What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2024-11-07 · 171 added, 200 removed, 476 unchanged (44% of the section changed)

Financial Statements

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

ASSETS (unaudited)

1 unchanged sentence

Cash and cash equivalents $ 33,705 $ 56,426

Accounts receivable (net of allowance of $ 385 and $ 572 at September 30, 2024, and December 31, 2023, respectively)

Restricted cash 626 626

Accounts receivable (net of allowance of $ 214 and $ 446 at March 31, 2025, and December 31, 2024, respectively)

26,079 38,647

13 unchanged sentences

Total assets $ 456,972 $ 529,522

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)

Current liabilities:

4 unchanged sentences

Operating lease liabilities, current 886 1,000

Current maturities of notes payable (includes unamortized discount of $ 2,022 and $ 2,228 at September 30, 2024, and December 31, 2023, respectively)

Current maturities of notes payable (includes unamortized discount of $ 2,168 and $ 2,176 at March 31, 2025, and December 31, 2024, respectively)

Total current liabilities 101,284 120,420

Notes payable, less current maturities (includes unamortized discount of $ 1,688 and $ 3,148 at September 30, 2024, and December 31, 2023, respectively)

Notes payable, less current maturities (includes unamortized discount of $ 750 and $ 1,280 at March 31, 2025, and December 31, 2024, respectively)

253,274 286,970

7 unchanged sentences

5,000,000 shares authorized;

115,000 shares issued and outstanding as of September 30, 2024, and December 31, 2023, respectively

115,000 shares issued and outstanding as of March 31, 2025, and December 31, 2024, respectively

124,668 123,230

Stockholders’ equity:

Stockholders’ equity (deficit):

Common stock, $ 0.0001 par value;

75,000,000 shares authorized;

27,440,968 and 29,908,407 shares issued and outstanding as of September 30, 2024, and December 31, 2023, respectively

28,484,279 and 28,168,267 shares issued and outstanding as of March 31, 2025, and December 31, 2024, respectively

Additional paid-in capital 606,029 605,286

Accumulated other comprehensive income (loss)

( 6,275 ) 6,168

Accumulated other comprehensive loss ( 16,403 ) ( 21,990 )

Accumulated deficit ( 627,452 ) ( 601,604 )

Total stockholders’ equity 907 126,294

Total liabilities, convertible preferred stock and stockholders’ equity $ 554,938 $ 870,024

Total stockholders’ equity (deficit) ( 37,823 ) ( 18,305 )

Total liabilities, convertible preferred stock and stockholders’ equity (deficit) $ 456,972 $ 529,522

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

2 unchanged sentences

(in thousands, except for share and per share amounts)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Subscription and support $ 60,182 $ 67,078

13 unchanged sentences

Depreciation and amortization 7,995 11,396

Acquisition-related expenses — 443 — 2,609

Divestiture-related expenses 1,745 —

Impairment of goodwill — 87,227

1 unchanged sentence

Loss from operations ( 1,052 ) ( 91,641 )

Other income (expense):

Other expense:

Interest income (expense), net ( 2,443 ) ( 4,958 )

Other income (expense), net ( 229 ) 103 ( 109 ) 911

Total other income (expense) 2,108 ( 2,422 ) ( 7,786 ) ( 12,451 )

Loss before benefit from (provision for) income taxes ( 1,203 ) ( 10,141 ) ( 108,109 ) ( 166,988 )

Benefit from (provision for) income taxes ( 530 ) 1,471 ( 1,193 ) 3,126

Loss on divestitures of businesses ( 23,457 ) —

Other expense, net ( 241 ) ( 78 )

Total other expense ( 26,141 ) ( 5,036 )

Loss before benefit from income taxes ( 27,193 ) ( 96,677 )

Benefit from income taxes 1,345 547

Net loss $ ( 25,848 ) $ ( 96,130 )

8 unchanged sentences

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net loss $ ( 25,848 ) $ ( 96,130 )

Other comprehensive income (loss):

Foreign currency translation adjustment 4,615 ( 4,103 ) 1,796 ( 3,248 )

Unrealized foreign currency translation adjustment 2,264 ( 2,611 )

Realized foreign currency translation 5,715 —

Unrealized translation gain (loss) on foreign currency denominated intercompany loans, net of taxes 1,498 ( 1,412 )

Interest rate swaps ( 14,428 ) ( 3,496 ) ( 16,707 ) ( 3,745 )

Interest rate swaps, net of reclassifications into earnings ( 3,890 ) 162

Other comprehensive income (loss):

3 unchanged sentences

Upland Software, Inc.

Condensed Consolidated Statements of Equity

(in thousands, except share amounts)

Three Months Ended September 30, 2024

Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Accumulated

Deficit Total

Stockholders’

Shares Amount Shares Amount

Balance at June 30, 2024 115,000 $ 120,403 27,265,746 $ 3 $ 603,526 $ ( 600 ) $ ( 596,441 ) $ 6,488

Dividends accrued - Convertible Preferred Stock — 1,406 — — ( 1,406 ) — — ( 1,406 )

Issuance of stock under Company plans, net of shares withheld for tax — — 175,222 — ( 190 ) — — ( 190 )

Stock-based compensation — — — — 3,423 — — 3,423

Foreign currency translation adjustment — — — — — 4,615 — 4,615

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries — — — — — 4,138 — 4,138

Interest rate swaps — — — — — ( 14,428 ) — ( 14,428 )

Net loss — — — — ( 1,733 ) ( 1,733 )

Balance at September 30, 2024 115,000 $ 121,809 27,440,968 $ 3 $ 605,353 $ ( 6,275 ) $ ( 598,174 ) $ 907

Three Months Ended September 30, 2023

Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Accumulated

Deficit Total

Stockholders’

Shares Amount Shares Amount

Balance at June 30, 2023 115,000 $ 114,935 32,654,615 $ 3 $ 616,556 $ 15,415 $ ( 464,190 ) $ 167,784

Dividends accrued - Convertible Preferred Stock — 1,344 — — ( 1,344 ) — — ( 1,344 )

Issuance of stock under Company plans, net of shares withheld for tax — — 269,754 — ( 353 ) — — ( 353 )

Stock repurchases and retirements — — ( 783,356 ) — ( 3,215 ) — — ( 3,215 )

Stock-based compensation — — — — 5,360 — — 5,360

Foreign currency translation adjustment — — — — — ( 4,103 ) — ( 4,103 )

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries — — — — — ( 2,588 ) — ( 2,588 )

Interest rate swaps — — — — — ( 3,496 ) — ( 3,496 )

Net loss — — — — — — ( 8,670 ) ( 8,670 )

Balance at September 30, 2023 115,000 $ 116,279 32,141,013 $ 3 $ 617,004 $ 5,228 $ ( 472,860 ) $ 149,375

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

Upland Software, Inc.

Condensed Consolidated Statements of Equity - continued

Condensed Consolidated Statements of Equity (Deficit)

(in thousands, except share amounts)

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Preferred Stock Common Stock Additional

4 unchanged sentences

Stockholders’

Equity (Deficit)

Shares Amount Shares Amount

2 unchanged sentences

Issuance of stock under Company plans, net of shares withheld for tax — — 316,012 — ( 494 ) — — ( 494 )

Stock repurchases and retirements — — ( 3,208,705 ) — ( 10,796 ) — — ( 10,796 )

Stock-based compensation — — — — 2,675 — — 2,675

Foreign currency translation adjustment — — — — — 1,796 — 1,796

Unrealized foreign currency translation adjustment — — — — — 2,264 — 2,264

Realized foreign currency translation from divestitures of businesses — — — — — 5,715 — 5,715

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries — — — — — 1,498 — 1,498

1 unchanged sentence

Net loss — — — — ( 25,848 ) ( 25,848 )

Balance at September 30, 2024 115,000 $ 121,809 27,440,968 $ 3 $ 605,353 $ ( 6,275 ) $ ( 598,174 ) $ 907

Nine Months Ended September 30, 2023

Balance at March 31, 2025 115,000 $ 124,668 28,484,279 $ 3 $ 606,029 $ ( 16,403 ) $ ( 627,452 ) $ ( 37,823 )

Three Months Ended March 31, 2024

Preferred Stock Common Stock Additional

4 unchanged sentences

Stockholders’

Equity (Deficit)

Shares Amount Shares Amount

5 unchanged sentences

Foreign currency translation adjustment — — — — — ( 2,611 ) — ( 2,611 )

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries, net of taxes — — — — — 1,111 — 1,111

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries — — — — — ( 1,412 ) — ( 1,412 )

Interest rate swaps — — — — — 162 — 162

Net loss — — — — — — ( 96,130 ) ( 96,130 )

Balance at September 30, 2023 115,000 $ 116,279 32,141,013 $ 3 $ 617,004 $ 5,228 $ ( 472,860 ) $ 149,375

Balance at March 31, 2024 115,000 $ 119,013 27,996,656 $ 3 $ 602,813 $ 2,307 $ ( 585,002 ) $ 20,121

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

1 unchanged sentence

Condensed Consolidated Statements of Cash Flows

Nine Months Ended September 30,

(in thousands)

Three Months Ended March 31,

Operating activities

4 unchanged sentences

Amortization of deferred costs 2,735 3,047

Foreign currency re-measurement gain

( 759 ) ( 983 )

Foreign currency re-measurement (gain) loss 460 ( 164 )

Non-cash interest, net and other income, net ( 1,186 ) ( 882 )

1 unchanged sentence

Non-cash loss on impairment of goodwill — 87,227

Non-cash loss on divestitures of businesses 23,457 —

Non-cash loss on retirement of fixed assets 2 —

Changes in operating assets and liabilities, net of purchase business combinations:

Changes in operating assets and liabilities:

Accounts receivable 7,971 9,361

7 unchanged sentences

Purchase of property and equipment ( 424 ) ( 183 )

Net cash used in investing activities ( 562 ) ( 1,034 )

Proceeds from the divestitures of businesses, net of cash transferred

Net cash provided by (used in) investing activities 3,789 ( 183 )

Financing activities

3 unchanged sentences

Taxes paid related to net share settlement of equity awards ( 494 ) ( 331 )

Issuance of common stock, net of issuance costs — 2

Additional consideration paid to sellers of businesses — ( 5,550 )

Net cash used in financing activities ( 34,723 ) ( 9,599 )

Effect of exchange rate fluctuations on cash 1,682 ( 437 )

Change in cash and cash equivalents ( 176,820 ) ( 9,062 )

Cash and cash equivalents, beginning of period 236,559 248,653

Cash and cash equivalents, end of period $ 59,739 $ 239,591

Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash ( 92 ) ( 284 )

Change in cash, cash equivalents and restricted cash ( 22,721 ) ( 4,945 )

Cash, cash equivalents and restricted cash, beginning of period 57,052 236,559

Cash, cash equivalents and restricted cash, end of period $ 34,331 $ 231,614

Supplemental disclosures of cash flow information:

Cash paid for interest, net of interest rate swaps $ 4,162 $ 8,720

Cash paid (received) for taxes, net of refunds $ 1,802 $ 6,227

Cash paid for taxes, net of refunds $ 1,976 $ 2,114

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

2 unchanged sentences

Organization and Nature of Operations

Upland Software, Inc.

(“Upland,” “we,” “us,” “our,” or the “Company”), a Delaware corporation, enables global businesses to work smarter with over 25 cloud software products that help increase revenue, reduce costs, and deliver business value.

Upland's solutions offer many integrated AI capabilities and cover digital marketing, knowledge management, contact center service, sales productivity, and content lifecycle automation.

Upland services over 10,000 customers ranging from large global corporations and various government agencies to small and medium-sized businesses.

Upland Software, Inc., together with its wholly owned subsidiaries (“Upland,” “we,” “us,” “our,” or the “Company”), a Delaware corporation headquartered in Austin, Texas, is a leader in AI-powered knowledge and content management software.

Our solutions help enterprises unlock critical knowledge, automate content workflows, and drive measurable ROI—enhancing customer and employee experiences while supporting regulatory compliance.

More than 1,100 enterprise customers rely on Upland to solve complex challenges and provide a trusted path for AI adoption.

The Company's customers operate in a wide variety of industries, including financial services, consulting services, technology, manufacturing, media, telecommunications, government, insurance, non-profit, healthcare, life sciences, retail, and hospitality.

Through a series of acquisitions and integrations, the Company has established a library of diverse software applications under the Upland brand that address specific digital transformation needs.

In addition to its strategy to increase core organic growth, Upland may pursue acquisitions within its cloud offerings of complementary technologies and businesses.

Basis of Presentation and Summary of Significant Accounting Policies

2 unchanged sentences

The condensed consolidated financial statements include the accounts of Upland Software, Inc.

and its wholly owned subsidiaries (collectively referred to as “Upland”, the “Company”, “we”, “us” or “our”).

and its wholly owned subsidiaries.

All intercompany accounts and transactions have been eliminated in consolidation.

2 unchanged sentences

In the opinion of management of the Company, the unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, in all material respects, and include all adjustments of a normal recurring nature necessary for a fair presentation.

The results of operations for the nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other period.

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

The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2024 Annual Report on Form 10-K.

5 unchanged sentences

however, actual results could differ from those estimates.

Upland is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of November 7, 2024, the date of issuance of this Quarterly Report on Form 10-Q.

Upland is not aware of any specific event or circumstance that would require an update to its estimates or judgments or a revision of the carrying value of its assets or liabilities as of May 12, 2025, the date of issuance of this Quarterly Report on Form 10-Q.

These estimates may change as new events occur and additional information is obtained.

Actual results could differ materially from these estimates under different assumptions or conditions.

Restricted Cash

The Company is required to maintain a letter of credit as collateral during the term of an operating lease for office space.

As of March 31, 2025 and December 31, 2024, we had $ 0.6 million of restricted cash deposited in a restricted account as collateral for the letter of credit.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows (in thousands):

3/31/2025 12/31/2024

Cash and cash equivalents $ 33,705 $ 56,426

Restricted cash 626 626

Total cash, cash equivalents and restricted cash $ 34,331 $ 57,052

Concentrations of Credit Risk and Significant Customers

4 unchanged sentences

To manage accounts receivable credit risk, the Company performs periodic credit evaluations of its customers and maintains current expected credit losses which considers such factors as historical loss information, geographic location of customers, current market conditions, and reasonable and supportable forecasts.

No individual customer represented more than 10% of total revenues for the nine months ended September 30, 2024, or more than 10% of accounts receivable as of September 30, 2024 or December 31, 2023.

No individual customer represented more than 10% of total revenues for the three months ended March 31, 2025, or more than 10% of accounts receivable as of March 31, 2025 or December 31, 2024.

Recent Accounting Pronouncements

Recently issued accounting pronouncements - Not Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which requires public entities to disclose information about their reportable segments' significant expenses and other segment items on an interim and annual basis.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

ASU 2023-07 should be applied on a retrospective basis.

The Company is currently evaluating the impact of adopting ASU 2023-07 on its disclosures.

In November 2024, the FASB, issued ASU 2024-04, Debt-Debt with Conversions and Other Options .

ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion.

This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the potential impact of this guidance on its disclosures.

In November 2024, the FASB, issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures .

ASU 2024-03 is intended to improve disclosures about a public business entity’s expense and provide more detailed information to investors about the types of expenses in commonly presented expense captions.

This ASU is effective for public companies with annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the effects of adoption of this guidance will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

ASU 2023-09 should be applied on a prospective basis, and retrospective application is permitted.

The Company is currently evaluating the impact of adopting ASU 2023-09 on its disclosures.

The Company will adopt ASU 2023-09 beginning in the first quarter of 2026.

ASU 2023-09 allows for adoption using either a prospective or retrospective transition method.

The Company is currently evaluating the effects this standard will have on its consolidated financial statements..

Fair Value Measurements

8 unchanged sentences

Assets measured at fair value on a recurring basis are summarized below (in thousands):

Fair Value Measurements at September 30, 2024

Fair Value Measurements at March 31, 2025

Level 1 Level 2 Level 3 Total

Money market funds included in cash and cash equivalents $ 37,364 $ — $ — $ 37,364

Cash equivalents - money market funds $ 17,822 $ — $ — $ 17,822

Interest rate swaps — 6,376 — 6,376

2 unchanged sentences

Level 1 Level 2 Level 3 Total

Money market funds included in cash and cash equivalents $ 211,661 $ — $ — $ 211,661

Cash equivalents - money market funds $ 40,428 $ — $ — $ 40,428

Interest rate swaps — 9,742 — 9,742

3 unchanged sentences

As the fair value measure is based on the market approach, they are categorized as Level 2.

The Company believes the carrying value of its long-term debt at September 30, 2024 approximates its fair value based on its variable interest rate feature and interest rates currently available to the Company.

The estimated fair value of the Company's debt, before debt discount, at September 30, 2024 and December 31, 2023 was $ 301.0 million and $ 482.1 million, respectively, based on valuation methodologies using interest rates currently available to the Company which are Level 2 inputs.

The Company believes the carrying value of its long-term debt at March 31, 2025 approximates its fair value based on its variable interest rate feature and interest rates currently available to the Company.

The estimated fair value of the Company's debt, before debt discount, at March 31, 2025 and December 31, 2024 was $ 259.4 million and $ 293.7 million, respectively, based on valuation methodologies using interest rates currently available to the Company which are Level 2 inputs.

Goodwill and Other Intangible Assets

Changes in the Company’s goodwill balance for the nine months ended September 30, 2024 are summarized in the table below (in thousands):

Changes in the Company’s goodwill balance for the three months ended March 31, 2025 are summarized in the table below (in thousands):

Balance at December 31, 2024 $ 260,976

Impairment of goodwill ( 87,227 )

Divestitures of businesses ( 2,938 )

Foreign currency translation adjustment 2,020

Balance at September 30, 2024 $ 269,010

As a result of the decline of our stock price impacting our market capitalization during the quarter ended March 31, 2024, we performed a quantitative impairment evaluation, which resulted in a goodwill impairment of $ 87.2 million.

Our quantitative goodwill impairment analysis applied two methodologies to estimate the Company’s fair value which were:

a) a discounted cash flow method and b) a guideline public company method.

The two methods indicated that the fair value of the Company was less than its carrying value.

The discounted cash flow method required significant judgments, including estimation of future cash flows, which is dependent on internally developed forecasts, estimation of the long-term rate of growth for our business, and determination of our weighted average cost of capital.

Under the guideline public company method, we estimated fair value based on a market multiple of revenues and earnings derived for comparable publicly traded companies with similar operating characteristics as the Company.

We will continue to evaluate Goodwill for impairment and adjust as indicators arise.

Balance at March 31, 2025 $ 260,058

The Company reviews its goodwill for impairment annually in the fourth quarter of the fiscal year and whenever events or changes in circumstances indicate that the carrying value of goodwill might not be recoverable.

Intangible assets, net include the estimated acquisition-date fair values of customer relationships, marketing-related assets, and developed technology that the Company recorded as part of its business acquisitions.

4 unchanged sentences

Amortization Net Carrying

September 30, 2024:

March 31, 2025:

Customer relationships 1 - 10

19 unchanged sentences

Total intangible assets $ 443,669 $ 319,766 $ 123,903

Management recorded no impairments of intangible assets during the three and nine months ended September 30, 2024 and September 30, 2023.

During the three months ended March 31, 2025, the Company divested certain products lines and their related intangible assets which resulted in a reduction of $ 25.0 million in the net carrying value of intangible assets.

Divestitures .

The Company periodically reviews the estimated useful lives of its identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value or revised useful life.

Total amortization expense was $ 13.5 million and $ 40.5 million during the three and nine months ended September 30, 2024, respectively and $ 17.2 million and $ 53.4 million for the three and nine months ended September 30, 2023, respectively.

The Company’s income tax expense (benefit) for the three and nine months ended September 30, 2024 and September 30, 2023 reflects its estimate of the effective tax rates expected to be applicable for the full years, adjusted for any discrete events that are recorded in the period in which they occur.

Management recorded no impairments of intangible assets during the three months ended March 31, 2025 and March 31, 2024.

Total amortization expense was $ 9.4 million and $ 13.5 million during the three months ended March 31, 2025 and March 31, 2024, respectively.

The Company’s income tax benefit for the three months ended March 31, 2025 and March 31, 2024 reflects its estimate of the effective tax rates expected to be applicable for the full years, adjusted for any discrete events that are recorded in the period in which they occur.

The estimates are re-evaluated each quarter based on the estimated tax expense for the full year.

The income tax expense of $ 0.5 million and $ 1.2 million for the three and nine months ended September 30, 2024, respectively, is largely comprised of foreign income taxes associated with our combined non-U.S.

operations which is partially offset for nine months ended September 30, 2024 by the non-cash impact of deferred taxes related to the goodwill impairment recorded in the first quarter of 2024.

The income tax benefit of $ 1.5 million and $ 3.1 million for the three and nine months ended September 30, 2023, respectively, is primarily related to foreign income taxes associated with our combined non U.S.

operations , the reduction of uncertain tax position due to expiration of related statutes of limitation specific to the quarter ended September 30, 2023 and the non-cash impact of deferred taxes related to the goodwill impairment recorded during the first quarter of 2023 impacting the year-to-date balance.

These tax benefits are offset by changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill and state taxes in certain states in which the Company does not file on a consolidated basis or have net operating loss carryforwards.

The Company historically incurred operating losses in the United States prior to 2021 and, given its cumulative losses and limited history of profits, has recorded a valuation allowance against its United States net deferred tax assets, exclusive of tax deductible goodwill, at September 30, 2024 and December 31, 2023, respectively.

The company has also recorded valuation allowances in Germany, Australia and the United Kingdom to offset larger losses in those jurisdictions.

The Company has reflected uncertain tax positions primarily within its long-term taxes payable and a portion within deferred tax assets for which the balance is immaterial at September 30, 2024.

The income tax benefit of $ 1.3 million for the three months ended March 31, 2025 is primarily related to the deferred tax benefit due to the divestitures of businesses during the three months ended March 31, 2025.

This tax benefit is offset by income taxes associated with U.S.

The income tax benefit of $ 0.5 million for the three months ended March 31, 2024 is primarily related to the non-cash deferred tax impacts of the goodwill impairments booked during the first quarter of 2024.

The tax benefit is offset by the foreign income taxes associated with our combined non-U.S.

operations, changes in deferred tax liabilities associated with amortization of United States tax deductible goodwill, and state taxes in certain states in which the Company does not file on a consolidated basis or have net operating loss carryforwards.

The Company historically incurred operating losses in the United States prior to 2021 and, given its cumulative losses and limited history of profits, has recorded a valuation allowance against its United States net deferred tax assets, exclusive of tax deductible goodwill, at March 31, 2025 and December 31, 2024, respectively.

The Company has reflected uncertain tax positions primarily within its long-term taxes payable and a portion within deferred tax assets for which the balance is immaterial at March 31, 2025.

The Company and its subsidiaries file tax returns in the U.S.

4 unchanged sentences

operating losses generated in years prior to 2021 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utilized.

Long-term debt consisted of the following at September 30, 2024 and December 31, 2023 (in thousands):

September 30, 2024 December 31, 2023

Senior secured loans (includes unamortized discount of $ 3,710 and $ 5,376 based on an imputed interest rate of 6.7 % and 7.6 %, at September 30, 2024 and December 31, 2023, respectively)

Long-term debt consisted of the following (in thousands):

March 31, 2025 December 31, 2024

Senior secured loans (includes unamortized discount of $ 2,918 and $ 3,456 based on an imputed interest rate of 6.7 % and 6.6 %, at March 31, 2025 and December 31, 2024, respectively)

$ 256,506 $ 290,194

1 unchanged sentence

Total long-term debt $ 253,274 $ 286,970

In August 2019, the Company entered into a credit agreement (the “Credit Facility”) which provided for (i) fully-drawn, 7 year, senior secured term loans (the “Term Loans”) and (ii) a $ 60 million, 5 year, revolving credit facility (the “Revolver”).

In 2019, the Company entered into a credit agreement (the “Credit Facility”) which provided for (i) fully-drawn, 7 year, senior secured term loans (the “Term Loans”) maturing August 6, 2026 and (ii) a $ 60 million, 5 year, revolving credit facility (the “Revolver”) which matured August 6, 2024.

The Term Loans are repayable on a quarterly basis by an amount equal to 0.25 % ( 1.00 % per annum) of the aggregate principal amount of such loan.

Any amount remaining unpaid is due and payable in full on August 6, 2026.

The Revolver matured August 6, 2024.

No amounts were drawn on the Revolver at the time of its maturity.

On August 15, 2024, the Company prepaid $ 175.0 million of the Term Loans and on September 30, 2024, prepaid an additional $ 2.0 million principal payment.

At the option of the Company, the Term Loans accrue interest at a per annum rate based on (i) the Base Rate (as defined below) plus a margin of 2.75 % or (ii) the rate (not less than 0.00 %) published by CME Group Benchmark Administration Limited (CBA), or as otherwise determined in accordance with the Credit Facility (based on a period equal to 1, 2, 3 or 6 months or, if available and agreed to by all relevant Lenders and the Agent, 12 months or such period of less than 1 month) plus a margin of 3.75 %.

1 unchanged sentence

Accrued interest is paid quarterly or, with respect to Term Loans that are accruing interest based on the Federal Funds Effective Rate, at the end of the applicable interest rate period.

At September 30, 2024, the floating interest rate was 9.1 % .

At March 31, 2025, the floating interest rate was 8.2 % .

The Revolver matured August 6, 2024.

No amounts were drawn on the Revolver at the time of its maturity.

The Credit Facility contains customary affirmative and negative covenants.

The Term Loans are secured by substantially all of the Company's assets.

As of September 30, 2024, the Company was in compliance with all covenants under the Credit Facility.

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

Interest rate swaps

In August 2019, the Company entered into floating-to-fixed interest rate swap agreements to limit exposure to interest rate risk related to our debt, effectively converting the entire balance of the Company's Term Loans from variable interest payments to fixed interest rate payments, based on an annualized fixed rate of 5.4 %, for the 7-year term of debt.

The Company has floating-to-fixed interest rate swap agreements to limit exposure to interest rate risk related to our debt, effectively converting a portion of the balance of the Company's Term Loans from variable interest payments to fixed interest rate payments, based on an annualized fixed rate of 5.4 % through the maturity of the Term Loans.

At the time the Company entered into the interest rate swap agreements, the Company designated all of the swaps as cash flow hedges and as such changes in fair value were recorded to accumulated other comprehensive income (loss) and reclassified to interest expense, net when the underlying transaction affected earnings.

In August 2023, the Company sold a portion of the notional amount of its interest rate swap assets back to the counterparties for $ 20.5 million.

At that time, a $ 20.5 million gain was recorded in accumulated other comprehensive income related to the notional amount sold.

That gain is being released to interest expense, net as interest is accrued on the Company’s variable-rate debt over the remaining term of the Term Loans as a decrease to interest expense, net.

In August 2024, the Company prepaid $ 175 million of the Term Loans and as a result, $ 9.0 million of the deferred gain was released to interest expense, net.

In August 2024, the Company de-designated all of the interest rate swaps in conjunction with the August 2024 debt prepayment.

The amount remaining in accumulated other comprehensive loss at the de-designation date was $ 11.4 million and is being amortized to interest expense, net over the effective period of the original interest rate swap agreements.

In August 2024, the Company de-designated all of the interest rate swaps and the realized and unrealized gains previously recognized as a component of accumulated other comprehensive income (loss) are being amortized to interest expense, net as interest is accrued or prepayments are made on the Company’s Term Loans.

Subsequent to the de-designation, changes in the fair value of the interest rate swaps are recorded to interest expense, net.

For the three and nine months ended September 30, 2024, a decrease in the interest rate swaps fair value of $ 2.8 million was recognized in interest expense, net.

The impact of the Company’s derivative financial instruments on its condensed consolidated statements of comprehensive (loss) income for the three and nine months ended September 30, 2024 and September 30, 2023 was as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

During the three months ended March 31, 2025, the Company sold a portion of their interest rate swaps for $ 1.2 million.

For the three months ended March 31, 2025, total unrealized change in the interest rate swaps fair value of $ 2.2 million was recognized in interest expense, net.

Notional amounts under the interest rate swaps were $ 216.9 million and $ 255.8 million at March 31, 2025 and December 31, 2024, respectively.

Amounts previously reported in accumulated other comprehensive loss related to the Company's derivatives are reclassified to interest expense, net as interest is accrued on the Company’s variable-rate debt or prepayments on the Term Loans are made.

The impact of the Company’s derivative financial instruments on its condensed consolidated statements of comprehensive (loss) income for the three months ended March 31, 2025 and March 31, 2024 was as follows (in thousands):

Three Months Ended March 31,

Unrealized gain (loss) recognized in Other comprehensive income (loss) on interest rate swaps $ — $ 1,619

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Total Other comprehensive income (loss) on interest rate swaps $ ( 3,890 ) $ 162

Cash interest costs averaged 6.9 % and 5.7 % for the nine months ended September 30, 2024 and 2023, respectively.

Cash interest costs averaged 5.9 % and 7.2 % for the three months ended March 31, 2025 and 2024, respectively.

Net Loss Per Share

We compute loss per share of our common stock, par value $ 0.0001 per share (“Common Stock”) and Series A Preferred Stock , par value $ 0.0001 per share (“Series A Preferred Stock”) using the two-class method.

The Company computes loss per share of our common stock, par value $ 0.0001 per share (“Common Stock”) and Series A Preferred Stock, par value $ 0.0001 per share (“Series A Preferred Stock”) using the two-class method.

The two-class method requires income available to common stockholders for the period to be allocated between Common Stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed.

We consider our Series A Preferred Stock to be a participating security, as its holders are entitled to fully participate in any dividends or other distributions declared or paid on our Common Stock on an as-converted basis.

The Company considers our Series A Preferred Stock to be a participating security, as its holders are entitled to fully participate in any dividends or other distributions declared or paid on our Common Stock on an as-converted basis.

The following table sets forth the computations of loss per share (in thousands, except share and per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net Loss $ ( 25,848 ) $ ( 96,130 )

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Net loss per common share, basic and diluted $ ( 0.97 ) $ ( 3.37 )

Due to the net losses for the three and nine months ended September 30, 2024 and September 30, 2023, respectively, basic and diluted loss per share were the same.

Due to the net losses for the three months ended March 31, 2025 and March 31, 2024, respectively, basic and diluted loss per share were the same.

The Company uses the application of the if-converted method for calculating diluted earnings per share on our Series A Preferred Stock.

The Company applies the treasury stock method for calculating diluted earnings per share on our stock options, restricted stock units and performance-based restricted stock units.

Contingently issuable shares associated with outstanding performance-based restricted stock units (each, a “PSU”) were not included in the basic earnings per share calculations for the periods presented, as the applicable vesting conditions had not been satisfied.

Potential shares of common stock are excluded from the computation of diluted earnings per share when their effect would be antidilutive.

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Potential shares of common stock not included in the computation of earnings per share because their effect would have been antidilutive or because the performance criterion was not met were as follows (in thousands):

September 30,

Stock options 103,561 141,699

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Total anti–dilutive common share equivalents 10,516,934 10,490,082

(1) As of September 30, 2024 , the Series A Preferred Stock plus accumulated dividends totaled $ 126.4 million.

(1) As of March 31, 2025 , the Series A Preferred Stock plus accumulated dividends totaled $ 129.2 million.

The Series A Preferred Stock has a conversion price of $ 17.50 per share, as detailed in “ Note 9.

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The Company does not anticipate that any current or pending legal proceedings will have a material adverse effect on the Company's condensed consolidated balances sheets or condensed consolidated statements of operations.

Letter of Credit

In conjunction with an operating lease agreement, the Company provided a $ 0.6 million letter of credit in conformance with the contractual provisions of the lease.

The letter of credit expires July 2029.

The amount underlying such letter of credit is reflected as restricted cash in the Company's consolidated balance sheets as of March 31, 2025.

Mezzanine Equity

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In connection with the issuance of the Series A Preferred Stock, the Company incurred direct and incremental expenses of $ 4.6 million comprised of transaction fees, and financial advisory and legal expenses which reduced the carrying value of the Series A Preferred Stock.

Contemporaneous with the Closing Date, the Company and the Purchaser entered into a Registration Rights Agreement (the “Registration Rights Agreement”) and the Company filed a Certificate of Designation (the “Certificate of Designation”) setting out the powers, designations, preferences, and other rights of the Series A Preferred Stock with the Secretary of State of the State of Delaware in connection with the Closing.

Pursuant to the Registration Rights Agreement, the Purchaser has certain customary registration rights with respect to any shares of Series A Preferred Stock or the Common Stock of the Company issuable upon conversion of the Series A Preferred Stock, including rights with respect to the filing of a shelf registration statement, underwritten offering rights and piggy back rights.

The Purchaser has certain customary registration rights with respect to any shares of Series A Preferred Stock or the Common Stock of the Company issuable upon conversion of the Series A Preferred Stock, including rights with respect to the filing of a shelf registration statement, underwritten offering rights and piggy back rights.

Dividend Provisions

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The dividend can be paid, in the Company’s sole discretion, in cash or dividend in kind by adding to the Liquidation Preference of each share of Series A Preferred Stock outstanding.

On June 7, 2023, the stockholders of the Company authorized, for purposes of complying with Nasdaq Listing Rules 5635(b) and (d), the issuance of shares of Common Stock underlying shares of Series A Preferred Stock in an amount equal to or in excess of 20% of the Common Stock outstanding immediately prior to the issuance of such Series A Preferred Stock (including upon the operation of anti-dilution provisions contained in the Certificate of Designation designating the terms of such Series A Preferred Stock).

On June 7, 2023, the stockholders of the Company

authorized, for purposes of complying with Nasdaq Listing Rules 5635(b) and (d), the issuance of shares of Common Stock underlying shares of Series A Preferred Stock in an amount equal to or in excess of 20% of the Common Stock outstanding immediately prior to the issuance of such Series A Preferred Stock (including upon the operation of anti-dilution provisions contained in the Certificate of Designation designating the terms of such Series A Preferred Stock).

The Series A Preferred Stock is also entitled to fully participate in any dividends paid to the holders of Common Stock in cash, in stock or otherwise, on an as-converted basis.

The Series A Preferred Stock had accrued unpaid dividends of $ 11.4 million as of September 30, 2024, representing 649,384 Common Stock shares upon conversion at $ 17.50 per share.

The Series A Preferred Stock had accrued unpaid dividends of $ 14.2 million as of March 31, 2025, representing 812,766 Common Stock shares upon conversion at $ 17.50 per share.

Liquidation Rights

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The Series A Preferred Stock will have distribution and liquidation rights senior to all other equity interests of the Company.

As of September 30, 2024, the Liquidation Preference of the Series A Preferred Stock was $ 126.4 million.

As of March 31, 2025, the Liquidation Preference of the Series A Preferred Stock was $ 129.2 million.

Optional Redemption

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The Series A Preferred Stock has customary anti-dilution provisions for stock splits, stock dividends, mergers, sales of significant assets, and reorganization events and recapitalization transactions or similar events, and weighted average anti-dilution protection, subject to customary exceptions for issuances pursuant to current or future equity-based incentive plans or arrangements (including upon the exercise of employee stock options).

Stockholders' Equity

Stockholders' Equity (Deficit)

The common stock has a par value of 0.0001 per share.

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The Share Repurchase Plan expired in May 2024 when the Company had repurchased all shares authorized for repurchase.

6,453,805 total shares were repurchased under the Share Repurchase Plan from September 2023 through its completion in May 2024.

In fiscal year 2024, the Company’s net stock repurchases are subject to a 1 percent excise tax under the Inflation Reduction Act.

The excise tax is included as a reduction to accumulated deficit in the condensed consolidated statements of equity.

Total accrued excise tax of $ 0.2 million is included in total cost of shares repurchased, excluded from average cost per share and excluded from total cash paid during the nine month period ended September 30, 2024 as the amount was unpaid at period end.

No stock repurchases were made during the three months ended September 30, 2024.

During the nine months ended September 30, 2024, the Company repurchased and subsequently retired 3,208,705 shares of Common Stock, for a total of $ 11.0 million cash paid under the Share Repurchase Plan.

As of September 30, 2024, the Share Repurchase Plan was complete and no further amounts are available for share repurchases.

Tax Benefit Preservation Plan and Preferred Stock Purchase Rights

Effective June 5, 2024, after approval of the Board and the Companys’ stockholders, the Company entered into the 2024 Tax Benefit Preservation Plan with Broadridge Corporate Issuer Solutions, LLC, as Rights Agent (the “2024 Tax Benefit Preservation Plan”).

Effective June 5, 2024, the Company entered into the 2024 Tax Benefit Preservation Plan with Broadridge Corporate Issuer Solutions, LLC, as Rights Agent (the “2024 Tax Benefit Preservation Plan”).

By adopting the 2024 Tax Benefit Preservation Plan, the Company is seeking to protect its ability to use its net operating loss carryforwards (“NOLs”) and other tax attributes to offset potential future income tax liabilities.

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The 2024 Tax Benefit Preservation Plan is intended to make it more difficult for the Company to undergo an ownership change by deterring any person from acquiring 4.9% or more of the outstanding shares of stock without the approval of the Board of Directors.

As part of the 2024 Tax Benefit Preservation Plan, the Board declared a dividend of one preferred stock purchase right (a “2024 Right”) for each outstanding share of Common Stock payable as of June 15, 2024.

27,030,605 2024 Rights were issued to the holders of record of shares of Common Stock.

As part of the 2024 Tax Benefit Preservation Plan, the Board declared a dividend of one preferred stock purchase right (a “2024 Right” and collectively the “2024 Rights”) for each outstanding share of Common Stock payable as of June 15, 2024.

In connection with the 2024 Tax Benefit Preservation Plan, 27,030,605 2024 Rights were issued.

The description and terms of the 2024 Rights are set forth in the 2024 Tax Benefit Preservation Plan.

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dollar, unrealized translation losses on intercompany loans with foreign subsidiaries, and realized and unrealized gains on interest rate swaps.

The following table shows the components of accumulated other comprehensive income (loss), net of income taxes, (“AOCI”) in the stockholders’ equity section of our condensed consolidated balance sheets at the dates indicated (in thousands):

September 30, 2024 December 31, 2023

Foreign currency translation adjustment $ ( 18,151 ) $ ( 19,947 )

Unrealized translation loss on intercompany loans with foreign subsidiaries, net of taxes ( 862 ) ( 3,330 )

Unrealized gain on interest rate swaps, net of amounts reclassified into interest expense, net 11,353 14,270

The following table shows the components of accumulated other comprehensive loss, net of income taxes, (“AOCI”) in the stockholders’ equity section of our condensed consolidated balance sheets at the dates indicated (in thousands):

March 31, 2025 December 31, 2024

Unrealized foreign currency translation adjustment, net of realized amounts reclassified into loss from divestitures of businesses $ ( 18,193 ) $ ( 26,172 )

Unrealized translation losses on intercompany loans with foreign subsidiaries, net of taxes ( 4,979 ) ( 6,477 )

Unrealized gains on interest rate swaps, net of amounts reclassified into interest expense, net 6,590 9,033

Realized gain on interest rate swap sale, net of amounts reclassified into interest expense, net 179 1,626

Total accumulated other comprehensive income (loss)

$ ( 6,275 ) $ 6,168

Total accumulated other comprehensive loss $ ( 16,403 ) $ ( 21,990 )

During the three months ended March 31, 2025, the Company divested certain products lines and reclassified $ 5.7 million of the cumulative foreign currency translation adjustment as a component of the loss on divestitures.

Divestitures .

The Company has intercompany loans that were used to fund the acquisitions of foreign subsidiaries.

Due to the long-term nature of the loans, the unrealized translation gains (losses) resulting from re-measurement are recognized as a component of AOCI.

The unrealized translation gains (losses) on intercompany loans with foreign subsidiaries as of September 30, 2024 is net of income tax expense of $ 3.2 million.

The tax impact related to unrealized translation gains (losses) on intercompany loans for the three and nine months ended September 30, 2024 was $ 0.1 million expense and $ 0.3 million benefit, respectively.

The tax impact related to unrealized translation gains (losses) on intercompany loans for the three and nine months ended September 30, 2023 was a $ 0.8 million benefit and a $ 0.2 million provision, respectively.

The unrealized translation losses on intercompany loans with foreign subsidiaries as of March 31, 2025 and December 31, 2024 are net of income tax of $ 1.4 million and $ 1.4 million, respectively.

The tax impact related to unrealized translation gains (losses) on intercompany loans for the three months ended March 31, 2025 and the three months ended March 31, 2024 was $ 0.1 million benefit and $ 0.1 million detriment, respectively.

The income tax expense/benefit allocated to each component of other comprehensive income for all other periods and components is not material.

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Key employees, officers and directors of the Company and its consultants or advisors are eligible to receive awards.

The following table summarizes PSU and RSU activity during the nine months ended September 30, 2024:

The following table summarizes PSU and RSU activity during the three months ended March 31, 2025:

Number of Units Weighted-Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 227,210 ) 4.51

Unvested restricted units outstanding as of September 30, 2024 2,766,050 $ 5.73

Unvested restricted units outstanding as of March 31, 2025 3,029,178 $ 5.70

The PSU and RSU activity table above includes 100,000 PSUs granted in 2023 and 250,000 PSUs granted in 2025 based on a 100 % target payout.

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Compensation expense for PSUs is recognized over the requisite service period and is not subject to adjustment regardless of whether the PSUs meet the performance metric.

The range of significant assumptions used in the Monte Carlo simulation model for the PSUs granted during the nine months ended September 30, 2024 was as follows:

The significant assumptions used in the Monte Carlo simulation model for the PSUs granted during the three months ended March 31, 2025 was as follows:

Expected volatility 81.9 %

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The Company recognizes stock-based compensation expense from all awards in the following expense categories included in our condensed consolidated statements of income (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Cost of revenue $ 121 $ 186

50 unchanged sentences

Generally, the Company reports revenue from vendor reseller agreements on a gross basis, meaning the amounts billed to customers are recorded as revenue, and expenses incurred are recorded as cost of revenue.

As the Company is primarily obligated in its messaging-related subscription contracts, has latitude in establishing prices associated with its messaging program management services, is responsible for fulfillment of the transaction, and has credit risk, we have concluded it is appropriate to record revenue on

a gross basis with related pass-through telecom messaging costs incurred from third parties recorded as cost of revenue.

Revenue provided from agreements in which the Company is an agent are immaterial.

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Our payment terms vary by the type and location of our customer and the products or services offered.

The term between invoicing and when payment is due is not significant.

The term between invoicing and

when payment is due is not significant.

For certain products or services and customer types, we require payment before the products or services are delivered to the customer.

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Unbilled receivables represent amounts for which the Company has recognized revenue, pursuant to its revenue recognition policy, for software licenses already delivered and professional services already performed, but invoiced in arrears and for which the Company believes it has an unconditional right to payment.

As of September 30, 2024 and December 31, 2023, unbilled receivables were $ 3.5 million and $ 2.7 million, respectively.

As of March 31, 2025 and December 31, 2024, unbilled receivables were $ 5.0 million and $ 3.4 million, respectively.

Deferred Commissions

7 unchanged sentences

Deferred commissions are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable consistent with the Company's long-lived assets policy.

No indicators of impairment were identified during the nine months ended September 30, 2024.

Amortization of deferred commissions in excess of commissions capitalized for the three and nine months ended September 30, 2024 was $ 0.9 million and $ 1.9 million, respectively.

No indicators of impairment were identified during the three months ended March 31, 2025.

Amortization of deferred commissions in excess of commissions capitalized for the three months ended March 31, 2025 and the three months ended March 31, 2024 was $ 0.7 million and $ 0.7 million, respectively.

Deferred Revenue

1 unchanged sentence

Deferred revenue is mainly unearned revenue related to subscription services and support services.

During the nine months ended September 30, 2024, we recognized $ 90.2 million and $ 2.0 million of subscription services and professional services revenue, respectively, that was included in the deferred revenue balances at the beginning of the period.

During the three months ended March 31, 2025, we recognized $ 40.7 million and $ 0.9 million of subscription services and professional services revenue, respectively, that was included in the deferred revenue balances at the beginning of the period.

Remaining Performance Obligations

As of September 30, 2024, approximately $ 242.7 million of revenue is expected to be recognized from remaining performance obligations.

As of March 31, 2025, approximately $ 215.0 million of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 71 % of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.

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Information about these operations is presented below (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Subscription and support:

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United Kingdom 118 98

Canada 35 38 186 94

Other International 955 622

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Total revenue $ 63,655 $ 70,736

During the three months ended March 31, 2025, the Company completed the divestitures of certain product lines for combined consideration of $ 5.5 million and up to $ 4.0 million in earn-outs over the next 2 years.

The combined net loss on divestitures was $ 23.5 million.

The Company incurred divestiture-related expenses of $ 1.7 million during the three months ended March 31, 2025 which are recorded in Divestiture-related expenses on the Company’s condensed consolidated statements of operations.

As part of the divestitures, the Company entered into a transition services agreement (“TSA”) with each of the buyers to assist them in the transition of certain functions, including, but not limited to, information technology, finance and accounting, for an initial period of 60 - 120 days unless extended by mutual agreement.

The Company has $ 2.0 million in receivables from the buyers for the TSA services recorded in prepaid expenses and other current assets in the condensed consolidated balance sheets at March 31, 2025.

Segment Information

The Company’s Chief Executive Officer is considered to be the Company’s chief operating decision-maker (“CODM”).

The CODM manages the business as a multi-product cloud-based software application business that utilizes a singular operating model to deliver a consistently high level of operating performance to customers regardless of their geography or IT environment.

Operating results are reviewed by the CODM primarily at the consolidated entity level for purposes of making resource allocation decisions and for evaluating financial performance.

Accordingly, the Company has determined that it is a single operating and reporting segment structure.

The key measure of profit or loss utilized by the CODM to assess performance of and allocate resources within the Company’s single operating segment is net loss.

This measure is presented on the condensed consolidated statements of operations.

Significant segment expenses included in net loss are cost of revenue, sales and marketing expenses, research and development expenses, general and administrative expenses, depreciation and amortization, interest expense, net and other income (expense), which are presented on the condensed consolidated statements of operations.

The measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

Subsequent Events

Subsequent to March 31, 2025, the Company completed the disposition of its mobile messaging product lines for total consideration of $ 10 million.

The Company is still evaluating the effects of the transaction on its condensed consolidated statements of operations for the three months ended June 30, 2025.

In conjunction with the divestitures completed in the quarter ended March 31, 2025 described in Note 12.

Divestitures and the subsequent divestiture described above, the Company terminated a legacy vendor contract related to out-sourced research and development for a one-time fee of $ 5.2 million which will be included in Divestiture-related expenses in the condensed consolidated statements of operations for the three months ended June 30, 2025.

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