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Item 7. Management’s Discussion and Analysis

2026-02-05 compared with 2025-02-06 · 106 added, 73 removed, 172 unchanged (51% of the section changed)

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“Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024.

We are a technology leader powering the future of the real estate industry.

Our Consolidated Financial Statements are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP").

This Annual Report also contains information regarding our non-GAAP income from operations ("Non-GAAP operating income") and non-GAAP operating margin ("Non-GAAP Operating Margin"), each of which constitutes a non-GAAP financial measure.

We use these non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

For more information regarding these non-GAAP financial measures, refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures" below.

We are a technology leader powering the future of real estate.

We provide a cloud-based platform on which our customers operate their businesses.

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Our services enable our customers to connect communities, increase operational efficiency, deliver exceptional customer experiences, and improve financial and operational performance.

Financial Highlights for the Fiscal Year 2025

• Total property management units under management grew 8% year-over-year to 9.4 million.

• Revenue grew 20% year-over-year to $950.8 million.

• GAAP operating income was $152.9 million, or 16.1% of revenue, compared to GAAP operating income of $135.6 million, or 17.1% of revenue in 2024.

• Non-GAAP operating income was $234.9 million, or 24.7% of revenue, compared to non-GAAP operating income of $199.8 million, or 25.2% of revenue, in 2024.

• Net cash provided by operating activities was $242.1 million, or 25.5% of revenue, compared to $188.2 million, or 23.7% of revenue, in 2024.

Key Business Metric

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Key Components of Results of Operations

Our core solutions and certain of our Value Added Services are offered on a subscription basis.

The subscription fees for our core solutions vary by property type and are designed to scale with the size of our customers’ businesses.

Our Subscription Services and certain of our Value Added Services are offered on a subscription basis.

The subscription fees for our Subscription Services vary by property type and are designed to scale with the size of our customers’ businesses.

We recognize revenue for subscription-based services on a straight-line basis over the contract term beginning on the date that our service is made available.

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A significant majority of our Value Added Services revenue comes from the use of our electronic payment services, tenant screening services, and risk mitigation services.

In addition, we charge our customers for assistance onboarding onto our core solutions and for certain other non-recurring services.

In addition, we charge our customers for assistance onboarding onto our Subscription Services and for certain other non-recurring services.

We generally invoice for these other services in advance of the services being completed and recognize revenue in the period the service is rendered.

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Cost of revenue paid to these third-party service providers includes, without limitation, the cost of electronic interchange and payment processing-related services to support our payments services, the cost of credit reporting services for our tenant screening services, and various costs associated with our risk mitigation service providers.

These third-party costs vary both in amount and as a percent of revenue for each Value Added Service offering.

These third-party costs vary both in amount and as a percentage of revenue for each Value Added Service offering.

Cost of revenue also includes personnel-related costs for our employees focused on customer service and the support of our operations (including salaries, cash bonuses, benefits, and stock-based compensation), platform infrastructure costs (such as data center operations and hosting-related costs), and allocated shared and other costs.

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Marketing activities include advertising, online lead generation, lead nurturing, customer and industry events, and the creation of industry-related content and collateral.

We focus our sales and marketing efforts on generating awareness of our software solutions, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers.

We focus our sales and marketing efforts on generating awareness of our products and services, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers.

Research and Product Development.

Research and product development expense consists of personnel-related costs for our employees focused on research and product development (including salaries, cash bonuses, benefits, and stock-based compensation), fees for third-party development resources, and allocated shared and other costs.

Our research and product development efforts are focused on expanding functionality and the ease of use of our existing software solutions by adding new core functionality, Value Added Services and other improvements, as well as developing new products and services.

Our research and product development efforts are focused on expanding functionality and the ease of use of our existing software products and services by adding new core functionality, Value Added Services and other improvements, as well as developing new products and services.

We capitalize our software development costs that meet the criteria for capitalization.

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Interest income, net includes interest earned on investment securities, amortization and accretion of the premium and discounts paid from the purchase of investment securities, and interest earned on cash deposited in our bank accounts.

