APPFOLIO INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 37 Consolidated Balance Sheets 39 Consolidated Statements of Operations 40 Consolidated Statements of Comprehensive (Loss) Income 41 Consolidated Statements of Stockholders' Equity 42 Consolidated Statements of Cash Flows 43 Notes to Consolidated Financial Statements 44 36 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of AppFolio, Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of AppFolio, Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 37 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition As described in Notes 2 and 3 to the consolidated financial statements, the Company’s total revenue was $950.8 million for the year ended December 31, 2025. The Company generates revenue from customers primarily for subscriptions to access the Subscription Services and Value Added Services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration the Company expects to receive in exchange for those services. The Company enters into contracts that can include various combinations of services, which are generally capable of being distinct within the context of the contract, and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. The Company recognizes revenue in proportion to the amount they have the right to invoice for certain Subscription Services and Value Added Services, as that amount corresponds directly with the performance completed to date. The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process. These procedures also included, among others (i) evaluating revenue transactions by either (a) testing the issuance and settlement of invoices and credit memos, tracing transactions not settled to a detailed listing of accounts receivable, and testing the completeness and accuracy of data provided by management or (b) testing, on a sample basis, revenue transactions by obtaining and inspecting source documents, such as executed contracts, invoices, and cash receipts and (ii) confirming, on a sample basis, outstanding customer invoice balances as of year-end and, and for confirmations not returned, obtaining and inspecting source documents, such as executed contracts, invoices, and subsequent cash receipts. /s/ PricewaterhouseCoopers LLP Los Angeles, California February 5, 2026 We have served as the Company’s auditor since 2012. 38 APPFOLIO, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except par values) December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 106,967 $ 42,504 Investment securities—current 144,256 235,745 Accounts receivable, net 36,873 24,346 Prepaid expenses and other current assets 65,218 32,807 Total current assets 353,314 335,402 Property and equipment, net 23,228 24,483 Operating lease right-of-use assets 15,924 17,472 Capitalized software development costs, net 11,324 15,429 Goodwill 96,410 96,410 Intangible assets, net 38,826 49,057 Deferred income taxes 58,823 76,910 Long-term investments 77,033 2,033 Other long-term assets 14,085 9,482 Total assets $ 688,967 $ 626,678 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $ 4,123 $ 2,378 Accrued employee expenses 59,774 30,157 Accrued expenses 20,829 14,658 Other current liabilities 22,121 16,087 Total current liabilities 106,847 63,280 Operating lease liabilities 33,287 37,476 Other liabilities 6,254 6,632 Total liabilities 146,388 107,388 Commitments and contingencies (Note 12) Stockholders’ equity: Preferred stock, $ 0.0001 par value, 25,000 shares authorized and no shares issued and outstanding as of December 31, 2025 and December 31, 2024 — — Class A common stock, $ 0.0001 par value, 250,000 shares authorized as of December 31, 2025 and December 31, 2024; 25,443 and 23,660 shares issued as of December 31, 2025 and December 31, 2024, respectively; 24,335 and 23,241 shares outstanding as of December 31, 2025 and December 31, 2024, respectively 3 2 Class B common stock, $ 0.0001 par value, 50,000 shares authorized as of December 31, 2025 and December 31, 2024; 11,655 and 13,163 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 1 2 Additional paid-in capital 284,054 254,821 Accumulated other comprehensive (loss) Income 30 173 Treasury stock, at cost, 1,108 and 419 shares of Class A common stock as of December 31, 2025 and December 31, 2024, respectively ( 172,480 ) ( 25,756 ) Retained earnings 430,971 290,048 Total stockholders’ equity 542,579 519,290 Total liabilities and stockholders’ equity $ 688,967 $ 626,678 The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. 39 APPFOLIO, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Year Ended December 31, 2025 2024 2023 Revenue $ 950,822 $ 794,202 $ 620,445 Costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) (1) 345,341 282,067 238,076 Sales and marketing (1) 143,904 110,597 107,602 Research and product development (1) 190,419 160,375 151,364 General and administrative (1) 95,590 85,974 93,452 Depreciation and amortization 22,651 19,545 28,988 Total costs and operating expenses 797,905 658,558 619,482 Income from operations 152,917 135,644 963 Other income, net 38 697 3 Interest income, net 8,157 13,981 7,031 Income before provision for income taxes 161,112 150,322 7,997 Provision for (benefit from) income taxes 20,189 ( 53,746 ) 5,295 Net income $ 140,923 $ 204,068 $ 2,702 Net income per common share: Basic $ 3.91 $ 5.63 $ 0.08 Diluted $ 3.88 $ 5.55 $ 0.07 Weighted average common shares outstanding: Basic 36,013 36,252 35,629 Diluted 36,327 36,782 36,417 (1) Includes stock-based compensation expense as follows: Year Ended December 31, 2025 2024 2023 Stock-based compensation expense included in costs and operating expenses: Cost of revenue (exclusive of depreciation and amortization) $ 5,138 $ 4,522 $ 3,703 Sales and marketing 12,332 8,030 5,983 Research and product development 30,687 25,414 20,974 General and administrative 22,633 22,361 21,704 Total stock-based compensation expense $ 70,790 $ 60,327 $ 52,364 The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. 40 APPFOLIO, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Year Ended December 31, 2025 2024 2023 Net income $ 140,923 $ 204,068 $ 2,702 Other comprehensive income (loss): Changes in unrealized losses on investment securities, net of tax ( 143 ) 74 1,783 Comprehensive income $ 140,780 $ 204,142 $ 4,485 The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. 41 APPFOLIO, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (in thousands) Accumulated Additional Other Common Stock Common Stock Paid-in Comprehensive Treasury Retained Class A Class B Capital (Loss) Income Stock Earnings Total Shares Amount Shares Amount Balance at December 31, 2022 20,569 2 14,746 2 209,704 ( 1,684 ) ( 25,756 ) 83,278 265,546 Exercise of stock options 255 — — — 2,595 — — — 2,595 Stock-based compensation — — — — 53,240 — — — 53,240 Vesting of restricted stock units, net of shares withheld for taxes 289 — — — ( 28,554 ) — — — ( 28,554 ) Conversion of Class B common stock to Class A common stock 630 — ( 630 ) — — — — — — Issuance of restricted stock awards 6 — — — — — — — — Other comprehensive income — — — — — 1,783 — — 1,783 Net income — — — — — — — 2,702 2,702 Balance at December 31,2023 21,749 2 14,116 2 236,985 99 ( 25,756 ) 85,980 297,312 Exercise of stock options 251 — — — 3,924 — — — 3,924 Stock-based compensation — — — — 61,239 — — — 61,239 Vesting of restricted stock units, net of shares withheld for taxes 288 — — — ( 47,327 ) — — — ( 47,327 ) Conversion of Class B common stock to Class A common stock 953 — ( 953 ) — — — — — — Other comprehensive income — — — — — 74 — — 74 Net income — — — — — — — 204,068 204,068 Balance at December 31, 2024 23,241 $ 2 13,163 $ 2 $ 254,821 $ 173 $ ( 25,756 ) $ 290,048 $ 519,290 Exercise of stock options and issuance of common stock under the Employee Stock Purchase Plan 13 — — — 1,084 — — — 1,084 Stock-based compensation — — — — 71,397 — — — 71,397 Vesting of restricted stock units, net of shares withheld for taxes 262 — — — ( 43,248 ) — — — ( 43,248 ) Conversion of Class B common stock to Class A common stock 1,508 1 ( 1,508 ) ( 1 ) — — — — — Repurchase of common stock ( 689 ) — — — — — ( 146,724 ) — ( 146,724 ) Other comprehensive loss — — — — — ( 143 ) — — ( 143 ) Net income — — — — — — — 140,923 140,923 Balance at December 31, 2025 24,335 $ 3 11,655 $ 1 $ 284,054 $ 30 $ ( 172,480 ) $ 430,971 $ 542,579 The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. 