Payoneer Global Inc.

NOTE 1 – GENERAL OVERVIEW

Unless otherwise noted herein, “we”, “us”, “our”, “Payoneer”, and the “Company” refer to Payoneer Global Inc.

Payoneer, incorporated in Delaware, empowers global commerce by connecting businesses, professionals, countries and currencies with its diversified cross-border payments platform. Payoneer enables small and medium-sized businesses (“SMB(s)”) around the globe to reach new audiences by reducing the complexity of cross-border trade, and facilitating seamless, cross-border payments. Payoneer offers its customers the flexibility to pay and get paid globally as easily as they do locally. The Company offers a global financial stack that includes cross-border AR/AP capabilities and includes services such as funds management, working capital, multicurrency accounts, and workforce management. The fully hosted service includes various payment options with minimal integration required, full back-office functions and customer support offered.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

a. Principles of consolidation, basis of presentation and accounting principles:

The accompanying condensed consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America (hereafter – U.S. GAAP) and include the accounts of Payoneer Global Inc. and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The consolidated interim financial information herein is unaudited; however, such information reflects all adjustments (consisting of normal, recurring adjustments), which are, in the opinion of management, necessary for a fair statement of results for the interim period. The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year. The year-end condensed balance sheet data was derived from audited financial statements for the year ended December 31, 2025, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These unaudited financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto of Payoneer Global Inc. and its subsidiaries.

b. Use of estimates in the preparation of financial statements:

The preparation of financial statements in conformity with U.S. 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include, but are not limited to, allowance for capital advance receivables, income taxes, goodwill, indefinite-lived intangible assets, revenue recognition, stock-based compensation, contingent consideration associated with M&A, and loss contingencies.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (continued):

c. Functional currency and translation:

The functional currency of the Company is the U.S. dollar (“dollar” or “$”). Where the Company’s foreign subsidiaries derive their revenue primarily from services provided to the parent company as well as obtain their financing from the parent company in dollars, the Company has determined the functional currencies to be the dollar as well.

Accordingly, monetary accounts maintained in currencies other than the dollar are re-measured into dollars in accordance with the principles set forth in ASC 830, Foreign Currency Translation (“ASC 830”).

Balances in non-dollar currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions reflected in the consolidated statements of comprehensive income, the transaction date exchange rates are used. The resulting transaction gains or losses are recorded as other financial income or expense. The Company recognized $2,443 of such transaction losses during the three months ended March 31, 2026. Depreciation, amortization and other changes deriving from non-monetary items are based on historical exchange rates.

Certain of the Company’s foreign subsidiaries acquired in the Skuad Pte. Ltd. (“Skuad”) and Boundless Technologies Limited

(“Boundless”) acquisitions have functional currencies that differ from the U.S. dollar, including the Euro and certain local currencies based on the country of domicile. In accordance with ASC 830, the assets and liabilities of these non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars at the period-end rate of exchange. Revenues, costs, and expenses of the non-U.S. dollar functional currency subsidiaries are translated into U.S. dollars using transaction date exchange rates. Gains and losses resulting from these translations are recorded as a component of other comprehensive income (“OCI”). Gains and losses from the remeasurement of foreign currency transactions into the functional currency are recognized as other financial income or expense in the consolidated statements of comprehensive income.

d. Recently issued accounting pronouncements:

The Company did not adopt any new standards or updates issued by the Financial Accounting Standards Board (“FASB”) during the three months ended March 31, 2026.

FASB Standards issued, but not adopted as of March 31, 2026

In 2024, the FASB issued guidance, ASU 2024-03, which requires the disaggregated disclosure of certain costs and expenses on an interim and annual basis. The new standard is effective for annual reporting periods beginning January 1, 2027 and interim periods beginning January 1, 2028 and can be applied prospectively with the option for retrospective application to all prior periods presented in the financial statements, with early adoption permitted. The Company is currently evaluating the potential impact of adopting this new guidance on its financial statement disclosures.

