What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-01 compared with 2025-11-06 · 113 added, 254 removed, 204 unchanged (64% of the section changed)

5 unchanged sentences

Forward-looking statements may be identified by the use of forward-looking words such as “anticipate,” “believe,” “may,” “will,” “continue,” “seek,” “estimate,” “intend,” “hope,” “predict,” “could,” “should,” “would,” “project,” “plan,” “expect” or the negative or plural of these words or similar expressions, although not all forward-looking statements contain these words.

These forward-looking statements include, but are not limited to, statements concerning the following:

• our financial performance and our ability to achieve or sustain profitability or predict future results;

• our plans regarding future acquisitions or divestitures and our ability to consummate and operationalize acquisitions or divestitures;

• our ability to expand our go to market operations, including our marketing and sales organization, and successfully increase sales of our products;

• our ability to obtain financing in the future on acceptable terms or at all;

• our expectations with respect to revenue, cost of revenue and operating expenses in future periods;

• our expectations with regard to revenue from perpetual licenses, usage fees, and professional services;

• our ability to adapt to macroeconomic factors impacting the global economy, including the Russia-Ukraine conflict, the conflicts in the Middle East, changes in trade policy, foreign currency exchange risk, inflation and supply chain constraints;

• our ability to attract and retain customers;

• our ability to successfully enter new markets and manage our international expansion;

• our ability to comply with privacy laws and regulations;

• our ability to incorporate and deliver artificial intelligence (“AI”) functionality into our products and services, including our ability to unlock critical knowledge, automate content workflows and drive measurable ROI;

• our ability to deliver high-quality customer service;

• our plans regarding, and our ability to effectively manage, our growth, including with respect to our growth investments;

• maintaining our senior management team and key personnel;

• the performance of our resellers;

• our ability to adapt to changing market conditions and competition;

• our ability to adapt to technological change and continue to innovate;

• the growth of demand for cloud-based, digital transformation applications;

• our ability to integrate our applications with other software applications;

• maintaining and expanding our relationships with third parties;

• costs associated with defending intellectual property infringement and other claims;

• our ability to maintain, protect and enhance our brand and intellectual property;

• our expectations with regard to trends, such as seasonality, which affect our business;

• impairments to goodwill and other intangible assets;

• our beliefs regarding how our applications benefit customers and what our competitive strengths are;

• the operation, reliability and security of our third-party data centers;

• our expectations as to the timing of the discontinuation of any Sunset Assets (as defined below), as well as the composition of Sunset Assets;

• our 2025 Share Repurchase Plan (as defined in Note 10.

Stockholders' Deficit ), including expectations regarding the timing and manner of repurchases made under the 2025 Share Repurchase Plan;

• our expectations as to the payment of dividends;

• our current level of indebtedness, including our exposure to variable interest rate risk;

• potential elimination or limitation of tax incentives or tax losses and/or reduction of U.S.

federal net operating loss carryforwards (“NOLs”);

• other risk factors included under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, as updated by this Quarterly Report on Form 10-Q and periodically updated as necessary in our future quarterly reports on Form 10-Q and other filings that we make with the SEC.

You should not rely upon forward-looking statements as predictions of future events.

1 unchanged sentence

The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025.

Moreover, we operate in a very competitive and rapidly changing environment.

New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q.

We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

3 unchanged sentences

Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

tax legislation titled the One Big Beautiful Bill Act (“OBBBA”) was signed into law on July 4, 2025 which makes permanent with modifications many of the provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were scheduled to expire at the end of 2025.

The legislation primarily impacted the deferred tax liability and income tax payable related to the provisions for the elimination of the capitalization of onshore research and development costs (Section 174), the business interest deduction limitation (Section 163j) and the reintroduction of 100% bonus depreciation for qualified property (Section 168).

We are continuing to monitor additional provisions of the OBBBA that become effective through 2027 for potential future impact.

The financial impact of the OBBBA impacting the 2025 tax year is included in the Company's operating results for the three and nine months ended September 30, 2025.

Upland Software, Inc.

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Core Organic Growth Rate does not represent actual organic revenue generated by our business as it stood at the beginning of the respective period.

For the three-month period ended September 30, 2025, our Core Organic Growth Rate was 2.6%.

For the three-month period ended March 31, 2026, our Core Organic Growth Rate was 0.25%.

Core Organic Growth Rates are not necessarily indicative of either future results of operations or actual results that might have been achieved had certain Sunset Asset classifications not been made or had certain acquisitions or dispositions been consummated on the first day of the prior year period presented.

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The following table represents a reconciliation of total revenue, the most comparable GAAP measure, to core organic revenue for each of the periods indicated.

Three Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

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The following table represents a reconciliation of net loss from continuing operations, the most comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated.

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

2025 2024 2025 2024

Three Months Ended March 31,

(dollars in thousands)

3 unchanged sentences

Interest expense (income), net 4,459 2,443

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

Other expense (income), net 834 241

5 unchanged sentences

Loss on divestitures of businesses — 23,457

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

Adjusted EBITDA $ 12,670 $ 13,082

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The period-to-period comparisons of results of operations are not necessarily indicative of results for future periods.

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

2025 2024 2025 2024

Amount Percent of Revenue Amount Percent of Revenue Amount Percent of Revenue Amount Percent of Revenue

Three Months Ended March 31,

Amount Percent of Revenue Amount Percent of Revenue

(dollars in thousands, except share and per share data)

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Divestiture-related expenses 22 — % 1,745 2 %

Impairment of goodwill and other intangibles — — % — — % 2,469 1 % 87,227 42 %

Total operating expenses 31,707 65 % 46,659 73 %

3 unchanged sentences

Loss on divestitures of businesses — — % (23,457) (37) %

Loss on debt extinguishment (2,301) (5) % — — % (2,301) (1) % — — %

Other income (expense), net (834) (2) % (241) — %

Total other expense (5,293) (11) % (26,141) (41) %

Loss before provision for income taxes (1,381) (3) % (1,203) (1) % (41,774) (25) % (108,109) (53) %

Loss before benefit from (provision for) income taxes (244) (1) % (27,193) (42) %

Benefit from (provision for) income taxes (986) (2) % 1,345 1 %

Net loss (1,122) (2) % (1,733) (3) % (39,999) (24) % (109,302) (53) %

Loss from operations (1,230) (3) % (25,848) (41) %

Preferred stock dividends and accretion (1,503) (3) % (1,438) (2) %

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Stockholders' Deficit” .

(2) Includes general and administrative stock-based compensation of $2.1 million and $2.4 million for the three months September 30, 2025 and September 30, 2024, respectively, and $6.7 million and $8.6 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

General and administrative expense excluding stock-based compensation as a percentage of total revenues was 13% and 13% for the three months ended September 30, 2025 and September 30, 2024, respectively, and 14% and 14% for the nine months ended September 30, 2025 and September 30, 2024.

(3) Includes depreciation and amortization of $1.2 million and $2.3 million for the three months ended September 30, 2025 and September 30, 2024, respectively, and $4.2 million and $7.1 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Divestitures regarding product lines divested in the nine months ended September 30, 2025.

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

2025 2024 % Change 2025 2024 % Change

(2) Includes general and administrative stock-based compensation of $0.8 million and $2.0 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

General and administrative expense excluding stock-based compensation as a percentage of total revenues was 16% and 15% for the three months ended March 31, 2026 and March 31, 2025, respectively.

(3) Includes depreciation and amortization of $1.0 million and $1.7 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

Comparison of the Three Months Ended March 31, 2026 and 2025

Divestitures regarding product lines divested in the three months ended March 31, 2025.

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

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Total revenue $ 48,690 $ 63,655 (24) %

Percentage of total revenue:

Subscription and support 94% 96% 95% 95%

Perpetual license 2% 2% 2% 2%

Total product revenue 96% 98% 97% 97%

Professional services 4% 2% 3% 3%

Total revenue 100% 100% 100% 100%

For the Three Months Ended September 30, 2025

Total revenue was $50.5 million in the three months ended September 30, 2025, compared to $66.7 million in the three months ended September 30, 2024, a decrease of $16.2 million, or 24%.

This decrease is primarily due to the expected declines in revenue related to divested product lines of $16.8 million and revenue related to Sunset Assets of $0.5 million.

These decreases are offset by an increase in subscription and support revenue of $1.1 million related to core products.

For the Nine Months Ended September 30, 2025

Total revenue was $167.6 million in the nine months ended September 30, 2025, compared to $206.8 million in the nine months ended September 30, 2024, a decrease of $39.2 million, or 19%.

This decrease is primarily due to the expected declines in revenue related to divested product lines of $36.8 million and related to Sunset Assets of $2.7 million.

The remaining decrease results from declines in perpetual license revenue of $0.1 million and professional services revenue of $0.4 million, offset by an increase in subscription and support revenue of $0.8 million related to core products.

For the Three Months Ended March 31, 2026

Total revenue was $48.7 million in the three months ended March 31, 2026, compared to $63.7 million in the three months ended March 31, 2025, a decrease of $15.0 million, or 24%.

This decrease is primarily due to the expected declines in revenue related to divested product lines of $14.0 million and Sunset Assets of $0.5 million.

Declines in perpetual license revenue of $0.3 million and professional services revenue of $0.3 million in core products were partially offset by an increase in subscription and support revenue of $0.1 million related to core products.

Cost of Revenue

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

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Gross profit $ 36,756 $ 45,607 (19) %

Percentage of total revenue:

Subscription and support (1)

21% 28% 24% 28%

Professional services and other 2% 2% 2% 2%

Total cost of revenue 23% 30% 26% 30%

Gross profit 77% 70% 74% 70%

(1) Includes amortization and stock compensation expense as follows:

(1) Includes amortization and stock-based compensation expense as follows:

Amortization $ 993 $ 1,666

Stock Compensation $ 69 $ 199 $ 333 $ 584

For the Three Months Ended September 30, 2025

Cost of subscription and support revenue was $10.8 million in the three months ended September 30, 2025, compared to $18.4 million in the three months ended September 30, 2024, a decrease of $7.6 million, or 42%.

The decrease related to divested product lines was $7.0 million attributable to infrastructure costs, variable telecom carrier costs, personnel costs and non-cash amortization of divested intangibles.

The decrease related to Sunset assets was $0.2 million and the remaining decrease related to a reduction of $0.4 million in non-cash amortization of intangibles in our on-going product lines.

Cost of professional services and other revenue was $0.9 million in the three months ended September 30, 2025, compared to $1.3 million in the three months ended September 30, 2024, a decrease of $0.4 million, or 28%.

The decrease in cost of professional services and other revenue was comprised of a decrease in personnel-related expenses of $0.1 million in our divested product lines and $0.3 million in our on-going product lines.

For the Nine Months Ended September 30, 2025

Cost of subscription and support revenue was $40.1 million in the nine months ended September 30, 2025, compared to $57.5 million in the nine months ended September 30, 2024, a decrease of $17.4 million, or 30%.

Stock-based compensation $ 86 $ 121

For the Three Months Ended March 31, 2026

Cost of subscription and support revenue was $11.1 million in the three months ended March 31, 2026, compared to $17.0 million in the three months ended March 31, 2025, a decrease of $5.9 million, or 34%.

The decrease related to divested product lines was $5.7 million attributable to infrastructure costs, variable telecom carrier costs, personnel costs and non-cash amortization of divested intangibles.

The decrease related to Sunset Assets was $0.8 million and the remaining decrease related to a reduction of $0.6 million in personnel-related expenses and $1.0 million in non-cash amortization of intangibles in our on-going product lines.

Cost of professional services and other revenue was $3.0 million in the nine months ended September 30, 2025, compared to $3.7 million in the nine months ended September 30, 2024, a decrease of $0.7 million, or 18%.

The decrease in cost of professional services and other revenue was comprised of a decrease in personnel-related expenses of $0.3 million in our divested product lines and $0.4 million in our on-going product lines.

The decrease related to Sunset assets was $0.2 million, primarily attributable to personnel-related costs.

A decrease of $0.3 million in non-cash amortization of intangibles in our on-going product lines was offset by a $0.3 million increase in infrastructure costs.

Cost of professional services and other revenue was $0.8 million in the three months ended March 31, 2026, compared to $1.1 million in the three months ended March 31, 2025, a decrease of $0.3 million, or 25%.

The decrease in cost of professional services and other revenue was comprised of a decrease in personnel-related expenses of $0.1 million in our divested product lines and $0.2 million in our on-going product lines due to lower professional services revenue in our core products.

Operating Expenses

Sales and Marketing Expense

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

1 unchanged sentence

$ 9,472 $ 13,756 (31) %

Percentage of total revenue 19% 24% 20% 24%

(1) Includes stock compensation expense as follows:

Stock Compensation $ 80 $ 398 $ 384 $ 1,156

For the Three Months Ended September 30, 2025

Sales and marketing expense was $9.7 million in the three months ended September 30, 2025, compared to $16.3 million in the three months ended September 30, 2024, a decrease of $6.6 million, or 41%.

The decrease related to divested product lines was $3.9 million comprised of $3.5 million in personnel-related costs and $0.4 million in marketing spend.

The remaining decrease was related to decreases of $0.1 million in costs related to our Sunset Assets, and $2.6 million related to declines in personnel-related costs and marketing spend in our on-going product lines.

For the Nine Months Ended September 30, 2025

Sales and marketing expense was $34.2 million in the nine months ended September 30, 2025, compared to $50.1 million in the nine months ended September 30, 2024, a decrease of $15.9 million, or 32%.

The decrease related to divested product lines was $9.2 million comprised of $8.1 million in personnel-related costs and $1.1 million in marketing spend and other sales costs.

The remaining decrease was related to decreases of $0.2 million in costs related to our Sunset Assets, and $5.8 million in personnel-related costs and $0.7 million in marketing and other spend in our on-going product lines.

(1) Includes stock-based compensation expense as follows:

Stock-based compensation $ 30 $ 252

For the Three Months Ended March 31, 2026

Sales and marketing expense was $9.5 million in the three months ended March 31, 2026, compared to $13.8 million in the three months ended March 31, 2025, a decrease of $4.3 million, or 31%.

The decrease related to divested product lines was $2.9 million in personnel-related costs.

The remaining decrease was due to declines in personnel-related costs of $0.1 million related to our Sunset Assets, and declines in personnel-related costs of $1.3 million related to our core product lines.

Research and Development Expense

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

1 unchanged sentence

$ 8,044 $ 11,542 (30) %

Percentage of total revenue 16% 17% 17% 17%

(1) Includes stock compensation expense as follows:

Stock Compensation $ 89 $ 470 $ 697 $ 1,714

For the Three Months Ended September 30, 2025

Research and development expense was $7.9 million in the three months ended September 30, 2025, compared to $11.4 million in the three months ended September 30, 2024, a decrease of $3.5 million, or 31.1%.

The decrease in research and development expense is primarily attributable to a $2.4 million decrease in personnel-related costs in our divested product lines and a $1.1 million decrease in personnel-related costs in our remaining product lines.

These decreases reflect the termination of our out-sourced research and development contract and the continued use of our efficient India Center of Excellence.

For the Nine Months Ended September 30, 2025

Research and development expense was $29.2 million in the nine months ended September 30, 2025, compared to $36.1 million in the nine months ended September 30, 2024 a decrease of $6.9 million, or 19.1%.

The decrease in research and development expense is primarily attributable to a $4.8 million decrease in personnel-related costs in our divested product lines, a $0.3 million decrease in personnel-related costs in our Sunset Assets and a $1.8 million decrease in personnel-related costs in our remaining product lines.

These decreases reflect the termination of our out-sourced research and development contract and the continued use of our efficient India Center of Excellence.

(1) Includes stock-based compensation expense as follows:

Stock-based compensation $ 83 $ 290

For the Three Months Ended March 31, 2026

Research and development expense was $8.0 million in the three months ended March 31, 2026, compared to $11.5 million in the three months ended March 31, 2025, a decrease of $3.5 million, or 30%.

The decrease in research and development expense is primarily attributable to a $2.1 million decrease in personnel-related costs in our divested product lines and a $1.4 million decrease in personnel-related and contractor costs in our remaining product lines.

The decrease in research and development expense in our core product lines reflects the 2025 termination of our out-sourced research and development contract and the continued use of our India Center of Excellence.

General and Administrative Expense

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

1 unchanged sentence

$ 8,538 $ 11,621 (27) %

Percentage of total revenue 17% 17% 18% 18%

(1) Includes stock compensation expense as follows:

Stock compensation $ 2,085 $ 2,356 $ 6,658 $ 8,624

For the Three Months Ended September 30, 2025

General and administrative expense was $8.8 million in the three months ended September 30, 2025, compared to $11.1 million in the three months ended September 30, 2024, a decrease of $2.3 million, or 20%.

This decrease is primarily due to a decrease of $1.2 million in personnel-related costs related to our on-going product lines including a decrease of $0.3 million in non-cash stock compensation expense.

Other decreases related to core product lines were decreased office lease expense of $0.4 million and decreased professional fees of $0.3 million.

The decrease related to our divested product lines was $0.4 million inclusive of the effects of the TSA agreements related to divestitures which ended in July 2025.

For the Nine Months Ended September 30, 2025

General and administrative expense was $30.6 million in the nine months ended September 30, 2025, compared to $38.2 million in the nine months ended September 30, 2024, a decrease of $7.5 million, or 20%.

This decrease is due to decreases of $4.9 million in personnel-related costs, $0.4 million in office lease expense and $1.0 million million in professional fees related to our on-going product lines and a $1.2 million decrease related to our divested product lines inclusive of the effects of the TSA agreements related to divestitures which ended in July 2025.

(1) Includes stock-based compensation expense as follows:

Stock-based compensation $ 762 $ 2,012

For the Three Months Ended March 31, 2026

General and administrative expense was $8.5 million in the three months ended March 31, 2026, compared to $11.6 million in the three months ended March 31, 2025, a decrease of $3.1 million, or 27%.

This decrease is primarily due to a decrease of $2.5 million in personnel-related costs related to our on-going product lines due to decreased headcount including a decrease of $1.2 million in non-cash stock-based compensation expense.

Software costs related to core product lines declined $0.2 million due to cost savings and professional fees declined $0.1 million.

The decrease related to our divested product lines was $0.3 million.

Depreciation and Amortization Expense

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

3 unchanged sentences

Total depreciation and amortization $ 5,631 $ 7,995 (30) %

Percentage of total revenue:

Depreciation 1% —% 1% 1%

Amortization 12% 17% 12% 16%

Total depreciation and amortization 13% 17% 13% 17%

For the Three Months Ended September 30, 2025

Depreciation and amortization expense was $6.4 million in the three months ended September 30, 2025, compared to $11.5 million in the three months ended September 30, 2024, a decrease of $5.1 million, or 45%.

All of the decrease resulted from the decline in amortization from intangible assets associated with the divested product lines.

For the Nine Months Ended September 30, 2025

Depreciation and amortization expense was $21.2 million in the nine months ended September 30, 2025, compared to $34.3 million in the nine months ended September 30, 2024, a decrease of $13.1 million, or 38%.

$12.9 million of the decrease resulted from the decline in amortization from intangible assets associated with the divested product lines, $0.1 million from Sunset assets, and $0.1 million related to intangible assets related to our ongoing product lines becoming fully amortized.

