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Item 1. Financial Statements

2025-07-31 compared with 2025-05-12 · 169 added, 97 removed, 550 unchanged (33% of the section changed)

Financial Statements

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

ASSETS (unaudited)

2 unchanged sentences

Restricted cash 626 626

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

Accounts receivable (net of allowance of $ 155 and $ 446 at June 30, 2025, and December 31, 2024, respectively)

20,129 38,647

13 unchanged sentences

Total assets $ 441,722 $ 529,522

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

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT

Current liabilities:

4 unchanged sentences

Operating lease liabilities, current 805 1,000

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

Current maturities of notes payable (includes unamortized discount of $ 2,160 and $ 2,176 at June 30, 2025, and December 31, 2024, respectively)

Total current liabilities 89,636 120,420

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

Notes payable, less current maturities (includes unamortized discount of $ 217 and $ 1,280 at June 30, 2025, and December 31, 2024, respectively)

252,458 286,970

7 unchanged sentences

5,000,000 shares authorized;

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

115,000 shares issued and outstanding as of June 30, 2025, and December 31, 2024, respectively

126,122 123,230

Stockholders’ equity (deficit):

Stockholders’ deficit:

Common stock, $ 0.0001 par value;

75,000,000 shares authorized;

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

28,708,922 and 28,168,267 shares issued and outstanding as of June 30, 2025, and December 31, 2024, respectively

Additional paid-in capital 607,463 605,286

1 unchanged sentence

Accumulated deficit ( 640,481 ) ( 601,604 )

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

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

Total stockholders’ deficit ( 42,389 ) ( 18,305 )

Total liabilities, convertible preferred stock and stockholders’ deficit $ 441,722 $ 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 March 31,

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

2025 2024 2025 2024

Subscription and support $ 50,467 $ 65,504 $ 110,649 $ 132,582

14 unchanged sentences

Divestiture-related expenses 6,879 — 8,624 —

Impairment of goodwill — 87,227

Impairment of goodwill and other intangibles 2,469 — 2,469 87,227

Total operating expenses 46,983 54,236 93,642 195,564

1 unchanged sentence

Other expense:

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

Interest expense, net ( 4,136 ) ( 5,056 ) ( 6,579 ) ( 10,014 )

Loss on divestitures of businesses ( 434 ) — ( 23,891 ) —

Other expense, net ( 241 ) ( 78 )

Other income (expense), net ( 1,595 ) 198 ( 1,836 ) 120

Total other expense ( 6,165 ) ( 4,858 ) ( 32,306 ) ( 9,894 )

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

Benefit from income taxes 1,345 547

Loss before benefit from (provision for) income taxes ( 13,200 ) ( 10,229 ) ( 40,393 ) ( 106,906 )

Benefit from (provision for) income taxes 171 ( 1,210 ) 1,516 ( 663 )

Net loss $ ( 13,029 ) $ ( 11,439 ) $ ( 38,877 ) $ ( 107,569 )

8 unchanged sentences

(in thousands)

Three Months Ended March 31,

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

2025 2024 2025 2024

Net loss $ ( 13,029 ) $ ( 11,439 ) $ ( 38,877 ) $ ( 107,569 )

1 unchanged sentence

Unrealized foreign currency translation adjustment 4,851 ( 208 ) 7,115 ( 2,819 )

Realized foreign currency translation 5,715 —

Realized foreign currency (loss) gain ( 1,292 ) — 4,423 —

Unrealized translation gain (loss) on foreign currency denominated intercompany loans, net of taxes 4,732 ( 258 ) 6,230 ( 1,670 )

5 unchanged sentences

Upland Software, Inc.

Condensed Consolidated Statements of Equity (Deficit)

Condensed Consolidated Statements of Stockholders’ Deficit

(in thousands, except share amounts)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Preferred Stock Common Stock Additional

6 unchanged sentences

Shares Amount Shares Amount

Balance at December 31, 2024 115,000 $ 123,230 28,168,267 $ 3 $ 605,286 $ ( 21,990 ) $ ( 601,604 ) $ ( 18,305 )

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

Dividends accrued - Convertible Preferred Stock — 1,454 — — ( 1,454 ) — — ( 1,454 )

6 unchanged sentences

Net loss — — — — ( 13,029 ) ( 13,029 )

Balance at June 30, 2025 115,000 $ 126,122 28,708,922 $ 3 $ 607,463 $ ( 9,374 ) $ ( 640,481 ) $ ( 42,389 )

Three Months Ended June 30, 2024

Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Accumulated

Deficit Total

Stockholders’

Equity (Deficit)

Shares Amount Shares Amount

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

Three Months Ended March 31, 2024

Dividends accrued - Convertible Preferred Stock — 1,390 — — ( 1,390 ) — — ( 1,390 )

Issuance of stock under Company plans, net of shares withheld for tax — — 235,141 — ( 232 ) — — ( 232 )

Stock repurchases and retirements — — ( 966,051 ) — ( 2,798 ) — — ( 2,798 )

Stock-based compensation — — — — 5,133 — — 5,133

Foreign currency translation adjustment — — — — — ( 208 ) — ( 208 )

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries — — — — — ( 258 ) — ( 258 )

Interest rate swaps — — — — — ( 2,441 ) — ( 2,441 )

Net loss — — — — — — ( 11,439 ) ( 11,439 )

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

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

Upland Software, Inc.

Condensed Consolidated Statements of Deficit - continued

(in thousands, except share amounts)

Six Months Ended June 30, 2025

Preferred Stock Common Stock Additional

9 unchanged sentences

Issuance of stock under Company plans, net of shares withheld for tax — — 540,655 — ( 680 ) — — ( 680 )

Stock-based compensation — — — — 5,749 — — 5,749

Unrealized foreign currency translation adjustment — — — — — 7,115 — 7,115

Realized foreign currency translation from divestitures of businesses 4,423 4,423

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries — — — — — 6,230 — 6,230

Interest rate swaps — — — — — ( 5,152 ) — ( 5,152 )

Net loss — — — — — — ( 38,877 ) ( 38,877 )

Balance at June 30, 2025 115,000 $ 126,122 28,708,922 $ 3 $ 607,463 $ ( 9,374 ) $ ( 640,481 ) $ ( 42,389 )

Six Months Ended June 30, 2024

Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Income (Loss) Accumulated

Deficit Total

Stockholders’

Equity (Deficit)

Shares Amount Shares Amount

Balance at December 31, 2023 115,000 $ 117,638 29,908,407 $ 3 $ 608,995 $ 6,168 $ ( 488,872 ) $ 126,294

Dividends accrued - Convertible Preferred Stock — 2,765 — — ( 2,765 ) — — ( 2,765 )

Issuance of stock under Company plans, net of shares withheld for tax — — 566,044 — ( 563 ) — — ( 563 )

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

1 unchanged sentence

Foreign currency translation adjustment — — — — — ( 2,819 ) — ( 2,819 )

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

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries, net of taxes — — — — — ( 1,670 ) — ( 1,670 )

Interest rate swaps — — — — — ( 2,279 ) — ( 2,279 )

Net loss — — — — — — ( 107,569 ) ( 107,569 )

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

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

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

2 unchanged sentences

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities

7 unchanged sentences

Non-cash stock-based compensation expense 5,749 8,655

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

Non-cash loss on impairment of goodwill and other intangibles 2,469 87,227

Non-cash loss on divestitures of businesses 23,891 —

25 unchanged sentences

Cash paid for taxes, net of refunds $ 5,148 $ 3,162

Non-cash investing and financing activities:

Note receivable from divestiture of product lines, net of discount $ 4,881 $ —

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

15 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 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 results of operations for the six months ended June 30, 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 May 12, 2025, 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 July 31, 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.

2 unchanged sentences

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.

As of June 30, 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):

4 unchanged sentences

Concentrations of Credit Risk and Significant Customers

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, accounts receivable and the Company’s interest rate swaps.

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, accounts receivable, other assets and the Company’s interest rate swaps.

The Company’s cash and cash equivalents are placed with high quality financial institutions, which, at times, may exceed federally insured limits.

2 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 three months ended March 31, 2025, or more than 10% of accounts receivable as of March 31, 2025 or December 31, 2024.

No individual customer represented more than 10% of total revenues for the six months ended June 30, 2025, or more than 10% of accounts receivable as of June 30, 2025 or December 31, 2024.

Recent Accounting Pronouncements

10 unchanged sentences

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.

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..

The ASU is effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of the new standard on its income tax disclosures and expects to adopt the standard for the fiscal year ending December 31, 2025.

The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements but anticipates expanded disclosures in its annual reporting.

Fair Value Measurements

8 unchanged sentences

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

Fair Value Measurements at March 31, 2025

Fair Value Measurements at June 30, 2025

Level 1 Level 2 Level 3 Total

8 unchanged sentences

Money market funds included in cash and cash equivalents are highly-liquid investments and are measured at fair value using quoted market prices and active markets, therefore are categorized as Level 1.

The fair value of the Company's interest rate swaps are measured at the end of each interim reporting period based on the then assessed fair value and adjusted if necessary.

The fair value of the Company's interest rate swaps are measured at the end of each interim reporting period based on the then assessed fair value.

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 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.

The Company believes the carrying value of its long-term debt at June 30, 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 June 30, 2025 and December 31, 2024 was $ 258.1 million and $ 293.7 million, respectively, based on valuation methodologies using interest rates currently available to the Company which are Level 2 inputs.

The Company’s non-financial assets, such as property and equipment, goodwill and intangible assets, are recorded at fair value upon a business combination and are remeasured at fair value only if an impairment charge is recognized.

The Company uses unobservable inputs to the valuation methodologies that are significant to the fair value measurements, and the valuations require management’s judgment due to the absence of quoted market prices.

The Company determines the fair value of its held and used assets, goodwill and intangible assets using an income, cost or market approach as determined reasonable.

As the fair value measures are based on unobservable inputs, they are categorized as Level 3.

Goodwill and Other Intangible Assets

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

Changes in the Company’s goodwill balance for the six months ended June 30, 2025 are summarized in the table below (in thousands):

Balance at December 31, 2024 $ 260,976

1 unchanged sentence

Foreign currency translation adjustment 8,362

Balance at March 31, 2025 $ 260,058

Balance at June 30, 2025 $ 260,705

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.

5 unchanged sentences

Amortization Net Carrying

March 31, 2025:

June 30, 2025:

Customer relationships 2 - 10

19 unchanged sentences

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

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.

During the three and six months ended June 30, 2025, the Company divested certain product lines and their related intangible assets which resulted in a reduction of $ 31.9 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.

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.

During the three months ended June 30, 2025, the Company identified a triggering event related to certain intangible assets associated with Sunset Assets and performed a valuation of certain long-lived assets in accordance with ASC 360 Impairment and Disposal of Long-Lived Assets .

The Company used a discounted cash flow analysis to estimate the fair value of the long-lived asset group.

As a result of the valuation, during the three months ended June 30, 2025 the Company recorded a $ 2.5 million of impairment charge related to intangible assets associated with certain Sunset Assets.

No impairments of intangibles were recorded during the three and six months ended June 30, 2024.

Total amortization expense was $ 7.9 million and $ 17.3 million during the three and six months ended June 30, 2025, respectively, and $ 13.5 million and $ 27.0 million for the three and six months ended June 30, 2024, respectively.

The Company’s income tax provision for the three and six months ended June 30, 2025 and June 30, 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 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.

The income tax benefit of $ 0.2 million and $ 1.5 million for the three and six months ended June 30, 2025, respectively, is primarily related to the deferred tax benefit due to the divestitures of businesses during the periods.

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 income tax provision of $ 1.2 million and $ 0.7 million for the three and six months ended June 30, 2024, respectively, is largely comprised of foreign income taxes associated with our combined non-U.S.

operations which is partially offset by the non-cash deferred tax impacts of the goodwill impairment booked during the first quarter of 2024.

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 June 30, 2025.

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

5 unchanged sentences

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)

June 30, 2025 December 31, 2024

Senior secured loans (includes unamortized discount of $ 2,377 and $ 3,456 based on an imputed interest rate of 6.7 % and 6.6 %, at June 30, 2025 and December 31, 2024, respectively)

$ 255,698 $ 290,194

7 unchanged sentences

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 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.

At June 30, 2025, the floating interest rate was 8.2 % .

The Credit Facility contains customary affirmative and negative covenants.

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

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

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

Interest rate swaps

3 unchanged sentences

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

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.

For the three and six months ended June 30, 2025, total unrealized change in the interest rate swaps fair value of $ 1.3 million and $ 3.4 million was recognized in interest expense, net, respectively.

Notional amounts under the interest rate swaps were $ 216.3 million and $ 255.8 million at June 30, 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,

The impact of the Company’s derivative financial instruments on its condensed consolidated statements of comprehensive (loss) income for the three and six months ended June 30, 2025 and June 30, 2024 was as follows (in thousands):

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

2025 2024 2025 2024

Unrealized gain (loss) recognized in Other comprehensive income (loss) on interest rate swaps $ — $ ( 956 ) — $ 663

1 unchanged sentence

Total Other comprehensive income (loss) on interest rate swaps $ ( 1,262 ) $ ( 2,441 ) $ ( 5,152 ) $ ( 2,279 )

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

Cash interest costs averaged 5.9 % and 7.2 % for the six months ended June 30, 2025 and 2024, respectively.

Subsequent Events regarding the refinancing of the Company’s outstanding Term Loans subsequent to quarter end.

Net Loss Per Share

3 unchanged sentences

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

Three Months Ended March 31,

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

2025 2024 2025 2024

Net Loss $ ( 13,029 ) $ ( 11,439 ) $ ( 38,877 ) $ ( 107,569 )

3 unchanged sentences

Net loss per common share, basic and diluted $ ( 0.51 ) $ ( 0.47 ) $ ( 1.47 ) $ ( 3.92 )

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.

Due to the net losses for the three and six months ended June 30, 2025 and June 30, 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.

12 unchanged sentences

Total anti–dilutive common share equivalents 10,242,883 10,329,311

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

(1) As of June 30, 2025 , the Series A Preferred Stock plus accumulated dividends totaled $ 130.7 million.

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

9 unchanged sentences

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.

The amount underlying such letter of credit is reflected as restricted cash in the Company's consolidated balance sheets as of June 30, 2025.

Mezzanine Equity

14 unchanged sentences

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 $ 14.2 million as of March 31, 2025, representing 812,766 Common Stock shares upon conversion at $ 17.50 per share.

The Series A Preferred Stock had accrued unpaid dividends of $ 15.7 million as of June 30, 2025, representing 895,839 Common Stock shares upon conversion at $ 17.50 per share.

Liquidation Rights

1 unchanged sentence

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

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

As of June 30, 2025, the Liquidation Preference of the Series A Preferred Stock plus accrued and unpaid dividends was $ 130.7 million.

Optional Redemption

17 unchanged sentences

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 (Deficit)

Stockholders' Deficit

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

27 unchanged sentences

Comprehensive income consists of two elements, net loss and other comprehensive income (loss).

Other comprehensive income (loss) items are recorded in the stockholders’ equity section of our condensed consolidated balance sheets and are excluded from net loss.

Other comprehensive income (loss) items are recorded in the stockholders’ deficit section of our condensed consolidated balance sheets and are excluded from net loss.

Our other comprehensive income consists primarily of foreign currency translation adjustments for subsidiaries with functional currencies other than the U.S.

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 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

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

June 30, 2025 December 31, 2024

Unrealized foreign currency translation adjustment, net of realized amounts reclassified into loss from divestitures of businesses $ ( 14,634 ) $ ( 26,172 )

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

Unrealized translation gains (losses) on intercompany loans with foreign subsidiaries, net of taxes ( 247 ) ( 6,477 )

Unrealized gains on interest rate swaps, net of amounts reclassified into interest expense, net 5,362 9,033

1 unchanged sentence

Total accumulated other comprehensive loss $ ( 9,374 ) $ ( 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.

During the six months ended June 30, 2025, the Company divested certain product lines and reclassified $ 4.4 million of the cumulative foreign currency translation adjustment as a component of the loss on divestitures.

Divestitures .

1 unchanged sentence

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 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 unrealized translation losses on intercompany loans with foreign subsidiaries as of June 30, 2025 and December 31, 2024 are net of income tax of $ 1.7 million and $ 1.4 million, respectively.

The tax benefit related to unrealized translation gains (losses) on intercompany loans for the three and six months ended June 30, 2025 was $ 0.3 million and $ 0.3 million, respectively and for the three and six months ended June 30, 2024 was $ 0.1 million benefit and $ 0.2 million benefit, respectively.

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

3 unchanged sentences

The assets and liabilities of those subsidiaries are translated into USD using the exchange rates in effect at the balance sheet date.

The related translation adjustments are recorded in a separate component of stockholders' equity in AOCI.

The related translation adjustments are recorded in a separate component of stockholders' deficit in AOCI.

Stock-Based Compensation

1 unchanged sentence

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 three months ended March 31, 2025:

The following table summarizes PSU and RSU activity during the six months ended June 30, 2025:

Number of Units Weighted-Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 517,210 ) 4.61

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

Unvested restricted units outstanding as of June 30, 2025 2,688,055 $ 5.34

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.

6 unchanged sentences

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

The significant assumptions used in the Monte Carlo simulation model for the PSUs granted during the six months ended June 30, 2025 was as follows:

Expected volatility 81.9 %

3 unchanged sentences

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 March 31,

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

2025 2024 2025 2024

Cost of revenue $ 143 $ 199 $ 264 $ 385

68 unchanged sentences

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

As of June 30, 2025 and December 31, 2024, unbilled receivables were $ 4.8 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 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.

No indicators of impairment were identified during the six months ended June 30, 2025.

Amortization of deferred commissions in excess of commissions capitalized for the three and six months ended June 30, 2025 was $ 0.3 million and $ 1.1 million, respectively and for the three and six months ended June 30, 2024 was $ 0.3 million and $ 1.0 million, respectively.

Deferred Revenue

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

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.

During the six months ended June 30, 2025, we recognized $ 21.2 million and $ 0.5 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 March 31, 2025, approximately $ 215.0 million of revenue is expected to be recognized from remaining performance obligations.

As of June 30, 2025, approximately $ 169.4 million of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 72 % of these remaining performance obligations over the next 12 months, with the balance recognized thereafter.

5 unchanged sentences

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

Three Months Ended March 31,

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

2025 2024 2025 2024

Subscription and support:

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United Kingdom 67 56 185 155

Canada 58 93 145 152

Other International 550 702 1,505 1,323

7 unchanged sentences

Total revenue $ 53,383 $ 69,339 $ 117,038 $ 140,075

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.

The Company completed the divestitures of certain product lines for combined total consideration of $ 10.0 million for the three months ended June 30, 2025 and $ 15.5 million with up to $ 4.0 million in earn-outs over the next 2 years for the six months ended June 30, 2025.

Total consideration for the three months ended June 30, 2025 included a secured promissory note in the principal amount of $ 5.5 million to be repaid quarterly over 5 years bearing interest at 10 % annually.

The Company recognized the promissory note at its fair value of $ 4.9 million on the date of sale.

The Company evaluated the collectability of the promissory note at June 30, 2025 and based on that evaluation the Company provided a $ 1.5 million reserve during the three months ended June 30, 2025 which is recorded as an additional loss on the divestiture of the product lines.

At June 30, 2025, the book value of the note was $ 3.4 million.

The Company will continue to monitor the collectability of the note and will record adjustments to the estimated net realizable value as deemed necessary until the note is settled.

This note matures in 2030.

At June 30, 2025, the current portion of the promissory note of $ 0.9 million is recorded in prepaid and other current assets on the Company’s condensed consolidated balance sheets and the long-term portion of the promissory note of $ 2.5 million is recorded in other assets on the Company’s condensed consolidated balance sheets.

The Company's interest in this note receivable is a variable interest and the underlying entity is a variable interest entity (“VIE”).

The Company is not the primary beneficiary of this VIE because the Company does not individually have the power to direct the activities that are most significant to the entity and accordingly, the VIE is not consolidated.

For the three and six months ended June 30, 2025, the combined net losses on divestitures were $ 0.4 million and $ 23.9 million, respectively.

The Company incurred divestiture-related expenses of $ 6.9 million and $ 8.6 million, respectively, during the three and six months ended June 30, 2025 which are recorded in divestiture-related expenses on the Company’s condensed consolidated statements of operations.

In conjunction with the divestitures, the Company terminated a legacy vendor contract related to out-sourced research and development for a one-time fee of $ 5.2 million which is included in divestiture-related expenses in the condensed consolidated statements of operations for the three months ended June 30, 2025.

As part of the divestitures, the Company entered into transition services agreements (each a “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 $ 1.8 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 June 30, 2025.

Segment Information

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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.

On July 25, 2025 (the “Closing Date”), the Company entered into a Credit Agreement (the “Credit Agreement”) which provides for (i) a senior secured term loan facility in the aggregate principal amount of $ 240.0 million (the “Term Loan”) and (ii) a senior secured revolving credit facility in the aggregate principal amount of $ 30.0 million (the “Revolving Facility” and together with the Term Loan, the “Credit Facilities”).

On the Closing Date the proceeds of the Term Loan, together with cash on hand, were used to redeem all of the $ 258.1 million outstanding aggregate principal amount of the Company’s previous senior secured credit facility.

The Term Loan will mature on July 25, 2031 and bear an interest rate of the secured overnight financing rate, which shall not be less than 1.5 %, plus a margin of 6.0 % per annum (with step downs and a potential step up at specified leverage levels).

The Term Loan also includes (i) a covenant tested quarterly which limits the consolidated secured leverage ratio to 6.0 to 1.0 or under and (ii) certain other changes to the terms of the Credit Agreement, including with respect to certain negative covenants.

Payments on the Term Loan will be due quarterly in amounts equal to (a) 2.50 % per annum of the original principal amount of the Term Loan commencing beginning December 31, 2025 through September 30, 2026, (b) 1.75 % per annum of the original principal amount of the Term Loan commencing December 31, 2026 through September 30, 2027, and (c) 1.00 % per annum of the original principal amount of the Term Loan commencing December 31, 2027 and continuing each fiscal quarter thereafter, with the balance payable on the final maturity date.

The Revolving Facility will mature on July 25, 2031 and will bear the same interest rate as the Term Loan.

The Revolving Facility will be subject to the same covenants and terms as the Term Loan.

The proceeds of loans under the Revolving Facility will be used by the Company from time to time after the Closing Date for working capital and other general corporate purposes.

The Credit Facilities contains customary representations, warranties, covenants, including financial covenant, and events of default.

The Credit Facilities are secured by substantially all of the Company’s assets, subject to certain exclusions.

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