TRAVELZOO

Previous wording

The "Advertising and Commerce" category consists of (a) advertising fees paid by travel companies for the publishing of their offers on Travelzoo’s media properties, (b) commissions and revenues generated from the sale of Getaways vouchers and bookings on our hotel platform, and (c) publishing fees from high-quality local businesses, sale of Local Deals vouchers and entertainment offers. Advertising fees may be based on audience reach, placement in email newsletters or on media properties, number of listings, number of clicks, and/or actual sales. We typically recognize advertising revenues upon delivery of emails orclicks, as tracked by our internal platform or third-party platforms, in the period of the applicable insertion orders, which are typically for periods between one month and twelve months and are not automatically renewed. For Getaways vouchers, we recognize a percentage of the face value of vouchers upon sale as commission, net of an allowance for future refunds. Merchant agreements for Getaways advertisers are typically for periods between twelve and twenty-four months and are not automatically renewed. Revenues generated from local business offers are based upon a percentage of the face value of the vouchers sold, commission on actual sales or a listing fee based on audience reach. We recognize revenue upon the sale of vouchers, upon notification of the amount of direct bookings or upon delivery of emails. For Local Deals vouchers, we recognize a percentage of the face value of vouchers upon the sale of the vouchers, net of an allowance for refunds. Insertion orders and merchant agreements for Local Dealsare typically for periods between one and twelve months and are not automatically renewed.

Current wording

The“Advertising and Commerce” category consists primarily of (a) advertising fees paid by travel companies for the publishing of their offers on Travelzoo’s media properties, (b) commissions and revenues generated from the sale of Getaways vouchers and bookings on our hotel platform, and (c) publishing fees from high-quality local businesses, sale of Local Deals vouchers and entertainment offers. Advertising fees may be based on audience reach, placement in email newsletters or on media properties, number of listings, number of clicks, and/or actual sales. We typically recognize advertising revenues upon delivery of emails orclicks, as tracked by our internal platform or third-party platforms, in the period of the applicable insertion orders, which are typically for periods between one month and twelve months and are not automatically renewed. For Getaways vouchers, we recognize a percentage of the face value of vouchers upon sale as commission, net of an allowance for future refunds. Merchant agreements for Getaways advertisers are typically for periods between twelve and twenty-four months and are not automatically renewed. Revenues generated from local business offers are based upon a percentage of the face value of the vouchers sold, commission on actual sales or a listing fee based on audience reach. We recognize revenue upon the sale of vouchers, upon notification of the amount of direct bookings or upon delivery of emails. For Local Deals vouchers, we recognize a percentage of the face value of vouchers upon the sale of the vouchers, net of an allowance for refunds. Insertion orders and merchant agreements for Local Dealsare typically for periods between one and twelve months and are not automatically renewed.

Previous wording

As of September 30, 2025 and December 31, 2024, the Company had approximately $2.9 million and$4.1 million of unredeemed vouchers that had been sold, respectively, representing the Company’s commission. The Company estimates a refund reserve using historical and current refund rates by product and by merchant location to calculate estimated future refunds. The Company estimated and recorded a refund reserve of $173,000 and $144,000 as of September 30, 2025 and December 31, 2024, respectively, for these unredeemed vouchers which is recorded as a reduction of revenues on the condensed consolidated statements of operations, and accrued expense and other on the condensed consolidated balance sheet.

Current wording

As of March 31, 2026 and December 31, 2025, the Company had approximately $3.4 million and$2.9 million of unredeemed vouchers that had been sold, respectively, representing the Company’s commission. The Company estimates a refund reserve using historical and current refund rates by product and by merchant location to calculate estimated future refunds. The Company estimated and recorded a refund reserve of $283,000 and$188,000 as of March 31, 2026 and December 31, 2025, respectively, for these unredeemed vouchers which is recorded as a reduction of revenues on the condensed consolidated statements of operations, and accrued expense and other on the condensed consolidated balance sheet.

