ZIPRECRUITER, INC.

1. Organization and Description of Business

ZipRecruiter, Inc. was incorporated in the state of Delaware on June 29, 2010. Hereinafter, ZipRecruiter, Inc. and its wholly owned subsidiaries ZipRecruiter Israel Ltd., ZipRecruiter UK Ltd., ZipRecruiter Canada Ltd., and Poplar Technologies Ltd. (d/b/a Breakroom) (“Breakroom”) are collectively referred to as “ZipRecruiter” or the “Company.” The Company is a two-sided marketplace that enables employers and job seekers to connect with one another online to fill job opportunities.

2. Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies

The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, certain information and disclosures normally included in consolidated financial statements presented in accordance with U.S. GAAP have been condensed or omitted.

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “2024 Form 10-K”). The condensed consolidated balance sheet as of December 31, 2024 has been derived from the Company’s audited consolidated financial statements.

In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments (consisting of normal recurring adjustments) necessary for the fair statement of the condensed consolidated financial statements.

There have been no changes in the Company’s accounting policies from those disclosed in the Company’s audited consolidated financial statements and the related notes included in the 2024 Form 10-K.

The operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results expected for the full year ending December 31, 2025 or any future period.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and footnotes thereto. Actual results could differ from those estimates.

Investments

The Company classifies and accounts for its money market mutual funds which have readily determinable fair values as equity securities, and it carries such securities at fair value with unrealized gains and losses reported in other income (expense), net in its condensed consolidated statements of operations.

The Company classifies and accounts for its debt securities as available-for-sale, and it carries such securities at fair value with unrealized gains and losses reported net of tax as a separate component of stockholders' equity (deficit) in accumulated other comprehensive income. During the three and nine months ended September 30, 2025, in connection with its available-for-sale debt securities, the Company recorded immaterial pre-tax unrealized gains in other comprehensive income withno associated tax expense. During both the three and nine months ended September 30, 2024, in connection with its available-for-sale debt securities, the Company recorded pre-tax unrealized gains of $0.2 million in other comprehensive income withno associated tax benefit.

The Company determines any realized gains and losses on the sale of its available-for-sale debt securities using a specific identification method, and it records such gains and losses through other income (expense), net in its condensed consolidated statements of operations. During the three months ended September 30, 2025, the Company didnot have any sales of its available-for-sale debt securities and consequently, did not reclassify any amounts out of accumulated other comprehensive income into other income (expense), net in the condensed consolidated statements of operations. During the nine months ended September 30, 2025, the Company recorded $1.0 million in proceeds related to sales of its available-for-sale debt securities and no material gross realized gains or gross realized losses as a result of those sales. Such securities were purchased during the nine months ended September 30, 2025, and consequently, the Company did not reclassify any amounts out of beginning accumulated other comprehensive income into other income (expense), net in the condensed consolidated statements of operations. During the three and nine months ended September 30, 2024, the Company didnot have any sales of its available-for-sale debt securities and consequently, did not reclassify any amounts out of accumulated other comprehensive income into other income (expense), net in the condensed consolidated statements of operations.

Segments and Geographic Information

The Company operates as a single operating segment. The Company’s Chief Operating Decision Maker (“CODM”), its Chief Executive Officer (the “CEO”), regularly reviews financial information presented on a consolidated basis for purposes of assessing financial performance and allocating resources.

The accounting policies of the Company’s single operating segment are the same as those described in the summary of significant accounting policies in Note 2 within the 2024 Form 10-K. The CODM uses net income (loss) as reported within the Company’s condensed consolidated statements of operations as the primary measure of profit or loss for purposes of assessing performance for the Company’s single operating segment and determining how to allocate resources into the Company’s single operating segment or into other parts of the entity, such as for acquisitions. Additionally, net income (loss) is used to monitor budget versus actual results to assess the performance of the segment. All cost and expense line items reported within the Company’s condensed consolidated statements of operations, as well as marketing and advertising expense, depreciation and amortization, and stock-based compensation expense, are significant.

The Company has disclosed amounts related to marketing and advertising expense within the table below in this Note 2, depreciation and amortization within the condensed consolidated statements of cash flows and stock-based compensation expense within Note 11. Additionally, the CODM does not evaluate operating segments using asset information.

Sales and marketing costs are expensed as incurred, and consist of the following:

Marketing and advertising expense includes advertising, online lead generation, customer and industry events and candidate acquisition. Other sales and marketing expense includes personnel-related costs (including salaries, sales commissions, bonuses, benefits, and stock-based compensation) for the

Company’s sales and marketing employees, marketing activities, and related allocated overhead costs. The Company allocates a portion of overhead costs, such as rent, IT costs, supplies, and depreciation and amortization, to other sales and marketing expense based on headcount.

Revenue is attributed to geographic regions based on locations where services are provided to the Company’s customers. Foreign countries outside of the United States, in aggregate, accounted for less than 2% of the Company’s revenue for each of the three and nine months ended September 30, 2025 and 2024. In addition, long-lived assets outside of the United States were not material as of September 30, 2025 and December 31, 2024.

Concentrations of Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents, marketable securities, and accounts receivable. The Company maintains its cash accounts with large financial institutions and at times, the cash accounts may exceed Federal Deposit Insurance Corporation limits. The Company has not experienced any losses in such accounts. The Company monitors the relative credit standing of the financial institutions with which it transacts and limits its credit exposure to any singular entity. Accordingly, the Company believes minimal credit risk exists with respect to these cash balances.

The Company invests only in highly rated debt and equity securities. The Company believes the financial institutions that hold its investments are financially sound, and accordingly, are subject to minimal credit risk.

One customer accounted for 15% and 10% of the Company’s outstanding accounts receivable as of September 30, 2025 and December 31, 2024, respectively. One additional customer accounted for 14% of the Company’s outstanding accounts receivable as of both September 30, 2025 and December 31, 2024. The Company closely monitors the financial conditions of the foregoing customers, which have been in good credit standing. No other customer individually accounted for 10% or more of the Company’s outstanding accounts receivable as of September 30, 2025 and December 31, 2024. As such, the Company does not consider the concentration of its accounts receivable to be a material risk. For the three and nine months ended September 30, 2025 and 2024, there were no customers that individually represented 10% or more of revenue.

The Company uses third parties to collect its credit card receivables and believes risk related to its credit card processors is minimal. The Company’s business is also subject to certain risks and concentrations related to its dependence on third-party suppliers for its hosting services.

Leases

In October 2024, the Company entered into a lease agreement for its new corporate headquarters. The lease commenced during the second quarter of 2025. At lease commencement, the Company recorded non-cash operating lease liabilities of $6.4 million arising from obtaining a right-of-use asset of $6.4 million as a result of the transaction.

The lease has an initial term of 65 months expiring in October 2030, with an option to renew forone five-year period exercisable at the Company's discretion. Future undiscounted lease payments related to the lease as of September 30, 2025 are $7.9 million, with $0.2 million due during the remainder of 2025, $1.5 million due in 2026, $1.6 million due in 2027, $1.6 million due in 2028, $1.7 million due in 2029, and $1.3 million due thereafter. Imputed interest on the lease as of September 30, 2025 is $1.3 million.

For a description of the Company’s lease accounting policies, see Note 2 – Basis of Presentation, Principles of Consolidation, and Summary of Significant Accounting Policies to the Company’s audited consolidated financial statements included in the 2024 Form 10-K.

Recent Accounting Pronouncements

Accounting Pronouncements Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which intends to enhance the transparency and decision usefulness of income tax disclosures, primarily through expanding disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S. and foreign jurisdictions. The update will be effective for annual periods beginning after December 15, 2024 on a prospective basis. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements other than the addition of certain incremental footnote disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disaggregated information about certain income statement expense line items on an annual and interim basis. The update will be effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027 on either a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the effects of the adoption of this update on its consolidated financial statements.

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, which modernizes the accounting for internal-use software costs and increases the operability of the recognition guidance about when to start capitalizing software costs by removing all references to prescriptive and sequential software development stages throughout Subtopic 350-40. The update will be effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods, on a prospective, modified, or retrospective basis. Early adoption is permitted. The Company is currently evaluating the effects of the adoption of this update on its consolidated financial statements.

3. Net Loss Per Share

The following table presents the Company’s basic and diluted net loss per share (in thousands, except per share amounts):

The weighted average number of potentially dilutive common stock equivalents of 9.8 million and 10.7 million were excluded from the computation of diluted net loss per share during the three and nine months ended September 30, 2025, respectively, because their inclusion would have been anti-dilutive. The weighted average number of potentially dilutive common stock equivalents of 12.4 million and 12.8 million were excluded from the computation of diluted net loss per share during the three and nine months ended September 30, 2024, respectively, because their inclusion would have been anti-dilutive.

4. Acquisitions

On July 23, 2024, the Company entered into a share purchase agreement with, and acquired 100% of the outstanding share capital in, Breakroom. Breakroom is a UK-based employee review platform focused on frontline industries such as retail and hospitality. The Company believes there is an opportunity with Breakroom to complement its employment sites in the United States.

The fair value of consideration transferred on the date of acquisition totaled $13.3 million, consisting of $12.4 million paid in cash and a liability of $0.9 million assumed related to non-employee investor holdback consideration. Such non-employee investor holdback consideration, payable one year subsequent to the date of acquisition, was paid during the three months ended September 30, 2025. This consideration was subject to customary holdback provisions and was not contingent upon the occurrence of specified future events.

The financial results of Breakroom from the date of acquisition were included in the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2025 and 2024. Pro forma results of operations have not been presented as the results do not have a material effect on any of the periods presented in the Company’s condensed consolidated financial statements.

The following table summarizes the estimated fair values of identified assets and liabilities as of the acquisition date (in thousands):

The following table summarizes the estimated fair values of identifiable intangible assets acquired and their estimated useful life at the date of acquisition (in thousands, except useful life information):

Amortization expense for such finite-lived intangible assets was $0.5 million and $1.5 million during the three and nine months ended September 30, 2025, respectively, and $0.4 million during both the three and nine months ended September 30, 2024. Future amortization expense for the Company’s finite-lived intangible assets as of September 30, 2025 is as follows for the years ended December 31, (in thousands):

The estimated fair value of the developed technology acquired was determined using the replacement cost method. This approach requires the use of inputs within Level 3 in the fair value hierarchy related to the cost to replace the technology, including time and resources required, as well as an estimated profit margin and opportunity cost.

The estimated fair value of the trade names and trademarks acquired was determined using the relief-from-royalty method. This approach requires the use of inputs within Level 3 in the fair value hierarchy, including revenue projections, a royalty rate based on qualitative factors and market-derived royalty rates, and a discount rate based on the Company’s weighted average cost of capital adjusted for risks commonly inherent in trade names.

Goodwill was primarily attributable to the workforce of the acquired business and benefits related to expanded market opportunities from integrating Breakroom’s technology with the Company’s marketplace offerings. All of the goodwill was assigned to the Company’s single reporting unit and was not deductible for tax purposes.

Upon the close of the transaction, the Company agreed to pay up to $3.5 million to former Breakroom founders, in equal quarterly installments over athree-year period post-closing of the transaction, contingent upon those employees’ continued employment with the Company (the “Employee Seller Holdback Consideration”). These costs are expensed over the continued employment period. For the three and nine months ended September 30, 2025, the Company incurred expenses of $0.3 million and $0.9 million, respectively, related to the Employee Seller Holdback Consideration, of which $0.2 million and $0.6 million, respectively, were recorded in research and development expenses and $0.1 million and $0.3 million, respectively, were recorded in general and administrative expenses within the Company’s condensed consolidated statements of operations. For both the three and nine months ended September 30, 2024, the Company incurred expenses of $0.3 million related to the Employee Seller Holdback Consideration, of which $0.2 million were recorded in research and development expenses and $0.1 million were recorded in general and administrative expenses within the Company’s condensed consolidated statements of operations. The Company recorded no additional acquisition-related costs for the three and nine months ended September 30, 2025. Additional acquisition-related costs were not material for the three and nine months ended September 30, 2024.

5. Revenue Information

The Company disaggregates revenue intotwo streams: subscription revenue and performance-based revenue. The following table presents the Company’s revenue streams (in thousands):

The Company recognized $11.0 million and $11.7 million of revenue during the three months ended September 30, 2025 and 2024, respectively, that was included in the deferred revenue balances as of June 30, 2025 and 2024, respectively.

The Company recognized $10.6 million and $12.7 million of revenue during the nine months ended September 30, 2025 and 2024, respectively, that was included in the deferred revenue balances as of December 31, 2024 and 2023, respectively.

As of September 30, 2025 and December 31, 2024, the Company hadno contract assets.

Deferred Commissions

Accounting Standards Codification 606 requires the deferral of the recognition of incremental costs to obtain a contract, which the Company has identified as certain of its sales commissions paid to internal sales representatives for the sale of the Company’s services. The Company amortizes deferred commissions over the expected period of benefit unless the amortization period is less than one year, in which case, the Company has elected to apply the practical expedient to expense those costs as incurred. Prior to April 2025, the expected customer life had been estimated to bethree years. In April 2025, the Company completed an assessment of the expected customer life and adjusted the expected customer life from three years tofour years. This change in accounting estimate was effective beginning April 1, 2025, and resulted in an immaterial impact to the Company’s financial statements for the three and nine months ended September 30, 2025.

For more information on deferred commissions, please see Note 5 – Revenue Information to the Company’s audited consolidated financial statements in the 2024 Form 10-K.

Performance Obligations

No revenue was recognized during the three and nine months ended September 30, 2025 and the three months ended September 30, 2024 from performance obligations satisfied in previous periods. Animmaterial amount of revenue was recognized during the nine months ended September 30, 2024 from performance obligations satisfied in previous periods.

As of September 30, 2025, the Company did not have any material remaining performance obligations expected to be recognized in the future. Generally, any remaining performance obligations relate primarily to subscription services such as time-based job posting plans, upsell services, and resume database plans that will be invoiced in future periods, and exclude (i) contracts with an original expected term of one year or less and (ii) contracts for which the Company only recognizes revenue at the amount to which it has the right to invoice for services performed.

6. Financial Instruments

Fair Value Measurements

The following table presents the Company’s financial assets measured at fair value on a recurring basis, as well as the amortized cost basis and gross unrealized gains and losses of those assets as of September 30, 2025 (in thousands):

As of December 31, 2024, the Company’s financial assets consisted of the following (in thousands):

The Company’s money market mutual funds and treasury securities are measured at fair value using quoted prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. The fair values of the Company’s Level 2 commercial paper and certificates of deposit are determined using quoted prices in markets that are not active or using model-driven valuations employing significant inputs derived from observable market data. The fair values of the Company’s Level 2 corporate notes and obligations and asset-backed securities are determined using an evaluated price based on a compilation of reported market information, such as benchmark yield curves, credit spreads and estimated default rates.

The carrying amounts of the Company’s remaining financial instruments not discussed in the above table, including accounts receivable and accounts payable, approximate fair value because of their short-term maturities, except for the Company’s senior unsecured notes due 2030 (the “Notes”) which are valued on a quarterly basis for disclosure purposes only based on quoted prices for the Notes in less active markets and categorized accordingly as Level 2 in the fair value hierarchy. The aggregate fair value of the Notes was estimated to be approximately $441.4 million as of September 30, 2025 and approximately $496.4 million as of December 31, 2024.

Equity Securities

The Company’s investments in equity securities consist primarily of money market mutual funds. During the three and nine months ended September 30, 2025 and 2024, the Company recordedno unrealized gains or losses in connection with its money market mutual funds held as of September 30, 2025.

Available-for-sale Debt Securities

The following table summarizes the fair value of the Company’s available-for-sale debt securities by contractual maturity as of September 30, 2025 (in thousands):

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations.

The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of September 30, 2025 (in thousands):

The following table summarizes the available-for-sale debt securities which have been in a continuous unrealized loss position for less than 12 months as of December 31, 2024 (in thousands):

The Company hadno available-for-sale debt securities in a continuous unrealized loss position for more than 12 months as of September 30, 2025 or December 31, 2024.

The Company didnot recognize any credit losses for its available-for-sale debt securities during the three and nine months ended September 30, 2025 and 2024. The Company hadno ending allowance balances for credit losses as of September 30, 2025 or December 31, 2024.

During the three months ended September 30, 2025, the Company hadno sales of its available-for-sale debt securities. During the nine months ended September 30, 2025, the Company recorded $1.0 million in proceeds related to sales of its available-for-sale securities. The Company recordedno material gross realized gains or gross realized losses in its condensed consolidated statements of operations as a result of those sales. During the three and nine months ended September 30, 2024, the Company hadno sales of its available-for-sale debt securities.

7. Accrued Expenses

Accrued expenses consist of the following (in thousands):

8. Debt

Credit Facility

In April 2021, the Company entered into a $250.0 million credit facility agreement with a syndicate of banks. In July 2024, the Company entered into a supplement to the credit facility agreement, which increased the aggregate revolving commitments available under the credit facility from $250.0 million to $290.0 million. The credit facility has a maturity date of April 30, 2026. The Company hadno amounts outstanding under its credit facility and was in compliance with the financial covenants as of September 30, 2025. The amount available under the credit facility as of September 30, 2025 was $287.4 million, which is the credit limit less letters of credit outstanding of $2.6 million.

Senior Unsecured Notes

On January 12, 2022, the Company issued an aggregate principal amount of $550.0 million senior unsecured Notes in a private placement. The Notes will mature on January 15, 2030 and bear interest at a rate of 5% per year. Interest on the Notes is payable semi-annually in arrears on January 15 and July 15 of each year. Unpaid interest amounts are included within accrued interest in the Company’s condensed consolidated balance sheets. At its sole discretion, the Company has the option to redeem the Notes at any time in whole or in part at specified redemption prices.

The Company includes its Notes, net of debt issuance costs, within long-term borrowings in its condensed consolidated balance sheets. As of September 30, 2025, the Company had a carrying amount of approximately $5.5 million of debt issuance costs related to the Notes.

For the three months ended September 30, 2025 and 2024, the Company recognized $7.2 million and $7.1 million, respectively, in interest expense related to the Notes. Such interest expense includes $0.3 million related to the amortization of debt issuance costs for both the three months ended September 30, 2025 and 2024. For the nine months ended September 30, 2025 and 2024, the Company recognized $21.5 million and $21.4 million, respectively, in interest expense related to the Notes. Such interest expense includes $0.8 million related to the amortization of debt issuance costs for both the nine months ended September 30, 2025 and 2024. The Notes had an effective interest rate of 5.4% for all periods.

9. Commitments and Contingencies

Legal Matters

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. If the Company determines that it is probable that a loss has been incurred and the amount is reasonably estimable, the Company will record a liability. However, if the Company determines that a contingent loss is reasonably possible and the loss or range of loss can be estimated, the Company will disclose the possible loss in the condensed consolidated financial statements. Legal costs relating to loss contingencies are expensed as incurred.

Indemnification

In the ordinary course of business, the Company may provide indemnification of varying scopes and terms to customers, investors, directors and officers with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements, services to be provided by the Company, or from certain claims made by third parties. These indemnification provisions may survive termination of the underlying agreement and the maximum potential amount of future payments the Company could be required to make under these indemnification provisions may not be subject to maximum loss clauses. The maximum potential amount of future payments the Company could be required to make under these indemnification provisions is indeterminable. The Company has never paid a material claim, nor has the Company been sued in connection with these indemnification arrangements. As of September 30, 2025, the Company hasnot accrued a liability for these indemnification arrangements because the likelihood of incurring a payment obligation, if any, in connection with these indemnification arrangements is neither probable nor reasonably estimable.

10. Share Repurchase Program

As of December 31, 2024, the Company’s board of directors authorized the Company to repurchase up to $650.0 million of outstanding shares of its common stock pursuant to a share repurchase program (the “Program”). In August 2025, the Company’s board of directors authorized an increase to the Program of $100.0 million, which resulted in a total of $750.0 million of outstanding shares of its common stock authorized for repurchase. Under the Program, the Company may repurchase shares of common stock through open market or privately negotiated transactions, block purchases, or pursuant to one or more Rule 10b5-1 plans. The Program does not obligate the Company to repurchase shares of common stock. There is no minimum or maximum number of shares to be repurchased under the Program.

During the nine months ended September 30, 2025, the Company repurchased 17.1 million shares of its Class A common stock for $93.9 million under the Program, including 6.2 million shares of its Class A common stock delivered under a Rule 10b5-1 plan totaling $35.0 million,6.3 million shares of its Class A common stock purchased in the open market totaling $35.9 million, and 4.6 million shares of its Class A common stock purchased in privately negotiated transactions with certain entities affiliated with Institutional Venture Partners totaling $23.0 million.

Approximately $129.2 million remains available for future repurchases of common stock under the Program as of September 30, 2025.

All shares repurchased under the Program were immediately retired. Repurchased shares reduced the Company’s outstanding shares and its weighted average number of shares of common stock outstanding for purposes of calculating basic and diluted earnings per share.

11. Stock-Based Compensation

Total stock-based compensation expense is recorded in the condensed consolidated statements of operations as follows (in thousands):

Equity Incentive Plan and Employee Stock Purchase Plan

Under the Company’s 2021 Equity Incentive Plan, as of September 30, 2025,35.9 million shares of Class A common stock were authorized, of which 18.3 million shares of Class A common stock were available for future issuance. The number of shares reserved for issuance was increased in January 2025 pursuant to the evergreen provisions set forth in the 2021 Equity Incentive Plan.

Under the Company’s 2021 Employee Stock Purchase Plan (the “ESPP”), as of September 30, 2025,4.5 million shares of Class A common stock were authorized. The number of shares reserved for issuance was increased in January 2025 pursuant to the evergreen provisions set forth in the ESPP.

The ESPP provides for concurrentsix-month offering and purchase periods beginning February 15 and August 15 of each year. During the three months ended September 30, 2025, no shares of Class A common stock were purchased under the ESPP. During the nine months ended September 30, 2025,0.3 million shares of Class A common stock were purchased under the ESPP for an aggregate amount of $1.7 million. In January 2025, the compensation committee of the Company’s board of directors approved the suspension of its ESPP following the completion of the purchase of shares of its common stock for the offering period that ended February 14, 2025. As such, because there was no ongoing offering and purchase period as of September 30, 2025, the Company did not record any liability related to accumulated payroll deductions under the ESPP.

Stock Options

A summary of the Company’s stock option activity for the nine months ended September 30, 2025 is as follows (in thousands, except weighted average information):

As of September 30, 2025, the Company has no remaining unvested stock options and no remaining stock-based compensation expense for its stock options.

Restricted Stock Units

For all restricted stock units (“RSUs”), the Company recorded stock-based compensation expense of $11.2 million and $39.0 million during the three and nine months ended September 30, 2025, respectively, and $15.1 million and $49.8 million during the three and nine months end September 30, 2024, respectively.

A summary of the Company’s RSU activity for the nine months ended September 30, 2025 is as follows (in thousands, except weighted average information):

As of September 30, 2025, total unrecognized stock-based compensation expense for unvested RSUs was $71.7 million, which is expected to be recognized over a weighted average period of 1.2 years.

12. Income Taxes

The Company computes its provision for income taxes by applying the estimated annual effective tax rate to pretax income or loss and adjusts the provision for discrete tax items recorded in the period. The income tax expense (benefit), effective tax rates, and statutory federal income tax rates for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands, except percentages):

*The effective tax rate for the nine months ended September 30, 2024 is not meaningful as a result of the low level of loss before income taxes recorded for the period.

The effective tax rate for the three and nine months ended September 30, 2025 differed from the U.S. federal statutory tax rate of 21% primarily due to tax detriments relating to the settlement of RSUs, certain non-deductible expenses including limitations on the amount of deductible officer compensation, state taxes, and net tax benefits from research and development tax credits.

The effective tax rate for the three and nine months ended September 30, 2024 differed from the U.S. federal statutory tax rate of 21% primarily due to tax detriments relating to the settlement of RSUs, limitations on the amount of deductible officer compensation, state taxes, and net tax benefits from research and development tax credits.

During the three and nine months ended September 30, 2025, the Company continued to record reserves for the current year uncertain tax positions recognized within the effective tax rate. The Company believes that any change to the unrecognized tax benefits in the next 12 months will not be material to the condensed consolidated financial statements.

On July 4, 2025, the U.S. enacted H.R. 1, commonly known as the One Big Beautiful Bill Act, which contains several provisions related to corporate taxes, including modifications to the capitalization of domestic research and development expenses. These modifications were included in the Company’s income tax provision for the three and nine months ended September 30, 2025. The result of their inclusion was a decrease in both the Company’s deferred tax assets and current taxes payable. The Company will continue to evaluate the impacts the new legislation will have on its consolidated financial statements, but does not anticipate a material impact to its effective tax rate for the year ended December 31, 2025.

The realizability of the Company’s deferred tax assets is dependent on generating sufficient future taxable income. Should estimates of future taxable income decline or if sustained cumulative losses emerge, it is possible the amount of the deferred tax asset considered realizable may be reduced. Any future reduction in the realizability of the Company’s deferred tax assets would necessitate an increase to the valuation allowance, resulting in a non-cash income tax expense recognized in the Consolidated Statements of Operations.

13. Subsequent Events

In October 2025, the Company renewed one of its noncancelable purchase commitments related to hosting service agreements. Future minimum commitments related to the Company’s noncancelable purchase commitments as a result of the renewal are approximately $2.7 million for 2025, $16.0 million for 2026, $16.0 million for 2027, $16.0 million for 2028, $16.0 million for 2029, and $13.3 million for 2030 and beyond.