ALKAMI TECHNOLOGY, INC. 10-Q

Item 1. Financial Statements ALKAMI TECHNOLOGY, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (UNAUDITED) June 30, December 31, 2026 2025 Assets Current assets Cash and cash equivalents $ 45,512 $ 63,457 Marketable securities 35,443 35,635 Accounts receivable, net 56,718 51,494 Deferred costs, current 17,464 15,894 Prepaid expenses and other current assets 22,318 20,736 Total current assets 177,455 187,216 Property and equipment, net 28,567 26,652 Right-of-use assets 17,208 13,462 Deferred costs, net of current portion 48,651 47,430 Intangibles, net 145,704 158,943 Goodwill 403,404 403,404 Other assets 10,092 10,120 Total assets $ 831,081 $ 847,227 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 12,330 $ 5,842 Accrued liabilities 35,176 47,359 Deferred revenues, current portion 33,513 34,770 Lease liabilities, current portion 2,170 1,576 Total current liabilities 83,189 89,547 Deferred revenues, net of current portion 26,041 25,800 Deferred income taxes 2,940 2,625 Convertible senior notes, net 337,204 336,230 Revolving loan — 15,000 Lease liabilities, net of current portion 18,784 15,739 Other non-current liabilities 246 237 Total liabilities 468,404 485,178 Stockholders’ Equity Preferred stock, $ 0.001 par value, 10,000,000 shares authorized and 0 shares issued and outstanding as of June 30, 2026 and December 31, 2025 — — Common stock, $ 0.001 par value, 500,000,000 shares authorized; and 106,941,980 and 106,101,875 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 107 106 Additional paid-in capital 905,286 885,796 Accumulated deficit ( 542,716 ) ( 523,853 ) Total stockholders’ equity 362,677 362,049 Total liabilities and stockholders' equity $ 831,081 $ 847,227 The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements. 1 ALKAMI TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (UNAUDITED) Three months ended June 30, Six months ended June 30, 2026 2025 2026 2025 Revenues $ 129,844 $ 112,059 $ 255,982 $ 209,894 Cost of revenues (1) 56,031 46,441 108,300 86,516 Gross profit 73,813 65,618 147,682 123,378 Operating expenses: Research and development 31,399 30,231 62,399 57,116 Sales and marketing 22,821 22,991 42,776 40,890 General and administrative 25,591 26,552 52,503 54,356 Amortization of acquired intangibles 1,707 1,707 3,414 2,275 Total operating expenses 81,518 81,481 161,092 154,637 Loss from operations ( 7,705 ) ( 15,863 ) ( 13,410 ) ( 31,259 ) Non-operating income (expense): Interest income 684 1,164 1,446 2,260 Interest expense ( 2,091 ) ( 3,188 ) ( 4,358 ) ( 3,989 ) Loss before income taxes ( 9,112 ) ( 17,887 ) ( 16,322 ) ( 32,988 ) (Benefit from) provision for income taxes ( 212 ) ( 4,296 ) 2,541 ( 11,581 ) Net loss $ ( 8,900 ) $ ( 13,591 ) $ ( 18,863 ) $ ( 21,407 ) Net loss per share attributable to common stockholders: Basic and diluted $ ( 0.08 ) $ ( 0.13 ) $ ( 0.18 ) $ ( 0.21 ) Weighted-average number of shares of common stock outstanding: Basic and diluted 106,862,412 103,389,459 106,626,081 102,912,715 (1) Includes amortization of acquired technology of $ 4.9 million for both the three months ended June 30, 2026 and 2025, and $ 9.8 million and $ 6.8 million for the six months ended June 30, 2026 and 2025, respectively. The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements. 2 ALKAMI TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (in thousands, except share data) (UNAUDITED) Three months ended June 30, 2026 Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance March 31, 2026 107,019,174 $ 107 $ 904,363 $ ( 533,816 ) $ 370,654 Stock-based compensation — — 17,492 — 17,492 Issuance of common stock upon restricted stock unit vesting 541,122 1 ( 1 ) — — Common stock issued under Employee Stock Purchase Plan (ESPP) 219,125 — 3,094 — 3,094 Exercised stock options 47,134 — 367 — 367 Payments for taxes related to net settlement of equity awards — — ( 5,030 ) — ( 5,030 ) Repurchases of common stock ( 884,575 ) ( 1 ) ( 14,999 ) — ( 15,000 ) Net loss — — — ( 8,900 ) ( 8,900 ) Balance June 30, 2026 106,941,980 $ 107 $ 905,286 $ ( 542,716 ) $ 362,677 Three months ended June 30, 2025 Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance March 31, 2025 103,019,976 $ 103 $ 817,958 $ ( 484,017 ) $ 334,044 Stock-based compensation — — 19,888 — 19,888 Issuance of common stock upon restricted stock unit vesting 855,832 1 ( 1 ) — — Common stock issued under 