QUINSTREET, INC

1. The Company

QuinStreet, Inc. (the “Company”)is a leader in performance marketplaces and technologies for the financial services and home services industries. The Company was incorporated in California in April 1999 and reincorporated in Delaware in December 2009. The Company specializes in customer acquisition for clients in high value, information-intensive markets or “verticals,” including financial services and home services. The corporate headquarters are located in Foster City, California, with additional offices throughout the United States, India, Mexico, and Switzerland. The majority of the Company’s operations and revenue are in North America.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

Prior Period Reclassifications

Certain prior periods amounts have been reclassified to conform with current period presentation. Amounts previously presented as “Other Revenue” were reclassified into “Home Services” in the Disaggregation of Revenue table within Note 3, Revenue. Post-closing payment obligations previously classified within Other liabilities on the Consolidated Balance Sheets have been reclassified to their own categories. These reclassifications had no effect on previously reported totals for assets, liabilities, stockholders’ equity, cash flows or net income.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from those estimates.

The Company derives revenue primarily from fees earned through the delivery of qualified inquiries such as clicks, leads, calls, applications, or customers. The Company recognizes revenue when the Company transfers promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue pursuant to the five-step framework contained in ASC 606, Revenue from Contracts with Customers: (i) identify the contract with a client; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations.

As part of determining whether a contract exists, probability of collection is assessed on a client-by-client basis at the outset of the contract. Clients are subjected to a credit review process that evaluates the clients’ financial position and the ability and intention to pay. If it is determined from the outset of an arrangement that the client does not have the ability or intention to pay, the Company will conclude that a contract does not exist and will continuously reassess its evaluation until the Company is able to conclude that a contract does exist.

Generally, the Company’s contracts specify the period of time as one month, but in some instances the term may be longer. However, for most of the Company’s contracts with clients, either party can terminate the contract at any time without penalty. Consequently, enforceable rights and obligations only exist on a day-to-day basis, resulting in individual daily contracts during the specified term of the contract or until one party terminates the contract prior to the end of the specified term.

The Company has assessed the services promised in its contracts with clients and has identified one performance obligation, which is a series of distinct services. Depending on the client’s needs, these services consist of a specified or an unlimited number of clicks, leads, calls, applications, customers, etc. (hereafter collectively referred to as “marketing results”) to be delivered over a period of time. The Company satisfies these performance obligations over time as the services are provided. The Company does not promise to provide any other significant goods or services to its clients.

Transaction price is measured based on the consideration that the Company expects to receive from a contract with a client. The Company’s contracts with clients contain variable consideration as the price for an individual marketing result varies on a day-to-day basis depending on the market-driven amount a client has committed to pay. However, because the Company ensures the stated period of its contracts does not generally span multiple reporting periods, the contractual amount within a period is based on the number of marketing results delivered within the period. Therefore, the transaction price for any given period is fixed and no estimation of variable consideration is required.

If a marketing result delivered to a client does not meet the contractual requirements associated with that marketing result, the Company’s contracts allow for clients to return a marketing result generally within 5-10 days of having received the marketing result. Such returns are factored into the amount billed to the client on a monthly basis and consequently result in a reduction to revenue in the same month the marketing result is delivered. No warranties are offered to the Company’s clients.

The Company does not allocate transaction price as the Company has only one performance obligation and its contracts do not generally span multiple periods. Taxes collected from clients and remitted to governmental authorities are not included in revenue. The Company elected to use the practical expedient which allows the Company to record sales commissions as expense as incurred when the amortization period would have been one year or less.

The Company bills clients monthly in arrears for the marketing results delivered during the preceding month. The Company’s standard payment terms are 30-60 days. Consequently, the Company does not have significant financing components in its arrangements.

Separately from the agreements the Company has with clients, the Company has agreements with Internet search companies, third-party publishers and strategic partners that it engages with to generate targeted marketing results for the Company’s clients. The Company receives a fee from its clients and separately pays a fee to the Internet search companies, third-party publishers and strategic partners. The Company evaluates whether it is the principal (i.e., report revenue on a gross basis) or agent (i.e., report revenue on a net basis). In doing so, the Company first evaluates whether it controls the goods or services before they are transferred to the clients. If the Company controls the goods or services before they are transferred to the clients, the Company is the principal in the transaction. As a result, the fees paid by the Company’s clients are recognized as revenue and the fees paid to its Internet search companies, third-party publishers and strategic partners are included in cost of revenue. If the Company does not control the goods or services before they are transferred to the clients, the Company is the agent in the transaction and recognizes revenue on a net basis. The Company has one subsidiary, CCM, which provides performance marketing agency and technology services to clients in financial services, education and other markets, recognizing revenue on a net basis. Determining whether the Company controls the goods or services before they are transferred to the clients may require judgment.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company’s investment portfolio consists of money market funds. Cash is deposited with financial institutions that management believes are creditworthy. To date, the Company has not experienced any material losses on its investment portfolio.

The Company maintains contracts with its clients, most of which are cancelable with little or no prior notice. In addition, these contracts do not contain penalty provisions for cancellation before the end of the contract term. The Company hadone client that accounted for 21% of net revenue in fiscal year 2026, two clients that accounted for 23% and 12% of net revenue in fiscal year 2025, andone client that accounted for 12% of net revenue in fiscal year 2024. The Company hadtwo clients that each accounted for 13% of net accounts receivable as of June 30, 2026, andtwo clients that accounted for 16% and 13% of net accounts receivable as of June 30, 2025. No other client accounted for 10% or more of net revenue infiscal years 2026, 2025 and 2024, or 10% or more of net accounts receivable as of June 30, 2026 and 2025.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company estimates and categorizes the fair value of its financial instruments by applying the following hierarchy:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to directly access.

