What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 148 added, 102 removed, 367 unchanged (41% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

Cost of revenue

8 unchanged sentences

Interest expense, net

Other (income) expense, net

Other expense (income), net

Loss before income tax

Income tax benefit

Income tax expense (benefit)

Net loss per share

2 unchanged sentences

Turtle Beach Corporation

Condensed Consolidated Statements of Comprehensive (Loss) Income

Condensed Consolidated Statements of Comprehensive Loss

(unaudited, in thousands)

Three Months Ended

Other comprehensive (loss) income:

Six Months Ended

Other comprehensive income (loss):

Foreign currency translation adjustment

Other comprehensive (loss) income

Comprehensive (loss) income

Other comprehensive income (loss)

Comprehensive loss

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

23 unchanged sentences

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

19,607,383 and 19,185,869 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

17,909,711 and 19,185,869 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

7 unchanged sentences

(unaudited, in thousands)

Three Months Ended

March 31, 2026

March 31, 2025

Six Months Ended

June 30, 2026

June 30, 2025

CASH FLOWS FROM OPERATING ACTIVITIES

7 unchanged sentences

Provision for obsolete inventory

Loss on extinguishment of debt

Changes in operating assets and liabilities, net of acquisitions:

7 unchanged sentences

Purchases of property and equipment

Acquisition of a business, net of cash acquired

Net cash (used for) provided by investing activities

Cash acquired in business combination

Net cash (used in) provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

1 unchanged sentence

Repayment of revolving credit facilities

Proceeds from term loan

Repayment of term loan

Proceeds from exercise of stock options

Repurchase of restricted stock

Repurchase of common stock

Net cash used for financing activities

Debt financing costs

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of period

2 unchanged sentences

Property and equipment purchases included in accounts payable and accrued liabilities

Unpaid debt financing costs

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

12 unchanged sentences

Balance at March 31, 2026

Other comprehensive income, net of tax

Issuance of restricted stock

Stock options exercised

Stock-based compensation

Repurchase of common stock to satisfy employee tax withholding obligations

Repurchase of common stock

Balance at June 30, 2026

Comprehensive

7 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

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

32 unchanged sentences

* Customer accounted for less than 10% of total accounts receivable in the period.

Customers that accounted for more than 10% of revenue during the three months ended March 31, 2026 and 2025 were as follows:

Customers that accounted for more than 10% of revenue during the three and six months ended June 30, 2026 and 2025 were as follows:

Three Months Ended

Six months ended

Accounting Pronouncements Issued and Adopted

14 unchanged sentences

The update eliminates the legacy three-stage waterfall model - preliminary, application development, and post-implementation.

Under the new standard, capitalization begins when management authorizes and commits funding for the project and completion is probable, aligning better with agile and iterative development practices.

The types of costs eligible remain unchanged, and the update does not affect accounting for software developed for sale

or licensing.

Under the new standard, capitalization begins when management authorizes and commits funding for the project and completion is probable, aligning better with agile and iterative

development practices.

The types of costs eligible remain unchanged, and the update does not affect accounting for software developed for sale or licensing.

This ASU will be effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

7 unchanged sentences

The Company is currently evaluating the impact of the adoption of this standard and does not expect that it will have a material impact on its disclosures.

Other recently issued accounting pronouncements are not expected to have a material impact on the Company's consolidated financial statements.

Fair Value Measurement

7 unchanged sentences

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

As of March 31, 2026 and December 31, 2025, 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, which is classified as Level 1, as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026

As of June 30, 2026 and December 31, 2025, 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, which is classified as Level 1, as of June 30, 2026 and December 31, 2025 (in thousands):

June 30, 2026

December 31, 2025

2 unchanged sentences

Cash equivalents are stated at amortized cost, which approximates fair value as of the consolidated balance sheet dates, due to the short period of time to maturity;

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.

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 paymen t.

The carrying values of the 2026 Revolving Credit Facility and 2026 Term Loan due in 2029 approximate fair value as their stated interest rates reflect current market rates.

Balance Sheet Components

3 unchanged sentences

Total inventories

During the three months ended June 30, 2026, the Company received tariff refunds totaling $ 8.2 million from the U.S.

Customs and Border Protection related to previously paid import duties, all of which were recorded as an increase to cash.

Of the total amount received, $ 4.3 million related to tariffs recognized in cost of revenue during the prior fiscal year.

Because the Company's right to the refund was established and the refund was received during the current quarter, the amount was recognized as a reduction of cost of goods revenue during the three months ended June 30, 2026.

An additional $ 3.6 million related to tariffs previously capitalized as a component of inventory and was recognized as a reduction to inventory.

The remaining amount, representing statutory interest on the refunded duties of $ 0.3 million , was recognized in Other expense (income), net in the accompanying condensed consolidated statements of operations.

Property and Equipment, net

8 unchanged sentences

Total property and equipment, net

Depreciation and amortization expense on property and equipment was $ 0.9 million and $ 1.1 million for the three months ended March 31, 2026 and 2025, respectively.

Depreciation and amortization expense on property and equipment was $ 0.8 million and $ 1.1 million for the three months ended June 30, 2026 and 2025, respectively.

Depreciation and amortization expense on property and equipment was $ 1.7 million and $ 2.2 million for the six months ended June 30, 2026 and 2025.

Other Current Liabilities

13 unchanged sentences

Intangible Assets, net

Acquired identifiable intangible assets, and related accumulated amortization, as of March 31, 2026 and December 31, 2025 consist of (in thousands):

March 31, 2026

Acquired identifiable intangible assets, and related accumulated amortization, as of June 30, 2026 and December 31, 2025 consist of (in thousands):

June 30, 2026

Customer relationships

7 unchanged sentences

Total Intangible Assets

Amortization expense related to definite lived intangible assets of $ 2.0 million was recognized for both the three months ended March 31, 2026 and 2025.

As of March 31, 2026, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows (in thousands):

2026 (remaining nine months)

Amortization expense related to definite lived intangible assets of $ 2.0 million was recognized for both the three months ended June 30, 2026 and 2025.

Amortization expense related to definite lived intangible assets of $ 4.0 million was recognized for both the six months ended June 30, 2026 and 2025.

As of June 30, 2026, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows (in thousands):

2026 (remaining six months)

Credit Facility and Long-Term Debt

The following table presents the amounts of the Revolving Credit Facility and Term Loan (in thousands):

The following table presents the outstanding principal amounts of the Revolving Credit Facility and Term Loan (in thousands):

Revolving credit facility

Total interest expense, inclusive of amortization of deferred financing costs, on current and non-current debt obligations was $ 1.4 million and $ 2.0 million for the three months ended March 31, 2026 and 2025, respectively.

Amortization of deferred financing costs were $ 0.2 million and $ 0.3 million for the three months ended March 31, 2026 and 2025, respectively.

Total interest expense, inclusive of amortization of deferred financing costs, on current and non-current debt obligations was $ 2.2 million and $ 2.0 million for the three months ended June 30, 2026 and 2025, respectively.

Total interest expense, inclusive of amortization of deferred financing costs, on current and non-current debt obligations was $ 3.6 million and $ 4.1 million for the six months ended June 30, 2026 and 2025, respectively.

Amortization of deferred financing costs was $ 0.3 million for both the three months ended June 30, 2026 and 2025.

Amortization of deferred financing costs was $ 0.5 million and $ 0.6 million for the six months ended June 30, 2026 and 2025, respectively.

2024 Revolving Credit Facility

4 unchanged sentences

Borrowing Base and updating interest rate and fee terms.

The facility included customary covenants, included a minimum fixed-charge coverage ratio when availability thresholds were not met, and restrictions on additional indebtedness, dividends share repurchases, certain investments, mergers, and asset sales.

The facility included customary covenants, including a minimum fixed-charge coverage ratio when availability thresholds were not met, and restrictions on additional indebtedness, dividends share repurchases, certain investments, mergers, and asset sales.

On August 1, 2025, the Company entered into the 2025 Credit Facility, defined and discussed below, and repaid in full the amount then-outstanding under the 2024 Revolving Credit Facility.

The Company treated the 2025 Credit Facility as a partial extinguishment to the 2024 Revolving Credit Facility and recognized a loss on extinguishment of debt of $ 0.3 million to write-off the unamortized deferred financing costs in interest expense in its condensed consolidated statements of operations.

The Company treated the 2025 Credit Facility as a partial extinguishment of the 2024 Revolving Credit Facility and recognized a loss on extinguishment of debt of $ 0.3 million to write-off the unamortized deferred financing costs in interest expense in its condensed consolidated statements of operations.

2024 Term Loan Facility

5 unchanged sentences

2025 Credit Facility

On August 1, 2025, the Company and certain of its subsidiaries entered into a Credit Agreement with Bank of America, as the administrative agent, the swingline lender and the line of credit issuer (the “2025 Credit Facility”).

On August 1, 2025, the Company and certain of our subsidiaries entered into a Credit Agreement with Bank of America, as the administrative agent, the swingline lender and the line of credit issuer ("the 2025 Credit Facility").

The 2025 Credit Facility was to mature on August 1, 2028 and included 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.

2 unchanged sentences

The 2025 Credit Facility may have been used for borrowings as well as for the issuance of letters of credit, repaying existing indebtedness outstanding as of the effective date of the 2025 Credit Facility and ongoing working capital and general corporate purposes as defined by the Credit Agreement governing the 2025 Credit Facility.

The 2025 Credit Facility replaced the Company’s previous debt arrangements at that time.

Borrowings under the 2025 Credit Facility bore interest at a rate that varied depending on the type of loan and the borrower.

The 2025 Credit Facility replaced our previous debt arrangements at that time.

Prior to its repayment and termination, borrowings under the 2025 Credit Facility bore interest at a rate that varied depending on the type of loan and the borrower.

The interest rate was calculated using a floating rate plus a margin.

Depending on the type of loan, the floating rate was either the prime rate announced by Bank of America, Term SOFR, Daily Simple SOFR, the Euro Interbank Offered Rate (“EURIBOR”) or the Sterling Overnight Index Average Reference Rate (“SONIA”).

The margin ranges 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.

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

The margin ranged 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 2025 Credit Facility also provided for an unused line fee, letter of credit fees, and agent fees.

The borrowers were able to voluntarily prepay the principal of any advance, without penalty or premium, at any time in whole or in part, subject to certain breakage costs.

As of March 31, 2026.

there were no outstanding borrowings under the revolving credit facility provided by the 2025 Credit Facility .

As of March 31, 2026, interest rates for the term loan and revolving credit facilities under the 2025 Credit Facility were 7.02 % and 0.00 % , respectively.

The 2025 Credit Facility required 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 $ 12.0 million to (b) EBITDA.

The 2025 Credit Facility also contained affirmative and negative covenants that, subject to certain exceptions, limited 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.

The 2025 Credit Facility contained customary events of default, including defaults triggered by the failure to make payments when due, breaches of covenants and representations, material impairment in the perfection of the lenders’ security interest in the collateral, and events related to bankruptcy and insolvency of the Company and its subsidiaries.

To secure their obligations under the 2025 Credit Facility, the Company and each of the other loan parties granted an all-assets lien with a first priority security interest in substantially all of their assets to the administrative agent.

As part of the 2025 Credit Facility, the Company recorded an aggregate amount of deferred debt financing costs of $ 2.3 million .

On April 30, 2026, the Company repaid in full the amount then-outstanding under the 2025 Credit Facility in connection with the 2026 Term Loan Facility, as defined and described below.

Refer to Note 12 Subsequent Event for further details on the 2026 Term Loan Facility.

Accordingly, the 2025 Credit Facility was no longer available to the Company as of June 30, 2026.

As part of the repayment, the Company recognized a loss on extinguishment of debt of $ 1.8 million to write-off the unamortized deferred financing costs in interest expense in its condensed consolidated statements of operations.

2026 Term Loan Facility

On April 30, 2026, the Company entered into a new financing agreement (the “2026 Term Loan Financing Agreement”) by and among the Company, Voyetra Turtle Beach, Inc.

(“VTB"), as borrower, each subsidiary of the Company listed as a guarantor on the signature pages thereto, the lenders from time to time party thereto, and Blue Torch, as administrative agent and collateral agent, pursuant to which Blue Torch made a loan to VTB in the aggregate amount of $ 85.0 million (the “2026 Term Loan Facility”), the proceeds of which were used to or will be used to (a) refinance existing indebtedness of the Company and its subsidiaries;

(b) for general corporate purposes;

and (c) to pay fees and expenses related to the loan transactions.

The 2026 Term Loan Facility will amortize in a quarterly amount equal to 1.25 % of the aggregate original principal amount of the 2026 Term Loan Facility.

Any prepayment, or any acceleration or other repayment in connection with an insolvency proceeding, occurring during the first twelve months following the closing date will be subject to a prepayment premium equal to (i) the interest that would otherwise have accrued on the principal amount being repaid through the twelve-month anniversary of the closing date, plus (ii) 3.00 % of the principal amount being repaid, provided that no such premium applies to regularly scheduled quarterly amortization payments or to certain prepayments specified in the 2026 Term Loan Financing Agreement.

The 2026 Term Loan Facility is secured by substantially all of the assets of the Company and its subsidiaries which are party to the 2026 Term Loan Facility.

The 2026 Term Loan Facility (a) will mature on April 30, 2029 ;

(b) will bear interest at a rate equal to (i) a base rate plus 6.50 % per annum for Reference Rate Loans and SOFR plus 7.50 % per annum for SOFR Loans if the total leverage ratio is greater than or equal to 3.00 x, (ii) a base rate plus 6.25 % per annum for Reference Rate Loans and SOFR plus 7.25 % per annum for SOFR Loans if the total leverage ratio is greater than or equal to 2.25 x but less than 3.00 x, and (iii) a base rate plus 5.75 % per annum for Reference Rate Loans and SOFR plus 6.75 % per annum for SOFR Loans if the total leverage ratio is less than 2.25 x;

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 June 30, 2026, the interest rate for outstanding borrowings was 11.17 % .

2026 Revolving Credit Facility

On April 30, 2026, the Company entered into a Loan, Guaranty and Security Agreement (the “2026 Revolving Credit Agreement”), by and among the Company, VTB, TBC Holding Company LLC, PDP, Turtle Beach Europe Limited, VTB Holdings, Inc., Tide Acquisition Sub II, LLC, the financial institutions party thereto and Bank of America, as agent, collateral agent and security trustee for the lenders to the credit facility (the “2026 Revolving Credit Facility”).

The 2026 Revolving Credit Agreement provides for, among other things:

(a) subject in each case to the applicable borrowing base, a US commitment in an amount equal to $ 50.0 million or $ 65.0 million based on the season and a UK commitment equal to $ 10.0 million or $ 15.0 million based on the season;

(b) a maturity date of April 30, 2029 ;

(c) interest rate and margin terms such that the loans will bear interest at a rate equal to (1) SOFR, (2) the US Base Rate, (3) SONIA for loans denominated in Sterling, and (4) EURIBOR for loans denominated in Euros, plus in each case, an applicable margin, which is between 0.50 % and 1.00 % for US Base Rate Loans and 1.50 % and 2.00 % for US Term SOFR Loans, UK SONIA Rate Loans and UK EURIBOR Loans;

and (d) certain affirmative and negative covenants and a springing (subject to certain triggers) fixed charge coverage ratio.

The obligations under the 2026 Revolving Credit

Agreement are secured by substantially all of the assets of the Company and its subsidiaries which are party to the 2026 Revolving Credit Agreement.

The respective priorities of the security interests securing the 2026 Term Loan Financing Agreement and the 2026 Revolving Credit Agreement are governed by an intercreditor agreement, dated as of April 30, 2026, between Blue Torch and Bank of America.

As of June 30, 2026, the Company was in compliance with all the financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $ 31.0 million .

As part of the 2026 Credit Facility, the Company recorded an aggregate amount of deferred debt financing costs of $ 1.2 million in its condensed consolidated balance sheet.

Maturities of Term Loan Debt

The following table summarized the maturities of debt, assuming no prepayments or refinancing, are as follows (in thousands):

2026 (remaining nine months)

The following table summarizes the maturities of debt, assuming no prepayments or refinancing, are as follows (in thousands):

2026 (remaining six months)

Current portion

8 unchanged sentences

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

On September 30, 2025, PDP moved for judgment on the pleadings on multiple aspects of Nyko’s counterclaims and that motion is pending.

On June 12, 2025, Nyko filed a lawsuit in the Southern District of California asserting that PDP and Turtle Beach Corporation (“TBC”) infringed the same four patents at issue in the declaratory judgment action filed by PDP.

2 unchanged sentences

On April 16, 2026, Nyko filed a First Amended Complaint that again alleged infringement by TBC and PDP.

PDP and TBC’s responses to that Complaint have not yet been filed.

On September 30, 2025, PDP moved for judgment on the pleadings on multiple aspects of Nyko’s counterclaims and that motion is pending.

On May 21, 2026, PDP filed an answer to Nyko’s First Amended Complaint and TBC moved to dismiss Nyko’s First Amended Complaint.

That motion is pending.

Intellectual Property Dispute:

On October 3, 2025, Robert Lyden, an individual, filed a patent infringement lawsuit against PDP, Voyetra Turtle Beach, Inc.

(“VTB”), and the Company in the United States District Court for the District of Minnesota, asserting infringement of one patent by the Victrix Pro BFG Wireless Controller and Victrix Gambit Wireless Controller.

On December 16, 2025, PDP, VTB and the Company moved to dismiss the complaint for improper venue.

On March 19, 2026, the Court granted that motion and transferred the case to the United States District Court for the Southern District of California where it is now pending.

(“VTB”), and Turtle Beach Corporation (“TBC”) in the United States District Court for the District of Minnesota, asserting infringement of one patent by the Victrix Pro BFG Wireless Controller and Victrix Gambit Wireless Controller.

On December 16, 2025, PDP, VTB and TBC moved to dismiss the complaint for improper venue.

On March 19, 2026, the Court granted that motion and transferred the case to the United States District Court for the Southern District of California.

On May 13, 2026, PDP, VTB and TBC moved to dismiss the Complaint.

That motion is pending.

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

1 unchanged sentence

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

The Company has not recorded any accrual at March 31, 2026 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, 2026 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.

The unfavorable resolution of these

matters could have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

The Company is engaged in other legal actions, not described above, arising in the ordinary course of its business and, while there can be no assurance, believes that the ultimate outcome of these other legal actions will not have a material adverse effect on its business, results of operations, financial condition, or cash flows.

The unfavorable resolution of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

is engaged in other legal actions, not described above, arising in the ordinary course of its business and, while there can be no assurance, believes that the ultimate outcome of these other legal actions will not have a material adverse effect on its business, results of operations, financial condition, or cash flows.

Product Warranties

4 unchanged sentences

Three Months Ended

Six Months Ended

Warranty, beginning of period

7 unchanged sentences

damages and expenses, including reasonable attorneys’ fees.

As of March 31, 2026, no material amounts have been accrued for indemnification provisions.

As of June 30, 2026, no material amounts have been accrued for indemnification provisions.

The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under its indemnification arrangements.

7 unchanged sentences

Three Months Ended

Income tax benefit

Six Months Ended

Income tax expense (benefit)

Effective income tax rate

A nominal provision for income taxes was recorded for the three months ended March 31, 2026, as there were no material changes in the Company’s income tax positions, estimates, or circumstances that would require recognition of a current or deferred tax expense or benefit.

A nominal provision for income taxes was recorded for the three and six months ended June 30, 2026, as there were no material changes in the Company’s income tax positions, estimates, or circumstances that would require recognition of a current or deferred tax expense or benefit.

The Company’s income tax positions, including the assessment of valuation allowances and uncertain tax positions, remain consistent with those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

2 unchanged sentences

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, 2026, the Company had uncertain tax positions of $ 1.8 million , inclusive of $ 0.4 million of interest and penalties.

As of June 30, 2026, the Company had uncertain tax positions of $ 1.8 million , inclusive of $ 0.4 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.

Accounting for income taxes requires that a valuation allowance be established when it is more likely

than not that all or a portion of the deferred taxes will not be realized.

The Company considers all positive and negative evidence in determining if, based on the weight of such evidence, a valuation allowance is required.

Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred taxes will not be realized.

The Company considers all positive and negative evidence in

determining if, based on the weight of such evidence, a valuation allowance is required.

In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance.

1 unchanged sentence

deferred tax assets as of December 31, 2022.

The Company continues to maintain this valuation allowance for the three months ended March 31, 2026.

The Company continues to maintain this valuation allowance for the three and six months ended June 30, 2026.

The Company will continue to evaluate all available positive and negative evidence in future periods to assess the realizability of its deferred tax assets and the need for a valuation allowance.

9 unchanged sentences

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

The Company repurchased 161,815 and 121,321 shares of its common stock in the three months ended March 31, 2026 and 2025, respectively, for a total cost of $ 2.2 million and $ 1.8 million , respectively.

The Company repurchased 1,994,526 and 372,198 shares of its common stock in the three months ended June 30, 2026 and 2025, respectively, for a total cost of $ 25.0 million and $ 5.0 million , respectively.

The Company repurchased 2,156,341 and 493,519 shares of its common stock in the six months ended June 30, 2026 and 2025, respectively, for a total cost of $ 27.2 million and $ 6.8 million , respectively.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

Cost of revenue

4 unchanged sentences

The following table summarizes the total unrecognized stock-based compensation expense and remaining recognition period by Restricted Stock Units ( “RSUs”) and Performance Stock Units (“PSUs”) (in thousands, except number of years):

March 31, 2026

June 30, 2026

Unrecognized Expense

1 unchanged sentence

Total unrecognized stock-based compensation expense

The following table presents the stock activity and the total number of shares available for grant as of March 31, 2026:

The following table presents the stock activity and the total number of shares available for grant as of June 30, 2026:

Number of Shares Available

Balance at December 31, 2025

Balance as of March 31, 2026

Balance as of June 30, 2026

Stock Option Activity

4 unchanged sentences

Options Forfeited

Outstanding at March 31, 2026

Vested and expected to vest at March 31, 2026

Exercisable at March 31, 2026

Outstanding at June 30, 2026

Vested and expected to vest at June 30, 2026

Exercisable at June 30, 2026

Stock options generally vested in accordance with the terms of the applicable award agreements and are exercisable for up to ten years once vested.

3 unchanged sentences

Nonvested restricted stock at December 31, 2025

Nonvested restricted stock at March 31, 2026

Nonvested restricted stock at June 30, 2026

Performance-Based Restricted Share Activity

Outstanding at December 31, 2025

Outstanding at March 31, 2026

The outstanding PSUs as of March 31, 2026 were comprised of 17,886 , 31,182 and 110,278 performance shares that were granted on April 1, 2023, 2024 and 2025, respectively.

With respect to the PSUs that were granted on April 1, 2025, the vesting is conditional upon the achievement of certain stock price appreciation targets between May 1, 2025 and May 1, 2026, internal financial targets for the year ended December 31, 2025, and continued service over a three-year service period.

Outstanding at June 30, 2026

The outstanding PSUs as of June 30, 2026 were comprised of 13,925 , 21,999 and 170,373 p erformance shares that were granted on April 1, 2024, 2025 and 2026, respectively.

With respect to the PSUs that were granted on April 1, 2026, the vesting is conditional based on the achievement of certain key financial and corporate strategic targets for the year ended December 31, 2026, and continued service over a three-year period.

The number of units that could be earned ranged from 0 % to 150 % of the target shares depending on the achievement of these targets.

The number of PSUs to be earned is subject to approval by the Board after the completion of the performance period based on the Company’s 2025 financial performance and stock price performance over the performance period 33 % of the earned PSUs granted in 2025 will vest in the second quarter of 2026, with the remaining 67 % vesting annually over the subsequent two years, subject to continued service.

The number of PSUs to be earned is subject to approval by the Board after the completion of the performance period based on the Company’s 2026 performance over the performance period.

Approximately 17,886 , 15,356 , and 12,201 performance shares were released during the six months ended June 30, 2026 relating to shares that were granted on April 1, 2023, 2024, and 2025, respectively.

Earned PSUs typically vest with 33 %, 33 % and 34 % of the earned PSUs shares over the first, second and third year of the requisite vesting period, respectively .

In January 2026, the holders exercised 550,000 wholly-funded warrants to an equal number of shares of the Company's common stock, which related to a series of transactions pursuant to the retirement of Series B Preferred Stock in 2018.

3 unchanged sentences

Three Months Ended

Six Months Ended

Weighted average common shares outstanding — Basic

5 unchanged sentences

Three Months Ended

Six Months Ended

Stock options

2 unchanged sentences

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 net (loss) income and operating (loss) income for purposes of allocating resources and evaluating financial performance.

The Company’s chief operating decision maker is its Chief Executive Officer .

The Chief Executive Officer regularly reviews operating loss and net loss for the Company’s single reportable segment when assessing performance and making resource allocation decisions.

Operating loss, which is the segment profit or loss measure most consistent with the measurement principles used in the Company’s consolidated financial statements, is used to evaluate the results of the Company’s core operations before the effects of interest expense, other income or expense, and income taxes.

Net loss is also reviewed by the Chief Executive Officer to evaluate overall consolidated performance after these items.

Because the Company has one reportable segment, the segment measures reviewed by the Chief Executive Officer are consistent with the corresponding consolidated measures presented in the Company’s condensed consolidated statements of operations .

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

Three Months Ended

Six Months Ended

Europe and Middle East

2 unchanged sentences

Three Months Ended

Six Months Ended

Significant segment expenses:

5 unchanged sentences

Interest expense, net

Other (income) expense, net

Income tax benefit

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

Subsequent Event

2026 Term Loan Facility

On April 30, 2026, the Company entered into a new financing agreement (the “2026 Term Loan Financing Agreement”) by and among the Company, VTB, as borrower, each subsidiary of the Company listed as a guarantor on the signature pages thereto, the lenders from time to time party thereto, and Blue Torch, as administrative agent and collateral agent, pursuant to which Blue Torch made a loan to VTB in the aggregate amount of $ 85.0 million (the “2026 Term Loan Facility”), the proceeds of which were used to or will be used to (a) refinance existing indebtedness of the Company and its subsidiaries;

(b) for general corporate purposes;

and (c) to pay fees and expenses related to the loan transactions.

The 2026 Term Loan Facility will amortize in a quarterly amount equal to 1.25 % of the aggregate original principal amount of the 2026 Term Loan Facility and may be prepaid at any time subject to a prepayment premium during the first year of the interest payments payable during the first year plus 3.00 %.

The 2026 Term Loan Facility is secured by substantially all of the assets of the Company and its subsidiaries which are party to the 2026 Term Loan Facility.

The 2026 Term Loan Facility (a) will mature on April 30, 2029 ;

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

2026 Revolving Credit Facility

The 2026 Revolving Credit Agreement provides for, among other things:

(b) a maturity date of April 30, 2029 ;

and (d) certain affirmative and negative covenants and a springing (subject to certain triggers) fixed charge coverage ratio.

The obligations under the 2026 Revolving Credit Agreement are secured by substantially all of the assets of the Company and its subsidiaries which are party to the 2026 Revolving Credit Agreement.

The foregoing descriptions of the 2026 Term Loan Financing Agreement and 2026 Revolving Credit Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the 2026 Term Loan Financing Agreement and 2026 Revolving Credit Agreement, copies of which are filed as Exhibits 10.1 and 10.2, respectively, with the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2026.

Other expense (income), net

Income tax expense (benefit)

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

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