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 Six months ended June 30, 2026 Common Stock Additional Paid-in Capital Accumulated Deficit Total Stockholders’ Equity Shares Amount Balance December 31, 2025 106,101,875 $ 106 $ 885,796 $ ( 523,853 ) $ 362,049 Stock-based compensation — — 35,086 — 35,086 Issuance of common stock upon restricted stock unit vesting 1,346,628 2 ( 2 ) — — Common stock issued under ESPP 219,125 — 3,094 — 3,094 Exercised stock options 158,927 — 1,341 — 1,341 Payments for taxes related to net settlement of equity awards — — ( 5,030 ) — ( 5,030 ) Repurchases of common stock ( 884,575 ) ( 1 ) ( 14,999 ) — ( 15,000 ) Net loss — — — ( 18,863 ) ( 18,863 ) Balance June 30, 2026 106,941,980 $ 107 $ 905,286 $ ( 542,716 ) $ 362,677 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 calls — — ( 33,879 ) — ( 33,879 ) Stock-based compensation replacement awards related to merger consideration and attributable to pre-combination services — — 821 — 821 Net loss — — — ( 21,407 ) ( 21,407 ) Balance June 30, 2025 104,083,138 $ 104 $ 841,520 $ ( 497,608 ) $ 344,016 The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements. 3 ALKAMI TECHNOLOGY, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (UNAUDITED) Six months ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 18,863 ) $ ( 21,407 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization expense 16,415 11,186 Accrued interest on marketable securities, net ( 75 ) ( 540 ) Stock-based compensation expense 34,802 35,608 Amortization of discount and debt issuance costs 1,118 785 Loss on impairment of intangible assets — 1,655 Deferred taxes 315 ( 12,006 ) Changes in operating assets and liabilities: Accounts receivable ( 5,224 ) ( 7,461 ) Prepaid expenses and other assets ( 2,098 ) ( 15,752 ) Accounts payable and accrued liabilities ( 5,793 ) 4,199 Deferred costs ( 2,361 ) ( 2,280 ) Deferred revenues ( 1,016 ) 1,506 Net cash provided by (used in) operating activities 17,220 ( 4,507 ) Cash flows from investing activities: Purchase of marketable securities ( 23,531 ) ( 29,971 ) Proceeds from sales, maturities, and redemptions of marketable securities 23,798 17,200 Purchases of property and equipment ( 772 ) ( 882 ) Capitalized software development costs ( 4,065 ) ( 3,208 ) Acquisition of business, net of cash acquired — ( 375,499 ) Net cash used in investing activities ( 4,570 ) ( 392,360 ) Cash flows from financing activities: Payments on revolving loan ( 15,000 ) ( 10,000 ) Debt issuance costs paid — ( 1,898 ) Proceeds from ESPP issuances 3,094 2,943 Proceeds from issuance of convertible senior notes — 335,513 Proceeds from borrowing under revolving loan — 60,000 Purchase of capped calls — ( 33,879 ) Payments for taxes related to net settlement of equity awards ( 5,030 ) — Proceeds from stock option exercises 1,341 2,255 Repurchases of common stock ( 15,000 ) — Net cash (used in) provided by financing activities ( 30,595 ) 354,934 Net decrease in cash and cash equivalents ( 17,945 ) ( 41,933 ) Cash and cash equivalents, beginning of period 63,457 94,359 Cash and cash equivalents, end of period $ 45,512 $ 52,426 The above financial statements should be read in conjunction with the Notes to the Unaudited Condensed Consolidated Financial Statements. 4 ALKAMI TECHNOLOGY, INC. Notes to the Unaudited Condensed Consolidated Financial Statements (in thousands, except share and per share data) (Unaudited) Note 1. Organization Description of Business Alkami Technology, Inc. (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 Sales & Service Platform, consisting of the Alkami Digital Banking Platform, Onboarding & Account Opening, and Data & Marketing, allows FIs to onboard, engage and grow 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. The Company was incorporated in Delaware in August 2011, and its principal offices are located in Plano, Texas. Note 2. Summary of Significant Accounting Policies The accompanying Condensed Consolidated Financial Statements reflect the application of significant accounting policies as described below. Basis of Presentation and Consolidation The interim unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All intercompany accounts and transactions are eliminated. In the Company's opinion, the accompanying interim Unaudited Condensed Consolidated Financial Statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial position, results of operations and cash flows for the periods indicated. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim Unaudited Condensed Consolidated Financial Statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). 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, 2025, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 26, 2026. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of results that may be expected for any other interim period or for the year ending December 31, 2026. 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 prior period amounts in the Unaudited Condensed Consolidated Statements of Operations and Notes to the Unaudited Condensed Consolidated Financial Statements to conform to current period’s presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include determining the timing and amount of revenue recognition. Operating Segment 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 Unaudited Condensed Consolidated Financial Statements for single reportable segment-level financial information, total assets, revenues from external customers, depreciation and amortization expense, interest income, interest expense, (benefit from) provision for income taxes, and significant non-cash transactions. 5 Repurchases of Common Stock The Company retires all common stock repurchased pursuant to its approved stock repurchase program. The Company records the par value of the common stock repurchased as a reduction of common stock and the excess of the purchase price over par as a reduction of additional paid-in capital, to the extent available, with any remaining excess charged to accumulated deficit on the Company's Unaudited Condensed Consolidated Balance Sheets. Recent Accounting Pronouncements 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 Condensed Consolidated Financial Statements. In November 2024, the FASB issued ASU No. 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). The amendments in the ASU require disclosures about specific types of expenses included in the expense captions presented on the Condensed Consolidated Statements of Operations, as well as disclosures about selling expenses. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, on a prospective basis. Early adoption is permitted. The Company is currently evaluating the impact of adoption on its Condensed Consolidated Financial disclosures. Note 3. Property and Equipment, Net Depreciation and amortization expense was $ 1.7 million and $ 3.2 million for the three and six months ended June 30, 2026, respectively, and $ 1.1 million and $ 2.1 million for the three and six months ended June 30, 2025, respectively. Property and equipment, net, includes the following amounts at June 30, 2026 and December 31, 2025: (in thousands) Useful Life June 30, 2026 December 31, 2025 Capitalized software development costs 5 years $ 32,379 $ 27,803 Equipment and software 3 to 5 years 3,767 3,283 Leasehold improvements 3 to 10 years 10,249 10,230 $ 46,395 $ 41,316 Less: accumulated depreciation and amortization ( 17,828 ) ( 14,664 ) Property and equipment, net $ 28,567 $ 26,652 Note 4. Revenues and Deferred Costs The following table disaggregates the Company's revenue by major source for the three and six months ended June 30, 2026 and 2025: Three months ended June 30, Six months ended June 30, (in thousands) 2026 2025 2026 2025 SaaS subscription services $ 122,975 $ 105,859 $ 243,753 $ 198,667 Implementation services 3,326 3,244 6,985 5,516 Other services 3,543 2,956 5,244 5,711 Total revenues $ 129,844 $ 112,059 $ 255,982 $ 209,894 The Company recognized approximately $ 23.0 million of revenue during the six months ended June 30, 2026 that was included in deferred revenues in the accompanying Unaudited 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, 2026, the Company’s remaining performance obligation totaled approximately $ 1.7 billion. The Company expects to recognize approximately 52.2 % of these remaining obligations as revenue over the next 24 months, an additional 33.0 % 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 $ 4.3 million and $ 3.6 million as of June 30, 2026 and December 31, 2025, respectively, which are included in other assets in the accompanying Unaudited Condensed Consolidated Balance Sheets. 