LEGALZOOM.COM, INC.

Previous wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and Part II, Item 8, “Financial Statements and Supplementary Data” included in our 2024 Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 26, 2025 and our other filings with the SEC. The following discussion contains forward-looking statements based upon current plans, expectations and beliefs and that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the "Risk Factors" section of this Quarterly Report on Form 10-Q. See “Forward-Looking Statements” preceding Part I of this Quarterly Report on Form 10-Q.

Current wording

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and Part II, Item 8, “Financial Statements and Supplementary Data” included in our 2025 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2026 and our other filings with the SEC. The following discussion contains forward-looking statements based upon current plans, expectations and beliefs and that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the "Risk Factors" section of this Quarterly Report on Form 10-Q. See “Forward-Looking Statements” preceding Part I of this Quarterly Report on Form 10-Q.

Previous wording

LegalZoom is a leading online platform for legal services, transforming how individuals and small businesses navigate the legal system. By combining intuitive technology with access to experienced attorneys—whether through our vast independent attorney network or the LegalZoom-owned law firm—we offer the tools and guidance people need to confidently manage everything from business formation and compliance to estate planning and ongoing legal support. We operate across all 50 states and in over 3,000 counties in the U.S. With over two decades of experience and millions of customers served, LegalZoom helps individuals and small businesses navigate legal needs with confidence.

Current wording

LegalZoom is a leading online platform for legal services, transforming how individuals and small businesses navigate the legal system. By combining intuitive technology with access to experienced attorneys—whether through our vast independent attorney network or our own law firm—we offer the tools and guidance people need to confidently manage everything from business formation and compliance to intellectual property protection and ongoing business management and legal support. Our ongoing business management services include virtual mail, legal forms, bookkeeping and estate planning services, among others. We operate across all 50 states and in over 3,000 counties in the U.S. With over two decades of experience and millions of customers served, LegalZoom helps individuals and small businesses navigate legal needs with confidence.

Previous wording

•Our share of small and medium-sized businesses (SMBs). In the three and nine months ended September 30, 2025 and 2024, business formations represented the largest share of our total transaction orders. Business formations act as an entrance point for many customers to the LegalZoom ecosystem, where they then often purchase a mix of transaction and subscription offerings alongside and after the initial formation transaction. In addition, we are expanding our go-to-market strategy to focus on new and established business, which we believe will decrease our dependency on business formations over time. As a result, our operating results depend on the continuation of new business formations in the U.S. and even more so, on our ability to increase our share of new business formations and to attract existing businesses to our platform.

Current wording

•Our share of small and medium-sized businesses (SMBs). In the three months ended March 31, 2026 and 2025, business formations represented the largest share of our total transaction orders. Business formations act as an entrance point for many customers to the LegalZoom ecosystem, where they then often purchase a mix of transaction and subscription offerings alongside and after the initial formation transaction. However, AI-driven search is reshaping customer acquisition dynamics and the ways in which customers find and engage with LegalZoom. As a result, we are diversifying our customer acquisition channels via strategic partnerships and collaborations, including with AI platforms, and expanding our go-to-market strategy to focus on both higher intent customers and emerging and established business. Over time, we expect partnerships to drive a greater share of high-value customer acquisition. As a result, our operating results depend on the continuation of new business formations in the U.S. and even more so, on our ability to attract new and existing businesses to our platform via various acquisition channels.

Previous wording

•Ability to enhance customer lifetime value. Our future performance depends on our ability to integrate new products and services into our LegalZoom ecosystem and to increase recurring revenue through subscription offerings. As we continue to test new and existing products and services in order to optimize our product line-up, including testing various commercialization strategies for those offerings, we have experienced and we expect to continue to experience increased volatility across our key business metrics. In addition, in an effort to enhance customer lifetime value, we intend to continue to invest in improving our customer experience, which includes investments in our educational content and improving our website and mobile experience.

Current wording

•Ability to enhance customer lifetime value. Our future performance depends on our ability to integrate new products and services into our LegalZoom ecosystem and to increase recurring revenue through subscription offerings. We are continuing to optimize our subscription business, including by testing various commercialization and pricing strategies for our offerings and introducing new, higher value, full-service do-it-for-me (“DIFM”) subscription offerings, including our concierge suite of offerings. As a result, we have experienced and we expect to continue to experience increased volatility across our key business metrics.

Previous wording

•Ability to integrate augmented legal expertise. We believe that the future of legal and small business services involves a combination of AI and human expertise. We aim to utilize AI to drive efficiency and scale, while relying on our team of business advisors and our independent network of attorneys to provide the judgment and trust that customers need. The extent to which we are able to combine AI with our human expertise in order to drive cost efficiencies and increase the consumption of our do-it-for-me offerings will impact our future results of operations.

Current wording

•Ability to integrate augmented legal expertise. We believe that the future of legal and small business services involves a combination of AI and human expertise. We aim to utilize AI to drive efficiency and scale, while relying on our team of concierge managers and our independent network of attorneys to provide the judgment and trust that customers need. The extent to which we are able to combine AI with our human expertise in order to drive cost efficiencies and increase the consumption of our DIFM offerings will impact our future results of operations.

Previous wording

In addition to the measures presented in our unaudited condensed consolidated financial statements, we regularly monitor the financial and operating metrics below to evaluate the growth of our business, measure the effectiveness of our marketing efforts, identify trends, formulate financial forecasts and make strategic decisions. For the three and nine months ended September 30, 2025, Formation Nation is included in the key business metrics below starting on February 10, 2025, the date we acquired Formation Nation. Prior periods have not been recast.

Current wording

In addition to the measures presented in our unaudited condensed consolidated financial statements, we regularly monitor the financial and operating metrics below to evaluate the growth of our business, measure the effectiveness of our marketing efforts, identify trends, formulate financial forecasts and make strategic decisions. Except with respect to annual small business retention rate, Formation Nation, Inc. (“Formation Nation”) has been included in the key business metrics below starting on February 10, 2025, the date we acquired Formation Nation.

Previous wording

We define the number of business formations in a given period as the number of limited liability company, or LLC, incorporation, not-for-profit and doing business as, or DBA, orders placed on our platform in such period. We consider the number of business formations to be an important metric considering that it is typically the first product or service small business customers purchase on our platform, creating the foundation for additional products and subsequent subscription revenue as customers adopt additional products and services throughout the lifecycle of their business.

Current wording

We define the number of business formations in a given period as the number of limited liability company (“LLC”), incorporation, not-for-profit and doing business as (“DBA”) orders placed on our platform in such period. We consider the number of business formations to be an important metric considering that it is typically the first product or service small business customers purchase on our platform, creating the foundation for additional products and subsequent subscription revenue as customers adopt additional products and services throughout the lifecycle of their business.

Previous wording

Furthermore, we believe our definition of the number of business formations is most closely aligned with U.S. Census reporting of new applications for Employer Identification Numbers, or EINs, which we believe to be the most relevant source of publicly available U.S. market data.

Current wording

Furthermore, we believe our definition of the number of business formations is most closely aligned with U.S. Census reporting of new applications for Employer Identification Numbers (“EINs”), which we believe to be the most relevant source of publicly available U.S. market data.

Previous wording

The below table sets forth the number of business formations for the three and nine months ended September 30, 2025 and 2024:

Current wording

The below table sets forth the number of business formations for the three months ended March 31, 2026 and 2025:

Previous wording

The below table sets forth the number of transactions for the three and nine months ended September 30, 2025 and 2024:

Current wording

The below table sets forth the number of transactions for the three months ended March 31, 2026 and 2025:

Previous wording

We experienced a 1% decrease in the number of transactions during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease resulted primarily from the decline in beneficial ownership information report filings following a FinCEN ruling on March 21, 2025 that eliminated this filing requirement for U.S. companies, partially offset by the inclusion of transactions from our Formation Nation acquisition and an increase in Annual Report filings.

Current wording

We experienced a 10% increase in the number of transactions during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to an increase in Annual Report filings within our compliance offerings as a result of filing automation and an increase in business formations. The increase was partially offset by a decline in beneficial ownership information report filings following a Financial Crimes Enforcement Network (“FinCEN”) ruling on March 21, 2025 that eliminated this filing requirement for U.S. companies.

Previous wording

The below table sets forth the average order value for the three and nine months ended September 30, 2025 and 2024:

Current wording

The below table sets forth the average order value for the three months ended March 31, 2026 and 2025:

Previous wording

We define average revenue per subscription unit, or ARPU, as of a given date as subscription revenue for the twelve-month period ended on such date, or LTM, divided by the average of the number of subscription units at the beginning and end of the LTM period. We consider ARPU to be an important metric because it helps to illustrate our ability to provide and monetize higher value subscriptions. In addition, when viewed together with subscription units, ARPU provides insight into the impact that higher-value subscriptions have on our ability to grow our subscription units.

Current wording

We define average revenue per subscription unit (“ARPU”) as of a given date as subscription revenue for the twelve-month period ended on such date (“LTM”) divided by the average of the number of subscription units at the beginning and end of the LTM period. We consider ARPU to be an important metric because it helps to illustrate our ability to provide and monetize higher value subscriptions. In addition, when viewed together with subscription units, ARPU provides insight into the impact that higher-value subscriptions have on our ability to grow our subscription units.

Previous wording

ARPU decreased 3% as of September 30, 2025 compared to September 30, 2024 driven primarily by a shift in mix towards our lower priced subscription offerings, including forms and e-signature, accounting solutions, and legal advisory subscriptions, due to the bundling of these products into certain business formation offerings.

Current wording

ARPU increased 4% as of March 31, 2026 compared to March 31, 2025 benefiting from pricing initiatives on our registered agent subscriptions, partially offset by a shift in mix towards our lower priced subscription offerings, including Forms and eSignature and accounting solutions, due to the bundling of these products into certain business formation offerings.

Previous wording

On a sequential basis, ARPU as of September 30, 2025 remained flat compared to June 30, 2025.

Current wording

On a sequential basis, ARPU as of March 31, 2026 decreased 1% compared to December 31, 2025.

Previous wording

We define annual small business retention rate as the percentage of small business subscription units active as of the last day of the quarter one year ago that were still active subscriptions 12 months later. Small business subscription units represent our subscriptions targeted at our small business customers and include subscriptions for our registered agent and compliance services, our tax solution, our virtual mail, forms and eSignature solutions and our small business legal advisory plan, and exclude subscriptions from our enterprise customers, our prior operations in the U.K. and our consumer legal advisory plan. Annual small business retention rate includes both monthly and annual subscription units and reflects all subscription unit attrition, including as a result of actual business failures of certain of our customers. Our annual small business retention rate as of September 30, 2025 was approximately 57%, which was impacted by the anniversarying of the bundling of annual forms and e-signature subscriptions into certain business formation offerings, which are typically lower retaining.

Current wording

We define annual small business retention rate as the percentage of small business subscription units active as of the last day of the quarter one year ago that were still active subscriptions 12 months later. Small business subscription units represent our subscriptions targeted at our small business customers and include subscriptions for our registered agent and compliance services, our tax solution, our virtual mail, forms and eSignature solutions and our small business legal advisory plan, and exclude subscriptions from our enterprise customers, our prior operations in the U.K., Formation Nation and our consumer legal advisory plan. Annual small business retention rate includes both monthly and annual subscription units and reflects all subscription unit attrition, including as a result of actual business failures of certain of our customers. Our annual small business retention rate as of March 31, 2026 was approximately 57% which was impacted by lower retaining annual forms and e-Signature subscriptions.

Previous wording

Subscription revenue—Subscription revenue is generated primarily from subscriptions to our registered agent, compliance packages, attorney advice, legal forms, tax and accounting, virtual mail and e-signature services, and software-as-a-service, or SaaS, subscriptions. We generally recognize revenue from our subscriptions ratably over the subscription term. Subscription terms generally range from thirty days to one year. Subscription revenue also includes amounts earned from third-party providers in connection with lead generation activities, where referred customers purchased services that are subscription in nature. Subscription revenue includes the transaction price allocated to bundled free trials for our subscription services and is net of promotional discounts, cancellations, sales allowances and credit reserves and payments to third party service providers such as legal plan law firms.

Current wording

Subscription revenue—Subscription revenue is generated primarily from subscriptions to our registered agent, compliance packages, attorney advice, legal forms, tax and accounting, virtual mail and eSignature services, and software-as-a-service (“SaaS”) subscriptions. We generally recognize revenue from our subscriptions ratably over the subscription term. Subscription terms generally range from thirty days to one year. Subscription revenue also includes amounts earned from third-party providers in connection with lead generation activities, where referred customers purchased services that are subscription in nature. Subscription revenue includes the transaction price allocated to bundled free trials for our subscription services and is net of promotional discounts, cancellations, sales allowances and credit reserves and payments to third party service providers such as legal plan law firms.

Previous wording

Cost of revenue includes all costs of providing and fulfilling our services. Cost of revenue primarily includes government filing fees, costs of fulfillment, customer care, including the cost of credentialed professionals for tax, and payroll services, and related benefits, including stock-based compensation, and costs of independent contractors for document preparation, telecommunications and data center costs, amortization of acquired developed technology, depreciation and amortization of network computers, equipment and internal-use software, printing, shipping and handling charges, credit and debit card fees, allocated overhead, legal document kit expenses, and sales and use taxes. We defer direct and incremental costs primarily related to government filing fees incurred prior to the associated service meeting the criteria for revenue recognition. These contract assets are recognized as cost of revenue in the same period the related revenue is recognized.

Current wording

Cost of revenue includes all costs of providing and fulfilling our services. Cost of revenue primarily includes government filing fees, costs of fulfillment, customer care, and payroll services, and related benefits, including stock-based compensation, and costs of independent contractors for document preparation, telecommunications and data center costs, amortization of acquired developed technology, depreciation and amortization of network computers, equipment and internal-use software, printing, shipping and handling charges, credit and debit card fees, allocated overhead, legal document kit expenses, and sales and use taxes. We defer direct and incremental costs primarily related to government filing fees incurred prior to the associated service meeting the criteria for revenue recognition. These contract assets are recognized as cost of revenue in the same period the related revenue is recognized.

Previous wording

Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, have been and will continue to be affected by various factors, primarily the mix between transaction and subscription revenue. Our long-term gross margin expansion is also expected to be driven by automation improvements and digitization efforts. Further, our acquisitions of other companies have negatively impacted our gross margin in the past, and any such future acquisitions could have a similar effect. Our gross margin could fluctuate from period to period due to fulfillment rates and seasonality.

Current wording

Gross profit, or revenue less cost of revenue, and gross margin, or gross profit as a percentage of revenue, have been and will continue to be affected by various factors, primarily the mix between transaction and subscription revenue. Our gross margin expansion is also expected to be driven by automation improvements and digitization efforts. Further, our acquisitions of other companies have negatively impacted our gross margin in the past, and any such future acquisitions could have a similar effect. Our gross margin could fluctuate from period to period due to fulfillment rates and seasonality.

Previous wording

Our operating expenses consist primarily of sales and marketing, technology and development, general and administrative expenses, and to a lesser extent, impairments of goodwill, long-lived assets, other assets and gain on sale of assets held for sale.

Current wording

Our operating expenses consist primarily of sales and marketing, technology and development, general and administrative expenses, and to a lesser extent, gain on sale of assets held for sale.

Previous wording

We intend to continue to invest in sales and marketing to drive additional revenue, further penetrate our expanding addressable market, and build on our digital brand leadership and awareness. We anticipate that sales and marketing expenses will continue to be our largest operating expense category for the foreseeable future.

Current wording

Customer acquisition media spend has historically been highest in the first quarter of the year to align with business formation seasonality. We expect to continue to invest in sales and marketing to drive additional revenue, further penetrate our expanding addressable market, and build on our digital brand leadership and awareness. We anticipate that sales and marketing expenses will continue to be our largest operating expense category for the foreseeable future.

Previous wording

Excluding stock-based compensation, we expect our technology and development expenses to remain relatively consistent as a percentage of our revenue for the foreseeable future, although our technology and development expenses may fluctuate as a percentage of our revenue from period-to-period due to seasonality and the timing and extent of these expenses.

Current wording

Excluding stock-based compensation, we expect our technology and development expenses to decrease as a percentage of our revenue as we continue to invest in process efficiency initiatives, which includes the use of AI, although our technology and development expenses may fluctuate as a percentage of our revenue from period-to-period due to seasonality and the timing and extent of these expenses.

Previous wording

We expect our general and administrative expenses to decrease as a percentage of our revenue over the longer term. Our general and administrative expenses may fluctuate as a percentage of our revenue from period-to-period due to seasonality and the timing and extent of these expenses.

Current wording

Our general and administrative expenses relate primarily to compensation and related benefits, including stock-based compensation, for executive and corporate personnel, professional and consulting fees, an allocation of depreciation and amortization, allocated overhead and legal costs. We expect our general and administrative expenses to decrease as a percentage of our revenue over the longer term. However, our general and administrative expenses may fluctuate as a percentage of our revenue from period-to-period due to the timing and extent of the foregoing expenses and seasonality.

Previous wording

Interest expense consists primarily of amortization of debt issuance costs related to our amended and restated credit and guaranty agreement, or Revolving Facility.

Current wording

Interest expense consists primarily of amortization of debt issuance costs related to our amended and restated credit and guaranty agreement (as amended, the “Amended Revolving Facility”) as well as interest incurred on the deferred cash consideration associated with the acquisition of Formation Nation.

Previous wording

We expect interest expense to remain insignificant in the near term as we have no outstanding indebtedness. However, we would incur interest expense in the longer term should we draw down on our Revolving Facility or incur other indebtedness.

Current wording

We expect interest expense to remain insignificant in the near term as we have no outstanding indebtedness. However, we would incur interest expense in the longer term should we draw down on our Amended Revolving Facility or incur other indebtedness.

Previous wording

Other (expense) income, net consists of realized and unrealized foreign currency gains and losses as well as the loss on debt extinguishment related to the Amended Revolving Facility.

Current wording

Other income, net consists of realized and unrealized foreign currency gains and losses.

Previous wording

Stock-based compensation expense increased for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 due to time-based restricted stock units, or RSUs, RSUs with performance and market conditions, and RSUs with market conditions granted to eligible employees and members of our senior leadership team in 2024 and 2025. See Note 9 to our unaudited condensed consolidated financial statements and Note 14 to our consolidated financial statements included in our 2024 Annual Report on Form 10-K for additional information.

Current wording

Stock-based compensation expense decreased for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to lower expense from performance-based stock units (“PSUs”), including awards with market conditions, granted in prior periods, as well as a reduction in expense from time-based restricted stock units (“RSUs”). See Note 8 to our unaudited condensed consolidated financial statements and Note 14 to our consolidated financial statements included in our 2025 Annual Report on Form 10-K for additional information.

Previous wording

The increase in total revenue for the three months ended September 30, 2025 was primarily driven by the increases in both subscription and transaction revenue. Subscription revenue was 66% of total revenue for both the three months ended September 30, 2025 and 2024 and transaction revenue was 34% of total revenue for both the three months ended September 30, 2025 and 2024.

Current wording

The increase in total revenue for the three months ended March 31, 2026 was primarily driven by the increases in both subscription and transaction revenue. Subscription revenue was 63% of total revenue for the three months ended March 31, 2026 and 2025 and transaction revenue was 37% of total revenue for the three months ended March 31, 2026 and 2025.

Previous wording

Transaction revenue increased 6% year-over-year for the nine months ended September 30, 2025 primarily due toapproximately$23.4 million in revenue from transactions derived from our acquisition of Formation Nation in February 2025 and an increase in revenue from Annual Report and Trademark filings, partially offset by a decline in beneficial ownership information report revenue due to the FinCEN ruling on March 21, 2025 that eliminated this filing requirement for U.S. companies.

Current wording

Transaction revenue increased 15% year-over-year for the three months ended March 31, 2026 primarily due to a 150%, or $6.6 million, increase in revenue from Annual Report filings within our compliance offerings as a result of filing automation as well as an increase in revenue from other small business transactions and the inclusion of a full quarter of revenue from Formation Nation, partially offset by a decline in beneficial ownership information report revenue due to the FinCEN ruling on March 21, 2025 that eliminated this filing requirement for U.S. companies.

Previous wording

Subscription revenue increased 10% year-over-year for the nine months ended September 30, 2025 primarily due to approximately $12.5 million in revenue from subscriptions derived from our acquisition of Formation Nation in February 2025, as well as a 7% increase in revenue from our compliance-related subscriptions, an increase in revenue from our Virtual Mail offering, and revenue earned from the 1-800 Accountant partnership entered into in December 2024, partially offset by our prior discontinuation of new customer acquisition for our tax offering.

Current wording

Subscription revenue increased 12% year-over-year for thethree months ended March 31, 2026 primarily due to a 17% increase in revenue from our registered agent subscriptions due to an increase in pricing of these subscriptions and a 25% increase in revenue from our legal advisory subscriptions from the bundling of this subscription into certain formation offerings. Subscription revenue growth was partially offset by our prior discontinuation of new customer acquisition for our tax offering.

Previous wording

Cost of revenue for the three months ended September 30, 2025 increased by $7.6 million primarily due to a $5.7 million increase in filing fees driven by the acceleration in fulfillment for certain services, a $0.8 million increase in other cost of service primarily related to Formation Nation, a $0.5 million increase in depreciation and amortization expense, and a $0.4 million increase in third party fees for customer fulfillment services. These increases were partially offset by a $0.3 million decrease in payroll and related benefits, largely due to a decrease in average headcount.

Current wording

Cost of revenue for the three months ended March 31, 2026 increased by $8.0 million primarily due to an $8.7 million increase in filing fees driven by the acceleration in fulfillment for certain services and a $0.9 million increase in credit card fees. These increases were partially offset by an $0.8 million decrease in third party fees for customer fulfillment services and an $0.8 million decrease in depreciation and amortization expense.

Previous wording

Gross profit for the three months ended September 30, 2025 increased by $14.0 million compared to three months ended September 30, 2024 due to a $21.6 million increase in revenue and a $7.6 million increase in cost of revenue.

Current wording

Gross profit for the three months ended March 31, 2026 increased by $15.7 million compared to three months ended March 31, 2025 due to a $23.7 million increase in revenue and an $8.0 million increase in cost of revenue.

Previous wording

Sales and marketing expenses for thethree months ended September 30, 2025 increased by $21.5 million primarily due to a $10.3 million increase in customer acquisition marketing spend. Customer acquisition marketing spend was $44.2 million and $34.0 million for thethree months ended September 30, 2025 and 2024, respectively, primarily due to lower performance marketing spend during the three months ended September 30, 2024. Additionally, there was a $9.0 million increase in payroll and related benefits largely due to an increase in sales and marketing headcount, and a $1.6 million increase in depreciation and amortization.

Current wording

Sales and marketing expenses for thethree months ended March 31, 2026 increased by $17.3 million primarily due to a $10.8 million increase in customer acquisition marketing spend. Customer acquisition marketing spend was $55.1 million and $44.2 million for thethree months ended March 31, 2026 and 2025, respectively, primarily due to lower performance marketing spend during the three months ended March 31, 2025. Additionally, there was a $4.5 million increase in payroll and related benefits largely due to an increase in sales and marketing headcount, and a $1.5 million increase in depreciation and amortization.

Previous wording

Technology and development expenses for the nine months ended September 30, 2025 decreased by$10.5 million primarily due to a decrease in payroll and related benefits largely due a decrease in technology and development headcount.

Current wording

Technology and development expenses for the three months ended March 31, 2026 decreased by $1.7 million primarily due to a$3.3 million decrease in payroll and related benefits driven by a reduction in technology and development headcount, partially offset by a$1.1 million increase in external consulting costs.

Previous wording

Gain on sale of assets held for sale for thenine months ended September 30, 2025 was$14.3 million due to the sale of our operational headquarters on March 31, 2025.

Current wording

Gain on sale of assets held for sale for thethree months ended March 31, 2025 was$14.3 million due to the sale of our operational headquarters on March 31, 2025.

Previous wording

The change in other income, net, between 2025 and 2024 was primarily due to the write down of our intercompany loans during 2024 which were denominated in British Pound Sterling, or GBP.

Current wording

The change in other income, net, between 2026 and 2025 was primarily due to unfavorable foreign exchange activity.

Previous wording

There was a $4.4 million decrease in the provision for income taxes for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The change was primarily due to lower pre-tax income and increased excess tax benefits from stock-based compensation for the three months ended September 30, 2025.

Current wording

There was a $2.8 million decrease in the provision for income taxes for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The change was primarily due to lower pre-tax income and decreased excess tax benefits from stock-based compensation for the three months ended March 31, 2026.

Previous wording

We fund our operations and capital expenditures from cash flows from operating activities. Our primary requirements for liquidity and capital are to finance working capital, capital expenditures and general corporate purposes. At September 30, 2025, our principal sources of liquidity were cash and cash equivalents of $237.2 million, which consisted of cash on deposit with banks and money market funds, of which approximately $4.3 million related to our foreign subsidiaries. Our cash and cash equivalents increased by $95.1 million from December 31, 2024 to September 30, 2025, primarily as a result of proceeds from stock option exercises primarily by former executive officers in the first quarter of 2025, proceeds from the sale of a property held for sale, and cash provided by operating activities, partially offset by cash paid for the acquisition of Formation Nation, repurchases of common stock, and purchases of property and equipment.

Current wording

We fund our operations and capital expenditures from cash flows from operating activities. Our primary requirements for liquidity and capital are to finance working capital, capital expenditures and general corporate purposes. At March 31, 2026, our principal sources of liquidity were cash and cash equivalents of $183.2 million, which consisted of cash on deposit with banks and money market funds, of which approximately $3.5 million related to our foreign subsidiaries. Our cash and cash equivalents decreased by $19.9 million from December 31, 2025 to March 31, 2026, primarily as a result of cash used in financing activities, including repurchases of common stock, shares surrendered for settlement of minimum statutory tax withholding as well as the payment of deferred consideration for the Formation Nation acquisition partially offset by cash provided by operating activities.

Previous wording

In October 2023, our board of directors approved a stock repurchase program authorizing repurchases of our common stock with no fixed expiration. In May 2025, our board of directors approved a $100.0 million increase in our stock repurchase program, bringing the aggregate amount authorized to $315.0 million. Approximately$112.0 million remained available for future repurchases under the stock repurchase program as of September 30, 2025. For additional information regarding our stock repurchase program, refer to Note 8 to our unaudited condensed consolidated financial statements.

Current wording

In October 2023, our board of directors approved a stock repurchase program authorizing repurchases of our common stock with no fixed expiration. In February 2026, our board of directors approved a $100.0 million increase in our stock repurchase program, bringing the aggregate amount authorized to $415.0 million. Approximately$126.0 million remained available for future repurchases under the stock repurchase program as of March 31, 2026. For additional information regarding our stock repurchase program, refer to Note 7 to our unaudited condensed consolidated financial statements.

Previous wording

On July 2, 2021, we entered into a $150.0 million amended and restated credit and guaranty agreement with JPMorgan Chase Bank, N.A., as the administrative agent. On July 14, 2025, we entered into an amendment to the amended and restated credit and guaranty agreement that, among other things, decreased the revolving loan commitments to $100.0 million and extended the maturity date of the revolving loan commitments to July 14, 2030. We refer to the amended and restated credit and guaranty agreement, as amended from time to time, as the Amended Revolving Facility. The Amended Revolving Facility provides for the issuance of up to $20.0 million of letters of credit as well as borrowings on same-day notice, referred to as swingline loans, in an amount of up to $10.0 million. As of September 30, 2025, we had no borrowings outstanding and $100.0 million was available for use under our Amended Revolving Facility.

Current wording

We have entered into a $100.0 million amended and restated credit and guaranty agreement with JPMorgan Chase Bank, N.A., as the administrative agent, with a maturity date of July 14, 2030. We refer to the amended and restated credit and guaranty agreement, as amended from time to time, as the Amended Revolving Facility. The Amended Revolving Facility also provides for the issuance of up to $20.0 million of letters of credit as well as borrowings on same-day notice, referred to as swingline loans, in an amount of up to $10.0 million. As of March 31, 2026, we had no borrowings outstanding and $100.0 million was available for use under our Amended Revolving Facility.