DHI GROUP, INC.

Previous wording

“believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to execute our tech-focused strategy, a write-off of all or a part of our goodwill and intangible assets, backlog not accurately representing future revenue, competition from existing and future competitors in the highly competitive markets in which we operate, failure to adapt our business model to keep pace with rapid changes in the recruiting and career services business and the development of new products and services, macroeconomic conditions, including government shutdowns, the impact of initiatives to restructure or streamline government agencies, such as DOGE, the risk that AI models will reduce demand for technology professionals in the workforce, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, a review of strategic alternatives may occur from time to time and the possibility that such review will not result in a transaction, inability to successfully integrate future acquisitions or identify and consummate future acquisitions, misappropriation or misuse of our intellectual property, claims against us for intellectual property infringement or failure to enforce our ownership of intellectual property, failure to attract and retain users who create and post original content on our web properties, taxation risks in various jurisdictions and the potential for unfavorable decisions related to tax assessments, taxation risks impacting our liability or past sales, and ability to make future sales, downturns in our customers' businesses, our indebtedness and our ability to borrow funds under our revolving credit facility or refinance our indebtedness, restrictions on our current and future operations under such indebtedness, development and use of artificial intelligence, failure to timely and efficiently scale, adapt and maintain our technology and infrastructure, capacity constraints, system failures or breaches of network security, usefulness of our candidate profiles to our customers, decreases in our user engagement, changes in search engines' methodologies, failure to halt operations of third-party web…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Information contained herein contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You should not place undue reliance on those statements because they are subject to numerous uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control. Forward-looking statements include, without limitation, information concerning our possible or assumed future financial condition, liquidity and results of operations, including expectations (financial or otherwise), our strategy, plans, objectives, and intentions, and growth potential. These statements often include words such as “may,” “will,” “should,” “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or similar expressions. These statements are based on assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to execute our tech-focused strategy, a write-off of all or a part of our goodwill and intangible assets, backlog not accurately representing future revenue, competition from existing and future competitors in the highly competitive markets in which we operate, failure to adapt our business model to keep pace with rapid changes in the recruiting and career services business and the development of new products and services, macroeconomic conditions, including government shutdowns, the impact of initiatives to restructure or streamline government agencies, such as DOGE, the risk that AI models will reduce demand for technology professionals in the workforce, failure to maintain and develop our reputation and brand recognition, failure to increase or maintain the number of customers who purchase recruitment packages, failure to attract qualified professionals to our websites or grow the number of qualified professionals who use our websites, a review of strategic alternatives may occur from time to time and the possibility that such review will not result in a transaction, inability to successfully integrate future acquisitions or identify and consummate future acquisitions, misappropriation or misuse of our intellectual property, claims against us for intellectual property infringement or failure to enforce our ownership of intellectual property, failure to attract and retain users who cre…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

In addition, information contained herein contains certain non-GAAP financial measures. These measures are not in accordance with, or an alternative for, measures in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures" for definitions of these measures as well as reconciliations to the mostly directly comparable GAAP measure.

Current wording

In addition, information contained herein contains certain non-GAAP financial measures. These measures are not in accordance with, or an alternative for, measures in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures" for definitions of these measures as well as reconciliations to the most directly comparable GAAP measure.

Previous wording

ClearanceJobs had 1,735 recruitment package customers as of June 30, 2026 compared to 1,868 as of June 30, 2025, a decrease of 7%, and average annual revenue per recruitment package customer increased $2,229, or 9%, from the prior year quarter. The increased revenue per recruitment package customer for ClearanceJobs was due to continued high demand for professionals with government security clearance and consistent product releases and enhancements driving activity on the site, along with lower renewals for its smaller customers. The lower customer count was due to lower renewals for ClearanceJobs' smaller customers, who remain uncertain around the timing and amount of federal defense contracting. Dice had 3,702 recruitment package customers as of June 30, 2026, which was a decrease of 663, or 15%, and average annual revenue per recruitment package customer for Dice increased by $465, or 3%, from the prior year quarter. The decrease in recruitment package customers was due to macroeconomic conditions causing lower renewals for Dice's smaller customers. The increase in revenue per recruitment package customer was due to the churn in Dice's smaller customers.