6 Deferred Cost Recognition The Company capitalized $ 1.8 million and $ 3.3 million in deferred commissions costs during the three and six months ended June 30, 2026, respectively, and $ 2.5 million and $ 3.5 million during the three and six months ended June 30, 2025, respectively, and recognized amortization of $ 2.0 million and $ 3.9 million during the three and six months ended June 30, 2026, respectively, and $ 1.6 million and $ 3.1 million during the three and six months ended June 30, 2025, respectively. Amortization expense is included in sales and marketing expenses in the accompanying Unaudited Condensed Consolidated Statements of Operations. Deferred commissions are considered costs to obtain a contract and are included in deferred costs in the accompanying Unaudited Condensed Consolidated Balance Sheets in the amount of $ 32.4 million and $ 32.9 million as of June 30, 2026 and December 31, 2025, respectively. The Company capitalized implementation costs of $ 3.9 million and $ 7.4 million during the three and six months ended June 30, 2026, respectively, and $ 3.1 million and $ 5.3 million during the three and six months ended June 30, 2025, respectively, and recognized amortization of $ 2.1 million and $ 4.1 million during the three and six months ended June 30, 2026, respectively, and $ 1.6 million and $ 3.0 million during the three and six months ended June 30, 2025, respectively. Amortization expense is included in cost of revenues in the accompanying Unaudited Condensed Consolidated Statements of Operations. These deferred costs are considered costs to fulfill client contracts and are included in deferred costs in the accompanying Unaudited Condensed Consolidated Balance sheets in the amount of $ 33.8 million and $ 30.4 million as of June 30, 2026 and December 31, 2025, 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 June 30, 2026 and 2025. Note 5. Accounts Receivable, net Accounts receivable, net includes the following amounts at June 30, 2026 and December 31, 2025: June 30, December 31, (in thousands) 2026 2025 Trade accounts receivable $ 49,698 $ 44,136 Unbilled receivables 7,677 7,914 Total receivables 57,375 52,050 Allowance for credit losses ( 460 ) ( 460 ) Reserve for estimated credits ( 197 ) ( 96 ) Total accounts receivable, net $ 56,718 $ 51,494 Note 6. Accrued Liabilities Accrued liabilities consisted of the following at June 30, 2026 and December 31, 2025: June 30, December 31, (in thousands) 2026 2025 Bonus accrual $ 7,597 $ 15,865 Commissions accrual 1,308 4,090 Client refund liability 719 1,388 Self-insured reserve 2,014 2,040 Accrued third-party solution costs 9,112 10,154 Accrued vendor purchases 4,671 3,092 Accrued hosting services 3,023 3,021 Other accrued liabilities 6,732 7,709 Total accrued liabilities $ 35,176 $ 47,359 7 Note 7. Debt Amended Credit Facility 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 (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 $ 60.0 million on the Revolving Facility during March 2025, with the proceeds used for the acquisition of Fin Technologies, Inc., dba MANTL (“MANTL”), which borrowings were fully repaid during the three months ended March 31, 2026. As of June 30, 2026, there were no borrowings outstanding under the Revolving Facility. 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 %, in July 2025, the rate increased to 7.70 %, and in December 2025, the rate decreased to 7.13 %, which remained the effective interest rate as of December 31, 2025. In January 2026, the rate decreased to 7.02 %, which remained the effective interest rate until full repayment as of March 31, 2026. Interest expense related to the outstanding borrowings on the Revolving Facility was $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2026, respectively, and $ 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. The Amended Credit Agreement contains customary affirmative and negative covenants. Before the Financial Covenant Trigger Date, the following covenants are applicable: (i) an annual recurring revenue growth covenant requiring the loan parties to have recurring revenues in any four consecutive fiscal quarter period in an amount that is at least 10 % greater than the recurring revenues for the corresponding four consecutive quarter period in the previous year; and (ii) a liquidity (defined as the aggregate amount of cash in bank accounts subject to a control agreement plus availability under the Revolving Facility) covenant, requiring the loan parties to have liquidity, tested on the last day of each calendar month, of $ 35.0 million or more. After the Financial Covenant Trigger Date, the existing annual recurring revenue growth and liquidity financial covenants are no longer applicable, and the following covenants take effect: (i) a Consolidated Total Net Leverage Ratio requiring the ratio, as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be less than 5.50 :1.00; (ii) a Consolidated Interest Coverage Ratio (as defined therein) requiring the ratio, for any fiscal quarter ending as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be more than 3.00 :1.00; and (iii) a Consolidated Senior Net Leverage Ratio (as defined therein) requiring the ratio, as calculated at the last day of such fiscal quarter for the period of 12 consecutive months then ending, to be less than 3.50 :1.00. The Third Amendment revised the free cash flow covenant, as calculated at the last day of each fiscal quarter for the period of 12 consecutive months then ending, requiring free cash flow to be not less than $( 25.0 ) million for the fiscal quarters ending on or prior to September 30, 2025 and requiring free cash flow to be not less than $ 0 for the fiscal quarters ending on or after December 31, 2025 and on or prior to September 30, 2026. On April 3, 2026, the Company entered into a Fourth Amendment (the “Fourth Amendment”) to the Amended Credit Agreement, which revised the operating covenant of the Amended Credit Agreement to permit the Group Members (as defined in the Amended Credit Agreement) to maintain accounts with Airwallex or its affiliates, provided that the aggregate amount of cash and cash equivalents maintained in such accounts does not at any time exceed $ 8.5 million. On May 1, 2026, the Company entered into a Fifth Amendment (the “Fifth Amendment”) to the Amended Credit Agreement, which permits the Company to use up to $ 100.0 million of its cash to repurchase its common stock. 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, 2026. 8 2030 Convertible Notes On March 13, 2025, the Company issued $ 345 million principal amount of 1.50 % convertible senior notes due March 15, 2030 (the “2030 Convertible Notes” or “Notes”). 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 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, which began 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 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 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; 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. 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. The 2030 Convertible Notes will be redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after March 20, 2028 and on or before the 62nd scheduled trading day immediately before the maturity date, but only if (i) the Notes are “freely tradable” (as defined in the Indenture) as of the date the Company sends the related redemption notice and all accrued and unpaid additional interest, if any, has been paid in full as of the most recent interest payment date occurring on or before the date the Company sends such notice; and (ii) the last reported sale price per share of the Company’s common stock exceeds 130 % of the conversion price on (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends such redemption notice; and (2) the trading day immediately before the date the Company sends such redemption notice. However, the Company may not redeem less than all of the outstanding Notes unless at least $ 75.0 million aggregate principal amount of Notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. No sinking fund is provided for the 2030 Convertible Notes, which means the Company is not required to redeem or retire the 2030 Convertible Notes periodically. If certain corporate events that constitute a “fundamental change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. 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, 2026, 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, 2026 Principal $ 345,000 Unamortized debt discount ( 7,101 ) Unamortized debt issuance costs ( 695 ) Net carrying amount $ 337,204 The debt discount and issuance costs are being amortized to interest expense over the term of the 2030 Convertible Notes using the effective interest rate method. 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, 2026, interest expense related to the 2030 Convertible Notes consisted of the following (in thousands): Three months ended June 30, Six months ended June 30, (in thousands) 2026 2025 2026 2025 Contractual interest expense $ 1,294 $ 1,293 $ 2,588 $ 1,509 Amortization of debt discount and issuance costs 498 488 974 624 Total interest expense $ 1,792 $ 1,781 $ 3,562 $ 2,133 9 As of June 30, 2026, the 2030 Convertible Notes had a principal amount of $ 345 million and an estimated fair value of $ 330 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. Capped Calls 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”). The premiums paid for the purchases of the Capped Calls were approximately $ 33.9 million. The Capped Calls have an initial strike price of approximately $ 32.82 per share, subject to certain adjustments substantially similar to those applicable to the corresponding 2030 Convertible Notes. The Capped Calls have an initial cap price of $ 47.74 per share, subject to certain adjustments. 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. The Capped Calls are separate transactions and are not part of the terms of the 2030 Convertible Notes. 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. Note 8. Stockholders' Equity Equity Compensation Plans Stock-based compensation expense was included in the Unaudited Condensed Consolidated Statements of Operations as follows: Three months ended June 30, Six months ended June 30, (in thousands) 2026 2025 2026 2025 Cost of revenues $ 1,798 $ 1,706 $ 3,228 $ 4,342 Research and development 5,139 5,424 10,384 10,858 Sales and marketing 2,350 3,550 5,308 6,397 General and administrative 8,205 8,835 15,882 17,920 Total stock-based compensation expenses $ 17,492 $ 19,515 $ 34,802 $ 39,517 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. Stock Repurchase Program On April 23, 2026, the Board of the Directors of the Company (the “Board”) authorized a stock repurchase program to repurchase up to $ 100.0 million of the Company’s common stock, through December 31, 2028. Repurchases under the program may be made from time to time, at management’s discretion, using a variety of methods, including open market purchases, privately negotiated transactions, and other means all in accordance with federal securities laws and other applicable legal requirements, including pursuant to one or more Rule 10b5-1 trading plans. The timing and size of any repurchases will be determined by management based on prevailing share prices, general economic and market conditions, the Company’s liquidity and capital needs, and other factors deemed relevant. The stock repurchase program does not obligate the Company to repurchase any specific number of shares and may be modified, suspended, or terminated at any time at the discretion of the Board. During the three months ended June 30, 2026, the Company repurchased on the open market 884,575 shares for $ 15 million. All shares of common stock that were repurchased were retired. As of June 30, 2026, $ 85 million remained available for future stock repurchases under the stock repurchase program. Note 9. Income Taxes The Company recorded income tax benefit of $ 0.2 million and income tax expense of $ 2.5 million for the three and six months ended June 30, 2026, respectively, resulting in an effective tax rate of 2.3 % and ( 15.6 )%, respectively, compared to 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. The Company’s effective tax rates for the three and six months ended June 30, 2026 and 2025 differ from the U.S. statutory tax rate primarily due to unfavorable permanent differences and changes in the valuation allowance recorded against the Company’s deferred tax assets. For the three and six months ended June 30, 2025, the effective tax rate was further impacted by a deferred tax benefit resulting from the partial release of a pre-existing valuation allowance in connection with the MANTL business combination. The Company recognizes deferred tax assets and liabilities based on the estimated future tax effects of temporary differences between the financial statement basis and tax basis of assets and liabilities given the provisions of enacted tax law. Management reviews deferred tax assets to assess their future realization by considering all available evidence, both positive and negative, to determine whether a valuation allowance is needed for all or some portion of the deferred tax assets, using a “more likely than not” standard. 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. As a result, the Company has established a valuation allowance against most of its deferred tax assets as realization is not 10 reasonably assured based upon a “more likely than not” threshold. The Company reassesses the realizability of deferred tax assets regularly, and it will adjust the valuation allowance as sufficient objective positive evidence becomes available. Note 10. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts receivable and accounts payable. The carrying values of cash, cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these instruments. Cash equivalents include amounts held in money market accounts that are measured at fair value using observable market prices. Marketable securities include debt securities that are measured at fair value using observable inputs. The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2. Significant other inputs that are directly or indirectly observable in the marketplace. Level 3. Significant unobservable inputs that are supported by little or no market activity. 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, 2026 and December 31, 2025 and indicate the fair value hierarchy of the valuation: Fair Value at Reporting Date Using (in thousands) June 30, 2026 Level 1 Level 2 Level 3 Assets: Cash equivalents (1) $ 34,686 $ 34,686 $ — $ — Marketable securities: Corporate bonds 8,347 — 8,347 — Commercial paper 7,513 — 7,513 — U.S. Treasury debt securities 19,583 19,583 — — Total marketable securities 35,443 19,583 15,860 — Total assets $ 70,129 $ 54,269 $ 15,860 $ — (1) Includes insured cash sweep account, cash sweep account, money market account and money market funds that have investments primarily in U.S. Government Agency debt, U.S. Treasury debt, U.S. Treasury Repurchase Agreements, U.S. Government Agency Repurchase Agreements, and corporate bonds that have a maturity of three months or less from the original acquisition date. Fair Value at Reporting Date Using (in thousands) December 31, 2025 Level 1 Level 2 Level 3 Assets: Cash equivalents (1) $ 51,426 $ 51,426 $ — $ — Marketable securities: Corporate bonds 9,732 — 9,732 — Commercial paper 995 — 995 — U.S. Treasury debt securities 23,905 23,905 — — International debt securities 1,003 — 1,003 — Total marketable securities 35,635 23,905 11,730 — Total assets $ 87,061 $ 75,331 $ 11,730 $ — (1) Includes insured cash sweep account, cash sweep account, money market account and money market funds that have investments primarily in U.S. Government Agency debt, U.S. Treasury debt, U.S. Treasury Repurchase Agreements, U.S. Government Agency Repurchase Agreements, and corporate bonds that have a maturity of three months or less from the original acquisition date. Note 11. Earnings Per Share 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, 2026 and 2025, 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 11 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, 2026 and 2025: Three months ended June 30, Six months ended June 30, (in thousands, except shares and per share amounts) 2026 2025 2026 2025 Net loss $ ( 8,900 ) $ ( 13,591 ) $ ( 18,863 ) $ ( 21,407 ) Weighted-average shares of common stock outstanding - basic and diluted 106,862,412 103,389,459 106,626,081 102,912,715 Net loss per common share - basic and diluted $ ( 0.08 ) $ ( 0.13 ) $ ( 0.18 ) $ ( 0.21 ) 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, 2026 2025 Stock options 719,933 983,034 Restricted Stock Units 7,973,996 7,491,398 ESPP 38,832 29,488 2030 Convertible Notes 10,511,495 10,511,495 Total anti-dilutive common share equivalents 19,244,256 19,015,415 Note 12. Commitments and Contingencies Legal Proceedings The Company may become party to various legal actions during the ordinary course of business. Defending such proceedings is costly and can impose a significant burden on management and employees, it may receive unfavorable preliminary or interim rulings during litigation, and there can be no assurances that favorable final outcomes will be obtained. In addition, the Company’s industry is characterized by the existence of a large number of patents, copyrights, trademarks, trade secrets and other intellectual property and proprietary rights. Companies in our industry are often required to defend against litigation claims based on allegations of infringement or other violations of intellectual property rights. Furthermore, client agreements typically require the Company to indemnify clients against liabilities incurred in connection with claims alleging its solutions infringe the intellectual property rights of a third party. From time to time, the Company has been involved in disputes related to patent and other intellectual property rights of third parties, none of which has resulted in material liabilities. The Company expects these types of disputes may continue to arise in the future. Based upon present information, the Company believes that its liability, if any, arising from such pending legal proceedings, asserted legal claims and known potential legal claims that are likely to be asserted, is not reasonably likely to be material to the Company’s financial position, results of operations, or cash flows, taking into account established accruals for estimated liabilities. Note 13. Leases The Company leases office space under non-cancellable operating leases for its corporate headquarters in Plano, Texas. On February 24, 2026, the Company entered into an agreement for an office lease in India that became effective on March 9, 2026, with a lease term of five years . The Company recognized a lease liability and ROU asset of $ 4.8 million for the India lease that was included in the Condensed Consolidated Balance Sheets as of March 31, 2026. Operating lease expense consisted of: Three months ended June 30, Six months ended June 30, (in thousands) 2026 2025 2026 2025 Operating lease expense $ 854 $ 671 $ 1,626 $ 1,343 Short-term lease expense and other (1) 357 351 663 526 Total lease expense $ 1,211 $ 1,022 $ 2,289 $ 1,869 (1) Other lease expense includes variable lease expense. 12 Supplemental Cash Flow Information Six months ended June 30, Cash flow information (in thousands) 2026 2025 Cash paid for operating lease liabilities $ 1,780 $ 1,393 Right-of-use assets obtained in exchange for operating lease obligations (1) $ 4,797 $ — (1) For the six months ended June 30, 2026, right-of-use assets obtained in exchange for operating lease obligations is related to the commencement of the Company’s lease agreement in India. The future maturities of operating lease liabilities are as follows: (in thousands) June 30, 2026 2026 (six months remaining) $ 1,920 2027 3,738 2028 3,945 2029 4,307 2030 4,458 Thereafter 9,017 Total minimum lease payments 27,385 Less: present value discount ( 6,431 ) Total lease liability balance $ 20,954 Note 14. 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. 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, 2026. Goodwill has a carrying value of $ 403.4 million as of both June 30, 2026 and December 31, 2025. Total intangible assets consisted of the following as of June 30, 2026 and December 31, 2025: As of June 30, 2026 (in thousands) Carrying Value Accumulated Amortization Net Carrying Value Finite-lived: Customer Relationships $ 92,800 $ ( 12,407 ) $ 80,393 Developed Technology 99,200 ( 39,288 ) 59,912 Tradenames 6,450 ( 1,076 ) 5,374 Total amortizable intangible assets 198,450 ( 52,771 ) 145,679 Website domain name (Indefinite-lived) 25 — 25 Total intangible assets $ 198,475 $ ( 52,771 ) $ 145,704 As of December 31, 2025 (in thousands) Carrying Value Accumulated Amortization Net Carrying Value Finite-lived: Customer Relationships $ 92,800 $ ( 9,314 ) $ 83,486 Developed Technology 99,200 ( 29,462 ) 69,738 Tradenames 6,450 ( 756 ) 5,694 Total amortizable intangible assets 198,450 ( 39,532 ) 158,918 Website domain name (Indefinite-lived) 25 — 25 Total intangible assets $ 198,475 $ ( 39,532 ) $ 158,943 13 Amortization expense recognized on intangible assets was $ 6.6 million and $ 13.2 million for the three and six months ended June 30, 2026, respectively, and $ 6.6 million and $ 9.0 million for the three and six months ended June 30, 2025, respectively. The following table shows the estimated annual amortization expense of the definite-lived intangible assets for the next five years and thereafter (in thousands): 2026 (six months remaining) $ 13,238 2027 23,614 2028 21,887 2029 21,887 2030 10,006 Thereafter 55,047 $ 145,679 Note 15. Subsequent Event In July 2026, the Company repurchased an additional 531,620 shares of its common stock under its authorized stock repurchase program for an aggregate consideration of $ 10.0 million. 14