INSIGHT ENTERPRISES INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation and Recently Issued Accounting Standards

At Insight, we accelerate transformation by unlocking the power of people and technology. We turn complexity into clarity, helping our clients achieve meaningful business outcomes and drive real results at scale. We serve these clients in North America; Europe, the Middle East and Africa (“EMEA”); and Asia-Pacific (“APAC”). As a Fortune 500-ranked Solutions Integrator, we deliver secure, end-to-end digital transformation and meet the needs of our clients through a comprehensive portfolio of solutions, far-reaching partnerships and 38 years of broad IT expertise. We amplify our solutions and services with global scale, local expertise and our e-commerce experience, enabling our clients to realize their digital ambitions in multiple ways. Our company is organized in the following three operating segments, which are primarily defined by their related geographies:

Our offerings in North America and certain countries in EMEA and APAC include hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly our financial position as of March 31, 2026 and our results of operations for the three months ended March 31, 2026 and 2025 and cash flows for the three months ended March 31, 2026 and 2025. The consolidated balance sheet as of December 31, 2025 was derived from the audited consolidated balance sheet at such date. The accompanying unaudited consolidated financial statements and notes have been prepared in accordance with the rules and regulations promulgated by the SEC and consequently do not include all of the disclosures normally required by United States generally accepted accounting principles (“GAAP”).

The results of operations for interim periods are not necessarily indicative of results for the full year, due in part to the seasonal nature of our business. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the related notes thereto, in our Annual Report on Form 10-K for the year ended December 31, 2025.

The consolidated financial statements include the accounts of Insight Enterprises, Inc. and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Additionally, these estimates and assumptions affect the reported amounts of net sales and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, we evaluate our estimates, including those related to sales recognition, anticipated achievement levels under partner funding programs, assumptions related to stock-based compensation valuation, allowances for doubtful accounts and contract assets, valuation of inventories, valuation of acquired intangible assets, litigation-related obligations, valuation allowances for deferred tax assets and impairment of long-lived assets, including purchased intangibles and goodwill, if indicators of potential impairment exist.

Recently Issued Accounting Standards

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40)". The standard requires public business entities to disclose detailed information about specific types of expenses that are relevant to certain line items on the income statement. The guidance is effective for annual periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements can be applied prospectively with the option for retrospective application, and early adoption is permitted. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025‑06, Intangibles—Goodwill and Other—Internal‑Use Software (Subtopic 350‑40): Targeted Improvements to the Accounting for Internal‑Use Software. The standard modernizes the accounting guidance for internal‑use software costs by eliminating references to software development project stages and introducing a principles‑based capitalization model. Under the updated guidance, entities begin capitalizing internal‑use software costs when management has authorized and committed funding for the project and it is probable that the software will be completed and placed into service for its intended use. The guidance is effective for fiscal years beginning after December 15, 2027 and interim reporting periods within those fiscal years. Early adoption is permitted, and the guidance may be applied prospectively, retrospectively, or using a modified retrospective approach. The Company is currently evaluating the impact the adoption of this standard will have on its consolidated financial statements.

2. Receivables, Contract Assets, Contract Liabilities and Performance Obligations

Contract Balances

The following table provides information about receivables, contract assets and contract liabilities as of March 31, 2026 and December 31, 2025 (in thousands):

Significant changes in the gross contract assets balances during the three months ended March 31, 2026 are as follows (in thousands):

Contract assets consist of amounts the Company is entitled to for the resale of third-party consumption-based services, prior to payment becoming unconditional. In these transactions, the Company invoices clients for the gross amount of consideration it is responsible to collect, including amounts ultimately passed on to the third-party service providers. As of March 31, 2026, contract assets, net of allowances, were $106,124,000.

Gross contract assets by our internal risk ratings as of March 31, 2026 are summarized as follows (in thousands):

Changes in the contract liabilities balances during the three months ended March 31, 2026 are as follows (in thousands):

During the three months ended March 31, 2025, the Company recognized revenue of $32,528,000 related to its contract liabilities.