(Benefit from) provision for income taxes.

(Benefit from) provision for income taxes consists of federal and state income taxes in the United States.

Provision for (benefit from) income taxes.

Provision for (benefit from) income taxes consists of federal and state income taxes in the United States.

Results of Operations

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(dollars in thousands)

Core solutions $ 180,605 $ 156,692 $ 23,913 15 %

Subscription Services $ 211,457 $ 180,605 $ 30,852 17 %

Value Added Services 721,549 605,011 116,538 19

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Total revenue $ 950,822 $ 794,202 $ 156,620 20 %

The increase in revenue for the year ended December 31, 2024, compared to the prior year, was primarily attributable to an increase in the usage of our electronic payment, tenant screening, and risk mitigation services.

During the year ended December 31, 2024, we experienced growth of 6% in the number of property management units under management compared to the prior year, which drove growth in both the number users and usage of our subscription and usage-based services.

Our electronic payment services experienced increased usage during the comparative periods as residents, property managers, and owners transacted more business online.

In addition, we stopped waiving eCheck (ACH) transaction fees beginning in the third quarter of 2023.

Our tenant screening and risk mitigation services usage also increased during the comparative periods, driven by higher adoption and growth in units under management, respectively.

The increase in revenue for the year ended December 31, 2025, compared to the prior year, was primarily attributable to an increase in the usage of our electronic payment, tenant screening, and risk mitigation services by property managers and residents.

During the year ended December 31, 2025, we experienced growth of 8% in the number of property management units under management compared to the prior year, which drove growth in users of our Subscription Services and Value Added Services.

We expect total revenue for the year ending December 31, 2026 to increase compared to the year ended December 31, 2025 as we continue to add new customers and property management units under management, along with increased adoption and usage of our Value Added Services.

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Percentage of revenue 0.5 % 0.6 %

Cost of revenue (exclusive of depreciation and amortization) for the year ended December 31, 2024, increased primarily due to increases in expenditures to third-party service providers related to the delivery of our Value Added Services of $40.7 million compared to the prior year.

This increase was directly associated with the increased adoption and utilization of our Value Added Services.

Allocated shared and other costs increased by $3.5 million for the year ended December 31, 2024, compared to the prior year, primarily related to investment in platform infrastructure in support of our overall growth.

Cost of revenue (exclusive of depreciation and amortization) increased for the year ended December 31, 2025, compared to the prior year primarily driven by higher third-party service provider costs of $54.7 million, due to increased adoption and usage of our Value Added Services, combined with a $4.9 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, for the year ended December 31, 2025.

We expect cost of revenue (exclusive of depreciation and amortization) for the year ending December 31, 2026, to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.

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Percentage of revenue 1.3 % 1.0 %

Sales and marketing expense for the year ended December 31, 2024 increased compared to the prior year, primarily due to a $2.4 million increase in advertising and promotion expense and a $3.4 million increase related to our FUTURE conference.

These increases were partially offset by a $1.5 million reduction in personnel-related costs, including cash bonuses and stock-based compensation.

The reduction in personnel-related costs included $3.8 million of severance and related personnel expenses from a workforce reduction in the third quarter of 2023.

For additional information, see Note 17, Workforce Reduction , of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

For the year ended December 31, 2024, stock-based compensation increased due to additional grants to current and new employees with higher grant date fair value.

We expect sales and marketing expense for the year ending December 31, 2025 to slightly increase as a percentage of revenue compared to the year ended December 31, 2024 as we increase awareness and presence through targeted go-to-market investment.

Sales and marketing expense for the year ended December 31, 2025 increased compared to the prior year primarily due to a $20.0 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, combined with a $6.8 million increase in advertising and promotion expense due to increased targeted go-to-market investment, for the year ended December 31, 2025.

We expect sales and marketing expense for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.

Research and Product Development

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Percentage of revenue 3.2 % 3.2 %

Research and product development expense for the year ended December 31, 2024 increased compared to the prior year.

The increase was mainly due to a $4.8 million rise in personnel-related costs, including cash bonuses and stock-based compensation.

