Hinge Health, Inc.

Hinge Health, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Description of Business

Hinge Health, Inc. and its subsidiaries and consolidated professional corporations (collectively “Hinge Health” or the “Company”) is focused on scaling and automating the delivery of health care, starting with musculoskeletal conditions. Leveraging an AI-powered care model, wearable devices, and access to expert clinicians, Hinge Health delivers personalized, evidence-based care that helps people move beyond pain, improving member outcomes and experiences and reducing costs for clients. The Company’s clients are primarily self-insured employers. The Company’s members represent an eligible life who has engaged with the Company’s platform at any point and whose engagement has been billed or is contractually eligible to be billed.

The Company was incorporated in Delaware in March 2016 and is headquartered in San Francisco, California. The Company has wholly-owned subsidiaries in Canada, India and the United Kingdom that provide research and development support.

2. Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described below and elsewhere in these notes to the unaudited condensed consolidated financial statements.

Basis of Presentation

These unaudited condensed consolidated financial statements are presented in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). Certain information and note disclosures normally included in the unaudited condensed consolidated financial statements prepared in accordance with GAAP have been omitted. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 3, 2026. In the opinion of management, the interim unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the Company’s financial position for the periods presented. The results for the interim periods presented are not necessarily indicative of future results or results for the full fiscal year or for any other period.

The Company’s unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and its affiliated professional medical corporations. The Company’s affiliated professional medical corporations are collectively referred to as Hinge Health Digital P.C.

Hinge Health Digital P.C. contracts with or otherwise employs physicians, physical therapists and other licensed health professionals in order to provide services to the Company’s members, and under certain management services agreements, the Company serves as the exclusive manager and administrator of Hinge Health Digital P.C.’s non-clinical functions and services. Hinge Health Digital P.C. is considered a variable interest entity (“VIE”) for which the Company is the primary beneficiary. The Company has the rights and power to control the activities of Hinge Health Digital P.C. and as a result the Company consolidates the activities of Hinge Health Digital P.C.

As of March 31, 2026 and December 31, 2025, total assets of the VIE, all of which are current, were $5.8 million and $3.8 million, respectively, and total liabilities, all of which are current, were $2.4 million and $1.3 million, respectively, after the elimination of intercompany transaction balances.

All intercompany transactions and balances have been eliminated upon consolidation.

Any reference in these notes to applicable guidance is meant to refer to authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASUs”) of the Financial Accounting Standards Board (“FASB”).

Significant Accounting Policies

There have been no material changes to the significant accounting policies of the Company during the three months ended March 31, 2026, as compared to those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 3, 2026.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Company’s unaudited condensed consolidated financial statements. Significant items that require estimates include, but are not limited to, variable consideration to recognize revenue, inventory valuation, estimated credit losses, income taxes, capitalized internal-use software development costs, the period of benefit for deferred commissions, and accounting for stock-based compensation. Despite the Company’s intention to establish accurate estimates and use reasonable assumptions, actual results may vary from the Company’s estimates.

Emerging Growth Company Status

The Company is an emerging growth company, as defined by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards that have different effective dates to public and private companies until the earlier of the date that (i) the company is no longer an emerging growth company or (ii) the company affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The Company expects to use the extended transition period for any other new or revised accounting standards during the period in which it remains an emerging growth company.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, marketable securities and trade accounts receivable. The primary focus of the Company’s investment strategy is to preserve capital and meet liquidity requirements. The Company’s investment policy addresses the level of credit exposure by limiting the concentration in any one corporate issuer and establishing a minimum allowable credit rating. To manage risk exposure, the Company invests cash equivalents and marketable securities in a variety of fixed income securities, including government and investment-grade debt securities and money market funds. The Company places its cash primarily in checking and money market accounts with reputable financial institutions. Deposits held with these financial institutions may exceed the amount of insurance provided on such deposits, if any.

The Company monitors accounts receivable for uncollectible accounts on an ongoing basis. No client represented greater than 10% of the Company’s accounts receivable as of March 31, 2026 and December 31, 2025. Additionally, no client represented greater than 10% of the Company’s revenue for the three months ended March 31, 2026 and 2025. For the purpose of assessing the concentration of credit risk for significant clients, the Company defines a client as a business or organization that purchases access to the Company’s platform directly from the Company or indirectly through one of the Company’s partners.

The Company is subject to supplier concentration risk from third-party suppliers that supply its inventory. The Company relies and expects to continue to rely on a small number of third-party suppliers to supply its inventory requirements. The Company’s inventory and ability to provide its peripheral Enso device product to members could be adversely affected by a significant interruption from these third-party suppliers.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable are stated at the amount management expects to collect from outstanding balances, net of allowances for credit losses. The Company records accounts receivable when it has the unconditional right to bill and receive payment regardless of whether revenue has been recognized. Unbilled receivables include contractually billable invoices that are not yet billed. Amounts that the Company has a contractual right to bill or has billed are non-refundable, unless certain performance conditions are not met per the contract.

Accounts receivable, net as of March 31, 2026 and December 31, 2025 was composed of the following (in thousands):

Allowances for credit losses are provided for those outstanding balances considered to be uncollectible based on the age of each outstanding invoice, historical collection history and the client’s expected ability to pay. Balances that are still outstanding after management has made reasonable collection efforts are written off through a charge to the allowance for credit losses.

Allowance for credit losses during the three months ended March 31, 2026 and 2025 were composed of the following (in thousands):

Deferred Inventory Costs

Deferred inventory costs are primarily composed of the Company’s kits and Enso device, which are sent to members. The Company amortizes the costs associated with the kits and devices over the member subscription period, consistent with the transfer to the member of the service to which the kits and devices relate. These costs are amortized ratably over the member subscription period and are included in cost of revenue in the accompanying unaudited condensed consolidated statement of operations and comprehensive income. Deferred inventory costs as of March 31, 2026 and December 31, 2025 were $21.9 million and $19.6 million, respectively, which were recorded to prepaid expenses and other current assets in the unaudited condensed consolidated balance sheets.

Deferred Commissions

The Company has determined that certain sales incentives provided to the Company’s sales team and payments related to partnership agreements are required to be capitalized when the Company expects to generate future economic benefits from the related revenue-generating contracts subsequent to the initial sales transaction. When determining the economic life of the deferred commission assets recognized, the Company considers historical renewal rates, expectations of future client renewals of contracts, and other factors that could impact the economic benefits that the Company expects to generate from the relationship with its clients. Deferred commissions are amortized over the 12-month member subscription period for partner commissions and estimated five-year client period of benefit for sales commissions and are included in sales and marketing expense in the accompanying unaudited condensed consolidated statements of operations and comprehensive income.

A summary of the activity of the Company’s deferred commission balances during the three months ended March 31, 2026 and 2025 were as follows (in thousands):

Deferred Revenue

Deferred revenue primarily consists of amounts which the Company has billed or can contractually bill from subscription services and is recognized as the revenue recognition criteria is met.

The following table summarizes the changes in the deferred revenue balances during the three months ended March 31, 2026 and 2025 (in thousands):

The Company’s performance obligations are satisfied within 12 months of a member performing their first billable activity. As of March 31, 2026 and December 31, 2025, the deferred revenue balance was composed entirely of noncancellable performance obligations that will be satisfied within 12 months.

The Company recognized revenue of $152.4 million and $104.8 million during the three months ended March 31, 2026 and 2025, respectively, which was included in deferred revenue balances at the beginning of the respective periods.

Revenue

The Company earns revenue from subscription fees by providing access to its platform and programs to treat and prevent MSK pain. The Company currently sells all of its subscriptions to its clients and generates substantially all of its revenue in the United States.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. ASC 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to the Company’s customers, which primarily consists of businesses, organizations or partners that have an agreement (collectively “clients”), in an amount that reflects the consideration the entity expects to be entitled to in exchange for those goods or services. Further, the Company’s members represent an eligible life who has engaged with the Company’s platform at any point and whose engagement has been billed or is contractually eligible to be billed.

The Company applies the principles of ASC 606 and determines revenue recognition by applying the following five steps:

•Identification of the contract, or contracts, with a customer;

•Identification of the performance obligations in the contract;

•Determination of the transaction price;

•Allocation of the transaction price to the performance obligations in the contract; and

•Recognition of revenue when, or as, the Company satisfies a performance obligation.

The Company determines it has a contract with a customer: (1) when the contract has been approved by the Company and the client; (2) it can identify each party’s rights regarding the services to be transferred and the payment terms for the services; and (3) it has determined that the client has the ability and intent to pay and (4) its members have engaged with the platform. The Company applies judgment in determining the client’s ability and intent to pay, which is based on a variety of factors, including the client’s payment history or, new client reputation and relationship with a health plan partner, as applicable. The Company’s typical contracts have a stated contractual term ofthree years, however for revenue recognition purposes, the contractual period isone year to align with the member subscription period as there are no enforceable rights and obligations until a subscription period for a member commences upon a first billable activity. After the initial stated contractual term, the Company’s contracts renew automatically for additionalone-year terms unless notice of termination is given by the client or the Company.

The contracts contain a number of promised goods and services, including access to the Company’s platform, technical support, as well as the Company’s peripheral products, which includes the Enso device. The Company has determined its contracts contain a single combined performance obligation under which the following are provided to members: (1) access to the platform that is delivered over time; (2) technical support which is delivered in the same pattern using the output method; and (3) the peripheral products, when and if sent as a part of its platform.

The Company may provide the Enso device as part of its platform, which remains the legal property of the Company during the contract term. The Company determines whether the Enso device is sent to members based on criteria that it controls. If the Enso device is sent to a member as part of the Company’s platform, it constitutes a lease component as this device remains the property of the Company and the member has the right to direct the use of the device during the contract term. Delivery of the device causes a change to the scope of the contract, as both the Company’s and clients’ rights have changed. The Company accounts for this change as a contract modification resulting in the termination of the old contract and the start of a new contract. The Company’s Enso device qualifies to be accounted for as an operating lease and the pattern of delivery from contract modification date to contract termination is consistent with the timing for non-lease components in the contract. For these client arrangements where the Enso device is leased in combination with services, the Company considers the arrangement to be predominately a service and thus a combined single performance obligation for purposes of revenue recognition.

The transaction price is a fixed annual fee or a variable fee based on member engagement activity during a service period. The Company’s contracts are billed either (a) after a member’s first completed billing activity for fixed annual fee contracts, (b) throughout the service period upon the achievement of cohort milestones, or (c) throughout the service period based upon member engagement activity. When the billable volume varies based upon the achievement of cohort milestones or member engagement activity, the consideration is variable at the time the contract is entered into. When the billable amount varies the Company estimates the variable consideration per member using the expected value method. The estimate is based on the Company’s historical experience with average member usage and cohort milestone achievement and is refreshed quarterly to ensure that a significant reversal in revenue will not occur and the estimates of billable amounts and constraints are adjusted for changes in member behavior over time. To the extent the Company cannot estimate with reasonable certainty the likelihood that the variable consideration will be achieved, the Company constrains this portion of the transaction price and recognizes it when or as the uncertainty is resolved. Based on historical achievement or member engagement experience and quarterly lookbacks, the Company adjusts revenue when the uncertainty has been resolved. If the actual amounts of consideration received differ from its estimates, the Company adjusts reported revenue in the period such variances become known. For the three months ended March 31, 2026 and 2025 changes to estimated variable consideration were not material.

Members have access to the Company’s platform for a 12-month subscription term that begins after the individual has completed their first billable activity on the platform. The Company does not earn any fees until this point. The Company recognizes revenue for each member ratably over the 12-month member subscription period in order to match the pattern of revenue recognition to the pattern of costs incurred in delivering its platform.

Timing of revenue recognition may differ from the timing of billing. A majority of the Company’s clients are billed upfront or throughout the first quarter of the member’s subscription period. The Company’s performance obligations are satisfied within 12 months of the member’s first billable activity. The Company’s contracts do not contain significant financing components.

Additionally, certain performance guarantees are included in most contracts and are estimated at each reporting period based on the Company’s historical performance or other available information. The Company recognizes any estimated adjustments to the contract price for not achieving the performance guarantees as an adjustment to revenue. Payouts on these performance guarantees have been immaterial to date.

Redeemable Convertible Preferred Stock

The Company has elected to apply the qualitative approach in determining whether an amendment to, or exchange of, an equity-classified redeemable convertible preferred stock (“Preferred Stock”) constitutes a modification or extinguishment when the Preferred Stock is not reclassified as a liability.

On February 18, 2025, the Company entered into a stock repurchase agreement (“Stock Repurchase Agreement”) with Coatue US 70 LLC and Coatue Growth Fund IV LP (collectively, “Coatue”). Pursuant to the Stock Repurchase Agreement, immediately prior to the completion of the Company’s initial public offering (the "IPO"), the Company repurchased shares of Series E preferred stock from Coatue US 70 LLC for an aggregate purchase price of $50.0 million (“Series E Repurchase”). The closing of the IPO was not conditioned upon the completion of the Series E Repurchase. Concurrently with the Stock Repurchase Agreement, the Company entered into a participation letter with Coatue, pursuant to which Coatue had the right, but not the obligation, to purchase from the Company at the IPO price an aggregate number of shares of Class A common stock in the Company’s IPO up to 5% of the shares of Class A common stock offered in the IPO. Additionally, Coatue voluntarily converted all of its remaining shares of Series E preferred stock into shares of Class B common stock immediately prior to the completion of the IPO and consented to convert and reclassify its shares of Series D Preferred Stock into shares of Class B common stock effective immediately prior to the completion of the IPO.

During the first quarter of 2025, the Company recorded a deemed contribution of $104.2 million upon the extinguishment of Series D and E Preferred Stock charged to additional paid in capital in the unaudited condensed consolidated statements of redeemable convertible preferred stock and stockholders' equity (deficit).

Net Income Per Share Attributable to Common Stockholders

Basic and diluted net income per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of redeemable convertible preferred stock to be participating securities as the holders of such stock are entitled to receive non-cumulative dividends on an as-converted basis, in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the redeemable convertible preferred stock as the holders of the Company’s redeemable convertible preferred stock do not have a contractual obligation to share in the losses of the Company. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights.

Basic net income per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. If the Company has reported net losses for a period presented, potentially dilutive securities for that period is antidilutive and, accordingly, basic net loss per share equals diluted net loss per share.

Recent Accounting Pronouncements Not Yet Adopted

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU results in a comprehensive list of interim disclosures that are required by GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027 with early adoption permitted. The Company does not expect a material impact on its financial statements and related disclosures.

In September 2025, the FASB issued ASU No. 2025-06, Intangible - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU removes all references to prescriptive and sequential software development stages. The ASU requires entities to begin capitalizing software costs when management authorizes and commits to funding the software project, and it is probable that the project will be completed and the software will be used for its intended purpose. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its unaudited condensed consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which amends ASC 326-20 to provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. The practical expedient permits all entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments in this ASU are effective for fiscal years beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance on its unaudited condensed consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20). The ASU intends to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20, Debt—Debt with Conversion and Other Options, providing clarifying guidance on how to determine whether a settlement of convertible debt (particularly, cash convertible instruments) at terms that differ from the original conversion terms should be accounted for under the induced conversion or extinguishments guidance. The new standard is effective for the Company for the annual period beginning after December 15, 2025. The Company does not expect a material impact on its financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The ASU intends to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion). The new standard is effective for the Company for the annual period beginning after December 15, 2026. The Company is currently evaluating the impact of this guidance on its financial statements and related disclosures.

3. Cash, Cash Equivalents and Marketable Securities and Fair Value Measurements

The Company’s cash equivalents and marketable securities classified as Level 1 financial instruments are composed of U.S. treasury securities and money market funds. Level 1 financial instruments are in active markets using unadjusted quoted market prices for identical instruments.

The Company’s marketable securities classified as Level 2 financial instruments are composed of investment-grade corporate and government agency securities and commercial paper. Level 2 financial instruments are not in active markets but are from a primary professional pricing source that uses quoted market prices for identical or comparable instruments, rather than direct observations of quoted prices in active markets. Fair values obtained from this professional pricing source can also be based on pricing models whereby all significant observable inputs, including maturity dates, issue dates, settlement dates, benchmark yields, reported trades, broker-dealer quotes, issue spreads, benchmark securities, bids, offers or other market related data, are observable or can be derived from, or corroborated by, observable market data for substantially the full term of the asset. The Company validates the quoted market prices provided by its primary pricing service by comparing the fair values of its Level 2 marketable securities portfolio balance provided by its primary pricing service against the fair values provided by the Company’s marketable security managers.

The Company valued the modification on the Stock Repurchase Agreement, which was accounted for as an extinguishment using Level 3 inputs in the valuation hierarchy due to the presence of significant unobservable inputs and was valued at $104.2 million.

There wereno transfers into or out of Level 3 securities during the three months ended March 31, 2026 and the year ended December 31, 2025.

As of March 31, 2026 and December 31, 2025, cash equivalents and marketable securities and the fair value hierarchy level consisted of the following (in thousands):

As of March 31, 2026 and December 31, 2025 the contractual maturities of the marketable securities were as follows (in thousands):

The Company does not intend to sell the marketable securities, and it is not more likely than not that the Company will be required to sell the marketable securities before recovery of their amortized cost basis, which may be at maturity.

For the three months ended March 31, 2026 and 2025 interest income earned from cash and cash equivalents and marketable securities included in other income, net in the unaudited condensed consolidated statements of operations and comprehensive income, was composed of the following (in thousands):

4. Balance Sheet Details

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets as of March 31, 2026 and December 31, 2025 was composed of the following (in thousands):

Deferred inventory costs for members are amortized ratably over the membership subscription period. The amortization cost for the three months ended March 31, 2026 and 2025 were $11.2 million and $7.4 million, respectively. These amortization costs are included in cost of revenue in the unaudited condensed consolidated statements of operations and comprehensive income.

Inventory

Inventory as of March 31, 2026 and December 31, 2025 was composed of the following (in thousands):

As of March 31, 2026 and December 31, 2025 inventory primarily consisted of the Company’s Enso device that have not been shipped to members.

Property, Equipment, and Software, Net

Property, equipment, and software, net as of March 31, 2026 and December 31, 2025 was composed of the following (in thousands):

During the three months ended March 31, 2026 and 2025 depreciation expense was $0.3 million for both the three month periods. During the three months ended March 31, 2026 and 2025 the Company capitalized internal-use software costs of $1.4 million (including $0.3 million in stock-based compensation expense) and $0.7 million, respectively, and incurred amortization expense of $0.7 million and $0.8 million, respectively.

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of March 31, 2026 and December 31, 2025 was composed of the following (in thousands):

5. Goodwill and Intangible Assets

During the three months ended March 31, 2026, there were no changes to the carrying amount of goodwill of $64.1 million.

Intangible assets, net as of March 31, 2026 and December 31, 2025 were as follows (in thousands, except years):

The useful lives of developed technology generally is between three toeight years and trade names generally is overten years. Amortization expense for the three months ended March 31, 2026 and 2025 was $0.2 million and $0.2 million, respectively.

As of March 31, 2026, future amortization expense related to the intangible assets was estimated as follows (in thousands):

6. Commitments and Contingencies

Legal and Tax Matters

As of March 31, 2026 and December 31, 2025 the Company is not subject to any pending or threatened litigation, individually or in the aggregate, for which it is reasonably possible to have a material effect on its unaudited condensed consolidated financial position or results of operations. In addition, state, local, and foreign tax jurisdictions have differing rules and regulations governing sales, use, value-added, and other taxes, and these rules and regulations can be complex and are subject to varying interpretations that may change over time. Based on the Company’s evaluation under ASC 450, Contingencies, a reserve is established for the estimated liability related to these taxes as and when the amounts are considered probable. For taxes that are reasonably possible, such an estimate cannot be made.

Indemnification Obligations

In the normal course of business, the Company may agree to indemnify third parties with whom it enters into contractual relationships, including clients, lessors, and parties to other transactions with the Company, with respect to certain matters. The Company has agreed, under certain conditions, to hold these third parties harmless against specified losses, such as those arising from a breach of representations or covenants, other third-party claims that the Company’s platform, programs or devices when used for their intended purposes infringe the intellectual property rights of such other third parties, or other claims made against certain parties. It is not possible to determine the maximum potential amount of liability under these indemnification obligations due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances that are likely to be involved in each particular claim.

Leases

The Company leases office spaces under non-cancelable operating lease agreements. These leases have remaining lease terms of approximatelyone tothree years, which represent the non-cancellable periods of the leases. Lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms as well as variable payments for common area maintenance and administrative services. Variable lease costs were immaterial for the three months ended March 31, 2026 and 2025. The Company has also received certain incentives from landlords, such as reimbursements for tenant improvements and rent abatement periods, which effectively reduce the total lease payments owed for these leases.

As of March 31, 2026, remaining future minimum lease payment obligations under the Company’s noncancellable operating leases were as follows (in thousands):

7. Redeemable Convertible Preferred Stock

Redeemable convertible preferred stock (“Preferred Stock”) outstanding as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands, except share amounts):

The holders of the Series E preferred stock have the following rights, preferences and privileges as of March 31, 2026:

Voting Rights—The holders of the Series E preferred stock initially vote as though their shares of Series E preferred stock had been converted into shares of Class B common stock (which conversion ratio is subject to any anti-dilution adjustment), with fifteen votes per share on all matters submitted to a vote of the stockholders; provided, however, that the Series E preferred stock does not entitle such holder to vote with respect to the election of directors. The holders of the Series E preferred stock retain additional rights, including the requirement that the Series E holders provide their affirmative vote or written consent in order for the Company to (i) amend, alter or repeal of any provision of its amended and restated certificate of incorporation or amended and restated bylaws in a manner that materially adversely affects the holders of the Series E preferred stock, (ii) waive the rights, preferences, and privileges of the Series E preferred stock including any waiver of the anti-dilution adjustment, (iii) waive the classification of a transaction as a “liquidation transaction” or any distribution of proceeds in connection with the Company’s liquidation, dissolution or winding up, or with a merger or consolidation or any other liquidation transaction, (iv) amend, alter, or repeal the definition of the threshold for the Series E preferred stock voting rights, or (v) increase or decrease (other than by conversion) the total number of authorized shares of Series E preferred stock. A “liquidation transaction” occurs if the Company (i) sells, conveys, exclusively licenses or otherwise disposes of all or substantially all of its assets, property or business, in one transaction or a series of related transactions, (ii) merges with or into or consolidates with any other corporation, limited liability company or other entity (other than a wholly-owned subsidiary), in one transaction or a series of related transactions, or (iii) effects the Company’s liquidation, dissolution or winding up; provided that none of the foregoing will be considered a liquidation transaction if the transaction is: (A) a merger effected exclusively for the purpose of changing the Company’s domicile or (B) a bona fide equity financing in which the Company is the surviving corporation.

Dividends—If the Company’s board of directors declares a dividend while shares of the Series E preferred stock remain outstanding, then such shares of Series E preferred stock shall first receive, or simultaneously receive, a dividend on each then outstanding share of Series E preferred stock in an amount at least equal to the dividend payable on each share of Series E preferred stock determined as if all shares of such Series E preferred stock had been converted into the applicable series of common stock.

Conversion—The Series E preferred stock has no stated maturity and will remain outstanding until all shares of the Series E preferred stock are converted into common stock. Each share of Series E preferred stock is initially convertible intoone share of Class B common stock (subject to any anti-dilution adjustment) at any time at the option of the holder, except that the shares of the Series E preferred stock will automatically convert into an equal number of shares of Class A common stock or Class B common stock, as applicable (subject to any anti-dilution adjustment), upon the sale of the Company’s common stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act where the public offering price is at least $77.46420 per share and the Company receives at least $100.0 million in aggregate cash proceeds, net of underwriting discounts and commissions. However, each share of Series E preferred stock will not be convertible into Class B common stock and instead will be convertible into Class A common stock (i) after the Class B Mandatory Conversion Time (as defined in the Company’s amended and restated certificate of incorporation), (ii) after the date any person and such person affiliates that beneficially owned shares of Series E preferred stock as of the immediately upon the filing and effectiveness of the Company’s amended and restated certificate of incorporation in connection with the IPO (the “Effective Time”) cease to beneficially own in the aggregate a number of shares of capital stock equal to at least 50% of the capital stock that such person and such person’s affiliates beneficially owned in the aggregate as of the Effective Time, or (iii) at any time that such Series E preferred stock is held by any person who was not the beneficial owner of such shares of Series E preferred stock as of the Effective Time. Once converted into common stock, the Series E preferred stock may not be reissued.

Anti-Dilution Adjustments—Subject to certain exceptions, any time the Company issues additional shares of capital stock without consideration or for consideration less than the Series E preferred stock conversion price, which is $77.46420, the Series E preferred stock conversion price will be automatically adjusted downward according to a broad-based weighted average formula, according to which the Series E preferred stock conversion price will be automatically adjusted by a fraction, (x) the numerator of which shall be the number of shares of common stock outstanding and deemed issued according to the Company’s amended and restated certificate of incorporation (“Outstanding Common”) plus the number of shares of common stock that the aggregate consideration received by the Company for such issuance of the Additional Stock (as defined below) would purchase at such conversion price; and (y) the denominator of which shall be the number of shares of Outstanding Common plus the number of shares of such Additional Stock. “Additional Stock” is any common stock issued or deemed issued by the Company after October 22, 2021, other than (i) securities issued pursuant to stock splits, stock dividends and similar transactions, (ii) securities issuable upon conversion, exchange or exercise of convertible, exchangeable or exercisable securities outstanding as of October 22, 2021, including, without limitation, warrants, notes or options, (iii) common stock issued or issuable pursuant to the Company’s stock option plans or restricted stock plans or agreements, (iv) the Company’s sale of common stock issued or issuable in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act, (v) securities issued or issuable as consideration for the acquisition by the Company of another company or business approved by the Company’s board of directors, (vi) securities issued or issuable primarily for non-equity financing purposes to financial institutions, equipment lessors, brokers or similar persons in connection with commercial credit arrangements, equipment financings, commercial property lease transactions or similar transactions approved by the board of directors, (vii) securities issued or issuable to an entity as a component of any business relationship with such entity primarily for the purpose of (a) joint venture, technology licensing or development activities, (b) distribution, supply or manufacture of the Company’s products or services or (c) any other arrangements involving corporate partners that are primarily for purposes other than raising capital, the terms of which business relationship with such entity are approved by the Company’s board of directors, (viii) common stock issued or issuable upon conversion of the Preferred Stock and (ix) securities issued or issuable in any other transaction for a consideration per share of less than the Series E preferred stock conversion price if the holders of the Series E preferred stock provide their affirmative vote.

Fractional Shares—The Company will not issue any fraction of a share of common stock upon any conversion of the Series E preferred stock. If the issuance would result in the issuance of a fraction of a share of common stock, the number of shares of common stock to be issued will be rounded down to the nearest whole share.

Right to Receive Liquidation Distribution—In the event of the Company’s liquidation, dissolution, or winding up, the holders of shares of the Series E preferred stock will be entitled to receive out of the net assets legally available for distribution to stockholders, after the payment of all of the Company’s debts and other liabilities, prior and in preference to any distribution of any assets to holders of the Company’s common stock, an amount of $77.46420 per share for each then outstanding share of Series E preferred stock plus any declared but unpaid dividends on such shares, which amount is equal to $200.0 million as of March 31, 2026. In order to waive any distribution of proceeds in the event of the Company’s liquidation, dissolution, or winding up, the holders of the Series E preferred stock must provide their written consent or affirmative vote.

Redemption—The Series E preferred stock is not mandatorily redeemable.

Fully Paid and Non-Assessable—All of the outstanding shares of the Series E preferred stock are fully paid and non-assessable.

8. Common Stock, Equity Incentive Plans and Stock-Based Compensation

Common Stock

In May 2025, prior to the completion of the Company’s IPO, the Company filed its amended and restated certificate of incorporation, which authorized a total of 1,000,000,000 shares of Class A common stock,120,000,000 shares of Class B common stock,4,330,341 shares of Series E preferred stock, and 100,000,000 shares of undesignated preferred stock. The amended and restated certificate of incorporation provided for the Common Stock and Series E Preferred Stock Reclassification and the Preferred Stock Reclassification. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled toone vote per share and is not convertible into any other shares of the Company’s capital stock. Each share of Class B common stock is entitled tofifteen votes per share and is convertible into one share of Class A common stock at any time. The Company’s Class B common stock also will automatically convert into shares of Class A common stock upon certain transfers and other events.

On November 10, 2025, the Company's board of directors approved a share repurchase program with authorization to purchase up to $250 million of our Class A Common Stock. Repurchases under the program may be made in the open market, in privately negotiated transactions, or by other methods, with the amount and timing of repurchases to be determined at the Company's discretion, depending on market conditions and corporate needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any particular amount of Class A Common Stock, and may be modified, suspended, or terminated at any time at the discretion of the Company's board of directors. The Company expects to fund repurchases with existing cash and cash equivalents and from cash from operations. During the first quarter of 2026, the Company repurchased and cancelled 2,453,512 Class A common shares for $105.8 million (including accrued excise tax payable of $0.8 million) and has $80.0 million available to repurchase under the program. The Company's policy is to record the repurchase to additional paid-in capital in the unaudited condensed consolidated balance sheets.

2025 Incentive Award Plan

In March 2025, the Company’s board of directors adopted, and the stockholders approved, the 2025 Incentive Award Plan (the “2025 Plan”). The 2025 Plan became effective on the business day immediately prior to the date of effectiveness of the registration statement on Form S-1 relating to the Company's IPO (the “IPO Registration Statement”), and is the successor to and continuation of the 2017 Plan. Stock options and restricted stock units granted generally vest over four years. As of March 31, 2026, there were 16,957,740 shares of Class A available to be issued under the 2025 Plan.

2025 Employee Purchase Plan

In March 2025, the Company’s board of directors adopted, and the stockholders approved, the Employee Stock Purchase Plan (the “ESPP”), which qualifies as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), and became effective on the business day immediately prior to the date of effectiveness of the IPO Registration Statement. The ESPP is designed to enable eligible employees to purchase shares of the Company's Class A common stock at a discount on a periodic basis through payroll deductions. Each offering period under the ESPP is forone year and consists oftwo six-month purchase periods, except for the first purchase period post-IPO. The purchase price for shares of Class A common stock purchased under the ESPP is 85% of the lesser of the fair market value of the Company’s Class A common stock on the first day of the applicable offering period and the fair market value of the Company’s Class A common stock on the last day of each purchase period. As of March 31, 2026, there were 2,891,007 shares of Class A common stock available to be issued under the Employee Stock Purchase Plan.

Stock-Based Compensation Expense

Stock-based compensation expense for the three months ended March 31, 2026, and 2025 were as follows (in thousands):

Restricted Stock Units and Performance-Based Restricted Stock Units

The following is a summary of the Company’s RSU and PRSU activity during the three months ended March 31, 2026:

As of March 31, 2026 the Company had $79.4 million of unrecognized stock-based compensation expense related to RSUs that will be recognized over the weighted average period of 0.9 years.

The intrinsic value of the RSUs was $170.9 million as of March 31, 2026.

As of March 31, 2026 the Company had $0.1 million of unrecognized stock-based compensation expense related to PRSUs that will be recognized over the weighted average period of 0.8 years.

The intrinsic value of the PRSUs was $218.5 million as of March 31, 2026.

Stock Options

Stock options granted under the 2017 Plan generally expire withinten years from the date of grant, generally vest over four years and are exercisable for shares of the Company’s common stock. The Company hasnot issued stock options since March 31, 2021. A summary of the stock options and changes during the three months ended March 31, 2026 are presented below:

The fair value of the options were expensed over the vesting period, on a straight-line basis, as the services are being provided. The intrinsic value is calculated as the difference between the exercise price of the underlying stock option award and the fair value of the Company’s common stock. The total intrinsic values of options exercised during the three months ended March 31, 2026 was $10.3 million.

Employee Stock Purchase Plan

The fair value of each ESPP share is estimated on the enrollment date of the most recent offering period using the Black-Scholes-Merton option-pricing model and the assumptions noted in the following table:

The Company hastwo open enrollment periods under ESPP. The first enrollment period started from the date of the IPO, May 22, 2025 and the second enrollment period started on November 17, 2025. The fair value of stock purchase rights granted during the 6-month and 12-month period for the first enrollment period was $11.65 per share and $13.60 per share, respectively. The fair value of the stock purchase rights granted during the 6-month and 12-month periods for the second offering period was $15.71 per share and $18.33 per share, respectively. As of March 31, 2026, the Company had $1.5 million of unrecognized compensation expense related to the ESPP that will be recognized over a weighted average period of 0.3 years.

9. Income Taxes

The Company calculates income tax expense (benefit) in interim periods by applying an estimated annual effective tax rate ("AETR") to income before income taxes and recognizing the tax effects of discrete items in the period in which they occur.

For both the three months ended March 31, 2026 and March 31, 2025, the Company's income tax provision includes federal, state, and foreign income tax components. The federal provision reflects limitations on the utilization of net operating loss carryforwards and tax credits under applicable tax law. The Company continues to maintain a full valuation allowance against its U.S. federal and state net deferred tax assets.

10. Net Income Per Share

The Company computes net income per share utilizing the two-class method required for participating securities. The two-class method determines net income per share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed income. The rights, including the liquidation and dividend rights, of the holders of the Company’s Class A common stock and Class B common stock are identical, except with respect to voting. As a result, the basic and diluted net income per share for all shares of Class A common stock and Class B common stock are the same and therefore presented on a combined basis.

The following table presents the reconciliation of the numerator and denominator for calculating basic and diluted net income per share (in thousands, except per share data):

(1)As discussed in Note 2, Summary of Significant Accounting Policies- Redeemable Convertible Preferred Stock, the Company has concluded that transactions contemplated by the Stock Repurchase Agreement with Coatue resulted in a modification which should be accounted as an extinguishment transaction. This extinguishment was treated as a deemed contribution for the purpose of calculating net income attributable to common stockholders.

11. Related Party Transactions

The Company engaged the law firm of Perkins Coie LLP for various legal services. Fees incurred for services provided by Perkins Coie LLP for the three months ended March 31, 2026 were $0.3 million, and $0.9 million were included in accounts payable and accrued liabilities included in the unaudited condensed consolidated balance sheets. Fees incurred for services provided by Perkins Coie LLP for the three months ended March 31, 2025 were $0.5 million, and $0.4 million were included in accounts payable and accrued liabilities included in the unaudited condensed consolidated balance sheets. A sibling of Daniel Perez, the Company's Chief Executive Officer and Director, was previously a partner with Perkins Coie LLP. The Company's Board of Directors believes that the terms of Perkins Coie LLP’s representation are no less favorable to the Company than those that could be obtained from an unrelated third party.

In February 2026, Mr. Perez's sibling joined the law firm of Morrison & Foerster LLP as a partner. From time to time the Company engages Morrison & Foerster LLP for various legal services. Fees incurred during the three months ended March 31, 2026 were de minimis for services provided by Morrison & Foerster LLP. The Company's Board of Directors believes that the terms of Morrison & Foerster LLP’s representation are no less favorable to the Company than those that could be obtained from an unrelated third party.

12. Segment Information

Operating segments are defined as components of an enterprise where separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), which the Company has identified as being the CEO, in deciding how to allocate resources and assessing performance. The Company operates inone operating segment andone reportable segment. The Company’s CODM allocates resources and assesses performance at the consolidated level.

The CODM uses consolidated net income as the measure of profit or loss in order to identify underlying trends in the performance of the business and to allocate resources and assess performance. The Company’s objective in making resource allocation decisions is to optimize the consolidated financial results. Consolidated financial forecasts and budget to actual results are also used by the CODM to assess performance and allocate resources, make strategic decisions related to headcount and incur capital expenditures.

The CODM reviews total assets as reported on the unaudited condensed consolidated balance sheets. The CODM does not review segment assets at a level other than that presented in the Company’s unaudited condensed consolidated balance sheets.

The table below presents the Company’s unaudited condensed consolidated net income including significant segment expenses (in thousands):

(3)Other segment income includes other income, net, employer taxes related to stock-based compensation expense, amortization of intangible assets and provision for income taxes.

The Company currently sells its subscriptions to its customers and generates substantially all of its revenue in the United States.

Long-lived assets are composed of intangible assets, property, equipment and software, net and right-of-use assets. Long-lived assets by geographical location are as follows (in thousands):