Current wording

ClearanceJobs had 1,764 recruitment package customers as of September 30, 2026 compared to 1,822 as of September 30, 2025, a decrease of 3%, and average annual revenue per recruitment package customer increased $2,627, or 10%, from the prior year quarter. The increased revenue per recruitment package customer for ClearanceJobs was due to continued high demand for professionals with government security clearance and consistent product releases and enhancements driving activity on the site, along with lower renewals for its smaller customers. The lower customer count was due to lower renewals for ClearanceJobs' smaller customers. Dice had 3,452 recruitment package customers as of September 30, 2026, which was a decrease of 787, or 19%, and average annual revenue per recruitment package customer for Dice increased by $672, or 4%, from the prior year quarter. The decrease in recruitment package customers was due to macroeconomic conditions causing lower renewals for Dice's smaller customers. The increase in revenue per recruitment package customer was due to the churn in Dice's smaller customers.

Previous wording

Backlog at June 30, 2026 decreased $7.3 million from December 31, 2025 and decreased $8.9 million from June 30, 2025. The decrease in backlog compared to both December 31, 2025 and June 30, 2025 was due to macroeconomic conditions causing lower demand for Dice's services while ClearanceJobs backlog increased as compared to June 30, 2025 and was flat as compared to December 31, 2025.

Current wording

Backlog at September 30, 2026 decreased $12.1 million from December 31, 2025 and decreased $6.8 million from September 30, 2025. The decrease in backlog compared to both December 31, 2025 and September 30, 2025 was due to macroeconomic conditions causing lower demand for Dice's services while ClearanceJobs backlog increased as compared to September 30, 2025 and was down as compared to December 31, 2025 due to the seasonality of bookings.

Previous wording

For the three months ended June 30, 2026, we experienced a decrease in revenue of $0.7 million, or 2%, as compared to the three months ended June 30, 2025. Revenues for ClearanceJobs increased $1.9 million, or 14%, as compared to the same period in 2025. Continued demand for professionals with government clearance, consistent product releases and enhancements and the acquisition of Point Solutions Group ("PSG") drove the increase. Revenue at Dice decreased $2.6 million, or 14%, compared to the same period in 2025 due to macroeconomic conditions driving lower renewal rates.

Current wording

For the three months ended September 30, 2026, we experienced an increase in revenue of $0.1 million, or 0%, as compared to the three months ended September 30, 2025. Revenues for ClearanceJobs increased $2.6 million, or 18%, as compared to the same period in 2025. Continued demand for professionals with government clearance, consistent product releases and enhancements and the acquisition of Point Solutions Group ("PSG") drove the increase. Revenue at Dice decreased $2.5 million, or 13%, compared to the same period in 2025 due to macroeconomic conditions driving lower renewal rates.

Previous wording

Sales and marketing expenses decreased $1.3 million, or 12% from the same period of the prior year. The ClearanceJobs segment was primarily flat to prior year. The Dice segment decreased by $1.3 million primarily due to a $1.4 million decrease in compensation related costs, primarily related to lower headcount and commissions.

Current wording

Sales and marketing expenses increased $0.9 million, or 10% from the same period of the prior year. The ClearanceJobs segment was primarily flat to prior year. The Dice segment increased by $0.9 million due to a $0.7 million increase in compensation related costs, primarily from employee termination benefits and a $0.4 million increase in discretionary marketing costs. The increase was partially offset by a $0.2 million decrease in commission.

Previous wording

General and administrative expenses decreased $0.2 million, or 4% from the same period of the prior year. The ClearanceJobs segment increased $0.3 million due to an increase in compensation related costs. The Dice segment decrease of $0.2 million was driven by a decrease in compensation related costs, primarily stock-based compensation. Other corporate expenses decreased by $0.3 million driven by a decrease in compensation related costs, primarily stock-based compensation.

Current wording

General and administrative expenses decreased $1.1 million, or 16% from the same period of the prior year. The ClearanceJobs segment was primarily flat to prior year. The Dice segment decrease of $0.5 million was driven by a lower operational costs, including bad debt and rent. Other corporate expenses decreased by $0.7 million driven by a decrease in compensation related costs, primarily stock-based compensation and lower professional fees.

Previous wording

Depreciation expense decreased $1.3 million, or 35%, compared to the same period in 2025. The ClearanceJobs segment decreased $0.3 million and the Dice segment decreased $1.0 million, in each case as fixed asset purchases, which are primarily comprised of capitalized development costs, have declined.

Current wording

Depreciation expense decreased $1.1 million, or 31%, compared to the same period in 2025. The ClearanceJobs segment decreased $0.1 million and the Dice segment decreased $1.0 million, in each case as fixed asset purchases, which are primarily comprised of capitalized development costs, have declined.

Previous wording

Amortization expense increased $0.3 million compared to the same period in 2025 as ClearanceJobs acquired definite lived intangible assets of $2.0 million in the first quarter of 2026 and $1.6 million in the third quarter of 2025. See Note 9 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Current wording

Amortization expense increased $0.2 million compared to the same period in 2025 as ClearanceJobs acquired definite lived intangible assets of $2.0 million in the first quarter of 2026 and $1.6 million in the third quarter of 2025. See Note 9 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Previous wording

Operating income (loss) for the six months ended June 30, 2026 was $6.9 million, a positive operating margin of 11.3%, compared to operating loss of $10.5 million, a negative operating margin of 16.4%, for the same period in 2025, an increase of $17.4 million. The increase in operating income and percentage operating margin was driven by the restructuring charge and impairment of goodwill in the prior year along with decreases in compensation related costs and depreciation expense.

Current wording

Operating income for the three months ended September 30, 2026 was $3.9 million, a positive operating margin of 12.0%, compared to operating loss of $4.5 million, a negative operating margin of 14.0%, for the same period in 2025, an increase of $8.3 million. The increase in operating income and operating margin percentage was primarily driven by the impairment charges in the prior year.

Previous wording

Income (loss) from equity method investment was approximately flat compared to the same period of the prior year. The Company records its proportionate share of eFinancialCareer's net income three months in arrears. See Note 7 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Current wording

Income from equity method investment decreased $0.1 million compared to the same period in 2025. The Company records its proportionate share of eFinancialCareer's net income three months in arrears. See Note 7 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Previous wording

Interest expense and other was approximately flat compared to the same period in 2025.

Current wording

Interest expense and other was approximately flat from the prior year. See Note 11 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Previous wording

The effective tax rate for the three months ended June 30, 2026 differed from the statutory rate due to a tax benefit of $0.3 million from the tax impacts of stock-based compensation awards and tax expense of $0.1 million from state income taxes. The tax rate for the three months ended June 30, 2025 differed from the statutory rate due to tax expense of $0.1 million from the tax impacts of stock-based compensation awards and a tax benefit of $0.4 million from the completion of a federal tax examination related to research credits.

Current wording

The effective tax rate for the three months ended September 30, 2026 differed from the statutory rate due to tax expense of $0.1 million from state income taxes. The tax rate for the three months ended September 30, 2025 differed from the statutory rate due to tax expense of $0.4 million from deduction limitations on executive compensation and a tax benefit of $0.2 million from state income taxes.

Previous wording

Diluted earnings (loss) per share was $0.06 and $(0.02) for the three months ended June 30, 2026 and 2025, respectively. The increase was driven by higher operating income, as described above, partially offset by higher income tax expense in the current period.

Current wording

Diluted earnings (loss) per share was $0.06 and $(0.10) for the three months ended September 30, 2026 and 2025, respectively. The increase was driven by higher operating income, as described above, partially offset by higher income tax expense in the current period.

Previous wording

We experienced a decrease in revenue of $3.3 million, or 5% during the six month period ended June 30, 2026 as compared to the six month period ended June 30, 2025. Revenue at ClearanceJobs increased by $2.5 million, or 9%, as compared to the same period in 2025. Continued demand for professionals with government clearance, consistent product releases and enhancements and the acquisition of PSG drove the increase. Revenue at Dice decreased by $5.8 million, or 16%, compared to the prior year due to macroeconomic conditions driving lower renewal rates.

Current wording

We experienced a decrease in revenue of $3.2 million, or 3% during the nine month period ended September 30, 2026 as compared to the nine month period ended September 30, 2025. Revenue at ClearanceJobs increased by $5.1 million, or 12%, as compared to the same period in 2025. Continued demand for professionals with government clearance, consistent product releases and enhancements and the acquisition of PSG drove the increase. Revenue at Dice decreased by $8.3 million, or 15%, compared to the prior year due to macroeconomic conditions driving lower renewal rates.

Previous wording

Cost of revenue expenses increased $0.6 million, or 6%, from the prior year period. The ClearanceJobs segment increased $2.2 million primarily due to a $2.3 million increase in compensation related costs primarily due to compensation costs relating to the PSG acquisition, partially offset by higher capitalized labor of $0.2 million. The Dice segment decreased $1.6 million compared to the prior year period due to a $1.0 million decrease in compensation related costs, primarily headcount and commissions, a $0.4 million decrease in operational costs, primarily professional fees and cloud computing, and a $0.2 million decrease in software subscriptions. Other corporate expenses decreased $0.1 million compared to the prior year due to a decrease in compensation related costs.

Current wording

Cost of revenue expenses increased $2.7 million, or 18%, from the prior year period. The ClearanceJobs segment increased $4.2 million primarily due to an increase in compensation related costs pertaining to the PSG acquisition. The Dice segment decreased $1.5 million compared to the prior year period due to a $1.0 million decrease in compensation related costs, primarily headcount and commissions and a $0.4 million decrease in operational costs, primarily professional fees and cloud computing. Other corporate expenses decreased $0.1 million compared to the prior year due to a decrease in compensation related costs.

Previous wording

Product development expense decreased $1.0 million, or 14%, from the prior year period. The ClearanceJobs segment increased $0.3 million driven by $0.7 million of higher compensation related costs, primarily from increased headcount, partially offset by higher capitalized labor of $0.4 million. The Dice segment decreased $1.1 million primarily due to lower compensation related costs of $2.3 million due to lower headcount, which was partially offset by lower capitalized labor of $1.3 million. Other corporate expenses decreased $0.2 million compared to prior year due to a decrease in compensation related costs.

Current wording

Product development expense decreased $0.6 million, or 7%, from the prior year period. The ClearanceJobs segment increased $0.4 million driven by $0.6 million of higher compensation related costs, primarily from increased headcount, partially offset by higher capitalized labor of $0.2 million. The Dice segment decreased $0.9 million primarily due to lower compensation related costs of $2.4 million due to lower headcount, which was partially offset by lower capitalized labor of $1.5 million. Other corporate expenses decreased $0.2 million compared to prior year due to a decrease in compensation related costs.

Previous wording

Sales and marketing expenses decreased $3.4 million, or 16% from the prior year period. The ClearanceJobs segment increased $0.1 million primarily due to compensation related costs. The Dice segment decreased $3.4 million driven by lower compensation related costs of $3.2 million due to lower headcount and commissions and a $0.2 million decrease in discretionary marketing expenses. Other corporate expenses decreased $0.1 million, primarily due to decrease in compensation related costs.

Current wording

Sales and marketing expenses decreased $2.5 million, or 8% from the prior year period. The ClearanceJobs segment increased $0.1 million primarily due to an increase in software subscriptions. The Dice segment decreased $2.5 million driven by lower compensation related costs. Other corporate expenses decreased $0.1 million, primarily due to decrease in compensation related costs.

Previous wording

General and administrative expense decreased $0.7 million, or 5%, from the prior year. The ClearanceJobs segment increased $0.1 million driven by higher compensation related costs. The Dice segment decreased $0.9 million due to a decrease in compensation related costs, primarily stock-based compensation and headcount. Other corporate expenses increased by $0.1 million driven by an increase in compensation related costs, primarily due to headcount.

Current wording

General and administrative expense decreased $1.8 million, or 9%, from the prior year. The ClearanceJobs segment increased $0.2 million driven by higher compensation related costs. The Dice segment decreased $1.4 million driven by a decrease of $1.0 million in compensation related costs, primarily stock-based compensation and headcount, and a decrease of $0.4 million in operational costs, including bad debt and rent. Other corporate expenses decreased by $0.5 million primarily driven by professional fees.

Previous wording

Depreciation expense decreased $2.5 million, or 32%, compared to the same period in 2025. The ClearanceJobs segment decreased $0.3 million and the Dice segment decreased by $2.2 million, in each case as fixed asset purchases, which are primarily comprised of capitalized development costs, have declined.

Current wording

Depreciation expense decreased $3.6 million, or 32%, compared to the same period in 2025. The ClearanceJobs segment decreased $0.4 million and the Dice segment decreased by $3.1 million, in each case as fixed asset purchases, which are primarily comprised of capitalized development costs, have declined.

Previous wording

Amortization expense increased $0.5 million compared to the same period in 2025 as ClearanceJobs acquired definite lived intangible assets of $2.0 million in the first quarter of 2026 and $1.6 million in the third quarter of 2025. See Note 9 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Current wording

Amortization expense increased $0.7 million compared to the same period in 2025 as ClearanceJobs acquired definite lived intangible assets of $2.0 million in the first quarter of 2026 and $1.6 million in the third quarter of 2025. See Note 9 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Previous wording

During the six months ended June 30, 2025, the Company recorded a restructuring charge of $6.5 million intended to streamline its operations, drive business objectives, reduce operating expenses and improve operating margins. See Note 5 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Current wording

During the nine months ended September 30, 2025, the Company recorded a restructuring charge of $6.5 million intended to streamline its operations, drive business objectives, reduce operating expenses and improve operating margins. See Note 5 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Previous wording

During the six months ended June 30, 2025 the Company recorded a $7.8 million loss related to the impairment of goodwill in the Dice segment. See Note 10 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Current wording

During the nine months ended September 30, 2025 the Company recorded a $7.8 million loss related to the impairment of goodwill in the Dice segment. See Note 10 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Previous wording

Operating income for the three months ended June 30, 2026 was $3.8 million, a positive operating margin of 12.2%, compared to operating loss of $1.3 million, a negative operating margin of 3.9%, for the same period in 2025, an increase of $5.1 million. The increase in operating income and operating margin percentage was driven by the restructuring charges in the prior year along with decreases in compensation related costs and depreciation expense.

Current wording

Operating income for the nine months ended September 30, 2026 was $10.7 million, a positive operating margin of 11.5%, compared to operating loss of $15.0 million, a negative operating margin of 15.6%, for the same period in 2025, an increase of $25.8 million. The increase in operating income and percentage operating margin was driven by the restructuring charge and impairments in the prior year along with decreases in compensation related costs.

Previous wording

Income (loss) from equity method investment was approximately flat compared to the same period of the prior year. The Company records its proportionate share of eFinancialCareer's net income three months in arrears. See Note 7 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Current wording

Income (loss) from equity method investment decreased $0.1 million compared to the same period of the prior year. The Company records its proportionate share of eFinancialCareer's net income three months in arrears. See Note 7 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Previous wording

Interest expense and other increased $0.1 million, or 11%, from the prior year, due to higher debt outstanding on our revolving credit facility during the current period. See Note 11 to the condensed consolidated financial statements included elsewhere in this report for additional information.

Current wording

Interest expense and other decreased $0.1 million, or 5%, from the prior year, due to lower interest rates on our revolving credit facility during the current period.

Previous wording

Our effective tax rate for the six months ended June 30, 2026 differed from the statutory rate due to tax expense of $0.2 million from state income taxes. The tax rate for the six months ended June 30, 2025 differed from the statutory rate due to tax expense of $0.6 million from the tax impacts of share-based compensation awards, tax expense of $1.9 million from nondeductible impairment charges, and a tax benefit of $0.4 million from the completion of a federal tax examination related to research credits.

Current wording

Our effective tax rate for the nine months ended September 30, 2026 differed from the statutory rate due to tax expense of $0.3 million from state income taxes. The tax rate for the nine months ended September 30, 2025 differed from the statutory rate due to tax expense of $0.6 million from the tax impacts of stock-based compensation awards, tax expense of $1.9 million from nondeductible impairment charges, tax expense of $0.1 million from deduction limitations on executive compensation, a tax benefit of $0.8 million from state income taxes, and a tax benefit of $0.4 million from the completion of a federal tax examination related to research credits.

Previous wording

Diluted earnings (loss) per share was $0.10 and $(0.23) for the six months ended June 30, 2026 and 2025, respectively. The increase was driven by higher operating income, as described above, partially offset by a higher income tax expense.

Current wording

Diluted earnings (loss) per share was $0.15 and $(0.33) for the nine months ended September 30, 2026 and 2025, respectively. The increase was driven by higher operating income, as described above, partially offset by a higher income tax expense.

Previous wording

A reconciliation of Adjusted EBITDA for the six months ended June 30, 2026 and 2025 follows (in thousands):

Current wording

A reconciliation of Adjusted EBITDA for the nine months ended September 30, 2026 and 2025 follows (in thousands):

Previous wording

A reconciliation of Adjusted EBITDA Margin for the six months ended June 30, 2026 and 2025 follows (in thousands):

Current wording

A reconciliation of Adjusted EBITDA Margin for the nine months ended September 30, 2026 and 2025 follows (in thousands):

Previous wording

A summary of our cash flows for the six months ended June 30, 2026 and 2025 follows (in thousands):

Current wording

A summary of our cash flows for the nine months ended September 30, 2026 and 2025 follows (in thousands):

Previous wording

We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility. At June 30, 2026, we had cash of $3.8 million compared to $2.9 million at December 31, 2025.

Current wording

We have financed our operations primarily through cash provided by operating activities and borrowings under our revolving credit facility. At September 30, 2026, we had cash of $3.2 million compared to $2.9 million at December 31, 2025.

Previous wording

Our principal internal sources of liquidity are cash, as well as the cash flow that we generate from our operations. In addition, we had $38.0 million in borrowing capacity under our $70.0 million Credit Agreement, as defined below, at June 30, 2026. Under our Credit Agreement, as defined below, we are subject to certain availability limits including our consolidated leverage ratio. We believe that our existing cash, cash generated from our continuing operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter. However, it is possible that one or more lenders under our Credit Agreement may refuse or be unable to satisfy their commitment to lend to us, we may violate one or more of our covenants or financial ratios contained in our Credit Agreement or we may need to refinance our debt and be unable to do so. In addition, our liquidity could be negatively affected by a decrease in demand for our products and services and the ability of our customers to pay for current or future services. We may also make acquisitions and may need to raise additional capital through future debt financings or equity offerings to the extent necessary to fund such acquisitions, which we may not be able to do on a timely basis or on terms satisfactory to us or at all.

Current wording

Our principal internal sources of liquidity are cash, as well as the cash flow that we generate from our operations. In addition, we had $40.0 million in borrowing capacity under our $70.0 million Credit Agreement, as defined below, at September 30, 2026. Under our Credit Agreement, as defined below, we are subject to certain availability limits including our consolidated leverage ratio. We believe that our existing cash, cash generated from our continuing operations and available borrowings under our Credit Agreement will be sufficient to satisfy our currently anticipated cash requirements through at least the next 12 months and the foreseeable future thereafter. However, it is possible that one or more lenders under our Credit Agreement may refuse or be unable to satisfy their commitment to lend to us, we may violate one or more of our covenants or financial ratios contained in our Credit Agreement or we may need to refinance our debt and be unable to do so. In addition, our liquidity could be negatively affected by a decrease in demand for our products and services and the ability of our customers to pay for current or future services. We may also make acquisitions and may need to raise additional capital through future debt financings or equity offerings to the extent necessary to fund such acquisitions, which we may not be able to do on a timely basis or on terms satisfactory to us or at all.

Previous wording

Cash flows from operating activities primarily consist of net income adjusted for certain non-cash items, including depreciation, amortization, changes in deferred tax assets and liabilities, stock-based compensation, income from equity method investments, impairments, and the effect of changes in working capital. Net cash flows from operating activities were $14.5 million and $9.1 million for the six month periods ended June 30, 2026 and 2025, respectively. Cash inflow from operations is driven by earnings and is dependent on the amount and timing of payments to vendors and employees and billings to and cash collections from our customers. Cash provided by operating activities during the 2026 period increased $5.4 million compared to the same period of 2025 due to lower compensation related costs, partially offset by lower cash collections from customers.

Current wording

Cash flows from operating activities primarily consist of net income adjusted for certain non-cash items, including depreciation, amortization, changes in deferred tax assets and liabilities, stock-based compensation, income from equity method investments, impairments, and the effect of changes in working capital. Net cash flows from operating activities were $21.7 million and $13.9 million for the nine month periods ended September 30, 2026 and 2025, respectively. Cash inflow from operations is driven by earnings and is dependent on the amount and timing of payments to vendors and employees and billings to and cash collections from our customers. Cash provided by operating activities during the 2026 period increased $7.8 million compared to the same period of 2025 primarily due to lower compensation related costs.

Previous wording

Cash used in investing activities during the six month period ended June 30, 2026 was $8.4 million compared to $4.2 million used in the same period of 2025. Cash used in investing activities in the six month period ended June 30, 2026 is comprised of $5.2 million of payments for acquisition and $3.3 million of fixed asset purchases, which are primarily capitalized development costs. Cash used in investing activities in the six month period ended June 30, 2025 is primarily comprised of capitalized development costs.

Current wording

Cash used in investing activities during the nine month period ended September 30, 2026 was $10.4 million compared to $7.2 million used in the same period of 2025. Cash used in investing activities in the nine month period ended September 30, 2026 is comprised of $5.3 million of payments for acquisitions and $5.1 million of fixed asset purchases, which are primarily capitalized development costs. Cash used in investing activities in the nine month period ended September 30, 2025 is primarily comprised of $1.4 million of payments for acquisition and $5.8 million of fixed asset purchases, which are primarily capitalized development costs.

Previous wording

Cash used in financing activities during the six month period ended June 30, 2026 was $5.2 million and was driven by $6.7 million related to share repurchases and $0.6 million of financing costs, partially offset by $2.0 million of net proceeds on long-term debt. Cash used in financing activities during the six month period ended June 30, 2025 was $5.8 million and was driven by $3.9 million related to share repurchases and $2.0 million of net payments on long-term debt.

Current wording

Cash used in financing activities during the nine month period ended September 30, 2026 was $11.0 million and was driven by $10.4 million related to share repurchases and $0.6 million of financing costs. Cash used in financing activities during the nine month period ended September 30, 2025 was $8.1 million and was driven by $6.1 million related to share repurchases and $2.0 million of net payments on long-term debt.

Previous wording

In April 2026, the Company entered into a new credit agreement (the "Credit Agreement"), which provides for a revolving loan facility of $70 million with an expansion option of $37.5 million, bringing the total facility to $107.5 million, as permitted under the terms of the Credit Agreement. Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company's option, at SOFR or a base rate plus a margin. Borrowings under the Credit Agreement denominated in pounds sterling, if any, bear interest at the SONIA rate plus a margin. The margin ranges from 2.50% to 3.25% on SOFR and SONIA loans and 1.50% to 2.25% on base rate loans, determined by the Company's most recent consolidated leverage ratio. The Company incurs a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the Company's most recent consolidated leverage ratio. Assuming an interest rate of 6.14% on our current borrowings, interest payments were expected to be $1.0 million from July 1, 2026 to December 31, 2026, $2.0 million for each of the years ended December 31, 2027, 2028, and 2029, and $0.5 million from January 1, 2030 to April 1, 2030. The facility will mature on April 1, 2030 and may be prepaid at any time without penalty.

Current wording

In April 2026, the Company entered into a new credit agreement (the "Credit Agreement"), which provides for a revolving loan facility of $70 million with an expansion option of $37.5 million, bringing the total facility to $107.5 million, as permitted under the terms of the Credit Agreement. Borrowings under the Credit Agreement denominated in U.S. dollars bear interest, payable at least quarterly, at the Company's option, at SOFR or a base rate plus a margin. Borrowings under the Credit Agreement denominated in pounds sterling, if any, bear interest at the SONIA rate plus a margin. The margin ranges from 2.50% to 3.25% on SOFR and SONIA loans and 1.50% to 2.25% on base rate loans, determined by the Company's most recent consolidated leverage ratio. The Company incurs a commitment fee ranging from 0.35% to 0.50% on any unused capacity under the revolving loan facility, determined by the Company's most recent consolidated leverage ratio. Assuming an interest rate of 6.40% on our current borrowings, interest payments were expected to be $0.5 million from October 1, 2026 to December 31, 2026, $1.9 million for each of the years ended December 31, 2027, 2028, and 2029, and $0.5 million from January 1, 2030 to April 1, 2030. The facility will mature on April 1, 2030 and may be prepaid at any time without penalty.

Previous wording

The Company has operating leases for corporate office space and certain equipment. The leases have terms from one year to ten years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. As of June 30, 2026, the value of our lease right-of-use asset was $4.2 million and the value of our lease liability was $8.7 million. See Note 6 to the condensed consolidated financial statements included elsewhere in this report for further information.

Current wording

The Company has operating leases for corporate office space and certain equipment. The leases have terms from one year to ten years, some of which include options to renew the lease, and are included in the lease term when it is reasonably certain that the Company will exercise the option. No leases include options to purchase the leased property. As of September 30, 2026, the value of our lease right-of-use asset was $3.9 million and the value of our lease liability was $8.4 million. See Note 6 to the condensed consolidated financial statements included elsewhere in this report for further information.

Previous wording

Following the expiration of the board's prior authorization of a $5 million stock repurchase plan in January 2026, in February 2026, the Company announced that the Board approved a new stock repurchase program that permits the purchase of up to $10.0 million of Company's common stock through February 2027. During the six months ended June 30, 2026, the Company repurchased 2.2 million shares for $5.8 million under the plans. As of June 30, 2026, the value of shares available to be purchased under the current plan was $4.5 million. Management has discretion in determining the conditions under which shares may be purchased from time to time. See Note 13 to the condensed consolidated financial statements included elsewhere in this report for further information.

Current wording

Following the expiration of the board's prior authorization of a $5.0 million stock repurchase plan in January 2026, in February 2026, the Company announced that the Board approved a new stock repurchase program that permits the purchase of up to $10.0 million of Company's common stock through February 2027. During the nine months ended September 30, 2026, the Company repurchased 3.0 million shares for $9.5 million under the plans. As of September 30, 2026, the value of shares available to be purchased under the current plan was $0.8 million. Management has discretion in determining the conditions under which shares may be purchased from time to time. See Note 13 to the condensed consolidated financial statements included elsewhere in this report for further information.