What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 140 added, 112 removed, 518 unchanged (33% of the section changed)

3 unchanged sentences

(in thousands, except par value and share data)

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Current assets

32 unchanged sentences

Class A common stock—par value $ 0.0001 ;

500,000,000 shares authorized as of March 31, 2026 and December 31, 2025 and 43,474,509 and 43,408,828 shares issued as of March 31, 2026 and December 31, 2025, respectively

500,000,000 shares authorized as of June 30, 2026 and December 31, 2025 and 43,504,355 and 43,408,828 shares issued as of June 30, 2026 and December 31, 2025, respectively

Class B common stock—par value $ 0.0001 ;

100,000,000 shares authorized as of March 31, 2026 and December 31, 2025 and 31,087,485 and 31,088,085 shares issued as of March 31, 2026 and December 31, 2025, respectively

Treasury stock at cost, 1,048,812 and 542,288 shares as of March 31, 2026 and December 31, 2025, respectively

100,000,000 shares authorized as of June 30, 2026 and December 31, 2025 and 31,087,385 and 31,088,085 shares issued as of June 30, 2026 and December 31, 2025, respectively

Treasury stock at cost, 2,795,084 and 542,288 shares as of June 30, 2026 and December 31, 2025, respectively

( 70,391 ) ( 16,935 )

8 unchanged sentences

(unaudited, in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Subscriptions $ 157,682 $ 132,657 $ 317,993 $ 267,009

11 unchanged sentences

Total operating expenses 150,183 132,670 294,796 255,890

Operating income (loss) 3,156 ( 834 )

Operating loss ( 5,440 ) ( 10,984 ) ( 2,284 ) ( 11,818 )

Other non-operating expense (income)

Other income, net

( 84 ) ( 5,716 )

Other expense (income), net 827 ( 17,564 ) 743 ( 23,280 )

Interest expense 3,780 5,319 7,952 10,637

Total other non-operating expense (income) 4,607 ( 12,245 ) 8,695 ( 12,643 )

Loss before income taxes

( 932 ) ( 436 )

(Loss) income before income taxes ( 10,047 ) 1,261 ( 10,979 ) 825

Income tax expense 1,770 1,573 2,363 2,314

$ ( 1,525 ) $ ( 1,177 )

Net loss $ ( 11,817 ) $ ( 312 ) $ ( 13,342 ) $ ( 1,489 )

Net loss per Class A and Class B share:

Basic and diluted $ ( 0.16 ) $ ( 0.00 ) $ ( 0.18 ) $ ( 0.02 )

$ ( 0.02 ) $ ( 0.02 )

Weighted average common shares outstanding:

Basic and diluted 72,896 74,202 73,348 74,148

73,820 74,094

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(unaudited, in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Comprehensive gain (loss), net of income taxes

Net loss $ ( 11,817 ) $ ( 312 ) $ ( 13,342 ) $ ( 1,489 )

Comprehensive loss, net of income taxes

Foreign currency translation adjustments 2,561 ( 19,641 ) 2,968 ( 23,357 )

Unrealized losses on available-for-sale securities ( 11 ) ( 41 ) ( 130 ) ( 58 )

( 119 ) ( 17 )

Other comprehensive loss, net of income taxes $ ( 9,267 ) $ ( 19,994 ) $ ( 10,504 ) $ ( 24,904 )

$ ( 1,237 ) $ ( 4,910 )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

13 unchanged sentences

Other comprehensive gain — — — 288 — — 288

— — — 288 — — 288

Balance, March 31, 2026 73,513,182 $ 7 $ 618,798 $ ( 36,174 ) $ ( 612,446 ) $ ( 29,152 ) $ ( 58,967 )

Net loss — — — — ( 11,817 ) — ( 11,817 )

Issuance of common stock to directors 7,776 — — — — — —

Vesting of restricted stock units 101,616 — ( 3,992 ) — — 2,689 ( 1,303 )

Exercise of stock options 21,970 — 246 — — — 246

Repurchase of common stock ( 1,847,888 ) — — — — ( 43,928 ) ( 43,928 )

Stock-based compensation expense — — 8,038 — — — 8,038

Other comprehensive gain — — — 2,550 — — 2,550

Balance, June 30, 2026

71,796,656 $ 7 $ 623,090 $ ( 33,624 ) $ ( 624,263 ) $ ( 70,391 ) $ ( 105,181 )

Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Total Stockholders' Deficit

Additional Paid-In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Treasury Stock Total Stockholders' Deficit

Shares Amount

8 unchanged sentences

Balance, March 31, 2025 74,220,200 $ 7 $ 597,086 $ ( 15,507 ) $ ( 613,331 ) $ — $ ( 31,745 )

Net loss — — — — ( 312 ) — ( 312 )

Issuance of common stock to directors 5,686 — — — — — —

Vesting of restricted stock units 77,082 — ( 1,269 ) — — — ( 1,269 )

Exercise of stock options 30,880 — 314 — — — 314

Repurchase of common stock ( 313,160 ) — — — — ( 10,000 ) ( 10,000 )

Stock-based compensation expense — — 8,953 — — — 8,953

Other comprehensive loss — — — ( 19,682 ) — — ( 19,682 )

Balance, June 30, 2025

74,020,688 $ 7 $ 605,084 $ ( 35,189 ) $ ( 613,643 ) $ ( 10,000 ) $ ( 53,741 )

3 unchanged sentences

(unaudited, in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

$ ( 1,525 ) $ ( 1,177 )

Net loss $ ( 13,342 ) $ ( 1,489 )

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

5 unchanged sentences

Foreign currency transaction losses (gains), net 3,372 ( 20,659 )

1,119 ( 3,989 )

Changes in assets and liabilities

8 unchanged sentences

Net cash provided by operating activities 60,909 43,026

48,827 44,966

Cash flows from investing activities

2 unchanged sentences

Purchases of property and equipment ( 2,491 ) ( 1,797 )

Net cash used by investing activities ( 5,283 ) ( 24,077 )

Net cash provided by (used by) investing activities 1,722 ( 33,093 )

Cash flows from financing activities

5 unchanged sentences

Effect of foreign exchange rate changes on cash and cash equivalents ( 1,075 ) 2,687

Net increase in cash and cash equivalents 14,215 16,430

Net decrease in cash and cash equivalents ( 14,699 ) ( 6,345 )

Cash and cash equivalents at beginning of period 135,810 118,552

5 unchanged sentences

Accrued capital expenditures $ 408 $ 54

Operating lease liabilities arising from obtaining right-of-use assets $ 5,370 $ —

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

16 unchanged sentences

During the fourth quarter of 2025, the Company reclassified certain information technology, cybersecurity, and facility operating expenses from general and administrative expenses to cost of revenue, research and development, and sales and marketing expense.

Amounts for the three months ended March 31, 2025 have been reclassified to conform to the current period presentation.

The revised presentation did not result in any changes to previously reported revenues, operating income (loss), loss before income taxes, net loss, or net loss per share.

Amounts for the three and six months ended June 30, 2025 have been reclassified to conform to the current period presentation.

The revised presentation did not result in any changes to previously reported revenues, operating loss, (loss) income before income taxes, net loss, or net loss per share.

Use of Estimates

9 unchanged sentences

Revenue generated from U.S.

federal government agencies was 25.8 % and 23.9 % of total revenue for the three months ended March 31, 2026 and 2025, respectively.

Additionally, 37.6 % and 36.2 % of our revenue during the three months ended March 31, 2026 and 2025, respectively, was generated from international customers.

No single end-customer accounted for more than 10% of our total revenue in the three months ended March 31, 2026 or 2025.

As of March 31, 2026 and December 31, 2025, we had one reseller whose accounts receivable balance comprised 8.6 % and 13.4 % of total accounts receivable, respectively.

federal government agencies was 26.1 % and 26.0 % of total revenue for the three and six months ended June 30, 2026, respectively.

Additionally, 38.2 % and 37.9 % of our revenue during the three and six months ended June 30, 2026, respectively, was generated from international customers.

For the three and six months ended June 30, 2025, revenue generated from U.S.

federal government agencies was 25.9 % and 24.9 % of total revenue, respectively.

Additionally, 38.4 % and 37.3 % of our revenue during the three and six months ended June 30, 2025, respectively, was generated from international customers.

No single end-customer accounted for more than 10% of our total revenue in the three and six months ended June 30, 2026 or 2025.

