UPWORK, INC 10-Q

Item 1. Financial Statements. UPWORK INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) March 31, 2026 December 31, 2025 ASSETS Current assets Cash and cash equivalents $ 328,400 $ 294,356 Marketable securities 251,334 378,425 Funds held in escrow, including funds in transit 203,685 180,752 Trade and client receivables – net of allowance of $ 6,329 and $ 5,919 as of March 31, 2026 and December 31, 2025, respectively 75,911 76,236 Prepaid expenses and other current assets 23,971 21,064 Total current assets 883,301 950,833 Property and equipment, net 49,278 44,421 Goodwill 149,192 149,192 Intangible assets, net 34,231 37,161 Operating lease asset 12,656 5,011 Deferred tax asset 111,402 111,495 Other assets, noncurrent 1,892 1,467 Total assets $ 1,241,952 $ 1,299,580 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities Accounts payable $ 11,092 $ 7,858 Escrow funds payable 203,685 180,752 Debt, current 360,231 359,770 Accrued expenses and other current liabilities 63,994 94,023 Deferred revenue 8,199 7,765 Total current liabilities 647,201 650,168 Operating lease liability, noncurrent 15,197 9,707 Other liabilities, noncurrent 9,927 9,390 Total liabilities 672,325 669,265 Commitments and contingencies (Note 8) Stockholders’ equity Common stock, $ 0.0001 par value; 490,000,000 shares authorized as of March 31, 2026 and December 31, 2025; 123,574,974 and 130,545,236 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively 12 13 Additional paid-in capital 501,066 592,599 Accumulated and other comprehensive income 139 754 Retained earnings 68,410 36,949 Total stockholders’ equity 569,627 630,315 Total liabilities and stockholders’ equity $ 1,241,952 $ 1,299,580 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) Three Months Ended March 31, (In thousands, except per share data) 2026 2025 Revenue $ 195,483 $ 192,706 Cost of revenue 44,641 41,806 Gross profit 150,842 150,900 Operating expenses Research and development 43,307 46,152 Sales and marketing 37,437 35,751 General and administrative 35,158 28,048 Provision for transaction losses 2,222 2,259 Total operating expenses 118,124 112,210 Income from operations 32,718 38,690 Other income, net 4,992 6,317 Income before income taxes 37,710 45,007 Income tax provision ( 6,249 ) ( 7,277 ) Net income $ 31,461 $ 37,730 Net income per share: Basic $ 0.25 $ 0.28 Diluted $ 0.24 $ 0.27 Weighted-average shares used to compute net income per share: Basic 128,116 135,208 Diluted 135,656 142,777 Other comprehensive income, net of tax: Net unrealized holding gain on marketable securities, net $ ( 615 ) $ 284 Total comprehensive income $ 30,846 $ 38,014 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited) (In thousands, except share amounts) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income Retained Earnings Total Stockholders’ Equity Three Months Ended March 31, 2026 Shares Amount Balances as of December 31, 2025 130,545,236 $ 13 $ 592,599 $ 754 $ 36,949 $ 630,315 Issuance of common stock upon exercise of stock options and common stock warrants 20,500 — 83 — — 83 Stock-based compensation expense — — 17,002 — — 17,002 Issuance of common stock for settlement of RSUs 1,130,978 — — — — — Tides Foundation common stock warrant expense — — 188 — — 188 Repurchase of common stock, including excise tax ( 8,121,740 ) ( 1 ) ( 108,806 ) — — ( 108,807 ) Unrealized gain on marketable securities — — — ( 615 ) — ( 615 ) Net income — — — — 31,461 31,461 Balances as of March 31, 2026 123,574,974 $ 12 $ 501,066 $ 139 $ 68,410 $ 569,627 (In thousands, except share amounts) Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (loss) Accumulated Deficit Total Stockholders’ Equity Three Months Ended March 31, 2025 Shares Amount Balances as of December 31, 2024 135,348,453 $ 14 $ 653,575 $ 264 $ ( 78,476 ) $ 575,377 Issuance of common stock upon exercise of stock options 163,078 — 652 — — 652 Stock-based compensation expense — — 13,337 — — 13,337 Issuance of common stock for settlement of RSUs 869,141 — — — — — Tides Foundation common stock warrant expense — — 188 — — 188 Repurchase of common stock, including excise tax ( 2,331,772 ) ( 1 ) ( 33,225 ) — — ( 33,226 ) Unrealized gain on marketable securities — — — 284 — 284 Net income — — — — 37,730 37,730 Balances as of March 31, 2025 134,048,900 $ 13 $ 634,527 $ 548 $ ( 40,746 ) $ 594,342 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 UPWORK INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, (In thousands) 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 31,461 $ 37,730 Adjustments to reconcile net income to net cash provided by operating activities: Provision for transaction losses 1,946 2,066 Depreciation and amortization 9,099 4,861 Amortization of debt issuance costs 460 460 Accretion of discount on purchases of marketable securities, net ( 1,850 ) ( 1,943 ) Amortization of operating lease asset 397 202 Tides Foundation common stock warrant expense 188 188 Stock-based compensation expense 15,421 12,272 Deferred taxes 93 — Changes in operating assets and liabilities: Trade and client receivables ( 784 ) ( 3,535 ) Prepaid expenses and other assets ( 3,480 ) ( 3,298 ) Operating lease liability ( 25 ) 830 Accounts payable 3,124 ( 1,987 ) Accrued expenses and other liabilities ( 33,466 ) ( 11,108 ) Deferred revenue 435 227 Net cash provided by operating activities 23,019 36,965 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities — ( 50,708 ) Proceeds from maturities of marketable securities 128,326 51,380 Proceeds from sale of marketable securities — 280 Purchases of property and equipment ( 1,723 ) ( 2,472 ) Internal-use software and platform development costs ( 8,391 ) ( 3,703 ) Net cash provided by (used in) investing activities 118,212 ( 5,223 ) CASH FLOWS FROM FINANCING ACTIVITIES: Change in escrow funds payable, net 23,554 19,258 Proceeds from exercises of stock options and common stock warrants 83 652 Repurchase of common stock ( 107,891 ) ( 33,054 ) Net cash used in financing activities ( 84,254 ) ( 13,144 ) NET CHANGE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH 56,977 18,598 Cash, cash equivalents, and restricted cash—beginning of period 478,908 505,593 Cash, cash equivalents, and restricted cash—end of period $ 535,885 $ 524,191 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for income taxes $ 500 $ 64 Cash paid for interest 559 451 SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES: Right-of-use asset recognized $ 8,042 $ — Property and equipment purchased but not yet paid 150 875 Internal-use software and platform development costs incurred but not yet paid 345 227 The accompanying notes are an integral part of these condensed consolidated financial statement s. 5 UPWORK INC. Notes to Condensed Consolidated Financial Statements (Unaudited) Note 1— Organization and Description of Business Upwork Inc., which is referred to as the Company or Upwork, through its complementary, wholly owned subsidiaries, connects businesses with global, AI-enabled talent across every on-demand work type, including freelance, agency, fractional, and payrolled. The