These costs, net of capitalized software development costs, were driven by headcount growth and higher salaries as we continued to invest in innovation.

Additionally, there was a $4.2 million increase in allocated shared and other costs, largely due to higher technology expense.

The increase in personnel costs was partially offset by $3.4 million in severance and related expenses from a workforce reduction in the third quarter of 2023.

For additional information, see Note 17, Workforce Reduction, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

For the year ended December 31, 2024, stock-based compensation increased due to additional grants to current and new employees with higher grant date fair value.

We expect research and product development expenses for the year ending December 31, 2025 to decrease as a percentage of revenue compared to the year ended December 31, 2024, as we continue to leverage headcount efficiencies.

Research and product development expense for the year ended December 31, 2025 increased compared to the prior year primarily due to a $22.8 million increase in personnel-related costs, including stock-based and performance-based compensation, net of capitalized software development costs driven by headcount growth, combined with a $2.3 million increase in software spending to support our research and development activities, for the year ended December 31, 2025.

We expect research and product development expenses for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.

General and Administrative

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Percentage of revenue 2.4 % 2.8 %

General and administrative expense for the year ended December 31, 2024 decreased compared to the prior year, primarily due to a $15.4 million decrease in personnel-related costs, including cash bonuses and stock-based compensation, which was partially offset by a $7.8 million increase in allocated shared and other costs.

The decrease in personnel-related costs was primarily due to the $14.9 million separation costs incurred in the first quarter of 2023 in connection with our former Chief Executive Officer's separation and the $2.5 million severance related expenses from a workforce reduction in the third quarter of 2023.

For additional information, see Note 9, Accrued Employee Expenses , and Note 17, Workforce Reduction , of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

The increase in allocated shared and other costs was primarily due to a $4.3 million lease modifications gain recognized in 2023 and a $3.5 million increase in technology and professional services expenses to support our growth in 2024.

We expect general and administrative expenses for the year ending December 31, 2025 to decrease as a percentage of revenue compared to the year ended December 31, 2024, as we continue to leverage headcount efficiencies.

General and administrative expense for the year ended December 31, 2025 increased compared to the prior year primarily due to a $12.3 million increase in personnel-related costs, including stock-based and performance-based compensation, driven by headcount growth, for the year ended December 31, 2025.

We expect general and administrative expenses for the year ending December 31, 2026 to stay relatively flat as a percentage of revenue compared to the year ended December 31, 2025.

Depreciation and Amortization

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Percentage of revenue 2.4 % 2.5 %

Depreciation and amortization expense for the year ended December 31, 2024 decreased, compared to the prior year, primarily due to decreased amortization expense associated with capitalized software development and intangible balances.

We expect depreciation and amortization expenses for the year ending December 31, 2025 to increase as a percentage of revenue compared to the year ended December 31, 2024 due to amortization of the intangible assets recognized from the acquisition of Move EZ, Inc.

Depreciation and amortization expense for the year ended December 31, 2025 increased, compared to the prior year, primarily due to amortization of the intangible assets recognized from the acquisition of Move EZ, Inc.

in the fourth quarter of 2024.

For additional information, see Note 7, Business Combination, and Note 8, Goodwill and Intangible Assets, Net , of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

We expect depreciation and amortization expenses for the year ending December 31, 2026 to stay flat as a percentage of revenue compared to the year ended December 31, 2025.

Interest Income, Net

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Percentage of revenue 0.9 % 1.8 %

Interest income for the year ended December 31, 2024 increased, compared to the prior year, primarily due to higher interest rates and purchases of available-for-sale investment securities.

(Benefit from) provision for income taxes

Interest income for the year ended December 31, 2025 decreased, compared to the prior year, primarily due to the sale of available-for-sale investment securities and lower interest rates.

Provision for (benefit from) income taxes

Year Ended December 31, Change

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(dollars in thousands)

Income (loss) before provision for income taxes $ 150,322 $ 7,997 $ 142,325 1780 %

(Benefit from) provision for income taxes

Income before provision for income taxes

$ 161,112 $ 150,322 $ 10,790 7 %

Provision for (benefit from) income taxes

$ 20,189 $ (53,746) $ 73,935 (138) %

Effective tax rate 12.5 % (35.8) %

The decrease in our effective tax rate for the year ended December 31, 2024, as compared to the prior year, is primarily due to the valuation allowance release against our federal and state deferred tax assets, which was partially offset by higher tax expense due to a significant increase in our pre-tax income.

The increase in our effective tax rate for the year ended December 31, 2025, as compared to the prior year, is primarily due to the tax benefits recognized in the prior year related to the valuation allowance release against our federal and state deferred tax assets, as well as lower excess tax benefits from stock-based compensation and research and development tax credits.

As of December 31, 2024, we recorded an income tax benefit of $53.7 million, primarily due to the release of our valuation allowance of certain U.S.

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Our principal sources of liquidity continue to be cash, cash equivalents, and investment securities, as well as cash flows generated from our operations.

As of December 31, 2024, our cash and cash equivalents and investment securities had an aggregate balance of $278.2 million.

As of December 31, 2025, we had $251.2 million in cash, cash equivalents, and investment securities.

We have financed our operations primarily through cash generated from operations.

In addition, to optimize our capital structure, on September 30, 2025, we entered into the Credit Facility, which provides for a $150.0 million senior secured revolving credit facility, including sublimits of $25.0 million for letters of credit and $25.0 million for swingline loans, and is scheduled to mature on September 30, 2030.

We did not draw on the Credit Facility in the fourth quarter of 2025, and as of December 31, 2025, we had no outstanding borrowings under the Credit Facility, and were in compliance with the covenants under the Credit Facility.

For more information regarding the Credit Facility, refer to "Credit Facility" in Note 11, Commitments and Contingencies , of our Consolidated Financial Statements of this Annual Report.

We believe that our existing cash and cash equivalents, investment securities, and cash generated from operating activities will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months.

The available borrowing capacity under the Credit Facility provides us additional liquidity and financial flexibility.

Capital Requirements

Our future capital requirements depend on many factors, including continued market acceptance of our software solutions;

changes in the number of our customers, adoption and utilization of our Value Added Services by new and existing customers;

Our future capital requirements depend on many factors, including continued market acceptance of our software products and services;

changes in the number of our customers;

adoption and utilization of our Value Added Services by new and existing customers;

the timing and extent of the introduction of new core functionality, products and Value Added Services;

and the timing and extent of our investments across our organization.

and the timing and extent of our investments across our organization, including acquisitions of businesses and technologies.

As of December 31, 2025, our non-cancelable purchase commitments for business operations totaled $31.3 million, which are due primarily over the next three years.

Operating lease obligations total $50.4 million as of December 31, 2024 associated with leased facilities and have varying maturities with $32.9 million due over the next five years.

Operating lease obligations associated with leased facilities totaled $38.2 million as of December 31, 2025 and have varying maturities with $44.8 million due over the next five years.

We have in the past entered into, and may in the future enter into, arrangements to acquire or invest in new technologies or markets.

We may, as a result of those arrangements or the general expansion of our business, be required to seek additional equity or debt financing, which may not be available on terms favorable to us or at all, impacting our ability to compete successfully, which would harm our business, results of operations, and financial condition.

Our Board of Directors has authorized the repurchase of up to $100.0 million of shares of our Class A common stock from time to time.

To date, we have repurchased $4.2 million of our Class A common stock under the Share Repurchase Program.

For additional information regarding our Share Repurchase Program, see Note 13, Stockholders' Equity, of the Notes to Consolidated Financial Statement included in Part II, Item 8 of this Annual Report.

During the first quarter of 2025, we substantially exhausted the shares of Class A common stock remaining available for purchase under the $100 million share repurchase program authorized by our Board of Directors in 2019 (the "2019 Stock Repurchase Program").

On April 23, 2025, our Board authorized the repurchase of up to $300.0 million of shares of our Class A common stock from time to time pursuant to the 2025 Stock Repurchase Program.

For more information regarding our repurchases under the 2019 Stock Repurchase Program and the 2025 Stock Repurchase Program, refer to Note 12, Stockholders' Equity , of our Consolidated Financial Statements of this Annual Report.

The following table presents our cash flows for the periods indicated (in thousands):

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Net cash provided by operating activities $ 242,105 $ 188,159

Net cash used in investing activities (151,761) (55,582)

Net cash provided by (used in) investing activities

10,244 (151,761)

Net cash used in financing activities (187,886) (43,403)

Net (decrease) in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

$ 64,463 $ (7,005)

Cash Provided by Operating Activities

Our primary source of operating cash inflows is cash collected from our customers in connection with their use of our core solutions and Value Added Services.

Our primary uses of cash from operating activities are for personnel-related expenditures and third-party costs incurred to support the delivery of our software solutions.

The net increase in cash provided by operating activities for the year ended December 31, 2024, compared to the prior year, was primarily due to a higher increase in cash collections from customers relative to the increase in operating expenditures during the year ended December 31, 2024.

Cash Used in Investing Activities

Cash used in investing activities is generally composed of the cash paid in business acquisition, net of cash acquired, purchases of investment securities, maturities and sales of investment securities, purchases of property and equipment, and additions to capitalized software development.

The net increase in cash used in investing activities for the year ended December 31, 2024, compared to the prior year, was primarily due to higher purchases of available-for-sale investment securities and the cash paid in business acquisition, net of cash acquired.

For additional information regarding the business combination, see Note 7 Business Combination, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Cash Used in Financing Activities

Cash used in financing activities is generally composed of net share settlements for employee tax withholdings associated with the vesting of equity awards offset by proceeds from the exercise of stock options.

The net increase in cash used in financing activities for the year ended December 31, 2024, compared to the prior year, was primarily due to an increase in net share settlements for employee tax withholdings associated with the vesting of equity awards.

Operating Activities

Our primary source of operating cash inflows is cash collected from our customers in connection with their use of our Subscription Services and Value Added Services.

Our primary uses of cash from operating activities are for personnel-related expenditures and third-party costs incurred to support the delivery of our software products and services.

The net increase in cash provided by operating activities for the year ended December 31, 2025, compared to the prior year, was primarily due to a higher increase in cash collections from customers relative to the increase in operating expenditures.

Investing Activities

Cash provided by (used in) investing activities is generally composed of cash paid in purchases of investment securities, maturities and sales of investment securities, purchases of property and equipment, business acquisition, net of cash acquired, and additions to capitalized software development.

The net increase in cash provided by investing activities for the year ended December 31, 2025, compared to the prior year, was primarily due to higher sales and maturities of available-for-sale investment securities and lower purchases of available-for-sale investment securities.

We used $77.4 million of cash paid for a business acquisition in 2024 and $75.0 million of cash for a long-term investment in 2025.

For additional information regarding the business acquisition and long-term investment, see Note 4, Investment Securities and Fair Value Measurements, and Note 7, Business Combination, of our Consolidated Financial Statements of this Annual Report.

Financing Activities

Cash used in financing activities is generally composed of net share settlements for employee tax withholdings associated with the vesting of equity awards and repurchases of our Class A common stock offset by proceeds from the exercise of stock options and issuance of common stock under our employee stock purchase plan.

The net increase in cash used in financing activities for the year ended December 31, 2025, compared to the prior year, was primarily due to repurchases of our Class A common stock.

Off-Balance Sheet Arrangements

As of December 31, 2025, we did not have any off-balance sheet arrangements.

Non-GAAP Financial Measures

To supplement our Consolidated Financial Statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), this Annual Report contains information regarding our non-GAAP income from operations ("Non-GAAP Operating Income") and non-GAAP operating margin ("Non-GAAP Operating Margin"), each of which constitutes a non-GAAP financial measure.

We use these non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

• Non-GAAP Operating Income excludes certain non-cash or non-recurring items, including stock-based compensation expense, amortization of stock-based compensation capitalized in software development costs, and amortization of purchased intangibles, as described below.

