Bandwidth Inc.

Previous wording

A global communications transformation is underway, and we believe Bandwidth is at the center. Our mission is to develop and deliver the power to communicate. We enable innovative organizations—from startup app developers to the world’s largest enterprises—to engage their end-users and deliver exceptional experiences everywhere people live, learn, work and play. Backed by the Bandwidth Communications Cloud, a global owned-and-operated network spanning more than 65 countries reaching over 90 percent of gross domestic product, innovative enterprises use Bandwidth’s Application Programming Interfaces (“APIs”) to easily embed voice, messaging and emergency services capabilities into software and applications. Bandwidth was the first cloud communications provider to offer a robust selection of APIs built on our own cloud platform. Our award-winning support teams help businesses around the world solve complex communications challenges every day.

Current wording

A global communications transformation is underway, and we believe Bandwidth is at the center. Our mission is to develop and deliver the power to communicate. We enable innovative organizations—from startup app developers to the world’s largest enterprises—to engage their end-users and deliver exceptional experiences everywhere people live, learn, work, and play. Backed by the Bandwidth Communications Cloud, our global owned-and-operated network spanning more than 65 countries reaching over 90 percent of global gross domestic product (“GDP”), innovative enterprises use Bandwidth’s Application Programming Interfaces (“APIs”) to easily embed voice, messaging, emergency services, and artificial intelligence (“AI”) capabilities into software and applications. Bandwidth was the first cloud communications provider to offer a robust selection of APIs built on our own cloud platform. Our award-winning support teams help businesses around the world transform their communications every day.

Previous wording

Bandwidth’s business benefits from multiple global megatrends, including enterprise migration to the cloud, adoption of Contact Centers as a Service (“CCaaS”) platforms, the need to be able to work from anywhere, reinvention of customer experience, growth in messaging applications to engage directly with consumers, and application of artificial intelligence (“AI”) technologies to cloud communications use cases. We believe these megatrends, which have created sizable total addressable markets, are secular, long-lasting and still early in the adoption curve.

Current wording

Bandwidth’s business continues to benefit from the application of AI technologies to cloud communications use cases, the enterprise migration to the cloud, adoption of Contact Center as a Service platforms, the need to be able to work from anywhere, the reinvention of customer experience, and the growth in messaging applications to engage directly with consumers. We believe these market trends are secular, long-lasting, and still early in the adoption curve.

Previous wording

With the combination of our software APIs, our global Communications Cloud and our broad range of experience with global regulatory frameworks, we believe Bandwidth is one of the best-positioned providers in our space to deliver mission-critical communications for global enterprises. In fact, Bandwidth already powers all the 2024 Gartner Ⓡ Magic Quadrant Leaders in the key cloud communications categories of Unified Communications as a Service (“UCaaS”) and CCaaS.

Current wording

With the combination of our software APIs, our global Communications Cloud, our AI orchestration capabilities, and our broad range of experience with global regulatory frameworks, we believe Bandwidth is one of the best-positioned providers in our space to deliver mission-critical communications for global enterprises. In fact, Bandwidth already powers all the 2025 Gartner Ⓡ Magic Quadrant Leaders in the key cloud communications categories of Unified Communications as a Service (“UCaaS”) and Contact Center as a Service (“CCaaS”), along with leading hyperscalers and Software as a Service (“SaaS”) platforms.

Previous wording

Our long-term vision is to continue strengthening this position as the key enabling platform for communications transformation. We will seek to do this in three ways: (1) cross-sell and up-sell our existing customers as they benefit from our global footprint and powerful APIs to automate and scale cloud communications; (2) focus on direct-to-enterprise growth to serve Global 2000 enterprises that directly leverage Bandwidth services to accelerate their digital transformations, and (3) aim to be the preferred provider for Software as a Service (“SaaS”) platforms that use conversational voice and messaging to create digital engagements that enhance the customer experience. These three strategies are the foundation of the durable business we seek to build.

