Upland Software, Inc.
For the period ended Sep 30, 2026. Filed Nov 4, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 4, 2026
UPLD$3.97+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-14.
0001505155-26-000070
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-04.
0001505155-26-000079
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 105 current paragraphs.
62 unchanged; 36 reworded; 6 added; 3 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Other
Current report
On July 31, 2026, the Company received a notification letter from the Nasdaq Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the Company no longer meets Nasdaq’s $15 million minimum market value of publicly held shares requirement under Nasdaq Listing Rule 5450(b)(2&3)(C) (the “MVPHS Requirement”) based on Nasdaq’s review of the market value of the Company’s publicly held shares for the previous 30 consecutive business days. The Nasdaq deficiency letter is a notice of deficiency, not delisting, and does not currently affect the listing or trading of the Company’s common stock on the Nasdaq Global Market. The Company’s common stock will continue to trade on the Nasdaq Global Market under the symbol “UPLD” at this time.
Current report
The Company has 180 days, or until January 27, 2027, to regain compliance with the MVPHS Requirement (the “Compliance Date”). If, at any time before the Compliance Date, the Company’s market value of publicly held shares closes at $15 million or more for a minimum of ten consecutive business days, but generally no more than 20 consecutive business days, Nasdaq will provide written notification to the Company that it has regained compliance with the MVPHS Requirement. If the Company does not regain compliance with the MVPHS Requirement by the Compliance Date, Nasdaq will provide written notification to the Company that the Company’s common stock will be subject to delisting. At that time, the Company may appeal the delisting determination to a Nasdaq Hearings Panel (the “Panel”). However, there can be no assurance that, if the Company receives a delisting notice and appeals the delisting determination to the Panel, such appeal would be successful.
Current report
The Company intends to actively monitor the market value of its publicly held shares and to consider plans for regaining compliance with the MVPHS Requirement. While the Company plans to review all available options, there can be no assurance that it will be able to regain compliance with the applicable rules before the Compliance Date, any additional compliance period, or at all.
Current report
Total revenue was $47.5 million in the three months ended September 30, 2026, compared to $50.5 million in the three months ended September 30, 2025, a decrease of $3.0 million, or 6%. This decrease is primarily due to declines in subscription and support revenue of $1.8 million and professional services revenue of $0.6 million primarily reflecting customer attrition in certain core products. The remaining $0.6 million reflects the planned wind-down of Sunset Assets of $0.4 million and divested product lines of $0.2 million consistent with our strategy to focus on our core portfolio.
Current report
Cash provided by operating activities was $13.7 million for the nine months ended September 30, 2026 compared to cash provided by operating activities of $18.5 million for the nine months ended September 30, 2025, a decrease of approximately $4.7 million. This decrease was primarily due to the non-recurring cash gains from the sales of our interest rate swaps in the nine months ended September 30, 2025 for $6.6 million. Other changes result from normal fluctuations in working capital and foreign currency exchange rates.
Removed paragraphs (3)
Previous report
Total revenue was $49.1 million in the three months ended June 30, 2026, compared to $53.4 million in the three months ended June 30, 2025, a decrease of $4.3 million, or 8%. This decrease is primarily due to the expected declines in revenue related to divested product lines of $3.8 million and Sunset Assets of $0.5 million. An increase in perpetual license revenue of $0.5 million related to core products was offset by a decrease in professional services revenue of $0.4 million in core products and a decrease in subscription and support revenue of $0.1 million related to core products.
Previous report
Expense from Income Taxes
Previous report
Cash provided by operating activities was $11.0 million for the six months ended June 30, 2026 compared to cash provided by operating activities of $11.6 million for the six months ended June 30, 2025, a decrease of approximately $0.6 million. This decrease was primarily due to a reduction in accrued compensation and other accrued expenses offset with reduced accounts receivable.
Reworded paragraphs (36)
Previous wording
On June 3, 2026, we filed a Certificate of Amendment to our charter with the Secretary of State of the State of Delaware, which effected a 1-for-10 reverse stock split of our issued and outstanding common stock (the "Reverse Stock Split"). As a result of the Reverse Stock Split, every ten shares of our issued and outstanding common stock were automatically combined into one share of common stock, without any change in par value per share, which remained $0.0001 per share. The Reverse Stock Split did not alter any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split resulted in fractional shares. No fractional shares were issued in connection with the Reverse Stock Split, and stockholders who would otherwise have been entitled to receive a fractional share received a cash payment in lieu thereof. All outstanding stock options, restricted stock units, and other equity-based awards, as well as the number of shares available for issuance under our 2024 Omnibus Incentive Plan, as amended, were proportionately adjusted in accordance with their respective terms.
Current wording
On June 3, 2026, we filed a Certificate of Amendment to our Amended and Restated Charter with the Secretary of State of the State of Delaware, which effected a 1-for-10 reverse stock split of our issued and outstanding common stock (the "Reverse Stock Split"). As a result of the Reverse Stock Split, every ten shares of our issued and outstanding common stock were automatically combined into one share of common stock, without any change in par value per share, which remained $0.0001 per share. The Reverse Stock Split did not alter any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split resulted in fractional shares. No fractional shares were issued in connection with the Reverse Stock Split, and stockholders who would otherwise have been entitled to receive a fractional share received a cash payment in lieu thereof. All outstanding stock options, restricted stock units, and other equity-based awards, as well as the number of shares available for issuance under our 2024 Omnibus Incentive Plan, as amended, were proportionately adjusted in accordance with their respective terms.
Previous wording
For the three-month period ended June 30, 2026, our Core Organic Growth Rate was negative 0.39%.
Current wording
For the three-month period ended September 30, 2026, our Core Organic Growth Rate was negative 3.86%.
Previous wording
We monitor our Adjusted EBITDA to help us evaluate the effectiveness and efficiency of our operations. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss), calculated in accordance with GAAP, adjusted for depreciation and amortization expense, net interest expense, loss on debt extinguishment, net other expense (income), benefit from (provision for) income taxes, stock-based compensation expense, acquisition and divestiture related expense, purchase accounting deferred revenue discount, gains and losses on divestitures of businesses, and impairment charges.
Current wording
We monitor our Adjusted EBITDA to help us evaluate the effectiveness and efficiency of our operations. Adjusted EBITDA is a non-GAAP financial measure. We define Adjusted EBITDA as net loss, calculated in accordance with GAAP, adjusted for depreciation and amortization expense, net interest expense, loss on debt extinguishment, net other expense (income), benefit from (provision for) income taxes, stock-based compensation expense, non-recurring litigation costs, acquisition and divestiture related expense, purchase accounting deferred revenue discount, gains and losses on divestitures of businesses, and impairment charges.
Previous wording
The following table represents a reconciliation of net loss from continuing operations, the most comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated.
Current wording
The following table represents a reconciliation of net loss, the most comparable GAAP measure, to Adjusted EBITDA for each of the periods indicated.
Previous wording
The following table set forth our results of operations for the specified periods, as well as our results of operations for the specified periods as a percentage of revenue. The period-to-period comparisons of results of operations are not necessarily indicative of results for future periods.
Current wording
The following table sets forth our results of operations for the specified periods, as well as our results of operations for the specified periods as a percentage of revenue. The period-to-period comparisons of results of operations are not necessarily indicative of results for future periods.
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
See Note 12. Divestitures regarding product lines divested in the three and six months ended June 30, 2025.
Current wording
See Note 12. Divestitures regarding product lines divested in the nine months ended September 30, 2025.
Previous wording
Total revenue was $97.8 million in the six months ended June 30, 2026, compared to $117.0 million in the six months ended June 30, 2025, a decrease of $19.2 million, or 16%. This decrease is primarily due to the expected declines in revenue related to divested product lines of $17.8 million and related to Sunset Assets of $0.9 million. The remaining decrease results from declines in professional services revenue of $0.7 million related to core products offset by an increase in perpetual license revenue of $0.2 million from core products.
Current wording
Total revenue was $145.4 million in the nine months ended September 30, 2026, compared to $167.6 million in the nine months ended September 30, 2025, a decrease of $22.2 million, or 13%. Approximately 87% of the decrease, $19.4 million, reflects the 2025 divestitures of $18.0 million and planned wind-down of Sunset Assets of $1.4 million consistent with our strategy to focus on higher-margin, higher-growth product lines. The remaining decrease results from declines in professional services revenue of $1.2 million and subscription and support revenue of $1.8 million related to core products offset by an increase in perpetual license revenue of $0.2 million from core products.
Previous wording
Cost of subscription and support revenue was $10.9 million in the three months ended June 30, 2026, compared to $12.4 million in the three months ended June 30, 2025, a decrease of $1.5 million, or 12%. The decrease related to divested product lines was $1.5 million attributable to infrastructure costs, variable telecom carrier costs, personnel costs and non-cash amortization of divested intangibles. The decrease related to Sunset Assets was $0.2 million, primarily attributable to personnel-related costs. A decrease of $0.3 million in non-cash amortization of intangibles in our core product lines was offset by a $0.5 million increase in infrastructure costs.
Current wording
Cost of subscription and support revenue was $10.7 million in the three months ended September 30, 2026, compared to $10.8 million in the three months ended September 30, 2025, a decrease of $0.1 million, or 1%. The decrease related to divested product lines was $0.1 million attributable to infrastructure costs and personnel costs. The decrease related to Sunset Assets was $0.1 million, primarily attributable to personnel-related costs and non-cash amortization of intangibles. A decrease of $0.4 million in non-cash amortization of intangibles in our core product lines was offset by a $0.4 million increase in infrastructure costs and a $0.1 million increase in variable telecom carrier costs.
Previous wording
Cost of professional services and other revenue was $0.8 million in the three months ended June 30, 2026, compared to $1.0 million in the three months ended June 30, 2025, a decrease of $0.2 million, or 22%. The decrease in cost of professional services and other revenue was comprised of a decrease of $0.2 million in our core product lines due to lower professional services revenue in our core products.
Current wording
Cost of professional services and other revenue was $0.8 million in the three months ended September 30, 2026, compared to $0.9 million in the three months ended September 30, 2025, a decrease of $0.1 million, or 10%. The decrease in cost of professional services and other revenue was comprised of a decrease of $0.1 million in our core product lines due to lower professional services revenue in our core products.
Previous wording
Cost of subscription and support revenue was $22.0 million in the six months ended June 30, 2026, compared to $29.4 million in the six months ended June 30, 2025, a decrease of $7.4 million, or 25%. The decrease related to divested product lines was $7.3 million attributable to infrastructure costs, variable telecom carrier costs, personnel costs and non-cash amortization of divested intangibles. The decrease related to Sunset Assets was $0.3 million partially offset by $0.2 million increase in our core product lines due to $0.8 million in infrastructure costs, $0.1 million in professional fees, and $0.1 million in variable telecommunications costs offset by a $0.7 million in non-cash amortization of intangibles and $0.1 million infrastructure costs.
Current wording
Cost of subscription and support revenue was $32.7 million in the nine months ended September 30, 2026, compared to $40.1 million in the nine months ended September 30, 2025, a decrease of $7.4 million, or 19%. The decrease related to divested product lines was $7.4 million attributable to infrastructure costs, variable telecom carrier costs, personnel costs and non-cash amortization of divested intangibles. The decrease related to Sunset Assets was $0.4 million. These decreases were offset by increases in our core product lines of $1.2 million in infrastructure costs, $0.1 million increase in professional fees, and $0.1 million increase in variable telecommunications costs which were offset by a $1.0 million decline in non-cash amortization of intangibles.
Previous wording
Cost of professional services and other revenue was $1.6 million in the six months ended June 30, 2026, compared to $2.1 million in the six months ended June 30, 2025, a decrease of $0.5 million, or 24%. The decrease in cost of professional services and other revenue was comprised of a decrease in personnel-related expenses of $0.4 million in our core product lines and $0.1 million in our divested product lines.
Current wording
Cost of professional services and other revenue was $2.4 million in the nine months ended September 30, 2026, compared to $3.0 million in the nine months ended September 30, 2025, a decrease of $0.6 million, or 20%. The decrease in cost of professional services and other revenue was comprised of a decrease in personnel-related expenses of $0.5 million in our core product lines and $0.1 million in our divested product lines.
Previous wording
Sales and marketing expense was $9.5 million in the three months ended June 30, 2026, compared to $10.8 million in the three months ended June 30, 2025, a decrease of $1.3 million, or 12%. The decrease related to core product lines was $0.7 million in personnel-related costs. The remaining decrease was due to declines in personnel-related costs of $0.5 million related to divested product lines and $0.1 million related to our Sunset Assets.
Current wording
Sales and marketing expense was $9.0 million in the three months ended September 30, 2026, compared to $9.7 million in the three months ended September 30, 2025, a decrease of $0.7 million, or 8%. The decrease related to core product lines was $0.6 million in personnel-related costs reflecting reorganization around our core portfolio. The remaining decrease was due to declines in personnel-related costs of $0.1 million related to our Sunset Assets.
Previous wording
Sales and marketing expense was $19.0 million in the six months ended June 30, 2026, compared to $24.5 million in the six months ended June 30, 2025, a decrease of $5.5 million, or 23%. The decrease related to divested product lines was $3.4 million comprised of $3.2 million in personnel-related costs and $0.2 million in marketing spend and other sales costs. The remaining decrease was primarily related to a decrease of $2.0 million in costs related to our core product lines comprised of $1.8 million in personnel-related costs and $0.2 million infrastructure costs, as well as a $0.1 million decrease in personnel-related costs associated with Sunset Assets.
Current wording
Sales and marketing expense was $28.0 million in the nine months ended September 30, 2026, compared to $34.2 million in the nine months ended September 30, 2025, a decrease of $6.3 million, or 18%. The decrease related to divested product lines was $3.5 million comprised of $3.3 million in personnel-related costs and $0.2 million in marketing spend and other sales costs. The remaining decrease was primarily related to a decrease of $2.6 million in costs related to our core product lines comprised of $2.5 million in personnel-related costs and $0.2 million infrastructure costs offset by $0.1 million in marketing costs, as well as a $0.2 million decrease in personnel-related costs associated with Sunset Assets.
Previous wording
Research and development expense was $7.8 million in the three months ended June 30, 2026, compared to $9.8 million in the three months ended June 30, 2025, a decrease of $2.0 million, or 21%. The decrease in research and development expense was primarily attributable to a $1.5 million decrease in personnel-related and contractor costs in our core product lines and a $0.5 million decrease in personnel-related costs in our divested product lines. The decrease in research and development expense in our core product lines reflects the 2025 termination of our out-sourced research and development contract and the continued use of our India Center of Excellence.
Current wording
Research and development expense was $7.8 million in the three months ended September 30, 2026, compared to $7.9 million in the three months ended September 30, 2025, a decrease of $0.1 million, or 1%. The decrease in research and development expense was primarily attributable to a $0.1 million decrease in personnel-related costs in our core product lines.
Previous wording
Research and development expense was $15.8 million in the six months ended June 30, 2026, compared to $21.3 million in the six months ended June 30, 2025 a decrease of $5.5 million, or 26%. The decrease in research and development expense was primarily attributable to a $2.9 million decrease in personnel-related costs in our core product lines and a $2.5 million decrease in personnel-related costs and $0.1 million decrease in infrastructure costs in our divested product lines. These decreases reflect the termination of our out-sourced research and development contract and the continued use of our efficient India Center of Excellence.
Current wording
Research and development expense was $23.6 million in the nine months ended September 30, 2026, compared to $29.2 million in the nine months ended September 30, 2025, a decrease of $5.6 million, or 19%. The decrease in research and development expense was primarily attributable to a $2.9 million decrease in personnel-related costs in our core product lines reflecting the termination of our out-sourced research and development contract and a $2.6 million decrease in personnel-related costs and $0.1 million decrease in infrastructure costs in our divested product lines.
Previous wording
General and administrative expense was $9.1 million in the three months ended June 30, 2026, compared to $10.2 million in the three months ended June 30, 2025, a decrease of $1.1 million, or 11%. This decrease was primarily due to a decrease of $1.9 million in personnel-related costs related to our core product lines due to decreased headcount including a decrease of $1.9 million in non-cash stock-based compensation expense and $0.1 million in third party software and equipment costs. This decrease was partially offset by the effects of $0.6 million in TSA fees related to divestitures received in 2025 with no such fees received in 2026, an increase of $0.1 million in board of director fees, an increase of $0.1 million of other taxes and an increase of $0.1 million of public company costs.
Current wording
General and administrative expense was $8.4 million in the three months ended September 30, 2026, compared to $8.8 million in the three months ended September 30, 2025, a decrease of $0.4 million, or 4%. This decrease was primarily due to a decrease of $1.4 million in non-cash stock-based compensation expense due to lower grant-date fair values of equity awards and a decrease of $0.1 million of public company costs related to the Reverse Split offset by an increase of $0.3 million in other personnel-related costs, and an increase of $0.5 million in professional fees, including $0.2 million in non-recurring litigation costs, an increase of $0.2 million in board of director fees, and an increase of $0.1 million in software costs reflecting our investment in AI-enabled tools to support operational efficiency.
Previous wording
General and administrative expense was $17.6 million in the six months ended June 30, 2026, compared to $21.8 million in the six months ended June 30, 2025, a decrease of $4.2 million, or 19%. This decrease was due to declines of $4.4 million in personnel-related costs, $0.3 million in infrastructure costs, and $0.2 million in professional fees related to our core products, and a $0.3 million decrease related to our divested product lines. These decreases were offset by the effects of $0.7 million in TSA fees related to divestitures received in 2025 with no such fees received in 2026, an increase of $0.2 million in other taxes and public company costs, and an increase of $0.1 million in board of director fees.
Current wording
General and administrative expense was $26.0 million in the nine months ended September 30, 2026, compared to $30.6 million in the nine months ended September 30, 2025, a decrease of $4.6 million, or 15%. This decrease was due to declines of $5.6 million in personnel-related costs due to decreased headcount, $0.2 million in infrastructure costs, and a $0.3 million decrease related to our divested product lines. These decreases were offset by the effects of $0.9 million in TSA fees related to divestitures received in 2025 with no such fees received in 2026, an increase of $0.3 million in board of director fees, and an increase of $0.3 million in legal fees.
Previous wording
Depreciation and amortization expense was $5.6 million in the three months ended June 30, 2026, compared to $6.9 million in the three months ended June 30, 2025, a decrease of $1.3 million, or 19%. The decrease was primarily driven by lower amortization expense of $0.7 million related to intangible assets associated with Sunset Assets, $0.5 million related to intangible assets associated with our divested product lines, and $0.1 million decline related to intangible assets associated with our core product line.
Current wording
Depreciation and amortization expense was $5.5 million in the three months ended September 30, 2026, compared to $6.4 million in the three months ended September 30, 2025, a decrease of $0.9 million, or 13%. The decrease was primarily driven by lower amortization expense of $0.7 million related to intangible assets associated with Sunset Assets and $0.2 million decline related to intangible assets and depreciation associated with our core product line.
Previous wording
Depreciation and amortization expense was $11.2 million in the six months ended June 30, 2026, compared to $14.9 million in the six months ended June 30, 2025, a decrease of $3.7 million, or 25%. The decrease was primarily driven by lower amortization expense of $2.2 million related to intangible assets associated with the divested product lines and $1.4 million related to our Sunset Assets. The remaining decrease of $0.1 million related to depreciation of our core product lines.
Current wording
Depreciation and amortization expense was $16.7 million in the nine months ended September 30, 2026, compared to $21.2 million in the nine months ended September 30, 2025, a decrease of $4.5 million, or 21%. The decrease was primarily driven by lower amortization expense of $2.2 million related to intangible assets associated with the divested product lines and $2.0 million related to our Sunset Assets. The remaining decrease of $0.3 million related to intangible assets and depreciation of our core product lines.
Previous wording
Divestiture-related expenses were nil in the three months ended June 30, 2026, compared to $6.9 million in the three months ended June 30, 2025. In conjunction with the divestitures completed in the first half of 2025, we incurred $5.2 million in fees related to a legacy vendor contract for out-sourced research and development that was terminated in 2025. Also, the divestiture-related expenses incurred in the three months ended June 30, 2025 consisted of $0.9 million in professional services fees and $0.8 million in severance costs related to the divestitures completed in the three months ended June 30, 2025. No divestiture-related expenses were incurred in the three months ended June 30, 2026 as no divestitures have been executed in 2026.
Current wording
Divestiture-related expenses were nil in the three months ended September 30, 2026, compared to $0.8 million in the three months ended September 30, 2025. In conjunction with the divestitures completed in the first half of 2025, we incurred $0.3 million in fees related to a legacy vendor contract for out-sourced research and development that was terminated in 2025. Also, the divestiture-related expenses incurred in the three months ended September 30, 2025 consisted of $0.2 million in professional services fees and $0.3 million in outsourced data center costs related to the divestitures completed in the three months ended September 30, 2025. No divestiture-related expenses were incurred in the three months ended September 30, 2026 as no divestitures have been executed in 2026.
Previous wording
Divestiture-related expenses were nominal in the six months ended June 30, 2026, compared to $8.6 million in the six months ended June 30, 2025. In conjunction with the divestitures completed in the first half of 2025, we incurred $5.2 million in fees related to a legacy vendor contract for out-sourced research and development that was terminated in 2025. Also, the divestiture-related expenses incurred in the six months ended June 30, 2025 consisted of $2.6 million in professional services fees and $0.8 million in severance costs related to the divestitures completed in the six months ended June 30, 2025. Limited divestiture-related expenses were incurred in the six months ended June 30, 2026 as final expenses were incurred related to the 2025 divestitures and no divestitures have been executed in 2026.
Current wording
Divestiture-related expenses were nominal in the nine months ended September 30, 2026, compared to $9.4 million in the nine months ended September 30, 2025. In conjunction with the divestitures completed in the first half of 2025, we incurred $5.5 million in fees related to a legacy vendor contract for out-sourced research and development that was terminated in 2025. Also, the divestiture-related expenses incurred in the nine months ended September 30, 2025 consisted of $2.6 million in professional services fees, $0.8 million in severance costs, and $0.5 million in outsourced data center costs related to the divestitures completed in the nine months ended September 30, 2025. Limited divestiture-related expenses were incurred in the nine months ended September 30, 2026 as final expenses were incurred related to the 2025 divestitures and no divestitures have been executed in 2026.
Previous wording
Goodwill impairment is recognized on a non-recurring basis when the carrying value (or GAAP basis book value) of our Company (which is our only reporting unit) exceeds the estimated fair value of our Company as determined by reference to a number of factors and assumptions. We assess goodwill for impairment annually on October 1st, or more frequently when an event occurs which could cause the carrying value of our Company to exceed the estimated fair value of our Company. As a result of a decline in our stock price and other indicators of impairment during the three months ended June 30, 2026, we performed a goodwill impairment evaluation which resulted in a goodwill impairment charge of $35.2 million in the three months ended June 30, 2026. No goodwill impairment was identified in the three or six months ended June 30, 2025. We will continue to evaluate goodwill for impairment and future impairments of goodwill could occur if we experience significant stock price declines or other indicators of impairment.
Current wording
Goodwill impairment is recognized on a non-recurring basis when the carrying value (or GAAP basis book value) of our Company (which is our only reporting unit) exceeds the estimated fair value of our Company as determined by reference to a number of factors and assumptions. We assess goodwill for impairment annually on October 1st, or more frequently when an event occurs which could cause the carrying value of our Company to exceed the estimated fair value of our Company. During the three months ended June 30, 2026, we identified indicators of impairment. We performed a goodwill impairment evaluation which resulted in a goodwill impairment charge of $35.2 million in the nine months ended September 30, 2026. During the three months ended June 30, 2025, we identified a triggering event related to certain identifiable intangible assets related to Sunset Assets and performed a valuation of those long-lived assets. As a result of the valuation, we recorded $2.5 million of impairment expense related to certain identifiable intangible assets associated with Sunset Assets.
Previous wording
We periodically review the estimated useful lives of our identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value or revised useful life. During the three months ended June 30, 2026, there were no impairments of identifiable intangible assets. During the three months ended June 30, 2025, we identified a triggering event related to certain identifiable intangible assets related to Sunset Assets and performed a valuation of those long-lived assets. As a result of the valuation, we recorded $2.5 million of impairment expense related to certain identifiable intangible assets associated with Sunset Assets.
Current wording
We periodically review the estimated useful lives of our identifiable intangible assets, taking into consideration any events or circumstances that might result in either a diminished fair value or revised useful life. During the three months ended September 30, 2026 and September 30, 2025, there were no impairments of identifiable intangible assets. We will continue to evaluate goodwill for impairment and future impairments of goodwill could occur if we experience significant stock price declines or other indicators of impairment.
Previous wording
Interest expense, net was $4.5 million in the three months ended June 30, 2026 compared to $4.1 million in the three months ended June 30, 2025, an increase of $0.4 million in net interest expense. This was primarily due to the effects of our interest rate derivatives which reduced interest expense by $1.1 million in the three months ended June 30, 2026 and by $1.5 million in the three months ended June 30, 2025, resulting in a $0.4 million year over year increase in interest expense recognized. In addition, interest income for the three months ended June 30, 2026 increased $0.1 million from interest income in the three months ended June 30, 2025 due to interest income recognized on seller note in the three months ended June 30, 2026 that did not exist in the three months ended June 30, 2025. This was offset by an increase of $0.3 million in interest expense on our outstanding debt, driven by higher effective interest rates during the quarter, partially offset by lower debt balance in 2026, as well as a $0.2 million reduction in interest expense related to the amortization of deferred financing costs.
Current wording
Interest expense, net was $5.1 million in the three months ended September 30, 2026 compared to $4.2 million in the three months ended September 30, 2025, an increase of $0.9 million in net interest expense. This was due in part to the amortization effects of our interest rate derivatives which resulted in a $1.3 million year over year increase in non-cash interest expense recognized. The effects of the interest rate derivatives was offset by a decrease of $0.4 million in cash interest expense on our outstanding debt, driven by a lower debt balance in 2026 and offset by higher effective interest rates during the quarter.
Previous wording
Interest expense, net was $9.0 million in the six months ended June 30, 2026, compared to $6.6 million in the six months ended June 30, 2025, an increase in net interest expense of $2.4 million, or 37%. The increase in interest expense is primarily attributable to the effects of our interest rate derivatives which reduced interest expense, net by $2.4 million in the six months ended June 30, 2026 and decreased interest expense by $4.9 million in the six months ended June 30, 2025, an increase in net interest expense of $2.5 million. This was offset by an increase of $0.3 million in interest expense, driven by higher all-in interest rate on our outstanding debt, partially offset by lower debt balance in 2026, as well as a $0.4 million reduction in interest expense relate to the amortization of deferred financing costs.
Current wording
Interest expense, net was $14.1 million in the nine months ended September 30, 2026, compared to $10.8 million in the nine months ended September 30, 2025, an increase in net interest expense of $3.3 million, or 30%. The increase in interest expense is primarily attributable to the effects of our interest rate derivatives which reduced interest expense, net by $3.0 million in the nine months ended September 30, 2026 and decreased interest expense by $6.8 million in the nine months ended September 30, 2025, an increase in net non-cash interest expense of $3.8 million. This was offset by a $0.5 million reduction in interest expense related to the amortization of deferred financing costs.
Previous wording
Loss on divestitures of businesses was nil for the six months ended June 30, 2026 as compared to $23.9 million in the six months ended June 30, 2025. During the six months ended June 30, 2025., we divested multiple product lines in order to focus on our higher margin and higher growth potential product lines. No such divestitures occurred in the six months ended June 30, 2026.
Current wording
Loss on divestitures of businesses was nil for the nine months ended September 30, 2026 as compared to $24.4 million in the nine months ended September 30, 2025. During the nine months ended September 30, 2025, we divested multiple product lines in order to focus on our higher margin and higher growth potential product lines. No such divestitures occurred in the nine months ended September 30, 2026.
Previous wording
Other expense, net was $1.1 million in the six months ended June 30, 2026, compared to other expense, net of $1.8 million in the six months ended June 30, 2025. Other income (expense), net recognized in the six months ended June 30, 2026 and June 30, 2025 related primarily to foreign currency exchange fluctuations.
Current wording
Other expense, net was $0.9 million in the nine months ended September 30, 2026, compared to other expense, net of $1.6 million in the nine months ended September 30, 2025. Other income (expense), net recognized in the nine months ended September 30, 2026 and September 30, 2025 related primarily to foreign currency exchange fluctuations.
Previous wording
The provision for income taxes was $0.8 million in the three months ended June 30, 2026, compared to a benefit from income taxes of $0.2 million in the three months ended June 30, 2025, resulting in an additional expense from income taxes of $1.0 million. The provision for income taxes for the three months ended June 30, 2026 relates primarily to income tax from non-U.S. operations. The benefit from income taxes in the three months ended June 30, 2025 relates primarily to the deferred tax benefit from the business divestitures in the first quarter of 2025 which was partially offset by the income tax from non-U.S. and U.S. operations.
Current wording
The provision for income taxes was $0.9 million in the three months ended September 30, 2026, compared to a benefit from income taxes of $0.3 million in the three months ended September 30, 2025, resulting in an additional expense from income taxes of $1.2 million. The provision for income taxes for the three months ended September 30, 2026 relates primarily to income tax from non-U.S. operations. The benefit from income taxes in the three months ended September 30, 2025 relates primarily to the deferred tax benefit from the business divestitures in the third quarter and the impact of U.S. tax legislation, the One Big Beautiful Bill Act, passed in July 2025. This tax benefit is partially offset by the income tax from non-U.S. and U.S. operations.
Previous wording
The provision for income taxes was $1.8 million in the six months ended June 30, 2026, compared to a benefit from for income taxes of $1.5 million in the six months ended June 30, 2025, an increase of expense of $3.3 million. This increase was primarily due to the deferred tax benefit from the business divestitures in the six months ended June 30, 2025 with no divestitures occurring in 2026.
Current wording
The provision for income taxes was $2.7 million in the nine months ended September 30, 2026, compared to a benefit from income taxes of $1.8 million in the nine months ended September 30, 2025, an increase of expense of $4.5 million. This increase was primarily due to the deferred tax benefit from the business divestitures in the nine months ended September 30, 2025 and the impact of U.S. tax legislation, the One Big Beautiful Bill Act passed in July 2025.
Previous wording
As of June 30, 2026, we had $31.7 million of cash, cash equivalents and restricted cash and $229.6 million of debt outstanding under our Credit Agreement. As of December 31, 2025, we had $30.0 million of cash, cash equivalents and restricted cash and $238.5 million of borrowings outstanding under our previous senior secured credit facility. The $1.7 million increase in cash, cash equivalents and restricted cash from December 31, 2025 to June 30, 2026 was primarily due to $11.0 million in cash inflows from operations netted with $8.9 million in debt repayments made in the six months ended June 30, 2026. Other uses of cash included $0.2 million in purchases of leasehold improvements and equipment and $0.2 million negative effect of exchange rates during the six months ended June 30, 2026.
Current wording
As of September 30, 2026, we had $29.5 million of cash, cash equivalents and restricted cash and $225.4 million of debt outstanding under our Credit Agreement. As of December 31, 2025, we had $30.0 million of cash, cash equivalents and restricted cash and $238.5 million of borrowings outstanding under our Term Loan. During the nine months ended September 30, 2026, we generated $13.7 million in cash from operations which funded $13.1 million in debt repayments.
Previous wording
Our cash and cash equivalents held by our foreign subsidiaries was $9.3 million as of June 30, 2026 and $10.0 million as of December 31, 2025. Our intent is to either permanently reinvest these funds outside the U.S. or use these funds to repay certain long-term intercompany loans. We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.
Current wording
Our cash and cash equivalents held by our foreign subsidiaries was $16.0 million as of September 30, 2026 and $10.0 million as of December 31, 2025. Our intent is to either permanently reinvest these funds outside the U.S. or use these funds to repay certain long-term intercompany loans. We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries.
Previous wording
Cash provided by investing activities was $0.2 million for the six months ended June 30, 2026 compared to cash provided by investing activities of $8.0 million for the six months ended June 30, 2025, a decrease of $7.8 million. Cash activity consisted of $0.4 million in collections on the note receivable related to divestitures and $0.2 million in purchases of leasehold improvements and equipment for the six months ended June 30, 2026 compared to cash proceeds from divestitures of businesses of $9.1 million and $1.1 million in purchases of leasehold improvements and equipment for the six months ended June 30, 2025.
Current wording
Cash provided by investing activities was $0.3 million for the nine months ended September 30, 2026 compared to cash provided by investing activities of $8.0 million for the nine months ended September 30, 2025, a decrease of $7.7 million. Cash activity consisted of $0.6 million in collections on the note receivable related to divestitures and $0.3 million in purchases of leasehold improvements and equipment for the nine months ended September 30, 2026 compared to cash proceeds from divestitures of businesses of $9.1 million, $1.3 million in purchases of leasehold improvements and equipment and $0.2 million in collections on the note receivable related to divestitures for the nine months ended September 30, 2025.
Previous wording
Cash used in financing activities was $9.3 million for the six months ended June 30, 2026 compared to $36.3 million for the six months ended June 30, 2025, a decrease of $27.0 million of cash used primarily due to $8.9 million in payments on our outstanding debt in the six months ended June 30, 2026 as compared to $35.6 million in payments made in the six months ended June 30, 2025.
Current wording
Cash used in financing activities was $13.9 million for the nine months ended September 30, 2026 compared to $61.6 million for the nine months ended September 30, 2025, a decrease of $47.7 million of cash used reflecting our continued deleveraging of the Company with $13.1 million in payments on our outstanding debt in the nine months ended September 30, 2026 as compared to a net cash outflow of $59.1 million in net debt payments made in the nine months ended September 30, 2025.
Previous wording
We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of August 14, 2026, the date of issuance of this Quarterly Report on Form 10-Q.
Current wording
We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of November 4, 2026, the date of issuance of this Quarterly Report on Form 10-Q. Estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.
Previous wording
Our unaudited interim financial statements and other financial information for the three and six months ended June 30, 2026, as presented herein and in “Item 1. Financial Statements” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”). Please refer to our Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.
Current wording
Our unaudited interim financial statements and other financial information for the three and nine months ended September 30, 2026, as presented herein and in “Item 1. Financial Statements” to this Quarterly Report on Form 10-Q, reflect no material changes in our critical accounting policies and estimates as set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”). Please refer to our Annual Report for a detailed description of our critical accounting policies that involve significant management judgment.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Benefit from (Provision for) Income Taxes
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Estimates may change as new events occur and additional information is obtained. Actual results could differ materially from these estimates under different assumptions or conditions.