ACCURAY INC

Previous wording

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Current wording

Item 2. Management**’s Discussion and Analysis of Financial Condition and Results of Operations

Previous wording

The following discussion and analysis of our financial condition as of September 30, 2025, and results of operations for the three months ended September 30, 2025 and 2024 should be read together with our unaudited condensed consolidated financial statements and related notes included in this report. Statements made in this Form 10-Q report that are not statements of historical fact are forward-looking statements that are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report relate, but are not limited, to: our future results of operations and financial position, including the sufficiency of cash resources and expected cash flows to fund future operations, including the next 12 months; our expectations regarding backlog, age-ins and age-outs, cancellations of contracts and foreign currency impacts; the anticipated drivers of our future capital requirements; expectations regarding our strategy in China and our China joint venture as well as its expected impact on our business; expectations regarding the market in China for radiation oncology systems; expectations regarding the effects of the global macroeconomic conditions on our financial results and business as well as the business of our customers and suppliers; expectations regarding the impact of changes in government administration policy positions; expectations regarding delays in deliveries and installations and its impact on our business; expectations regarding inflation, supply chain challenges and heightened logistics costs and its impact on our business, including gross margins and net income (loss); expectations regarding revenue from the Americas region; expectations regarding the timing of deliveries and revenue conversion; our expectations regarding the adequacy of our manufacturing facilities; the anticipated risks associated with our foreign operations and fluctuations in the U.S. Dollar and foreign currencies as well as our ability to mitigate such risks; tariffs and trade policies; expectations related to the effect of the GILTI tax and the One Big Beautiful Bill Act on the company; expectations related to our convertible notes and credit facilities; expectations related to our leases; the amount of unrecognized tax amounts; the sufficiency of our cash, cash equivalents and investments to meet our anticipated cash needs for working capital and capital expenditures and our business strategy, plans and objectives. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “may,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements involve risks and uncertainties. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, actual results could differ materially from the results expressed or implied b…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The following discussion and analysis of our financial condition as of December 31, 2025, and results of operations for the three and six months ended December 31, 2025 and 2024 should be read together with our unaudited condensed consolidated financial statements and related notes included in this report. Statements made in this Form 10-Q report that are not statements of historical fact are forward-looking statements that are subject to the“safe harbor”* provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report relate, but are not limited, to: our future results of operations and financial position, including the sufficiency of cash resources and expected cash flows to fund future operations, including the next 12 months; our expectations regarding backlog, age-ins and age-outs, cancellations of contracts and foreign currency impacts; the anticipated drivers of our future capital requirements; expectations regarding our strategy in China and our China joint venture as well as its expected impact on our business; expectations regarding the market in China for radiation oncology systems; expectations regarding the effects of the global macroeconomic conditions on our financial results and business as well as the business of our customers and suppliers; expectations regarding the impact of changes in government administration policy positions; expectations regarding delays in deliveries and installations and its impact on our business; expectations regarding inflation, supply chain challenges and heightened logistics costs and its impact on our business, including gross margins and net income (loss); expectations regarding revenue from the Americas region; expectations regarding the timing of deliveries and revenue conversion; our expectations regarding the adequacy of our manufacturing facilities; the anticipated risks associated with our foreign operations and fluctuations in the U.S. Dollar and foreign currencies as well as our ability to mitigate such risks; tariffs and trade policies; expectations related to the effect of the GILTI tax and the One Big Beautiful Bill Act on the company; expectations related to our convertible notes and credit facilities; expectations related to our leases; the amount of unrecognized tax amounts; the sufficiency of our cash, cash equivalents and investments to meet our anticipated cash needs for working capital and capital expenditures and our business strategy, plans and objectives. Forward-looking statements generally can be identified by words such as*“anticipates,”* “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “may,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements involve risks and uncertainties. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, actual results could differ materially from the results expressed or im…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; geopolitical concerns, such as the Russia-Ukraine and Middle East conflicts and increasing tension between China and the U.S., including with respect to Taiwan; uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program; changes in government administration policy positions; recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; and other factors that may emerge. We are also continuing to navigate supply chain and inflation challenges, both of which continues to be a significant headwind that affects the Company’s results of operations.

Current wording

We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; geopolitical concerns, such as the Russia-Ukraine and Middle East conflicts and tension between China and the U.S., including with respect to Taiwan; uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program; changes in government administration policy positions; new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; and other factors that may emerge. We are also continuing to navigate supply chain and inflation challenges, both of which continues to be a significant headwind that affects the Company’s results of operations.

Previous wording

As a global company, approximately 70% of our raw materials and product components are sourced within the U.S. and finished products are assembled and manufactured within the U.S. with over 80% exported throughout the world. There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. If existing tariffs increase, we would expect minimal shipments to China despite customer demand. We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results will be adversely impacted through at least the first half of fiscal year 2026.

Current wording

As a global company, approximately 70% of our raw materials and product components are sourced within the U.S. and finished products are assembled and manufactured within the U.S. with over 80% exported throughout the world. There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. If existing tariffs increase, we would expect minimal shipments to China despite customer demand. We continue to work to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results have been adversely impacted in the past and may continue to be adversely impacted in the future.

Previous wording

There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results are expected to be adversely impacted through fiscal year 2026.

Current wording

There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. We continue to work to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results are expected to be adversely impacted through fiscal year 2026.

Previous wording

Gross orders decreased by $15.8 million during the three months ended September 30, 2025, respectively, as compared to the same period in the prior fiscal year, primarily due to the timing of system gross orders from the EIMEA and China regions, partially offset by an increase in system gross orders from the Americas region.

Current wording

Gross orders decreased by $10.7 million and $26.5 million during the three and six months ended December 31, 2025, respectively, as compared to thesame periods in the prior fiscal year, primarily due to the timing of system gross orders from the EIMEA and China regions.

Previous wording

Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period. Our book-to-bill ratio was 1.1 for the three months ended September 30, 2025, as compared to 1.1 for the three months ended September 30, 2024, respectively. A book-to-bill ratio greater than 1.2 generally indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time.

Current wording

Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period. Our book-to-bill ratio was 1.5 and 1.3 for the three and six months ended December 31, 2025, respectively, as compared to 1.3 and 1.2 for the three and six months ended December 31, 2024, respectively. A book-to-bill ratio greater than 1.2 generally indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time. Given that book-to-bill ratio is an operational measure and that our methodology for calculating book-to-bill ratio does not meet the definition of a non-GAAP measure, as that term is defined by the Securities and Exchange Commission, a quantitative reconciliation for book-to-bill ratio is not required nor provided.

Previous wording

Net orders are defined as gross orders less cancellations, age-outs net of age-ins, foreign currency impacts and other adjustments during the period. Net orders decreased by $23.7 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to a decrease in gross orders, an increase in age-outs, and no age-ins during three months ended September 30, 2025.

Current wording

Net orders are defined as gross orders less cancellations, age-outs net of age-ins, foreign currency impacts and other adjustments during the period. Net orders decreased by $23.0 million and $46.8 million during the three and six months ended December 31, 2025, respectively, as compared to the same periods in the prior fiscal year, primarily due to a decrease in gross orders, an increase in age-outs and no age-ins in fiscal year 2026.

Previous wording

Results of Operations — Three months ended September 30, 2025 and 2024

Current wording

Results of Operations—** Three and Six Months Ended December 31, 2025 and 2024**

Previous wording

Products net revenue decreased $11.2 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year. The decrease in products net revenue was mostly driven by a lower volume of shipments to China.

Current wording

Products net revenue decreased by $16.2 million and $27.4 million during the three and six months ended December 31, 2025, respectively, as compared to the same periods in the prior fiscal year, was primarily due to a lower volume of shipments to China, partially offset by a higher volume of shipments to the EIMEA region and Asia Pacific regions.

Previous wording

Services net revenue increased $3.6 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to higher contract revenues as a result of an increase in our installed base.

Current wording

Services net revenue increased by $2.2 million and $5.8 million during the three and six months ended December 31, 2025, respectively, as compared to the same periods in the prior fiscal year, primarily due to higher contract revenues as a result of an increase in our installed base and revenues from training and installations.

Previous wording

Net revenue decreased $7.6 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to a lower volume of shipments to China, partially offset by higher volume of shipments to the EIMEA and Americas regions.

Current wording

Net revenue decreased $14.0 million and$21.5 million during thethree and six months ended December 31, 2025, as compared to the same periods in the prior fiscal year, primarily due to a lower volume of shipments to China, partially offset by a higher volume of shipments to the EIMEA and Asia Pacific regions.

Previous wording

Gross profit decreased by $7.9 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to a decrease in net revenues. The decrease in gross profit as a percentage of revenue was due to both geographic and product sales mix, and incremental costs associated with tariffs during the three months ended September 30, 2025.

Current wording

Gross profit decreased by $17.8 million and $25.3 million during the three and six months ended December 31, 2025, respectively, as compared to the same periods in the prior fiscal year, primarily due to a decrease in product unit sales and product mix. The decrease in gross profit as a percentage of revenue during thethree and six months ended December 31, 2025, as compared to the same periods in the prior fiscal year, was due to both geographic and product sales mix, and less shipments from our JV to its end customers.

Previous wording

Research and development expenses decreased by $0.7 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to $1.7 million in capitalized labor costs for software development projects in the current period, partially offset by higher spending for research and development projects.

Current wording

Research and development expenses decreased by$2.9 million and$3.9 million during thethree and six months ended December 31, 2025, respectively, as compared to the same periods in the prior fiscal year, primarily due to $1.5 million and $3.1 million in capitalized labor costs for software development projects during thethree and six months ended December 31, 2025, respectively, and lower spending for research and development projects in fiscal year 2026.

Previous wording

Income (loss) from equity method investment, net

Current wording

Income from equity method investment, net

Previous wording

Income from equity method investment, which relates to our JV, increased by $0.5 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to an increase in gross profit and a decrease in operating expenses.

Current wording

Income from equity method investment, which relates to our JV, decreased by$1.1 million and$0.6 million during thethree and six months ended December 31, 2025, respectively, as compared to the same periods in the prior fiscal year, primarily due to decrease in revenue due toless shipments from our JV to its end customers.

Previous wording

Loss from change in fair value of warrant liability

Current wording

Gain from change in fair value of warrant liability

Previous wording

Our Penny Warrants are accounted for as a liability with the changes in the fair value of the warrants recognized in the statement of operations and comprehensive loss. During the three months ended September 30, 2025, we recorded a loss of $1.9 million due to an increase in the share price of our common stock during the period.

Current wording

Our Penny Warrants are accounted for as a liability with the changes in the fair value of the warrants recognized in the statement of operations and comprehensive loss. During thethree and six months ended December 31, 2025, we recorded a gain of$5.7 million and$3.8 million, respectively, due to a decrease in the share price of our common stock during the periods.

Previous wording

At September 30, 2025, we had $63.3 million in cash and cash equivalents, excluding restricted cash. Cash from operations could be affected by various risks and uncertainties, including, declines in our revenue, particularly without a corresponding decrease in our expenses, the timing of payments from our customers and our expenditures, as well as but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2026. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. Based on our cash and cash equivalents balance, available debt facilities, current business plan and revenue prospects, we believe we will have sufficient cash resources and anticipated cash flows to fund our operations for at least the next 12 months. However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions.

Current wording

At December 31, 2025, we had $41.3 million incash and cash equivalents, excluding restricted cash. Cash from operations could be affected by various risks and uncertainties, including declines in our revenue, particularly without a corresponding decrease in our expenses, the timing of payments from our customers and our expenditures, as well as but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2026. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. Based on our cashand cash equivalents balance, available debt facilities, current business plan and revenue prospects, we believe we will have sufficient cash resources and anticipated cash flows to fund our operations for at least the next 12 months. However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions.

Previous wording

On June 6, 2025, we entered into a senior secured credit agreement (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC, a leading global asset manager (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”, and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto. The Financing Agreement provides for (a) $150 million of new five-year term loan facilities (the “Term Loan Facilities”), (b) a new $20 million delayed draw term loan facility (the “Delayed Draw Facility”) and (c) a new $20 million revolving credit facility (the

Current wording

On June 6, 2025, we entered into a senior secured credit agreement (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC, a leading global asset manager (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”, and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto. The Financing Agreement provides for (a) $150 million of new five-year term loan facility (the “Term Loan Facility”), (b) a new $20 million delayed draw term loan facility (the “Delayed Draw Facility”) and (c) a new $20 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility and Delayed Draw Facility, the “Facilities”). The proceeds of the Delayed Draw Facility may be used to fund any future repurchases of outstanding 3.75% Convertible Senior Notes due 2026 (“2026 Notes”). In December 2025, we entered into amendments to the Financing Agreement. The first amendment to the Financing Agreement (the "First Amendment") provided for the inclusion of certain restricted cash balances in the liquidity covenant in the Financing Agreement. The second amendment to the Financing Agreement (the "Second Amendment") provided for (i) the removal of the leverage condition we must meet to draw down on the Delayed Draw Facility; (ii) the reduction of the capacity of the Delayed Draw Facility to $18.25 million; and (iii) the delay of the commencement of the requirement for us to meet the fixed charge coverage ratio and leverage ratio to December 31, 2026. In addition, we agreed to pay an additional $1.9 million in fees and amounts available to be drawn under the revolving credit facility were reduced to $15.0 million through December 31, 2026.

Previous wording

On June 6, 2025, concurrently with its entry into the Financing Agreement, the Company issued detachable warrants to purchase the Company’s common stock to certain of its lenders (the “Warrant Holders”) under the Financing Agreement. The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $0.01 per share (“Penny Warrants” and together with the Premium Warrants, the “Warrants”), exercisable immediately and expiring on June 6, 2032. No Penny Warrants were exercised as of September 30, 2025. Pursuant to the terms of the Financing Agreement, if the Company uses the Delay Draw Facility, the Company will be obligated to issue additional detachable warrants on terms substantially similar to the Warrants to certain of its lenders under the Financing Agreement.

Current wording

On June 6, 2025, concurrently with our entry into the Financing Agreement, we issued detachable warrants to purchase our common stock to certain of our lenders (the “Warrant Holders”) under the Financing Agreement. The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “June 2025 Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $0.01 per share, which are exercisable immediately and expire June 6, 2032 (the “June 2025 Penny Warrants” and together with the June 2025 Premium Warrants, the “ June 2025 Warrants”). On December 15, 2025, concurrently with our entry into the Second Amendment, we issued detachable warrants to purchase our common stock to the Warrant Holders under the Amended Financing Agreement. The Warrant Holders were issued warrants to purchase (i) 3,062,726 shares of common stock with an exercise price of $1.50 per share, exercisable on and after June 16, 2026 and expiring on December 15, 2032 (the “December 2025 Super Premium Warrants”), (ii) 2,187,661 shares of common stock with an exercise price of $1.25 per share, exercisable on andafter June 16, 2026 and expiring on December 15, 2032 (the “December 2025 Premium Warrants”), and (iii)1,750,129 shares of common stock with an exercise price of $0.01 per share, which areexercisable immediately and expire on December 15, 2032 ( the "December 2025 Penny Warrants" and together with the December 2025 Premium Warrants and December 2025 Super Premium Warrants, the "December 2025 Warrants"). Pursuant to the terms of the Amended Financing Agreement if the Company uses the Delayed Draw Facility, the Company will be obligated to issue additional detachable warrants on terms substantially similar to the December 2025 Warrants to certain of its lenders under the Amended Financing Agreement. As of December 31, 2025, no warrants have been exercised.

Previous wording

Interest on the borrowings under the Facilities is payable in arrears on the applicable interest payment date at an interest rate equal to, at the Company’s option, either: (i) a term SOFR-based rate (subject to a 2.00%per annum floor), plus an applicable margin of 8.50%, per annum or (ii) a base rate (subject to a 3.00%per annum floor), plus an applicable margin of 7.50% per annum. The agreement provides the option for payment-in-kind (“PIK”) interest up to 6.00% per annum (subject to an increase in applicable margin of 1/3 of 1.00% per annum for each 1.00% per annum of interest elected to be paid in kind), which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the term loan. In June 2025, we accrued $0.6 million in PIK interest and we elected the maximum PIK option for the first interest payment date of fiscal year 2026. The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50% per annum of the average unused portion of the Revolving Credit Facility. See Note 7. Commitments and Contingenciesof our Annual Report on Form 10-K filed with the SEC on August 28, 2025 for future cash payments related to the Term Loan Facilities.

Current wording

Interest on the borrowings under the Facilities is payable in arrears on the applicable interest payment date at an interest rate equal to, at the Company’s option, either: (i) a term SOFR-based rate (subject to a 2.00%per annum floor), plus an applicable margin of 8.50%, per annum* or (ii) a base rate (subject to a 3.00%per annum floor), plus an applicable margin of 7.50% per annum.The agreement provides the option for payment-in-kind (“PIK”) interest up to 6.00% *per annum (subject to an increase in applicable margin of 1/3 of 1.00% per annum for each 1.00% per annum of interest elected to be paid in kind), which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the term loan. In June 2025, we accrued $0.6 million in PIK interest and we elected the maximum PIK option for the first interest payment date of fiscal year 2026. The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50% per annum of the average unused portion of the Revolving Credit Facility. See Note 7.Commitments and Contingenciesof our Annual Report on Form 10-K filed with the SEC on August 28, 2025 for future cash payments related to the Term Loan Facility.

Previous wording

As of September 30, 2025, $18.0 million aggregate principal amount of the 2026 Notes remain outstanding and will be due on June 1, 2026. We intend to use operating cash to pay the remaining balance of the 2026 Notes. The 2026 Notes are classified as short-term debt on consolidated balance sheets.

Current wording

As of December 31, 2025, $18.0 million aggregate principal amount of the 2026 Notes remain outstanding and will be due on June 1,2026. We intend to use operating cash and proceeds from the Delayed Draw Facility to pay the remaining balance of the 2026 Notes. The 2026 Notes are classified as short-term debt on the consolidated balance sheets.

Previous wording

Additionally, the undistributed earnings of our foreign subsidiaries as of September 30, 2025, for all countries except Japan, France, Switzerland, Germany and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes. As of September 30, 2025, we had $8.8 million of cash and cash equivalents at our foreign subsidiaries. If such funds were repatriated, there will be additional foreign tax withholdings imposed depending on the country from which the funds were repatriated.

Current wording

Additionally, the undistributed earnings of our foreign subsidiaries as of December 31, 2025, for all countries except Japan, France, Switzerland, Germany and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes. As of December 31, 2025, wehad $13.5 millionof cash and cash equivalents at our foreign subsidiaries. If such funds were repatriated, there will be additional foreign tax withholdings imposed depending on the country from which the funds were repatriated.

Previous wording

Our cash flows for the three months ended September 30, 2025 and 2024 are summarized as follows (in thousands):

Current wording

Our cash flows for the six months ended December 31, 2025 and 2024 are summarized as follows (in thousands):

Previous wording

Net cash provided by operating activities during the three months ended September 30, 2025, was due to $21.1 million from the net changes of assets and liabilities and $12.8 million from non-cash items, and offset by a net loss of $21.7 million.

Current wording

Net cash used in operating activities during the six months ended December 31, 2025, was due to a net loss of $35.4 million, offset by $17.3 million from the net changes of assets and liabilities and $14.4 million from non-cash items.

Previous wording

Net cash used in investing activities was $3.8 million during the three months ended September 30, 2025, due to spending $1.9 million for the purchase of property and equipment and $1.9 million in costs for capitalized investments for software to be sold.

Current wording

Net cash used in investing activities was $9.4 million during the six months ended December 31, 2025, due to spending $4.9 million for the purchase of property and equipment and $4.5 million for capitalized investments for software to be sold.

Previous wording

Net cash used in financing activities was $0.5 million during the three months ended September 30, 2025, was due to payments on the outstanding principal of our Term Loan Facility.

Current wording

Net cash used in financing activities was $0.8 million during the six months ended December 31, 2025, was due to $0.8 million in payments on the outstanding principal of our Term Loan Facility and $0.4 million in debt financing costs paid for the amendments to the Financing Agreement in December 2025.

Previous wording

We presented our contractual obligations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Our contractual obligations consist of debt, operating leases, purchase commitments, and other contractual obligations. There have been no material changes to these obligations outside the ordinary course of business during the three months ended September 30, 2025 as compared to the contractual obligations disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended June 30, 2025.

Current wording

We presented our contractual obligations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Our contractual obligations consist of debt, operating leases, purchase commitments, and other contractual obligations. There have been no material changes to these obligations outside the ordinary course of business during the six months ended December 31, 2025 as compared to the contractual obligations disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended June 30, 2025.

Previous wording

During the three months ended September 30, 2025, there were no material changes to the critical accounting policies and estimates, previously disclosed in Part II, Item 7, of our Annual Report on Form 10-K filed with the SEC on August 28, 2025.

Current wording

During the six months ended December 31, 2025, there were no material changes to the critical accounting policies and estimates, previously disclosed in Part II, Item 7, of our Annual Report on Form 10-K filed with the SEC on August 28, 2025.