On September 18, 2025, the FASB issued ASU 2025-06 Accounting for and Disclosure of Software Costs. The new standard modernizes the guidance to reflect the software development approaches currently being used by removing all references to "development stages" from ASC 350-40 Intangibles—Goodwill and Other - Internal-Use Software. Under ASU 2025-06, only the following criteria in ASC 350-40-25-12(b) and (c) must be met for entities to begin capitalizing software costs: (i) management, with the relevant authority, implicitly or explicitly authorizes and commits to funding a computer software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the "probable-to-complete recognition threshold"). This standard is effective for all entities for annual reporting periods beginning January 1, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its financial statements and related disclosures.

** NOTE 3 – ACQUISITIONS**

Boundless

On January 19, 2026, the Company acquired a controlling equity interest and all of the voting shares of Boundless Technologies Limited, an Ireland-based Employer of Record (“EOR”) platform that helps businesses seamlessly and compliantly employ people around the world. This acquisition marks another step in Payoneer’s strategy to deliver a comprehensive financial stack for SMBs that operate internationally. The transaction was accounted for in accordance with ASC 805,*Business Combinations (“ASC 805”),*using the acquisition method of accounting with Payoneer as the acquirer.

The following table summarizes the fair value of the consideration transferred:

The deferred payments are payable over asix andtwelve-month period following the acquisition and relate to potential post-acquisition claims and the achievement of certain integration and performance-related milestones. Additionally, the transaction includes an earn-out provision of up to$4 million contingent upon reaching certain performance and tenure milestones payable in cash. Because the earn-out is contingent upon the founders’ continued employment, it is excluded from considered contingent consideration under ASC 805 and is accounted for as post-combination compensation expense. The earnout will be recognized as compensation expense over the requisite 14 month service period based on the estimated amount expected to be earned, which will be reassessed each reporting period.

The following table summarizes the recognized amounts of identifiable assets acquired and liabilities assumed:

The excess purchase price consideration over the fair value of net tangible and identifiable assets acquired was recorded as goodwill.

NOTE 3 – ACQUISITIONS (continued):

Due to its insignificant size relative to the Company, the Company will not provide supplemental pro forma information for the current and prior year reporting periods. Payoneer incurred acquisition-related costs of $1,159, of which $295 was incurred during the three months ended March 31, 2026. These costs were included in general and administrative expenses on the condensed consolidated statement of comprehensive income.

The allocation of the purchase price for this acquisition has been prepared on a preliminary basis and changes to the allocation to certain assets, liabilities, and tax estimates may occur as additional information becomes available throughout the measurement period, which will not exceed 12 months from the date of acquisition.

PayEco

On April 9, 2025, the Company acquired 100% of the equity interests of PayEco Finance Information Holding Corporation (“PayEco”), the parent company of EasyLink Payment Co., Ltd., (now Payoneer Payments (Guangdong) Co Ltd) a licensed China based payment service provider, for a total consideration of$76,074. The consideration is comprised of the following:

Refer to Note 10 for details on the license intangible asset acquired.

Skuad

During the three months ended March 31, 2026, Payoneer paid $8,738, representing the remaining amount of the earn-out as the performance criteria had been met.

NOTE 4 – CAPITAL ADVANCE (“CA”) RECEIVABLES

The Company enters into transactions with pre-qualified sellers in which the Company purchases a designated amount of future receivables for an upfront cash purchase price.

During the three months ended March 31, 2026 and 2025, the Company has purchased and collected the following principal amounts associated with CA receivables, including foreign exchange adjustments:

The following are current and overdue balances that are segregated into the timing of expected collections at March 31, 2026:

The following are current and overdue balances that are segregated into the timing of expected collections at December 31, 2025:

As of March 31, 2026 and December 31, 2025, in calculating the allowance for CA losses, the Company applied a range of loss rates to the CA portfolio of 0.64% to 2.12%.

NOTE 5 – CUSTOMER FUNDS AND INVESTMENTS

The Company has invested certain customer funds in available-for-sale debt securities and term deposits. The following table summarizes the assets underlying customer funds as of March 31, 2026 and December 31, 2025:

As of March 31, 2026, the estimated fair value of the available-for-sale debt securities included $3,927 in unrealized gains and $1,678 in unrealized losses, net of tax. The gross unrealized losses of $2,148 related to assets with a fair value of $402,630 which had been in a continuous unrealized loss position for less than 12 months.

Unrealized losses have not been recognized into income as the Company neither intends to sell, nor anticipates that it is more likely than not that it will be required to sell, the securities before recovery of their amortized cost basis. The decline in fair value is due to changes in market interest rates, rather than credit losses. The Company will continue to monitor the performance of the investment portfolio and assess whether impairment due to expected credit losses has occurred.

During the period ended March 31, 2026, the Company did not sell any available-for-sale debt securities or incur any realized gains or losses.

As of March 31, 2026, $352,987 of the Company’s available-for-sale debt securities were due to mature within one year or less, and $950,258 were due to mature between one and five years.

NOTE 6 – DERIVATIVES AND HEDGING

The following table summarizes the fair value of outstanding derivative instruments at March 31, 2026 and December 31, 2025.

** **During the three months ended March 31, 2026 and 2025, the Company recognized $297 in unrealized losses, net of tax and $3,285, in unrealized gains, net of tax, on derivative instruments designated as cash flow hedges in OCI, respectively.

During the three months ended March 31, 2026 and 2025, the Company recognized reductions to revenue of $1,966 and $118, respectively, related to its interest rate floors. During the three months ended March 31, 2026 and 2025, the Company also recognized reductions to operating expenses of $2,061 and $705, respectively, related to its foreign currency derivatives.

As of March 31, 2026, the Company estimated that $9,229 of unrealized losses related to interest rate floor cash flow hedges currently included in AOCI are expected to be reclassified into net income within the next 12 months. As of March 31, 2026, the Company estimated that $568 of unrealized gains related to foreign currency cash flow hedges currently included in AOCI are expected to be reclassified into operating expenses within the next 12 months. As of March 31, 2026, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 55 months. During the three months ended March 31, 2026 and 2025, the Company did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings prior to the occurrence of the hedged transaction.

As of March 31, 2026 and December 31, 2025, the Company recognized an obligation to return cash collateral related to interest rate floors of $27,440 and $27,260, respectively, which was offset against the gross derivative balances shown in the table above.

NOTE 7 – FAIR VALUE

The following tables summarize the Company’s financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025:

Note 1: As of March 31, 2026 and December 31, 2025, the Company recognized an obligation to return cash collateral related to its interest rate floors of $27,440 and $27,260, respectively, which was offset against the gross derivative balances shown in the table above.

NOTE 7 – FAIR VALUE (continued):

The Company’s foreign currency derivative instruments are valued using pricing models that take into account the contract terms and relevant currency rates. The Company’s interest rate floors are valued using pricing models that take into account the contract terms and relevant interest rates.

As of March 31, 2026 and December 31, 2025, the fair values of the Company’s cash, cash equivalents, customer funds (other than the portion consisting of available-for-sale debt securities), restricted cash, accounts receivable, capital advance receivables, accounts payable, and outstanding operating balances approximated the carrying values of these instruments presented in the Company’s condensed consolidated balance sheets because of their nature.

In 2024, the Company recognized a liability for contingent consideration related to the Skuad acquisition. During the three months ended March 31, 2026 and 2025, the Company recognized $285 and $265, respectively in loss related to the change in the fair value of the liability, included within General and administrative expenses on the condensed consolidated statements of comprehensive income. During the three months ended March 31, 2026, Payoneer paid $8,738 representing the remaining amount of the earn-out as the performance criteria had been met.

In 2025, the Company recognized liabilities for deferred payments related to the PayEco acquisition. During the three months ended March 31, 2026, the Company recognized $129 in loss related to the imputed interest associated with the liability, included within Other financial expense, net on the condensed consolidated statements of comprehensive income.

NOTE 8 - OTHER CURRENT ASSETS

Composition of Other current assets, grouped by major classifications, is as follows:

NOTE 9 – PROPERTY, EQUIPMENT AND SOFTWARE

Composition of property, equipment and software, grouped by major classifications, is as follows:

Depreciation expense for the three months ended March 31, 2026 and 2025 was $3,881 and $2,136, respectively.

During the three months ended March 31, 2026, the Company disposed of Leasehold improvements and Furniture and office equipment with a cost of $5,789 that were fully depreciated. During the three months ended March 31, 2025, the Company retired an insignificant amount of computers, software, and peripheral equipment that were fully depreciated.

NOTE 10 –GOODWILL AND INTANGIBLE ASSETS

Goodwill

Refer to Note 3 for details around goodwill acquired during the three months ended March 31, 2026. The following table presents the goodwill balance and adjustments related to those balances during the three months ended March 31, 2026.

Composition of intangible assets, grouped by major classifications, is as follows:

As discussed in Note 3, in January 2026, the Company completed its acquisition of Boundless. As part of this acquisition, the Company acquired $3,657 of Customer relationships with a useful life of 7 years.

As discussed in Note 3, in 2025, the Company completed its acquisition of PayEco. The Company determined that this transaction is an asset acquisition under ASC 805, as the acquired group of assets does not have a substantive process that together with the assets acquired significantly contribute to the ability to create outputs. Therefore, the business definition is not met. The Company has determined that the license is an indefinite lived intangible asset with a carrying value of $97,357 at March 31, 2026.

Amortization expense for the three months ended March 31, 2026 and 2025 was $15,035 and $12,254 respectively.

During the three months ended March 31, 2026 and 2025, the Company didnot recognize any impairment related to internal use software assets.

Expected future finite-lived intangible asset amortization as of March 31, 2026, excluding capitalized internal use software of $22,607 not yet placed in service as of that date, was as follows:

NOTE 11 - OTHER PAYABLES

Composition of Other payables, grouped by major classifications, is as follows:

NOTE 12 – OTHER LONG-TERM LIABILITIES

Composition of other long-term liabilities, grouped by major classifications, is as follows:

NOTE 13 – WARRANTS AND SHAREHOLDERS’ EQUITY:

Share Repurchase Program and Treasury Stock

On May 7, 2023, the Company’s Board of Directors authorized a stock repurchase program that provides for the repurchase of up to $80,000 of its common stock, including any applicable excise tax. On December 7, 2023, the Board of Directors authorized an amendment to the program to increase the authorized amount of repurchases to an aggregate amount not to exceed $250,000, including the amount that remained available as of December 7, 2023 to repurchase common stock under, but not any prior repurchases effected pursuant to, the previous authorization, and any applicable excise tax. On July 30, 2025, our Board of Directors amended the existing repurchase authorization to increase the authorized amount of repurchases to an aggregate amount not to exceed $300,000, which amount includes amounts that remained available to repurchase common stock under, but not any prior repurchases effected pursuant to, the existing repurchase program, and any applicable excise tax. The effective date of the amended authorization was August 6, 2025, and the amended authorization expires on December 31, 2027. The share repurchase program is intended to offset the impact of dilution from the issuance of new shares as part of employee compensation programs. Any share repurchases under this stock repurchase program may be made through open market transactions, privately negotiated transactions or other means including in accordance with Rule 10b-18 and/or Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The timing and total amount of repurchases is subject to business and market conditions and the Company’s discretion.

NOTE 13 – WARRANTS AND SHAREHOLDERS’ EQUITY (continued):

During the three months ended March 31, 2026, the Company repurchased 14,343,587 shares of its common stock for $74,066 at a weighted average cost of $5.16 per share. During the three months ended March 31, 2026, the Company accrued an excise tax of $551 related to share repurchase activity which was recorded in treasury stock at cost.During the three months ended March 31, 2025, the Company repurchased 1,880,309 shares of its common stock for $16,978 at a weighted average cost of $9.04 per share. As of March 31, 2026, a total of $117,445 remained available for future repurchases of the Company’s common stock under the program.

Accumulated Other Comprehensive Income (Loss)

The changes in the balances of each component of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2026 and 2025 were as follows:

NOTE 14 – COMMITMENTS AND CONTINGENCIES

The Company’s business is subject to various laws and regulations in the United States and other countries where the Company operates. Any regulatory action, tax or legal challenge against the Company for noncompliance with any regulatory or legal requirement could result in significant fines, penalties, or other enforcement actions, increased costs of doing business through adverse judgment or settlement, reputational harm, loss of banking or other operational relationships, the diversion of significant amounts of management time and operational resources, and could require changes in compliance requirements or impose limits on the Company’s ability to expand its product offerings, or otherwise harm or have a material adverse effect on the Company’s business. From time to time, the Company incurs insignificant fines and penalties in the ordinary course of business.

On September 28, 2021, the National Banking and Securities Commission (CNBV) and the Bank of Mexico revoked the banking license of a banking entity utilized by the Company due to the banking entity not meeting applicable capital requirements. As a result, the Company is unable to withdraw funds from the banking entity. The Company has reserved $2,250 for potential losses related to those funds above the recovered amount. The Company applied for and recovered the maximum statutory reimbursement through the deposit insurance provided by Mexican Institute for the Protection of Banking Services (IPAB), totaling $140. The Company has filed a claim in liquidation for the remaining funds; however, the percentage of the deposit that will be recovered in liquidation is not known at this time.

NOTE 14 – COMMITMENTS AND CONTINGENCIES (continued):

From time to time, the Company is involved in other disputes or regulatory inquiries that arise in the ordinary course of business. These may include suits by its customers alleging, among other things, acting unfairly and/or not in conformity regarding pricing, rules or agreements, improper disclosure of the Company’s prices, rules, or policies or that the Company’s practices, prices, rules, policies, or customer agreements violate applicable law.

In addition to these types of disputes and regulatory inquiries, the operations of the Company are also subject to regulatory and/or legal review and/or challenges that tend to reflect the increasing global regulatory focus to which the industry in which the Company operates is subject and, when taken as a whole with other regulatory and legislative action, such actions could result in the imposition of costly new compliance burdens on the Company and may lead to increased costs and decreased transaction volume and revenue.

This includes the risk that tax authorities in various jurisdictions may challenge, and in some cases have challenged, the Company’s compliance with non-income tax obligations which could result in assessments, disputes, and additional compliance requirements affecting the Company and our customers.

Any claims or regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, settlement payments, damage awards (including statutory damages for certain causes of action in certain jurisdictions), fines, penalties, injunctive relief, or increased costs of doing business through adverse judgment or settlement, require the Company to change its business practices, require significant amounts of management time, result in the diversion of operational resources, or otherwise harm the business.

NOTE 15 – REVENUE

The following table presents revenue recognized from contracts with customers as well as revenue from other sources:

NOTE 15 – REVENUE (continued):

Based on the information provided to and reviewed by the Company’s Chief Operating Decision Maker (“CODM”), the Company believes that the nature, amount, timing, and uncertainty of its revenue and cash flows and how they are affected by economic factors are most appropriately depicted through its primary regional markets. The following table presents the Company’s revenue disaggregated by primary regional market, with revenues being attributed to the country (in the region) in which the billing address of the transacting customer is located, with the exception of global bank transfer revenues, where revenues are disaggregated based on the billing address of the transaction funds source.

NOTE 16 - TRANSACTION COSTS

Composition of transaction costs, grouped by major classifications, is as follows:

NOTE 17 – SEGMENT INFORMATION

The Company determines operating segments based on how its CODM manages the business, makes operating decisions around the allocation of resources, and evaluates operating performance. The Company’s CODM are its Chief Executive Officer and Chief Financial Officer, who review its operating results on a consolidated basis. The Company operates inone segment and hasone reportable segment.

The Company’s CODM use consolidated net income, as shown on the condensed consolidated statements of comprehensive income, as the measure of segment profitability. The CODM use net income to evaluate the Company’s ongoing operations and for internal planning and forecasting purposes. This analysis is used in making strategic investment decisions. The Company’s measure of segment assets is reported on the condensed consolidated balance sheets as total assets.

(1) Refer to Note 16 for disaggregation of transaction cost into significant segment expense categories.

(2) Other operating expenses include miscellaneous, individually insignificant operating expenses. The Company’s CODM review these items in aggregate.

(3) Other segment items included in net income include finance income and expense, which primarily includes corporate interest income and foreign currency remeasurement gains and losses.

NOTE 18 – STOCK-BASED COMPENSATION

Stock Options

The following table summarizes the options to purchase shares of common stock activity under the Company’s equity incentive plans for the three months ended March 31, 2026:

The weighted average exercise price of the options outstanding as of March 31, 2026 was $3.03 per share.

NOTE 18 – STOCK-BASED COMPENSATION (continued):

Restricted and Performance Stock Units

The following table summarizes the restricted stock unit (“RSU”) and performance stock unit (“PSU”) activity under the Company’s equity incentive plan and other business arrangements associated with business acquisitions as of March 31, 2026:

During the three months ended March 31, 2026, the number of shares reserved for issuance under the Company’s Omnibus Stock Incentive Plan was increased by 13,948,172 shares. In the three months ended March 31, 2026, the Company granted 13,476,833 RSUs under the Company's Omnibus Stock Incentive Plan, which are subject to time-vesting and continued service conditions.

In the same period, the Company granted 1,405,197 PSUs under the same Plan, which are subject to time-vesting, continued service conditions and achievement of specified company performance goals.

The Company withholds common stock shares associated with net share settlements to cover tax withholding obligations upon the vesting of restricted stock units under its employee equity incentive plan in the United States. During the three months ended March 31, 2026 and 2025, the Company withheld 754,226 and 722,437 shares for $4,058 and $7,494, respectively. RSU vesting is shown net of this withholding on the condensed consolidated statements of shareholders’ equity and cash flows.

The Company collects cash from proceeds from certain international employees’ sales of common stock. The amount is held in a Company bank account until it is remitted to the employees. Due to the restrictions on the use of the funds in the bank account, we have classified the amount as short-term restricted cash, and a corresponding liability is included in Other payables in the condensed consolidated balance sheets. As of March 31, 2026, $254 of such funds were held.

Employee Stock Purchase Plan

During the three months ended March 31, 2026, the number of shares reserved for issuance under the Company’s Employee Stock Purchase Plan (“ESPP”) was increased by 3,487,043 shares. As of March 31, 2026, approximately 5,696,764 shares were reserved for future issuance under the Company’s ESPP. The fair value attributable to the ESPP was $1,450 as of November 30, 2025, the beginning of the current offering period, and was measured using the Black-Scholes pricing model. The current offering period is expected to close May 30, 2026.

The expense associated with the ESPP recognized during the three months ended March 31, 2026 was $725.

NOTE 18 – STOCK-BASED COMPENSATION (continued):

Impact on Results of Operations

The impact on the Company’s results of operations of recording stock-based compensation expense under the Company’s equity incentive plans and other stock-based consideration arrangements associated with business acquisitions, including the ESPP, were as follows:

Note that $465 and $615 in stock-based compensation awards were capitalized as part of internal-use software during the three months ended March 31, 2026 and 2025, respectively.

NOTE 19 - INCOME TAXES

The Company’s provision for income taxes in the interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in the period.

The Company had an effective tax rate of 33.0% and 26.0% for the three months ended March 31, 2026 and 2025, respectively. For the three months ended March 31, 2026, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% was primarily the result of nondeductible stock-based compensation, foreign subsidiary provision to return adjustments, and the base erosion and anti-abuse tax, all of which was partially offset by a decrease in the Company’s provision for uncertain tax positions and the U.S. tax benefit for income derived from foreign customers. For the three months ended March 31, 2025, the difference between the Company’s effective tax rate and the U.S. federal statutory rate of 21% primarily the result of an increase in the provision for uncertain tax positions and nondeductible stock compensation, partially offset by the U.S. tax benefit for income earned from foreign customers.

The Company maintains a valuation allowance in jurisdictions where it is more likely than not that all or a portion of a deferred tax asset may not be realized. In determining whether a valuation allowance is warranted, the Company evaluates factors such as prior earnings history, expected future earnings and the reversal of existing taxable temporary differences. As of March 31, 2026, the Company maintains a full valuation allowance on its deferred tax assets in Singapore, associated with the Skuad acquisition in Singapore, and in Germany as management believes it is more likely than not that the deferred tax assets will not be recognized in these jurisdictions. The Company maintains its previous conclusion that a valuation allowance on deferred tax assets in the United States and Israel is not necessary.

NOTE 20 – NET EARNINGS PER SHARE

The Company’s basic net earnings per share is calculated by dividing net income attributable to common shareholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. The diluted net earnings per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury share method or the if-converted method based on the nature of such securities. Diluted net earnings per share is the same as basic net earnings per share in periods when the effects of potentially dilutive shares of common shares are anti-dilutive.

Basic and diluted net earnings per share attributable to common stockholders were calculated as follows:

Note that the following shares have been excluded from the computation of diluted earnings per share for the three months ended March 31, 2026 and 2025 as their effect was antidilutive, conditions were not met, or they were not in the money in the reporting period.

Note 1: As that term is defined in the Agreement and Plan of Reorganization dated February 3, 2021 (as amended) with FTAC Olympus Acquisition Corp.