Previous wording

Merchant payables of $11.8 million as of September 30, 2025 related to unredeemed vouchers is recorded on the condensed consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed. Certain merchant contracts, typically in foreign locations, allow the Company to retain the proceeds from unredeemed vouchers upon expiration. With these contracts, the Company estimates the value of vouchers that will ultimately not be redeemed and records the estimate as revenues in the same period.

Current wording

Merchant payables of $13.5 million as of March 31, 2026 related to unredeemed vouchers is recorded on the condensed consolidated balance sheet, representing amounts payable to merchants by the Company for vouchers sold but not redeemed. Certain merchant contracts, typically in foreign locations, allow the Company to retain the proceeds from unredeemed vouchers upon expiration. With these contracts, the Company estimates the value of vouchers that will ultimately not be redeemed and records the estimate as revenues in the same period.

Previous wording

The "Membership Fees" category consists of subscription fees paid by Travelzoo Club Members and Jack's Flight Club Premium members. Travelzoo membership has historically been free, however, on January 1, 2024, the Company introduced an annual membership fee of $40 (or local equivalent) for new members in the United States, Canada, United Kingdom and Germany, with the 2024 annual fee waived for existing members. Jack’s Flight Club subscription options are quarterly, semi-annually, and annually. We recognize subscription revenues ratably over the respective subscription periods.

Current wording

The“Membership Fees” category consists of subscription fees paid by Travelzoo Club Members and Jack's Flight Club Premium members. Travelzoo membership has historically been free, however, on January 1, 2024, the Company introduced an annual membership fee of $40 (or local equivalent) for new members in the United States, Canada, United Kingdom and Germany, with the 2024 annual fee waived for existing members. On January 1, 2026, we increased the annual membership fee to $50 in the United States for new members, For existing members, the new pricing is applied from the next renewal of their membership after February 1, 2026. On April 1, 2026, we increased the annual membership fee to €40 in Germany for new members. For existing members, the new pricing is applied from the next renewal of their membership after May 1, 2026. Jack’s Flight Club subscription options are quarterly, semi-annually, and annually. We recognize subscription revenues ratably over the respective subscription periods.

Previous wording

Our ability to continue generating revenues through advertising, commissions and subscriptions depends heavily upon our ability to maintain and grow an attractive audience for our publications. We monitor our membership base to assess our efforts to maintain and grow our audience reach. We obtain additional members and increase activity on our websites by acquiring traffic from Internet search and social media companies. The costs to grow our audience have had, and we expect will continue to have, a significant impact on our financial results and can vary from period to period. With the introduction of membership fees in 2024, we have been adjusting our member acquisition practices to ensure that we pursue a strategy of efficient growth. We initially reduced our expenditures on acquiring members as we tested new strategies for efficacy. Having now been able to achieve in certain cases a one quarter payback period to acquire a paying member, we have now increased and plan to further increase these expenditures to grow our paid membership and engagement with our products. We will continue to invest for so long as we are able to maintain efficiency. We do not know if we will be able to maintain efficiency or continue efficiently growing through member acquisition. We continue to see a shift in users accessing our services through mobile devices and social media and, therefore, anticipate continuing to address these growing channels through additional investments.

Current wording

The Company’s ability to grow revenues depends heavily upon the ability to maintain and grow the number of Travelzoo members and Jack’s Flight Club members. The costs to market our membership have had, and we expect will continue to have, a significant impact on our financial results and can vary from period to period.

Previous wording

In addition to the type of membership offered, we believe the average cost per acquisition depends mainly on the advertising rates we pay for media buys, the quality of the members we acquire (based on both clicks and purchases through Travelzoo), our ability to manage our member acquisition efforts successfully, the regions we target to acquire new members and the relative costs for that region, and the degree of competition in our industry. All else equal, increased competition may require us to increase advertising for our brand and advertisers’ deals.

Current wording

In addition to the type of membership offered, we believe the average cost per acquisition depends mainly on the advertising rates we pay for media buys, the quality of the members we acquire (based on both clicks and purchases through Travelzoo), our ability to manage our member acquisition efforts successfully, the regions we target to acquire new members and the relative costs for that region, and the degree of competition in our industry.

Previous wording

Revenues from Membership fees increased $2.1 million for the three months ended September 30, 2025 from the three months ended September 30, 2024 due to the increase ofsubscription fees paid by Travelzoo and Jack's Flight Club members.

Current wording

Revenues from Membership fees increased $2.1 million for the three months ended March 31, 2026 from the three months ended March 31, 2025 due to the increase in paying members.

Previous wording

Cost of revenues consists primarily of network expenses related to powering the Company's websites, database services, sending e-mails, amortization of capitalized website development costs, software and license expenses, publishing fees to partners of the Travelzoo Network, costs incurred upon the sale of pre-purchased vouchers and other products, including directly attributable member services (call center), cost of certain membership benefits that are considered integral to the contractual obligation to Club Members, and fees to payment processors. Cost of revenues was $4.5 million and $2.5 million, respectively, for the three months ended September 30, 2025 and 2024. Cost of revenues was $13.1 million and $7.7 million, respectively, for the nine months ended September 30, 2025 and 2024.

Current wording

Cost of revenues consists primarily of network expenses related to powering the Company's websites, database services, sending e-mails, amortization of capitalized website development costs, software and license expenses, publishing fees to partners of the Travelzoo Network, costs incurred upon the sale of pre-purchased vouchers and other products, including directly attributable member services (call center), cost of certain membership benefits that are considered integral to the contractual obligation to Club Members, and fees to payment processors. Cost of revenues was $5.2 million and $4.2 million, respectively, for the three months ended March 31, 2026 and 2025.

Previous wording

Cost of revenues increased $2.0 million for the three months ended September 30, 2025 from the three months ended September 30, 2024 primarily due to the increase in costs recognized upon the sale of pre-purchased vouchers.

Current wording

Cost of revenues increased $1.0 million for the three months ended March 31, 2026 from the three months ended March 31, 2025 primarily due to the increase in costs recognized upon the sale of pre-purchased vouchers.

Previous wording

Sales and marketing expenses consist primarily of advertising and promotional expenses, salary and related expenses associated with sales, marketing and production employees, expenses related to our participation in industry conferences, marketing professional service costs, public relations expenses and facilities costs. Sales and marketing expenses were $12.2 million and $8.2 million for the three months ended September 30, 2025 and 2024, respectively. Sales and marketing expenses were $34.4 million and $26.2 million for the nine months ended September 30, 2025 and 2024, respectively. Advertising expenses consist primarily of online advertising which we refer to as traffic acquisition cost and member acquisition costs. For the three months ended September 30, 2025 and 2024, advertising expenses accounted for 26% and 14%, respectively, of the total sales and marketing expenses. For the nine months ended September 30, 2025 and 2024, advertising expenses accounted for 22% and 12%, respectively, of the total sales and marketing expenses. The goal of our advertising was to acquire new members to our email products, increase the traffic to our websites, increase brand awareness and increase our audience through mobile and social media platforms.

Current wording

Sales and marketing expenses consist primarily of advertising and promotional expenses, salary and related expenses associated with sales, marketing and production employees, expenses related to our participation in industry conferences, marketing professional service costs, public relations expenses and facilities costs. Sales and marketing expenses were $11.1 million and $10.2 million for the three months ended March 31, 2026 and 2025, respectively. Advertising expenses consist primarily of online advertising which we refer to as traffic acquisition cost and member acquisition costs. For the three months ended March 31, 2026 and 2025, advertising expenses accounted for 22% and 15%, respectively, of the total sales and marketing expenses. The goal of our advertising was to acquire new members to our email products, increase the traffic to our websites, increase brand awareness and increase our audience through mobile and social media platforms.

Previous wording

Sales and marketing expenses increased$4.0 million for the three months ended September 30, 2025 from the three months ended September 30, 2024. The increase was primarily due to the increase in member acquisition costs as a result of management's strategic plan.

Current wording

Sales and marketing expenses increased$0.9 million for the three months ended March 31, 2026 from the three months ended March 31, 2025. The increase was primarily due to the increase in member acquisition costs as a result of management's strategic plan.

Previous wording

Product development expenses consist primarily of salary and related expenses associated with software development employees, fees for professional services, software maintenance, amortization, and facilities costs. Product development expenses were $631,000 and $594,000 for the three months ended September 30, 2025 and 2024, respectively. Product development expenses were $2 million and $1.8 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

Product development expenses consist primarily of salary and related expenses associated with software development employees, fees for professional services, software maintenance, amortization, and facilities costs. Product development expenses were $664,000 and $634,000 for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Product development expenses increased $37,000 for thethree months ended September 30, 2025 from thethree months ended September 30, 2024 primarily due to the increase insalary expense.

Current wording

Product development expenses increased $30,000 for thethree months ended March 31, 2026 from thethree months ended March 31, 2025 primarily due to the increase insalary expense.

Previous wording

General and administrative expenses consist primarily of salary and related expenses associated with administrative and executive employees, bad debt expense, professional service expenses, legal expenses, amortization of intangible assets, general office expense and facilities costs. General and administrative expenses were $4.4 million and $4.7 million for the three months ended September 30, 2025 and 2024, respectively. General and administrative expenses were $13.4 million and $13.9 million for the nine months ended September 30, 2025 and 2024, respectively.

Current wording

General and administrative expenses consist primarily of salary and related expenses associated with administrative and executive employees, bad debt expense, professional service expenses, legal expenses, amortization of intangible assets, general office expense and facilities costs. General and administrative expenses were $3.8 million and $4.3 million for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

General and administrative expenses decreased $302,000 for the three months ended September 30, 2025 from the three months ended September 30, 2024 primarily due to a $175,000 decrease in salary expense and a $193,000 decrease in bad debt.

Current wording

General and administrative expenses decreased $493,000 for the three months ended March 31, 2026 from the three months ended March 31, 2025 primarily due to a $305,000 decrease in stock compensation expenses and a $210,000 decrease in bad debt.

Previous wording

Other income, net consisted primarily of foreign exchange transactions gains and losses, sublease income, German federal government funding for COVID-related pandemic relief, interest income and interest expense. Other income (loss), net was ($64,000) and $359,000, respectively, for the three months ended September 30, 2025 and 2024. Other income, net was $727,000 and $674,000, respectively, for the nine months ended September 30, 2025 and 2024.

Current wording

Other income, net consisted primarily of foreign exchange transaction gains and losses, sublease income, German federal government funding for COVID-related pandemic relief, interest income and interest expense. Other income (loss), net was ($5,000) and $629,000, respectively, for the three months ended March 31, 2026 and 2025.

Previous wording

Our income is generally taxed in the U.S., Canada and U.K. Our income tax provision reflects federal, state and country statutory rates applicable to our worldwide income. Income tax expense was $245,000 and $1.1 million, respectively, for the three months ended September 30, 2025 and 2024. Our effective tax rate from continuing operations was 58% and 26%, respectively, for the three months ended September 30, 2025 and 2024. The Company’s effective tax rate for the three months ended September 30, 2025 changed from the three months ended September 30, 2024 primarilydue to a higher interest expense related to unrecognized tax positionsin the three months ended September 30, 2025. Income tax expense was $2.2 million and $3.9 million, respectively, for the nine months ended September 30, 2025 and 2024. The Company’s effective tax rate from continuing operations was 30% and 27%for thenine months ended September 30, 2025 and 2024.

Current wording

Our income is generally taxed in the U.S., Canada and U.K. Our income tax provision reflects federal, state and country statutory rates applicable to our worldwide income. Income tax expense was $0.9 million and $1.2 million, respectively, for the three months ended March 31, 2026 and 2025. Our effective tax rate from continuing operations was 27% and 26%, respectively, for the three months ended March 31, 2026 and 2025. The Company’s effective tax rate for the three months ended March 31, 2026 changed from the three months ended March 31, 2025 primarilydue to a decrease in operating profitin the three months ended March 31, 2026.

Previous wording

We do not know what our income taxes will be in future periods. There may be fluctuations that have a material impact on our results of operations. Our income taxes are dependent on numerous factors such as the geographic mix of our taxable income, federal and state and foreign country tax law and regulations and changes thereto, the determination of whether valuation allowances for certain tax assets are required or not, audits of prior years’ tax returns resulting in adjustments, resolution of uncertain tax positions and different treatment for certain items for tax versus books. We expect fluctuations in our income taxes from year to year and from quarter to quarter. Some of the fluctuations may be significant and have a material impact on our results of operations.

Current wording

We do not know what our income taxes will be in future periods. There may be fluctuations that have a material impact on our results of operations. Our income taxes are dependent on numerous factors such as the geographic mix of our taxable income, federal and state and foreign country tax law and regulations and changes thereto, the determination of whether valuation allowances for certain tax assets are required or not, audits of prior years’ tax returns resulting in adjustments, resolution of uncertain tax positions and different treatment for certain items for tax versus book purposes. We expect fluctuations in our income taxes from year to year and from quarter to quarter. Some of the fluctuations may be significant and have a material impact on our results of operations.

Previous wording

North America revenues increased by $1.4 million for the three months ended September 30, 2025 from the three months ended September 30, 2024. This increase was primarily due to the increase in paid membership fees and Getaway vouchers. North America expenses increased by $3.4 million for the three months ended September 30, 2025 from the three months ended September 30, 2024. The increase was primarily due to a $1.3 million increase in cost of revenue related to purchase of vouchers and gift cards which were sold during the three months ended September 30, 2025, and a $1.7 million increase inmember acquisition costs.

Current wording

North America revenues increased by $539,000 for the three months ended March 31, 2026 from the three months ended March 31, 2025. This increase was primarily due to the increase in paid membership fees and Getaways vouchers. North America expenses increased by $0.9 million for the three months ended March 31, 2026 from the three months ended March 31, 2025. The increase was primarily due to a $932,000 increase in cost of revenue related to purchase of vouchers and gift cards which were sold during the three months ended March 31, 2026.

Previous wording

Europe revenues increased by $547,000 for the three months ended September 30, 2025 from the three months ended September 30, 2024. The increase was primarily due tothe increase in paid membership fees. Europe expenses increased by $2.2 million for the three months ended September 30, 2025 from the three months ended September 30, 2024 primarily due to $833,000 in member acquisition costs, a $569,000 increase in cost of revenue related to the purchase of vouchers and gift cards which were sold during the three months ended September 30, 2025, and a $269,000 increase in salary and related expenses.

Current wording

Europe revenues increased by $565,000 for the three months ended March 31, 2026 from the three months ended March 31, 2025. The increase was primarily due tothe increase in paid membership fees and Getaway vouchers. Europe expenses increased by $514,000 for the three months ended March 31, 2026 from the three months ended March 31, 2025 primarily due to a $408,000 increase in member acquisition costs and a $260,000 increase in cost of revenue related to the purchase of vouchers and gift cards which were sold during the three months ended March 31, 2026.

Previous wording

Foreign currency movements relative to the U.S. dollar negatively impacted our local currency income from our operations in Europe by approximately $41,000 for thethree months ended September 30, 2025 and positively impacted our local currency income from our operations in Europe by approximately $31,000 for thethree months ended September 30, 2024. Foreign currency movements relative to the U.S. dollar negatively impacted our local currency income from our operations in Europe by approximately $31,000 for thenine months ended September 30, 2025 and positively impacted our local currency income from our operations in Europe by approximately $84,000 for thenine months ended September 30, 2024.

Current wording

Foreign currency movements relative to the U.S. dollar positively impacted our local currency income from our operations in Europe by approximately $2,000 and $11,000 for thethree months ended March 31, 2026 and 2025, respectively.

Previous wording

Jack’s Flight Club revenues increased by$150,000 for thethree months ended September 30, 2025 from the three months ended September 30, 2024 due to the increase of subscription fees paid by the members. Jack’s Flight Club expenses increased by $140,000 for the three months ended September 30, 2025 from the three months ended September 30, 2024 primarily due to the increase in advertising expenses.

Current wording

Jack’s Flight Club revenues increased by$29,000 for thethree months ended March 31, 2026 from the three months ended March 31, 2025 due to the increase in subscription fees paid by the members. Jack’s Flight Club expenses increased by $89,000 for the three months ended March 31, 2026 from the three months ended March 31, 2025 primarily due to the increase in advertising expenses.

Previous wording

New Initiatives segment primarily consists of Travelzoo licensing business, Travelzoo META, Metaverse experience scouting and development business and theretail and fashion business acquired with MTE. New Initiatives revenues decreased $6,000 for the three months ended September 30, 2025 from the three months ended September 30, 2024 primarily due to the decrease in theretail and fashion business. New Initiatives segment expenses decreased by $145,000 for the three months ended September 30, 2025 from the three months ended September 30, 2024 primarily due to the decrease insalary and related expenses.

Current wording

New Initiatives segment primarily consists of Travelzoo licensing business, Travelzoo META, Metaverse experience scouting and development business and theretail and fashion business acquired with MTE.

Previous wording

As of September 30, 2025, we had $8.5 million in cash and cash equivalents, of which $6.1 million was held outside the U.S. in our foreign operations. If this cash is distributed to the U.S., we may be subject to additional foreign withholdings taxes in certain circumstances. We also had $756,000 in restricted cash held in the U.S. and U.K. as of September 30, 2025.

Current wording

As of March 31, 2026, we had $10.6 million in cash and cash equivalents, of which $7.4 million was held outside the U.S. in our foreign operations. If this cash is distributed to the U.S., we may be subject to additional foreign withholding taxes in certain circumstances. We also had $754,000 in restricted cash held in the U.S. and U.K. as of March 31, 2026.

Previous wording

Cash, cash equivalents and restricted cash decreased $8.5 million from $17.7 million as of December 31, 2024 to $9.2 million as of September 30, 2025, primarily due to $13 million cash used to repurchase common stock, offset partially by $4.2 million cash provided by operating activities.

Current wording

Cash, cash equivalents and restricted cash increased $562,000 from $10.8 million as of December 31, 2025 to $11.3 million as of March 31, 2026, primarily due to $3.9 million cash provided by operating activities, partially offset by $3.3 million cash used to repurchase common stock.

Previous wording

As of September 30, 2025, we had merchant payables of $11.8 million related to unredeemed vouchers. In the Company’s financial statements presented in this 10-Q report, following U.S. generally accepted accounting principles (“GAAP”), we classified all merchant payables as current. When all merchant payables are classified as current, there is negative net working capital (which is defined as current assets minus current liabilities) of$11.4 million. Payables to merchants are generally due upon redemption of vouchers. As of September 30, 2025, unredeemed vouchers have maturities through March 2026; however, expiration dates may be extended on a case-by-case basis and final payment to merchants upon expiration may not be due for up to a year after. Based on current projections of redemption activity, we expect that cash on hand as of September 30, 2025 will be sufficient to provide for working capital needs for at least the next twelve months.

Current wording

As of March 31, 2026, we had merchant payables of $13.5 million related to unredeemed vouchers. In the Company’s financial statements presented in this 10-Q report, following U.S. generally accepted accounting principles (“GAAP”), we classified all merchant payables as current. When all merchant payables are classified as current, there is negative net working capital (which is defined as current assets minus current liabilities) of$10.8 million. Payables to merchants are generally due upon redemption of vouchers. As of March 31, 2026, unredeemed vouchers have maturities through March 2026; however, expiration dates may be extended on a case-by-case basis and final payment to merchants upon expiration may not be due for up to a year after. Based on current projections of redemption activity, we expect that cash on hand as of March 31, 2026 will be sufficient to provide for working capital needs for at least the next twelve months.

Previous wording

Net cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. Net cash provided by operating activities for the nine months ended September 30, 2025 was $4.2 million, which primarily consisted of net income of $4.9 million, $1.2 million increase in non-cash items and $884,000 decrease in cash from changes in operating assets and liabilities. Adjustments for non-cash items primarily consisted of $1.1 million for stock-based compensation and $239,000 for depreciation and amortization. The decrease in cash from changes in operating assets and liabilities was primarily due to $5.1 million decrease in merchant payables, offset partially by $2.4 million increase in deferred revenue and $2.1 million increase in accounts payable.

Current wording

Net cash provided by operating activities is net income adjusted for certain non-cash items and changes in assets and liabilities. Net cash provided by operating activities for the three months ended March 31, 2026 was $3.9 million, which primarily consisted of net income of $2.5 million, $154,000 increase in non-cash items and a $1.2 million increase in cash from changes in operating assets and liabilities. Adjustments for non-cash items primarily consisted of $77,000 for net foreign currency effect and $56,000 for depreciation and amortization. The increase in cash from changes in operating assets and liabilities was primarily due to $2.8 million decrease in accounts receivable, offset partially by $2 million increase in deferred revenue and $1.9 million increase in merchant payables.

Previous wording

Cash paid for income tax, net of refunds received, during the nine months ended September 30, 2025 and 2024 was $3.6 million and $1.5 million, respectively.

Current wording

Cash paid for income tax, net of refunds received, during the three months ended March 31, 2026 and 2025 was $290,000 and $1.5 million, respectively.

Previous wording

Net cash used in investing activities for the nine months ended September 30, 2025 and 2024 was $49,000 and $129,000, respectively. The cash used in investing activities for the nine months ended September 30, 2025 consisted of purchases of property and equipment.

Current wording

Net cash used in investing activities for the three months ended March 31, 2026 and 2025 was $8,000 and $21,000, respectively. The cash used in investing activities for the three months ended March 31, 2026 consisted of purchases of property and equipment.

Previous wording

Critical accounting policies and estimates are those that we believe are important in the preparation of ourcondensed consolidated financial statements because they require that we use judgment and estimates in applying those policies. Preparation of thecondensed consolidated financial statements and accompanying notes requires that we make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of thecondensed consolidated financial statements as well as revenue and expenses during the periods reported. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions. Our critical accounting policies include income taxes. For additional information about our critical accounting policies and estimates, see the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2024 as well as updates in the current fiscal year provided in “Note 1 Summary of Significant Accounting Policies” in the notes to the condensed consolidated financial statements.

Current wording

Critical accounting policies and estimates are those that we believe are important in the preparation of ourcondensed consolidated financial statements because they require that we use judgment and estimates in applying those policies. Preparation of thecondensed consolidated financial statements and accompanying notes requires that we make estimates and assumptions that affect the reported amounts and classifications of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of thecondensed consolidated financial statements as well as revenue and expenses during the periods reported. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions. Our critical accounting policies include income taxes. For additional information about our critical accounting policies and estimates and recent accounting pronouncements, see the disclosure included in our Annual Report on Form 10-K for the year ended December 31, 2025 as well as updates in the current fiscal year provided in “Note 1 Summary of Significant Accounting Policies” in the notes to the condensed consolidated financial statements.