Current wording

We aim to be the key enabling platform for communications transformation in the AI era. We will seek to do this in three ways: (1) cross-sell and up-sell our existing customers as they benefit from our global footprint, powerful APIs, and AI orchestration capabilities to automate and scale cloud communications; (2) focus on direct-to-enterprise growth to serve Global 2000 enterprises that directly leverage Bandwidth services to accelerate their digital transformations; and (3) be the preferred provider for enterprises and SaaS platforms that use conversational voice and messaging to create digital engagements that enhance the customer experience. These three strategies are the foundation of the durable business we seek to build.

Previous wording

For the three months ended September 30, 2025 and 2024, total revenue was $192 million and $194 million, respectively, representing a decrease of 1% between periods. For the three months ended September 30, 2025 and 2024, net loss was$1 millionand net income was less than $1 million, respectively. For the nine months ended September 30, 2025 and 2024, total revenue was$546 million and$539 million, respectively, representing an increase of 1% between periods. For the nine months ended September 30, 2025 and 2024, net loss was$10 million and$5 million, respectively.

Current wording

For the three months ended March 31, 2026 and 2025, total revenue was $209 million and $174 million, respectively, representing an increase of 20% between periods. For the three months ended March 31, 2026 and 2025, net income was$4 million and net loss was $4 million, respectively.

Previous wording

Repurchase of 2026 Convertible Notes

Current wording

Repurchase of 2026 and 2028 Convertible Notes

Previous wording

During February 2025, we entered into the 2025 Repurchases to repurchase approximately $27 million aggregate principal amount of the 2026 Convertible Notes for an aggregate cash price of approximately $26 million. The 2025 Repurchases closed on February 24, 2025. Following the 2025 Repurchases and previous repurchases of the 2026 Convertible Notes, approximately $8 million aggregate principal amount of the 2026 Convertible Notes remains outstanding.

Current wording

During March 2026, we entered into separate, privately negotiated repurchase agreements with a limited number of holders of the 2028 Convertible Notes (the “2026 Repurchases”) to repurchase approximately $100 million aggregate principal amount of the 2028 Convertible Notes for an aggregate cash price of approximately $92 million. The 2026 Repurchases closed on March 4, 2026. Following the 2026 Repurchases, approximately $150 million aggregate principal amount of the 2028 Convertible Notes remains outstanding.

Previous wording

The difference between the consideration used for the 2025 Repurchases and the carrying value of the 2026 Convertible Notes resulted in a gain of $1 million recorded within net gain on extinguishment of debt on our condensed consolidated statements of operations for the nine months ended September 30, 2025.

Current wording

The difference between the consideration used for the 2026 Repurchases and the carrying value of the 2028 Convertible Notes resulted in a gain of $7 million recorded within net gain on extinguishment of debt on our consolidated statements of operations for the three months ended March 31, 2026.

Previous wording

We believe net retention rate is useful in evaluating our business. For the three months ended September 30, 2025 and 2024, the net retention rate was 105% and 117%, respectively. The decline in our net retention rate was driven by lower political messaging revenue following the U.S. presidential election in November 2024.

Current wording

We believe net retention rate is useful in evaluating our business. For the three months ended March 31, 2026 and 2025, our net retention rate was 102% and 116%, respectively. The decrease in our net retention rate was driven by less political messaging over the previous four quarters relative to the prior year.

Previous wording

Cloud communications revenue is derived from (i) reoccurring sources such as per minute voice usage and voice calling, per text message usage and other usage services and fees, and (ii) monthly recurring charges arising from phone number services, 911-enabled phone number services, messaging services and other services. Messaging surcharge revenue is derived from fees imposed by certain carriers within the messaging ecosystem, which are subsequently invoiced and passed through to customers.

Current wording

Cloud communications revenue is derived from (i) reoccurring sources such as per minute voice usage and voice calling, per text message usage and other usage services and fees, and (ii) monthly recurring charges arising from phone number services, 911-enabled phone number services, messaging services, software services and other services. Messaging surcharge revenue is derived from fees imposed by certain carriers within the messaging ecosystem, which are subsequently invoiced and passed through to customers.

