What changed in this filing

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Item 1. Financial Statements

2025-06-30 compared with 2025-03-31 · 139 added, 79 removed, 382 unchanged (36% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

(in thousands, except share data) February 28, 2025 November 30, 2024

(in thousands, except share data) May 31, 2025 November 30, 2024

Current assets:

1 unchanged sentence

Accounts receivable, net 140,122 163,575

Unbilled receivables 35,454 34,672

Unbilled receivables, current portion 34,136 34,672

Other current assets 49,387 52,489

Total current assets 325,651 368,813

Long-term unbilled receivables 30,416 28,893

Unbilled receivables, non-current portion 29,890 28,893

Property and equipment, net 12,474 13,746

8 unchanged sentences

Accounts payable $ 9,043 $ 13,910

Short-term deferred revenue, net 328,798 332,142

Deferred revenue, current portion, net 308,360 332,142

Convertible senior notes, current portion, net 358,051 —

Accrued compensation and related payroll taxes 41,727 64,672

Short-term operating lease liabilities 8,975 9,202

Operating lease liabilities, current portion 8,250 9,202

Other accrued liabilities 24,840 35,219

Total current liabilities 750,271 455,145

Long-term deferred revenue, net 71,508 72,270

Convertible senior notes, net 797,277 796,267

Deferred revenue, non-current portion, net 80,219 72,270

Convertible senior notes, non-current portion, net 440,244 796,267

Long-term debt, net 660,000 730,000

Long-term operating lease liabilities 24,260 26,259

Operating lease liabilities, non-current portion 22,548 26,259

Deferred tax liabilities 2,481 2,279

Other noncurrent liabilities 6,699 5,958

Other non-current liabilities 5,128 5,958

Commitments and contingencies

12 unchanged sentences

Condensed Consolidated Statements of Operations

Three Months Ended

(in thousands, except per share data) February 28, 2025 February 29, 2024

Three Months Ended Six Months Ended

(in thousands, except per share data) May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

Software licenses $ 50,795 $ 53,979 $ 109,240 $ 118,079

34 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended

(in thousands) February 28, 2025 February 29, 2024

Three Months Ended Six Months Ended

(in thousands) May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

Net income $ 17,029 $ 16,188 $ 27,975 $ 38,827

Other comprehensive loss, net of tax:

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments 4,546 105 3,134 ( 1,441 )

Unrealized loss on hedging activity, net of tax benefit of $ 218 for the three months ended February 29, 2024

Total other comprehensive loss, net of tax ( 1,412 ) ( 2,236 )

Unrealized loss on hedging activity, net of tax benefit of $ 142 and $ 360 for the three and six months ended May 31, 2024, respectively

— ( 445 ) — ( 1,135 )

Total other comprehensive income (loss), net of tax 4,546 ( 340 ) 3,134 ( 2,576 )

Comprehensive income $ 21,575 $ 15,848 $ 31,109 $ 36,251

1 unchanged sentence

Condensed Consolidated Statements of Stockholders’ Equity

Three Months Ended February 28, 2025

Six Months Ended May 31, 2025

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

8 unchanged sentences

Net income — — — 27,975 — 27,975

Other comprehensive loss — — — — ( 1,412 ) ( 1,412 )

Balance, February 28, 2025 43,022 $ 430 $ 353,039 $ 115,999 $ ( 37,621 ) $ 431,847

Three Months Ended February 29, 2024

Other comprehensive income — — — — 3,134 3,134

Balance, May 31, 2025 43,101 $ 431 $ 362,091 $ 123,254 $ ( 33,075 ) $ 452,701

Three Months Ended May 31, 2025

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

(in thousands) Number of Shares Amount

Balance, March 1, 2025 43,022 $ 430 $ 353,039 $ 115,999 $ ( 37,621 ) $ 431,847

Issuance of stock under employee stock purchase plan 119 1 5,206 — — 5,207

Exercise of stock options 118 2 2,780 — — 2,782

Vesting of restricted stock units 290 3 ( 3 ) — — —

Withholding tax payments related to net issuance of RSUs ( 97 ) ( 1 ) ( 5,459 ) — — ( 5,460 )

Stock-based compensation — — 16,741 — — 16,741

Treasury stock repurchases and retirements, including excise tax ( 351 ) ( 4 ) ( 10,213 ) ( 9,774 ) — ( 19,991 )

Net income — — — 17,029 — 17,029

Other comprehensive income — — — — 4,546 4,546

Balance, May 31, 2025 43,101 $ 431 $ 362,091 $ 123,254 $ ( 33,075 ) $ 452,701

Six Months Ended May 31, 2024

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

(in thousands) Number of Shares Amount

Balance, December 1, 2023 43,796 $ 438 $ 370,579 $ 120,858 $ ( 32,160 ) $ 459,715

4 unchanged sentences

Stock-based compensation — — 24,453 — — 24,453

Purchase of capped calls, net of tax — — ( 32,080 ) — — ( 32,080 )

Dividends declared — — — ( 16,097 ) — ( 16,097 )

2 unchanged sentences

Other comprehensive loss — — — — ( 2,576 ) ( 2,576 )

Balance, February 29, 2024 43,689 $ 437 $ 372,273 $ 123,429 $ ( 34,396 ) $ 461,743

Balance, May 31, 2024 43,063 $ 431 $ 330,382 $ 105,590 $ ( 34,736 ) $ 401,667

Three Months Ended May 31, 2024

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Total Stockholders' Equity

(in thousands) Number of Shares Amount

Balance, March 1, 2024 43,689 $ 437 $ 372,273 $ 123,429 $ ( 34,396 ) $ 461,743

Issuance of stock under employee stock purchase plan 116 1 4,388 — — 4,389

Exercise of stock options 54 — 2,296 — — 2,296

Vesting of restricted stock units 254 3 ( 3 ) — — —

Withholding tax payments related to net issuance of RSUs ( 89 ) — ( 4,702 ) — — ( 4,702 )

Stock-based compensation — — 11,989 — — 11,989

Purchase of capped calls, net of tax — — ( 32,080 ) — — ( 32,080 )

Dividends declared — — — ( 7,867 ) — ( 7,867 )

Treasury stock repurchases and retirements ( 961 ) ( 10 ) ( 23,779 ) ( 26,160 ) — ( 49,949 )

Net income — — — 16,188 — 16,188

Other comprehensive loss — — — — ( 340 ) ( 340 )

Balance, May 31, 2024 43,063 $ 431 $ 330,382 $ 105,590 $ ( 34,736 ) $ 401,667

Condensed Consolidated Statements of Cash Flows

Three Months Ended

(in thousands) February 28, 2025 February 29, 2024

Six Months Ended

(in thousands) May 31, 2025 May 31, 2024

Cash flows from operating activities:

24 unchanged sentences

Repurchases of common stock, including excise tax ( 50,108 ) ( 72,449 )

Proceeds from issuance of senior convertible notes, net of issuance costs of $ 11,200

Purchase of capped calls — ( 42,210 )

Dividend equivalent and dividend payments to stockholders ( 654 ) ( 16,122 )

1 unchanged sentence

Principal payment on term loan — ( 261,250 )

Payment of credit facility debt issuance costs — ( 6,821 )

Net cash flows used in financing activities ( 118,103 ) ( 67,798 )

Effect of exchange rate changes on cash and cash equivalents 6,069 ( 1,661 )

Net increase in cash and cash equivalents 6,084 6,264

Net (decrease) increase in cash and cash equivalents ( 16,071 ) 63,462

Cash and cash equivalents, beginning of period 118,077 126,958

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows, continued

Three Months Ended

(in thousands) February 28, 2025 February 29, 2024

Six Months Ended

(in thousands) May 31, 2025 May 31, 2024

Supplemental disclosure:

35 unchanged sentences

This update is effective beginning with the Company’s 2025 fiscal year annual reporting period.

The Company is currently evaluating the impact that the adoption of this standard and will include the additional disclosures in the financial statements for the fiscal year ended November 30, 2025.

The Company is currently evaluating the impact that the adoption of this standard and will include the additional disclosures in the financial statements for the fiscal year ending November 30, 2025.

In December 2023, the FASB issued Accounting Standards Update No.

17 unchanged sentences

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at February 28, 2025:

The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at May 31, 2025:

Fair Value Measurements Using

14 unchanged sentences

The following table details the fair value and carrying value of our Convertible Senior Notes due 2026 and 2030 (together referred to as "the Notes"):

February 28, 2025 November 30, 2024

May 31, 2025 November 30, 2024

(in thousands) Carrying Value Fair Value Carrying Value Fair Value

4 unchanged sentences

Total $ 798,295 $ 928,406 $ 796,267 $ 999,921

(1) The carrying value of the convertible senior notes due 2026 (the "2026 Notes"), is reflected net of $ 2.5 million and $ 3.1 million of unamortized debt issuance costs as of February 28, 2025 and November 30, 2024, respectively.

(2) The carrying value of the convertible senior notes due 2030 (the "2030 Notes"), is reflected net of $ 10.2 million and $ 10.7 million of unamortized debt issuance costs as of February 28, 2025 and November 30, 2024, respectively.

(1) The carrying value of the convertible senior notes due 2026 (the "2026 Notes"), is reflected net of $ 1.9 million and $ 3.1 million of unamortized debt issuance costs as of May 31, 2025 and November 30, 2024, respectively.

(2) The carrying value of the convertible senior notes due 2030 (the "2030 Notes"), is reflected net of $ 9.8 million and $ 10.7 million of unamortized debt issuance costs as of May 31, 2025 and November 30, 2024, respectively.

The fair value of the Notes is based on quoted prices in an over-the-counter market on the last trading day of the reporting period and classified within Level 2 in the fair value hierarchy.

1 unchanged sentence

The carrying amounts of other financial assets and liabilities including cash and cash equivalents, accounts receivable, unbilled accounts receivable, accounts payable, and accrued liabilities approximate their respective fair values due to their immediate or short-term maturities.

Borrowings under our revolving credit facility are recorded at carrying value, which approximates fair value due to the frequent nature of such borrowings and repayments.

The Company considers this as a Level 2 input.

Intangible Assets and Goodwill

1 unchanged sentence

Intangible assets are comprised of the following significant classes:

February 28, 2025 November 30, 2024

May 31, 2025 November 30, 2024

(in thousands) Gross Carrying Amount Accumulated Amortization Net Book Value Gross Carrying Amount Accumulated Amortization Net Book Value

3 unchanged sentences

Total $ 1,252,719 $ ( 602,162 ) $ 650,557 $ 1,253,719 $ ( 530,148 ) $ 723,571

In the three months ended February 28, 2025 and February 29, 2024, amortization expense related to intangible assets was $ 36.2 million and $ 25.2 million, respectively.

Future amortization expense for intangible assets as of February 28, 2025, is as follows:

In the three and six months ended May 31, 2025, amortization expense related to intangible assets was $ 36.6 million and $ 72.8 million, respectively.

In the three and six months ended May 31, 2024, amortization expense related to intangible assets was $ 23.7 million and $ 49.0 million, respectively.

Future amortization expense for intangible assets as of May 31, 2025, is as follows:

(in thousands)

2 unchanged sentences

Total $ 650,557

Changes in the carrying amount of goodwill in the three months ended February 28, 2025 are as follows:

Changes in the carrying amount of goodwill in the six months ended May 31, 2025 are as follows:

(in thousands)

2 unchanged sentences

Translation adjustments 21

Balance, February 28, 2025

Balance, May 31, 2025

(1) The additions to goodwill during fiscal year 2025 represent measurement period adjustments related to the acquisition of ShareFile in October 2024.

3 unchanged sentences

On October 31, 2024, we completed the acquisition of ShareFile from Cloud Software Group, Inc.

and its subsidiaries ("Cloud") for an aggregate purchase price of $ 875.0 million in cash, subject to a $ 25.0 million working capital credit and certain customary adjustments.

and its subsidiaries for an aggregate purchase price of $ 875.0 million in cash, subject to a $ 25.0 million working capital credit and certain customary adjustments.

We funded the acquisition through $ 730.0 million in borrowings under our existing $ 900.0 million revolving credit facility and cash on hand.

3 unchanged sentences

The preliminary fair value estimates of the net assets acquired are based upon preliminary calculations and valuations, and those estimates and assumptions are subject to change as we obtain additional information for those estimates during the measurement period, which is up to one year from the acquisition date.

During the three months ended February 28, 2025, the Company identified measurement period adjustments that resulted in increases in goodwill totaling $ 1.6 million.

During the first quarter of fiscal year 2025, the Company identified measurement period adjustments that resulted in increases in goodwill totaling $ 1.6 million.

There were no measurement period adjustments identified in the second quarter of fiscal year 2025.

The preliminary allocation of the purchase price, including the measurement period adjustments, is as follows:

15 unchanged sentences

Acquisition-related transaction costs (e.g., legal, due diligence, valuation, and other professional fees) and certain acquisition restructuring and related charges are not included as a component of consideration transferred but are required to be expensed as incurred.

During the three months ended February 28, 2025, we incurred approximately $ 2.3 million of acquisition-related costs, which are included in acquisition-related expenses on our condensed consolidated statement of operations.

The amount of revenue of ShareFile included in our condensed consolidated statement of operations during the three months ended February 28, 2025, was $ 63.6 million.

During the three and six months ended May 31, 2025, we incurred approximately $ 1.4 million and $ 3.7 million, respectively, of acquisition-related costs, which are included in acquisition-related expenses on our condensed consolidated statement of operations.

The amount of revenue of ShareFile included in our condensed consolidated statement of operations during the three and six months ended May 31, 2025, was $ 65.9 million and $ 129.6 million, respectively.

We determined that disclosing the amount of ShareFile related earnings included in the condensed consolidated statement of operations is impracticable, as certain operations of ShareFile were integrated into the operations of the Company from the date of acquisition.

In connection and concurrent with the ShareFile acquisition, we entered into a Transition Services Agreement ("TSA") with Cloud for a period of six months from the date of acquisition, with the option to extend the TSA beyond this period for certain services.

Expenses related to the TSA were not significant during the three months ended February 28, 2025 and are not expected to be significant in future periods.

In connection and concurrent with the ShareFile acquisition, we entered into a Transition Services Agreement ("TSA") with Cloud Software Group, Inc.

for a period of six months from the date of acquisition, with the option to extend the TSA beyond this period for certain services.

The TSA was terminated during the second quarter of fiscal year 2025 and expenses related to the TSA were not significant during the three and six months ended May 31, 2025.

Pro Forma Information

2 unchanged sentences

These pro forma adjustments include:

(i) a net increase in amortization expense to record amortization expense relating to the $ 464.0 million of acquired identifiable intangible assets, (ii) an increase in interest expense to record interest for the periods presented as a result of drawing down our revolving line of credit in connection with the acquisition, (iii) an increase in acquisition-related expenses in connection with the acquisition that were not included in the purchase price, (iv) additional expense related to the TSA entered into between Progress and Cloud, and (v) the income tax effect of the adjustments made at the statutory tax rate of the U.S.

(i) a net increase in amortization expense to record amortization expense relating to the $ 464.0 million of acquired identifiable intangible assets, (ii) an increase in interest expense to record interest for the periods presented as a result of drawing down our revolving line of credit in connection with the acquisition, (iii) an increase in acquisition-related expenses in connection with the acquisition that were not included in the purchase price, (iv) additional expense related to the TSA entered into between Progress and Cloud Software Group, Inc., and (v) the income tax effect of the adjustments made at the statutory tax rate of the U.S.

(approximately 24.0%).

The pro forma financial information does not reflect any adjustments for anticipated expense savings resulting from the acquisition and is not necessarily indicative of the operating results that would have actually occurred had the transaction been consummated on December 1, 2022.

(in thousands, except per share data) Pro Forma Three Months Ended February 29, 2024

(in thousands, except per share data) Pro Forma Three Months Ended May 31, 2024

Revenue $ 236,565

2 unchanged sentences

Net income per diluted share $ 0.17

As of February 28, 2025 and November 30, 2024, we had the following debt obligations:

(in thousands) February 28, 2025 November 30, 2024

(in thousands, except per share data) Pro Forma Six Months Ended May 31, 2024

Revenue $ 481,160

Net income $ 19,804

Net income per basic share $ 0.46

Net income per diluted share $ 0.45

As of May 31, 2025, we had the following debt obligations:

(in thousands) Outstanding Principal Unamortized Discount and Issuance Costs for the Notes Net Carrying Amount

Long-term debt:

3.5 % convertible senior notes due 2030

$ 450,000 $ ( 9,756 ) $ 440,244

Revolving credit facility 660,000 — 660,000

Total long-term debt 1,110,000 ( 9,756 ) 1,100,244

Current portion of long-term debt:

1.0 % convertible senior notes due 2026

360,000 ( 1,949 ) 358,051

Revolving credit facility 700,000 730,000

Total face value of long-term debt 1,510,000 1,540,000

Unamortized discount and issuance costs for the Notes ( 12,723 ) ( 13,733 )

Total debt $ 1,470,000 $ ( 11,705 ) $ 1,458,295

As of November 30, 2024, we had the following debt obligations:

(in thousands) Outstanding Principal Unamortized Discount and Issuance Costs for the Notes Net Carrying Amount

Long-term debt:

During the three months ended February 28, 2025, we repaid $ 30.0 million on the revolving credit facility.

The average interest rate of the revolving credit facility during the three months ended February 28, 2025 was 6.60 %, and the interest rate as of February 28, 2025 was 6.67 %.

1.0 % convertible senior notes due 2026

$ 360,000 $ ( 3,053 ) $ 356,947

3.5 % convertible senior notes due 2030

450,000 ( 10,680 ) 439,320

Revolving credit facility 730,000 — 730,000

Total debt $ 1,540,000 $ ( 13,733 ) $ 1,526,267

During the six months ended May 31, 2025, we repaid $ 70.0 million on the revolving credit facility and reclassified the 1.0 % convertible senior notes due April 15, 2026 from long-term debt to current liabilities.

The average interest rate of the revolving credit facility during the three and six months ended May 31, 2025 was 6.67 % and 6.64 %, respectively, and the interest rate as of May 31, 2025 was 6.67 %.

Common Stock Repurchases

In January 2023, our Board of Directors increased the share repurchase authorization by $ 150.0 million to an aggregate authorization of $ 228.0 million.

In the three months ended February 28, 2025 and February 29, 2024, we repurchased and retired 0.5 million shares for $ 30.0 million and 0.4 million shares for $ 22.5 million, respectively.

As of February 28, 2025, there was $ 77.2 million remaining under the current authorization.

In the three months ended May 31, 2025 and May 31, 2024, we repurchased and retired 0.4 million shares for $ 20.0 million and 1.0 million shares for $ 49.9 million, respectively.

In the six months ended May 31, 2025 and May 31, 2024, we repurchased and retired 0.9 million shares for $ 50.0 million and 1.4 million shares for $ 72.4 million, respectively.

As of May 31, 2025, there was $ 57.2 million remaining under the current authorization.

Stock-Based Compensation

10 unchanged sentences

The following table provides the classification of stock-based compensation as reflected on our condensed consolidated statements of operations:

Three Months Ended

(in thousands) February 28, 2025 February 29, 2024

Three Months Ended Six Months Ended

(in thousands) May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

Cost of maintenance, SaaS, and professional services $ 1,560 $ 912 $ 2,755 $ 1,898

5 unchanged sentences

Timing of Revenue Recognition

Our revenues are derived from licensing our products and from related services, which consist of maintenance, SaaS, and consulting and education.

Our revenues are derived from licensing our products and from related services, which consist of maintenance, SaaS, and professional services.

Information relating to revenue from external customers by revenue type is as follows:

Three Months Ended

(in thousands) February 28, 2025 February 29, 2024

Three Months Ended Six Months Ended

(in thousands) May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

Performance obligations transferred at a point in time:

11 unchanged sentences

Information relating to revenue from external customers from different geographical areas is as follows:

Three Months Ended

(in thousands) February 28, 2025 February 29, 2024

Three Months Ended Six Months Ended

(in thousands) May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

North America $ 147,326 $ 102,902 $ 301,972 $ 210,184

4 unchanged sentences

No single customer, partner, or country outside the U.S.

accounted for more than 10% of our total revenue for the three months ended February 28, 2025 or February 29, 2024.

accounted for more than 10% of our total revenue for the three and six months ended May 31, 2025 or May 31, 2024.

Contract Balances

Unbilled Receivables and Contract Assets

As of February 28, 2025, billing of our long-term unbilled receivables is expected to occur as follows:

As of May 31, 2025, billing of our non-current unbilled receivables is expected to occur as follows:

(in thousands)

2 unchanged sentences

Contract assets arise when revenue is recognized in excess of billings and the right to the amount due from customers is conditioned on something other than the passage of time, such as the completion of a related performance obligation.

We did not have any net contract assets as of February 28, 2025 or November 30, 2024.

We did not have any net contract assets as of May 31, 2025 or November 30, 2024.

Deferred Revenue

2 unchanged sentences

Our net deferred revenue balance is primarily made up of deferred maintenance and deferred revenue related to our SaaS offerings.

As of February 28, 2025, the changes in net deferred revenue were as follows:

As of May 31, 2025, the changes in net deferred revenue were as follows:

(in thousands)

3 unchanged sentences

Revenue recognized from current period arrangements ( 222,551 )

Balance, February 28, 2025 $ 400,306

Balance, May 31, 2025 $ 388,579

Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods.

As of February 28, 2025, transaction price allocated to remaining performance obligations was $ 478.3 million.

As of May 31, 2025, transaction price allocated to remaining performance obligations was $ 497.5 million.

We expect to recognize approximately 76 % of the revenue within the next year and the remainder thereafter.

4 unchanged sentences

We determined that a three to five year product life represents the period of benefit that we receive from these incremental costs based on both qualitative and quantitative factors, which include customer contracts, industry norms, and product upgrades.

Total deferred contract costs were $ 5.9 million and $ 6.7 million as of February 28, 2025 and November 30, 2024, respectively, and are included in other current assets and other assets on our condensed consolidated balance sheets.

Total deferred contract costs were $ 5.5 million and $ 6.7 million as of May 31, 2025 and November 30, 2024, respectively, and are included in other current assets and other assets on our condensed consolidated balance sheets.

Amortization of deferred contract costs is included in sales and marketing expense on our condensed consolidated statement of operations and was minimal in all periods presented.

6 unchanged sentences

Translation and other adjustments — 24 24

Balance, February 28, 2025 $ 5,055 $ 6,450 $ 11,505

Costs incurred during the three months ended February 28, 2025 are primarily related to our restructuring action in fiscal year 2024, as well as facility closures in connection with previous restructuring actions in fiscal years 2023 and 2020.

We do not expect to incur additional material expenses as part of these actions.

Balance, May 31, 2025 $ 3,397 $ 1,612 $ 5,009

Costs incurred during the three and six months ended May 31, 2025 are primarily related to our restructuring action that commenced in fiscal year 2024, arising from the integration of the ShareFile business.

Cash disbursements for expenses incurred to date under this restructuring are expected to be made through the fourth quarter of fiscal year 2025.

The restructuring reserve is included in other accrued liabilities on the condensed consolidated balance sheets as of May 31, 2025.

We do not expect to incur additional material expenses in connection with this restructuring.

Earnings Per Share

2 unchanged sentences

The following table sets forth the calculation of basic and diluted earnings per share on an interim basis:

Three Months Ended

(in thousands, except per share data) February 28, 2025 February 29, 2024

Three Months Ended Six Months Ended

(in thousands, except per share data) May 31, 2025 May 31, 2024 May 31, 2025 May 31, 2024

Net income $ 17,029 $ 16,188 $ 27,975 $ 38,827

6 unchanged sentences

Diluted $ 0.39 $ 0.37 $ 0.63 $ 0.87

We excluded stock awards representing approximately 397,000 and 714,000 shares of common stock from the calculation of diluted earnings per share in the three months ended February 28, 2025 and February 29, 2024, respectively, as these awards were anti-dilutive.

We excluded stock awards representing approximately 776,000 and 586,000 shares of common stock, respectively, from the calculation of diluted earnings per share in the three and six months ended May 31, 2025 as these awards were anti-dilutive.

We excluded stock awards representing approximately 1,273,000 and 993,000 shares of common stock, respectively, from the calculation of diluted earnings per share in the three and six months ended May 31, 2024, as these awards were anti-dilutive.

The dilutive impact of the Notes on our calculation of diluted earnings per share is measured using the if-converted method.

However, because the principal amount of the Notes will be settled in cash, the dilutive impact of applying the if-converted method is limited to the in-the-money portion, if any.

During the three months ended February 28, 2025, we included the 2026 Notes in our diluted earnings per share calculation and we excluded the 2030 Notes in our diluted earnings per share calculation because the conversion feature in the 2030 Notes was out of the money.

During the three months ended February 29, 2024, we did not include the 2026 Notes in our diluted earnings per share calculation because the conversion feature was out of the money.

During the three and six months ended May 31, 2025, we included the 2026 Notes in our diluted earnings per share calculation and we excluded the 2030 Notes in our diluted earnings per share calculation because the conversion feature in the 2030 Notes was out of the money.

During the three and six months ended May 31, 2024, we did not include the Notes in our diluted earnings per share calculation because the conversion feature in the Notes was out of the money.

Segment Information

12 unchanged sentences

Expenses Incurred and Future Costs

For the three months ended February 28, 2025 and February 29, 2024, we incurred net costs of $ 0.7 million and $ 1.0 million , respectively, related to the MOVEit Vulnerability.

The costs recognized are net of insurance recoveries of $ 0.7 million and $ 0.8 million for the three months ended February 28, 2025 and February 29, 2024, respectively.

During the three and six months ended May 31, 2025, we incurred net costs of approximately $ 0.7 million and $ 1.5 million, respectively, related to the MOVEit Vulnerability.

The costs recognized are net of insurance recoveries of $ 0.6 million and $ 1.3 million for the three and six months ended May 31, 2025, respectively.

During the three and six months ended May 31, 2024, we incurred net costs of $ 3.0 million and $ 4.0 million, respectively, related to the MOVEit Vulnerability.

The costs recognized are net of insurance recoveries of $ 1.9 million for the three and six months ended May 31, 2024.

The timing of recognizing insurance recoveries may differ from the timing of recognizing the associated expenses.

4 unchanged sentences

Also, each of the governmental inquiries and investigations mentioned above could result in adverse judgements, settlements, fines, penalties, or other resolutions, the amount, scope and timing of which could be material, but of which we are currently unable to reasonably estimate.

Therefore, we have not recorded a loss contingency liability for the MOVEit Vulnerability as of February 28, 2025.

Therefore, we have not recorded a loss contingency liability for the MOVEit Vulnerability as of May 31, 2025.

Insurance Coverage

During the period when the MOVEit Vulnerability occurred, we maintained $ 15.0 million of cybersecurity insurance coverage, which is expected to reduce our exposure to expenses and liabilities arising from these events.

As of February 28, 2025, we have recorded approximately $ 6.5 million of insurance recoveries related to the MOVEit Vulnerability, providing us with approximately $ 6.0 million of remaining cybersecurity insurance coverage under the applicable policy.

As of May 31, 2025, we have recorded approximately $ 7.1 million of insurance recoveries related to the MOVEit Vulnerability, providing us with approximately $ 5.4 million of remaining cybersecurity insurance coverage under the applicable policy.

We will pursue recoveries to the maximum extent available under our insurance policies.

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