As of June 30, 2026 and December 31, 2025, we had one reseller whose accounts receivable balance comprised 14.7 % and 13.4 % of total accounts receivable, respectively.

Cash and Cash Equivalents

3 unchanged sentences

The allowance is based on our assessment of the collectability of accounts and incorporates an estimation of expected lifetime credit losses on our receivables.

We regularly review the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, post-balance sheet date collection activity, and current economic trends that affect collectability.

We regularly review the composition of our accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, post-balance sheet date collection activity, and current economic trends that affect collectability.

If the financial condition of our customers were to deteriorate, resulting in their inability to make required payments, additional provisions for expected credit losses would be required and would increase bad debt expense.

The allowance for doubtful accounts totaled $ 3.1 million and $ 3.4 million as of March 31, 2026 and December 31, 2025, respectively.

The allowance for doubtful accounts totaled $ 3.4 million as of each of June 30, 2026 and December 31, 2025.

Deferred Commissions

1 unchanged sentence

These costs are recorded as deferred commissions in the consolidated balance sheets.

Costs to obtain a subscriptions contract for a new customer or upsell an existing customer’s subscriptions are amortized over an estimated economic life of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals.

Costs to obtain a subscription contract for a new customer or upsell an existing customer’s subscription are amortized over an estimated economic life of five years as sales commissions on initial sales are not commensurate with sales commissions on contract renewals.

Commissions paid relating to contract renewals are deferred and amortized over the related renewal period.

1 unchanged sentence

We periodically review the carrying amount of deferred contract acquisition costs to determine whether events or changes in circumstances have occurred that could impact the estimated economic life.

Costs to obtain a contract for professional services arrangements are expensed as incurred as the contractual period of our professional services arrangements are generally one year or less.

Costs to obtain a contract for professional services arrangements are expensed as incurred as the contractual periods of our professional services arrangements are generally one year or less.

Amortization associated with deferred commissions is recorded to sales and marketing expense in our consolidated statements of operations.

Total commission expense was $ 11.3 million and $ 11.7 million for the three months ended March 31, 2026 and 2025, respectively.

Total commission expense was $ 12.7 million and $ 24.0 million for the three and six months ended June 30, 2026, respectively.

Total commission expense was $ 12.8 million and $ 25.0 million for the three and six months ended June 30, 2025, respectively.

Property and Equipment

9 unchanged sentences

Recent Accounting Pronouncements

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

In the first quarter of 2026, we adopted ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient allowing companies to assume the conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets.

Adopting this provision did not impact the calculation of our expected credit loss for our current accounts receivable.

The ASU only impacted our disclosures with no impact to our results of operations, cash flows, and financial condition.

Adopting this provision did not impact the calculation of our expected credit loss for our current accounts receivable, our results of operations, cash flows, and financial condition.

Not Yet Adopted

9 unchanged sentences

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements, which is intended to improve the navigability of the guidance in ASC 270 - Interim Reporting and clarify when it applies.

Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP.

Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with U.S.

ASU 2025-11 also addresses the form and content of such financial statements, in addition to interim disclosure requirements.

The guidance also establishes a principle under which companies must disclose events since the end of the last annual reporting period that have a material impact on the entity.

The new guidance will be effective for interim reporting periods with annual reporting periods beginning after December 15,

The new guidance will be effective for our interim periods beginning in the first quarter of 2028.

Early adoption is permitted.

4 unchanged sentences

We generate professional services revenue from fees for our consulting services, including application development and deployment assistance as well as training related to our platform.

The following table summarizes revenue recorded during the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

The following table summarizes revenue recorded during the three and six months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Cloud subscriptions $ 131,667 $ 106,915 $ 256,178 $ 206,741

Other subscriptions 26,015 25,742 61,815 60,268

35,800 34,526

Total subscriptions 157,682 132,657 317,993 267,009

42 unchanged sentences

Variable consideration is included in the transaction price to the extent it is probable a significant reversal will not occur.

The amount of variable consideration excluded from the transaction price for the three months ended March 31, 2026 and 2025 was immaterial.

The amount of variable consideration excluded from the transaction price for the three and six months ended June 30, 2026 and 2025 was immaterial.

