BigBear.ai Holdings, Inc.

Previous wording

The following discussion and analysis provides information that BigBear.ai Holdings, Inc. (“BigBear.ai”,“BigBear.ai Holdings”, or the “Company”) management believes is relevant to an assessment and understanding of BigBear.ai’s unaudited consolidated results of operations and financial condition. The following discussion and analysis should be read in conjunction with BigBear.ai’s condensed consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. Certain information contained in this management discussion and analysis includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Please see “Cautionary Note Regarding Forward-Looking Statements,” and “Risk Factors” in our Quarterly Report on Form 10-Q on Form 10-K. Unless the context otherwise requires, all references in this section to the “Company,” “BigBear.ai,” “we,” “us,” or “our” refer to BigBear.ai Holdings, Inc.

Current wording

The following discussion and analysis provides information that BigBear.ai Holdings, Inc. (“BigBear.ai”,“BigBear.ai Holdings”, or the “Company”) management believes is relevant to an assessment and understanding of BigBear.ai’s audited consolidated results of operations and financial condition. The following discussion and analysis should be read in conjunction with BigBear.ai’s condensed consolidated financial statements and notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. Certain information contained in this management discussion and analysis includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Please see “Cautionary Note Regarding Forward-Looking Statements,” and “Risk Factors” in our Annual Report on Form 10-K. Unless the context otherwise requires, all references in this section to the “Company,” “BigBear.ai,” “we,” “us,” or “our” refer to BigBear.ai Holdings, Inc.

Previous wording

•Results of Operations: This section provides a discussion of our results of operations for three and the nine months ended September 30, 2025 and September 30, 2024.

Current wording

•Results of Operations: This section provides a discussion of our results of operations for the three months ended March 31, 2026 and March 31, 2025.

Previous wording

On September 30, 2025, the continuing resolution (“CR”) allowing U.S. government departments and agencies to operate through the end of the government fiscal year expired and the U.S. government shut down. As a result of the U.S. government shutdown, our business and results of operations may be impacted by the disruptions to federal government offices, workers and operations, including risks relating to the funding of certain programs, stop work orders, delay in contract awards, new program starts, payments for work performed, and other actions. Generally, the significance of these impacts will primarily be based on the length of the shutdown and timing of passage of a new CR or a full budget.

Current wording

On September 30, 2025, the continuing resolution (“CR”) allowing U.S. government departments and agencies to operate through the end of the government fiscal year expired and the U.S. government shut down. As a result of the U.S. government shutdown, our business and results of operations were insignificantly impacted by the disruptions to federal government offices, workers and operations, including funding of certain programs, stop work orders, delay in contract awards, new program starts, payments for work performed, and other actions. On November 12, 2025, Congress passed a funding extension through January 30, 2026 for nine of the twelve bills and full-year appropriations for three bills. On February 3, 2026, the President signed into law a bill to end the partial government shutdown that began on January 31. The bill provides full-year appropriations for several programs, including the Pentagon and State departments; however, the Department of Homeland Security continues to remain unfunded. The impact of the January shutdown did not have a meaningful impact on our results.

Previous wording

We continue to expect the global economic and geopolitical environment to drive adoption of our offerings over the long term, as it has heightened the need for advanced AI tools that provide enhanced intelligence and full spectrum cyber operations – areas where we believe we have unmatched capabilities. While these challenges are still evolving and the eventual outcome remains highly uncertain, we do not believe that these events will have a material impact on our business and results of operations. However, if these challenges worsen, leading to greater disruptions and uncertainty within the technology industry or global economy, our business and results of operations could be negatively impacted.

Current wording

We continue to expect the global economic and geopolitical environment to drive adoption of our offerings over the long term, as it has heightened the need for advanced AI tools that provide enhanced intelligence and full spectrum cyber operations – areas where we believe we have unmatched capabilities. While these challenges are still evolving and the eventual outcome remains highly uncertain, we do not believe that these events will have a material impact on our business and results of operations.

