What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-10 compared with 2025-03-11 · 566 added, 415 removed, 649 unchanged (60% of the section changed)

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INDEX TO THE FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (Deloitte & Touche LLP, Los Angeles, California, PCAOB ID # 34 )

Report of Independent Registered Public Accounting Firm (BDO USA, P.C., San Jose, California, PCAOB ID #243)

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Stockholders and Board of Directors

To the stockholders and the Board of Directors of Backblaze, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Backblaze, Inc.

and subsidiaries (the "Company") as of December 31, 2025, the related consolidated statements of operations and comprehensive loss, changes in stockholders' equity, and cash flows, for the year ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audit.

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 audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the 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 financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Los Angeles, California

March 10, 2026

We have served as the Company's auditor since 2025.

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Backblaze, Inc.

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We have audited the accompanying consolidated balance sheets of Backblaze, Inc.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

Th ese consolidated financial statements are the responsibility of the Company’s management.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

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/s/ BDO USA, P.C.

We have served as the Company’s auditor since 2020.

We served as the Company's auditor from 2020 to 2024.

San Jose, California

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$ 29,182 $ 45,776

Marketable securities 22,199 9,139

Accounts receivable, net

Short-term investments, net 9,139 16,799

Prepaid expenses and other current assets

Prepaid expenses 4,195 3,457

Other current assets

Total current assets

65,688 65,748

Restricted cash, non-current — 4,128

Property and equipment, net

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Operating lease liabilities, non-current 20,166 12,844

Deferred revenue, non-current

Debt facility, non-current — 4,128

Deferred revenue and other liabilities, non-current

Total liabilities

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113,000,000 shares authorized as of December 31, 2025 and 2024;

53,375,770 and 39,150,610 shares issued and outstanding as of December 31, 2024 and 2023, respectively.

58,962,339 shares issued and 58,705,790 outstanding as of December 31, 2025 and 53,375,770 shares issued and outstanding as of December 31, 2024.

Class B common stock, 0.0001 par value;

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zero shares issued and outstanding as of December 31, 2025 and 2024.

Treasury stock, at cost;

256,549 and zero shares as of December 31, 2025 and 2024, respectively

Additional paid-in capital

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2025 2024 2023

$ 145,835 $ 127,628 $ 102,019

Cost of revenue

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Investment income 1,961 1,422 1,984

Interest expense, net ( 3,658 ) ( 3,792 )

Interest expense ( 3,866 ) ( 3,658 ) ( 3,792 )

Loss before provision for income taxes

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Net loss per share attributable to Class A and Class B common stockholders, basic and diluted (1)

Weighted average shares used in computing net loss per share attributable to Class A and Class B common stockholders, basic and diluted (1)

$ ( 0.46 ) $ ( 1.11 ) $ ( 1.66 )

Weighted average Class A and Class B common shares outstanding 56,209,667 43,543,023 36,011,446

________________

(1) On July 6, 2023, all shares of the Company’s then outstanding Class B common stock were automatically converted into the same number of Class A common stock, pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation.

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Class A Common Stock (1)

Shares Amount

Treasury Stock Additional

Shares Amount Shares Amount

Balance as of December 31, 2022

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Net loss — — — — — ( 59,713 ) ( 59,713 )

Issuance of Class A common stock upon exercise of stock options 2,446,846 — 4,613 — 4,613

Issuance of Class A common stock under 2021 Plan 2,327,073 — — — —

Issuance of Class A common stock related to the 2021 Employee Stock Purchase Plan ("ESPP") 695,046 — 2,339 — 2,339

Issuance of restricted stock units related to the 2022 Bonus Plan (See Note 14) 287,908 — 1,848 — 1,848

Issuance of common stock upon exercise of stock options 2,446,846 — — — 4,613 — 4,613

Issuance of common stock related to the 2021 Equity Incentive Plan 2,327,073 — — — — — —

Issuance of common stock related to the 2021 Employee Stock Purchase Plan 695,046 — — — 2,339 — 2,339

Issuance of restricted stock units related to bonus plans 287,908 — — — 1,848 — 1,848

Stock-based compensation — — — — 27,103 — 27,103

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Issuance of common stock upon exercise of stock options 2,526,902 — — — 7,537 — 7,537

Issuance of common stock under 2021 Plan 3,434,104 — — — —

Issuance of common stock related to ESPP 780,206 — 2,768 — 2,768

Issuance of restricted stock units related to the 2023 Bonus Plan (See Note 14) 296,448 — 3,507 — 3,507

Issuance of common stock related to the 2021 Equity Incentive Plan 3,434,104 — — — — — —

Issuance of common stock related to the 2021 Employee Stock Purchase Plan 780,206 — — — 2,768 — 2,768

Issuance of restricted stock units related to bonus plans 296,448 — — — 3,507 — 3,507

Stock-based compensation — — — — 30,422 — 30,422

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53,375,770 5 — — 273,602 ( 195,985 ) 77,622

— — — — — ( 25,612 ) ( 25,612 )

Purchase of treasury stock — — ( 256,549 ) ( 1,983 ) — — ( 1,983 )

Issuance of common stock upon exercise of stock options 1,580,237 — — — 5,268 — 5,268

Issuance of common stock related to the 2021 Equity Incentive Plan 3,085,157 1 — — ( 1,918 ) — ( 1,917 )

Issuance of common stock related to the 2021 Employee Stock Purchase Plan 619,604 — — — 2,550 — 2,550

Issuance of restricted stock units related to bonus plans 301,571 — — — 2,014 — 2,014

Stock-based compensation

— — — — 25,279 — 25,279

Balance as of December 31, 2025

58,962,339 $ 6 ( 256,549 ) $ ( 1,983 ) $ 306,795 $ ( 221,597 ) $ 83,221

________________

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(in thousands)

For the Years

Ended December 31,

For the Years Ended December 31,

2025 2024 2023

CASH FLOWS FROM OPERATING ACTIVITIES

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

Net accretion of discount on investment securities and net realized investment gains

Noncash lease expense on operating leases 4,944 2,727 2,350

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25,591 28,328 24,912

Impairment loss on right-of-use assets 898 —

Impairment loss on long-lived assets 1,159 898 232

Stock-based compensation

26,436 28,628 25,177

Impairment of capitalized internal-use software — 232

Gain on disposal of property and equipment ( 347 ) ( 154 ) ( 292 )

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Accounts receivable

Prepaid expenses and other current assets

( 1,651 ) ( 1,031 ) 56

Prepaid expenses and other current assets ( 1,527 ) ( 741 ) ( 445 )

( 2,673 ) ( 1,346 ) ( 389 )

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130 948 ( 1,422 )

Deferred revenue

Deferred revenue and other liabilities, non-current

473 5,505 4,526

Operating lease liabilities ( 4,467 ) ( 2,588 ) ( 2,464 )

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Repayment of debt facility ( 2,454 ) ( 4,682 ) ( 4,450 )

Payment of debt issuance costs ( 602 ) — —

Proceeds from insurance premium financing — — 893

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Proceeds from lease financing obligations — — 4,450

Purchase of treasury stock ( 1,983 ) — —

Proceeds from exercises of stock options 5,338 7,477 4,708

Taxes paid for net share settlement of equity awards ( 1,917 ) — —

Proceeds from ESPP 2,550 2,768 2,339

Net cash provided by (used in) financing activities 22,772 ( 8,842 )

Net increase in cash 29,146 5,465

Cash and cash equivalents and restricted cash, at beginning of period 16,630 11,165

Cash and cash equivalents, at end of period $ 45,776 $ 16,630

Net cash (used in) provided by financing activities ( 14,798 ) 22,772 ( 8,842 )

Net (decrease) increase in cash and cash equivalents and restricted cash ( 16,594 ) 29,146 5,465

Cash and cash equivalents and restricted cash, beginning of period 45,776 16,630 11,165

Cash and cash equivalents and restricted cash, end of period $ 29,182 $ 45,776 $ 16,630

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH

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Total cash and cash equivalents and restricted cash, non-current $ 29,182 $ 45,776 $ 16,630

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

SUPPLEMENTAL INFORMATION:

Cash paid for interest

$ 3,738 $ 3,579 $ 3,733

Cash paid for income taxes

Cash paid for operating lease liabilities $ 4,012 $ 2,801

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

Stock-based compensation included in property and equipment and capitalized internal-use software $ 3,991 $ 4,960

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Accrued bonus settled in restricted stock units $ 2,014 $ 3,507 $ 1,848

Bonus plan expense classified as stock-based compensation $ 2,248 $ 3,034

Equipment acquired through finance lease and lease financing obligations $ 17,105 $ 13,094

Assets obtained in exchange for operating lease obligations $ 9,206 $ 5,448

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

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Backblaze, Inc.

and its subsidiaries (collectively, “Backblaze” or the “Company”) is a storage cloud platform, providing businesses and consumers with solutions to store and use their data.

Backblaze provides these cloud services through purpose-built, web-scale software built on commodity hardware.

Backblaze was incorporated in the state of Delaware on April 20, 2007 and is headquartered in San Mateo, California.

and its subsidiaries (collectively, “Backblaze” or the “Company”) is a high-performance storage cloud platform, designed to help businesses and consumers store, use, and protect their data.

The Company delivers its services through the Backblaze Storage Cloud platform, a purpose-built, web-scale software architecture operating on commodity hardware.

Backblaze’s offerings include B2 Cloud Storage, an Infrastructure-as-a-Service (“IaaS”) solution, and Computer Backup, a Software-as-a-Se rvice (“SaaS”) solution.

The Company was incorporated in the state of Delaware on April 20, 2007.

Follow-On Offering

On November 20, 2024, the Company issued and sold an aggregate of 6,250,000 shares of the Company’s Class A common stock, par value $ 0.0001 per share (the “Common Stock”) at a public offering price of $ 5.60 per share (the “Follow-On Offering”).

The Company also granted the underwriters an option to purchase up to an additional 937,500 shares of Common Stock at the same per-share price of $ 5.60 per share.

On November 20, 2024, the Company issued and sold an aggregate of 6,250,000 shares of the Company’s Class A common stock, par value $ 0.0001 per share at a public offering price of $ 5.60 per share (the “Follow-On Offering”).

The Company also granted the underwriters an option to purchase up to an additional 937,500 shares of Class A common stock at the same per-share price of $ 5.60 per share.

The underwriters exercised their option to purchase the additional shares.

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Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements and accompanying notes have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries, including the formation of Backblaze Netherlands B.V.

and Backblaze Worldwide, Inc.

subsidiaries in 2023.

Principles of Consolidation

All intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

To conform to the current period’s presentation, certain prior-period amounts have been reclassified as follows:

• Prepaid expenses previously included in “Prepaid and other current assets” have been reclassified to a separate line item in the consolidated balance sheets for the year ended December 31, 2024.

• A reclass of approximately $ 0.2 million previously classified as prepaid expenses as of December 31, 2024, has been reclassified to “Other” of other current assets in Footnote 6 and the consolidated balance sheet.

• Net accretion of discount on investment securities and net realized investment gains previously presented separately have been reclassified to “Other” in the consolidated statements of cash flows for the years ended December 31, 2024 and December 31, 2023.

• Machinery and equipment, previously presented as a separate major asset class of property and equipment in Note 7, have been reclassified to data center equipment for the year ended December 31, 2024.

These reclassifications had no impact on total assets, liabilities, or stockholders’ equity.

Emerging Growth Company

The Company is an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

Under the JOBS Act, EGCs can delay adopting new or revised accounting standards issued subsequent

to the enactment of the JOBS Act until such time as those standards apply to private companies.

The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an EGC or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

The Company expects to use the extended transition period for any other new or revised accounting standards during the period in which it remains an EGC.

The Company will maintain its EGC status until the fifth anniversary of the Company’s initial public offering.

The Company intends to use the extended transition period for any other new or revised accounting standards during the period in which it remains an EGC.

As a result, our Form 10-K for the year ending December 31, 2026 will no longer reflect any reduced disclosure requirements as an emerging growth company.

Segment Information

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Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the

accompanying notes.

Such estimates and assumptions include the costs to be capitalized as internal-use software, which include determining whether projects will result in new or additional functionality, the useful lives of other long-lived assets, impairment considerations for long-lived assets, the incremental borrowing rate for lease agreements, lease and non-lease component allocation, estim ates related to variable consideration, valuation of the Company’s Employee Stock Purchase Plan (“ESPP”) expense, and accounting for income taxes, including estimates for deferred tax assets, valuation allowance, and uncertain tax positions.

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Future actual results could differ materially from these estimates.

During the second quarter of 2025, the Company completed a study of the useful lives of its property and equipment.

Effective April 1, 2025, the estimated life of data center equipment, which includes hard drives, servers, and other infrastructure equipment, was extended on a prospective basis from a range of 3 to 5 years to a uniform 6 years.

The reassessment was based on historical data and continuous improvements made to the efficiency and durability of the Company’s storage infrastructure.

The change in estimate reduced depreciation expense and increased net income by approximately $ 5.2 million for the year ended December 31, 2025, resulting in an increase of $ 0.09 per basic and diluted share for the year ended December 31, 2025.

Comprehensive Loss

The Company does not have any components of other comprehensive income recorded within the consolidated financial statements and therefore does not separately present a statement of comprehensive income in the consolidated financial statements.

Foreign Currency

The reporting currency of the Company is the United States dollar (“USD”).

The functional currency of the Company and its subsidiaries is USD.

Transaction gains and losses that arise from exchange rate fluctuations on monetary transactions denominated in a currency other than the functional currency are included in general and administrative on the consolidated statements of operations and comprehensive loss when realized.

Foreign currency transaction gains and losses primarily arise from exchange rate fluctuations on monetary transactions denominated in a currency other than the functional currency.

Because the functional currency of the Company and its foreign subsidiaries is the United States dollar (“USD”), the Company does not have foreign currency translation adjustments.

Transaction gains and losses are included in general and administrative on the Company’s consolidated statements of operations and comprehensive loss.

Foreign exchange loss for the periods indicated was as follows (in thousands):

For the Years Ended December 31,

2025 2024 2023

Foreign exchange loss

$ 451 $ 32 $ 123

Concentrations and Risks and Uncertainties

Financial instruments that potentially subject the Company to credit risk primarily consist of cash, cash equivalents, accounts receivable, short-term investments, and unbilled accounts receivable.

The Company maintains its cash, restricted cash, and short-term investments with high-quality financial institutions with investment-grade ratings.

In the event of a failure of any financial institutions where the Company maintains deposits, it may lose timely access to its funds at such institutions and incur significant losses to the extent its funds exceed the $250,000 limit insured by the Federal Deposit Insurance Corporation.

Deposits with these financial institutions may exceed the amount of insurance provided on such deposits.

For accounts receivable, the Company is exposed to credit risk in the event of nonpayment by customers to the extent of the amount recorded on the consolidated balance sheets.

Financial instruments that potentially subject the Company to credit risk primarily consist of cash, cash equivalents, accounts receivable, marketable securities, and unbilled receivables.

The Company maintains its cash, cash equivalents, and marketable securities with high-quality financial institutions that have investment-grade credit ratings.

Although these institutions are considered to be financially sound, deposits may exceed the amounts insured or guaranteed by the Federal Deposit Insurance Corporation, which could subject the Company to risk of loss in the event of the failure of any such financial institution.

The Company is also exposed to credit risk related to accounts receivable and unbilled receivables from customers.

The Company does not have separate collateral requirements to support financial instruments subject to credit risk.

Concentration of vendors.

The Company acquires infrastructure equipment from third party vendors.

Vendors may have limited sources of equipment and supplies, which may expose the Company to potential supply and service disruptions that could harm the Company’s business.

The following table presents concentrations related to the Company’s cash disbursements, accounts payable transactions, and accounts receivable transactions.

Vendors may have limited sources of equipment and supplies, which may expose the Company to potential supply-chain and service disruptions that could harm the Company’s business.

The following table presents concentrations of vendors and customers that accounted for more than 10% related to the Company’s cash disbursements, accounts payable, and accounts receivable.

For the Years Ended December 31,

2025 2024 2023

Cash disbursement concentration

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The Company derives substantially all of its revenue from the services operating on its Backblaze Storage Cloud platform:

its Backblaze B2 Cloud Storage (“B2 Cloud Storage”) and Backblaze Computer Backup (“Computer Backup”) offerings.

The potential for severe impact to the Company’s business could result if the Company was unable to operate its platform or serve customers through its platform, for an extended period of time.

its B2 Cloud Storage and Computer Backup offerings.

No customer accounted for more than 10% of the Company’s revenues during the years ended December 31, 2025, 2024 and 2023 .

Restructuring

Restructuring charges are comprised of severance costs related to workforce reductions and facilities costs related to the Company’s partial exit from leased space at its corporate headquarters.

The Company recognizes restructuring charges when the liability is incurred.

For involuntary terminations, employee termination benefits are accrued at the date (i) management has committed to a plan of termination, which includes identification of employees to be terminated and related information, (ii) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn, and (iii) employees have been notified of their termination dates and expected severance payments.

For voluntary terminations, the Company recognizes a liability when the termination benefit has been irrevocably accepted by the employee.

The Company classifies certain costs as restructuring charges when they are incurred and considered direct and incremental in connection with management-approved programs that result in significant changes to the scope of the business or the manner in which the business is conducted.

Restructuring charges include employee severance and related costs associated with workforce reductions, facility-related costs incurred to exit or consolidate office space, costs associated with strategic transformation initiatives, and other costs directly attributable to restructuring and transforming the Company’s operations.

Restructuring costs associated with strategic transformation initiatives are generally recognized as expense as the related services are performed or costs are otherwise incurred, while other restructuring-related costs, including asset impairments, are recognized in accordance with the applicable accounting policies for those costs.

Employee severance and related costs are recognized when the Company has committed to a plan of termination, the plan identifies the employees affected and the expected completion date, the actions required to complete the plan indicate that it is unlikely that significant changes will be made to the plan or that the plan will be withdrawn.

For involuntary terminations, a liability is recognized in accordance with the applicable guidance based on whether employees are required to render future service to receive the benefits.

Revenue Recognition

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The Company derives its revenue primarily from fees earned from customers accessing these offerings through its platform.

These fees are primarily paid monthly in arrears for its consumption-based, or capacity based, arrangements related to its B2 Cloud Storage offering, or charged upfront for subscription-based arrangements related to its Computer Backup and B2 Cloud Storage offerings.

The Company provides services to its customers under Computer Backup subscription-based arrangements o f one month , one-year , and two-years , which automatically renew at the end of the respective term.

The Company generally provides services to its customers under its B2 Cloud Storage subscription-based offering arrangements of one-year to five-years .

The Company also recognizes revenue fro m products offered to its customers for the ability to securely restore data using a USB drive (“USB Restore”) and for migrating large data sets to its platform using its proprietary Fireball device.

The Company refers to these products as its “Physical Media revenue”.

Physical Media revenue was less than 1 % of the Company’s revenue for each of the years ended December 31, 2024 and 2023.

The Company’s monthly subscription arrangements do not provide customers with refund rights.

One to five-year subscription arrangements are eligible for a full refund up to 30 days after subscribing.

For its Physical Media revenue, the Company offers a full refund to its customers restoring data using a USB drive, if the drives are returned to the Company within 30 days of receipt.

The Company recognizes revenue net of its estimate of expected customer cancellations, returns, and discounts.

These estimates involve inherent uncertainties and use of management’s judgment.

While the majority of the Company’s customers pay via credit card, amounts that have been invoiced are recorded in accounts receivable and in revenue, or deferred revenue, depending on whether appropriate revenue recognition criteria have been met.

• B2 Cloud Storage is provided as an IaaS solution and is offered predominantly on a consumption-based model, with fees billed monthly in arrears, and to a lesser extent through capacity-based subscription plans with terms ranging from one to five years .

• The Computer Backup is provided as a SaaS solution under subscription arrangements with one month , one -year , and two -year terms, all of which are billed upfront and automatically renew at the end of their respective terms.

In addition, customers may incur usage-based fees related to extended version history retention, which are recognized as revenue as the related services are provided.

While the majority of the Company’s customers pay via credit card, certain customers’ accounts are invoiced and recorded in accounts receivable and in revenue, or deferred revenue, depending on whether appropriate revenue recognition criteria have been met.

As the Company provides its offerings as a hosted service, it does not provide customers the contractual right to take possession of the software at any time, does not incur set up costs, and does not charge an installation fee for its new customers.

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• it is probable the Company will collect substantially all of the consideration in the contract.

The Company applies judgm ent in determining the customer’s ability and intent to pay, which is based on a variety of factors;

however, as a substantial portion of the Company ’s revenue was generated from customers paying via credit card during the years ended December 31, 2024 and 2023, respectively, the risk of non-payment is low and historical write-offs having been immaterial.

The Company applies judgment in determining a customer’s ability and intent to pay based on a variety of factors, including historical payment experience for existing customers and customer profile considerations for new customers.

Identify the performance obligations in the contract.

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The Company’s contracts typically contain a single distinct performance obligation representing one of its Backblaze Storage Cloud platform offerings, which includes either B2 Cloud Storage or Computer Backup services and related customer support.

Customers also have the option to purchase a USB device for USB Restore and rental of its Fireball device at the standalone selling price (“SSP”).

Determine the transaction price.

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The Company’s variable consideration includes consumption-based revenue and revenue arrangements that offer the right of return.

The Company offers a 30 day right of ret urn for its 1 to 5-year subscription-based arrangements and records a refund liability based on historical return data.

The Company offers a 30 day right of ret urn for its one to five -year subscription-based arrangements and records a refund liability based on historical return data.

Certain fees that are considered consideration payable to a customer are accounted for as a reduction of the transaction price.

None of the Company’s contracts contain a significant financing component.

Company’s contracts contain a significant financing component.

Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental entities (e.g., sales and other indirect taxes).

Allocate the transaction price to performance obligations in the contract.

Contracts that contain multiple distinct performance obligations require an allocation of the transaction price to each performance obligation based on a relative SSP.

Contracts that contain multiple distinct performance obligations require an allocation of the transaction price to each performance obligation based on a relative standalone selling price (“SSP”).

The Company determines SSP for performance obligations based on the price it sells a service or product separately.

Recognize revenue when or as the Company satisfies a performance obligation.

Revenue is recognized based on the output method when control of the services is transferred to the customer and in an amount that reflects the consideration the Company expects to receive in exchange for those services.

Performance obligations are satisfied over time when the customer simultaneously receives and consumes the benefits as the Company performs.

Revenue is generally recognized over the common measure of progress (i.e., time-based or consumption-based) for the entire performance obligation.

Revenue from subscription-based arrangements is recognized on a straight-line basis over the contractual term beginning on the date that the service commences, as customers are entitled to the same benefits throughout the contractual term.

Fees from consumption-based arrangements are generally recognized as services are delivered based on the amount of daily storage consumed.

Revenue for USB Restore is recognized as USB devices are delivered to customers, and recognition of the Company’s Fireball device rental is time-based.

Revenue is recognized when or as the Company satisfies its performance obligations.

The Company’s cloud service arrangements generally represent a single performance obligation that is satisfied over time as a series of distinct services that are substantially the same.

The Company measures progress using an output method based on the value of services transferred to the customer and applies the “right to invoice” practical expedient for arrangements in which invoiced amounts correspond directly with the value transferred.

Subscription-based arrangements are recognized on a straight-line basis over the contractual term beginning on the service commencement date.

Consumption-based arrangements are recognized based on actual usage as services are delivered.

The Company also offers a 14-day free trial pe riod for its Computer Backup subscription-based arrangements and it does not enter into a contract with the customer during this trial period.

Separately, under its consumption-based arrangements, the Company does not charge customers until at least 10 gigabytes of data have been stored.

The non-current deferred revenue balance of $ 5.1 million on the Company’s consolidated balance sheet as of December 31, 2024 will be recognized starting in 2026 and going forward.

As of December 31, 2023, the Company’s non-current deferred revenue balance was $ 4.1 million, which will be recognized in 2025.

The non-current deferred revenue balance of $ 5.4 million included in the Company’s consolidated balance sheet as of December 31, 2025 will be recognized starting in 2027 and thereafter.

As of December 31, 2024, the Company’s non-current deferred revenue balance was $ 5.1 million, which will be recognized in 2026 and thereafter.

For revenue generated from arrangements that involve third-parties, the Company evaluates whether it is the principal or the agent based on maintaining control over the services being provided and maintaining the relationship with the end-customer.

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Cost of revenue includes costs directly associated with the delivery of services and products, which consists of expenses for providing Backblaze’s platform to its customers.

These expenses include rent and utilities for operating in co-location facilities, personnel costs, network and bandwidth costs, shipping and handling for Physical Media revenue, depreciation of the Company’s equipment and capital lease assets in co-location facilities and other infrastructure expenses incurred in connection with its customers’ use of its services.

These expenses include rent and utilities for operating in data center spaces, personnel costs, network and bandwidth costs, depreciation of the Company’s equipment and finance lease assets in data center spaces and other infrastructure expenses incurred in connection with its customers’ use of its services.

The Company periodically receives discounts from third-party vendors that are recorded as a reduction to cost of revenue on its consolidated statements of operations and comprehensive loss.

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Advertising costs are expensed as incurred and are included in sales and marketing expenses in the consolidated statements of operations and comprehensive loss.

These costs were $ 4.2 million and $ 3.6 million for the years ended December 31, 2024 and 2023, respectively.

Prior-year amounts have been updated to conform to current year presentation and had no impact on the Company’s previously reported consolidated financial statements.

T hese costs were $ 2.5 million, $ 3.0 million, and $ 2.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The Company accounts for income taxes using the asset and liability method.

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All stock-based compensation to employees is measured on the grant date, based on the fair value of the awards on the date of grant.

The Company recognizes compensation cost for its awards on a straight-line basis over the requisite service period, which is generally a vesting period of one to four years , except for the awards granted under the Company’s 2022 Bonus Plan (see Note 14).

Stock-based compensation includes restricted stock units (“RSUs”), stock option grants and stock purchase rights under the Employee Stock Purchase Plan (“ESPP”).

The Company recognizes compensation cost for equity-classified awards on a straight-line basis over the requisite service period, which is generally a vesting period of one to four years .

Awards granted under the Company’s bonus plans are accounted for as liability-classified share-based payment awards because the bonus payout represents a fixed monetary amount that is settled in a variable number of shares.

For such awards, the Company recognizes compensation cost over the requisite service period based on the fair value of the liability, which is remeasured at each reporting date until settlement.

Upon settlement and issuance of restricted stock units (“RSUs”), the awards are reclassified to equity.

Stock-based compensation includes RSUs, stock option grants and stock purchase rights under the ESPP.

The Company uses the Black-Scholes option pricing model to measure the fair value of its stock options and the stock purchase rights under the ESPP.

The Black-Scholes option pricing model requires the use of complex assumptions, which determine the fair value of stock-based awards.

If an award contains a provision whereby vesting is accelerated upon a change in control, the Company recognizes stock-based compensation expense on a straight-line basis, as a change in control is considered to be outside of its control and is not considered probable until it occurs.

Forfeitures are accounted for in the period in which they occur.

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Cash and cash equivalents include cash and certain highly liquid investments with maturities of 90 days or less at the date of purchase.

Cash equivalents are primarily recorded at cost, which approximates fair value due to their short maturities.

The classification of the Company’s cash and cash equivalents is Level 1 within the valuation hierarchy.

Cash equivalents are primarily recorded at cost, which approximates fair value.

Restricted Cash

The Company had restricted cash of $ 4.1 million related to the line of credit agreement with City National Bank as of December 31, 2023 .

The Company did no t have a restricted cash balance as of December 31, 2024.

See Note 12 for further details.

Investments, net

The Company holds all investments on a held-to-maturity basis, and they are reported at amortized cost with realized gains or losses reported in earnings.

The Company determines the appropriate classification of its investment in debt securities at the time of purchase and re-evaluates such determination at each balance sheet date.

The Company did no t have a restricted cash balance as of December 31, 2025 and 2024 .

Marketable Securities

The Company classifies marketable debt securities with original maturities greater than 90 days as held-to-maturity and reports them at amortized cost, with realized gains and losses recognized in earnings.

Marketable securities with original maturities of 90 days or less are classified as cash equivalents.

The Company determines the appropriate classification of its debt securities at the time of purchase and re-evaluates such determination at each balance sheet date.

The Company will recognize an allowance for estimated credit losses on its held-to-maturity securities, using a forward-looking expected loss model, which reflects losses that are expected to be incurred over the life of the financial instrument.

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The allowance for credit losses was a nominal amount for the years ended December 31, 2025 an d 2024.

The Company’s short-term investments include investment grade commercial paper with original maturities of 365 days or less at the date of purchase.

Short-term investments are recorded at amortized cost on the consolidated balance sheet.

Fair Value of Financial Instruments

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Level 3 — Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities and other liabilities and deferred revenue, current approximate their respective fair values due to the short maturities of those instruments.

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses, other current assets, accounts payable, and accrued expenses and other current liabilities approximate their respective fair values due to the short maturities of those instruments.

Accounts Receivable, Net

Accounts receivable are recorded net of an allowance when the Company has an unconditional right to payment.

Under the current expected credit losses model, accounts receivable are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection.

Accounts receivable are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection.

The allowance is estimated based on the Company’s assessment of its ability to collect on customer accounts receivable.

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Substantially all of the Company’s unbilled accounts receivable is charged via a credit card upon billing.

Unbilled accounts receivable is included in prepaid expenses and other current assets on the consolidated balance sheets.

Unbilled accounts receivable is included in other current assets on the consolidated balance sheets.

The balance of unbilled accounts receivable as of December 31, 2025 and 2024 is presented in Note 6.

Deferred Contract Costs

The Company’s deferred contract costs are composed of third-party affiliate commissions and, starting in 2024, a commission structure for its sales team.

Sales commissions and related taxes and benefits earned by our sales force as well as sales commission earned by marketing affiliates are considered incremental and recoverable costs of obtaining a contract with a customer.

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Amortization expense is included in sales and marketing expenses on the consolidated statements of operations and comprehensive loss.

Deferred contract costs are included within other current assets and other assets in the consolidated balance sheets.

Property and Equipment, Net

Property and equipment, both owned and under capital leases, are stated at cost, less accumulated depreciation, which is computed on a straight-line basis over the asset’s estimated useful life.

Property and equipment, both owned and under finance leases, are stated at cost, less accumulated depreciation, which is computed on a straight-line basis over the asset’s estimated useful life.

Leasehold improvements are amortized over the shorter of the useful life of the asset or expected lease term.

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Data center equipment (1)

Machinery and equipment

Computer equipment

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Shorter of useful life or expected lease term

________________

(1) During the second quarter of 2025, the estimated lives of data center equipment were extended from a range of 3 to 5 years to a uniform 6 years.

See “Use of Estimates” above for further details.

Capitalized Internal-Use Software, Net

The Company capitalizes qualifying software development costs related to new features and enhancements to the functionality of its platform and related products.

The costs consist of personnel costs (including related benefits and stock-based compensation) that are incurred during the application development stage.

The costs consist of personnel costs (including related taxes and benefits and stock-based compensation) that are incurred during the application development stage.

Capitalization of costs begins when two criteria are met:

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The Company determines the useful lives of identifiable project assets after considering the specific facts and circumstances related to each project.

The amortization of costs related to the platform applications is included in cost of revenue in the consolidated statements of operations and comprehensive loss.

Significant judgments related to the capitalization of software costs include determining whether it is probable that projects will result in new or additional functionality.

Amortization of capitalized software costs is substantially included in cost of revenue in the consolidated statements of operations and comprehensive loss.

Impairment of Long-lived Assets

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The Company classifies deferred revenue from services that will be provided in more than 12 months as non-current on its consolidated balance sheets.

The Company enters into finance lease arrangements for hard drives and related equipment, and operating leases for rental of co-location space in data centers and offices.

The Company generally enters into finance lease arran gements for hard drives and related equipment for its data center operations, and operating leases for rental of data center spaces and office space.

The Company determines if an arrangement is or contains a lease at inception by evaluating various factors, including if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration and other facts and circumstances.

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The Company has elected the short-term lease practical expedient for all asset classes, which allows the lessee to not apply the recognition requirements of ASC 842 to short-term leases (leases with original terms of 12 months or less and that do not include a purchase option that the lessee is reasonably certain to exercise).

The Company has elected the practical expedient to combine lease and non-lease components for all of its leases, with the exception of its leases belonging to the colocation lease agreement asset class.

For its colocation lease agreements, the Company only recognizes fixed minimum payments for tangible components as right-of-use assets and operating lease liabilities, as this class of agreements may include significant intangible components.

Accounting Pronouncements Recently Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “ Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosure .” The ASU updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance.

These disclosures are required quarterly and also applies to public entities with a single reportable segment.

The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024, with early adoption permitted.

It is required to be adopted retrospectively for all prior periods presented in the financial statements.

We adopted the provisions of ASU 2023-07 in the fourth quarter of 2025, which resulted in additional disclosures in the notes to our consolidated financial statements.

See Note 17, Segment Reporting.

The adoption of this standard did not have an impact on the Company’s financial position or results of operations.

The Company has elected the practical expedient to combine lease and non-lease components for all of its leases, with the exception of leases related to the co-location lease agreement asset class.

For co-location lease agreements, the Company only recognizes fixed minimum payments for tangible components as right-of-use assets and operating lease liabilities, as these arrangements may include significant intangible components.

Regulatory Developments

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB Act”) was enacted, introducing amendments to U.S.

tax laws with various effective dates from 2025 to 2027.

The OBBB Act includes significant provisions, such as the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act, international tax framework, and the restoration of favorable tax treatment for certain business provisions including the immediate expensing of the US research and development expenditure.

The Company has completed its assessment of the tax law changes enacted under the OBBB Act.

Based on this assessment, the OBBB Act did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025, and the Company does not expect these changes to have a material impact on future periods.

In January 2024, the European Union (“EU”) enacted the EU Data Act, which became effective in September 2025.

The legislation establishes statutory rights for EU and European Economic Area (“EEA”) customers, including the ability to terminate contracts with no more than two months’ notice, reimbursement of unused prepaid service, and limitations on early termination penalties, among other changes.

These provisions primarily affect the Company’s subscription arrangements with EU and EEA customers by shortening the enforceable contract term and requiring consideration of expanded refund rights.

The Company evaluated the implications of the EU Data Act on its customer arrangements, including remaining performance obligations, and determined that it did not have a material impact on the Company’s consolidated financial statements for the current reporting period.

The Company has incorporated the provisions of the EU Data Act into its revenue recognition policies and contract assessments and expects to reflect any impact prospectively as customer arrangements are modified or renewed under the new requirements.

Recently Issued Accounting Pronouncements

In December 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-11,“ Interim Reporting (Topic 270):

Narrow-Scope Improvements ” This standard improves the navigability of the required interim disclosures and clarifies when the guidance is applicable, as well as provides additional guidance on what disclosures should be provided in interim reporting periods.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2027, and interim reporting periods beginning after December 15, 2028.

The Company is evaluating the impact this the new standard may have, but does not expect it to have a significant impact on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software.” This standard updates the recognition model for internal-use software by eliminating the project stage framework and requiring capitalization once projects are approved and completion is probable, and also clarifies related disclosure requirements.

This ASU is effective for interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard.

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

Measurement of Credit Losses for Accounts Receivable and Contract Assets.” This standard allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers .

The standard is effective for all entities for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years.

Early adoption is permitted, and the standard is to be applied prospectively.

The Company is currently evaluating the impact of the adoption of this standard.

In November 2024, the FASB issued ASU 2024-03, “ Income Statement (Subtopic 220-40) - Reporting Comprehensive Income - Expense Disaggregation Disclosures.

” The ASU requires disclosure of specified information about certain costs and expenses, including (i) certain amounts already required to be disclosed in the same disclosure as the other disaggregation requirements, (ii) a qualitative description of amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (iii) the total amount of selling expenses and an entity’s definition of such

This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 on either a prospective or retrospective basis.

For public companies, this ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 on either a prospective or retrospective basis.

Early adoption is permitted.

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In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740) - Improvements to Income Tax Disclosures ” requiring enhancements and further transparency to certain income tax disclosures, most notably the tax rate reconciliation and income taxes paid.

This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis and retrospective application is permitted.

This ASU is effective for fiscal years beginning after December 15, 2024 for public companies and is effective for fiscal years beginning after December 15, 2025 for non-public business entities.

In accordance with our EGC status, the Company will implement the standard beginning with its annual reporting period ending December 31, 2026.

This amendment should be applied on a prospective basis and retrospective application is permitted.

The Company is currently evaluating the impact of the adoption of this standard.

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The following table presents the Company’s revenue disaggregated by solution (in thousands):

For the Years Ended

For the Years Ended December 31,

2025 2024 2023

B2 Cloud Storage

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$ 145,835 $ 127,628 $ 102,019

________________

(1) For the periods presented, Physical Media revenue has been consolidated into B2 Cloud Storage or Computer Backup revenue based on the underlying offering from which it originates.

The following table presents the Company’s total revenue disaggregated by timing of revenue recognition (in thousands):

For the Years Ended

For the Years Ended December 31,

2025 2024 2023

Consumption-based arrangements

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68,236 65,658 55,679

Physical Media (point in time)

Point in time arrangements

Total revenue

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Total revenue by geographic area, based on the location of the Company’s customers, was as follows (in thousands):

For the Years Ended

For the Years Ended December 31,

2025 2024 2023

United States

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For the Years Ended December 31,

2025 2024 2023

Total revenue recognized, included in each deferred revenue balance at the beginning of each respective period

$ 30,640 $ 26,076 $ 22,983

The Company’s deferred revenue as stated on the consolidated balance sheets presented approximates its contract liability balance as of December 31, 2024 and 2023.

The Company’s total deferred revenue balance as of December 31, 2024 , approximates the aggregate amount of the transaction price allocated to remaining performance obligations (“RPOs”) as of that date.

As of December 31, 2024 , the Company’s RPOs were $ 41.3 million.

This amount includes deferred revenue arising from consideration invoiced for which the related performance obligations have not been satisfied, as well as future committed revenue for periods within current contracts with customers whose contracts exceed one year.

As of December 31, 2024, the Company expects to recogn ize $ 34.3 million or approximately 83 % of its RPOs over the next 12 months, and substantially all of its RPOs over the next 24 months.

Deferred revenue represents the invoiced portion of the Company’s contract liabilities for which the related performance obligations are still outstanding.

The Company’s remaining performance obligations (“RPOs”) include deferred revenue as well as future committed revenue under existing customer contracts.

The following tables presents the Company’s RPOs (in millions):

Within 1 Year Over 1 Year (1)

As of December 31, 2025 $ 35.5 $ 30.7 $ 66.2

As of December 31, 2024 $ 34.3 $ 7.0 $ 41.3

________________

(1) The increase in remaining performance obligations as of December 31, 2025 was primarily driven by a new multi-year customer contract executed during the fourth quarter of 2025.

Deferred Contract Costs

The following table presents the Company’s amortization of deferred contract costs (in thousands):

Deferred contract costs for affiliates

Deferred contract costs for sales commissions

For the Years Ended December 31

Amortization of deferred contract costs related to affiliates

The following tables presents the Company’s amortization of deferred contract costs (in thousands):

Deferred contract costs for marketing affiliates $ 335 $ 542

Deferred contract costs for sales commission

$ 2,639 $ 972

2025 2024 2023

Amortization of deferred contract costs related to marketing affiliates $ 852 $ 1,142 $ 978

Amortization of deferred contract costs related to sales commissions

Fair Values and Gross Unrealized Gains and Losses on Investments

The following table summarizes adjusted cost, gross unrealized gains and losses, and fair value by significant investment category.

The Company’s commercial paper investments with original maturities greater than 90 days are classified as held-to-maturity and commercial paper investments with original maturities of 90 days or less are classified as cash

equivalents on its consolidated balance sheets as of December 31, 2024 and 2023 .

See additional information on our investments in Note 5.—Fair Value Measurements .

$ 480 $ 126 $ —

Marketable Securities

Fair Values and Gross Unrealized Gains and Losses on Held-to-Maturity Investments

The amortized cost, gross unrealized gains and losses, and fair values of interest-bearing securities, by type of security, were as follows (in thousands):

Amortized Cost Gross Unrealized Fair Value Net Carrying Value

As of December 31, 2025

(In Thousands)

Commercial paper $ 9,139 $ — $ ( 2 ) $ 9,137 $ 9,139

Cash equivalents

Money market funds $ 8,729 $ — $ — $ 8,729 $ 8,729

Total cash equivalents $ 8,729 $ — $ — $ 8,729 $ 8,729

treasury securities $ 9,461 $ 12 $ — $ 9,473 $ 9,461

Corporate debt securities 12,740 4 — 12,744 12,738

Total investments $ 22,201 $ 16 $ — $ 22,217 $ 22,199

Amortized Cost Gross Unrealized Fair Value Net Carrying Value

As of December 31, 2024

(In Thousands)

Cash equivalents

Commercial paper $ 9,139 $ — $ ( 2 ) $ 9,137 $ 9,139

Commercial paper $ 16,799 $ — $ ( 10 ) $ 16,789 $ 16,799

Scheduled Maturities

The amortized cost and fair value of held-to-maturity securities as of December 31, 2024 and 2023 by contractual maturity are shown below.

As of December 31, 2024

Amortized Cost Fair Value

(In Thousands)

Within one year $ 9,139 $ 9,137

After one year through five years — —

After 5 years through 10 years — —

After 10 years — —

Total investments $ 9,139 $ — $ ( 2 ) $ 9,137 $ 9,139

As of December 31, 2023

Scheduled Maturities

The amortized cost and fair value of held-to-maturity securities as of December 31, 2025 by contractual maturity are shown below.

Amortized Cost Fair Value

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Aging of Unrealized Losses

For those securities in an unrealized loss position, the length of time the securities were in such a position is presented in the table below.

Less than 12 Months

# of Securities Fair Value Unrealized Losses

There were no securities in an unrealized loss position as of December 31, 2025 .

As of December 31, 2024 , certain securities were in an immaterial unrealized loss position for less than twelve months.

Fair Value Measurements

The following table presents the level within the fair value hierarchy at which the Company’s held-to-maturity investments are measured (in thousands):

As of December 31, 2025

(Dollars In Thousands)

Commercial paper 3 $ 9,137 $ ( 2 )

Less than 12 Months

# of Securities Fair Value Unrealized Losses

Level 1 Level 2 Other (1)

Cash equivalents

Money market funds $ — $ — $ 8,729 $ 8,729

treasury securities 9,473 — — 9,473

Corporate debt securities — 12,744 — 12,744

Total $ 9,473 $ 12,744 $ 8,729 $ 30,946

________________

(1) Investments in money market funds measured at fair value using the net asset value per share practical expedient are not subject to hierarchy level classification disclosure.

The Company invests in money market funds that seek to maintain a stable net asset value.

These investments include commingled funds that comprise high-quality short-term securities representing liquid debt and monetary instruments where the redemption value is likely to be the fair value.

Redemption is permitted daily without written notice.

As of December 31, 2024

(Dollars In Thousands)

Commercial paper 4 $ 16,789 $ ( 10 )

Fair Value Measurements

The Company classifies its fair value disclosure of held-to-maturity investments, which are comprised of investment grade commercial paper, within Level 2 of the fair value hierarchy because the fair value of these securities are priced by using inputs based on non-binding market consensus that are primarily corroborated by observable market data or quoted market prices for similar instruments.

The following table summarizes the fair value of the Company’s Level 2 instruments held as of December 31, 2024 and 2023 (in thousands):

Level 1 Level 2 Total

Commercial paper $ — $ 9,137 $ 9,137

Total $ — $ 9,137 $ 9,137

There were no transfers between levels of the fair value hierarchy for the years ended December 31, 2025 and 2024.

The Company held no assets or liabilities that were measured at fair value on a recurring basis as of December 31, 2024 and 2023.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following (in thousands):

During the years ended December 31, 2025 and 2024, the only significant assets measured at fair value on a non-recurring basis were right-of-use assets related to the Company’s corporate headquarters lease.

In 2024, the Company recognized an impairment related to a partial exit from its headquarters building, and in 2025, the Company recognized an additional impairment upon its complete exit from the same building.

These impairments were measured using discounted cash flow models with Level 3 inputs, informed by market data and valuation information obtained from third-party specialists, including assumptions related to expected sublease cash flows and market participant discount rates.

Other Current Assets

Other current assets consisted of the following (in thousands):

Unbilled accounts receivable, net $ 3,746 $ 2,864

Prepaid expenses 3,257 3,314

Receivable from payment processor 615 1,347

Other 2,269 1,334

Total prepaid expenses and other current assets

Total other current assets

$ 6,630 $ 5,545

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66,569 65,037

Machinery and equipment

16,872 14,004

Computer equipment

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$ 57,310 $ 42,949

(1) Construction-in-process relates to assets that have not yet been placed in service related to hard drives not yet deployed.

Deprec iation expense was $ 21.3 million and $ 21.3 million for the years ended December 31, 2024 and 2023, respectively.

For the Company’s equipment under finance leases and collateralized financing obligations, accumulated depreciation was $ 29.3 million and $ 31.6 million as of December 31, 2024 and 2023, respectively.

The carrying value of the Company’s equipment under finance lease agreements and collateralized financing obligations was $ 35.7 million and $ 37.1 million as of December 31, 2024 and 2023, respectively.

During the years ended December 31, 2024 and 2023, the Company recorded gains of $ 0.2 million and $ 0.4 million, respectively, as a result of disposing of certain hard drives.

These disposals occurred in the ordinary course of business, as the Company continuously evaluates its requirements for operating its data centers.

The gains are recorded as general and administrative expenses in the Company’s consolidated statements of operations and comprehensive loss.

________________

(1) The net book value of the Company’s equipment under finance lease agreements and lease financing obligations was $ 45.7 million and $ 35.7 million as of December 31, 2025 and 2024, respectively.

The following table presents property and equipment, net and operating lease right-of-use assets by geographic region (in thousands):

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$ 40,825 $ 41,801

Amortization expense of capitalized internal-use software was $ 7.0 million and $ 3.6 million for the years ended December 31, 2024 and 2023, respectively.

Amortization of developed software and software purchased for internal use are included in cost of revenue and general and administrative expense, respectively, in the Company’s consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023.

Amortization expense of capitalized internal-use software included in the consolidated statements of operations and comprehensive loss is as follows (in thousands):

For the Years Ended December 31,

2025 2024 2023

Cost of revenue (1)

$ 10,398 $ 6,989 $ 3,598

General and administrative

Total amortization expense of capitalized internal-use software $ 10,408 $ 6,999 $ 3,626

________________

(1) Includes $ 0.1 million of restructuring charges for the year ended December 31, 2025.

See Note 16 for additional information.

As of December 31, 2025, future amortization expense is expected to be as follows (in thousands):

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2026 $ 11,936

The Company evaluates capitalized internal-use software for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

During the year ended December 31, 2023, the Company recorded an impairment expense of $ 0.2 million, related to an in-house operating system initiative that was determined to no longer provide future economic benefits during 2023.

The impairment expense is recorded as research and development expense in the Company’s consolidated statements of operations and comprehensive loss.

No impairment expense was recorded during the year ended December 31, 2024.

Accrued Expenses and Other Current Liabilities

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Accrued expenses 1,815 1,457

Accrued value-added tax ("VAT") 1,139 1,266

Financed insurance premiums (see Note 12) — 893

Accrued value-added tax 1,225 1,139

Other 559 883

Accrued expenses and other current liabilities $ 9,406 $ 7,584

(1) Certain reclassifications to previously reported financial information have been made to conform to our current period presentation.

As of December 31, 2024 , the Company reclassified certain current liabilities from accounts payable to accrued expenses and other current liabilities.

The prior period amount of $ 0.3 million as of December 31, 2023 has been reclassified to conform with current presentation.

Finance Leases and Lease Financing Obligations

The Company enters into finance lease arrangements to obtain hard drives and related equipment for its data center operations.

The term of t hese agreements primarily range from two -to- four years and certain of these arrangements have optional renewals to extend the term of the lease generally at a fixed price.

Contingent rental payments are generally not included in the Company’s finance lease agreements.

Finance Leases

The Company generally enters into finance lease arrangements to obtain hard drives and other infrastructure equipment for its data center operations.

The term of t hese agreements primarily range from three to five years and certain of these arrangements have optional renewals to extend the term of the lease generally at a fixed price.

Finance leases are generally secured by the underlying leased equipment.

The Company’s finance leases have original lease periods expiring between 2026 and 2030.

Finance leases are included in property and equipment, net on the Company’s consolidated balance sheets.

As of December 31, 2024, the weighted average remaining lease term for finance lease and lease financing obligation agreements was approximately 1.9 years and the weighted average discount rate for finance leases was 11.9 %.

December 31, 2023, the weighted average remaining lease term for finance lease and lease financing obligation agreements was approximately 1.7 years and the weighted average discount rate for finance leases was 11.0 %.

The following table presents information regarding assets acquired through finance lease and lease financing obligation agreements, which are related to sale-leaseback agreements (in thousands):

Finance lease right-of-use assets are included in property and equipment, net on the Company’s consolidated balance sheets.

Operating Leases

The Company leases data center spaces and office space under non-cancelable operating leases with various expiration dates.

Certain lease agreements include renewal options to extend the lease term at a price to be determined upon exercise.

These options are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments.

Contingent rental payments are generally not included in the Company’s lease agreements.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Th e Company's leases have original lease periods expiring between 2026 and 2033 .

Summary of Lease Information

The weighted average remaining lease terms and discount rates as of December 31, 2025 and 2024 were as follows:

December 31, 2025 December 31, 2024

Operating leases Finance Leases (1)

Remaining lease term 5.4 years 2.5 years 4.4 years 1.9 years

Discount rate 6.9 % 12.6 % 7.2 % 11.9 %

________________

(1) Includes lease financing obligation costs.

The following table presents the components of lease expense (in thousands):

For the Years Ended December 31,

2025 2024 (1)

Finance lease costs

Depreciation expense (2)

$ 9,131 $ 12,674 $ 14,059

Total finance lease costs $ 15,118 $ 16,886

Total interest expense included in finance lease costs $ 2,444 $ 2,827

Total lease financing obligation costs $ 3,339 $ 1,775

Total interest expense included in lease financing obligation costs $ 675 $ 409

Cash paid on interest on finance lease and lease financing obligations $ 3,119 $ 3,236

Depreciation expense on assets acquired through the Company’s finance leases and lease financing obligations is included in cost of revenue in its consolidated statements of operations and comprehensive loss.

Interest expense $ 3,407 $ 2,444 $ 2,827

Lease financing obligation costs

Depreciation expense (2)

$ 1,307 $ 2,664 $ 1,366

Interest expense $ 229 $ 675 $ 409

Operating lease costs

Rental expense related to lease components $ 5,920 $ 3,397 $ 3,128

Rental expense related to non-lease components (3)

4,340 5,010 4,999

Variable lease costs 4,358 4,086 1,798

Short term lease costs — — 716

Total operating lease costs $ 14,618 $ 12,493 $ 10,641

Total included in cost of revenue $ 13,879 $ 11,384 $ 9,063

Total included in general and administrative $ 739 $ 1,109 $ 1,578

________________

(1) The presentation of prior period data has been revised to conform to current year presentation.

There have been no changes to the reported amounts, rather certain amounts have been disaggregated to further improve clarity and transparency.

(2) Substantially all of the depreciation expense on assets acquired through the Company’s finance leases and lease financing obligations is included in cost of revenue in its consolidated statements of operations and comprehensive loss.

(3) Non-lease components are related to non-tangible utilities and services used in the Company’s co-location lease agreements, which are not recorded on the Company’s consolidated balance sheets.

The Company used judgment and third-party data in determining the stand-alone price for allocating consideration to lease and non-lease components under these lease agreements, such as the price of utilities as compared to its tangible data center footprint within each facility.

The following table presents supplemental cash flow information relating to the Company’s leases (in thousands):

For the Years Ended December 31,

2025 2024 2023

Operating cash flows

Cash paid for interest on finance lease and lease financing obligations $ 3,734 $ 3,119 $ 3,236

Cash paid for operating lease liabilities $ 5,636 $ 4,012 $ 2,801

Non-cash items

Equipment acquired through finance leases $ 24,864 $ 17,105 $ 13,094

Right-of-use assets obtained in exchange for operating lease obligations $ 12,674 $ 9,206 $ 5,448

During the year ended December 31, 2023, the Company entered into two sale-leaseback arrangements with vendors to provide an aggregate of $ 4.5 million in cash proceeds for previously purchased hard drives and related equipment.

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The assets continue to be depreciated over their useful lives, and payments are allocated between interest expense and repayment of the financing liability.

The Company did no t enter into any sale-leaseback arrangements during the year ended December 31, 2024.

The future minimum commitments for these finance leases and lease financing obligations as of December 31, 2024 were as follows (in thousands):

The Company did not enter into any sale-leaseback arrangements during the years ended December 31, 2025 and 2024.

The future minimum commitments for finance leases and lease financing obligations as of December 31, 2025 were as follows (in thousands):

Year Ending December 31,

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2028 5,856 — 5,856

Total future minimum lease and financing commitments 30,258 2,921 33,179

Less imputed interest ( 3,500 ) ( 210 ) ( 3,710 )

Total finance lease and lease financing obligation $ 26,758 $ 2,711 $ 29,469

Commitments and Contingencies

Operating Leases

The Company leases its facilities for data centers and office space under non-cancelable operating leases with various expiration dates.

Certain lease agreements include renewal options to extend the lease term at a price to be determined upon exercise.

These options are not reasonably certain to be exercised and therefore are not factored into the determination of lease payments.

Contingent rental payments are generally not included in the Company’s lease agreements.

The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Th e Company's leases have original lease periods expiring between 2025 and 2031 .

The Company had no short-term leases as of December 31, 2024 and short-term lease costs of $ 0.7 million during the year ended December 31, 2023.

A s of December 31, 2024, the weighted average remaining lease term for operating leases was approximately 4.4 years and the weighted average discount rate for operating leases was approximately 7.2 %.

As of December 31, 2023, the weighted average remaining lease term for operating leases was approximately 5.5 years and the weighted average discount rate for operating leases was approximately 7.1 %.

The future minimum commitments for these operating leases as of December 31, 2024 were as follows (in thousands), which excludes amounts allocated to services under operating lease agreements that are considered non-lease components:

Year Ending December 31,

Thereafter 923

Total future minimum operating lease commitments 19,547

2029 4,997 — 4,997

Total future minimum commitments 42,595 487 43,082

Less imputed interest ( 6,893 ) ( 24 ) ( 6,917 )

Total $ 35,702 $ 463 $ 36,165

Non-lease components included in the Company’s colocation lease agreements are related to non-tangible utilities and services used in its data center operations, which are not recorded on the Company’s consolidated balance sheets.

The Company used judgment and third-party data in determining the stand-alone price for allocating consideration to lease and non-lease components under these colocation lease agreements, such as, the price of utilities as compared to its tangible data center footprint within each colocation facility.

The future minimum commitments for the Company’s non-cancellable contractual obligations as of December 31, 2024 for non-lease components were as follows (in thousands):

As of December 31, 2025 , the Company's future minimum obligations for operating leases and non-cancellable contractual commitments related to non-lease components were as follows (in thousands):

Year Ending December 31,

Operating leases Non-lease components Total

2026 $ 6,780 $ 3,886 $ 10,666

2027 5,604 3,075 8,679

2028 5,265 3,081 8,346

2029 4,162 2,559 6,721

2030 3,163 1,352 4,515

Thereafter 5,525 109 5,634

Total future minimum commitments 30,499 $ 14,062 $ 44,561

The following table presents information regarding the Company’s operating leases (in thousands).

Total operating lease cost does not include costs related to services.

For the Years Ended December 31,

Rental expense for both lease and non-lease components $ 8,407 $ 8,127

Rental expense for both lease and non-lease components included in cost of revenue $ 7,234 $ 6,821

Rental expense related to lease components $ 3,397 $ 3,128

Total operating lease cost $ 12,493 $ 10,641

Total operating lease cost o f $ 12.5 million for the year ended December 31, 2024 includes $ 4.1 million of variable lease costs.

The Company did not incur short-term lease costs during the year ended December 31, 2024 .

Total operating lease cost of $ 10.6 million for the year ended December 31, 2023 includes $ 1.8 million of variable lease costs and $ 0.7 million of short-term lease costs.

Other Contractual Commitments

Less imputed interest ( 5,080 )

Total $ 25,419

In June 2025, the Company amended an existing lease for a data center facility to (i) extend the non-cancellable term of the original lease and (ii) expand into additional infrastructure designed to support multiple-storage offerings.

This expansion is expected to commence in the second quarter of 2026 and includes a non-cancellable lease term of approximately 7 years.

The original lease term was also extended to align with this period.

The Company concluded that the multi-storage data center space represents a separate asset class from the Company’s existing co-location data center space.

As a result, the lease and non-lease components related to this expanded space are combined in accordance with the Company’s established lease accounting policy.

The Company accounted for the lease amendment as a modification under ASC 842.

The amendment consists of two components:

(i) an extension of the original lease term, which was remeasured as of the modification date, and (ii) a lease for additional, distinct space, which will be accounted for as a separate lease component and measured at its commencement date in the second quarter of 2026.

The Company applied an incremental borrowing rate (“IBR”) of 6.8 % to remeasure the lease liability.

The IBR was estimated based on current market rates for secured borrowings with similar terms and adjusted for the Company’s credit profile.

As of December 31, 2025, the Company had approximately $ 17.5 million of future minimum undiscounted lease payments related to the expanded lease space, which has not yet commenced and, accordingly, is not included in the operating lease commitments table above.

Commitments and Contingencies

Contractual Commitments

Other non-cancellable commitments relate mainly to service agreements to support the Company’s operations.

As of December 31, 2024, the Company had non-cancelable purchase commitmen ts of $ 1.0 million and $ 0.4 million payable during the years ending December 31, 2025 and 2026.

As of December 31, 2025, the Company had non-cancelable purchase commitmen ts of $ 2.5 million, $ 2.2 million, and $ 0.8 million payable during the years ending December 31, 2026, 2027, and 2028, respectively.

During 2024, the Company made payments of $ 0.2 million to a related party, Meaningful Works, for marketing services per terms of an agreement.

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Contributions to the 401(k) plan are discretionary.

The Company contributed $ 2.0 million and $ 1.9 million to the 401(k) plan for the years ended December 31, 2024 and 2023, respectively.

The Company contributed $ 1.9 million, $ 2.0 million, and $ 1.9 million to the 401(k) plan for the years ended December 31, 2025, 2024, and 2023, respectively.

Legal Matters

The Company is involved from time to time in various claims and legal actions arising in the ordinary course of business.

While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that there are not any current legal proceedings that are likely to have a material adverse effect on its financial position, results of operations or cash flows.

However, the results of legal proceedings are inherently unpredictable and litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources, and other factors.

Where appropriate, the Company establishes accruals for matters that are both probable and reasonably estimable and generally maintains insurance to cover certain types of litigation claims, subject to policy limits, retentions and deductibles, and other factors.

As of December 31, 2025, the Company was not subject to any claims that are expected to have a material adverse effect on its financial position, results of operations, or cash flows.

Nonetheless, the outcome of litigation is inherently uncertain, any such matters, individually or in the aggregate, could result in adverse impacts on the Company, including defense and settlement costs, diversion of management resources, and other factors.

Indemnification

The Company enters into indemnification provisions under agreements with other parties from time to time in the ordinary course of business.

The Company has agreed in certain circumstances to indemnify and defend the indemnified party for claims and related losses suffered or incurred by the indemnified party from third-party claims due to the Company’s activities or non-compliance with certain representations and warranties made by the Company.

It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular provision.

No losses have been recorded in the consolidated statements of operations and comprehensive loss in connection with the indemnification provisions.

Debt Facility

In December 2023 , the Company entered into a fourth amendment related to the revolving credit agreement (as amended, the “RCA”) with City National Bank (“Lender”).

These agreements may require the Company to indemnify and defend the indemnified party against third-party claims arising from the Company’s activities or from any breaches of representations or warranties made by the Company.

To date, the Company has not incurred any material costs or losses in connection with such indemnification obligations.

However, it is not possible to reasonably estimate the maximum potential amount under these indemnification agreements due to the unique facts and circumstances of each arrangement.

As a result, the Company has not recorded any liabilities related to these obligations in its consolidated financial statements as of the periods presented.

Revolving Credit Facility

On June 4, 2025, the Company entered into a credit agreement (the “Credit Agreement”) with Citizens Bank, N.A.

(the “Lender”), establishing a senior secured revolving credit facility with a total borrowing capacity of up to $ 20.0 million (the “Revolving Credit Facility”) to be used for general corporate purposes and working capital needs.

The Revolving Credit Facility allows for borrowings, repayments, and re-borrowings up to the total capacity, subject to compliance with the terms of the Credit Agreement.

The Revolving Credit Facility includes a sub-limit of up to $ 3.0 million for the issuance of letters of credit.

The Credit Agreement is scheduled to mature on June 4, 2027, at which point all obligations become due.

The Credit Agreement includes an option that allows the Company to extend the maturity date by one year , subject to certain conditions.

The Company incurred $ 0.6 million of deferred financing costs related to the Revolving Credit Facility, which are amortized on a straight-line basis over the facility’s two-year term and recorded in other assets on the consolidated balance sheet as of December 31, 2025.

The Revolving Credit Facility is secured by a first-priority lien on substantially all assets of the Company and its consolidated subsidiaries, each of which also guarantees the obligations under the facility.

Borrowings under the facility bear interest at a variable rate, at the Company’s discretion, equal to either (a) the average Secured Overnight Financing Rate (“SOFR”) plus 3.25 % or (b) a base rate, as defined in the Credit Agreement, plus 2.25 %.

Additionally, the Credit Agreement requires the payment of a commitment fee of 0.35 % on the unused portion of the Revolving Credit Facility and a letter of credit availability fee of 0.125 % on outstanding letters of credit.

As of December 31, 2025, the Company had no outstanding borrowings under the Revolving Credit Facility.

As of December 31, 2025, no letters of credit were outstanding and $ 20.0 million was available for borrowing under the Revolving Credit Facility.

The fair value (level 2 of the fair value hierarchy described in Note 2) of this debt instrument

approximates the carrying value as borrowings under this debt instrument are based on a current variable market interest rate.

Debt Covenants under the Credit Agreement

The Credit Agreement contains customary restrictive financial and operating covenants, including limitations on our ability to incur additional indebtedness, pay dividends, make certain investments, sell assets, and engage in other specified transactions.

In August 2025, in connection with the establishment of a new share repurchase program (see Note 11 for further information), the Company amended the Credit Agreement to permit share repurchases of up to $ 10.0 million, thereby excluding such repurchases from the covenant restrictions.

The Credit Agreement also requires the Company to comply with the following financial covenants on a quarterly basis:

(i) a minimum liquidity of $ 10.0 million held on deposit with the Lender, over which the Company retains control and considers as cash and cash equivalents, (ii) a minimum consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) (as defined below) threshold, and (iii) a maximum total leverage ratio of 2.75 to 1.00 , which is calculated based on consolidated EBITDA.

The Credit Agreement defines consolidated EBITDA on a trailing four fiscal quarter basis and includes specified adjustments and exclusions.

As a result, EBITDA as defined under the Credit Agreement may differ materially from Adjusted EBITDA as presented elsewhere in this report.

For example, the calculation of EBITDA under the Credit Agreement includes exceptions and caps related to adjustments for (i) restructuring and other strategic initiatives, (ii) legal settlements, (iii) completed acquisitions, and (iv) all other non-cash and non-specified non-recurring charges.

As of December 31, 2025, the Company was in compliance with the covenants under the Credit Agreement.

RCA Debt Facility

In December 2023 , the Company entered into a fourth amendment related to the revolving credit agreement (as amended, the “RCA”) with City National Bank.

Under this amendment, the maximum borrowing available was reduced from $ 30.0 million to $ 20.0 million.

Furthermore, advances on the line of credit will bear monthly interest at a variable rate equal to, at the Company’s discretion, (a) the average Secured Overnight Financing Rate (“SOFR”) plus 2.75 %, or (b) the base rate.

The base rate under the RCA is a rate equal to the greater of (i) 3.00 % or (ii) the prime rate most recently announced by the Lender.

The RCA had an unused line fee equal to 0.3 % of the difference between the maximum balance available under the RCA and the average daily balance outstanding during the quarter, payable within ten days of the last day of each quarter.

The RCA provided for an annual commitment fee equal to 0.5 % on the amount available to be borrowed, payable annually on December 29th.

On December 10, 2024, the Company voluntarily terminated the RCA with the Lender.

On December 10, 2024, the Company voluntarily terminated the RCA agreement.

At the time of termination, no amounts were outstanding under the RCA, as the Company had fully paid down the revolving credit amount following the closing of the Follow-On Offering in November 2024.

The Company recognized $ 0.1 million related to the acceleration of the remaining unamortized debt issuance costs incurred in connection with securing and amending the RCA.

The Company classified the facility as a debt facility, non-current on its consolidated balance sheets as of December 31, 2023.

Prior to its termination, the outstanding balance of the RCA was collateralized by cash held by the Company.

As such, the Company held cash that it deemed to be restricted, which was included in restricted cash, non-current on the Company’s consolidated balance sheets as of December 31, 2023.

Total interest expense and amortization of debt issuance costs related to the RCA were $ 0.7 million and $ 0.6 million for the years ended December 31, 2024 and 2023, respectively.

Total interest expense and amortization of debt issuance costs related to the RCA was $ 0.7 million and $ 0.6 million for the years ended December 31, 2024 and 2023.

Insurance Premium Financing Agreement

In November 2023, the Company entered into an insurance policy with annual premiums totaling $ 1.2 million .

The Company executed a finance agreement with AFCO Premium Credit LLC over a term of twelve months , with an annual interest rate and weighted average interest rate for the year ended December 31, 2023 of 7.0 %, that finances the payment of the total premiums owed.

The Company executed a finance agreement with AFCO Premium Credit LLC over a term of twelve months to finance the payment of the total premiums owed.

The finance agreement required a $ 0.3 million down payment, with the remaining $ 0.9 million plus interest paid over three quarterly installments.

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Stockholders’ Equity

Common Stock.

From the time of its initial public offering through July 5, 2023, the Company had two outstanding classes of common stock, Class A common stock and Class B common stock.

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In addition, on July 7, 2023, the Company filed a Certificate of Retirement with the Secretary of State of the State of Delaware effecting the retirement of the shares of Class B common stock that were issued but no longer outstanding following the Conversion.

Equity Incentive Plans

2011 Equity Incentive Plan (the “2011 Plan”)

The Company adopted the 2011 Plan to provide stock-based awards to employees, directors, and service providers.

The 2011 Plan expired in September 2021, and no new awards may be granted under it.

Awards granted before expiration remain outstanding and continue to be governed by the terms of the 2011 Plan until they are exercised, forfeited, or expire.

Shares that are forfeited, canceled, or expire become available for issuance under the Company’s 2021 Equity Incentive Plan.

2021 Equity Incentive Plan (the “2021 Plan”)

Under the 2021 Plan, the Company may grant options, stock appreciation rights, RSUs, restricted stock awards, other equity-based awards and incentive bonuses to employees, officers, non-employee directors and other service providers of the Company and its affiliates.

The number of shares available for issuance under the 2021 Plan automatically increases on January 1 of each year from 2022 through 2031 by an amount equal to the lesser of:

(i) 4,784,100 shares, (ii) 5 % of the total number of shares of Class A common stock outstanding on the preceding December 31, or (iii) a smaller number of shares determined by the Company’s Board of Directors.

2021 Employee Stock Purchase Plan (the “2021 ESPP”)

The number of shares available for issuance under the 2021 ESPP automatically increases on January 1 of each year from 2022 through 2041 in an amount equal to the lesser of:

(i) 1,913,630 shares, (ii) 2 % of the total number of shares of Class A common stock outstanding on the preceding December 31, or (iii) a smaller number of shares determined by the Company’s Board of Directors.

2024 New Employee Equity Incentive Plan (the “Inducement Plan”)

On August 2, 2024, the Company adopted the Inducement Plan, pursuant to which the Company reserved 414,740 shares of its Class A common stock to be us ed exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company.

Reserved Shares for Future Issuance

The Company had reserved shares of common stock for future issuance as follows:

December 31, 2024 December 31, 2023

2011 Equity Incentive Plan ("2011 Plan")

Options outstanding 5,264,351 7,988,657

December 31, 2025

2011 Equity Incentive Plan

Options outstanding 1,114,620 1,318,485

Shares subject to options outstanding 3,501,410

2021 Equity Incentive Plan

Shares subject to options outstanding 996,615

Restricted stock units outstanding 4,325,318

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2024 Inducement Plan

Restricted stock units outstanding 283,759

Shares available for future grants 48,148

18,631,997 22,927,115

Share Repurchase Program

In August 2025, the Company’s Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $ 10.0 million of its Class A common stock through August 1, 2026.

The program is intended to offset dilution resulting from stock-based compensation.

Repurchases are to be funded from the proceeds of employee stock option exercises and from employee contributions under the 2021 ESPP.

Repurchases may be made from time to time in open market transactions, pursuant to Rule 10b5-1 trading plans, or through other means, in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

The timing, number of shares repurchased, and prices paid for the shares under this program will depend on general business and market conditions as well as corporate and regulatory limitations, prevailing stock prices, and other considerations.

The share repurchase program may be suspended, modified, or discontinued at any time and does not obligate the Company to acquire any amount of Class A common stock.

During the year ended December 31, 2025, the Company repurchased a total of 256,549 shares of its Class A common stock for $ 2.0 million.

As of December 31, 2025, approximately $ 8.0 million remained available for repurchases under the program.

Stock-Based Compensation

Equity Incentive Plans

In 2021, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”) under which the Company may grant options, stock appreciation rights, RSUs, restricted stock awards, other equity-based awards and incentive bonuses to employees, officers, non-employee directors and other service providers of the Company and its affiliates.

The number of shares available for issuance under the 2021 Plan is increased on January 1 of each year beginning in 2022 and ending with a final increase in 2031 in an amount equal to the lesser of:

(i) 4,784,100 shares, (ii) 5 % of the total number of shares of Class A common stock outstanding on the preceding December 31, or (ii) a smaller number of shares determined by the Company’s Board of Directors.

As of December 31, 2024 , the 2021 Plan provides for future grants and/or issuances of up to 6,933,867 shares of our common stock.

Equity-based awards under our employee compensation plans are made with newly issued shares reserved for this purpose.

In 2021, the Company adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”).

The number of shares available for issuance under the 2021 ESPP is increased on January 1 of each year beginning in 2022 and ending with a

final increase in 2041 in an amount equal to the lesser of:

(i) 1,913,630 shares, (ii) 2 % of the total number of shares of Class A common stock outstanding on the preceding December 31, or (ii) a smaller number of shares determined by the Company’s Board of Directors.

As of December 31, 2024 , the 2021 Plan provides for future grants and/or issuances of up to 965,766 shares of our common stock.

On August 2, 2024, the Company adopted the 2024 New Employee Equity Incentive Plan (the “Inducement Plan”), pursuant to which the Company reserved 414,740 shares of its Class A common stock to be used exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company.

The Inducement Plan was adopted by the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) without stockholder approval.

Restricted Stock Units

RSUs granted under the 2021 Plan generally vest based on continued service up to a four-year period for employees, and over a one-year period for non-employee directors.

RSUs granted under the 2021 Plan and the Inducement Plan generally vest based on continued service up to a four-year period for employees, and over a one-year period for non-employee directors.

RSU activity for the year ended December 31, 2025 was as follows:

Shares Weighted-average grant date fair value per share

Shares unvested as of December 31, 2023

RSUs unvested as of December 31, 2024

4,764,133 $ 6.18

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Forfeited ( 1,069,880 ) $ 6.56

Shares unvested and expected to vest as of December 31, 2024

RSUs unvested as of December 31, 2025

4,609,077 $ 6.44

The weighted-average grant date fair values per unit of RSUs granted during the years ended December 31, 2025, 2024 and 2023, were $ 6.65 , $ 6.97 and $ 5.06 , respectively.

The total grant date fair values of RSUs that vested during the years ended December 31, 2025, 2024 and 2023, were $ 21.3 million, $ 23.3 million and $ 15.8 million, respectively.

As of December 31, 2025, total unrecognized compensation cost related to RSUs was $ 26.9 million, which will be recognized over a weighted-average period of 2.02 years.

In February and March 2025, the Company’s Compensation Committee approved the issuance of RSUs totaling approximately 2.8 million.

In February 2026, the Company’s Compensation Committee approved the issuance of RSUs totaling 2,036,670 .

These RSUs have service-based vesting periods that are satisfied over three years .

The Company expects to recognize $ 8.9 million in stock-based compensation on a straight-line basis over the vesting period of these awards.

During March 2022, the Compensation Committee approved a new bonus structure (“Bonus Plan”) for its employees.

The Bonus Plan is contingent upon the achievement of annual corporate performance targets.

In each respective calendar year, the Company accrues for the Bonus Plan.

The actual payout amount is determined by the Compensation Committee based on the actual achievement with respect to the annual performance targets and paid in the subsequent year in the variable number of RSUs equal to the payout amount.

These RSUs are issued under the 2021 Plan and are subject to performance and service condition vesting requirements, beginning from the grant date to the payout date.

Participants must remain employed with the Company through the date of payout to maintain eligibility under the Bonus Plan.

Pursuant to the Bonus Plan, during February 2023 the Compensation Committee approved the issuance of approximately 288,000 RSUs that immediately vested based on actual performance against the performance targets for 2022.

During February 2023, the Company’s Board of Directors approved 2023 corporate performance targets under its Bonus Plan for its employees.

During February 2024, the Company’s Board of Directors approved annual corporate performance targets under its Bonus Plan for 2024 for its employees.

As of December 31, 2024, the accrued balance was $ 1.8 million, reported as a component of accrued expenses and other current liabilities on the consolidated balance sheets.

Pursuant to the Bonus Plan, during

February 2025 and February 2024, the Company’s Compensation Committee approved the issuance of 301,571 RSUs and approximately 296,000 RSUs, respectively, that immediately vested.

The Company recognized $ 2.2 million and $ 3.0 million in stock-based compensation during the years ended December 31, 2024 and 2023, respectively based on progress made towards these performance targets.

During the years ended December 31, 2024 and 2023 , the Company capitalized $ 0.3 million and $ 0.5 million, respectively, of stock-based compensation expense under this plan for the development of internal-use software.

Stock Options

The Company maintains an annual bonus program under which bonus awards are contingent upon the achievement of corporate performance targets and are settled in RSUs issued under the Company’s 2021 Plan.

Bonus amounts represent fixed monetary values that are settled in a variable number of RSUs based on the Company’s stock price at the date of settlement.

Participants must remain employed with the Company through the pay out date to maintain eligibility for bonus awards.

The requisite service period for these awards begins on the date the Compensation Committee approves the bonus plan and ends on the payout date.

In February 2025, the Compensation Committee approved the issuance of 301,571 RSUs, which vested upon issuance, related to bonus awards earned based on actual corporate performance for the year ended December 31, 2024.

In January 2025, the Compensation Committee approved the bonus plan for the year ended December 31, 2025.

While the bonus program for 2025 initially contemplated settlement in a combination of cash and RSUs, the Compensation Committee subsequently determined that bonus awards for the period would be settled entirely in RSUs.

In February 2026, the Compensation Committee approved the issuance of RSUs with an aggregate grant-date fair value of approximately $ 4.1 million in settlement of bonus awards earned based on actual corporate performance for the year ended December 31, 2025 .

Upon issuance, 689,790 RSUs vested and were settled on a net share basis.

Pursuant to the bonus plans, the Company recognized $ 3.8 million, $ 2.2 million, and $ 3.0 million in stock-based compensation during the years ended December 31, 2025, 2024, and 2023, respectively , of which the Company capitalized $ 0.3 million of stock-based compensation expense during the years ended December 31, 2025 and 2024, and $ 0.5 million during the year ended December 31, 2023 for the development of internal-use software.

Stock Options

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4,498,025 $ 8.42 4.19 $ 3,818

Vested and expected to vest

6,378,753 $ 7.28 4.95 $ 12,136

The intrinsic value of options exercised was $ 13.9 million and $ 8.8 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, total unrecognized compensation cost related to stock options was $ 2.8 million , which will be recognized over a weighted-average period of 0.60 years .

The initial offering period under the ESPP commenced in November 2021 and the first purchase date occurred in May 2022.

Under the Company’s ESPP, eligible employees may authorize payroll deductions of up to 50 % of their eligible compensation, subject to IRS limitations, during prescribed offering periods to purchase shares of the Company’s Class A common stock at a price per share equal to 85 % of the lesser of (1) the stock price at the employee’s first participation in the offering period or (2) the fair market value of the Company’s common stock on the purchase date.

A participant may participate in only one offering period at a time, and a new offering period generally begins each May 20th and November 20th.

Each offering period is generally 24 months and consists of four exercise dates (each, generally six months following the start of the offering period or the preceding exercise date, as the case may be).

If the fair market value of the Company’s Class A common stock is less on a given exercise date than on the date of grant, employee participation in that offering period ends and participants are automatically re-enrolled in the next new offering period.

The ESPP shall terminate automatically 20 years after its effective date, unless the ESPP is extended by the Board of Directors and the extension is approved within 12 months by a vote of the stockholders of the Company.

During the years ended December 31, 2024 and 2023, 780,206 and 695,046 shares of Class A common stock were purchased under the ESPP.

The fair value of the purchase rights under the ESPP was estima ted using the Black-Scholes option pricing model.

The Company recorded stock-based compensation expense under this plan of $ 1.6 million and $ 4.2 million f or the years ended December 31, 2024 and 2023, respectively, of which $ 0.5 million and $ 0.8 million was capitalized for the development of capitalized internal-use software.

The intrinsic value of options exercised was $ 5.4 million, $ 13.9 million, and $ 8.8 million for the years ended December 31, 2025, 2024, and 2023, respectively.

There was no unrecognized compensation cost as of December 31, 2025.

The Company maintains an ESPP under which eligible employees may purchase shares of the Company’s Class A common stock through payroll deductions, subject to IRS and plan limitations.

Offering periods last 24 months and include purchase dates at six -month intervals.

Shares are purchased at 85 % of the lower of the fair market value of the stock at the beginning of the offering period or on the applicable purchase date.

If the fair market value of the Company’s Class A common stock on a purchase date is lower than the fair market value at the beginning of the offering period, the offering period is automatically reset and participants are enrolled in a new offering period, resulting in incremental modification expense recognized in stock-based compensation expense on a straight-line basis over the new offering period.

The reset provision under the ESPP was triggered on November 20, 2025, May 20, 2025, and November 20, 2024 each resulting in incremental modification expense of $ 0.8 million, $ 1.0 million, and $ 0.2 million.

The ESPP will terminate in November 2041, unless extended by the Board of Directors in accordance with its terms.

The Company recorded stock-based compensation expense under this plan of $ 2.2 million, $ 1.6 million, and $ 4.2 million f or the years ended December 31, 2025, 2024 , and 2023, respectively, of which $ 0.3 million, $ 0.5 million, and $ 0.8 million, respectively, was capitalized for the development of capitalized internal-use software.

As of December 31, 2025 , the total unrecognized stock-based compensation expense related to the ESPP was $ 2.8 million, which is expected to be recognized over a weighted average period of 0.79 years.

The following table summarizes the Black-Scholes option pricing model weighted-average assumptions used in estimating the fair value of the stock purchase rights granted to employees under the ESPP for the years ended December 31, 2024 and 2023:

The following table summarizes the Black-Scholes option pricing model weighted-average assumptions used to estimate the fair value of the ESPP stock purchase rights for the years ended December 31, 2025 and 2024:

For the Years Ended December 31,

2025 2024 2023

Expected term (in years)

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4.31 % - 5.43 %

4.29 % - 5.43 %

Expected dividend yield — % — % — %

Total Stock-Based Compensation Expense

Stock-based compensation expense included in the consolidated statements of operations and comprehensive loss consists of all RSUs, including those related to the Bonus Plan, options, and ESPP awards.

Total stock-based compensation expense was as follows (in thousands):

Stock-based compensation expense included in the consolidated statements of operations and comprehensive loss was as follows (in thousands):

For the Years Ended December 31,

2025 2024 2023

Cost of revenue

1 unchanged sentence

Research and development

12,094 11,277 9,218

Sales and marketing

6,130 9,505 8,801

General and administrative

6,655 5,939 5,172

Total stock-based compensation expense (1)

$ 26,436 $ 28,628 $ 25,177

(1) Stock-based compensation expense includes restructuring charges of $ 2.5 million and $ 0.1 million , incurred during the years ended December 31, 2024 and 2023.

Of the $ 2.5 million in stock-based compensation restructuring charges incurred during the year ended December 31, 2024, $ 0.3 million related to cost of revenue , $ 0.9 million related to research and development costs, $ 1.2 million , related to sales and marketing costs, and $ 0.1 million related to general and administrative costs.

Of the $ 0.1 million in stock-based compensation restructuring charges occurred during 2023.

$ 0.1 million related to sales and marketing costs.

During the years ended December 31, 2024 and 2023 , the Company capitalized $ 4.0 million and $ 5.0 million, respectively, of stock-based compensation for the development of capitalized internal-use software and property and equipment.

Additionally, during the year ended December 31, 2024 , the Compensation Committee approved amendments to outstanding vested stock options held by certain former employees in connection with their voluntary separation from the Company to extend the option expiration and also accelerate the vesting of RSU’s.

As a result of the modifications, the Company recognized $ 1.1 million of expense, of which $ 0.8 million is recorded in sales and marketing, and $ 0.3 million is recorded in general and administrative expense on the Company’s consolidated statements of operations and comprehensive loss.

The Company also incurred stock-based compensation costs of $ 2.5 million in connection with restructuring activities that occurred during the year ended December 31, 2024.

________________

(1) Stock-based compensation expense includes restructuring charges of $ 2.5 million incurred during the year ended December 31, 2024, including $ 0.3 million related to cost of revenue , $ 0.9 million related to research and development costs, $ 1.2 million related to sales and marketing costs, and $ 0.1 million related to general and administrative costs.

Stock-based compensation expense includes restructuring charges of $ 0.1 million incurred during the year ended December 31, 2023, which were related to sales and marketing and general and administrative costs.

Nominal stock-based compensation expense related to restructuring was recognized during the year ended December 31, 2025.

See Note 16 for additional information.

During the years ended December 31, 2025, 2024, and 2023 the Company capitalized $ 2.6 million, $ 4.0 million and $ 5.0 million, respectively, of stock-based compensation for the development of capitalized internal-use software and property and equipment.

As a result of the modifications, the Company recognized $ 1.1 million of expense, of which $ 0.8 million is recorded in sales and marketing and $ 0.3 million is recorded in general and administrative expense on the Company’s consolidated statements of operations and comprehensive loss.

Net Loss per Share Attributable to Common Stockholders

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The diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive common stock equivalents during the period.

For purposes of this calculation, the Company’s stock options, share purchase rights pursuant to the Company’s ESPP, shares issuable under the Bonus Plan, and unvested restricted stock are considered to be potential common stock equivalents, but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive.

Prior to the Conversion, as defined below, of Class A and Class B common stock were the only outstanding equity in the Company.

The rights of the holders of the Class A common stock and Class B common stock were identical, except with respect to voting, transfer, and conversion.

Accordingly, the Class A common stock and Class B common stock shared equally in the Company’s net losses.

For purposes of this calculation, the Company’s stock options, share purchase rights pursuant to the Company’s ESPP, shares issuable under the Bonus Plan, and unvested RSUs are considered to be potential common stock equivalents, but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is antidilutive.

On July 6, 2023, all of the Company’s then-outstanding shares of Class B common stock, par value $ 0.0001 per share, were automatically converted into the same number of shares of Class A common stock, par value $ 0.0001 per share, pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation (the “Conversion”).

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Prior to the Conversion, Class A and Class B common stock were the only outstanding equity in the Company.

The rights of the holders of the Class A common stock and Class B common stock were identical, except with respect to voting, transfer, and conversion.

Accordingly, the Class A common stock and Class B common stock shared equally in the Company’s net losses.

The following table presents the calculation of basic and diluted net loss per share (in thousands, except share and per share data):

For the Years Ended December 31,

(in thousands, except share and per share amounts)

2025 2024 2023

Net loss and comprehensive loss attributable to common stockholders

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Denominator for basic and diluted net loss per share:

Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted

Weighted average Class A and Class B common shares outstanding – basic and diluted

56,209,667 43,543,023 36,011,446

Net loss per share attributable to common stockholders – basic and diluted

Net loss per share attributable to Class A and Class B common stockholders – basic and diluted

$ ( 0.46 ) $ ( 1.11 ) $ ( 1.66 )

Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share as the inclusion of all potential common shares outstanding would have been antidilutive.

The potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented are as follows:

The weighted average potential shares of common stock that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented are as follows:

2025 2024 2023

RSUs 2,445,618 2,245,142 5,256,833

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Restructuring

Restructuring Plans

2025 Restructuring and Transformation Plan

In November 2025, the Company initiated a restructuring and transformation plan designed primarily to improve efficiency and enhance the performance of its sales and marketing functions to support its go-to-market initiatives (the “2025 Restructuring and Transformation Plan”).

The 2025 Restructuring and Transformation Plan includes the reallocation of resources, the redesign of sales and marketing strategies and processes, and other corporate actions.

During the year ended December 31, 2025, the Company incurred charges of approximately $ 2.5 million, including employee termination expenses, an impairment charge related to the Company’s exit from its corporate headquarters facility, and other transformation costs.

The Company expects to incur additional charges of approximately $ 4.7 million to $ 7.5 million through the first quarter of 2027, at which time the 2025 Restructuring and Transformation Plan is expected to be completed.

These charges include estimated employee termination expenses of approximately $ 0.8 million to $ 1.2 million, and other business transformation costs.

Restructuring costs related to the 2025 Restructuring and Transformation Plan for the year ended December 31, 2025 were as follows (in thousands):

Workforce reduction $ 970

Impairment loss on right-of-use asset 901

Other transformation costs 667

Total restructuring costs $ 2,538

The following table summarizes liabilities incurred under the 2025 Restructuring and Transformation Plan that are included in accounts payable and accrued expenses and other current liabilities on the consolidated balance sheet (in thousands):

Workforce Reduction Transformation Total

Balance as of January 1, 2025

Charges incurred 970 667 1,637

Noncash charges — ( 109 ) ( 109 )

Cash payments during the period ( 460 ) ( 393 ) ( 853 )

Balance as of December 31, 2025

$ 510 $ 165 $ 675

2024 Restructuring Plan

In November 2024, management approved a restructuring plan intended to improve the Company’s cost structure and operating efficiency (the “2024 Restructuring Plan”).

The 2024 Restructuring Plan included a reduction in headcount of approximately 12 % of the Company’s workforce.

During this period, approximately 12 % of the Company’s workforce terminated employment involuntarily.

In addition, as part of the 2024 Restructuring Plan, the Company reduced its footprint at its corporate headquarters.

The 2024 Restructuring Plan included a reduction in headcount of approximately 12 % of the Company’s workforce and a reduction of the Company’s footprint at its corporate headquarters.

The 2024 Restructuring Plan was substantially completed by December 31, 2024.

During the year ended December 31, 2024, the Company recognized restructuring charges of $ 4.9 million, primarily for employee severance and benefits in connection with the workforce reduction, which amounted to $ 3.9 million.

The Company also recorded an impairment charge of $ 0.9 million on its right-of-use asset related to the lease of the Company’s corporate headquarters and $ 0.1 million of professional services fees related to the execution of the Company’s 2024

Restructuring Plan, both of which are recorded as a component of general and administrative in the consolidated statements of operations and comprehensive loss.

The impairment charge of $ 0.9 million related to the Company’s corporate headquarters was the result of a partial exit from the office space for which the Company has an operating lease.

The Company intends to sublease the vacated space in connection with the partial exit from the facility, and as a result, the Company determined that the right-of-use asset associated with the lease may exceed its fair value.

The Company performed an assessment of the right-of-use asset and determined that the carrying value of the asset was impaired based on the application of a discounted cash flow model to a valuation appraisal of the facility obtained from a third party.

The majority of the employee severance and benefits costs incurred in connection with the 2024 Restructuring Plan were related to noncash stock-based compensation.

Restructuring costs related to the 2024 Restructuring Plan for the years ended December 31, 2025 and 2024 and from inception to date were as follows (in thousands):

December 31, 2025 Year Ended

December 31, 2024 Inception to Date

Workforce reduction $ ( 125 ) $ 3,897 $ 3,772

Impairment loss on right-of-use asset 59 898 957

Professional fees — 66 66

Total $ ( 66 ) $ 4,861 $ 4,795

The majority of the workforce reduction costs incurred in connection with the 2024 Restructuring Plan were related to noncash stock-based compensation.

The Company accelerated certain of the RSUs awarded to employees impacted by the 2024 Restructuring Plan and also extended certain of the employees’ options to satisfy the settlement of termination benefits to impacted employees.

The severance and benefits costs related to the noncash stock-based compensation amounted to $ 2.5 million, of which $ 2.1 million related to the acceleration of RSUs and $ 0.4 million related to the extension of options.

These charges were recorded as components of various line items in the consolidated statements of operations and comprehensive loss.

The following table presents the stock-based compensation costs as reported in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and December 31, 2023 (in thousands):

For the Years Ended

Stock-based Compensation

Cost of revenue $ 291 $ —

Research and development 885 —

Sales and marketing 1,225 80

General and administrative 123 45

$ 2,524 $ 125

In January 2023, the Company initiated measures to reduce headcount to pursue greater cost efficiency and align strategic initiatives (the “2023 Restructuring Plan”).

These measures were substantially completed by June 30, 2023, and the total cost was $ 3.6 million.

During this period, approximately 1 % of the Company’s workforce terminated employment voluntarily and 4 % terminated employment involuntarily.

As a result, the Company incurred employee termination expenses and other associated costs.

A summary of the restructuring charges related to the 2024 Restructuring Plan and the 2023 Restructuring Plan as reported in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2024 and 2023 are presented in the table below.

Of the total charges incurred during the year ended December 31, 2023, $ 0.7 million were related to involuntary terminations.

All costs during the year ended December 31, 2024 were related to involuntary terminations.

For the Years Ended

Total Restructuring Charges (in thousands)

Cost of revenue $ 460 $ —

Research and development 1,278 2,311

Sales and marketing 1,867 1,025

General and administrative (1)

$ 4,861 $ 3,616

(1) General and administrative includes $ 0.9 million related to the impairment of the right-of-use asset related to the lease of the Company’s corporate headquarters.

The workforce reduction costs related to the noncash stock-based compensation amounted to $ 2.5 million, of which $ 2.1 million related to the acceleration of RSUs and $ 0.4 million related to the extension of options.

The following table presents a summary of the liabilities related to the 2024 Restructuring Plan that are included within accrued expenses and other current liabilities on the consolidated balance sheet (in thousands):

4 unchanged sentences

Balance as of December 31, 2024 355

(1) Charges incurred exclude right-of-use asset impairment of $ 0.9 million.

The following table presents a summary of the liabilities related to the 2023 Restructuring Plan that were included within accrued expenses and other current liabilities on the consolidated balance sheet, (in thousands):

Cash payments during the period ( 230 )

Other adjustments ( 125 )

Balance as of December 31, 2025 $ —

2023 Restructuring Plan

In January 2023, the Company initiated measures to reduce headcount to pursue greater cost efficiency and align strategic initiatives (the “2023 Restructuring Plan”).

All costs under the 2023 Restructuring Plan were incurred during the year ended December 31, 2023 for workforce reduction costs totaling $ 3.6 million.

During this period, approximately 1 % of the

Company’s workforce terminated employment voluntarily and 4 % terminated employment involuntarily.

As a result, the Company incurred employee termination expenses and other associated costs.

The following table presents a summary of the liabilities related to the 2023 Restructuring Plan (in thousands):

Balance as of January 1, 2023 $ —

2 unchanged sentences

Balance as of December 31, 2023

Cumulative Restructuring Costs

Total restructuring costs related to the Company’s restructuring plans were reported in the consolidated statements of operations and comprehensive loss were as follows (in thousands):

For the Years Ended December 31,

2025 2024 2023

Restructuring Costs

Cost of revenue $ 115 $ 460 $ —

Research and development 285 1,278 2,311

Sales and marketing 687 1,867 1,025

General and administrative 1,385 1,256 280

Total $ 2,472 $ 4,861 $ 3,616

The following table presents the stock-based compensation costs related to our restructuring activity as reported in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024 (in thousands):

For the Years Ended December 31,

2025 2024 2023

Stock-based Compensation

Cost of revenue $ — $ 291 $ —

Research and development — 885 —

Sales and marketing 11 1,225 80

General and administrative — 123 45

Total $ 11 $ 2,524 $ 125

Segment Reporting

The Company operates in one reportable segment, which derives revenue from the services operating on its storage platform.

The Company’s CODM, the chief executive officer, reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance on a regular basis.

The CODM does not assess the performance of our products and solutions on measures of profit or loss, or asset-based metrics.

Measure of Segment Assets

The CODM reviews asset information on a consolidated basis;

accordingly, the measure of segment assets is total consolidated assets as reported on the consolidated balance sheet.

Measure of Segment Profit or Loss

The key measure of segment profit or loss utilized by the CODM to assess performance of and allocate resources to the Company’s operating segment is consolidated net income (loss) and adjusted earnings before interest, taxes, depreciation and amortization.

Net income (loss) is used in monitoring budget versus actual results.

This measure is presented on the consolidated statements of operations and comprehensive loss.

Significant segment expenses included in net income (loss) include cost of revenue, research and development, sales and marketing, general and administrative expense, investment income, interest expense, net, and income tax provision, which are presented on the consolidated statements of operations and comprehensive loss.

The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets.

See Note 3 and Note 7 for additional disclosures of disaggregated revenue and geographical information.

In addition to the significant segment expenses noted above, significant segment expenses reviewed by the CODM for the years ended December 31, 2024 and 2023 are presented in the following table (in thousands):

For the Years Ended

The key GAAP measure of segment profit or loss utilized by the CODM is consolidated net income (loss), which is presented on the consolidated statements of operations and comprehensive loss, and is used to monitor budget versus actual results.

Significant Segment Expenses

The CODM also evaluates operating performance using adjusted research and development, adjusted sales and marketing, and adjusted general and administrative (collectively, “adjusted operating expenses”) that we define as each respective GAAP expense category excluding stock-based compensation expense, depreciation and amortization, restructuring costs, and other non-recurring charges.

These adjusted operating expense measures provides the CODM with greater transparency into the underlying trends in our business by facilitating period-to-period comparisons of our ongoing cost structure, excluding the impact of certain non-cash or non-recurring items that may not be indicative of our operating performance.

These measures are intended to assist in forecasting and budgeting, in order to inform resource-allocation decisions.

The table below presents each adjusted operating expense for the years ended December 31, 2025, 2024, and 2023 as well as the items excluded from each adjusted measure (in thousands):

For the Years Ended December 31,

2025 2024 2023

Revenue $ 145,835 $ 127,628 $ 102,019

Adjusted cost of revenue 30,234 28,448 25,845

Adjusted research and development 33,302 30,166 27,505

Adjusted sales and marketing 30,474 34,103 31,335

Adjusted general and administrative 20,061 21,875 21,304

Depreciation 15,085 21,329 21,286

Amortization (1)

10,408 6,999 3,626

Stock-based compensation (2)

26,425 26,104 25,052

Restructuring costs 2,472 4,861 3,616

Other segment items (3)

2,986 2,274 2,163

Net loss and comprehensive loss $ ( 25,612 ) $ ( 48,531 ) $ ( 59,713 )

________________

(1) $ 0.1 million of amortization expense for the year ended December 31, 2025 is classified as restructuring charges in the table above, as these charges were incurred as part of our 2025 Restructuring and Transformation Plan.

(2) $ 2.5 million and $ 0.1 million of stock-based compensation expense for the years ended December 31, 2024 and 2023, as well as a nominal amount for the year ended December 31, 2025, are classified as restructuring charges in the table above.

(3) Other segment items include investment income, interest expense, foreign exchange (gain) loss, legal settlement costs, impairment of long-lived assets, and income tax provision.

The following table presents the components of net loss before income taxes (in thousands):

For the Years Ended

For the Years Ended December 31,

2025 2024 2023

United States

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The provision for income taxes included in the consolidated statements of operations and comprehensive loss is comprised of the following (in thousands):

For the Years Ended

For the Years Ended December 31,

2025 2024 2023

Total current

1 unchanged sentence

Total provision

The following table presents a reconciliation of the statutory federal rate and the Company’s effective tax rate, using a federal statutory rate of 21%:

For the Years Ended

The following table presents a reconciliation of the statutory federal rate of 21% and the Company’s effective tax rate:

For the Years Ended December 31,

2025 2024 2023

Statutory federal income (benefit) rate

4 unchanged sentences

Change in valuation allowance

29 % 37 % 29 %

Stock-based compensation

3 % ( 4 ) % 2 %

( 7 ) % ( 7 ) % ( 6 ) %

( 1 ) % — % — %

Effective tax rate

11 unchanged sentences

Accruals and other

76,236 56,097

Total gross deferred tax assets 86,050 76,236

Valuation allowance

( 69,974 ) ( 62,492 )

Total deferred tax assets

Total net deferred tax assets

16,076 13,744

13 unchanged sentences

deferred tax assets have been fully offset by a valuation allowance.

The val uation allowance increased by $ 17.9 million and $ 17.6 million during the years ended December 31, 2024 and 2023, respectively.

Effective for tax years beginning after December 31, 2021, taxpayers are required to capitalize any expenses incurred that are considered incidental to research and experimentation (R&E) activities under IRC Section 174.

While taxpayers historically had the option of deducting these expenses under IRC Section 174, the December 2017 Tax Cuts and Jobs Act mandates capitalization and amortization of R&E expenses for tax years beginning after December 31, 2021.

Expenses incurred in connection with R&E activities in the US must be amortized over a 5-year period if incurred, and R&E expenses incurred outside the US must be amortized over a 15-year period.

R&E activities are broader in scope than qualified research activities that are considered under IRC Section 41 (relating to the research tax credit).

For the year ended December 31, 2024, the Company performed an analysis based on available guidance and determined that it will not impact (increase) taxable income.

The Company will continue to monitor this issue for future developments and its impact on taxable income.

The val uation allowance increased by $ 7.5 million, $ 17.9 million, and $ 17.6 million during the years ended December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2025, the Company had federal and state NOL carryforwards of $ 172.5 million and $ 109.7 million, respectively.

The federal NOL carryforwards consisted of $ 16.0 million generated before January 1, 2018, which will begin to expire in 2027 but are able to offset 100% of taxable income and $ 107.3 million generated after December 31, 2017 that will carryforward indefinitely but will be subject to 80% taxable income limitation beginning in tax years after December 31, 2022 as provided by the CARES Act.

The federal NOL carryforwards consisted of $ 16.0 million generated before January 1, 2018, which will begin to expire in 2030 and are able to offset 100% of taxable income.

The NOLs generated after December 31, 2017 of $ 156.5 million carryforward indefinitely, and can only offset 80% of taxable income when utilized with exception of NOLs generated in 2018 to 2020 which carryforward indefinitely and can offset 100% of taxable income for tax years beginning before January 1, 2021, as provided by the CARES Act.

State net operating loss carryforwards in the amount of $ 90.6 million begin expiring in 2029 and approximately $ 19.1 million have an indefinite life.

3 unchanged sentences

The Company performed a Section 382 analysis through December 31, 2024 and determined that ownership changes occurred in the year 2007, 2009, 2012, and 2024.

The ownership changes identified had no significant impact on federal and state net operating losses.

The ownership changes identified had no significant

impact on federal and state net operating losses.

The annual limitations may result in the expiration of net operating losses and credits before utilization in the future.

On August 16, 2022, the Inflation Reduction Act was enacted in the U.S.

and introduced a 15% alternative minimum tax based on the financial statement income of certain large corporations (“CAMT”) and an excise tax of 1% of stock repurchases, effective January 1, 2023.

The various provisions of the Inflation Reduction Act do not have a material impact on the Company’s consolidated financial statements for the years ended December 31, 2024 and 2023 .

Uncertain Income Tax Positions

The following table summarizes the activity related to the Company’s unrecognized tax benefits (in thousands):

For the Years Ended

For the Years Ended December 31,

2025 2024 2023

Balance at beginning of year

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The total amount of unrecognized tax benefits as of December 31, 2025 was $ 2.8 million, all related to federal and state tax jurisdictions .

If recognized, none of the unrecognized tax benefits would affect the effective tax rate.

If recognized, these unrecognized tax benefits would not affect the effective tax rate because the Company maintains a full valuation allowance against its deferred tax assets.

As of December 31, 2025, the Company had no interest related to unrecognized tax benefits.

7 unchanged sentences

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data