What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 159 added, 149 removed, 610 unchanged (34% of the section changed)

40 unchanged sentences

(in thousands, except per share amounts)

For the three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Cost of revenue (1)

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Other expense

Income before provision for income taxes

Income (loss) before provision for income taxes

Provision for income taxes

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(1) Amounts include stock-based compensation expense and associated payroll tax costs, as follows:

For the three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Cost of revenue

7 unchanged sentences

(in thousands)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Net income (loss)

Other comprehensive income (loss):

Net unrealized gain on marketable securities

Net unrealized loss on marketable securities

Total comprehensive income (loss)

4 unchanged sentences

(in thousands)

For the three months ended March 31, 2026

Three and six months ended June 30, 2026

Comprehensive

2 unchanged sentences

Proceeds from exercise of stock options

Release of restricted stock units

Restricted stock units vested, net of shares withheld for employee taxes

Stock-based compensation

1 unchanged sentence

Balance at March 31, 2026

For the three months ended March 31, 2025

Proceeds from exercise of stock options

Restricted stock units vested, net of shares withheld for employee taxes

Stock-based compensation

Total other comprehensive loss

Net income (loss)

Balance at June 30, 2026

Three and six months ended June 30, 2025

Comprehensive

3 unchanged sentences

Proceeds from exercise of stock options

Release of restricted stock units

Restricted stock units vested, net of shares withheld for employee taxes

Stock-based compensation

1 unchanged sentence

Balance at March 31, 2025

Proceeds from exercise of stock options

Restricted stock units vested, net of shares withheld for employee taxes

Stock-based compensation

Total other comprehensive loss

Balance at June 30, 2025

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

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(in thousands)

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

Cash flows from operating activities

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Purchase of marketable securities

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from exercise of stock options

Taxes paid related to net share settlement of stock options

Taxes paid related to net share settlement of equity awards

Payment of convertible note issuance costs

Repayment of convertible notes and financing obligation

Net cash used in financing activities

Net cash provided by (used in) financing activities

Net change in cash and cash equivalents and restricted cash

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Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes in our Annual Report.

The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results to be expected for the year ending December 31, 2026, or for any other period.

The results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the results to be expected for the year ending December 31, 2026, or for any other period.

Basis of consolidation

7 unchanged sentences

• the allowance for credit losses;

• constrained revenue;

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• constrained revenue;

• variable consideration for revenue recognition;

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• the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions;

Because of the use of estimates inherent in financial reporting process actual results could differ and the differences could be material to the Company’s consolidated financial statements.

Because of the use of estimates inherent in the financial reporting process, actual results could differ and the differences could be material to the Company’s consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

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The Company provides professional-grade commerce solutions for all types of customers at all stages of their ecommerce growth.

The Company conducts business as a single operating and reportable segment, which is based upon the Company's current organizational and management structure, as well as information used by the chief operating decisions makers (CODMs) to allocate resources and assess company performance.

The Company conducts business as a single operating and reportable segment, which is based upon the Company's current organizational and management structure, as well as information used by the chief operating decision makers (CODMs) to allocate resources and assess company performance.

The Company’s CODM committee is comprised of the chief executive officer (CEO) and the chief financial officer and chief operating officer (CFO and COO).

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The accounting policies of the segment are the same as those described in the summary of significant accounting policies in Note 2.

In accordance with ASC 280, the Company concludes that consolidated net loss, as reported on the consolidated statement of operations, is the key measure of profitability that is required to be reported as it is the measure determined in accordance with measurement principles most consistent with GAAP.

The CODMs use net loss to allocate resources and assess performance which enhances the CODMs' ability to compare past financial performance with current financial performance and analyze business performance and trends.

In accordance with ASC 280, the Company concludes that consolidated net income (loss), as reported on the consolidated statement of operations, is the key measure of profitability that is required to be reported as it is the measure determined in accordance with measurement principles most consistent with GAAP.

The CODMs use net income (loss) to allocate resources and assess performance which enhances the CODMs' ability to compare past financial performance with current financial performance and analyze business performance and trends.

This metric is used when monitoring budget versus actual results, and to assess the performance of the Company's strategic priorities of driving efficient revenue growth.

The significant expenses within net loss on which the CODM committee relies include those that are reported on the consolidated statements of operations.

The significant expenses within net income (loss) on which the CODM committee relies include those that are reported on the consolidated statements of operations.

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

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Billing for revenues relating to the volume of transactions processed by the customer are generally billed a month in arrears, resulting in an unbilled receivable.

The accounts receivable balance at March 31, 2026 and December 31, 2025 included unbilled receiv ables of $ 15.7 million, a nd $ 14.3 million, respectively.

The accounts receivable balance at June 30, 2026 and December 31, 2025 included unbilled receivables of $ 15.0 million an d $ 14.3 million, respectively.

The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for credit losses for accounts receivable deemed uncollectible.

In order to determine the allowance, the Company analyzes grouped customers by similar risk profiles, along with the invoiced accounts receivable portfolio, the age of the outstanding balance and historical write-offs, unbilled accounts receivable for significant risks and historical collection activity.

To determine the allowance, the Company analyzes grouped customers by similar risk profiles, along with the invoiced accounts receivable portfolio, the age of the outstanding balance and historical write-offs, unbilled accounts receivable for significant risks and historical collection activity.

Additionally, the Company applied the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets.

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Balance at March 31, 2026

Provision for expected credit losses

Write-offs recorded against the allowance

Balance at June 30, 2026

Contract Assets

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Typically, contract assets arise from agreements that have tiered billings over the contract life, promotional billing periods, and partner and services revenue agreements that include substantive minimums.

Net contract assets we re $ 2.2 million a s of March 31, 2026 as compared to $ 2.5 million as of December 31, 2025.

Net contract assets wer e $ 1.8 million as of June 30, 2026 as compared to $ 2.5 million as of December 31, 2025.

The Company is exposed to credit losses primarily through sales of products and services to customers and partners.

The Company assesses the collectability of outstanding contract assets on an ongoing basis and maintains a reserve which is included in the allowance for credit losses for contract assets deemed uncollectible.

In order to determine the allowance, the Company analyzes the contract asset portfolio for significant risks by considering historical collection experience to determine what will ultimately be collected from its customers and partners.

To determine the allowance, the Company analyzes the contract asset portfolio for significant risks by considering historical collection experience to determine what will ultimately be collected from its customers and partners.

Delinquency level and customer type have been identified as the primary specific risk affecting the Company’s contract assets.

The Company applied the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets.

The Company has provisione d $ 0.3 million for credit losses related to contract assets as of March 31, 2026 and December 31, 2025 .

The Company has provisioned $ 0.3 million for credit losses related to contract assets as of June 30, 2026 and December 31, 2025.

Deferred commissions

The Company capitalizes certain sales commissions earned by the Company's sales and account management teams as these commission payments are considered incremental and recoverable costs of obtaining a contract with a customer.

The Company begins amortizing deferred commissions costs for a particular customer agreement once the revenue recognition criteria are met and

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amortizes those deferred costs over the expected period of customer benefit.

The Company begins amortizing deferred commissions costs for a particular customer agreement once the revenue recognition criteria are met and amortizes those deferred costs over the expected period of customer benefit.

The Company amortizes deferred sales commissions ratably over the customer life which is approximately 3 years.

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Amounts recognized from deferred revenue represent primarily revenue from the sale of subscription solutions, integration, and marketing services.

The Company recognize d $ 30.4 million of previously deferred revenue during the three months ended March 31, 2026 .

The Company recogni zed $ 14.3 million and $ 44.7 million o f previously deferred revenue during the three and six months ended June 30, 2026 .

Capitalized Internal-Use Software Costs

The Company capitalizes software costs associated with the development of internal software in accordance with ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software.

These costs are incurred during the application development phase and meet other requirements for capitalization.

These costs are incurred during the application development phase and meet other requirements for capitalization, including certain software tools.

Capitalized software costs are recorded as part of property and equipment, net, and capitalized software costs related to hosting arrangements are recorded within prepaid expenses and other assets within the condensed consolidated balance sheets.

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Revenue from revenue-sharing arrangements is recognized at the time the earning activity is complete, which is generally monthly and variable based on customer usage.

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Revenue from partner technology integration fees is recognized on a straight-line basis over the life of the contract, beginning when the integration is complete.

The Company's most significant partner technology integration offering is BigCommerce Payments, an embedded payment solution.

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Revenue for marketing services are recognized either at the time the earning activity is complete, or ratably over the length of the contract, depending on the nature of the obligations in the contract.

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The Company also derives revenue from the sales of website themes and applications upon delivery.

The Company recognizes partner revenue share on a net basis as the Company has determined that the Company is the agent in the Company’s arrangements with third-party application providers.

All other revenue is recognized on a gross basis, as the Company has determined the Company is the principal in these arrangements.

Partner revenue share is recognized on a net basis as the Company is the agent in the arrangements with third-party application providers.

All other revenue is recognized on a gross basis, as the Company is the principal in these arrangements.

Contracts with multiple performance obligations

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(in thousands)

As of March 31, 2026

As of March 31, 2025

As of June 30, 2026

As of June 30, 2025

Cost of revenue

Cost of revenue consists primarily of expenses related to third-party cloud computing and data storage services, personnel-related costs (including stock-based compensation) for customer support and professional services personnel, costs of maintai ning and securing infrastructure and platform, credit card processing fees, allocation of overhead costs, and amortization of capitalized internal-use software.

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securing infrastructure and platform, credit card processing fees, allocation of overhead costs, and amortization of capitalized internal-use software.

Stock-based compensation

The Company issues stock options, restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) to eligible employees and directors.

The Company values stock options using the Black-Scholes option-pricing model at the date of grant and recognizes the related stock-based compensation expense on a straight-line basis over the service period, net of estimated forfeitures, which is typically four years .

The Company has issued stock options, restricted stock units (“RSUs”) and performance based restricted stock units (“PSUs”) to eligible employees and directors.

The Company valued stock options using the Black-Scholes option-pricing model at the date of grant and recognizes the related stock-based compensation expense on a straight-line basis over the service period, net of estimated forfeitures, which is typically four years .

The Company measures the fair value of RSUs based on the closing market price of the common stock on the date of grant.

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The market-based awards will cliff-vest at the end of the three-year period ranging from 0 percent to 200 percent of the target number of PSUs granted.

The Company also grants PSUs to executive officers and other members of senior management which provide for shares of common stock to be earned based on its attainment of the Company's adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) and revenue relative to a target specified in the applicable agreement, and are referred to as Company performance-based awards.

The Company also grants PSUs to executive officers and other members of senior management which provide for shares of common stock to be earned based on its attainment of the Company's adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) and annual recurring revenue ("ARR") relative to a target specified in the applicable agreement, and are referred to as Company performance-based awards.

The Company typically values these awards at the closing market price on the date of grant.

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These services allow customers to access the Company’s subscription solutions over the contract period.

The customer is not allowed to take possession of

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the solutions or transfer the solutions.

The customer is not allowed to take possession of the solutions or transfer the solutions.

The Company’s revenue arrangements do not contain general rights of refund in the event of cancellations.

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Disaggregation of revenue

The following table disaggregates revenue by major source:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

(in thousands)

2 unchanged sentences

Revenue by geographic region was as follows:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

(in thousands)

2 unchanged sentences

Revenue by geographical region is determined based on the region of the Company’s contracting entity, which may be different than the region of the customer.

Revenue attributed to the United States was approximate ly 76 percent d uring the three months ended March 31, 2026 and 2025.

Revenue attributed to EMEA was approximate ly 13 percent and 12 percent f or the three months ended March 31, 2026 and 2025, respectively.

No single region, other than the United States and EMEA, represented more than ten percent of total revenue during the three months ended March 31, 2026 and 2025.

Revenue attributed to the United States was approximatel y 75 percent for the three months ended June 30, 2026 and 76 percent for the three months ended June 30, 2025.

For the six months ended June 30, 2026 and 2025 , revenue attributed to the United States was approximately 76 percent.

Revenue attributed to EMEA was approximately 13 percent for the three and six months ended June 30, 2026 and approximat ely 12 percent for the three and six months ended June 30, 2025.

No single region, other than the United States and EMEA, represented more than ten percent of total revenue during the three and six months ended June 30, 2026 and 2025.

Deferred commissions

1 unchanged sentence

The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred commissions, and the remainder is recorded in deferred commissions, net of current portion reflected on the condensed consolidated balance sheets.

The Company did no t recognize an impairment of deferred commissions for the three months ended March 31, 2026 and 2025.

Sales commissions o f $ 0.6 million a nd $ 0.6 million were deferred for the three months ended March 31, 2026 and 2025, respectively;

deferred commission amortization expense w as $ 2.0 million an d $ 2.7 million for the three months ended March 31, 2026 and 2025 , respectively.

The Company did no t recognize an impairment of deferred commissions for the three and six months ended June 30, 2026 and 2025.

Sales commission s of $ 1.2 million an d $ 1.6 million were deferred for the three months ended June 30, 2026 and 2025, respectively;

an d $ 1.8 million and $ 2.2 million were deferred for the six months ended June 30, 2026 and 2025, respectively.

Deferred commission amortization expense w as $ 1.7 million an d $ 2.5 million for the three months ended June 30, 2026 and 2025, respectivel y;

and $ 3.7 million and $ 5.1 million for the six months ended June 30, 2026 and 2025 , respectively.

Fair value measurements

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When determining fair value, the Company considers the principal or most advantageous market in which it would transact, and assumptions that market participants would use when pricing asset or liabilities.

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The accounting standard for fair value establishes a fair value hierarchy based on three levels of inputs, the first two of which are considered observable and the last unobservable.

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• Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

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• Level 2 – Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 – Inputs are unobservable that are significant to the fair value of the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s data.

The following table presents information about the Company’s cash equivalents and marketable securities that were measured at fair value as of March 31, 2026 and December 31, 2025:

As of March 31, 2026

The following table presents information about the Company’s cash equivalents and marketable securities that were measured at fair value as of June 30, 2026 and December 31, 2025:

As of June 30, 2026

(in thousands)

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treasury securities

(1) Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets, in addition t o $ 57.9 million of cash as of March 31, 2026 .

(1) Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets, in addition t o $ 57.6 million of cash as of June 30, 2026 .

As of December 31, 2025

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(in thousands)

As of March 31, 2026

As of June 30, 2026

As of December 31, 2025

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Total marketable securities

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The following tables summarize the gains, losses, and estimated fair value of cash equivalents, marketable securities as of March 31, 2026 and December 31, 2025:

As of March 31, 2026

The following tables summarize the gains, losses, and estimated fair value of cash equivalents, marketable securities as of June 30, 2026 and December 31, 2025:

As of June 30, 2026

(in thousands)

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treasury securities

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As of December 31, 2025

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Goodwill amounts are not amortized but tested for impairment on an annual basis or more often when circumstances indicate that goodwill may not be recoverable.

There was no impairment of goodwill for the three months ended March 31, 2026 and 2025.

Intangible assets are amortized on a straight-line basis over the useful life.

Intangible assets amortizatio n was $ 1.5 million a nd $ 2.3 million for the three months ended March 31, 2026 and 2025, respectively.

There was no impairment of intangible assets for the three months ended March 31, 2026 and 2025.

As of March 31, 2026, expected amortization expense for intangible assets was as follows:

There was no impairment of goodwill for the three and six months ended June 30, 2026 and 2025.

Finite-lived intangible assets are amortized on a straight-line basis over the useful life.

Intangible ass ets amortization was $ 1.5 million and $ 2.5 million, respectively, for the three months ended June 30, 2026 and 2025, and was $ 3.0 million and $ 4.9 million, respectively, for the six months ended June 30, 2026 and 2025.

There was no impairment of intangible assets for the three and six months ended June 30, 2026 and 2025.

As of June 30, 2026, expected amortization expense for intangible assets was as follows:

(in thousands)

March 31, 2026

Remaining nine months of 2026

June 30, 2026

Remaining six months of 2026

Commitments and contingencies

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These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter.

The outcomes of legal proceedings and other contingencies are, however,

The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties.

The Company is not presently a party to any legal proceedings that, if

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inherently unpredictable and subject to significant uncertainties.

The Company is not presently a party to any legal proceedings that, if determined adversely to the Company, would have a material adverse effect on the Company's condensed consolidated financial statements.

determined adversely to the Company, would have a material adverse effect on the Company's condensed consolidated financial statements or statements of cash flows.

Purchase Obligations

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These commitments are non-cancellable and expire within one to four years .

The Company had unconditional purchase obligations as of March 31, 2026 as follows:

The Company had unconditional purchase obligations as of June 30, 2026 as follows:

(in thousands)

As of March 31, 2026

Remaining nine months of 2026

As of June 30, 2026

Remaining six months of 2026

Defined contribution plan

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The Plan allows for eligible employees to participate by contributing a portion of their compensation on a pre-tax basis, subject to annual limits established by the Internal Revenue Service.

The Company matches 50 percent of the first 6 percent of eligible compensation contributed by a participating U.S.

The Company matches fifty percent of the first six percent of eligible compensation contributed by a participating U.S.

employee to the Plan.

Matching contributions are recognized as compensation expense in the period in which the associated employee services are rendered.

For the three months ended March 31, 2026 and 2025 , the Company recorded $ 0.7 million, respectively, in compensation expense related to employer matching contributions to the retirement plan.

For the three months ended June 30, 2026 and 2025 , the Company recorded $ 0.6 million and $ 0.7 million, respectively, in compensation expense related to employer matching contributions to the Plan, and recorded $ 1.3 million and $ 1.4 million, respectively for the six months ended June 30, 2026 and 2025 .

Operating leases, right-of-use assets and lease liabilities

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Renewal options were not included in the right-of-use asset and operating lease liability calculation.

As of March 31, 2026 , there were no finance leases.

There was no impairment recorded for leases for the three months ended March 31, 2026 and 2025.

During fiscal 2025, the Company entered into a sublease agreement for approximately 6 years to relocate its Austin headquarters.

The sublease commenced in March 2025 , and expires on the earlier of January 31, 2031, or two months prior to such earlier date as the Master Lease (as defined in the Sublease) may otherwise expire or terminate.

Operating lease expense was $ 0.5 million and $ 0.2 million for the three months ended March 31, 2026 and 2025, respectively.

As of June 30, 2026 , there were no finance leases.

There was no impairment recorded for leases for the three and six months ended June 30, 2026 and 2025.

Operating lease expens e was $ 0.5 million a nd $ 0.4 million for the three months ended June 30, 2026 and 2025, respectively, and was $ 1.0 million a nd $ 0.6 million for the six months ended June 30, 2026 and 2025, respectively.

The future maturities of operating lease liabilities are as f ollows:

(in thousands)

As of March 31, 2026

Remaining nine months of 2026

As of June 30, 2026

Remaining six months of 2026

Total minimum lease payments

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During fiscal 2025, the Company committed to a plan (the “2025 Restructure”) to realign the Company’s current workforce with the Company’s on-going cost structure.

The decision to implement the 2025 Restructure is based on continuous improvement efforts

The decision to implement the 2025 Restructure is based on continuous improvement efforts to optimize operational costs and efficiencies across fiscal 2026 intended to better position the Company for continued profitable revenue growth.

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to optimize operational costs and efficiencies across fiscal 2026 intended to better position the Company for continued profitable revenue growth.

In connection with the 2025 Restructure, restructuring charges are primarily comprised of severance payments, professional services, contract costs, accelerated depreciation of internal use software and other related costs.

Within the condensed consolidated balance sheet, the liability for severance benefits of $ 2.9 million as of the three months ended March 31, 2026 , is recorded to other current liabilities, $ 0.4 million of professional services are recorded in accrued expenses, and $ 0.3 million of contract costs are recorded in accounts payable.

Within the condensed consolidated balanc e sheet, the liability for 2025 Restructuring charges of $ 1.5 million as of June 30, 2026, is recorded to other current liabilities.

These charges were recorded within Restructuring Charges on the accompanying condensed consolidated statement of operations.

The Company estimates to incur additional costs relating to the 2025 Restructure of approximate ly $ 2.0 million to $ 4.6 million through fiscal 2026 relating to relocation and retention benefits and professional services costs.

The Company expects to incur additional costs relating to the 2025 Restructure of approximat ely $ 1.0 million to $ 3.0 million through the first half of fiscal 2027 relating to relocation and retention benefits and professional services costs.

The additional expenses the Company expects to incur are subject to assumptions, and actual expenses may differ from the estimates disclosed above.

The following table summarizes the activities related to the 2025 Restructure:

As of March 31, 2026

The following table summarizes the activities related to the Company's 2025 Restructure:

As of June 30, 2026

As of December 31, 2025

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The following table summarizes the components of other current liabilities:

As of March 31,

As of June 30,

As of December 31,

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Accrued professional services

Accrued interest

Accrued interest - related party

Total Other liabilities

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The Company's convertible note obligations, including the level within the fair value hierarchy (see note 4.

Fair Value Measurements), are as follows:

As of March 31, 2026

As of June 30, 2026

As of December 31, 2025

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Total carrying value of convertible notes

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(*) The fair value was calculated using a binomial lattice model which incorporates the terms and conditions of the convertible notes and market-based risk measurement that are indirectly observable, such as market credit spread, and therefore are Level 3 investments.

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Since the market for trading of the 2026 Convertible Notes is not considered to be an active market, the estimated fair value is based on Level 2 inputs.

The following table presents details of the Company's convertible notes as of March 31, 2026 which are further discussed below:

The following table presents details of the Company's convertible notes as of June 30, 2026 which are further discussed below:

Date of Issuance

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September 2021

The $ 150.0 million principal amount of the 2028 Convertible Notes is held by a related party, who is an equity holder of the Company.

The $ 150.0 million principal amount of the 2028 Convertible Notes is held by a related party, who is an equity holder.

The total interest expense recognized related to the Company’s convertible notes and financing obligation consists of the following:

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

(in thousands)

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In August 2024 , the Company entered into a privately negotiated exchange agreement (the "Exchange Agreement") with a holder of its 0.25 percent unsecured convertible senior notes due 2026 (the "2026 Convertible Notes").

Pursuant to the Exchange Agreement, the Company exchanged (the "Exchange Transaction") approximately $ 161.2 million in aggregate principal amount of the 2026 Convertible Notes for $ 150.0 million in aggregate principal amount of new 7.50 percent convertible senior notes due 2028 (the “2028 Convertible Notes”) and approximately $ 0.1 million in cash, with such payment representing the accrued and unpaid interest on such 2026 Convertible Notes.

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The 2028 Convertible Notes are senior, initially unsecured obligations of the Company and accrue interest at a rate of 7.50 percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year , beginning on October 1, 2024.

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If a “fundamental change” (as defined in the indenture for the 2028 Convertible Notes) occurs, then, subject to a limited exception, noteholders may require the Company to repurchase their 2028 Convertible Notes for cash.

The repurchase price will be equal to the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, up to, but excluding, the applicable repurchase date.

As of March 31, 2026 , approximately $ 150.0 million aggregate principal amount of 2028 Convertible Notes remain outstanding.

The remaining unamortized debt issuance costs are recorded as a contra-liability and are amortized utilizing the effective interest rate of approximately 8 percent over the term of the 2028 Convertible Notes.

The repurchase price will be equal to the

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principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, up to, but excluding, the applicable repurchase date.

As of June 30, 2026 , approximately $ 150.0 million aggregate principal amount of 2028 Convertible Notes remain outstanding.

The remaining unamortized debt issuance costs are recorded as a contra-liability and are amortized utilizing the effective interest rate of approxim ately 8 percent over the term of the 2028 Convertible Notes.

The remaining unamortized premium related to the fair value adjustment of the 2028 Convertible Notes is amortized using an effective interest rate of approximately 6 percent.

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2026 Convertible Notes

In February 2025, the Company entered into separate, privately negotiated repurchase agreements with holders of its outstanding 2026 Convertible Notes to repurchase approximately $ 59.1 million aggregate principal amount of its 2026 Convertible Notes for aggregate cash consideration of approximately $ 54.4 million, including accrued but unpaid interest.

This transaction resulted in a net gain on repurchases of debt of approximately $ 3.9 million, net of $ 0.6 million write-off of unamortized debt issuance costs.

As of March 31, 2026 , approximately $ 4.1 million principal amount of 2026 Convertible Notes remain outstanding.

The remaining unamortized debt issuance costs are recorded as a contra-liability and are amortized utilizing the effective interest rate of 0.73 p ercent over the term of the 2026 Convertible Notes.

As of June 30, 2026 , approximately $ 4.1 million principal amount of 2026 Convertible Notes remain outstanding.

The remaining unamortized debt issuance costs are recorded as a contra-liability and are amortized utilizing the effective interest rate of 0.73 percent over the term of the 2026 Convertible Notes.

The Company is in compliance with the terms of the indenture, and has not experienced any events that would constitute an Event of Default under the 2026 Convertible Notes.

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A total of 3,873,885 shares of common stock were initially authorized and reserved for issuance under the 2020 Plan.

This share reserve automatically increased, and will continue to increase, on each subsequent January 1st through and including January 1, 2031, by an amount equal to the smaller of (a) 5 percent of the number of shares of common stock issued and outstanding on the immediately preceding December 31 and (b) an amount determined by the b oard of directors.

On January 1, 2026 and 2025 the share reserve increased by 4,082,622 shares and 3,928,833 shares, respectively.

During the three months ended June 30, 2026, the Company's Board of Directors approved the adoption of a stockholder rights plan and declared a dividend distribution of one preferred share purchase right on e ach outstanding share of the Company's Common Stock.

Each right will entitle stockholders to buy one one-thousandth of a share of the Company's Series A Junior Participating Preferred Stock at an exercise price of $ 13.00 per one one-thousandth of a share, subject to adjustment.

The dividend was payable to holders of record as of the close of business on April 27, 2026 .

The rights will be exercisable only if a person or group acquires 10% or more (or 20% or more in the case of a Passive Institutional Investor) of the Company's outstanding common stock and various other criteria are met (the “Distribution Date”).

Until the Distribution Date, the rights will not be exercisable;

the rights will not be evidenced by separate rights certificates;

and the rights will be transferable by, and only in connection with, the transfer of common stock.

The rights will expire on April 12, 2027 , unless earlier redeemed or exchanged by the Company.

Stock options

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Plan shares expired or canceled

Balance as of March 31, 2026

Balance as of June 30, 2026

Vested and expected to vest

Exercisable as of March 31, 2026

At March 31, 2026, there was an estima ted $ 2.7 million of total unrecognized compensation expense related to stock options, which reflects outstanding stock option awards that are vested and outstanding stock option awards that are expected to vest.

This expense will be recognized over a weighted-average period of 2.30 years.

Exercisable as of June 30, 2026

At June 30, 2026, there was an estimat ed $ 2.2 million of t otal unrecognized compensation expense related to stock options, which reflects outstanding stock option awards that are vested and outstanding stock option awards that are expected to vest.

This expense will be recognized over a weighted-average peri od of 2.22 years.

Restricted Stock Units

RSU ac tivity for the three months ended March 31, 2026 was as follows:

RSU activity for the six months ended June 30, 2026 was as follows:

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(in thousands)

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Vested and converted to shares

Balance as of March 31, 2026

Balance as of June 30, 2026

Vested and expected to vest

The expected stock-based compensation expense remaining to be recognized as of March 31, 2026 is $ 21.8 million related to R SUs, which reflects outstanding RSUs that are vested and outstanding RSUs that are expected to vest.

The expected stock-based compensation expense remaining to be recognized as of June 30, 2026 is $ 18.0 million related to R SUs, which reflects outstanding RSUs that are vested and outstanding RSUs that are expected to vest.

This expense will be recognized over a weighted-average period of 2.48 years.

Market-based PSU and performance-based PSU activity for the three months ended March 31, 2026 was as follows:

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Market-based PSU and performance-based PSU activity for the six months ended June 30, 2026 was as follows:

(in thousands)

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Vested and converted to shares

Balance as of March 31, 2026

Balance as of June 30, 2026

Vested and expected to vest

The grant date fair value of the market-based awards issued in March was $ 3.29 .

Significant assumptions used in the Monte Carlo simulation model for the market-based PSU aw ards granted are as follows:

Three months ended March 31,

65.71 % - 75.43 %

The grant date fair value of the market-based awards issued i n March and May was $ 3.29 .

Significant assumptions used in the Monte Carlo simulation model for the market-based PSU awards granted are as follows:

Six months ended June 30,

Risk-free interest rate

4.22 % - 4.31 %

Dividend yield

The aggregate expected stock-based compensation expense remaining to be recognized as of March 31, 2026 is $ 3.4 million , which reflects market-based and performance-based PSUs that are outstanding and expected to vest.

This expense will be recognized over a weighted-average period of 1.62 years.

The income tax expense for the three months ended March 31, 2026 is based on the estimated annual effective tax rate for fiscal 2026.

The aggregate expected stock-based compensation expense remaining to be recognized as of June 30, 2026 is $ 2.68 million which reflects market-based and performance-based PSUs that are outstanding and expected to vest.

This expense will be recognized over a weighted-average peri od of 1.39 years.

The income tax expense for the three and six months ended June 30, 2026 is based on the estimated annual effective tax rate for fiscal 2026.

The Company’s provision for income taxes is based on estimated effective tax rates derived from an estimate of annual consolidated earnings before taxes, adjusted for nondeductible expenses, other permanent items, valuation allowances, and any applicable income tax credits.

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federal and state net deferred tax assets as it was more likely than not that those deferred tax assets will not be realized.

However, given the Company's recent net income, in accordance with our policy, the Company will continue to monitor the positive and negative evidence, and will adjust the valuation allowance as sufficient position evidence becomes available.

The exact timing and amount of the valuation allowance release would be subject to change based on the level of profitability that the Company can achieve.

For the three months ended March 31, 2026 , the Company’s provision for income taxes reflected income tax expense of $ 0.5 million on $ 4.2 million of pr e-tax book income for an effective tax rate of approximately 11 percent.

F or the three months ended March 31, 2025, the Company had tax expens e of $ 0.5 million on a pre-tax book income of $ 0.2 million for an effective tax rate of approximately 306 percent.

For the three months ended March 31, 2026, the Company’s effective tax rate was higher than the U.S.

federal statutory rate of 21 percent primarily due to deferred tax expense related to tax amortization of acquired goodwill, changes in the Company’s tax reserves, and movement in the Company’s valuation allowance position.

The Company’s total income tax expense consists primarily of federal and state current income tax expense unable to be offset by tax attributes due to limitations under tax regulations, deferred income tax expense relating to the tax amortization of acquired goodwill, and current income tax expense from foreign operations.

For the three months ended March 31, 2025 , the Company’s effective tax rate was lower than the U.S.

For the three months ended June 30, 2026 and 2025, the Company’s provision for income taxes reflected an effective tax rate of ( 15.62 ) percent and ( 2.71 ) percent, respectively.

For the six months ended June 30, 2026 and 2025, the Company had an effective tax rate of ( 11.96 ) percent and ( 9.32 ) percent, respectively.

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For the three and six months ended June 30, 2026 and 2025, the Company’s effective tax rate was lower than the U.S.

federal statutory rate of 21 percent primarily due to the Company's valuation allowance offsetting the benefits of losses.

The Company’s total income tax expense consists primarily of state current income tax expense unable to be offset by attributes, deferred income tax expense relating to the tax amortization of acquired goodwill, and current income tax expense from foreign operations.

Operating losses and tax credits generated in years prior to 2022 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utili zed.

Tax years 2022 through 2025 generally re main open to examination by the major taxing jurisdictions to which the Company is subject.

The Company is currently not under an income tax audit by any taxing jurisdiction.

Operating losses and tax credits generated in years prior to 2022 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utilized.

Tax years 2022 through 2025 generally remain open to examination by the major taxing jurisdictions to which the Company is subject.

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The dilutive effect of outstanding awards is reflected in diluted net income per share by application of the treasury stock method.

Three months ended March 31,

Three months ended June 30,

Six months ended June 30,

(in thousands)

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Weighted average shares outstanding for diluted net income per share

(1) Due to the Company reporting net loss for the three months ended March 31, 2025 , there are no common shares added to calculate diluted EPS because the effect would be anti-dilutive.

(1) Due to the Company reporting net loss for the three and six months ended June 30, 2025 , there are no common shares added to calculate diluted EPS because the effect would be anti-dilutive.

The following potentially dilutive securities outstanding have been excluded from the computation of weighted-average shares outstanding for diluted net income per share because the effect would be anti-dilutive:

As of March 31,

As of June 30,

(in thousands)

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Total potentially dilutive securities

Subsequent Event

Stockholder Rights Plan

On April 13, 2026 , our Board of Directors approved the adoption of a stockholder rights plan and entered into a Rights Agreement with Equiniti Trust Company, LLC, as Rights Agent, and declared a dividend distribution of one preferred share purchase right on e ach outstanding share of the Company's Common Stock.

Each right will entitle stockholders to buy one one-thousandth of a share of our Series A Junior Participating Preferred Stock at an exercise price of $ 13.00 per one one-thousandth of a share, subject to adjustment.

The dividend was payable to holders of record as of the close of business on April 27, 2026 .

The rights will be exercisable only if a person or group acquires 10% or more (or 20% or more in the case of a Passive Institutional Investor) of our outstanding common stock and various other criteria are met (the “Distribution Date”).

Until the Distribution Date, the rights will not be exercisable;

the rights will not be evidenced by separate rights certificates;

and the rights will be transferable by, and only in connection with, the transfer of common stock.

The rights will expire on April 12, 2027 , unless earlier redeemed or exchanged by the Company.

The adoption did not have a material impact on the Company's condensed consolidated financial statements.

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Special note regarding forward-looking statements

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• anticipated trends and challenges in our business and the markets in which we operate;

• the conflicts involving Iran, Israel, and the United States and Russia and Ukraine and the potential impact on our operations, global economic and geopolitical conditions;

• ongoing and future geopolitical conflicts, including those involving Iran, Israel, and the United States, and the Russia-Ukraine conflict, could adversely affect our operations and financial results;

• the impacts of changes in United States trade policy and global tariffs;

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Although we believe the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties which are subject to change based on various important factors, some of which are beyond our control.

For more information regarding these risks and uncertainties as well as certain additional risks that we face, refer to “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on March 2, 2026 (our "Annual Report") and “Risk Factors,” in this Quarterly Report on Form 10-Q as well as factors more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q.

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more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q.

If one or more of the factors affecting the expectations reflected in our forward-looking information and statements proves incorrect, our actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements.

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

What changed 10-Q

Item 1. Financial Statements