| SEGMENT DISCLOSURES |
13. SEGMENT DISCLOSURES The Company operates its business as one operating segment. Operating segments are defined as components of an enterprise in which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM, the Chief Executive Officer, reviews financial information regularly at the consolidated level. Net income (loss) and adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), a non-GAAP measure, are both used as metrics to evaluate performance of the business in deciding whether to reinvest profits into software development, acquisitions or into other areas of the Company. The Company believes that Adjusted EBITDA is a useful supplemental measure to evaluate overall operating performance as it measures business performance by focusing on cash related results and it is an important metric to lenders under the Company’s Credit Agreement. The most directly comparable GAAP measure to Adjusted EBITDA is net income (loss). The CODM monitors consolidated forecasted versus actual net income (loss) and Adjusted EBITDA results for the purpose of determining the general health of the Company and assessing the performance of the Company as compared to management’s expectations. The following significant expense categories and measures of segment income (loss) are regularly reported to the CODM for the Company’s single segment: | | | | | | | | | | | | | For the three months ended June 30, | | For the six months ended June 30, | | 2026 | | 2025 | | 2026 | | 2025 | | | (unaudited) | | (unaudited) | Total Revenues | $ | 203,970 | | $ | 184,559 | | $ | 400,616 | | $ | 361,621 | Less: | | | | | | | | | | | | Cost of revenues – software subscriptions | | 52,170 | | | 44,459 | | | 103,346 | | | 88,704 | Cost of revenues – services | | 20,500 | | | 18,900 | | | 41,101 | | | 38,723 | Research & development | | 24,805 | | | 20,582 | | | 49,355 | | | 41,468 | Selling & marketing | | 51,899 | | | 48,454 | | | 104,534 | | | 96,609 | General & administrative | | 51,142 | | | 43,392 | | | 105,481 | | | 88,420 | Depreciation & amortization | | 6,720 | | | 6,187 | | | 13,162 | | | 12,067 | Change in fair value of acquisition contingent earn-outs | | (100) | | | 2,300 | | | (5,838) | | | (12,400) | Other segment items (1) | | 1,277 | | | 4,149 | | | 4,524 | | | 7,408 | Interest income, net | | (344) | | | (1,228) | | | (1,301) | | | (2,767) | Income tax benefit | | (13,142) | | | (1,675) | | | (20,281) | | | (6,780) | Net income (loss) (GAAP) | $ | 9,043 | | $ | (961) | | $ | 6,533 | | $ | 10,169 | Adjustments: | | | | | | | | | | | | Interest income, net | | (344) | | | (1,228) | | | (1,301) | | | (2,767) | Income tax benefit | | (13,142) | | | (1,675) | | | (20,281) | | | (6,780) | Depreciation and amortization – property and equipment | | 6,720 | | | 6,187 | | | 13,162 | | | 12,067 | Depreciation and amortization of capitalized software and acquired intangible assets – cost of subscription revenues | | 21,882 | | | 16,670 | | | 41,968 | | | 32,525 | Amortization of acquired intangible assets – selling and marketing expense | | 522 | | | 571 | | | 1,047 | | | 1,102 | Amortization of cloud computing implementation costs – general and administrative expense | | 1,358 | | | 1,018 | | | 2,395 | | | 2,024 | Stock-based compensation expense | | 13,762 | | | 11,990 | | | 32,270 | | | 33,034 | Severance expense (2) | | 2,689 | | | 317 | | | 10,097 | | | 774 | Acquisition contingent consideration | | — | | | 200 | | | — | | | 200 | Change in fair value of acquisition contingent earn-outs | | (100) | | | 2,300 | | | (5,838) | | | (12,400) | Acquisition-related retained employee compensation(3) | | 1,250 | | | — | | | 1,667 | | | — | Transaction costs (4) | | 7,375 | | | 2,980 | | | 13,359 | | | 5,640 | Adjusted EBITDA (Non-GAAP) | $ | 51,015 | | $ | 38,369 | | $ | 95,078 | | $ | 75,588 | (1) Other segment items include professional fees, contracted labor, transaction costs, acquisition related earn-out adjustments and foreign currency exchange gains (losses). | (2) The three and six months ended June 30, 2026 include $1,713 and $7,883, respectively, in severance costs related to the Value Creation Plan. For further information, refer to Note 15, “Restructuring” to the condensed consolidated financial statements. | (3) The acquisition-related compensation expenses recorded for the three and six months ended June 30, 2026 are related to the Additional Cash Consideration obligation associated with the acquisition of Brinta. For further information, refer to Note 3, “Acquisitions” to the condensed consolidated financial statements. | (4)The three and six months ended June 30, 2026 periods include $6,250 and $8,800, respectively, in costs incurred to support the execution of our Value Creation Plan. For further information, refer to Note 15, “ Restructuring” to the condensed consolidated financial statements. Amounts also include legal expenses associated with pending litigation related to claims the Company has made against a competitor. For further information, refer to Note 12, “Commitments and Contingencies” to the condensed consolidated financial statements. |
Additionally, the Company considers stock-based compensation expense a significant expense category. For further information, refer to Note 11, “Stock-Based Award Plans.” As the Company operates solely within one segment, total assets, property and equipment, net, and capitalized software, net are reported at the consolidated level on the condensed consolidated balance sheets. The Company’s assets include both current and long-lived assets, and corporate assets. As of June 30, 2026 and December 31, 2025, $1,480 and $1,347, respectively, of the Company’s property and equipment assets were held outside of the U.S. Depreciation and amortization, property and equipment additions, and capital software additions are reported at the consolidated level on the condensed consolidated statements of cash flows. The Company disaggregates revenue from contracts with customers based on geographical regions, timing of revenue recognition, and the major product and service types. For both the three and six months ended June 30, 2026, approximately 11% of the Company’s revenues were generated from customers located outside the U.S. For both the three and six months ended June 30, 2025, approximately 9% of the Company’s revenues were generated from customers located outside the U.S. None of the Company’s customers represented more than 10% of total revenues for the three or six months ended June 30, 2026 or 2025. For further information, including disaggregation of revenues, refer to Note 2, “Revenue Recognition.”
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