What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-05 · 200 added, 102 removed, 290 unchanged (51% of the section changed)

19 unchanged sentences

The scientific principles underlying our work must be transparent and fully explainable during the regulatory process, so we have developed expertise in incorporating data and results into regulatory documents.

software and regulatory services streamline the creation of regulatory filings and speed regulatory data flow to maximize the chances of successful commercialization.

Our software and regulatory services streamline the creation of regulatory filings and speed regulatory data flow to maximize the chances of successful commercialization.

AI and machine learning technologies are being incorporated across our software and services portfolios, providing opportunities to expand the number of data sources utilized, better predict outcomes, and streamline reporting.

63 unchanged sentences

The following table reconciles net income (loss) to Adjusted EBITDA:

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED

2025 2024 2025 2024

(in thousands)

2 unchanged sentences

Interest income(a) (1,243) (2,486) (2,885) (5,060)

Benefit from income taxes(a) (201) (751)

Depreciation and amortization expense(a) 873 432

Intangible asset amortization(a) 17,741 15,996

(Benefit from) Provision for income taxes(a) 8,219 305 8,018 (446)

Depreciation and amortization 18,818 16,597 37,432 33,025

Currency (gain) loss(a) (577) 104 (639) 980

2 unchanged sentences

Acquisition-related expenses(e) 428 1,073 1,304 2,787

Reorganization expense(f) 151 51

Loss on disposal of fixed assets(g) 6 —

Executive recruiting expense(h) 661 380

Transaction - related expenses (f) — 2,753 — 2,753

Severance expense(g) — 183 — 183

Reorganization expense(h) 934 2,163 1,085 2,214

Loss (gain) on disposal of fixed assets(i) (1) 13 5 13

Executive recruiting expense(j) — 43 661 423

Adjusted EBITDA $ 31,935 $ 26,318 $ 66,778 $ 55,461

The following table reconciles net income (loss) to adjusted net income:

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED

2025 2024 2025 2024

(in thousands)

5 unchanged sentences

Acquisition-related expenses(e) 428 1,073 1,304 2,787

Reorganization expense(f) 151 51

Loss on disposal of fixed assets(g) 6 —

Executive recruiting expense(h) 661 380

Income tax expense impact of adjustments(i) (5,071) (7,089)

Transaction - related expenses (f) — 2,753 — 2,753

Severance expense(g) — 183 — 183

Reorganization expense(h) 934 2,163 1,085 2,214

Loss (gain) on disposal of fixed assets(i) (1) 13 5 13

Executive recruiting expense(j) — 43 661 423

Income tax expense impact of adjustments(k) (3,799) (8,273) (8,869) (15,362)

Adjusted net income $ 11,558 $ 11,393 $ 33,806 $ 27,941

The following table reconciles diluted earnings per share to adjusted diluted earnings per share:

THREE MONTHS ENDED MARCH 31,

THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED

2025 2024 2025 2024

Diluted earnings per share(a) (0.01) (0.08) 0.02 (0.11)

4 unchanged sentences

Acquisition-related expenses(e) — 0.01 0.01 0.02

Reorganization expense(f) — —

Loss on disposal of fixed assets(g) — —

Executive recruiting expense(h) — —

Income tax expense impact of adjustments(i) (0.03) (0.04)

Transaction - related expenses (f) — 0.02 — 0.02

Severance expense(g) — — — —

Reorganization expense(h) 0.01 0.01 0.01 0.01

Loss (gain) on disposal of fixed assets(i) — — — —

Executive recruiting expense(j) — — — —

Income tax expense impact of adjustments(k) (0.02) (0.05) (0.05) (0.10)

Adjusted diluted earnings per share $ 0.07 $ 0.07 $ 0.21 $ 0.17

Basic weighted average common shares outstanding 160,916,057 160,505,223 160,955,936 160,014,746

Effect of potentially dilutive shares outstanding (j) 354,034 889,094

Effect of potentially dilutive shares outstanding (l) 932,945 961,455 645,088 925,274

Adjusted diluted weighted average common shares outstanding 161,849,002 161,466,678 161,601,024 160,940,020

6 unchanged sentences

(e) Represents costs associated with mergers and acquisitions and any retention bonuses pursuant to the acquisitions.

(f) Represents expenses related to reorganization, including legal entity reorganization and lease abandonment costs associated with the evaluation of our office space footprint.

(g) Represents the gain or loss related to the disposal of fixed assets.

(h) Represents recruiting and relocation expenses related to hiring senior executives.

(i) Represents the income tax effect of the non-GAAP adjustments calculated using the applicable statutory rate by jurisdiction.

(j) Represents potentially dilutive shares that were included from our GAAP diluted weighted average common shares outstanding.

(f) Represents costs associated with our public offerings that are not capitalized, as well as debt issuance costs that are not deferred or treated as a contra-liability directly deducted from the carrying value of the associated debt liability.

(g) Represents charges for severance provided to former executives.

(h) Represents expenses related to reorganization, including legal entity reorganization and lease abandonment costs associated with the evaluation of our office space footprint.

(i) Represents the gain or loss related to the disposal of fixed assets.

(j) Represents recruiting and relocation expenses related to hiring senior executives.

(k) Represents the income tax effect of the non-GAAP adjustments calculated using the applicable statutory rate by jurisdiction.

(l) Represents potentially dilutive shares that were included from our GAAP diluted weighted average common shares outstanding.

In addition to adjusted EBITDA, adjusted net income, and adjusted diluted earnings per share, management also uses organic revenue, a non-GAAP financial metric, to measure the growth of our existing business operations excluding the impact of acquisitions and divestitures.

1 unchanged sentence

The table below presents revenue growth from organic operations and acquisitions:

THREE MONTHS ENDED MARCH 31, Growth

Q1 2025 vs Q1 2024

SIX MONTHS ENDED

JUNE 30, Growth

vs YTD Q2 2024

(in thousands except percentage)

41 unchanged sentences

Provision for (benefit from) income taxes consists of U.S.

federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business.

federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct

We expect income tax expense to increase over time as the Company continues to grow more profitable.

Business Combinations

Since 2013 and as of March 31, 2025, we have completed 21 acquisitions, of which 14 have included software or technology.

Since 2013 and as of June 30, 2025, we have completed 21 acquisitions, of which 14 have included software or technology.

Details of acquisitions that have closed since the beginning of fiscal year 2024 are provided below.

11 unchanged sentences

Results of Operations

We have included the results of operations of acquired companies in our condensed consolidated results of operations from the date of their respective acquisitions, which impacts the comparability of our results of operations when comparing results for the three months ended March 31, 2025 to the three months ended March 31, 2024, respectively.

Three Months Ended March 31, 2025 Versus Three Months Ended March 31, 2024

The following table summarizes our unaudited statements of operations data for the three months ended at March 31, 2025 and 2024:

THREE MONTHS ENDED MARCH 31, CHANGE

We have included the results of operations of acquired companies in our condensed consolidated results of operations from the date of their respective acquisitions, which impacts the comparability of our results of operations when comparing results for the three and six months ended June 30, 2025 to the three and six months ended June 30, 2024, respectively.

Three Months Ended June 30, 2025 Versus Three Months Ended June 30, 2024

The following table summarizes our unaudited statements of operations data for the three months ended at June 30, 2025 and 2024:

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

3 unchanged sentences

Total revenues $ 104,570 $ 93,313 $ 11,257 12 %

Total revenues increased $9.4 million, or 10%, to $106.0 million for the three months ended March 31, 2025 as compared to the same period in 2024.

The overall revenue growth was primarily due to an increase in revenue from our technology-enabled services and software product offerings, driven by growth from business acquisition, which increased by $5.9 million, as well as strong demand from existing customers, expansion of relationships with existing customers and new customers.

Software revenues increased $7.1 million, or 18%, to $46.4 million for the three months ended March 31, 2025 as compared to the same period in 2024, primarily driven by by growth from business acquisition, which increased by $5.6 million, as well as strong demand within existing customers, and expansion of relationships with existing customers.

Services revenues increased $2.3 million, or 4%, to $59.6 million for the three months ended March 31, 2025 as compared to the same period in 2024, primarily attributed to continued growth in technology-enabled services with existing and new customers.

Total revenues increased $11.3 million, or 12%, to $104.6 million for the three months ended June 30, 2025 as compared to the same period in 2024.

The overall revenue growth was primarily due to an increase in revenue from our technology-enabled services and software product offerings, driven by strong demand from existing customers, expansion of relationships with existing customers and new customers as well as growth from business acquisition, which increased by $5.3 million.

Software revenues increased $8.5 million, or 22%, to $46.7 million for the three months ended June 30, 2025 as compared to the same period in 2024, primarily driven by growth from business acquisition, which increased by $5.1 million, as well as strong demand within existing customers, and expansion of relationships with existing customers.

Services revenues increased $2.8 million, or 5%, to $57.9 million for the three months ended June 30, 2025 as compared to the same period in 2024, primarily attributed to continued growth in technology-enabled services with existing and new customers.

Cost of Revenues

THREE MONTHS ENDED MARCH 31, CHANGE

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

1 unchanged sentence

Cost of revenues $ 40,716 $ 39,809 $ 907 2 %

Cost of revenues increased $2.3 million, or 6%, to $41.5 million for the three months ended March 31, 2025 as compared to the same period in 2024.

The increase was primarily due to a $1.2 million increase in intangible assets amortization, a $0.6 million increase in licensing cost, and a $0.5 million increase related to executive recruiting expenses.

% of total revenues 39 % 43 %

Cost of revenues increased $0.9 million, or 2%, to $40.7 million for the three months ended June 30, 2025 as compared to the same period in 2024.

The increase was primarily due to a $1.3 million increase in intangible assets amortization, a $1.2 million increase in license and service cost, a $0.7 million increase in professional and consulting expense, and a $0.1 million increase in equipment and software expense, partially offset by a $1.3 million decrease in in employee-related costs, and a $1.2 million decrease in stock-based compensation costs.

Sales and Marketing Expenses

THREE MONTHS ENDED MARCH 31, CHANGE

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

2 unchanged sentences

% of total revenues 13 % 13 %

Sales and marketing expenses increased by $2.0 million, or 19%, to $12.7 million for the three months ended March 31, 2025 as compared to the same period in 2024.

Sales and marketing expenses increased primarily due to a $2.0 million increase in employee-related costs mainly resulting from head count growth driven by acquisitions along with investment to build the commercial organization, and a $0.2 million increase in stock-based compensation costs, partially offset by a $0.3 million decrease in travel related expenses.

Sales and marketing expenses increased by $1.8 million, or 15%, to $14.0 million for the three months ended June 30, 2025 as compared to the same period in 2024.

Sales and marketing expenses increased primarily due to a $1.5 million increase in employee-related costs mainly resulting from head count growth driven by acquisitions along with investment to build the commercial organization, and a $0.1 million increase in marketing expense.

Research and Development Expenses

THREE MONTHS ENDED MARCH 31, CHANGE

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

2 unchanged sentences

% of total revenues 9 % 10 %

Research and development expenses decreased by $1.5 million, or 12%, to $10.5 million for the three months ended March 31, 2025 as compared to the same period in 2024.

The decrease in research and development expenses was primarily due to a $2.3 million increase in capitalized cost in R&D, reflecting strategic investments, a $0.7 million decrease in stock-based compensation costs, and a $0.2 million decrease in licensing cost, partially offset by a $1.8 million increase in employee-related costs, mainly resulting from head count

growth associated with investments in software development, including AI integration across our product portfolio.

Research and development expenses decreased by $0.1 million, or 1%, to $9.0 million for the three months ended June 30, 2025 as compared to the same period in 2024.

The decrease in research and development expenses was primarily due to a $1.3 million increase in capitalized cost in R&D, a $0.7 million decrease in stock-based compensation costs, a $0.2 million decrease in license cost, and a $0.1 million decrease in professional and consulting expense, partially offset by a $2.3 million increase in employee-related costs, mainly resulting from head count growth associated with investments in software development, including AI integration across our product portfolio.

General and Administrative Expenses

THREE MONTHS ENDED MARCH 31, CHANGE

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

2 unchanged sentences

% of total revenues 16 % 30 %

General and administrative expenses decreased by $3.3 million, or 14%, to $19.7 million for the three months ended March 31, 2025 as compared to the same period in 2024.

The decrease in general and administrative expenses was primarily due to a $3.1 million decrease related to remeasurement changes in the fair value of contingent consideration, a $1.4 million decrease in stock-based compensation costs, and a $0.8 million increase in lease abandonment gains, and partially offset by a $0.7 million increase in employee-related costs primarily resulting from headcount growth and organizational restructure, a $0.5 million increase in business acquisition costs, a $0.3 million increase in provision for credit allowance, a $0.3 million increase in public company expenses and other miscellaneous expenses, and a $0.2 million increase in professional and consulting expenses.

Intangible Asset Amortization

THREE MONTHS ENDED MARCH 31, CHANGE

General and administrative expenses decreased by $10.9 million, or 39%, to $17.2 million for the three months ended June 30, 2025 as compared to the same period in 2024.

The decrease in general and administrative expenses was primarily due to an $8.5 million reduction related to remeasurement changes in the fair value of contingent consideration, a $2.6 million decrease in transaction costs primarily due to significant refinancing expenses for a term loan and revolving line of credit incurred in the same quarter of the prior year, a $1.3 million decrease in employee-related costs primarily due to decrease in organizational restructure expense, and a $0.7 million decrease in provision for credit allowance, partially offset by a $1.1 million increase in professional and consulting expense, a $0.7 million increase in equipment and software expense, a $0.3 million increase in stock-based compensation costs, and a $0.3 million increase in facility and lease-related expense.

Depreciation and Amortization

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Intangible asset amortization $ 13,094 $ 12,593 $ 501 4 %

Depreciation and amortization

$ 14,155 $ 13,194 $ 961 7 %

% of total revenues 14 % 14 %

Intangible asset amortization expense increased by $0.5 million, or 4%, to $13.1 million for the three months ended March 31, 2025 as compared to the same period in 2024.

The increase in intangible asset amortization expense was primarily due to a $1.0 million increase in amortization in capitalized software, and offset by a $0.5 million decrease in amortization from acquired intangible assets.

Depreciation and Amortization Expense

THREE MONTHS ENDED MARCH 31, CHANGE

Amortization and depreciation expense increased by $1.0 million, or 7%, to $14.2 million for the three months ended June 30, 2025 as compared to the same period in 2024.

The increase in depreciation and amortization expense was primarily due to a $1.0 million net increase in intangible assets amortization, which included a $1.6 million increase in amortization of capitalized software, partially offset by a $0.6 million decrease in amortization of acquired intangible assets.

In addition, depreciation expense for fixed assets decreased $0.1 million, primarily due to a $0.1 million decrease in depreciation of furniture and fixture.

Interest Expense

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Interest expense $ 4,802 $ 5,578 $ (776) (14) %

% of total revenues 5 % 6 %

Interest expense decreased by $0.8 million, or 14%, to $4.8 million for the three months ended June 30, 2025, as compared to the same period in 2024.

The change in interest expense was primarily due to a $1.2 million decrease in interest from our floating rate term loan debt, primarily due to a decline in market interest rates and a reduced base margin rate resulting from the refinancing of the term loan, and a $0.2 million decrease related with the amortization of debt issuance cost, partially offset by a $0.6 million decrease in gain from our interest swap hedge activities.

Net Other Income

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Net other (income) expense $ (1,501) $ (2,350) $ 849 (36) %

% of total revenues (1) % (3) %

Net other income decreased by $0.8 million to $1.5 million for the three months ended June 30, 2025 as compared to the same period in 2024.

The decrease in net other income was primarily due to a $1.2 million decrease in interest income, along with a $0.3 million increase in miscellaneous expense, partially offset by $0.7 million increase in gain from remeasurement related to the fluctuation of the foreign currency rate.

Provision for Income Taxes

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Provision for Income Taxes

$ 8,219 $ 305 $ 7,914 (2595) %

Effective income tax rate 131 % (2) %

Our income tax expense was $8.2 million, resulting in an effective income tax rate of 131% for the three months ended June 30, 2025 as compared to an income tax expense of $0.3 million, or an effective income tax rate of (2)%, for the same period in 2024.

Our income tax expense for the three months ended June 30, 2025 and 2024 was primarily due to the tax effects of U.S.

pre-tax income, the relative mix of domestic and international

earnings, the impact of non-deductible items, adjustments to the valuation allowances, the effects of tax elections made for U.K.

earnings, and discrete tax items.

THREE MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

$ (1,968) $ (12,574) $ 10,606 84 %

Net loss was $2.0 million representing a $10.6 million increase in net income for the three months ended June 30, 2025 as compared to a net loss of $12.6 million for the same period of 2024.

The increase in net income was primarily due to a $11.3 million increase in revenue, a $8.2 million decrease in operating expenses, partially offset by a $7.9 million increase in tax expense and a $0.9 million increase in cost of revenue.

Six Months Ended June 30, 2025 Versus Six Months Ended June 30, 2024

The following table summarizes our unaudited statements of operations data for the six months ended at June 30, 2025 and 2024:

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Software $ 93,064 $ 77,514 $ 15,550 20 %

Services 117,510 112,453 5,057 4 %

Total revenues $ 210,574 $ 189,967 $ 20,607 11 %

Total revenues increased $20.6 million, or 11%, to $210.6 million for the six months ended June 30, 2025 as compared to the same period in 2024.

The overall revenue growth was primarily due to an increase in revenue from our technology-enabled services and software product offerings, driven by growth from business acquisition, which increased by $11.2 million, as well as strong demand from existing customers, expansion of relationships with existing customers and new customers.

Software revenues increased $15.6 million, or 20%, to $93.1 million for the six months ended June 30, 2025 as compared to the same period in 2024, primarily driven by by growth from business acquisition, which increased by $10.6 million, as well as strong demand within existing customers, and expansion of relationships with existing customers.

Services revenues increased $5.1 million, or 4%, to $117.5 million for the six months ended June 30, 2025 as compared to the same period in 2024, primarily attributed to continued growth in technology-enabled services with existing and new customers.

Cost of Revenues

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Cost of revenues $ 82,237 $ 79,064 $ 3,173 4 %

% of total revenues 39 % 42 %

Cost of revenues increased $3.2 million, or 4%, to $82.2 million for the six months ended June 30, 2025 as compared to the same period in 2024.

The increase was primarily due to a $2.5 million increase in intangible assets amortization, a $1.8 million increase in license and service cost, a $0.8 million increase in professional and consulting expense, a $0.5 million increase related to executive recruiting expenses, and a $0.3 million increase in equipment and software expense, partially offset by a $1.3 million decrease in employee related costs, and a $1.3 million decrease in stock-based compensation costs.

Sales and Marketing Expenses

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Sales and marketing $ 26,706 $ 22,900 $ 3,806 17 %

% of total revenues 13 % 12 %

Sales and marketing expenses increased by $3.8 million, or 17%, to $26.7 million for the six months ended June 30, 2025 as compared to the same period in 2024.

Sales and marketing expenses increased primarily due to a $3.5 million increase in employee-related costs mainly resulting from head count growth driven by investment to build the commercial organization along with acquisitions, a $0.2 million increase in stock-based compensation costs, a $0.2 million increase in equipment and software expense, and a $0.1 million increase in sales commission and bonus, partially offset by a $0.2 million decrease in travel related expenses.

Research and Development Expenses

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Research and development $ 19,494 $ 21,062 $ (1,568) (7) %

% of total revenues 9 % 11 %

Research and development expenses decreased by $1.6 million, or 7%, to $19.5 million for the six months ended June 30, 2025 as compared to the same period in 2024.

The decrease in research and development expenses was primarily due to a $3.6 million increase in capitalized cost in R&D, reflecting strategic investments, a $1.4 million decrease in stock-based compensation costs, and a $0.4 million decrease in licensing cost, and a $0.3 million decrease in professional and consulting expense, partially offset by a $4.1 million increase in employee-related costs, mainly resulting from head count growth associated with investments in software development, including AI integration across our product portfolio.

General and Administrative Expenses

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

General and administrative $ 36,840 $ 51,050 $ (14,210) (28) %

% of total revenues 17 % 27 %

General and administrative expenses decreased by $14.2 million, or 28%, to $36.8 million for the six months ended June 30, 2025 as compared to the same period in 2024.

The decrease in general and administrative expenses was primarily due to a $11.6 million decrease related to remeasurement changes in the fair value of contingent consideration, a $2.6 million decrease in transaction costs primarily due to significant refinancing expenses for a term loan and revolving line of credit incurred in the same period of the prior year, a $1.1 million decrease in stock-based compensation costs, a $0.7 million decrease in merger and acquisition cost, a $0.5 million decrease in employee-related costs primarily due to lower organizational restructure expense, a $0.4 million decrease in provision for credit allowance, and a $0.2 million decrease in executive recruiting expense, partially offset by a $2.2 million increase in professional and consulting expense, and an $0.8 million increase in equipment and software expense.

Depreciation and Amortization

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Depreciation and amortization $ 28,122 $ 26,219 $ 1,903 7 %

% of total revenues 13 % 14 %

Depreciation and amortization expense increased $0.4 million, to $0.9 million for the three months ended March 31, 2025 as compared to the same period in 2024.

The increase in depreciation and amortization expense was primarily due to a $0.5 million increase in depreciation expense for computer equipment.

Amortization and depreciation expense increased by $1.9 million, or 7%, to $28.1 million for the six months ended June 30, 2025 as compared to the same period in 2024.

The increase in depreciation and amortization expense was primarily due to a net $2.0 million increase in intangible assets amortization, which included a $3.1 million increase in amortization of capitalized software, partially offset by a $1.1 million decrease in amortization of acquired intangible assets.

In addition, depreciation expense for fixed assets decreased $0.1 million, primarily due to a $0.1 million decrease in depreciation of furniture and fixture.

Interest Expense

THREE MONTHS ENDED MARCH 31, CHANGE

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

2 unchanged sentences

% of total revenues 5 % 6 %

Interest expense decreased by $0.9 million, or 16%, to $4.8 million for the three months ended March 31, 2025, as compared to the same period in 2024.

The change in interest expense was primarily due to a $1.3 million decrease in interest from our floating rate term loan debt, primarily due to a decline in market interest rates and a reduced base margin rate resulting from the refinancing of the term loan, and a $0.2 million decrease related with the amortization of debt issuance cost, partially offset by a $0.6 million decrease in gain from our interest swap hedge activities.

Net Other (Income) expense

THREE MONTHS ENDED MARCH 31, CHANGE

Interest expense decreased by $1.7 million, or 15%, to $9.6 million for the six months ended June 30, 2025, as compared to the same period in 2024.

The change in interest expense was primarily due to a $2.6 million decrease in interest from our floating rate term loan debt, primarily due to a decline in market interest rates and a reduced base margin rate resulting from the refinancing of the term loan, and a $0.5 million decrease related

with the amortization of debt issuance cost, partially offset by a $1.2 million decrease in gain from our interest swap hedge activities.

Net Other Income

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

2 unchanged sentences

% of total revenues (2) % (2) %

Net other income increased by $0.1 million to $1.7 million for the three months ended March 31, 2025 as compared to the same period in 2024.

The increase in net other income was primarily due to a $0.9 million increase in gain from remeasurement related to the fluctuation of the foreign currency rate, along with a $0.1 million increase in miscellaneous income, partially offset by a $0.9 million decrease in interest income.

Benefit for Income Taxes

THREE MONTHS ENDED MARCH 31, CHANGE

Net other income decreased by $0.7 million to $3.2 million for the six months ended June 30, 2025 as compared to the same period in 2024.

The decrease in net other income was primarily due to a $2.2 million decrease in interest income, and $0.2 million increase in other miscellaneous expense, partially offset by a $1.6 million increase in gain from remeasurement related to the fluctuation of the foreign currency rate.

Provision (Benefit) for Income Taxes

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

(in thousands)

Benefit for Income Taxes $ (201) $ (751) $ 550 73 %

Provision (Benefit) for Income Taxes

$ 8,018 $ (446) $ 8,464 1898 %

Effective income tax rate 74 % 3 %

Our income tax benefit was $0.2 million, resulting in an effective income tax rate of (4)% for the three months ended March 31, 2025 as compared to an income tax benefit of $0.8 million, or an effective income tax rate of 14%, for the same period in 2024.

Our income tax benefit for the three months ended March 31, 2025 and 2024 was primarily due to the tax effects of U.S.

Our income tax expense was $8.0 million, resulting in an effective income tax rate of 74% for the six months ended June 30, 2025 as compared to an income tax benefit of $0.4 million, or an effective income tax rate of 3%, for the same period in 2024.

Our income tax benefit for the six months ended June 30, 2025 and 2024 was primarily due to the tax effects of U.S.

pre-tax income, the relative mix of domestic and international earnings, the impact of non-deductible items, adjustments to the valuation allowances, the effects of tax elections made for U.K.

1 unchanged sentence

Net Income (Loss)

THREE MONTHS ENDED MARCH 31, CHANGE

SIX MONTHS ENDED JUNE 30, CHANGE

2025 2024 $ %

2 unchanged sentences

$ 2,775 $ (17,257) $ 20,032 116 %

Net income was $4.7 million representing a $9.4 million increase in net income for the three months ended March 31, 2025 as compared to a net loss of $4.7 million for the same period of 2024.

The increase in net income was primarily due to a $9.4 million increase in revenue, a $1.8 million decrease in operating expenses, and a $1.1 million increase in total net other income, partially offset by a $2.3 million increase in cost of revenue, and a $0.6 million decrease in tax benefit.

Net income was $2.8 million representing a $20.0 million increase in net income for the six months ended June 30, 2025 as compared to a net loss of $17.3 million for the same period of 2024.

The increase in net income was primarily due to a $20.6 million increase in revenue, a $10.1 million decrease in operating expenses, a $1.7 million decrease in interest expense, partially offset by an $8.5 million increase in tax expense, a $3.2 million increase in cost of revenue, and a $0.7 million decrease in net other income.

Liquidity and Capital Resources

We have consistently generated positive cash flow from operations, providing $17.4 million and $4.3 million as a source of funds for the three months ended March 31, 2025 and 2024, respectively.

We have consistently generated positive cash flow from operations, providing $35.2 million and $14.1 million as a source of funds for the six months ended June 30, 2025 and 2024, respectively.

Our additional liquidity comes from several sources:

maintaining adequate balances of cash and cash equivalents, issuing common stock, and accessing credit facilities and revolving lines of credit.

The following table provides a summary of the major sources of liquidity for the three and twelve months periods ended at March 31, 2025 and December 31, 2024 and as of March 31, 2025 and December 31, 2024.

MARCH 31, 2025 DECEMBER 31,

The following table provides a summary of the major sources of liquidity for the six- and 12-month periods ended at June 30, 2025 and December 31, 2024 and as of June 30, 2025 and December 31, 2024.

JUNE 30, 2025 DECEMBER 31,

(dollars in thousands)

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(a) Net cash from operating activities for three months ended at March 31, 2025 and twelve months ended at December 31, 2024.

(b) Cash balances as of March 31, 2025 and December 31, 2024 included $58.4 million and $45.8 million in cash and cash equivalents, respectively, held outside of the United States.

Our material cash requirements from known contractual obligations are principal and interest payments on long term debt.

(a) Net cash from operating activities for six months ended June 30, 2025 and twelve months ended December 31, 2024.

(b) Cash balances as of June 30, 2025 and December 31, 2024 included $62.3 million and $45.8 million in cash and cash equivalents, respectively, held outside of the United States.

On April 11, 2025, our Board of Directors approved a stock repurchase program authorizing the Company to repurchase up to $100.0 million of its common stock.

During the second quarter ended June 30, 2025, we repurchased 1,793,279 shares of our common stock for a total purchase price of $25.0 million.

As of June 30, 2025, approximately $75.0 million remained available under the stock repurchase program.

Our other material cash requirements from known contractual obligations are principal and interest payments on long term debt.

We also have future cash obligations of $16.9 million for lease contracts, which have remaining terms of one to nine years.

The principal amount of long-term debt outstanding as of March 31, 2025 matures in the following years:

The principal amount of long-term debt outstanding as of June 30, 2025 matures in the following years:

Remainder of 2025 2026 2027 2028 2029 Thereafter TOTAL

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We believe our existing sources of liquidity will be sufficient to meet our working capital, capital expenditures, and contractual obligations for the foreseeable future.

Our expected primary uses on a short-term

and long-term basis are for repayment of debt, interest payments, working capital, capital expenditures, geographic or service offering expansion, acquisitions, investments, and other general corporate purposes.

Our expected primary uses on a short-term and long-term basis are for repayment of debt, interest payments, working capital, capital expenditures, geographic or service offering expansion, acquisitions, investments, and other general corporate purposes.

We believe we will meet short-term and long-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash balances, and potential future equity or debt transactions.

Our future capital requirements, however, will depend on many factors, including funding for potential acquisitions, investments, and other growth and strategic opportunities, which could increase our cash requirements.

While we believe we have, and will be able to generate, sufficient liquidity to fund our operations for the foreseeable future, our sources of liquidity could be affected by factors described under “Risk Factors” in our 2024 Annual Report.

While we believe we have, and will be able to generate, sufficient liquidity to fund our operations

for the foreseeable future, our sources of liquidity could be affected by factors described under “Risk Factors” in our 2024 Annual Report.

The following table presents a summary of our cash flows for the periods shown:

THREE MONTHS ENDED MARCH 31,

SIX MONTHS ENDED JUNE 30,

(in thousands)

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Our cash flows from operating activities primarily include net income adjusted for (i) non-cash items included in net income, such as provisions (recoveries) for credit losses, depreciation and amortization, stock-based compensation, deferred taxes, and other non-cash items and (ii) changes in the balances of operating assets and liabilities.

Net cash provided by operating activities in the first three months of 2025 was $17.4 million, compared to $4.3 million in the same period of 2024.

The $13.1 million increase in cash from operating activities was primarily driven by an increase in cash-adjusted net income, a decrease in accounts receivable, and a lower cash outflows related to prepaid and other assets, partially offset by lower cash inflows from deferred revenues and increase in accrued expenses and other liabilities.

Net cash provided by operating activities in the first six months of 2025 was $35.2 million, compared to $14.1 million in the same period of 2024.

The $21.1 million increase in cash from operating activities was primarily driven by an increase in cash-adjusted net income, a decrease in accounts receivable, and a lower cash outflows related to prepaid and other assets, partially offset by lower cash inflows from deferred revenues and increase cash outflow in accrued expenses and other liabilities.

Investing Activities

Net cash used by investing activities in the first three months of 2025 was $5.8 million, an increase of $2.2 million, compared to $3.6 million in the same period of 2024.

The change in investing activities was primarily due to a $2.2 million increase in cash utilized in capitalized software development costs to support our growth.

Net cash used by investing activities in the first six months of 2025 was $12.7 million, an increase of $3.0 million, compared to $9.7 million in the same period of 2024.

The change in investing activities was primarily due to a $3.5 million increase in cash utilized in capitalized software development costs to support our growth, and a $0.5 million decrease in cash outflow for capital expenditure.

Financing Activities

Net cash used by financing activities in the first three months of 2025 was $14.0 million, compared to $10.3 million in the same period of 2024.

The $3.6 million increase in cash outflow in financing activities was primarily due to a $4.6 million increase in cash payments for contingent consideration related to a business acquisition, partially offset by a $0.9 million decrease in cash payments associated with share awards vested and withheld for payroll tax.

Net cash used by financing activities in the first six months of 2025 was $44.7 million, compared to $14.1 million in the same period of 2024.

The $30.6 million increase in cash outflow in financing activities was primarily due to a $25.0 million increase in cash used for repurchasing the company's common stock, a $6.3 million decrease in cash inflow from debt refinancing activities, a $2.8 million increase in cash payments for contingent consideration related to a business acquisition, a $0.7 million increase in prepayments on term loan debt, partially offset by a $3.1 million decrease in cash payments associated with share awards vested and withheld for payroll tax and a $1.2 million decrease in payment for debt refinancing fees.

We have been a party to a Credit Agreement since August 2017 that provides for a senior secured term loan and commitments under a revolving credit facility (as amended, the “Credit Agreement”).

On June 26, 2024, we entered into the Fifth Amendment to the Credit Agreement (the “Amendment”), which primarily (1) amended the principal amount of the term loan to $300.0 million and the maturity date to June 26, 2031;

On June 26, 2024, we

entered into the Fifth Amendment to the Credit Agreement (the “Amendment”), which primarily (1) amended the principal amount of the term loan to $300.0 million and the maturity date to June 26, 2031;

and (2) extended the termination date associated with the $100.0 million revolving credit commitment to June 26, 2029.

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All obligations under the Credit Agreement, and the guarantees of those obligations, are secured on a first lien basis, subject to certain exceptions, by substantially all of our assets and the assets of the other guarantors.

As of March 31, 2025, we were in compliance with the covenants of the Credit Agreement.

As of March 31, 2025, we had $297.8 million of outstanding borrowings on the term loan, and $100.0 million of availability under the revolving credit facility under the Credit Agreement.

As of June 30, 2025, we were in compliance with the covenants of the Credit Agreement.

As of June 30, 2025, we had $297.0 million of outstanding borrowings on the term loan, and $100.0 million of availability under the revolving credit facility under the Credit Agreement.

Contractual Obligations and Commercial Commitments

There have been no material changes to our contractual obligations during the three months ended March 31, 2025 from those disclosed in our 2024 Annual Report, except for payments made in the ordinary course of business.

We recorded income tax benefit of $0.2 million for the three months ended March 31, 2025 and income tax benefit $0.8 million for the three months ended March 31, 2024.

As of March 31, 2025, we had federal and state NOLs of approximately $6.2 million and $4.9 million, respectively, which are available to reduce future taxable income and expire between 2035 and 2036 and 2029 and 2040, respectively.

There have been no material changes to our contractual obligations during the six months ended June 30, 2025 from those disclosed in our 2024 Annual Report, except for payments made in the ordinary course of business.

We recorded income tax expense of $8.0 million for the six months ended June 30, 2025 and income tax benefit $0.4 million for the six months ended June 30, 2024.

As of June 30, 2025, we had federal and state NOLs of approximately $6.2 million and $4.9 million, respectively, which are available to reduce future taxable income and expire between 2035 and 2036 and 2029 and 2040, respectively.

We had federal R&D tax credit carryforwards of approximately $0.3 million to offset future income taxes, which expire between 2027 and 2048.

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Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.

As required by Accounting Standards Codification Topic 740, Income Taxes, our management has evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets, which are composed

principally of NOL carryforwards, Section 174 carryforwards, investment tax credit carryforward, and foreign tax credit carryforwards.

As required by Accounting Standards Codification (‘‘ASC’’) Topic 740, Income Taxes, our management has evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets, which are composed principally of NOL carryforwards, Section 174 carryforwards, investment tax credit carryforward, and foreign tax credit carryforwards.

Management has determined that it is more likely than not that we will not realize the benefits of foreign tax credit carryforwards.

At the foreign subsidiaries, management has determined that it is more likely than not that we will not realize the benefits of certain NOL carryforwards.

As a result, a valuation allowance of $24 million was recorded at December 31, 2024.

As of March 31, 2025, the valuation allowance remained unchanged from December 31, 2024.

As a result, a

valuation allowance of $24 million is recorded at December 31, 2024.

As of June 30, 2025, the valuation allowance remained unchanged from December 31, 2024.

Off-Balance Sheet Arrangements

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We discussed the accounting policies that we believe are most critical to the portrayal of our results of operations and financial condition and require management’s most difficult, subjective, and complex judgments in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2024 Annual Report.

There were no significant changes to our critical accounting estimates during the three months ended March 31, 2025.

There were no significant changes to our critical accounting estimates during the three months ended June 30, 2025.

Recently Adopted and Issued Accounting Standards

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For information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures about Market Risk,” in Part II, Item 7A of the Company’s 2024 Annual Report.

There were no material changes to the Company’s market risk exposure during the three months ended March 31, 2025.

There were no material changes to the Company’s market risk exposure during the six months ended June 30, 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis