MITEK SYSTEMS INC
For the period ended Mar 31, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 7, 2026
MITK$17.24+1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-05.
0001628280-26-005783
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0000807863-26-000026
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 76 previous paragraphs and 88 current paragraphs.
32 unchanged; 26 reworded; 22 added; 18 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 2 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (22)
Current report
Second Quarter Fiscal 2026 Highlights
Current report
•During the quarter, we repaid the 2026 Notes (as defined below) in full and borrowed $50.0 million under our Term Loan (as defined below), simplifying our capital structure and reducing potential dilution.
Current report
Interest expense decreased $0.9 million, or 40%, to $1.5 million for the three months ended March 31, 2026, compared to $2.4 million for the three months ended March 31, 2025. The current quarter consisted of $0.8 million of amortization of debt discount and issuance costs and $0.7 million of cash interest, compared to $2.1 million of amortization and $0.3 million of cash interest in the prior year quarter. The decrease was primarily attributable to lower amortization of debt discount and issuance costs following repayment of the 2026 Notes in February 2026, partially offset by interest expense on the Term Loan drawn in January 2026.
Current report
Comparison of the Six Months Ended March 31, 2026 and 2025
Current report
nm - not meaningful
Current report
Revenue
Current report
Total revenue increased $9.9 million, or 11%, to $99.1 million in the six months ended March 31, 2026, compared to $89.2 million in the six months ended March 31, 2025. Software license revenue increased $1.2 million, or 3%, to $39.9 million in the six months ended March 31, 2026, compared to $38.7 million in the six months ended March 31, 2025. This increase is primarily due to increases in revenue from our standalone biometrics ID Live and our CheckReader™ products, partially offset by a decrease in our Mobile Deposit® software products in the six months ended March 31, 2026, compared to the same period in 2025. SaaS, maintenance and other revenue increased $8.7 million, or 17%, to $59.2 million in the six months ended March 31, 2026, compared to $50.5 million in the six months ended March 31, 2025. This increase is primarily due to strong growth in revenue from our Mobile Verify®, MiVIP, Mobile Deposit®, and Check Fraud Defender products in the six months ended March 31, 2026, compared to the same period in 2025.
Current report
Cost of Revenue
Current report
Selling and Marketing Expenses
Current report
Research and Development Expenses
Current report
Research and development expenses include payroll, employee benefits, stock-based compensation, third party contractor expenses, and other headcount-related costs associated with software engineering and mobile capture science. Research and development expenses decreased $3.1 million, or 17%, to $14.9 million in the six months ended March 31, 2026, compared to $18.1 million in the six months ended March 31, 2025. The decrease in research and development expenses is primarily due to increased capitalization of costs for internal-use software of $2.4 million commensurate with alignment of priorities and resources to focus on plaform-level capabilities. The decrease in research and development expenses are also driven by lower stock-based compensation expense of $2.2 million, reflecting ongoing optimization of our cost structure and strategic realignment of resources toward platform-level capabilities including reversal of expense for roles that exited the organization as part of this realignment in the six months ended March 31, 2026 compared to the same period in 2025.
Current report
General and Administrative Expenses
Current report
General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with finance, legal, administration, and information technology functions, as well as third party legal, accounting, and other administrative costs. General and administrative expenses increased $1.3 million, or 6%, to $23.3 million in the six months ended March 31, 2026, compared to $22.0 million in the six months ended March 31, 2025. The increase was primarily due to higher personnel-related costs including stock-based compensation expense, partially offset by lower audit, accounting and tax fees, lower executive transition costs, and lower legal and other costs as we replaced full-time consultants with full-time employees during the six months ended March 31, 2026, compared to the same period in 2025.
Current report
Restructuring Costs
Current report
Interest Expense
Current report
Interest expense decreased $0.8 million, or 17%, to $4.0 million for the six months ended March 31, 2026, compared to $4.8 million for the six months ended March 31, 2025. The current period consisted of $3.0 million of amortization of debt discount and issuance costs and $1.0 million of cash interest, compared to $4.2 million of amortization and $0.6 million of cash interest in the prior year period. The decrease in amortization following repayment of the 2026 Notes in February 2026 was partially offset by approximately two months of cash interest on the Term Loan drawn in January 2026.
Current report
Other Income (Expense), Net
Current report
The increase was primarily due to an increase in interest income received from our marketable securities in the six months ended March 31, 2026 as compared to the same period in 2025.
Current report
Income Tax Benefit (Provision)
Current report
In February 2026, we repaid the $155.3 million in aggregate principal of our 0.75% senior notes due 2026 (the “2026 Notes”) at maturity. We funded the repayment through a combination of cash on hand, net sales and maturities of investments, and the $50.0 million Term loan draw described below.
Current report
In January 2026, we borrowed $50.0 million under the Term Loan provided for in our Amended Credit Agreement, dated May 7, 2025. The Term Loan matures in May 2030, bears interest at a variable rate (term SOFR or WSJ prime, plus a margin tied to our net leverage ratio), and is secured on a first priority basis by substantially all of our assets. Quarterly amortization payments commenced on April 1, 2026. As of March 31, 2026, $50.0 million was outstanding under the Term Loan,and the Revolving Line was undrawn. See Note 8, "Debt," for additional information regarding the terms of the Amended Credit Agreement, including covenants and events of default.
Current report
During the three and six months ended March 31, 2026, we repurchased and retired 760,238 shares for $7.8 million (average price of $10.24 per share) and 1,838,571 shares for $17.8 million (average price of $9.67 per share), respectively, under our 2024 Share Repurchase Program. As of March 31, 2026, $3.2 million remained available under the 2024 Share Repurchase Program, and the Board of Directors has authorized an additional $50.0 million repurchase program (announced February 2026) that will become effective at the completion of the 2024 Share Repurchase Program and will remain in effect for two years. We have not made any repurchases from April 1, 2026 through May 6, 2026. See Note 7, “Stockholders’ Equity” for additional information.
Removed paragraphs (18)
Previous report
First Quarter Fiscal 2026 Highlights
Previous report
Interest expense includes the amortization of debt discount and issuance costs and coupon interest accrued on our 0.75% convertible senior notes due 2026 (the “2026 Notes”) and Amended Credit Agreement (as defined below). Interest expense was $2.5 million for the three months ended December 31, 2025 and consisted of $2.2 million of amortization of debt discount and issuance costs and $0.3 million of interest incurred. Interest expense was $2.4 million for the three months ended December 31, 2024 and consisted of $2.1 million of amortization of debt discount and issuance costs and $0.3 million of interest incurred. As we amortize the debt discount and issuance costs using the effective interest method, amortization expense increases over the term of the agreement.
Previous report
In February 2021, the Company issued $155.3 million aggregate principal amount of the 2026 Notes (including the Additional Notes, as defined below). The 2026 Notes were issued pursuant to an Indenture, dated February 5, 2021 (the “Indenture”), between the Company and UMB Bank, National Association, as trustee. The Indenture included customary covenants and sets forth certain events of default after which the 2026 Notes could be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving the Company after which the 2026 Notes became automatically due and payable. The Company granted the initial purchasers of the 2026 Notes (collectively, the “Initial Purchasers”) a 13-day option to purchase up to an additional $20.3 million aggregate principal amount of the 2026 Notes (the “Additional Notes”), which was exercised in full. As of December 31, 2025, the Company was in compliance with the covenants in the Indenture.
Previous report
After August 1, 2025, the 2026 Notes were convertible at the option of the holders at any time prior to the close of business on the maturity date. The net proceeds from this offering were approximately $149.7 million, after deducting the Initial Purchasers’ discounts and commissions and the Company’s estimated offering expenses related to the offering. The Company used a portion of the net proceeds from the offering to pay the cost of the Notes Hedge (as defined below), after such cost was partially offset by the proceeds from the Warrant Transactions (as defined below).
Previous report
In accounting for the issuance of the 2026 Notes, the conversion option of the 2026 Notes was deemed an embedded derivative requiring bifurcation from the 2026 Notes (“host contract”) and separate accounting as an embedded derivative liability, that was subsequently reclassified to additional paid-in capital when the stockholders of the Company approved an increase to the number of authorized shares of Common Stock, to an amount sufficient to settle the conversion of the 2026 Notes. The proceeds from the 2026 Notes were first allocated to the embedded derivative liability and the remaining proceeds were then allocated to the host contract. On February 5, 2021, the fair value of the embedded derivative liability representing the conversion option was $33.2 million and the remaining $116.5 million was allocated to the host contract. The difference between the principal amount of the 2026 Notes and the fair value of the host contract (the “debt discount”) is amortized to interest expense using the effective interest method over the term of the 2026 Notes.
Previous report
The Company repaid the 2026 Notes in full in the second quarter of fiscal 2026.
Previous report
In connection with the issuance of the 2026 Notes, the Company entered into transactions for convertible notes hedge (the “Notes Hedge”) with Bank of America, N.A., Jefferies International Limited and Goldman Sachs & Co. LLC (the “Option Counterparties”). The Notes Hedge provided the Company with the option to acquire, on a net settlement basis, approximately 7.4 million shares of Common Stock at a strike price of $20.85, which is equal to the number of shares of Common Stock that notionally underlie and correspond to the conversion price of the 2026 Notes. The Company also entered into Warrant Transactions with the Option Counterparties relating to the same number of shares of the Common Stock, subject to customary anti-dilution adjustments. The strike price of the Warrant Transactions is $26.53 per share, which represents a 75.0% premium to the last reported sale price of the Common Stock on the Nasdaq Capital Market on February 2, 2021, and is subject to certain adjustments under the terms of the Warrant Transactions.
Previous report
As of December 31, 2025, the Notes Hedge of $33.2 million is included in additional paid-in capital in the condensed consolidated balance sheet and will not be remeasured provided the requirements to qualify for the scope exception in ASC 815-10-15-74(a) continue to be met and the Company had not purchased any shares under the Notes Hedge. The Notes Hedge expired on February 1, 2026, without the Company exercising any option to acquire Common Stock.
Previous report
As a result of the Warrant Transactions, the Company is required to recognize incremental dilution of earnings per share to the extent the average share price is over $26.53 for any fiscal quarter. During the three months ended December 31, 2025, there was no dilution of earnings per share. The Warrant Transactions expire over a period of 80 trading days commencing on May 1, 2026 and may be settled in net shares of Common Stock or net cash at the Company’s election. Upon initial sale, the Warrant Transactions were recorded as an increase in additional paid-in capital within stockholders’ equity of $23.9 million. As of December 31, 2025, the Warrant Transactions had not been exercised and remained outstanding.
Previous report
On May 7, 2025, the Company, together with its subsidiaries, A2iA Corp. and ID R&D, Inc., entered into the First Amendment to Loan and Security Agreement (the “Amendment”), amending the Credit Agreement, and as amended by the Amendment (the “Amended Credit Agreement”), by and among the Company and the Bank.
Previous report
The Amended Credit Agreement provides for, among other things, (i) the establishment of a delayed draw term loan (the “Term Loan”) in an aggregate principal amount of up to $75.0 million that may be drawn prior to February 28, 2026 for the sole purpose of paying amounts outstanding under the 2026 Notes due February 1, 2026 and customary fees and expenses in connection therewith, (ii) a revolving line of credit (the “Revolving Line”) whereby the Company may borrow up to $25.0 million with an additional $15.0 million to be advanced under the Revolving Line at the sole discretion of the Bank. On January 21, 2026, the Company borrowed $50.0 million under its Term Loan. The Term Loan and Revolving Line are secured on a first priority basis by the Company’s assets.
Previous report
In connection with the Amended Credit Agreement, the Company incurred issuance costs of $0.2 million which were recorded to Other income (expense), net. The Term Loan and the Revolving Line both mature on May 1, 2030. Commencing on April 1, 2026, the Borrower must make amortization payments on any advances under the Term Loan at the percentages set forth in the Amendment.
Previous report
Borrowings under the Amended Credit Agreement generally bear interest at a variable rate equal to (a) term SOFR plus a specified margin or (b) WSJ prime plus a specified margin, in each case which will be adjusted based on the Company’s net leverage ratio at the time of borrowing. Borrower must also pay the Bank (i) a commitment fee of $125,000 and (ii) an “Unused Revolving Line Facility Fee” of 0.25% per annum of the average unused portion of the Revolving Line.
Previous report
The Amended Credit Agreement contains representations, warranties, and negative and affirmative covenants customary for transactions of this type. These include covenants limiting the ability of Borrower and any of their subsidiaries, subject to certain exceptions and baskets, to, among other things, (i) incur indebtedness, (ii) incur liens on their assets, (iii) enter into any merger or consolidation with, or acquire all or substantially all of the equity or property of, another person, (iv) dispose of any of their business or property, (v) make or permit any payment on subordinated debt, or (vi) pay any dividend, make any other distribution, or redeem any equity.
Previous report
The Amended Credit Agreement contains customary events of default and also provides that an event of default includes any default resulting in a right by third parties to accelerate maturity of indebtedness in excess of $500,000. If any event of default occurs and is not cured within applicable grace periods set forth in the Amended Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. In addition, Borrower may be required to deposit cash with the Bank in an amount equal to 1.05 of any undrawn letters of credit denominated in U.S. Dollars or 1.15
Previous report
On May 13, 2024, the Board authorized and approved a share repurchase program for up to $50.0 million of the currently outstanding shares of our Common Stock. The share repurchase program was effective as of May 16, 2024 and will expire on May 16, 2026. The timing, price and actual number of shares of Common Stock repurchased will depend on a variety of factors including price, market conditions and corporate and regulatory requirements. The repurchases may be made from time (i) through open market purchases, block trades, privately negotiated transactions, one or more trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or any combination of the foregoing, in each case in accordance with applicable laws, rules and regulations or (ii) in such other manner as will comply with the provisions of the Exchange Act. The share repurchase program does not require the Company to repurchase shares of its Common Stock and it may be discontinued, suspended or amended at any time.
Previous report
The Company made purchases of $10.0 million, or 1,078,333 shares, during the three months ended December 31, 2025 at an average price of $9.27 per share and subsequently retired the shares. The Company made purchases of $3.3 million, or 363,378 shares, during the three months ended December 31, 2024 at an average price of $8.99 per share and subsequently retired the shares. Total purchases made under the share repurchase program since inception were $39.0 million as of December 31, 2025, and the repurchased shares were retired.
Previous report
During the period beginning January 1, 2026 through February 4, 2026, the Company made purchases of $7.2 million, or 705,638 shares at an average price of $10.26 per share. On February 5, 2026, the Board of Directors of the Company approved a new share repurchase program, authorizing the Company to repurchase up to $50.0 million of its Common Stock. The new share repurchase program will become effective at the completion of the Company’s 2024 share repurchase program and will remain effective for a period of up to two years.
Reworded paragraphs (26)
Previous wording
Mitek Systems, Inc. (“Mitek” or the “Company”) is a global provider of digital identity verification and fraud prevention solutions. The Company’s technologies help organizations verify identities, mitigate fraud risk, and enable secure digital interactions in response to increasingly complex and evolving threats, including those driven by artificial intelligence (“AI”).
Current wording
Mitek Systems, Inc. (“Mitek” or the “Company”) is a global provider of digital identity verification and fraud prevention solutions. Our technologies help organizations verify identities, mitigate fraud risk, and enable secure digital interactions in response to increasingly complex and evolving threats, including those driven by artificial intelligence (“AI”).
Previous wording
Mitek’s platform addresses key use cases across digital interactions and customer lifecycle, including new account openings, account access, and mobile check deposit. Core capabilities include AI, machine learning, computer vision, proprietary biometric liveness, and deepfake detection technologies that support identity verification, detect manipulation, and help prevent digital impersonation.
Current wording
Our platform addresses key use cases across digital interactions and customer lifecycle, including new account openings, account access, and mobile check deposit. Core capabilities include AI, machine learning, computer vision, proprietary biometric liveness, and deepfake detection technologies that support identity verification, detect manipulation, and help prevent digital impersonation.
Previous wording
The Company’s mobile check deposit product enables approximately 1.2 billion transactions annually and is widely used by financial institutions to provide consumers with fast, accurate, and secure remote deposit functionality. Mitek’s identity verification technologies are embedded within mobile and web applications, delivering real-time, automated identity validation across critical digital interactions.
Current wording
Our mobile check deposit product enables approximately 1.2 billion transactions annually and is widely used by financial institutions to provide consumers with fast, accurate, and secure remote deposit functionality. Our identity verification technologies are embedded within mobile and web applications, delivering real-time, automated identity validation across critical digital interactions.
Previous wording
As of the date of this filing, Mitek serves more than 7,000 organizations globally, including financial institutions, financial technology (“fintech”) companies, telecommunications providers, and digital marketplaces. The Company’s solutions assist customers in addressing fraud risk, complying with Know Your Customer (“KYC”) and anti-money laundering (“AML”) regulations, and improving operational efficiency and user experience.
Current wording
As of the date of this filing, we serve more than 7,000 organizations globally, including financial institutions, financial technology (“fintech”) companies, telecommunications providers, and digital marketplaces. Our solutions assist customers in addressing fraud risk, complying with Know Your Customer (“KYC”) and anti-money laundering (“AML”) regulations, and improving operational efficiency and user experience.
Previous wording
•Revenue for the three months ended December 31, 2025 was $44.2 million, an increase of 19% compared to revenue of $37.3 million in the three months ended December 31, 2024.
Current wording
•Revenue for the three months ended March 31, 2026 was $54.8 million, an increase of 6% compared to revenue of $51.9 million in the three months ended March 31, 2025.
Previous wording
•Net income was $2.8 million, or $0.06 per diluted share, during the three months ended December 31, 2025, compared to net loss of $4.6 million, or $0.10 per diluted share, during the three months ended December 31, 2024.
Current wording
•Net income was $9.5 million, or $0.20 per diluted share, during the three months ended March 31, 2026, compared to net income of $9.2 million, or $0.20 per diluted share, during the three months ended March 31, 2025.
Previous wording
•Cash provided by operating activities was $8.0 million for the three months ended December 31, 2025, compared to cash provided by operating activities of $0.6 million for the three months ended December 31, 2024.
Current wording
•Cash provided by operating activities was $7.1 million for the six months ended March 31, 2026, compared to cash provided by operating activities of $14.3 million for the six months ended March 31, 2025.
Previous wording
•We added new patents to our portfolio during the three months ended December 31, 2025, bringing our total number of issued patents to 111 as of December 31, 2025. In addition, we had 26 patent applications outstanding as of December 31, 2025.
Current wording
•We added a new patent to our portfolio during the three months ended March 31, 2026, bringing our total number of issued patents to 112 as of March 31, 2026. In addition, we had 25 patent applications outstanding as of March 31, 2026.
Previous wording
Total revenue increased $7.0 million, or 19%, to $44.2 million in the three months ended December 31, 2025 compared to $37.3 million in the three months ended December 31, 2024. Software license revenue increased $1.9 million, or 16%, to $13.9 million in the three months ended December 31, 2025 compared to $12.0 million in the three months ended December 31, 2024. This increase is primarily due to an increase in revenue from our standalone biometrics ID Live products in the three months ended December 31, 2025 compared to the same period in 2024. SaaS, maintenance and other revenue increased $5.1 million, or 20%, to $30.3 million in the three months ended December 31, 2025 compared to $25.3 million in the three months ended December 31, 2024. This increase is primarily due to an increase in transaction volume from our MiVIP and Check Fraud Defender products in the three months ended December 31, 2025 compared to the same period in 2024.
Current wording
Total revenue increased $2.9 million, or 6%, to $54.8 million in the three months ended March 31, 2026 compared to $51.9 million in the three months ended March 31, 2025. Software license revenue decreased $0.8 million, or 3%, to $26.0 million in the three months ended March 31, 2026, compared to $26.7 million in the three months ended March 31, 2025. This decrease is primarily due to a decrease in revenue from our Mobile Deposit® software products, partially offset by increases in our CheckReader™ and biometrics products in the three months ended March 31, 2026 compared to the same period in 2025. SaaS, maintenance and other revenue increased $3.7 million, or 15%, to $28.9 million in the three months ended March 31, 2026, compared to $25.2 million in the three months ended March 31, 2025. This increase is primarily due to increased customer adoption of Mobile Verify® , MiVIP, and Check Fraud Defender products in the three months ended March 31, 2026 compared to the same period in 2025.
Previous wording
Cost of revenue includes personnel costs related to billable services and software support, hosting costs, and the costs of royalties for third party products embedded in our products. Cost of revenue increased $2.5 million, or 41%, to $8.4 million in the three months ended December 31, 2025 compared to $5.9 million in the three months ended December 31, 2024. The increase in cost of revenue is primarily due to an increase in SaaS revenue as well as increased investment in our SaaS products and increases in service intensive customer work with more personnel costs directly supporting our customers during the three months ended December 31, 2025 compared to the same period in 2024.
Current wording
Cost of revenue includes personnel costs related to billable services and software support, hosting costs, and the costs of royalties for third party products embedded in our products. Cost of revenue increased $2.0 million, or 31%, to $8.6 million in the three months ended March 31, 2026, compared to $6.5 million in the three months ended March 31, 2025. The increase in cost of revenue is primarily due to an increase in SaaS revenue as well as increased investment in our SaaS products, and increases in service intensive customer work with more personnel costs directly supporting our customers during the three months ended March 31, 2026 compared to the same period in 2025.
Previous wording
Research and development expenses include payroll, employee benefits, stock-based compensation, third party contractor expenses, and other headcount-related costs associated with software engineering and mobile capture science. Research and development expenses decreased $0.9 million, or 11%, to $7.4 million in the three months ended December 31, 2025 compared to $8.3 million in the three months ended December 31, 2024. The decrease in research and development expenses is primarily due to lower stock-based compensation expense due to continued realignment of headcount toward platform-level capabilities including reversal of expense for roles that exited the organization as part of this realignment and increases in capitalized software development costs commensurate with the realignment of priorities to these platform-level capabilities in the three months ended December 31, 2025 compared to the same period in 2024.
Current wording
Research and development expenses include payroll, employee benefits, stock-based compensation, third party contractor expenses, and other headcount-related costs associated with software engineering and mobile capture science. Research and development expenses decreased $2.2 million, or 23%, to $7.6 million in the three months ended March 31, 2026, compared to $9.8 million in the three months ended March 31, 2025. The decrease in research and development expenses is primarily due to increased capitalization of costs for internal-use software of $1.3 million commensurate with alignment of priorities and resources to focus on plaform-level capabilities. The decrease in research and development expenses are also driven by lower stock-based compensation expense of $0.9 million, reflecting ongoing optimization of our cost structure and strategic realignment of resources toward platform-level capabilities including reversal of expense for roles that exited the organization as part of this realignment in the three months ended March 31, 2026 compared to the same period in 2025.
Previous wording
General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with finance, legal, administration, and information technology functions, as well as third party legal, accounting, and other administrative costs. General and administrative expenses decreased $0.8 million, or 7%, to $11.1 million in the three months ended December 31, 2025 compared to $11.9 million in the three months ended December 31, 2024. The decrease in general and administrative expenses is primarily due to lower bad debt expense, lower executive transition costs, lower audit and accounting fees, and lower third-party and professional fees, partially offset by higher personnel-related costs during the three months ended December 31, 2025 compared to the same period in 2024.
Current wording
General and administrative expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with finance, legal, administration, and information technology functions, as well as third party legal, accounting, and other administrative costs. General and administrative expenses increased $2.1 million, or 21%, to $12.2 million in the three months ended March 31, 2026, compared to $10.1 million in the three months ended March 31, 2025. The increase in general and administrative expenses is primarily due to higher personnel-related costs including stock-based compensation expense and higher bad debt expense due to one customer defaulting on a payment plan, partially offset by lower audit and accounting fees during the three months ended March 31, 2026 compared to the same period in 2025.
Previous wording
Amortization of acquired intangibles and acquisition-related costs include amortization of intangible assets, adjustments recorded due to changes in the fair value of contingent consideration, and other costs associated with acquisitions. Amortization and acquisition-related costs decreased $0.4 million, or 10%, to $3.3 million in the three months ended December 31, 2025 compared to $3.7 million in the three months ended December 31, 2024. The decrease in amortization and acquisition-related costs is primarily due to a decrease in amortization expense of intangible assets from previous acquisitions that were fully amortized prior to the three months ended December 31, 2025 compared to the same period in 2024.
Current wording
Amortization of acquired intangibles and acquisition-related costs include amortization of intangible assets, adjustments recorded due to changes in the fair value of contingent consideration, and other costs associated with acquisitions. Amortization of acquired intangibles and acquisition-related costs decreased $0.3 million, or 8%, to $3.3 million in the three months ended March 31, 2026, compared to $3.6 million in the three months ended March 31, 2025. The decrease is primarily due to a decrease in amortization expense of intangible assets from previous acquisitions that were fully amortized prior to the three months ended March 31, 2026 compared to the same period in 2025.
Previous wording
Other income (expense), net includes interest income net of amortization and net realized gains or losses on our marketable securities portfolio, and foreign currency transactional gains and losses. Other income (expense), net increased $0.9 million, or 166%, to $1.5 million of income in the three months ended December 31, 2025 compared to $0.6 million of income in the three months ended December 31, 2024. The increase was primarily due to lower foreign currency exchange transactional losses and higher other income in the three months ended December 31, 2025 as compared to the same period in 2024.
Current wording
Other income (expense), net includes interest income net of amortization and net realized gains or losses on our marketable securities portfolio, and foreign currency transactional gains and losses. Other income (expense), net decreased $0.5 million, or 43%, to $0.6 million of income in the three months ended March 31, 2026, compared to $1.1 million of income in the three months ended March 31, 2025. The decrease was primarily due to higher loss on foreign currency exchange transactional losses from changes in foreign currency rates and decreased investment income as a result of reduced average cash and investment balances following debt repayment activities in the three months ended March 31, 2026, as compared to the same period in 2025.
Previous wording
For the three months ended December 31, 2025, we recorded an income tax provision of $1.6 million which yielded an effective tax rate of 37%. For the three months ended December 31, 2024, we recorded an income tax benefit of $0.3 million which yielded an effective tax rate of 6%. The difference between the U.S. federal statutory tax rate and our effective tax rate for the three months ended December 31, 2025 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation, as well as the impact of the global intangible low-taxed income inclusion and federal, state and foreign research and development credits on the tax provision.
Current wording
For the three months ended March 31, 2026, we recorded an income tax provision of $3.2 million which yielded an effective tax rate of 25%. For the three months ended March 31, 2025, we recorded an income tax provision of $0.9 million which yielded an effective tax rate of 9%. The difference between the U.S. federal statutory tax rate and our effective tax rate for the three months ended March 31, 2026 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation, as well as the impact of the global intangible low-taxed income inclusion and federal, state and foreign research and development credits on the tax provision. The difference between the U.S. federal statutory tax rate and our effective tax rate for the three months ended March 31, 2025 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation, release of valuation allowances relating to one of the Company's operations in a foreign jurisdiction, as well as the impact of stock-based compensation, and federal, state and foreign research and development credits on the tax provision.
Previous wording
Selling and marketing expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with sales and marketing personnel. Selling and marketing expenses also include non-billable costs of professional services personnel, advertising expenses, product promotion costs, trade shows, and other brand awareness programs. Selling and marketing expenses decreased $1.5 million, or 16%, to $8.1 million in the three months ended December 31, 2025 compared to $9.7 million in the three months ended December 31, 2024. The decrease in selling and marketing expense is primarily due to a re-allocation of headcount to focus on service intensive customer work and lower stock-based compensation expense associated with roles that have exited the organization in the three months ended December 31, 2025 compared to the same period in 2024.
Current wording
Selling and marketing expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with sales, marketing, and customer success personnel. Selling and marketing expenses also include non-billable costs of professional services personnel, advertising expenses, product promotion costs, trade shows, and other brand awareness programs. Selling and marketing expenses decreased $2.5 million, or 12%, to $17.7 million in the six months ended March 31, 2026, compared to $20.2 million in the six months ended March 31, 2025. The decrease in selling and marketing expense is primarily due to a re-allocation of headcount to focus on service intensive customer work, $2.1 million increase in deferred contract costs, and lower stock-based compensation expense associated with roles that have exited the organization in the six months ended March 31, 2026 compared to the same period in 2025.
Previous wording
Restructuring costs consist of employee severance obligations and other related costs. Restructuring costs were $0.5 million in the three months ended December 31, 2025 and related to a restructuring that occurred in the first quarter of fiscal 2026. Restructuring costs were $0.8 million in the three months ended December 31, 2024 and related to a restructuring that occurred in the first quarter of fiscal 2025.
Current wording
Restructuring costs consist of employee severance obligations and other related costs. Restructuring costs were $0.5 million in the six months ended March 31, 2026 related to a restructuring that occurred in the first quarter of fiscal 2026. Restructuring costs were $0.8 million in the six months ended March 31, 2025 and related to a restructuring that occurred in the first quarter of fiscal 2025.
Previous wording
Cash generated from operations and proceeds from the issuance of the 2026 Notes (as defined below) have historically been our primary sources of liquidity to fund operations and investments to grow our business. Our additional sources of liquidity include available cash balances and the Amended Credit Agreement (as defined below). On December 31, 2025, we had $191.8 million in cash and cash equivalents and investments compared to $196.5 million on September 30, 2025, a decrease of $4.7 million, or 2%. In summary, our cash flows from continuing operations were as follows (amounts in thousands):
Current wording
Cash generated from operations, proceeds from the issuance of the 2026 Notes (as defined above) and proceeds from the Term Loan (as defined below) have historically been our primary sources of liquidity to fund operations and investments to grow our business. Our additional sources of liquidity include available cash balances and the Revolving Line (as defined below). On March 31, 2026, we had $77.6 million in cash and cash equivalents and investments compared to $196.5 million on September 30, 2025, a decrease of $118.9 million, or 61%. This decrease was primarily driven by the repayment of $155.3 million for the 2026 Notes, and share repurchases of $17.8 million, partially offset by $50.0 million in borrowings under the Term Loan and cash generated from operations. In summary, our cash flows from continuing operations were as follows (amounts in thousands):
Previous wording
Cash flows related to operating activities are dependent on net income, adjustments to net income and changes in working capital. Net cash provided by operating activities during the three months ended December 31, 2025 was $8.0 million and resulted primarily from net non-cash charges of $9.3 million and net income of $2.8 million, partially offset by unfavorable changes in operating assets and liabilities of $4.0 million. Net cash provided by operating activities during the three months ended December 31, 2024 was $0.6 million and resulted primarily from net non-cash charges of $10.5 million, partially offset by a net loss of $4.6 million and by unfavorable changes in operating assets and liabilities of $5.4 million. The increase in cash inflows from operating activities of $7.5 million during the three months ended December 31, 2025 compared to three months ended December 31, 2024 was primarily due to the increase in net income.
Current wording
Cash flows related to operating activities are dependent on net income, adjustments to net income and changes in working capital. Net cash provided by operating activities during the six months ended March 31, 2026 was $7.1 million and resulted primarily from net non-cash charges of $20.3 million and net income of $12.3 million, partially offset by changes in operating assets and liabilities of $25.6 million driven primarily by an increase in accounts receivable. The increase in accounts receivable of $26.9 million relates to large deals executed late in the quarter with cash collections anticipated in the fiscal third quarter, and is partially offset by a decrease in contract assets of $4.0 million and an increase in deferred revenue of $7.6 million. Net cash provided by operating activities during the six months ended March 31, 2025 was $14.3 million and resulted primarily from net non-cash charges of $15.8 million and net income of $4.5 million, partially offset by changes in operating assets and liabilities of $6.0 million, driven primarily by an increase in accounts receivable. The increase in accounts receivable of $18.9 million is partially offset by a decrease in contract assets of $5.6 million and an increase in deferred revenue of $7.9 million. The decrease in cash inflows from operating activities of $7.2 million during the six months ended March 31, 2026, compared to six months ended March 31, 2025 was primarily due to an increase in changes in operating assets and liabilities partially offset by higher net income and non-cash charges.
Previous wording
Net cash provided by investing activities was $24.4 million during the three months ended December 31, 2025, which consisted primarily of net maturities of investments of $25.8 million, partially offset by capital expenditures of $1.4 million. Net cash provided by investing activities was $0.8 million during the three months ended December 31, 2024, which consisted primarily of net sales and maturities of investments of $1.2 million, partially offset by capital expenditures of $0.3 million. The increase in cash inflows from investing activities of $23.6 million during the three months ended December 31, 2025 compared to three months ended December 31, 2024 was primarily due to an increase in net maturities of investments in anticipation of the payment of our 2026 Notes in the second fiscal quarter of 2026.
Current wording
Net cash provided by investing activities was $31.2 million during the six months ended March 31, 2026, which consisted primarily of net sales and maturities of investments of $34.1 million, partially offset by capital expenditures of $3.0 million. Net cash provided by investing activities was $0.5 million during the six months ended March 31, 2025, which consisted primarily of net maturities of investments of $1.0 million, partially offset by capital expenditures of $0.6 million. The increase in cash inflows from investing activities of $30.7 million during the six months ended March 31, 2026, compared to six months ended March 31, 2025 was primarily due to an increase in net sales and maturities of investments in anticipation of the repayment of our 2026 Notes in the second fiscal quarter of 2026.
Previous wording
Net cash used in financing activities was $11.5 million during the three months ended December 31, 2025, primarily due to repurchases and retirements of Common Stock of $10.0 million and payment of tax withholding obligations related to net share settlements of equity awards of $2.0 million, partially offset by proceeds on other borrowings of $0.4 million. Net cash used in financing activities was $3.1 million during the three months ended December 31, 2024, primarily due to repurchases and retirements of Common Stock of $3.3 million, partially offset by $0.2 million of net proceeds from the issuance of equity plan Common Stock. The increase in cash outflows from financing activities during the three months ended December 31, 2025 was primarily due to higher repurchases and retirements of Common Stock and the payment of tax withholding obligations related to net share settlements of equity awards in the three months ended December 31, 2025.
Current wording
Net cash used in financing activities was $122.6 million during the six months ended March 31, 2026, primarily due to a $155.3 million repayment of our 2026 Notes in the second fiscal quarter of 2026, repurchases and retirements of Common Stock of $17.8 million and payment of tax withholding obligations related to net share settlements of equity awards of $2.1 million, partially offset by a Term Loan draw of $50.0 million, net proceeds from the issuance of equity plan Common Stock of $2.2 million, and proceeds on other borrowings of $0.3 million. Net cash used in financing activities was $3.1 million during the six months ended March 31, 2025, primarily due to repurchases and retirements of Common Stock of $3.3 million, partially offset by $0.3 million of net proceeds from the issuance of equity plan Common Stock. The increase in cash outflows from financing activities during the six months ended March 31, 2026 was primarily due to the repayment of our 2026 Notes and higher repurchases and retirements of Common Stock, partially offset by the draw on our Term Loan in the six months ended March 31, 2026.
Previous wording
The Amended Credit Agreement requires the Company to maintain a net leverage ratio of no more than 2.50 to 1.00 and if the Company consummates a permitted acquisition during the trailing twelve-month period, the net leverage ratio may not exceed 2.75 to 1.00. As of December 31, 2025, the Company was in compliance with the net leverage ratio covenant of the Amended Credit Agreement. There are no outstanding borrowings under the Amended Credit Agreement as of December 31, 2025.
Current wording
The Amended Credit Agreement requires the Company to maintain a net leverage ratio of no more than 2.50 to 1.00 and if the Company consummates a permitted acquisition during the trailing twelve-month period, the net leverage ratio may not exceed 2.75 to 1.00. As of March 31, 2026, the Company was in compliance with the net leverage ratio covenant of the Amended Credit Agreement.
Previous wording
The Company has certain loan agreements with Spanish government agencies. These agreements have repayment periods of five to twelve years and bear interest rates ranging from 0% to 3.72%. As of December 31, 2025, $4.8 million was outstanding under these agreements and $0.3 million and $4.5 million are recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets. As of September 30, 2025, $4.3 million was outstanding under these agreements and approximately $0.3 million and $4.0 million is recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets.
Current wording
The Company has certain loan agreements with Spanish government agencies. These agreements have repayment periods of five to twelve years and bear interest rates ranging from —% to 3.72%. As of March 31, 2026, $4.5 million was outstanding under these agreements and $0.3 million and $4.3 million are recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets. As of September 30, 2025, $4.3 million was outstanding under these agreements and approximately $0.3 million and $4.0 million is recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets.
Previous wording
At December 31, 2025, we had investments of $16.7 million, designated as available-for-sale debt securities, which consisted of commercial paper, corporate issuances, and government securities, carried at fair value as determined by quoted market prices for identical or similar assets, with unrealized gains and losses, net of tax, and reported as a separate component of stockholders’ equity. All securities for which maturity or sale is expected within one year are classified as “current” on the condensed consolidated balance sheets. All other securities are classified as “long-term” on the condensed consolidated balance sheets. At December 31, 2025, we had $15.0 million of our available-for-sale securities classified as current and $1.7 million of our available-for-sale securities classified as long-term. At September 30, 2025, we had $38.9 million of our available-for-sale securities classified as current and $3.5 million of our available-for-sale securities classified as long-term.
Current wording
At March 31, 2026, we had investments of $8.4 million, designated as available-for-sale debt securities, which consisted of commercial paper, corporate issuances, and government securities, carried at fair value as determined by quoted market prices for identical or similar assets, with unrealized gains and losses, net of tax, and reported as a separate component of stockholders’ equity. All securities for which maturity or sale is expected within one year are classified as “current” on the condensed consolidated balance sheets. All other securities are classified as “long-term” on the condensed consolidated balance sheets. At March 31, 2026, we had $8.4 million of our available-for-sale securities classified as current and none of our available-for-sale securities classified as long-term. At September 30, 2025, we had $38.9 million of our available-for-sale securities classified as current and $3.5 million of our available-for-sale securities classified as long-term.
Previous wording
We had working capital of $36.0 million at December 31, 2025 compared to $39.5 million at September 30, 2025. Our material cash requirements include repayment of the 2026 Notes as well as those related to leases as described in Note 10. “Leases” of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q. Based on our current operating plan we believe the current cash and cash equivalents, cash received from proceeds under the Amended Credit Agreement, and cash expected to be generated from operations will be adequate to satisfy our material cash requirements as well as our working capital needs for at least the next twelve months from the date the financial statements are filed for the foreseeable future.
Current wording
We had working capital of $96.6 million at March 31, 2026, compared to $39.5 million at September 30, 2025. Our material cash requirements include repayment of the Term Loan as well as those related to leases as described in Note 10. “Leases” of the notes to the condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q. Based on our current operating plan we believe the current cash and cash equivalents, cash available under the Revolving Line, and cash expected to be generated from operations will be adequate to satisfy our material cash requirements as well as our working capital needs for at least the next twelve months from the date the financial statements are filed and for the foreseeable future.
Previous wording
Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements and accompanying notes, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of the condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. We review our estimates on an on-going basis, including those related to revenue recognition, stock-based compensation, income taxes and the valuation of goodwill, intangibles and other long-lived assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. The critical accounting policies and estimates used in the preparation of our condensed consolidated financial statements are described in Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2025 Annual Report.
Current wording
Our discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements and accompanying notes, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of the condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent assets and liabilities. We review our estimates on an ongoing basis, including those related to revenue recognition, stock-based compensation, income taxes and the valuation of goodwill, intangibles and other long-lived assets. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. The critical accounting policies and estimates used in the preparation of our condensed consolidated financial statements are described in Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2025 Annual Report.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Selling and marketing expenses include payroll, employee benefits, stock-based compensation, and other headcount-related costs associated with sales and marketing personnel. Selling and marketing expenses also include non-billable costs of professional services personnel, advertising expenses, product promotion costs, trade shows, and other brand awareness programs. Selling and marketing expenses decreased $0.9 million, or 9%, to $9.6 million in the three months ended March 31, 2026, compared to $10.5 million in the three months ended March 31, 2025. The decrease in selling and marketing expense is primarily due to a re-allocation of headcount to focus on service intensive customer work and $1.3 million increase on deferred contract costs in the three months ended March 31, 2026 compared to the same period in 2025.
Current report — wording carried from elsewhere
Restructuring costs consist of employee severance obligations and other related costs. Restructuring costs were immaterial in the three months ended March 31, 2026. Restructuring costs were immaterial in the three months ended March 31, 2025.
Current report — wording carried from elsewhere
The following table summarizes certain aspects of our results of operations for the six months ended March 31, 2026 and 2025 (amounts in thousands, except percentages):
Current report — wording carried from elsewhere
Cost of revenue includes personnel costs related to billable services and software support, direct costs associated with our hardware products, hosting costs, and the costs of royalties for third party products embedded in our products. Cost of revenue increased $4.5 million, or 36%, to $17.0 million in the six months ended March 31, 2026, compared to $12.5 million in the six months ended March 31, 2025. The increase in cost of revenue is primarily due to an increase in SaaS revenue as well as increased investment in our SaaS products and increases in service intensive customer work with more personnel costs directly supporting our customers during the six months ended March 31, 2026, compared to the same period in 2025.
Current report — wording carried from elsewhere
Amortization of acquired intangibles and acquisition-related costs
Current report — wording carried from elsewhere
Amortization of acquired intangibles and acquisition-related costs include amortization of intangible assets, adjustments recorded due to changes in the fair value of contingent consideration, and other costs associated with acquisitions. Amortization of acquired intangibles and acquisition-related costs decreased $0.6 million, or 9%, to $6.6 million in the six months ended March 31, 2026, compared to $7.3 million in the six months ended March 31, 2025. This decrease is primarily due to a decrease in amortization expense of intangible assets from previous acquisitions that had been fully amortized during the six months ended March 31, 2026, compared to the same period in 2025.
Current report — wording carried from elsewhere
Other income (expense), net includes interest income net of amortization and net realized gains or losses on our marketable securities portfolio and foreign currency transactional gains or losses. Other income (expense), net increased $0.5 million, or 28%, to $2.1 million income in the six months ended March 31, 2026, compared to $1.7 million income in the six months ended March 31,
Current report — wording carried from elsewhere
For the six months ended March 31, 2026, we recorded an income tax provision of $4.8 million which yielded an effective tax rate of 28%. For the six months ended March 31, 2025, we recorded an income tax provision of $0.6 million which yielded an effective tax rate of 12%. The difference between the U.S. federal statutory tax rate and our effective tax rate for the six months ended March 31, 2026 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation, as well as the impact of the global intangible low-taxed income inclusion and federal, state and foreign research and development credits on the tax provision. The difference between the U.S. federal statutory tax rate and our effective tax rate for the six months ended March 31, 2025 was primarily due to a mix of worldwide income, the impact of non-deductible executive compensation, release of valuation allowances relating to one of the Company's operations in a foreign jurisdiction, as well as the impact of stock-based compensation, and federal, state and foreign research and development credits on the tax provision.