Life360, Inc.

1. Nature of Business

Life360, Inc. (the “Company”) is a leading technology platform connecting millions of people throughout the world to the people, pets, and things they care about most. The Company has created a new category at the intersection of family, technology, and safety to help keep families connected and safe. The Company’s core offering, the Life360 mobile application, includes features like communications, driving safety, digital safety, and location sharing. Beyond the everyday, Life360 also provides much-needed protection and saves lives, which is crucial for families in emergency situations such as natural disasters, vehicle collisions, physical property theft, and digital identity theft. The Life360 mobile application operates under a “freemium” model where its core offering is available to members at no charge, with additional membership subscription options that are available but not required.

In addition to the Life360 mobile application, the Company also offers hardware tracking devices through the sale of Tile by Life360, Inc. (“Tile”) and Life360 Pet GPS products to keep members close to the people, pets, and things they care about most. The Company’s suite of product and service offerings, including the Life360 and Tile mobile applications, and related third-party services, is system and platform-agnostic, allowing its products and services to work seamlessly for its members, regardless of the devices they use.

The Company also generates advertising revenue through the placement of third-party advertisements on its platform and across third-party publisher networks through the Company’s advertising technology platform, and other revenue through partnerships and the sale of aggregated, non-personally identifiable data for data insight purposes.

2. Summary of Significant Accounting Policies

Included below are select significant accounting policies. Refer to Note 2, "Summary of Significant Accounting Policies" in the Company’s Annual Report for a full list of the Company’s significant accounting policies.

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the U.S. (“GAAP”) for interim periods and following the requirements of the SEC for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP can be condensed or omitted. All inter-company transactions and balances have been eliminated upon consolidation.

The condensed consolidated balance sheet as of December 31, 2025, included herein, was derived from the audited financial statements as of that date. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all normal recurring adjustments necessary to provide a fair presentation of the Company’s financial position, results of operations, stockholders’ equity, and cash flows for the interim periods presented. Operating results for these interim periods are not necessarily indicative of the Company’s future results of operations.

The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report.

In 2026, the Company revised its presentation of Advertising revenue and Cost of advertising revenue in the condensed consolidated statements of operations and comprehensive income. These amounts were previously included within Other revenue and Cost of other revenue, respectively. During the current period, the Company also revised its presentation of Investments in the condensed consolidated balance sheets, which were previously included within Prepaid expenses and other assets, noncurrent. These changes were made to provide more meaningful information to financial statement users. Comparative prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net income or total assets.

Revenue Recognition

There have been no significant changes to the Company’s revenue recognition policies as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2025. Revenue recognition disclosures have been updated in line with the presentation of Advertising revenue in the condensed consolidated statements of operations and comprehensive income.

Advertising Revenue

Advertising revenue is generated from advertisers, advertising agencies, and platform partners through managed advertising arrangements, programmatic and open marketplace channels, self-service advertising, and other advertising services. Advertisements are placed across both the Company’s own properties and third-party publisher networks. These offerings include audience targeting, advertising technology solutions, and related professional services, facilitated by the Company’s advertising technology platform.

Managed advertising arrangements are direct sales of advertising inventory to advertisers and agencies, where the Company provides campaign management and optimization services. Programmatic advertising refers to the automated buying and selling of advertising inventory through open marketplace and other programmatic channels, including auction-based bidding on advertising exchanges. This includes exchange-based transactions where advertising inventory is made available to all buyers through both the Company’s advertising platform and third-party advertising exchanges. Self-service advertising consists of advertising media spend, platform access fees, and other advertising services through the Company's advertising technology platform. Other advertising-related services include professional services and measurement and analytics solutions.

The Company’s advertising arrangements may include multiple promised services, which are evaluated to determine whether they represent distinct performance obligations, with revenue allocated to each distinct performance obligation based on its relative standalone selling price. Consideration is typically based on a per-impression or similar usage-based model, but may also include fixed fees or revenue-sharing arrangements. When arrangements involve third-party inventory or services, the Company evaluates whether it acts as the principal or agent in the transaction and reports revenue on a gross basis when it acts as the principal in the transaction, or on a net basis when it acts as an agent. Revenue from advertising arrangements, including variable consideration, is recognized in the period in which impressions are delivered or related services are performed.

Other Revenue

The Company’s other revenue consists of data and partnership revenue. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for additional detail regarding the components and revenue recognition for data revenue.

Partnership revenue includes lead generation offerings and agreements with third parties that provide access to anonymized data insights on the Company’s mobile platform. Under these agreements, the Company may earn a percentage of the revenue generated from data insights. Revenue is recorded on a gross basis if the Company acts as the principal in the transaction, or a net basis if the Company acts as the agent. Variable consideration from partnership arrangements is recognized in the period in which the related services are delivered.

Cost of Revenue

Cost of Advertising Revenue

Cost of advertising revenue includes cloud-based hosting costs supporting the Company’s advertising technology platform, amortization of acquired intangibles and internally developed software, third-party data and content licensing costs, personnel-related costs, and allocated overhead, such as facilities, including rent and utilities, and shared information technology costs. For advertising revenue recognized on a gross basis, cost of advertising revenue includes traffic acquisition costs, which represent amounts paid to third-party publishers for advertising placements and inventory access. Personnel-related expenses include salaries, bonuses, benefits, and stock-based compensation for advertising operations personnel.

Cost of Other Revenue

Cost of other revenue includes cloud-based hosting costs as well as costs of product operations functions and personnel-related costs associated with the Company’s data platforms.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses. Significant items subject to such estimates, judgments, and assumptions include:

•revenue recognition, including the determination of selling prices for distinct performance obligations sold in multiple performance obligation arrangements, the period over which revenue is recognized for certain arrangements, and estimated delivery dates for orders with title transfer upon delivery;

•allowance for credit losses and product returns;

•promotional and marketing allowances;

•inventory valuation;

•average useful customer life;

•valuation of stock-based awards, including market-based restricted stock units (“MRSUs”);

•achievement of performance-based restricted stock units (“PRSUs”);

•legal contingencies;

•impairment of long-lived assets and goodwill;

•valuation of non-cash consideration, contingent consideration, investments, convertible notes, and embedded derivatives;

•useful lives of long-lived assets; and

•income taxes including valuation allowances on deferred tax assets.

The Company bases its estimates and judgments on historical experience and on various assumptions that it believes are reasonable under the circumstances. Actual results could differ significantly from those estimates.

Recently Adopted Accounting Pronouncements

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU introduces a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. The updates in this ASU are effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods. The Company adopted this ASU on January 1, 2026 on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements or related disclosures.

Accounting Pronouncements Not Yet Adopted

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). This ASU provides requirements for the recognition, measurement, presentation, and disclosure for environmental credits and related environmental credit obligations for entities that generate, purchase, or receive environmental credits or have a regulatory compliance obligation that may be settled using environmental credits. The ASU is effective for annual periods beginning after December 15, 2027 and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270) Narrow-Scope Improvements. The ASU clarifies and reorganizes interim reporting guidance, including disclosure requirements related to events occurring since the end of the most recent annual reporting period, and improves the presentation and usability of interim financial statement disclosures. The ASU is effective for interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its interim financial reporting and does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. The ASU narrows the scope of derivative accounting by excluding certain non-exchange-traded contracts whose terms are based on the normal operations or activities of one of the parties, and clarifies that share-based noncash consideration received from a customer in a revenue contract should be accounted for under ASC 606 until the right to the consideration becomes unconditional. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within those annual periods, with early adoption permitted. The Company does not expect the adoption of this ASU to have a material impact on its financial position or results of operations.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU eliminates project stages and requires software cost capitalization to begin after management has authorized and committed to funding the software project and it is probable the project will be completed and used to perform the function intended. The ASU also requires additional property, plant and equipment disclosures for all capitalized software costs. The ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those years, with early adoption permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU is effective for the Company beginning in fiscal year 2027 and interim periods beginning in fiscal year 2028, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

Concentrations of Risk and Significant Customers

Major Customers

The Company’s customers primarily consist of individual consumers, who subscribe to the Company’s product offerings through its third-party platforms (each a “Channel Partner”), advertising customers, data and partnership revenue customers, and retail partners, who purchase hardware tracking devices from the Company and resell them directly to individual consumers. Any changes in customer preferences and trends or changes in terms of use of Channel Partners’ platforms could have an adverse impact on the Company’s results of operations and financial condition.

The Company derives its accounts receivable from revenue earned from customers located in the U.S. and internationally. Channel, advertising, and retail partners account for the majority of the Company’s revenue and accounts receivable for all periods presented.

The following tables set forth the information about Channel Partners that processed revenue transactions and advertising and retail partners who accounted for more than 10% of revenue or accounts receivable, respectively:

• Represents less than 10%

Supplier Concentration

The Company currently outsources the manufacturing of its hardware devices to a sole contract manufacturer. Although there are a limited number of manufacturers, management believes that other suppliers could provide similar manufacturing services on comparable terms.

Cash and Cash Equivalents

The Company considers all highly liquid investment securities with remaining maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include deposits, money market funds, and U.S. Treasury securities. Money market funds are valued using quoted market prices and therefore are classified within Level 1 of the fair value hierarchy.

Restricted Cash

The restricted cash, current balance of $1.0 million as of September 30, 2026, primarily relates to cash held in escrow to fund potential third-party fees. There wasno restricted cash, current balance as of December 31, 2025. The restricted cash, noncurrent balance of $1.6 million as of September 30, 2026 and December 31, 2025, primarily relates to cash deposits restricted under letters of credit issued on behalf of the Company in support of indebtedness to trade creditors incurred in the ordinary course of business.

Short-Term Investments

The Company classifies all marketable debt securities that have maturities at the time of purchase greater than three months as short-term investments. The appropriate classification is determined at the time of purchase and reevaluated at each balance sheet date. These securities have been classified as available-for-sale as they represent funds readily available for current operations, and the Company has the ability and intent to liquidate them at any time to meet its operating cash needs, if necessary. The Company’s available-for-sale securities are recorded at fair value each reporting period. The majority of the securities are valued using quoted prices of similar instruments and are thus classified within Level 2 of the fair value hierarchy. The Company reports the unrealized gain (loss) on available-for-sale securities, net of tax, as a component of stockholders’ equity, except for the changes in allowance for expected credit losses, which are recorded in other income (expense), net on the condensed consolidated statements of operations and comprehensive income. The Company records accrued interest on these securities within prepaid expenses and other current assets on the condensed consolidated balance sheets. Realized gains and losses on sales of available-for-sale securities are determined using the specific identification method and are recognized in other income (expense), net, in the period of sale, with the related unrealized gain or loss reclassified from accumulated other comprehensive income to earnings.

3. Segment and Geographic Revenue

The Company operates asone operating segment. Operating segments are defined as components of an entity for which separate financial information is regularly evaluated by the chief operating decision maker (“CODM”), which is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance. The Company’s CODM evaluates financial information and resources and assesses the performance of these resources on a consolidated basis. There is no expense or asset information that is supplemental to information disclosed within the condensed consolidated financial statements, that is regularly provided to the CODM. The allocation of resources and assessment of performance of the operating segment is based on consolidated net income and functional expenses as reported on our condensed consolidated statements of operations and comprehensive income. Because the Company operates asone operating segment, financial segment information, including expense and asset information, can be found in the condensed consolidated financial statements. All material long-lived assets are based in the U.S.

Revenue by geography is generally based on the address of the customer as defined in the contract with the customer. The following table sets forth revenue by geographic region for the periods presented (in thousands):

The Company’s revenues in the U.S. were $150.9 million, or 87%, of total revenue for the three months ended September 30, 2026 and $104.6 million, or 84%, of total revenue for the three months ended September 30, 2025. The Company’s revenues in the U.S. were $409.2 million, or 86%, of total revenue for the nine months ended September 30, 2026 and $291.6 million, or 85%, of total revenue for the nine months ended September 30, 2025.

4. Deferred Revenue

Deferred revenue consists primarily of payments received and accounts receivable recorded in advance of revenue recognition under the Company’s subscription service arrangements and is recognized as the revenue recognition criteria are met. The Company primarily invoices its customers for its subscription services arrangements in advance. Deferred revenue also includes balances related to future performance obligations for hardware, advertising, and other revenue. Amounts anticipated to be recognized within one year of the balance sheet date are recorded as deferred revenue, current and the remaining portion is recorded as deferred revenue, noncurrent on the condensed consolidated balance sheets.

During the three and nine months ended September 30, 2026, the Company recognized revenue of $6.3 million and $43.8 million, respectively, that was included in the deferred revenue balance at December 31, 2025. During the three and nine months ended September 30, 2025, the Company recognized revenue of $5.9 million and $37.5 million, respectively, that was included in the deferred revenue balance at December 31, 2024.

Remaining performance obligations represent the amount of contracted future revenue not yet recognized as the amounts relate to undelivered performance obligations, including both deferred revenue and non-cancellable contracted amounts that will be invoiced and recognized as revenue in future periods. As permitted in ASC 606, Revenue from Contracts with Customers, and specifically ASC 606-10-50-14(a), the Company has excluded from this amount variable consideration allocated entirely to wholly unsatisfied performance obligations. Revenue expected to be recognized in connection with remaining performance obligations was $205.1 million as of September 30, 2026, of which the Company expects 47% to be recognized over the next twelve months.

5. Short-Term Investments

Short-term investments consist of marketable debt securities, which are comprised of U.S. Treasury securities. The Company classifies its short-term investments as available-for-sale. Available-for-sale investments are carried at fair value, with unrealized gains and losses on available-for-sale securities, net of tax reported as a component of accumulated other comprehensive income in the condensed consolidated balance sheets. Unrealized gains and losses represent fair value adjustments due to changes in market interest rates and are realized only if the securities are sold prior to maturity. Realized gains and losses are included in net income. The Company does not intend to sell, nor expects to be required to sell, these securities before recovery of their amortized cost basis.

In 2026, the Company deployed surplus cash into a managed portfolio of U.S. Treasury securities and U.S. government money market funds. U.S. Treasury securities with original maturities greater than three months and up to twelve months at the date of purchase are classified as short-term investments. U.S. Treasury securities with original maturities of three months or less at the date of purchase and U.S. government money market funds are classified as cash equivalents.

As of September 30, 2026, the Company’s short-term investments consisted of the following (in thousands):

As of September 30, 2026, all short-term investments had contractual maturities of less than one year. The Company did not record an allowance for credit losses on its short-term investments during the three and nine months ended September 30, 2026.

The Company recognized $115.0 million and $131.9 million in proceeds from the sale or maturity of short-term investments during the three and nine months ended September 30, 2026, respectively. Realized gains or losses were immaterial during the three and nine months ended September 30, 2026.

Accrued interest income on short-term investments was $0.4 million as of September 30, 2026 and is included within prepaid expenses and other current assets on the condensed consolidated balance sheet.

6. Fair Value Measurements

The Company measures and reports certain assets and liabilities at fair value each reporting period using a fair value hierarchy that prioritizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company measures certain non-marketable equity securities and warrant investments at fair value on a nonrecurring basis in accordance with ASC 321, Investments - Equity Securities. Instruments are remeasured to fair value when observable price changes in orderly transactions for an identical or a similar investment of the same issuer occur.

The three levels of inputs that may be used to measure fair value are as follows:

Level 1 – Observable inputs, such as quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – Valuations based on unobservable inputs to the valuation methodology and including data about assumptions market participants would use in pricing the asset or liability based on the best information available under the circumstances.

The recorded carrying amounts of certain financial instruments, including cash and cash equivalents, prepaid expenses, accounts payable, and accounts receivable as of September 30, 2026 and December 31, 2025, approximate fair value due to their short-term maturities.

Recurring Fair Value Measurements

The Company measures and reports certain assets and liabilities at fair value on a recurring basis. The fair value of these assets and liabilities as of September 30, 2026 and December 31, 2025 are classified as follows (in thousands):

The change in fair value of the Level 3 instruments are as follows (in thousands):

Convertible Note Investment

In May 2025, the Company entered into a series of transactions with Aura Consolidated Group, Inc. (“Aura”) including (i) a 3-year advertising partnership and revenue sharing agreement intended to expand the Company’s advertising revenue and other revenue channels and subscription membership offerings, and (ii) a $25.0 million convertible note investment by the Company into Aura (“Convertible Note Investment”). The note bears zero interest and matures on May 12, 2030. The principal is due at maturity and includes both optional and mandatory conversion features, which may result in conversion into the issuer’s equity upon the occurrence of specific events, including financing events, change in control, or at maturity. The Company elected to apply the fair value option in accordance with ASC 825, Financial Instruments, to account for the hybrid instrument as a single financial instrument. As a result, the entire instrument is measured at fair value, with changes recognized within Gain on change in fair value of investments on the condensed consolidated statements of operations and comprehensive income. A loss from change in fair value of $0.4 million and $5.1 million was recognized for the three and nine months ended September 30, 2026, respectively. A gain from changes in fair value of $0.8 million and $1.2 million was recognized for the three and nine months ended September 30, 2025, respectively. The Convertible Note Investment is included within investments on the condensed consolidated balance sheet.

The Company classifies the Convertible Note Investment as Level 3 due to the absence of relevant observable inputs. The fair value of the Convertible Note Investment was determined using a scenario-based, probability-weighted option pricing model. Significant assumptions include the discount rate as well as the timing and probability weighting of each settlement scenario.

Nonrecurring Fair Value Measurements

The Company measures certain non-marketable equity securities and warrant investments at fair value on a nonrecurring basis in accordance with ASC 321, Investments - Equity Securities, which are included within Investments on the condensed consolidated balance sheet. Additionally, the Company measures and reports certain assets at fair value each reporting period. For additional information, refer to Note 8, "Balance Sheet Components". Instruments that are remeasured to fair value when observable price changes in orderly transactions for an identical or a similar investment of the same issuer occur are considered Level 2 investments.

Related Party Investment

The Company’s preferred stock investment in a related party (the “Related Party Investment”) is classified within Level 2 of the fair value hierarchy as the valuation is based on an observable price for identical or similar shares that are not readily determinable. In August 2026, the related party completed a new round of preferred stock financing, which resulted in an observable price change based on the issuance of identical or similar preferred stock. As a result, a $17.8 million gain was recorded within Gain on change in fair value of investments on the condensed consolidated statements of operations and comprehensive income for both the three and nine months ended September 30, 2026. No observable price changes were recorded during the three months ended September 30, 2025. A $0.9 million gain related to an observable price change was recorded during the nine months ended September 30, 2025. Cumulative gains recorded since the initial investment were $18.7 million as of September 30, 2026. The carrying value of the Related Party Investment was $23.7 million and $5.9 million as of September 30, 2026, and December 31, 2025, respectively, and is included within Investments on the condensed consolidated balance sheet.

Related Party Warrant

In 2024, the Company was granted a warrant to purchase shares of common stock in a related party (the “Related Party Warrant”). The grant was considered non-cash consideration in the transaction price of the technology exclusivity and revenue share agreement with the related party. The Company measured the Related Party Warrant at fair value on the date of issuance. In September 2026, the revenue share agreement and the terms of the Related Party Warrant were amended and accounted for as a contract modification. The incremental fair value of the warrant modification was approximately $10.4 million and was recorded as an increase to the Related Party Warrant and to deferred revenue, which is amortized to Other revenue over the term of the amended revenue share agreement. The Company classifies the Related Party Warrant as Level 3 due to the absence of relevant observable inputs.

The incremental fair value of the Related Party Warrant was determined as of the modification date using an option pricing model. Significant assumptions include expected volatility, the probability of vesting, and a discount for lack of marketability.

The carrying value of the Related Party Warrant was $14.3 million and $3.9 million as of September 30, 2026, and December 31, 2025, respectively, and is included within investments on the condensed consolidated balance sheet. Refer to Note 14, "Related-Party Transactions" for more information.

7. Business Combinations

Nativo, Inc.

On November 9, 2025, the Company entered into an Agreement and Plan of Reorganization with Nativo, Inc. (“Nativo”) to acquire 100% of the outstanding equity interests of Nativo. Nativo is an advertising technology company that provides advertising serving, content distribution, and measurement solutions to publishers and advertisers. The acquisition accelerates and expands the Company’s advertising capabilities and monetization opportunities by leveraging Nativo's advertising technology and established publisher and advertiser relationships. The transaction closed on January 2, 2026, and has been accounted for as a business combination in accordance with ASC 805 -Business Combinations. The total consideration was $104.0 million, consisting of approximately $75.9 million in cash and $28.0 million in common stock, equivalent to 435,599 shares. The $75.9 million in cash consideration includes a $16.3 million indemnification holdback amount which is payable 24 months from the transaction close date upon satisfaction of certain obligations. The Company incurred transaction-related expenses of $3.8 million during the year ended December 31, 2025. No transaction costs were incurred during the three months ended September 30, 2026, and an immaterial amount was incurred during the nine months ended September 30, 2026. These costs were recorded within General and administrative expenses in the condensed consolidated statements of operations and comprehensive income.

The following table summarizes the acquisition date fair values of consideration transferred and net assets acquired (in thousands):

The total purchase consideration has been allocated on a preliminary basis to the assets acquired, including intangible assets, and liabilities assumed based on their fair values as of the date of the acquisition, with the excess recorded to goodwill. The preliminary allocation may be subject to adjustment during the measurement period of up to 12 months from the date of acquisition including, but not limited to, intangible assets and income taxes. Any changes in the fair values of the assets acquired and liabilities assumed during the measurement period may result in adjustments to goodwill. Goodwill, which is not deductible for tax purposes, is primarily attributable to the value of expected synergies from the business combination, the assembled workforce, and growth opportunities.

The $46.5 million of identified intangible assets recognized in connection with the acquisition are subject to amortization using the straight-line method over the following estimated useful lives:

The deferred purchase price liability of $16.3 million represents the present value of the indemnification holdback amount of approximately $17.8 million, which is payable to the sellers 24 months following the acquisition close date upon satisfaction of certain obligations. The deferred purchase price liability was discounted to present value based on a market rate of interest commensurate with the 24 month payment term. This has been recorded in Other liabilities, noncurrent on the Company’s condensed consolidated balance sheet.

The Company has not presented the pro forma results of operations for the acquisition as the impact is not material to the Company’s condensed consolidated results of operations.

8. Balance Sheet Components

Accounts receivable, net

Accounts receivable, net consists of the following (in thousands):

Accounts receivable, net is presented net of the allowance for credit losses, which represents management’s estimate of expected credit losses based on historical trends, current economic conditions, and other relevant factors as of September 30, 2026 and December 31, 2025, respectively.

Included in accounts receivable, net are unbilled receivables, which are amounts that have not yet been invoiced to customers as of the balance sheet date, but are contractually owed to the Company. As of September 30, 2026 and December 31, 2025, unbilled receivables were $18.7 million and $10.3 million, respectively.

Inventory

Inventory consists of the following (in thousands):

There wereno inventory write-offs recorded for the three and nine months ended September 30, 2026 and 2025.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

Prepaid expenses primarily consist of advance payments for cloud platform costs, insurance, inventory, advertising, and other costs incurred in the ordinary course of business. Other receivables primarily consist of refunds owed to the Company and other amounts which the Company is expected to receive in less than twelve months.

Property and Equipment, net

Property and equipment, net consists of the following (in thousands):

For the three and nine months ended September 30, 2026, depreciation expense was $0.2 million and $0.6 million, respectively, and for the three and nine months ended September 30, 2025, depreciation expense was $0.1 million and $0.3 million, respectively.

There wasno impairment of property and equipment or long-lived assets recognized during the three and nine months ended September 30, 2026 or 2025.

Investments

Investments consist of the following (in thousands):

As of September 30, 2026, Investments included the Convertible Note Investment, a warrant to purchase shares of preferred stock of a data partner (the “Data Revenue Partner Warrant”), the Related Party Investment, the Related Party Warrant, and other strategic investments in privately-held companies. As of December 31, 2025, Investments included the Convertible Note Investment, the Data Revenue Partner Warrant, the Related Party Investment, and the Related Party Warrant. Refer to Note 6, "Fair Value Measurements" and Note 14, "Related-Party Transactions" for additional information.

Prepaid expenses and other assets, noncurrent

Prepaid expenses and other assets, noncurrent, which was $6.1 million and $3.1 million as of September 30, 2026 and December 31, 2025, respectively, primarily consist of cloud platform costs.

Leases

The Company leases office space under a non-cancellable operating lease with a remaining lease term of 0.2 years, which includes the option to extend the lease.

The Company did not have any finance leases as of September 30, 2026 or December 31, 2025.

The components of lease expense are as follows (in thousands):

(1) Amounts include short-term leases, which are immaterial.

Supplemental balance sheet information related to leases is as follows (in thousands, except lease term):

The weighted-average discount rate used to measure the present value of the operating lease liabilities was 5.0% for each period presented.

Maturities of the Company’s operating lease liability, which does not include short-term leases, as of September 30, 2026 were as follows (in thousands):

Goodwill and Intangible Assets, net

Intangible assets, net consists of the following (in thousands):

For the three and nine months ended September 30, 2026, the Company capitalized $1.5 million and $4.9 million, respectively, in internally developed software. For the three and nine months ended September 30, 2025, the Company capitalized $1.3 million and $5.4 million, respectively, in internally developed software.

During the three and nine months ended September 30, 2026, the Company completed an immaterial acquisition. The transaction was accounted for as an asset acquisition as it did not meet the definition of a business combination. The acquired assets consisted entirely of developed technology and had a fair value of $2.6 million with an estimated useful life of 3 years.

For the three and nine months ended September 30, 2026, amortization expense was $5.9 million and $16.6 million, respectively. For the three and nine months ended September 30, 2025, amortization expense was $3.8 million and $9.6 million, respectively.

During the three and nine months ended September 30, 2026 and 2025, there wasno impairment of intangible assets recorded.

As of September 30, 2026, the estimated remaining amortization expense for intangible assets by fiscal year is as follows (in thousands):

The weighted-average remaining useful lives of the Company’s acquired intangible assets, excluding internally developed software projects that were not yet in service, are as follows:

As of September 30, 2026 and December 31, 2025, the Company had $1.2 million and $2.8 million of capitalized internally developed software projects that were not yet in service, respectively. These projects have been excluded from the weighted-average remaining useful life calculation for internally developed software in the table above.

As of September 30, 2026 and December 31, 2025, goodwill was $173.6 million and $134.6 million, respectively. Goodwill increased $39.0 million in connection with the acquisition of Nativo. Refer to Note 7, "Business Combinations" for additional information. No goodwill impairment was recorded during the three and nine months ended September 30, 2026 or 2025.

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following (in thousands):

As of September 30, 2026, other current liabilities primarily relate to taxes payable and inventory received but not yet billed. As of December 31, 2025, other current liabilities primarily relate to the Company’s deferred purchase price liability related to the Fantix, Inc. acquisition, inventory received but not yet billed, and taxes payable.

Other Liabilities, noncurrent

Other liabilities, noncurrent consist of the deferred purchase price liability recorded in connection with the acquisition of Nativo, which was $16.8 million andzero as of September 30, 2026 and December 31, 2025, respectively.

The deferred purchase price liability was recorded at present value using a market rate of interest commensurate with the 24 month payment term, with the discount accreted to interest expense over the 24 month holdback period. As of September 30, 2026, the Company had recognized approximately $0.5 million of non-cash interest accretion within other income (expense), net in the condensed consolidated statements of operations and comprehensive income. Refer to Note 7, "Business Combinations" for additional information on the acquisition of Nativo.

9. Convertible Notes

June 2025 Convertible Notes

In June 2025, the Company issued $320.0 million aggregate principal amount of 0.00% convertible senior notes due June 1, 2030. The June 2025 Convertible Notes are senior unsecured obligations and do not bear regular interest. Each $1,000 principal amount of the notes is initially convertible into 12.3501 shares of the Company’s common stock, which represents a conversion price of approximately $80.97 per share, subject to adjustment upon the occurrence of specified events. In certain circumstances, including conversions in connection with a make-whole fundamental change, the conversion rate may be increased, resulting in a conversion price as low as $61.11. However, the maximum number of shares issuable per $1,000 principal amount is capped at 16.3639, which is subject to the same adjustment provisions as the initial conversion rate.

The June 2025 Convertible Notes are convertible at the option of the holders prior to the close of business on the business day immediately preceding March 1, 2030, only under the following circumstances: (1) during any fiscal quarter (and only during such quarter) beginning after September 30, 2025, if the closing price of the Company’s common stock for at least 20 trading days in any 30 consecutive trading day period ending on the last trading day of the prior fiscal quarter is greater than or equal to 130% of the then-applicable conversion price; (2) during thefive business days immediately following any 10 consecutive trading day period in which the trading price per $1,000 principal amount of notes was less than 98% of the product of the closing price of the Company’s common stock and the conversion rate on each applicable trading day, following a request for such determination by a holder; (3) if the Company calls the notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events, such as certain mergers, reorganizations, or other changes of control.

The June 2025 Convertible Notes are convertible at the option of the holders on or after March 1, 2030, at any time prior to the close of business on the second scheduled trading day prior to the maturity date. Upon conversion, the Company will settle the principal portion of any June 2025 Convertible Notes in cash. Any amounts due on conversion over the principal portion may be settled, at the Company’s election, in cash, shares of common stock, or a combination thereof.

The Company may not redeem the June 2025 Convertible Notes prior to June 5, 2028. On or after that date, the Company may redeem all or a portion of the notes for cash if the closing price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during a 30 consecutive trading day period ending on the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will equal the principal amount of the notes to be redeemed, plus any accrued and unpaid interest up to, but excluding, the redemption date.

Upon the occurrence of a fundamental change, which includes certain change-of-control transactions, a delisting of the Company’s common stock, or a liquidation event, holders may require the Company to repurchase up to 100% of their notes, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date for cash.

The Company accounts for the June 2025 Convertible Notes entirely as a liability in accordance with ASC 470-20, Debt with Conversion and Other Options, as amended by ASU 2020-06. The embedded conversion feature is not separately accounted for as it does not require bifurcation under ASC 815, Derivatives and Hedging, as it is considered clearly and closely related to the host debt contract and does not meet the criteria for derivative accounting. The notes were issued at par and are recorded net of debt issuance costs.

As of September 30, 2026, the June 2025 Convertible Notes are classified as noncurrent as the conditions allowing holders of the notes to convert have not been met and the notes are not redeemable until June 5, 2028. The balance has been recorded within convertible notes, net, noncurrent on the Company’s condensed consolidated balance sheet.

The net carrying amount of the June 2025 Convertible Notes consists of the following (in thousands):

The debt issuance costs are amortized to interest expense over the term of the June 2025 Convertible Notes using the effective interest rate method. The effective interest rate used to amortize the debt issuance costs is 0.68%. Interest expense recognized related to the June 2025 Convertible Notes was $0.5 million and $1.6 million for the three and nine months ended September 30, 2026, respectively. Interest expense recognized related to the June 2025 Convertible Notes was $0.5 million and $0.7 million for the three and nine months ended September 30, 2025, respectively. Interest expense is included within other income (expense), net on the condensed consolidated statements of operations and comprehensive income.

The estimated fair value of the June 2025 Convertible Notes, which we classify as Level 2 financial instruments, was determined using observable market prices. As of September 30, 2026, the estimated fair value of the June 2025 Convertible Notes was $290.1 million.

June 2025 Capped Calls

In connection with the pricing of the June 2025 Convertible Notes, the Company entered into privately-negotiated capped call transactions with certain dealer counterparties (the “June 2025 Capped Calls”). The June 2025 Capped Calls have an initial strike price of approximately $80.97 per share, which corresponds to the initial conversion price of the June 2025 Convertible Notes and is subject to certain adjustments. The June 2025 Capped Calls have a cap price of $122.22 per share, which is also subject to certain adjustments. The $33.7 million cost incurred in connection with the June 2025 Capped Calls was recorded as a reduction to Additional paid-in capital on the Company’s condensed consolidated balance sheet. This was partially offset by an $8.0 million increase to Additional paid-in capital related to the release of the associated valuation allowance in 2025. Conditions triggering adjustments to the initial strike price and the initial cap price of these capped calls are similar to those causing adjustments for the June 2025 Convertible Notes.

The June 2025 Capped Calls are intended to reduce or offset potential dilution to our common stock upon any conversion of the June 2025 Convertible Notes, with this reduction or offset subject to the specified cap price. The June 2025 Capped Calls are separate transactions, and are not part of the terms of the June 2025 Convertible Notes. These transactions are classified as equity in accordance with ASC 815, Derivatives and Hedging, as they are (i) indexed to the Company’s own stock, (ii) settled in shares or permitted net-share settlement, and (iii) do not require net cash settlement. As such, the June 2025 Capped Calls have been recorded within stockholders’ equity and are not accounted for as derivatives.

10. Commitments and Contingencies

Purchase Commitments

The Company has contractual commitments with our cloud platform provider and contract manufacturer that are non-cancellable. As of September 30, 2026, future non-cancellable commitments under these arrangements were as follows (in thousands):

Contingencies

From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. The Company is not subject to any current pending legal matters or claims that the Company believes could have a material adverse effect on its financial position, results of operations, or cash flows.

Indemnification

To date, the Company has not incurred significant costs and has not accrued any material liabilities in the accompanying condensed consolidated financial statements as a result of its indemnification obligations.

Litigation and Arbitration

Occasionally, the Company is involved in various legal proceedings, formal and informal dispute resolution processes, which may include arbitration or litigation, claims, and government investigations in the ordinary course of business. The outcome of litigation and other legal matters is inherently uncertain, though the Company intends to vigorously defend against any such matters. In making a determination regarding accruals, using available information, the Company evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which the Company is a party and records a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. When the Company determines an unfavorable outcome is not probable or reasonably estimable, the Company does not accrue for any potential litigation loss. Actual outcomes of these legal and regulatory proceedings may materially differ from the Company’s estimates.

From time to time, the Company is subject to "mass arbitration" demands, in which a large number of claimants assert similar claims against the Company in arbitration within a short period of time. Mass arbitration proceedings can result in significant administrative and arbitrator fees payable to the administering provider, which may be assessed irrespective of the merits of the underlying claims and in advance of any determination of liability. The Company is currently a respondent in more than one such proceeding, including the matter described below.

On August 14, 2023, plaintiffs Stephanie Ireland-Gordy and Shannon Ireland-Gordy filed a putative class action lawsuit against Tile, Life360, and Amazon.com, Inc. in the U.S. District Court for the Northern District of California (the “Court”), seeking damages as well as injunctive and declaratory relief. An amended complaint was filed on April 26, 2024, adding named plaintiffs Melissa Broad and Jane Doe. Plaintiffs allege that Tile trackers were used by third parties to monitor their movements without their consent, and assert product liability and other claims. On February 14, 2025, the Company filed a Motion to Dismiss. On August 6, 2025, the Court granted the Company’s Motion to Dismiss the claims of the Ireland-Gordy plaintiffs with prejudice and the remaining plaintiffs' claims are stayed pending an appeal of the Court's ruling on the Company’s Motion to Compel Arbitration, which was granted-in-part and denied-in-part. On March 3, 2026, the U.S. Court of Appeals for the Ninth Circuit ruled in the Company’s favor, reversing the district court’s partial denial of the Motion to Compel Arbitration and directing that all remaining claims be compelled to arbitration. The deadline for plaintiffs to file a petition for a writ of certiorari with the U.S. Supreme Court passed on June 1, 2026 without a petition having been filed. At this time, a loss is neither probable nor reasonably estimable, and as a result, no legal accrual has been recorded on the condensed consolidated balance sheets as of September 30, 2026.

In July 2025, the Keller Postman law firm filed arbitration demands with JAMS on behalf of approximately 8,600 claimants alleging that Life360’s advertising practices did not comply with the California Unruh Civil Rights Act by serving ads based on claimants’ protected characteristics such as age and gender. The Company believes it has substantial defenses and intends to vigorously defend the matter.

Following the filing of these demands, JAMS issued an invoice to the Company in the amount of approximately $17.0 million (the “JAMS Invoice”) for the initial mandatory filing fees associated with the proceeding. The Company believes that the claims should instead be administered by the National Arbitration and Mediation (“NAM”) pursuant to the Company’s Terms of Service and filed a petition to compel arbitration before NAM in the California Superior Court, County of San Mateo. In October 2026, the court denied the Company’s petition as to one claimant, ruling that such claimant’s arbitration would remain with JAMS but found that the Company had disputed the appropriate forum in good faith; fees associated with that claimant’s arbitration have been addressed separately and are not included in the amount above. The Company believes it has meritorious grounds to appeal the October ruling and is evaluating its options, including an appeal. The Company’s petition to compel remains pending as to the remaining claimants, with a hearing scheduled for February 2027. The JAMS Invoice is being held in abeyance by JAMS until a court determines that the remaining claims must be arbitrated before JAMS and is not currently due or payable. If the Company’s petition is denied as to the remaining claimants, the JAMS invoice may become payable in whole or in part, and the Company may be required to pay some or all of the JAMS Invoice. At this time, a loss associated with the underlying claims is neither probable nor reasonably estimable, and no accrual for damages has been recorded. The Company is currently unable to estimate the reasonably possible loss or range of loss, if any, associated with the underlying claims.

The Company receives claims and other threats of litigation from customers in the ordinary course of business. These claims are arbitrable and the Company accrues various costs for these claims, including arbitration fees, legal fees and costs. At this time, a loss is neither probable nor reasonably estimable from any such claims, and as a result, no legal accruals have been recorded on the condensed consolidated balance sheet as of September 30, 2026.

No litigation reserve was recorded on the condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025.

11. Common and Treasury Stock

Common Stock

The Company has the following potentially outstanding common stock reserved for issuance:

Treasury Stock

In May 2026, the Company’s Board of Directors authorized a share repurchase program allowing the deployment of up to $225.0 million to repurchase the Company’s outstanding common stock (the “Repurchase Program”). The Repurchase Program has no expiration date, does not obligate the Company to acquire a specific number of shares, and may be modified, suspended, or discontinued at any time. Repurchases may be made from time to time in the open market, in privately-negotiated transactions, in block trades, and/or through Rule 10b5-1 trading plans and Rule 10b-18 transactions, depending on market conditions and applicable rules and regulations. The Company accounts for treasury stock under the cost method.

During the three months ended September 30, 2026, the Company repurchased 666,336 shares of common stock for an aggregate purchase price of $31.2 million, and an average price of $46.85 per share, including commissions. During the nine months ended September 30, 2026, the Company repurchased 981,098 shares of common stock for an aggregate purchase price of $44.4 million, and an average price of $45.30 per share, including commissions. As of September 30, 2026, $180.6 million remained available under the Repurchase Program.

12. Equity Incentive Plan

2011 Equity Incentive Plan

The Company’s equity incentive plan allows the Company to grant restricted stock units (“RSUs”), which includes time-based, performance-based, and market-based restricted stock units, restricted stock, and stock options to employees and consultants of the Company and any of the Company’s parent, subsidiaries, or affiliates, and to the members of the Board of Directors.

Time-Based Restricted Stock Units

Time-based restricted stock units (“TRSUs”) generally vest based on continued service over a specified period, which is typically four years. Each TRSU represents the right to receive one share of common stock upon vesting. The fair value of TRSUs is determined based on the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense for these awards is recognized on a straight-line basis over the requisite service period and is offset by actual forfeitures as they occur.

Performance-Based Restricted Stock Units

PRSUs are granted primarily to executive officers and, in limited cases, to certain other senior-level employees. Vesting is based on continued service and the attainment of certain financial performance metrics, including revenue and Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization targets, over aone-year performance period, as established and approved by the Board of Directors. The number of shares issued upon vesting may be greater or lesser than the target award amount depending on actual performance, and shares attained above target will be recognized as awards granted in the period earned.

The Company granted 235,600 PRSUs during the nine months ended September 30, 2026 with the weighted-average grant-date fair value per share of $39.78. The fair value of PRSUs is determined based on the closing price of the Company’s common stock on the date of grant. Stock-based compensation expense is recognized on a graded-vesting basis for multi-tranche awards and on a straight-line basis for single-tranche awards, based on the estimated probability of achieving the performance conditions, which is reassessed each period. If achievement of the performance conditions is not considered probable, all previously recognized stock-based compensation expense related to the unvested awards is reversed.

Market-Based Restricted Stock Units

MRSUs are granted to certain executive officers. Vesting is based on continued service and the Company’s total shareholder return duringone-year, two-year, andthree-year performance periods as measured relative to the group of companies comprising the S&P Software and Services Select Index. The number of shares issued upon vesting may be greater or lesser than the target award amount depending on actual performance, and shares attained above target will be recognized as awards granted in the period earned.

The Company granted 106,936 MRSUs during the nine months ended September 30, 2026 with the weighted-average grant-date fair value per share of $39.31. Stock-based compensation expense is recognized on a graded-vesting basis over the service period and is not adjusted for actual performance outcomes.

The Company determined the fair value of the MRSUs granted using a Monte Carlo simulation model with the following assumptions:

RSUs, including TRSUs, PRSUs, and MRSUs

RSU activity for the period presented is as follows:

As of September 30, 2026, there was total unrecognized stock-based compensation expense for outstanding RSUs of $181.6 million to be recognized over a weighted-average period of approximately 2.9 years. This amount is comprised of unrecognized compensation expense of $168.0 million related to outstanding TRSUs, $7.8 million related to outstanding PRSUs, and $5.8 million related to outstanding MRSUs.

The number of RSUs vested and settled includes shares of common stock that the Company withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.

Stock Options

Stock option activity for the periods presented is as follows (in thousands, except share and per share data):

As of September 30, 2026, there was no unrecognized stock-based compensation expense for outstanding stock options.

Stock-Based Compensation

Stock-based compensation expense was allocated as follows (in thousands):

There was $0.3 million and $1.1 million of capitalized stock-based compensation costs recognized during the three and nine months ended September 30, 2026, respectively. There was $0.3 million and $0.9 million of capitalized stock-based compensation costs recognized during the three and nine months ended September 30, 2025, respectively.

13. Income Taxes

The provision for income taxes for interim quarterly reporting periods is based on the Company's estimates of the effective tax rates for the full fiscal year, in accordance with ASC 740-270, Income Taxes, Interim Reporting. ASC 740-270-25-2 requires that an annual effective tax rate be determined and such annual effective rate be applied to year-to-date income/loss in interim periods. The effective tax rate in any quarter may be subject to fluctuations during the year as new information is obtained, which may positively or negatively affect the assumptions used to estimate the annual effective tax rate, including factors such as valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions, if any, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business.

Accounting for income taxes for interim periods generally requires the provision for income taxes to be determined by applying an estimate of the annual effective tax rate for the full fiscal year to income or loss before income taxes, excluding unusual or infrequently occurring discrete items, for the reporting period.

For the three and nine months ended September 30, 2026, the Company recorded a provision for income taxes of $6.0 million and a benefit from income taxes of $9.7 million, respectively. The effective tax rate differs from the U.S. federal statutory rate primarily due to executive compensation and other non-deductible expenses, tax credits, and discrete tax benefits recognized during the quarter, which were primarily related to excess tax benefits for stock-based compensation.

For the three and nine months ended September 30, 2025, the Company recorded a provision for income taxes of $0.4 million and a benefit from income taxes of $0.2 million, respectively.

14. Related-Party Transactions

Hubble Transactions

In 2024, the Company entered into a strategic partnership and series of transactions with Hubble Network, Inc. (“Hubble”), including (i) a technology exclusivity and revenue share agreement (“Hubble Agreement”) beginning on November 12, 2024; (ii) a Hubble SAFE investment (“Related Party SAFE”); and (iii) Hubble’s issuance of a warrant to purchase common stock (“Related Party Warrant”). Hubble is a related party because Alex Haro, Hubble’s founder and CEO, is a co-founder, former executive, and current member of the Company’s Board of Directors.

In September 2026, the Company and Hubble amended the Hubble Agreement and the Related Party Warrant concurrently (collectively, the “2026 Related Party Amendments”). The amendments (i) extended the Hubble Agreement’s initial term from five years tosix years, (ii) established a fixed revenue-share payment for the nine months ended September 30, 2026, and each year thereafter through 2029, and (iii) modified the vesting terms of the Related Party Warrant, converting half of the unvested shares to time-based vesting in equal quarterly installments from 2027 through 2028, and extending the remaining milestone deadlines by one year, with no change to exercise price or share count. The Company accounted for this as a contract modification and, using an option-pricing model, recorded incremental fair value of approximately $10.4 million, recorded as an increase to the Related Party Warrant and to deferred revenue, amortized to Other revenue over the term of the 2026 Related Party Amendments. The grant of the Related Party Warrant was considered non-cash consideration in the transaction price of the Hubble Agreement, which the Company measured at fair value on the date of issuance. As of September 30, 2026,2,049,191 shares of the Related Party Warrant have vested.

In August 2026, Hubble completed a new preferred financing round on terms similar to the Company’s existing holding (the “Related Party Investment”), resulting in an observable price change in the Related Party Investment and a gain recorded within gain on change in fair value of investments. In April 2025, the Related Party SAFE converted into the Related Party Investment, also resulting in an observable price change and a gain recorded within gain on change in fair value of investments. Refer to Note 6, "Fair Value Measurements" for additional information.

The following tables include related party impact on amounts recognized in the condensed consolidated statements of operations and comprehensive income as follows (in thousands):

The $3.7 million of revenue-share payments recognized for the three months ended September 30, 2026, reflects the revised revenue-share terms under the 2026 Related Party Amendments.

The following table includes related party impact on amounts recorded on the condensed consolidated balance sheets as follows (in thousands):

15. Net Income Per Share

Basic net income per share is calculated by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per share reflects the potential dilution that could occur if options, RSUs, warrants, or other securities with features that could result in the issuance of common stock were exercised or converted to common stock using the treasury-stock method.

In connection with the June 2025 Convertible Notes, the Company applied the if-converted method under ASC 260, Earnings Per Share, to calculate diluted earnings per share. Since the June 2025 Convertible Notes require principal settlement in cash and only the premium is potentially settled in shares, the Company includes the incremental dilutive shares (the conversion spread) in the denominator only when the average stock price exceeds the conversion price. For the three and nine months ended September 30, 2026, the June 2025 Convertible Notes were not dilutive, and therefore no incremental shares were included in diluted EPS.

The following table presents the calculation of basic and diluted net income per share (in thousands, except share and per share information):

Certain potential shares of common stock were excluded from the diluted net income per share calculation as their inclusion would have been antidilutive. Excluded shares are as follows:

16. Subsequent Events

In November 2026, the Company purchased 290,738 preferred shares for $5.0 million in a financing round of a related party. Refer to Note 14, "Related-Party Transactions" for more information on related parties.