8X8 INC /DE/

Previous wording

While the implications of macroeconomic events on our business, results of operations, and overall financial position remain uncertain over the long term, we expect that adverse economic conditions could adversely impact our business in future periods. For example, our installed base includes more than 50,000 small businesses, which tend to be disproportionately impacted by macroeconomic headwinds.

Current wording

While the implications of macroeconomic events on our business, results of operations, and overall financial position remain uncertain over the long term, we expect that adverse economic conditions could adversely impact our business in future periods. For example, our installed base includes approximately 50,000 small businesses, which tend to be disproportionately impacted by macroeconomic headwinds.

Previous wording

As part of our long-term strategy to grow our revenue and increase profitability and cash flow, we are focused on retaining our existing customers and expanding our mid-market, enterprise and public sector customer base. We believe that continued innovation is a critical factor in attracting and retaining our customers and is an important variable in achieving sustainable growth. We are committed to maintaining a high level of investment in research and development to deliver innovation across our Platform for CX, expand our ecosystem of integrated third-party applications, and maintain the high platform availability our customers require.

Current wording

As part of our long-term strategy to grow our revenue and increase profitability and cash flow, we are focused on retaining our existing customers and expanding our mid-market, enterprise and public sector customer base. We believe that continued innovation is a critical factor in attracting and retaining our customers and is an important variable in achieving sustainable growth. We are committed to continuing our investment in research and development to deliver innovation across our Platform for CX, expand our ecosystem of integrated third-party applications, and maintain the high platform availability our customers require.

Previous wording

Our investment in innovation has been complemented by initiatives to manage the cost of delivering our services and improve our sales efficiency. We continue to monitor factors that could have an impact on customer buying behavior and demand, including macroeconomic conditions, the competitive environment, contract duration, churn, upsell and down-sell, renewals, and payment terms, all of which have caused variability in our results and may continue to do in the future. We expect the cost of delivering our communication services, both in total dollars and as a percentage of service revenue, to vary with the amount of service revenue and the mix of subscription and usage revenue within service revenue. To improve our sales efficiency over time, we continue to invest in marketing programs to drive awareness for our solutions, and we have increased training for our sales teams, and invested in tools to increase productivity. We have also expanded our reseller partner programs to extend our reach within our target customer market, placing increased emphasis on developing a community of value-added resellers who provide implementation services and Tier 1 customer support in addition to sales. To support our customers and partners, we have expanded our customer success organization and continue to invest in improvements to our back-office processes to increase our operational efficiency over time.

Current wording

Our investment in innovation has been complemented by initiatives to manage the cost of delivering our services and improve our sales efficiency. We continue to monitor factors that could have an impact on customer buying behavior and demand, including technological changes in artificial intelligence ("AI") and AI-related developments, macroeconomic conditions, the competitive environment, contract duration, churn, upsell and down-sell, renewals, and payment terms, all of which have caused variability in our results and may continue to do in the future. We expect the cost of delivering our communication services, both in total dollars and as a percentage of service revenue, to vary with the amount of service revenue and the mix of subscription and usage revenue within service revenue. To improve our sales efficiency over time, we continue to invest in marketing programs to drive awareness for our solutions, and we have increased training for our sales teams and invested in tools to increase productivity. We have also expanded our reseller partner programs to extend our reach within our target customer market, placing increased emphasis on developing a community of value-added resellers who provide implementation services and Tier 1 customer support in addition to sales. To support our customers and partners, we have expanded our customer success organization and continue to invest in improvements to our back-office processes to increase our operational efficiency over time.

Previous wording

Service revenue increased by $4.0 million, or 2.3%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. This change was driven by an increase of $11.9 million in platform usage revenue generated primarily in the Asia-Pacific region. This increase was partially offset by a decrease in subscription revenue of $7.9 million consisting predominantly of former Fuze customers.

Current wording

Service revenue increased by $6.2 million, or 3.6%, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024. This change was driven by an increase of $14.0 million in platform usage revenue generated primarily in the Asia-Pacific region, resulting from higher customer consumption volumes of our usage-based offerings, reflecting expanded customer adoption and usage of messaging, minutes and AI-based solutions during the period. This increase was partially offset by a decrease in subscription revenue of $7.8 million consisting predominantly of former Fuze customers.

Previous wording

Service revenue increased by $7.5 million, or 2.2%, for the six months ended September 30, 2025, compared to the six months ended September 30, 2024. This change was driven by an increase of $20.1 million in platform usage revenue generated primarily in the Asia-Pacific region. This increase was partially offset by a decrease in subscription revenue of $12.6 million consisting predominantly of former Fuze customers.

Current wording

Service revenue increased by $13.7 million, or 2.6%, for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024. This change was driven by an increase of $34.2 million in platform usage revenue generated primarily in the Asia-Pacific region, resulting from higher customer consumption volumes of our usage-based offerings, reflecting expanded customer adoption and usage of messaging, minutes and AI-based solutions during the period. This increase was partially offset by a decrease in subscription revenue of $20.5 million consisting predominantly of former Fuze customers.

Previous wording

Other revenue decreased by $1.2 million, or 10.8%, for the six months ended September 30, 2025, compared to the six months ended September 30, 2024, due to lower product revenue of $1.6 million, partially offset by an increase in professional service revenue of $0.4 million.

Current wording

Other revenue decreased by $0.1 million, or 1.0%, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, due to a decrease in professional service revenue of $0.5 million, partially offset by an increase in product revenue of $0.4 million.

Previous wording

Other revenue decreased by $0.9 million, or 15.6%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to lower product revenue of $0.8 million and decreased professional service revenue of $0.1 million.

Current wording

Other revenue decreased by $1.3 million, or 7.6%, for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, due to lower product revenue and professional service revenue of $1.1 million and $0.2 million, respectively.

Previous wording

Cost of service revenue increased by $7.4 million, or 14.8%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to increases of $10.1 million in costs to deliver our subscription and platform usage services and $0.3 million in salaries, benefits and consulting costs. These increases were partially offset by decreases of $1.6 million in amortization of intangible assets, $0.8 million in stock-based compensation, and $0.6 million in amortization of capitalized software.

Current wording

Cost of service revenue increased by $9.0 million, or 17.8%, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily due to increases of $10.9 million in network and carrier service provider costs to deliver our subscription and platform usage services to support our capacity needs and $0.6 million in salaries, benefits and consulting costs. These increases were partially offset by decreases of $1.6 million in amortization of intangible assets, $0.5 million in stock-based compensation, and $0.4 million in amortization of capitalized software.

Previous wording

Cost of service revenue increased by $11.8 million, or 11.8%, for the six months ended September 30, 2025, compared to the six months ended September 30, 2024, primarily due to increases of $17.3 million in costs to deliver our subscription and platform usage services and $1.4 million in salaries, benefits and consulting costs. These increases were partially offset by decreases of $3.2 million in amortization of intangible assets, $2.3 million in stock-based compensation, and $1.4 million in amortization of capitalized software.

Current wording

Cost of service revenue increased by $20.8 million, or 13.8%, for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, primarily due to increases of $28.2 million in network and carrier service provider costs to deliver our subscription and platform usage services to support our capacity needs and $2.0 million in salaries, benefits and consulting costs. These increases were partially offset by decreases of $4.8 million in amortization of intangible assets, $2.7 million in stock-based compensation, and $1.9 million in amortization of capitalized software.

Previous wording

Cost of other revenue decreased by $0.5 million, or 6.8%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to decreases of $0.5 million in lower product costs associated with IP telephone hardware and $0.2 million of stock-based compensation. These decreases were partially offset by an increase of $0.2 million in salaries, benefits, and consulting costs to deliver our professional services.

Current wording

Cost of other revenue increased by $0.1 million, or 0.7%, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily due to an increase of $0.3 million in product costs associated with IP telephone hardware. This increase was partially offset by a decrease of $0.2 million in stock-based compensation.

Previous wording

Cost of other revenue decreased by $1.1 million, or 7.3%, for the six months ended September 30, 2025, compared to the six months ended September 30, 2024, primarily due to decreases of $1.1 million in lower product costs associated with IP telephone hardware and $0.5 million of stock-based compensation. These decreases were partially offset by an increase of $0.5 million in salaries, benefits, and consulting costs to deliver our professional services.

Current wording

Cost of other revenue decreased by $1.1 million, or 4.7%, for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, primarily due to decreases of $0.9 million in lower product costs associated with IP telephone hardware and $0.7 million of stock-based compensation. These decreases were partially offset by an increase of $0.5 million in salaries, benefits, and consulting costs to deliver our professional services.

Previous wording

Research and development expenses decreased by $3.4 million, or 10.8%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to decreases of $2.1 million in stock-based compensation, $1.4 million in internally-developed software and other costs, and $0.6 million in costs to operate data centers and facilities. These decreases were partially offset by increases of $0.4 million in amortization of capitalized software and $0.3 million in combined salaries, benefits, and consulting costs necessary for us to conduct our product, platform development and engineering efforts.

Current wording

Research and development expenses decreased by $2.6 million, or 8.9%, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily due to decreases of $2.2 million in stock-based compensation, $1.2 million in combined salaries, benefits, and consulting costs necessary for us to conduct our product, platform development and engineering efforts, and $0.7 million in costs to operate data centers. These decreases were partially offset by increases of $1.1 million in software licenses and other costs and $0.4 million in amortization of capitalized software.

Previous wording

Research and development expenses decreased by $7.1 million, or 11.3%, for the six months ended September 30, 2025, compared to the six months ended September 30, 2024, primarily due to decreases of $5.2 million in stock-based compensation, $2.4 million in internally-developed software and other costs, and $1.0 million in costs to operate data centers and facilities. These decreases were partially offset by increases of $1.2 million in combined salaries, benefits, and consulting costs necessary for us to conduct our product, platform development and engineering efforts and $0.3 million in amortization of capitalized software.

Current wording

Research and development expenses decreased by $9.8 million, or 10.5%, for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, primarily due to decreases of $7.4 million in stock-based compensation, $2.6 million in internally-developed software and other costs, and $1.7 million in costs to operate data centers and facilities. These decreases were partially offset by increases of $1.2 million in software licenses and $0.7 million in amortization of capitalized software.

Previous wording

Sales and marketing expenses decreased by $1.0 million, or 1.6%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to decreases of $3.3 million in channel commissions and amortization of deferred contract acquisition costs and $0.5 million in stock-based compensation expense. These decreases were partially offset by increases of $1.9 million in salaries, benefits, and consulting costs and $0.9 million in paid media and other marketing services costs.

Current wording

Sales and marketing expenses decreased by $5.1 million, or 7.8%, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily due to decreases of $3.4 million in channel commissions and amortization of deferred contract acquisition costs, $1.4 million in stock-based compensation expense, and $0.7 million in paid media and other marketing services costs. These decreases were partially offset by an increase of $0.4 million in salaries, benefits, and consulting costs.

Previous wording

Sales and marketing expenses were flat for the six months ended September 30, 2025, compared to the six months ended September 30, 2024, primarily due to increases of $5.3 million in salaries, benefits, and consulting costs and $2.6 million in paid media and other marketing services costs. These increases were partially offset by decreases of $6.1 million in channel commissions and amortization of deferred contract acquisition costs and $1.7 million in stock-based compensation expense.

Current wording

Sales and marketing expenses decreased by $5.1 million, or 2.6% for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, primarily due to decreases of $9.5 million in channel commissions and amortization of deferred contract acquisition costs and $3.1 million in stock-based compensation expense. These decreases were partially offset by increases of $5.7 million in salaries, benefits, and consulting costs and $1.8 million in paid media and other marketing services costs.

Previous wording

General and administrative expenses increased by $2.4 million, or 12.0%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to increases of $3.6 million in legal and regulatory costs, $0.5 million in facilities costs, and $0.3 million in salaries, benefits, and consulting costs. These increases were partially offset by a decrease of $2.0 million in stock-based compensation and other costs.

Current wording

General and administrative expenses increased by $4.2 million, or 25.2%, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily due to an increase of $6.7 million in legal and regulatory costs. This increase was partially offset by a decrease of $2.5 million in stock-based compensation and other general corporate costs.

Previous wording

General and administrative expenses increased by $2.6 million, or 6.1%, for the six months ended September 30, 2025, compared to the six months ended September 30, 2024, primarily due to increases of $4.2 million in legal and regulatory costs, $0.7 million in facilities costs, and $1.0 million in salaries, benefits, and consulting costs. These increases were partially offset by a decrease of $3.3 million in stock-based compensation and other costs.

Current wording

General and administrative expenses increased by $6.8 million, or 11.4%, for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, primarily due to increases of $10.9 million in legal and regulatory costs, $0.9 million in salaries, benefits, and consulting costs, and $0.6 million in facilities costs. These increases were partially offset by decreases of $2.6 million in stock-based compensation and $3.0 million in other general corporate costs.

Previous wording

Interest expense decreased by $3.1 million, or 38.7%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to a lower interest rate and principal balance on the 2024 Term Loan compared to the 2022 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Current wording

Interest expense decreased by $1.3 million, or 21.5%, for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily due to a lower interest rate and principal balance on the 2024 Term Loan. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Previous wording

Interest expense decreased by $9.1 million, or 50.7%, for the six months ended September 30, 2025, compared to the six months ended September 30, 2024, primarily due to a lower interest rate and principal balance on the 2024 Term Loan compared to the 2022 Term Loan and capitalized interest related to property, plant and equipment from general borrowing costs. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Current wording

Interest expense decreased by $10.3 million, or 43.5%, for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, primarily due to a lower interest rate and principal balance on the 2024 Term Loan compared to the 2022 Term Loan and capitalized interest related to property, plant and equipment from general borrowing costs. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Previous wording

We recognized $0.5 million of other income, net during the three months ended September 30, 2025, compared to $12.7 million of other expense, net during the three months ended September 30, 2024, primarily due to a decrease in the loss on debt extinguishment of $12.0 million, a $1.7 million decrease due to foreign exchange losses, and a $0.2 million reduction in other expense. These decreases were offset by a $0.5 million decrease in interest income earned on cash and cash equivalents and a reduced gain of $0.2 million on the remeasurement of Warrants issued in connection with the 2022 Term Loan.

Current wording

We recognized $0.5 million of other income, net during the three months ended December 31, 2025, compared to $0.8 million of other income, net during the three months ended December 31, 2024, primarily due to a decrease of $1.6 million due to reduced foreign exchange gains and a $0.3 million decrease in interest income earned on cash and cash equivalents. These decreases were offset by a reduced loss of $1.2 million on the remeasurement of Warrants issued in connection with the 2022 Term Loan, a reduction in the loss on debt extinguishment of $0.2 million, and a $0.2 million decrease in other expense.

Previous wording

We recognized $0.8 million of other income, net during the six months ended September 30, 2025, compared to $11.0 million of other expense, net during the six months ended September 30, 2024, primarily due to a decrease in the loss on debt extinguishment of $11.9 million and a $2.7 million decrease due to foreign exchange losses. These decreases were offset by a reduced gain of $1.8 million on the remeasurement of Warrants issued in connection with the 2022 Term Loan and a $1.0 million decrease in interest income earned on cash and cash equivalents.

Current wording

We recognized $1.3 million of other income, net during the nine months ended December 31, 2025, compared to $10.2 million of other expense, net during the nine months ended December 31, 2024, primarily due to a decrease in the loss on debt extinguishment of $12.1 million, a $1.0 million decrease due to reduced foreign exchange losses, and a decrease of $0.3 million in other expenses. These decreases were offset by $1.3 million decrease in interest income earned on cash and cash equivalents and a reduced gain of $0.6 million on the remeasurement of Warrants issued in connection with the 2022 Term Loan.

Previous wording

The provision for income taxes decreased by $0.9 million for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily driven by the effect of the OBBBA's federal and state tax provision for the three months ended September 30, 2025.

Current wording

The provision for income taxes decreased by $0.4 million for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily driven by the effect of the OBBBA's federal and state tax provision for the three months ended December 31, 2025.

Previous wording

The provision for income taxes decreased by $0.3 million for the six months ended September 30, 2025, compared to the six months ended September 30, 2024, primarily driven by the effect of the OBBBA's federal and state tax provisions, which were partially offset by an increase in profit before tax of foreign profitable entities for the six months ended September 30, 2025 as compared to the six months ended September 30, 2024.

Current wording

The provision for income taxes decreased by $0.7 million for the nine months ended December 31, 2025, compared to the nine months ended December 31, 2024, primarily driven by the effect of the OBBBA's federal and state tax provisions, which were partially offset by an increase in profit before tax of foreign profitable entities for the nine months ended December 31, 2025 as compared to the nine months ended December 31, 2024.

Previous wording

(1) Restricted cash supports letters of credit securing leases for office facilities and certain equipment for the same periods, and an accrued holdback related to a business combination.

Current wording

(1) Restricted cash supports letters of credit securing leases for office facilities and certain equipment for the same periods, and funds related to business combinations.

Previous wording

Our outstanding 2024 Term Loan allows for voluntary prepayments. In order to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we may, from time to time, make prepayments. The Company evaluates opportunities for stock repurchases and may utilize cash and cash equivalents to repurchase shares under the 2017 Plan. During the six months ended September 30, 2025, the Company repurchased 1.0 million shares of common stock in the open market for approximately $1.8 million at an average price of $1.83 per share. For more information, see Note 9, Stock-Based Compensation and Stockholders' Equity.

Current wording

Our outstanding 2024 Term Loan allows for voluntary prepayments. In order to reduce future cash interest payments, as well as future amounts due at maturity or upon redemption, we may, from time to time, make prepayments. The Company evaluates opportunities for stock repurchases and may utilize cash and cash equivalents to repurchase shares under the 2017 Plan. During the nine months ended December 31, 2025, the Company repurchased 1.0 million shares of common stock in the open market for approximately $1.8 million at an average price of $1.83 per share. For more information, see Note 9, Stock-Based Compensation and Stockholders' Equity.

Previous wording

Cash provided by operating activities decreased by $9.8 million to $20.7 million for the six months ended September 30, 2025, primarily due to changes in working capital, the timing of billings and customer collections, as well as the amount and timing of disbursements to our vendors. Cash used in investing activities increased $1.5 million to $8.7 million for the six months ended September 30, 2025, mainly due to an increase in capitalized internal-use software costs. Cash used in financing activities increased by $1.5 million to $26.7 million for the six months ended September 30, 2025, mainly due to principal repayments for our term loan, payments for repurchases of shares of common stock, and other financing activities.

Current wording

Cash provided by operating activities decreased by $16.3 million to $41.4 million for the nine months ended December 31, 2025, primarily due to reduced net loss, and to a lesser extent, changes in working capital, the timing of billings and customer collections, as well as the amount and timing of disbursements to our vendors. Cash used in investing activities increased $2.6 million to $12.8 million for the nine months ended December 31, 2025, mainly due to an increase in capitalized internal-use software costs. Cash used in financing activities decreased by $27.3 million to $31.8 million for the nine months ended December 31, 2025, mainly due to principal repayments for our term loan and payments for repurchases of shares of common stock.

Previous wording

The 2024 Term Loan bears interest at an annual rate equal to the Term SOFR, plus a margin of either 2.50%, 2.75% or 3.00% based on the consolidated total net leverage ratio of the Company and its subsidiaries. The initial margin was 3.00% for the fiscal quarter ending September 30, 2024 and remained 3.00% as of September 30, 2025. We have the option to pay interest monthly, quarterly, or semi-annually. During the three months ended September 30, 2025, we elected monthly interest payment terms which resulted in cash payments of $2.5 million. For the three months ending December 31, 2025, we have elected quarterly interest payment terms, which will result in cash payments of approximately $2.2 million. As of September 30, 2025, the debt issuance costs were amortized to interest expense over the term of the 2024 Term Loan at an effective interest rate of 8.65%.

Current wording

The 2024 Term Loan bears interest at an annual rate equal to the Term SOFR, plus a margin of either 2.50%, 2.75% or 3.00% based on the consolidated total net leverage ratio of the Company and its subsidiaries. The initial margin was 3.00% for the fiscal quarter ending September 30, 2024 and remained 3.00% as of December 31, 2025. We have the option to pay interest monthly, quarterly, or semi-annually. During the three months ended December 31, 2025, we elected quarterly interest payment terms which resulted in cash payments of $2.2 million. For the three months ending March 31, 2026, we have elected monthly interest payment terms, which will result in cash payments of approximately $2.0 million. As of December 31, 2025, the debt issuance costs were amortized to interest expense over the term of the 2024 Term Loan at an effective interest rate of 8.64%.

Previous wording

Under the terms of the 2024 Credit Agreement, the Company has the right to prepay the 2024 Term Loan at any time without any premium or penalty. The Company completed three principal repayments of the 2024 Term Loan during fiscal year 2025 for a total of $48.0 million in aggregate principal amount. The Company completed two principal repayments of the 2024 Term Loan during fiscal year 2026 for a total of $25.0 million in aggregate principal amount. As of September 30, 2025, the scheduled remaining principal repayments are $44.5 million in fiscal year 2027 ($7.0 million on June 30, 2026 and $12.5 million on September 30, 2026 and each quarter thereafter through maturity) and $82.5 million principal is due before or upon maturity in fiscal year 2028. These annualized repayments will be made in quarterly installments. As of September 30, 2025, the Company has paid $37.5 million, $3.0 million, and $10.0 million of the originally scheduled principal repayments for fiscal year 2026, 2027, and 2028 respectively, and the remaining principal amount of the 2024 Term Loan after the payments is $127.0 million.

Current wording

Under the terms of the 2024 Credit Agreement, the Company has the right to prepay the 2024 Term Loan at any time without any premium or penalty. The Company completed three principal repayments of the 2024 Term Loan during fiscal year 2025 for a total of $48.0 million in aggregate principal amount. The Company completed three principal repayments of the 2024 Term Loan during fiscal year 2026 for a total of $30.0 million in aggregate principal amount. As of December 31, 2025, the scheduled remaining principal repayments are $39.5 million in fiscal year 2027 ($2.0 million on June 30, 2026 and $12.5 million on September 30, 2026 and each quarter thereafter through maturity) and $82.5 million principal is due before or upon maturity in fiscal year 2028. These annualized repayments will be made in quarterly installments. As of December 31, 2025, the Company has paid $37.5 million, $8.0 million, and $10.0 million of the originally scheduled principal repayments due fiscal year 2026, 2027, and 2028 respectively, and the remaining principal amount of the 2024 Term Loan after the payments is $122.0 million.

Previous wording

On August 5, 2024, we repaid in full the outstanding principal amount and accrued interest of the 2022 Term Loan using the proceeds of the 2024 Term Loan and cash on hand. The Repayment was accounted for as a debt extinguishment. The carrying value of the 2022 Term Loan, including the unamortized debt discount and issuance costs, was derecognized. The difference of $12.0 million between the cash consideration paid to extinguish the 2022 Term Loan and the carrying value of the 2022 Term Loan was recognized as a loss on debt extinguishment included in the loss on debt extinguishment line item recorded in other expense in the condensed consolidated statement of operations and comprehensive income (loss). The Warrants continue to be outstanding with no change in terms in connection with the Repayment or issuance of the 2024 Term Loan.

Current wording

On August 5, 2024, we repaid in full the outstanding principal amount and accrued interest of the 2022 Term Loan using the proceeds of the 2024 Term Loan and cash on hand. The Repayment was accounted for as a debt extinguishment. The carrying value of the 2022 Term Loan, including the unamortized debt discount and issuance costs, was derecognized. The difference of $12.0 million between the cash consideration paid to extinguish the 2022 Term Loan and the carrying value of the 2022 Term Loan was recognized as a loss on debt extinguishment included in the loss on debt extinguishment line item recorded in other income (expense) in the condensed consolidated statement of operations and comprehensive income (loss). The Warrants continue to be outstanding with no change in terms in connection with the Repayment or issuance of the 2024 Term Loan.

Previous wording

Loans made under the 2022 Credit Agreement bore interest at an annual rate equal to the Term SOFR, subject to a floor of 1.00% and a credit spread adjustment of 0.10%, plus a margin of 6.50%. During the six months ended September 30, 2024, we paid $9.4 million of interest under the 2022 Term Loan.

Current wording

Loans made under the 2022 Credit Agreement bore interest at an annual rate equal to the Term SOFR, subject to a floor of 1.00% and a credit spread adjustment of 0.10%, plus a margin of 6.50%. During the nine months ended December 31, 2024, we paid $9.4 million of interest under the 2022 Term Loan.

Previous wording

As of March 31, 2025, our material cash requirements and other obligations were $527.1 million. During the six months ended September 30, 2025, we increased our non-cancellable three-year hosting service contract commitment from $24.1 million to $54.0 million. Under this agreement, $4.8 million remains due during fiscal year 2026, $10.0 million will be due during fiscal year 2027 and $10.0 million will be due during fiscal year 2028. For information regarding our material cash requirements and other obligations, see Item 7, "Management's Discussion and Analysis", in the Form 10-K.

Current wording

As of March 31, 2025, our material cash requirements and other obligations were $527.1 million. During the nine months ended December 31, 2025, we increased our non-cancellable three-year hosting service contract commitment from $24.1 million to $54.0 million. Under this agreement, $2.4 million remains due during fiscal year 2026, $10.0 million will be due during fiscal year 2027 and $10.0 million will be due during fiscal year 2028. For information regarding our material cash requirements and other obligations, see Item 7, "Management's Discussion and Analysis", in the Form 10-K.

Previous wording

During the six months ended September 30, 2025, we reduced the 2024 Term Loan contractual principal by $25.0 million to $127.0 million. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Current wording

During the nine months ended December 31, 2025, we reduced the 2024 Term Loan contractual principal by $30.0 million to $122.0 million. See Note 8, Convertible Senior Notes and Term Loan, for further details.

Previous wording

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). See Note 1, The Company and Significant Accounting Policies, in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report, which describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. There have been no significant changes during the six months ended September 30, 2025 to our critical accounting policies and estimates previously disclosed in our Form 10-K.

Current wording

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). See Note 1, The Company and Significant Accounting Policies, in the notes to the unaudited condensed consolidated financial statements included in this Quarterly Report, which describes the significant accounting policies and methods used in the preparation of our consolidated financial statements. There have been no significant changes during the nine months ended December 31, 2025 to our critical accounting policies and estimates previously disclosed in our Form 10-K.