Upland Software, Inc. 10-K

Item 8. Financial Statements and Supplementary Data UPLAND SOFTWARE, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 53 Consolidated Balance Sheets 55 Consolidated Statements of Operations 56 Consolidated Statements of Comprehensive Loss 57 Consolidated Statements of Equity (Deficit) 58 Consolidated Statements of Cash Flows 59 Notes to Consolidated Financial Statements 60 52 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Upland Software, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Upland Software, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, equity (deficit) and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 53 Evaluation of goodwill for impairment Description of the Matter At December 31, 2025, the Company’s goodwill balance was $260 million. As discussed in Note 2 to the consolidated financial statements, goodwill is tested at least annually for impairment, or more frequently when events or circumstances indicate that it is more likely than not that the Company’s fair value is less than its carrying value. Estimating fair value in connection with this impairment evaluation involves the utilization of the discounted cash flow and guideline public company methods. As described in Note 4 to the consolidated financial statements, the Company performed a quantitative impairment evaluation during the quarter ended December 31, 2025, which did not result in goodwill impairment. Auditing management’s quantitative goodwill impairment evaluation was complex because the estimation of fair value under the income approach involves subjective management assumptions, including estimation of future revenue growth rates, operating margins, and weighted average cost of capital. Assumptions used in these valuation models are forward-looking, and changes in these assumptions can have a material effect on the determination of fair value. How We Addressed the Matter in Our Audit Our audit procedures to test the Company’s impairment evaluation included, among others, assessing the valuation methodologies and significant assumptions discussed above and the underlying data used to develop such assumptions. For example, we compared the significant assumptions to current industry, market, and economic trends, to historical results of the Company and to other guideline companies within the same industry. We also assessed the historical accuracy of management’s estimates and performed independent sensitivity analyses. We involved our valuation specialists to assist us in evaluating the methodologies and auditing the significant assumptions used to calculate the estimated fair values. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2013. Austin, Texas March 3, 2026 54 Upland Software, Inc. Consolidated Balance Sheets (in thousands, except share and per share amounts) December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 29,398 $ 56,426 Restricted cash 626 626 Accounts receivable, net of allowance for credit losses 25,603 38,647 Deferred commissions, current 5,660 8,361 Unbilled receivables 3,981 3,441 Income tax receivable, current 1,832 762 Prepaid expenses and other current assets 8,154 10,129 Total current assets 75,254 118,392 Tax credits receivable 863 951 Property and equipment, net 1,815 1,518 Operating lease right-of-use asset 1,713 1,364 Intangible assets, net 62,317 123,903 Goodwill 259,631 260,976 Deferred commissions, noncurrent 7,865 12,147 Interest rate derivatives 15 9,742 Other assets 3,704 529 Total assets $ 413,177 $ 529,522 LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 2,140 $ 9,388 Accrued compensation 4,358 6,226 Accrued expenses and other current liabilities 3,938 6,876 Deferred revenue 74,768 93,706 Operating lease liabilities, current 817 1,000 Current maturities of notes payable (includes unamortized discount of $ 1,133 and $ 2,176 at December 31, 2025 and December 31, 2024, respectively) 7,739 3,224 Total current liabilities 93,760 120,420 Notes payable, less current maturities (includes unamortized discount of $ 4,961 and $ 1,280 at December 31, 2025 and December 31, 2024, respectively) 224,667 286,970 Deferred revenue, noncurrent 4,841 4,670 Operating lease liabilities, noncurrent 1,971 762 Noncurrent deferred tax liability, net 6,723 11,347 Other long-term liabilities 505 428 Total liabilities 332,467 424,597 Commitments and contingencies ( Note 9) Mezzanine Equity: Series A Convertible Preferred stock, 0.0001 par value; 5,000,000 shares authorized: 115,000 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 129,078 123,230 Stockholders’ deficit: Common stock, $ 0.0001 par value; 75,000,000 shares authorized as of December 31, 2025 and December 31, 2024, respectively; 29,118,178 and 28,168,267 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 3 3 Additional paid-in capital 607,275 605,286 Accumulated other comprehensive loss ( 15,138 ) ( 21,990 ) Accumulated deficit ( 640,508 ) ( 601,604 ) Total stockholders’ deficit ( 48,368 ) ( 18,305 ) Total liabilities, convertible preferred stock and stockholders’ deficit $ 413,177 $ 529,522 See accompanying notes. 55 Upland Software, Inc. Consolidated Statements of Operations (in thousands, except share and per share amounts) Year Ended December 31, 2025 2024 2023 Revenue: Subscription and support $ 205,073 $ 260,685 $ 281,554 Perpetual license 5,280 5,837 6,077 Total product revenue 210,353 266,522 287,631 Professional services 6,523 8,272 10,221 Total revenue 216,876 274,794 297,852 Cost of revenue: Subscription and support 50,882 76,037 88,894 Professional services and other 3,876 5,055 7,467 Total cost of revenue 54,758 81,092 96,361 Gross profit 162,118 193,702 201,491 Operating expenses: Sales and marketing 44,113 66,301 64,342 Research and development 36,511 47,365 49,375 General and administrative 38,025 49,463 61,264 Depreciation and amortization 26,850 45,622 58,614 Acquisition and divestiture related expenses 9,720 19 3,060 Impairment of goodwill and other intangibles 2,469 87,227 128,755 Total operating expenses 157,688 295,997 365,410 Income (loss) from operations 4,430 ( 102,295 ) ( 163,919 ) Other income (expense): Interest expense, net ( 15,785 ) ( 8,939 ) ( 18,684 ) Loss on divestitures of businesses ( 24,364 ) — — Loss on debt extinguishment ( 2,301 ) — — Other income (expense), net ( 652 ) 1,142 236 Total other expense, net ( 43,102 ) ( 7,797 ) ( 18,448 ) Loss before benefit from (provision for) income taxes ( 38,672 ) ( 110,092 ) ( 182,367 ) Benefit from (provision for) income taxes ( 232 ) ( 2,640 ) 2,493 Net loss $ ( 38,904 ) $ ( 112,732 ) $ ( 179,874 ) Preferred stock dividends ( 5,848 ) ( 5,592 ) ( 5,347 ) Net loss attributable to common stockholders $ ( 44,752 ) $ ( 118,324 ) $ ( 185,221 ) Net loss per common share: Net loss per common share, basic and diluted $ ( 1.56 ) $ ( 4.26 ) $ ( 5.77 ) Weighted-average common shares outstanding, basic and diluted 28,615,649 27,789,248 32,074,906 See accompanying notes. 56 Upland Software, Inc. Consolidated Statements of Comprehensive Loss (in thousands) Year Ended December 31, 2025 2024 2023 Net loss $ ( 38,904 ) $ ( 112,732 ) $ ( 179,874 ) Other comprehensive income (loss): Unrealized foreign currency translation adjustment 6,526 ( 6,225 ) 2,685 Realized foreign currency gain 4,423 — — Unrealized translation gain (loss) on foreign currency denominated intercompany loans, net of taxes 3,872 ( 3,147 ) 4,096 Interest rate swaps, net of reclassifications into earnings ( 7,969 ) ( 18,786 ) ( 11,723 ) Other comprehensive income (loss): $ 6,852 $ ( 28,158 ) $ ( 4,942 ) Comprehensive loss $ ( 32,052 ) $ ( 140,890 ) $ ( 184,816 ) See accompanying notes. 57 Upland Software, Inc. Consolidated Statements of Equity (Deficit) ( in thousands, except share amount ) Preferred Stock Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Equity (Deficit) Shares Amount Shares Amount Balance at December 31, 2022 115,000 $ 112,291 32,221,855 $ 3 $ 606,755 $ 11,110 $ ( 308,998 ) $ 308,870 Dividends accrued - Convertible Preferred Stock — 5,347 — — ( 5,347 ) — — ( 5,347 ) Issuance of stock under Company plans, net of shares withheld for tax — — 931,652 — ( 1,086 ) — — ( 1,086 ) Stock repurchases and retirements — — ( 3,245,100 ) — ( 14,201 ) — — ( 14,201 ) Stock-based compensation — — — — 22,874 — — 22,874 Foreign currency translation adjustment — — — — — 2,685 — 2,685 Unrealized translation gain (loss) on foreign currency denominated intercompany loans — — — — — 4,096 — 4,096 Interest rate swaps — — — — — ( 11,723 ) — ( 11,723 ) Net loss — — — — — — ( 179,874 ) ( 179,874 ) 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 — 5,592 — — ( 5,592 ) — — ( 5,592 ) Issuance of stock under Company plans, net of shares withheld for tax — — 1,468,565 — ( 2,591 ) — — ( 2,591 ) Stock repurchases and retirements — — ( 3,208,705 ) — ( 10,796 ) — — ( 10,796 ) Stock-based compensation — — — — 15,270 — — 15,270 Foreign currency translation adjustment — — — — — ( 6,225 ) — ( 6,225 ) Unrealized translation gain (loss) on foreign currency denominated intercompany loans — — — — — ( 3,147 ) — ( 3,147 ) Interest rate swaps — — — — — ( 18,786 ) — ( 18,786 ) Net loss — — — — — — ( 112,732 ) ( 112,732 ) Balance at December 31, 2024 115,000 $ 123,230 28,168,267 $ 3 $ 605,286 $ ( 21,990 ) $ ( 601,604 ) $ ( 18,305 ) Dividends accrued - Convertible Preferred Stock — 5,848 — — ( 5,848 ) — — ( 5,848 ) Issuance of stock under Company plans, net of shares withheld for tax — — 1,005,508 — ( 1,134 ) — — ( 1,134 ) Stock repurchases and retirements — — ( 55,597 ) — ( 137 ) — — ( 137 ) Stock-based compensation — — — — 9,108 — — 9,108 Realized foreign currency translation from divestitures of businesses — — — — — 4,423 — 4,423 Foreign currency translation adjustment — — — — — 6,526 — 6,526 Unrealized translation gain (loss) on foreign currency denominated intercompany loans — — — — — 3,872 — 3,872 Interest rate swaps — — — — — ( 7,969 ) — ( 7,969 ) Net loss — — — — — — ( 38,904 ) ( 38,904 ) Balance at December 31, 2025 115,000 $ 129,078 29,118,178 $ 3 $ 607,275 $ ( 15,138 ) $ ( 640,508 ) $ ( 48,368 ) See accompanying notes. 58 Upland Software, Inc. Consolidated Statements of Cash Flows (in thousands) Year Ended December 31, 2025 2024 2023 Operating activities Net loss $ ( 38,904 ) $ ( 112,732 ) $ ( 179,874 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 32,137 54,986 71,985 Deferred income taxes ( 5,283 ) ( 3,658 ) ( 4,209 ) Amortization of deferred costs 8,132 12,150 13,170 Foreign currency re-measurement ( 873 ) ( 999 ) ( 538 ) Non-cash interest, net and other income, net ( 2,931 ) ( 11,978 ) ( 2,976 ) Non-cash stock-based compensation expense 9,108 15,270 22,874 Non-cash loss on impairment of goodwill and other intangibles 2,469 87,227 128,755 Non-cash loss on divestitures of businesses 24,364 — — Non-cash loss on retirement of fixed assets 60 17 47 Non-cash loss on debt extinguishment 2,301 — — Changes in operating assets and liabilities: Accounts receivable 5,393 ( 328 ) 8,916 Prepaid expenses and other current assets ( 854 ) 74 ( 471 ) Other assets ( 1,062 ) ( 10,089 ) 10,866 Accounts payable ( 5,719 ) 1,344 ( 6,896 ) Accrued expenses and other liabilities ( 926 ) ( 556 ) ( 6,188 ) Deferred revenue ( 1,612 ) ( 6,489 ) ( 5,518 ) Net cash provided by operating activities 25,800 24,239 49,943 Investing activities Purchase of property and equipment ( 1,352 ) ( 882 ) ( 1,220 ) Collections on note receivable 339 — — Proceeds from the divestitures of businesses, net of cash transferred 9,813 — — Net cash provided by (used in) investing activities 8,800 ( 882 ) ( 1,220 ) Financing activities Proceeds from notes payable, net of debt discount 234,600 — — Payments on notes payable ( 295,150 ) ( 188,400 ) ( 40,400 ) Payments of debt issuance costs ( 1,625 ) ( 358 ) ( 221 ) Stock repurchases and retirement ( 137 ) ( 10,958 ) ( 14,060 ) Taxes paid related to net share settlement of equity awards ( 1,134 ) ( 2,591 ) ( 1,091 ) Issuance of common stock, net of issuance costs — — 5 Additional consideration paid to sellers of businesses — — ( 5,617 ) Net cash used in financing activities ( 63,446 ) ( 202,307 ) ( 61,384 ) Effect of exchange rate fluctuations on cash, cash equivalents and restricted cash 1,818 ( 557 ) 567 Change in cash, cash equivalents and restricted cash ( 27,028 ) ( 179,507 ) ( 12,094 ) Cash, cash equivalents and restricted cash, beginning of period 57,052 236,559 248,653 Cash, cash equivalents and restricted cash, end of period $ 30,024 $ 57,052 $ 236,559 Supplemental disclosures of cash flow information: Cash paid for interest, net of interest rate derivatives $ 20,403 $ 28,900 $ 32,137 Cash paid for taxes, net of refunds $ 6,946 $ 2,015 $ 7,106 Non-cash investing and financing activities: Note receivable from divestiture of businesses, net of discount $ 4,881 $ — $ — Right-of-use assets obtained in exchange for lease obligations $ 1,259 $ — $ — See accompanying notes. 59 Upland Software, Inc. Notes to Consolidated Financial Statements 1. Organization and Nature of Operations Upland Software, Inc. (“Upland,” “we,” “us,” “our,” or the “Company”), a Delaware corporation, is a leader in AI-powered knowledge and content management software. Our solutions help enterprises unlock critical knowledge, automate content workflows, and drive measurable ROI—enhancing customer and employee experiences while supporting regulatory compliance. More than 1,100 enterprise customers rely on Upland to solve complex challenges and provide a trusted path for AI adoption. The Company's customers operate in a wide variety of industries, including financial services, consulting services, technology, manufacturing, media, telecommunications, government, insurance, non-profit, healthcare, life sciences, retail, and hospitality. 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes in the Company’s accounting policies since December 31, 2024. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make, on an ongoing basis, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the 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, impairment of goodwill, intangibles and long-lived assets, the useful lives of intangible assets and property and equipment, 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. Management regularly evaluates its estimates and assumptions using historical experience and other factors; 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 March 3, 2026, the date of issuance of this Annual Report on Form 10-K. These estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions. Cash and Cash Equivalents Cash and cash equivalents consist of cash deposits and liquid investments with original maturities of three months or less when purchased. Cash equivalents are stated at cost, which approximates market value, because of the short maturity of these instruments. Restricted Cash The Company is required to maintain a letter of credit as collateral during the term of an operating lease for office space. As of December 31, 2025 and December 31, 2024, we had $ 0.6 million of restricted cash deposited in a restricted account as collateral for the letter of credit. The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statements of cash flows (in thousands): As of December 31, 2025 2024 Cash and cash equivalents $ 29,398 $ 56,426 Restricted cash 626 626 Total cash, cash equivalents and restricted cash $ 30,024 $ 57,052 60 Accounts Receivable and Allowance for Credit Losses The Company extends credit to the majority of its customers. Issuance of credit is based on ongoing credit evaluations by the Company of customers’ financial condition and generally requires no collateral. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Invoices generally require payment due upon receipt of invoice. The Company generally does not charge interest on past due payments, although the Company's contracts with its customers usually allow it to do so. 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. The allowance for credit losses on accounts receivable was $ 0.1 million, $ 0.4 million and $ 0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. Concentration of Credit Risk and Significant Customers Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are placed with high-quality financial institutions, which, at times, may exceed federally insured limits. The Company has not experienced any losses in these accounts, and the Company does not believe it is exposed to any significant credit risk related to cash and cash equivalents. The Company provides credit, in the normal course of business, to a number of its customers. The Company performs periodic credit evaluations of its customers and generally does not require collateral. No individual customer represented more than 10% of total revenues for the years ended December 31, 2025, 2024 or 2023 or more than 10% of accounts receivable at December 31, 2025 or 2024. Property and Equipment Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over each asset’s useful life. Leasehold improvements are amortized over the shorter of the lease term or of the estimated useful lives of the related assets. Upon retirement or disposal, the cost of each asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to income. Repairs, maintenance, and minor replacements are expensed as incurred. The estimated useful lives of property and equipment are as follows: Computer hardware and equipment 3 - 5 years Purchased software and licenses 3 - 5 years Furniture and fixtures 7 years Leasehold improvements Lesser of estimated useful life or lease term Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired. We assess goodwill for impairment annually on October 1st, or more frequently when events or circumstances indicate that it is more likely than not that the Company's fair value is less than its carrying value. As we operate as one reporting unit, the goodwill impairment evaluation is performed at the consolidated entity level. We first assess qualitative factors to determine whether impairment indicators exist. Based on the qualitative assessment, if it is determined that it is more likely than not that the Company's fair value is less than its carrying value, then we perform a quantitative analysis using a fair-value-based approach to determine the amount, if any, of goodwill impairment. See “ Note 4. Goodwill and Other Intangible Assets” for more information regarding goodwill impairments. Intangible Assets The Company’s intangible assets consist primarily of customer relationships, marketing-related intangible assets and developed technology. Intangible assets with definite lives are amortized over their estimated useful lives on a straight-line basis. The straight-line method of amortization represents the Company’s best estimate of the distribution of the economic value of the identifiable intangible assets. Each period the Company evaluates the estimated remaining useful lives of long-lived assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization. Definite lived intangible assets are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable. When such events or circumstances arise, an estimate of future undiscounted cash flows produced by the asset, or the appropriate grouping of assets, is compared to the asset's carrying value to determine whether impairment exists. If the asset is determined to be impaired, the impairment loss is measured based on the excess of its carrying value 61 over its fair value. See “ Note 4. Goodwill and Other Intangible Assets” for more information regarding intangible asset impairments. Software Development Costs Software development costs for software to be sold are expensed as incurred until the point the Company establishes technological feasibility. Technological feasibility is established upon the completion of a working model. Costs incurred by the Company between establishment of technological feasibility and the point at which the product is ready for general release are capitalized, subject to their recoverability, and amortized over the economic life of the related products. Because the Company believes its current process for developing its software products essentially results in the completion of a working product concurrent with the establishment of technological feasibility, no software development costs have been capitalized to date. Software development costs associated with internal use software are incurred in three stages of development: the preliminary project stage, the application development stage, and the post-implementation stage. Costs incurred during the preliminary project and post-implementation stages are expensed as incurred. Eligible internal and external costs associated with significant upgrades and enhancements incurred during the application development stage are capitalized as property and equipment. During the years ended December 31, 2025, 2024 or 2023, there were no internal use software development costs capitalized under ASC 350-40, Internal-Use Software . ASC 350-40 also requires hosting arrangements that are service contracts to follow the guidance for internal-use software to determine which implementation costs can be capitalized. In accordance with ASC 350-40, (i) capitalized implementation costs are classified in the same balance sheet line item as the amounts prepaid for the related hosting arrangement; (ii) amortization of capitalized implementation costs are presented in the same income statement line item as the service fees for the related hosting arrangement; and (iii) cash flows related to capitalized implementation costs are presented within the same category of cash flow activity as the cash flows for the related hosting arrangement (i.e. operating activity). As of December 31, 2025 and 2024, the net carrying value of capitalized implementation costs related to hosting arrangements that were incurred during the application development stage were not material. Capitalized implementation costs are amortized over the expected term of the arrangement and are amortized in the same line item on our consolidated statements of operations as the expense for fees for the associated hosting arrangement. Debt Issuance Costs The Company capitalizes underwriting, legal, and other direct costs incurred related to the issuance of debt. Costs associated with term loan are recorded as a direct deduction from the associated long-term debt and costs associated with revolving facilities are recorded in other assets in the consolidated balance sheets. All costs are amortized to interest expense, net over the term of the related debt using the effective interest rate method. Derivatives The Company has entered into interest rate derivative instruments to manage a portion of the interest rate risk associated with its variable rate debt. Derivatives are recorded as either assets or liabilities in the statement of financial position at fair value. The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. 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 its outstanding debt. The interest rate cap was not designated for hedge accounting, accordingly the change in the fair value of the interest rate cap is reported in interest expense, net on the consolidated statements of operations. In 2019, the Company entered into floating-to-fixed interest rate swap agreements to limit exposure to interest rate risk related to its variable rate debt. Prior to August 2024, the Company had determined the interest rate swaps qualified for designation as cash flow hedges and recorded the changes in their fair value on its consolidated statements of comprehensive loss and reclassified these amounts into earnings within interest expense, net when the payments occurred. In August 2024, in conjunction with the prepayment of a portion of the Company’s debt, the Company de-designated its interest rate swaps and as a result, under the accounting guidance, changes in the fair value of the interest rate swaps after that date are recorded in interest expense, net in the consolidated statements of operations. Amounts deferred in the consolidated statements of comprehensive loss for the interest rate swaps are reclassified to interest expense, net on the consolidated statements of operations in the period in which the hedged item affects earnings over the term of the derivative instrument. Cash flows from interest rate derivatives are classified in the same category as the cash flows for the underlying item being hedged within "Net cash provided by operating activities" on the consolidated statements of cash flows. See Note 6. Debt - Interest rate derivatives. 62 Fair Value of Financial Instruments The Company recognizes financial instruments in accordance with the authoritative guidance on fair value measurements and disclosures for financial assets and liabilities. This guidance defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosures about fair value measurements. The guidance also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs, such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore, requiring an entity to develop its own assumptions. Preferred Stock In August 2022, the Company closed on the issuance and sale of its Series A Convertible Preferred Stock (the “Series A Preferred Stock”). The Series A Preferred Stock is classified as Mezzanine Equity because it is redeemable at the option of its holders upon a deemed liquidation event and has a condition for redemption that is not solely within the control of the issuer. See “ Note 11. Mezzanine Equity—Series A Convertible Preferred Stock” for further details. Revenue Recognition 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. 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. Revenue is recognized net of sales credits and allowances. Revenue is recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. Revenue is recognized based on the following five step model in accordance with ASC 606, Revenue from Contracts with Customers : • Identification of the contract with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • 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 revenue within a single operating segment. Subscription and Support Revenue The Company's software solutions are available for use as hosted application arrangements under subscription fee agreements without licensing perpetual rights to the software. 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. 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 provided short code connectivity for its two-way short message service programs and campaigns. These product lines were divested in the first quarter of 2025. As discussed further in the “ Principal vs. Agent Considerations ” section below, the Company recognizes revenue related to these messaging-related subscription contracts on a gross basis. Perpetual License Revenue The Company also records revenue from the sales of proprietary software products under perpetual licenses. Revenue from distinct on-premises licenses is recognized upfront at the point in time when the software is made available to the customer. The Company’s products do not require significant customization. 63 Professional Services Revenue Professional services provided with subscription and support licenses and perpetual licenses consist of implementation fees, data extraction, configuration, and training. The Company’s implementation and configuration services do not involve significant customization of the software and are not considered essential to the functionality. Revenue from professional services is recognized over time as such services are performed. Revenue for fixed price services is generally recognized over time applying input methods to estimate progress to completion. Revenue for consumption-based services are generally recognized as the services are performed. Performance Obligations and Standalone Selling Price A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting. The Company has contracts with customers that often include multiple performance obligations, usually including professional services sold with either individual or multiple subscriptions or perpetual licenses. For these contracts, the Company records individual performance obligations separately if they are distinct by allocating the contract's total transaction price to each performance obligation in an amount based on the relative standalone selling price (“SSP”) of each distinct good or service in the contract. We only include estimated amounts of variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We determine the SSP based on our overall pricing objectives, taking into consideration market conditions and other factors, including the value of our contracts, historical standalone sales, customer demographics, geographic locations, and the number and types of users within our contracts. Principal vs. Agent Considerations The Company evaluates whether it is the principal (i.e., report revenues on a gross basis) or agent (i.e., report revenues on a net basis) for vendor reseller agreements and messaging-related subscription agreements. 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. 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. Generally, the Company reports revenue from vendor reseller agreements on a gross basis, meaning the amounts billed to customers are recorded as revenue, and expenses incurred are recorded as cost of revenue. As the Company is primarily obligated in its messaging-related subscription contracts, has latitude in establishing prices associated with its messaging program management services, is responsible for fulfillment of the transaction, and has credit risk, we have concluded it is appropriate to record revenue on a gross basis with related pass-through telecom messaging costs incurred from third parties recorded as cost of revenue. Revenue provided from agreements in which the Company is an agent are immaterial. Contract Balances The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables, and deferred revenue. Billings scheduled to occur after the performance obligation has been satisfied and revenue recognition has occurred result in unbilled receivables, which are expected to be billed during the succeeding twelve-month period and are recorded in unbilled receivables in our consolidated balance sheets. A contract liability results when we receive prepayments or deposits from customers in advance for implementation, maintenance and other services, as well as subscription fees. Customer prepayments are generally applied against invoices issued to customers when services are performed and billed. We recognize contract liabilities as revenue upon satisfaction of the underlying performance obligations. Contract liabilities that are expected to be recognized as revenue during the succeeding twelve-month period are recorded in deferred revenue and the remaining portion is recorded in deferred revenue, noncurrent on the consolidated balance sheets at the end of each reporting period. 64 Deferred Revenue Deferred revenue primarily consist of amounts that have been billed to or received from customers in advance of revenue recognition and prepayments received from customers in advance for maintenance and other services, as well as initial subscription fees. We recognize deferred revenue as revenue when the services are performed, and the corresponding revenue recognition criteria are met. 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. For certain products or services and customer types, we require payment before the products or services are delivered to the customer. Unbilled Receivables 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. Deferred Commissions Sales commissions earned by our sales force, and related payroll taxes, are considered incremental and recoverable costs of obtaining a contract with a customer. Deferred commissions and other costs for new customer contracts are capitalized upon contract signing and amortized on a systematic basis that is consistent with the transfer of goods and services over the expected life of the customer relationships, which has been determined to be approximately 6 years. The expected life of our customer relationships is based on historical data and management estimates, including estimated renewal terms and the useful life of the associated underlying technology. Commissions paid on renewal contracts are not commensurate with commissions paid on new customer contracts, as such, deferred commissions related to renewals are capitalized and amortized over the estimated contractual renewal term of 18 months. We utilized the 'portfolio approach' practical expedient, which allows entities to apply the guidance to a portfolio of contracts with similar characteristics as the effects on the financial statements of this approach would not differ materially from applying the guidance to individual contracts. The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded as deferred commissions, current, and the remainder is recorded as deferred commissions, noncurrent, in our consolidated balance sheets. Amortization expense is included in sales and marketing expenses on our consolidated statements of operations. Deferred commissions are reviewed for impairment whenever events or circumstances indicate their carrying value may not be recoverable No indicators of impairment of deferred commissions were identified during the years ended December 31, 2025, 2024 or 2023. Cost of Revenue Cost of revenue primarily consists of salaries and related expenses (e.g. bonuses, employee benefits, and payroll taxes) for personnel directly involved in the delivery of services and products directly to customers. Cost of revenue also includes the amortization of acquired technology, and hosting and infrastructure costs related to the delivery of the Company’s products and services. Advertising Costs Advertising costs are expensed in the period incurred. Advertising expenses were $ 1.0 million, $ 2.3 million and $ 2.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. Advertising costs are recorded in Sales and marketing expenses on our consolidated statements of operations. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities will be recognized in the period that includes the enactment date. A valuation allowance is established against the deferred tax assets to reduce their carrying value to an amount that is more likely than not to be realized. The Company has adopted a permanent reinvestment position whereby foreign earnings for foreign subsidiaries are expected to be reinvested and future earnings are not expected to be repatriated as dividends. As a result of this policy, no tax liability has been accrued in anticipation of future dividends from foreign subsidiaries. The Company accounts for uncertainty of income taxes based on a “more likely than not” threshold for the recognition and derecognition of tax positions. Interest and penalties are recorded as a component of income tax expense. 65 Leases The Company determines if an arrangement is a lease at inception. This determination includes the review of contracts with third parties to identify the existence of potential embedded leases. Operating leases are included in operating lease right-of-use (“ROU”) assets, current and noncurrent operating lease liabilities on the Company’s consolidated balance sheets. Finance leases are included in property and equipment, accrued expenses and other liabilities, and other noncurrent liabilities on the Company’s consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and the corresponding lease liabilities represent its obligation to make lease payments arising from the lease. Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease ROU asset includes any initial direct costs incurred and is reduced for any tenant incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company does not record short term leases with an initial lease term of one year or less on the consolidated balance sheets. As the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. Stock-Based Compensation The cost of services received from employees and non-employees in exchange for awards of equity instruments is recognized in our consolidated statements of operations based on the estimated fair value of those awards on the grant date and amortized on a straight-line basis over the requisite service period. We value restricted stock units at the closing price of our common stock on the grant date. We value stock option awards using the Black-Scholes option-pricing model. From time to time, we grant restricted stock units that also include performance or market-based conditions (“PRSUs”). For PRSUs granted with a market condition, we use a Monte Carlo simulation analysis to value the award. Compensation expense for awards with marked-based conditions is recognized over the requisite service period of the grant based on the grant date fair value of the award and is not subject to fluctuation due to achievement of the underlying market-based condition. We record forfeitures as they occur . Comprehensive Loss The Company utilizes the guidance in ASC 220, Income Statement—Reporting Comprehensive Income , for the reporting and display of comprehensive income and loss and its components in the consolidated financial statements. Comprehensive loss consists of net loss, foreign currency translation adjustments for subsidiaries with functional currencies other than the United States dollar (“USD”), unrealized translation gains (losses) on certain foreign currency denominated intercompany loans, and gains (losses) on interest rate swaps designated as cash flow hedges and related amortization of amounts reclassified into interest expense, net. Refer to “ Note 12. Stockholders' Deficit—Accumulated Other Comprehensive Loss ” for further discussion of the components of accumulated other comprehensive loss. Foreign Currency Transactions The functional currency of the Company’s foreign subsidiaries are generally the local currencies. Results of operations for foreign subsidiaries are translated into USD using the average exchange rates on a monthly basis during the year. 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 as a separate component of the Company’s consolidated statements of stockholders' equity in accumulated other comprehensive loss. Assets and liabilities denominated in currencies other than the functional currency are remeasured using the current exchange rate for monetary accounts and historical exchange rates for non-monetary accounts, with exchange differences on remeasurement included in other expense, net in the consolidated statements of operations. The Company has foreign currency denominated intercompany loans. To the extent that repayment of the loans is not anticipated for the foreseeable future, foreign currency gains (losses) resulting from remeasurement are recognized in accumulated other comprehensive loss in the consolidated statements of stockholders' deficit. Foreign currency translation gains and losses related to long-term intercompany loans that are payable in the foreseeable future are recorded in other expense, net in the consolidated statements of operations. 66 Recent Accounting Pronouncements Recently issued accounting pronouncements - Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued accounting standards update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. The ASU is effective for public business entities for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this ASU for the Annual Report for the year ended December 31, 2025 and applied the expanded disclosure requirements. The adoption of this ASU did not have an impact on the company’s consolidated financial position, results of operations or cash flows. Recently issued accounting pronouncements - Not Adopted In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which addresses suggestions received from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments may be applied prospectively or retrospectively. Early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements which provides clarity about current requirements to help entities determine whether disclosures not specified in ASC 270 should be provided in interim reporting periods. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, and permits prospective or full retrospective adoption. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures. In September 2025, the FASB issued 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 and does not anticipate a material impact 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 will adopt this guidance in the first quarter of 2026 and does not anticipate a material impact 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 will adopt this guidance in the first quarter of 2026 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 . ASU 2024-04 is intended to clarify requirements for determining whether certain settlements of convertible debt instruments, including convertible debt instruments with cash conversion features or convertible debt instruments that are not currently convertible, should be accounted for as an induced conversion. This ASU is effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company will adopt this guidance in the first quarter of 2026 and does not anticipate a material impact on its consolidated financial statements. 67 In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures . 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 does not expect the adoption of this standard to have a material impact on its consolidated financial statements but anticipates expanded disclosures in its consolidated financial statements. 3. Fair Value Measurements Assets measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements at December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 18,551 $ — $ — $ 18,551 Interest rate derivatives $ — $ 15 $ — $ 15 Total $ 18,551 $ 15 $ — $ 18,566 Fair Value Measurements at December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash equivalents - money market funds $ 40,428 $ — $ — $ 40,428 Interest rate derivatives — 9,742 — 9,742 Total $ 40,428 $ 9,742 $ — $ 50,170 The Company’s cash equivalents - money market funds 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 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’s other financial instruments consist principally of cash and cash equivalents, accounts receivable, accounts payable, and long–term debt. The carrying value of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value, primarily due to short maturities. The Company believes the carrying value of its long-term debt approximates its fair value based on its variable interest rate feature and interest rates currently available to the Company. The estimated fair value and carrying value of the Company's debt, before debt discount, at December 31, 2025 and December 31, 2024 are $ 238.5 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 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. 68 4. Goodwill and Other Intangible Assets Changes in the Company’s goodwill balance for each of the two years in the period ended December 31, 2025 are summarized in the table below (in thousands): Balance at December 31, 2023 $ 353,778 Impairment of goodwill ( 87,227 ) Foreign currency translation adjustment ( 5,575 ) Balance at December 31, 2024 $ 260,976 Divestitures of businesses ( 8,633 ) Foreign currency translation adjustment 7,288 Balance at December 31, 2025 $ 259,631 The Company reviews goodwill for impairment annually at the beginning of 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. As a result of the decline of the Company’s stock price at December 31, 2025 and March 31, 2024, the Company determined that a triggering event had occurred, therefore we performed quantitative impairment evaluations as of those interim dates. As a result of the quantitative impairment evaluation at December 31, 2025, the Company determined that no impairment existed at that date as the estimated fair value of the Company’s one reporting unit exceeded the carrying value. As a result of the quantitative impairment evaluation at March 31, 2024, the Company determined that the carrying value of its one reporting unit exceeded the estimated fair value which resulted in goodwill impairment of $ 87.2 million during the quarter ended March 31, 2024. The quantitative goodwill impairment analyses applied two methodologies to estimate the Company’s fair value which were: a) a discounted cash flow method and b) a guideline public company method which were equally weighted. The discounted cash flow method requires significant judgments, including estimation of future cash flows, which is dependent on internally developed forecasts, estimation of the long-term rate of growth for the business, and determination of the weighted average cost of capital. Under the guideline public company method, the Company estimates fair value based on a market multiple of revenues and earnings derived for comparable publicly traded companies with similar operating characteristics as the Company. See Note 15. Divestitures regarding divested businesses. 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 past business acquisitions purchases and from acquisitions of customer relationships. The following is a summary of the Company’s intangible assets, net (in thousands): Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2025 Customer relationships 7 - 10 $ 201,918 $ 146,221 $ 55,697 Trade name 9.6 - 10 1,196 889 307 Developed technology 4 - 9 32,340 26,126 6,214 Favorable leases 6.3 $ 270 $ 171 $ 99 Total intangible assets $ 235,724 $ 173,407 $ 62,317 Estimated Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount December 31, 2024 Customer relationships 1 - 10 $ 348,524 $ 239,563 $ 108,961 Trade name 1.5 - 10 9,329 7,949 1,380 Developed technology 4 - 9 85,558 72,132 13,426 Favorable leases 6.3 258 122 136 Total intangible assets $ 443,669 $ 319,766 $ 123,903 During the year ended December 31, 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. See Note 15. Divestitures . 69 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 year ended December 31, 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, the Company recorded a $ 2.5 million impairment charge related to intangible assets associated with certain Sunset Assets for the year ended December 31, 2025. No impairments of intangibles were recorded during the years ended December 31, 2024 or 2023. Total amortization expense was $ 31.2 million, $ 53.8 million, and $ 70.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, the estimated annual amortization expense for the next five years and thereafter is as follows (in thousands): Year ending December 31: Amortization Expense 2026 $ 24,958 2027 21,869 2028 13,600 2029 1,890 Total $ 62,317 5. Income Taxes The Company's loss before provision of income taxes was as follows (in thousands): Year Ended December 31, 2025 2024 2023 Loss before provision for income taxes: United States $ ( 27,370 ) $ ( 76,081 ) $ ( 117,208 ) Foreign ( 11,302 ) ( 34,011 ) ( 65,159 ) $ ( 38,672 ) $ ( 110,092 ) $ ( 182,367 ) The components of the provision for (benefit from) income taxes attributable to continuing operations were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Current Federal $ 155 $ 126 $ — State 407 1,216 901 Foreign 4,976 4,922 1,613 Total current $ 5,538 $ 6,264 $ 2,514 Deferred Federal $ ( 95 ) $ 87 $ ( 468 ) State 30 ( 876 ) ( 771 ) Foreign ( 5,241 ) ( 2,835 ) ( 3,768 ) Total deferred ( 5,306 ) ( 3,624 ) ( 5,007 ) Provision for (benefit from) income taxes $ 232 $ 2,640 $ ( 2,493 ) 70 As of December 31, 2025 the Company had total net operating loss carryforwards of approximately $ 216.7 million consisting of $ 195.4 million and $ 21.3 million related to the U.S federal and foreign net operating loss carryforwards, respectively. In addition, as of December 31, 2025 the Company had research and development credit carryforwards of $ 4.2 million. $ 136.5 million of the U.S. federal net operating loss carryforwards are related to years prior to 2018 and begin to expire in 2026 and the remaining $ 58.9 million carry forward indefinitely. Utilization of the U.S. federal net operating loss and tax credits may be subject to substantial annual limitation due to the “change of ownership” provisions of the Internal Revenue Code of 1986. The annual limitation will result in the expiration of approximately $ 153.9 million of U.S. federal net operating losses and $ 4.2 million of credit carryforwards before utilization. $ 21.3 million of foreign net operating loss carryforwards carry forward indefinitely. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred taxes are as follows (in thousands): As of December 31, 2025 2024 2023 Deferred tax assets: Accrued expenses and allowances $ 424 $ 722 $ 583 Deferred revenue 798 794 571 Stock compensation 297 512 489 Net operating loss and tax credit carryforwards 21,218 27,683 40,222 Disallowed interest expense carryforwards 20,185 19,482 17,670 Capital expenses 41 346 66 Tax credit carryforwards 70 216 — Lease liability 705 453 960 Unrealized losses 1,168 — — Research and development expenses 19,484 19,402 13,247 Other 563 550 410 Valuation allowance ( 53,936 ) ( 50,385 ) ( 41,259 ) Net deferred tax assets $ 11,017 $ 19,775 $ 32,959 Deferred tax liabilities: Prepaid expenses $ ( 148 ) $ ( 142 ) $ — Intangible assets ( 11,832 ) ( 23,409 ) ( 36,342 ) Goodwill ( 1,890 ) ( 195 ) ( 2,850 ) Tax credit carryforwards — — ( 15 ) Right of use asset ( 430 ) ( 326 ) ( 670 ) Unrealized gains — ( 2,143 ) ( 4,049 ) Deferred commissions ( 3,063 ) ( 4,562 ) ( 5,003 ) Net deferred tax liabilities $ ( 17,363 ) $ ( 30,777 ) $ ( 48,929 ) Net deferred taxes $ ( 6,346 ) $ ( 11,002 ) $ ( 15,970 ) Due to the uncertainty surrounding the timing of realizing the benefits of its favorable tax attributes in future tax returns, the Company has placed a valuation allowance against its domestic net deferred tax assets, exclusive of goodwill. During the years ended December 31, 2025 and 2024 the valuation allowance increased by $ 4.0 million and $ 9.1 million, respectively. The valuation allowance for the year ended December 31, 2025 increased $ 7.0 million related to the U.S. valuation allowance, offset by a $ 3.0 million decrease in the U.K. valuation allowance. The valuation allowance for the year ended December 31, 2024 increased by $ 9.1 million due to an increase of $ 10.1 million related primarily to current U.S., U.K. and Australia operations, offset with the tax effects of $ 1.0 million of items recorded in other comprehensive income. 71 At December 31, 2025, we did not provide deferred income taxes on temporary differences resulting from earnings of certain foreign subsidiaries which are indefinitely reinvested. The reversal of these temporary differences could result in additional tax; however, it is not practicable to estimate the amount of any unrecognized deferred income tax liabilities at this time. Deferred income taxes are provided as necessary with respect to earnings that are not indefinitely reinvested. The Tax Cuts and Jobs Act of 2017 subjects a U.S. shareholder to current tax on certain earnings of foreign subsidiaries under a provision commonly known as the global intangible low-taxed income (“GILTI”). Under U.S. GAAP, an accounting policy election can be made to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years, or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to account for GILTI as the of effects of cross-border taxes in the year the tax is incurred. The Company’s provision for income taxes differs from the expected tax expense (benefit) computed by applying the statutory federal income tax rate to income before taxes due to the following: Year Ended December 31, 2025 2024 2023 $ % $ % $ % U.S.federal statutory rate $ ( 8,121 ) 21.0 % $ ( 23,119 ) 21.0 % $ ( 38,297 ) 21.0 % Nontaxable or nondeductible items: Stock compensation 1,419 ( 3.6 ) % 1,300 ( 1.2 ) % 3,518 ( 1.9 ) % Goodwill impairment — — % 8,301 ( 7.5 ) % 13,717 ( 7.5 ) % Divestiture tax impact 2,207 ( 5.7 ) % — — % — — % Other ( 258 ) 0.7 % 725 ( 0.7 ) % 640 ( 0.4 ) % Effects of cross-border taxes — — % 2,810 ( 2.6 ) % 2,317 ( 1.3 ) % Changes in valuation allowance 2,428 ( 6.3 ) % 3,182 ( 2.9 ) % 3,454 ( 1.9 ) % State taxes, net of federal income tax effect 428 ( 1.1 ) % 308 ( 0.3 ) % 571 ( 0.3 ) % Foreign tax effects: United Kingdom Statutory rate difference between United Kingdom and United States 1,656 ( 4.3 ) % 2,068 ( 1.9 ) % ( 906 ) 0.5 % Dividends received deduction ( 1,150 ) 3.0 % ( 2,736 ) 2.5 % — — % Goodwill impairment — — % 215 ( 0.2 ) % 2,184 ( 1.2 ) % Changes in valuation allowance ( 3,471 ) 9.0 % 2,465 ( 2.2 ) % 3,493 ( 1.9 ) % Divestiture tax impact 3,812 ( 9.9 ) % — — % — — % Other ( 134 ) 0.4 % 830 ( 0.8 ) % ( 522 ) 0.3 % Canada Statutory rate difference between Canada and United States 1,160 ( 3.0 ) % ( 1,056 ) 1.0 % 21.0 % ( 722 ) 0.7 % Goodwill impairment — — % 3,920 ( 3.6 ) % (0.3) % 4,678 ( 2.6 ) % Changes in valuation allowance ( 277 ) 0.7 % — — % — — % Other 145 ( 0.4 ) % 793 ( 0.7 ) % — % ( 571 ) 0.1 % Ireland Statutory rate difference between Ireland and United States ( 2,299 ) 5.9 % 908 ( 0.8 ) % 2,378 ( 1.3 ) % Goodwill impairment — — % 1,647 ( 1.5 ) % 2,198 ( 1.2 ) % Divestiture tax impact 2,964 ( 7.7 ) % — — % — — % Other ( 108 ) 0.3 % ( 56 ) 0.1 % ( 565 ) 0.3 % Other foreign jurisdictions ( 169 ) 0.4 % 135 ( 0.1 ) % 558 ( 0.3 ) % Changes in unrecognized tax benefits — — % — — % ( 616 ) 0.3 % $ 232 ( 0.6 ) % $ 2,640 ( 2.4 ) % $ ( 2,493 ) 1.4 % 72 The Company periodically reviews the uncertainties and judgments related to the application of complex income tax regulations to determine income tax liabilities in several jurisdictions. The Company uses a “more likely than not” criterion for recognizing an asset for unrecognized income tax benefits or a liability for uncertain tax positions. The Company has determined it has an immaterial exposure related to uncertain tax positions as of December 31, 2025. To the extent the Company is required to recognize interest and penalties related to unrecognized tax liabilities, this amount will be recorded as an accrued liability. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025, the Company has not accrued any interest or penalties related to uncertain tax positions. Cash paid (received) for taxes was as follows (in thousands): Year Ended December 31, 2025 2024 2023 Australia $ ( 5 ) $ ( 2 ) $ ( 12 ) Canada (Federal) 2,806 ( 1,024 ) 2,701 Canada (Provincial) 1,073 ( 171 ) 951 Ireland 1,079 1,121 1,971 India 320 331 244 Netherlands ( 140 ) 62 226 US (Federal) 676 — — US (State): Texas 477 238 249 New Jersey ( 77 ) 196 197 US (State - Other) 660 1,247 597 Other 77 17 ( 18 ) Total cash taxes paid $ 6,946 $ 2,015 $ 7,106 The Company and its subsidiaries file tax returns in the U.S. federal jurisdiction and in several state and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years ending before December 31, 2020 and is no longer subject to state and local or foreign income tax examinations by tax authorities for years ending before December 31, 2019 US operating losses generated in years prior to 2020 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utilized. 6. Debt Long-term debt consisted of the following at December 31, 2025 and December 31, 2024 (in thousands): December 31, 2025 2024 Senior secured loans (includes unamortized discount of $ 6,094 and $ 3,456 based on an imputed interest rate of 10.4 % and 6.6 %, at December 31, 2025 and December 31, 2024, respectively) $ 232,406 $ 290,194 Less current maturities (including Excess Cash Flow payment) ( 7,739 ) ( 3,224 ) Total long-term debt $ 224,667 $ 286,970 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 million (the “Term Loan”) and (ii) a senior secured revolving credit facility in the aggregate principal amount of $ 30 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 then current 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 December 31, 2025, the floating interest rate was 9.7 %. 73 Payments on the Term Loan are due quarterly in amounts equal to (a) 2.5 % per annum of the original principal amount of the Term Loan commencing beginning December 31, 2025 through September 30, 2026, (b) 1.8 % per annum of the original principal amount of the Term Loan commencing December 31, 2026 through September 30, 2027, and (c) 1.0 % 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. Quarterly Excess Cash Flow payments may be due approximately 90 days after each quarter end based on net leverage ratios as defined in the Credit Agreement. At December 31, 2025, the Excess Cash Flow payment due under the terms of the Credit Agreement was $ 3.3 million and is included in current maturities of long-term debt in the consolidated balance sheets. 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 December 31, 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 December 31, 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. 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 consolidated statements of operations for the year ended December 31, 2025. The Company incurred $ 7.1 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 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 its 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 its outstanding debt. The interest rate cap is reported at fair value and is included in other assets on the consolidated balance sheets, and the change in the fair value of the interest rate cap is reported in interest expense, net on the consolidated statements of operations. 74 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 derivative financial instruments on its consolidated statements of comprehensive loss was as follows (in thousands): Year Ended December 31 2025 2024 2023 Unrealized gain (loss) recognized in other comprehensive loss on interest rate swaps $ — $ ( 2,918 ) $ ( 6,434 ) Amounts reclassified from accumulated other comprehensive loss to interest expense, net ( 7,969 ) ( 15,868 ) ( 5,289 ) Total other comprehensive income (loss) on interest rate derivatives, net of reclassifications into earnings $ ( 7,969 ) $ ( 18,786 ) $ ( 11,723 ) The impact of the Company’s interest rate derivatives on its consolidated statements of operations was as follows (in thousands): Year Ended December 31 2025 2024 2023 Unrealized loss in fair value of interest rate derivatives $ ( 3,237 ) $ ( 1,611 ) $ — Amounts reclassified from accumulated other comprehensive loss to interest expense, net 7,969 15,868 5,289 Cash payments 3,163 9,423 13,942 Total income (expense) related to interest rate derivatives in interest expense, net $ 7,895 $ 23,680 $ 19,231 In the next twelve months assuming no additional prepayments, the Company estimates that $ 2.7 million will be reclassified from accumulated other comprehensive loss to interest expense, net on the consolidated statements of operations. Cash interest costs averaged 7.9 %, 6.6 %, and 7.2 % for the years ended December 31, 2025, 2024, and 2023, respectively. Debt Maturities Under the terms of the Credit Facilities, future debt maturities of long-term debt excluding debt discounts at December 31, 2025 are as follows (in thousands): Year ending December 31: Amount 2026 $ 8,872 2027 3,750 2028 2,400 2029 2,400 2030 2,400 Thereafter 218,678 Total debt outstanding $ 238,500 Less unamortized discount 6,094 Total debt outstanding, net of discount $ 232,406 7. Net Loss Per Share The Company computes loss per share of Common Stock and 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 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 Common Stock on an as-converted basis. 75 The following table sets for the computations of net loss per share (in thousands, except share and per share amounts): Year Ended December 31, 2025 2024 2023 Numerator: Net loss $ ( 38,904 ) $ ( 112,732 ) $ ( 179,874 ) Preferred stock dividends and accretion ( 5,848 ) ( 5,592 ) ( 5,347 ) Net loss attributable to common stockholders $ ( 44,752 ) $ ( 118,324 ) $ ( 185,221 ) Denominator: Weighted–average common shares outstanding, basic and diluted 28,615,649 27,789,248 32,074,906 Net loss per common share, basic and diluted $ ( 1.56 ) $ ( 4.26 ) $ ( 5.77 ) Due to the net losses incurred for the years ended December 31, 2025, 2024 and 2023, basic and diluted loss per share were the same, as the effect of all potentially dilutive securities would have been anti-dilutive. The Company uses the application of the if-converted method for calculating diluted earnings per share on Series A Preferred Stock. The Company applies the treasury stock method for calculating diluted earnings per share on stock options, restricted stock awards, restricted stock units and performance restricted stock units. Contingently issuable shares associated with outstanding performance-based restricted stock units (each, a “PSU”) were not included in the basic earnings per share calculations for the periods presented, as the applicable vesting conditions had not been satisfied. Potential shares of common stock are excluded from the computation of diluted earnings per share when their effect would be antidilutive. Performance-based restricted stock units are considered dilutive when the related performance criteria have been met assuming the end of the reporting period represents the end of the performance period. All potential shares of common stock are antidilutive in periods of net loss. 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: Year Ended December 31, 2025 2024 2023 Stock options 71,632 103,561 149,914 Restricted stock units 1,699,383 2,177,132 1,758,847 Performance restricted stock units 250,000 100,000 100,000 Series A Preferred Stock on an as-converted basis (1) 7,636,226 7,302,047 6,982,493 Total anti–dilutive common share equivalents 9,657,241 9,682,740 8,991,254 (1) As of December 31, 2025, the Series A Preferred Stock plus accumulated dividends totaled $ 133.6 million. The Series A Preferred Stock has a conversion price of $ 17.50 per share, as detailed in “ Note 11. Mezzanine Equity”. 8. Leases Operating Leases The Company leases office space under operating leases that expire between 2026 and 2033. The terms of the Company's non-cancelable operating lease arrangements typically contain fixed rent increases over the term of the lease, rent holidays and provide for additional renewal periods. Rent expense on these operating leases is recognized over the term of the lease on a straight-line basis. Lease Expense The Company has entered into sublease agreements related to excess office space. Sublease income is recognized as an offset to lease costs. The Company’s current sublease agreements terminate in 2027. Operating lease obligations in the future minimum payments table below do not include the impact of future rental income of $ 0.5 million related to these subleases as of December 31, 2025. 76 The components of lease expense were as follows (in thousands): Year Ended December 31, 2025 2024 2023 Operating lease cost $ 1,279 $ 2,195 $ 3,243 Sublease income ( 226 ) ( 797 ) ( 1,762 ) Total lease expense $ 1,053 $ 1,398 $ 1,481 Other information about lease amounts recognized in the consolidated financial statements is summarized as follows: Year Ended December 31, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities (in thousands): Operating cash flows from operating leases $ 496 $ 2,483 Right-of-use assets obtained in exchange for lease obligations (in thousands): Operating leases $ 1,259 $ 212 Weighted average remaining lease term (in years): Operating leases 5.4 1.9 Weighted average discount rate Operating leases 7.5 % 6.2 % The Company no longer has any finance lease agreements. Future minimum payments for operating lease obligations are as follows (in thousands): Operating Leases 2026 $ 1,053 2027 492 2028 392 2029 355 2030 352 Thereafter 764 Total minimum lease payments 3,408 Less amount representing interest ( 620 ) Present value of lease liabilities $ 2,788 Operating lease liabilities, current $ 817 Operating lease liabilities, noncurrent 1,971 Total lease liabilities $ 2,788 9. Commitments and Contingencies Purchase Commitments The Company has purchase commitments related to hosting services, third-party technology used in the Company's solutions and for other services the Company purchases as part of normal operations. In certain cases these arrangements require a minimum annual purchase commitment. 77 Future minimum payments for purchase commitments are as follows (in thousands): Year Purchase Commitments 2026 $ 9,597 2027 8,263 2028 8,217 2029 8,238 2030 5,934 Total minimum payments $ 40,249 Litigation In the normal course of business, the Company may become involved in various lawsuits and legal proceedings. As of December 31, 2025, the Company is not involved in any current or pending legal proceedings that it believes may have a material adverse effect on its consolidated financial position or results of operations. In addition, when we acquire companies, we require that the sellers provide industry standard indemnification for breaches of representations and warranties contained in the acquisition agreement and we will withhold payment of a portion of the purchase price for a period of time in order to satisfy any claims that we may make for indemnification. In certain transactions, we agree with the sellers to purchase a representation and warranty insurance policy that will pay such claims for indemnification. From time to time we may have one or more claims for indemnification pending. Similarly, we may have one or more ongoing negotiations related to the amount of an earnout. Gain contingencies related to indemnification claims are not recognized on the consolidated financial statements until realized. Letter of Credit In conjunction with a December 2024 operating lease agreement, the Company provided a $ 0.6 million letter of credit in conformance with the contractual provisions of the lease. The letter of credit expires July 2029. The amount underlying such letter of credit is reflected as restricted cash in the Company's consolidated balance sheets as of December 31, 2025 and 2024. 10. Property and Equipment, Net Property and equipment consisted of the following (in thousands) at: December 31, 2025 2024 Equipment $ 4,996 $ 5,399 Furniture and fixtures 124 221 Leasehold improvements 1,228 639 Accumulated depreciation ( 4,533 ) ( 4,741 ) Property and equipment, net $ 1,815 $ 1,518 Depreciation expense on property and equipment, net was $ 1.0 million, $ 1.2 million and $ 1.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The Company recorded no impairments of property and equipment during the years ended December 31, 2025, 2024 and 2023. During the years ended December 31, 2025, 2024 and 2023, we recognized $ 60.0 thousand, $ 17.0 thousand and $ 47.0 thousand in losses on disposal of assets including office equipment and leasehold improvements. 78 11. Mezzanine Equity Series A Convertible Preferred Stock In 2022, the Company issued 115,000 shares of Series A Preferred Stock of the Company, par value $ 0.0001 per share, at a price of $ 1,000 per share (the “Initial Liquidation Preference”) for an aggregate purchase price of $ 115.0 million. In connection with the issuance of the Series A Preferred Stock, the Company incurred direct and incremental expenses comprised of transaction fees, and financial advisory and legal expenses of $ 4.6 million which reduced the the carrying value of the Series A Preferred Stock. The Purchaser has certain customary registration rights with respect to any shares of Series A Preferred Stock or the Common Stock of the Company issuable upon conversion of the Series A Preferred Stock, including rights with respect to the filing of a shelf registration statement, underwritten offering rights and piggy back rights. Dividend Provisions The Series A Preferred Stock rank senior to the Company’s common stock with respect to payment of dividends and rights on the distribution of assets on any liquidation, dissolution or winding up of the affairs of the Company. The Series A Preferred Stock has an Initial Liquidation Preference of $ 1,000 per share, representing an aggregate Liquidation Preference (as defined below) of $ 1,000 upon issuance. Holders of the Series A Preferred Stock are entitled to the dividend at the rate of 4.5 % per annum, within first seven years after the Closing Date regardless of whether declared or assets are legally available for the payment. Such dividends shall accrue and compound quarterly in arrears from the date of issuance of the shares. The dividend rate will increase to 7.0 % on the seven -year anniversary of the Closing Date. 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). 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 $ 18.6 million as of December 31, 2025. Liquidation Rights In the event of any Liquidation, holders of the Series A Preferred Stock are entitled to receive an amount per share equal to the greater of (1) the Initial Liquidation Preference per share plus any accrued or declared but unpaid dividends on such shares (the “Liquidation Preference”) or (2) the amount payable if the Series A Preferred Stock were converted into common stock. The Series A Preferred Stock will have distribution and liquidation rights senior to all other equity interests of the Company. As of December 31, 2025, the Liquidation Preference of the Series A Preferred Stock plus accrued and unpaid dividends was $ 133.6 million. Optional Redemption On or after the 7th anniversary of the original issue date of the Series A Preferred Stock, the Company has the right to redeem any outstanding shares of the Series A Preferred Stock for a cash purchase price equal to 105 % of the Liquidation Preference plus accrued and unpaid dividends as of the date of redemption. Deemed Liquidation Event Redemption Upon a fundamental change, holders of the Series A Preferred Stock have the right to require the Company to repurchase any or all of its Series A Preferred Stock for cash equal to the greater of (1) 105 % of the Liquidation Preference plus the present value of the dividend payments the holders would have been entitled to through the fifth anniversary of the issue date and (2) the amount that such Preferred Stock would have been entitled to receive as if converted into common shares immediately prior to the fundamental change. A fundamental change (“Deemed Liquidation Event”) is defined as either the direct or indirect sale, lease, transfer, conveyance or other disposition of all or substantially all the properties or assets of the Company and its subsidiaries to any third party or the consummation of any transaction, the result of which is that any third party or group of third parties become the beneficial owner of more than 50 % of the voting power of the Company. Voting Rights The Series A Preferred Stock vote together with the Common Shares on all matters and not as a separate class (except as specifically provided in the Certificate of Designation or as otherwise required by law) on an as-if-converted basis. 79 The holders of the Series A Preferred Stock have the right to elect one member of 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 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 The Series A Preferred Stock may be converted, at any time in whole or in part at the option of the holder into a number of shares of common stock equal to the quotient obtained by dividing the sum of the Liquidation Preference plus all accrued and unpaid dividends by the conversion price of $ 17.50 (the “Conversion Price”). The Conversion Price is subject to adjustment in the following events: • Stock splits and combinations • Tender offers or exchange offers • Distribution of rights, options, or warrants at a price per share that is less than the average of the last reported sale prices per share of Common Stock for the ten consecutive trading days • Spin-offs and other distributed property • Issuance of equity-linked securities at a price per share less than the conversion price Anti-Dilution Provisions 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). 12. Stockholders' Deficit Common Stock The common stock has a par value of $ 0.0001 per share. Each share of common stock is entitled to one vote at all meetings of stockholders. 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 the Board of Directors, whenever funds are legally available therefore, subject to the priority rights of any outstanding preferred stock. Share repurchase programs 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 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 September and October 2023, the Board of Directors authorized a stock repurchase program (the “2023 Share Repurchase Plan”) in the aggregate amount of up to $ 25.0 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. 80 In the year ended December 31, 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 December 31, 2025, $ 9.9 million was still available for share repurchases under the 2025 Share Repurchase Plan. 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. The Company’s net stock repurchases are subject to a 1 percent excise tax under the Inflation Reduction Act. The excise tax is included as a reduction to accumulated deficit in the consolidated statements of stockholders’ equity. Total accrued excise tax was immaterial at December 31, 2025 Tax Benefit Preservation Plan and Preferred Stock Purchase Rights Effective June 5, 2024, the Company entered into the 2024 Tax Benefit Preservation Plan with Broadridge Corporate Issuer Solutions, LLC, as Rights Agent (the “2024 Tax Benefit Preservation Plan”). By adopting the 2024 Tax Benefit Preservation Plan, the Company is seeking to protect its ability to use its net operating loss carryforwards (“NOLs”) and other tax attributes to offset potential future income tax liabilities. 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. As part of the 2024 Tax Benefit Preservation Plan, the Board declared a dividend of one preferred stock purchase right (a “2024 Right”) for each outstanding share of Common Stock of the Company as of June 15, 2024. 27,030,605 Rights were issued to the holders of record of shares of Common Stock. The description and terms of the 2024 Rights are set forth in the 2024 Tax Benefit Preservation Plan. The 2024 Rights trade with, and are inseparable from, the Common Stock, and the record holders of shares of Common Stock are the record holders of the 2024 Rights. The 2024 Rights are not exercisable until the Distribution Date, as defined in the 2024 Tax Benefit Preservation Plan. After the Distribution Date, each Right will be exercisable to purchase from the Company one one-thousandth of a share of Series B Junior Participating Preferred Stock, par value $ 0.0001 per share, of the Company (the “Series B Preferred”), at a purchase price of $15.25 per one one-thousandth of a share of Series B Preferred (the “Purchase Price”), subject to adjustment as provided in the 2024 Tax Benefit Preservation Plan. Until a Right is exercised or exchanged, the holder thereof, as such, will have no rights as a stockholder of the Company by virtue of holding such Right, including, without limitation, the right to vote and to receive dividends. The Board of Directors may adjust the Purchase Price, the number of shares of Series B Preferred issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, a reclassification of the Series B Preferred or Common Stock or certain other specified transactions. No adjustments to the Purchase Price of less than 1 % are required to be made. Each one one-thousandth of a share of Series B Preferred, if issued: • Will not be redeemable. • Will entitle holders to quarterly dividend payments of $ 0.001 per one one-thousandth of a share of Series B Preferred, or an amount equal to the dividend paid on one share of Common Stock, whichever is greater. • Will entitle holders upon liquidation either to receive $ 0.001 per one one-thousandth of a share of Series B Preferred, or an amount equal to the payment made on one share of Common Stock, whichever is greater. • Will have the same voting power as one share of Common Stock. • If shares of Common Stock are exchanged as a result of a merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of Common Stock. Accumulated Other Comprehensive Loss Comprehensive loss consists of two elements, net loss and other comprehensive income (loss). Other comprehensive income (loss) items are recorded in the stockholders’ deficit section on the consolidated balance sheets and excluded from net loss. Other comprehensive loss consists primarily of unrealized foreign currency translation adjustments for subsidiaries with functional currencies other than the USD, unrealized translation gains (losses) on intercompany loans with foreign subsidiaries when repayment of those loans is not anticipated in the foreseeable future, and gains (losses) on interest rate swaps, net of amounts reclassified into interest expense, net. 81 The following table shows the ending balance of the components of accumulated other comprehensive loss, net of income taxes, in the stockholders’ equity section on the consolidated balance sheets at the dates indicated (in thousands): December 31, 2025 2024 Unrealized foreign currency translation adjustment, net of realized amounts reclassified into loss from divestitures of businesses $ ( 15,223 ) $ ( 26,172 ) Unrealized translation losses on intercompany loans with foreign subsidiaries, net of taxes ( 2,605 ) ( 6,477 ) Unrealized gains on interest rate swaps, net of amounts reclassified into interest expense, net 2,690 9,033 Realized gain on interest rate swap sale, net of amounts reclassified into interest expense, net — 1,626 Total accumulated other comprehensive loss $ ( 15,138 ) $ ( 21,990 ) 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. 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 as a separate component of stockholders' deficit in AOCI. During the year ended December 31, 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. See Note 15. Divestitures . As of December 31, 2025 and December 31, 2024, the unrealized translation losses on intercompany loans with foreign subsidiaries considered long-term in nature are net of unrealized income tax of $ 1.5 million and $ 1.4 million, respectively. The income tax expense/benefit allocated to each component of other comprehensive loss 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. Stock-Based Compensation The Company’s stock-based compensation generally includes awards of restricted stock units (“RSUs”) and performance-based restricted stock units (“PRSUs”). Key employees, officers and directors of the Company and its consultants or advisors are eligible to receive awards under the Upland Software, Inc. 2024 Omnibus Incentive Plan. Prior to 2024, awards were issued under the Upland Software, Inc. 2014 Equity Incentive Plan or the Amended and Restated Upland Software, Inc. 2010 Stock Option Plan (collectively, the “Plans”). At December 31, 2025, there were 1,090,826 shares of common stock reserved for issuance under the Plans including the reserve for maximum vesting potential of performance-based restricted stock units as described below. Restricted Stock Units (“RSU”) Restricted stock units primarily vest over a period of 1 to three years upon the satisfaction of a service-based condition with yearly or quarterly vesting. The total fair value of the RSUs vested during the years ended December 31, 2025, 2024 and 2023 was $ 3.4 million, $ 4.3 million and $ 5.0 million, respectively. Performance-Based Restricted Stock Units (“PRSU”) In 2025, 2024 and 2023, fifty percent of the awards granted to the Chief Executive Officer were PRSUs. The PRSU agreements provide that the quantity of units subject to vesting may range from 0 % to 300 % of the units granted based on the Company's absolute total shareholder return (“TSR”) at the end of twenty-four to thirty-six month performance periods. The 2025 PRSU did not vest during year ended December 31, 2025. In December 2024, 750,000 of the 2024 PRSUs vested when the TSR met the performance criteria. The 2023 PRSU did not vest prior to the end of its performance period on December 31, 2025 and was cancelled. The total fair value of PRSUs vested during the years ended December 31, 2025, 2024 and 2023 was nil , $ 3.5 million and nil , respectively. 82 Significant assumptions used in the Monte Carlo simulation model for the PRSUs granted during the years ended December 31, 2025, 2024 and 2023 are as follows: December 31, 2025 December 31, 2024 December 31, 2023 Expected volatility 81.9 % 62.1 % - 74.6 % 55.5 % Risk-free interest rate 4.2 % 4.0 % - 4.4 % 4.4 % Remaining performance period (in years) 3.08 3.08 - 2.73 2.86 Dividend yield — — — The risk-free interest rate assumption is based upon observed interest rates for constant maturity U.S. Treasury securities as of the grant date. Expected volatility is based on the historical volatility of the Company’s common stock over the estimated expected life. The Company does not pay a dividend, therefore, the dividend yield is assumed to be zero. The following table summarizes PRSU and RSU activity during the year ended December 31, 2025 : Number of Units Weighted-Average Grant Date Fair Value Unvested restricted units outstanding as of December 31, 2024 2,277,132 $ 5.36 Granted 2,025,000 4.77 Vested ( 1,493,869 ) 5.01 Cancelled ( 100,000 ) 14.73 Forfeited ( 758,880 ) 4.45 Unvested restricted units outstanding as of December 31, 2025 1,949,383 $ 4.88 At December 31, 2025, there were 1,699,383 restricted stock units and 250,000 performance-based restricted stock units outstanding under the Plans. The PRSU and RSU activity table above includes PRSU units granted that are based on a 100 % target payout. As of December 31, 2025, $ 5.8 million of unrecognized compensation cost related to unvested restricted stock units (including performance based awards) is expected to be recognized over a weighted-average period of 1.88 years. Stock Option Activity Under the Plans, options granted to date generally vest over a three or four year period, with a maximum term of ten years . Stock option activity during the year ended December 31, 2025 is as follows: Number of Options Outstanding Weighted– Average Exercise Price Weighted– Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2024 103,561 $ 10.77 Options expired ( 31,929 ) 7.56 Outstanding at December 31, 2025 71,632 $ 12.20 0.9 $ — Options vested and expected to vest at December 31, 2025 71,632 $ 12.20 0.9 $ — Options vested and exercisable at December 31, 2025 71,632 $ 12.20 0.9 $ — The aggregate intrinsic value of options exercised at December 31, 2025, 2024, and 2023, was nil , nil , and nil , respectively. All of the Company’s outstanding stock options are fully vested. As of December 31, 2025, there was no remaining unrecognized compensation cost related to stock options. 83 Share-based Compensation The Company recognized share-based compensation expense from all awards in the following expense categories (in thousands): Year Ended December 31, 2025 2024 2023 Cost of revenue $ 420 $ 765 $ 952 Research and development 785 2,095 2,463 Sales and marketing 448 1,512 2,059 General and administrative 7,455 10,898 17,400 Total $ 9,108 $ 15,270 $ 22,874 I ncome tax benefits recognized from stock-based compensation arrangements in each of the periods presented were immaterial due to cumulative losses and valuation allowances. 13. Revenue Recognition Deferred Commissions The following table presents the activity impacting deferred commissions for the year ended December 31, 2025 (in thousands): Deferred Commissions Balance as of 12/31/2023 $ 22,997 Capitalized deferred commissions 9,662 Amortization of deferred commissions ( 12,151 ) Balance as of 12/31/2024 $ 20,508 Deferred commissions divested (see Note 15. Divestitures ) ( 5,646 ) Capitalized deferred commissions 6,796 Amortization of deferred commissions ( 8,133 ) Balance as of 12/31/2025 $ 13,525 Deferred Revenue During the year ended December 31, 2025, we recognized $ 81.6 million and $ 1.9 million of subscription services and professional services revenue, respectively, that was included in the deferred revenue balances at the beginning of the period. Remaining Performance Obligations As of December 31, 2025, approximately $ 165.6 million of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 70 % of these remaining performance obligations over the next 12 months, with the balance recognized thereafter. Disaggregated Revenue The Company disaggregates revenue from contracts with customers by geography and revenue generating activity, as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. 84 Revenue by geography is based on the ship-to address of the customer, which is intended to approximate where the customers' users are located. The ship-to country is generally the same as the billing country. The Company has operations primarily in the U.S., United Kingdom and Canada. Information about these operations is presented below (in thousands): Year Ended December 31, 2025 2024 2023 Revenues: Subscription and support: United States $ 150,574 $ 187,762 $ 201,252 United Kingdom 21,218 33,697 37,004 Canada 11,815 12,793 13,644 Other International 21,466 26,433 29,654 Total subscription and support revenue 205,073 260,685 281,554 Perpetual license: United States 2,042 2,959 2,654 United Kingdom 345 310 589 Canada 189 258 199 Other International 2,704 2,310 2,635 Total perpetual license revenue 5,280 5,837 6,077 Professional services: United States 3,863 4,919 5,961 United Kingdom 767 937 1,318 Canada 578 704 827 Other International 1,315 1,712 2,115 Total professional service revenue 6,523 8,272 10,221 Total revenue $ 216,876 $ 274,794 $ 297,852 14. Employee Benefit Plans The Company has established various international defined contribution plans and one voluntary defined contribution retirement plan qualifying under Section 401(k) of the Internal Revenue Code. The Company made no contributions to the 401(k) plans for the years ended December 31, 2025, 2024 and 2023. 15. Divestitures During the year ended December 31, 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. For the year ended December 31, 2025, the combined net loss on divestitures was $ 24.4 million and divestiture-related expenses were $ 9.7 million. 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 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 December 31, 2025, the book value of the note was $ 3.0 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 December 31, 2025, the current portion of the promissory note, net of the allowance, was $ 0.5 million and is recorded in prepaid expenses and other current assets on the Company’s consolidated balance sheets and the long-term portion of the promissory note, net of the allowance, was $ 2.5 million and is recorded in other assets on the Company’s 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. 85 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. Each TSA period has lapsed as of December 31, 2025. The Company has $ 0.2 million in TSA receivables due from the buyers recorded in prepaid expenses and other current assets in the consolidated balance sheets at December 31, 2025. 16. Segment Information and Geographic Information The Company’s Chief Executive Officer is considered to be the chief operating decision-maker (“CODM”). The CODM manages the business as a multi-product cloud-based software application business that utilizes a singular operating model to deliver a consistently high level of operating performance to customers regardless of their geography or IT environment. Operating results are reviewed by the CODM primarily at the consolidated entity level for purposes of making resource allocation decisions and for evaluating financial performance. Accordingly, we consider the Company to be in a single operating and reporting segment structure. The key measure of profit or loss utilized by the CODM to assess the performance of and allocate resources within the Company’s single operating segment is net loss. This measure is presented on the consolidated statements of operations. Significant segment expenses included in net loss are cost of revenue, sales and marketing, research and development, general and administrative, depreciation and amortization, acquisition and divestiture related expenses, interest expense, net and other income (expense), which are presented on the consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheets as total assets. Revenue See “ Note 13 Revenue Recognition—Disaggregated Revenue ” for a detail of revenue by geography. Property and equipment December 31, 2025 2024 Property and equipment, net: United States $ 1,208 $ 720 United Kingdom 75 117 Canada 369 367 Other International 163 314 Total property and equipment, net $ 1,815 $ 1,518 Operating lease right-of-use asset December 31, 2025 2024 Operating lease right-of-use asset: United States $ 1,436 $ 906 United Kingdom 59 67 Canada 74 161 Other International 144 230 Total operating lease right-of-use asset $ 1,713 $ 1,364 86 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.