Level 2 — Valuations based on quoted prices for similar assets or liabilities; valuations for interest-bearing securities based on non-daily quoted prices in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company’s financial instruments consist principally of cash equivalents, accounts receivable, accounts payable, post-closing payments and contingent consideration related to acquisitions. The recorded values of the Company’s accounts receivable and accounts payable approximate their current fair values due to the relatively short-term nature of these accounts. See Note 5, Fair Value Measurements, for additional information regarding fair value measurements.

Cash and Cash Equivalents

All highly liquid investments with maturities ofthree months or less at the date of purchase are classified as cash equivalents on the Company’s consolidated balance sheets.

Accounts Receivable and Allowances

The Company’s accounts receivable are derived from clients located principally in the United States. The Company performs ongoing credit evaluation of its customers and generally does not require collateral. The Company makes estimates of expected credit losses for the allowance for doubtful accounts and allowance for unbilled receivables based upon its assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers.

The following table presents the changes in the Company’s allowance for credit losses for the periods indicated (in thousands):

The revenue reserve was $2.9 million and $1.0 million as of June 30, 2026 and 2025. The total allowance for credit losses and revenue reserve was $3.4 million and $1.9 million as of June 30, 2026 and 2025.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization, and are depreciated on a straight-line basis over the estimated useful lives of the assets, as follows:

Internal Software Development Costs

The Company incurs costs to develop software for internal use. The Company expenses all costs that relate to the planning and post-implementation phases of development as product development expense. Costs incurred in the development phase are capitalized and amortized over the product’s estimated useful life if the product is expected to have a useful life beyondsix months. Costs associated with repair or maintenance of existing sites or the development of website content are included within cost of revenue in the Company’s consolidated statements of operations and comprehensive income (loss). The Company’s policy is to amortize capitalized internal software development costs on a product-by-product basis using the straight-line method over the estimated economic life of the application, which is generallytwo years. The Company capitalized internal software development costs of $10.9 million and $9.3 million in fiscal years 2026 and 2025. Amortization of internal software development costs is reflected within cost of revenue in the Company’s consolidated statements of operations and comprehensive income (loss).

Leases

At the commencement date of a lease, the Company recognizes lease liabilities which represent its obligation to make lease payments, and right-of-use (“ROU”) assets which represent its right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date. The ROU asset is measured at cost, which includes the initial measurement of the lease liability and initial direct costs incurred by the Company and excludes lease incentives. Lease liabilities are recorded in accrued liabilities and operating lease liabilities, noncurrent. ROU assets are recorded in operating lease right-of-use assets.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. Lease agreements that contain both lease and non-lease components are generally accounted for separately. The Company does not recognize lease liabilities and ROU assets for short-term leases with terms of twelve months or less.

Acquisitions and Business Combinations

In each acquisition transaction, the Company assesses whether the transaction should follow accounting guidance applicable to an asset acquisition or a business combination. This assessment requires an evaluation of whether the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, resulting in an asset acquisition or, if not, resulting in a business combination. An asset acquisition is an acquisition of an asset, or a group of assets, that does not meet the definition of a business.

The Company accounts for asset acquisitions using the cost accumulation and allocation model, whereby the costs of the acquisition are allocated to the assets acquired on a relative fair value basis in accordance with the Company’s accounting policies.

The Company accounts for business combinations using the acquisition method, which requires that the total consideration for each acquired business be allocated to the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. During the measurement period, which may be up toone year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

In determining the fair value of assets acquired and liabilities assumed in a business combination, the Company used the income approach to value its most significant acquired asset. Significant assumptions relating to the Company’s estimates in the income approach include base revenue, revenue growth rate net of client attrition, projected gross margin, discount rates, projected operating expenses and the future effective income tax rates. The valuations of our acquired businesses have been performed by a third-party valuation specialist under the Company management’s supervision. The Company believes that the estimated fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that marketplace participants would use. However, such assumptions are inherently uncertain and actual results could differ from those estimates. Future changes in our assumptions or the interrelationship of those assumptions may negatively impact future valuations. In future measurements of fair value, adverse changes in discounted cash flow assumptions could result in an impairment of goodwill or intangible assets that would require a non-cash charge to the consolidated statements of operations and comprehensive income (loss) and may have a material effect on our financial condition and operating results.

Acquisition related costs in a business combination are not considered part of the consideration, and are expensed as operating expense as incurred. Contingent consideration, if any, is measured at fair value initially on the acquisition date as well as subsequently at the end of each reporting period until settlement at the end of the assessment period. The Company includes the results of operations of the businesses acquired as of the beginning of the acquisition dates.

Amortization of intangible assets acquired in business combinations is recognized over their estimated useful lives and recorded in either cost of revenue or operating expenses based on the nature of the underlying asset.

The Company conducts a test for the impairment of goodwill at the reporting unit level on at least an annual basis and whenever there are events or changes in circumstances that would more likely than not reduce the estimated fair value of a reporting unit below its carrying value. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows and determining appropriate discount rates, growth rates, an appropriate control premium and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit which could trigger impairment.

The Company performs its annual goodwill impairment test on April 30 and conducts a qualitative assessment to determine whether it is necessary to perform a quantitative goodwill impairment test. In assessing the qualitative factors, the Company considers the impact of key factors such as changes in the general economic cond itions, changes in industry and competitive environment, stock price, actual revenue performance compared to previous years, forecasts and cash flow generation. The Company hadone reporting unit for purposes of allocating and testing goodwill forfiscal year 2026. Based on the results of the qualitative assessment completed as of April 30, 2026, there wereno indicators of impairment.

Long-Lived Assets

The Company evaluates long-lived assets, such as property and equipment and purchased intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If necessary, a quantitative test is performed that requires the application of judgment when assessing the fair value of an asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. As of April 30, 2026, the Company evaluated its long-lived assets and concluded there wereno indicators of impairment. The weig hted-average useful life of intangible assets was 5.9 years as of June 30, 2026.

Investments in Equity Securities

The Company’s investments in equity securities, which are reported within other assets, noncurrent, on the consolidated balance sheets, include investments in privately held companies without readily determinable market values. The Company adjusts the carrying value of its investments in equity securities to fair value when transactions for identical or similar investments of the same issuer are observable. All gains and losses on investments in equity securities, realized and unrealized, are recognized within other (expense)income, net on the Company’s consolidated statements of operationsand comprehensive income (loss).

The Company applies the equity method of accounting for investments in other entities when it exercises significant influence. Under the equity method, the Company’s share of each investee’s profit or loss is recognized within other (expense)income, net on the Company’s consolidated statements of operationsand comprehensive income (loss).

The Company applies the fair value measurement alternative for investments in other entities when it holds less than 20% ownership in the entity and does not exercise significant influence. These investments consist of equity holdings in non-public companies and are recorded within other assets, noncurrent, on the consolidated balance sheets.

The Company regularly reviews investments accounted for under the equity method and the fair value measurement alternative for possible impairment, which generally involves an analysis of the facts and changes in circumstances influencing the investment, expectations of the entity’s cash flows and capital needs, and the viability of its business model. The evaluation for impairment of investments in equity securities considers qualitative factors, including the financial condition and specific events related to an investee that may indicate the fair value of the investment is less than its carrying value. No impairment charges for investments in equity securities were recorded forfiscal years 2026 and 2025.

Income Taxes

The Company accounts for income taxes using an asset and liability approach to record deferred taxes. The Company’s deferred income tax assets represent temporary differences between the financial statement carrying amount and the tax basis of existing assets and liabilities that will result in deductible amounts in future years, including net loss carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company regularly assesses the realizability of our deferred tax assets. Judgment is required to determine whether a valuation allowance is necessary and the amount of such valuation allowance, if appropriate. The Company considers all available evidence, both positive and negative to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating the need, or continued need, for a valuation allowance the Company considers, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, forecasts of future profitability, and the duration of statutory carryforward periods. The Company’s judgments regarding future profitability may change due to future market conditions, changes in U.S. or international tax laws and other factors.

The Company recognizes tax benefits from an uncertain tax position only if it is more likely than not, based on the technical merits of the position, that the tax position will be sustained on examination by the tax authorities. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest and penalties related to unrecognized tax benefits are recognized within income tax expense.

Segment information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), or decision making group, in deciding how to allocate resources and in assessing performance. The Company’s CODM, its chief executive officer, reviews financial information presented on a consolidated basis, and no expense or operating income is evaluated at a segment level. Given the consolidated level of review by the Company’s chief executive officer, the Company operates asone reportable segment.

Foreign Currency Translation

The Company’s foreign operations are subject to exchange rate fluctuations. The majority of the Company’s sales and expenses are denominated in U.S. dollars. The functional currency for the majority of the Company’s foreign subsidiaries is the U.S. dollar. For these subsidiaries, assets and liabilities denominated in foreign currency are remeasured into U.S. dollars at current exchange rates for monetary assets and liabilities and historical exchange rates for nonmonetary assets and liabilities. Net revenue, cost of revenue and expenses are generally remeasured at average exchange rates in effect during each period. Gains and losses from foreign currency remeasurement are included in other (expense) income, net in the Company’s consolidated statements of operations and comprehensive income (loss). Certain foreign subsidiaries designate the local currency as their functional currency. For those subsidiaries, the assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average exchange rates for the period. The foreign currency translation adjustments are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Foreign currency transaction gains and losses are recorded within other (expense) income, net in the Company’s consolidated statements of operations and comprehensive income (loss) and were not material for any period presented.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. Comprehensive income (loss) is disclosed as part of thestatements of operations and comprehensive income (loss).

Loss Contingencies

The Company is subject to the possibility of various loss contingencies arising in the ordinary course of business. Management considers the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information available to its management to determine whether such accruals should be adjusted and whether new accruals are required.

From time to time, the Company is involved in disputes, litigation and other legal actions. The Company records a charge equal to at least the minimum estimated liability for a loss contingency only when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements, and (ii) the range of loss can be reasonably estimated. The actual liability in any such matters may be materially different from the Company’s estimates, which could result in the need to adjust the liability and record additional expenses.

The Company measures and records the expense related to stock-based transactions based on the fair values of stock-based payment awards, as determined on the date of grant. The fair value of restricted stock units with a service condition (“service-based RSU”) is determined based on the closing price of the Company’s common stock on the date of grant. To estimate the fair value of stock options and purchase rights granted under the employee stock purchase plan (“ESPP”), the Company selected the Black-Scholes option pricing model. The fair value of restricted stock units with a service and performance condition (“performance-based RSU”) is determined based on the closing price of the Company’s common stock on the date of grant. Grant date as defined by ASC 718 is determined when the components that comprise the performance targets have been fully established. If a grant date has not been established, the compensation expense associated with the performance-based RSUs is re-measured at each reporting date based on the closing price of the Company’s common stock at each reporting date until the grant date has been established. In applying these models, the Company’s determination of the fair value of the award is affected by assumptions regarding a number of subjective variables. These variables include, but are not limited to, the Company’s expected stock price volatility over the term of the award and the employees’ actual and projected stock option exercise and pre-vesting employment termination behaviors.

The Company recognizes stock-based compensation expense for options and service-based RSUs using the straight-line method, and for performance-based RSUs using the graded vesting method, based on awards ultimately expected to vest. The Company recognizes stock-based compensation expense for the purchase rights granted under the ESPP using the straight-line method over the offering period. The Company estimates future forfeitures at the date of grant. On an annual basis, the Company assesses changes to its estimate of expected forfeitures based on recent forfeiture activity. The effect of adjustments made to the forfeiture rates, if any, is recognized in the period that change is made. See Note 13, Stock Benefit Plans, for additional information regarding stock-based compensation.

401(k) Savings Plan

The Company sponsors a 401(k) defined contribution plan covering all U.S. employees. There wereno employer contributions under this plan infiscal years 2026 and 2025.

Recent Accounting Pronouncements

Accounting Pronouncements Already Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures(ASU 2023-09) to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. Weadopted this guidance for the year ended June 30, 2026, on a prospective basis, which resulted in additional disclosure in the notes to the consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses(ASU 2024-03) to expand the disclosure requirements for income statement expenses. In January 2025, the FASB issued ASU 2025-01, to further clarify the effective date. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statement disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06) to make targeted improvements to the accounting for internal-use software. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its financial statements.

ASU’s not included in the Company's disclosures were assessed and determined to be not applicable and not material to the Company’s consolidated financial statements or disclosures.

3. Revenue

Disaggregation of Revenue

The following table presents the Company’s net revenue disaggregated by vertical (in thousands):

Contract Balances

The contract liabilities, which represent client deposits from the Company’s contracts with its clients and deferred revenue, were $1.4 million and $1.3 million as of June 30, 2026 and June 30, 2025.

The Company’s contract liabilities result from payments received in advance of revenue recognition and advance consideration received from clients, which precede the Company’s satisfaction of the associated performance obligation. The changes in the liability balances during the fiscal year ended June 30, 2026 was related to advance consideration received from clients of $16.7 million, offset by revenue recognized of $16.6 million.

4. Net Income (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed by using the weighted-average number of shares of common stock outstanding, including potential dilutive shares of common stock assuming the dilutive effect of outstanding stock options, unvested restricted stock units, and shares issuable related to the ESPP using the treasury stock method.

The following table presents the calculation of basic and diluted net income (loss) per share:

(1)

Diluted net loss per share for 2024 does not reflect any potential common stock relating to stock options, restricted stock units, or shares issuable related to the ESPP due to net loss incurred. The assumed issuance of any additional shares would be anti-dilutive.

(2)

These weighted shares relate to anti-dilutive stock options, restricted stock units, and shares issuable related to the ESPP as calculated using the treasury stock method and could be dilutive in the future.

5. Fair Value Measurements

The following table presents the fair value of the Company’s financial instruments (in thousands):

There wereno transfers between Level 1, Level 2 and Level 3 during the periods presented.

Cash Equivalents

All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents on the Company’s consolidated balance sheets. The valuation technique used to measure the fair value of money market funds included using quoted prices in active markets for identical assets and are classified as Level 1 within the fair value hierarchy.

Post-Closing Payments Related to Acquisitions

The post-closing payments are future payments related to the acquisition of HomeBuddy in fiscal year 2026, and AquaVida in fiscal year 2024. The final installment payments for Modernize and BestCompany, totaling$5.5 million and $2.0 million, were made during the fiscal year 2026. As the fair value of the Company’s post-closing payments was determined based on installments stipulated in the terms of the acquisition agreements and discount rates observable in the market, the post-closing payments are classified as Level 2 within the fair value hierarchy. See Note 6, Acquisitions, for further details related to the HomeBuddy acquisition.

Contingent Consideration Related to Acquisitions

The contingent consideration consists of the estimated fair value of future payments related to the Company’s acquisition of AquaVida. The AquaVida contingent consideration is based upon a percentage of margin achieved and is uncapped over a four-year period. The Company paid $6.7 million during the fourth quarter of fiscal year 2026 for the second earnout payment based on actual margin results. The fair value of the contingent consideration is determined using the real options technique which incorporates various estimates, including projected net revenue, projected media margin, volatility and discount rates. As certain of these inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. Significant changes in the projected net revenue, projected media margin, or discount rates would have a material impact on the fair value of the contingent consideration. Changes in the fair value of the contingent consideration are recorded in earnings on the Company’s consolidated statements of operations and comprehensive income (loss).

The Company reassesses the estimated fair value of the contingent consideration at the end of each reporting period based on the information available at the time. The Company recorded a net increase of $4.7 million to the fair value of the contingent consideration of AquaVida in fiscal year 2026, which is included in general and administrative expenses on the Company’s consolidated statements of operations and comprehensive income (loss). The fair value of the contingent consideration of AquaVida decreased from $13.6 million to $11.5 million as of June 30, 2026.

The following table presents the changes in the contingent consideration (in thousands):

6. Acquisitions

On January 2, 2026, the Company completed the acquisition of HomeBuddy, a technology enabled marketplace in the home services vertical that connects homeowners with contractors, to expand the Company’s home services footprint and strengthen its media and customer relationships. In exchange for all of the outstanding equity interests of HomeBuddy, the Company paid $114.8 million in cash at closing and is obligated to pay $75.0 million inpost‑closing payments (“Anniversary Payments”), payable in equal annual installments over four years, beginning on the first anniversary of the closing date. The Anniversary Payments represent deferred consideration and were recorded at their present fair value at the acquisition date. The deferred consideration is accreted as interest expense over the four year term using the effective interest rate method.

The following table summarizes the Company’s preliminary calculation of the total purchase price as of the acquisition date (in thousands):

The acquisition was accounted for as a business combination and the results of operations of HomeBuddy have been included in the Company’s results of operations from January 2, 2026. Transaction costs related to the acquisition, consisting of advisory, accounting, and legal fees, were $3.5 million forfiscal year 2026 and were recognized within general and administrative expenses in the consolidated statements of operations.

The Company entered into continuation of service agreements with certain HomeBuddy personnel for continued service post-acquisition. The retention bonuses are treated as post-combination compensation expense, vest over 6,12, or 18 month periods, and are contingent upon continued employment with the Company. Retention bonus expense was $3.1 million forfiscal year 2026 and was recognized within cost of revenue and operating expenses in the consolidated statements of operations.