Our estimates of variable consideration are also subject to subsequent true-up adjustments and may result in changes to transaction prices;

20 unchanged sentences

The following table sets forth our contract asset and contract liability balances (in thousands):

March 31, 2026 December 31, 2025 March 31, 2025 December 31, 2024

June 30, 2026 December 31, 2025 June 30, 2025 December 31, 2024

Contract assets, current *

7 unchanged sentences

* Current and non-current contract assets are reported as components of the ‘Prepaid expenses and other current assets’ and ‘Other assets’ line items, respectively, in our consolidated balance sheets.

Revenue recognized from amounts included in contract liabilities at the beginning of the period totaled $ 134.3 million and $ 118.2 million for the three months ended March 31, 2026 and 2025, respectively.

Revenue recognized from amounts included in contract liabilities at the beginning of the period totaled $ 234.8 million and $ 202.8 million for the six months ended June 30, 2026 and 2025, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of March 31, 2026, we had an aggregate transaction price of $ 600.1 million allocated to unsatisfied performance obligations.

As of June 30, 2026, we had an aggregate transaction price of $ 625.3 million allocated to unsatisfied performance obligations.

We expect to recognize $ 428.8 million of this balance as revenue over the next 12 months with the remaining amount recognized thereafter.

As of March 31, 2026, our lease portfolio consists entirely of operating leases for corporate offices.

As of June 30, 2026, our lease portfolio consists entirely of operating leases for corporate offices.

Our operating leases have remaining lease terms with various expiration dates through 2031, and some leases include options to extend the term for up to an additional 10 years.

3 unchanged sentences

We often receive customary incentives from our landlords such as tenant improvement allowances (“TIAs”) and rent abatement periods, which effectively reduce total lease payments owed for the leases.

The following table sets forth the components of lease expense for the three months ended March 31, 2026 and 2025 (in thousands, exclusive of sublease income):

Three Months Ended March 31,

The following table sets forth the components of lease expense for the three and six months ended June 30, 2026 and 2025 (in thousands, exclusive of sublease income):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Operating lease cost $ 2,556 $ 2,615 $ 4,919 $ 5,008

2 unchanged sentences

Total $ 4,339 $ 4,141 $ 8,569 $ 8,156

Sublease income totaled $ 0.3 million for each of the three months ended March 31, 2026 and 2025.

Sublease income totaled $ 0.3 million and $ 0.6 million for the three and six months ended June 30, 2026, respectively.

Sublease income totaled $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2025, respectively.

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of March 31, 2026 and December 31, 2025 is presented in the following table (in thousands, except for lease term and discount rate):

March 31, 2026 December 31, 2025

Supplemental balance sheet information related to operating leases as of June 30, 2026 and December 31, 2025 is presented in the following table (in thousands, except for lease term and discount rate):

June 30, 2026 December 31, 2025

Right-of-use assets for operating leases $ 30,437 $ 28,075

4 unchanged sentences

Weighted average discount rate 9.2 % 9.4 %

Supplemental cash flow and expense information related to operating leases for the three months ended March 31, 2026 and 2025 is shown below (in thousands):

Three Months Ended March 31,

Supplemental cash flow and expense information related to operating leases for the three and six months ended June 30, 2026 and 2025 is shown below (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Operating cash outflows for operating leases $ 3,414 $ 3,248 $ 6,824 $ 6,441

1 unchanged sentence

Interest expense on operating lease liabilities 1,345 1,466 2,665 2,949

A summary of our future minimum lease commitments under non-cancellable operating leases as of March 31, 2026 is shown below (in thousands):

Non-cash operating lease liabilities arising from obtaining right-of-use assets 5,370 — 5,370 —

A summary of our future minimum lease commitments under non-cancellable operating leases as of June 30, 2026 is shown below (in thousands):

Operating Leases

2026 (excluding the three months ended March 31, 2026)

2026 (excluding the six months ended June 30, 2026)

Thereafter 10,842

3 unchanged sentences

Goodwill and Intangible Assets

The following table details the changes in goodwill during the three months ended March 31, 2026 and fiscal year ended December 31, 2025 (in thousands):

The following table details the changes in goodwill during the six months ended June 30, 2026 and fiscal year ended December 31, 2025 (in thousands):

Carrying Amount

3 unchanged sentences

Foreign currency translation adjustments ( 838 )

Balance as of March 31, 2026

Intangible assets, net consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

Balance as of June 30, 2026

Intangible assets, net consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026 December 31, 2025

Developed technology $ 7,318 $ 7,537

3 unchanged sentences

Intangible assets, net $ 588 $ 1,246

Intangible amortization expense was $ 0.3 million for each of the three months ended March 31, 2026 and 2025.

As of March 31, 2026, the weighted average remaining amortization periods for developed technology and customer relationships were approximately 0.4 years and 5.1 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of March 31, 2026 (in thousands):

Intangible amortization expense was $ 0.3 million and $ 0.6 million for each of the three and six months ended June 30, 2026 and 2025, respectively.

As of June 30, 2026, the weighted average remaining amortization periods for developed technology and customer relationships were approximately 0.2 years and 4.8 years, respectively.

The following table shows the projected annual amortization expense related to amortizable intangible assets as of June 30, 2026 (in thousands):

Projected Amortization

2026 (excluding the three months ended March 31, 2026)

2026 (excluding the six months ended June 30, 2026)

Thereafter 44

1 unchanged sentence

Property and Equipment, net

Property and equipment, net consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

Property and equipment, net consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026 December 31, 2025

Leasehold improvements $ 55,558 $ 55,465

1 unchanged sentence

Computer software and hardware

10,111 10,504

Internally developed software

4 unchanged sentences

Property and equipment, net $ 30,667 $ 32,087

Depreciation expense totaled $ 2.0 million and $ 2.2 million for the three months ended March 31, 2026 and 2025, respectively.

We disposed of $ 0.5 million worth of fully depreciated equipment during the three months ended March 31, 2026.

We had no disposals or retirements during the three months ended March 31, 2025.

Depreciation expense totaled $ 2.2 million and $ 4.1 million for the three and six months ended June 30, 2026, respectively.

Depreciation expense totaled $ 2.2 million and $ 4.4 million for the three and six months ended June 30, 2025, respectively.

We disposed of $ 0.2 million and $ 0.7 million worth of fully depreciated equipment during the three and six months ended June 30, 2026.

We had no disposals or retirements during the three and six months ended June 30, 2025.

Accrued Expenses

Accrued expenses consisted of the following as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026 December 31, 2025

Accrued expenses consisted of the following as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026 December 31, 2025

Hosting costs and license fees $ 7,296 $ 6,570

Legal costs 2,257 1,438

Contract labor costs 2,343 2,600

Reimbursable employee expenses 2,118 1,123

Contract labor costs 2,016 2,600

Audit and tax expenses 1,517 1,818

Taxes payable 1,266 1,953

Marketing and tradeshow expenses 1,536 892

Taxes payable 931 1,953

Other accrued expenses 3,991 2,089

9 unchanged sentences

The Credit Agreement also provides for customary events of default, including but not limited to, non-payment, breaches, or defaults in the performance of covenants, insolvency, bankruptcy, and the occurrence of a material adverse effect on us.

On August 5, 2026, we entered into a new Senior Secured Credit Agreement providing for aggregate commitments of $ 300.0 million, consisting of a $ 240.0 million revolving credit facility and a $ 60.0 million term loan facility.

The proceeds from the new facility, which matures on August 5, 2031, were used to refinance the Company’s existing indebtedness and will provide ongoing liquidity for working capital requirements, general corporate purposes, and other strategic initiatives.

In connection with closing, we reduced our cash balance by $ 36.6 million to reduce our indebtedness.

As of August 5, 2026, we had used borrowing capacity of $ 140.0 million under our $ 240.0 million revolving credit facility and had $ 60.0 million outstanding on the term loan facility.

The foregoing description of the new Senior Secured Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the new Senior Secured Credit Agreement, to be filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ending September 30, 2026.

The following table summarizes outstanding debt balances (in thousands):

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Borrowings under revolving credit facility

8 unchanged sentences

(1) Deferred debt issuance costs associated with the term loan facility are recorded net of the debt obligation and amortized to interest expense over the term of the Credit Agreement.

As of March 31, 2026, we were in compliance with all covenants contained in the Credit Agreement.

As of June 30, 2026, we were in compliance with all covenants contained in the Credit Agreement.

In addition, we had $ 62.0 million outstanding under our $ 100.0 million revolving credit facility, and we had outstanding letters of credit totaling $ 7.8 million in connection with securing leased office spaces.

2 unchanged sentences

Fluctuations in the distribution of pre-tax income among our operating subsidiaries can lead to fluctuations of the effective tax rate in the consolidated financial statements.

For the three months ended March 31, 2026 and 2025, the actual effective tax rates were ( 63.6 )% and ( 170.0 )%, respectively.

The change in the effective tax rates for each period as compared to the same period in the prior year was primarily due to near pre-tax break-even positions in both years.

As of March 31, 2026, our net unrecognized tax benefits totaled $ 8.8 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance.

For the three and six months ended June 30, 2026, the actual effective tax rates were ( 17.6 )% and ( 21.5 )%, respectively.

For the three and six months ended June 30, 2025, the actual effective tax rates were 124.7 % and 280.5 %, respectively.

The change in the effective tax rates for each period as compared to the same period in the prior year was primarily due to a net loss position in 2026, compared to a breakeven position in 2025.

As of June 30, 2026, our net unrecognized tax benefits totaled $ 8.8 million, which if recognized would result in no net effect on the effective tax rate due to a valuation allowance.

The amount of reasonably possible unrecognized tax benefits that could decrease over the next 12 months due to the expiration of certain statutes of limitations or settlements of tax audits is not material to our consolidated financial statements.

1 unchanged sentence

federal jurisdiction and in various state and foreign jurisdictions.

Due to our net operating loss carryforwards, the tax years 2016 through 2026 remain open to examination by the major

taxing jurisdictions to which we are subject.

Due to our net operating loss carryforwards, the tax years 2016 through 2026 remain open to examination by the major taxing jurisdictions to which we are subject.

There are no open examinations that would have a meaningful impact on our consolidated financial statements.

8 unchanged sentences

We account for forfeitures of our stock-based awards as they occur rather than estimating expected forfeitures.

As of March 31, 2026, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $ 0.4 million and will be recognized over a weighted average period of 0.3 years.

As of June 30, 2026, the total compensation cost related to unvested stock options not yet recognized, which relates exclusively to the 2022 CEO option grant, was $ 0.1 million and will be recognized over a weighted average period of 0.1 years.

Total unrecognized compensation cost related to unvested RSUs was approximately $ 46.9 million, which will be recognized over a weighted average period of 1.7 years.

2 unchanged sentences

The portion of the annual bonus to be paid in the form of RSUs is recorded as stock-based compensation expense while the related obligations are recorded as liabilities in the ‘Accrued compensation and related benefits’ line item on our consolidated balance sheets.

During the three months ended March 31, 2026 and 2025, we recognized $ 2.8 million and $ 1.2 million of stock-based compensation related to this program, respectively.

The following table summarizes the components of our stock-based compensation expense for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

During the three and six months ended June 30, 2026, we recognized $ 2.1 million and $ 4.9 million of stock-based compensation related to this program, respectively.

During the three and six months ended June 30, 2025, we recognized $ 1.7 million and $ 2.9 million of stock-based compensation related to this program, respectively.

The following table summarizes the components of our stock-based compensation expense for the three and six months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Cost of revenue

9 unchanged sentences

Diluted loss per share is computed similar to basic, except the weighted average number of common shares outstanding is increased to include additional outstanding shares from the assumed exercise of stock options and vesting of stock awards, if dilutive.

The dilutive effect, if any, of convertible

shares is calculated using the treasury stock method.

The dilutive effect, if any, of convertible shares is calculated using the treasury stock method.

As we reported net losses for all periods presented, all outstanding shares would be considered antidilutive if they were to be assumed as vested or exercised.

The following outstanding securities, prior to the use of the treasury stock method, have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been antidilutive to loss per share:

Three months ended March 31,

Three and six months ended June 30,

Stock options

7 unchanged sentences

The agreement, which originated in July 2021 and was amended in October 2024, currently contains minimum annual spending requirements of $ 44.0 million from November 2024 to October 2029.

Spending under this agreement for the three months ended March 31, 2026 and 2025 totaled $ 16.2 million and $ 10.4 million, respectively.

Spending under this agreement for the three and six months ended June 30, 2026 totaled $ 17.2 million and $ 33.4 million, respectively.

Spending under this agreement for the three and six months ended June 30, 2025 totaled $ 12.9 million and $ 23.3 million, respectively.

The timing of payments under the agreement may vary, but we expect to meet our minimum annual spending requirement during the term of the arrangement.

19 unchanged sentences

On January 6, 2026, the Supreme Court of Virginia issued an opinion affirming the opinion rendered by the Court of Appeals on both sides and remanding the case for a retrial.

On May 7, 2026,

the Circuit Court set the retrial to begin on January 11, 2027.

On May 7, 2026, the Circuit Court set the retrial to begin on January 11, 2027.

We cannot predict the outcome of any further appeals or any retrial or the exact time it will take to resolve them.

5 unchanged sentences

Amortization expense associated with the JPI premium is recorded to general and administrative expenses in our consolidated statements of operations.

JPI amortization expense was $ 2.1 million and $ 3.1 million for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, $ 8.3 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $ 12.5 million is classified as 'Other assets’ on our consolidated balance sheets.

JPI amortization expense was $ 2.0 million and $ 4.0 million for the three and six months ended June 30, 2026, respectively.

JPI amortization expense was $ 3.1 million and $ 6.2 million for the three and six months ended June 30, 2025, respectively.

As of June 30, 2026, $ 6.9 million of the unamortized balance is classified as ‘Prepaid expenses and other current assets’ while the remaining $ 12.0 million is classified as 'Other assets’ on our consolidated balance sheets.

Defamation Case

9 unchanged sentences

Pegasystems claims up to $ 41.9 million in damages resulting from its claims, while the Company claims up to $ 109.5 million in damages from competitive situations related to the counterclaims and up to $ 2.33 billion in damages from Pegasystems' total profits derived from the conduct at issue in the counterclaims.

Motions for summary judgment are due in June 2026, and a jury trial is currently scheduled for November 2026.

A hearing on summary judgment motions was held on July 24, 2026 and a jury trial is currently scheduled for November 2026.

While the Company believes strongly in its claims and defenses, we are unable to reasonably estimate the likelihood of success for either party or the range of any possible gain or loss to the Company given the uncertainty as to the likelihood, amount, and timing of any potential gain or loss related to our counterclaims or Pegasystems’ claims.

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On February 17, 2026, the Board of Directors authorized a program to repurchase up to $ 50.0 million of our common stock (the “Share Repurchase Program”), effective February 2026 through February 2028.

In the first quarter of 2026, we repurchased 0.8 million shares under this program at an average share price of $ 25.85 , totaling an aggregate cost of $ 21.8 million.

As of March 31, 2026, shareholders’ equity included 73.5 million shares outstanding, net of 1.0 million shares of common stock held in treasury.

On May 5, 2026, the Board of Directors approved an additional $ 50.0 million for the Share Repurchase Program, bringing the total aggregate authorization under the program to $ 100.0 million.

All other terms and conditions of the Share Repurchase Program remain unchanged.

In the second quarter of 2026, we repurchased 1.8 million shares under this program at an average share price of $ 23.75 , totaling an aggregate cost of $ 43.9 million.

As of June 30, 2026, shareholders’ equity included 71.8 million shares outstanding, net of 2.8 million shares of common stock held in treasury.

Segment and Geographic Information

Operating segments are defined as components of an enterprise for which discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) for purposes of allocating resources and evaluating financial performance.

We have determined our CODM is our Chief Executive Officer.

We have determined our CODM is our CEO.

We have one operating and one reportable segment, representing our consolidated business that helps organizations design, automate, and optimize important business processes from start to finish.

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Our reportable segment determination is based on our management and internal reporting structure, the nature of the subscriptions and services we offer, and the financial information evaluated regularly by our CODM.

The CODM uses operating income (loss) and net loss reported on the consolidated statements of operations to assess performance for the segment and decide how to allocate resources.

The CODM uses operating loss and net loss reported on the consolidated statements of operations to assess performance for the segment and decide how to allocate resources.

In addition, the CODM reviews the expense categories presented on the consolidated statements of operations to manage the Company’s operations.

Operating income (loss) and net loss are used to evaluate profitability trends in the business, and the CODM considers budget-to-actual variances for both profit measures when making decisions about allocating capital and resources.

Significant segment expenses, which are the expenses included in operating income (loss) and net loss, as well as other segment items such as other income, net and income tax expense are included in the consolidated statements of operations.

Operating loss and net loss are used to evaluate profitability trends in the business, and the CODM considers budget-to-actual variances for both profit measures when making decisions about allocating capital and resources.

Significant segment expenses, which are the expenses included in operating loss and net loss, as well as other segment items such as other expense (income), net and income tax expense are included in the consolidated statements of operations.

The CODM does not review any significant segment expense information that differs from the expense presented in the consolidated statements of operations.

Further, the measure of segment assets is total assets as reported on the consolidated balance sheets.

The following table summarizes revenue by geography for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

The following table summarizes revenue by geography for the three and six months ended June 30, 2026 and 2025 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Domestic $ 125,535 $ 105,193 $ 251,679 $ 211,386

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With respect to geographic information, revenue is attributed to respective geographies based on the contracting address of the customer.

The value of our long-lived assets, which are comprised of property and equipment, intangible assets with finite lives, and right-of-use assets, held in the United States and internationally as of March 31, 2026 were $ 47.4 million and $ 10.8 million, respectively.

The value of our long-lived assets, which are comprised of property and equipment, intangible assets with finite lives, and right-of-use assets, held in the United States and internationally as of June 30, 2026 were $ 47.5 million and $ 14.2 million, respectively.

As of December 31, 2025, our long-lived assets held in the United States and internationally were $ 49.0 million and $ 12.4 million, respectively.

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Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.

There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of March 31, 2026 and December 31, 2025.

There were no instruments measured at fair value on a recurring basis using significant unobservable inputs as of June 30, 2026 and December 31, 2025.

The valuation techniques that may be used to measure fair value are as follows:

2 unchanged sentences

• Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (i.e., replacement cost).

The carrying amounts of our accounts receivable, accounts payable, and accrued expenses approximate fair value as of March 31, 2026 and December 31, 2025 because of the relatively short duration of these instruments.

The carrying amounts of our accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 2026 and December 31, 2025 because of the relatively short duration of these instruments.

Additionally, the carrying value of our debt associated with the term loan facility approximates fair value because the interest rates are variable and reset on relatively short durations to the current market rates.

1 unchanged sentence

Changes in the fair value of available-for-sale securities, excluding other-than-temporary impairments, have been recorded in ‘Accumulated other comprehensive loss’ in our consolidated balance sheets.

The components of our cash, cash equivalents, and investments as of March 31, 2026 are as follows (in thousands):

As of March 31, 2026

The components of our cash, cash equivalents, and investments as of June 30, 2026 are as follows (in thousands):

As of June 30, 2026

Fair Value Measurement Balance Sheet Classification

20 unchanged sentences

Total investments $ 187,183 $ 42 $ 187,225 $ 135,810 $ 51,415

We did not hold any Level 3 assets at any point during the three months ended March 31, 2026.

Additionally, there were no transfers between Levels 1 and 2 during the three months ended March 31, 2026.

Interest income on our investments, which is recorded within ‘Other income, net’ on our consolidated statements of operations, totaled $ 1.5 million and $ 1.6 million for the three months ended March 31, 2026 and 2025, respectively.

The contractual maturities of our debt securities as of March 31, 2026 and December 31, 2025 were all one year or less.

We did not hold any Level 3 assets at any point during the three and six months ended June 30, 2026.

Additionally, there were no transfers between Levels 1 and 2 during the six months ended June 30, 2026.

Interest income on our investments, which is recorded within ‘Other expense (income), net’ on our consolidated statements of operations, totaled $ 1.5 million and $ 3.0 million for the three and six months ended June 30, 2026, respectively.

Interest income on our investments totaled $ 2.0 million and $ 3.6 million for the three and six months ended June 30, 2025, respectively.

The contractual maturities of our debt securities as of June 30, 2026 and December 31, 2025 were all one year or less.

Actual maturities may differ from contractual maturities because borrowers have the right to call or prepay certain obligations.

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

What changed 10-Q

Item 1. Financial Statements