Slides
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Blackbaud Investor Presentation Ticker: BLKB July 29, 2026
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Forward-looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements in this presentation consist of, among other things, statements regarding future operating results, all of which are based on current expectations, estimates, and forecasts, and the beliefs and assumptions of the Company’s management. Words such as “believes,” “seeks,” “expects,” “may,” “might,” “should,” “intends,” “could,” “would,” “likely,” “will,” “targets,” “plans,” “anticipates,” “aims,” “projects,” “estimates,” or any variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions that are difficult to predict. Accordingly, they should not be viewed as assurances of future performance, and actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that could cause actual results to differ materially from the Company’s expectations expressed in this presentation include: expectations for continuing to successfully execute the Company’s growth and operational improvement strategies; expectations of future growth in the social good software solutions market, segments within that market and the Company’s total addressable market; expectations that achieving the Company’s goals will extend its competitive advantage and provide improved product quality and innovative solutions for its customers; expectations that centers of excellence and use of best-of-breed platforms will drive increasing operating efficiency and contribute to margin improvement; expectations that the Company’s financial position provides flexibility to fuel future growth through acquisitions or other opportunities; expectations that past acquisitions have expanded the Company’s customer and market opportunities; risks associated with unfavorable media coverage; risks associated with acquisitions; risks inherent in the expansion of our international operations; the possibility of reduced growth or amount of charitable giving; uncertainty regarding increased business and renewals from existing customers; risks associated with implementation of software products; the ability to attract and retain key personnel; risks related to the Company’s leverage, credit facility and share repurchase program; lengthy sales and implementation cycles; technological changes that make the Company’s products and services less competitive; risk related to the adequacy of our data security procedures and cybersecurity and data protection risks and related liabilities and potential legal proceedings involving us and uncertainty regarding existing legal proceedings and the other risk factors set forth from time to time in the Company’s SEC filings. Factors that could cause or contribute to such differences include, but are not limited to, those summarized under Risk Factors in the Company’s most recent annual report on Form 10-K, and any quarterly reports on Forms 10-Q thereafter, copies of which are available free of charge at the SEC’s website at www.sec.gov or upon request from the Company’s investor relations department. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent the Company’s beliefs and assumptions only as of the date of this presentation. Except as required by law, the Company does not intend, and undertakes no obligation, to revise or update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward- looking statements, even if new information becomes available in the future. Trademark Usage All Blackbaud product names appearing herein are trademarks or registered trademarks of Blackbaud, Inc. This presentation contains trade names, trademarks and service marks of other companies. The Company does not intend its use or display of other parties’ trade names, trademarks and service marks to imply a relationship with, or endorsement or sponsorship of, these other parties.
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Historical Financials and Non-GAAP Financial Measures Use of Non-GAAP Financial Measures: The Company has provided in this presentation financial information that has not been prepared in accordance with GAAP. The Company uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to GAAP measures, in evaluating the Company’s ongoing operational performance. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing its financial results from period to period with other companies in the Company’s industry, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. The Company believes that these non-GAAP financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in the Company’s business. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures. Blackbaud discusses non-GAAP organic revenue growth measures, including non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth, and non-GAAP organic recurring revenue growth on a constant currency basis, which Blackbaud believes provide useful information for evaluating the periodic growth of its business as well as growth on a consistent basis. Each measure of non-GAAP organic revenue growth excludes incremental acquisition-related revenue attributable to companies acquired in the current fiscal year. For companies acquired in the immediately preceding fiscal year, if any, each measure of non-GAAP organic revenue growth reflects presentation of full year incremental non-GAAP revenue derived from such companies as if they were combined throughout the prior period, and it includes the current period non-GAAP revenue attributable to those companies. In addition, each measure of non-GAAP organic revenue growth excludes prior period revenue associated with divested businesses. The exclusion of the prior period revenue is intended to present the results of the divested businesses within the results of the combined company for the same period of time in both the prior and current periods. Blackbaud believes this presentation provides a more comparable representation of our current business’ organic revenue growth and revenue run-rate. In these materials, Blackbaud is presenting the following unaudited information: historical recurring and total revenue for the three and six month periods ended June 30, 2026, for the fiscal year ended December 31, 2025 and the interim periods therein; calculations for recurring revenue growth and total revenue growth for the six month period ended June 30, 2026 and the interim periods therein; and calculations of non-GAAP organic revenue growth, non-GAAP organic recurring revenue growth, non-GAAP organic revenue growth on a constant currency basis and non-GAAP organic recurring revenue growth on a constant currency basis for the same periods. Rule of 40 is defined as non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software development costs; stock-based compensation; acquisition and disposition-related costs; employee severance; GCC workforce transition costs; restructuring and other real estate activities; costs, net of insurance, related to the previously disclosed security incident discovered in May 2020 (the "Security Incident"); and impairment charges. Non-GAAP free cash flow is defined as operating cash flow less capital expenditures, including costs required to be capitalized for software development, and capital expenditures for property and equipment. Blackbaud believes non-GAAP free cash flow provides a useful measure of the company's operating performance. Historical Financial Statements Being Presented: In these materials, Blackbaud is presenting the following unaudited historical financial information: historical consolidated balance sheets as of the fiscal year ended December 31, 2025 and interim consolidated balance sheets for each of the quarters within fiscal 2026 and 2025; historical consolidated statements of comprehensive income for the fiscal year ended December 31, 2025 and interim consolidated statements of comprehensive income for each of the quarters within fiscal 2026 and 2025; historical consolidated statements of cash flows for the fiscal year ended December 31, 2025 and interim consolidated statements of cash flows for each of the interim year-to-date periods within fiscal 2026 and 2025; and historical non-GAAP financial information for the fiscal year ended December 31, 2025 and for each of the quarters within fiscal 2026 and 2025 as well as reconciliations of the non-GAAP measures to their most directly comparable GAAP measures and related non-GAAP adjustments. Blackbaud is providing this unaudited financial information to allow investors and analysts to more easily access and review the Company’s historical consolidated financial data by including such information in one document. Reconciliation of GAAP to Non-GAAP Financial Measures: Reconciliations of the most directly comparable GAAP measures to non-GAAP financial measures and related adjustments, as well as details of Blackbaud's methodology for calculating non-GAAP organic revenue growth, non-GAAP organic revenue growth on a constant currency basis, non-GAAP organic recurring revenue growth, non-GAAP organic recurring revenue growth on a constant currency basis and Rule of 40 can be found in the Appendix to these materials and on the "Investor Relations" page of the Company's website. Blackbaud has not reconciled forward-looking non-GAAP financial measures contained in this investor material to their most directly comparable GAAP measures. Such reconciliations would require unreasonable efforts at this time to estimate and quantify with a reasonable degree of certainty various necessary GAAP components, including for example those related to compensation, acquisition transactions and integration, tax items or others that may arise. These components and other factors could materially impact the amount of the future directly comparable GAAP measures, which may differ significantly from their non-GAAP counterparts.
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Blackbaud Investment Pillars Innovation Driving Product Value • AI empowering customers • Embedded cyber security protects customer data • Product first approach driving 90%+ retention rates • Market leading portfolio depth and breadth • Continued migration to 3rd party cloud enables leverage & efficiencies Rich Market Opportunity • Global market leadership • Significant available TAM • Stable end markets • Fragmented competitive landscape Attractive Financial Model • Enviable recurring revenue stream • Large and diverse customer base • Sustained double digit earnings growth • Strong cash flows Purposeful Capital Allocation • Multi-year, programmatic share repurchase • Focus on debt level to maintain optimal capital structure • Targeted M&A to bolster innovation
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Business Overview
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Cloud Software We build, integrate and implement vertical- specific solutions purpose-built for the unique needs of our customers. Data Intelligence Using exclusive data, analytics and expertise, we deliver unparalleled insight and intelligence to the customers we serve. Services We drive impact through dedicated customer support and training, along with strategic and managed services tailored to our customers. Expertise With over four decades of experience, we are undisputed industry experts on technology for social good. Blackbaud is the world’s leading provider of AI-powered solutions for social impact Blackbaud propels impact at scale with the sector’s most intelligent solutions
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AI-powered solutions serving the specific needs of the diverse social impact market Arts & Cultural Organizations Foundations Individual Change Agents Companies Healthcare Organizations K-12 Schools Faith Communities Higher Education Institutions Nonprofits
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Our core competencies expand what is possible for purpose-driven organizations Fundraising & Engagement • Fundraising • Peer-to-Peer Fundraising • Marketing AI & Data Intelligence • Agents for Good • Insights • Data Health Financial Management • Fund Accounting • Financial Aid Management • Tuition Management Services • Consulting Services • Implementation and Optimization Services Social Responsibility • Employee Giving and Volunteering • Grantmaking Organizational & Program Management • Education Management • Ticketing Payment Services • Merchant Services • Payables Grant & Award Management • Grantmaking • Award Management
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• Blackbaud is the leading provider of AI-powered solutions wholly dedicated to powering social impact • Only Blackbaud offers a full portfolio of purpose-built, integrated solutions • Highly fragmented competition offers single-point solutions • Large customer base with strong retention Most comprehensive solution set that accelerates impact OUR COMPETITORS1 Fundraising, Relationship Management & Engagement (and partners) Payment Services Financial Management, Grant & Award Management Organizational & Program Management Corporate Social Responsibility 1Informed by internal competitive intelligence and analysis.
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Fueling accelerated impact for our customers 225% year-over-year increase in giving and volunteering by using YourCause® CSRconnect® and Impact EdgeTM $250M rolling fundraising average achieved by leveraging Blackbaud Enterprise Fundraising CRMTM 941% increase in annual fundraising since the inception of its Challenge Against Cancer program by using Blackbaud TeamRaiser® 50% reduction in workload by leveraging Payment Assistant in Blackbaud Financial Edge NXT® 90% of lapsed donors recaptured by using Prospect Insights in Blackbaud Raiser's Edge NXT® 84% year-over-year increase in fundraising with their use of Blackbaud Raiser’s Edge NXT® and Blackbaud Donation Forms
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Large and underpenetrated total addressable market $10B+ Blackbaud TAM $3.5B $3.0B $1.0B $1.5B $1.5B Sources: FY 2025 Blackbaud Revenue. Global Blackbaud TAM based on IRS data, Canadian Revenue Agency, Private School Universe, IPEDS, Dun & Bradstreet, HIMSS, Guidestar, S&P Global database, Small Business & Entrepreneurship Council, Blackbaud internal data Fundraising, Relationship Management and Engagement Revenue Penetration: <20% Payment Services Revenue Penetration: <20% Corporate Social Responsibility Revenue Penetration: <5% Financial Management, Grant and Award Management Revenue Penetration: <10% Organizational and Program Management Revenue Penetration: <10%
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Q2 2026 Performance & FY26 Financial Guidance
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Q2 2026 Performance 38.7% 38.0% Q2 2025 Q2 2026 Non-GAAP performance through 6/30/26. Non-GAAP adjusted EBITDA is defined as GAAP net income plus interest, net; income tax provision (benefit); depreciation; amortization of intangible assets from business combinations; amortization of software development costs; stock-based compensation; acquisition and disposition-related costs; employee severance; GCC workforce transition costs; restructuring and other real estate activities; costs, net of insurance, related to the previously disclosed security incident discovered in May 2020 (the "Security Incident"); and impairment charges. Please refer to the appendix of this presentation. $282.0M $6.2M $2.8M ($0.4M) $290.6M Q2 2025 Contractual Recurring Transactional Recurring One-time Services Q2 2026 Non-GAAP Organic Revenue Year over Year Profitability Year over Year $1.22 $1.33 Q2 2025 Q2 2026 Non-GAAP Diluted EPSNon-GAAP Adj. EBITDA Margin 3.0% Organic Revenue Growth 9% growth
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2026 total company guidance ($ in millions, except per share amounts) Low Midpoint High Implied Growth at Midpoint Total Revenue $1,173 $1,176 $1,179 4.25% Non-GAAP Adjusted EBITDA $430 $434 $438 7% Non-GAAP EPS $5.15 $5.20 $5.25 17% Non-GAAP Free Cash Flow $280 $285 $290 37% Assumptions included in full year 2026 financial guidance: Non -GAAP annualized effective tax rate of 24.5%; Interest expense for the year of $62M - $66M; Fully diluted shares for the year in the range of 45M – 46M; Capital expenditures for the year in the range of $60M to $70M, including approximately $52M to $62M of capitalized software development costs. Expect to finish in the upper half of the guidance range
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Anticipated impact of larger up for renewal cohort on FY26 revenue growth outlook and gross dollar retention rate • Dollar value of renewal cohorts fluctuate from year to year based on mix of contracts up for renewal. • Blackbaud’s 2026 contractual recurring renewal cohort is approximately 40% larger than last year. • As a result, we continue to expect a near-term dip in reported gross dollar retention as a greater amount of recurring revenue comes up for renewal during the year. As we move past this larger renewal cohort, we expect gross dollar retention rates to climb back to our more recent norm of 91% to 92% by the end of 2027. • The larger renewal cohort is expected to have a negative impact of 0.5 to 0.75 percentage points on total revenue growth for 2026, which is reflected in our financial guidance ranges. 2025 2026 Estimate Renewal Cohort Sizes ~40% Increase YoY
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Long-term Aspirational Goals
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Blackbaud is an ideal platform for compounding profitable growth Clear market leader with the most comprehensive set of purpose-built and mission critical solutions powering social impact Durable and proven operating model with resilient end markets and strong recurring revenue Sustained competitive advantage via commitment to AI and product innovation with a platform to deliver these solutions at scale Track record of delivering improved financial performance with a pathway to consistent revenue growth, expanding margins and double-digit EPS growth over the long-term
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Significant financial progress since 2020 $2.94 $5.20 FY20 FY26 Guidance Midpoint Non-GAAP Diluted EPS 10% CAGR $242M $434M FY20 FY26 Guidance Midpoint Non-GAAP Adjusted EBITDA 10% CAGR $913M $1,176M FY20 FY26 Guidance Midpoint Total Revenue 4% CAGR $76M $285M FY20 FY26 Guidance Midpoint Non-GAAP Free Cash Flow 25% CAGR
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• Goal of achieving Rule of 45 by 2030. • New product offerings such as Agents for Good represent potential upside to current long-term revenue growth targets. • Expect EBITDA growth to outpace revenue growth via operating leverage and ongoing cost and efficiency initiatives, with focus on improving EBITDA to FCF conversion. • Targeting consistent double digit non- GAAP EPS growth supported by continued stock repurchase and debt reduction. 1) FY25 growth rates after normalizing for estimated impact of 12/31/24 divestiture of EverFi. Executing on defined initiatives to drive strong financial results ($ in millions, except per share amounts) FY25 Actuals FY26 Guidance Midpoint CAGR Targets: ‘26 – ’30 Total Revenue $1,128 (5.5% growth1) $1,176 (4.3% growth) 4% to 6% Non-GAAP Adjusted EBITDA $405 (~8% growth1) $434 (7% growth) 6% to 8% Non-GAAP EPS $4.45 (~12% growth1) $5.20 (17% growth) 13%+ FCF Margin 18% 24% Expand FCF margin to 28%+
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Blackbaud’s revenue growth model Contractual Recurring (Software) Transactional Recurring (Payments) One-time Services and Other Total Revenue Revenue Mix (% of FY25 Total) 64% 34% 2% 100% Historical Growth CAGR (FY20-FY25) 4% 8% (19%) 4% Growth Drivers • Bookings (new logo) • Bookings (cross-sell & upsell) • Sales productivity • Customer retention (3+ year contracts) • Price uplift at renewal & annual escalators • New unit (new logo) • New unit (cross-sell & upsell) • Same store volume growth • Digital giving mix shift • Pricing models • Small component of overall revenue • Actively shrunk this portion of portfolio (transition to third party partners) to focus on high value software and payments Expected Growth Contribution (FY26-FY30) Mid single-digit Mid to high single-digit Near-term drag becoming neutral contributor Mid single-digit plus
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Revenue driver: proven “land and expand” model underpinned by product development and innovation New Logo Approximately half of direct sales force focused on new customer acquisition to refill top of funnel in “land and expand” sales model New Product Blackbaud’s Agents for Good strategy brings net new products into sales team’s bag for 2026+ Cross-sell / Upsell Approximately half of direct sales force focused on selling to existing customers. Meaningful opportunity for continued product expansion
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Revenue driver: mission critical products drive strong retention rates 90% 90% 91% 92% 92% 92% 2020 2021 2022 2023 2024 2025 Gross Dollar Retention Rate Historical gross dollar retention metrics exclude EverFi that was divested as of 12/31/2024. 3+ years (~25% on 4+ years) Typical contract term length Mid to high single-digit Contract price increase at renewal Mid to high single-digit Embedded annual price escalators
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Revenue driver: diverse transactional revenue streams deliver high single-digit growth 55% 20% 20% 5% Tuition Management Products: Blackbaud Tuition Management Growth Drivers: New customers, private school enrollment growth, pricing optimization Consumer Giving Products: JustGiving Growth Drivers: New customers, same store volume growth, pricing optimization, geographic expansion, viral events Donation Processing Products: Blackbaud Integrated Payments Growth Drivers: New customers, same store volume growth, pricing optimization, viral events $384M FY25 Revenue 8% CAGR FY20-FY25 Event-Based Usage
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Profit driver: multiple initiatives underway to deliver high-single digit EBITDA growth and margin expansion 26.5% 35.9% FY20 Adjusted EBITDA Margin FY25 Adjusted EBITDA Margin FY30 Adjusted EBITDA Margin 940 bps 40%+ Delivered significant margin improvement via initiatives including headcount efficiencies, data center consolidation and reduction in real estate footprint. Global workforce strategy to broaden access to talent and improve operating efficiency. Continued platform modernization on core products will improve unit economics and gross margins. Finalize third party cloud transition and shut down two remaining colocation data centers (including the largest). Reduce overall vendor footprint and consolidate tools to command better contract pricing. Currently piloting AI tools in all aspects of internal operations. Meaningful opportunity for efficiency gains in R&D, sales and marketing and G&A over the mid to long term. Workforce Strategy Platform Modernization Data Center Closures Vendor Optimization AI & Other Efficiency Gains
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Capital allocation: strong free cash flow generation to fund investments and fuel disciplined capital allocation strategy $76M $168M $154M $214M $245M $208M $285M $0 $50 $100 $150 $200 $250 $300 2020 2021 2022 2023 2024 2025 2026 Guidance Midpoint Non-GAAP free cash flow1 25% CAGR 1. Non-GAAP adjusted free cash flow is defined as operating cash flow less capital expenditures, including costs required to be cap italized for software development, and capital expenditures for property and equipment. FY21-FY25 represent adjusted FCF which adds back cash outflows, net of insurance, related to the previously disclosed Security Incident discovered in May 2020 . 2. FY 2025 figure includes approximately $12 million of cash tax benefit related to the One Big Beautiful Bill Act and approxima tely $60 million of one-time items and working capital fluctuations that negatively impacted our 2025 free cash flow. 2026 Free Cash Flow guidance assumes $10m to $15m of non- recurring net benefit. • Positive cash tax impact primarily related to the One Big Beautiful Bill Act. • Partially offset by transition costs associated with global workforce strategy. 2
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Capital allocation: executing on stock repurchase program to meaningfully reduce common stock outstanding 53.6M 51.6M 51.6M 50.9M 49.2M 48.5M 48.5M 48.1M 46.7M 46.3M 45.5M 0.2M 3.0M 0.8M 1.6M 1.5M 0.5M 1.4M 1.6M 0.8M -2.0M 0.0M 2.0M 4.0M 6.0M 8.0M 10.0M 40.0M 42.0M 44.0M 46.0M 48.0M 50.0M 52.0M 54.0M Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Common Stock Outstanding Shares Repurchased 15% net reduction since Q4 2023 98% Percentage of cumulative FCF allocated to stock repurchase between 2023 and 2025 50%+ Expected percentage of cumulative FCF between 2026 and 2030 that will be allocated to future stock repurchases to continue reducing common stock outstanding over time $1 Billion Board authorization for stock repurchases. $850 million remaining as of 6/30/2026
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Capital allocation: long-term capital allocation strategy focused on maximizing shareholder value Stock Repurchases • Blackbaud has reduced common stock outstanding by 15% since Q4 2023 • Expect to allocate 50%+ of FY26-FY30 free cash flow to stock repurchases and continue to reduce common stock outstanding over time Debt Repayment • Manage debt balance and related interest expense to optimize for non-GAAP EPS and FCF growth over the long-term • Targeting Debt to EBITDA ratio below 2.0x over the mid and long-term Accretive M&A Target acquisition opportunities with high synergy value and a focus on vertical end markets already served by other Blackbaud products The timing and amount of repurchases depends on several factors, including market and business conditions, the trading price of our common stock and the nature of other investment opportunities. The repurchase program may be limited, suspended or discon tinued at any time without prior notice.
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Blackbaud Investment Pillars Innovation Driving Product Value • AI empowering customers • Embedded cyber security protects customer data • Product first approach driving 90%+ retention rates • Market leading portfolio depth and breadth • Continued migration to 3rd party cloud enables leverage & efficiencies Rich Market Opportunity • Global market leadership • Significant available TAM • Stable end markets • Fragmented competitive landscape Attractive Financial Model • Enviable recurring revenue stream • Large and diverse customer base • Sustained double digit earnings growth • Strong cash flows Purposeful Capital Allocation • Multi-year, programmatic share repurchase • Focus on debt level to maintain optimal capital structure • Targeted M&A to bolster innovation
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Thank you.
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Appendix
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Unaudited Historical Financial Information and Non-GAAP Financial Measures Being Presented Reclassifications to the unaudited historical financial information In order to provide comparability between periods presented, our “operating lease right-of-use assets“ line has been combined within “other assets" in the previously reported condensed consolidated balance sheets to conform to the presentation of the current period. Similarly, "operating lease liabilities, net of current portion" has been combined within "other liabilities" in the previously reported condensed consolidated balance sheets to conform to the presentation of the current period.
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Historical Consolidated Balance Sheets (Unaudited) (in thousands) Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026 Q2 2026 Assets Current assets: Cash and cash equivalents $ 37,243 $ 41,566 $ 38,255 $ 38,914 $ 34,096 $ 34,388 Restricted cash 419,400 870,248 419,185 720,061 418,671 846,620 Accounts receivable, net of allowance 78,105 146,044 82,561 80,517 75,691 134,888 Customer funds receivable 4,522 5,696 3,996 1,308 7,605 6,378 Prepaid expenses and other current assets 88,329 91,551 94,838 89,290 106,158 96,620 Total current assets 627,599 1,155,105 638,835 930,090 642,221 1,118,894 Property and equipment, net 85,031 83,052 85,332 85,076 85,053 85,499 Software development costs, net 150,113 153,604 154,074 155,842 156,628 158,999 Goodwill 1,054,290 1,057,927 1,056,656 1,056,815 1,055,777 1,055,923 Intangible assets, net 126,338 120,791 112,697 106,654 99,279 93,379 Other assets 58,995 60,050 56,847 56,205 70,340 81,802 Total assets $ 2,102,366 $ 2,630,529 $ 2,104,441 $ 2,390,682 $ 2,109,298 $ 2,594,496 Liabilities and stockholders’ equity Current liabilities: Trade accounts payable $ 46,435 $ 42,664 $ 48,761 $ 27,344 $ 46,884 $ 35,431 Accrued expenses and other current liabilities 46,138 42,101 53,050 43,272 37,515 37,603 Due to customers 422,780 874,757 421,820 719,833 425,124 851,793 Debt, current portion 23,350 22,566 22,613 22,660 23,160 22,595 Deferred revenue, current portion 325,559 398,836 383,138 368,986 333,996 403,630 Total current liabilities 864,262 1,380,924 929,382 1,182,095 866,679 1,351,052 Debt, net of current portion 1,182,343 1,136,112 1,042,005 1,087,037 1,163,182 1,127,412 Deferred tax liability 25,085 25,254 9,246 21,981 27,333 33,407 Deferred revenue, net of current portion 6,033 2,179 1,773 2,778 6,054 2,773 Other liabilities 7,166 13,322 13,846 11,737 11,496 12,822 Total liabilities 2,084,889 2,557,791 1,996,252 2,305,628 2,074,744 2,527,466 Commitments and contingencies Stockholders’ equity: Preferred stock — — — — — — Common stock, $0.001 par value 72 72 72 72 74 74 Additional paid-in capital 1,319,562 1,347,234 1,369,807 1,391,641 1,415,521 1,438,227 Treasury stock, at cost (1,198,721) (1,199,608) (1,231,316) (1,316,224) (1,423,843) (1,452,356) Accumulated other comprehensive loss (8,302) (6,292) (9,198) (5,948) (3,850) (925) Retained earnings (95,134) (68,668) (21,176) 15,513 46,652 82,010 Total stockholders’ equity 17,477 72,738 108,189 85,054 34,554 67,030 Total liabilities and stockholders’ equity $ 2,102,366 $ 2,630,529 $ 2,104,441 $ 2,390,682 $ 2,109,298 $ 2,594,496
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Historical Consolidated Statements of Comprehensive Income (Unaudited) (in thousands, except share and per share amounts) Q1 2025 Q2 2025 Q3 2025 Q4 2025 FY 2025 Q1 2026 Q2 2026 Revenue $ 269,936 $ 282,030 $ 281,143 $ 295,256 $ 1,128,365 $ 281,140 $ 290,597 Cost of revenue 114,815 113,633 113,653 122,972 465,073 114,581 112,434 Gross profit 155,121 168,397 167,490 172,284 663,292 166,559 178,163 Operating expenses Sales, marketing and customer success 44,644 44,046 44,105 44,769 177,564 47,349 46,256 Research and development 33,559 33,595 37,198 33,778 138,130 36,916 34,856 General and administrative 56,679 32,856 31,044 34,031 154,610 30,261 34,449 Amortization of intangible assets 534 566 570 564 2,234 588 586 Total operating expenses 135,416 111,063 112,917 113,142 472,538 115,114 116,147 Income from operations 19,705 57,334 54,573 59,142 190,754 51,445 62,016 Interest expense (16,945) (18,411) (16,774) (15,840) (67,970) (16,036) (17,579) Other income, net 2,105 1,118 3,245 2,531 8,999 2,396 1,984 Income before provision (benefit) for income taxes 4,865 40,041 41,044 45,833 131,783 37,805 46,421 Income tax provision (benefit) 542 13,575 (6,448) 9,144 16,813 6,666 11,063 Net income $ 4,323 $ 26,466 $ 47,492 $ 36,689 $ 114,970 $ 31,139 $ 35,358 Earnings per share Basic $ 0.09 $ 0.55 $ 1.00 $ 0.78 $ 2.41 $ 0.68 $ 0.79 Diluted $ 0.09 $ 0.55 $ 0.98 $ 0.76 $ 2.37 $ 0.67 $ 0.79 Common shares and equivalents outstanding Basic weighted average shares 48,429,061 47,784,062 47,680,002 46,845,015 47,680,184 45,562,304 44,759,580 Diluted weighted average shares 49,445,079 48,248,057 48,498,285 47,960,158 48,469,961 46,351,379 44,884,337 Other comprehensive income Foreign currency translation adjustment 3,259 7,324 (2,284) 568 8,867 (1,480) (117) Unrealized (loss) gain on derivative instruments, net of tax (6,692) (5,314) (622) 2,682 (9,946) 3,578 3,042 Total other comprehensive (loss) income (3,433) 2,010 (2,906) 3,250 (1,079) 2,098 2,925 Comprehensive income $ 890 $ 28,476 $ 44,586 $ 39,939 $ 113,891 $ 33,237 $ 38,283
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Historical Consolidated Statements of Cash Flows (Unaudited) 3 months ended 6 months ended 9 months ended 12 months ended 3 months ended 6 months ended (in thousands) 3/31/2025 6/30/2025 9/30/2025 12/31/2025 3/31/2026 6/30/2026 Cash flows from operating activities Net income $ 4,323 $ 30,789 $ 78,281 $ 114,970 $ 31,139 $ 66,497 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 21,647 43,346 64,652 86,215 20,551 41,293 Net provision for credit losses and sales returns 788 2,973 3,788 4,382 1,128 3,020 Stock-based compensation expense 22,170 49,422 71,079 92,910 23,880 46,586 Deferred taxes (221) (653) (16,682) (181) 4,257 9,380 Amortization of deferred financing costs and discount 699 1,346 1,940 2,480 486 1,269 Other non-cash adjustments (5,384) (5,407) (5,180) (5,177) — 1,313 Changes in operating assets and liabilities, net of acquisition and disposal of businesses: Accounts receivable 4,770 (64,984) (2,422) (938) 3,613 (57,465) Prepaid expenses and other assets (5,192) (8,955) (9,707) (4,487) (18,048) (11,416) Trade accounts payable (4,651) (8,408) (3,233) (23,535) 19,258 6,818 Accrued expenses and other liabilities (8,134) (9,910) 2,033 (10,826) (3,186) 530 Deferred revenue (29,427) 38,770 22,991 9,737 (31,619) 34,688 Net cash provided by operating activities 1,388 68,329 207,540 265,550 51,459 142,513 Cash flows from investing activities Purchase of property and equipment (688) (1,311) (4,805) (7,767) (1,668) (4,117) Capitalized software development costs (12,970) (27,787) (40,268) (54,236) (12,798) (26,127) Purchase of net assets of acquired companies, net of cash and restricted cash acquired — — — (700) — — Cash used in disposition of business (12,235) (12,235) (12,235) (12,235) — — Other investing activities — — — — — (8,675) Net cash used in investing activities (25,893) (41,333) (57,308) (74,938) (14,466) (38,919) Cash flows from financing activities Proceeds from issuance of debt 216,200 272,300 307,000 404,500 139,900 209,500 Payments on debt (85,523) (187,666) (316,922) (369,784) (74,968) (180,857) Employee taxes paid for withheld shares upon equity award settlement (37,948) (38,655) (39,669) (40,403) (25,112) (25,319) Change in due to customers (320,248) 128,582 (323,467) (25,557) (294,090) 132,582 Change in customer funds receivable (2,483) (3,262) (1,676) 997 (6,395) (5,175) Purchase of treasury stock, including excise tax payments (100,030) (103,205) (133,338) (217,152) (82,103) (111,637) Net cash (used in) provided by financing activities (330,032) 68,094 (508,072) (247,399) (342,768) 19,094 Effect of exchange rate on cash, cash equivalents, and restricted cash 1,668 7,212 5,768 6,250 (433) (655) Net (decrease) increase in cash, cash equivalents, and restricted cash (352,869) 102,302 (352,072) (50,537) (306,208) 122,033 Cash, cash equivalents, and restricted cash, beginning of period 809,512 809,512 809,512 809,512 758,975 758,975 Cash, cash equivalents, and restricted cash, end of period $ 456,643 $ 911,814 $ 457,440 $ 758,975 $ 452,767 $ 881,008
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Historical Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) (in thousands, except share and per share amounts) Q1 2025 Q2 2025 Q3 2025 Q4 2025 FY 2025(1) Q1 2026 Q2 2026 GAAP Revenue $ 269,936 $ 282,030 $ 281,143 $ 295,256 $ 1,128,365 $ 281,140 $ 290,597 GAAP gross profit $ 155,121 $ 168,397 $ 167,490 $ 172,284 $ 663,292 $ 166,559 $ 178,163 GAAP gross margin 57.5 % 59.7 % 59.6 % 58.4 % 58.8 % 59.2 % 61.3 % Non-GAAP adjustments: Add: Stock-based compensation expense 2,698 3,250 2,850 2,719 11,517 3,087 2,714 Add: Amortization of intangibles from business combinations 7,052 7,020 6,811 6,761 27,644 6,267 5,404 Add: Employee severance — 302 (18) — 284 — — Add: GCC workforce transition costs — — — — — 275 267 Subtotal 9,750 10,572 9,643 9,480 39,445 9,629 8,385 Non-GAAP gross profit $ 164,871 $ 178,969 $ 177,133 $ 181,764 $ 702,737 $ 176,188 $ 186,548 Non-GAAP gross margin 61.1 % 63.5 % 63.0 % 61.6 % 62.3 % 62.7 % 64.2 % GAAP income from operations $ 19,705 $ 57,334 $ 54,573 $ 59,142 $ 190,754 $ 51,445 $ 62,016 GAAP operating margin 7.3 % 20.3 % 19.4 % 20.0 % 16.9 % 18.3 % 21.3 % Non-GAAP adjustments: Add: Stock-based compensation expense 22,170 27,252 21,657 21,831 92,910 23,880 22,706 Add: Amortization of intangibles from business combinations 7,586 7,586 7,381 7,325 29,878 6,855 5,990 Add: Employee severance — 2,147 (242) — 1,905 — — Add: GCC workforce transition costs — — — — — 1,026 1,974 Add: Acquisition and disposition-related costs 25,132 264 383 112 25,891 147 866 Add: Security Incident-related costs 2,180 395 247 282 3,104 — — Add: Impairment of capitalized software development costs — — — — — — 1,056 Subtotal 57,068 37,644 29,426 29,550 153,688 31,908 32,592 Non-GAAP income from operations $ 76,773 $ 94,978 $ 83,999 $ 88,692 $ 344,442 $ 83,353 $ 94,608 Non-GAAP operating margin 28.4 % 33.7 % 29.9 % 30.0 % 30.5 % 29.6 % 32.6 % GAAP income before provision (benefit) for income taxes $ 4,865 $ 40,041 $ 41,044 $ 45,833 $ 131,783 $ 37,805 $ 46,421 GAAP net income $ 4,323 $ 26,466 $ 47,492 $ 36,689 $ 114,970 $ 31,139 $ 35,358 Shares used in computing GAAP diluted earnings per share 49,445,079 48,248,057 48,498,285 47,960,158 48,469,961 46,351,379 44,884,337 GAAP diluted earnings per share $ 0.09 $ 0.55 $ 0.98 $ 0.76 $ 2.37 $ 0.67 $ 0.79 Non-GAAP adjustments: Add: GAAP income tax provision (benefit) 542 13,575 (6,448) 9,144 16,813 6,666 11,063 Add: Total Non-GAAP adjustments affecting income from operations 57,068 37,644 29,426 29,550 153,688 31,908 32,592 Non-GAAP income before provision for income taxes 61,933 77,685 70,470 75,383 285,471 69,713 79,013 Assumed non-GAAP income tax provision(2) 15,174 19,033 17,265 18,469 69,941 17,080 19,358 Non-GAAP net income $ 46,759 $ 58,652 $ 53,205 $ 56,914 $ 215,530 $ 52,633 $ 59,655 Shares used in computing Non-GAAP diluted earnings per share 49,445,079 48,248,057 48,498,285 47,960,158 48,469,961 46,351,379 44,884,337 Non-GAAP diluted earnings per share $ 0.95 $ 1.22 $ 1.10 $ 1.19 $ 4.45 $ 1.14 $ 1.33 (1) The individual amounts for each quarter may not sum to full year totals due to rounding. (2) We use a non-GAAP effective tax rate of 24.5% when calculating non -GAAP net income and non-GAAP diluted earnings per share. We base this rate on our estimated annual GAAP income tax rate, adjusted for items excluded from GAAP income when calculating non-GAAP income and for significant nonrecurring tax adjustments. We review this non -GAAP tax rate annually to determine whether it remai ns appropriate for evaluating our financial performance. In conducting this review, we consider our GAAP annual effective tax rate, changes in tax legislation, non-GAAP adjustments, and shifts in the geographic mix of revenues and expenses. We also evaluate other factors that we deem significant. Because the tax treatment of non -GAAP adjustments differs from GAAP and because of our methodology fo r estimating the annual tax rate, the non-GAAP tax rate may differ from the GAAP tax rate and from our actual tax liabilities.
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Historical Reconciliations of GAAP to Non-GAAP Financial Measures (Unaudited) 3 months ended 6 months ended 9 months ended 12 months ended 3 months ended 6 months ended (in thousands) 3/31/2025 6/30/2025 9/30/2025 12/31/2025 3/31/2026 06/30/2026 GAAP net cash provided by operating activities 1,388 68,329 207,540 265,550 51,459 142,513 GAAP operating cash flow margin 0.5 % 12.4 % 24.9 % 23.5 % 18.3 % 24.9 % Non-GAAP adjustments: Less: purchase of property and equipment (688) (1,311) (4,805) (7,767) (1,668) (4,117) Less: capitalized software development costs (12,970) (27,787) (40,268) (54,236) (12,798) (26,127) Non-GAAP free cash flow $ (12,270) $ 39,231 $ 162,467 $ 203,547 $ 36,993 $ 112,269 Non-GAAP free cash flow margin (4.5) % 7.1 % 19.5 % 18.0 % 13.2 % 19.6 %
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Historical Revenue by Type (Unaudited) (in thousands, except share and per share amounts) Q1 2025 Q2 2025 Q3 2025 Q4 2025 FY 2025 Q1 2026 Q2 2026 Revenue Contractual recurring $ 175,465 $ 180,128 $ 182,984 $ 183,243 $ 721,820 $ 182,314 $ 186,365 Transactional recurring 87,860 96,151 92,818 107,512 384,341 94,171 98,926 Total recurring revenue $ 263,325 $ 276,279 $ 275,802 $ 290,755 $ 1,106,161 $ 276,485 $ 285,291 One-time services and other 6,611 5,751 5,341 4,501 22,204 4,655 5,306 Total revenue $ 269,936 $ 282,030 $ 281,143 $ 295,256 $ 1,128,365 $ 281,140 $ 290,597
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Historical Reconciliations of GAAP and Non-GAAP Organic Revenue Growth (Unaudited) (dollars in thousands) Six months ended Three months ended Year ended Three months ended 06/30/2026 06/30/2025 06/30/2026 03/31/2026 12/31/2025 12/31/2025 09/30/2025 06/30/2025 03/31/2025 GAAP revenue $ 571,737 $ 551,966 $ 290,597 $ 281,140 $ 1,128,365 $ 295,256 $ 281,143 $ 282,030 $ 269,936 GAAP revenue growth 3.6 % 3.0 % 4.2 % Less: Non-GAAP revenue from divested businesses(1) — — — — — — — — — Non-GAAP organic revenue(2) $ 571,737 $ 551,966 $ 290,597 $ 281,140 $ 1,128,365 $ 295,256 $ 281,143 $ 282,030 $ 269,936 Non-GAAP organic revenue growth 3.6 % 3.0 % 4.2 % Non-GAAP organic revenue(2) $ 571,737 $ 551,966 $ 290,597 $ 281,140 1,128,365 $ 295,256 $ 281,143 $ 282,030 $ 269,936 Foreign currency impact on Non-GAAP organic revenue(3) (2,930) — (690) (2,240) — — — — — Non-GAAP organic revenue on constant currency basis(3) $ 568,807 $ 551,966 $ 289,907 $ 278,900 $ 1,128,365 $ 295,256 $ 281,143 $ 282,030 $ 269,936 Non-GAAP organic revenue growth on constant currency basis 3.1 % 2.8 % 3.3 % GAAP recurring revenue 561,776 539,604 285,291 276,485 1,106,161 290,755 275,802 276,279 263,325 GAAP recurring revenue growth 4.1 % 3.3 % 5.0 % Less: Non-GAAP recurring revenue from divested businesses(1) — — — — — — — — — Non-GAAP organic recurring revenue(2) $ 561,776 $ 539,604 $ 285,291 $ 276,485 $ 1,106,161 $ 290,755 $ 275,802 $ 276,279 $ 263,325 Non-GAAP organic recurring revenue growth 4.1 % 3.3 % 5.0 % Non-GAAP organic recurring revenue(2) $ 561,776 $ 539,604 $ 285,291 $ 276,485 1,106,161 $ 290,755 $ 275,802 $ 276,279 $ 263,325 Foreign currency impact on non-GAAP organic recurring revenue(3) (2,868) — (670) (2,198) — — — — — Non-GAAP organic recurring revenue on constant currency basis(3) $ 558,908 $ 539,604 $ 284,621 $ 274,287 $ 1,106,161 $ 290,755 $ 275,802 $ 276,279 $ 263,325 Non-GAAP organic recurring revenue growth on constant currency basis 3.6 % 3.0 % 4.2 % (1) Non-GAAP revenue from divested businesses excludes revenue associated with divested businesses in the prior period. The exclusion of the prior period revenue is to present the results of the divested business with the results of the combined company for the same period of time in both the prior and current periods. (2) Non-GAAP organic revenue and non-GAAP organic recurring revenue for the prior year periods presented herein may not agree tonon-GAAP organic revenue presented in the respective prior period quarterly financial information solely due to the manner in which non-GAAP organic revenue growth is calculated. (3) To determine non-GAAP organic revenue growth and non-GAAP organic recurring revenue growth on a constant currency basis, revenues from entities reporting in foreign currencies were translated to U.S. Dollars using the comparable period's quarterly weighted average foreign currency exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro.
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Reconciliations of Non-GAAP Organic Revenue Growth and Rule of 40 (Unaudited) (dollars in thousands) Three months ended Six months ended 06/30/2026 06/30/2025 06/30/2026 06/30/2025 GAAP net income $ 35,358 $ 26,466 $ 66,497 $ 30,789 Non-GAAP adjustments: Add: Interest, net 15,652 16,443 30,009 31,733 Add: GAAP income tax provision 11,063 13,575 17,729 14,117 Add: Depreciation 2,845 2,667 5,051 5,642 Add: Amortization of intangibles from business combinations 5,990 7,586 12,845 15,172 Add: Amortization of software development costs(1) 12,804 12,304 25,225 24,176 Subtotal 48,354 52,575 90,859 90,840 Non-GAAP EBITDA $ 83,712 $ 79,041 $ 157,356 $ 121,629 Non-GAAP EBITDA margin(2) 28.8 % 27.5 % Non-GAAP adjustments: Add: Stock-based compensation expense 22,706 27,252 46,586 49,422 Add: Employee severance — 2,147 — 2,147 Add: GCC workforce transition costs 1,974 — 3,000 — Add: Acquisition and disposition-related costs 866 264 1,013 25,396 Add: Security Incident-related costs — 395 — 2,575 Add: Impairment of capitalized software development costs 1,056 — 1,056 — Subtotal 26,602 30,058 51,655 79,540 Non-GAAP adjusted EBITDA $ 110,314 $ 109,099 $ 209,011 $ 201,169 Non-GAAP adjusted EBITDA margin(3) 38.0 % 36.6 % Rule of 40(4) 41.0 % 40.2 % Non-GAAP adjusted EBITDA 110,314 109,099 209,011 201,169 Foreign currency impact on Non-GAAP adjusted EBITDA(5) (162) (1,096) (1,191) (891) Non-GAAP adjusted EBITDA on constant currency basis(5) $ 110,152 $ 108,003 $ 207,820 $ 200,278 Non-GAAP adjusted EBITDA margin on constant currency basis 38.0 % 36.5 % Rule of 40 on constant currency basis(6) 40.8 % 39.6 % (1) Includes amortization expense related to software development costs and amortization expense from capitalized cloud compu ting implementation costs. (2) Measured by GAAP revenue divided by non-GAAP EBITDA. (3) Measured by non-GAAP organic revenue divided by non-GAAP adjusted EBITDA. (4) Measured by non-GAAP organic revenue growth plus non-GAAP adjusted EBITDA margin. See Non-GAAP organic revenue growth table on prior slide. (5) To determine non-GAAP adjusted EBITDA on a constant currency basis, non -GAAP adjusted EBITDA from entities reporting in fore ign currencies were translated to U.S. Dollars using the comparable prior period's quarterly weighted average foreign currenc y exchange rates. The primary foreign currencies creating the impact are the Australian Dollar, British Pound, Canadian Dollar and Euro. (6) Measured by non-GAAP organic revenue growth on constant currency basis plus non -GAAP adjusted EBITDA margin on constant currency basis. See Non-GAAP organic revenue growth table on prior slide.
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Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, 2026 (in thousands, except per share amounts) GAAP Stock-based compensation expense Amortization of intangibles from business combinations GCC workforce transition costs Acquisition and disposition-related costs Impairment of capitalized software development costs Non-GAAP adjustments subtotal Non-GAAP Revenue 290,597 — — — — — — 290,597 Cost of revenue 112,434 (2,714) (5,404) (267) — — (8,385) 104,049 Gross profit 178,163 2,714 5,404 267 — — 8,385 186,548 Total gross margin 61.3 % 2.9 % 64.2 % Operating expenses Sales, marketing and customer success 46,256 (3,402) — (33) — — (3,435) 42,821 Research and development 34,856 (6,485) — (181) — — (6,666) 28,190 General and administrative 34,449 (10,105) — (1,493) (866) (1,056) (13,520) 20,929 Amortization 586 — (586) — — — (586) — Total operating expenses 116,147 (19,992) (586) (1,707) (866) (1,056) (24,207) 91,940 Income from operations 62,016 22,706 5,990 1,974 866 1,056 32,592 94,608 Total operating margin 21.3 % 11.3 % 32.6 % Net income $ 35,358 $ 59,655 Shares used in computing diluted earnings per share 44,884 44,884 Diluted earnings per share $ 0.79 $ 1.33
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Three Months Ended June 30, 2025 (in thousands, except per share amounts) GAAP Stock-based compensation expense Amortization of intangibles from business combinations Employee severance Acquisition and disposition-related costs Security Incident- related costs Non-GAAP adjustments subtotal Non-GAAP Revenue 282,030 — — — — — — 282,030 Cost of revenue 113,633 (3,250) (7,020) (302) — — (10,572) 103,061 Gross profit 168,397 3,250 7,020 302 — — 10,572 178,969 Total gross margin 59.7 % 3.8 % 63.5 % Operating expenses Sales, marketing and customer success 44,046 (4,328) — (300) — — (4,628) 39,418 Research and development 33,595 (6,476) — (989) — — (7,465) 26,130 General and administrative 32,856 (13,198) — (556) (264) (395) (14,413) 18,443 Amortization 566 — (566) — — — (566) — Total operating expenses 111,063 (24,002) (566) (1,845) (264) (395) (27,072) 83,991 Income from operations 57,334 27,252 7,586 2,147 264 395 37,644 94,978 Total operating margin 20.3 % 13.4 % 33.7 % Net Income $ 26,466 $ 58,652 Shares used in computing diluted earnings per share 48,248 48,248 Diluted earnings per share $ 0.55 $ 1.22 Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited)
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Six Months Ended June 30, 2026 (in thousands, except per share amounts) GAAP Stock-based compensation expense Amortization of intangibles from business combinations GCC workforce transition costs Acquisition and disposition-related costs Impairment of capitalized software development costs Non-GAAP adjustments subtotal Non-GAAP Revenue 571,737 — — — — — — 571,737 Cost of revenue 227,015 (5,801) (11,671) (542) — — (18,014) 209,001 Gross profit 344,722 5,801 11,671 542 — — 18,014 362,736 Total gross margin 60.3 % 3.1 % 63.4 % Operating expenses Sales, marketing and customer success 93,605 (8,251) — (317) — — (8,568) 85,037 Research and development 71,772 (12,739) — (375) — — (13,114) 58,658 General and administrative 64,710 (19,795) — (1,766) (1,013) (1,056) (23,630) 41,080 Amortization 1,174 — (1,174) — — — (1,174) — Total operating expenses 231,261 (40,785) (1,174) (2,458) (1,013) (1,056) (46,486) 184,775 Income from operations 113,461 46,586 12,845 3,000 1,013 1,056 64,500 177,961 Total operating margin 19.8 % 11.3 % 31.1 % Net Income $ 66,497 $ 112,288 Shares used in computing diluted earnings per share 45,605 45,605 Diluted earnings per share $ 1.46 $ 2.46 Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited)
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Six Months Ended June 30, 2025 (in thousands, except per share amounts) GAAP Stock-based compensation expense Amortization of intangibles from business combinations Employee severance Acquisition and disposition-related costs Security Incident- related costs Non-GAAP adjustments subtotal Non-GAAP Revenue 551,966 — — — — — — 551,966 Cost of revenue 228,448 (5,948) (14,072) (302) — — (20,322) 208,126 Gross profit 323,518 5,948 14,072 302 — — 20,322 343,840 Total gross margin 58.6 % 3.7 % 62.3 % Operating expenses Sales, marketing and customer success 88,690 (8,452) — (300) — — (8,752) 79,938 Research and development 67,154 (12,390) — (989) — — (13,379) 53,775 General and administrative 89,535 (22,632) — (556) (25,396) (2,575) (51,159) 38,376 Amortization 1,100 — (1,100) — — — (1,100) — Total operating expenses 246,479 (43,474) (1,100) (1,845) (25,396) (2,575) (74,390) 172,089 Income from operations 77,039 49,422 15,172 2,147 25,396 2,575 94,712 171,751 Total operating margin 14.0 % 17.1 % 31.1 % Net Income $ 30,789 $ 105,411 Shares used in computing diluted earnings per share 48,787 48,787 Diluted earnings per share $ 0.63 $ 2.16 Reconciliation of GAAP to Non-GAAP Consolidated Statements of Operations (Unaudited)