What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-07-31 · 200 added, 157 removed, 562 unchanged (39% of the section changed)

Financial Statements

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

ASSETS (unaudited)

2 unchanged sentences

Restricted cash 626 626

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

Accounts receivable (net of allowance of $ 133 and $ 446 at September 30, 2025, and December 31, 2024, respectively)

18,937 38,647

10 unchanged sentences

Deferred commissions, noncurrent 7,951 12,147

Interest rate swap assets 5,094 9,742

Interest rate derivatives 48 9,742

Other assets 3,925 529

7 unchanged sentences

Operating lease liabilities, current 829 1,000

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

Current maturities of notes payable (includes unamortized discount of $ 1,203 and $ 2,176 at September 30, 2025, and December 31, 2024, respectively)

Total current liabilities 83,950 120,420

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

Notes payable, less current maturities (includes unamortized discount of $ 4,952 and $ 1,280 at September 30, 2025, and December 31, 2024, respectively)

229,048 286,970

7 unchanged sentences

5,000,000 shares authorized;

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

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

127,592 123,230

2 unchanged sentences

75,000,000 shares authorized;

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

28,891,348 and 28,168,267 shares issued and outstanding as of September 30, 2025, and December 31, 2024, respectively

Additional paid-in capital 607,856 605,286

7 unchanged sentences

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

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

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

2025 2024 2025 2024

17 unchanged sentences

Total operating expenses 33,501 50,298 127,143 245,862

Loss from operations ( 7,035 ) ( 5,371 ) ( 8,087 ) ( 97,012 )

Other expense:

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

Income (loss) from operations 5,348 ( 3,311 ) ( 2,739 ) ( 100,323 )

Other income (expense):

Interest income (expense), net ( 4,204 ) 2,337 ( 10,783 ) ( 7,677 )

Loss on divestitures of businesses ( 473 ) — ( 24,364 ) —

Loss on debt extinguishment ( 2,301 ) — ( 2,301 ) —

Other income (expense), net 249 ( 229 ) ( 1,587 ) ( 109 )

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

Total other income (expense) ( 6,729 ) 2,108 ( 39,035 ) ( 7,786 )

Loss before benefit from (provision for) income taxes ( 1,381 ) ( 1,203 ) ( 41,774 ) ( 108,109 )

10 unchanged sentences

(in thousands)

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

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

2025 2024 2025 2024

2 unchanged sentences

Unrealized foreign currency translation adjustment ( 969 ) 4,615 6,146 1,796

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

Realized foreign currency gain — — 4,423 —

Unrealized translation gain (loss) on foreign currency denominated intercompany loans, net of taxes ( 1,491 ) 4,138 4,739 2,468

7 unchanged sentences

(in thousands, except share amounts)

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Preferred Stock Common Stock Additional

6 unchanged sentences

Shares Amount Shares Amount

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

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

Dividends accrued - Convertible Preferred Stock — 1,470 — — ( 1,470 ) — — ( 1,470 )

Issuance of stock under Company plans, net of shares withheld for tax — — 238,023 — ( 323 ) — — ( 323 )

Stock repurchases and retirements — — ( 55,597 ) ( 137 ) — — ( 137 )

Stock-based compensation — — — — 2,323 — — 2,323

Unrealized foreign currency translation adjustment — — — — — ( 969 ) — ( 969 )

Realized foreign currency translation from divestitures of businesses — — — — — ( 1,292 ) — ( 1,292 )

Unrealized translation gain (loss) on intercompany loans with foreign subsidiaries — — — — — ( 1,491 ) — ( 1,491 )

1 unchanged sentence

Net loss — — — — ( 1,122 ) ( 1,122 )

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

Balance at September 30, 2025 115,000 $ 127,592 28,891,348 $ 3 $ 607,856 $ ( 13,506 ) $ ( 641,603 ) $ ( 47,250 )

Three Months Ended September 30, 2024

Preferred Stock Common Stock Additional

6 unchanged sentences

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

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

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

3 unchanged sentences

Net loss — — — — — — ( 1,733 ) ( 1,733 )

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

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

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

2 unchanged sentences

(in thousands, except share amounts)

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Preferred Stock Common Stock Additional

9 unchanged sentences

Issuance of stock under Company plans, net of shares withheld for tax — — 778,678 — ( 1,003 ) — — ( 1,003 )

Stock repurchases and retirements — — ( 55,597 ) — ( 137 ) — — ( 137 )

Stock-based compensation — — — — 8,072 — — 8,072

4 unchanged sentences

Net loss — — — — — — ( 39,999 ) ( 39,999 )

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

Balance at September 30, 2025 115,000 $ 127,592 28,891,348 $ 3 $ 607,856 $ ( 13,506 ) $ ( 641,603 ) $ ( 47,250 )

Nine Months Ended September 30, 2024

Preferred Stock Common Stock Additional

15 unchanged sentences

Net loss — — — — — — ( 109,302 ) ( 109,302 )

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

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

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

2 unchanged sentences

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Operating activities

10 unchanged sentences

Non-cash loss on retirement of fixed assets 60 18

Non-cash loss on debt extinguishment 2,301 —

Changes in operating assets and liabilities:

8 unchanged sentences

Purchase of property and equipment ( 1,265 ) ( 562 )

Collections on note receivable 167 —

Proceeds from the divestitures of businesses, net of cash transferred

1 unchanged sentence

Financing activities

Payments of debt costs ( 7 ) ( 77 )

Proceeds from notes payable, net of debt discount 234,600 —

Payments on notes payable ( 293,650 ) ( 181,050 )

Payments of debt issuance costs ( 1,399 ) ( 77 )

Stock repurchases and retirement ( 137 ) ( 10,958 )

6 unchanged sentences

Supplemental disclosures of cash flow information:

Cash paid for interest, net of interest rate swaps $ 8,048 $ 17,565

Cash paid for interest, net $ 14,201 $ 24,409

Cash paid for taxes, net of refunds $ 6,122 $ 1,802

Non-cash investing and financing activities:

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

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

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

12 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

No material changes have been made to the Company’s significant accounting policies disclosed in Note 2, Basis of Presentation and Summary of Significant Accounting Policies , in our Annual Report.

No material changes have been made to the Company’s significant accounting policies disclosed in Note 2, Basis of Presentation and Summary of Significant Accounting Policies , in the Company’s Annual Report.

The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting.

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 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 results of operations for the nine months ended September 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.

1 unchanged sentence

The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of revenues and expenses.

Significant items subject to such estimates include those related to revenue recognition, deferred commissions, allowance for credit losses, stock-based compensation, contingent consideration, acquired intangible assets, impairment of goodwill, intangibles and long-lived assets, the useful lives of intangible assets and property and equipment, the fair value of the Company’s interest rate swaps and income taxes.

Significant items subject to such estimates include those related to revenue recognition, deferred commissions, allowance for credit losses, stock-based compensation, impairment of goodwill, intangibles and long-lived assets, the useful lives of intangible assets and property and equipment, the fair value of the Company’s interest rate derivatives and income taxes.

In accordance with GAAP, management bases its estimates on historical experience and on various other assumptions that management believes are reasonable under the circumstances.

1 unchanged sentence

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 July 31, 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 November 6, 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 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.

As of September 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, other assets 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, and other assets.

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 six months ended June 30, 2025, or more than 10% of accounts receivable as of June 30, 2025 or December 31, 2024.

No individual customer represented more than 10% of total revenues for the three and nine months ended September 30, 2025 or September 30, 2024.

One individual customer represented 10.9 % of accounts receivable as of September 30, 2025.

No individual customer represented more than 10% of accounts receivable as of December 31, 2024.

Recent Accounting Pronouncements

Recently issued accounting pronouncements - Not Adopted

In September 2025, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) 2025-07 Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract.

ASU 2025-07 expands the scope exception for certain contracts not traded on an exchange to include contracts for which settlement is based on operations or activities specific to one of the parties to the contract.

This improvement is expected to result in more contracts and embedded features being excluded from the scope of Topic 815.

This ASU is effective for annual periods beginning after December 15, 2026, including interim periods within those fiscal years, with early adoption permitted.

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

In September 2025, FASB”) issued ASU 2025-06 Intangibles—Goodwill and Other—Internal-Use Software Targeted Improvements to the Accounting for Internal-Use Software related to accounting for internal-use software costs.

ASU 2025-06 improves the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods.

This ASU is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

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

In July 2025, the FASB issued ASU 2025-05 Measurement of Credit Losses for Accounts Receivable and Contract Assets related to credit losses for accounts receivable and contract assets.

ASU 2025-05 provides a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets.

This ASU is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the effects adoption of this guidance and does not anticipate a material impact on its consolidated financial statements.

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

1 unchanged sentence

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.

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

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.

ASU 2024-03 (as clarified by ASU 2025-01) 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.

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

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

1 unchanged sentence

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 is currently evaluating the impact of the new standard on its income tax disclosures and will 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.

6 unchanged sentences

and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions.

The Company’s financial instruments consist principally of cash and cash equivalents, money market funds, accounts receivable, accounts payable, interest rate swaps, and debt.

The Company’s financial instruments consist principally of cash and cash equivalents, money market funds, accounts receivable, accounts payable, interest rate derivatives, and debt.

The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value, primarily due to short maturities.

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

Fair Value Measurements at June 30, 2025

Fair Value Measurements at September 30, 2025

Level 1 Level 2 Level 3 Total

Cash equivalents - money market funds $ 7,941 $ — $ — $ 7,941

Interest rate swaps — 5,094 — 5,094

Interest rate derivatives — 48 — 48

Total $ 7,941 $ 48 $ — $ 7,989

2 unchanged sentences

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

Interest rate swaps — 9,742 — 9,742

Interest rate derivatives — 9,742 — 9,742

Total $ 40,428 $ 9,742 $ — $ 50,170

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.

The fair value of the Company's interest rate derivatives 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 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 believes the carrying value of its long-term debt at September 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 September 30, 2025 and December 31, 2024 was $ 240.0 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.

3 unchanged sentences

Goodwill and Other Intangible Assets

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

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

Balance at December 31, 2024 $ 260,976

1 unchanged sentence

Foreign currency translation adjustment 6,644

Balance at June 30, 2025 $ 260,705

Balance at September 30, 2025 $ 258,987

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.

The following is a summary of the Company’s intangible assets, net (in thousands):

3 unchanged sentences

Amortization Net Carrying

June 30, 2025:

September 30, 2025:

Customer relationships 2 - 10

19 unchanged sentences

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

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.

During the nine months ended September 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.

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 .

During the nine months ended September 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.

As a result of the valuation, during the nine months ended September 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 months ended September 30, 2025 or the three and nine months ended September 30, 2024.

Total amortization expense was $ 7.3 million and $ 24.6 million during the three and nine months ended September 30, 2025, respectively, and $ 13.5 million and $ 40.5 million for the three and nine months ended September 30, 2024, respectively.

The Company’s income tax provision for the three and nine months ended September 30, 2025 and September 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 $ 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 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.

The income tax benefit of $ 0.3 million and $ 1.8 million for the three and nine months ended September 30, 2025, respectively, is largely comprised of the tax benefit due to divestitures of businesses during these periods.

The income tax benefit for the three months ended September 30, 2025 also includes tax benefits generated from the impact of U.S.

tax legislation, the One Big Beautiful Bill Act, enacted in July 2025.

These tax benefits are offset by income taxes associated with U.S.

The income tax provision 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 the Company’s 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 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 June 30, 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 June 30, 2025.

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, 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):

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)

September 30, 2025 December 31, 2024

Senior secured loans (includes unamortized discount and debt costs of $ 6,155 and $ 3,456 based on an imputed interest rate of 11.1 % and 6.6 %, at September 30, 2025 and December 31, 2024, respectively)

$ 233,845 $ 290,194

1 unchanged sentence

Total long-term debt $ 229,048 $ 286,970

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.

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 %.

The Base Rate for any day is a rate per annum equal to the greatest of (i) the prime rate in effect on such day, (ii) the Federal Funds Effective Rate (not less than 0.00 %) in effect on such day plus ½ of 1.00%, and (iii) the Federal Funds Effective Rate for a one month interest period beginning on such day plus 1.00 %.

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

Interest rate swaps

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 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 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 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,

On July 25, 2025 (the “Closing Date”), the Company entered into a Credit Agreement (the “Credit Agreement”) which provided 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 matures on July 25, 2031 and bears 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).

At September 30, 2025, the floating interest rate was 10.3 % .

Payments on the Term Loan are 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 maturity date.

The Revolving Facility matures on July 25, 2031 and bears the same interest rate as the Term Loan.

The proceeds of loans under the Revolving Facility can be used by the Company for working capital and other general corporate purposes.

No amounts were outstanding under the Revolving Facility as of September 30, 2025.

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.

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.

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

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

The Company’s previous senior secured credit agreement provided for (i) 7 year, senior secured term loans which were repaid July 25, 2025 with the proceeds of the Term Loan and (ii) a $ 60 million, 5 year, revolving credit facility which matured August 6, 2024 with no amounts drawn.

In conjunction with the repayment of the previous credit agreement, the Company incurred a loss on early extinguishment of debt of $ 2.3 million related to the write-off of unamortized debt discount and deferred financing fees, which was recorded as a loss on debt extinguishment in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025.

The Company incurred $ 6.9 million of lender fees (debt discount) and third party financing costs associated with the Credit Agreement

entered into in July 2025.

The lender fees and third party costs associated with the Term Loan are recorded as a direct deduction from the long-term debt and the lender fees and third party costs associated with the Revolving Facility are recorded in Other assets in the condensed consolidated balance sheets.

All lender fees and third party costs are amortized into interest expense, net over the contractual term of the Credit Agreement.

Interest rate derivatives

In 2019 the Company entered into floating-to-fixed interest rate swap agreements to limit exposure to interest rate risk related to their debt, effectively converting a portion of the balance of the Company's debt from variable interest payments to fixed interest rate payments, based on an annualized fixed rate of 5.4 % through the maturity of the previous senior secured term loans, August 6, 2026.

At the time the Company entered into the interest rate swap agreements, the Company designated all of the swaps as cash flow hedges.

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 loss are being amortized to interest expense, net as interest is accrued or prepayments are made on the Company’s debt.

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

On July 18, 2025, the Company sold all of its remaining floating-to-fixed interest rate swap agreements.

Effective September 30, 2025, the Company entered into an interest rate cap agreement to limit exposure to interest rate risk, effectively capping the secured overnight financing rate at 4.5 % related to $ 120.0 million of their outstanding debt.

The interest rate cap is reported at fair value and is included in other assets on the condensed consolidated balance sheets, and the change in the fair value of the interest rate cap is reported in interest expense, net on the condensed consolidated statements of operations.

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

The impact of the Company’s interest rate swaps on its condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2025 and September 30, 2024 was as follows (in thousands):

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

2025 2024 2025 2024

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

Amounts reclassified from Accumulated other comprehensive income (loss) to interest expense, net ( 1,262 ) ( 1,485 ) ( 5,152 ) ( 2,942 )

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 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.

Unrealized loss recognized in other comprehensive loss on interest rate swaps

$ — $ ( 3,580 ) $ — $ ( 2,917 )

Amounts reclassified from accumulated other comprehensive loss to interest expense, net

( 1,672 ) ( 10,848 ) ( 6,824 ) ( 13,790 )

Total other comprehensive loss on interest rate swaps, net of reclassifications into earnings

$ ( 1,672 ) $ ( 14,428 ) $ ( 6,824 ) $ ( 16,707 )

The impact of the Company’s interest rate derivatives on its condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and September 30, 2024 was as follows (in thousands):

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

2025 2024 2025 2024

Unrealized gain (loss) in fair value of interest rate derivatives

$ 242 $ ( 2,777 ) ( 3,204 ) $ ( 2,777 )

Amounts reclassified from accumulated other comprehensive loss to interest expense, net

1,672 10,848 6,824 13,790

Cash payments

— 2,500 3,163 7,384

Total income (expense) from interest rate derivatives in Interest expense, net

$ 1,914 $ 10,571 $ 6,783 $ 18,397

Cash interest costs averaged 7.1 % and 6.9 % for the nine months ended September 30, 2025 and 2024, respectively.

Net Loss Per Share

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 Company computes net loss per share of 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.

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 June 30, Six Months Ended June 30,

The Company considers its 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 its Common Stock on an as-converted basis.

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

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

2025 2024 2025 2024

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Net loss per common share, basic and diluted $ ( 0.09 ) $ ( 0.12 ) $ ( 1.56 ) $ ( 4.07 )

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.

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.

Due to the net losses for the three and nine months ended September 30, 2025 and September 30, 2024, respectively, basic and diluted net loss per share were the same.

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

The Company applies the treasury stock method for calculating diluted earnings per share on its 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.

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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 87,561 103,561

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Total anti–dilutive common share equivalents 9,966,347 10,090,424

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

(1) As of September 30, 2025 , the Series A Preferred Stock plus accumulated dividends totaled $ 132.1 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 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 June 30, 2025.

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

Mezzanine Equity

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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 $ 15.7 million as of June 30, 2025, representing 895,839 Common Stock shares upon conversion at $ 17.50 per share.

The Series A Preferred Stock had accrued unpaid dividends of $ 17.1 million as of September 30, 2025, representing 979,845 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 June 30, 2025, the Liquidation Preference of the Series A Preferred Stock plus accrued and unpaid dividends was $ 130.7 million.

As of September 30, 2025, the Liquidation Preference of the Series A Preferred Stock plus accrued and unpaid dividends was $ 132.1 million.

Optional Redemption

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The holders of the Series A Preferred Stock will have the right to elect one member of the Board of Directors of the Company (the “Board of Directors”) for so long as holders of the Series A Preferred Stock own in the aggregate at least 5 % of the shares of Common Stock on a fully diluted basis.

In addition, the holders of the Series A Preferred Stock will have the right to elect one non-voting observer to the Board of Directors for so long as they hold at least 10 % of the shares of Convertible Preferred Stock outstanding as of the date of the issue date.

In addition, the holders of the Series A Preferred Stock will have the right to elect one non-voting observer to the Board

of Directors for so long as they hold at least 10 % of the shares of Convertible Preferred Stock outstanding as of the date of the issue date.

Conversion Feature

12 unchanged sentences

The number of authorized shares of common stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of shares of capital stock of the Company representing a majority of the votes represented by all outstanding shares of capital stock of the Company entitled to vote.

The holders of common stock are also entitled to receive dividends, when, if and as declared by our board of directors, whenever funds are legally available therefore, subject to the priority rights of any outstanding preferred stock.

Share repurchase program

In September 2023, the Board of Directors authorized a stock repurchase program (the “Share Repurchase Plan”) in the aggregate amount of up to $ 25 million that allowed the Company to repurchase shares of its issued and outstanding Common Stock.

The holders of common stock are also entitled to receive dividends, when, if and as declared by the board of directors, whenever funds are legally available therefore, subject to the priority rights of any outstanding preferred stock.

Share Repurchase Programs

In September 2023, the Board of Directors authorized a stock repurchase program (the “2023 Share Repurchase Plan”) in the aggregate amount of up to $ 25 million (inclusive of any taxes payable as a result of such repurchase) that allowed the Company to repurchase shares of its issued and outstanding Common Stock.

The 2023 Share Repurchase Plan expired in May 2024 when the Company had repurchased all shares authorized for repurchase.

On August 15, 2025, the Board of Directors authorized a stock repurchase program (the “2025 Share Repurchase Plan”) in the aggregate amount of up to $ 10 million (inclusive of any taxes payable as a result of such repurchase) that would allow the Company to repurchase shares of its issued and outstanding common stock, par value $ 0.0001 per share (“Common Stock”) from time to time in the open market or otherwise (including in negotiated transactions, open market transactions, through accelerated share repurchase, through indirect purchases of Common Stock such as by using derivatives or in other transactions) in each case in accordance with applicable securities laws so long as the aggregate purchase price paid for such transactions does not exceed $ 10 million (inclusive of any taxes payable as a result of such repurchase) for all such purchases.

The authorization does not have a specified expiration date.

Accordingly, unless terminated earlier by resolution of the Board, the 2025 Share Repurchase Plan will expire when the Company has repurchased all shares authorized for repurchase thereunder.

The Company is not obligated to acquire any particular amount of Common Stock and may modify or suspend the repurchases at any time in the Company’s discretion.

In the three and nine months ended September 30, 2025, the Company purchased 55,597 shares as part of the 2025 Stock Repurchase Plan at an average price of $ 2.44 per share, excluding commission costs and the impact of excise taxes.

As of September 30, 2025, $ 9.9 million was still available for share repurchases under the 2025 Share Repurchase Plan.

Tax Benefit Preservation Plan and Preferred Stock Purchase Rights

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The Company’s ability to use such NOLs and other tax attributes would be substantially limited if the Company experiences an “ownership change,” as defined in Section 382 of the Internal Revenue Code.

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.

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” and collectively the “2024 Rights”) for each outstanding share of Common Stock payable as of June 15, 2024.

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

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

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’ deficit section of our condensed consolidated balance sheets at the dates indicated (in thousands):

June 30, 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 the condensed consolidated balance sheets at the dates indicated (in thousands):

September 30, 2025 December 31, 2024

Unrealized foreign currency translation adjustment, net of realized amounts reclassified into loss from divestitures of businesses $ ( 15,603 ) $ ( 26,172 )

3 unchanged sentences

Total accumulated other comprehensive loss $ ( 13,506 ) $ ( 21,990 )

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.

During the nine months ended September 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 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 unrealized translation losses on intercompany loans with foreign subsidiaries as of September 30, 2025 and December 31, 2024 are net of income tax of $ 1.6 million and $ 1.4 million, respectively.

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

The Company reclassifies taxes from AOCI to earnings as the items to which the tax effects relate are similarly reclassified.

The functional currency of our foreign subsidiaries are the local currencies.

The functional currency of foreign subsidiaries are the local currencies.

Results of operations for foreign subsidiaries are translated into United States dollars (“USD”) using the average exchange rates on a monthly basis during the year.

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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 six months ended June 30, 2025:

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

Number of Units Weighted-Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 660,127 ) 4.45

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

Unvested restricted units outstanding as of September 30, 2025 2,327,512 $ 5.39

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

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

Expected volatility 81.9 %

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Dividend yield —

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 June 30, Six Months Ended June 30,

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

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

2025 2024 2025 2024

6 unchanged sentences

Revenue Recognition Policy

Revenue is recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services over the term of the agreement, generally when made available to the customers.

Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services over the term of the agreement, generally

when made available to the customers.

We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations.

7 unchanged sentences

• Recognition of revenue when, or as, the Company satisfies a performance obligation

Performance obligations under our contracts consist of subscription and support, perpetual licenses, and professional services revenues within a single operating segment.

Performance obligations under customer contracts consist of subscription and support, perpetual licenses, and professional services revenues within a single operating segment.

Subscription and Support Revenue

1 unchanged sentence

Subscription fees from these applications are recognized over time on a ratable basis over the customer agreement term beginning on the date the Company's solution is made available to the customer.

As our customers have access to use our solutions over the term of the contract agreement we believe this method of revenue recognition provides a faithful depiction of the transfer of services provided.

Our subscription contracts are generally 1 to 3 years in length.

As customers have access to use our solutions over the term of the contract agreement we believe this method of revenue recognition provides a faithful depiction of the transfer of services provided.

Subscription contracts are generally 1 to 3 years in length.

Amounts that have been invoiced are recorded in accounts receivable and deferred revenue or subscription and support revenue, depending on whether the revenue recognition criteria have been met.

Additional fees for monthly usage above the levels included in the standard subscription fee are recognized as subscription and support revenue at the end of each month and are invoiced concurrently.

Subscription and support revenue includes revenue related to the Company’s digital engagement application which provides short code connectivity for its two-way short message service (“SMS”) programs and campaigns.

As discussed further in the “Principal vs.

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Where the Company is the principal, it first obtains control of the inputs to the specific good or service and directs their use to create the combined output.

The Company's control is evidenced by its involvement in the integration of the good or service on its platform before it is transferred to its customers, and is further supported by the Company being primarily responsible to its customers and having a level of discretion in establishing pricing.

The Company's control is

evidenced by its involvement in the integration of the good or service on its platform before it is transferred to its customers, and is further supported by the Company being primarily responsible to its customers and having a level of discretion in establishing pricing.

While none of the factors individually are considered presumptive or determinative, in reaching conclusions on gross versus net revenue recognition, the Company places the most weight on the analysis of whether or not it is the primary obligor in the arrangement.

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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.

1 unchanged sentence

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 June 30, 2025 and December 31, 2024, unbilled receivables were $ 4.8 million and $ 3.4 million, respectively.

As of September 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 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.

No indicators of impairment were identified during the nine months ended September 30, 2025.

Amortization of deferred commissions in excess of commissions capitalized for the three and nine months ended September 30, 2025 was $ 0.1 million and $ 1.2 million, respectively and for the three and nine months ended September 30, 2024 was $ 0.9 million and $ 1.9 million, respectively.

Deferred Revenue

1 unchanged sentence

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

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.

During the nine months ended September 30, 2025, we recognized $ 75.3 million and $ 1.6 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 June 30, 2025, approximately $ 169.4 million of revenue is expected to be recognized from remaining performance obligations.

As of September 30, 2025, approximately $ 158.9 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.

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

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

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

2025 2024 2025 2024

18 unchanged sentences

Total revenue $ 50,526 $ 66,692 $ 167,564 $ 206,767

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.

During the nine months ended September 30, 2025, the Company completed divestitures of certain product lines for combined total consideration of $ 15.5 million with up to $ 4.0 million in earn-outs over the next 2 years.

Total consideration 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 evaluated the collectability of the promissory note at inception and based on that evaluation the Company provided a $ 1.5 million reserve which was recorded as an additional loss on the divestiture of the product lines.

At September 30, 2025, the book value of the note was $ 3.2 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.

At September 30, 2025, the current portion of the promissory note of $ 0.7 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 $ 4.0 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.

For the three and nine months ended September 30, 2025, the combined net losses on divestitures were $ 0.5 million and $ 24.4 million, respectively.

The Company incurred divestiture-related expenses of $ 0.8 million and $ 9.4 million, respectively, during the three and nine months ended September 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 and other cancellation costs of $ 5.5 million which is included in divestiture-related expenses in the condensed consolidated statements of operations for the nine months ended September 30, 2025.

The Company has $ 0.9 million in TSA receivables and escrow due from the buyers recorded in prepaid expenses and other current assets in the condensed consolidated balance sheets at September 30, 2025.

Segment Information

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

Subsequent Events

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”).

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).

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