Previous wording

Research and development expenses primarily consist of salaries, equity-based compensation expense, and benefits for personnel involved in research and development activities as well as allocated overhead. Certain research and development expenses relate to software developed for sale, lease, or will otherwise be marketed. Costs incurred subsequent to the establishment of technological feasibility and prior to the general availability of the software, are capitalized when they are expected to become significant. All other research and development expenses are expensed in the period incurred.

Current wording

Research and development expenses primarily consist of salaries, equity-based compensation expense, and benefits for personnel involved in research and development activities as well as allocated overhead. Certain research and development expenses relate to software developed for sale, lease, or that will otherwise be marketed. Costs incurred subsequent to the establishment of technological feasibility and prior to the general availability of the software, are capitalized when they are expected to become significant. All other research and development expenses are expensed in the period incurred.

Previous wording

Transaction expenses incurred in 2024 consist of diligence, legal and other related expenses associated with the Pangiam Acquisition, which was completed on February 29, 2024.

Current wording

Transaction expenses consist of diligence, legal and other related expenses associated with recent acquisitions, as well as costs associated with evaluating other acquisition opportunities.

Previous wording

Net (decrease) increase in fair value of derivatives consists of fair value remeasurements of the 2029 Convertible Notes Conversion Option, 2026 Convertible Notes Conversion Option, PIPE warrants, RDO warrants, and IPO private warrants.

Current wording

Net increase in fair value of derivatives consists of fair value remeasurements of the 2029 Convertible Notes Conversion Option, 2026 Convertible Notes Conversion Option, PIPE warrants, RDO warrants, and IPO private warrants.

Previous wording

Other income, net consists primarily of interest income earned on our money market accounts and held-to-maturity investments, foreign exchange gains and losses, and other non-operating expenses.

Current wording

Other expense (income), net consists primarily of realized gains and losses on the sale of available for sale investments, foreign exchange gains and losses, and other non-operating expenses.

Previous wording

Cost of revenues as a percentage of total revenues increased to 78% for the three months ended September 30, 2025 as compared to 74% for the three months ended September 30, 2024. The increase in cost of revenue as a percentage of total revenue was partially driven by a higher mix of higher margin solutions work in the three months ended September 30, 2024 as compared to the three months ended September 30, 2025. The decrease in total dollars of cost of revenues was primarily due to lower volume on certain Army programs for the three months ended September 30, 2025.

Current wording

Cost of revenues as a percentage of total revenues was 66% and 79% for the three months ended March 31, 2026 and 2025, respectively. The decrease in cost of revenue as a percentage of total revenue was driven by the inclusion of higher margin Ask Sage revenues during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease in total dollars of cost of revenues was primarily due to lower volume on Army programs during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Previous wording

SG&A expenses as a percentage of total revenues for the nine months ended September 30, 2025 increased to 69% as compared to 51% for the nine months ended September 30, 2024. The year-over-year increases include Pangiam’s headcount and operating expenses not fully included in the first quarter of 2024 (the Pangiam acquisition was completed on February 29, 2024) as well as the carrying cost of excess resource capacity due to delays in government funding on certain programs during the nine months ended September 30, 2025.

Current wording

SG&A expenses as a percentage of total revenues for the three months ended March 31, 2026 increased to 85% as compared to 65% for the three months ended March 31, 2025. The year-over-year increases include Ask Sage’s headcount and operating expenses not present in the first quarter of 2025, as well as significant investments in sales, marketing and other initiatives during the three months ended March 31, 2026.

Previous wording

Research and development expenses increased by $3.4 million during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase in research and development expenses was driven by increased headcount, the timing of certain research and development projects, as well as the inclusion of Pangiam’s results.

Current wording

Research and development expenses increased by $1.4 million during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase in research and development expenses was driven by fewer projects qualifying for software capitalization compared to the three months ended March 31, 2025.

Previous wording

Restructuring charges increased by $2.9 million during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. Restructuring charges consist of employee separation costs related to strategic cost saving initiatives to better align our organization and cost structure and improve the affordability of our products and services as well as employee separation costs associated with strategic changes in certain key leadership roles.

Current wording

Restructuring charges decreased by $1.7 million during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. Restructuring charges consist of employee separation costs related to strategic cost saving initiatives to better align our organization and cost structure and improve the affordability of our products and services as well as employee separation costs associated with strategic changes in certain key leadership roles.

Previous wording

Transaction expenses for the nine months ended September 30, 2024 consist of diligence, legal and other related expenses associated with the Pangiam Acquisition.

Current wording

Transaction expenses for the three months ended March 31, 2026 consist of diligence, legal and other related expenses associated with the Ask Sage and CargoSeer acquisitions, as well as costs associated with evaluating other acquisition opportunities. There were no transaction expenses for the three months ended March 31, 2025.

Previous wording

Interest expense consists primarily of interest expense, commitment fees and debt issuance cost amortization under our Convertible Notes. The decrease in thethree months ended September 30, 2025 as compared to the three months ended September 30, 2024 was due to a lower average outstanding balance. See the Liquidity and Capital Resources section below for more information.

Current wording

Interest expense during the three months ended March 31, 2026 and 2025 consists primarily of interest expense, debt issuance discount amortization, commitment fees and debt issuance cost amortization under our Convertible Notes. See the Liquidity and Capital Resources section below for more information. The change in interest expense during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is primarily due to a lower average principal balance on the 2029 Convertible Notes due to the conversion of the remaining balance during the three months ended March 31, 2026.

Previous wording

The change in other income, net during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 was primarily driven by interest income earned on money market accounts and held-to-maturity investments.

Current wording

The change in other expense (income), net during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025 is primarily driven by foreign exchange losses and management fees on our debt securities portfolio.

Previous wording

The effective tax rate for the nine months ended September 30, 2025 and the nine months ended September 30, 2024 are consistent. The effective tax rate for the nine months ended September 30, 2025 differs from the U.S. federal income tax rate of 21.0% primarily due to state and local income taxes, permanent differences between book and taxable income, certain discrete items and the change in valuation allowance. The expense for the nine months ended September 30, 2025 primarily relates to income derived from our United Kingdom entity.

Current wording

The effective tax rate for the three months ended March 31, 2026 and 2025 differs from the U.S. federal income tax rate of 21.0% primarily due to state and local income taxes, permanent differences between book and taxable income, certain discrete items and the change in valuation allowance. The benefit for the three months ended March 31, 2026 and 2025 primarily relates to state minimum taxes offset by income tax benefit derived from our United Kingdom entity and to the change in valuation allowance as a result of the Ask Sage acquisition.

Previous wording

The Company uses Adjusted EBITDA to evaluate its operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Adjusted EBITDA is a financial measure not calculated in accordance with GAAP. Adjusted EBITDA is defined as net income (loss) adjusted for interest expense, interest income, income tax expense (benefit), depreciation and amortization, equity-based compensation and associated employer payroll taxes, net increase (decrease) in fair value of derivatives, restructuring charges, non-recurring strategic initiatives, non-recurring litigation, transaction expenses, non-recurring integration costs, goodwill impairment, and loss on extinguishment of debt. Non-GAAP financial performance measures are used to supplement the financial information presented on a GAAP basis. This non-GAAP financial measure should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis. Because not all companies use identical calculations, our presentation of non-GAAP measures may not be comparable to other similarly titled measures of other companies.

Current wording

The Company uses Adjusted EBITDA to evaluate its operating performance, generate future operating plans, and make strategic decisions, including those relating to operating expenses and the allocation of internal resources. Adjusted EBITDA is a financial measure not calculated in accordance with GAAP. Adjusted EBITDA is defined as net loss adjusted for interest expense, interest income, income tax expense, depreciation and amortization, equity-based compensation and associated employer payroll taxes, net increase in fair value of derivatives, restructuring charges, non-recurring strategic initiatives, non-recurring litigation, transaction expenses, non-recurring integration costs, and loss on extinguishment of debt. Non-GAAP financial performance measures are used to supplement the financial information presented on a GAAP basis. This non-GAAP financial measure should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis. Because not all companies use identical calculations, our presentation of non-GAAP measures may not be comparable to other similarly titled measures of other companies.

Previous wording

The following table presents a reconciliation of Adjusted EBITDA to net income (loss), computed in accordance with GAAP:

Current wording

The following table presents a reconciliation of Adjusted EBITDA to net loss, computed in accordance with GAAP:

Previous wording

Our primary sources of liquidity are cash flows provided by our operations and maturities of held-to-maturity investments. We have also generated liquidity through our ATM programs, private placements of our common stock and warrants. Our primary short-term cash requirements are to fund payroll obligations, working capital, operating lease obligations, interest payments and short-term debt, including current maturities of long-term debt. Working capital requirements can vary significantly from period to period, particularly as a result of the timing of receipts and disbursements related to long-term contracts. Based on our projected cash flow and liquidity needs, we believe that our cash from operating activities generated from continuing operations during the year will be adequate for the next 12 months to meet our anticipated uses of cash flow.

Current wording

Our primary sources of liquidity are cash flows provided by our operations and maturities of available-for-sale investments. We have also generated liquidity through our ATM programs, private placements of our common stock, and warrants. Our primary short-term cash requirements are to fund payroll obligations, working capital, operating lease obligations, interest payments and short-term debt, including current maturities of long-term debt. Working capital requirements can vary significantly from period to period, particularly as a result of the timing of receipts and disbursements related to long-term contracts. Based on our projected cash flow and liquidity needs, we believe that our cash from operating activities generated from continuing operations and our existing cash balance will be adequate for the next 12 months to meet our anticipated uses of cash flow.

Previous wording

In June 2025, the Company filed a prospectus supplement to the 2023 Shelf Registration Statement which allows the Company to sell, from time to time and at its discretion, Company securities having an aggregate offering price of up to $150 million including shares of common stock that may be sold pursuant to the Company’s Controlled Equity Offering Agreement (the “June 2025 Sales Agreement”).

Current wording

During the years ended December 31, 2025 and 2024, the Company filed various prospectus supplements to the 2023 Shelf Registration Statement which allowed the Company to sell, from time to time and at its discretion, Company securities having an aggregate offering price of up to $637.1 million including shares of common stock that may be sold pursuant to the Company’s Controlled Equity Offering Agreement (the “Sales Agreements”). During the year ended December 31, 2025, the Company sold 142,253,313 shares of common stock under the Sales Agreements for an aggregate offering price of $637.1 million. Total issuance costs related to the ATM Program were approximately $8.3 million, resulting in aggregate net proceeds of approximately $628.8 million.

Previous wording

Net proceeds from the ATM Program not utilized to fund ongoing operating cash flows are invested in U.S. treasury notes and corporate bonds. The Company purchases these debt securities with the positive intent and ability to hold to its maturity. Such debt securities are classified as held-to-maturity and recorded at amortized cost, net of any allowance for credit losses. In order to ensure ongoing cash availability to fund operating expenditures and growth initiatives, maturities of individual HTM investments occur monthly and are reinvested if those funds are not required to supplement operating liquidity requirements. HTM investments do not have maturities that exceed 24 months from acquisition. The Company’s investment policy requires that HTM investments not explicitly or implicitly guaranteed by the U.S. Government be issued by institutions highly rated by major rating agencies and have a long history of no credit losses. The investment policy also limits the concentration of HTM investments within a given sector and/or with any individual issuer. HTM investments are not callable prior to contractual maturity.

Current wording

Net proceeds from the ATM Program not utilized to fund ongoing operating cash flows are invested in U.S. Treasury notes and corporate bonds. These debt securities are classified as available for sale and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive (loss) income. In order to ensure ongoing cash availability to fund operating expenditures and growth initiatives, maturities of individual AFS investments occur monthly and are reinvested if those funds are not required to supplement operating liquidity requirements. AFS investments do not have maturities that exceed 24 months from acquisition. The Company’s investment policy requires that AFS investments not explicitly or implicitly guaranteed by the U.S. Government be issued by institutions highly rated by major rating agencies and have a long history of no credit losses. The investment policy also limits the concentration of AFS investments within a given sector and/or with any individual issuer. AFS investments are not callable prior to contractual maturity.

Previous wording

As the intent is to hold these debt securities to contractual maturity, the Company’s HTM investments are not included in the measure of total available liquidity in the table below. Proceeds from coupon payments or the maturity of HTM investments will increase the Company’s total available liquidity to the extent the funds are not reinvested in additional HTM investments.

Current wording

As these debt securities are available for sale, they are included in the measure of total available liquidity in the table below at fair value. Proceeds from coupon payments or the maturity of AFS investments will increase the Company’s total available liquidity to the extent the funds are not reinvested in additional AFS investments.

Previous wording

On December 7, 2021, the Company issued $200.0 million of unsecured convertible notes (the“2026 Convertible Notes”) to certain investors. The 2026 Convertible Notes bear interest at a rate of 6.0% per annum, payable semi-annually, and not including any interest payments that are settled with the issuance of shares, were convertible into 17,391,304 shares of the Company’s common stock at an initial Conversion Price of $11.50. The Conversion Price is subject to adjustments, including but not limited to, the Conversion Rate Reset described below and in Note 12—Debtof the Notes to condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. The 2026 Convertible Notes mature on December 15, 2026.

Current wording

On December 7, 2021, the Company issued $200.0 million of unsecured convertible notes (the“2026 Convertible Notes”) to certain investors. The 2026 Convertible Notes bear interest at a rate of 6.0% per annum, payable semi-annually, and not including any interest payments that are settled with the issuance of shares, were convertible into 17,391,304 shares of the Company’s common stock at an initial Conversion Price of $11.50. The Conversion Price is subject to adjustments, including but not limited to, the Conversion Rate Reset described below and in Note 11—Debt of the Notes to condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. The 2026 Convertible Notes mature on December 15, 2026.

Previous wording

On December 19, 2024, the Company entered into privately negotiated exchange agreements (each, an “Exchange Agreement”) with a limited number of holders of the Company’s existing 2026 Convertible Notes, to exchange the existing convertible notes for new senior secured convertible notes due 2029 (the “2029 Convertible Notes”, together with the 2026 Convertible Notes, the “Convertible Notes”). The Company exchanged (the “Exchange Transaction”) approximately $182.3 million principal amount of the 2026 Convertible Notes for $182.3 million in aggregate principal amount of the Company’s 2029 Convertible Notes and approximately $0.4 million in cash, with such cash payment representing the accrued and unpaid interest on such then existing Convertible Notes. The 2029 Convertible Notes bear interest at a rate of (i) 6.0% per annum, if interest is paid in cash and (ii) 7.0% per annum, if we elect, subject to certain conditions, to pay interest in kind with shares of our common stock. To the extent that the certain liquidity conditions of us and our subsidiaries is not satisfied as of the last business day of any calendar month, then with respect to the period applicable to the interest payment date immediately following the month in which such liquidity condition is not satisfied, the interest rate will be (i) 9.00% per annum, if interest is paid in cash and (ii) 10.00% per annum, if we elect, subject to certain conditions, to pay interest in kind with shares of our common stock (it being understood that such increased rate shall apply solely for such six-month period applicable to such interest payment date). The initial conversion rate is 281.4491 shares of common stock per $1,000 principal amount of 2029 Convertible Notes, which represents an initial conversion price of $3.55 per share of the Company’s common stock. The conversion rate and the conversion price are subject to adjustments. The exchange was accounted for as an extinguishment of the 2026 Convertible Notes and the 2029 Convertible Notes were recognized at fair value, which approximated the carrying amount of the principal balances exchanged.

Current wording

On December 19, 2024, the Company entered into privately negotiated exchange agreements (each, an “Exchange Agreement”) with a limited number of holders of the Company’s existing 2026 Convertible Notes, to exchange the existing convertible notes for new senior secured convertible notes due 2029 (the “2029 Convertible Notes”, together with the 2026 Convertible Notes, the “Convertible Notes”). The Company exchanged (the “Exchange Transaction”) approximately$182.3 million principal amount of the 2026 Convertible Notes for$182.3 million in aggregate principal amount of the Company’s 2029 Convertible Notes and approximately $0.4 million in cash, with such cash payment representing the accrued and unpaid interest on such then existing Convertible Notes. The 2029 Convertible Notes bear interest at a rate of (i) 6.0% per annum, if interest is paid in cash and (ii) 7.0% per annum, if we elect, subject to certain conditions, to pay interest in kind with shares of our common stock. To the extent that certain liquidity conditions of us and our subsidiaries are not satisfied as of the last business day of any calendar month, then with respect to the period applicable to the interest payment date immediately following the month in which such liquidity condition is not satisfied, the interest rate will be (i) 9.00% per annum, if interest is paid in cash and (ii) 10.00% per annum, if we elect, subject to certain conditions, to pay interest in kind with shares of our common stock (it being understood that such increased rate shall apply solely for such six-month period applicable to such interest payment date). The initial conversion rate is 281.4491 shares of common stock per $1,000 principal amount of 2029 Convertible Notes, which represents an initial conversion price of $3.55 per share of the Company’s common stock. The conversion rate and the conversion price are subject to adjustments. The exchange was accounted for as an extinguishment of the 2026 Convertible Notes and the 2029 Convertible Notes were recognized at fair value, which approximated the carrying amount of the principal balances exchanged.

Previous wording

Upon completion of the Exchange Transaction, the aggregate principal amount of the 2026 Convertible Notes outstanding was $17.7 million. The Company did not receive any cash proceeds from the issuance of the 2029 Convertible Notes pursuant to the Exchange Transactions.

Current wording

Upon completion of the Exchange Transaction, the aggregate principal amount of the 2026 Convertible Notes outstanding was$17.7 million. The Company did not receive any cash proceeds from the issuance of the 2029 Convertible Notes pursuant to the Exchange Transactions.

Previous wording

$57.7 million of the 2029 Convertible Notes have been voluntarily converted by noteholders following the Exchange Transaction. These conversions have resulted in the issuance of approximately 16.7 million shares of common stock in exchange for the retirement of the respective notes.

Current wording

During the three months ended March 31, 2025, $57.7 million of the 2029 Convertible Notes were voluntarily converted by noteholders following the Exchange Transaction. These conversions resulted in the issuance of 16.7 million shares of common stock.

Previous wording

The 2026 Convertible Notes and the 2029 Convertible Notes require the Company to meet certain financial and other covenants. The 2029 Convertible Notes added a covenant that requires the Company to maintain liquidity of at least $15 million measured as of the last business day of any month. As of September 30, 2025, the Company was in compliance with all covenants related to the Convertible Notes.

Current wording

The 2026 Convertible Notes require the Company to meet certain financial and other covenants. As of March 31, 2026, the Company was in compliance with all covenants related to the 2026 Convertible Notes.

Previous wording

The following table presents the carrying amounts and fair values associated with the Convertible Notes as of September 30, 2025. The fair value of the Convertible Notes is considered to be a Level 3 fair value measurement.

Current wording

The following table presents the carrying amounts and fair values associated with the 2026 Convertible Notes as of March 31, 2026. The fair value of the 2026 Convertible Notes is considered to be a Level 3 fair value measurement.

Previous wording

For the nine months ended September 30, 2024, net cash used in operating activities was $23.3 million. Net loss before deducting depreciation, amortization and other non-cash items was $22.2 million and was further impacted by an unfavorable change in net working capital of $1.2 million which reduced operating cash flows during this period. The unfavorable change in net working capital was largely driven by an increase in accounts receivable of $5.4 million and a decrease in accounts payable of $8.2 million. These were partially offset by an increase in accrued liabilities of $7.6 million, a decrease in contract assets of $3.1 million, an increase in contract liabilities of $0.5 million, a decrease in prepaid expenses and other assets of $1.5 million, and an increase in other liabilities of $0.2 million.

Current wording

For the three months ended March 31, 2026, net cash used in operating activities was $18.0 million. Net loss before deducting depreciation, amortization and other non-cash items was $10.4 million and was further impacted by an unfavorable change in net working capital of $7.6 million. The unfavorable change in net working capital was largely driven by a decrease in accounts payable of $2.0 million, a decrease in contract liabilities of $3.5 million, an increase in accounts receivable of $0.7 million, and an increase in contract assets of $0.7 million.

Previous wording

For the nine months ended September 30, 2025, net cash used in operating activities was $20.1 million. Net loss before deducting depreciation, amortization and other non-cash items was $34.7 million and was further impacted by a favorable change in net working capital of $14.6 million which partially offset operating cash outflows during this period. The favorable change in net working capital was largely driven by a decrease in accounts receivable of $14.2 million, an increase in accrued expenses of $6.5 million, an increase in other liabilities of $0.2 million, an increase in contract liabilities of $1.0 million, These were partially offset by an increase in contract assets of $1.3 million, a decrease in accounts payable of $2.9 million and an increase in prepaid expenses and other assets of $3.1 million.

Current wording

For the three months ended March 31, 2025, net cash used in operating activities was $6.7 million. Net loss before deducting depreciation, amortization and other non-cash items was $12.0 million and was further impacted by a favorable change in net working capital of $5.4 million which partially offset operating cash outflows during this period. The favorable change in net working capital was largely driven by a decrease in accounts receivable of $4.3 million, an increase in accrued expenses of $4.4 million, an increase in other liabilities of $1.7 million, an increase in contract liabilities of $0.5 million, and a decrease in contract assets of $0.4 million. These were partially offset by a decrease in accounts payable of $4.2 million and an increase in prepaid expenses and other assets of $1.8 million.

Previous wording

For the nine months ended September 30, 2025, net cash used in investing activities was $262.9 million, primarily consisting of purchases of held-to-maturity investments of $258.7 million and capitalized software development costs of $3.8 million.

Current wording

For the three months ended March 31, 2025, net cash used in investing activities was $1.6 million, primarily consisting of capitalized software development costs of $1.5 million.

Previous wording

For the nine months ended September 30, 2024, net cash provided by financing activities was $50.2 million, primarily consisting of the net proceeds from the issuance of the Private Placement and Registered Direct Offering shares of $53.8 million, partially offset by the payment of taxes related to net share settlement of equity awards of $3.1 million and the net repayment of $1.2 million related to the 2023 D&O Financing Loan.

Current wording

For the three months ended March 31, 2026, net cash used in financing activities was $0.8 million, primarily consisting of the proceeds from the exercise of options of $0.1 million, offset by payments of taxes related to net share settlement of equity awards of $0.9 million.

Previous wording

For the nine months ended September 30, 2025, net cash provided by financing activities was $690.1 million, primarily consisting of the net proceeds from the exercise of the 2024 PIPE warrants and 2024 RDO warrants of $64.7 million and gross proceeds of $637.1 million from the issuance of common stock under our ATM Program. These cash inflows were partially offset by payment of debt issuance costs to third parties in connection with the Exchange Transaction of $4.7 million, payment of transaction costs in connection with the ATM of $8.3 million, and payment of taxes related to net share settlement of equity awards of $2.0 million.

Current wording

For the three months ended March 31, 2025, net cash provided by financing activities was $65.9 million, primarily consisting of the net proceeds from the exercise of the 2024 PIPE warrants and 2024 RDO warrants of $64.7 million and proceeds of $6.6 million from the issuance of common stock under our ATM Program. These cash inflows were partially offset by payment of debt issuance costs to third parties in connection with the Exchange Transaction of $4.3 million and payment of taxes related to net share settlement of equity awards of $1.3 million.

Previous wording

For the critical accounting estimates used in preparing our condensed consolidated financial statements, we make assumptions and judgments that can have a significant impact on revenue and expenses in ourcondensed consolidated statements of operations, as well as, on the value of certain assets and liabilities on our condensed consolidated balance sheets. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe are reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions.

Current wording

For the critical accounting estimates used in preparing our condensed consolidated financial statements, we make assumptions and judgments that can have a significant impact on revenue and expenses in ourcondensed consolidated statements of operations and comprehensive loss, as well as, on the value of certain assets and liabilities on our condensed consolidated balance sheets. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe are reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions.