What changed in this filing

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Item 1. Financial Statements

2025-07-31 compared with 2025-05-01 · 144 added, 97 removed, 415 unchanged (37% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

March 31, December 31,

June 30, December 31,

Current assets

27 unchanged sentences

Stockholders’ Equity

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of March 31, 2025 and December 31, 2024

Preferred stock, $ 0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of June 30, 2025 and December 31, 2024

Common stock, $ 0.001 par value, 500,000,000 shares authorized;

and 103,019,976 and 102,088,783 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

and 104,083,138 and 102,088,783 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 841,520 833,129

6 unchanged sentences

(in thousands, except share and per share data)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

2025 2024 2025 2024

Revenues $ 112,059 $ 82,160 $ 209,894 $ 158,287

15 unchanged sentences

Interest expense ( 3,188 ) ( 74 ) ( 3,989 ) ( 147 )

Gain on financial instruments — 112

Loss on financial instruments — ( 112 ) — —

Loss before income taxes ( 17,887 ) ( 12,132 ) ( 32,988 ) ( 23,376 )

5 unchanged sentences

Basic and diluted 103,389,459 98,103,527 102,912,715 97,524,379

(1) Includes amortization of acquired technology of $ 1.9 million and $ 1.3 million for the three months ended March 31, 2025 and 2024, respectively.

(1) Includes amortization of acquired technology of $ 4.9 million and $ 1.4 million for the three months ended June 30, 2025 and 2024, respectively, and $ 6.8 million and $ 2.7 million for the six months ended June 30, 2025 and 2024, respectively.

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(in thousands, except share data)

Three months ended March 31, 2025

Three months ended June 30, 2025

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance January 1, 2025

Balance March 31, 2025

103,019,976 $ 103 $ 817,958 $ ( 484,017 ) $ 334,044

1 unchanged sentence

Issuance of common stock upon restricted stock unit vesting 855,832 1 ( 1 ) — —

Common stock issued under Employee Stock Purchase Plan (ESPP) 126,666 — 2,943 — 2,943

Exercised stock options 80,664 — 732 — 732

Net loss — — — ( 13,591 ) ( 13,591 )

Balance June 30, 2025

104,083,138 $ 104 $ 841,520 $ ( 497,608 ) $ 344,016

Three months ended June 30, 2024

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance March 31, 2024 97,515,483 $ 98 $ 769,608 $ ( 446,799 ) $ 322,907

Stock-based compensation — — 15,356 — 15,356

Issuance of common stock upon restricted stock unit vesting 537,974 — — — —

Common stock issued under ESPP 216,174 — 2,598 — 2,598

Exercised stock options 715,739 1 5,756 — 5,757

Payments for taxes related to net settlement of equity awards — — ( 7,117 ) — ( 7,117 )

Net loss — — — ( 12,317 ) ( 12,317 )

Balance June 30, 2024

98,985,370 $ 99 $ 786,201 $ ( 459,116 ) $ 327,184

Six months ended June 30, 2025

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance December 31, 2024

102,088,783 $ 102 $ 833,129 $ ( 476,201 ) $ 357,030

Stock-based compensation — — 36,253 — 36,253

Issuance of common stock upon restricted stock unit vesting 1,553,338 2 ( 2 ) — —

Common stock issued under ESPP 126,666 2,943 — 2,943

Exercised stock options 314,351 — 2,255 — 2,255

Capped call transaction — — ( 33,879 ) — ( 33,879 )

1 unchanged sentence

Net loss — — — ( 21,407 ) ( 21,407 )

Balance March 31, 2025 103,019,976 $ 103 $ 817,958 $ ( 484,017 ) $ 334,044

Three months ended March 31, 2024

Balance June 30, 2025

104,083,138 $ 104 $ 841,520 $ ( 497,608 ) $ 344,016

Six months ended June 30, 2024

Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity

Shares Amount

Balance January 1, 2024 96,722,098 $ 97 $ 760,210 $ ( 435,366 ) $ 324,941

Balance December 31, 2023 96,722,098 $ 97 $ 760,210 $ ( 435,366 ) $ 324,941

Stock-based compensation — — 29,262 — 29,262

Issuance of common stock upon restricted stock unit vesting 1,021,491 1 ( 1 ) — —

Common stock issued under ESPP 216,174 — 2,598 — 2,598

Exercised stock options 1,025,607 1 6,927 — 6,928

1 unchanged sentence

Net loss — — — ( 23,750 ) ( 23,750 )

Balance March 31, 2024

Balance June 30, 2024

98,985,370 $ 99 $ 786,201 $ ( 459,116 ) $ 327,184

3 unchanged sentences

(in thousands)

Three months ended March 31,

Six months ended June 30,

Cash flows from operating activities:

6 unchanged sentences

Loss on impairment of intangible assets 1,655 —

Gain on financial instruments — ( 112 )

Deferred taxes ( 12,006 ) 47

1 unchanged sentence

Accounts receivable ( 7,461 ) ( 3,453 )

Prepaid expenses and other current assets ( 5,416 ) ( 1,633 )

Prepaid expenses and other assets ( 15,752 ) ( 3,790 )

Accounts payable and accrued liabilities 4,199 ( 653 )

11 unchanged sentences

Cash flows from financing activities:

Payments on revolving loan ( 10,000 ) —

Debt issuance costs paid ( 1,898 ) —

Proceeds from ESPP issuances 2,943 2,598

Proceeds from issuance of convertible senior notes 335,513 —

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Cash and cash equivalents, end of period $ 52,426 $ 61,432

Supplemental information and non-cash activities

Accrued but unpaid debt issuance costs $ 1,119 $ —

(1) See Note 3 for additional information regarding non-cash investing activities for the three months ended March 31, 2025 and 2024 related to capitalized software development costs.

(1) See Note 4 for additional information regarding non-cash investing activities for the six months ended June 30, 2025 and 2024 related to capitalized software development costs.

The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements.

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Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes for the fiscal year ended December 31, 2024, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2025.

Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2025.

The Company has no sources of other comprehensive income, and accordingly, net loss presented each period is the same as comprehensive loss.

The Company has reclassified certain amounts in its notes to the condensed consolidated financial statements in the prior periods to conform to current periods presentation.

Use of Estimates

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The Company's chief operating decision maker, the Chief Executive Officer, assesses performance for the Company's single reportable segment and decides how to allocate resources based on the Company’s net loss (see the unaudited condensed consolidated statements of operations).

For single reportable segment-level financial information, total assets, revenues from external customers, depreciation and amortization expense, interest income and interest expense, (benefit from) provision for income taxes, other non-operating expenses, and significant non-cash transactions, see Item 1.

Financial Statements.

See the accompanying condensed consolidated financial statements for single reportable segment-level financial information, total assets, revenues from external customers, depreciation and amortization expense, interest income and interest expense, (benefit from) provision for income taxes, other non-operating expenses, and significant non-cash transactions.

Recent Accounting Pronouncements

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A portion of the Merger Consideration of approximately $ 9.1 million was placed into escrow to secure certain post-closing obligations as defined in the Merger Agreement.

As of March 31, 2025, the allocation of the purchase price for MANTL has not been finalized, and the one-year measurement period has not ended.

As of June 30, 2025, the allocation of the purchase price for MANTL has not been finalized.

The preliminary purchase price allocations are based upon the preliminary valuation of assets and liabilities.

These estimates and assumptions are subject to change as the Company obtains additional information during the measurement period.

The following table summarizes the fair value amounts recognized as of the acquisition date for each major class of asset acquired or liability assumed:

(in thousands) Preliminary Fair Value as of March 17, 2025

The following table summarizes the fair value of the amounts recognized as of the acquisition date for each major class of asset acquired or liability assumed, as well as adjustments made during the measurement period:

(in thousands) Preliminary Fair Value as of March 17, 2025 Measurement Period Adjustments Adjusted Fair Value as of June 30, 2025

Cash $ 2,784 $ — $ 2,784

Trade accounts receivables 1,479 — 1,479

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Total cash consideration for acquisition, less cash acquired $ 375,499 $ — $ 375,499

The measurement period adjustments recorded for the three months ended June 30, 2025 are related to post-closing working capital adjustments and assumption of deferred tax liabilities.

The table below outlines the purchased identifiable intangible assets:

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These awards were settled in cash upon the closing of the transaction and were accounted for as post-combination stock-based compensation expense.

As a result, the Company recognized stock-based compensation expense of $ 3.9 million, of which $ 1.0 million, $ 1.0 million, $ 0.3 million, and $ 1.6 million are included in cost of revenues, research and development, sales and marketing, and general and administrative, respectively, within the condensed consolidated statements of operations for the three months ended March 31, 2025.

For the three months ended March 31, 2025, the Company recognized acquisition-related expenses of $ 2.4 million related to the acquisition of MANTL.

The financial results of MANTL, for the period of March 18, 2025 through March 31, 2025, are included in the Company’s condensed consolidated financial statements and notes.

The revenue contribution from the MANTL acquisition was $ 1.4 million for the same period.

As a result, the Company recognized stock-based compensation expense of $ 3.9 million, of which $ 1.0 million, $ 1.0 million, $ 0.3 million, and $ 1.6 million are included in cost of revenues, research and development, sales and marketing, and general and administrative, respectively, in the condensed consolidated statements of operations for the six months ended June 30, 2025.

For the three and six months ended June 30, 2025, the Company recognized acquisition-related expenses of $ 0.5 million and $ 2.9 million, respectively, related to the acquisition of MANTL.

The financial results of MANTL, for the period of March 18, 2025 through June 30, 2025, are included in the Company’s condensed consolidated financial statements and notes.

The revenue contribution from the MANTL acquisition was $ 10.3 million and $ 11.7 million for the three and six months ended June 30, 2025, respectively.

Property and Equipment, Net

Depreciation and amortization expense was $ 1.0 million and $ 0.9 million for the three months ended March 31, 2025 and 2024, respectively.

Property and equipment, net, includes the following amounts at March 31, 2025 and December 31, 2024:

(in thousands) Useful Life March 31, 2025 December 31, 2024

Software 2 to 5 years

Depreciation and amortization expense was $ 1.1 million and $ 2.1 million for the three and six months ended June 30, 2025, respectively, and $ 0.9 million and $ 1.8 million for the three and six months ended June 30, 2024, respectively.

Property and equipment, net, includes the following amounts at June 30, 2025 and December 31, 2024:

(in thousands) Useful Life June 30, 2025 December 31, 2024

Capitalized software development costs 5 years 23,328 19,728

Computers and equipment 3 years 2,568 2,379

Furniture and fixtures 5 years 14 357

Equipment and software 3 to 5 years

Leasehold improvements 3 to 10 years

3 unchanged sentences

Property and equipment, net $ 24,190 $ 22,075

For the three months ended March 31, 2025 and 2024, the Company had non-cash investing activities of $ 0.2 million and $ 0.2 million for capitalized stock-based compensation related to capitalized software development costs.

Additionally, the Company recognized stock-based compensation expense through the amortization of capitalized stock-based compensation associated with capitalized software development costs of $ 0.1 million and less than $ 0.1 million for the three months ended March 31, 2025, and 2024, respectively.

For both the six months ended June 30, 2025 and 2024, the Company had non-cash investing activities of $ 0.4 million for capitalized stock-based compensation related to capitalized software development costs.

Additionally, the Company recognized stock-based compensation expense through the amortization of capitalized stock-based compensation associated with capitalized software development costs of less than $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2025, respectively, and $ 0.1 million for both the three and six months ended June 30, 2024.

See Note 15 for information related to a capitalized software development costs impairment.

Revenues and Deferred Costs

The following table disaggregates the Company's revenue by major source for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The following table disaggregates the Company's revenue by major source for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30,

Six months ended June 30,

(in thousands) 2025 2024 2025 2024

3 unchanged sentences

Total revenues $ 112,059 $ 82,160 $ 209,894 $ 158,287

The Company recognized approximately $ 3.7 million of revenue during the three months ended March 31, 2025 that was included in deferred revenues in the accompanying condensed consolidated balance sheets as of the beginning of the reporting period.

For those contracts that were wholly or partially unsatisfied as of March 31, 2025, the Company’s remaining performance obligation totaled approximately $ 1.6 billion, which includes $ 0.2 billion for MANTL.

The Company recognized approximately $ 6.8 million of revenue during the six months ended June 30, 2025 that was included in deferred revenues in the accompanying condensed consolidated balance sheets as of the beginning of the reporting period.

For those contracts that were wholly or partially unsatisfied as of June 30, 2025, the Company’s remaining performance obligation totaled approximately $ 1.6 billion.

The Company expects to recognize approximately 49.5 % of these remaining obligations as revenue over the next 24 months, an additional 34.4 % in the next 25 to 48 months, and the remaining balance thereafter.

This estimate does not include estimated consideration for excess user and transaction processing fees that the Company expects to earn under its subscription contracts.

Contract assets totaled $ 2.4 million, including $ 0.6 million related to MANTL, and $ 1.9 million as of March 31, 2025 and December 31, 2024, respectively, which are included in other assets in the accompanying condensed consolidated balance sheets.

Contract assets totaled $ 2.9 million, including $ 0.7 million related to MANTL, and $ 1.9 million as of June 30, 2025 and December 31, 2024, respectively, which are included in other assets in the accompanying condensed consolidated balance sheets.

Deferred Cost Recognition

The Company capitalized $ 1.0 million and $ 1.2 million in deferred commissions costs during the three months ended March 31, 2025 and 2024 respectively, and recognized amortization of $ 1.5 million and $ 1.2 million during the three months ended March 31, 2025 and 2024, respectively.

The Company capitalized $ 2.5 million and $ 3.5 million in deferred commissions costs during the three and six months ended June 30, 2025, respectively, and $ 1.7 million and $ 2.9 million for the three and six months ended June 30, 2024, respectively, and recognized amortization of $ 1.6 million and $ 3.1 million during the three and six months ended June 30, 2025, respectively, and $ 1.3 million and $ 2.5 million during the three and six months ended June 30, 2024, respectively.

Amortization expense is included in sales and marketing expenses in the accompanying condensed consolidated statements of operations.

Deferred commissions are considered costs to obtain a contract and are included in deferred costs in the accompanying condensed consolidated balance sheets in the amount of $ 25.4 million and $ 25.9 million as of March 31, 2025 and December 31, 2024, respectively.

The Company capitalized implementation costs of $ 2.5 million and $ 2.9 million during the three months ended March 31, 2025, and 2024, respectively, and recognized amortization of $ 1.4 million for both the three months ended March 31, 2025 and 2024.

Deferred commissions are considered costs to obtain a contract and are included in deferred costs in the accompanying condensed consolidated balance sheets in the amount of $ 26.4 million and $ 25.9 million as of June 30, 2025 and December 31, 2024, respectively.

The Company capitalized implementation costs of $ 3.1 million and $ 5.3 million during the three and six months ended June 30, 2025, respectively, and $ 2.3 million and $ 5.2 million for the three and six months ended June 30, 2024, respectively, and recognized amortization of $ 1.6 million and $ 3.0 million for the three and six months ended June 30, 2025, respectively, and $ 1.3 million and $ 2.7 million during the three and six months ended June 30, 2024, respectively.

Amortization expense is included in cost of revenues in the accompanying condensed consolidated statements of operations.

These deferred costs are considered costs to fulfill client contracts and are included in deferred costs in the accompanying condensed consolidated balance sheets in the amount of $ 25.3 million and $ 24.5 million as of March 31, 2025 and December 31, 2024, respectively.

These deferred costs are considered costs to fulfill client contracts and are included in deferred costs in the accompanying condensed consolidated balance sheets in the amount of $ 26.8 million and $ 24.5 million as of June 30, 2025 and December 31, 2024, respectively.

The Company periodically reviews the carrying amount of deferred costs to determine whether events or changes in circumstances have occurred that could impact the period of benefit.

No material impairment losses were recognized in relation to these capitalized costs for the three months ended March 31, 2025 and 2024.

Accounts Receivable

Accounts receivable includes the following amounts at March 31, 2025 and December 31, 2024:

March 31, December 31,

No material impairment losses were recognized in relation to these capitalized costs for the three or six months ended June 30, 2025 and 2024.

Accounts Receivable, net and Prepaid expenses and other current assets

Accounts receivable, net includes the following amounts at June 30, 2025 and December 31, 2024:

June 30, December 31,

(in thousands) 2025 2024

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Reserve for estimated credits ( 133 ) ( 186 )

$ 46,790 $ 38,739

Total accounts receivable, net $ 47,679 $ 38,739

Prepaid expenses and other current assets includes the following amounts at June 30, 2025 and December 31, 2024:

June 30, December 31,

(in thousands) 2025 2024

Prepaid expenses $ 16,810 $ 11,798

Other receivables 10,492 1,105

Other current assets 1,109 794

Total prepaid expenses and other current assets $ 28,411 $ 13,697

Accrued Liabilities

Accrued liabilities consisted of the following at March 31, 2025 and December 31, 2024:

March 31, December 31,

Accrued liabilities consisted of the following at June 30, 2025 and December 31, 2024:

June 30, December 31,

(in thousands) 2025 2024

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ESPP liability 766 757

Self-insurance reserve 1,780 1,516

Other accrued liabilities 11,631 8,633

2 unchanged sentences

On February 27, 2025, the Company entered into a Third Amendment (the “Third Amendment”) to the Company’s Amended and Restated Credit Agreement dated as of April 29, 2022 (as amended, the “Amended Credit Agreement”), with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as administrative agent, and other lenders party thereto.

The Third Amendment, among other things, (i) extended the maturity date of the revolving commitment from April 29, 2027 to February 27, 2030, (ii) increased the amount of the revolving loan commitment by $ 100 million, for a total revolving commitment of $ 225 million, (iii) extended the Financial Covenant Trigger Date (as defined therein) to December 31, 2026 or such earlier date as designated by the Company, (iv) reduced the applicable interest rate margins (1) prior to the Financial Covenant Trigger Date, from SOFR plus 3.00 % to 3.50 % per annum to SOFR plus 2.75 % to 3.25 % per annum, based on the Recurring Revenue Leverage Ratio (as defined therein) and (2) on or after the Financial Covenant Trigger Date, from SOFR plus 1.50 % to 3.00 % per annum to SOFR plus 1.25 % to 2.50 % per annum, based on the Consolidated Total Net Leverage Ratio (as defined therein), (v) permitted the acquisition of MANTL pursuant to the terms of the Merger Agreement, (vi) permitted certain Permitted Convertible Indebtedness and Permitted Equity Derivative Transactions (as such terms are defined therein), subject to certain restrictions, and (vii) modified certain covenants.

The Third Amendment, among other things, (i) extended the maturity date of the revolving commitment from April 29, 2027 to February 27, 2030, (ii) increased the amount of the revolving loan commitment by $ 100 million, for a total revolving commitment of $ 225 million (the “Revolving Facility”), (iii) extended the Financial Covenant Trigger Date (as defined therein) to December 31, 2026 or such earlier date as designated by the Company, (iv) reduced the applicable interest rate margins (1) prior to the Financial Covenant Trigger Date, from SOFR plus 3.00 % to 3.50 % per annum to SOFR plus 2.75 % to 3.25 % per annum, based on the Recurring Revenue Leverage Ratio (as defined therein) and (2) on or after the Financial Covenant Trigger Date, from SOFR plus 1.50 % to 3.00 % per annum to SOFR plus 1.25 % to 2.50 % per annum, based on the Consolidated Total Net Leverage Ratio (as defined therein), (v) permitted the acquisition of MANTL pursuant to the terms of the Merger Agreement, (vi) permitted certain Permitted Convertible Indebtedness and Permitted Equity Derivative Transactions (as such terms are defined therein), subject to certain restrictions, and (vii) modified certain covenants.

Revolving Facility loans under the Amended Credit Agreement may be voluntarily prepaid and re-borrowed.

The Amended Credit Agreement previously provided for a term loan, which was fully repaid in December 2023 and cannot be re-borrowed.

The Company had borrowings of $ 60 million on the revolving loan during March 2025, with the proceeds used for the acquisition of MANTL, which remained outstanding as of March 31, 2025.

The interest rate in effect for the revolving loan as of March 31, 2025 is 9.75 %.

Interest expense related to the outstanding borrowings on the revolver loan is $ 0.3 million for the three months ended March 31, 2025.

The Company had borrowings of $ 60 million on the Revolving Facility during March 2025, with the proceeds used for the acquisition of MANTL, of which $ 50 million remained outstanding as of June 30, 2025.

The interest rate in effect for the Revolving Facility as of March 31, 2025 was 9.75 %.

In April 2025, the rate decreased to 7.68 %, which remained the effective interest rate as of June 30, 2025.

Interest expense related to the outstanding borrowings on the Revolving Facility was $ 1.2 million and $ 1.5 million for the three and six months ended June 30, 2025, respectively.

Obligations under the Amended Credit Agreement are guaranteed by the Company’s subsidiaries and secured by all or substantially all of the assets of the Company and its subsidiaries pursuant to an Amended and Restated Guarantee and Collateral Agreement.

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The Amended Credit Agreement also contains customary events of default which, if they occur, could result in the termination of commitments under the Amended Credit Agreement, the declaration that all outstanding loans are immediately due and payable in whole or in part, and the requirement to maintain cash collateral deposits in respect of outstanding letters of credit.

The Company was in compliance with all covenants as of March 31, 2025.

The Company was in compliance with all covenants as of June 30, 2025.

2030 Convertible Notes

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The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of March 13, 2025, between the Company and U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”).

Bank Trust Company, National Association, as trustee.

The 2030 Convertible Notes are the Company’s senior, unsecured obligations and bear interest at a rate of 1.50 % per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2025.

1 unchanged sentence

In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time.

As the Company issued the Convertible Notes on March 13, 2025 ASU 2020-06 became effective for the Company on January 1, 2025.

As the Company issued the 2030 Convertible Notes on March 13, 2025, ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity became effective for the Company on January 1, 2025.

The 2030 Convertible Notes are convertible at the option of the holders of the 2030 Convertible Notes before November 15, 2029, only under the following circumstances:

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or (4) upon the occurrence of certain corporate events or distributions on the Company’s common stock.

From and after November 15, 2029,

noteholders may convert their Notes at any time at their election, until the close of business on the second scheduled trading day immediately before the maturity date.

From and after November 15, 2029, noteholders may convert their Notes at any time at their election, until the close of business on the second scheduled trading day immediately before the maturity date.

The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election.

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The definition of “fundamental change” includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock.

As of March 31, 2025, the conditions allowing holders of the 2030 Convertible Notes to convert were not met.

As of June 30, 2025, the conditions allowing holders of the 2030 Convertible Notes to convert were not met.

The net carrying amount of the 2030 Convertible Notes consisted of the following (in thousands):

(in thousands) March 31, 2025

(in thousands) June 30, 2025

Principal $ 345,000

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The effective interest rate used to amortize the discount and issuance costs of the 2030 Convertible Notes is 2.14 %.

For the three months ended March 31, 2025, interest expense related to the 2030 Convertible Notes consisted of the following (in thousands):

(in thousands) Three months ended March 31, 2025

For the three and six months ended June 30, 2025, interest expense related to the 2030 Convertible Notes consisted of the following (in thousands):

(in thousands) Three months ended June 30, 2025 Six months ended June 30, 2025

Contractual interest expense $ 1,293 $ 1,509

1 unchanged sentence

Total interest expense $ 1,781 $ 2,133

As of March 31, 2025, the 2030 Convertible Notes had a principal amount of $ 345 million and an estimated fair value of $ 372 million.

The estimated fair value of the 2030 Convertible Notes, which are Level 2 financial instruments, were determined based on the quoted bid prices of the 2030 Convertible Notes in an over-the-counter market on the last trading day of the reporting period.

As of June 30, 2025, the 2030 Convertible Notes had a principal amount of $ 345 million and an estimated fair value of $ 406 million.

The estimated fair value of the 2030 Convertible Notes, which are Level 2 financial instruments, was determined based on the quoted bid prices of the 2030 Convertible Notes in an over-the-counter market on the last trading day of the reporting period.

In connection with the 2030 Convertible Notes, the Company has entered into privately negotiated capped call transactions with certain financial institutions pursuant to capped call confirmations (collectively, the “Capped Calls”).

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The Capped Calls have an initial cap price of $ 47.74 per share, subject to certain adjustments.

The Capped Calls cover, subject to anti-dilution adjustments, approximately 14.5 million shares of the Company’s common stock.

The Capped Calls are generally expected to reduce potential dilution to the Company’s common stock and/or offset any potential cash payments that the Company could be required to make in excess of the principal amount of any converted 2030 Convertible Notes, with such reduction and/or offset subject to a cap.

1 unchanged sentence

The Capped Calls do not meet the criteria for separate accounting as a derivative as they are indexed to the Company's stock and meet the requirements to be classified in equity and, as such, are not remeasured each reporting period.

The premiums paid for the Capped Calls were included as a net reduction to additional paid-in capital within stockholders’ equity during the quarter ended March 31, 2025.

The premiums paid for the Capped Calls were included as a net reduction to additional paid-in capital within stockholders’ equity during the six months ended June 30, 2025.

Stockholders' Equity

1 unchanged sentence

Stock-based compensation expense was included in the condensed consolidated statements of operations as follows:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

Total stock-based compensation expenses $ 19,515 $ 15,013 $ 39,517 $ 28,565

In connection with the acquisition of MANTL, the vesting of certain outstanding unvested equity awards were accelerated and settled in cash resulting in $ 3.9 million of stock-based compensation expense for the three months ended March 31, 2025.

In connection with the acquisition of MANTL in March 2025, the vesting of certain outstanding unvested equity awards were accelerated and settled in cash, resulting in the Company recognizing $ 3.9 million of stock-based compensation expense for the six months ended June 30, 2025.

See Note 3 for additional information.

The Company recorded an income tax benefit of $ 7.3 million and income tax expense of $ 0.2 million for the three months ended March 31, 2025 and 2024, respectively, resulting in an effective tax rate of 48.2 % and ( 1.7 )%, respectively.

The Company’s effective tax rates for the three months ended March 31, 2025 and 2024 differ from the statutory tax rate primarily due to the impact of the valuation allowance against its deferred tax assets and state tax expense, offset by a deferred tax benefit attributable to the partial release of the Company’s pre-existing valuation allowance related to the MANTL business combination.

The acquisition of MANTL resulted in the recognition of a net deferred tax liability of $ 8.8 million.

to the Notes to the Unaudited Condensed Consolidated Financial Statements for further information.

The Company recorded an income tax benefit of $ 4.3 million and $ 11.6 million for the three and six months ended June 30, 2025, respectively, resulting in an effective tax rate of 24.0 % and 35.1 %, respectively, compared to income tax expense of $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2024, respectively, resulting in an effective tax rate of ( 1.5 )% and ( 1.6 )%, respectively.

The Company’s effective tax rates for the three and six months ended June 30, 2025 and 2024 differ from the statutory tax rate primarily due to the impact of the valuation allowance against its deferred tax assets and state tax expense, offset by a deferred tax benefit attributable to the partial release of the Company’s pre-existing valuation allowance related to the MANTL business combination.

The acquisition of MANTL resulted in the recognition of a net deferred tax liability of $ 3.8 million and $ 12.6 million for the three and six months ended June 30, 2025, respectively.

See Note 3 for further information.

Prior to the business combination, MANTL had a full valuation allowance on its net deferred tax assets.

7 unchanged sentences

The Company reassesses the realizability of deferred tax assets regularly, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available.

On July 4, 2025, H.R.1, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States, which, among other provisions, includes a retroactive repeal of the Tax Cuts and Jobs Act’s requirement to amortize Section 174 research and development expenses over five years.

Starting with tax years beginning after December 31, 2024, domestic research and development expenses can be fully deducted in the year incurred, however it retains the requirement to amortize foreign research and development expenditures over 15 years.

The Company is currently evaluating the impact of OBBBA to our financial statements and disclosures.

Fair Value of Financial Instruments

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The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period.

The following tables summarize the Company’s financial assets measured at fair value as of March 31, 2025 and December 31, 2024 and indicate the fair value hierarchy of the valuation:

The following tables summarize the Company’s financial assets measured at fair value as of June 30, 2025 and December 31, 2024 and indicate the fair value hierarchy of the valuation:

Fair Value at Reporting Date Using

(in thousands) March 31, 2025 Level 1 Level 2 Level 3

(in thousands) June 30, 2025 Level 1 Level 2 Level 3

Cash equivalents (1)

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

Because the Company has reported a net loss for the three months ended March 31, 2025 and 2024, the number of shares used to calculate diluted net loss per share attributable to common stockholders is the same as the number of shares used to calculate basic net loss per share attributable to common stockholders for the period presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation.

In connection with the offering of the 2030 Convertible Notes, the Company entered into Capped Calls which are intended to reduce or offset the potential dilution from shares of common stock issued upon conversion.

Because the Company has reported a net loss for the three and six months ended June 30, 2025 and 2024, the number of shares used to calculate diluted net loss per share attributable to common stockholders is the same as the number of shares used to calculate basic net loss per share attributable to common stockholders for the period presented because the potentially dilutive shares would have been anti-dilutive if included in the calculation.

In connection with the offering of the 2030 Convertible Notes, the Company entered into Capped Calls that are intended to reduce or offset the potential dilution from shares of common stock issued upon conversion.

The impact of the Capped Calls is not included when calculating potentially dilutive shares since their effect is anti-dilutive.

The computation of basic and diluted net loss per share attributable to common stockholders is as follows for the three months ended March 31, 2025 and 2024:

Three months ended March 31,

The computation of basic and diluted net loss per share attributable to common stockholders is as follows for the three and six months ended June 30, 2025 and 2024:

Three months ended June 30,

Six months ended June 30,

(in thousands, except shares and per share amounts) 2025 2024 2025 2024

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The following potential shares of common stock were excluded from diluted net loss per share as the Company had a net loss in each of the periods presented:

Three months ended of March 31,

As of June 30,

Stock options 983,034 2,860,009

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Operating lease expense consisted of:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

(in thousands)

2025 2024 2025 2024

Operating lease expense

$ 671 $ 674 $ 1,343 $ 1,343

Short-term lease expense and other (1)

351 129 526 432

Total lease expense

$ 1,022 $ 803 $ 1,869 $ 1,775

(1) Other lease expense includes variable lease expense.

Supplemental Cash Flow Information

Three months ended March 31,

Six months ended June 30,

Cash flow information (in thousands)

Cash paid for operating lease liabilities

$ 1,393 $ 1,324

The future maturities of operating lease liabilities are as follows:

(in thousands) March 31, 2025

2025 (nine months remaining) $ 2,178

(in thousands) June 30, 2025

2025 (six months remaining) $ 1,457

Thereafter 11,912

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Goodwill and Other Intangibles

Goodwill and intangible assets deemed to have an indefinite life are not amortized, but are reviewed annually for impairment of value or

when indicators of a potential impairment are present.

Goodwill and intangible assets deemed to have an indefinite life are not amortized, but are reviewed annually for impairment of value or when indicators of a potential impairment are present.

As part of the Company’s business planning cycle, the Company performs an annual goodwill impairment test in the fourth quarter of the fiscal year.

There were no indications of impairment of goodwill noted as of March 31, 2025.

For the three months ended March 31, 2025, the Company recorded $ 252.1 million to goodwill related to the acquisition of MANTL.

There were no indications of impairment of goodwill noted as of June 30, 2025.

In March 2025, the Company recorded $ 252.1 million to goodwill related to the acquisition of MANTL under the preliminary purchase price allocation.

For the three months ended June 30, 2025, the Company adjusted goodwill related to the acquisition of MANTL to $ 255.8 million.

See Note 3 for further information.

Goodwill has a carrying value of $ 400.2 million and $ 148.1 million as of March 31, 2025 and December 31, 2024, respectively.

Total intangibles assets consisted of the following as of March 31, 2025 and December 31, 2024:

As of March 31, 2025

Goodwill has a carrying value of $ 403.8 million and $ 148.1 million as of June 30, 2025 and December 31, 2024, respectively.

Total intangibles assets consisted of the following as of June 30, 2025 and December 31, 2024:

As of June 30, 2025

(in thousands) Carrying Value Accumulated Amortization Net Carrying Value

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Total intangible assets $ 48,945 $ ( 19,924 ) $ 29,021

Amortization expense recognized on intangible assets was $ 2.4 million and $ 1.7 million for the three months ended March 31, 2025 and 2024, respectively.

In March 2025, due to the acquisition of MANTL, the Company assessed all of the assets of MK Decisioning Systems, LLC for potential impairment and determined that $ 1.2 million of developed technology intangible assets, $ 0.1 million of customer relationship intangible assets, as well as $ 0.4 million of capitalized software development costs included in property and equipment, net would not have future economic benefit and the value of the intangibles were written off, resulting in a loss on impairment of $ 1.7 million.

This non-cash charge was recorded to loss on impairment of intangible assets in the condensed consolidated statements of operations.

Amortization expense recognized on intangible assets was $ 6.6 million and $ 9.0 million for the three and six months ended June 30, 2025, respectively, and $ 1.7 million and $ 3.4 million for the three and six months ended June 30, 2024, respectively.

In March 2025, due to the acquisition of MANTL, the Company assessed all of the assets of MK Decisioning Systems, LLC for potential impairment and determined that $ 1.2 million of developed technology intangible assets, $ 0.1 million of customer relationship intangible assets, as well as $ 0.4 million of capitalized software development costs included in property and equipment, net, would not have future economic benefit and the value of the intangible assets was written off, resulting in a loss on impairment of $ 1.7 million.

This non-cash charge was recorded to loss on impairment of intangible assets and is included in the condensed consolidated statements of operations for the six months ended June 30, 2025.

No impairment was identified for goodwill or any other assets.

The following table shows the estimated annual amortization expense of the definite-lived intangible assets for the next five years and thereafter (in thousands):

2025 (nine months remaining)

2025 (six months remaining)

Thereafter 65,051

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 1. Financial Statements