Company’s portfolio of platforms and other workforce solutions includes the Upwork Marketplace, the world’s human and AI-powered work marketplace that connects businesses with on-demand access to highly skilled independent talent worldwide, and Lifted, the Company’s wholly owned subsidiary that provides a purpose-built solution for enterprise organizations to source, contract, manage, and pay talent across the full spectrum of contingent work. The Company’s customers consist of both talent and clients, where talent includes independent professionals and agencies of varying sizes that deliver services through the Upwork Marketplace, Lifted, or other Company workforce solutions. Clients range from small businesses and entrepreneurs to large enterprises that seek and engage with talent through these platforms and other workforce solutions. Upwork Inc. is incorporated in the state of Delaware and is headquartered in Palo Alto, California. Unless otherwise expressly stated or the context otherwise requires, the terms “Upwork” and the “Company” in these notes to the condensed consolidated financial statements refer to Upwork Inc. and its wholly owned subsidiaries. Note 2— Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States, which is referred to as U.S. GAAP, and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, which is referred to as the Annual Report, filed with the SEC on February 13, 2026. The condensed consolidated balance sheet as of December 31, 2025, included herein, was derived from the audited financial statements as of that date but does not include all disclosures including notes required by U.S. GAAP. The condensed consolidated financial statements include the accounts of Upwork and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements reflect all normal recurring adjustments necessary for a fair statement of the financial position, results of operations, changes in stockholders’ equity and cash flows for the interim periods, but do not purport to be indicative of the results of operations or financial condition to be anticipated for the full year ending December 31, 2026. Prior period presentation has been revised to conform to the current period presentation as of March 31, 2026. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods presented. Such estimates include, but are not limited to: valuation of acquired intangible assets; the useful lives of assets; assessment of the recoverability of long-lived assets; goodwill impairment; allowance for expected credit 6 losses; liabilities relating to transaction losses; stock-based compensation; and accounting for income taxes. Management bases its estimates on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The Company evaluates its estimates, assumptions, and judgments on an ongoing basis using historical experience and other factors and revises them when facts and circumstances dictate. The Company 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. 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. Summary of Significant Accounting Policies The significant accounting policies applied in the Company’s audited consolidated financial statements, as disclosed in the Annual Report, are applied consistently in these unaudited interim condensed consolidated financial statements. Recently Adopted Accounting Pronouncements In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which is referred to as ASU 2025-05. ASU 2025-05 provides an optional practical expedient to permit entities to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of short-term trade receivables and contract assets when developing reasonable and supportable forecasts for estimating expected credit losses. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025. The Company adopted ASU 2025-05. The Company has evaluated the impact of ASU 2025-05 and as a result its adoption did not have a material impact on the consolidated financial statements. The Company’s trade receivables are short-duration in nature and have historically experienced low credit losses, and its existing aging-based allowance methodology is substantially consistent with the practical expedient introduced by ASU 2025-05. Recent Accounting Pronouncements Not Yet Adopted With the exception of those discussed below, the Company has reviewed the accounting pronouncements issued prior to or during the three months ended March 31, 2026, and concluded they were either not applicable or not expected to have a material impact on the Company’s condensed consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which is referred to as ASU 2024-03. ASU 2024-03 requires public entities to disclose detailed information about specific types of expenses included within the expense captions presented on the face of the income statement. While ASU 2024-03 does not alter the presentation of expense captions on the face of the income statement, it introduces requirements for disaggregating certain expense captions into specified categories within the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that ASU 2024-03 will have on its consolidated financial statements and accompanying footnotes. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which is referred to as ASU 2025-06. ASU 2025-06 modernizes the accounting for internal-use software by removing all references to prescriptive and sequential software development stages. ASU 2025-06 requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, and for interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the timing of adoption and the potential impact of this new guidance on its consolidated financial statements. 7 Note 3— Revenue Disaggregation of Revenue Based on the information provided to and reviewed by the Chief Operating Decision Maker, who is referred to as the CODM, the nature, amount, timing, and uncertainty of revenue and cash flows and how they are affected by economic factors are most appropriately depicted by the type of service and primary geographical markets. Revenues recorded within these categories are earned from similar products and services for which the nature of associated fees and the related revenue recognition models are substantially similar. The Company disaggregates revenue by two types of services: Marketplace revenue and Enterprise revenue. The following table sets forth total revenue by type of service for the periods presented: Three Months Ended March 31, (In thousands) 2026 2025 Marketplace $ 170,705 $ 166,293 Enterprise 24,778 26,413 Total revenue $ 195,483 $ 192,706 The following table sets forth total revenue by geographic area based on the billing address of talent and clients for the periods presented: Three Months Ended March 31, (In thousands) 2026 2025 Talent United States $ 29,787 $ 27,339 Philippines 14,584 14,584 India 12,693 13,501 Pakistan (1) 13,211 10,650 Rest of world (1)(2) 42,881 41,721 Total talent 113,156 107,795 Clients United States 57,989 59,242 Rest of world (2) 24,338 25,669 Total clients 82,327 84,911 Total revenue $ 195,483 $ 192,706 (1) For the three months ended March 31, 2025, the Company revised the presentation of geographic revenue to separately present Pakistan to conform to the current period presentation. This change in presentation did not impact total talent revenue or total revenue for the periods presented. (2) During each of the three months ended March 31, 2026 and 2025, no single country included in the Rest of world category had revenue that exceeded 10% of total talent revenue, total clients revenue, or total revenue. Deferred Revenue and Remaining Performance Obligation Deferred revenue represents amounts billed in advance for services not yet rendered. Deferred revenue expected to be recognized within the next twelve months is classified as current deferred revenue. 