-lived assets, as applicable, and, although these are non-cash charges, the assets being depreciated, amortized, or impaired may have to be replaced in the future.

Three Months Ended June 30,

Six Months Ended June 30,

Net income (loss)

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Depreciation and amortization

Legal costs non-recurring

Litigation contingency

Stock-based compensation expense (1)

Other stock-based compensation expense

Stock option expense

Consolidated adjusted EBITDA

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Our ability to generate sufficient cash flow from operations or to access certain capital markets, including banks, is necessary to fund our operations and capital expenditures, repurchase our common stock, and meet obligations as they become due.

Currently, our primary use of cash on hand is to sustain and grow our business operations, including, but not limited to, making commission and revenue share payments to agents and brokers and cash outflows for operating expenses and dividend payments.

In addition, the Company has no known material cash requirements as of March 31, 2026 relating to capital expenditures, commitments, or human capital (except as passthrough commissions to agents and brokers concurrent with settled real estate transactions).

The Company intends to use available cash to pay the remaining $17 million antitrust litigation settlement amount.

In addition, the Company has no known material cash requirements as of June 30, 2026 relating to capital expenditures, commitments, or human capital (except as passthrough commissions to agents and brokers concurrent with settled real estate transactions), other than cash payments due pursuant to litigation settlement agreements, which may be paid in installments over time.

For information regarding the Company’s expected cash requirement related to litigation settlement agreements, see Note 11 – Commitments and Contingencies to the unaudited condensed consolidated financial statements.

We believe that our existing balances of cash and cash equivalents and cash flows expected to be generated from our operations will be sufficient to satisfy our operating requirements for at least the next twelve months.

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In order to support and achieve our future growth plans, we may need or seek advantageously to obtain additional funding through equity or debt financing.

We believe that our current operating structure

will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next twelve months.

There can be no assurance such financing will be available on terms acceptable to us or at all.

If we raise funds by issuing equity securities, dilution to our stockholders may result.

We believe that our current operating structure will facilitate sufficient cash flows from operations to satisfy our expected long-term liquidity requirements beyond the next twelve months.

Net Working Capital

Net working capital is calculated as the Company’s total current assets less its total current liabilities.

The following table presents our net working capital as of March 31, 2026 and December 31, 2025:

March 31, 2026

The following table presents our net working capital as of June 30, 2026 and December 31, 2025:

June 30, 2026

December 31, 2025

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Net working capital

As of March 31, 2026, net working capital increased by $12.2 million, compared to net working capital as of December 31, 2025 due to an increase in net accounts receivable, due to the timing of receivable collections, partially offset by an increase in accruals for customer deposits.

The following table presents our cash flows for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

As of June 30, 2026, net working capital increased by $27.9 million, compared to net working capital as of December 31, 2025 due to an increase in cash and restricted cash and net accounts receivable, due to the timing of receivable collections, and a decrease in the litigation contingency, due to the payments made in June 2026, such increases were partially offset by an increase in commissions payable accruals.

The following table presents our cash flows for the six months ended June 30, 2026 and 2025:

Six Months Ended June 30,

Net cash provided by operating activities

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Net change in cash, cash equivalents and restricted cash

For the three months ended March 31, 2026, net cash provided by operating activities decreased ($19.3) million compared to the same period in 2025.

The decrease in cash provided by operating activities was primarily driven by lower agent equity compensation and changes in working capital.

As of March 31, 2026, the Company has accrued the remaining $17.0 million installment of the antitrust litigation settlement, which it intends to pay from available cash on or before June 27, 2026.

For the three months ended March 31, 2026, net cash used in investing activities decreased due to lower cash used for investments in affiliates and other assets and purchases of property and equipment compared to the same period in 2025.

For the three months ended March 31, 2026, net cash flows used in financing activities decreased compared to the same period in 2025, due to no stock repurchases in the first quarter of 2026.

For the six months ended June 30, 2026, net cash provided by operating activities decreased ($16.6) million compared to the same period in 2025, primarily driven by the payments made for the litigation contingency.

For the six months ended June 30, 2026, cash used in investing activities decreased due to lower cash used for investments in affiliates and purchases of property and equipment, partially offset by increased cash used for the purchase of a business compared to the same period in 2025.

For the six months ended June 30, 2026, net cash flows used in financing activities decreased compared to the same period in 2025, due to no stock repurchases in the first half of 2026 compared to $29.9 million of stock repurchases for the same period in 2025.

Acquisitions have not been a material element of our ongoing business, but we continue to seek opportunities to expand and enhance our portfolio of solutions, access new revenue streams, or otherwise complement or accelerate the growth of our existing operations .

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There were no changes to critical accounting policies or estimates as reflected in our 2025 Annual Report.

For additional information regarding our critical accounting policies and estimates, see the Critical Accounting Policies and Estimates section of Part II, Item 7 Management’s Discussion and Analysis of Financial Conditions and Results of Operations included in our 2025 Annual Report.

For additional information regarding our critical accounting policies and estimates, see the Critical Accounting Policies and Estimates section of Part II, Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2025 Annual Report.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposures to market risk since December 31, 2025.

For details on the Company’s market risks relating to interest rates and foreign currency exchange rates, see Part II, Item 7A Quantitative and Qualitative Disclosures About Market Risk in our 2025 Annual Report.

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