Q2 Holdings, Inc.

Previous wording

Delivering advanced digital solutions in the complex and heavily regulated financial services industry requires significant resources, personnel and expertise. We provide digital solutions that are designed to be highly configurable, scalable and adaptable to the specific needs of our customers. We design and develop our solutions with an open platform approach intended to provide comprehensive integration among our solution offerings and our customers' internal and third-party systems. Our platform architecture supports modular innovation and enables customers and partners to deploy new capabilities efficiently while maintaining operational resilience and compliance. This integrated approach allows our customers to deliver a unified financial experience across digital channels. Our solutions provide our customers the flexibility to configure their digital services in a manner that is consistent with each customer's specific offerings, workflows, processes and controls. Our solutions also allow our customers to personalize the digital experiences they deliver to their End Users by extending their individual services and brand requirements across digital channels. Our solutions are designed to comply with the stringent security and technical regulations applicable to financial institutions and financial services providers and to safeguard our customers' data and that of their End Users.

Current wording

Delivering advanced digital solutions in the complex and heavily regulated financial services industry requires significant resources, personnel and expertise. We provide digital solutions that are designed to be highly configurable, scalable and adaptable to the specific needs of our customers. We design and develop our solutions with an open platform approach intended to provide comprehensive integration among our solution offerings and our customers' internal and third-party systems. Our platform architecture supports modular innovation and enables customers and partners to deploy new capabilities efficiently while maintaining operational resilience and compliance. This integrated approach allows our customers to deliver a unified financial experience across digital channels. Our solutions provide our customers the flexibility to configure their digital services in a manner that is consistent with each customer's specific offerings, workflows, processes and controls. Our solutions also allow our customers to personalize the digital experiences they deliver to their End Users by extending their individual services and brand requirements across digital channels. Our solutions are designed with the stringent security, technical and regulatory requirements applicable to financial institutions and financial services providers in mind and to safeguard our customers' data and that of their End Users.

Previous wording

Founded over 21 years ago, Q2 began by providing digital banking solutions to domestic regional and community financial institutions, or RCFIs. We have rapidly grown since then through a combination of innovation, broad market adoption of our solutions, strategic investments and acquisitions. As customer needs and technology architectures have evolved, we have expanded our solution portfolio to address a broader set of mission-critical technology, data and operational requirements across the financial services value chain. Our expanded collection of solutions now spans digital banking, digital lending and relationship pricing, regulatory and compliance, risk and fraud, account switching, data-driven sales enablement, spending insights and portfolio management, and also includes our open platform solutions as well as our core and BaaS offerings. We serve account holders and borrowers across retail, small to medium business, or SMBs, and commercial segments. While we continue to generate a substantial majority of our revenue from our digital banking platform, we are actively leveraging our broader product portfolio and deep domain expertise to expand our market presence. This strategy includes seeking to further penetrate the digital banking market and drive significant growth across our diverse customer base in the broader financial services sector, while opening up new and meaningful expansion opportunities for our business.

Current wording

Founded over 22 years ago, Q2 began by providing digital banking solutions to domestic regional and community financial institutions, or RCFIs. We have rapidly grown since then through a combination of innovation, broad market adoption of our solutions, strategic investments and acquisitions. As customer needs and technology architectures have evolved, we have expanded our solution portfolio to address a broader set of mission-critical technology, data and operational requirements across the financial services value chain. Our expanded collection of solutions now spans digital banking, digital lending and relationship pricing, regulatory and compliance, risk and fraud, account switching, data-driven sales enablement, spending insights and portfolio management, and also includes our open platform solutions as well as our core and BaaS offerings. We serve account holders and borrowers across retail, small to medium business, or SMBs, and commercial segments. While we continue to generate a substantial majority of our revenue from our digital banking platform, we are actively leveraging our broader product portfolio and deep domain expertise to expand our market presence. This strategy includes seeking to further penetrate the digital banking market and drive significant growth across our diverse customer base in the broader financial services sector, while opening up new and meaningful expansion opportunities for our business.

Previous wording

We believe that financial services providers are best served by a broad portfolio of digital solutions offering rapid, flexible and comprehensive integration with internal and third-party solutions enabling them to deliver modern, intuitive, advanced and regulatory-compliant digital solutions. We also believe our unique position in the market stems from the breadth and depth of our solution offerings and customer base, our open and flexible platform approach, our position as a leading provider of digital banking solutions to a large network of financial institutions, and our expertise in delivering new, advanced, innovative and regulatory-compliant digital solutions. These strengths allow us to address the evolving needs and challenges within the financial services industry, as we continually innovate and adapt our offerings to meet the changing demands of our customers and their End Users. We intend to continue to make investments in technology innovation and software development to enhance our existing solutions and platforms while expanding our product portfolio.

Current wording

We believe that financial services providers are best served by a broad portfolio of digital solutions offering rapid, flexible and comprehensive integration with internal and third-party solutions enabling them to deliver modern, intuitive, advanced and regulatory-compliant digital solutions. We also believe our unique position in the market stems from the breadth and depth of our solution offerings and customer base, our open and flexible platform approach, our position as a leading provider of digital banking solutions to a large network of financial institutions, and our expertise in delivering new, advanced, innovative digital solutions designed for the regulated financial services industry. These strengths allow us to address the evolving needs and challenges within the financial services industry, as we continually innovate and adapt our offerings to meet the changing demands of our customers and their End Users. We intend to continue to make investments in technology innovation and software development to enhance our existing solutions and platforms while expanding our product portfolio.

Previous wording

We define a Registered User as an individual associated with an account holder of a customer with an active consumer digital banking solution who has registered to use one or more of our digital banking solutions and has current access to use those solutions as of the last day of the reporting period presented. Growth in Registered Users is driven by expansion within existing customer relationships, increased adoption of digital banking services by end users and the addition of new customers. Over time, we expect the number of Registered Users to grow at a faster rate than the number of related Customer Accounts as customers increase penetration across their user bases, although growth may fluctuate from period to period. Our customers had approximately 27.3 million, 24.7 million and 22.0 million Registered Users as of December 31, 2025, 2024 and 2023, respectively. Registered Users as of June 30, 2026 were 27.8 million compared to 26.2 million as of June 30, 2025.

Current wording

We define a Registered User as an individual associated with an account holder of a customer with an active consumer digital banking solution who has registered to use one or more of our digital banking solutions and has current access to use those solutions as of the last day of the reporting period presented. Growth in Registered Users is driven by expansion within existing customer relationships, increased adoption of digital banking services by End Users and the addition of new customers. Over time, we expect the number of Registered Users to grow at a faster rate than the number of related Customer Accounts as customers increase penetration across their user bases, although growth may fluctuate from period to period. Our customers had approximately 27.3 million, 24.7 million and 22.0 million Registered Users as of December 31, 2025, 2024 and 2023, respectively. Registered Users as of September 30, 2026 were 28.5 million compared to 27.0 million as of September 30, 2025.

Previous wording

Our Subscription ARR was $780.1 million, $681.9 million and $593.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. Subscription ARR as of June 30, 2026 was $825.5 million compared to $716.0 million as of June 30, 2025. Our Total ARR was $921.4 million, $824.2 million and $734.8 million for the years ended December 31, 2025, 2024 and 2023, respectively. Total ARR as of June 30, 2026 was $970.8 million compared to $860.6 million as of June 30, 2025.

Current wording

Our Subscription ARR was $780.1 million, $681.9 million and $593.9 million for the years ended December 31, 2025, 2024 and 2023, respectively. Subscription ARR as of September 30, 2026 was $846.0 million compared to $745.4 million as of September 30, 2025. Our Total ARR was $921.4 million, $824.2 million and $734.8 million for the years ended December 31, 2025, 2024 and 2023, respectively. Total ARR as of September 30, 2026 was $988.6 million compared to $888.4 million as of September 30, 2025.

Previous wording

Transaction-related costs include various legal and professional service expenses incurred in connection with mergers, acquisition, divestitures and other corporate transactions, which are recognized when incurred.

Current wording

Transaction-related costs include various legal and professional service expenses incurred in connection with mergers, acquisitions, divestitures and other corporate transactions, which are recognized when incurred.

Previous wording

(1)Includes amortization of acquired technology of $4.3 million and $5.5 million for the three months ended June 30, 2026 and 2025, respectively, and $8.7 million and $11.0 million for each of the six months ended June 30, 2026 and 2025, respectively.

Current wording

(1)Includes amortization of acquired technology of $4.3 million and $5.5 million for the three months ended September 30, 2026 and 2025, respectively, and $13.0 million and $16.5 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

(1)Includes amortization of acquired technology of 2.0% and 2.8% for the three months ended June 30, 2026 and 2025, respectively, and 2.0% and 2.9% for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(1)Includes amortization of acquired technology of 1.9% and 2.7% for the three months ended September 30, 2026 and 2025, respectively, and 2.0% and 2.8% for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Comparison of the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

During the three months ended June 30, 2026, the increase in revenues was primarily attributable to a $24.4 million increase in subscription revenue from the sale of additional solutions to new and existing customers and growth in expansions with existing customers and a $1.2 million increase in transactional revenue, partially offset by a $0.9 million decrease in services and other revenue.

Current wording

During the three months ended September 30, 2026, the increase in revenues was primarily attributable to a $22.9 million increase in subscription revenue from the sale of additional solutions to new and existing customers and growth in expansions with existing customers and a $1.0 million increase in services and other revenue.

Previous wording

During the six months ended June 30, 2026, the increase in revenues was primarily attributable to a $49.9 million increase in subscription revenue from the sale of additional solutions to new and existing customers and growth in expansions with existing customers, a $1.1 million increase in services and other revenue and a $0.4 million increase in transactional revenue.

Current wording

During the nine months ended September 30, 2026, the increase in revenues was primarily attributable to a $72.9 million increase in subscription revenue from the sale of additional solutions to new and existing customers and growth in expansions with existing customers, a $2.0 million increase in services and other revenue and a $0.6 million increase in transactional revenue.

Previous wording

We have observed improved subscription bookings and associated revenue primarily from our digital banking solutions from both initial bookings with new customers and expansions with existing customers. For the three and six months ended June 30, 2026, our subscription revenue growth was 15% and 16%, respectively, as compared to the prior year period, and we expect subscription revenue will continue to increase as a percentage of total revenue.

Current wording

We have observed improved subscription bookings and associated revenue primarily from our digital banking solutions from both initial bookings with new customers and expansions with existing customers. For the three and nine months ended September 30, 2026, our subscription revenue growth was 14% and 15%, respectively, as compared to the prior year period, and we expect subscription revenue will continue to increase as a percentage of total revenue.

Previous wording

During the three months ended June 30, 2026, the decrease in cost of revenues was primarily attributable to a $1.7 million decrease in depreciation of our data center assets resulting from our migration to third-party public cloud service providers, a $1.3 million decrease as a result of higher capitalized implementation costs and a $1.2 million decrease in amortization of acquired technology that was fully amortized during the prior year, partially offset by a $1.3 million increase from the amortization of capitalized software development and capitalized implementation services, a $1.2 million increase in third-party public cloud service provider costs and software costs necessary to support growing customer activity and a $0.7 million increase in allocated overhead costs, which includes AI-related usage costs and facilities costs.

Current wording

During the three months ended September 30, 2026, the decrease in cost of revenues was primarily attributable to a $1.8 million net decrease in hosting and third-party public cloud related costs and a $1.5 million decrease in depreciation of our data center assets, both of which resulted from our migration to third-party public cloud service providers. Additionally, we had a $1.2 million decrease in amortization of acquired technology that was fully amortized during the prior year and a $0.6 million decrease as a result of higher capitalized implementation costs, partially offset by a $1.5 million increase from the amortization of capitalized software development and capitalized implementation services, a $0.8 million net increase in third-party costs related to intellectual property included in our solutions and transaction processing costs, a $0.5 million increase in software, including AI-related usage costs and a $0.4 million increase in allocated overhead costs, which includes facilities costs.

Previous wording

During the six months ended June 30, 2026, the decrease in cost of revenues was primarily attributable to a $3.7 million decrease in depreciation of our data center assets resulting from our migration to third-party public cloud service providers, a $2.9 million decrease as a result of higher capitalized implementation costs, a $2.3 million decrease in amortization of acquired technology that was fully amortized during the prior year and a $0.4 million decrease in other discretionary expenses, partially offset by a $3.7 million increase in third-party public cloud service provider costs and software costs necessary to support growing customer activity, a $3.2 million increase from the amortization of capitalized software development and capitalized implementation services and a $1.3 million increase in allocated overhead, which includes AI-related usage costs and facilities costs.

Current wording

During the nine months ended September 30, 2026, the decrease in cost of revenues was primarily attributable to a $5.3 million decrease in depreciation of our data center assets resulting from our migration to third-party public cloud service providers, a $3.6 million decrease as a result of higher capitalized implementation costs, a $3.5 million decrease in amortization of acquired technology that was fully amortized during the prior year and a $0.4 million net decrease in other discretionary expenses, partially offset by a $4.7 million increase from the amortization of capitalized software development and capitalized implementation services, a $2.0 million net increase in hosting and third-party public cloud related costs, a $1.1 million net increase in third-party costs related to intellectual property included in our solutions and transaction processing costs, a $1.1 million increase in software, including AI-related usage costs and a $0.9 million increase in allocated overhead, which includes facilities cost.

Previous wording

During the three months ended June 30, 2026, the decrease in sales and marketing was primarily attributable to a $1.7 million decrease in personnel costs, largely from stock-based compensation, partially offset by a $0.4 million increase in allocated overhead, which includes AI-related usage costs and facilities costs and a $0.3 million increase in marketing events.

Current wording

During the three months ended September 30, 2026, the decrease in sales and marketing was primarily attributable to a $2.2 million decrease in personnel costs, largely from stock-based compensation, partially offset by a $0.2 million increase in software, including AI-related usage costs and a $0.2 million increase in allocated overhead, which includes facilities costs.

Previous wording

During the six months ended June 30, 2026, the decrease in sales and marketing was primarily attributable to a $2.2 million decrease in personnel costs, largely from stock-based compensation and a $0.4 million decrease in other discretionary expenses, partially offset by a $0.7 million increase in allocated overhead, which includes AI-related usage costs and facilities costs.

Current wording

During the nine months ended September 30, 2026, the decrease in sales and marketing was primarily attributable to a $4.4 million decrease in personnel costs, largely from stock-based compensation and a $0.5 million decrease in other discretionary expenses, partially offset by a $0.6 million increase in allocated overhead, which includes facilities costs and a $0.5 million increase in software, including AI-related usage costs.

Previous wording

During the three months ended June 30, 2026, the increase in research and development was primarily attributable to a $3.6 million increase in personnel costs as a result of the growth in our research and development organization to support continued enhancements to our solutions, a $1.1 million increase in allocated overhead costs, which includes AI-related usage costs and facilities costs and a $1.0 million increase in software and other discretionary expenses, partially offset by a $1.5 million decrease from higher capitalization of software development costs.

Current wording

During the three months ended September 30, 2026, the increase in research and development was primarily attributable to a $2.8 million increase in personnel costs as a result of the growth in our research and development organization to support continued enhancements to our solutions, a $1.7 million increase in software, including AI-related usage costs and a $0.4 million increase in allocated overhead costs, which includes facilities costs, partially offset by a $2.1 million decrease from higher capitalization of software development costs and a $0.4 million decrease due to an impairment loss in the prior year related to capitalized software development costs from certain software assets that are no longer expected to be recoverable.

Previous wording

During the six months ended June 30, 2026, the increase in research and development was primarily attributable to an $8.2 million increase in personnel costs as a result of the growth in our research and development organization to support continued enhancements to our solutions, a $1.9 million increase in allocated overhead costs, which includes AI-related usage costs and facilities costs and a $1.2 million increase in software and other discretionary expenses, partially offset by a $3.1 million decrease from higher capitalization of software development costs.

Current wording

During the nine months ended September 30, 2026, the increase in research and development was primarily attributable to a $10.9 million increase in personnel costs as a result of the growth in our research and development organization to support continued enhancements to our solutions, a $4.0 million increase in software, including AI-related usage costs and a $1.3 million increase in allocated overhead costs, which includes facilities costs, partially offset by a $5.1 million decrease from higher capitalization of software development costs and a $0.4 million decrease due to an impairment loss in the prior year related to capitalized software development costs from certain software assets that are no longer expected to be recoverable.

Previous wording

During the three months ended June 30, 2026, the increase in general and administrative expenses was primarily attributable to a $1.2 million increase in professional services, $0.5 million net increase in other discretionary expenses and a $0.3 million increase in allocated overhead costs, which includes AI-related usage costs and facilities costs.

Current wording

During the three months ended September 30, 2026, the increase in general and administrative expenses was primarily attributable to a $0.8 million increase in personnel costs to support the growth of our business, a $0.5 million increase in software, including AI-related usage costs, a $0.4 million increase in professional services and a $0.2 million increase in allocated overhead costs, which includes facilities costs.

Previous wording

During the six months ended June 30, 2026, the increase in general and administrative expenses was primarily attributable to a $1.3 million increase in personnel costs, including stock-based compensation, to support the growth of our business, a $1.2 million increase in professional services, a $0.7 million net increase in other discretionary expenses and a $0.4 million net increase in allocated overhead, which includes AI-related usage costs and facilities costs, partially offset by a $1.8 million non-recurring legal settlement charge in the prior year related to certain litigation.

Current wording

During the nine months ended September 30, 2026, the increase in general and administrative expenses was primarily attributable to a $2.2 million increase in personnel costs to support the growth of our business, a $1.6 million increase in professional services, a $1.1 million increase in software, including AI-related usage costs, a $0.4 million net increase in allocated overhead, which includes facilities costs and a $0.3 million net increase in other discretionary expenses, partially offset by a $1.8 million non-recurring legal settlement charge in the prior year related to certain litigation.

Previous wording

We expect to continue to incur incremental expenses associated with the growth of our business and compliance requirements associated with operating as a regulated, public company. Although general and administrative expenses may fluctuate on a near-term basis, over the long term, we anticipate that general and administrative expenses will continue to increase in absolute dollars as we continue to incur additional spending to ensure continued regulatory and SOX compliance. We expect such expenses to decline as a percentage of our revenues over the longer term as our revenues grow and we realize cost efficiencies in the business.

Current wording

We expect to continue to incur incremental expenses associated with the growth of our business and compliance requirements associated with operating as a regulated, public company and serving customers in a highly regulated industry. Although general and administrative expenses may fluctuate on a near-term basis, over the long term, we anticipate that general and administrative expenses will continue to increase in absolute dollars as we continue to incur additional spending to ensure continued regulatory and SOX compliance. We expect such expenses to decline as a percentage of our revenues over the longer term as our revenues grow and we realize cost efficiencies in the business.

Previous wording

During the three months ended June 30, 2026, the net increase in lease and other restructuring charges was primarily attributable to a $0.6 million increase in severance charges associated with restructuring or eliminating certain positions and a $0.3 million increase related to updated assessments and ongoing expenses of previously vacated facilities.

Current wording

During the three months ended September 30, 2026, the net increase in lease and other restructuring charges was primarily attributable to a $0.3 million increase in severance charges associated with restructuring or eliminating certain positions and a $0.2 million net increase related to updated assessments and ongoing expenses of previously vacated facilities.

Previous wording

During the six months ended June 30, 2026, the net decrease in lease and other restructuring charges was primarily attributable to a reduction in severance charges associated with restructuring or eliminating certain positions.

Current wording

During the nine months ended September 30, 2026, the net decrease in lease and other restructuring charges was primarily attributable to a reduction in severance charges associated with restructuring or eliminating certain positions.

Previous wording

During the six months ended June 30, 2026, the decrease in other income, net was primarily attributable to a $3.8 million decrease in interest income due to lower cash investible balances resulting from the repayment of convertible notes at maturity in the prior year and in current period, partially offset by a $0.9 million realized gain on the sale of fixed assets recognized during the current period and a $0.9 million increase for decreased interest expense due to the maturities of our convertible notes.

Current wording

During the three months ended September 30, 2026, the decrease in other income, net was primarily attributable to a $4.6 million decrease in interest income due to lower cash investible balances resulting from the repayment of our convertible notes at maturity, partially offset by a $1.1 million increase for decreased interest expense due to the maturities of our convertible notes.

Previous wording

During the three months ended June 30, 2026, the decrease in other income, net was primarily attributable to a $2.5 million decrease in interest income due to lower cash investible balances resulting from the repayment of convertible notes at maturity in the prior year and current period, partially offset by a $0.9 million realized gain on the sale of fixed assets recognized during the current period and a $0.5 million increase for decreased interest expense due to the maturities of our convertible notes.

Current wording

During the nine months ended September 30, 2026, the decrease in other income, net was primarily attributable to an $8.3 million decrease in interest income due to lower cash investible balances resulting from the repayment of our convertible notes at maturity, partially offset by a $1.9 million increase for decreased interest expense due to the maturities of our convertible notes and a $0.8 million realized gain on the sale of fixed assets recognized during the current period.

Previous wording

During the six months ended June 30, 2026, the increase in provision for income taxes was primarily driven by a $1.9 million increase in state income taxes and a $1.0 million increase in foreign income taxes.

Current wording

During the three months ended September 30, 2026, the increase in provision for income taxes was primarily driven by a $1.7 million increase in state income taxes, partially offset by a $0.4 million decrease in federal income taxes and a $0.3 million decrease in foreign income taxes.

Previous wording

During the three months ended June 30, 2026, the increase in provision for income taxes was primarily driven by a $0.7 million increase in state income taxes and a $0.5 million increase in foreign income taxes, offset by a $1.1 million decrease in federal income taxes.

Current wording

During the nine months ended September 30, 2026, the increase in provision for income taxes was primarily driven by a $3.5 million increase in state income taxes and a $0.7 million increase in foreign income taxes, partially offset by a $0.5 million decrease in federal income taxes.

Previous wording

As of June 30, 2026, our principal sources of liquidity were cash, cash equivalents and investments of $106.4 million. Based upon our current levels of operations, we believe that our cash flow from operations along with our other sources of liquidity, including our ability to access capital markets and available borrowings under our $125.0 million Revolving Credit Agreement, are adequate to meet our cash requirements for the next twelve months. We also believe that our longer-term working capital, planned capital expenditures, repurchases of common stock under our share repurchase program, or the Repurchase Program, and other general corporate funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facility. However, if we determine a need for additional short-term or long-term liquidity, there is no assurance that such financing, if pursued, would be adequate or available on terms acceptable to us.

Current wording

As of September 30, 2026, our principal sources of liquidity were cash, cash equivalents and investments of $123.0 million. Based upon our current levels of operations, we believe that our cash flow from operations along with our other sources of liquidity, including our ability to access capital markets and available borrowings under our $125.0 million Revolving Credit Agreement, are adequate to meet our cash requirements for the next twelve months. We also believe that our longer-term working capital, planned capital expenditures, repurchases of common stock under the Repurchase Program and other general corporate funding requirements will be satisfied through cash flows from operations and, to the extent necessary, from our borrowing facility. However, if we determine a need for additional short-term or long-term liquidity, there is no assurance that such financing, if pursued, would be adequate or available on terms acceptable to us.

Previous wording

For the six months ended June 30, 2026, our net cash and cash equivalents provided by operating activities was $117.0 million, which consisted of net income of $56.5 million and non-cash adjustments of $79.8 million, partially offset by cash outflows from changes in operating assets and liabilities of $19.3 million. The primary drivers of cash outflows in operating assets and liabilities were a $24.0 million cash outflow resulting from a gross increase in deferred solution costs primarily from annual commission payments in the prior period and deferred implementation costs from both new customers and existing customer expansion and a $19.0 million cash outflow resulting from an increase in accounts receivable, primarily due to the timing and collection of billings. Cash outflows were partially offset by a $29.2 million cash inflow resulting from an increase in deferred revenue due to the timing of annual billings and deposits received from customers prior to the recognition of revenue from those related payments. Non-cash adjustments primarily consisted of stock-based compensation, depreciation and amortization, amortization of deferred implementation and deferred solution and other costs, amortization of debt issuance costs and lease restructuring and impairments.

Current wording

For the nine months ended September 30, 2026, our net cash and cash equivalents provided by operating activities was $181.7 million, which consisted of net income of $89.7 million and non-cash adjustments of $118.9 million, partially offset by cash outflows from changes in operating assets and liabilities of $27.0 million. The primary drivers of cash outflows in operating assets and liabilities were a $42.6 million cash outflow resulting from an increase in accounts receivable, primarily due to the timing and collection of billings and a $29.6 million cash outflow resulting from a gross increase in deferred solution costs primarily from annual commission payments in the prior period and deferred implementation costs from both new customers and existing customer expansion. Cash outflows were partially offset by a $43.3 million cash inflow resulting from an increase in deferred revenue due to the timing of annual billings and deposits received from customers prior to the recognition of revenue from those related payments. Non-cash adjustments primarily consisted of stock-based compensation, depreciation and amortization and amortization of deferred implementation and deferred solution and other costs.

Previous wording

For the six months ended June 30, 2025, our net cash and cash equivalents provided by operating activities was $92.2 million, which consisted of net income of $16.5 million and non-cash adjustments of $84.4 million, partially offset by cash outflows from changes in operating assets and liabilities of $8.8 million. The primary drivers of cash outflows in operating assets and liabilities were a $18.2 million cash outflow resulting from an increase in accounts receivable, primarily due to the timing of annual billings, a $16.0 million cash outflow resulting from a net increase in deferred solution costs primarily from annual commission payments and deferred implementation costs and a $12.8 million cash outflow resulting from a decrease in accounts payable and accrued liabilities due to timing of payments and payment of annual bonuses during the first quarter. Cash outflows were partially offset by a $39.7 million cash inflow resulting from an increase in deferred revenue due to the increase in billings for services to be provided in future periods and deposits received from customers in advance of service delivery. Non-cash adjustments primarily consisted of stock-based compensation, depreciation and amortization, amortization of deferred implementation and deferred solution and other costs and amortization of debt issuance costs, partially offset by a decrease in deferred income taxes.

Current wording

For the nine months ended September 30, 2025, our net cash and cash equivalents provided by operating activities was $137.8 million, which consisted of net income of $31.6 million and non-cash adjustments of $130.1 million, partially offset by cash outflows from changes in operating assets and liabilities of $23.9 million. The primary drivers of cash outflows in operating assets and liabilities were a $28.0 million cash outflow resulting from an increase in accounts receivable, primarily due to the timing of annual billings, a $26.1 million cash outflow resulting from a gross increase in deferred solution costs primarily from annual commission payments and deferred implementation costs from both new customers and existing customer expansions. Cash outflows were partially offset by a $33.9 million cash inflow resulting from an increase in deferred revenue due to the timing of annual billings and deposits received from customers prior to the recognition of revenue from those related payments. Non-cash adjustments primarily consisted of stock-based compensation, depreciation and amortization, amortization of deferred implementation and deferred solution and other costs and amortization of debt issuance costs, partially offset by amortization of premiums and discounts on investments and deferred income taxes.

Previous wording

For the six months ended June 30, 2026, our net cash provided by investing activities was $36.9 million, consisting of $58.7 million received from the maturities of investments, partially offset by $13.5 million for capitalized software development costs and $8.3 million for the purchase of property and equipment.

Current wording

For the nine months ended September 30, 2026, our net cash provided by investing activities was $27.0 million, primarily consisting of $58.7 million received from the maturities of investments, partially offset by $21.1 million for capitalized software development costs and $10.4 million for the purchase of property and equipment.

Previous wording

For the six months ended June 30, 2025, our net cash used in investing activities was $41.6 million, consisting of $66.2 million for purchases of investments, $10.5 million for capitalized software development costs and $2.1 million for the purchase of property and equipment, partially offset by $37.2 million received from the maturities of investments.

Current wording

For the nine months ended September 30, 2025, our net cash used in investing activities was $28.3 million, consisting of $91.5 million for purchases of investments, $16.2 million for capitalized software development costs and $4.8 million for the purchase of property and equipment, partially offset by $84.2 million received from the maturities of investments.

Previous wording

For the six months ended June 30, 2026, our net cash used in financing activities was $420.5 million, consisting of $304.0 million for repayment of the 2026 Notes and $120.1 million for share repurchases under the Repurchase Program, partially offset by $3.6 million received from contributions to our ESPP to purchase our common stock.

Current wording

For the nine months ended September 30, 2026, our net cash used in financing activities was $459.3 million, consisting of $304.0 million for repayment of the 2026 Notes and $158.9 million for share repurchases under the Repurchase Program, partially offset by $3.6 million received from contributions to our ESPP to purchase our common stock.

Previous wording

For the six months ended June 30, 2025, our net cash provided by financing activities was $4.2 million, attributable to cash received from exercises of stock options and contributions to our ESPP to purchase our common stock.

Current wording

For the nine months ended September 30, 2025, our net cash provided by financing activities was $4.2 million, attributable to cash received from exercises of stock options and contributions to our ESPP to purchase our common stock.

Previous wording

Our principal commitments consist of non-cancelable operating leases primarily related to our facilities, minimum purchase commitments for third-party products, stadium sponsorship costs, commitment fees associated with our Revolving Credit Agreement, third-party public cloud service provider fees and other product costs. Our obligations under the Revolving Credit agreement are described in Note 9 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. Information regarding our non-cancellable leases and other purchase commitments as of June 30, 2026 can be found in Note 7 and Note 8 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

Our principal commitments consist of non-cancellable operating leases primarily related to our facilities, minimum purchase commitments for third-party products, stadium sponsorship costs, commitment fees associated with our Revolving Credit Agreement, third-party public cloud service provider fees and other product costs. Our obligations under the Revolving Credit Agreement are described in Note 9 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. Information regarding our non-cancellable leases and other purchase commitments as of September 30, 2026 can be found in Note 7 and Note 8 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

See Note 2 - Summary of Significant Accounting Policies contained in the Notes to Condensed Consolidated Financial Statements included in this report, regarding the impact of certain recent accounting pronouncements.

Current wording

See Note 2 - Summary of Significant Accounting Policies contained in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q regarding the impact of certain recent accounting pronouncements.