Previous wording

For the three months ended September 30, 2025 and 2024, we generated 74% and 75%, respectively, of our cloud communications revenue from reoccurring sources. For the nine months ended September 30, 2025 and 2024, we generated 73% and 74%, respectively, of our cloud communications revenue from reoccurring sources. The large bulk of our remaining cloud communications revenue is generated from recurring monthly charges.

Current wording

For the three months ended March 31, 2026 and 2025, we generated 74% and 73%, respectively, of our cloud communications revenue from reoccurring sources. The large bulk of our remaining cloud communications revenue is generated from recurring monthly charges.

Previous wording

We recognize accounts receivable at the time the customer is invoiced. Additionally, we record a receivable for unbilled revenue if services have been delivered and are billable in subsequent periods. Unbilled revenue made up 58% and 55% of outstanding accounts receivable, net of allowances, as of September 30, 2025 and 2024, respectively.

Current wording

We recognize accounts receivable at the time the customer is invoiced. Additionally, we record a receivable for unbilled revenue if services have been delivered and are billable in subsequent periods. Unbilled revenue made up 61% and 57%, of outstanding accounts receivable, net of allowance, as of March 31, 2026 and 2025, respectively.

Previous wording

For the three months ended September 30, 2025, our cloud communications revenue increased by$3 million, or 2%, compared with the same period in 2024. Within cloud communications revenue, our Global Voice Plans revenue grew by 7% and was driven by higher voice traffic on our network. Our Programmable Messaging revenue decreased by 20% largely from lower political messaging activity following the U.S. presidential election in November 2024. Our Enterprise Voice revenue grew by 22%, reflecting strong momentum as our Maestro platform’s flexibility and vendor-agnostic UCaaS/CCaaS strategy continues to attract new customers.

Current wording

For the three months ended March 31, 2026, our cloud communications revenue increased by$17 million, or 13%, compared with the same period in 2025. Within cloud communications revenue, our Global Voice Plans revenue grew by 12% and was driven by higher voice traffic on our network. Our Programmable Messaging revenue increased by 15% largely from higher civic engagement related commercial messaging during the quarter. Our Enterprise Voice revenue grew by 14%, reflecting strong momentum as customers increasingly choose Maestro for its flexibility and vendor-agnostic UCaaS/CCaaS model.

Previous wording

For the three months ended September 30, 2025, our messaging surcharges revenue decreased by$5 million, or 9%, compared with the same period in 2024. This decline was primarily driven by lower political messaging activity following the U.S. presidential election in November 2024.

Current wording

For the three months ended March 31, 2026, our messaging surcharges revenue increased by$18 million, or 44%, compared with the same period in 2025. This increase was primarily driven by higher civic engagement related commercial messaging and higher surcharge fees imposed by certain carriers within the messaging ecosystem.

Previous wording

For the three months ended September 30, 2025, our average annual customer revenue was $0.2 million, which increased less than $0.1 million compared with the same period in 2024, as a result of our strategy to attract and retain larger customers who provide revenue scale and enhanced profitability.

Current wording

For the three months ended March 31, 2026, our average annual customer revenue was $0.2 million, which increased by 7% compared with the same period in 2025, as a result of our strategy to attract and retain larger customers who provide revenue scale and enhanced profitability.

Previous wording

For the three months ended September 30, 2025, total cost of revenue decreased by$3 million, compared with the same period in 2024, driven by lower messaging cost of revenue of$5 million from less political messaging following the 2024 U.S. presidential election. Thecombination of changes in total revenue and total cost of revenue yielded an increase in total gross profit of$1 million, or 1% from the same period in 2024, driven byongoing efficiencies and improved unit economics as we successfully scale larger volumes of voice traffic on our network.

Current wording

For the three months ended March 31, 2026, total cost of revenue increased by$28 million, compared with the same period in 2025, driven by higher pass-through messaging surcharges of$18 million primarily from carrier surcharge rate increases. Thecombination of changes in total revenue and total cost of revenue yielded an increase in total gross profit of$6 million, or 9% from the same period in 2025, driven byongoing efficiencies and improved unit economics as we successfully scale larger volumes of voice traffic on our network.

Previous wording

For the three months ended September 30, 2025, our total gross margin percentage of 38% increased by less than 1%, compared with the same period in 2024, driven by lower pass-through messaging surcharges within the total revenue mix.

Current wording

For the three months ended March 31, 2026, our total gross margin percentage of 37% decreased by 4%, compared with the same period in 2025, driven by higher pass-through messaging surcharges within the total revenue mix.

Previous wording

As a percentage of revenue, total operating expenses for thethree months ended September 30, 2025 and 2024 were 40% and 38%, respectively.

Current wording

As a percentage of revenue, total operating expenses for the three months ended March 31, 2026 and 2025 were 40% and 44%, respectively.

Previous wording

For the three months ended September 30, 2025, research and development expenses increased by$3 million, or 9%, compared with the same period in 2024. Our continued investment in evolving our network infrastructure was the key driver behind this increase.

Current wording

For the three months ended March 31, 2026, research and development expenses increased by$8 million, or 26%, compared with the same period in 2025. Our continued investment in evolving our network infrastructure was the key driver behind this increase.

Previous wording

For the three months ended September 30, 2025, sales and marketing expenses decreased by $2 million, or 6%, compared with the same period in 2024, primarily due to lower headcount expenses from our resource optimization efforts.

Current wording

For the three months ended March 31, 2026, sales and marketing expenses decreased by $2 million, or 7%, compared with the same period in 2025, primarily due to lower headcount expenses from lower average headcount during the period.

Previous wording

For the nine months ended September 30, 2025, general and administrative expenses increased by$4 million, or 8%, compared with the same period in 2024, driven by higher headcount expenses in connection with ongoing operational support needs.

Current wording

For the three months ended March 31, 2026, general and administrative expenses increased by less than $1 million, or 2%, compared with the same period in 2025.

Previous wording

For the three months ended September 30, 2025, interest expense, net of interest income decreased by$1 million compared with the same period in 2024, primarily from a decrease in interest expense resulting from the 2025 Repurchases in February 2025.

Current wording

For the three months ended March 31, 2026, interest expense, net of interest income increased by less than $1 million compared with the same period in 2025, primarily from an increase in interest expense resulting from borrowing on our Credit Facility.

Previous wording

For the three months ended September 30, 2025, we recognized an income tax benefit of$2 million, an increase of$2 million compared with the same period in 2024. The resulting effective tax rate for the three months ended September 30, 2025 was 64.8%, compared with 228.7% in 2024. The increase in income tax benefit was primarily due to a$2 million benefit recognized as a result of favorable tax law changes enacted under OBBBA.

Current wording

For the three months ended March 31, 2026, we recognized an income tax benefit of$2 million, an increase of $1 million compared with the same period in 2025. The resulting effective tax rate for the three months ended March 31, 2026 was (58.9)%, compared with 1.8% for the three months ended March 31,2025. The increase in income tax benefit was primarily due to favorable U.S. federal and state tax law changes as a result of the OBBBA.

Previous wording

For the three months ended September 30, 2025, the effective tax rate of 64.8% differed from the federal statutory rate of 21% in the U.S. primarily due to the valuation allowance recorded against our U.S. federal and state net deferred tax assets.

Current wording

For the three months ended March 31, 2026, the effective tax rate of (58.9)% differed from the federal statutory rate of 21% in the U.S. primarily due to the valuation allowance recorded against our U.S. federal and state net deferred tax assets, as well as differences in statutory income tax rates across foreign jurisdictions.

Previous wording

Our liquidity is provided by our cash flow from operations less expenditures for capital equipment, and supplemented by financing activities from time to time. Our cash flow from operations is driven by monthly payments from customers for communication services consumed during the period. Our primary uses of cash include operating costs, such as fees paid to other network service providers, network operations costs, personnel costs and facility expenses, as well as the purchase of property, plant and equipment to support growth on our communications platform. As of September 30, 2025, we had cash and cash equivalents of $73 million and marketable securities of $7 million.

Current wording

Our liquidity is provided by our cash flow from operations less expenditures for capital equipment, and supplemented by financing activities from time to time. Our cash flow from operations is driven by monthly payments from customers for communication services consumed during the period. Our primary uses of cash include operating costs, such as fees paid to other network service providers, network operations costs, personnel costs and facility expenses, as well as the purchase of property, plant and equipment to support growth on our communications platform and repurchases of shares of our Class A common stock under our share repurchase program. As of March 31, 2026, we had cash and cash equivalents of $47 million and marketable securities of $3 million.

Previous wording

In August 2023, we entered into a credit agreement (as amended to date, the “Credit Agreement”), among the Company, as borrower, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, swingline lender and letters of credit issuer, which provides for a $150 million revolving credit facility (the “Credit Facility”). As of September 30, 2025, we had no outstanding borrowings under the Credit Facility and the available borrowing capacity was $150 million. See Note 8, “Debt,” to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information regarding the Credit Agreement, including a summary of the current terms of the Credit Facility.

Current wording

In August 2023, we entered into a credit agreement (as amended to date, the “Credit Agreement”), among the Company, as borrower, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent, swingline lender and letters of credit issuer, which provides for a $150 million revolving credit facility (the “Credit Facility”). As of March 31, 2026, we had $51 million outstanding borrowings under the Credit Facility and the available borrowing capacity was $99 million. See Note 7, “Debt,” to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information regarding the Credit Agreement, including a summary of the current terms of the Credit Facility.

Previous wording

During February 2025, we repurchased approximately$27 million aggregate principal amount of the 2026 Convertible Notes for an aggregate cash price of approximately$26 million. Following the 2025 Repurchases and previous repurchases, approximately$8 million aggregate principal amount of the 2026 Convertible Notes remains outstanding. We may, at any time and from time to time, seek to retire or purchase our 2026 Convertible Notes or 2028 Convertible Notes through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Current wording

During March 2026, we repaid the remaining$8 million aggregate principal amount of the 2026 Convertible Notes. Additionally, during March 2026, we entered into the 2026 Repurchases to repurchase$100 million aggregate principal amount for an aggregate cash price of$92 million. The 2026 Repurchases closed on March 4, 2026. Following the 2026 Repurchases, approximately $150 million aggregate principal amount of the 2028 Convertible Notes remains outstanding. We may, at any time and from time to time, seek to retire or purchase our 2028 Convertible Notes through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Previous wording

Our principal future commitments consist of (i) an aggregate of $258 million in Convertible Notes, (ii) $456 million infuture minimum rent payments for ourcurrent office space, including a $450 millionnon-cancelable lease for our new corporate headquarters, which commenced in the third quarter of 2023 and which will continue for an initial twenty (20) year term, and (iii) $19 million in non-cancelable purchase obligations and future minimum payments under contracts to various service providers. For additional information on these future contractual obligations, see Note 8,“Debt,” and Note 12,“Commitments and Contingencies,” to thecondensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Current wording

Our principal future commitments consist of (i) an aggregate of $150 million in Convertible Notes, (ii) $447 million infuture minimum rent payments for ourcurrent office space, including a $440 millionnon-cancelable lease for our corporate headquarters, which commenced in the third quarter of 2023 and which will continue for an initial twenty (20) year term, and (iii) $20 million in non-cancelable purchase obligations and future minimum payments under contracts to various service providers. For additional information on these future contractual obligations, see Note 7,“Debt,” and Note 11,“Commitments and Contingencies,” to thecondensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

For the nine months ended September 30, 2025, net cash provided by operating activities was$51 million and was generated by our aggregate results of $70 million during the period, net of (1) non-cash items comprising depreciation and amortization, non-cash reduction to the right-of-use asset, amortization of debt discount and issuance costs, stock-based compensation, deferred taxes and other, net gain on extinguishment of debt and (2) a$19 million cash outflow from lower operating liabilities and higher operating assets. Within operating liabilities, the net cash used as a result of lower accrued expenses and other liabilities of $13 million during the nine months ended September 30, 2025, was primarily driven by the timing of payments. Within operating assets, the net cash used as a result of higher accounts receivable of$6 million during thenine months ended September 30, 2025, was driven by higher unbilled receivables balances arising from higher usage amounts in the last month of the quarter ended September 30, 2025.

Current wording

For the three months ended March 31, 2026, net cash provided by operating activities was$9 million and was generated by our aggregate results of $26 million during the period, net of (1) non-cash items comprising depreciation and amortization, non-cash reduction to the right-of-use asset, amortization of debt discount and issuance costs, stock-based compensation, deferred taxes and other, net gain on extinguishment of debt and (2) a$18 million cash outflow, primarily from lower operating liabilities and higher operating assets. Within operating liabilities, net cash used of $4 million was driven by $9 million of outflows from decreases in accounts payable, partially offset by $7 million of cash generated by increases in accrued expenses and other liabilities. The increase in accrued expenses and other liabilities was largely driven by the timing of payments and correlated with higher network usage. Within operating assets, the net cash used of $14 million was primarily driven by higher unbilled receivables balances of $10 million from higher usage amounts in the last month of the quarter ended March 31, 2026 and changes in prepaid expenses and other current assets of$4 million.

Previous wording

For the nine months ended September 30, 2025 net cash used in investing activities was $30 million. Cash used in investing activities was primarily driven by (1) cash used for the purchase of property, plant and equipment of$17 million and cash used for capitalized software development costs of$8 million, driven by investments in the communications platform, and (2) cash used for purchases of marketable securities, net of maturities, of$5 million from diversifying into higher yielding investments.

Current wording

For the three months ended March 31, 2026, net cash used in investing activities was $4 million. Cash used in investing activities was primarily driven by cash used for the purchase of property, plant and equipment of$7 million and cash used for capitalized software development costs of$2 million, driven by investments in the communications platform, partially offset by cash generated from proceeds of marketable securities, net of purchases, of$5 million.

Previous wording

GAAP defines gross profit as revenue less cost of revenue. Cost of revenue includes all expenses associated with our various service offerings as more fully described under the caption “Key Components of Statements of Operations-Cost of Revenue and Gross Margin.” We define Non-GAAP gross profit as gross profit after adding back the following items:

Current wording

GAAP defines gross profit as revenue less cost of revenue. Cost of revenue includes all expenses associated with our various service offerings as more fully described under the caption “Key Components of Statements of Operations-Cost of Revenue and Gross Margin.”

Previous wording

(1) Calculated by dividing Non-GAAP gross profit by cloud communications revenue of $142 million and $411 million for the three and nine months ended September 30, 2025, respectively, and $139 million and $396 million for the three and nine months ended September 30, 2024, respectively.

Current wording

(1) Calculated by dividing Non-GAAP gross profit by cloud communications revenue of $150 million and $133 million for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

The following table shows a reconciliation of net (loss) income to non-GAAP net income and net (loss) income per share to non-GAAP net income per non-GAAP share for the periods presented:

Current wording

The following table shows a reconciliation of net income (loss) to non-GAAP net income and net income (loss) per share to non-GAAP net income per non-GAAP share for the periods presented:

Previous wording

(1)Non-recurring items not indicative of ongoing operations and other include (i) $1.2 million of foreign exchange charges primarily related to balance sheet revaluations during the three and nine months ended September 30, 2025, and less than $0.1 million and $0.2 million of losses on disposals of property, plant and equipment during the three and nine months ended September 30, 2025, respectively, (ii) $0.5 million of nonrecurring litigation expense and $0.1 million of losses on sale of business during the nine months ended September 30, 2025, and (iii) $1.0 million gain on the sale of an intangible asset during the three and nine months ended September 30, 2024, and less than $0.1 million and $0.2 million of losses on disposals of property, plant and equipment during the three and nine months ended September 30, 2024, respectively.

Current wording

(1)Non-recurring items not indicative of ongoing operations and other include (i) $(0.6) million of foreign exchange charges primarily related to balance sheet revaluations during the three months ended March 31, 2026, (ii) $0.2 million and less than $0.1 million of losses on disposals of property, plant and equipment during the three months ended March 31, 2026 and 2025, respectively, and (iii) $0.5 million of nonrecurring litigation expense during the three months ended March 31, 2025.

Previous wording

(2) The estimated tax-effect of adjustments is determined by recalculating the tax provision on a Non-GAAP basis. The Non-GAAP effective income tax rate was 17.2% and 15.5% for the nine months ended September 30, 2025 and 2024, respectively. For the nine months ended September 30, 2025, the Non-GAAP effective income tax rate differed from the federal statutory tax rate of 21% in the U.S. primarily due to the research and development tax credits generated in 2025. We analyze the Non-GAAP valuation allowance position on a quarterly basis. As of September 30, 2025, we have no valuation allowance against our deferred tax assets for Non-GAAP purposes.

Current wording

(2) The estimated tax-effect of adjustments is determined by recalculating the tax provision on a Non-GAAP basis. The Non-GAAP effective income tax rate was 20.6% and 19.4% for the three months ended March 31, 2026 and 2025, respectively. We analyze the Non-GAAP valuation allowance position on a quarterly basis. As of March 31, 2026, we have no valuation allowance against our deferred tax assets for Non-GAAP purposes.

Previous wording

The following table shows a reconciliation of net (loss) income to Adjusted EBITDA for the periods presented:

Current wording

The following table shows a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:

Previous wording

(1)Non-recurring items not indicative of ongoing operations and other include (i) $1.2 million of foreign exchange charges primarily related to balance sheet revaluations during the three and nine months ended September 30, 2025, and less than $0.1 million and $0.2 million of losses on disposals of property, plant and equipment during the three and nine months ended September 30, 2025, respectively, (ii) $0.5 million of nonrecurring litigation expense and $0.1 million of losses on sale of business during the nine months ended September 30, 2025, and (iii) $1.0 million gain on the sale of an intangible asset during the three and nine months ended September 30, 2024, and less than $0.1 million and $0.2 million of losses on disposals of property, plant and equipment during the three and nine months ended September 30, 2024, respectively.

Current wording

(1)Non-recurring items not indicative of ongoing operations and other include (i) $(0.6) million of foreign exchange charges primarily related to balance sheet revaluations during the three months ended March 31, 2026, (ii) $0.2 million and less than $0.1 million of losses on disposals of property, plant and equipment during the three months ended March 31, 2026 and 2025, respectively, and (iii) $0.5 million of nonrecurring litigation expense during the three months ended March 31, 2025.

Previous wording

There have been no material changes to our critical accounting policies and significant judgments and estimates as compared to the critical accounting policies and significant judgments and estimates disclosed in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 20, 2025 (the “Annual Report”).

Current wording

There have been no material changes to our critical accounting policies and significant judgments and estimates as compared to the critical accounting policies and significant judgments and estimates disclosed in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (“SEC”) on February 19, 2026.

Previous wording

See Note 2, “Summary of Significant Accounting Policies,” to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a summary of recently adopted accounting standards and recent accounting pronouncements not yet adopted, if applicable.

Current wording

See Note 1, “Description of Business and Summary of Significant Accounting Policies,” to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for a summary of recently adopted accounting standards and recent accounting pronouncements not yet adopted, if applicable.