v3.26.1
DEBT
 9 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
DEBT
8. DEBT
The carrying values of the Company’s debt as of June 30, 2026 and September 30, 2025 are as follows (amounts in thousands):
June 30, 2026September 30, 2025
Convertible senior notes$— $155,250 
Term loan49,375 — 
Revolving credit line— — 
Less: unamortized discount and issuance costs, net of amortization— (3,034)
Total debt, net of unamortized discount and issuance costs49,375 152,216 
Less: current portion of term loan and convertible senior notes2,813 152,216 
Long-term portion of term loan$46,562 $— 
Convertible Senior Notes
In February 2021, the Company issued an aggregate principal amount of $155.3 million in 0.75% convertible senior notes due February 1, 2026 (“2026 Notes”). The Company repaid the 2026 Notes in full in the second quarter of fiscal 2026.
Amended Credit Agreement - Revolving Credit Line and Term Loan
On May 7, 2025, the Company, together with its subsidiaries, A2iA Corp. and ID R&D, Inc., (the “Borrowers”), entered into the First Amendment to Loan and Security Agreement (the “Amendment”), amending the Credit Agreement, and as amended by the Amendment (the “Amended Credit Agreement”), by and among the Company and Silicon Valley Bank (the “Bank”).
The Amended Credit Agreement provides for, among other things, (i) the establishment of a delayed draw term loan (the “Term Loan”) in an aggregate principal amount of up to $75.0 million that may be drawn prior to February 28, 2026 for the sole purpose of paying amounts outstanding under the 2026 Notes due February 1, 2026 and customary fees and expenses in connection therewith, and (ii) a revolving line of credit (the “Revolving Line”) whereby the Company may borrow up to $25.0 million with an additional $15.0 million to be advanced under the Revolving Line at the sole discretion of the Bank. On January 21, 2026, the Company borrowed $50.0 million under its Term Loan. The Term Loan and Revolving Line are secured on a first priority basis by the Company’s assets.
In connection with the Amended Credit Agreement, the Company incurred issuance costs of $0.2 million, which were recorded to Other income (expense), net in the condensed consolidated statement of operations and comprehensive income (loss). The Term Loan and the Revolving Line both mature on May 1, 2030. Commencing on April 1, 2026, the Company must make amortization payments on any advances under the Term Loan at the percentages set forth in the Amendment.
Borrowings under the Amended Credit Agreement generally bear interest at a variable rate equal to (a) term SOFR plus a specified margin, or (b) WSJ prime plus a specified margin, in each case which will be adjusted based on the Company’s net leverage ratio at the time of borrowing. Borrowers must also pay the Bank (i) a commitment fee of $125,000 and (ii) an “Unused Revolving Line Facility Fee” of 0.25% per annum of the average unused portion of the Revolving Line. The Term Loan carrying value approximates fair value and is valued using Level 2 inputs within the fair value hierarchy, as defined in Note 4 “Fair Value Measurements”.
The Amended Credit Agreement contains representations, warranties, and negative and affirmative covenants customary for transactions of this type. These include covenants limiting the ability of the Borrowers and any of their subsidiaries, subject to certain exceptions and baskets, to, among other things, (i) incur indebtedness, (ii) incur liens on their assets, (iii) enter into any merger or consolidation with, or acquire all or substantially all of the equity or property of, another person, (iv) dispose of any of their business or property, (v) make or permit any payment on subordinated debt, or (vi) pay any dividend, make any other distribution, or redeem any equity.
The Amended Credit Agreement contains customary events of default and also provides that an event of default includes any default resulting in a right by third parties to accelerate maturity of indebtedness in excess of $500,000. If any event of default occurs and is not cured within applicable grace periods set forth in the Amended Credit Agreement or waived, all loans and other obligations could become due and immediately payable and the facility could be terminated. In addition, Borrower may be required to deposit cash with the Bank in an amount equal to 1.05 of any undrawn letters of credit denominated in U.S. Dollars or 1.15 of any undrawn letters of credit denominated in a foreign currency.
The Amended Credit Agreement requires the Company to maintain a net leverage ratio of no more than 2.50 to 1.00 and if the Company consummates a permitted acquisition during the trailing twelve-month period, the net leverage ratio may not exceed 2.75 to 1.00. As of June 30, 2026, the Company was in compliance with the net leverage ratio covenant of the Amended Credit Agreement. There is $49.4 million in outstanding borrowings under the Amended Credit Agreement as of June 30, 2026.
The following table presents the total amount of interest cost recognized relating to the Term Loan and 2026 Notes (amounts in thousands):
Three Months Ended June 30,Nine Months Ended June 30,
2026202520262025
Contractual interest expense$721 $290 $1,679 $871 
Amortization of debt discount and issuance costs— 2,179 3,034 6,403 
Total interest expense recognized$721 $2,469 $4,713 $7,274 

The derived effective interest rate on the 2026 Notes was determined to be 6.71%, which remained unchanged from the date of issuance through repayment. The derived effective interest rate on the Amended Credit Agreement was determined to be 4.16% for the nine months ended June 30, 2026, with a remaining term of 3.9 years as of June 30, 2026.
Maturities of principal amounts of our Amended Credit Agreement as of June 30, 2026 were as follows (amounts in thousands):
Principal Amounts
Remaining 2026
$625 
20273,125 
20284,375 
20295,625 
203035,625 
Total$49,375 
Other Borrowings
The Company has certain loan agreements with Spanish government agencies. These agreements have repayment periods of five to twelve years and bear interest rates ranging from 0% to 3.72%. As of June 30, 2026, $4.5 million was outstanding under these agreements and $0.3 million and $4.2 million are recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets. As of September 30, 2025, $4.3 million was outstanding under these agreements and approximately $0.3 million and $4.0 million are recorded in other current liabilities and other non-current liabilities, respectively, in the condensed consolidated balance sheets.
Maturities of principal amounts of our other borrowings as of June 30, 2026 were as follows (amounts in thousands):
Principal Amounts
Remaining 2026$103 
2027312 
2028535 
2029535 
2030535 
2031 and thereafter2,450 
Total$4,470