What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-08 compared with 2025-05-12 · 181 added, 127 removed, 480 unchanged (39% of the section changed)

2 unchanged sentences

(in thousands, except share and per share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Current assets:

1 unchanged sentence

Short-term investments 250,410 187,025

Accounts receivable, net of allowance for credit losses of $ 2,942 and $ 1,833 at March 31, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 2,738 and $ 1,833 at June 30, 2025 and December 31, 2024, respectively

150,683 168,242

25 unchanged sentences

Preferred stock, $ 0.01 par value per share;

10,000,000 shares authorized at March 31, 2025 and December 31, 2024;

0 shares issued and outstanding at March 31, 2025 and December 31, 2024

10,000,000 shares authorized at June 30, 2025 and December 31, 2024;

0 shares issued and outstanding at June 30, 2025 and December 31, 2024

Common stock, $ 0.01 par value per share;

100,000,000 shares authorized at March 31, 2025 and December 31, 2024;

64,752,047 and 64,067,220 shares issued at March 31, 2025 and December 31, 2024, respectively;

64,181,792 and 63,496,965 shares outstanding at March 31, 2025 and December 31, 2024, respectively

Treasury stock, at cost, 570,255 shares at March 31, 2025 and December 31, 2024

100,000,000 shares authorized at June 30, 2025 and December 31, 2024;

65,277,744 and 64,067,220 shares issued at June 30, 2025 and December 31, 2024, respectively;

64,707,489 and 63,496,965 shares outstanding at June 30, 2025 and December 31, 2024, respectively

Treasury stock, at cost, 570,255 shares at June 30, 2025 and December 31, 2024

( 4,765 ) ( 4,765 )

5 unchanged sentences

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

Table of Content s

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except share and per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Product subscriptions 208,097 200,067 $ 412,032 $ 396,985

11 unchanged sentences

Total operating expenses 147,640 141,776 298,514 276,167

Income (loss) from operations ( 101 ) 9,716

Income from operations

3,494 5,223 3,393 14,939

Other income (expense), net:

10 unchanged sentences

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

Table of Content s

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(in thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 8,338 $ 6,538 $ 10,443 $ 7,944

1 unchanged sentence

Change in fair value of cash flow hedges 2,800 ( 329 ) 4,615 ( 958 )

Adjustment for net (gains)/ losses realized on cash flow hedges and included in net income, net of taxes ( 325 ) ( 381 )

Adjustment for net losses (gains) realized on cash flow hedges and included in net income, net of taxes

471 ( 92 ) 146 ( 473 )

Total change in unrealized gains (losses) on cash flow hedges 3,271 ( 421 ) 4,761 ( 1,431 )

Change in unrealized gains (losses) on investments 134 ( 555 )

Change in unrealized losses on investments

( 176 ) ( 209 ) ( 42 ) ( 764 )

Total other comprehensive income (loss) 3,095 ( 630 ) 4,719 ( 2,195 )

Comprehensive income (loss) $ 3,729 $ ( 159 )

Comprehensive income

$ 11,433 $ 5,908 $ 15,162 $ 5,749

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

Table of Content s

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

Three Months Ended March 31, 2025 and 2024

Three Months Ended June 30, 2025 and 2024

(in thousands)

6 unchanged sentences

Shares Amount Shares Amount

Balance, March 31, 2025 64,182 $ 642 571 $ ( 4,765 ) $ 1,042,355 $ 419 $ ( 985,929 ) $ 52,722

Stock-based compensation expense — — — — 26,134 — — 26,134

Vesting of restricted stock units 518 5 — — ( 5 ) — — —

Shares withheld for employee taxes ( 25 ) ( 1 ) — — ( 596 ) — — ( 597 )

Issuance of common stock from aquisition 32 — — — 755 — — 755

Other comprehensive gain — — — — — 3,095 — 3,095

Net income — — — — — — 8,338 8,338

Balance, June 30, 2025 64,707 $ 646 571 $ ( 4,765 ) $ 1,068,643 $ 3,514 $ ( 977,591 ) $ 90,447

Common stock Treasury stock Additional

paid-in-capital Accumulated

comprehensive

loss Accumulated

deficit Total

stockholders’

Shares Amount Shares Amount

Balance, March 31, 2024 62,269 $ 623 570 $ ( 4,765 ) $ 930,126 $ ( 221 ) $ ( 1,012,154 ) $ ( 86,391 )

Stock-based compensation expense — — — — 29,066 — — 29,066

Vesting of restricted stock units 457 5 — — ( 5 ) — — —

Shares withheld for employee taxes ( 33 ) — — — ( 1,326 ) — — ( 1,326 )

Issuance of common stock upon exercise of stock options 9 — — — 135 — — 135

Other comprehensive loss — — — — — ( 630 ) — ( 630 )

Net income — — — — — — 6,538 6,538

Balance, June 30, 2024 62,702 $ 628 570 $ ( 4,765 ) $ 957,996 $ ( 851 ) $ ( 1,005,616 ) $ ( 52,608 )

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

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

Six Months Ended June 30, 2025 and 2024

(in thousands)

Common stock Treasury stock Additional

paid-in-capital Accumulated

comprehensive

loss Accumulated

deficit Total

stockholders’

Shares Amount Shares Amount

Balance, December 31, 2024 63,497 $ 635 571 $ ( 4,765 ) $ 1,011,080 $ ( 1,205 ) $ ( 988,034 ) $ 17,711

5 unchanged sentences

Issuance of common stock upon exercise of stock options 157 1 — — 1,588 — — 1,589

Issuance of common stock from acquisition 32 — — — 755 — — 755

Other comprehensive gain — — — — — 4,719 — 4,719

Net income — — — — — — 10,443 10,443

Balance, March 31, 2025 64,182 $ 642 571 $ ( 4,765 ) $ 1,042,355 $ 419 $ ( 985,929 ) $ 52,722

Balance, June 30, 2025 64,707 $ 646 571 $ ( 4,765 ) $ 1,068,643 $ 3,514 $ ( 977,591 ) $ 90,447

Common stock Treasury stock Additional

14 unchanged sentences

Net income — — — — — — 7,944 7,944

Balance, March 31, 2024 62,296 $ 623 570 $ ( 4,765 ) $ 930,126 $ ( 221 ) $ ( 1,012,154 ) $ ( 86,391 )

Balance, June 30, 2024 62,702 $ 628 570 $ ( 4,765 ) $ 957,996 $ ( 851 ) $ ( 1,005,616 ) $ ( 52,608 )

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

Table of Content s

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

23 unchanged sentences

Cash flows from financing activities:

Payment of debt issuance costs ( 1,290 ) —

Payments for maturity of convertible senior notes

Taxes paid related to net share settlement of equity awards ( 1,898 ) ( 3,089 )

1 unchanged sentence

Proceeds from stock option exercises 1,589 1,404

Net cash provided by financing activities 4,732 4,362

Issuance of common stock from acquisition

Net cash (used in) provided by financing activities

( 42,390 ) 3,361

Effect of exchange rate changes on cash ,cash equivalents and restricted cash 4,847 ( 2,076 )

Net decrease in cash, cash equivalents and restricted cash ( 43,390 ) ( 7,755 )

Net (decrease) increase in cash, cash equivalents and restricted cash

( 80,774 ) 30,418

Cash, cash equivalents and restricted cash, beginning of period 342,101 214,130

5 unchanged sentences

Cash and cash equivalents $ 261,327 $ 236,975

Restricted cash included in other assets and prepaid expenses and other current assets 7,249 7,659

Restricted cash included in other assets

Total cash, cash equivalents and restricted cash $ 261,327 $ 244,548

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

Table of Content s

Notes to Condensed Consolidated Financial Statements (Unaudited)

Description of Business, Basis of Presentation and Consolidation and Significant Accounting Policies

Description of Business

13 unchanged sentences

All intercompany transactions and balances have been eliminated in consolidation.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

Use of Estimates

5 unchanged sentences

Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no changes to the significant accounting policies during the three-month period ended March 31, 2025.

Table of Content s

There have been no changes to the significant accounting policies during the six-month period ended June 30, 2025.

Recent Accounting Pronouncements

27 unchanged sentences

Such amounts are recognized as revenue over the contractual period consistent with the above methodology.

For the three months ended March 31, 2025 and 2024, we recognized revenue of $ 185.6 million and $ 179.3 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented.

For the three months ended June 30, 2025 and 2024, we recognized revenue of $ 187.3 million and $ 179.0 million, respectively, and for the six months ended June 30, 2025 and 2024, we recognized $ 321.8 million and $ 310.8 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods presented.

Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current.

2 unchanged sentences

Unbilled receivables include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced.

If the right to

Table of Content s

consideration is based on satisfaction of another performance obligation in the contract other than the passage of time, we record a contract asset.

As of March 31, 2025 and December 31, 2024, unbilled receivables of $ 2.4 million and $ 2.5 million , respectively, are included in prepaid expenses and other current assets in our consolidated balance sheet.

As of March 31, 2025 and December 31, 2024, we had no contract assets recorded on our unaudited condensed consolidated balance sheet.

If the right to consideration is based on satisfaction of another performance obligation in the contract other than the passage of time, we record a contract asset.

As of June 30, 2025 and December 31, 2024, unbilled receivables of $ 2.2 million and $ 2.5 million ,

respectively, are included in prepaid expenses and other current assets in our consolidated balance sheet.

As of June 30, 2025 and December 31, 2024, we had no contract assets recorded on our unaudited condensed consolidated balance sheet.

Transaction Price Allocated to the Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2025.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2025.

The estimated revenues do not include unexercised contract renewals.

15 unchanged sentences

The fair value of the contingent purchase consideration will be reassessed each reporting period and any required adjustment will be recorded to general and administrative expense.

As of March 31, 2025, the fair value of the contingent purchase consideration was $ 12.6 million of which $ 7.0 million was recorded within accrued expenses and other current liabilities and $ 5.6 million w as recorded within other liabilities in our unaudited condensed consolidated balance sheet.

In the three months ended March 31, 2025, we recorded approximately $ 0.2 million of accretion expense related to the contingent purchase consideration to general and administrative expense.

As of June 30, 2025 , the fair value of the contingent purchase c onsideration was $ 12.8 million of which $ 7.1 million was recorded within accrued expenses and other current liabilities and $ 5.7 million was reco rded within other liabilities in our unaudited condensed consolidated balance sheet.

For the three and six months ended June 30, 2025 , we recorded approximately $ 0.2 million and $ 0.4 million of accretion expense related to the contingent purchase consideration to general and administrative expense.

In connection with the acquisition, we expect to issue an aggregate value of $ 2.3 million of our common stock to two key employees of Noetic in three installments over a 36 -month period following the closing date of the transaction, subject to continued employment requirements (the “Key Employee Consideration”), which therefore will be recognized as stock-based compensation expense over the required employment period.

In June 2025, the Company issued 31,911 shares of common stock as the first installment of common stock issued to the two key Noetic employees.

The number of shares to be issued at each issuance date for both the Earnout Consideration and the Key Employee Consideration will be determined by dividing the aggregate value by the fair market value of our common stock on the issuance date, and therefore will be liability-classified until the final issuance dates.

In the three months ended March 31, 2025, we recognized stock-based compensation expense related to such shares in the amount of $ 1.0 million .

Table of Content s

In the three and six months ended June 30, 2025 , we recognized stock-based compensation expense related to such shares in the amount of $ 1.0 million and $ 2.1 million .

The following table summarizes the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands):

23 unchanged sentences

The acquired goodwill and intangible asset were not deductible for tax purposes.

Our revenue and net loss attributable to the Noetic business for the three months ended March 31, 2025 were not material.

Our revenue and net loss attributable to the Noetic business for the six months ended June 30, 2025 were not material.

Our investments, which are all classified as available-for-sale, consisted of the following:

As of March 31, 2025

Losses Fair Value

June 30, 2025

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

(in thousands)

U.S government agencies $ 338,351 $ 205 $ ( 134 ) $ 338,422

Total $ 300,900 $ 351 $ ( 104 ) $ 301,147

Total assets $ 338,351 $ 205 $ ( 134 ) $ 338,422

As of December 31, 2024

3 unchanged sentences

Total $ 224,187 $ 328 $ ( 216 ) $ 224,299

Table of Content s

As of March 31, 2025 and December 31, 2024, our available-for-sale investments had maturities ranging from 1 to 17 months.

For all of our investments for which the amortized cost basis was greater than the fair value at March 31, 2025 and December 31, 2024, we have concluded that there is no plan to sell the security nor is it more likely than not that we would be required to sell the security before its anticipated maturity.

As of June 30, 2025 and December 31, 2024, our available-for-sale investments had maturities ranging from 1 to 18 and from 1 to 17 months, respectively.

For all of our investments for which the amortized cost basis was greater than the fair value at June 30, 2025 and December 31, 2024, we have concluded that there is no plan to sell the security nor is it more likely than not that we would be required to sell the security before its anticipated maturity.

In making the determination as to whether the unrealized loss is other-than-temporary, we considered the length of time and extent the investment has been in an unrealized loss position, the financial condition and near-term prospects of the issuers, the issuers’ credit rating and the time to maturity.

9 unchanged sentences

We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers.

Table of Content s

The following table presents our financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories:

As of March 31, 2025

As of June 30, 2025

Level 1 Level 2 Level 3 Total

4 unchanged sentences

Contingent consideration (other current liabilities and other long-term liabilities) — — 12,789 12,789

Foreign currency forward contracts designated as cash flow hedges (other current and long-term liabilities) — 440 — 440

Total liabilities $ — $ — $ 12,789 $ 12,789

9 unchanged sentences

Cash and cash equivalents are excluded from the table above as carrying amounts reported in our unaudited condensed consolidated balance sheet equal or approximate fair value.

As of March 31, 2025, the fair value of our 2.25 %, 0.25 % and 1.25 % convertible senior notes due 2025, 2027 and 2029, as further described in Note 10, Debt , was $ 45.8 million, $ 548.6 million and $ 257.1 million, respectively, based upon quoted market prices.

As of June 30, 2025, the fair value of our 0.25 % and 1.25 % convertible senior notes due 2027 and 2029, as further described in Note 10, Debt , was $ 556.5 million and $ 265.1 million, respectively, based upon quoted market prices.

We consider the fair value of the Notes (as defined in Note 10, Debt ) to be a Level 2 measurement due to limited trading activity of the Notes.

As of March 31, 2025, the fair value of our contingent consideration, as further described in Note 3, Business Combinations, was $ 12.6 million and is classified as a Level 3 measurement based on inputs not observable in the market.

Table of Content s

As of June 30, 2025, the fair value of our contingent consideration, as further described in Note 3, Business Combinations, was $ 12.8 million and is classified as a Level 3 measurement based on inputs not observable in the market.

Property and Equipment

Property and equipment are recorded at cost and consist of the following:

March 31, December 31,

June 30, December 31,

(in thousands)

5 unchanged sentences

Property and equipment, net $ 29,639 $ 32,245

We recorded depreciation expense of $ 2.8 million and $ 2.9 million for the three months ended March 31, 2025 and 2024, respectively.

We recorded depreciation expense of $ 2.3 million and $ 2.8 million for the three months ended June 30, 2025 and 2024, respectively, and $ 5.1 million and $ 5.7 million for the six months ended June 30, 2025 and 2024, respectively.

Goodwill and Intangibles

Goodwill was $ 575.3 million as of March 31, 2025 and December 31, 2024.

Goodwill was $ 575.3 million as of June 30, 2025 and December 31, 2024.

The following table presents details of our intangible assets which include acquired identifiable intangible assets and capitalized internal-use software costs:

Average Estimated Useful Life (years) As of March 31, 2025 As of December 31, 2024

Average Estimated Useful Life (years) As of June 30, 2025 As of December 31, 2024

Gross Carrying

12 unchanged sentences

Intangible assets are expensed on a straight-line basis over the useful life of the asset.

Amortization expense was $ 8.9 million and $ 8.4 million for the three months ended March 31, 2025 and 2024, respectively.

Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of March 31, 2025 was as follows (in thousands):

2025 (for the remaining nine months) $ 24,437

Amortization expense was $ 9.0 million and $ 8.1 million for the three months ended June 30, 2025 and 2024, respectively, and $ 17.9 million and $ 16.5 million for the six months ended June 30, 2025 and 2024, respectively.

Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of June 30, 2025 was as follows (in thousands):

2025 (for the remaining six months) $ 16,369

2030 and thereafter 4,409

Total $ 65,895

The table above excludes the impact of $ 9.1 million of capitalized internal-use software costs for projects that have not been completed as of March 31, 2025, and therefore, all the costs associated with these projects have not been incurred.

Table of Content s

The table above excludes the impact of $ 9.1 million of capitalized internal-use software costs for projects that have not been completed as of June 30, 2025, and therefore, all the costs associated with these projects have not been incurred.

Deferred Contract Acquisitions and Fulfillment Costs

The following table summarizes the activity of the deferred contract acquisition and fulfillment costs, which primarily consist of capitalized sales commissions, for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table summarizes the activity of the deferred contract acquisition and fulfillment costs, which primarily consist of capitalized sales commissions, for the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

(in thousands)

5 unchanged sentences

To mitigate our exposure to foreign currency fluctuations resulting from certain expenses denominated in certain foreign currencies, we enter into forward contracts that are designated as cash flow hedging instruments.

These forward contracts have contractual maturities of eighteen months or less, and as of March 31, 2025 and December 31, 2024, outstanding forward contracts had a total notional value of $ 61.0 million and $ 50.4 million, respectively.

These forward contracts have contractual maturities of eighteen months or less, and as of June 30, 2025 and December 31, 2024, outstanding forward contracts had a total notional value of $ 57.8 million and $ 50.4 million, respectively.

The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract.

During the three months ended March 31, 2025 and 2024, all cash flow hedges were considered effective.

During the three and six months ended June 30, 2025 and 2024, all cash flow hedges were considered effective.

Refer to Note 5, Fair Value Measurements , for the fair values of our outstanding derivative instruments.

7 unchanged sentences

2029 Notes March 15, 2029 1.25 % March 15, 2024 1.69 % March 15 and September 15 15.4213 $ 64.85 4.6

The 2025 Notes, the 2027 Notes and the 2029 Notes are senior unsecured obligations, do not contain any financial covenants and are governed by indentures between the Company, as issuer, and U.S.

On May 1, 2025, the Company paid $ 46.5 million to redeem the outstanding portion of the 2025 Notes, including the outstanding principal amount and accrued interest through the maturity date of the 2025 Notes.

The 2027 Notes and the 2029 Notes are senior unsecured obligations, do not contain any financial covenants and are governed by indentures between the Company, as issuer, and U.S.

Trust Company, Bank National Association, as trustee (the “Indentures”).

The total net proceeds from the 2025 Notes, the 2027 Notes and the 2029 Notes offerings, after deducting initial purchase discounts and debt issuance costs, were $ 222.8 million, $ 585.0 million and $ 292.0 million, respectively.

For additional details on the terms of our Notes, see Note 11, Debt , to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

As of March 31, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holders.

The 2025 Notes became convertible at the option of the holders effective November 1, 2024.

The holders may convert the 2025 Notes, the 2027 Notes and the 2029 Notes at any time on or after November 1, 2024, December 15, 2026 and December 15, 2028, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above.

As of June 30, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holders.

The holders may convert the 2027 Notes and the 2029 Notes at any time on or after December 15, 2026 and December 15, 2028, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the Indentures.

Table of Content s

If we undergo a fundamental change (as set forth in the Indentures) at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require us to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100 % of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

equal to 100 % of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

In addition, following certain corporate events that occur prior to the maturity date or following our issuance of a notice of redemption, in each case as described in the Indentures, we will increase the conversion rate for a holder of the Notes who elects to convert its Notes in connection with such a corporate event or during the related redemption period in certain circumstances.

Subsequent to the balance sheet date, on May 1, 2025, the Company paid $ 46.5 million to redeem the outstanding portion of the 2025 Notes, including the outstanding principal amount and accrued interest through the maturity date of the 2025 Notes.

For additional details on the terms of our Notes, see Note 11, Debt , to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Accounting for the Notes

1 unchanged sentence

The debt issuance costs are amortized to interest expense using the effective interest method over the contractual term of the Notes.

The net carrying amount of the Notes as of March 31, 2025 and December 31, 2024 was as follows (in thousands):

The net carrying amount of the Notes as of June 30, 2025 and December 31, 2024 was as follows (in thousands):

2025 Notes 2027 Notes 2029 Notes

2 unchanged sentences

Amortization of debt issuance costs — 97 97 — 1,241 1,241 — 680 680

Balance at March 31, 2025 $ 45,992 $ ( 25 ) $ 45,967 $ 600,000 $ ( 4,949 ) $ 595,051 $ 300,000 $ ( 5,748 ) $ 294,252

Principal payment upon maturity ( 45,992 ) — ( 45,992 ) — — — — — —

Balance at June 30, 2025 $ — $ — $ — $ 600,000 $ ( 4,323 ) $ 595,677 $ 300,000 $ ( 5,400 ) $ 294,600

Interest expense related to the Notes was as follows (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes 2029 Notes Total

2 unchanged sentences

Total interest expense $ 110 $ 1,002 $ 1,286 $ 2,398 $ 332 $ 999 $ 1,248 $ 2,579

Six Months Ended June 30,

2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes 2029 Notes Total

Contractual interest expense $ 345 $ 750 $ 1,875 $ 2,970 $ 518 $ 750 $ 1,874 $ 3,142

Amortization of debt issuance costs 97 1,241 680 2,018 149 1,247 622 2,018

Total interest expense $ 442 $ 1,991 $ 2,555 $ 4,988 $ 667 $ 1,997 $ 2,496 $ 5,160

In connection with the offering of the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into privately negotiated capped call transactions with certain counterparties (the “2025 Capped Calls”, “2027 Capped Calls” and “2029 Capped Calls”) (collectively, the “Capped Calls”).

2 unchanged sentences

In addition, the Capped Calls are subject to certain specified additional disruption events that may give rise to a termination of the Capped Calls, including nationalization, insolvency or delisting, changes in law, failures to deliver, insolvency filings and hedging disruptions.

Table of Content s

The following table sets forth other key terms and premiums paid for the Capped Calls related to each series of Notes:

4 unchanged sentences

Expiration dates March 4, 2025 - April 29, 2025 January 1, 2027 - March 11, 2027 February 13, 2029 - March 13, 2029

Subsequent to the balance sheet date, the 2025 Capped Calls expired in full on April 29, 2025.

The 2025 Capped Calls expired in full on April 29, 2025.

The Company did not elect to exercise any portion of the 2025 Capped Calls prior to expiration.

2 unchanged sentences

The 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives.

Table of Content s

Credit Agreement

On June 25, 2025 (the "Closing Date"), the Company entered into a credit agreement (the "Credit Agreement"), by and among the Company, Rapid7 LLC, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, that provides for a $ 200.0 million revolving credit facility with a letter of credit sublimit of $ 20.0 million.

The Credit Agreement allows for incremental facilities up to the greater of $ 141 million or 75 % of Consolidated EBITDA (as defined in the Credit Agreement).

Additional incremental facilities may be incurred, subject to certain conditions.

We incurred fees of $ 1.6 million in connection with entering into the Credit Agreement.

The fees are recorded in other current and non-current assets on the consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement.

Under the terms of the Credit Agreement, we are required to pay a commitment fee on the unused portion of the credit facility.

The commitment fee rate is determined by the total net leverage ratio of the Company and its subsidiaries, ranging from 0.20 % to 0.25 % per annum on the unused portion of the credit facility.

The commitment fee is expensed as incurred and included within interest expense on the condensed consolidated statement of operations.

The Credit Agreement matures on the fifth anniversary of the Closing Date or, if certain specified liquidity conditions are not satisfied, 91 days prior to the earliest maturity date of either the 2027 or the 2029 Notes.

The Credit Agreement also contains certain affirmative and negative covenants, including a requirement to maintain a minimum interest coverage ratio for the duration of the Credit Agreement and a maximum net leverage ratio.

The borrowings under the Credit Agreement bear interest at a variable annual rate based on either the Secured Overnight Financing Rate (SOFR) subject to a floor of zero or alternate base rate plus, in each case, a fixed margin, which varies depending on the Company’s net leverage ratio.

As of June 30, 2025, we did not have any outstanding borrowings under the Credit Agreement.

As of June 30, 2025, we had a total of $ 6.0 million in letters of credit outstanding as collateral for certain office space leases which reduce the amount of borrowing availability under our Credit Agreement.

Stock-Based Compensation

Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options and purchase rights issued under our employee stock purchase plan was classified in the accompanying unaudited condensed consolidated statements of operations as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in thousands)

7 unchanged sentences

Our Compensation Committee adopted and approved the performance goals, targets and payout formulas for our 2025 and 2024 bonus plans, including permitting our executive officers and certain other employees the opportunity to receive payment of their earned bonuses in the form of common stock (in lieu of cash).

During the three months ended March 31, 2025 and 2024, we recognized stock-based compensation expense related to such bonuses in the amount of $ 0.3 million and $ 0.1 million, respectively, based on the probable expected performance against the pre-established corporate financial objectives as of March 31, 2025 and 2024.

During each of the three months ended June 30, 2025 and 2024, we recognized stock-based compensation expense related to such bonuses in the amount of $ 0.4 million and $ 0.4 million, respectively, and during the six months ended June 30, 2025 and 2024, we recognized stock-based compensation expense in the amount of $ 0.7 million and $ 0.5 million, respectively, based on the probable expected performance against the pre-established corporate financial objectives as of June 30, 2025 and 2024.

For employees, including executive officers, who elect to receive their bonuses in the form of common stock (in lieu of cash), the payouts are expected to be made in the form of fully vested stock awards in the first quarter of the following year pursuant to our 2015 Equity Incentive Plan, as amended.

1 unchanged sentence

(b) Restricted Stock, Restricted Stock Units and Performance-Based Restricted Stock Units

RSUs and PSUs activity during the three months ended March 31, 2025 was as follows:

RSUs and PSUs activity during the six months ended June 30, 2025 was as follows:

Shares Weighted-

4 unchanged sentences

Forfeited ( 404,603 ) $ 54.17

Unvested balance as of March 31, 2025 4,278,876 $ 46.29

As of March 31, 2025, the unrecognized compensation expense related to our unvested RSUs and PSUs was $ 113.4 million.

Unvested balance as of June 30, 2025 3,961,440 $ 43.45

As of June 30, 2025, the unrecognized compensation expense related to our unvested RSUs and PSUs was $ 91.6 million.

This unrecognized compensation expense will be recognized over an estimated weighted-average amortization period of 1.15 years.

2 unchanged sentences

In addition, the portion of the PSUs that are earned would be capped at a maximum of 200 % of the target level payout and if certain net ARR or Adjusted EBITDA goals were not met, no PSUs will be earned.

The PSUs have a performance period of one year and the earned PSUs will vest in three equal installments following each of the first, second and third anniversary of the vesting commencement date, subject to the participant’s continuous service as of each such date.

In the three months ended March 31, 2025, we recorded $ 0.5 million of stock-based compensation expense related to these PSUs based on estimated achievement of the performance criteria.

Table of Content s

each such date.

In the three and six months ended June 30, 2025, we recorded $ 0.6 million and $ 1.1 million, respectively, of stock-based compensation expense related to these PSUs based on estimated achievement of the performance criteria.

The following tables summarizes information about stock option activity during the reporting periods:

Shares Weighted

Price Weighted

5 unchanged sentences

Forfeited/cancelled ( 200 ) $ 10.88 $ —

Outstanding as of March 31, 2025 425,321 $ 13.23 1.3 $ 5,649

Vested and exercisable as of March 31, 2025 425,321 $ 13.23 1.3 $ 5,649

Outstanding as of June 30, 2025 425,121 $ 13.23 1.1 $ 4,215

Vested and exercisable as of June 30, 2025 425,121 $ 13.23 1.1 $ 4,215

(d) Employee Stock Purchase Plan

3 unchanged sentences

On March 14, 2025, we issued 186,793 sha res of common stock to employees, with a purchase price of $ 23.79 per share, for aggregate proceeds of $ 4.4 million.

Table of Content s

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year.

Our effective tax rates for the three months ended March 31, 2025 and 2024 are as follows:

Three Months Ended March 31,

(in thousands, except share and per share data)

Our effective tax rates for the three and six months ended June 30, 2025 and 2024 are as follows:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Effective Tax Rate 19.3 % 7.6 % 31.0 % 54.4 %

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three months ended March 31, 2025 were due to foreign taxes on our international operations, state income taxes, and the impact of valuation allowance on deferred tax assets.

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three months ended March 31, 2024 were due to foreign taxes on our international operations, state income taxes, the impact of valuation allowance on deferred tax assets, and certain discrete items.

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three and six months ended June 30, 2025 were due to foreign taxes on our international operations, state income taxes, and the impact of valuation allowance on deferred tax assets.

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three and six months ended June 30, 2024 were due to foreign taxes on our international operations, state income taxes, the impact of valuation allowance on deferred tax assets, and certain discrete items.

Net Income per Share

The following table summarizes the computation of basic and diluted net income per share of our common stock for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table summarizes the computation of basic and diluted net income per share of our common stock for the three months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in thousands, except share and per share data)

7 unchanged sentences

Net income per share, diluted $ 0.13 $ 0.09 $ 0.16 $ 0.11

We intend to settle any conversion of our 2025 Notes, 2027 Notes and 2029 Notes in cash, shares, or a combination thereof.

We intend to settle any conversion of our 2027 Notes and 2029 Notes in cash, shares, or a combination thereof.

The dilutive impact of the Notes for our calculation of diluted net income per share is considered using the if-converted method.

For the three months ended March 31, 2025 and 2024, the shares underlying the Notes were not considered in the calculation of diluted net income per share as the effect would have been anti-dilutive.

For the three and six months ended June 30, 2025 and 2024, the shares underlying the Notes were not considered in the calculation of diluted net income per share as the effect would have been anti-dilutive.

In connection with the issuance of the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into the 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls, which were not included for the purpose of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.

As of March 31, 2025, the 2025 Notes were convertible at the option of the holder;

however, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

As of March 31, 2024, the 2025 Notes, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

As of June 30, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

As of June 30, 2024, the 2025 Notes, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

We had not received any conversion notices through the issuance date of our unaudited condensed consolidated financial statements.

1 unchanged sentence

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding for the respective periods below because they would have been anti-dilutive:

Table of Content s

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

Options to purchase common stock — 595,498 — 595,498

24 unchanged sentences

Based on our interpretation of the regulations and available case law, we believe that the tax positions we have taken on our filed tax return in Israel are sustainable and we intend to defend our position through all available means.

As such, we have not recorded any impact of the ITA assessment in our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2025.

As such, we have not recorded any impact of the ITA assessment in our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2025.

We are continuing to monitor developments related to this matter and its impact on our existing income tax reserves for all open years.

1 unchanged sentence

Segment Information and Information about Geographic Areas

We operate in a single reportable segment, providing product subscriptions and professional services to our customers.

The segment’s accounting policies are consistent with those described in Note 1, Summary of Significant Accounting Policies .

Table of Content s

chief operating decision maker (“CODM”) is our Chief Executive Officer.

One of the measures of profit or loss that is used by our CODM to assess performance and allocate resources is consolidated net income, as reported in the consolidated statements of operations.

We operate in a single reportable operating segment, providing product subscriptions and professional services to our customers.

The operating segment’s accounting policies are consistent with those described in Note 1, Summary of Significant Accounting Policies .

Our chief operating decision maker (“CODM”) is our Chief Executive Officer.

One of the measures of profit or loss that is used by our CODM to assess performance and allocate resources is consolidated net income, as reported in the condensed consolidated statements of operations.

Consolidated net income is used by our CODM in monitoring actual versus budgeted results as well as in benchmarking against our competitors, which are used in assessing performance of the segment.

The following table includes segment revenue, segment profit or loss, significant segment expenses and other segment expenses for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table includes segment revenue, segment profit or loss, significant segment expenses and other segment expenses for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in thousands)

8 unchanged sentences

13,668 13,915 29,766 25,805

Other segment expenses 2

Other segment expense, net 2

28,010 32,738 58,258 71,807

4 unchanged sentences

Adjusted general and administrative excludes the impact of stock-based compensation, amortization of acquired intangible assets and acquisition-related expenses.

2 Other segment expenses include stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses, restructuring expense, interest income, interest expense, other income (expense) and provision for (benefit from) income taxes.

See the unaudited condensed consolidated financial statements for other financial information regarding our operating segment.

Net revenues by geographic area presented based upon the location of the customer are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(in thousands)

North America $ 157,945 $ 157,340

United States $ 153,207 $ 152,204 $ 303,757 $ 302,449

Rest of world 60,986 55,787 120,689 110,643

1 unchanged sentence

Property and equipment, net by geographic area was as follows:

As of March 31, 2025 As of December 31, 2024

As of June 30, 2025 As of December 31, 2024

(in thousands)

North America $ 22,411 $ 22,613

United States $ 20,517 $ 22,613

Rest of World 9,122 9,632

5 unchanged sentences

108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the errors and determined that the related impact was not material to results of operations or financial position for any historical annual or interim period.

As a result, we have corrected the errors by adjusting prior period financial statements as of and for the three months ended March 31, 2024.

Refer to the consolidated financial statements included in our Annual Report on Form

Table of Content s

10-K for the year ended December 31, 2024 for detailed tables showing the effect of the immaterial error corrections to certain line items of our unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows for the interim period ended March 31, 2024.

Table of Content s

As a result, we have corrected the errors by adjusting prior period financial statements

as of and for the three and six months ended June 30, 2024.

Refer to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for detailed tables showing the effect of the immaterial error corrections to certain line items of our unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows for the interim period ended June 30, 2024.

Subsequent Events

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act ("OBBBA").

The OBBBA changes the current tax law related to both corporate income taxes and deferred tax assets and liabilities, which the Company currently accounts for under ASC 740, Income taxes ("ASC 740") .

The income tax effects of a change in tax law on current taxes related to current year ordinary income and changes to deferred taxes arising subsequent to the date of enactment are included in the annual effective tax rate, beginning in the period of enactment.

The Company is currently evaluating the impact of the OBBBA on its business, financial condition, and results of operations under ASC 740.

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