Transaction price allocated to the remaining performance obligations

The following table includes estimated net sales related to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2026 that are expected to be recognized in the future (in thousands):

With the exception of remaining performance obligations associated with our OneCall Support Services contracts which are included in the table above regardless of original duration, the remaining performance obligations that have original expected durations of one year or less are not included in the table above. Certain contracts are cancellable for convenience and are effectively month-to-month. These contracts are excluded from the total remaining performance obligation disclosure under the practical expedient for contracts with an original expected duration of one year or less. Additionally, for our time and material services contracts, including disposal service arrangements, whereby we have the right to consideration from a client in an amount that corresponds directly with the value to the client of our performance completed to date, we recognized revenue in the amount to which we have a right to invoice as of March 31, 2026 and do not disclose information about related remaining performance obligations in the table above.

3. Assets Held for Sale

Beginning in the second quarter of 2025, our property in Santa Monica, California had been classified as held for sale within other current assets, and the carrying value of the property was determined to be greater than its estimated fair value less costs to sell. Accordingly, we previously recorded a loss on impairment of a long lived real estate asset of $12,588,000 within selling and administrative expenses. During the three months ended March 31, 2026, we recorded an additional impairment charge of $1,368,700, resulting in total impairment charges of $13,956,700 on the property. Subsequent to March 31, 2026, the property was sold for $7,990,000. During the three months ended March 31, 2025, we didnot have any assets held for sale.

4. Net Earnings Per Share

Basic earnings per share ("EPS") is computed by dividing net earnings available to common stockholders by the weighted average number of common shares outstanding during each period. Diluted EPS is computed on the basis of the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period using the treasury stock method. Dilutive potential common shares include outstanding restricted stock units (“RSUs”) and certain shares underlying our previously outstanding 0.75% Convertible Senior Notes due 2025 (the "Convertible Notes") and the warrants (the "Warrants") relating to the Call Spread Transactions (as defined in Note 5), as applicable. A reconciliation of the denominators of the basic and diluted EPS calculations follows (in thousands, except per share data):

For the three months ended March 31, 2026 and 2025, approximately 286,000 and 57,000, respectively, of our RSUs were excluded from the diluted EPS calculations because their inclusion would have been anti-dilutive. These share-based awards could be dilutive in future periods.

5. Debt, Inventory Financing Facilities, Finance Leases and Other Financing Obligations

Debt

Our long-term debt consists of the following (in thousands):

On December 19, 2025, we entered into the Sixth Amendment to the Credit Agreement (as amended, the "credit agreement") to modify our ABL facility. The amendment, among other things, increased the maximum borrowing amount under the ABL facility from $1,800,000,000 to $2,000,000,000, including a maximum borrowing capacity that could be used for borrowing by certain foreign subsidiaries of $350,000,000. The amendment also extended the maturity date of the ABL facility from July 22, 2027 to December 19, 2030 and increased our flexibility with respect to the sale of receivables. From time to time and at our option, we may request to increase the aggregate amount available for borrowing under the ABL facility by up to an aggregate of the U.S. dollar equivalent of $750,000,000, subject to customary conditions, including receipt of commitments from lenders. The ABL facility is guaranteed by certain of our material subsidiaries and is secured by a lien on certain of our assets and certain of each other borrower’s and each guarantor’s assets. The ABL facility provides for an uncommitted first-in, last-out revolving facility in an aggregate amount of up to $100,000,000. As of March 31, 2026, eligible accounts receivable and inventory permitted availability to $1,955,867,000 of the full $2,000,000,000 facility amount, of which $975,670,000 was outstanding.

The ABL facility contains customary affirmative and negative covenants and events of default. If a default occurs (subject to customary grace periods and materiality thresholds) under the credit agreement, certain actions may be taken, including, but not limited to, possible termination of commitments and required payment of all outstanding principal amounts plus accrued interest and fees payable under the credit agreement. As of March 31, 2026, no such events have occurred.

Senior Unsecured Notes due 2032

On May 20, 2024, we issued $500,000,000 aggregate principal amount of 6.625% Senior Notes due 2032 (the "Senior Notes") that mature on May 15, 2032. The Senior Notes are senior unsecured obligations of the Company and guaranteed by each of the Company's existing and future direct and indirect U.S. subsidiaries that is or becomes a guarantor or borrower under the ABL facility, subject to certain exceptions. The net proceeds from the offering were used to repay a portion of the outstanding borrowings under the ABL facility. The Senior Notes were issued pursuant to an indenture (the "Senior Notes Indenture") containing certain covenants that limit the Company's ability to, subject to certain exceptions, create, incur, or assume liens to secure debt, among other things. The Senior Notes bear interest at an annual rate of 6.625% payable semiannually, in arrears, on May 15 th and November 15 th of each year beginning on November 15, 2024.

The Company may redeem the Senior Notes prior to May 15, 2027, with an amount equal to the net cash proceeds received by the Company from certain equity offerings at a redemption price equal to 106.625% of the principal amount of such notes, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the aggregate principal amount of the Senior Notes. The Senior Notes are subject to redemption at specified prices on or after May 15, 2027 plus accrued and unpaid interest, if any, on such notes redeemed, to, but excluding, the applicable redemption date. In addition, at any time prior to May 15, 2027, the Company may, on one or more occasions, redeem the Senior Notes in whole or in part, at its option, upon notice, at a redemption price equal to 100% of the principal amount of such notes plus a “make-whole” premium as specified in the Senior Notes Indenture and accrued and unpaid interest, if any, to, but excluding, the redemption date.

If the Company experiences certain change of control events, together with a ratings decline, as described in the Senior Notes Indenture, the Company will be required to make an offer to repurchase some or all of the Senior Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date.

The Senior Notes are subject to certain customary events of default and acceleration clauses. As of March 31, 2026, no such events have occurred.

The Senior Notes consist of the following balances reported within the consolidated balance sheets (in thousands):

Convertible Senior Notes due 2025

In August 2019, we issued $350,000,000 aggregate principal amount of the Convertible Notes that matured on February 15, 2025. The Convertible Notes bore interest at an annual rate of 0.75% payable semiannually, in arrears, on February 15 th and August 15 th of each year. The Convertible Notes were general unsecured obligations of Insight and were guaranteed on a senior unsecured basis by Insight Direct USA, Inc., a wholly owned subsidiary of Insight.

Upon maturity, the significant majority of Convertible Note holders elected to convert their notes. As a result, the aggregate principal amount of $333,091,000 was settled in cash with the additional amounts due as a result of conversion being settled in shares of our common stock. The conversion rate was 14.6376 shares of common stock per $1,000 principal amount of the Convertible Notes (equivalent to the initial conversion price of approximately $68.32 per share of common stock). We issued 2,832,627 shares upon conversion.

The Convertible Notes were reflected in the consolidated balance sheets prior to their maturity.

The effective interest rate on the principal of the Convertible Notes was 0.75%.Interest expense recognized for the three months ended March 31, 2025 consisted of contractual coupon interest and amortization of debt issuance costs and was included in the consolidated statement of operations.

Convertible Note Hedge and Warrant Transaction

In connection and concurrent with the issuance of the Convertible Notes, we entered into certain convertible note hedge and warrant transactions (the "Call Spread Transactions") with respect to the Company’s common stock.

The convertible note hedge consisted of an option to purchase up to 5,123,160 common stock shares at a price of $68.32 per share. On February 15, 2025, we executed the convertible note hedge upon the conversion of the Convertible Notes discussed above. Upon execution, we received 2,833,276 shares of common stock, which we used to meet our obligation under the Convertible Notes to issue shares of common stock upon conversion.

Additionally, we sold Warrants to purchase 5,123,160 shares of common stock at a price of $103.12 per share as part of the Call Spread Transactions. The Warrants expired on May 15, 2025 and could not be exercised prior to maturity. The Company received aggregate proceeds of approximately $34,440,000 in 2019 for the sale of the Warrants.

On January 6, 2025, we entered into an agreement to settle 2,049,264 of the total 5,123,160 Warrants. These Warrants were settled entirely in cash for $138,892,000 on February 27, 2025. We recorded a liability of approximately $112,590,000 to accrued expenses and other current liabilities upon execution of the agreement. The change in the fair value of the settlement liability through the settlement date of $26,301,000 was recognized in net income.

On February 25, 2025, we entered into an agreement to settle an additional 1,536,948 of the remaining Warrants. These Warrants were settled entirely in cash for $83,072,000 on April 2, 2025. We recorded a liability of approximately $84,304,000 to accrued expenses and other current liabilities upon execution of the agreement. The change in the fair value of the settlement liability through the settlement date of $1,233,000 was recognized in net income.

During 2025, the remaining 1,536,948 Warrants were either settled or expired with no value. We issued an aggregate of 215,324 shares of our common stock to settle the remaining Warrants. As a result, there wereno outstanding Warrants as of December 31, 2025 or March 31, 2026.

The Call Spread Transactions had no effect on the terms of the Convertible Notes and reduced potential dilution by effectively increasing the initial conversion price of the Convertible Notes to $103.12 per share of the Company’s common stock.

Inventory Financing Facilities

We have maximum availability under our unsecured inventory financing facility with MUFG Bank Ltd (“MUFG”) of $280,000,000. As of March 31, 2026, we have maximum availability under our unsecured inventory financing facility with PNC Bank, N.A. (“PNC”) of $375,000,000, including a $25,000,000 facility in Canada (the "Canada facility"). We also have maximum availability under our unsecured inventory financing facility with Wells Fargo in EMEA (the "EMEA facility") of $50,000,000. As of March 31, 2026, our combined inventory financing facilities had a total maximum capacity of $705,000,000, of which $259,611,000 was outstanding.

The inventory financing facilities will remain in effect until they are terminated by any of the parties. If balances are not paid within stated vendor terms (typically 60 days), they will accrue interest at prime plus 2.00% on the MUFG facility, Canadian Overnight Repo Rate Average plus 4.50% on the Canada facility and Term SOFR, EURIBOR, or SONIA, as applicable, plus 4.50% and 0.25% on the PNC (other than the Canada facility) and EMEA facilities, respectively. Amounts outstanding under these facilities are classified separately as accounts payable – inventory financing facilities in the accompanying consolidated balance sheets and within cash flows from financing activities in the accompanying consolidated statements of cash flows. We impute interest on the average daily balance outstanding during these stated vendor terms based on our incremental borrowing rate during the period.

6. Income Taxes

Our effective tax rates were 39.4% and 60.5% for the three months ended March 31, 2026 and 2025, respectively. For both periods, the effective tax rate was unfavorably impacted by state income taxes, higher taxes on earnings in foreign jurisdictions, and the non-deductibility of losses from the revaluation of earnout liabilities. The effective tax rate for the three months ended March 31, 2026 was further increased by tax shortfalls on share-based compensation. The effective tax rate for the three months ended March 31, 2025 was further increased by the non-deductibility of net losses associated with warrant settlement liabilities, partially offset by a non-recurring release of a valuation allowance on foreign tax credit carryforwards.

As of March 31, 2026 and December 31, 2025, we had approximately $14,327,000 and $13,272,000, respectively, of unrecognized tax benefits. Of these amounts, approximately $2,085,000 and $1,667,000, respectively, related to accrued interest. In the future, if recognized, the remaining liability associated with uncertain tax positions could affect our effective tax rate.

7. Share Repurchase Program

On December 19, 2025, we announced that our Board of Directors authorized the repurchase of up to $299,000,000 of our common stock, including amounts that remained from prior authorizations. As of March 31, 2026, approximately $224,000,000 remained available for repurchases under our share repurchase program. Our share repurchases may be made on the open market, subject to Rule 10b-18 or in privately negotiated transactions, through block trades, through 10b5-1 plans or otherwise, at management’s discretion. The number of shares purchased and the timing of the purchases will be based on market conditions, working capital requirements, general business conditions and other factors. We intend to retire the repurchased shares.

During the three months ended March 31, 2026, we repurchased 899,561 shares of our common stock on the open market at a total cost of approximately $75,000,000 (an average price of $83.37 per share). During the three months ended March 31, 2025, we didnot repurchase any shares of our common stock. All shares repurchased during the three months ended March 31, 2026 were retired.

8. Commitments and Contingencies

Contractual

In the ordinary course of business, we issue performance bonds to secure our performance under certain contracts or state tax requirements. As of March 31, 2026, we had approximately $38,381,000 of performance bonds outstanding. These bonds are issued on our behalf by a surety company on an unsecured basis; however, if the surety company is ever required to pay out under the bonds, we have contractually agreed to reimburse the surety company.

Management believes that payments, if any, related to these performance bonds are not probable at March 31, 2026. Accordingly, we have not accrued any liabilities related to such performance bonds in our consolidated financial statements.

The Company has a minimum required purchase commitment of approximately $100,467,000 pursuant to an agreement primarily related to cloud services. The total purchase commitment is required to be met or exceeded during a 5-year period, starting October 1, 2023 through September 30, 2028. At March 31, 2026, we had a remaining purchase commitment of $51,235,000. If total purchases do not meet the required commitment by September 30, 2028, the shortfall must be prepaid by the Company and can be used for further purchases through September 30, 2029.

The Company has a minimum required purchase commitment of approximately $40,000,000 pursuant to an agreement primarily related to software as a service. The total purchase commitment was required to be met during a 4-year period, starting November 30, 2022 through November 29, 2026. If total purchases did not meet the required commitment by November 29, 2026, the Company could extend the term of the commitment through November 29, 2027. During this extended period, any credit balance would remain available for payment against the usage of the subscribed products. As of March 31, 2026, the Company has satisfied the minimum purchase commitment under this agreement and hasno remaining purchase commitment outstanding.

As of March 31, 2026, the Company has recorded a contingent liability of approximately $27,793,000, payable to a partner to settle various contractual commitments to resell a minimum amount of cloud services to clients.

Employment Contracts and Severance Plans

We have employment contracts with, and severance plans covering, certain officers and management teammates under which severance payments would become payable in the event of specified terminations without cause or terminations under certain circumstances after a change in control. In addition, vesting of outstanding nonvested RSUs would accelerate following a change in control. If severance payments under the current employment agreements or plan payments were to become payable, the severance payments would generally range from three totwenty-four months of salary.

Indemnifications

From time to time, in the ordinary course of business, we enter into contractual arrangements under which we agree to indemnify either our clients or third-party service providers from certain losses incurred relating to services performed on our behalf or for losses arising from defined events, which may include litigation or claims relating to past performance. These arrangements include, but are not limited to, the indemnification of our clients for certain claims arising out of our performance under our sales contracts, the indemnification of our landlords for certain claims arising from our use of leased facilities and the indemnification of the lenders that provide our credit facilities for certain claims arising from their extension of credit to us. Such indemnification obligations may not be subject to maximum loss clauses.

Management believes that payments, if any, related to these indemnifications are not probable at March 31, 2026. Accordingly, we have not accrued any liabilities related to such indemnifications in our consolidated financial statements.

We have entered into separate indemnification agreements with certain of our executive officers and with each of our directors. These agreements require us, among other requirements, to indemnify such officers and directors against expenses (including attorneys’ fees), judgments and settlements incurred by such individual in connection with any action arising out of such individual’s status or service as our executive officer or director (subject to exceptions such as where the individual failed to act in good faith or in a manner the individual reasonably believed to be in, or not opposed to, the best interests of the Company) and to advance expenses incurred by such individual with respect to which such individual may be entitled to indemnification by us. There are no pending legal proceedings that involve the indemnification of any of the Company’s directors or officers.

Contingencies Related to Third-Party Review

From time to time, we are subject to potential claims and assessments from third parties. We are also subject to various governmental, client and partner audits. We continually assess whether or not such claims have merit and warrant accrual. Where appropriate, we accrue estimates of anticipated liabilities in our consolidated financial statements. Such estimates are subject to change and may affect our results of operations and our cash flows.

Legal Proceedings

From time to time, we are party to various legal proceedings incidental to the business, including preference payment claims asserted in client bankruptcy proceedings, indemnification claims, claims of alleged infringement of patents, trademarks, copyrights and other intellectual property rights, employment claims, claims related to services provided, interruptions, or outages, claims of alleged non-compliance with contract provisions and claims related to alleged violations of laws and regulations. We regularly evaluate the status of the legal proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional loss, may have been incurred and determine if accruals are required. If accruals are not required, we further evaluate each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made. Although litigation is inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that our consolidated financial position, results of operations or liquidity could be materially and adversely affected in any particular period by the work required pursuant to any legal proceedings or the resolution of any legal proceedings during such period. Legal expenses related to defense of any legal proceeding or the negotiations, settlements, rulings and advice of outside legal counsel in connection with any legal proceedings are expensed as incurred.

9. Segment Information

We operate inthree reportable geographic operating segments: North America; EMEA; and APAC. Our offerings in North America and certain countries in EMEA and APAC include IT hardware, software and services, including cloud solutions. Our offerings in the remainder of our EMEA and APAC segments consist largely of software and certain software-related services and cloud solutions.

In the following table, revenue is disaggregated by our reportable operating segments, which are primarily defined by their related geographies, as well as by major product offering, by major client group and by recognition on either a gross basis as a principal in the arrangement, or on a net basis as an agent, for the three months ended March 31, 2026 and 2025 (in thousands):

The method for determining what information regarding operating segments, products and services, geographic areas of operation and major clients to report is based upon the “management approach,” or the way that management organizes the operating segments within a company, for which separate financial information is evaluated regularly by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources. Our CODM is our Chief Executive Officer, which was Joyce Mullen as of March 31, 2026. Effective as of April 13, 2026, Jack Azagury serves as our Chief Executive Officer.

All significant intercompany transactions are eliminated upon consolidation, and there are no differences between the accounting policies used to measure profit and loss for our segments or on a consolidated basis. Net sales are defined as net sales to external clients. None of our clients exceeded ten percent of consolidated net sales for the three months ended March 31, 2026 or 2025.

A portion of our operating segments’ selling and administrative expenses arise from shared services and infrastructure that we have historically provided to them in order to realize economies of scale and to use resources efficiently. These expenses, collectively identified as corporate charges, include senior management expenses, internal audit, legal, tax, insurance services, treasury and other corporate infrastructure expenses. Charges are allocated to our operating segments, and the allocations have been determined on a basis that we considered to be a reasonable reflection of the utilization of services provided to or benefits received by the operating segments.

The following tables present our results of operations by reportable operating segment for the periods indicated (in thousands):

Our CODM uses Adjusted earnings from operations ("Adjusted EFO") when assessing the performance of and deciding how to allocate resources to the operating segments. For example, Adjusted earnings from operations is a basis for executive variable compensation. Significant selling and administrative expenses primarily reflect personnel costs, including teammate benefits. Effective in the first quarter of 2026, we transitioned to an updated definition of Adjusted EFO that also excludes stock‑based compensation expense in order to improve comparability across companies. Prior period segment information has been recast to conform to the current period presentation. Adjusted earnings from operations excludes amortization of intangible assets, severance and restructuring expenses, acquisition and integration related expenses, stock-based compensation expense and certain other expenses. These other expenses include transformation costs, revaluation of earnout liabilities and other non-significant expenses. Our CODM uses comparisons of actual Adjusted earnings from operations against budgets, forecasts and prior periods as a basis for assessing current period segment performance as well as for determining necessary resources to assign, including for determining necessary investments or reductions in resources.

The following is a summary of our total assets by reportable operating segment (in thousands):

We recorded the following pre-tax amounts, by reportable operating segment, for depreciation and amortization in the accompanying consolidated financial statements (in thousands):

10. Acquisition

Sekuro

Effective October 31, 2025, we acquired 100 percent of the issued and outstanding shares of Sekuro Limited ("Sekuro") for a preliminary cash purchase price of approximately $79,498,000, net of cash, cash equivalents, and restricted cash acquired of $3,822,000, which is comprised of the initial purchase price of $85,347,000 paid in cash upon the acquisition, partially offset by the contractual adjustments to the purchase price of $2,027,000. The total purchase price also includes the estimated fair value of earn out payments of approximately $11,439,000, which provide an incentive opportunity for the sellers to earn up to AUD 122,500,000, contingent upon Sekuro achieving certain EBITDA and net revenue performance targets through October 2027. The AUD 122,500,000 includes up to AUD 42,500,000 available to the sellers for over achievement against EBITDA and net revenue performance targets. Sekuro is a global cybersecurity and digital resilience provider that offers end-to-end security services for enterprises and governments. We believe the acquisition positions us to better meet the growing demand for comprehensive security solutions in an increasingly complex threat landscape.

The preliminary fair value of net assets acquired was approximately $16,183,000, including approximately $21,431,000 of identifiable intangible assets, consisting primarily of customer relationships of $20,379,000 that will be amortized using the straight-line method over the estimated economic life often years. As these intangible assets are not tax deductible, we recognized a related deferred tax liability of approximately $6,429,000. The preliminary purchase price was allocated using the information currently available. Further information obtained upon the finalization of the fair value assumptions for identifiable intangible assets acquired and final assessments of various other assets and liabilities could lead to an adjustment of the purchase price allocation. Goodwill acquired approximated $74,754,000, which was recorded in our APAC operating segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

We consolidated the results of operations for Sekuro within our APAC operating segment since its acquisition on October 31, 2025. Our historical results would not have been materially affected by the acquisition of Sekuro and, accordingly, we have not presented pro forma information as if the acquisition had been completed at the beginning of each period presented in our consolidated statement of operations.

We recognized a net loss of $4,007,000 within selling and administrative expenses due to the net changes in the estimated fair value of the earnout payments for the three months ended March 31, 2026.

Inspire11

Effective October 1, 2025, we acquired 100 percent of the issued and outstanding equity of Inspire11 LLC ("Inspire11") for a cash purchase price of approximately $209,822,000, net of cash and cash equivalents acquired of $1,413,000, which is comprised of the initial purchase price of $205,171,000 paid in cash upon the acquisition, and a seller retention fund of $6,300,000 and other costs of $160,000 payable post-closing, partially offset by the contractual adjustments to the purchase price of $351,000 and settlement of pre-existing relationship of $45,000. The total purchase price also includes the estimated fair value of earn out payments of approximately $37,790,000, which provide an incentive opportunity for the sellers to earn up to $66,000,000, contingent upon Inspire11 achieving certain EBITDA performance targets through September 2027. Inspire11 is an award-winning technology delivery firm with deep advisory, data, and AI expertise. We believe this acquisition strengthens our capabilities as a leading solutions integrator through the integration of proven AI delivery accelerators, deep data and analytics expertise, and a results-driven methodology to convert AI initiatives into tangible business value and transformative growth.

The preliminary fair value of net assets acquired was approximately $59,146,000, including approximately $50,800,000 of identifiable intangible assets, consisting primarily of customer relationships of $28,000,000 and non-compete agreements of $21,300,000. The preliminary purchase price was allocated using the information currently available. Further information obtained upon the finalization of the fair value assumptions for identifiable intangible assets acquired and various accrued expense balance assessments, including tax related liabilities, could lead to an adjustment of the purchase price allocation. Goodwill acquired approximated $188,466,000, which was recorded in our North America operating segment. Approximately 98% of goodwill is expected to be deductible for income tax purposes.

We consolidated the results of operations for Inspire11 within our North America operating segment since its acquisition on October 1, 2025. Our historical results would not have been materially affected by the acquisition of Inspire11 and, accordingly, we have not presented pro forma information as if the acquisition had been completed at the beginning of each period presented in our consolidated statement of operations.

We recognized a net loss of $6,620,000 within selling and administrative expenses due to the net changes in the estimated fair value of the earnout payments for the three months ended March 31, 2026.

Infocenter

Effective May 1, 2024, we acquired 100 percent of the issued and outstanding shares of Infocenter.io Corporation ("Infocenter") for a cash purchase price of $265,000,000, net of cash and cash equivalents acquired of $5,103,000, which is comprised of the initial purchase price of $269,477,000 paid in cash upon the acquisition and contractual adjustments to the purchase price of $626,000 paid in July 2024. The total purchase price of $289,200,000 also includes the estimated fair value of earn out payments of approximately $24,200,000, which provide an incentive opportunity for the sellers of up to $106,250,000, based on Infocenter achieving certain EBITDA performance through April 2026. Infocenter is a pure-play ServiceNow Elite Partner dedicated to automating business processes on the Now Platform®. We believe this acquisition enhances our Solutions Integrator offering framework to drive better business outcomes for our clients by enabling them to scale their multicloud environments with modern infrastructure, applications, and unified data and AI platforms.

The fair value of net assets acquired was approximately $98,084,000, including approximately $123,900,000 of identifiable intangible assets, consisting primarily of customer relationships that will be amortized using the straight-line method over the estimated economic life often years. As these intangible assets are not tax deductible, we recognized a related deferred tax liability of approximately $31,832,000. We finalized the purchase price allocation in relation to this acquisition in the second quarter of 2025, with no material changes to our preliminary estimates. Goodwill acquired approximated $191,116,000, which was recorded in our North America operating segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

We consolidated the results of operations for Infocenter within our North America operating segment since its acquisition on May 1, 2024. Our historical results would not have been materially affected by the acquisition of Infocenter and, accordingly, we have not presented pro forma information as if the acquisition had been completed at the beginning of each period presented in our consolidated statement of operations.

We recognized net losses of $14,666,000 and $15,200,000 within selling and administrative expenses due to the net changes in the estimated fair value of the earnout payments for the three months ended March 31, 2026 and 2025, respectively. On July 1, 2025, we paid approximately $39,602,000 for Infocenter's first earnout period.

11. Derivative Financial Instruments

We use derivatives to partially offset our exposure to fluctuations in certain foreign currencies. We do not enter into derivative contracts for speculative or trading purposes. Derivatives are recorded at fair value on the balance sheet based on observable market based inputs or unobservable inputs that are corroborated by market data (Level 2) where available. Gains or losses resulting from changes in fair value of our non hedge designated derivatives are recorded currently in income. Gains or losses resulting from changes in fair value of our hedge designated derivatives are recorded in other comprehensive income. Our foreign currency derivative instruments are not subject to any master netting arrangements with our counterparties.

We use foreign exchange forward contracts to mitigate risk associated with our net investment in foreign currency denominated operations. These forward contracts are designated as net investment hedges. In December 2025, we entered intotwo foreign exchange forward contracts to mitigate risk associated with our foreign operations denominated in Euros. These forward contracts, one forthree years and another forfive years, each have a notional value of $50,000,000. These foreign currency forward contracts are carried at fair value. Changes in the fair value of these instruments during the three months ended March 31, 2026 were immaterial.

We use foreign exchange forward contracts to mitigate risk associated with certain non-functional currency assets and liabilities from fluctuations in foreign currency exchange rates. Our non-functional currency assets and liabilities are primarily related to foreign currency denominated payables, receivables, and cash balances. The foreign currency forward contracts, carried at fair value, typically have a maturity of one month or less.

12. Subsequent Event

Sale of the Santa Monica Property

Our property in Santa Monica, California, which had been classified as held for sale as of March 31, 2026, was sold on April 3, 2026 for gross proceeds of $7,990,000. The Santa Monica property was acquired as part of an acquisition completed in 2019. Through March 31, 2026, the Company had recorded cumulative impairment charges of $13,956,700 related to the property. The sale occurred subsequent to the reporting period and, accordingly, was not reflected in the accompanying unaudited condensed consolidated financial statements.

New Chief Executive Officer

Effective April 13, 2026, Mr. Azagury was appointed as President and Chief Executive Officer of the Company and as a member of the Company’s board of directors, succeeding Ms. Mullen. The effective date of Mr. Azagury's appointment occurred subsequent to the reporting period and did not impact the accompanying unaudited condensed consolidated financial statements. Ms. Mullen will continue to serve in a consulting and advisory role pursuant to the terms of her executive employment agreement.