8 The Company has applied the practical expedients and exemptions and does not disclose the value of remaining performance obligations for (i) contracts with an original expected length of one year or less; and (ii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct service that forms part of a single performance obligation under the series guidance. Contract Balances The following table provides information about the balances of the Company’s Trade and client receivables, net of allowance and contract liabilities included in deferred revenue and other liabilities, noncurrent as of the dates presented: (In thousands) March 31, 2026 December 31, 2025 Trade and client receivables, net of allowance $ 75,911 $ 76,236 Contract liabilities Deferred revenue, current 8,199 7,765 During the three months ended March 31, 2026, changes in the contract liabilities balances were primarily the result of normal business activity. Revenue recognized during the three months ended March 31, 2026 that was included in deferred revenue as of December 31, 2025 was $ 7.8 million. Revenue recognized during the three months ended March 31, 2025 that was included in deferred revenue as of December 31, 2024 was $ 7.2 million. Note 4— Fair Value Measurements The Company defines fair value as the exchange price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The authoritative guidance describes three levels of inputs that may be used to measure fair value: • Level I—Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets; • Level II—Observable inputs other than Level I prices, such as unadjusted quoted prices for similar assets or liabilities in active markets, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level III—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. These inputs are based on the Company’s own assumptions used to measure assets and liabilities at fair value and require significant management judgment or estimation. The categorization of a financial instrument within the fair value hierarchy is based upon the lowest level of input that is significant to its fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the assets or liabilities. The Company’s financial instruments that are carried at fair value consist of Level I and Level II assets as of March 31, 2026 and December 31, 2025. The following tables summarize the Company’s available-for-sale marketable securities’ amortized cost, gross unrealized gains, gross unrealized losses, and fair value 9 by significant investment category reported as cash equivalents or marketable securities as of March 31, 2026 and December 31, 2025: (In thousands) March 31, 2026 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash Equivalents Marketable Securities Level I Money market funds $ 176,418 $ — $ — $ 176,418 $ 176,418 $ — Treasury bills 113,260 — ( 26 ) 113,234 — 113,234 U.S. government securities 35,773 47 ( 30 ) 35,790 — 35,790 Total Level I 325,451 47 ( 56 ) 325,442 176,418 149,024 Level II Corporate bonds 101,155 221 ( 73 ) 101,303 — 101,303 Foreign government and agency securities 999 8 — 1,007 — 1,007 Total Level II 102,154 229 ( 73 ) 102,310 — 102,310 Total $ 427,605 $ 276 $ ( 129 ) $ 427,752 $ 176,418 $ 251,334 (In thousands) December 31, 2025 Amortized Cost Unrealized Gain Unrealized Loss Fair Value Cash Equivalents Marketable Securities Level I Money market funds $ 73,519 $ — $ — $ 73,519 $ 73,519 $ — Treasury bills 257,425 88 — 257,513 39,697 217,816 U.S. government securities 37,642 122 — 37,764 — 37,764 Total Level I 368,586 210 — 368,796 113,216 255,580 Level II Corporate bonds 117,532 561 ( 1 ) 118,092 — 118,092 Foreign government and agency securities 4,738 15 — 4,753 — 4,753 Total Level II 122,270 576 ( 1 ) 122,845 — 122,845 Total $ 490,856 $ 786 $ ( 1 ) $ 491,641 $ 113,216 $ 378,425 Additionally, the Company deposits funds held in escrow in interest-bearing and non-interest-bearing cash accounts. The interest earned on the interest-bearing accounts is included in Revenue in the Company’s condensed consolidated statement of operations and comprehensive income. As of March 31, 2026 and December 31, 2025, the fair value of the Company’s funds held on behalf of customers and held in interest-bearing cash accounts was measured using Level I inputs. The Company’s non-financial assets acquired pursuant to its acquisitions of Bubty B.V., which is referred to as Bubty, and Ascen Inc., which is referred to as Ascen, including intangible assets and goodwill, are measured at estimated fair value on a non-recurring basis. For additional information, refer to “Note 7—Business Combination.” The following table summarizes the remaining contractual maturities of our cash equivalents and marketable securities as of March 31, 2026: (In thousands) Amortized Cost Fair Value Due within one year $ 292,454 $ 292,425 Due after one year through five years 135,151 135,327 Total $ 427,605 $ 427,752 10 Unrealized Investment Losses For available-for-sale marketable debt securities with unrealized loss positions, the Company does not intend to sell these securities, nor does it anticipate that it will need to or be required to sell the securities. As of March 31, 2026 and December 31, 2025, the decline in fair value of these securities was attributable to changes in interest rates and not due to credit-related factors. As of March 31, 2026 and December 31, 2025, the Company considered any decreases in market value to be temporary in nature and did not consider any of the Company’s marketable securities to be other-than-temporarily impaired. The Company did not record any impairment charges with respect to its marketable securities during each of the three months ended March 31, 2026 and 2025. During the three months ended March 31, 2026 and 2025, interest income, net was $ 5.8 million and $ 7.1 million, respectively. Interest income, net is included in Other income, net in the Company’s condensed consolidated statement of operations and comprehensive income. Note 5— Balance Sheet Components Cash and Cash Equivalents, Restricted Cash, and Funds Held In Escrow, Including Funds In Transit The following table reconciles cash and cash equivalents, restricted cash, and funds held in escrow that are restricted as reported in the condensed consolidated balance sheets as of March 31, 2026 and December 31, 2025 to the total of the same amounts shown in the condensed consolidated statement of cash flows for the three months ended March 31, 2026: (In thousands) March 31, 2026 December 31, 2025 Cash and cash equivalents $ 328,400 $ 294,356 Restricted cash 3,800 3,800 Funds held in escrow, including funds in transit 203,685 180,752 Total cash, cash equivalents, and restricted cash as shown in the condensed consolidated statement of cash flows $ 535,885 $ 478,908 Property and Equipment, Net Property and equipment, net consisted of the following as of the dates presented: (In thousands) March 31, 2026 December 31, 2025 Internal-use software and platform development $ 92,674 $ 83,461 Leasehold improvements 8,609 7,755 Computer equipment and software 8,312 7,630 Office furniture and fixtures 1,118 1,076 Total property and equipment 110,713 99,922 Less: accumulated depreciation ( 61,435 ) ( 55,501 ) Property and equipment, net $ 49,278 $ 44,421 For the three months ended March 31, 2026 and 2025, depreciation expense related to property and equipment, excluding internal-use software and platform development, was $ 0.7 million and $ 0.4 million, respectively. For the three months ended March 31, 2026 and 2025, the Company capitalized $ 9.2 million and $ 4.6 million of internal-use software and platform development costs, respectively. For the three months ended March 31, 2026 and 2025, amortization expense related to the capitalized internal-use software and platform development costs was $ 5.5 million and $ 2.6 million, respectively. 11 Intangible Assets, Net The carrying value of intangible assets was as follows as of the dates presented: March 31, 2026 December 31, 2025 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 34,600 $ 8,300 $ 26,300 $ 34,600 $ 6,203 $ 28,397 Assembled workforce 3,188 3,188 — 3,188 3,188 — Customer relationships 11,000 3,069 7,931 11,000 2,236 8,764 Total $ 48,788 $ 14,557 $ 34,231 $ 48,788 $ 11,627 $ 37,161 Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following as of the dates presented: (In thousands) March 31, 2026 December 31, 2025 Accrued compensation and related benefits $ 16,185 $ 51,858 Accrued taxes 24,078 19,715 Accrued vendor expenses 11,774 12,899 Accrued payment processing fees 5,153 4,708 Accrued talent costs 1,581 1,678 Operating lease liability, current 4,049 1,672 Other 1,174 1,493 Total accrued expenses and other current liabilities $ 63,994 $ 94,023 Stockholders’ Equity For all performance stock unit awards, which are referred to as PSU awards, granted under the Company’s 2018 Equity Incentive Plan, which is referred to as the 2018 EIP, the number of PSU awards that become earned and eligible to vest is based on the Company’s achievement of performance conditions established at the time of grant by the compensation committee of the Company’s board of directors, which is referred to as the compensation committee, relating to one or more performance periods, which is referred to as the PSU Performance Condition. Following the completion of the applicable performance period, the compensation committee certifies the Company’s achievement of the applicable PSU Performance Condition, and the dates on which such certifications occur are referred to as Certification Dates. In order for any PSU awards to be earned and vest, recipients must remain in continuous service with the Company through the applicable Certification Date, which is referred to as the PSU Service Condition. The Company classifies all PSU awards as equity awards. Stock-based compensation expense related to PSU awards is recognized as a component of operating expenses in the Company’s condensed consolidated statements of operations and comprehensive income and is recognized over the longer of the expected achievement period of the applicable PSU Performance Condition or the applicable PSU Service Condition. The grant-date fair value of PSU awards is determined using valuation techniques appropriate for the specific award terms, including valuation models that incorporate the impact of market-based conditions, as applicable. At each reporting date prior to the applicable Certification Date, the Company reassesses the number of PSU awards that are probable of vesting, and any changes are reflected in stock-based compensation expense in the period of change. 12 2026 PSU Awards In February 2026, the compensation committee approved the grant of PSU awards to certain members of the Company’s leadership team under the 2018 EIP, which awards are referred to as the 2026 PSU Awards. These awards were granted on February 18, 2026. Up to fifty percent of the maximum number of shares subject to the 2026 PSU Awards are eligible to vest based on the Company’s achievement of certain financial performance targets over a two-year performance period consisting of the Company’s fiscal years ending December 31, 2026 and 2027, and up to the remaining fifty percent of the maximum number of shares subject to the 2026 PSU Awards are eligible to vest based on the Company’s achievement of certain financial performance targets over a three-year performance period consisting of the Company’s fiscal years ending December 31, 2026, 2027, and 2028. The performance targets consist of a weighted average achievement percentage, reflecting equal weighting of adjusted EBITDA and revenue achievement for each fiscal year within the applicable performance period, subject to adjustment by a relative total shareholder return compound annual growth rate multiplier, all as established by the compensation committee at the time of grant. Stock-based compensation expense related to the 2026 PSU Awards is recognized over the longer of the expected achievement period for the PSU Performance Condition and the PSU Service Condition, which is approximately 24 months and 36 months for the portions of the awards eligible to vest based on performance for the performance periods ending December 31, 2027 and December 31, 2028, respectively. Share Repurchase Program In September 2025, the Company’s board of directors authorized a share repurchase program for the repurchase of up to $ 100.0 million of shares of the Company’s outstanding common stock, which is referred to as the 2025 Share Repurchase Authorization. Under the 2025 Share Repurchase Authorization, the Company repurchased and subsequently retired 2.1 million shares of its common stock for an aggregate amount of $ 36.0 million, at an average price of $ 17.33 per share, from September 2025 through December 2025, and an additional 4.6 million shares for an aggregate amount of $ 64.0 million, at an average price of $ 14.00 per share, from January 2026 through March 2026. As of March 31, 2026, the Company had no remaining balance available for repurchases under the 2025 Share Repurchase Authorization. In February 2026, the Company’s board of directors authorized a share repurchase program for the repurchase of up to $ 300.0 million of shares of the Company’s outstanding common stock, which is referred to as the 2026 Share Repurchase Authorization, and together the 2026 Share Repurchase Authorization and the 2025 Share Repurchase Authorization are referred to as the Share Repurchase Authorizations. Under the 2026 Share Repurchase Authorization, the Company repurchased and subsequently retired 3.5 million shares of its common stock for an aggregate amount of $ 43.9 million, at an average price of $ 12.37 per share, in March 2026. As of March 31, 2026, the Company had $ 256.1 million available for repurchase under the 2026 Share Repurchase Authorization. Collectively, during the three months ended March 31, 2026, the Company repurchased and subsequently retired 8.1 million shares of its common stock for an aggregate amount of $ 107.9 million at an average price of $ 13.28 per share, including fees associated with the repurchases and excluding excise tax, under the Share Repurchase Authorizations. Repurchases of the Company’s common stock under the 2026 Share Repurchase Authorization may be made from time to time on the open market (including through the use of trading plans intended to qualify under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended), in privately negotiated transactions, or by other methods, at the Company’s discretion, and in accordance with applicable securities laws and other restrictions. The 2026 Share Repurchase Authorization has no expiration date and will continue until otherwise suspended, terminated, or modified at any time for any reason. The 2026 Share Repurchase Authorization does not obligate the Company to repurchase any dollar amount or 13 number of shares, and the timing and amount of any repurchases will depend on market and business conditions. Note 6— Leases Lisbon Office Lease In January 2026, the Company commenced a new operating lease for approximately 16,189 square feet of office space and 27 parking spaces in Lisbon, Portugal, pursuant to a lease agreement entered into in December 2025. Although structured as a services agreement under local law, the Company evaluated the arrangement under U.S. GAAP and concluded that it contains a lease under ASC 842. The initial lease term is 72 months from the commencement date, scheduled to expire in December 2031, unless terminated earlier. The Company evaluated the three-year renewal options and determined they are not reasonably certain to be exercised; accordingly, they have not been included in the measurement of the right-of-use asset or lease liability. As a result of entering into this lease, the Company recognized a right-of-use asset and lease liability of approximately $ 3.6 million and $ 3.5 million, respectively. Monthly rent payments under the lease are approximately € 0.1 million and are recorded within general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income. The lease is denominated in Euros, and the lease liability is remeasured at each reporting date using the current spot exchange rate, with foreign currency gains and losses recognized in earnings. Palo Alto Office Lease — Expansion Space In February 2026, the Company commenced two new operating leases for expansion space at its corporate headquarters in Palo Alto, California, pursuant to a First Amendment to its existing office lease executed in January 2026. The amendment added Suite 125 (approximately 7,540 square feet) and Suite 302 (approximately 1,390 square feet), bringing total leased space at the location to approximately 21,615 square feet across three suites. The term for both suites runs through the existing lease expiration of September 2032. The Company concluded that the expansion represents two separate leases rather than a modification of the existing lease, and both suites are classified as operating leases. The Company evaluated the two existing renewal options, each for an additional three years , and determined they are not reasonably certain to be exercised; accordingly, they have not been included in the measurement of the right-of-use assets or lease liabilities. As a result of entering into these leases, the Company recognized right-of-use assets and lease liabilities of approximately $ 3.7 million for Suite 125 and approximately $ 0.7 million for Suite 302. Monthly rent payments, in aggregate under the lease, are approximately $ 0.1 million and are recorded within general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income. Note 7— Business Combination 2025 Acquisitions Bubty B.V. On June 27, 2025, Lifted acquired 100 % of the equity interests of Bubty, a Netherlands-based platform supporting enterprise management of contingent workforce solutions, for total purchase price consideration of $ 20.4 million. This acquisition advances the Company's strategic objectives by equipping Lifted with enhanced workforce management capabilities and a platform for clients managing global talent. The acquisition of Bubty was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. Accordingly, the allocation of the purchase price is as follows (in thousands): 14 Cash and cash equivalents $ 77 Trade and client receivables 71 Intangible assets 18,600 Total assets $ 18,748 Accounts payable, accrued expenses and other liabilities $ 930 Deferred tax liability 3,614 Total liabilities $ 4,544 Net assets $ 14,204 Goodwill 6,206 Total purchase price consideration $ 20,410 The excess of the purchase consideration over the fair value of net assets acquired has been recorded as goodwill. The goodwill is primarily attributable to the expected synergies from integrating Bubty’s workforce management technology and operations with Lifted, and the value of the assembled workforce, which do not qualify for separate recognition as identifiable intangible assets. The goodwill is not deductible for income tax purposes. The Company engaged an independent third-party valuation specialist to assist in the determination of the fair value of intangible assets acquired. All key estimates, assumptions, and forecasts were either provided by or reviewed by management. While the third-party specialist provided significant input into the valuation, the final conclusions reflect the judgment of management. The fair value measurements of the intangible assets were based primarily on significant unobservable inputs, and this represents a Level 3 measurement. As of the acquisition date, the fair value and expected useful lives of the identifiable intangible assets acquired were as follows (dollars in thousands): Fair Value Expected Useful life Developed technology $ 18,600 5 years Ascen Inc. On August 18, 2025, Lifted acquired 100 % of the equity interests of Ascen, a tech-enabled employer of record company specifically designed for the contingent labor space, for total purchase price consideration of $ 40.8 million. This acquisition supports the Company’s strategic objective to enhance its enterprise offerings by enabling clients of Lifted to engage workers classified as employees for U.S. tax purposes. 15 The acquisition of Ascen was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations. Accordingly, the allocation of the purchase price is as follows (in thousands): Cash and cash equivalents $ 2,688 Trade and client receivables 12,420 Intangible assets 15,000 Other current assets 2,116 Total assets $ 32,224 Accounts payable, accrued expenses and other liabilities $ 9,080 Deferred tax liability 4,306 Total liabilities $ 13,386 Net assets $ 18,838 Goodwill 21,922 Total purchase price consideration $ 40,760 The excess of the purchase consideration over the fair value of net assets acquired has been recorded as goodwill. The goodwill is primarily attributable to the expected synergies from Lifted’s ownership of Ascen and the Company’s expansion into employer of record and staffing solutions, which do not qualify for separate recognition as identifiable intangible assets. The goodwill is not deductible for income tax purposes. The Company engaged an independent third-party valuation specialist to assist in the determination of the fair value of intangible assets acquired. All key estimates, assumptions, and forecasts were either provided by or reviewed by management. While the third-party specialist provided significant input into the valuation, the final conclusions reflect the judgment of management. The fair value measurements of the intangible assets were based primarily on significant unobservable inputs, and this represents a Level 3 measurement. As of the acquisition date, the fair value and expected useful lives of the identifiable intangible assets acquired were as follows (dollars in thousands): Fair Value Expected Useful life Customer relationship $ 10,000 3 years Developed technology $ 5,000 5 years Total intangibles $ 15,000 During the three months ended December 31, 2025, the Company decreased goodwill by $ 1.3 million related to the Ascen acquisition based on new information obtained about facts and circumstances that existed as of the acquisition date, resulting in a reduction to the purchase price allocation. The Company finalized the purchase price allocations for the acquisitions of Bubty and Ascen in accordance with ASC 805, and no further measurement period adjustments are expected. The Company incurred approximately $ 4.4 million of transaction-related expenses in connection with these acquisitions for the nine months ended September 30, 2025, all of which were recorded in general and administrative expenses in the consolidated statements of operations and comprehensive income. No additional transaction-related expenses were incurred during the three months ended December 31, 2025. 16 The Company has not presented unaudited supplemental pro forma financial information for the business acquisitions described above, as management determined that such information was not material to the Company’s consolidated results of operations for the periods presented, assuming the acquisitions had occurred as of the beginning of the comparable prior reporting period. As of March 31, 2026, acquisition-related compensation includes aggregate founders’ holdback amounts of $ 16.4 million to be paid over a three-year period from the date of the respective deal close, subject to the relevant founder's continued employment or service, as applicable. This represents compensation for post-combination services because the payments are subject to the relevant founder's continuous employment or service, as applicable, to the relevant vesting dates. The Company expects to recognize related compensation expense over the service period as amounts are earned. Note 8— Commitments and Contingencies Letters of Credit In conjunction with the Company’s operating lease agreements, as of March 31, 2026 and December 31, 2025, the Company had irrevocable letters of credit outstanding in the aggregate amount of $ 0.3 million. The letters of credit are collateralized by restricted cash in the same amount. No amounts had been drawn against these letters of credit as of March 31, 2026 and December 31, 2025. Contingencies The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Potential contingencies may include various claims and litigation or non-income tax matters that arise from time to time in the normal course of business. Due to uncertainties inherent in such contingencies, the Company can give no assurance that it will prevail in any such matters, which could subject the Company to significant liability or damages. Any claims, litigation, or other contingencies could have an adverse effect on the Company’s business, financial position, results of operations, or cash flows in or following the period that claims, litigation, or other contingencies are resolved. As of March 31, 2026 and December 31, 2025, the Company was not a party to any material legal proceedings or claims, nor is the Company aware of any pending or threatened litigation or claims, including non-income tax matters, that could reasonably be expected to have a material adverse effect on its business, operating results, cash flows, or financial condition. Accordingly, the amounts accrued for contingencies for which the Company believes a loss is probable were not material as of March 31, 2026 and December 31, 2025. Indemnification The Company has indemnification agreements with its officers, directors, and certain key employees to indemnify them while they are serving in good faith in their respective positions. In the ordinary course of business, the Company and its operating subsidiaries enter into contractual arrangements under which they agree to provide indemnification of varying scope and terms to clients, business partners, vendors, and other parties, including, but not limited to, losses arising out of the Company’s or its operating subsidiaries’ breach of such agreements, claims related to potential data or information security breaches, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from their products and services or their acts or omissions. In addition, subject to the terms of the applicable agreement, as part of the Enterprise Solutions and certain other premium offerings, the Company and its operating subsidiaries indemnify clients that subscribe to worker classification services for losses arising from worker misclassification. It is not possible to determine the maximum potential loss under these indemnification provisions due to the Company’s limited history of prior indemnification claims and the facts and circumstances involved in each particular provision. 17 Note 9— Debt The following table presents the carrying value of the Company’s debt obligations as of March 31, 2026 and December 31, 2025: (In thousands) March 31, 2026 December 31, 2025 Convertible senior notes $ 360,998 $ 360,998 Total debt 360,998 360,998 Less: Unamortized debt issuance costs ( 767 ) ( 1,228 ) Balance $ 360,231 $ 359,770 Debt, current 360,231 359,770 Weighted-average interest rate 0.77 % 0.76 % Convertible Senior Notes Due 2026 In August 2021, the Company issued 0.25 % convertible senior notes due 2026, which are referred to as the Notes. The Notes were issued pursuant to and are subject to the terms and conditions of an indenture between the Company and Computershare Trust Company, National Association (as successor in interest to Wells Fargo Bank, National Association), as trustee, which is referred to as the Indenture. The Notes were offered and sold in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. As of March 31, 2026 and December 31, 2025, $ 361.0 million aggregate principal amount of the Notes remained outstanding. The Notes are senior, unsecured obligations of the Company and bear interest at a rate of 0.25 % per year. Interest began to accrue on August 10, 2021, and is payable semiannually in arrears on February 15 and August 15 of each year, beginning on February 15, 2022, and the principal amount of the Notes will not accrete. The Notes will mature on August 15, 2026, unless earlier redeemed, repurchased, or converted in accordance with the terms of the Notes. Holders may convert all or any portion of their Notes, in multiples of $1,000 principal amount, at the option of the holder (i) on or after May 15, 2026, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date, and (ii) prior to the close of business on the business day immediately preceding May 15, 2026, only upon satisfaction of certain conditions and during certain periods specified as follows: • during any calendar quarter commencing after the calendar quarter ending on December 31, 2021, if the last reported sale price of the Company’s common stock is greater than or equal to 130 % of the conversion price for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter of the conversion price on each applicable trading day; • during the five consecutive business day period after any five consecutive trading day period, which is referred to as the Measurement Period, in which the trading price (as defined in the Indenture) per $1,000 principal amount of Notes for each trading day of the Measurement Period was less than 98 % of the product of the last reported sale price per share of the Company’s common stock on such trading day and the conversion rate on such trading day; • if the Company calls such Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and • upon the occurrence of specified corporate events described in the Indenture. Upon conversion, the Notes may be settled in shares of the Company’s common stock, cash or a combination of cash and shares of the common stock, at the election of the Company. The Notes have an initial conversion rate of 15.1338 shares of common stock per $1,000 principal amount of Notes, which is subject to adjustment in certain circumstances. This is equivalent to an initial conversion price of approximately $ 66.08 per share of the Company’s common stock. The conversion rate is subject to 18 customary adjustments under certain circumstances in accordance with the terms of the Indenture. In addition, if certain corporate events that constitute a make-whole fundamental change (as defined in the Indenture) occur or if the Company issues a notice of redemption with respect to the Notes prior to the maturity date, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Company may redeem for cash all or any portion of the Notes (subject to a partial redemption limitation), at the Company’s option, on or after August 20, 2024, if the last reported sale price per share of the Company’s common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100 % of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest, if any, to, but excluding, the redemption date. No sinking fund is provided for the Notes, which means that the Company is not required to redeem or retire the Notes periodically. Upon the occurrence of a fundamental change (as defined in the Indenture), subject to certain conditions, holders have the right to require the Company to repurchase for cash all or a portion of their Notes at a price equal to 100 % of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest thereon, if any, until, but excluding, the fundamental change repurchase date. The Notes are the Company’s senior unsecured obligations and rank senior in right of payment to any of the Company’s existing and future indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company’s existing and future unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all existing and future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. For each of the three months ended March 31, 2026 and 2025, interest expense was $ 0.2 million, and amortization of the issuance costs was $ 0.5 million related to the Notes. As of March 31, 2026 and December 31, 2025, the if-converted value of the Notes did not exceed the outstanding principal amount. As of March 31, 2026, the total estimated fair value of the Notes was $ 355.0 million and was determined based on a market approach using actual bids and offers of the Notes in an over-the-counter market on the last trading day of the period. The Company considers these assumptions to be Level II inputs in accordance with the fair value hierarchy described in “Note 4—Fair Value Measurements.” Capped Calls In connection with the issuance of the Notes, the Company entered into privately negotiated capped call transactions, which are referred to as the Capped Calls, with various financial institutions. Subject to customary anti-dilution adjustments substantially similar to those applicable to the Notes, the Capped Calls cover the number of shares of the Company’s common stock initially underlying the Notes. By entering into the Capped Calls, the Company expects to reduce the potential dilution to its common stock (or, in the event a conversion of the Notes is settled in cash, to reduce its cash payment obligation) in the event that at the time of conversion of the Notes its common stock price per share exceeds the conversion price of the Notes, with such reduction subject to a cap based on the cap price. If, however, the market price per share of common stock, as measured under the terms of the Capped Calls, exceeds the cap price of the Capped Calls, there would be dilution and/or there would not be an offset of such potential cash payments, in each case, to the extent that the then-market price per share of common stock exceeds the cap price of the Capped Calls. The initial cap price of the Capped Calls is $ 92.74 per share of common stock, which represents a premium of 100 % over the last reported sale price of the common stock of $ 46.37 per share on August 5, 2021, the date of issuance of the Notes, and is subject to certain customary adjustments under the terms of the Capped Calls; provided that the cap price will not be reduced to an amount less than the strike price of $ 66.08 per share. 19 The Capped Calls are separate transactions and are not part of the terms of the Notes. The Capped Calls meet the criteria for classification as equity and, as such, are not remeasured each reporting period and are included as a reduction to additional paid-in-capital within stockholders’ equity. Note 10— Net Income per Share The following table sets forth the computation of the Company’s basic and diluted net income per share for the periods presented: Three Months Ended March 31, (In thousands, except share and per share data) 2026 2025 Numerator: Basic: net income $ 31,461 $ 37,730 Interest expense related to convertible senior notes, net of tax 573 576 Diluted $ 32,034 $ 38,306 Denominator: Weighted-average shares used to compute net income per share, basic and diluted Basic 128,116,112 135,208,178 Options to purchase common stock 488,857 590,766 Common stock issuable upon vesting of restricted stock units and performance stock units 1,410,138 971,177 Common stock issuable upon exercise of common stock warrants 149,905 232,847 Common stock issuable in connection with employee stock purchase plan 27,806 310,599 Common stock issuable in connection with convertible senior notes 5,463,045 5,463,045 Diluted 135,655,863 142,776,612 Net income per share: Basic $ 0.25 $ 0.28 Diluted $ 0.24 $ 0.27 The following potentially dilutive shares were excluded from the computation of diluted net income per share for the periods presented because including them would have been anti-dilutive: Three Months Ended March 31, 2026 2025 Options to purchase common stock 1,500,000 1,500,000 Common stock issuable upon vesting of restricted stock units and performance stock units 8,590,572 9,389,674 Common stock issuable in connection with employee stock purchase plan 644,641 373,809 Total 10,735,213 11,263,483 20 Note 11— Income Taxes The Company computes its provision for income taxes by applying the estimated annual effective tax rate to year-to-date income from recurring operations and adjusts the provision for discrete tax items recorded in the period. For the three months ended March 31, 2026 and 2025, the Company’s income tax provision was $ 6.2 million and $ 7.3 million, respectively. The decrease in income tax provision for the three months ended March 31, 2026, was primarily attributable to lower income before income taxes in the current period. The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance when it is more likely than not that some or all of its deferred tax assets will not be realized. This assessment is based on the weight of all available evidence, including cumulative pre-tax income or losses, anticipated future earnings, the impact of permanent differences, and items recorded in other comprehensive income or losses. Based on all available positive and negative evidence, including demonstrated sustained profitability, which is objective and verifiable, and after considering anticipated future earnings, the Company concluded it is more likely than not that its U.S. federal deferred tax assets will be realizable. The Company continues to maintain a valuation allowance against its California deferred tax assets, as it is more likely than not that these assets will not be realized, primarily due to expected research and development tax credit generation exceeding the Company’s ability to utilize these assets in future periods. The Company is subject to taxation in the United States and various other state and foreign jurisdictions. Due to certain tax attribute carryforwards, the tax years 2001 to 2024 remain open to examination by the major taxing jurisdictions in which the Company is subject to tax. Due to differing interpretations of tax laws and regulations, tax authorities may dispute the Company’s tax filing positions. The Company periodically evaluates its exposures associated with its tax filing positions and believes that adequate amounts have been reserved for adjustments that may result from tax examinations. On July 4, 2025, Public Law 119-21 was enacted, introducing changes to U.S. tax law, including 100% bonus depreciation and the expensing of domestic research costs. In accordance with ASC 740, Income Taxes, the effects of enacted tax law changes must be recognized in the period in which the legislation is enacted. Certain provisions became effective in the first quarter of 2026, and these impacts have been reflected in the Company’s first quarter 2026 results. Note 12— Segment Information Operating segments are defined as components of an entity for which separate financial information is available and that is regularly provided to the CODM in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the Company’s CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. The accounting policies of the Company’s reportable segment, as well as how the Company derives revenue, are consistent with those described in “Note 2—Basis of Presentation and Summary of Significant Accounting Policies” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The CODM uses consolidated net income to assess performance, evaluate cost optimization, and allocate resources, including personnel-related and financial or capital resources, in the annual budget and forecasting process, as well as budget-to-actual variances on a monthly basis. As such, the Company has determined that it operates as one operating and reportable segment. The following tables set forth significant expense categories and other specified amounts included in consolidated net income that are otherwise regularly provided to the CODM for the three months ended March 31, 2026 and 2025: 21 Three Months Ended March 31, 2026 2025 Revenue $ 195,483 $ 192,706 Cost of revenue (1) 39,128 39,201 Research and development (1) 35,126 38,544 Sales and marketing (1) 36,017 33,750 General and administrative (1)(2) 25,564 22,940 Provision for transaction losses 2,222 2,259 Stock-based compensation expense 15,421 12,272 Depreciation and amortization 9,099 4,861 Interest income ( 5,850 ) ( 7,098 ) Interest expense 704 686 Income tax provision 6,249 7,277 Other segment items (3) 342 284 Segment net income $ 31,461 $ 37,730 (1) For all periods presented, excludes stock-based compensation and depreciation and amortization included in cost of revenue, research and development, sales and marketing, and general and administrative expenses, as these amounts are regularly provided to the CODM. (2) For all periods presented, excludes expenses related to the warrant to purchase 500,000 shares of the Company’s common stock at an exercise price of $ 0.01 per share issued to the Tides Foundation in 2018, which is referred to as the Tides Foundation Warrant. (3) For the three months ended March 31, 2026 and 2025, the Company incurred $ 0.2 million of expenses related to the Tides Foundation Warrant. Substantially all of the Company’s long-lived assets, including operating lease right-of-use assets, were located in the United States as of March 31, 2026 and December 31, 2025. Note 13— Subsequent Events Restructuring Plan On May 7, 2026, the Company announced a restructuring plan, which is referred to as the Restructuring Plan, intended to build a more efficient operating model and position the Company for profitable growth as the nature of work evolves. The Company anticipates that the Restructuring Plan will include a reduction of the Company’s total workforce by approximately 24 % and the Company estimates that it will incur between approximately $ 16.0 million and $ 23.0 million in pre-tax restructuring charges in connection with the Restructuring Plan. The Company expects most of these charges to be cash expenditures and to be recognized over the next two or three quarters with the majority of these charges in the second quarter of 2026. 22