What changed in this filing

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Item 1. Financial Statements

2025-09-29 compared with 2025-06-30 · 130 added, 83 removed, 438 unchanged (33% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets

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

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

Current assets:

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Condensed Consolidated Statements of Operations

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Software licenses $ 63,437 $ 57,850 $ 172,677 $ 175,929

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Condensed Consolidated Statements of Comprehensive Income

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Net income $ 19,413 $ 28,464 $ 47,388 $ 67,291

1 unchanged sentence

Foreign currency translation adjustments 654 2,084 3,788 643

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

Unrealized loss on hedging activity, net of tax benefit of $ 0 and $ 360 for the three and nine months ended August 31, 2024, respectively

— — — ( 1,135 )

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Condensed Consolidated Statements of Stockholders’ Equity

Six Months Ended May 31, 2025

Nine Months Ended August 31, 2025

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

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Other comprehensive income — — — — 3,788 3,788

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

Three Months Ended May 31, 2025

Balance, August 31, 2025 42,905 $ 429 $ 371,623 $ 138,051 $ ( 32,421 ) $ 477,682

Three Months Ended August 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

Balance, June 1, 2025 43,101 $ 431 $ 362,091 $ 123,254 $ ( 33,075 ) $ 452,701

Issuance of stock under employee stock purchase plan 74 1 3,600 — — 3,601

Exercise of stock options 15 — 337 — — 337

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

Withholding tax payments related to net issuance of RSUs ( 2 ) — — — — —

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Other comprehensive income — — — — 654 654

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

Six Months Ended May 31, 2024

Balance, August 31, 2025 42,905 $ 429 $ 371,623 $ 138,051 $ ( 32,421 ) $ 477,682

Nine Months Ended August 31, 2024

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

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Other comprehensive loss — — — — ( 492 ) ( 492 )

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

Three Months Ended May 31, 2024

Balance, August 31, 2024 42,899 $ 429 $ 338,594 $ 119,241 $ ( 32,652 ) $ 425,612

Three Months Ended August 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

Balance, June 1, 2024 43,063 $ 431 $ 330,382 $ 105,590 $ ( 34,736 ) $ 401,667

Issuance of stock under employee stock purchase plan 78 1 2,971 — — 2,972

Exercise of stock options 45 1 1,993 — — 1,994

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

Withholding tax payments related to net issuance of RSUs — ( 2 ) ( 33 ) — — ( 35 )

Stock-based compensation — — 10,558 — — 10,558

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

Dividends declared — — — ( 7,764 ) — ( 7,764 )

1 unchanged sentence

Net income — — — 28,464 — 28,464

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

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

Other comprehensive income — — — — 2,084 2,084

Balance, August 31, 2024 42,899 $ 429 $ 338,594 $ 119,241 $ ( 32,652 ) $ 425,612

Condensed Consolidated Statements of Cash Flows

Six Months Ended

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

Nine Months Ended

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

Cash flows from operating activities:

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Purchases of property and equipment ( 2,840 ) ( 2,328 )

Payments for acquisitions ( 1,195 ) —

Payments for acquisitions, net of cash acquired ( 20,653 ) —

Net cash flows used in investing activities ( 23,493 ) ( 2,328 )

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Condensed Consolidated Statements of Cash Flows, continued

Six Months Ended

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

Nine Months Ended

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

Supplemental disclosure:

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Dividends declared and unpaid $ — $ 8,423

Contingent consideration payable in Nuclia acquisition $ 1,080 $ —

See notes to unaudited condensed consolidated financial statements.

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The Company is currently evaluating the impact that the adoption of these standards will have on its consolidated financial statements and disclosures.

In September 2025, the FASB issued Accounting Standards Update No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06").

ASU 2025-06 modernizes the accounting for internal-use software costs by increasing the operability of the recognition guidance considering different methods of software development.

ASU 2025-06, which can be applied prospectively, retrospectively, or with a modified transition approach, is effective for the Company for annual reporting as well as interim period reporting beginning in fiscal year 2029.

Early adoption is permitted.

The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

Fair Value Measurements

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 May 31, 2025:

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

Fair Value Measurements Using

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Foreign exchange derivatives $ 112 $ — $ 112 $ —

Contingent consideration $ ( 1,080 ) $ — $ — $ ( 1,080 )

The following table details the fair value measurements within the fair value hierarchy of our financial assets and liabilities at November 30, 2024:

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If market prices are not available, the fair value measurement is based on models that use primarily market-based parameters including yield curves, volatilities, credit ratings and currency rates.

In certain cases,

where market rate assumptions are not available, we are required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument.

We classified contingent consideration related to the Nuclia acquisition, which occurred in the third fiscal quarter of 2025, within Level 3 of the fair value hierarchy because the fair value is derived using significant unobservable inputs.

We utilized the Monte Carlo simulation method to estimate the fair value of the contingent liability as of the reporting date.

Thousands of iterations of the simulation were performed using forecasted financial data to develop a distribution of future values which, in turn, provide indicated earn-out payments.

The total estimated fair value equals the sum of the average present values of the indicated earn-out payments.

The fair value of the contingent consideration will be remeasured each reporting period and any required adjustment will be recorded to acquisition-related expenses in our condensed consolidated statement of operations.

Business Combinations for additional details.

The following table reflects the activity for our contingent consideration obligation measured at fair value using Level 3 inputs for the nine months ended August 31, 2025:

(in thousands)

Balance, December 1, 2024 $ —

Acquisition date fair value of contingent consideration ( 1,080 )

Balance, August 31, 2025 $ ( 1,080 )

There were no transfers between levels of the fair value measurement hierarchy during the nine months ended August 31, 2025 and 2024.

Assets and Liabilities Not Carried at Fair Value

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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"):

May 31, 2025 November 30, 2024

August 31, 2025 November 30, 2024

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

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Total $ 799,332 $ 823,530 $ 796,267 $ 999,921

(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.

(1) The carrying value of the convertible senior notes due 2026 (the "2026 Notes"), is reflected net of $ 1.4 million and $ 3.1 million of unamortized debt issuance costs as of August 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 $ 9.3 million and $ 10.7 million of unamortized debt issuance costs as of August 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.

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Intangible assets are comprised of the following significant classes:

May 31, 2025 November 30, 2024

August 31, 2025 November 30, 2024

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

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Total $ 1,258,316 $ ( 638,953 ) $ 619,363 $ 1,253,719 $ ( 530,148 ) $ 723,571

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 the three and nine months ended August 31, 2025, amortization expense related to intangible assets was $ 37.2 million and $ 110.0 million, respectively.

In the three and nine months ended August 31, 2024, amortization expense related to intangible assets was $ 20.1 million and $ 69.1 million, respectively.

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

(in thousands)

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Total $ 619,363

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

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

(in thousands)

Balance, December 1, 2024 $ 1,292,177

Additions (1)

Additions from business combinations (1)

Measurement period adjustments (2)

Translation adjustments 46

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.

Balance, August 31, 2025

(1) The additions to goodwill during fiscal year 2025 are related to the acquisition of Nuclia.

Refer to Note 4:

Business Combinations for additional information.

(2) Represents measurement period adjustments related to ShareFile during fiscal year 2025.

Refer to Note 4:

Business Combinations for additional information.

Business Combinations

Nuclia Acquisition

On June 30, 2025, we completed the acquisition of Nuclia, an innovator in agentic Retrieval-Augmented Generation AI solutions, for a purchase price with an aggregate fair value of $ 21.4 million, which was primarily allocated to purchased technology and goodwill.

The purchase consideration consisted of $ 20.3 million of cash paid at closing and contingent consideration with an estimated fair value of $ 1.1 million.

We are required to pay contingent earn-out consideration of up to $ 5.0 million to former Nuclia shareholders, based on the achievement of certain revenue targets during fiscal year 2026.

The fair value of the earn-out liability was determined to be $ 1.1 million as of the acquisition date.

Fair Value Measurements for additional details.

We have not disclosed the amount of revenues and earnings of Nuclia since acquisition, nor pro forma financial information, as those amounts are not significant to our condensed consolidated financial statements.

ShareFile Acquisition

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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.

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

Refer to Note 5:

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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.

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

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

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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 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.

During the three and nine months ended August 31, 2025, we incurred approximately $ 0.1 million and $ 3.8 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 nine months ended August 31, 2025, was $ 64.6 million and $ 194.1 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.

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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.

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 nine months ended August 31, 2025.

Pro Forma Information

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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 May 31, 2024

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

Revenue $ 240,872

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Net income per diluted share $ 0.46

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

(in thousands, except per share data) Pro Forma Nine Months Ended August 31, 2024

Revenue $ 722,032

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Net income per diluted share $ 0.90

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

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

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

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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 %.

Credit Facility

On July 21, 2025, the Company entered into an amended and restated credit agreement (the "Credit Agreement") with certain lenders, which provides a $ 1.5 billion secured revolving credit facility (the "revolving credit facility").

The revolving credit facility has sublimits for swing line loans up to $ 25.0 million and for the issuance of standby letters of credit in a face amount up to $ 25.0 million.

The amount outstanding under our prior secured credit facility is now outstanding under the amended and restated credit facility.

Interest rates for the revolving credit facility are determined by reference to a Term Benchmark Rate or a base rate at our option and would range from 1.25 % to 2.50 % above the Term Benchmark Rate for Term Benchmark-based borrowings or from 0.25 % to 1.50 % above the defined base rate for base rate borrowings, in each case based upon our consolidated total net leverage ratio.

During the third fiscal quarter of 2025, we repaid $ 40.0 million on the revolving credit facility.

The interest rate as of August 31, 2025 was 6.32 %.

The revolving credit facility matures on the earlier of (i) July 21, 2030, and (ii) the date that is 91 days prior to the maturity date of our 2030 Notes subject to certain conditions as set forth in the Credit Agreement, including the repayment of the 2030 Notes, the refinancing of the 2030 Notes including a maturity date that is on or after October 21, 2030, and compliance with a liquidity test when all amounts outstanding will be due and payable in full.

Revolving loans may be borrowed, repaid and reborrowed until the maturity date, at which time all amounts outstanding must be repaid.

Accrued interest on the loans is payable quarterly in arrears.

As of August 31, 2025, there was $ 620.0 million outstanding under the revolving credit facility and $ 2.1 million of letters of credit.

Costs incurred to obtain the Credit Agreement of $ 6.2 million, along with $ 5.2 million of unamortized debt issuance costs related to the previous credit agreement, were recorded as debt issuance costs and will be amortized over the term of the debt agreement.

The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict our ability to, among other things, grant liens, make investments, make acquisitions, incur indebtedness, merge or consolidate,

dispose of assets, pay dividends or make distributions, repurchase stock, change the nature of the business, enter into certain transactions with affiliates and enter into burdensome agreements, in each case subject to customary exceptions for a credit facility of this size and type.

We are also required to maintain compliance with a consolidated interest charge coverage ratio and a consolidated senior secured net leverage ratio.

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 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.

In the three months ended August 31, 2025 and August 31, 2024, we repurchased and retired 0.3 million shares for $ 15.0 million and 0.3 million shares for $ 14.3 million, respectively.

In the nine months ended August 31, 2025 and August 31, 2024, we repurchased and retired 1.2 million shares for $ 65.1 million and 1.6 million shares for $ 86.8 million, respectively.

As of August 31, 2025, there was $ 42.2 million remaining under the current authorization.

On September 23, 2025, our Board of Directors increased the share repurchase authorization by $ 200.0 million to an aggregate authorization of $ 242.2 million.

Stock-Based Compensation

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Cost of maintenance, SaaS, and professional services $ 1,486 $ 834 $ 4,241 $ 2,732

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Performance obligations transferred at a point in time:

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

North America $ 163,404 $ 104,369 $ 465,376 $ 314,553

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

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

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

Contract Balances

Unbilled Receivables and Contract Assets

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

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

(in thousands)

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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 May 31, 2025 or November 30, 2024.

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

Deferred Revenue

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

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

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

(in thousands)

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Revenue recognized from current period arrangements ( 396,612 )

Balance, May 31, 2025 $ 388,579

Balance, August 31, 2025 $ 381,062

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

As of August 31, 2025, transaction price allocated to remaining performance obligations was $ 592.3 million.

We expect to recognize approximately 74 % of the revenue within the next year and the remainder thereafter.

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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 $ 5.5 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.

Total deferred contract costs were $ 5.8 million and $ 6.7 million as of August 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.

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Translation and other adjustments — 25 25

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.

Balance, August 31, 2025 $ 3,201 $ 679 $ 3,880

Costs incurred during the three and nine months ended August 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.

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

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

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Net income $ 19,413 $ 28,464 $ 47,388 $ 67,291

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Diluted $ 0.44 $ 0.65 $ 1.07 $ 1.52

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.

We excluded stock awards representing approximately 844,000 and 672,000 shares of common stock, respectively, from the calculation of diluted earnings per share in the three and nine months ended August 31, 2025 as these awards were anti-dilutive.

We excluded stock awards representing approximately 560,000 and 849,000 shares of common stock, respectively, from the calculation of diluted earnings per share in the three and nine months ended August 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 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.

During the nine months ended August 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 months ended August 31, 2025, 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.

During the three and nine months ended August 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

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As a result of the MOVEit Vulnerability, we are party to certain class action lawsuits filed by individuals who claim to have been impacted by the exfiltration of data from the environments of our MOVEit Transfer customers, which have been centralized in multi-district litigation in the District of Massachusetts (the "MDL").

The MDL remains in a relatively early litigation stage in which motions to dismiss have been filed but not yet ruled upon.

In the event dismissals are not granted, the MDL is not expected to conclude within this fiscal year.

We have also been cooperating with inquires and investigations from various governmental authorities, none of which have, as of this filing, resulted in any prosecution or enforcement actions.

The MDL remains in a relatively early litigation stage in which motions to dismiss were filed and partially granted in July 2025, resulting in the dismissal of approximately half of the pending claims.

Following the court’s ruling on the motions to dismiss, we filed a motion for reconsideration in which we asked the court to reconsider its ruling on some of the undismissed claims.

The MDL is not expected to conclude within this fiscal year.

We have also been cooperating with inquiries and investigations from various governmental authorities, none of which have, as of this filing, resulted in any prosecution or enforcement actions.

Expenses Incurred and Future Costs

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.

During the three and nine months ended August 31, 2025, we incurred net costs of approximately $ 0.7 million and $ 2.1 million, respectively, related to the MOVEit Vulnerability.

The costs recognized are net of insurance recoveries of $ 0.4 million and $ 1.7 million for the three and nine months ended August 31, 2025, respectively.

During the three and nine months ended August 31, 2024, we incurred net costs of approximately $ 0.9 million and $ 5.0 million, respectively, related to the MOVEit Vulnerability.

The costs recognized are net of insurance recoveries of $ 0.6 million and $ 2.5 million for th e three and nine months ended August 31, 2024, respectively.

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

3 unchanged sentences

Furthermore, with respect to the MDL, the proceedings remain in the early stages, alleged damages have not been specified, there is uncertainty as to the likelihood of a class or classes being certified or the ultimate size of any class if certified, and there are significant factual and legal issues to be resolved.

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 May 31, 2025.

Also, each of the governmental inquiries and investigations mentioned above could result in adverse judgments, 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 August 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 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.

As of August 31, 2025, we have approximately $ 5.0 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