CS Disco, Inc.

Previous wording

We generate substantially all of our revenue from our customers’ actual usage of ourproduct offerings. Customers generally do not commit to purchase a specific amount of usage on ourproduct offerings and their usage can fluctuate based on the number and nature of legal matters they have at any particular time. As a result, our revenue and other financial results can fluctuate from period to period given the inherent unpredictability of the timing, duration and scope of legal casework. We also offer our customers the option to enter into subscriptions based on committed minimum usage on an annual or multi-year basis, which represented 8% of our revenue for each of the three and six months ended June 30, 2026, and 10% and 11% for the three and six months ended June 30, 2025, respectively. In addition, we generate revenue from a range of professional services aimed at accelerating the time-to-value for our customers.

Current wording

We generate substantially all of our revenue from our customers’ actual usage of ourproduct offerings. Customers generally do not commit to purchase a specific amount of usage on ourproduct offerings and their usage can fluctuate based on the number and nature of legal matters they have at any particular time. As a result, our revenue and other financial results can fluctuate from period to period given the inherent unpredictability of the timing, duration and scope of legal casework. We also offer our customers the option to enter into subscriptions based on committed minimum usage on an annual or multi-year basis, which represented 8% of our revenue for each of the three and nine months ended September 30, 2026, and 9% and 10% of our revenue for thethree and nine months ended September 30, 2025, respectively. In addition, we generate revenue from a range of professional services aimed at accelerating the time-to-value for our customers.

Previous wording

As of June 30, 2026, we had $10.9 million of cash and cash equivalents and $90.5 million of short-term investments. We generated revenue of $43.1 million and $38.1 million in the three months ended June 30, 2026 and 2025, respectively, representing period-over-period growth of 13%. We generated revenue of $85.0 million and $74.8 million in the six months ended June 30, 2026 and 2025, respectively, representing period-over-period growth of 14%. Our net loss was $8.7 million and $10.8 million for the three months ended June 30, 2026 and 2025, respectively, and $18.3 million and $22.2 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

As of September 30, 2026, we had $12.5 million of cash and cash equivalents and $84.2 million of short-term investments. We generated revenue of $45.3 million and $40.9 million in the three months ended September 30, 2026 and 2025, respectively, representing a period-over-period growth of 11%, and $130.4 million and $115.7 million in the nine months ended September 30, 2026 and 2025, respectively, representing a period-over-period growth of 13%. When excluding the $1.3 million impact of the contingent matter from the three months ended September 30, 2025, the period-over-period growth in the three and nine months ended September 30, 2026 was 15%, and 14%, respectively. Our net loss was $5.0 million and $13.7 million for the three months ended September 30, 2026 and 2025, respectively, and $23.3 million and $35.9 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

We generated Adjusted EBITDA of $(3.4) million and $(2.7) million in the three months ended June 30, 2026 and 2025, respectively, and $(6.9) million and $(7.8) million in the six months ended June 30, 2026 and 2025, respectively. See the section titled “—Non-GAAP Financial Measure” for the definition of Adjusted EBITDA, as well as a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP.

Current wording

We generated Adjusted EBITDA of $0.1 million and $(0.3) million in the three months ended September 30, 2026 and 2025, respectively, and $(6.8) million and $(8.1) million in the nine months ended September 30, 2026 and 2025, respectively. See the section titled “—Non-GAAP Financial Measure” for the definition of Adjusted EBITDA, as well as a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP.

Previous wording

Our market is global and we believe there is a significant opportunity to expand our international customer base, particularly in the United Kingdom, and further expand our operations internationally, particularly in India. In the three and six months ended June 30, 2026, 12% and 11% of our revenue was generated by customers outside of the United States, respectively. Operationally, we expect to continue to expand our global employee headcount in India.

Current wording

Our market is global and we believe there is a significant opportunity to expand our international customer base, particularly in the United Kingdom, and further expand our operations internationally, particularly in India. In each of the three and nine months ended September 30, 2026, approximately 12% of our revenue was generated by customers outside of the United States. Operationally, we expect to continue to expand our global employee headcount in India.

Previous wording

For each of the three and six months ended June 30, 2026, usage-based revenue represented 92% of total revenue and subscription revenue fees represented 8% of total revenue. In the three and six months ended June 30, 2025, usage-based revenue represented 90% and 89% of total revenue, respectively, and subscription revenue fees represented 10% and 11% of total revenue, respectively.

Current wording

In each of the three and nine months ended September 30, 2026, usage-based revenue represented 92% of total revenue, and subscription revenue fees represented 8% of total revenue. In the three and nine months ended September 30, 2025, usage-based revenue represented 91% and 90% of total revenue, respectively, and subscription revenue fees represented 9% and 10% of total revenue, respectively.

Previous wording

Sales and marketing expenses consist primarily of personnel-related costs directly associated with our sales and marketing staff, including salaries, benefits, bonuses, commissions, stock-based compensation and allocated overhead costs. Sales and marketing expenses also include advertising costs and other expenses associated with our marketing and business development programs. In addition, sales and marketing expenses consist of travel-related expenses, software services dedicated for use by our sales and marketing organizations and outside services contracted for sales and marketing purposes. We expect that our sales and marketing expenses will increase modestly in absolute dollars and will continue to be our largest operating expense for the foreseeable future as we grow our business. Our sales and marketing expenses are expected to decrease as a percentage of our revenue over time.

Current wording

Sales and marketing expenses consist primarily of personnel-related costs directly associated with our sales and marketing staff, including salaries, benefits, bonuses, commissions, stock-based compensation and allocated overhead costs. Sales and marketing expenses also include advertising costs and other expenses associated with our marketing and business development programs. In addition, sales and marketing expenses consist of travel-related expenses, software services dedicated for use by our sales and marketing organizations and outside services contracted for sales and marketing purposes. We expect that our sales and marketing expenses will increase in absolute dollars and will continue to be our largest operating expense for the foreseeable future as we grow our business. Our sales and marketing expenses are expected to decrease as a percentage of our revenue over time.

Previous wording

Total revenue increased by $5.0 million, or 13%, for the three months ended June 30, 2026 compared to the same period in 2025. Revenue related to new customers added since June 30, 2025 contributed $5.9 million, which was partially offset by a $0.9 million decrease in revenue from customers that existed as of June 30, 2025. The change in revenue from existing customers was driven by decreases in usage of our service offerings by several of our existing customers.

Current wording

Total revenue increased by $4.4 million, or 11%, for the three months ended September 30, 2026 compared to the same period in 2025. When excluding the $1.3 million impact of the contingent matter from the three months ended September 30, 2025, total revenue increased by $5.8 million, or 15%. Revenue related to new customers added since September 30, 2025 contributed $7.1 million, which was partially offset by a $2.7 million decrease in revenue from customers that existed as of September 30, 2025. The change in revenue from existing customers was driven by a $1.4 million decrease in usage of our product offerings and contingent revenue recognized of $1.3 million in the three months ended September 30, 2025.

Previous wording

Revenue generated from our software product offerings increased by $4.1 million, or 13%, for the three months ended June 30, 2026 compared to the same period in 2025 due to increases in usage of our software product offerings. Revenue generated from our services product offerings increased by $0.9 million, or 18%, for the three months ended June 30, 2026 compared to the same period in 2025 due to an increase in usage of our services product offerings.

Current wording

Revenue generated from our software product offerings increased by $3.4 million, or 10%, for the three months ended September 30, 2026 compared to the same period in 2025. When excluding the $1.2 million impact of the contingent matter from the three months ended September 30, 2025, software revenue increased by $4.6 million, or 13%. This change is attributable to increased usage of our software product offerings. Revenue generated from our services product offerings increased by $1.0 million, or 18%, for the three months ended September 30, 2026 compared to the same period in 2025 due to increases in usage of our services product offerings.

Previous wording

Total cost of revenue increased by $2.6 million, or 14%, for the six months ended June 30, 2026 compared to the same period in 2025. This change was primarily driven by a $1.4 million increase in costs for cloud hosting as a result of increased usage of our software product offerings, a $0.8 million increase in salary and benefits costs as a result of increased headcount, and an increase of $0.2 million in outsourced staffing vendor fees.

Current wording

Total cost of revenue increased by $1.1 million, or 11%, for the three months ended September 30, 2026 compared to the same period in 2025. This change was primarily driven by a $0.6 million increase in costs for cloud hosting as a result of increased usage of our software product offerings and a $0.4 million increase in salary and benefits costs as a result of increased headcount.

Previous wording

Research and development expenses increased by $1.0 million, or 7%, for the three months ended June 30, 2026 compared to the same period in 2025. The change was primarily driven by an increase of $0.7 million in software costs predominantly related to additional AI-powered productivity and development tools as well as a $0.3 million increase in personnel costs.

Current wording

Research and development expenses increased by $0.4 million, or 3%, for the three months ended September 30, 2026 compared to the same period in 2025. The change was primarily driven by an increase of $0.6 million in software costs predominantly related to additional AI-powered productivity and development tools as well as a $0.3 million increase in personnel costs and a $0.2 million increase in professional services. These changes were partially offset by a $0.7 million increase in capitalized development.

Previous wording

Sales and marketing expenses increased by $1.6 million, or 11%, for the three months ended June 30, 2026 compared to the same period in 2025. The change was primarily driven by an increase of $1.4 million in personnel costs, including commissions expense for our sales personnel.

Current wording

Sales and marketing expenses increased by $1.3 million, or 9%, for the three months ended September 30, 2026 compared to the same period in 2025. The change was primarily driven by a $1.0 million increase in personnel costs, including commissions expense for our sales personnel.

Previous wording

Total revenue increased by $10.3 million, or 14%, for the six months ended June 30, 2026 compared to the same period in 2025. Revenue related to new customers added since June 30, 2025 contributed $11.7 million, which was partially offset by a $1.4 million decrease in revenue from customers that existed as of June 30, 2025. The change in revenue from existing customers was driven by decreases in usage of our service offerings by several of our existing customers.

Current wording

Total revenue increased by $14.7 million, or 13%, for the nine months ended September 30, 2026 compared to the same period in 2025. When excluding the $1.3 million impact of the contingent matter from the nine months ended September 30, 2025, total revenue increased by $16.0 million, or 14%. Revenue related to new customers added since September 30, 2025 contributed $16.6 million, which was partially offset by a $1.9 million decrease in revenue from customers that existed as of September 30, 2025. The change in revenue from existing customers was driven by a $0.6 million decrease in usage of our services product offerings and contingent revenue recognized of $1.3 million in the nine months ended September 30, 2025.

Previous wording

Revenue generated from our software product offerings increased by $7.9 million, or 12%, for the six months ended June 30, 2026 compared to the same period in 2025 due to increases in usage of our software product offerings. Revenue generated from our services product offerings increased by $2.4 million, or 22%, for the six months ended June 30, 2026 compared to the same period in 2025 due to an increase in usage of our services product offerings.

Current wording

Revenue generated from our software product offerings increased by $11.2 million, or 11%, for the nine months ended September 30, 2026 compared to the same period in 2025. When excluding the $1.2 million impact of the contingent matter from the nine months ended September 30, 2025, software revenue increased by $12.4 million, or 13%. This change is attributable to increased usage of our software product offerings. Revenue generated from our services product offerings increased by $3.4 million, or 21%, for the nine months ended September 30, 2026 compared to the same period in 2025 due to increases in usage of our services product offerings.

Previous wording

Total cost of revenue increased by $1.3 million, or 14%, for the three months ended June 30, 2026 compared to the same period in 2025. This change was primarily driven by a $0.7 million increase in costs for cloud hosting as a result of increased usage of our software product offerings, a $0.4 million increase in salary and benefits costs as a result of increased headcount, and an increase of $0.2 million in outsourced staffing vendor fees.

Current wording

Total cost of revenue increased by $3.7 million, or 13%, for the nine months ended September 30, 2026 compared to the same period in 2025. This change was primarily driven by a $2.0 million increase in costs for cloud hosting as a result of increased usage of our software product offerings, a $1.2 million increase in salary and benefits costs as a result of increased headcount, and an increase of $0.2 million in outsourced staffing vendor fees.

Previous wording

Research and development expenses increased by $1.4 million, or 5%, for the six months ended June 30, 2026 compared to the same period in 2025. The change was primarily driven by an increase of $0.9 million in software costs predominantly related to AI-powered productivity and development tools as well as an increase of $0.8 million in personnel costs. These changes were partially offset by a $0.3 million increase in capitalized software development.

Current wording

Research and development expenses increased by $1.8 million, or 4%, for the nine months ended September 30, 2026 compared to the same period in 2025. The change was primarily driven by an increase of $1.5 million in software costs predominantly related to AI-powered productivity and development tools as well as an increase of $1.1 million in personnel costs as a result of increased headcount. These changes were partially offset by a $1.0 million increase in capitalized software development.

Previous wording

Sales and marketing expenses increased by $3.2 million, or 11%, for the six months ended June 30, 2026 compared to the same period in 2025. The change was driven by an increase of $2.5 million in personnel costs, including commissions expense for our sales personnel, an increase of $0.3 million in marketing expense, and an increase of $0.2 million in professional services cost.

Current wording

Sales and marketing expenses increased by $4.5 million, or 10%, for the nine months ended September 30, 2026 compared to the same period in 2025. The change was driven by an increase of $3.4 million in personnel costs, including commissions expense for our sales personnel, an increase of $0.4 million in marketing expense, and an increase of $0.3 million in professional services cost.

Previous wording

General and administrative expenses decreased by $1.5 million, or 14%, for the three months ended June 30, 2026 compared to the same period in 2025. This change was primarily attributable to a decrease of $1.6 million in legal costs related to the securities litigation and a decrease of $0.4 million in bad debt expense. These changes were partially offset by an increase in professional services costs of $0.8 million.

Current wording

General and administrative expenses decreased by $9.3 million, or 24%, for the nine months ended September 30, 2026 compared to the same period in 2025. This change was primarily attributable to a decrease of $9.2 million in legal costs related to the stockholder litigation, a decrease of $0.7 million in personnel costs, and a decrease in bad debt expense and insurance costs of $0.5 million and $0.3 million, respectively. These changes were partially offset by an increase in professional services costs of $1.5 million and an increase of software costs of $0.4 million.

Previous wording

We have financed operations primarily through customer payments and net proceeds from sales of equity securities, including our IPO in July 2021. As of June 30, 2026, our principal sources of liquidity were cash and cash equivalents and short-term investments, totaling $10.9 million and $90.5 million, respectively. Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Short-term investments consist of highly-rated U.S. Treasury securities and corporate debt securities with maturities of more than three months but less than one year at the date of purchase. We believe our existing cash and cash equivalents and short-term investments will be sufficient to fund anticipated cash requirements for the next 12 months. We believe we will meet our longer-term expected future cash requirements primarily from a combination of cash flow from operating activities and available cash and cash equivalents and short-term investments. We may also engage in equity or debt financings to secure additional funds.

Current wording

We have financed operations primarily through customer payments and net proceeds from sales of equity securities, including our IPO in July 2021. As of September 30, 2026, our principal sources of liquidity were cash and cash equivalents and short-term investments, totaling $12.5 million and $84.2 million, respectively. Cash equivalents include highly liquid investments that are readily convertible to known amounts of cash and have original maturities of three months or less. Short-term investments consist of highly-rated U.S. Treasury securities and corporate debt securities with maturities of more than three months but less than one year at the date of purchase. We believe our existing cash and cash equivalents and short-term investments will be sufficient to fund anticipated cash requirements for the next 12 months. We believe we will meet our longer-term expected future cash requirements primarily from a combination of cash flow from operating activities and available cash and cash equivalents and short-term investments. We may also engage in equity or debt financings to secure additional funds.

Previous wording

Our principal cash requirements consist of obligations under our operating leases and purchase commitments to our cloud hosting providers and other vendors. There were no changes in our material cash requirements during the six months ended June 30, 2026 from the material cash requirements disclosed in our most recent Annual Report on Form 10-K.

Current wording

Our principal cash requirements consist of obligations under our operating leases and purchase commitments to our cloud hosting providers and other vendors. There were no changes in our material cash requirements during the nine months ended September 30, 2026 from the material cash requirements disclosed in our most recent Annual Report on Form 10-K.

Previous wording

Our future capital requirements will depend on many factors, including our revenue growth rate, usage of our product offerings, billing frequency, the timing and extent of spending to support further sales and marketing and research and development efforts, and the continuing market acceptance of our product offerings. Although fluctuations in general macroeconomic and industry conditions, including conditions resulting from fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, the recent U.S. government shutdown, the executive orders issued by President Trump, and the effects of global events, such as the Russia-Ukraine war, the war in Iran and the broader conflict and escalating tensions in the Middle East, have not materially impacted our liquidity to date, we plan to continue to evaluate aspects of our spending, including capital expenditures, discretionary spending and strategic investments throughout 2026. We have considered the impacts of these factors on our liquidity and capital resources to date, and we do not currently expect them to impact our ability to meet future liquidity needs.

Current wording

Our future capital requirements will depend on many factors, including our revenue growth rate, usage of our product offerings, billing frequency, the timing and extent of spending to support further sales and marketing and research and development efforts, and the continuing market acceptance of our product offerings. Although fluctuations in general macroeconomic and industry conditions, including conditions resulting from fluctuations in inflation and interest rates, the imposition of tariffs in the United States and abroad, the 2025 U.S. government shutdown, the executive orders issued by President Trump, and the effects of global events, such as the Russia-Ukraine war, the war in Iran and the broader conflict and escalating tensions in the Middle East, have not materially impacted our liquidity to date, we plan to continue to evaluate aspects of our spending, including capital expenditures, discretionary spending and strategic investments throughout 2026. We have considered the impacts of these factors on our liquidity and capital resources to date, and we do not currently expect them to impact our ability to meet future liquidity needs.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2026 was $12.8 million, a decrease of $2.0 million from net cash used in operating activities of $14.7 million for the six months ended June 30, 2025. The change in cash flow used in operations was primarily due to working capital charges.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2026 was $15.8 million, consistent with net cash used in operating activities of $15.7 million for the nine months ended September 30, 2025. The change in cash flow used in operations was primarily due to a decrease in net loss offset by working capital changes, primarily related to accounts receivable due to timing of collection from our customers, accrued legal loss, and the insurance recoverable receivable related to the accrued legal loss.

Previous wording

Net cash provided by investing activities for the six months ended June 30, 2026 was $4.1 million, an increase of $20.4 million from net cash used in investing activities of $16.3 million for the six months ended June 30, 2025. The change in cash provided by (used in) investing activities was primarily related to maturities and purchases of short-term investments.

Current wording

Net cash provided by investing activities for the nine months ended September 30, 2026 was $8.8 million, an increase of $17.1 million from net cash used in investing activities of $8.3 million for the nine months ended September 30, 2025. The change in cash provided by (used in) investing activities was primarily related to maturities partially offset by purchases of short-term investments.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2026 was $0.1 million, consistent with net cash used in financing activities of $0.1 million for the six months ended June 30, 2025.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2026 was $0.1 million, a decrease of $0.2 million from net cash provided by financing activities of $0.1 million for the nine months ended September 30, 2025. The change in cash provided by (used in) financing activities was primarily related to an increase in repurchases of common stock related to net share settlement, partially offset by the absence of cash paid for acquisitions in 2026.