QUINSTREET, INC

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the Securities and Exchange Commission (“SEC”).

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, filed with the SEC.

Previous wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they do not materialize or if they prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “expect,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “outlook,” “may,” “will,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions or variations intended to identify forward-looking statements. These statements reflect the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified in “Part II —Item 1A. Risk Factors” below, and those discussed in the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, and in other documents we file from time to time with the SEC. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Current wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they do not materialize or if they prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “expect,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “outlook,” “may,” “will,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions or variations intended to identify forward-looking statements. These statements reflect the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified in “Part II — Item 1A. Risk Factors” below, and those discussed in the sections titled “Cautionary Note On Forward-Looking Statements” and “Risk Factors” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, and in other documents we file from time to time with the SEC. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Previous wording

Our financial services client vertical represented 67% and 71% of net revenue for the three and nine months ended March 31, 2026, and 74% and 76% of net revenue for the three and nine months ended March 31, 2025. Our home services client vertical represented 33% and 29% of net revenue for the three and nine months ended March 31, 2026, and 26% and 24% for the three and nine months ended March 31, 2025. We generated the majority of our revenue from sales to clients in the United States.

Current wording

Our financial services client vertical represented 65% and 73% of net revenue for the three months ended September 30, 2026 and 2025. Our home services client vertical represented 35% and 27% of net revenue for the three months ended September 30, 2026 and 2025. We generated the majority of our revenue from sales to clients in the United States.

Previous wording

One client in our financial services client vertical accounted for 24% of net revenue for the three months ended March 31, 2026, and 22% of net revenue for the nine months ended March 31, 2026. One client in our financial services client vertical accounted for 27% of our net revenue for the three months ended March 31, 2025, and two clients accounted for 23% and 13% of our net revenue for the nine months ended March 31, 2025.

Current wording

One client in our financial services client vertical accounted for 19% of net revenue for the three months ended September 30, 2026, and one client accounted for 21% of net revenue for the three months ended September 30, 2025.

Previous wording

Acquisitions have historically been, and continue to be, an important element of our overall corporate strategy and use of capital. We have completed several strategic acquisitions, including the acquisition of Homebuddy completed in January 2026, the acquisitions of BestCompany and AquaVida completed in fiscal year 2024, the acquisitions of Modernize, Mayo Labs, LLC ("Mayo Labs") and FC Ecosystem ("FCE") completed in fiscal year 2021, and the acquisitions of AmOne Corp. ("AmOne"), CloudControlMedia, LLC ("CCM"), and MyBankTracker.com, LLC ("MBT") completed in fiscal year 2019.

Current wording

Acquisitions have historically been, and continue to be, an important element of our overall corporate strategy and use of capital. We have completed several strategic acquisitions, including the acquisition of GetTheReferral.com, Inc. completed in October 2026, the acquisition of HomeBuddy completed in fiscal year 2026, the acquisitions of BestCompany.com, LLC ("BestCompany") and AquaVida completed in fiscal year 2024, the acquisitions of Modernize, Inc. (“Modernize”), Mayo Labs, LLC ("Mayo Labs") and FC Ecosystem ("FCE") completed in fiscal year 2021. For detailed information regarding our recent acquisition of HomeBuddy, refer to Note 6, Acquisitions, to our condensed consolidated financial statements.

Previous wording

Cost of revenue consists primarily of media and marketing costs, personnel costs, amortization of intangible assets, depreciation expense and facilities expense. Media and marketing costs consist primarily of fees paid to third-party publishers, media owners or managers, or to strategic partners that are directly related to a revenue-generating event and of pay-per-click, or PPC, ad purchases from Internet search companies. We pay these third-party publishers, media owners or managers, strategic partners and Internet search companies on a revenue-share, a cost-per-lead, or CPL, or cost-per-click, or CPC, basis. Personnel costs include salaries, stock-based compensation expense, bonuses, commissions and related taxes, and employee benefit costs. Personnel costs are primarily related to individuals associated with maintaining our servers and websites, our call center operations, our editorial staff, client management, creative team, content, compliance group and media purchasing analysts. Costs associated with software incurred in the development phase or obtained for internal use are capitalized and amortized to cost of revenue over the software’s estimated useful life.

Current wording

Cost of revenue consists primarily of media and marketing costs, personnel costs, amortization of intangible assets, depreciation expense and facilities expense. Media and marketing costs consist primarily of fees paid to third-party publishers, media owners or managers, or to strategic partners that are directly related to a revenue-generating event and of pay-per-click, or PPC, ad purchases from Internet search companies. We pay these third-party publishers, media owners or managers, strategic partners and Internet search companies on a revenue-share, a cost-per-lead, or CPL, cost-per-click, or CPC, or cost-per-action, or CPA, basis. Personnel costs include salaries, stock-based compensation expense, bonuses, commissions and related taxes, and employee benefit costs. Personnel costs are primarily related to individuals associated with maintaining our servers and websites, our call center operations, our editorial staff, client management, creative team, content, compliance group and media purchasing analysts. Costs associated with software incurred in the development phase or obtained for internal use are capitalized and amortized to cost of revenue over the software’s estimated useful life.

Previous wording

General and Administrative. General and administrative expenses consist primarily of personnel costs of our finance, legal, employee benefits and compliance, technical support and other administrative personnel, accounting and legal professional services fees, facilities fees and bad debt expense.

Current wording

General and Administrative. General and administrative expenses consist primarily of personnel costs of our finance, legal, employee benefits and compliance, technical support and other administrative personnel, accounting and legal professional services fees, facilities fees, bad debt expense, and fair value adjustments to contingent consideration related to the AquaVida acquisition.

Previous wording

Interest and other (expense) income, net, consists primarily of interest expense, interest income, and other income and expense. Interest expense is related to imputed interest on post-closing payments related to our acquisitions, and interest and fees related to our credit facility. Borrowings under our credit facility and related interest expense could increase (or decrease) as we continue to implement our acquisition strategy and draw down, or repay on the facility, or if our interest rates increase or decrease due to market factors or our operating performance. Interest income represents interest earned on our cash and cash equivalents, which may increase or decrease depending on market interest rates and the amounts invested. Other (expense) income, net includes gains and losses on foreign currency exchange, and other non-operating items.

Current wording

Interest and other income (expense), net, consists primarily of interest expense, interest income, and other income and expense. Interest expense is related to interest and fees related to our credit facility, and imputed interest on post-closing payments related to our acquisitions. Borrowings under our credit facility and related interest expense could increase (or decrease) as we continue to implement our acquisition strategy and draw down, or repay on the facility, or if our interest rates increase or decrease due to market factors or our operating performance. Interest income represents interest earned on our cash and cash equivalents, which may increase or decrease depending on market interest rates and the amounts invested. Other income (expense), net includes gains and losses on foreign currency exchange, and other non-operating items.

Previous wording

In presenting our consolidated financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and reported amounts of revenue and expenses during the reporting period.

Current wording

In presenting our condensed consolidated financial statements in conformity with U.S. GAAP, we are required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the financial statements, and reported amounts of revenue and expenses during the reporting period.

Previous wording

Net revenue increased by $76.3 million, or 28%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Revenue from our home services client vertical increased by $44.2 million, or 63%, primarily as a result of the acquisition of HomeBuddy which contributed $39.1 million in net revenue for the three months ended March 31, 2026, in addition to increased client budgets, and successful execution of growth initiatives. Revenue from our financial services client vertical increased by $32.1 million, or 16%, primarily due to an increase in revenue in our insurance business of $38.2 million, attributable to higher demand from a broad base of carrier clients, offset by a decrease in our other financial services client verticals of $6.1 million.

Current wording

Net revenue increased by $130.8 million, or 46%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Revenue from our home services client vertical increased by $67.3 million, or 86%, primarily as a result of the acquisition of HomeBuddy, increased client budgets, and successful execution of growth initiatives. Revenue from our financial services client vertical increased by $63.5 million, or 31%, primarily due to an increase in revenue in our insurance business of $63.4 million, attributable to higher demand from a broad base of carrier clients.

Previous wording

Cost of revenue increased by $62.8 million, or 26%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by increased media and marketing costs of $62.0 million due to higher revenue volumes, and increased personnel cost of $1.3 million, offset by decreased amortization expense of $1.2 million. Gross profit margin, which is the difference between net revenue and cost of revenue as percentage of net revenue, was 12% and 10% for the three months ended March 31, 2026 and 2025. The increase in gross profit margin was attributable to a decrease in personnel cost and depreciation cost as a percentage of net revenue, offset by an increase in media and marketing costs as a percentage of net revenue.

Current wording

Cost of revenue increased by $104.4 million, or 40%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily driven by increased media and marketing costs of $101.2 million due to higher revenue volumes. Gross profit margin, which is the difference between net revenue and cost of revenue as a percentage of net revenue, was 13% and 9% for the three months ended September 30, 2026 and 2025. The increase in gross profit margin was attributable to a decrease in personnel costs and depreciation cost as a percentage of net revenue.

Previous wording

Sales and marketing expenses increased by $2.8 million, or 55%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to increased personnel cost due to higher headcount as a result of the HomeBuddy acquisition, and increased amortization expense due to the acquisition of related intangible assets.

Current wording

Product development expenses increased by $2.8 million, or 34%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025, primarily due to increased personnel cost of $2.3 million due to higher headcount as a result of the HomeBuddy acquisition.

Previous wording

Benefit from (Provision for) Income Taxes

Current wording

(Provision for) Income Taxes

Previous wording

We recorded a provision for income taxes of $0.8 million and benefit from income taxes of $47.9 million for the three and nine months ended March 31, 2026, and a provision for income taxes of $0.5 million and $0.4 million for the three and nine months ended March 31, 2025.

Current wording

We recorded a provision for income taxes of $4.1 million and $0.2 million for the three months ended September 30, 2026 and 2025.

Previous wording

As of the second quarter of fiscal year 2026, we determined that sufficient positive evidence existed to conclude that substantially all of our valuation allowance was no longer needed and that it is more likely than not that we would be able to utilize the majority of the deferred tax assets. Accordingly, we recorded a net benefit from income taxes of $47.9 million for the nine months ended March 31, 2026 primarily related to the release of the valuation allowance for the majority of our federal and state deferred tax assets of $61.2 million.

Current wording

We performed an assessment on the likelihood of realizing the benefits of our deferred tax assets. As of the second quarter of fiscal year 2026, due to the preponderance of positive evidence, including our projected cumulative profit before taxes and future forecasts of continued profitability for the United States, we determined that sufficient positive evidence existed to conclude that substantially all of our valuation allowance was no longer needed and that it is more likely than not that we would be able to utilize the majority of the deferred tax assets. Accordingly, we released the valuation allowance on the majority of our federal and state deferred tax assets during fiscal year 2026. As of September 30, 2026, we continue to conclude that it is more likely than not that these deferred tax assets will be realized. We continue to maintain a valuation allowance related to our deferred tax assets for our foreign entities, federal and state capital loss carryforwards and California research and development tax credits.

Previous wording

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 continuing operations in the interim period which includes the enactment date. We continue to evaluate the impact of The Act on our financial statements, including the related tax implications to the current and future fiscal years.

Current wording

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 U.S. research and development costs. The impact on current and deferred taxes for tax law changes is reported in continuing operations in the interim period which includes the enactment date. The impacts of The Act are reflected in our estimated annual effective tax rate for fiscal year 2027.

Previous wording

As of March 31, 2026, our principal sources of liquidity consisted of cash and cash equivalents of $102.0 million, cash we expect to generate from future operations, and our $150.0 million Revolving Credit Facility, from which we have drawn $70.0 million. Our cash and cash equivalents are maintained in highly liquid investments with remaining maturities of 90 days or less at the time of purchase. We believe our cash equivalents are liquid and accessible.

Current wording

As of September 30, 2026, our principal sources of liquidity consisted of cash and cash equivalents of $141.5 million, cash we expect to generate from future operations, and our $150.0 million Revolving Credit Facility, from which we have drawn $70.0 million. Our cash and cash equivalents are maintained in highly liquid investments with remaining maturities of 90 days or less at the time of purchase. We believe our cash equivalents are liquid and accessible.

Previous wording

Our short-term and long-term liquidity requirements primarily arise from our working capital requirements, capital expenditures, internal software development costs, repurchases of our common stock, debt service and commitment fees on our $150.0 million revolving credit facility, and acquisitions from time to time. Our acquisitions also may have deferred purchase price components and contingent consideration which requires us to make a series of payments following the acquisition closing date. For example, on January 2, 2026, we completed the acquisition of HomeBuddy, pursuant to which we paid $114.8 million in cash at closing and is obligated to pay $75.0 million in additional post-closing payments, payable in equal annual installments over a four-year period. Our primary operating cash requirements include the payment of media costs, personnel costs, costs of information technology systems and office facilities. Our ability to fund these requirements will depend on our future cash flows, which are determined, in part, by future operating performance and are, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control, and also our ability to access our revolving credit facility. Even though we may not need additional funds to fund anticipated liquidity requirements, we may still elect to obtain additional debt financing, issue additional equity securities or draw down on or increase our borrowing capacity under our current revolving credit facility for other reasons.

Current wording

Our short-term and long-term liquidity requirements primarily arise from our working capital requirements, capital expenditures, internal software development costs, repurchases of our common stock, debt service and commitment fees on our $150.0 million Revolving Credit Facility, and acquisitions from time to time. Our acquisitions also may have deferred purchase price components and contingent consideration which requires us to make a series of payments following the acquisition closing date. For example, on January 2, 2026, we completed the acquisition of HomeBuddy, pursuant to which we paid $114.8 million in cash at closing and we are obligated to pay $75.0 million in additional post-closing payments, payable in equal annual installments over a four-year period. Our primary operating cash requirements include the payment of media costs, personnel costs, costs of information technology systems and office facilities. Our ability to fund these requirements will depend on our future cash flows, which are determined, in part, by future operating performance and are, therefore, subject to prevailing global macroeconomic conditions and financial, business and other factors, some of which are beyond our control, and also our ability to access our revolving credit facility. Even though we may not need additional funds to fund anticipated liquidity requirements, we may still elect to obtain additional debt financing, issue additional equity securities or draw down on or increase our borrowing capacity under our current revolving credit facility for other reasons.

Previous wording

In April 2022, our Board of Directors authorized the 2022 Stock Repurchase Program allowing the repurchase of up to $40.0 million worth of common stock. During the nine months ended March 31, 2026, we repurchased and retired 1,121,745 shares of our common stock at an average price of $14.94 per share, at a total cost of $16.8 million (including a broker commission of $0.03 per share). Repurchases under this program took place in the open market and were made under a Rule 10b5-1 plan. The repurchased shares of common stock were recorded as treasury stock and were accounted for under the cost method. There were no repurchases made during the fiscal year 2025. As of October 22, 2025, we had fully utilized the $40.0 million authorized for repurchase under the 2022 Stock Repurchase Program.

Current wording

In October 2025, the Board of Directors authorized a stock repurchase program allowing us to repurchase up to $40.0 million of our outstanding shares of common stock. There were no stock repurchases during the three months ended September 30, 2026. As of September 30, 2026, approximately $25.4 million remained available for repurchase pursuant to the board authorization. During the three months ended September 30, 2025, we repurchased and retired 462,440 shares of our common stock at an average price of $15.41 per share, at a total cost of $7.1 million (including a broker commission of $0.03 per share).

Previous wording

Cash flows from operating activities are primarily the result of our net income adjusted for depreciation and amortization, change in the fair value of contingent consideration, provision for sales returns and doubtful accounts receivable, stock-based compensation expense, non-cash lease expense, deferred income taxes, and changes in working capital components. Cash provided by operating activities was $78.2 million for the nine months ended March 31, 2026, compared to $55.1 million for the nine months ended March 31, 2025.

Current wording

Cash flows from operating activities are primarily the result of our net income adjusted for depreciation and amortization, change in the fair value of contingent consideration, provision for sales returns and doubtful accounts receivable, stock-based compensation expense, non-cash lease expense, deferred income taxes, and changes in working capital components. Cash provided by operating activities was $23.3 million for the three months ended September 30, 2026, compared to $19.6 million for the three months ended September 30, 2025.

Previous wording

Cash provided by operating activities for the nine months ended March 31, 2026 consisted of a net income of $62.1 million, a net increase in cash from changes in working capital of $13.7 million, and non-cash adjustments of $2.3 million. The changes in working capital accounts were primarily attributable to an increase in accrued liabilities and accounts payable of $56.2 million, offset by an increase in accounts receivable of $44.9 million. These increases were primarily due to higher revenue for the nine months ended March 31, 2026 as compared to the nine months ended March 31, 2025, and timing of receipts and payments. The non-cash adjustments primarily consisted of stock-based compensation expense of $27.2 million, and depreciation and amortization expense of $16.6 million, offset by a one-time non-cash benefit of $47.9 million related to our release of the valuation allowance for the majority of our federal and certain state deferred tax assets.

Current wording

Cash provided by operating activities for the three months ended September 30, 2026 consisted of a net income of $17.0 million and non-cash adjustments of $21.9 million, offset by a net decrease in cash from changes in working capital of $15.7 million. The non-cash adjustments primarily consisted of stock-based compensation expense of $11.0 million, depreciation and amortization expense of $6.2 million, and deferred income taxes of $2.8 million. The changes in working capital accounts were primarily attributable to an increase in accounts receivable and prepaid expenses and other assets of $29.6 million, offset by an increase in accrued liabilities and accounts payable of $14.0 million. These increases were primarily due to higher revenue for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, and timing of receipts and payments.

Previous wording

Cash provided by operating activities for the nine months ended March 31, 2025 consisted of a net income of $1.5 million and non-cash adjustments of $57.4 million offset by a net decrease in cash from changes in working capital of $3.8 million. The non-cash adjustments primarily consisted of stock-based compensation expense of $24.5 million, depreciation and amortization expense of $18.6 million, change in the fair value of contingent consideration of $12.4 million, and provision for sales return and doubtful accounts receivable of $1.7 million. The changes in working capital accounts were primarily attributable to an increase in accounts receivable of $27.1 million and an increase in prepaid expenses and other assets of $2.5 million, offset by an increase in accrued liabilities of $18.1 million and an increase in accounts payable of $7.7 million. The increases in accounts receivable, and accrued liabilities and accounts payable were primarily due to higher revenue levels for the nine months ended March 31, 2025 as compared to the nine months ended March 31, 2024, and timing of receipts and payments.

Current wording

Cash provided by operating activities for the three months ended September 30, 2025 primarily consisted of a net income of $4.5 million and non-cash adjustments of $15.1 million. The non-cash adjustments primarily consisted of stock-based compensation expense of $9.2 million and depreciation and amortization expense of $5.8 million. The changes in working capital accounts were primarily attributable to an increase in accounts receivable of $14.8 million, offset by an increase in accrued liabilities and accounts payable of $14.5 million. The increases in accounts receivable, and accrued liabilities and accounts payable were primarily due to higher revenue for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, and timing of receipts and payments.

Previous wording

Cash flows from investing activities generally include capital expenditures, capitalized internal software development costs, and acquisitions from time to time. Cash used in investing activities was $115.0 million for the nine months ended March 31, 2026, compared to $8.4 million for the nine months ended March 31, 2025.

Current wording

Cash flows from investing activities generally include capital expenditures, capitalized internal software development costs, and acquisitions from time to time. Cash used in investing activities was $2.9 million for the three months ended September 30, 2026, compared to $4.1 million for the three months ended September 30, 2025.

Previous wording

Cash used in investing activities in the nine months ended March 31, 2025 was primarily due to internal software development costs and capital expenditures of $6.9 million.

Current wording

Cash used in investing activities in the three months ended September 30, 2025 primarily consisted of capitalized internal software development costs of $2.9 million and capital expenditures of $1.2 million.

Previous wording

Cash flows from financing activities generally include post-closing payments related to business acquisitions, payment of withholding taxes related to the release of restricted stock, net of share settlement, repurchases of common stock, proceeds from issuance of common stock under employee stock purchase plan and exercise of stock options. Cash provided by financing activities was $37.8 million for the nine months ended March 31, 2026, compared to cash used in financing activities of $15.4 million for the nine months ended March 31, 2025.

Current wording

Cash flows from financing activities generally include post-closing payments related to business acquisitions, payment of withholding taxes related to the release of restricted stock, net of share settlement, repurchases of common stock, proceeds from issuance of common stock under employee stock purchase plan and exercise of stock options. Cash used in financing activities was $7.1 million for the three months ended September 30, 2026, compared to $15.3 million for the three months ended September 30, 2025.

Previous wording

Cash provided by financing activities in the nine months ended March 31, 2026 was primarily due to the borrowings of $70.0 million under the Revolving Credit Facility and proceeds from the issuance of common stock under the employee stock purchase plan of $3.2 million, offset by repurchase of common stock of $16.8 million, payment of withholding taxes related to the release of restricted stock, net of share settlement of $9.4 million, and post-closing payments and contingent consideration related to acquisitions of $7.3 million.

Current wording

Cash used in financing activities in the three months ended September 30, 2026 primarily consisted of payment of withholding taxes related to the release of restricted stock, net of share settlement of $8.4 million, offset by proceeds from the issuance of common stock under the employee stock purchase plan of $1.3 million.

Previous wording

Cash used in financing activities in the nine months ended March 31, 2025 was due to payment of withholding taxes related to the release of restricted stock, net of share settlement of $11.3 million and payment of post-closing payments and contingent consideration related to acquisitions of $8.0 million, offset by proceeds from the exercise of stock options and issuance of common stock under the employee stock purchase plan of $3.9 million.

Current wording

Cash used in financing activities in the three months ended September 30, 2025 primarily consisted of repurchase of common stock of $6.7 million, payment of withholding taxes related to the release of restricted stock, net of share settlement of $5.3 million and payment of post-closing payments and contingent consideration related to acquisitions of $4.6 million, offset by proceeds from the issuance of common stock under the employee stock purchase plan of $1.3 million.

Previous wording

The Financing Agreement also contains customary covenants that limit, among other things, the ability of us and our subsidiaries to (i) incur indebtedness, (ii) incur liens on their property, (iii) pay dividends or make certain other distributions, (iv) sell their assets, (v) make certain loans or investments, (vi) merge or consolidate), (vii) voluntarily repay or prepay certain indebtedness and (viii) enter into transactions with affiliates, in each case subject to certain exceptions. The Financing Agreement contains customary representations and warranties and events of default.

Current wording

The Financing Agreement also contains customary covenants that, among other things, limit our ability and the ability of our subsidiaries to (i) incur indebtedness, (ii) incur liens on their property, (iii) pay dividends or make certain other distributions, (iv) sell assets, (v) make certain loans or investments, (vi) merge or consolidate, (vii) voluntarily repay or prepay certain indebtedness and (viii) enter into transactions with affiliates, in each case subject to certain exceptions. The Financing Agreement contains customary representations and warranties and events of default.

Previous wording

The proceeds of the loans drawn under the Revolving Credit Facility are being used to partially fund our acquisition of HomeBuddy and may be used to fund our general working capital needs and general corporate purposes. As of March 31, 2026, we had borrowings under our revolving credit facility of $70.0 million.

Current wording

The proceeds of the loans drawn under the Revolving Credit Facility are being used to partially fund our acquisition of HomeBuddy and may be used to fund our general working capital needs and general corporate purposes. As of September 30, 2026, we had borrowings under our Revolving Credit Facility of $70.0 million, which was classified as noncurrent debt as the principal is contractually due on January 2, 2031.