What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-08 · 140 added, 109 removed, 387 unchanged (39% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Cost of revenue

3 unchanged sentences

General and administrative

Insurance recovery

Insurance recovery, net

Acquisition-related cost

Total operating expenses

Operating income (loss)

Operating (loss) income

Interest expense

Other non-operating expense, net

Other expense, net

Loss before income tax

Income tax benefit

Net (loss) income

Net (loss) income per share

Income tax (benefit) expense

Net loss per share

Weighted average number of shares:

1 unchanged sentence

Turtle Beach Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive Loss

(unaudited, in thousands)

Three Months Ended

Net (loss) income

Six Months Ended

Other comprehensive income (loss)

1 unchanged sentence

Other comprehensive income (loss)

Comprehensive income (loss)

Comprehensive loss

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

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Common stock, $ 0.001 par value - 25,000,000 shares authorized;

19,850,436 and 19,961,696 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

19,823,915 and 19,961,696 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Total Stockholders’ Equity

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(unaudited, in thousands)

Three Months Ended

March 31, 2025

March 31, 2024

Six Months Ended

June 30, 2025

June 30, 2024

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

Fair value step-up adjustment to acquired inventory

Amortization of intangible assets

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Repayment of revolving credit facilities

Proceeds of term loan

Proceeds from term loan

Repayment of term loan

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Cash and cash equivalents - end of period

SUPPLEMENTAL DISCLOSURE OF INFORMATION

Cash paid for interest

Cash paid for income taxes

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

5 unchanged sentences

Balance at December 31, 2024

Other comprehensive income

Other comprehensive income, net of tax

Issuance of restricted stock

3 unchanged sentences

Balance at March 31, 2025

Other comprehensive income, net of tax

Issuance of restricted stock

Stock options exercised

Stock-based compensation

Repurchase of common stock

Balance at June 30, 2025

Comprehensive

Balance at December 31, 2023

Other comprehensive loss

Other comprehensive loss, net of tax

Issuance of acquisition-related stock

3 unchanged sentences

Balance at March 31, 2024

Other comprehensive income, net of tax

Issuance of restricted stock

Stock options exercised

Stock-based compensation

Repurchase of common stock

Balance at June 30, 2024

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

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Description of Business

Turtle Beach Corporation (“Turtle Beach” or the “Company”), headquartered in San Diego, California and incorporated in the state of Nevada in 2010, is a premier audio and gaming technology company with expertise and experience in developing, commercializing, and marketing innovative products across a range of large addressable markets under the Turtle Beach® brands.

Turtle Beach, a worldwide leader of feature-rich headset solutions for use across multiple platforms, including video game and entertainment consoles, handheld consoles, personal computers (“PC”), tablets and mobile devices, expanded its brand beyond gaming headsets and launched its gaming controller product line, as well as gaming flight simulation and racing simulation accessories, and strengthened its gaming PC keyboards and mice product lines.

In 2024, Turtle Beach acquired Performance Designed Products, LLC (“PDP”), another leading gaming accessory brand with a robust slate of products, including gaming controllers, gamepads for all platforms and licensing deals with popular gaming and entertainment properties.

In March 2024, Turtle Beach acquired Performance Designed Products LLC (“PDP”), another leading gaming accessory brand with a robust slate of products, including gaming controllers, gamepads for all platforms and licensing deals with popular gaming and entertainment properties.

Summary of Significant Accounting Policies

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Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

The amendments are effective for the Company’s annual periods beginning January 1, 2025, with early adoption permitted, and should be applied either prospectively or retrospectively.

This ASU is effective for fiscal years beginning after December 15, 2024 and allows for adoption on a prospective basis, with early adoption is permitted.

The Company is currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.

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As a result, the total final purchase consideration was $ 114.4 million , partially funded by borrowing on the new term loan facility (see Note 7).

Additionally, the Company recognized $ 4.9 million of acquisition-related costs that were expensed during the three months ended March 31, 2024, and are included as a component of general & administrative expenses in the unaudited Condensed Consolidated Statement of Operations.

Additionally, the Company recognized $ 6.3 million of acquisition-related costs that were expensed during the six months ended June 30, 2024, and are included as “Acquisition-related costs” in the unaudited Condensed Consolidated Statement of Operations.

The following table summarizes the allocation of the consideration transferred to the assets acquired and liabilities assumed at the acquisition date:

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The goodwill from the acquisition, which is fully deductible for tax purposes, consists largely of synergies and economies of scale expected from adding the operations of PDP's and the Company’s existing business and supply channels.

PDP's net revenue has been integrated in the Company's unaudited condensed consolidated financial statements in the three months ended March 31, 2025 .

PDP's net revenue included in the Company’s consolidated results was $ 5.9 million for the three months ended March 31, 2024.

Pro Forma Financial Information (Unaudited)

The following table reflects the unaudited pro forma operating results of the Company for the three months ended March 31, 2024, which give effect to the acquisition of PDP as if it had occurred on January 1, 2023.

Three Months Ended

(in thousands)

The unaudited pro forma results are based on assumptions that the Company believes are reasonable under the circumstances and are not necessarily indicative of the operating results that would have occurred had the acquisition been effective January 1, 2023, nor are they intended to be indicative of results that may occur in the future.

Unaudited pro forma information includes adjustments primarily related to acquisition related costs, incremental costs related to fair value adjustments on acquired inventory, amortization of acquired intangible assets, recognition of benefit related to acquired net deferred tax liabilities, interest expense on transaction financing, and accounting policy alignment.

PDP's net revenue has been integrated in the Company's unaudited condensed consolidated financial statements in the six months ended June 30, 2025 .

PDP's net revenue included in the Company’s consolidated results was $ 21.8 million and $ 27.7 million for the three and six months ended June 30, 2024 , respectively.

Fair Value Measurement

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Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and the revolving line of credit.

As of March 31, 2025 and December 31, 2024, the Company has not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted.

The following is a summary of the carrying amounts and estimated fair values of the Company's financial instruments as of March 31, 2025 and December 31, 2024:

March 31, 2025

As of June 30, 2025 and December 31, 2024, the Company has not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted.

The following is a summary of the carrying amounts and estimated fair values of the Company's financial instruments as of June 30, 2025 and December 31, 2024:

June 30, 2025

December 31, 2024

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and accounts receivable and accounts payable are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment.

The carrying value of the Credit Facility and Term Loan due 2027 equals fair value as the stated

interest rate approximates market rates currently available to the Company.

The carrying value of the Credit Facility approximates fair value, due to the variable rate nature of the debt, as of March 31, 2025 and December 31, 2024 .

The carrying value of the Credit Facility and Term Loan due 2027 equals fair value as the stated interest rate approximates market rates currently available to the Company.

The carrying value of the Credit Facility approximates fair value, due to the variable rate nature of the debt, as of June 30, 2025 and December 31, 2024 .

Balance Sheet Components

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Total property and equipment, net

(1) In the three months ended March 31, 2025, the Company wrote off certain fully depreciated demonstration units and tooling totaling $ 14.9 million .

There was no proceeds recognized upon disposal.

Depreciation and amortization expense on property and equipment was $ 1.1 million and $ 0.9 million for the three months ended March 31, 2025 and 2024, respectively.

(1) In March 2025, the Company wrote off certain fully depreciated demonstration units and tooling totaling $ 14.9 million .

There were no proceeds recognized upon disposal.

Depreciation and amortization expense on property and equipment was $ 1.1 million and $ 1.2 million for the three months ended June 30, 2025 and 2024, respectively.

Depreciation and amortization expense on property and equipment was $ 2.2 million and $ 2.1 million for the six months ended June 30, 2025 and 2024.

Other Current Liabilities

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The Company conducts its goodwill impairment analysis annually or more frequently if changes in facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit may be less than its carrying value.

Due to a significant decline in the Company's stock price and the potential negative impact of tariffs and other external factors on the business, management performed a quantitative and qualitative assessment and concluded that the market capitalization of $ 284.9 million exceeded the net carrying value of the business.

Accordingly, it was determined that no events or changes in circumstances indicated that the carrying value may not be recoverable.

There were no impairment indicators and the

Company's market capitalization continues to exceed the net carrying value of the business.

As such, the Company did not perform any further qualitative or quantitative testing.

The following table summarizes the changes in the carrying amount of goodwill (in thousands):

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Purchase price adjustment

Balance as of March 31, 2025

Balance as of June 30, 2025

Intangible Assets, net

Acquired identifiable intangible assets, and related accumulated amortization, as of March 31, 2025 and December 31, 2024 consisted of (in thousands):

March 31, 2025

Acquired identifiable intangible assets, and related accumulated amortization, as of June 30, 2025 and December 31, 2024 consisted of (in thousands):

June 30, 2025

Customer relationships

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Total Intangible Assets

Amortization expense related to definite lived intangible assets of $ 2.0 million and $ 0.6 million was recognized for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows (in thousands):

Amortization expense related to definite lived intangible assets of $ 2.0 million and $ 2.1 million was recognized for the three months ended June 30, 2025 and 2024, respectively.

Amortization expense related to definite lived intangible assets of $ 4.0 million and $ 2.7 million for the six months ended June 30, 2025 and 2024, respectively.

As of June 30, 2025, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows (in thousands):

Credit Facility and Long-Term Debt

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Revolving credit facility, maturing March 2027

Term loan Due 2027

Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $ 2.0 million and $ 0.4 million for the three months ended March 31, 2025 and 2024, respectively.

Amortization of deferred financing costs was $ 0.3 million and $ 0.1 million for the three months ended March 31, 2025 and 2024, respectively.

Term loan due March 2027

Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $ 2.0 million and $ 2.2 million for the three months ended June 30, 2025 and 2024, respectively.

Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $ 4.1 million and $ 2.7 million for the six months ended June 30, 2025 and 2024, respectively.

Amortization of deferred financing costs were $ 0.3 million in each of the three months ended June 30, 2025 and 2024, respectively.

Amortization of deferred financing costs were $ 0.6 million and $ 0.3 million for the six months ended June 30, 2025 and 2024, respectively.

Revolving Credit Facility

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(“Bank of America”), as administrative agent, collateral agent and security trustee for Lenders (as defined therein), which replaced the then existing asset-based revolving loan agreement.

The Credit Facility was amended on each of December 17, 2018, May 31, 2019, and March 10, 2023.

The Credit Facility, as amended, expires on March 13, 2027 and provides for a line of credit of up to $ 50 million inclusive of a sub-facility limit of $ 10 million for TB Europe, a wholly owned subsidiary of Turtle Beach.

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In addition, Turtle Beach is required to pay a commitment fee on the unused revolving loan commitment at a rate ranging from 0.375 % to 0.50 % , and letter of credit fees and agent fees.

As of March 31, 2025, interest rates for outstanding borrowings were 8.10 % for base rate loans and 6.19 % for Term SOFR loans.

As of June 30, 2025, interest rates for outstanding borrowings were 8.10 % for base rate loans and 4.32 % for Term SOFR loans.

The Company is subject to quarterly financial covenant testing if certain availability thresholds are not met or certain other events occur (as defined in the Credit Facility).

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Obligations under the Credit Facility are secured by a security interest and lien upon substantially all of the Company’s assets.

As of March 31, 2025, the Company was in compliance with all the financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $ 51.2 million.

As of June 30, 2025, the Company was in compliance with all the financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $ 36.2 million .

On March 13, 2024, Turtle Beach and certain of its subsidiaries entered into a new financing agreement with Blue Torch Finance, LLC, (“Blue Torch”), pursuant to which Blue Torch for an aggregate amount of $ 50 million (the “Term Loan Facility”), the proceeds of which were used to (i) fund a portion of the PDP acquisition purchase price;

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and (c) is subject to certain affirmative, negative and financial covenants, including a minimum liquidity covenant and a quarterly total net leverage ratio covenant.

As of March 31, 2025, the interest rate for outstanding borrowings was 12.19 % .

On August 7, 2024, the Company and Blue Torch amended the Term Loan Facility to, among other things, permit the Company to repurchase Company common stock in an aggregate amount not to exceed $ 30 million prior to March 31, 2025, subject to the satisfaction of certain conditions.

The other material terms of the Term Loan Facility were unchanged.

As of March 31, 2025, the Company was in compliance with all the financial covenants under the Term Loan Facility.

As of June 30, 2025, the interest rate for outstanding borrowings was 12.19 % .

As of June 30, 2025, the Company was in compliance with all the financial covenants under the Term Loan Facility.

Maturities of Term Loan Debt

As of March 31, 2025, maturities of debt, assuming no prepayments, are as follows (in thousands):

As of June 30, 2025, maturities of debt, assuming no prepayments, are as follows (in thousands):

Credit Agreement

On August 1, 2025, the Company entered into the Credit Agreement (the “Credit Agreement”) with Bank of America, as the administrative agent, the swingline lender and the line of credit issuer, replacing the Company’s previous debt arrangements.

The Credit Agreement, matures on August 1, 2028 and includes a $ 60 million term loan facility and a $ 90 million revolving credit facility with designated sub-facility limits of (i) $ 15 million for the U.K.

Borrower, (ii) $ 10 million or a swingline facility and (iii) $ 5 million for letters of credit.

Actual credit availability under the revolving facility is subject to a borrowing base limitation that is calculated based on a percentage of eligible trade accounts receivable and inventories, the balances of which fluctuate, and is subject to discretionary reserves and revaluation adjustments.

The Company may utilize the facilities for borrowings as well as for the issuance of letters of credit, repaying existing indebtedness outstanding as of the effective date of the Credit Agreement and ongoing working capital and general corporate purposes as defined by the Credit Agreement.

The facilities under the Credit Agreement replaced the Company’s previous debt arrangements.

Borrowings will bear interest at a rate that varies depending on the type of loan calculated using a floating rate plus a margin.

Depending on the type of loan, the floating rate will either be the prime rate announced by Bank of America, Term SOFR, Daily Simple SOFR, EURIBOR or SONIA.

The margin will range from 2.00 % to 2.75 % for base rate loans and SONIA based loans and from 3.00 % to 3.75 % for Term SOFR, Daily Simple SOFR and EURIBOR loans.

The Credit Agreement also provides for an unused line fee, letter of credit fees, and agent fees.

The Credit Agreement requires the Company and its subsidiaries to (i) maintain a fixed charge coverage ratio, defined as the ratio, determined on a consolidated basis for the Company and its subsidiaries for the applicable measurement period, of (a) EBITDA minus unfinanced capital expenditures and cash taxes paid for such period to (b) consolidated interest charges for such period plus principal payments or redemptions of outstanding debt plus certain restricted payments and (ii) maintain a consolidated leverage ratio, defined as the ratio, determined on a consolidated basis for the Company and its subsidiaries for the applicable measurement period, of (a) certain funded indebtedness minus unrestricted cash up to a maximum of $ 12 million to (b) EBITDA.

The Credit Agreement also contains affirmative and negative covenants that, subject to certain exceptions, limit our ability to take certain actions, including our ability to incur debt, pay dividends and repurchase stock, make certain investments and other payments, enter into certain mergers and consolidations, engage in sale leaseback transactions and transactions with affiliates, and encumber and dispose of assets.

Commitments and Contingencies

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Insolvency Dispute in Germany:

On February 15, 2024, TBC Holding Company LLC (“TBCH”), a wholly owned subsidiary of Turtle Beach Corporation, was served with a lawsuit that was brought to the German Higher Regional Court in Stade by the insolvency administrator of KJE Europe GmbH, a company registered and existing under the laws of Germany.

In his complaint, the insolvency administrator claims that TBCH is liable to reimburse any payments received by th e TBCH under a certain settlement agreement with KJE Europe GmbH dated June 30, 2020.

On February 15, 2024, TBC Holding Company LLC (“TBCH”), a wholly owned subsidiary of Turtle Beach Corporation, was served with a lawsuit that was brought to the German Higher Regional Court in Stade by the insolvency administrator of KJE Europe GmbH (“KJE”) , a company registered and existing under the laws of Germany.

In his complaint, the insolvency administrator claims that TBCH is liable to reimburse any payments received by the TBCH under a certain settlement agreement with KJE dated June 30, 2020.

On February 28, 2025, the Court ruled in favor of the insolvency administrator holding that TBCH was liable for EUR 1.4 million plus interest and costs.

TBCH continues to believe the claims do not have merit and has appealed the judgment.

As of March 31, 2025, the Company has accrued for the potential impact of loss contingency.

TBCH appealed the judgment and the parties subsequently negotiated a settlement agreement that became effective following the approval of the creditors' assembly of KJE on August 5, 2025.

Under the settlement agreement, TBCH agreed to make a payment of EUR 722,989.00 to KJE's insolvency estate and to withdraw its appeal in exchange for a full and final release of all claims the insolvency administrator may have against TBCH, with a portion of the payment amount being allowed as a claim in KJE's insolvency proceedings .

As of June 30, 2025, the Company had accrued for the potential impact of loss contingency.

Intellectual Property Dispute :

PDP, a wholly-owned subsidiary of Turtle Beach Corporation, has received a letter from OKYN Holdings, Inc., d/b/a Nyko Technologies (“Nyko”) claiming that PDP’s Ultra Slim Charge System for PlayStation 4 (“Ultra Slim”) infringes certain patents allegedly owned by Nyko.

The Ultra Slim product is no longer being sold by PDP in the United States.

To date, Nyko has not filed a lawsuit regarding its allegations.

PDP is investigating the claims and will vigorously defend itself.

On May 28, 2025, PDP filed an action for declaratory judgment of non-infringement of four patents purportedly owned by OKYN Holdings, Inc., d/b/a Nyko Technologies (“Nyko”) in the United States District Court for the Southern District of California.

Nyko had written to PDP on October 31, 2024 asserting that PDP’s Ultra Slim Charge System for PlayStation 4 (“Ultra Slim”) infringed those patents.

Nyko has responded to PDP’s complaint and filed counterclaims for patent infringement by the Ultra Slim.

On June 12, 2025, Nyko filed a lawsuit in the Southern District of California asserting that PDP and Turtle Beach Corporation infringed the same four

patents at issue in the declaratory judgment action filed by PDP.

On July 8, 2025, PDP and Turtle Beach moved to dismiss Nyko’s complaint and that motion is pending.

Intellectual Property Dispute :

On July 18, 2025, Gametronics LLC filed a patent infringement lawsuit against Voyetra Turtle Beach, Inc., (“VTB”) a wholly owned subsidiary of Turtle Beach Corporation, in the United States District Court for the District of Delaware, asserting infringement of three patents by the Victrix Pro BFG Wireless Controller.

VTB is investigating Gametronics’ allegations.

The Company will continue to vigorously defend itself in the foregoing unresolved matters.

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Accordingly, the Company cannot predict the outcome of these matters.

The Company has not recorded any accrual at March 31, 2025 for contingent losses associated with these matters unless otherwise disclosed above based on its belief that losses, while possible, are not probable.

The Company has not recorded any accrual at June 30, 2025 for contingent losses associated with these matters unless otherwise disclosed above based on its belief that losses, while possible, are not probable.

Further, any possible range of loss cannot be reasonably estimated at this time.

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Three Months Ended

Six Months Ended

Warranty, beginning of period

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damages and expenses, including reasonable attorneys’ fees.

As of March 31, 2025, no material amounts have been accrued for indemnification

As of June 30, 2025, no material amounts have been accrued for indemnification

The Company does not believe, based on historical experience and information currently available, that it is probable that any

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Three Months Ended

Six Months Ended

Income tax benefit

Effective income tax rate

The effective tax rate for the three months ended March 31, 2025 was primarily impacted by the change in U.S.

The effective tax rate for the three and six months ended June 30, 2025 was primarily impacted by the change in U.S.

valuation allowance, foreign taxes, and Federal and State current tax.

The effective tax rate for the three months ended March 31, 2024 was primarily impacted by the release of U.S.

The effective tax rate for the three and six months ended June 30, 2024 was primarily impacted by the release of U.S.

valuation allowance for PDP acquired net deferred tax liabilities.

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Interest and penalties associated with income tax matters are included in the provision for income taxes in the condensed consolidated statements of operations.

As of March 31, 2025, the Company had uncertain tax positions of $ 2.5 million , inclusive of $ 0.6 million of interest and penalties.

As of June 30, 2025, the Company had uncertain tax positions of $ 2.5 million , inclusive of $ 0.6 million of interest and penalties.

As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date.

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deferred tax assets as of December 31, 2022.

The Company continues to maintain this valuation allowance for the three months ended March 31, 2025.

For the three months ended March 31, 2024 , the Company recorded a $ 6.7 million of tax benefit related to the PDP acquisition, including a reversal of $ 7.0 million of valuation allowance for PDP acquired net deferred tax liabilities.

The Company continues to maintain this valuation allowance for the three and six months ended June 30, 2025.

For the six months ended June 30, 2024 , the Company recorded a $ 6.2 million of tax benefit related to the PDP acquisition, including a reversal of $ 6.4 million of valuation allowance for PDP acquired net deferred tax liabilities.

The Company is subject to income taxes domestically and in various foreign jurisdictions.

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The federal tax years open under the statute of limitations are 2021 through 2023, and the state tax years open under the statute of limitations are 2020 through 2023, and the foreign tax years open under the statute of limitations are 2021 through 2023.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100 % bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

ASC 740, “Income Taxes”, requires the tax effects of changes in tax rates and tax law be recognized in the period in which the legislation is enacted.

The Company is currently evaluating the impact of the OBBBA and the results of such evaluation will be reflected in the Company’s Form 10-Q for the quarter ended September 30, 2025, the period of enactment.

Equity Incentive Plans and Stock-Based Compensation

Stock Repurchase Activity

On April 9, 2019, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $ 15.0 million of its common stock.

Any repurchases under the program will be made from time to time on the open market at prevailing market prices.

On April 1, 2021, the Board of Directors approved an extension and expansion of this stock repurchase program up to $ 25.0 million of its common shares, expiring April 9, 2023 .

On March 3, 2023, the Company’s Board of Directors approved a two-year extension of this stock repurchase plan.

On April 9, 2024, the Board of Directors approved an additional expansion of this stock repurchase program to up to $ 55 million of the Company’s common shares.

During the three months ended March 31, 2025, the Company repurchased 0.1 million shares of its common stock for a total cost of $ 1.8 million .

As of March 31, 2025, the total cost of repurchased common stock was $ 29.6 million .

On May 7, 2025, The Company' Board of Directors authorized a stock repurchase program to acquire up to $ 75 million of Company common stock.

The amount and timing of specific repurchases are subject to market conditions, applicable legal requirements, restrictions in the Company’s debt agreements and other factors.

The Company intends to fund the share repurchases using cash from operations or short-term borrowings and may suspend or discontinue repurchases at any time.

The share repurchase program is scheduled to expire on May 6, 2027 .

The Company repurchased 0.4 million and 1.0 million shares of its common stock during the three months ended June 30, 2025 and 2024, respectively, for a total cost of $ 5.0 million and $ 15.2 million , respectively.

The Company repurchased 0.5 million and 1.0 million shares of its common stock during the six months ended June 30, 2025 and 2024, respectively for a total cost of $ 6.8 million and $ 15.2 million , respectively.

Stock-Based Compensation

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Three Months Ended

Six Months Ended

Cost of revenue

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Total stock-based compensation

The following table presents the stock activity and the total number of shares available for grant as of March 31, 2025 (in thousands):

The following table presents the stock activity and the total number of shares available for grant as of June 30, 2025:

Balance at December 31, 2024

Plan Amendment

Options Cancelled

Restricted Stock Cancelled

Restricted Stock Granted

Balance at March 31, 2025

Performance Shares Issued

Balance at June 30, 2025

Stock Option Activity

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Options Forfeited

Outstanding at March 31, 2025

Vested and expected to vest at March 31, 2025

Exercisable at March 31, 2025

Outstanding at June 30, 2025

Vested and expected to vest at June 30, 2025

Exercisable at June 30, 2025

Stock options are time-based and the majority are exercisable within 10 years of the date of grant, but only to the extent they have vested.

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Shares forfeited

Nonvested restricted stock at March 31, 2025

As of March 31, 2025, total unrecognized compensation cost related to the nonvested restricted stock granted was $ 7.0 million , which is expected to be recognized over a remaining weighted average vesting period of 2.1 years.

As of March 31, 2025 , the Company had 550,000 wholly funded warrants related to a series of transactions pursuant to which the previously outstanding Series B Preferred Stock were retired.

Nonvested restricted stock at June 30, 2025

As of June 30, 2025, total unrecognized compensation cost related to the nonvested restricted stock granted was $ 9.7 million , which is expected to be recognized over a remaining weighted average vesting period of 2.5 years.

As of June 30, 2025 , the Company had 550,000 wholly funded warrants related to a series of transactions pursuant to which the previously outstanding Series B Preferred Stock were retired.

The warrants do not expire.

Net (Loss) Income Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock attributable to common stockholders (in thousands, except per-share data):

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share of common stock attributable to common stockholders (in thousands, except per-share data):

Three Months Ended

Net (loss) income

Six Months Ended

Weighted average common shares outstanding — Basic

Plus incremental shares from assumed conversions:

Dilutive effect of restricted stock

Dilutive effect of stock options

Dilutive effect of warrants

Effect of dilutive securities

Weighted average common shares outstanding — Diluted

Net (loss) income per share:

Net loss per share:

Incremental shares from stock options and restricted stock are computed by the treasury stock method.

The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock, reduced by the repurchase of shares with the proceeds from the assumed exercises and unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises.

The weighted average shares listed below were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method (in thousands).

Three Months Ended

Six Months Ended

Stock options

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The Company operates in a single reportable segment.

The entire business is managed by a single management team whose chief operating decision maker is the Chief Executive Officer , who evaluates segment performance based on operating income (loss) for purposes of allocating resources and evaluating financial performance.

The entire business is managed by a single management team whose chief operating decision maker is the Chief Executive Officer , who evaluates segment performance based on net income (loss) and operating income (loss) for purposes of allocating resources and evaluating financial performance.

The following table represents total net revenue based on where customers are physically located (in thousands):

Three Months Ended

Six Months Ended

North America

Europe and Middle East

Total net revenues

The following table reflects the incremental disclosure requirements related to our adoption of ASU 2023-07 for the following periods (in thousands):

Total net revenue

The following table reflects the significant expenses of the Company's reportable segment for the following periods (in thousands):

Three Months Ended

Six Months Ended

Significant segment expenses:

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General and administrative

Other costs (1)

Operating income (loss)

Reconciliation of segment operating income to net (loss) income:

Other (recovery) costs (1)

Operating (loss) income

Interest expense, net

Other non-operating expense, net

Other expense, net

Income tax benefit

Net (loss) income

(1) Other costs in the three months ended March 31, 2025 include acquisition-related costs and an insurance recovery.

Other costs in the three months ended March 31, 2024 include acquisition-related costs.

(1) Other costs in the three and six months ended June 30, 2025 include acquisition-related costs and an insurance recovery.

Other costs in the three and six months ended June 30, 2024 include acquisition-related costs.

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