Commerce.com, Inc.

1. Overview

Commerce.com, Inc. ("Commerce," the "Company," "us," "we", or "our") provides an open commerce ecosystem built to help merchants win as AI reshapes how customers discover and buy. Our platform supports a range of business models, including business-to-consumer ("B2C"), business-to-business ("B2B"), and small businesses ("SB") use cases, and is designed to provide the infrastructure necessary to operate online storefronts, manage catalogs and orders, distribute product data, and develop digital content across multiple channels.

The Company is the parent brand behind BigCommerce, Feedonomics, and Makeswift, and provides an integrated set of enterprise-grade solutions organized across three integrated control planes designed to support the evolving needs of modern commerce. The Company's platform enables businesses to operate within an increasingly AI-driven commerce ecosystem by supporting product discovery, customer engagement, and transaction execution across a range of digital channels and interfaces. As AI agents take a larger role in the purchase journey, the Company continues to invest in agentic capabilities to help merchants stay discoverable and able to transact whenever customers buy.

The Company operates as a data-centric, global, multi-tenant SaaS infrastructure that enables businesses of all sizes to launch and scale ecommerce operations with lower total cost of ownership and faster time to market. The Company's strategy centers on openness, extensibility, and partner collaboration, distinguishing itself from closed platforms by prioritizing customer choice and aligning with best-in-class providers in payments, fulfillment, ERP, marketing, and other categories to ensure customers can compose the right solution for their business. The Company believes the future of commerce is modular, intelligent, and user-controlled.

2. Summary of significant accounting policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information.

In the opinion of management, there have been no significant changes from the significant accounting policies disclosed in Note 2 of the "Notes to Consolidated Financial Statements" included in our Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on March 2, 2026 (our "Annual Report"). The accompanying interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting of normal, recurring adjustments, necessary for a fair presentation. Certain information and disclosures normally included in the notes to the annual consolidated financial statements prepared in accordance with GAAP have been omitted from these interim unaudited condensed consolidated financial statements pursuant to the rules and regulations of the SEC. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the accompanying notes in our Annual Report. The results of operations for the three and nine months ended September 30, 2026, are not necessarily indicative of the results to be expected for the year ending December 31, 2026, or for any other period.

Basis of consolidation

The accompanying condensed consolidated financial statements include the Company’s accounts and the accounts of the Company’s wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on December 31. References to "fiscal 2026," for example, refer to the fiscal year ended December 31, 2026.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions.

Significant estimates and assumptions made by management in these condensed consolidated financial statements include:

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the allowance for credit losses;

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constrained revenue;

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variable consideration for revenue recognition;

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the period of benefit associated with costs capitalized to obtain revenue contracts;

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fair value of certain stock awards issued;

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valuation of convertible notes;

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incremental borrowing rate used in the measurement of lease liabilities;

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fair value of facility restructuring activities;

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the useful lives of intangible assets; and

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the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions;

Because of the use of estimates inherent in the financial reporting process, actual results could differ and the differences could be material to the Company’s consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

ASU 2025-12, Codification Improvements

In December 2025, the FASB issued ASU 2025-12, Codification Improvements to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (1) clarify, (2) correct errors, and (3) make minor improvements. ASU 2025-12 is effective for the Company's fiscal years beginning after December 15, 2026, and interim periods within those annual reporting periods. The Company does not expect this standard to have a material impact on the Company's consolidated financial statements.

ASU 2024-03, Disaggregation of Income Statement Expenses (Topic 220)

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. The new guidance is intended to provide investors more detailed disclosures around certain types of expenses, including employee compensation, depreciation, intangible asset amortization, and other specific expense categories. This standard also requires disclosure of the total amount of selling expenses to be presented in the notes to the financial statements. ASU 2024-03 is effective for the Company's fiscal years beginning after December 15, 2026, and interim periods within fiscal years after December 15, 2027. The Company is currently assessing the impact this standard will have on the Company's consolidated financial statements.

ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)

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. The amendments in this Update remove all references to prescriptive and sequential software developmental stages (referred to as "project stages"). ASU 2025-06 requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. ASU 2025-06 is effective for the Company's fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently assessing the impact this standard will have on the Company's consolidated financial statements.

ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements

In November 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements to improve the navigability of required interim disclosures and clarify when applicable. ASU 2025-11 is not intended to change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements, but to provide clarity on current interim reporting requirements. ASU 2025-11 is effective for the Company's fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently assessing the impact this standard will have on the Company's condensed consolidated financial statements.

Other accounting standard updates effective for interim and annual periods beginning after December 31, 2025 are not expected to have a material impact on the Company’s financial position, results of operations or cash flows.

Segments

The Company provides professional-grade commerce solutions for all types of customers at all stages of their ecommerce growth. The Company conducts business as asingle operating and reportable segment, which is based upon the Company's current organizational and management structure, as well as information used by the chief operating decision makers (CODMs) to allocate resources and assess company performance.

The Company’s CODM committee is comprised of thechief executive officer (CEO) and the chief financial officer and chief operating officer (CFO and COO). The Company's CODM committee reviews the financial information presented on a consolidated basisfor purposes of making operating decisions, allocating resources, and evaluating financial performance. The accounting policies of the segment are the same as those described in the summary of significant accounting policies in Note 2.

In accordance with ASC 280, the Company concludes that consolidated net income (loss), as reported on the consolidated statement of operations, is the key measure of profitability that is required to be reported as it is the measure determined in accordance with measurement principles most consistent with GAAP. The CODMs use net income (loss) to allocate resources and assess performance which enhances the CODMs' ability to compare past financial performance with current financial performance and analyze business performance and trends. This metric is used when monitoring budget versus actual results, and to assess the performance of the Company's strategic priorities of driving efficient revenue growth. The significant expenses within net income (loss) on which the CODM committee relies include those that are reported on the consolidated statements of operations. The measure of segment assets is reported on the consolidated balance sheets as total assets.

Accounts receivable

Accounts receivable are stated at net realizable value and include both billed and unbilled receivables. Accounts receivable are net of an allowance for credit losses, are not collateralized, and do not bear interest. Payment terms range fromdue immediately todue within 90 days. Unbilled receivable balances arise primarily when the Company provides services in advance of invoicing for those services. Billing for revenues relating to the volume of transactions processed by the customer are generally billed a month in arrears, resulting in an unbilled receivable. The accounts receivable balance at September 30, 2026 and December 31, 2025 included unbilled receivables of $12.8 million and $14.3 million, respectively.

The Company assesses the collectability of outstanding accounts receivable on an ongoing basis and maintains an allowance for credit losses for accounts receivable deemed uncollectible. To determine the allowance, the Company analyzes grouped customers by similar risk profiles, along with the invoiced accounts receivable portfolio, the age of the outstanding balance and historical write-offs, unbilled accounts receivable for significant risks and historical collection activity. Additionally, the Company applied the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets.

Identified risks pertaining to the Company’s invoiced accounts receivable include the delinquency level and customer type. The estimate of the amount of accounts receivable that may not be collected is based on aging of the accounts receivable balances, historical customer delinquency, and assessment of the overall portfolio and general economic conditions.

The allowance for credit losses consisted of the following:

Contract Assets

The Company records a contract asset when revenue recognized on a contract exceeds the billings. Contract assets are recorded on the condensed consolidated balance sheets at the end of each reporting period in prepaid expenses and other assets, net. Typically, contract assets arise from agreements that have tiered billings over the contract life, promotional billing periods, and partner and services revenue agreements that include substantive minimums. Net contract assets were $1.5 million as of September 30, 2026 as compared to $2.5 million as of December 31, 2025.

The Company is exposed to credit losses primarily through sales of products and services to customers and partners. The Company assesses the collectability of outstanding contract assets on an ongoing basis and maintains a reserve which is included in the allowance for credit losses for contract assets deemed uncollectible. To determine the allowance, the Company analyzes the contract asset portfolio for significant risks by considering historical collection experience to determine what will ultimately be collected from its customers and partners. Delinquency level and customer type have been identified as the primary specific risk affecting the Company’s contract assets. The Company applied the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets. The Company has provisi oned $0.3 million for credit losses related to contract assets as of September 30, 2026 and December 31, 2025.

Deferred commissions

The Company capitalizes certain sales commissions earned by the Company's sales and account management teams as these commission payments are considered incremental and recoverable costs of obtaining a contract with a customer. The Company begins amortizing deferred commissions costs for a particular customer agreement once the revenue recognition criteria are met and amortizes those deferred costs over the expected period of customer benefit. The Company amortizes deferred sales commissions ratably over the customer life which is approximately 3 years. The amortization of deferred commission is recorded in sales and marketing expense within the condensed consolidated statement of operations. The Company periodically reviews the carrying amount of deferred commissions to determine whether events or changes in circumstances have occurred that could impact the period of benefit of the deferred costs.

Deferred revenue

Deferred revenue primarily consists of amounts that have been received from customers in advance of the performance obligation being satisfied. The Company recognizes revenue from deferred revenue when the services are performed and the corresponding revenue recognition criteria are met. Amounts recognized from deferred revenue represent primarily revenue from the sale of subscription solutions, integration, and marketing services. The Company recognized $8.0 million and $52.7 million ofpreviously deferred revenue during the three and nine months ended September 30, 2026.

Capitalized Internal-Use Software Costs

The Company capitalizes software costs associated with the development of internal software in accordance with ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software. These costs are incurred during the application development phase and meet other requirements for capitalization, including certain software tools. Capitalized software costs are recorded as part of property and equipment, net, and capitalized software costs related to hosting arrangements are recorded within prepaid expenses and other assets within the condensed consolidated balance sheets. These costs are amortized once placed in service over the useful life, which is generally 36 months.

Revenue Recognition

Subscription solutions

Subscription solutions revenue consists primarily of subscription fees from all plans and recurring professional services. Subscription solutions are typically charged annually for the Company’s customers to sell their products and process transactions on the BigCommerce platform. Subscription solutions are generally charged per online store and are based on the store’s subscription plan. Subscription fees are adjusted if a customer’s gross merchandise volume ("GMV") or orders processed are above specified plan thresholds on a trailing twelve-month basis. For most subscription solutions arrangements, the Company utilizes the right to invoice practical expedient and, therefore, recognizes fixed monthly fees or a pro-rata portion of fees and any transaction fees as revenue in the month they are earned. The Company utilizes a pricing structure that provides a discount to the contractual price for customers who have prepayment terms. The total subscription fee and recurring professional services are recognized on a straight-line basis over the term of the contract. In determining the amount of revenue to be recognized, the Company determines whether collection of the entire transaction price is probable. Only amounts deemed probable are recognized as revenue. Key factors in this determination are historical contract termination rates, general economic factors, and customer specific factors.

Subscription solutions include revenue from Feedonomics. Feedonomics provides an AI-based product data feed management platform and related services that enable online retailers and other sellers to automate online listings of the sellers’ information across multiple third-party marketplaces and advertisers. The Company provides these services under service contracts which are generally one year or less, and in many cases month-to-month. These service types may be sold stand-alone or as part of a multi-service bundle (e.g. both marketplaces and advertising). Services are performed and fees are determined based on monthly usage and are billed in arrears.

Contracts with the Company’s retail customers are generally month-to-month, while contract terms with the Company’s enterprise customers generally range fromone tothree years. Contracts are typically non-cancelable and do not contain refund-type provisions. Revenue is presented net of sales tax and other taxes the Company collects on behalf of governmental authorities.

Partner and services

The Company's partner and services revenue include partner technology integrations, marketing services provided to partners, professional services, and revenue share. Revenue share primarily relates to fees earned by the Company’s partners from customers using the BigCommerce platform, where the Company has an arrangement with such partners to share in those fees as they occur. Revenue from revenue-sharing arrangements is recognized at the time the earning activity is complete, which is generally monthly and variable based on customer usage.

Revenue from partner technology integration fees is recognized on a straight-line basis over the life of the contract, beginning when the integration is complete. The Company's most significant partner technology integration offering is BigCommerce Payments, an embedded payment solution.

Revenue for marketing services are recognized either at the time the earning activity is complete, or ratably over the length of the contract, depending on the nature of the obligations in the contract. Payments received in advance of services being rendered are recorded as deferred revenue and recognized when the obligation is completed.

Professional services, which primarily consist of education packages, launch services, solutions architecting, implementation consulting, and catalog transfer services, are generally billed and recognized as revenue when delivered. The Company also derives revenue from the sales of website themes and applications upon delivery.

Partner revenue share is recognized on a net basis as the Company is the agent in the arrangements with third-party application providers. All other revenue is recognized on a gross basis, as the Company is the principal in these arrangements.

Contracts with multiple performance obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require judgment.

The Company’s subscription contracts are generally comprised of a single performance obligation to provide access to the BigCommerce platform, but can include additional performance obligations. For contracts with multiple performance obligations where the contracted price differs from the standalone selling price (“SSP”) for any distinct service, the Company may be required to allocate the contract’s transaction price to each performance obligation using the Company’s best estimate of SSP. Judgment is required to determine the SSP for each distinct performance obligation. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The primary method used to estimate SSP is the observable prices of products or services sold or priced separately in comparable circumstances to similar customers.

Contracts with the Company’s partners may include multiple performance obligations, which can include integrations and marketing activities. In determining whether integration services are distinct from hosting services the Company considers various factors. These considerations include the level of integration, interdependency, and interrelation between the implementation and hosting services. The Company has concluded that the integration services included in contracts with hosting obligations are not distinct. As a result, the Company defers any arrangement fees for integration services and recognizes such amounts over the life of the hosting obligation commencing when the integration has been completed. To determine if marketing activities are distinct, the Company considers the nature of the promise in the contract, the timing of payment, and the partner expectations. Additional consideration for some partner contracts varies based on the level of customer activity on the platform. Certain agreements contain minimum guarantees of revenue share. These contracts are evaluated to determine if the guaranteed minimum is substantive. If the minimum is deemed substantive, revenue is recognized ratably over the life of the agreement. For most contracts, variable fees are recognized in the period they are earned as the Company utilizes the right to invoice practical expedient.

The timing of revenue recognition, billings and cash collections can result in billed accounts receivable, unbilled receivables, contract assets, and deferred revenue.

Remaining performance obligation

The Company's remaining performance obligations are contracted revenue minimums that have not yet been recognized, including amounts that will be invoiced and recognized as revenue in future periods. Remaining performance obligations are subject to future economic risks, including bankruptcies, regulatory changes and other market factors. The majority of the Company's noncurrent remaining performance obligations are expected to be recognized in the next 13 to 36 months. One of the Company's strategic partner's contract renewal is reflected in the total remaining performance obligation.

Remaining performance obligation consisted of the following:

Cost of revenue

Cost of revenue consists primarily of expenses related to third-party cloud computing and data storage services, personnel-related costs (including stock-based compensation) for customer support and professional services personnel, costs of maintaining and securing infrastructure and platform, credit card processing fees, allocation of overhead costs, and amortization of capitalized internal-use software.

Stock-based compensation

The Company has issued stock options, restricted stock units (“RSUs”) and performance based restricted stock units (“PSUs”) to eligible employees and directors.

The Company valued stock options using the Black-Scholes option-pricing model at the date of grant and recognizes the related stock-based compensation expense on a straight-line basis over the service period, net of estimated forfeitures, which is typically four years.

The Company measures the fair value of RSUs based on the closing market price of the common stock on the date of grant. RSUs generally vest over afour-year period either (i) in equal annual installments, or (ii)25 percent on the one-year anniversary of the grant date with the remaining 75 percent vesting in equal quarterly installments thereafter, in each case, subject to continued service. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period.

The Company grants PSUs to executive officers and other members of senior management which provide for shares of common stock to be earned based on the Company's total stockholder return compared to the Russell 2000 index, and are referred to as market-based awards. The Company values these market-based awards on the grant date using the Monte Carlo simulation model. The determination of fair value is affected by the Company's stock price and a number of assumptions including the expected volatility and the risk-free interest rate. The Company assumes no dividend yield and recognizes stock-based compensation expense on a straight-line basis from grant date over the service period of the award. The market-based awards will cliff-vest at the end of thethree-year period ranging from 0 percent to 200 percent of the target number of PSUs granted.

The Company also grants PSUs to executive officers and other members of senior management which provide for shares of common stock to be earned based on its attainment of the Company's adjusted earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”) and annual recurring revenue ("ARR") relative to a target specified in the applicable agreement, and are referred to as Company performance-based awards. The Company typically values these awards at the closing market price on the date of grant. The vesting of Company performance-based awards is conditioned upon the achievement of certain targets and will vest inthree annual tranches in a percentage of the target number of shares between 0 percent to 200 percent. The Company recognizes stock-based compensation expense on a straight-line basis over the service period, if it is probable that the performance condition will be achieved. Adjustments to stock-based compensation expense are made, as needed, each reporting period based on changes in our estimate of the number of units that are probable of vesting.

Costs to restructure certain internal operations are accounted for as one-time termination and exit costs. A liability for a cost associated with restructuring activities is recognized and measured at its estimated fair value in our condensed consolidated balance sheet in the period the liability is incurred. All costs relating to restructurings are recorded as "Restructuring charges" in the condensed consolidated statement of operations.

The Company recognizes employee severance costs when payments are probable and amounts are estimable or when notification occurs depending on whether the severance costs paid are part of an ongoing benefit arrangement. When estimating the fair value of facility restructuring activities, assumptions are applied regarding estimated sub-lease payments to be received, which can differ materially from actual results. Costs related to contracts without future benefit or contract terminations are recognized at the earlier of the contract termination or the cease-use dates. Additionally, restructuring charges include considerations of various capital alternatives or changes in business activities which include expenses related to retention and relocation benefits, accelerated depreciation, professional services, and other costs.

3. Revenue recognition and deferred costs

Revenue recognition

The Company’s source of revenue consists of subscription solutions fees and partner and services fees. These services allow customers to access the Company’s subscription solutions over the contract period. The customer is not allowed to take possession of the solutions or transfer the solutions. The Company’s revenue arrangements do not contain general rights of refund in the event of cancellations.

Disaggregation of revenue

The following table disaggregates revenue by major source:

Revenue by geographic region was as follows:

Revenue by geographical region is determined based on the region of the Company’s contracting entity, which may be different than the region of the customer. Revenue attributed to the United States was approxima tely 75 percent for thethree months ended September 30, 2026 and 76 percent forthe three months ended September 30, 2025. For the nine months ended September 30, 2026 and 2025, revenue attributed to the United States was approximately 76 percent. Revenue attributed to EMEA was approximately 13 percent for the three and nine months ended September 30, 2026 and approximately 12 percent for the three and nine months ended September 30, 2025. No single region, other than the United States and EMEA, represented more than ten percent of total revenue during the three and nine months ended September 30, 2026 and 2025.

Deferred commissions

The Company amortizes certain sales commissions costs that are considered incremental and recoverable costs of obtaining a contract with a customer. The portion of capitalized costs expected to be amortized during the succeeding twelve-month period is recorded in current assets as deferred commissions, and the remainder is recorded in deferred commissions, net of current portion reflected on the condensed consolidated balance sheets. The Company didnot recognize an impairment of deferred commissions for the three and nine months ended September 30, 2026 and 2025.

Sales commissions of $1.5 million and $1.2 million were deferred for the three months ended September 30, 2026 and 2025, respectively; and $3.3 million and $3.4 million were deferred for the nine months ended September 30, 2026 and 2025, respectively.

Deferred commission amortization expense was $1.5 million and $2.3 million for the three months ended September 30, 2026 and 2025, respectively; and $5.2 million and $7.4 million for the nine months ended September 30, 2026 and 2025, respectively.

4. Fair value measurements

Financial instruments carried at fair value include cash and cash equivalents, restricted cash and marketable securities.

For assets and liabilities measured at fair value, fair value is the price to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact, and assumptions that market participants would use when pricing asset or liabilities.

The accounting standard for fair value establishes a fair value hierarchy based on three levels of inputs, the first two of which are considered observable and the last unobservable. The standard requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The three levels of inputs that may be used to measure fair value are as follows:

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Level 1 – Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

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Level 2 – Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3 – Inputs are unobservable that are significant to the fair value of the asset or liability and are developed based on the best information available in the circumstances, which might include the Company’s data.

The following table presents information about the Company’s cash equivalents and marketable securities that were measured at fair value as of September 30, 2026 and December 31, 2025:

(1) Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets, in addition to $62.1 millionof cash as of September 30, 2026.

(1) Included in “Cash and cash equivalents” in the accompanying Condensed Consolidated Balance Sheets, in addition to $44.6 million of cash, as of December 31, 2025.

The contractual maturities of the investments classified as marketable securities were as follows:

The following tables summarize the gains, losses, and estimated fair value of cash equivalents, marketable securities as of September 30, 2026 and December 31, 2025:

5. Goodwill and intangible assets

Goodwill represents the excess of the purchase price in a business combination over the fair value of net tangible and intangible assets acquired.

Goodwill amounts are not amortized but tested for impairment on an annual basis or more often when circumstances indicate that goodwill may not be recoverable. There wasno impairment of goodwill for thethree and nine months ended September 30, 2026 and 2025.

Finite-lived intangible assets are amortized on a straight-line basis over the useful life. Intangible assets amortization was $1.4 million and $1.9 million, respectively, for thethree months ended September 30, 2026 and 2025, and was $4.3 million and $6.8 million, respectively, for the nine months ended September 30, 2026 and 2025. There wasno impairment of intangible assets for thethree and nine months ended September 30, 2026 and 2025.

As of September 30, 2026, expected amortization expense for intangible assets was as follows:

6. Commitments and contingencies

Legal Proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of its business. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s reputation and future operating results.

In the ordinary course of business, the Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. The Company is not presently a party to any legal proceedings that, if determined adversely to the Company, would have a material adverse effect on the Company's condensed consolidated financial statements or statements of cash flows.

Purchase Obligations

The Company has contractual commitments for services with third-parties related to hosting and internal software systems. These commitments are non-cancellable and expire withinone tothree years. The Company had unconditional purchase obligations as of September 30, 2026 as follows:

Defined contribution plan

The Company sponsors a tax-qualified 401(k) defined contribution retirement plan for its U.S. employees (the "Plan"). The Plan allows for eligible employees to participate by contributing a portion of their compensation on a pre-tax basis, subject to annual limits established by the Internal Revenue Service.

The Company matches fifty percent of the firstsix percent of eligible compensation contributed by a participating U.S. employee to the Plan. Matching contributions are recognized as compensation expense in the period in which the associated employee services are rendered. For thethree months ended September 30, 2026 and 2025, the Company recorded $0.6 million and $0.7 million, respectively, in compensation expense related to employer matching contributions to the Plan, and recorded $1.9 million and $2.1 million, respectively for thenine months ended September 30, 2026 and 2025.

7. Operating leases, right-of-use assets and lease liabilities

The Company leases or subleases facilities under operating lease agreements that expire at various dates through 2031. Some of these arrangements contain renewal options and require the Company to pay taxes, insurance and maintenance costs. Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Right-of-use assets also include adjustments related to deferred lease payments and lease incentives. Renewal options were not included in the right-of-use asset and operating lease liability calculation. As of September 30, 2026, there wereno finance leases.

During the three months ended September 30, 2026, the Company ceased use of the Sydney, Australia leased office space and recorded an impairment of approximately $0.6 million to reduce the related right-of-use ("ROU") asset to the estimated fair value, determined using a discounted cash flow analysis of projected sublease income. The charge was recorded within Restructuring Charges on the condensed consolidated statement of operations.

Operating lease expense was $0.6 million and $0.4 million for the three months ended September 30, 2026 and 2025, respectively, andwas $1.6 million and $1.0 million for the nine months ended September 30, 2026 and 2025, respectively.

The future maturities of operating lease liabilities are as follows:

8. Restructuring charges

2026 Restructure

During the three months ended September 30, 2026, the Company committed to a restructuring plan (the "2026 Restructure") to further improve operational efficiencies and realign the current workforce with the Company's on-going cost structure. The 2026 Restructure charges are recorded within Restructuring Charges on the accompanying condensed consolidated statement of operations, and are primarily comprised of severance payments, costs associated with the exit of the Sydney, Australia leased office space, software contract costs, professional services, and other related costs. Within the condensed consolidated balance sheet, the liabilityfor severance benefits and professional services of $2.5 million as of September 30, 2026 is recorded to other current liabilities and $0.3 million of contract costs are recorded to accrued liabilities.

The Company expects to incur additional restructuring charges of approximately $5.4 million to $10.9 million in connection with the 2026 Restructure, of which approximately $3.5 million to $7.5 million is expected to be recognized in the fourth quarter of fiscal 2026 and the remainder in fiscal 2027. These charges are expected to consist of employee-related costs, including severance and retention benefits, costs associated with the exit of certain facilities, software contract costs, professional services, and other related costs. The additional expenses the Company expects to incur are subject to assumptions, and actual expenses may differ from the estimates disclosed above.

The following table summarizes the activities related to the Company's 2026 Restructure:

2025 Restructure

During fiscal 2025, the Company committed to a restructuring plan (the “2025 Restructure”).

During the three and nine months ended September 30, 2026, the Company recorded charges of $0.3 million and $1.2 million, respectively, related to the 2025 Restructure within Restructuring charges on the accompanying condensed consolidated statement of operations. The remaining liability of $1.3 million related to the 2025 Restructure is included in other current liabilities on the condensed consolidated balance sheet as of September 30, 2026.

The Company expects to incur additional costs of approxim ately $0.8 million to $1.8 million relating to the 2025 Restructure, of which approximately $0.5 million to $1.1 million is expected to be recognized in the fourth quarter of fiscal 2026 and the remainder in fiscal 2027. These charges are expected to consist of relocation and retention benefits and professional services costs. The additional expenses the Company expects to incur are subject to assumptions, and actual expenses may differ from the estimates disclosed above.

The following table summarizes the activities related to the Company's 2025 Restructure:

9. Other liabilities

The following table summarizes the components of other current liabilities:

10. Debt

The Company's convertible note obligations, including the level within the fair value hierarchy (see note 4. Fair Value Measurements), are as follows:

(*) The fair value was calculated using a binomial lattice model which incorporates the terms and conditions of the convertible notes and market-based risk measurement that are indirectly observable, such as market credit spread, and therefore are Level 3 investments. The lattice model produced an estimated fair value based on changes in the price of the underlying common share price over successive periods of time. An estimated yield based on market data was used to discount straight debt cash flows.

(**) The fair value is influenced by interest rates, the Company's stock price and is determined by prices observed in market trading. Since the market for trading of the 2026 Convertible Notes is not considered to be an active market, the estimated fair value is basedon Level 2 inputs.

Subsequent to September 30, 2026, the 2026 Convertible Notes matured in accordance with their terms on October 1, 2026. On the maturity date, the Company repaid the entire $4.1 million aggregate principal amount, together with accrued and unpaid interest. Following this repayment, no amounts remain outstanding under the 2026 Convertible Notes, and the indenture governing the 2026 Convertible Notes has been satisfied and discharged.

The following table presents details of the Company's convertible notes as of September 30, 2026 which are further discussed below:

The $150.0 million principal amount of the 2028 Convertible Notes is held by a related party, who is an equity holder.

The total interest expense recognized related to the Company’s convertible notes and financing obligation consists of the following:

2028 Convertible Notes

In August 2024, the Company entered into a privately negotiated exchange agreement (the "Exchange Agreement") with a holder of its 0.25 percent unsecured convertible senior notes due 2026 (the "2026 Convertible Notes"). Pursuant to the Exchange Agreement, the Company exchanged (the "Exchange Transaction") approximately $161.2 million in aggregate principal amount of the 2026 Convertible Notes for $150.0 million in aggregate principal amount of new 7.50 percent convertible senior notes due 2028 (the “2028 Convertible Notes”).

The 2028 Convertible Notes are senior, initially unsecured obligations of the Company and accrue interest at a rate of 7.50 percent per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2024. The 2028 Convertible Notes will mature on October 1, 2028, unless earlier converted, redeemed or repurchased by the Company. Before July 3, 2028, noteholders will have the right to convert their 2028 Convertible Notes only upon the occurrence of certain events. From and after July 3, 2028, noteholders may convert their 2028 Convertible Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company's election. The 2028 Convertible Notes will be convertible with an initial conversion rate of 62.5000 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which represents an initial conversion price of $16.00 per share of common stock, when certain conditions are met. The conversion rate and conversion price will be subject to adjustments related to standard anti-dilution provisions upon the occurrence of certain events.

The Company was not permitted to redeem the 2028 Convertible Notes prior to October 7, 2026. Beginning on October 7, 2026, the 2028 Convertible Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at the Company’s option at any time, and from time to time, on or before the 25th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of the Company’s common stock exceeds 130 percent of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest, if any, up to, but excluding, the redemption date. In addition, calling any 2028 Convertible Note for redemption will constitute a Make-Whole Fundamental Change with respect to that 2028 Convertible Note, in which case the conversion rate applicable to the conversion of that 2028 Convertible Note will be increased in certain circumstances if it is converted after it is called for redemption. Pursuant to the Partial Redemption Limitation, the Company may not elect to redeem less than all of the outstanding 2028 Convertible Notes unless at least $100.0 million aggregate principal amount of 2028 Convertible Notes are outstanding and not subject to redemption as of the time the Company sends the related redemption notice.

If a “fundamental change” (as defined in the indenture for the 2028 Convertible Notes) occurs, then, subject to a limited exception, noteholders may require the Company to repurchase their 2028 Convertible Notes for cash. The repurchase price will be equal to the principal amount of the 2028 Convertible Notes to be repurchased, plus accrued and unpaid interest, if any, up to, but excluding, the applicable repurchase date.

As of September 30, 2026, approximately $150.0 million aggregate principal amount of 2028 Convertible Notes remain outstanding. The remaining unamortized debt issuance costs are recorded as a contra-liability and are amortized utilizing the effective interest rate of approxim ately 8 percent over the term of the 2028 Convertible Notes. The remaining unamortized premium related to the fair value adjustment of the 2028 Convertible Notes is amortized using an effective interest rate of approximately 6 percent. The Company is in compliance with the terms of the indenture, and has not experienced any events that would constitute an event of default.

11. Stockholders’ equity

2020 Equity incentive plan

In 2020, the Company adopted the 2020 Equity Incentive Plan, or “2020 Plan”, under which stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based restricted stock units and other cash-based or stock-based awards may be granted to employees, consultants and directors. Shares of common stock that are issued and available for issuance under the 2020 Plan consist of authorized, but unissued or reacquired shares of common stock or any combination thereof. The Company has granted awards of stock options, restricted stock units, and market-based and performance-based restricted stock units under the 2020 Plan.

A total of 3,873,885 shares of common stock were initially authorized and reserved for issuance under the 2020 Plan. This share reserve automatically increased, and will continue to increase, on each subsequent January 1st through and including January 1, 2031, by an amount equal to the smaller of (a)5 percent of the number of shares of common stock issued and outstanding on the immediately preceding December 31 and (b) an amount determined by the board of directors. On January 1, 2026 and 2025 the share reserve increased by 4,082,622 shares and 3,928,833 shares, respectively.

During the three months ended June 30, 2026, the Company's Board of Directors approved the adoption of a stockholder rights plan and declared a dividend distribution of one preferred share purchase right on each outstanding share of the Company's common stock. Each right will entitle stockholders to buy one one-thousandth of a share of the Company's Series A Junior Participating Preferred Stock at an exercise price of $13.00 per one one-thousandth of a share, subject to adjustment. The dividend was payable to holders of record as of the close of business on April 27, 2026.

The rights will be exercisable only if a person or group acquires 10% or more (or 20% or more in the case of a Passive Institutional Investor) of the Company's outstanding common stock and various other criteria are met (the “Distribution Date”). Until the Distribution Date, the rights will not be exercisable; the rights will not be evidenced by separate rights certificates; and the rights will be transferable by, and only in connection with, the transfer of common stock. The rights will expire on April 12, 2027, unless earlier redeemed or exchanged by the Company.

Stock options

Stock options generally vest and become exercisable over a service period of 4 years from the date of grant, subject to continued service. The Company has not granted and does not anticipate granting stock options in fiscal 2026.

The expected stock-based compensation expense remaining to be recognized as of September 30, 2026 is $1.8 million related to stock options, which reflects outstanding stock option awards that are vested and outstanding stock option awards that are expected to vest. This expense will be recognized over a weighted-average period of 2.11 years.

Restricted Stock Units

RSU activity for thenine months ended September 30, 2026 was as follows:

The expected stock-based compensation expense remaining to be recognized as of September 30, 2026 is $15.4 million related to RSUs, which reflects outstanding RSUs that are vested and outstanding RSUs that are expected to vest. This expense will be recognized over a weighted-average period of 2.39 years.

Market-based PSU and performance-based PSU activity for thenine months ended September 30, 2026 was as follows:

The grant date fair value of the market-based awards issued in March and May was $3.29. Significant assumptions used in the Monte Carlo simulation model for the market-based PSU awards granted are as follows:

The aggregate expected stock-based compensation expense remaining to be recognized as of September 30, 2026 is $2.1 million which reflects market-based and performance-based PSUs that are outstanding and expected to vest. This expense will be recognized over a weighted-average period of 1.25 years.

Share Repurchase Program

On September 10, 2026, the Company's Board of Directors (the "Board") authorized a program to repurchase up to $50 million of shares of the Company's common stock (the "Share Repurchase Program"). The Share Repurchase Program became effective September 10, 2026 and expires on the earlier of September 10, 2028, or when $50 million of shares have been repurchased.

Under the Share Repurchase Program, any repurchase of shares will take place in open market transactions or privately negotiated transactions in accordance with applicable securities and other laws, including the Securities Exchange Act of 1934. The timing, manner, price and amount of any repurchases are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. The Share Repurchase Program does not obligate the Company to acquire any specific number of shares. The Company's Board may modify, suspend, extend or terminate the repurchase program at any time. As of September 30, 2026, the Company has not repurchased any shares.

12. Income taxes

The Company's provision for income taxes for the three and nine months ended September 30, 2026 is based on the estimated annual effective tax rate for fiscal 2026 applied to year-to-date ordinary income (loss), adjusted for discrete items, if any, which are recognized in the period in which they occur. Jurisdictions with an anticipated or year-to-date ordinary loss for which no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The estimated annual effective tax rate is derived from an estimate of annual earnings before taxes, adjusted for nondeductible expenses, other permanent items, valuation allowances, and any applicable income tax credits.

The Company continues to maintain a full valuation allowance against its U.S. federal and state net deferred tax assets, and against the deferred tax assets of certain foreign subsidiaries, as it is more likely than not that those deferred tax assets will not be realized. Although the Company generated pretax income for the nine months ended September 30, 2026, it remains in a cumulative pretax loss position in the U.S. over the most recent three-year period and incurred a pretax loss for the three months ended September 30, 2026. The Company will continue to monitor the positive and negative evidence, and will adjust the valuation allowance as sufficient positive evidence becomes available. The exact timing and amount of the valuation allowance release would be subject to change based on the level of profitability that the Company can achieve.

For the three months ended September 30, 2026 and 2025, the Company’s provision for income taxes reflected an effective tax rate of (2.95) percent and (10.44) percent, respectively. For the nine months ended September 30, 2026 and 2025, the Company had an effective tax rate of 31.63 percent and (9.55) percent, respectively.

For the three and nine months ended September 30, 2026 and 2025, the Company’s effective tax rate differed from the U.S. federal statutory rateof 21 percent primarily due to the Company's valuation allowances in the U.S. and certain foreign jurisdictions offsetting the benefits of losses in those jurisdictions. The Company’s total income tax expense consists primarily of current income tax expense from profitable foreign operations, including foreign withholding taxes, state current income tax expense unable to be offset by attributes, and deferred income tax expense relating to the tax amortization of acquired goodwill, which has an indefinite life for book purposes and cannot be fully offset by deferred tax assets. For the nine months ended September 30, 2026, these items resulted in income tax expense that was high relative to the Company's modest pretax income and, therefore, an effective tax rate above statutory rate. For the three months ended September 30, 2026, the Company recorded income tax expense on a pretax loss, resulting in a negative effective tax rate.

Net operating losses and tax credits generated in years prior to 2022 remain open to adjustment until the statute of limitations closes for the tax year in which the net operating losses are utilized. Tax years 2022 through 2025 generally remain open to examination by the major taxing jurisdictions to which the Company is subject; certain foreign jurisdictions have longer examination periods.

13. Net income (loss) per share

Basic net income (loss) per share is computed by dividing net income (loss) by the number of shares of common stock outstanding for the period. Diluted net income per share is computed by giving effect to all potential weighted average dilutive common stock, including options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted net income per share by application of the treasury stock method.

(1)Due to the Company reporting net loss for the three months ended September 30, 2026 and the three and nine months ended September 30, 2025 there areno common shares added to calculate diluted EPS because the effect would be anti-dilutive.

The following potentially dilutive securities outstanding have been excluded from the computation of weighted-average shares outstanding for diluted net income (loss) per share because the effect would be anti-dilutive:

14. Subsequent event

During October 2026, management approved a plan to vacate the Company's corporate headquarters office in Austin, Texas. The premises are leased under a sublease expiring January 31, 2031. The Company has entered into an agreement with a third-party real estate broker to act as its exclusive agent in marketing the premises for sublease. The Company is evaluating the related long-lived assets, including the operating lease right-of-use asset and leasehold improvements, for indicators of impairment, and none are noted as of September 30, 2026.

On November 3, 2026, Daniel Lentz, the Company’s Chief Financial Officer and Chief Operating Officer, notified the Company of his intention to depart the Company effective November 13, 2026. The Company’s Board of Directors appointed Tyler Duncan, Senior Vice President of Finance and Investor Relations, to serve as Interim Chief Financial Officer effective upon Mr. Lentz’s departure.

Special note regarding forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions, or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “will,” and similar words or phrases. These forward-looking statements include statements concerning the following:

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our expectations regarding our revenue, expenses, sales, and operations;

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anticipated trends and challenges in our business and the markets in which we operate;

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ongoing and future geopolitical conflicts, including those involving Iran, Israel, and the United States, and the Russia-Ukraine conflict, could adversely affect our operations and financial results;

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the impacts of changes in United States trade policy and global tariffs;

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our anticipated areas of investments and expectations relating to such investments;

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our anticipated cash needs and our estimates

regarding our capital requirements and refinancing;

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our ability to compete in our industry and innovation by our competitors;

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our ability to anticipate market needs or develop new or enhanced services to meet those needs;

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our ability to manage growth and to expand our infrastructure;

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our ability to establish and maintain intellectual property rights;

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social, ethical, or regulatory issues involving the development, deployment, and use capabilities of AI;

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our ability to manage expansion into international markets and new industries;

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our ability to hire and retain key personnel;

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our ability to successfully identify, manage, and integrate any existing and potential acquisitions;

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our ability to successfully execute our rebranding initiative;

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our ability to adapt to emerging regulatory developments, technological changes, and cybersecurity needs;

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the anticipated effect on our business of litigation to which we are or may become a party;

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the anticipated benefits and opportunities related to past and ongoing restructuring may not be realized or may take longer to realize than expected;

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defects or disruptions in our services;

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interruptions or delays in services from third parties;

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customer attrition or our ability to execute renewals;

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our ability to manage key executive succession and retention or continue to attract qualified personnel;

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our ability to implement a go-to-market strategy that focuses on efficient profitable revenue growth, operating leverage, and cash flow, may be impacted by unforeseen challenges in streamlining our organization and adapting to market dynamics; and

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other statements described in this Quarterly Report on Form 10-Q under “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Although we believe the expectations reflected in these forward-looking statements are reasonable, these statements are not guarantees of future performance and involve risks and uncertainties which are subject to change based on various important factors, some of which are beyond our control. For more information regarding these risks and uncertainties as well as certain additional risks that we face, refer to “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on March 2, 2026 and “Risk Factors,” in this Quarterly Report on Form 10-Q as well as factors more fully described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on Form 10-Q.

If one or more of the factors affecting the expectations reflected in our forward-looking information and statements proves incorrect, our actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements. Therefore, we caution the reader not to place undue reliance on any forward-looking information or statements. The effect of these factors is difficult to predict. Factors other than these also could adversely affect our results, and the reader should not consider these factors to be a complete set of all potential risks or uncertainties. New factors emerge from time to time, and management cannot assess the impact of any such factor on our business or the extent to which any factor, or combination of factors, may cause results to differ materially from those contained in any forward-looking statement. Any forward-looking statements only speak as of the date of this document, and we undertake no obligation to update any forward-looking information or statements, whether written or oral, to reflect any change, except as required by law. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.