What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-06-30 compared with 2026-03-31 · 88 added, 73 removed, 172 unchanged (48% of the section changed)

29 unchanged sentences

Three Months Ended Percentage Change

(in thousands) February 28, 2026 February 28, 2025 As Reported Constant Currency

(in thousands) May 31, 2026 May 31, 2025 As Reported Constant Currency

Revenue $ 253,465 $ 237,355 7 % 6 %

Total revenue increased as compared to the same period last year primarily due to increases in license sales of our OpenEdge product offering and a positive foreign currency impact.

Six Months Ended Percentage Change

(in thousands) May 31, 2026 May 31, 2025 As Reported Constant Currency

Revenue $ 501,264 $ 475,370 5 % 4 %

Total revenue increased in the second quarter of fiscal year 2026 as compared to the same period last year primarily due to increases in license sales as well as a positive impact from foreign currency exchange, while maintenance, SaaS, and professional services were essentially unchanged from prior periods.

Software Licenses Revenue

Three Months Ended Percentage Change

(in thousands) February 28, 2026 February 28, 2025 As Reported Constant Currency

(in thousands) May 31, 2026 May 31, 2025 As Reported Constant Currency

Software licenses $ 68,979 $ 50,795 36 % 34 %

As a percentage of total revenue 27 % 21 %

Software licenses revenue increased in the first quarter of fiscal year 2026 primarily due to increases in our OpenEdge product offering.

Six Months Ended Percentage Change

(in thousands) May 31, 2026 May 31, 2025 As Reported Constant Currency

Software licenses $ 136,560 $ 109,240 25 % 22 %

As a percentage of total revenue 27 % 23 %

Software licenses revenue increased in the second quarter of fiscal year 2026 primarily due to increases in our DataDirect, Chef, and MarkLogic product offerings.

Software licenses revenue increased in the first six months of fiscal year 2026 primarily due to increases in our DataDirect, MarkLogic, and OpenEdge product offerings.

Maintenance, SaaS, and Professional Services Revenue

Three Months Ended Percentage Change

(in thousands) February 28, 2026 February 28, 2025 As Reported Constant Currency

(in thousands) May 31, 2026 May 31, 2025 As Reported Constant Currency

Maintenance $ 101,222 $ 103,491 (2) % (4) %

6 unchanged sentences

As a percentage of total revenue 73 % 79 %

Maintenance revenue increased in the first quarter of fiscal year 2026 due to a positive foreign currency impact.

SaaS revenue slightly increased as compared to the same period last year.

Professional services revenue decreased across multiple product offerings as compared to the same period last year.

Six Months Ended Percentage Change

(in thousands) May 31, 2026 May 31, 2025 As Reported Constant Currency

Maintenance $ 201,561 $ 203,026 (1) % (3) %

As a percentage of total revenue 40 % 43 %

SaaS 143,466 141,515 1 % 1 %

As a percentage of total revenue 29 % 30 %

Professional services 19,677 21,589 (9) % (10) %

As a percentage of total revenue 4 % 5 %

Total maintenance, SaaS, and professional services $ 364,704 $ 366,130 — % (2) %

As a percentage of total revenue 73 % 77 %

Maintenance and SaaS revenue were essentially unchanged from prior periods.

Professional services revenue decreased across multiple product offerings as compared to the same periods last year.

Cost of Software Licenses

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Cost of software licenses $ 3,675 $ 2,987 23 % $ 6,688 $ 5,912 13 %

2 unchanged sentences

Cost of software licenses as a percentage of software license revenue varies from period to period depending upon the relative product mix.

The increase in the first quarter of fiscal year 2026 compared to the same period last year was related to increased royalty costs.

The increases in the second quarter and first six months of fiscal year 2026 compared to the same periods last year were related to increased royalty costs.

Cost of Maintenance, SaaS, and Professional Services

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Cost of maintenance, SaaS, and professional services $ 32,259 $ 33,764 (4) % $ 64,359 $ 66,648 (3) %

1 unchanged sentence

Cost of maintenance, SaaS, and professional services consist primarily of hosting costs, and personnel-related costs attributable to customer support, cloud operations, consulting, and education.

The decrease year-over-year was primarily due to decreased contractors and headcount related costs in fiscal year 2026.

The decreases in all periods shown are primarily due to decreased contractors and headcount related costs in fiscal year 2026.

Amortization of Acquired Intangibles – Costs of Revenue

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Amortization of acquired intangibles $ 8,938 $ 10,537 (15) % $ 17,689 $ 20,959 (16) %

1 unchanged sentence

Amortization of acquired intangibles included in costs of revenue primarily represents the amortization of the value assigned to technology-related intangible assets obtained in business combinations.

The year-over-year decrease is due to certain existing intangible assets being fully amortized as compared to the prior period.

The year-over-year decreases in all periods shown are due to the run-off of existing intangible assets over the period.

Sales and Marketing

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Sales and marketing $ 54,341 $ 49,677 9 % $ 106,338 $ 100,973 5 %

As a percentage of total revenue 21 % 21 % 21 % 21 %

Sales and marketing expenses increased due to increased marketing and sales events costs, partially offset by lower personnel-related costs.

Sales and marketing expenses increased in all periods presented due to increased personnel-related costs, partially offset by lower marketing and sales events costs.

These costs as a percentage of total revenue were 21% in all periods presented.

Product Development

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Product development $ 48,840 $ 46,570 5 % $ 99,314 $ 92,945 7 %

As a percentage of total revenue 19 % 20 % 20 % 20 %

Product development expenses increased primarily due to increased personnel-related costs associated with higher headcount.

Product development expenses increased in all periods presented primarily due to increased personnel-related costs.

General and Administrative

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

General and administrative $ 32,236 $ 25,637 26 % $ 58,740 $ 51,260 15 %

1 unchanged sentence

General and administrative expenses include the costs of our finance, human resources, legal, information systems, and administrative departments.

The increase was due to higher stock-based compensation expense, partially offset by lower contractors and outside services and other general and administrative costs.

The increases in all periods shown was due to higher stock-based compensation expense and additional reserves related to our receivables, partially offset by lower contractors and outside services costs.

Amortization of Acquired Intangibles – Operating Expenses

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Amortization of acquired intangibles $ 26,167 $ 26,063 — % $ 51,784 $ 51,871 — %

1 unchanged sentence

Amortization of acquired intangibles included in operating expenses primarily represents the amortization of value assigned to intangible assets obtained in business combinations other than assets identified as purchased technology.

Amortization of acquired intangibles decreased in the first quarter of fiscal year 2026 due to certain existing intangible assets being fully amortized as compared to the prior period.

Amortization of acquired intangibles decreased in all periods shown due to the run-off of existing intangible assets over the period.

Cyber Vulnerability Response Expenses, Net

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Cyber vulnerability response expenses, net $ 1,266 $ 730 73 % $ 2,624 $ 1,467 79 %

As a percentage of total revenue — % — % 1 % — %

As previously disclosed, since the discovery of the MOVEit Vulnerability that was disclosed on June 5, 2023, we have incurred expenses and will incur future costs related to litigation and governmental investigations related to the MOVEit Vulnerability.

Such costs and expenses are net of received and expected insurance recoveries.

Since the discovery of the MOVEit Vulnerability that was disclosed on June 5, 2023, we have incurred expenses and will incur future costs related to the MOVEit Vulnerability.

Such costs and expenses are net of received insurance recoveries.

Please refer to Note 12, Cyber Related Matters for additional details, and updates regarding the MOVEit Vulnerability.

Restructuring Expenses

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Restructuring expenses $ 1,480 $ 1,043 42 % $ 2,186 $ 8,072 (73) %

As a percentage of total revenue 1 % — % — % 2 %

Restructuring expenses recorded in the first quarter of fiscal year 2026 primarily relate to the headcount reduction action in November 2025, and facility closures in other existing restructuring actions.

Restructuring expenses recorded in the first quarter of fiscal year 2025 primarily relate to headcount reductions and a facility closure in connection with the restructuring action related to the ShareFile acquisition in November 2024.

Restructuring expenses recorded in the second quarter and first six months of fiscal year 2026 primarily relate to the headcount reduction action in November 2025, and facility closures in other existing restructuring actions.

Restructuring expenses recorded in the second quarter and first six months of fiscal year 2025 primarily relate to headcount reductions and a facility closure in connection with the restructuring action related to the ShareFile acquisition in November 2024.

See Note 9, Restructuring for additional details, including types of expenses incurred and the timing of future expenses and cash payments.

Acquisition-Related Expenses

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Acquisition-related expenses $ (939) $ 1,731 (154) % $ (125) $ 4,221 (103) %

2 unchanged sentences

These costs consist of professional service fees, including third-party legal and valuation-related fees.

Acquisition-related expenses in the first quarter of fiscal year 2026 primarily related to our pursuit of other acquisition opportunities.

Acquisition-related expenses in the same period of fiscal year 2025 were primarily related to our acquisition of ShareFile.

The decrease in acquisition-related expenses in the second quarter of and first six months fiscal year 2026 are due to the fair value adjustment related to the contingent earn-out to former Nuclia shareholders.

See Note 4, Business Combinations, acquisition-related expenses in the same period of fiscal year 2025 were primarily related to our acquisition of ShareFile.

Other (Expense) Income

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Interest expense $ (15,911) $ (18,138) (12) % $ (31,157) $ (36,567) (15) %

3 unchanged sentences

As a percentage of total revenue (6) % (8) % (6) % (8) %

Total other expense, net, decreased in the first quarter of fiscal year 2026 as compared to the same period last year primarily due to a decrease in interest expense resulting from principal payments made on our revolving line of credit.

Total other expense, net, decreased in the second quarter and first six months of fiscal year 2026 due to a lower weighted average balance and interest rate on our revolving line of credit as compared to the same periods last year.

These decreases in interest expense were partially offset by the redemption of our 2026 Notes in April, which was funded by drawing on our revolving line of credit that carries a higher interest rate than the Notes.

Refer to Note 5, Debt for further discussion.

Foreign currency loss increased year-over-year due to rate volatility and timing of intercompany and hedge settlement activities.

Foreign currency loss decreased year-over-year due to rate volatility and timing of intercompany and hedge settlement activities.

Provision for Income Taxes

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025 Percentage Change

Three Months Ended Six Months Ended

(in thousands) May 31, 2026 May 31, 2025 Percentage Change May 31, 2026 May 31, 2025 Percentage Change

Provision for income taxes $ 7,767 $ 2,835 174 % $ 15,246 $ 5,191 194 %

As a percentage of income before income taxes 27 % 14 % 26 % 16 %

Our effective tax rate was 25% and 18% in the first fiscal quarters of 2026 and 2025, respectively.

Our effective tax rate was 27% and 14% in the second fiscal quarters of 2026 and 2025, respectively.

The increase in the effective rate is primarily due to changes in the jurisdictional mix of earnings, including the proportion of U.S.

versus non-U.S.

income and discrete tax expense of $0.5 million in the first fiscal quarter of 2026 compared to a discrete tax benefit of $0.3 million in the first fiscal quarter of 2025.

income, and discrete tax expense of $0.8 million in the second fiscal quarter of 2026 compared to a discrete tax benefit of $1.1 million in the second fiscal quarter of 2025.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law, introducing significant changes to the U.S.

27 unchanged sentences

ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

Our ARR was $863.0 million and $849.0 million as of February 28, 2026 and February 28, 2025, respectively, which is an increase of 2% year-over-year.

Our ARR was $868 million and $850 million as of May 31, 2026 and 2025, respectively, which is an increase of 2% year-over-year.

Net Retention Rate

8 unchanged sentences

Cash and Cash Equivalents

(in thousands) February 28, 2026 November 30, 2025

(in thousands) May 31, 2026 November 30, 2025

Cash and cash equivalents $ 102,978 $ 94,807

The increase in cash and cash equivalents of $18.4 million from the end of fiscal year 2025 was due to cash inflows from operations of $98.6 million, $1.7 million in cash received from the issuance of common stock, and the effect of exchange rates on cash of $1.3 million.

The increase in cash and cash equivalents of $8.2 million from the end of fiscal year 2025 was due to cash inflows from operations of $177.5 million.

The cash inflows described above were offset by cash outflows of $110.0 million to pay down the revolving line of credit, repurchases of common stock of $55.1 million, and purchases of property and equipment of $4.6 million.

Except as described below, there are no limitations on our ability to access our cash and cash equivalents.

As of February 28, 2026, $69.0 million of our cash and cash equivalents was held by our foreign subsidiaries.

As of May 31, 2026, $70.0 million of our cash and cash equivalents was held by our foreign subsidiaries.

The Company has determined that a substantial portion of unremitted foreign earnings are no longer indefinitely reinvested.

2 unchanged sentences

Deferred taxes are recorded for earnings of our foreign operations that we determine are not indefinitely reinvested.

Three Months Ended

(in thousands) February 28, 2026 February 28, 2025

Six Months Ended

(in thousands) May 31, 2026 May 31, 2025

Net cash flows provided by operating activities $ 177,463 $ 98,943

2 unchanged sentences

Cash Flows Provided by Operating Activities

The increase in cash generated from operations in the first three months of fiscal year 2026 as compared to the same period last year was primarily due to increased collections in fiscal year 2026.

Our gross accounts receivable as of February 28, 2026, decreased by $50.8 million from the end of fiscal year 2025.

Our days sales outstanding ("DSO") in accounts receivable was 52 days in the first quarter of fiscal year 2026 compared to 48 days and 73 days in the first and fourth fiscal quarters of 2025, respectively, due to the timing of billings and collections.

The increase in cash generated from operations in the first six months of fiscal year 2026, as compared to the same period last year, was primarily attributable to higher collections, increased income from operations, and lower interest expense.

Our gross accounts receivable as of May 31, 2026, decreased by $72.0 million from the end of fiscal year 2025.

Our days sales outstanding ("DSO") in accounts receivable was 49 days in the second quarter of fiscal year 2026 compared to 53 days and 73 days in the second and fourth fiscal quarters of 2025, respectively, due to the timing of billings and collections.

Cash Flows Used in Investing Activities

Net cash outflows and inflows of our net investment activity are generally a result of the timing of our purchases and maturities of securities, which are classified as cash equivalents, as well as the timing of acquisitions and divestitures.

In the first three months of fiscal year 2026, we purchased $2.7 million of property and equipment.

In the first quarter of fiscal year 2025 we had $1.3 million of purchases of property and equipment and a payment of $1.2 million related to the acquisition of ShareFile.

Net cash outflows and inflows of our net investment activity are generally a result of capital expenditures as well as the timing of acquisitions.

In the first six months of fiscal year 2026, we purchased $4.6 million of property and equipment.

In the second quarter of fiscal year 2025 we had $1.8 million of purchases of property and equipment and a payment of $1.2 million related to the acquisition of ShareFile.

Cash Flows Used in Financing Activities

We received $5.4 million from the exercise of stock options and the issuance of shares under our employee stock purchase plan in the first three months of fiscal year 2026 as compared to $6.2 million in the first three months of fiscal year 2025.

We made withholding tax payments related to net share settlements of equity awards of $3.7 million in the first three months of fiscal year 2026 as compared to $4.6 million in the first three months of fiscal year 2025.

We repurchased $20.4 million of our common stock under our share repurchase plan in the first three months of fiscal year 2026 as compared to $30.1 million in the same period of the prior year.

Further, we made payments on our revolving line of credit of $60.0 million through the first quarter of fiscal year 2026 as compared to $30.0 million in the first quarter of fiscal year 2025.

We repurchased $55.1 million of our common stock under our share repurchase plan in the first six months of fiscal year 2026 as compared to $50.1 million in the same period of the prior year.

Further, we received proceeds from our revolving line of credit of $360.0 million which we used to repurchase our convertible senior note for $360.0 million, and additionally we made payments on our revolving line of credit of $110.0 million through the second quarter of fiscal year 2026 as compared to $70.0 million in the same period of fiscal year 2025.

Share Repurchases

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.

In the three months ended February 28, 2026 and 2025, we repurchased and retired 0.5 million shares for $20.0 million and 0.5 million shares for $30.0 million, respectively.

During the three and six months ended May 31, 2026, we repurchased and retired 1.2 million shares for $34.7 million and 1.7 million shares for $54.7 million, respectively.

During the three and six months ended May 31, 2025, we repurchased and retired 0.4 million shares for $20.0 million and 0.9 million shares for $50.0 million, respectively.

The shares were repurchased in both periods as part of the share repurchase program as authorized by our Board of Directors.

As of February 28, 2026, there was $182.2 million remaining under the current authorization.

As announced on September 9, 2024, our Board of Directors approved the suspension of our quarterly dividend in connection with the ShareFile acquisition and plans to redirect such capital toward the repayment of debt to increase liquidity for future M&A and for share repurchases, both of which are prioritized in our capital allocation policy.

As of May 31, 2026, there was $147.5 million remaining under the current authorization.

Restructuring Activities

8 unchanged sentences

We expect to continue to make payments on the revolving credit facility and are also continuously evaluating additional financing options, the net proceeds of which could be used for general corporate purposes or to repay outstanding indebtedness.

In the future, we may use the available capacity under our revolving credit facility for any payments made in connection with any settlement of the 2026 Notes upon conversion, redemption, or repayment of our 2026 Notes at or prior to the 2026 Notes maturity.

We may also use the available capacity for general corporate purposes.

Legal and Other Regulatory Matters

3 unchanged sentences

The MDL has also consolidated an insurance subrogation complaint (where an insurer is seeking recovery for expenses incurred on behalf of its insured in connection with the MOVEit Vulnerability) and, as of the date of this filing, one customer cross-claim.

The MDL remains in a relatively early stage and is not expected to conclude within the next twelve months.

Motions to dismiss were filed and partially granted in July 2025, then further partially granted in January 2026 in response to our motions for reconsideration.

In all, the court has dismissed, in whole or in part, 23 of the 33 claims asserted by the plaintiffs in the MDL.

In all, the court has dismissed, in whole or in part, 23 of the 33 claims asserted by the bellwether plaintiffs in the MDL.

The court has ordered the conclusion of fact discovery by September 29, 2026, and that the filing of class certification briefing will begin on August 28, 2026, and continue into the fourth quarter of 2026.

The MDL is not expected to conclude within the next twelve months.

As previously disclosed, we have also cooperated with inquiries and investigations from various governmental authorities, a number of which have been formally closed and, as of the date of this filing, have not resulted in any prosecution or enforcement actions.

We expect our exposure to such expenses and liabilities to be reduced by insurance.

Please refer to Note 12, Cyber Related Matters to the condensed consolidated financial statements for additional details and updates regarding the MOVEit Vulnerability.

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis