What changed in this filing

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Item 1. Financial Statements

2025-10-31 compared with 2025-07-31 · 124 added, 109 removed, 450 unchanged (34% of the section changed)

3 unchanged sentences

(in thousands, except share and per share data)

June 30, December 31,

September 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 June 30, 2025 and December 31, 2024

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

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

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

and 105,004,011 and 102,088,783 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital 862,423 833,129

6 unchanged sentences

(in thousands, except share and per share data)

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

2025 2024 2025 2024

16 unchanged sentences

Interest expense ( 2,978 ) ( 180 ) ( 6,967 ) ( 327 )

Loss on financial instruments — ( 112 ) — —

Loss before income taxes ( 14,833 ) ( 9,461 ) ( 47,821 ) ( 32,837 )

5 unchanged sentences

Basic and diluted 104,345,319 99,435,002 103,395,497 98,165,903

(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.

(1) Includes amortization of acquired technology of $ 4.9 million and $ 1.3 million for the three months ended September 30, 2025 and 2024, respectively, and $ 11.7 million and $ 4.0 million for the nine months ended September 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 June 30, 2025

Three months ended September 30, 2025

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

Shares Amount

Balance March 31, 2025

Balance June 30, 2025

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

1 unchanged sentence

Issuance of common stock upon restricted stock unit vesting 894,525 1 ( 1 ) — —

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

Exercised stock options 26,348 — 187 — 187

Net loss — — — ( 14,804 ) ( 14,804 )

Balance June 30, 2025

Balance September 30, 2025

105,004,011 $ 105 $ 862,423 $ ( 512,412 ) $ 350,116

Three months ended June 30, 2024

Three months ended September 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

Balance June 30, 2024 98,985,370 $ 99 $ 786,201 $ ( 459,116 ) $ 327,184

Stock-based compensation — — 15,633 — 15,633

Issuance of common stock upon restricted stock unit vesting 716,460 1 ( 1 ) — —

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

Exercised stock options 794,824 — 5,154 — 5,154

1 unchanged sentence

Net loss — — — ( 9,442 ) ( 9,442 )

Balance June 30, 2024

Balance September 30, 2024

100,496,654 $ 100 $ 806,962 $ ( 468,558 ) $ 338,504

Six months ended June 30, 2025

Nine months ended September 30, 2025

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

4 unchanged sentences

Issuance of common stock upon restricted stock unit vesting 2,447,863 3 ( 3 ) — —

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

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

Exercised stock options 340,699 — 2,442 — 2,442

2 unchanged sentences

Net loss — — — ( 36,211 ) ( 36,211 )

Balance June 30, 2025

Balance September 30, 2025

105,004,011 $ 105 $ 862,423 $ ( 512,412 ) $ 350,116

Six months ended June 30, 2024

Nine months ended September 30, 2024

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

7 unchanged sentences

Net loss — — — ( 33,192 ) ( 33,192 )

Balance June 30, 2024

Balance September 30, 2024

100,496,654 $ 100 $ 806,962 $ ( 468,558 ) $ 338,504

3 unchanged sentences

(in thousands)

Six months ended June 30,

Nine months ended September 30,

Cash flows from operating activities:

Net loss $ ( 36,211 ) $ ( 33,192 )

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization expense 19,055 7,854

10 unchanged sentences

Deferred revenues 5,189 2,987

Net cash (used in) provided by operating activities ( 4,507 ) 1,499

Net cash provided by operating activities 26,300 12,486

Cash flows from investing activities:

15 unchanged sentences

Proceeds from stock option exercises 2,442 12,082

Net cash provided by (used in) financing activities 354,934 ( 3,269 )

Net cash provided by financing activities 330,121 1,497

Net (decrease) increase in cash and cash equivalents ( 37,043 ) 40,029

1 unchanged sentence

Cash and cash equivalents, end of period $ 57,316 $ 80,956

(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.

(1) See Note 4 for additional information regarding non-cash investing activities for the nine months ended September 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.

4 unchanged sentences

Alkami Technology, Inc.

(the “Company”) is a cloud-based digital banking solutions provider.

(the “Company”) is a cloud-based digital sales and service platform provider.

The Company inspires and empowers community, regional and super-regional financial institutions (“FIs”) to compete with large, technologically advanced and well-resourced banks in the United States.

The Company’s solution, the Alkami Digital Banking Platform, allows FIs to onboard and engage new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture.

The Company’s solution, the Alkami Digital Sales and Service Platform, allows FIs to onboard and engage new users, accelerate revenues and meaningfully improve operational efficiency, all with the support of a proprietary, true cloud-based, multi-tenant architecture.

The Company cultivates deep relationships with its clients through long-term, subscription-based contractual arrangements, aligning its growth with its clients’ success and generating an attractive unit economic model.

9 unchanged sentences

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 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.

Operating results for the three and nine months ended September 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.

The Company has reclassified certain prior period amounts in these Notes to the Unaudited Condensed Consolidated Financial Statements to conform to current periods presentation.

Use of Estimates

4 unchanged sentences

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).

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

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”).

The amendments in the ASU are intended to simplify the capitalization guidance by removing all references to software development project stages so that guidance is neutral to different software development methods.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027 and for interim periods within those annual reporting periods.

Early adoption is permitted.

The Company is currently evaluating the impact of the adoption on its financial statements.

In July 2025, the FASB issued ASU No.

2025-05, “Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”).

The amendments in the ASU provide entities with a practical expedient they may elect to use when developing an estimate of expected credit losses on current accounts receivable and contract asset balances arising from transactions accounted for under Topic ASC 606 - Revenue from Contracts with Customers.

Under this practical expedient, entities may elect to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.

ASU 2025-05 is effective for fiscal years and interim periods beginning after December 15, 2025.

Early adoption is permitted.

The Company is currently evaluating the impact of the adoption on its financial statements.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

3 unchanged sentences

Early adoption is permitted.

The Company is currently evaluating the impact of adoption on our financial disclosures.

The Company is currently evaluating the impact of adoption on its financial disclosures.

Business Combination

4 unchanged sentences

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

As of September 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.

1 unchanged sentence

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

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

Cash $ 2,784 $ — $ 2,784

18 unchanged sentences

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 measurement period adjustments recorded for the nine months ended September 30, 2025 are related to post-closing working capital adjustments, a deferred revenue adjustment, and assumption of deferred tax liabilities.

The table below outlines the purchased identifiable intangible assets:

12 unchanged sentences

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, 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.

For the three and nine months ended September 30, 2025, the Company recognized acquisition-related expenses of $ 0.2 million and $ 3.1 million, respectively, related to the acquisition of MANTL.

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

The revenue contribution from the MANTL acquisition was $ 11.0 million and $ 22.7 million for the three and nine months ended September 30, 2025, respectively.

Property and Equipment, Net

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

Depreciation and amortization expense was $ 1.3 million and $ 3.4 million for the three and nine months ended September 30, 2025, respectively, and $ 1.0 million and $ 2.8 million for the three and nine months ended September 30, 2024, respectively.

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

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

Capitalized software development costs 5 years 25,641 19,728

5 unchanged sentences

Property and equipment, net $ 25,437 $ 22,075

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.

For the nine months ended September 30, 2025 and 2024, the Company had non-cash investing activities of $ 0.7 million and $ 0.6 million, respectively, 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 $ 0.2 million for the three and nine months ended September 30, 2025, respectively, and less than $ 0.1 million and $ 0.1 million for both the three and nine months ended September 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 and six months ended June 30, 2025 and 2024:

Three months ended June 30,

Six months ended June 30,

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

Three months ended September 30,

Nine months ended September 30,

(in thousands) 2025 2024 2025 2024

3 unchanged sentences

Total revenues $ 112,954 $ 85,906 $ 322,848 $ 244,193

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 recognized approximately $ 9.3 million of revenue during the nine months ended September 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 September 30, 2025, the Company’s remaining performance obligation totaled approximately $ 1.6 billion.

The Company expects to recognize approximately 49.9 % of these remaining obligations as revenue over the next 24 months, an additional 34.2 % 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 $ 2.9 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.

Contract assets totaled $ 2.9 million, including $ 0.2 million related to MANTL, and $ 1.9 million as of September 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 $ 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.

The Company capitalized $ 3.9 million and $ 7.4 million in deferred commissions costs during the three and nine months ended September 30, 2025, respectively, and $ 3.1 million and $ 6.0 million for the three and nine months ended September 30, 2024, respectively, and recognized amortization of $ 1.5 million and $ 4.6 million during the three and nine months ended September 30, 2025, respectively, and $ 1.3 million and $ 3.8 million during the three and nine months ended September 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 $ 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.

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 $ 28.7 million and $ 25.9 million as of September 30, 2025 and December 31, 2024, respectively.

The Company capitalized implementation costs of $ 3.5 million and $ 8.8 million during the three and nine months ended September 30, 2025, respectively, and $ 2.4 million and $ 7.6 million for the three and nine months ended September 30, 2024, respectively, and recognized amortization of $ 1.5 million and $ 4.5 million for the three and nine months ended September 30, 2025, respectively, and $ 1.4 million and $ 4.1 million during the three and nine months ended September 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 $ 26.8 million and $ 24.5 million as of June 30, 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 $ 28.8 million and $ 24.5 million as of September 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 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,

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

Accounts Receivable, net

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

September 30, December 31,

(in thousands) 2025 2024

5 unchanged sentences

Total accounts receivable, net $ 50,675 $ 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 June 30, 2025 and December 31, 2024:

June 30, December 31,

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

September 30, December 31,

(in thousands) 2025 2024

15 unchanged sentences

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 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 Company had borrowings of $ 60 million on the Revolving Facility during March 2025, with the proceeds used for the acquisition of MANTL, of which $ 25 million remained outstanding as of September 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.

In April 2025, the rate decreased to 7.68 % and in July 2025, the rate increased to approximately 7.70 %, which remained the effective interest rate as of September 30, 2025.

Interest expense related to the outstanding borrowings on the Revolving Facility was $ 0.9 million and $ 2.4 million for the three and nine months ended September 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.

10 unchanged sentences

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 June 30, 2025.

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

2030 Convertible Notes

2 unchanged sentences

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.

Each $1,000 principal amount of the 2030 Convertible Notes will be convertible into 30.4681 shares of the Company’s common stock, which is equivalent to a conversion price of approximately $ 32.82 per share, subject to adjustment upon the occurrence of specified events.

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 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.

As the Company issued the 2030 Convertible Notes on March 13, 2025, ASU No.

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:

(1) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on June 30, 2025, if the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price for each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) if the trading price per $ 1,000 principal amount of the 2030 Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day;

(2) during the five consecutive business days immediately after any 10 consecutive trading day period (such 10 consecutive trading day period, the “measurement period”) if the trading price per $ 1,000 principal amount of the 2030 Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day;

(3) if the Company calls (or is deemed to have called) the 2030 Convertible Notes for redemption;

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

As of September 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) June 30, 2025

(in thousands) September 30, 2025

Principal $ 345,000

4 unchanged sentences

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

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

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

(in thousands) Three months ended September 30, 2025

Nine months ended September 30, 2025

Contractual interest expense $ 1,323 $ 2,832

1 unchanged sentence

Total interest expense $ 1,833 $ 3,966

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

As of September 30, 2025, the 2030 Convertible Notes had a principal amount of $ 345 million and an estimated fair value of $ 373 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.

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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 six months ended June 30, 2025.

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

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

Total stock-based compensation expenses $ 20,729 $ 15,257 $ 60,246 $ 43,822

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 $ 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.

The Company recorded an income tax benefit of less than $0.1 million and $ 11.6 million for the three and nine months ended September 30, 2025, respectively, resulting in an effective tax rate of 0.2 % and 24.3 %, respectively, compared to income tax benefit of less than $0.1 million and income tax expense of $ 0.4 million for the three and nine months ended September 30, 2024, respectively, resulting in an effective tax rate of 0.2 % and ( 1.1 )%, respectively.

The Company’s effective tax rates for the three and nine months ended September 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 $ 12.6 million for both the three and nine months ended September 30, 2025.

See Note 3 for further information.

5 unchanged sentences

The assessment considers, among other matters:

historical losses, a forecast of future taxable income, the duration of statutory carryback and carryforward periods, and ongoing prudent and feasible tax planning strategies.

losses, a forecast of future taxable income, the duration of statutory carryback and carryforward periods, and ongoing prudent and feasible tax planning strategies.

As a result, the Company has established a valuation allowance against most of its deferred tax assets as realization is not reasonably assured based upon a “more likely than not” threshold.

2 unchanged sentences

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.

Due to the Company’s valuation allowance, OBBBA does not have a material impact on its condensed consolidated financial statements.

Fair Value of Financial Instruments

8 unchanged sentences

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 June 30, 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 September 30, 2025 and December 31, 2024 and indicate the fair value hierarchy of the valuation:

Fair Value at Reporting Date Using

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

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

Cash equivalents (1)

29 unchanged sentences

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 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.

Because the Company has reported a net loss for the three and nine months ended September 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 and six months ended June 30, 2025 and 2024:

Three months ended June 30,

Six months ended June 30,

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

Three months ended September 30,

Nine months ended September 30,

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

3 unchanged sentences

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:

As of June 30,

As of September 30,

Stock options 956,686 2,058,570

15 unchanged sentences

Operating lease expense consisted of:

Three months ended June 30,

Six months ended June 30,

Three months ended September 30,

Nine months ended September 30,

(in thousands)

5 unchanged sentences

Total lease expense $ 941 $ 969 $ 2,810 $ 2,744

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

(1) Other lease expense includes variable lease expense.

Supplemental Cash Flow Information

Six months ended June 30,

Nine months ended September 30,

Cash flow information (in thousands)

2 unchanged sentences

The future maturities of operating lease liabilities are as follows:

(in thousands) June 30, 2025

2025 (six months remaining) $ 1,457

(in thousands) September 30, 2025

2025 (three months remaining)

Thereafter 11,912

5 unchanged sentences

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 June 30, 2025.

There were no indications of impairment of goodwill noted as of September 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.

For the nine months ended September 30, 2025, the Company adjusted goodwill related to the acquisition of MANTL to $ 255.4 million.

See Note 3 for further information.

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

Goodwill has a carrying value of $ 403.4 million and $ 148.1 million as of September 30, 2025 and December 31, 2024, respectively.

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

As of September 30, 2025

(in thousands) Carrying Value Accumulated Amortization Net Carrying Value

17 unchanged sentences

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

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.

Amortization expense recognized on intangible assets was $ 6.7 million and $ 15.7 million for the three and nine months ended September 30, 2025, respectively, and $ 1.7 million and $ 5.1 million for the three and nine months ended September 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.

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 nine months ended September 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 (six months remaining)

2025 (three months remaining)

Thereafter 65,051

Subsequent Events

On October 29, 2025, the Company appointed Cassandra Hudson as Chief Financial Officer of the Company effective November 1, 2025, succeeding Bryan Hill who will retire from the Company on October 31, 2025.

The Company entered into an employment agreement with Ms.

Hudson that provides the terms and conditions of her employment.

Refer to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 30, 2025 for additional information.

In connection with Mr.

Hill's retirement, the Company entered into a consulting agreement with him to serve as a consultant providing transition services through December 15, 2026.

Hill’s consulting agreement, his restricted stock unit awards will continue to vest while providing transition services.

As a result, the Company is evaluating the accounting for the modification of his unvested equity awards.

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