The Company allocated the preliminary purchase price to identifiable assets acquired and liabilities assumed based on their estimated fair values. The preliminary fair value of the assets acquired and liabilities assumed was determined by the Company. Management also engaged a third-party valuation specialist to assist with the measurement of the preliminary fair value of identifiable intangible assets. The estimated fair value of the identifiable assets acquired and liabilities assumed was based on management’s best estimates. The intangible assets acquired include customer relationships, tradename and trademarks, developed technology, and noncompetition agreements. The fair value of the customer relationships was determined using the multi-period excess earnings method. The significant assumptions used in determining the preliminary fair value of the customer relationships intangible asset included revenue growth rates, gross margin, customer retention rate, and discount rate. The fair value of tradename and trademarks was determined using the relief-from-royalty method. The significant assumptions used in determining the preliminary fair values of the tradename and trademarks included tradename life, royalty rates and the discount rate. The fair value of developed technology was determined using the replacement cost method. The fair value of noncompetition agreement was determined using the with-and-without method.

The excess of the purchase price over the aggregate fair value of the net identifiable assets acquired was recorded as goodwill and is primarily attributable to synergies the Company expects to achieve related to the acquisition. The goodwill is not deductible for tax purposes. The Company manages its operations as a single operating segment and allocates goodwill to the single reporting segment based on expected benefit from synergies.

The following table summarizes the preliminary allocation of the purchase price to the fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):

The following table summarizes the preliminary fair values of the identifiable intangible assets acquired and the estimated useful lives as of the acquisition date (in thousands):

The Company is still finalizing the purchase price and the allocation of the purchase price to the individual assets acquired. Accordingly, these preliminary estimates are subject to change during the measurement period, which is the period subsequent to the acquisition date during which the acquirer may adjust the provisional amounts recognized for a business combination, not to exceed one year from the acquisition date. The final purchase price allocation, which may include changes in the allocations within intangible assets and between intangible assets and goodwill, as well as changes in the estimated useful lives of the intangible assets, will be determined when the Company has completed the detailed review of underlying inputs and assumptions used in its preliminary purchase price allocation. Amortization of intangible assets acquired is recorded in either cost of revenue or operating expenses, based on the nature of the underlying asset.

The following table represents the amount of net revenue and net income from operations related to the HomeBuddy acquisition which has been included in the consolidated statements of operations for the periods indicated subsequent to the acquisition date (in thousands):

The unaudited pro forma financial information in the table below summarizes the combined results of operations for the Company and the acquired business of HomeBuddy as though this acquisition had occurred as of the beginning of fiscal year 2025. The unaudited pro forma financial information is presented for illustrative purposes only and does not necessarily reflect what the combined company’s results of operations would have been had the acquisition occurred as of the beginning of fiscal year 2025, nor is it necessarily indicative of the future results of operations of the combined company (in thousands):

The pro forma financial information presented above has been calculated after adjusting the results of QuinStreet, Inc. and HomeBuddy to reflect certain business combination and one-time accounting effects such as fair value adjustment of amortization expense from acquired intangible assets, interest expense on the amounts drawn under the Revolving Credit Facility to finance the acquisition, accretion of post-closing acquisition payments, and acquisition costs. The historical consolidated financial information has been adjusted in the pro forma combined financial results to give effect to pro forma events that are directly attributable to the business combination, reasonably estimable and factually supportable.

The unaudited pro forma financial information above includes a nonrecurring significant adjustment made to account for certain costs incurred as if the acquisition had been completed as of the beginning of fiscal year 2025. Transaction costs of $3.5 million were excluded from the unaudited pro forma financial information forfiscal year 2026, but included for fiscal year 2025.

7. Balance Sheet Components

Accounts Receivable, Net

Accounts receivable, net was comprised of the following (in thousands):

Prepaid Expenses and Other Assets

Prepaid expenses and other assets were comprised of the following (in thousands):

Property and Equipment, Net

Property and equipment, net was comprised of the following (in thousands):

Depreciation expense was $3.3 million, $3.2 million and $3.0 million for fiscal years 2026, 2025 and 2024. Amortization expense related to internal software development costs was $10.2 million, $11.8 million and $10.2 million for fiscal years 2026, 2025 and 2024.

Accrued liabilities

Accrued liabilities were comprised of the following (in thousands):

Other liabilities, noncurrent

Other liabilities, noncurrent were comprised of the following (in thousands):

8. Intangible Assets, Net and Goodwill

Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):

Amortization of intangible assets was $11.7 million, $9.5 million and $10.7 million for fiscal years 2026, 2025 and 2024.

Future amortiza tion expense for the Company’s intangible assets as of June 30, 2026 was as follows (in thousands):

The changes in the carrying amount of goodwill for the fiscal year 2026 were as follows (in thousands):

Goodwill acquired is associated with the acquisition of HomeBuddy completed in fiscal year 2026. See Note 6, Acquisitions, for further details related to the HomeBuddy acquisition.

There wasno goodwill impairment recognized during fiscal years 2026 and 2025.

9. Debt

On January 2, 2026, the Company entered into the senior secured credit agreement ("Financing Agreement") with MUFG Bank, LTD., as administrative agent for the lenders and certain other parties signatory thereto. The Financing Agreement provides for a new $150.0 million credit facility consisting of a five‑year revolving credit line ("Revolving Credit Facility").

Borrowings under the Revolving Credit Facility are secured by first-priority liens on substantially all assets of QuinStreet, Inc. and certain subsidiaries, subject to certain exceptions. Interest is payable at specified margins above either Term Secured Overnight Financing Rate ("SOFR") or the Alternate Base Rate ("ABR"). Interest on the borrowings under the Revolving Credit Facility are payable at interest rates equal to, at the Company’s option, either: (a) a SOFR-based rate (subject to a 0.00%per annum floor), plus an applicable margin of 2.00% to 2.75% per annum depending on the Consolidated Total Net Leverage Ratio (as defined in the Financing Agreement), or (b) a base rate (subject to a 0.00% per annum floor), plus an applicable margin of 1.00% to 1.75% per annum depending on the Consolidated Total Net Leverage Ratio (as defined in the Financing Agreement). The Financing Agreement requires the Company to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee of 0.25% to 0.40% per annum depending on the Consolidated Total Net Leverage Ratio (as defined in the Financing Agreement) on the unused portion of the Revolving Credit Facility.

The Financing Agreement includes customary financial and nonfinancial covenants, including a maximum Consolidated Total Net Leverage Ratio (with a temporary step‑up following certain material acquisitions) and a minimum Consolidated Interest Coverage Ratio (as defined in the Financing Agreement). The Company was in compliance with all covenants as of June 30, 2026.

On January 2, 2026, the Company borrowed $70.0 million under the Revolving Credit Facility. As of June 30, 2026, $70.0 million was outstanding and was classified as noncurrent debt as the principal was not contractually due within 12 months, and unused commitments were $80.0 million.

Up front lender, arranger, and legal costs incurred in connection with the credit facility totaled $1.8 million and were deferred as a financing cost asset and amortized to interest expense on a straight-line basis over the remaining term of the facility. The deferred cost asset is classified as a noncurrent asset.

The Revolving Credit Facility stated maturity date is January 2, 2031.

10. Income Taxes

The components of income (loss) before income taxes were as follows (in thousands):

The components of the provision for (benefit from) income taxes were as follows (in thousands):

The following table represents a reconciliation of the statutory federal rate and the Company’s effective tax rate (after the adoption of ASU 2023-09) for the year ended June 30, 2026 (in thousands):

California, Florida, and New York make up the majority (greater than 50%) of the state income tax expense, net of federal income tax effect, category.

For the years ended June 30, 2025 and June 30, 2024, prior to the adoption of ASU 2023-09, the reconciliation between the statutory federal income tax expense and the Company’s effective income tax expense was as follows (in thousands):

The amounts of cash income taxes paid by the Company are as follows (in thousands):

The components of the noncurrent deferred tax assets and liabilities, net were as follows (in thousands):

The Company has a net deferred tax asset balance of $47.3 million and a net deferred tax liability balance of $4.8 million as of June 30, 2026 within the assets and liabilities, noncurrent on the Company’s consolidated balance sheet. As of 2025, the Company had a deferred tax liability of $3.7 million included within other liabilities, noncurrent on the Company’s consolidated balance sheet. In 2026, the Company had a net deferred tax asset primarily related to net operating loss carryforwards, tax credits and capitalized research expenditures and a net deferred tax liability related to the intangible basis difference with respect to the acquisition of HomeBuddy. In 2025, the net deferred tax liability is related to indefinite lived deferred tax liabilities unable to be offset with deferred tax assets. The Company evaluated the need for a valuation allowance by considering among other things, the nature, frequency and severity of current and cumulative losses, reversal of taxable temporary differences, tax planning strategies, forecasts of future profitability, and the duration of statutory carryforward periods. In the second quarter of fiscal year 2026, due to the preponderance of positive evidence, including the Company’s cumulative profit before taxes and future forecasts of continued profitability in the United States, the Company determined that sufficient positive evidence existed to conclude that substantially all of its valuation allowance was no longer needed. Accordingly, the Company released the valuation allowance for the majority of its federal and state deferred tax assets. The Company continues to maintain a valuation allowance related to its deferred tax assets for its capital loss carryforwards, California research and development tax credits and foreign net operating losses. If there are unfavorable changes to actual operating results or to projections of future income, the Company may determine that it is more likely than not that such deferred tax assets may not be realizable. The Company has a valuation allowance of approximately $8.7 million and $69.3 million as of June 30, 2026 and 2025.

As of June 30, 2026 and 2025, the Company hada federal operating loss carryforward of approximately $75.4 million and $105.4 million. As of June 30, 2026 and 2025, the Company’s state operating loss carryforward was approximately $68.0 million and $82.8 million. With the exception of $68.6 million of federal net operating losses that can be carried forward indefinitely, the federal and state net operating losses, if not used, will begin to expire on June 30, 2038 and June 30, 2026, respectively. However, the Company currently expects to fully utilize the federal net operating losses generated in fiscal year 2018 during the next fiscal year and therefore does not expect such losses to expire. Further, based on current forecasts of future taxable income, management expects to realize the benefits of the remaining net operating loss carryforwards before the applicable expiration dates. The operating loss carryforward in the India jurisdiction was approximately $0.5 million which will begin to expire on June 30, 2027. The Company has federal and California research and development tax credit carryforwards of approximately $15.2 million and $13.8 million to offset future taxable income. The federal research and development tax credits, if not used, will begin to expire on June 30, 2034, while the state tax credit carryforwards do not have an expiration date and may be carried forward indefinitely.

Utilization of the operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of operating loss carryforwards and credits before utilization.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits was as follows (in thousands):

The Company’s policy is toinclude interest and penalties related to unrecognized tax benefits within the Company’s provision for (benefit from) income taxes. As of June 30, 2026, the Company has accrued $1.8 million for interest and penalties related to the unrecognized tax benefits. The balance of interest and penalties is recorded as other liabilities, noncurrent on the Company’s consolidated balance sheet.

As of June 30, 2026, unrecognized tax benefits of $1.1 million, if recognized, would affect the Company’s effective tax rate. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months.

The Company files income tax returns in the United States, various U.S. states and certain foreign jurisdictions and is no longer subject to U.S. federal, state and local, or non-U.S., income tax examinations by tax authorities for years before fiscal 2014. As of June 30, 2026, the tax years 2014 through 2026 remain open in the U.S., and the tax years 2021 through 2026 remain open in various foreign jurisdictions. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from our examinations.

On July 4, 2025, U.S. legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14” (“The Act”) was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. Key provisions include permanently restoring bonus depreciation allowances, permanent changes in the limitations for deducting business interest expense and permanent reintroduction of expensing of US research and development costs. The impact on current and deferred taxes for tax law changes is reported in operating income in the first quarter of fiscal year 2026, the period including the enactment date. The Company has evaluated the impact of The Act on its results of operations and has recognized the related tax impacts in fiscal year 2026 which includes the period of enactment.

11. Leases

The Company has operating leases primarily for its office facilities. The leases expire at various dates through fiscal year 2032, some of which include options to renew, with renewal terms of up to 5 years. The Company does not include any renewal options in the lease terms for calculating lease liability, as the renewal options allow the Company to maintain operational flexibility and the Company is not reasonably certain that it will exercise these renewal options at the time of the lease commencement.

The components of lease expense were as follows (in thousands):

(1)

Variable lease expense is primarily composed of common area maintenance charges.

Supplemental information related to operating leases was as follows (in thousands, except lease term and discount rate):

The implicit rate within each lease is not readily determinable and therefore the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of the lease payments. The determination of the incremental borrowing rate requires judgment. The Company determined its incremental borrowing rate for each lease using indicative bank borrowing rates, adjusted for various factors including level of collateralization, term and currency to align with the terms of a lease.

Maturities of operating lease liabilities as of June 30, 2026 were as follows (in thousands):

12. Commitments and Contingencies

Guarantor Arrangements

The Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The term of the indemnification period is for the officer or director’s lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and enables the Company to recover a portion of any future amounts under certain circumstances and subject to deductibles and exclusions. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is not material. Accordingly, the Company hadno liabilities recorded for these agreements as of June 30, 2026 and 2025.

In the ordinary course of its business, the Company from time to time enters into standard indemnification provisions in its agreements with its clients. Pursuant to these provisions, the Company may be obligated to indemnify its clients for certain losses suffered or incurred, including losses arising from violations of applicable law by the Company or by its third-party publishers, losses arising from actions or omissions of the Company or its third-party publishers, and for third-party claims that a Company product infringed upon any United States patent, copyr ight, or other intellectual property rights. Where practicable, the Company limits its liabilities under such indemnities. Subject to these limitations, the term of such indemnification provisions is generally coterminous with the corresponding agreements and survives for the duration of the applicable statute of limitations after termination of the agreement. The potential amount of future payments to defend lawsuits or settle indemnified claims under these indemnification provisions is generally limited and the Company believes the estimated fair value of these indemnity provisions is not material. Accordingly, the Company hadno liabilities recorded for these agreements as of June 30, 2026 and 2025.

Letters of Credit

The Company has a $0.3 million letter of credit agreement with a financial institution that is used as collateral for the Company’s corporate headquarters’ operating lease. The letter of credit automatically renews annually without amendment unless canceled by the financial institution within 30 days of the annual expiration date.

13. Stockholders’ Equity

Stock Repurchases

In April 2022, the Board of Directors authorized the 2022 Stock Repurc hase Program allowing the repurchase of up to $40.0 million worth of common stock. During the second quarter of fiscal year 2026, the Company had fully utilized the $40.0 million authorized for repurchase under the 2022 Stock Repurchase Program. In October 2025, the Board of Directors authorized the 2025 Stock Repurchase Program allowing the Company to repurchase up to $40.0 million of the outstanding shares of common stock. In fiscal year 2026, the Company repurchased and retired 2,308,491 shares of its common stock at an average price of $13.59 per share, at a total cost of $31.4 million (including a broker commission of $0.03 per share). Repurchases under these programs took place in the open market. The repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. As of June 30, 2026, approximately $25.4 million remained available for stock repurchases pursuant to the board authorization. There wereno repurchases made during the fiscal year 2025.

Retirement of Treasury Stock

In fiscal year 2026, the Company retired 2,308,491 shares of its common stock with a carrying value of $31.4 million under the 2022 and 2025 Stock Repurchase Programs. Infiscal year 2025, the Company retiredno shares of its common stock. The Company’s accounting policy upon the retirement of treasury stock is to deduct its par value from common stock and to reflect any excess of cost over par value as a deduction from additional paid-in capital.

14. Stock Benefit Plans

In fiscal years 2026, 2025 and 2024, the Company recorded stock-based compensation expense of $37.4 million, $31.8 million and $23.7 million. In fiscal year 2026, the Company recognized tax benefits related to current year book stock-based compensation of $7.3 million, which is reflected in the Company’s provision for income taxes. There wereno tax benefits recognized in fiscal years 2025 and 2024 due to the Company's valuation allowance.

Stock Incentive Plans

In November 2009, the Company’s board of directors adopted the 2010 Equity Incentive Plan (the “2010 Incentive Plan”) and the Company’s stockholders approved the 2010 Incentive Plan in January 2010. The 2010 Incentive Plan became effective upon the completion of the IPO of the Company’s common stock in February 2010. The 2010 Incentive Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NQSOs”), restricted stock, restricted stock units (“RSUs”), stock appreciation rights, performance-based stock awards and other forms of equity compensation, as well as for the grant of performance cash awards. The Company may issue ISOs only to its employees. NQSOs and all other awards may be granted to employees, including officers, nonemployee directors and consultants.

To date, the Company has granted ISOs, NQSOs, service-based RSUs, market-based RSUs, and performance-based RSUs under the 2010 Incentive Plan. ISOs and NQSOs are generally granted to employees with an exercise price equal to the market price of the Company’s common stock at the date of grant. Stock options granted to employees generally have a contractual term ofseven years and vest over four years of continuous service, with 25 percent of the stock options vesting on theone-year anniversary of the date of grant and the remaining 75 percent vesting in equal monthly installments over the three year period thereafter. RSUs generally vest over four years of continuous service, with 25 percent of the RSUs vesting on the one-year anniversary of the date of grant and 6.25 percent vesting quarterly thereafter for the next 12 quarters, subject to any performance or stock price targets. Performance-based RSUs vest variably subject to specified financial performance goals. The Company evaluates the portion of the awards that are probable to vest quarterly until the performance criteria are met.

An aggregate of 23,125,612 shares of the Company’s common stock were reserved for issuance under the 2010 Incentive Plan as of June 30, 2026, and this amount will be increased by any outstanding stock awards that expire or terminate for any reason prior to their exercise or settlement. The number of shares of the Company’s common stock reserved for issuance was increased annually through July 1, 2019 by up tofive percent of the total number of shares of the Company’s common stock outstanding on the last day of the preceding fiscal year. The maximum number of shares that may be issued under the 2010 Incentive Plan is 30,000,000. There were 11,656,451 shares available for issuance under the 2010 Incentive Plan as of June 30, 2026.

In November 2009, the Company’s board of directors adopted the 2010 Non-Employee Directors’ Stock Award Plan (the “Directors’ Plan”) and the stockholders approved the Directors’ Plan in January 2010. The Directors’ Plan became effective upon the completion of the Company’s IPO. The Directors’ Plan provides for the automatic grant of NQSOs and RSUs to non-employee directors and also provides for the discre tionary grant of NQSOs and RSUs. Stock options granted to new non-employee directors vest in equal monthly installments over four years and annual stock option grants to existing directors vest in equal monthly installments overone year. The initial service-based RSU grants vest daily over a period offour years and annual service-based RSU grants vest daily over a period ofone year.

An aggregate of 4,598,838 shares of the Company’s common stock were reserved for issuance under the Directors’ Plan as of June 30, 2026. This amount was increased annually through July 1, 2019, by the sum of 200,000 shares and the aggregate number of shares of the Company’s common stock subject to awards granted under the Directors’ Plan during the immediately preceding fiscal year. There were 1,802,275 shares available for issuance under the Directors’ Plan as of June 30, 2026.

Valuation Assumptions

The Company uses the Black-Scholes option-pricing model to fair value its stock options. Options are granted with an exercise price equal to the fair value of the common stock at the date of grant. The Company calculates the weighted-average expected life of options using the simplified method pursuant to the accounting guidance for share-based payments as its historical exercise experience does not provide a reasonable basis upon which to estimate expected term. The Company estimates the expected volatility of its common stock based on its historical volatility over the expected term of the stock option. The Company has no history or expectation of paying dividends on its common stock. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected term of the stock option.

Stock Option Award Activity

No stock options were granted during fiscal year 2026. All stock options outstanding as of June 30, 2026 were vested and exercisable. The following table summarizes the stock option award activity under the plans:

The following table summarizes the total intrinsic value, the cash received and the actual tax benefit of options exercised (in thousands):

There wasno unrecognized compensation expense related to stock options because all outstanding options were vested as of June 30, 2026.

Service-Based Restricted Stock Unit Activity

The following table summarizes the service-based RSU activity under the plans:

As of June 30, 2026, there was $36.3 million of total unrecognized compensation expense related to service-based RSUs, which is expected to be recognized over a weighted-average period of 2.4 years.

Performance-Based Restricted Stock Unit Activity

The following table summarizes the performance-based RSU activity under the 2010 Incentive Plan:

As of June 30, 2026, there was $8.8 million of total unrecognized compen sation expense related to performance-based RSUs, which is expected to be recognized over a weighted-average period of 1.2 years.

At the time of vesting, a portion of RSUs are withheld by the Company to provide for federal and state tax withholding obligations resulting from the release of the RSUs.

Employee Stock Purchase Plan

In October 2021, the Company adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), with 2,164,999 shares of common stock reserved for future issuance under the plan. The 2021 ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation. The 2021 ESPP provides for consecutive offering periods that will typically have a duration of approximately 24 months in length, and each offering period is comprised of four purchase periods of approximately six months in length.

On each purchase date, eligible employees may purchase the Company’s common stock at a price per share equal to 85% of the lesser of (1) the fair market value of the common stock on the first trading day of each offering period, or (2) the fair market value of the common stock on the purchase date. A participant may purchase up to a maximum of 2,500 shares of the common stock during each purchase period, subject to a maximum of $25,000 worth of shares of the common stock in each calendar year (as determined under applicable tax rules). If the fair market value of the common stock on any purchase date is lower than it was on the first trading day of that offering period, participants will be automatically withdrawn from the current offering period and be immediately re-enrolled in a new offering period. In fiscal year 2026,341,692 shares of common stock were purchased under the 2021 ESPP. As of June 30, 2026,884,251 shares were available for issuance under the 2021 ESPP.

ESPP employee payroll contributions accrued as of June 30, 2026 amounting to $1.5 million are included within accrued liabilities on the Company’s consolidated balance sheet, and will be used to purchase shares for the ESPP purchase period ending on August 24, 2026.

The fair value of the purchase rights for the ESPP are estimated on the date of grant using the Black-Scholes model with the following assumptions:

15. Segment Information

The Company manages its operations as asingle operating segment for the purpose of assessing performance and making operating decisions. The Company’s CODM is thechief executive officer, who manages operations based on financial information provided on a consolidated basis to assess performance and decide how to allocate resources.

As asingle reportable operating segment entity, the Company's segment performance measure is net income (loss), which is used to monitor budget versus actual results. Segment income from operations includes all geographic revenues, related cost of net revenues and operating expenses directly attributable to the reportable segment.

The significant components of segment costs and expenses, along with a reconciliation to net income (loss) are presented below (in thousands):

(1)Digital marketing services (“DMS”)expense primarily includes media and marketing expense, personnel-related costs, general facilities, and professional fees.

(2)General and administrative expense and Corporate systems expense are primarily comprised of personnel-related costs, professional fees, general facilities, office-related costs and technology service costs.

(3)Other segment cost and expense primarily includes non-cash depreciation, amortization, stock-based compensation and other non-recurring expenses, as well as interest and income taxes, which are included in net income (loss).

The following tables summarize the net revenue and long-lived assets by geographic area (in thousands):