42 APPFOLIO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Cash from operating activities Net income $ 140,923 $ 204,068 $ 2,702 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 22,651 19,543 28,989 Amortization of operating lease right-of-use assets 2,221 2,030 2,132 Amortization of costs capitalized to obtain revenue contracts, net 11,115 9,985 9,515 Gain on lease modification — — ( 4,281 ) Deferred income taxes 18,139 ( 76,937 ) ( 490 ) Stock-based compensation, including as amortized 70,790 60,328 52,363 Other ( 2,119 ) ( 8,220 ) ( 3,108 ) Changes in operating assets and liabilities: Accounts receivable ( 12,527 ) ( 3,383 ) ( 4,206 ) Prepaid expenses and other assets ( 21,446 ) ( 5,859 ) ( 23,008 ) Accounts payable 1,767 1,559 ( 1,565 ) Operating lease liabilities ( 4,263 ) ( 3,143 ) ( 2,504 ) Accrued expenses and other liabilities 14,854 ( 11,812 ) 3,744 Net cash provided by operating activities 242,105 188,159 60,283 Cash from investing activities Purchases of available-for-sale investments ( 228,887 ) ( 317,173 ) ( 195,740 ) Proceeds from sales of available-for-sale investments 202,662 9,984 1,013 Proceeds from maturities of available-for-sale investments 118,970 240,035 152,382 Purchases of property and equipment ( 3,155 ) ( 2,016 ) ( 9,041 ) Capitalization of software development costs ( 3,440 ) ( 5,170 ) ( 4,825 ) Purchases of long-term investments ( 75,000 ) — 629 Cash paid in business acquisition, net of cash acquired ( 906 ) ( 77,421 ) — Net cash provided by (used in) investing activities 10,244 ( 151,761 ) ( 55,582 ) Cash from financing activities Proceeds from stock option exercises 134 3,924 2,595 Tax withholding for net share settlement ( 43,248 ) ( 47,327 ) ( 28,556 ) Proceeds from the issuance of common stock under the employee stock purchase plan 951 — — Purchase of common stock ( 145,723 ) — — Net cash used in financing activities ( 187,886 ) ( 43,403 ) ( 25,961 ) Net increase (decrease) in cash, cash equivalents and restricted cash 64,463 ( 7,005 ) ( 21,260 ) Cash, cash equivalents and restricted cash Beginning of period 42,754 49,759 71,019 End of period $ 107,217 $ 42,754 $ 49,759 Cash, cash equivalents and restricted cash at end of period: Cash and cash equivalents $ 106,967 $ 42,504 $ 49,509 Restricted cash included in prepaid expenses and other current assets 250 250 250 Total cash, cash equivalents and restricted cash shown in the consolidated statements of cash flows $ 107,217 $ 42,754 $ 49,759 Supplemental disclosure of cash flow information Cash paid for income taxes $ 28,840 $ 14,022 $ 8,086 Cash paid for amounts included in the measurement of lease liabilities included in operating cash flows $ 6,251 $ 5,828 $ 4,732 The accompanying notes to the Consolidated Financial Statements are an integral part of these statements. 43 APPFOLIO, INC. NOTES TO CONSOLIDATED AUDITED FINANCIAL STATEMENTS 1. Nature of Business AppFolio, Inc. ("we," "us" or "our") is a technology leader powering the future of real estate. We provide a cloud-based platform on which our customers operate their businesses. Our services enable our customers to connect communities, increase operational efficiency, deliver exceptional customer experiences, and improve financial and operational performance. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Consolidated Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Reclassification We reclassified certain amounts in our Consolidated Statements of Cash Flows within the cash flows from operating activities section in the prior year to conform to the current year's presentation. We also reclassified long-term investments from other long-term assets in our Consolidated Balance Sheets in the prior year to conform to the current year's presentation. Principles of Consolidation The accompanying Consolidated Financial Statements include the operations of AppFolio, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. 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 the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue, expenses, other income, and provision for income taxes during the reporting period. Assets and liabilities which are subject to judgment and use of estimates include the fair value of assets and liabilities assumed in business combinations, the fair value of financial instruments, useful lives of property and equipment and intangible assets, capitalized software development costs, incremental borrowing rate applied in lease accounting, impairment of goodwill and long-lived assets, the period of benefit associated with deferred costs, stock-based compensation, income taxes, and contingencies. Actual results could differ from those estimates and any such differences may have a material impact on our Consolidated Financial Statements. Segment Information Our chief operating decision maker ("CODM"), the Chief Executive Officer, allocates resources and assesses financial performance based upon discrete financial information at the consolidated level. There are no segment managers who are held accountable by our CODM, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level. Accordingly, we have determined that we operate as a single operating and reportable segment. Our CODM uses consolidated net income (loss) as the sole measure of segment profit or loss. Significant segment expenses include cost of revenue (excluding depreciation and amortization), sales and marketing, research and product development, general and administrative expenses, and depreciation and amortization. For expenses incurred during the years ended December 31, 2025, 2024 and 2023, refer to our Consolidated Statements of Operations. Stock-based compensation expense is also recognized as a significant segment expense. Details regarding this expense for the years ended December 31, 2025, 2024 and 2023 was included in the parenthetical note to the respective Consolidated Statements of Operations. Concentrations of Credit Risk Financial instruments that potentially subject us to credit risk consist principally of cash, cash equivalents, restricted cash, accounts receivable, and investment securities. We maintain cash balances at financial institutions in excess of amounts insured by United States government agencies or payable by the United States government directly. We place our cash with high credit, quality financial institutions. We invest in investment securities with a minimum rating of A by Standard & Poor's or A-1 by Moody's and regularly monitor our investment security portfolio for changes in credit ratings. Concentrations of credit risk with respect to accounts receivable and revenue are limited due to a large, diverse customer base. As of December 31, 2025, (i) no individual customer exceeded 10% of our total revenues in any of the periods presented, and (ii) 22 % of our accounts receivable balance was attributable to amounts due from a risk mitigation provider. For purposes of assessing concentration of credit risk and significant customers, a group of residents that are receiving services from a third party that controls and transfers the specified services are regarded as one single customer. 44 Business Combinations The results of a business acquired in a business combination are included in our Consolidated Financial Statements from the date of acquisition. We allocate the purchase price to the identifiable assets and liabilities of the acquired business at their acquisition date fair values. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to make significant judgments and estimates, including the selection of valuation methodologies and assumptions. Critical estimates used in valuing certain intangible assets include, but are not limited to, development costs, the time required to recreate the assets and profit margin a market participant would receive, and rate of return. These estimates are based on information obtained from the management of the acquired companies, our assessment of the information, and historical experience. 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. 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. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, in the marketplace. Level 3 - Unobservable inputs that are supported by little or no market activity. Cash, Cash Equivalents and Restricted Cash We consider all highly liquid investments, readily convertible to cash, and which have a remaining maturity date of three months or less at the date of purchase, to be cash equivalents. Cash and cash equivalents are recorded at fair value and consist primarily of bank deposits, and money market funds. Investment Securities Our investment securities currently consist of United States government and agency securities. We classify investment securities as available-for-sale at the time of purchase and reevaluate such classification at each balance sheet date. All investments are recorded at estimated fair value and investments with original maturities of less than one year at the time of purchase are classified as short-term. Unrealized gains and losses for available-for-sale investment securities are included in accumulated other comprehensive income, a component of stockholders' equity. For available-for-sale debt securities in an unrealized loss position, we first assess whether we intend to sell, or whether it is more likely than not that we will be required to sell the security before recovery of its amortized cost basis. If either of these criteria is met, the security’s amortized cost basis is written down to fair value through income. For securities in an unrealized loss position that do not meet these criteria, we evaluate whether the decline in fair value has resulted from credit loss or other factors. If this assessment indicates a credit loss exists, the credit-related portion of the loss is recorded as an allowance for losses on the security. No allowance for credit losses for available-for-sale investment securities was recorded as of December 31, 2025 and 2024. Strategic Investments Our strategic investments consist of non-marketable equity investments in privately-held companies in which we do not have a controlling interest or significant influence. We record these strategic investments as long-term investments in our Consolidated Balance Sheets. We have elected to apply the measurement alternative for equity investments in privately-held companies that do not have readily determinable fair values, measuring them at cost, less any impairment, plus or minus adjustments resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. An impairment loss is recorded when an event or circumstance indicates a decline in value has occurred. In determining the estimated fair value of our strategic investments in privately held companies, we use the most recent and available data. Valuations of privately held securities are inherently complex due to the lack of readily available market data and require the use of judgment. The determination of whether an orderly transaction is for an identical or similar 45 investment requires use of significant judgment. In our evaluation, we consider factors such as differences in the rights and preferences of the investments and the extent to which those differences would affect the fair values of those investments. Our impairment analysis encompasses an assessment of both qualitative and quantitative factors including the investee's financial metrics, market acceptance of the investee's product or technology, general market conditions and liquidity considerations. Accounts Receivable Accounts receivable are recorded at the invoiced amount, net of an allowance for credit losses. The allowance for credit losses is based on historical loss experience, the number of days that receivables are past due, and an evaluation of the potential risk of loss associated with delinquent accounts. Accounts receivable considered uncollectible are charged against the allowance for credit losses when identified. We do not have any off-balance sheet credit exposure related to our customers. As of December 31, 2025 and 2024, our allowance for credit losses was not material. Property and Equipment Property and equipment is stated at cost net of accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of assets as follows: Asset Type Depreciation Period Computer equipment 3 years Furniture and fixtures 7 years Office equipment 3 to 5 years Leasehold improvements Shorter of remaining life of lease or asset life Leases We determine if an arrangement is a lease at inception. Operating lease right-of-use ("ROU") assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments, over the lease term at commencement date. As none of our leases provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU assets also include any lease payments made to the lessor before or at the lease commencement date and excludes lease incentives received and initial direct costs incurred. Our lease terms may include options to extend the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We have lease arrangements with lease and non-lease components, which are generally accounted for as a single lease component. Leases with an initial term of twelve months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. Capitalized Software Development Costs Software development costs consist of certain payroll and stock-based compensation costs incurred to develop functionality of our internal-use software solutions. We capitalize certain software development costs for new offerings as well as significant upgrades and enhancements to our existing software solutions. Capitalized software development costs are amortized using the straight-line method over an estimated useful life of three years . We do not transfer ownership of our software, license, or lease our software to third parties. Goodwill and Intangible Assets, Net Goodwill is tested for impairment at least annually at the reporting unit level or at other times whenever events or changes in circumstances indicate that goodwill might be impaired. A qualitative assessment is performed to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount. A quantitative assessment is performed if the qualitative assessment results in a more-likely-than-not determination or if a qualitative assessment is not performed. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded to the extent that the reporting unit’s carrying value exceeds its fair value. We test for goodwill impairment annually during the fourth quarter of the calendar year. Based on the annual assessment performed at November 1, 2025, we determined it was not more likely than not that our reporting unit fair value was less than its carrying value and no quantitative impairment test assessment was required. No impairment losses were recorded for goodwill during the years ended December 31, 2025, 2024 and 2023. 46 Intangible assets primarily consist of customer relationships, developed technology, acquired database, domain names and patents, which are recorded at cost, less accumulated amortization. We determine the appropriate useful life of our intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized over their estimated useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed. Impairment of Long-Lived Assets We assess the recoverability of our long-lived assets when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of the asset or asset group to the future undiscounted cash flows we expect the asset or asset group to generate. Any excess of the carrying value of the asset or asset group above its fair value is recognized as an impairment loss. There were no impairment charges related to the identified long-lived assets for the years ended December 31, 2025, 2024 and 2023. Revenue Recognition We generate revenue from our customers primarily from our Subscription Services and Value Added Services. Revenue is recognized upon transfer of control of promised services in an amount that reflects the consideration we expect to receive in exchange for those services. We enter into contracts that can include various combinations of services, which are generally capable of being distinct within the context of the contract and accounted for as separate performance obligations. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We recognize revenue in proportion to the amount that we have the right to invoice for certain Subscription Services and Value Added Services, as that amount corresponds directly with our performance completed to date. Refer to Note 3, Revenue and Other Information for the disaggregated breakdown of revenue between Subscription Services, Value Added Services and Other revenue. Many of our contracts with customers contain multiple performance obligations. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require judgment. We account for individual performance obligations separately if they are 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. Judgment is required to determine the standalone selling price for each distinct performance obligation. We typically have more than one standalone selling price for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, we determine the standalone selling price based on our overall pricing objectives, taking into consideration customer demographics and other factors. Fees are fixed based on rates specified in the subscription agreements, which do not provide for any refunds or adjustments. Subscription Services We charge our customers on a subscription basis for our Subscription Services. Our customers do not have rights to the underlying software code of our products and services, and, accordingly, we recognize subscription revenue over time on a straight-line basis over the contract term beginning on the date that our service is made available to the customer. The terms of our subscription agreements are monthly, annual, and multiyear and we typically invoice our customers for subscription services in monthly or annual installments, in advance of the subscription period. Value Added Services We primarily charge our customers on a usage basis for our Value Added Services. Usage-based fees are charged either as a percentage of the transaction amount (e.g., for certain of our electronic payment services) or on a flat fee per transaction basis with no minimum usage commitments (e.g., for our tenant screening and risk mitigation services). We recognize revenue for usage-based services in the period the service is rendered. Our electronic payments services fees are recorded gross of interchange and payment processing related fees. We generally invoice our customers for usage-based services on a monthly basis or collect the fee at the time of service. We also have certain Value Added Services which are charged on a subscription basis. Revenue from these services is recognized in a similar manner as the above-described Subscription Services. Some subscription or usage-based Value Added Services, such as fees for electronic payment services, are paid by either our customers or our customers' stakeholders at the time the services are rendered. We work with third-party partners to provide certain of our Value Added Services. For these Value Added Services, we evaluate whether we are the principal, and report revenue on a gross basis, or the agent, and report revenue on a net basis. In this assessment we consider if we obtain control of the specified services before they are transferred to the customer, as well as other indicators such as whether we are the party primarily responsible for fulfillment, and whether we have discretion in establishing price. 47 Other Revenue Other revenue include fees from one-time services related to the implementation of our software solutions and other recurring or one-time fees related to our customers who are not otherwise using our Subscription Services. This includes legacy customers of businesses we have acquired where the customers haven't migrated to our Subscription Services. The fees for implementation and data migration services are billed upon signing our core subscription contract and are recognized as revenue in the period the service is rendered. Other services are billed when the services rendered are completed and delivered to the customer or billed in advance and deferred over the subscription period. Deferred Costs Deferred costs, which primarily consist of sales commissions, are considered incremental and recoverable costs of obtaining a contract with a customer. These costs are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be three years . We typically do not pay commissions for contract renewals. We determined the period of benefit by taking into consideration our customer contract term, the useful life of our internal-use software, average customer life, and other factors. Amortization expense for deferred costs is included within sales and marketing expense in the accompanying Consolidated Statements of Operations. Cost of Revenue (Exclusive of Depreciation and Amortization) Many of our Value Added Services are facilitated by third-party service providers. 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. Cost of revenue also consists of 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. Cost of revenue excludes depreciation of property and equipment, amortization of capitalized software development costs and amortization of intangible assets. Sales and Marketing Sales and marketing expense consists of personnel-related costs for our employees focused on sales and marketing (including salaries, sales commissions, cash bonuses, benefits, and stock-based compensation), costs associated with sales and marketing activities, and allocated shared and other costs. 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 products and services, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers. Advertising expenses were $ 14.3 million, $ 10.6 million and $ 8.6 million for each of the years ended December 31, 2025, 2024 and 2023, respectively, and are expensed as incurred. 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 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 which meet the criteria for capitalization. Amortization of capitalized software development costs is included in depreciation and amortization expense. General and Administrative General and administrative expense consists of personnel-related costs for employees in our executive, finance, information technology, human resources, legal, compliance, and administrative organizations (including salaries, cash bonuses, benefits, and stock-based compensation). In addition, general and administrative expense includes fees for third-party professional services (including audit, legal, compliance, and tax services), transaction costs related to business combination, sales of subsidiary businesses, regulatory fines and penalties, other corporate expenses, impairment of long-lived assets, and allocated shared costs. 48 Depreciation and Amortization Depreciation and amortization expense includes depreciation of property and equipment, amortization of capitalized software development costs, and amortization of intangible assets. We depreciate or amortize property and equipment, software development costs, and intangible assets over their expected useful lives on a straight-line basis, which approximates the pattern in which the economic benefits of the assets are consumed. Stock-Based Compensation We recognize stock-based compensation expense for restricted stock awards ("RSAs") and restricted stock units ("RSUs") with only service conditions on a straight-line basis over the requisite service period. For RSUs with both service and performance conditions ("PSUs"), compensation cost is recorded on a graded-vesting method, if it is probable that the performance condition will be achieved. Adjustments to compensation expense are made each period based on changes in our estimate of the number of PSUs that are probable of vesting. PSUs will vest on the vesting date and upon achievement of the relevant performance metric once such calculation is finalized in accordance with our internal policies. We estimate a forfeiture rate to calculate our stock-based compensation expense for our stock-based awards. Income Taxes We recognize deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the Consolidated Statements of Operations in the period that includes the enactment date. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In evaluating the need for a valuation allowance at each reporting period, we consider the weighting of all available positive and negative evidence, which includes, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, future projections of profitability, timing of the future reversal of existing temporary differences and the duration of statutory carryforward periods. Recent Accounting Pronouncements Adopted In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Improvements to Income Tax Disclosures , which requires that an entity, on an annual basis, disclose additional income tax information, including more detailed breakdowns of the effective tax rate to the statutory rate and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively and is effective for calendar year-end public business entities in the 2025 annual period and in 2026 for interim periods with early adoption permitted. We adopted the standard in our fiscal year 2025 annual financial statements prospectively. For additional information, refer to Note 14 Income Taxes , in our Consolidated Financial Statements. Recent Accounting Pronouncements Not Yet Adopted In November 2024, FASB issued ASU 2024-03, Disaggregation of Income Statement Expense. The new standard requires additional disclosures about specific types of expenses included in the expense captions presented on the face of income statements as well as disclosures about selling expenses. The guidance applies prospectively with the option to apply the standard retrospectively and is effective for calendar year-end public business entities in the 2027 annual period and in 2028 for interim periods with early adoption permitted. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements. In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends ASC 326-202 to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The guidance will be applied on a prospective basis and is effective for calendar year-end public business entities in the 2026 annual period and its interim periods, with early adoption permitted. We plan to adopt the standard from January 1, 2026, and we expect the adoption of the standard will not have any material impact on our financial statements. In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting guidance for the costs to develop software for internal use. The new guidance amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. The new guidance will be effective for calendar year-end public business entities in the 2028 annual period. The guidance can be applied on a fully prospective basis, a modified basis for in-process projects, or a full retrospective basis. We are currently evaluating the impact of this ASU on our Consolidated Financial Statements. 49 3. Revenue and Deferred Costs The following table presents our revenue categories (in thousands): Year Ended December 31, 2025 2024 2023 Subscription Services $ 211,457 $ 180,605 $ 156,692 Value Added Services 721,549 605,011 454,098 Other 17,816 8,586 9,655 Total revenue $ 950,822 $ 794,202 $ 620,445 Our revenue is generated primarily from United States customers. Deferred Costs Deferred costs were $ 22.8 million and $ 16.8 million as of December 31, 2025 and 2024, respectively, of which $ 11.2 million and $ 9.9 million, respectively, are included in Prepaid expenses and other current assets and $ 11.6 million and $ 6.9 million, respectively, are included in Other long-term assets in the accompanying Consolidated Balance Sheets. Amortization expense for deferred costs was $ 11.1 million, $ 10.0 million, and $ 9.5 million for the years ended December 31, 2025, 2024, and 2023, respectively. For the years ended December 31, 2025 and 2024, no impairments were identified in relation to the costs capitalized for the periods presented. Remaining Performance Obligations Transaction price allocated to remaining performance obligations (“RPO”) represents contracted revenue that has not been recognized, which includes deferred revenue and non-cancelable amounts that will be invoiced and recognized as revenue in future periods. RPO does not include revenue related to performance obligations that are part of a contract whose original expected duration is one year or less or related to usage-based Value Added Services that are billed in arrears. As of December 31, 2025, the total non-cancelable RPO under our contracts with customers was $ 93.9 million, and we expect to recognize revenue on approximately 38.4 % of these RPO over the following 12 months, with the balance to be recognized thereafter. This RPO balance grew significantly during 2025 as we began selling more multi-year revenue contracts. 4. Investment Securities and Fair Value Measurements Investment Securities Investment securities classified as available-for-sale consisted of the following as of December 31, 2025 and 2024 (in thousands): December 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government and agency securities $ 144,216 $ 40 $ — $ 144,256 Total available-for-sale investment securities $ 144,216 $ 40 $ — $ 144,256 December 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. government and agency securities 235,509 261 ( 25 ) 235,745 Total available-for-sale investment securities $ 235,509 $ 261 $ ( 25 ) $ 235,745 As of December 31, 2025, the decline in fair value below amortized cost basis was not considered other than temporary as it is more likely than not we will hold the securities until maturity or recovery of the cost basis. No allowance for credit losses for available-for-sale investment securities was recorded as of December 31, 2025 or 2024. The fair values of available-for-sale investment securities, by remaining contractual maturity, are as follows (in thousands): 50 December 31, 2025 December 31, 2024 Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Due in one year or less $ 144,216 $ 144,256 $ 235,509 $ 235,745 Total available-for-sale investment securities $ 144,216 $ 144,256 $ 235,509 $ 235,745 During the years ended December 31, 2025 and 2024, we had sales and maturities (which include calls) of investment securities, as follows (in thousands): Year Ended December 31, 2025 Gross Realized Gains Gross Realized Losses Gross Proceeds from Sales Gross Proceeds from Maturities U.S. government and agency securities 94 ( 49 ) 202,662 118,970 $ 94 $ ( 49 ) $ 202,662 $ 118,970 Year Ended December 31, 2024 Gross Realized Gains Gross Realized Losses Gross Proceeds from Sales Gross Proceeds from Maturities U.S. government and agency securities 4 ( 1 ) 9,984 240,035 $ 4 $ ( 1 ) $ 9,984 $ 240,035 The tables above do not include our strategic investments of non-marketable equity investments in privately-held companies, which are recorded in long-term investments in our Consolidated Balance Sheets. These strategic investments consist of the following as of December 31, 2025 and December 31, 2024 (in thousands): December 31, 2025 December 31, 2024 Second Nature $ 75,000 $ — Others 2,033 2,033 Total long-term investments $ 77,033 $ 2,033 In April 2025, we purchased a minority, non-controlling equity interest in Second Nature Holdings, L.P. (“Second Nature”) for $ 75.0 million, paid with cash on hand. We determined that we do not have significant influence over Second Nature, and our investment in Second Nature has been classified as an investment in equity securities without readily determinable fair value. There were no realized or unrealized gains or losses from remeasurement of investments in equity securities under the measurement alternative for the years ended December 31, 2025 and 2024. Fair Value Measurements Recurring Fair Value Measurements The following tables present our financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 by level within the fair value hierarchy (in thousands): 51 December 31, 2025 Level 1 Level 2 Total Fair Value Cash equivalents: Money market funds $ 89,365 $ — $ 89,365 Available-for-sale investment securities: U.S. government and agency securities — 144,256 144,256 Total $ 89,365 $ 144,256 $ 233,621 December 31, 2024 Level 1 Level 2 Total Fair Value Cash equivalents: Money market funds $ 25,167 $ — $ 25,167 Available-for-sale investment securities: U.S. government and agency securities — 235,745 235,745 Total $ 25,167 $ 235,745 $ 260,912 The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their fair value because of the short maturity of these items. There were no changes to our valuation techniques used to measure asset and liability fair values on a recurring basis during the year ended December 31, 2025. The valuation techniques for the financial assets in the tables above are as follows: Cash Equivalents As of December 31, 2025 and 2024, cash equivalents include cash invested in money market funds with a maturity of three months or less. Fair value is based on market prices for identical assets. Available-for-Sale Investment Securities Our Level 2 investment securities were priced by a pricing vendor. The pricing vendor utilizes the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, other observable inputs like market transactions involving comparable securities are used. Strategic Investments Measured and Recorded at Fair Value on a Non-Recurring Basis Strategic investments primarily include equity investments in privately-held companies, which do not have a readily determinable fair value. Strategic investments are classified as Level 3 in the fair value hierarchy, as their nonrecurring fair value measurements may include observable and unobservable inputs. As of December 31, 2025 and December 31, 2024, the balance of strategic investments was $ 77.0 million and $ 2.0 million, respectively. 5. Property and Equipment, net All of our property and equipment is located in the United States. Property and equipment, net consists of the following (in thousands): December 31, 2025 2024 Computer equipment $ 2,387 $ 2,796 Furniture and fixtures 5,126 5,292 Office equipment 3,708 3,729 Leasehold improvements 32,144 28,787 Construction in process 19 357 Gross property and equipment 43,384 40,961 Less: Accumulated depreciation ( 20,156 ) ( 16,478 ) Total property and equipment, net $ 23,228 $ 24,483 52 Depreciation expense for property and equipment totaled $ 4.3 million, $ 5.2 million, and $ 7.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. 6. Capitalized Software Development Costs, net Capitalized software development costs, net were as follows (in thousands): December 31, 2025 2024 Capitalized software development costs, gross $ 112,108 $ 117,480 Less: Accumulated amortization ( 100,784 ) ( 102,051 ) Capitalized software development costs, net $ 11,324 $ 15,429 Capitalized software development costs were $ 4.0 million, $ 6.1 million and $ 5.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Amortization expense with respect to software development costs totaled $ 8.2 million, $ 12.2 million and $ 19.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. During the years ended December 31, 2025 and 2024, we disposed of $ 9.4 million and $ 15.2 million, respectively, of fully amortized capitalized software development costs. Future amortization expense with respect to capitalized software development costs is estimated as follows (in thousands): Years Ending December 31, 2026 5,808 2027 4,242 2028 1,274 Total amortization expense $ 11,324 7. Business Combination Acquisition of Move EZ, Inc. On October 22, 2024, we acquired all of the outstanding shares of Move EZ, Inc., d/b/a LiveEasy (“LiveEasy”) for a total cash purchase consideration of $ 78.5 million. LiveEasy is a concierge platform providing moving and home services throughout the resident onboarding process. The transaction was accounted for using the acquisition method, and as a result, assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date. The following table summarizes the final purchase price allocation (in thousands) as well as the estimated useful lives of the acquired intangible assets over which they are amortized on a straight-line basis, as this approximates the pattern in which economic benefits are consumed: Estimated Fair Value Estimated Useful Life (in years) Cash and cash equivalents 272 Identified intangible assets: Customer relationships 39,000 5 Developed technology 9,800 5 Goodwill 40,350 Deferred tax liabilities ( 8,874 ) Other net tangible liabilities ( 2,047 ) Net assets acquired $ 78,501 Customer relationships represent the fair value of the underlying contracts and related relationships with LiveEasy's customers and service providers. Developed technology represents the fair value of the technologies that pertain to a customer-facing concierge platform that provides moving and home services. We used a replacement cost method to determine the fair value of both intangible assets. The assumptions used are development costs, the time required to recreate the assets and profit margin a market participant would receive, and rate of return. 53 The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill, which is not deductible for tax purposes. Goodwill is primarily attributed to the assembled workforce of LiveEasy and anticipated operational synergies. 8. Goodwill and Intangible Assets, Net Intangible assets, net consisted of the following (in thousands, except years): December 31, 2025 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Useful Life in Years Customer relationships 39,000 ( 9,100 ) 29,900 5.0 Developed technology 9,800 ( 2,287 ) 7,513 5.0 Database 4,710 ( 3,297 ) 1,413 10.0 Domain names 90 ( 90 ) — 5.0 Patents 252 ( 252 ) — 5.0 Total intangible assets, net $ 53,852 $ ( 15,026 ) $ 38,826 5.4 December 31, 2024 Gross Carrying Value Accumulated Amortization Net Carrying Value Weighted Average Useful Life in Years Customer relationships 39,000 ( 1,300 ) 37,700 5.0 Developed technology 9,800 ( 327 ) 9,473 5.0 Database 4,710 ( 2,826 ) 1,884 10.0 Domain names 90 ( 90 ) — 5.0 Patents 252 ( 252 ) — 5.0 Total intangible assets, net $ 53,852 $ ( 4,795 ) $ 49,057 5.4 Amortization expense with respect to intangible assets totaled $ 10.2 million, $ 2.1 million and $ 2.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Future amortization expense with respect to intangible assets is estimated as follows (in thousands): Years Ending December 31, 2026 $ 10,231 2027 10,231 2028 10,231 2029 8,133 Total $ 38,826 Our goodwill balance is solely attributed to acquisitions. The change in the carrying amount of goodwill during the years ended December 31, 2025, 2024 and 2023 is as follows (in thousands): Goodwill at December 31, 2023 $ 56,060 Acquisition of LiveEasy 40,350 Goodwill at December 31, 2024 96,410 Goodwill at December 31, 2025 $ 96,410 9. Leases Operating leases for our corporate offices have remaining lease terms ranging from 1.6 years to 7.1 years, some of which include options to extend the leases for up to ten years . These options to extend have not been recognized as part of our operating lease ROU assets and lease liabilities as it is not reasonably certain that we will exercise these options. Our lease agreements do not contain any residual value guarantees or material restrictive covenants. Certain leases contain provisions for property-related costs that are variable in nature for which we are responsible, including common area maintenance, which are expensed as incurred. 54 The components of lease expense recognized in the Consolidated Statements of Operations were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Operating lease cost $ 4,070 $ 4,188 $ 4,362 Variable lease cost 1,370 1,479 1,737 Total lease cost $ 5,440 $ 5,667 $ 6,099 Lease-related assets and liabilities were as follows (in thousands, except years and %): December 31, 2025 2024 Assets Operating lease right-of-use assets 15,924 17,472 Liabilities Other current liabilities $ 4,873 $ 4,273 Operating lease liabilities 33,287 37,476 Total lease liabilities $ 38,160 $ 41,749 Weighted-average remaining lease term (years) 6.3 7.4 Weighted-average discount rate 5.2 % 5.1 % In January 2023, we entered into an amendment to the lease agreement for our San Diego facility (the "San Diego Lease"). We remeasured the lease liability and recorded a reduction to the lease liability and ROU asset using the discount rate at the modification date, which resulted in a gain of $ 2.4 million in the Consolidated Statements of Operations. In June 2023, we entered into a second amendment to reduce the rentable square footage and our future rental payment obligations under the San Diego Lease pursuant to which we made a one-time payment of $ 2.9 million. We again remeasured the lease liability and recorded a reduction to the lease liability using the discount rate at the modification date. As a result, we recorded a gain of $ 1.9 million in the Consolidated Statements of Operations. In July 2023, we entered into an agreement to sublet one of our office spaces in Santa Barbara through December 31, 2031 (the "Santa Barbara 90 Sublease"). The total rental commitment over the term of the Santa Barbara 90 Sublease is $ 6.1 million. We performed impairment testing in accordance with ASC 360, and no impairment related to the ROU assets was recorded for the year ended December 31, 2023. Future minimum lease payments under non-cancellable leases as of December 31, 2025 were as follows (in thousands): Years ending December 31, 2026 $ 6,662 2027 6,844 2028 6,962 2029 6,910 2030 7,110 Thereafter 10,353 Total future minimum lease payments 44,841 Less: imputed interest ( 6,681 ) Total $ 38,160 55 10. Other Balance Sheet Components Prepaid expenses and other current assets Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2025 2024 Income tax receivable (1) $ 27,133 $ 1,089 Prepaid expenses 15,707 12,430 Deferred commissions (2) 11,166 9,898 Deposits for insurance services (3) 7,765 6,668 Other 3,447 2,722 Total Prepaid expenses and other current assets $ 65,218 $ 32,807 (1) For additional information on income tax, refer to Note 14, Income Taxes. (2) For additional information on deferred commissions, refer to Deferred Costs in Note 2, Summary of Significant Accounting Policies. (3) For additional information on deposits held with a third party related to requirements to maintain collateral for insurance services, refer to "Liability to Landlord Insurance" in Note 11, Commitments and Contingencies. Accrued Employee Expenses Accrued employee expenses consisted of the following (in thousands): December 31, 2025 2024 Accrued bonuses (1) $ 43,298 $ 17,092 Accrued payroll and other 16,476 13,065 Total accrued employee expenses $ 59,774 $ 30,157 (1) Accrued bonuses increased significantly as of December 31, 2025, due to the shift from a semi-annual to an annual payment cycle. Whereas a portion of the prior year’s bonus was paid mid-year, the 2025 fiscal year accrual represents the total annual incentive to be paid in the first quarter of 2026. Other Current Liabilities Other Current Liabilities consisted of the following (in thousands): December 31, 2025 2024 Unearned premium liabilities (1) $ 6,662 $ 5,455 Insurance reserves (2) 6,630 3,908 Operating lease liabilities-current 4,873 4,273 Others 3,956 2,451 Total other current liabilities $ 22,121 $ 16,087 (1) Unearned premium liabilities are the refundable portion of commissions received in connection with the sale of renters insurance policies to residents through AppFolio Insurance Services, Inc., our wholly-owned subsidiary. In the event a resident cancels their renters insurance policy prior to the end of such policy, we may be required to refund a pro rata portion of the commission paid on such policy. (2) For additional information on insurance reserves, refer to "Legal Liability to Landlord Insurance" in Note 11, Commitments and Contingencies. 56 11. Commitments and Contingencies Commitments 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 associated with lease facilities totaled $ 38.2 million as of December 31, 2025 and have varying maturities with $ 44.8 million due over the next five years . Liability to Landlord Insurance We have a wholly-owned subsidiary, Terra Mar Insurance Company, Inc., which was established in connection with reinsuring liability to landlord insurance policies offered to our customers by a third-party service provider. We assume a 100 % quota share of the liability to landlord insurance policies placed with our customers by our third-party service provider. We accrue for reported claims, and include an estimate of losses incurred but not reported by our property manager customers, in cost of revenue because we bear the risk related to all such claims. Our estimated liability for reported claims and incurred but not reported claims as of December 31, 2025 and 2024 was $ 6.6 million and $ 3.9 million, respectively, and is included in Other current liabilities on our Consolidated Balance Sheets. Included in Prepaid expenses and other current assets as of December 31, 2025 and 2024 are $ 7.8 million and $ 6.7 million, respectively, of deposits held with a third party related to requirements to maintain collateral for this risk mitigation service. Credit Facility 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 may, subject to customary conditions and consent of the applicable lenders, increase the revolving commitment or incur term loans thereunder (capped at amounts specified in the Credit Facility) or extend the maturity date of the Credit Facility. Borrowings under the Credit Facility bear interest at variable rates based, at our option, on Term Secured Overnight Financing Rate Data ("SOFR"), Daily Simple SOFR, or a Base Rate, plus an applicable margin (ranging from 125.0 to 200.00 basis points in the case of Term SOFR and Daily Simple SOFR and 25.0 to 100.00 basis points in the case of the Base Rate) determined by our Consolidated Net Leverage Ratio, all as defined in the Credit Facility. We also pay a quarterly commitment fee (ranging from 15.0 to 30.0 basis points depending on our Consolidated Net Leverage Ratio) on unused amounts, as well as customary letter of credit and agency fees. The obligations under the Credit Facility are guaranteed by certain of our subsidiaries and secured by a first-priority security interest in substantially all of our and our guarantors' personal property, subject to customary exclusions and exceptions. The Credit Facility includes customary representations, warranties, affirmative and negative covenants, including a financial covenant requiring maintenance of a Consolidated Net Leverage Ratio, and events of default. The negative covenants include, among other things, restrictions on our and our subsidiaries' ability to incur indebtedness and liens, make investments, pay dividends or distributions or repurchase equity interests, merge, consolidate or otherwise dispose of assets, enter into transactions with affiliates, and prepay, redeem, purchase or otherwise retire junior indebtedness, all subject to certain exceptions. As of December 31, 2025, there were no outstanding borrowings under the Credit Facility, and we were in compliance with the covenants under the Credit Facility. Legal Proceedings From time to time, we are involved in various other investigative inquiries, legal proceedings and disputes arising from or related to matters incident to the ordinary course of our business activities, including actions with respect to intellectual property, employment, labor, regulatory and contractual matters. Although the ultimate outcome of such investigative inquiries, legal proceedings and other disputes cannot be predicted with certainty, we do not believe that any such investigative inquires, legal proceedings and other disputes, if determined adversely to us, would, individually or taken together, have a material adverse effect on our business, operating results, financial condition or cash flows. 57 Indemnification In the ordinary course of business, we may provide indemnification of varying scope and terms to customers, business partners, investors, directors, officers, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of any applicable agreements, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from our services or our acts or omissions. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments we could be required to make under these indemnification provisions may not be subject to maximum loss clauses and is indeterminable. We have not incurred any costs as a result of such indemnification obligations and have not recorded any liabilities related to such obligations in the Consolidated Financial Statements. 12. Stockholders' Equity Amended and Restated Certificate of Incorporation Under our Amended and Restated Certificate of Incorporation, we are authorized to issue 250,000,000 shares of Class A common stock, 50,000,000 shares of Class B common stock and 25,000,000 shares of undesignated preferred stock, each with a par value of $ 0.0001 per share. Class A Common Stock and Class B Common Stock Holders of our Class A common stock and Class B common stock are entitled to dividends when, as, and if declared by our Board of Directors, subject to the rights of the holders of all classes of stock outstanding having priority rights to dividends. As of December 31, 2025, we have not declared any dividends. The holder of each share of Class A common stock is entitled to one vote, while the holder of each share of Class B common stock is entitled to ten votes. Each share of our Class B common stock is convertible at any time at the option of the holder into one share of our Class A common stock and generally converts into a share of our Class A common stock upon transfer. Class A common stock and Class B common stock are collectively referred to as common stock throughout the notes to these financial statements, unless otherwise noted. Preferred Stock Our Board of Directors, subject to the limitations prescribed by Delaware law, has the authority to issue up to 25,000,000 shares of preferred stock and to determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or action by the stockholders. Share Repurchase Program On February 20, 2019, our Board of Directors authorized a $ 100.0 million share repurchase program (the "2019 Stock Repurchase Program") relating to our outstanding shares of Class A common stock. Under the 2019 Stock Repurchase Program, we were authorized to repurchase shares of our Class A common stock from time to time in open market purchases or privately negotiated transactions. The 2019 Stock Repurchase Program did not obligate us to repurchase any minimum dollar amount or number of shares, did not have an expiration date, and it could have been modified, suspended or terminated at any time and for any reason. During the first quarter of 2025, we repurchased 445,311 shares of our Class A common stock through open market repurchases under the 2019 Stock Repurchase Program at an average purchase price of $ 215.05 per share, inclusive of broker commissions, for an aggregate repurchase price of $ 95.8 million which was recorded as a reduction to stockholders' equity. As a result of the repurchases, we substantially exhausted the remaining shares available for purchase under the 2019 Stock Repurchase Program, and it has terminated. On April 23, 2025, our Board authorized a $ 300.0 million share repurchase program (the "2025 Stock Repurchase Program") relating to our outstanding shares of Class A common stock. Under the 2025 Stock Repurchase Program, we are authorized to repurchase shares of our Class A common stock from time to time in open market purchases or privately negotiated transactions. The 2025 Stock Repurchase Program does not obligate us to repurchase any minimum dollar amount or number of shares, has no expiration date, and can be modified, suspended or terminated at any time and for any reason. The timing and actual number of shares repurchased will depend on a variety of factors, including price, corporate and legal requirements, market conditions and other factors. During the second quarter of 2025, we repurchased 243,987 shares of our Class A common stock through open market repurchases under the 2025 Stock Repurchase Program at an average purchase price of $ 204.77 per share, inclusive of broker commissions, for an aggregate repurchase price of $ 50.0 million which was recorded as a reduction to stockholders' equity. We did not repurchase any shares of our Class A common stock during the third or fourth quarter of 2025. As of December 31, 2025, the amount remaining available for repurchases under the 2025 Stock Repurchase Program was $ 250.0 million. 58 13. Stock-Based Compensation We currently have two stock incentive plans: the 2015 Stock Incentive Plan (the "2015 Plan") and, the 2025 Omnibus Incentive Plan (the "2025 Plan"), which was approved by our stockholders at our 2024 annual meeting of stockholders. We did not grant any awards under the 2025 Plan in 2024. On January 1, 2025, the 2025 Plan superseded and replaced the 2015 Plan and no further awards will be granted under the 2015 Plan, but the 2015 Plan will continue to govern outstanding awards granted under the 2015 Plan. Under the 2025 Plan, 1,500,000 shares of our Class A common stock were initially reserved and available for grant and issuance subject to adjustment in accordance with the terms of the 2025 Plan. In addition, the number of shares of Class A common stock authorized for issuance under the 2025 Plan will be subject to an annual increase on January 31 of each calendar year during the term of the 2025 Plan, equal to the lesser of (a) the total number of shares of Class A common stock underlying awards granted under the 2025 Plan in the immediately preceding calendar year, less the sum of (i) the number of shares of Class A common stock subject to an award granted under the 2025 Plan that expired, or was canceled, forfeited or terminated, and (ii) the number of shares of Class A common stock withheld by the Company to satisfy any tax withholding obligation, in the case of each of (i) and (ii), during the immediately preceding calendar year, and (b) such smaller number of shares of Class A common stock as is determined by the Board of Directors. We granted RSUs and PSUs during 2025 pursuant to the 2025 Plan. RSUs and PSUs represent the right on the part of the holder to receive shares of our Class A common stock at a specified date in the future and/or upon the achievement of performance conditions at the discretion of our compensation committee, subject to forfeiture of that right due to termination of employment. Our 2025 Employee Stock Purchase Plan (the “ESPP”) authorizes the issuance of shares of our Class A common stock pursuant to purchase rights granted to our employees. The purchase price for shares purchased under the 2025 ESPP with respect to any offering period is an amount equal to 85 % of the fair market value of a share of our Class A common stock on the applicable purchase date (i.e., the last trading day of the applicable offering period). Offering periods are six months long and begin on February 16 and August 16 of each year. The first offering period under the ESPP began on Monday, February 17, 2025. 1,250,000 shares of Class A common stock are authorized for issuance under the ESPP, subject to adjustment in accordance with the terms of the ESPP. In addition, commencing on January 31, 2026 and on each January 31st thereafter during the term of the ESPP, the number of shares of Class A common stock authorized for issuance under the ESPP will be increased by the lesser of (a) the number of shares of Class A common stock issued or transferred pursuant to rights granted under the ESPP during the preceding calendar year, (b) such lesser number of shares of Class A common stock as determined by our compensation committee, or (c) 1,250,000 shares of Class A common stock. For the year ended December 31, 2025, our stock-based compensation expense for the ESPP was not material. Stock Options A summary of activity in connection with our stock options for the year ended December 31, 2025 is as follows (number of shares in thousands): Number of Shares Weighted Average Exercise Price per Share Weighted Average Remaining Contractual Life in Years Options outstanding as of December 31, 2024 129 $ 121.50 7.6 Options granted — — Options exercised ( 9 ) 14.83 Options cancelled/forfeited — 12.00 Options outstanding as of December 31, 2025 120 $ 129.74 7.2 At December 31, 2025: Options vested and expected to vest 120 $ 129.74 7.2 Options exercisable 40 $ 129.74 7.2 Our stock-based compensation expense for stock options was not material for the periods presented. The total intrinsic value of options exercised in 2025, 2024 and 2023 was $ 1.9 million, $ 52.2 million and $ 36.4 million, respectively. This intrinsic value represents the difference between the fair value of our Class A common stock on the date of exercise and the exercise price of each option. Based on the fair value of our Class A common stock as of December 31, 2025, the total intrinsic value of all outstanding options, exercisable options, and options vested and expected to vest was $ 17.5 million. 59 Restricted Stock Units A summary of activity in connection with our RSUs for the year ended December 31, 2025 is as follows (number of shares in thousands): Number of Shares Weighted Average Grant Date Fair Value per Share Unvested as of December 31, 2024 785 $ 159.98 Granted 393 226.81 Vested ( 439 ) 156.35 Forfeited ( 112 ) 180.07 Unvested as of December 31, 2025 627 $ 200.81 Unvested RSUs as of December 31, 2025 were composed of 0.6 million RSUs with only service conditions and 0.1 million PSUs with both service conditions and performance conditions. RSUs granted with only service conditions generally vest over a four-year period, assuming continued employment through the applicable vesting date. The number of PSUs granted, as included in the above table, assumes achievement of the performance metric at 100 % of the performance target. The unvested PSUs as of December 31, 2025, are subject to vesting based on the achievement of pre-established performance metrics for the year ending December 31, 2025 and will vest over a three year period, assuming continued employment through each applicable vesting date. The actual number of shares to be granted at the end of the performance period will range from 0 % to 171 % of the target number of shares depending on achievement relative to the performance metric over the applicable period. We recognized stock-based compensation expense for the RSUs and PSUs of $ 69.4 million, $ 59.2 million and $ 51.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, the total estimated remaining stock-based compensation expense for the aforementioned RSUs and PSUs was $ 100.2 million, which is expected to be recognized over a weighted average period of 2.2 years. The total fair value of RSUs and PSUs vested during the years ended December 31, 2025, 2024 and 2023 was approximately $ 107.1 million, $ 111.8 million and $ 82.2 million, respectively. 14. Income Taxes As described in Note 2, Summary of Significant Accounting Policies, we have elected to prospectively adopt the guidance in ASU 2023-09, Improvements to Income Taxes Disclosures. The following table is a reconciliation of the U.S. federal statutory rate of 21% to our effective tax rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09: Year Ended December 31, 2025 (dollars in thousands) U.S. federal statutory income tax rate $ 33,833 21 % State and local income taxes, net of federal benefit (1) ( 1,083 ) ( 1 ) Tax credits ( 11,424 ) ( 7 ) Nontaxable or nondeductible items Excess tax benefits from stock-based compensation ( 10,340 ) ( 6 ) Non-deductible officers' compensation 4,559 3 Other nondeductible items 896 1 Changes in unrecognized tax benefits 3,748 2 Provision for (benefit from) income taxes $ 20,189 13 % (1) The state(s) that contribute to the majority (greater than 50%) of the tax effect in this category is California The following table is a reconciliation of the U.S. federal statutory rate of 21% to our effective tax rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09: 60 Year Ended December 31, 2024 2023 U.S. federal statutory income tax rate 21 % 21 % State and local income taxes, net of federal benefit ( 2 ) ( 44 ) Change in valuation allowance ( 37 ) 215 Stock-based compensation expense ( 13 ) ( 108 ) Federal research and development tax credits ( 10 ) ( 93 ) Non-deductible officers' compensation 5 79 Other permanent differences — ( 4 ) Provision for (benefit from) income taxes ( 36 ) % 66 % The (benefit from) provision for income tax consists of the following (in thousands): Year Ended December 31, 2025 2024 2023 Current Federal $ 550 $ 26,452 $ 3,485 State and local 2,169 6,280 2,299 Foreign 11 30 — Total current 2,730 32,762 5,784 Deferred Federal 19,453 ( 46,578 ) ( 477 ) State and local ( 1,994 ) ( 39,930 ) ( 12 ) Total deferred 17,459 ( 86,508 ) ( 489 ) Total (benefit from) provision for income taxes $ 20,189 $ ( 53,746 ) $ 5,295 The components of deferred tax assets (liabilities) were as follows (in thousands): December 31, 2025 2024 Deferred income tax assets: Net operating loss carryforwards $ 39,660 $ 9,201 Research and development tax credits 36,205 24,326 Capitalized research and software costs 996 66,090 Stock-based compensation 3,252 413 Lease liability 9,939 11,139 Other 2,073 1,495 Total deferred tax assets 92,125 112,664 Deferred tax liabilities: Property and equipment $ ( 2,524 ) $ ( 3,351 ) Intangible assets ( 12,514 ) ( 15,387 ) Capitalized commissions ( 5,927 ) ( 4,463 ) State taxes ( 8,170 ) ( 7,749 ) Lease asset ( 4,148 ) ( 4,695 ) Other ( 19 ) ( 109 ) Total deferred tax liabilities ( 33,302 ) ( 35,754 ) Total net deferred tax liabilities $ 58,823 $ 76,910 In evaluating the need for a valuation allowance at each reporting period, we consider the weighting of all available positive and negative evidence, which includes, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, future projections of profitability, timing of the future reversal of existing temporary differences, and the duration of statutory carryforward periods. In assessing all available evidence, we determined that there 61 was sufficient positive evidence to overcome the negative evidence, including our past and current financial results, growth demonstrated in our top-line performance, as well as projected profitability. Accordingly, we determined it is more likely than not that the deferred tax assets will be realized and we released our valuation allowance at December 31, 2024. As of December 31, 2025, we had federal and state net operating loss carryforwards $ 146.8 million and $ 112.5 million, respectively. The federal net operating loss carryforwards do not expire and state net operating losses will begin to expire in 2028. As of December 31, 2025, we also had federal and state research and development credit carryforwards of $ 11.8 million and $ 36.9 million, respectively. The federal credit carryforwards will begin to expire in 2044, while the state credit carryforwards apply indefinitely. Utilization of our net operating loss and credit carryforwards may be subject to annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. The following is a reconciliation of the total amounts of reserves for unrecognized tax benefits from uncertain tax positions (in thousands): Year Ended December 31, 2025 2024 2023 Unrecognized tax benefit beginning of year $ 14,935 $ 12,315 $ 9,455 Increases-tax positions in prior year 416 1,203 — Increases-tax positions in current year 3,418 3,732 2,860 Statute of limitation expiration $ — $ ( 2,315 ) $ — Unrecognized tax benefit end of year $ 18,769 $ 14,935 $ 12,315 As of December 31, 2025, we recorded gross uncertain tax benefits of $ 18.8 million a majority of which would impact our effective tax rate, if recognized. We accrued interest and penalties related to our uncertain income tax positions in our income tax expense, and the amount of interest and penalties accrued for the year ended December 31, 2025 and 2024 are immaterial. We file income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. While the applicable statute of limitations are generally open for three to four years for the jurisdictions we file in, we remain subject to income tax examinations for years ended after December 31, 2019 for federal taxes and all years for most state jurisdictions due to the usage of carryforward attributes, such as net operating losses and research and development credits. As of December 31, 2025, we have not been notified for audit by the Internal Revenue Service or any significant state jurisdiction. The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025 (in thousands): Year Ended December 31, 2025 Federal taxes $ 22,390 State taxes 6,450 International taxes — Cash paid for income taxes (net of refunds) $ 28,840 62 15. Net Income Per Share Basic net income per share includes no dilution and is computed by dividing net income for the period by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income for the period by the weighted average number of shares of common stock and potentially dilutive common stock outstanding during the period. The dilutive effect of outstanding options and equity incentive awards is reflected in diluted net income per share by application of the treasury stock method. The calculation of diluted net income per share excludes all anti-dilutive common shares. Net income per common share was the same for shares of our Class A and Class B common stock because they are entitled to the same liquidation and dividend rights and are therefore combined in the table below. The following table sets forth the computation of basic and diluted net income per common share (in thousands): Year Ended December 31, 2025 2024 2023 Basic net income per share: Numerator Net income $ 140,923 $ 204,068 $ 2,702 Less: undistributed earnings to participating securities — 12 — Net income attributable to common stockholders $ 140,923 $ 204,056 $ 2,702 Denominator Weighted average common shares outstanding 36,013 36,254 35,636 Less: Weighted average unvested restricted shares subject to repurchase — 2 7 Weighted average common shares outstanding; basic 36,013 36,252 35,629 Net income per common share; basic $ 3.91 $ 5.63 $ 0.08 Diluted net income per share: Numerator Net income attributable to common stockholders $ 140,923 $ 204,056 $ 2,702 Denominator Weighted average common shares outstanding; basic 36,013 36,252 35,629 Add: Weighted average dilutive options outstanding 40 58 333 Add: Weighted average dilutive RSUs outstanding 274 472 455 Weighted average common shares outstanding; diluted 36,327 36,782 36,417 Net income per common share; diluted $ 3.88 $ 5.55 $ 0.07 Potentially dilutive securities that are not included in the calculation of diluted net income per share because doing so would be antidilutive are as follows (in thousands): Year Ended December 31, 2025 2024 2023 Unvested Restricted Stock Awards — — 6 Options — — 120 Restricted Stock Units 14 2 20 Total potentially dilutive securities 14 2 146 16. Workforce Reduction During the year ended December 31, 2023, we implemented a plan to reduce our workforce by 149 employees in order to scale our business more efficiently. Impacted employees were notified in August 2023. There were no workforce reductions during the years ended December 31, 2025 and 2024. The following table presents the total severance and related personnel costs by function, for the year ended December 31, 2023 (in thousands): 63 Severance and Related Personnel Cost Cost of revenue $ 2,367 Sales and marketing 3,795 Research and product development 3,407 General and administrative 2,514 Total (1) $ 12,083 (1) Total severance and related personnel costs include $ 1.8 million of accelerated stock-based compensation expense recognized during the year ended December 31, 2023. The following is a summary of changes in the accrued severance and related personnel cost, within Accrued Employee Expenses on the Consolidated Balance Sheets (in thousands): Accrued Severance and Related Personnel Cost Balance as of December 31, 2022 $ — Severance and related personnel cost 10,278 Cash Payments ( 9,425 ) Balance as of December 31, 2023 $ 853 Cash Payments ( 853 ) Balance as of December 31, 2024 $ — 17. Retirement Plans We have a 401(k) retirement and savings plan made available to all employees. We may, at our discretion, make matching contributions to the 401(k) plan. Cash contributions to the plan were $ 7.7 million, $ 7.4 million, and $ 7.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 64