For the Three Months Ended March 31, 2026

Depreciation and amortization expense was $5.6 million in the three months ended March 31, 2026, compared to $8.0 million in the three months ended March 31, 2025, a decrease of $2.4 million, or 30%.

$0.7 million of the decrease resulted from the decline in amortization from intangible assets associated with Sunset Assets and $1.7 million of the decrease resulted from the decline in amortization from intangible assets associated with our divested product lines.

Divestiture-related Expenses

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

Divestiture-related expenses $ 22 $ 1,745 (100) %

Percentage of total revenue 1% —% 7% 1%

For the Three Months Ended September 30, 2025

Divestiture-related expenses were $0.8 million in the three months ended September 30, 2025, compared to nil in the three months ended September 30, 2024.

In conjunction with the divestitures completed in 2025, we incurred an additional $0.2 million in professional fees, accrued $0.3 million in expected data center fees and recorded an additional cost of $0.3 million related to the cancellation of a legacy vendor contract for out-sourced research and development.

No divestiture-related expenses were incurred in the three months ended September 30, 2024.

For the Nine Months Ended September 30, 2025

Divestiture-related expenses were $9.4 million in the nine months ended September 30, 2025, compared to nil in the nine months ended September 30, 2024.

The divestiture-related expenses incurred in the nine months ended September 30, 2025 consisted of $2.6 million in professional services fees related to the divestitures completed in the nine months ended September 30, 2025.

We also recorded a one-time termination fee and other cancellation costs of $5.5 million related to a legacy vendor contract for out-sourced research and development.

Additional costs included severance of $0.8 million and $0.5 million of license and data center fees.

No divestiture-related expenses were incurred in the nine months ended September 30, 2024.

Impairment of goodwill and other intangibles

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

2025 2024 % Change 2025 2024 % Change

(dollars in thousands)

Impairment of goodwill and other intangibles $ — $ — N/A $ 2,469 $ 87,227 (97) %

We periodically review the estimated useful lives of our 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 nine months ended September 30, 2025, we identified a triggering event related to certain intangible assets related to Sunset Assets and performed a valuation of certain long-lived assets in accordance with ASC 360 Impairment and Disposal of Long-Lived Assets .

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

As a result of the valuation, we recorded $2.5 million of impairment expense related to certain Sunset intangible assets.

Goodwill impairment is recognized on a non-recurring basis when the carrying value (or GAAP basis book value) of our Company (which is our only reporting unit) exceeds the estimated fair value of our Company as determined by reference to a number of factors and assumptions, including the trends in the stock price of our Common Stock.

We assess goodwill for impairment annually on October 1st, or more frequently when an event occurs which could cause the carrying value of our Company to exceed the estimated fair value of our Company.

As a result of declines in our stock price during the three months ended March 31, 2024, we performed a goodwill impairment evaluation which resulted in a goodwill impairment of $87.2 million in the nine months ended September 30, 2024.

We will continue to evaluate goodwill for impairment in 2025 and future impairments of goodwill could occur if we experience significant stock price declines.

For the Three Months Ended March 31, 2026

Divestiture-related expenses were nominal in the three months ended March 31, 2026, compared to $1.7 million in the three months ended March 31, 2025.

In conjunction with the divestitures completed in the first quarter of 2025, we incurred $1.7 million in legal, accounting and other professional fees.

Limited divestiture-related expenses were incurred in the three months ended March 31, 2026 as final expenses were incurred related to the 2025 divestitures and no divestitures were executed in 2026.

Other Expense

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

2 unchanged sentences

Loss on divestitures of businesses — (23,457) (100) %

Loss on debt extinguishment (2,301) — 100 % (2,301) — 100 %

Other income (expense), net (834) (241) 246 %

Total other expense $ (5,293) $ (26,141) (80) %

Percentage of total revenue:

Interest expense, net (8)% 4% (6)% (4)%

Loss on divestitures of businesses (1)% —% (15)% —%

Loss on debt extinguishment (5)% —% (1)% —%

Other income (expense), net —% —% (16)% —%

Total other expense (14)% 4% (23)% (4)%

For the Three Months Ended September 30, 2025

Interest expense, net of interest income, was $4.2 million of net interest expense in the three months ended September 30, 2025 compared to $2.3 million of net interest income in the three months ended September 30, 2024, reflecting additional expense of $6.5 million.

This was primarily due to the effects of our interest rate derivatives which reduced interest expense, net by $1.9 million in the three months ended September 30, 2025 and reduced interest expense, net by $10.6 million in the three months ended September 30, 2024, an increase in net interest expense of $8.7 million.

In addition, interest income for the three months ended September 30, 2025 declined $1.3 million from interest income in the three months ended September 30, 2024 due to lower cash and cash equivalents.

These changes were offset by a decrease in cash interest expense of $3.2 million due to the reduction of our outstanding debt balance which lowered cash interest expense.

The remaining decrease in expense related to the amortization of deferred financing costs.

Loss on divestitures of businesses was $0.5 million in the three months ended September 30, 2025 compared to nil in the three months ended September 30, 2024.

In the three months ended September 30, 2025, we finalized the divestitures of certain product lines in order to focus on our higher margin and higher growth potential product lines.

No divestitures were closed in the three months ended September 30, 2024.

Loss on debt extinguishment was $2.3 million in the three months ended September 30, 2025 compared to nil in the three months ended September 30, 2024.

In the three months ended September 30, 2025, the non-cash loss on debt extinguishment was the result of the replacement of our previous credit facility with our new credit facility.

As a result of replacing our previous credit facility, we were required to expense the $2.3 million of remaining unamortized debt discount and debt costs on our previous credit facility.

No debt was extinguished in the three months ended September 30, 2024.

Other income (expense), net recognized during the three months ended September 30, 2025 and 2024 was related primarily to foreign currency exchange fluctuations.

For the Nine Months Ended September 30, 2025

Interest expense, net of interest income was $10.8 million in the nine months ended September 30, 2025, compared to $7.7 million in the nine months ended September 30, 2024, an increase in net interest expense of $3.1 million, or 40%.

The increase in interest expense is primarily attributable to the effects of our interest rate derivatives which reduced interest expense, net by $6.8 million in the nine months ended September 30, 2025 and decreased interest expense by $18.4 million in the nine months ended September 30, 2024, an increase in net interest expense of $11.6 million.

In addition, interest income declined by $6.2 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 due to lower cash and cash equivalents.

These changes were offset by a decline of $14.3 million in cash interest expense due to less outstanding debt as compared to the prior year.

Loss on divestitures of businesses was $24.4 million for the nine months ended September 30, 2025 as compared to nil in the nine months ended September 30, 2024.

During the nine months ended September 30, 2025, we divested multiple product lines in order to focus on our higher margin and higher growth potential product lines.

No such divestitures occurred in the nine months ended September 30, 2024.

Loss on debt extinguishment was $2.3 million in the nine months ended September 30, 2025 compared to nil in the nine months ended September 30, 2024.

In the nine months ended September 30, 2025, the non-cash loss on debt extinguishment was the result of the replacement of our previous credit facility with our new credit facility.

As a result of paying down our previous credit facility, we were required to expense $2.3 million of remaining unamortized debt discount on our previous term loan.

No debt was extinguished in the nine months ended September 30, 2024.

Other expense, net was $1.6 million in the nine months ended September 30, 2025, compared to other expense, net of $0.1 million in the nine months ended September 30, 2024.

Other income (expense), net recognized in the nine months ended September 30, 2025 and September 30, 2024 related primarily to foreign currency exchange fluctuations.

For the Three Months Ended March 31, 2026

Interest expense, net was $4.5 million in the three months ended March 31, 2026 compared to $2.4 million in the three months ended March 31, 2025, an increase of $2.1 million in net interest expense.

This was primarily due to the effects of our interest rate derivatives which reduced interest expense by $1.2 million in the three months ended March 31, 2026 and by $3.4 million in the three months ended March 31, 2025, resulting in a $2.2 million year over year increase in interest expense.

In addition, interest income for the three months ended March 31, 2026 declined $0.1 million from interest income in the three months ended March 31, 2025 due to lower cash and cash equivalents.

These increases were offset by a $0.1 million decline in interest expense, driven by the decrease in our outstanding debt balance, which more than offset the impact of higher interest rates, as well as a $0.2 million reduction related to the amortization of deferred financing costs.

No divestitures were closed in the three months ended March 31, 2026.

In the three months ended March 31, 2025, we finalized the divestitures of certain product lines in order to focus on our higher margin and higher growth potential product lines.

Other income (expense), net recognized during the three months ended March 31, 2026 and 2025 was related primarily to foreign currency exchange fluctuations.

Benefit from Income Taxes

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

2025 2024 % Change 2025 2024 % Change

Three Months Ended March 31,

2026 2025 % Change

(dollars in thousands)

Benefit from (provision for) income taxes $ (986) $ 1,345 (173) %

Percentage of total revenue 1% (2)% 1% —%

For the Three Months Ended September 30, 2025

The benefit from income taxes was $0.3 million in the three months ended September 30, 2025, compared to a provision for income taxes of $0.5 million in the three months ended September 30, 2024, resulting in an increase in benefit from income taxes of $0.8 million.

The benefit from income taxes for the three months ended September 30, 2025 relates primarily to the tax benefit due to divestiture of businesses in the third quarter and the impact of U.S.

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

For the Three Months Ended March 31, 2026

The provision for income taxes was $1.0 million in the three months ended March 31, 2026, compared to a benefit from income taxes of $1.3 million in the three months ended March 31, 2025, resulting in an additional expense from income taxes of $2.3 million.

The provision for income taxes for the three months ended March 31, 2026 relates primarily to income tax from non-U.S.

The benefit from income taxes in the three months ended March 31, 2025 relates primarily to the deferred tax benefit from the business divestitures in the first quarter of 2025.

This tax benefit is partially offset by the income tax from non-U.S.

For the Nine Months Ended September 30, 2025

The benefit from income taxes was $1.8 million in the nine months ended September 30, 2025, compared to a provision for income taxes of $1.2 million in the nine months ended September 30, 2024, an increase of benefit of $3.0 million.

This increase was primarily due to the deferred tax benefit from the business divestitures in the nine months ended September 30, 2025 and the impact of U.S.

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

Liquidity and Capital Resources

We have financed our operations primarily through cash generated from operating activities, the raising of capital including sales of our Common Stock or our convertible preferred stock, and borrowings under credit facilities.

As of September 30, 2025, we had $23.4 million of cash, cash equivalents and restricted cash and $240.0 million of borrowings outstanding under our Credit Agreement.

As of March 31, 2026, we had $30.4 million of cash, cash equivalents and restricted cash and $233.7 million of debt outstanding under our Credit Agreement.

As of December 31, 2025, we had $30.0 million of cash, cash equivalents and restricted cash and $238.5 million of borrowings outstanding under our previous senior secured credit facility.

The $33.7 million decrease in cash, cash equivalents and restricted cash from December 31, 2024 to September 30, 2025 was primarily due to $293.7 million in debt repayments made in the nine months ended September 30, 2025, netted with the proceeds of our new Credit Facility of $234.6 million.

Other uses of cash included $1.3 million in purchases of leasehold improvements and equipment and $1.0 million taxes paid related to net settlement of shares which were offset by $9.1 million cash proceeds from divestitures of businesses, $18.5 million in cash inflows from operations and $1.5 million positive effect of exchange rates during the nine months ended September 30, 2025.

Our cash and cash equivalents held by our foreign subsidiaries was $14.3 million as of September 30, 2025 and $32.4 million as of December 31, 2024.

Our intent is to permanently reinvest these funds outside the U.S.

and our current plans do not demonstrate a need to repatriate them to fund our domestic operations.

The $0.4 million increase in cash, cash equivalents and restricted cash from December 31, 2025 to March 31, 2026 was primarily due to $5.6 million in cash inflows from operations netted with $4.8 million in debt repayments made in the three months ended March 31, 2026.

Other uses of cash included $0.1 million in purchases of leasehold improvements and equipment and $0.2 million negative effect of exchange rates during the three months ended March 31, 2026.

Our cash and cash equivalents held by our foreign subsidiaries was $13.2 million as of March 31, 2026 and $10.0 million as of December 31, 2025.

Our intent is to either permanently reinvest these funds outside the U.S.

or use these funds to repay certain long-term intercompany loans.

We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.

We believe our available cash and cash equivalents, together with our positive cash flows from operations and the liquidity provided by our $30 million revolving credit facility will be sufficient to meet our anticipated cash needs.

Credit Facility

On July 25, 2025, we entered into a Credit Agreement with (i) a new $240.0 million, six-year term loan and (ii) a $30.0 million revolving credit facility maturing in July 2031.

We used the proceeds of the term loan, together with cash on hand, including proceeds from the sale of our interest rate swaps, to redeem all of our prior existing Term Loans.

The proceeds of loans under the revolving

credit facility will be used for working capital and other general corporate purposes.

No amounts have been drawn on the revolving credit facility as of September 30, 2025.

The following table summarizes our cash flows for the periods indicated:

Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands)

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Net cash provided by operating activities $ 5,603 $ 8,305

Net cash provided by (used in) investing activities 7,965 (562)

Net cash provided by investing activities 96 3,789

Net cash used in financing activities (5,109) (34,723)

4 unchanged sentences

Cash Flows from Operating Activities

Cash provided by operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the anticipated growth of our business.

Cash provided by operating activities is significantly influenced by the amount of cash we invest in personnel and infrastructure to support the growth of our business.

Our working capital consists primarily of cash, receivables from customers, prepaid assets, unbilled professional services, deferred commissions, accounts payable, accrued compensation and other accrued expenses, lease liabilities, and deferred revenues.

The volume of professional services rendered, the volume and timing of customer bookings and contract renewals, and the related timing of collections on those bookings and renewals, as well as the timing of spending commitments and payments of our accounts payable, accrued expenses, accrued payroll and related benefits, all affect these account balances.

Cash provided by operating activities was $18.5 million for the nine months ended September 30, 2025 compared to cash provided by operating activities of $14.9 million for the nine months ended September 30, 2024, an increase of approximately $3.6 million.

This increase was primarily due to non-recurring $6.6 million of cash gains on the sales of our interest rate swaps in the nine months ended September 30, 2025.

This cash gain was offset by payment of non-recurring divestiture-related expenses of $9.4 million and changes in our working capital for the nine months ended September 30, 2025 related to collections on accounts receivable, increases in prepaid expenses, increases in other assets, payments of current liabilities and changes in deferred revenue.

Cash provided by operating activities was $5.6 million for the three months ended March 31, 2026 compared to cash provided by operating activities of $8.3 million for the three months ended March 31, 2025, a decrease of approximately $2.7 million.

This decrease was primarily due to a reduction in accrued compensation and other accrued expenses combined with reduced accounts receivable due to the divestitures completed in 2025.

A substantial source of cash is invoicing for subscriptions and support fees in advance, which is recorded as deferred revenue, and is included on our condensed consolidated balance sheets as a liability.

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Other activities, such as divestitures of businesses including the collections on note receivable from divested product lines, and purchases of other fixed assets, may affect our cash flows from investing activities in such periods as these transactions occur.

Cash provided by investing activities was $8.0 million for the nine months ended September 30, 2025 compared to cash used by investing activities of $0.6 million for the nine months ended September 30, 2024, an increase of $8.5 million.

During the nine months ended September 30, 2025, the Company divested of certain products and received cash proceeds of $9.1 million.

Other cash proceeds consisted $0.2 million in collections on the note receivable related to divestitures.

Cash used in investing activities consisted of purchases of leasehold improvements and equipment of $1.3 million for the nine months ended September 30, 2025 compared to $0.6 million of purchases of property and equipment for the nine months ended September 30, 2024.

Cash provided by investing activities was $0.1 million for the three months ended March 31, 2026 compared to cash provided by investing activities of $3.8 million for the three months ended March 31, 2025, a decrease of $3.7 million.

Cash activity consisted of $0.2 million in collections on the note receivable related to divestitures and $0.1 million in purchases of leasehold improvements and equipment for the three months ended March 31, 2026 compared to cash proceeds from divestitures of businesses of $4.2 million and $0.4 million in purchases of leasehold improvements and equipment for the three months ended March 31, 2025.

Cash Flows from Financing Activities

Historically, our primary financing activities have consisted of capital raises, proceeds from debt obligations, repayments and servicing of our debt obligations, share repurchases and share based employee payroll tax payment activity.

Cash used in financing activities was $61.6 million for the nine months ended September 30, 2025 compared to $192.8 million for the nine months ended September 30, 2024, an decrease of $131.2 million of cash used due to $53.7 million in payments on our previous senior secured credit facility in the nine months ended September 30, 2025 compared to $181.1 million in payments made in the nine months ended September 30, 2024.

Common Stock repurchases totalled $0.1 million for the nine months ended September 30, 2025 as

compared to $11.0 million for the nine months ended September 30, 2024.

Cash paid for lender fees and debt issuance costs was $6.8 million for the nine months ended September 30, 2025 as compared to $0.1 million for the nine months ended September 30, 2024.

Cash used in financing activities was $5.1 million for the three months ended March 31, 2026 compared to $34.7 million for the three months ended March 31, 2025, a decrease of $29.6 million of cash used primarily due to $4.8 million in payments on our outstanding debt in the three months ended March 31, 2026 as compared to $34.2 million in payments made in the three months ended March 31, 2025.

Critical Accounting Policies and the Use of Estimates

4 unchanged sentences

To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

The following critical accounting policies reflect significant judgments and estimates used in the preparation of our condensed consolidated financial statements:

• income taxes;

• goodwill and other intangibles.

We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of November 6, 2025, the date of issuance of this Quarterly Report on Form 10-Q.

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

We believe that the accounting policy discussed below is critical to understanding our historical and future performance, as this policy relates to a more significant area involving management’s judgments and estimates.

Goodwill Impairment

We assess goodwill for impairment annually on October 1st, or more frequently when an event occurs which could cause the carrying value of the Company to exceed the estimated fair value of the Company.

As we operate as one reporting unit, the goodwill impairment evaluation is performed at the consolidated entity level by comparing the estimated fair value of the Company to its carrying value.

We first assess qualitative factors to determine whether it is more likely than not that the fair value of our single reporting unit is less than its carrying value.

Qualitative factors considered include:

industry and market considerations;

macroeconomic conditions;

and other relevant events and factors.

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 if the fair value of our reporting unit is less than its carrying value.

Performing a quantitative goodwill impairment test includes the determination of the fair value of a reporting unit and involves significant estimates and assumptions.

These estimates and assumptions include, among others, revenue growth rates and operating margins used to calculate projected future cash flows, weighted average cost of capital, and future economic and market conditions.

See “ Note 4.

Goodwill and Other Intangible Assets for more information.

We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of May 1, 2026, the date of issuance of this Quarterly Report on Form 10-Q.

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.

Other Key Accounting Policies

Our unaudited interim financial statements and other financial information for the three and nine months ended September 30, 2025, as presented herein and in “ Item 1.

Our unaudited interim financial statements and other financial information for the three months ended March 31, 2026, as presented herein and in “ Item 1.

Financial Statements ” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”).

5 unchanged sentences

Basis of Presentation and Summary of Significant Accounting Policies—Recent Accounting Pronouncements” to our condensed consolidated financial statements.

Quantitative and Qualitative Disclosures About Market Risk

As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this Item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis