APPIAN CORP

Previous wording

Appian provides process automation technology. For over 25 years, our highly reliable and scalable platform has been leveraged by large enterprises and governments. Combining leading edge process orchestration and intelligence, we provide everything an organization needs to design, automate, and optimize critical processes, facilitating continuous adaptation in changing environments.

Current wording

Appian provides process automation. For over 25 years, our highly reliable and scalable platform has been leveraged by large enterprises and governments. Combining leading edge process orchestration and intelligence, we provide everything an organization needs to design, automate, and optimize critical processes, facilitating continuous adaptation in changing environments.

Previous wording

Our customers primarily include financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation organizations. Generally, our sales team targets its efforts at organizations with over 2,000 employees and $2.0 billion in annual revenue. For the three and six months ended June 30, 2026, revenue generated from U.S. federal government agencies was 26.1% and 26.0% of total revenue, respectively. For the three and six months ended June 30, 2025, revenue generated from U.S. federal government agencies was 25.9% and 24.9% of total revenue, respectively. No single end-customer accounted for more than 10% of our total revenue in the three and six months ended June 30, 2026 or 2025.

Current wording

Our customers primarily include financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation organizations. Generally, our sales team targets its efforts at organizations with over 2,000 employees and $2.0 billion in annual revenue. For the three and nine months ended September 30, 2026, revenue generated from U.S. federal government agencies was 30.1% and 27.5% of total revenue, respectively. For the three and nine months ended September 30, 2025, revenue generated from U.S. federal government agencies was 25.0% and 24.9% of total revenue, respectively. No single end-customer accounted for more than 10% of our total revenue in the three and nine months ended September 30, 2026 or 2025.

Previous wording

We offer our platform globally. Our platform supports multiple languages to facilitate collaboration and address challenges in multinational organizations. In the three and six months ended June 30, 2026, 38.2% and 37.9%, respectively, of our total revenue was generated from customers outside of the United States as compared to 38.4% and 37.3% in the three and six months ended June 30, 2025, respectively. As of June 30, 2026, we operated in 16 countries. We believe we have a significant opportunity to continue to grow our international footprint, and we are investing in new geographies, including through investment in direct and indirect sales channels, professional services, and customer support and implementation partners.

Current wording

We offer our platform globally. Our platform supports multiple languages to facilitate collaboration and address challenges in multinational organizations. In the three and nine months ended September 30, 2026, 37.7% and 37.9%, respectively, of our total revenue was generated from customers outside of the United States as compared to 39.7% and 38.2% in the three and nine months ended September 30, 2025, respectively. As of September 30, 2026, we operated in 17 countries. We believe we have a significant opportunity to continue to grow our international footprint, and we are investing in new geographies, including through investment in direct and indirect sales channels, professional services, and customer support and implementation partners.

Previous wording

Subscriptions revenue is primarily derived from cloud subscriptions bundled with maintenance and support and hosting services, license subscriptions, and maintenance and support for license subscriptions. Our maintenance and support agreements provide customers with the right to unspecified software upgrades, maintenance releases and patches released during the term of the maintenance and support agreement on a when-and-if-available basis, and rights to technical support. License subscriptions are offered when the customer prefers to self-manage the deployment of our platform within their own infrastructure. When our platform is delivered as a cloud subscription, we manage operational needs in third-party hosted data centers.

Current wording

Subscriptions revenue is primarily derived from cloud subscriptions (bundled with maintenance, support and hosting services), license subscriptions, and maintenance and support for license subscriptions. Our maintenance and support agreements provide customers with the right to unspecified software upgrades, maintenance releases and patches released during the term of the maintenance and support agreement on a when-and-if-available basis, and rights to technical support. License subscriptions are offered when the customer prefers to self-manage the deployment of our platform within their own infrastructure. When our platform is delivered as a cloud subscription, we manage operational needs in third-party hosted data centers.

Previous wording

Interest expense consists primarily of interest on our debt, amortization of deferred financing fees, unused credit facility fees, and commitment fees on our letters of credit.

Current wording

Interest expense consists primarily of interest on our debt, amortization of deferred debt issuance costs, unused credit facility fees, and commitment fees on our letters of credit.

Previous wording

Total revenue increased $32.6 million, or 19.1%, in the three months ended June 30, 2026 compared to the same period in 2025 due to an increase in our subscriptions revenue of $25.0 million coupled with an increase in our professional services revenue of $7.6 million. The increase in subscriptions revenue was driven by a $24.8 million increase in cloud subscriptions revenue and a $0.3 million increase in other subscriptions revenue. With respect to new versus existing customers, there was a $4.7 million increase in subscriptions revenue from sales to new customers, while the remaining $20.4 million of the increase was attributable to expanded deployments, price increases on renewals, and corresponding sales of additional subscriptions to existing customers. The increase in professional services revenue was due primarily to a $5.1 million increase in revenue from sales to new customers along with a $2.5 million increase in sales to existing customers.

Current wording

Total revenue increased $47.6 million, or 25.5%, in the three months ended September 30, 2026 compared to the same period in 2025 due to an increase in our subscriptions revenue of $40.6 million coupled with an increase in our professional services revenue of $7.1 million. The increase in subscriptions revenue was driven by a $22.8 million increase in cloud subscriptions revenue and a $17.8 million increase in other subscriptions revenue. With respect to new versus existing customers, there was a $3.4 million increase in subscriptions revenue from sales to new customers, while the remaining $37.1 million of the increase was attributable to expanded deployments, price increases on renewals, and corresponding sales of additional subscriptions to existing customers. The increase in professional services revenue was due primarily to a $4.4 million increase in revenue from sales to new customers along with a $2.7 million increase in sales to existing customers.

Previous wording

Cost of revenue increased $9.6 million, or 19.5%, in the three months ended June 30, 2026 compared to the same period in 2025, primarily due to a $5.0 million increase in professional services and product support personnel costs coupled with a $2.7 million increase in hosting costs and a $1.2 million increase in contractor costs. Professional services and product support personnel costs increased due to an increase in salaries and a 19% increase in headcount from June 30, 2025 to June 30, 2026. Hosting costs increased due to an increase in sales of our cloud offering during the three months ended June 30, 2026, while contractor costs increased due to an increase in the usage of subcontractors for professional services engagements.

Current wording

Cost of revenue increased $12.8 million, or 25.2%, in the three months ended September 30, 2026 compared to the same period in 2025, primarily due to a $7.3 million increase in professional services and product support personnel costs coupled with a $2.8 million increase in hosting costs and a $1.8 million increase in contractor costs. Professional services and product support personnel costs increased due to an increase in salaries, a $1.4 million increase in bonus expense, and a 24% increase in headcount from September 30, 2025 to September 30, 2026. Hosting costs increased due to an increase in sales of our cloud offering during the three months ended September 30, 2026, while contractor costs increased due to an increase in the usage of subcontractors for professional services engagements.

Previous wording

Sales and marketing expense increased $8.0 million, or 12.8%, in the three months ended June 30, 2026 compared to the same period in 2025, primarily due to a $5.2 million increase in sales and marketing personnel costs, a $1.1 million increase in marketing expenses, and a $1.0 million increase in travel and entertainment costs. Sales and marketing personnel costs increased due to a 13% increase in headcount from June 30, 2025 to June 30, 2026. Marketing expenses increased due to higher spend on marketing materials and events relative to the prior year. In addition, travel and entertainment expenses increased due to increases in airfare and lodging associated with a higher number of in-person events and engagements relative to the prior year.

Current wording

Sales and marketing expense increased $12.3 million, or 22.9%, in the three months ended September 30, 2026 compared to the same period in 2025, primarily due to an $8.5 million increase in personnel costs, a $1.9 million increase in contract labor and consulting fees, and a $1.0 million increase in travel and entertainment costs. Sales and marketing personnel costs increased due to a 14% increase in headcount, a $1.6 million increase in commissions expense, and a $0.7 million increase in stock compensation expense from September 30, 2025 to September 30, 2026. Contract labor and consulting fees increased due to an increase in the use of contract labor and consultants period over period.

Previous wording

Research and development expense increased $4.7 million, or 10.9%, in the three months ended June 30, 2026 compared to the same period in 2025. This change is primarily attributable to a $4.1 million increase in research and development personnel costs and a $1.0 million increase in cloud computing and software costs. Research and development personnel costs increased due to a 7% increase in headcount period over period.

Current wording

Research and development expense increased $8.0 million, or 18.8%, in the three months ended September 30, 2026 compared to the same period in 2025. This change is primarily attributable to a $6.0 million increase in personnel costs and a $1.7 million increase in cloud computing and software costs. Research and development personnel costs increased due to a 12% increase in headcount, a $1.3 million increase in bonus expense, and a $0.9 million increase in stock compensation expense.

Previous wording

General and administrative expense increased $4.9 million, or 17.6%, in the three months ended June 30, 2026 compared to the same period in 2025 primarily due to a $4.6 million increase in professional fees and a $0.7 million increase in general and administrative personnel costs. These increases were partially offset by a $1.6 million decrease in insurance expense. The increase in professional fees was the result of a $3.8 million increase in legal fees associated with our litigation against Pegasystems. Personnel costs increased largely due to an increase in salaries and a 17% increase in headcount from June 30, 2025 to June 30, 2026. Insurance expense decreased due to a $1.2 million decrease in amortization expense related to our judgment preservation insurance policy due to a change in the estimated amortization period.

Current wording

General and administrative expense increased $6.4 million, or 23.7%, in the three months ended September 30, 2026 compared to the same period in 2025 primarily due to a $3.1 million increase in professional fees, a $2.6 million increase in personnel costs, and a $0.9 million increase in talent acquisition and employee-related spending. These increases were partially offset by a $1.1 million decrease in insurance expense. Personnel costs increased due to an increase in salaries, a 17% increase in headcount, and a $0.4 million increase in stock compensation expense from September 30, 2025 to September 30, 2026. The increase in professional fees was the result of a $2.5 million increase in legal fees associated with our litigation against Pegasystems. Insurance expense decreased due to a $1.4 million decrease in amortization expense related to our judgment preservation insurance policy due to a change in the estimated amortization period.

Previous wording

Other expense, net was $0.8 million in the three months ended June 30, 2026 compared to other income, net $17.6 million in the three months ended June 30, 2025. This change was primarily due to $2.3 million in foreign exchange losses in the three months ended June 30, 2026 as compared to $15.6 million in foreign exchange gains in the three months ended June 30, 2025.

Current wording

Other expense, net was $4.8 million in the three months ended September 30, 2026 compared to other income, net of $1.4 million in the three months ended September 30, 2025. This change was primarily due to $5.3 million in foreign exchange losses in the three months ended September 30, 2026 as compared to $0.3 million in foreign exchange losses in the three months ended September 30, 2025. This change was further driven by a $0.8 million decrease in interest income and a $0.4 million write off of deferred debt issuance costs associated with the refinance of the Credit Agreement in the three months ended September 30, 2026.

Previous wording

Interest expense decreased by $1.5 million in the three months ended June 30, 2026 as compared to the corresponding period in 2025 primarily due to a lower effective interest rate and lower outstanding principal compared to the prior year period.

Current wording

Interest expense decreased by $2.0 million in the three months ended September 30, 2026 as compared to the corresponding period in 2025 primarily due to a lower effective interest rate and lower outstanding principal as compared to the prior year period.

Previous wording

Total revenue increased $68.4 million, or 20.3%, in the six months ended June 30, 2026 compared to the same period in 2025 due to an increase in our subscriptions revenue of $51.0 million as well as an increase in our professional services revenue of $17.4 million. The increase in subscriptions revenue was driven by a $49.4 million increase in cloud subscriptions revenue and a $1.5 million increase in other subscriptions revenue. With respect to new versus existing customers, there was a $7.7 million increase in subscriptions revenue from sales to new customers, while the remaining $43.3 million of the increase was attributable to expanded deployments, price increases on renewals, and corresponding sales of additional subscriptions to existing customers. The increase in professional services revenue was due primarily to a $9.7 million increase in revenue from sales to new customers, along with a $7.6 million increase in sales to existing customers.

Current wording

Total revenue increased $116.0 million, or 22.1%, in the nine months ended September 30, 2026 compared to the same period in 2025 due to an increase in our subscriptions revenue of $91.6 million as well as an increase in our professional services revenue of $24.4 million. The increase in subscriptions revenue was driven by a $72.2 million increase in cloud subscriptions revenue and a $19.3 million increase in other subscriptions revenue. With respect to new versus existing customers, there was a $7.9 million increase in subscriptions revenue from sales to new customers, while the remaining $83.7 million of the increase was attributable to expanded deployments, price increases on renewals, and corresponding sales of additional subscriptions to existing customers. The increase in professional services revenue was due primarily to a $9.7 million increase in revenue from sales to new customers, along with a $14.8 million increase in sales to existing customers.

Previous wording

Cost of revenue increased $19.9 million, or 21.4%, in the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a $8.6 million increase in professional services and product support personnel costs coupled with a $6.2 million increase in hosting costs and a $3.5 million increase in contractor costs. Professional services and product support personnel costs increased due to an increase in salaries and a 19% increase in headcount from June 30, 2025 to June 30, 2026. Hosting costs increased due to an increase in sales of our cloud offering during the six months ended June 30, 2026, while contractor costs increased due to an increase in the usage of subcontractors for professional services engagements.

Current wording

Cost of revenue increased $32.7 million, or 22.8%, in the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to a $15.8 million increase in professional services and product support personnel costs coupled with a $9.0 million increase in hosting costs and a $5.3 million increase in contractor costs. Professional services and product support personnel costs increased due to an increase in salaries, a $1.4 million increase in bonus expense, and a 24% increase in headcount from September 30, 2025 to September 30, 2026. Hosting costs increased due to an increase in sales of our cloud offering during the nine months ended September 30, 2026, while contractor costs increased due to an increase in the usage of subcontractors for professional services engagements.

Previous wording

Sales and marketing expense increased $16.3 million, or 13.7%, in the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a $10.7 million increase in sales and marketing personnel costs, a $2.4 million increase in travel and entertainment costs, and a $2.2 million increase in marketing expenses. Sales and marketing personnel costs increased due to a 13% increase in sales and marketing headcount from June 30, 2025 to June 30, 2026. Travel and entertainment expense increased due to a higher number of in-person events and engagements relative to the prior year. In addition, marketing expenses increased due to higher spend on marketing materials and events relative to the prior year.

Current wording

Sales and marketing expense increased $28.5 million, or 16.6%, in the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to a $19.1 million increase in personnel costs, a $3.5 million increase in travel and entertainment costs, a $2.6 million increase in contract labor and consulting costs, and a $2.6 million increase in marketing expenses. Personnel costs increased due to a 14% increase in headcount, a $1.7 million increase in commissions expense, and a $0.7 million increase in stock compensation expense. Contract labor and consulting costs increased due to greater use of contractors and consultants period over period. In addition, marketing expenses increased due to higher spend on materials and events.

Previous wording

Research and development expense increased $9.1 million, or 10.8%, in the six months ended June 30, 2026 compared to the same period in 2025. This change is primarily attributable to a $6.8 million increase in research and development personnel costs, a $2.1 million increase in information technology costs, and a $0.9 million increase in contractor costs. Research and development personnel costs increased due to a 7% increase in headcount period over period. Information technology costs increased primarily due to higher spend on cloud computing services and computer software.

Current wording

Research and development expense increased $17.1 million, or 13.5%, in the nine months ended September 30, 2026 compared to the same period in 2025. This change is primarily attributable to a $12.8 million increase in personnel costs, a $3.9 million increase in information technology costs, and a $1.3 million increase in contractor costs. Personnel costs increased due to a 12% increase in headcount, a $1.9 million increase in bonus expense, and a $1.6 million increase in stock compensation expense. Information technology costs increased primarily due to higher spend on cloud computing services and computer software.

Previous wording

General and administrative expense increased $13.5 million, or 25.5%, in the six months ended June 30, 2026 compared to the same period in 2025 primarily due to a $10.5 million increase in professional fees, a $3.2 million increase in personnel costs, and a $0.8 million increase in information technology costs. These increases were partially offset by a $2.4 million decrease in insurance expense. The increase in professional fees was the result of a $9.0 million increase in legal fees associated with our litigation against Pegasystems. Personnel costs increased due to a 17% increase in headcount from June 30, 2025 to June 30, 2026, while information technology spending increased due to higher spend on computer software and cloud computing. Insurance expense decreased due to a $2.2 million decrease in amortization expense related to our judgment preservation insurance policy due to a change in the estimated amortization period.

Current wording

General and administrative expense increased $19.9 million, or 24.9%, in the nine months ended September 30, 2026 compared to the same period in 2025 primarily due to a $13.6 million increase in professional fees, a $5.8 million increase in personnel costs, a $1.1 million increase in talent acquisition and employee-related spending, and a $1.1 million increase in information technology costs. These increases were partially offset by a $3.4 million decrease in insurance expense. The increase in professional fees was driven by an $11.6 million increase in legal fees associated with our litigation against Pegasystems. Personnel costs increased due to a 17% increase in headcount and a $0.9 million increase in stock compensation expense, while information technology spending increased due to higher spend on computer software and cloud computing. Insurance expense decreased due to a $3.6 million decrease in amortization expense related to our judgment preservation insurance policy due to a change in the estimated amortization period.

Previous wording

Other expense, net was $0.7 million in the six months ended June 30, 2026 compared to other income, net of $23.3 million in the six months ended June 30, 2025. This change was primarily due to $3.8 million in foreign exchange losses in the six months ended June 30, 2026 as compared to $19.7 million in foreign exchange gains in the six months ended June 30, 2025.

Current wording

Other expense, net was $5.6 million in the nine months ended September 30, 2026 compared to other income, net of $24.7 million in the nine months ended September 30, 2025. This change was primarily due to $9.1 million in foreign exchange losses in the nine months ended September 30, 2026 as compared to $19.4 million in foreign exchange gains in the nine months ended September 30, 2025. This change was further driven by a $1.4 million decrease in interest income and a $0.4 million write off of deferred debt issuance costs associated with the refinance of the Credit Agreement during the nine months ended September 30, 2026.

Previous wording

Interest expense decreased by $2.7 million in the six months ended June 30, 2026 as compared to the corresponding period in 2025 primarily due to a lower effective interest rate and lower outstanding principal across the comparable periods.

Current wording

Interest expense decreased by $4.7 million in the nine months ended September 30, 2026 as compared to the corresponding period in 2025 primarily due to a lower effective interest rate and lower outstanding principal across the comparable periods.

Previous wording

Income tax expense was consistent between the six months ended June 30, 2026 and the corresponding period in 2025. Pre-tax book income in certain international subsidiaries decreased for the six months ended June 30, 2026, partially offset by increased U.S. state taxes and withholding taxes.

Current wording

Income tax expense decreased by $0.5 million in the nine months ended September 30, 2026 as compared to the corresponding period in 2025 due to pre-tax book income in certain international subsidiaries decreasing for the nine months ended September 30, 2026, partially offset by increased U.S. state taxes and withholding taxes.

Previous wording

Our non-GAAP financial performance measures include the following: non-GAAP subscriptions cost of revenue, non-GAAP professional services cost of revenue, non-GAAP total cost of revenue, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP total operating expense, non-GAAP operating (loss) income, non-GAAP non-operating (expense) income, non-GAAP income tax expense (benefit), non-GAAP net (loss) income, and non-GAAP net (loss) income per share, basic and diluted. These non-GAAP financial performance measures exclude the effect of stock-based compensation expense, unrealized foreign exchange rate gains and losses, certain non-ordinary litigation-related expenses consisting of legal and other professional fees associated with the Pegasystems cases (net of insurance reimbursements), or Litigation Expense, amortization of the judgment preservation insurance policy, or JPI Amortization, and lease impairments and lease-related charges associated with actions taken to reduce the footprint of our leased office spaces, or Lease Impairment and Lease-Related Charges. While some of these items may be recurring in nature and should not be disregarded in the evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods as these items can vary significantly from period to period depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses in the future, we believe removing these items for purposes of calculating our non-GAAP financial measures provides investors with a more focused presentation of our ongoing operating performance.

Current wording

Our non-GAAP financial performance measures include the following: non-GAAP subscriptions cost of revenue, non-GAAP professional services cost of revenue, non-GAAP total cost of revenue, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP total operating expense, non-GAAP operating income, non-GAAP non-operating expense (income), non-GAAP income tax expense, non-GAAP net (loss) income, and non-GAAP net (loss) income per share, basic and diluted. These non-GAAP financial performance measures exclude the effect of stock-based compensation expense, unrealized foreign exchange rate gains and losses and write off of deferred debt issuance costs, or Other Adjustments, certain non-ordinary litigation-related expenses consisting of legal and other professional fees associated with the Pegasystems cases (net of insurance reimbursements), or Litigation Expense, amortization of the judgment preservation insurance policy, or JPI Amortization, and lease impairments and lease-related charges associated with actions taken to reduce the footprint of our leased office spaces, or Lease Impairment and Lease-Related Charges. While some of these items may be recurring in nature and should not be disregarded in the evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods as these items can vary significantly from period to period depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses in the future, we believe removing these items for purposes of calculating our non-GAAP financial measures provides investors with a more focused presentation of our ongoing operating performance.

Previous wording

We also discuss adjusted EBITDA, a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our business. We define adjusted EBITDA as net loss before (1) other expense (income), net, (2) interest expense, (3) income tax expense, (4) depreciation expense and amortization of intangible assets, (5) stock-based compensation expense, (6) Litigation Expense, (7) JPI Amortization, and (8) Lease Impairment and Lease-Related Charges. The most directly comparable GAAP financial measure to adjusted EBITDA is net loss. Users should consider the limitations of using adjusted EBITDA, including the fact this measure does not provide a complete depiction of our operating performance. Adjusted EBITDA is not intended to purport to be an alternative to net loss as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

Current wording

We also discuss adjusted EBITDA, a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our business. We define adjusted EBITDA as net income (loss) before (1) other expense (income), net, (2) interest expense, (3) income tax expense, (4) depreciation expense and amortization of intangible assets, (5) stock-based compensation expense, (6) Litigation Expense, (7) JPI Amortization, and (8) Lease Impairment and Lease-Related Charges. The most directly comparable GAAP financial measure to adjusted EBITDA is net income (loss). Users should consider the limitations of using adjusted EBITDA, including the fact this measure does not provide a complete depiction of our operating performance. Adjusted EBITDA is not intended to purport to be an alternative to net income (loss) as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

Previous wording

(c)Per share amounts do not foot due to rounding.

Current wording

(d)Per share amounts do not foot due to rounding.

Previous wording

(a)Accounts for the impact of 0.5 million shares of dilutive securities.

Current wording

(c)Accounts for the impact of 0.5 million shares of dilutive securities.

Previous wording

The following table reconciles GAAP net loss to adjusted EBITDA for the three and six months ended June 30, 2026 and 2025 (in thousands):

Current wording

The following table reconciles GAAP net income (loss) to adjusted EBITDA for the three and nine months ended September 30, 2026 and 2025 (in thousands):

Previous wording

We believe our existing cash and cash equivalents and short-term investments and marketable securities, together with any positive cash flows from operations and available borrowings under our revolving credit facility, will be sufficient to support working capital and capital expenditure requirements for at least the next twelve months.

Current wording

We believe our existing cash and cash equivalents and short-term investments and marketable securities, together with any positive cash flows from operations and available borrowings under our revolving credit facility, will be sufficient to support working capital and capital expenditure requirements for at least the next 12 months.

Previous wording

On August 5, 2026, we entered into a new Senior Secured Credit Agreement by and among the Company, Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as administrative agent and collateral agent for the lenders party thereto (the “New Credit Agreement”), providing for aggregate commitments of $300.0 million, consisting of a $240.0 million revolving credit facility and a $60.0 million term loan facility. The proceeds from the new facility, which matures on August 5, 2031, were used to refinance the Company’s existing indebtedness and will provide ongoing liquidity for working capital requirements, general corporate purposes, and other strategic initiatives. In connection with the closing of the New Credit Agreement, we reduced our cash balance by $36.6 million to reduce our indebtedness. As of August 5, 2026, we had used borrowing capacity of $140.0 million under our $240.0 million revolving credit facility and had $60.0 million outstanding on the term loan facility.

Current wording

On August 5, 2026, we entered into a new five-year Senior Secured Credit Facilities Credit Agreement with Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as administrative agent and collateral agent for the lenders party thereto (the “Credit Agreement”) in an aggregate principal commitment of $300.0 million, comprising a $60.0 million term loan facility and a $240.0 million revolving credit facility, which includes a $50.0 million letter of credit sub-facility and a $25.0 million swingline sub-facility. The Credit Agreement matures on August 5, 2031 and replaces our prior debt facility that was in place as of June 30, 2026. The proceeds from the new facility were used to refinance the Company’s existing indebtedness and will provide ongoing liquidity for working capital requirements, general corporate purposes, and other strategic initiatives. In connection with the refinancing, we reduced our cash balance by $36.6 million to lower our indebtedness. As of September 30, 2026, we had used borrowing capacity of $140.0 million under our $240.0 million revolving credit facility and had $60.0 million outstanding on the term loan facility.

Previous wording

Our current principal uses of cash are funding operations and other working capital requirements. Historically, we have also utilized cash to pay for the acquisition of businesses that were complementary to ours, and we may pursue similar opportunities in the future. Over the past several years, revenue has increased significantly from year to year and, as a result, cash flows from customer collections have also grown. However, as we continue to invest in growing our business, operating expenses have also increased.

Current wording

Our current principal uses of cash are funding operations, stock repurchases, and other working capital requirements. Historically, we have also utilized cash to pay for the acquisition of businesses that were complementary to ours, and we may pursue similar opportunities in the future. Over the past several years, revenue has increased significantly from year to year and, as a result, cash flows from customer collections have also grown. However, as we continue to invest in growing our business, operating expenses have also increased.

Previous wording

Furthermore, we have a non-cancellable cloud hosting arrangement with AWS that contains provisions for minimum purchase commitments. Specifically, purchase commitments under the agreement total $220.0 million over five years. The agreement, which was originated in July 2021 and amended in October 2024, currently contains minimum annual spending requirements of $44.0 million from November 2024 to October 2029. Spending under this agreement for the three and six months ended June 30, 2026 totaled $17.2 million and $33.4 million, respectively. Spending under this agreement for the three and six months ended June 30, 2025 totaled $12.9 million and $23.3 million, respectively. We expect to meet our minimum annual spending requirement during the term of the arrangement.

Current wording

Furthermore, we have a non-cancellable cloud hosting arrangement with AWS that contains provisions for minimum purchase commitments. Specifically, purchase commitments under the agreement total $220.0 million over five years. The agreement, which originated in July 2021 and was amended in October 2024, currently contains minimum annual spending requirements of $44.0 million from November 2024 to October 2029. Spending under this agreement for the three and nine months ended September 30, 2026 totaled $18.8 million and $52.2 million, respectively. Spending under this agreement for the three and nine months ended September 30, 2025 totaled $14.3 million and $37.6 million, respectively. We expect to meet our minimum annual spending requirement during the term of the arrangement.

Previous wording

Net cash provided by operating activities was $60.9 million for the six months ended June 30, 2026 as compared to $43.0 million of net cash provided by operating activities for the six months ended June 30, 2025. The increase in net cash provided by operating activities was primarily driven by increased cash collections stemming from strong contract bookings in the fourth quarter of 2025 and throughout the first six months of 2026, as well as our continuing cost management activities.

Current wording

Net cash provided by operating activities was $45.5 million for the nine months ended September 30, 2026 as compared to $61.7 million of net cash provided by operating activities for the nine months ended September 30, 2025. The $16.2 million decrease in net cash provided by operating activities was primarily driven by an increase in operating expenses due to higher legal fees associated with the Pegasystems litigation and increased personnel-related costs to support headcount growth.

Previous wording

Net cash provided by investing activities was $1.7 million for the six months ended June 30, 2026 as compared to $33.1 million in net cash used by investing activities for the six months ended June 30, 2025. This change was primarily driven by a $21.1 million increase in proceeds from the maturity of investments coupled with a $14.4 million decrease in purchases of short-term investments.

Current wording

Net cash provided by investing activities was $2.3 million for the nine months ended September 30, 2026 as compared to $27.5 million in net cash used by investing activities for the nine months ended September 30, 2025. This change was primarily driven by a $20.0 million increase in proceeds from the maturity of investments coupled with a $14.4 million decrease in purchases of short-term investments, partially offset by a $4.6 million increase in capital expenditures.

Previous wording

Net cash used by financing activities was $76.3 million for the six months ended June 30, 2026 as compared to $19.0 million of net cash used by financing activities for the six months ended June 30, 2025. The increase in net cash used by financing activities was primarily due to a $55.7 million increase in repurchases of common stock and a $1.9 million increase in payments for employee taxes related to the net share settlement of equity awards during the six months ended June 30, 2026.

Current wording

Net cash used by financing activities was $134.7 million for the nine months ended September 30, 2026 as compared to $30.1 million of net cash used by financing activities for the nine months ended September 30, 2025. The increase in net cash used by financing activities was primarily due to a $63.0 million increase in common stock repurchases, $38.2 million of payments to refinance and reduce outstanding debt, and a $4.0 million increase in payments for employee withholding taxes related to the net share settlement of equity awards during the nine months ended September 30, 2026.