Non-GAAP Operating Margin is calculated as Non-GAAP Operating Income as a percentage of revenue.

We use each of these non-GAAP financial measures internally to assess and compare operating results across reporting periods, for internal budgeting and forecasting purposes, and to evaluate our financial performance.

We believe these non-GAAP financial measures also provide useful supplemental information to investors and facilitate the analysis of our operating results and comparison of operating results across reporting periods.

In particular, we believe these non-GAAP financial measures are useful to investors and others in assessing our operating performance due to the following factors:

• Stock-based compensation expense and amortization of stock-based compensation capitalized in software development costs.

We utilize stock-based compensation to attract and retain employees.

It is principally aimed at aligning their interests with those of our stockholders while ensuring long-term retention, rather than to address operational performance for any particular period.

As a result, stock-based compensation expenses vary for reasons that are generally unrelated to financial and operational performance in any particular period.

• Amortization of purchased intangibles.

We view amortization of purchased intangible assets as items arising from pre-acquisition activities determined at the time of an acquisition.

While these intangible assets are evaluated for impairment regularly, amortization of the cost of purchased intangibles is an expense that is not typically affected by operations during any particular period.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies may calculate non-GAAP financial results differently.

In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and can exclude expenses that may have a material impact on our reported financial results.

As such, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

A reconciliation of income from operations, the most comparable GAAP measure, to Non-GAAP Operating Income, and operating margin, the most comparable GAAP measure, to Non-GAAP Operating Margin is provided in the table below.

We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.

Reconciliation from GAAP to Non-GAAP Results

(in thousands except percentages)

Year Ended December 31,

Income from operations:

GAAP income from operations $ 152,917 $ 135,644

Stock-based compensation expense 70,790 60,327

Amortization of stock-based compensation capitalized in software development costs 963 1,754

Amortization of purchased intangibles 10,231 2,100

Non-GAAP income from operations $ 234,901 $ 199,825

Operating margin:

GAAP operating margin 16.1 % 17.1 %

Stock-based compensation expense as a percentage of revenue 7.4 7.6

Amortization of stock-based compensation capitalized in software development costs as a percentage of revenue 0.1 0.2

Amortization of purchased intangibles as a percentage of revenue 1.1 0.3

Non-GAAP operating margin 24.7 % 25.2 %

Critical Accounting Policies and Estimates

Our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report are prepared in accordance with accounting principles generally accepted in the United States of America.

Our Consolidated Financial Statements and the related notes included elsewhere in this Annual Report are prepared in accordance with GAAP.

The preparation of our Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

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Accordingly, these are the policies we believe are the most critical to a full understanding and evaluation of our Consolidated Financial Statements.

For additional information, see Note 2, Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report.

For additional information, refer to Note 2, Summary of Significant Accounting Policies, of our Consolidated Financial Statements of this Annual Report.

Revenue Recognition

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We account for individual performance obligations separately if they are distinct.

The performance obligations for these contracts include access and use of our core solutions, implementation services, and customer support.

Access and use of our core solutions and implementation services are considered distinct.

The performance obligations for these contracts include access and use of our Subscription Services, implementation services, and customer support.

Access and use of our Subscription Services and implementation services are considered distinct.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis.

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Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

During the measurement period of up to one year from the acquisition date, we

may record adjustments to the preliminary fair value of the assets acquired and liabilities assumed with a corresponding offset to goodwill for these business combinations.

During the measurement period of up to one year from the acquisition date, we may record adjustments to the preliminary fair value of the assets acquired and liabilities assumed with a corresponding offset to goodwill for these business combinations.

Acquisition-related transaction costs are not included as a component of consideration transferred, but are accounted for as an operating expense in the period in which the costs are incurred.

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Recent Accounting Pronouncements

For information regarding recent accounting pronouncements, refer to Note 2, Summary of Significant Accounting Policies of our Consolidated Financial Statements included elsewhere in this Annual Report.

For information regarding recent accounting pronouncements, refer to Note 2, Summary of Significant Accounting Policies of our Consolidated Financial Statements of this Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis