See Note 4, Business Combinations, to the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended January 31, 2026.

EMD Acquisition

On April 12, 2026, the Company entered into an asset purchase agreement with WDMarketdesk, LLC (“EMD” and the transaction, the “EMD Acquisition”) to purchase substantially all of the assets and assume certain liabilities of EMD. The EMD Acquisition closed on May 1, 2026.

EMD is a Workday Services Partner that helps organizations implement and optimize Workday through advisory and consulting services. The acquisition is expected to enhance the Company’s Gloo 360 portfolio by expanding its capabilities in enterprise technology enablement, operational efficiency, and data-driven decision-making. By helping to modernize work for customers through forward-deployed engineering and agentic AI, the Company expects to deliver better outcomes for its customers.

The contractual purchase price of $17.3 million, which is still subject to net working capital adjustments, was adjusted to the acquisition date fair value of $16.8 million, with the difference pertaining to an adjustment to the closing date fair value of equity consideration. The as-adjusted purchase price consisted of the following:

The equity consideration transferred in the EMD Acquisition, consists of 1,536,198 shares of Class A common stock with an aggregate fair value of $9.8 million.

The EMD Acquisition includes a contingent consideration arrangement that requires an additional cash consideration payment of up to $0.75 million if certain future revenue targets are met. The arrangement provides for two annual measurement periods: the first being the trailing twelve months following the closing date, and the second being the trailing twelve months following the first anniversary of the closing date. The maximum potential payout is $0.5 million for the initial period and $0.25 million for the second period. The payments are subject to a formula based on the revenue performance of EMD during each respective period. The fair value of the contingent consideration recognized on the acquisition date of $0.2 million was estimated by applying a Monte Carlo Simulation approach. As of July 31, 2026, contingent consideration was included in acquisition-related liabilities. The EMD Promissory Note was recorded at acquisition date fair value and is further described in Note 12.

The Company incurred an immaterial amount of transaction-related costs, which were expensed as incurred and included in general and administrative expenses on the consolidated statements of operations.

Equity Consideration, Contingent Consideration and the EMD Promissory Note represent non-cash investing and financing activities on the Condensed Consolidated Statements of Cash Flows.

The EMD Acquisition was accounted for as a business combination using the acquisition method of accounting in accordance with ASC 805. The Company was identified as the accounting acquirer in the transaction. Under the acquisition method of accounting, the assets acquired and liabilities assumed are recorded at their respective fair values as of the EMD Acquisition closing date.

The aggregate purchase price noted above was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date, primarily using Level 2 and Level 3 inputs. Refer to Note 6, Fair Value Measurements for additional information. These fair value estimates represent management’s best estimate of future cash flows (including sales, cost of sales, income taxes, etc.), discount rates, competitive trends, market comparable equity valuations, and other factors. Inputs used were generally determined from historical data supplemented by current and anticipated market conditions and growth rates.

The Company engaged an independent third-party valuation firm to assist in determining the fair value of the transaction, including intangible assets, debt, and contingent consideration.

The excess of the consideration transferred over the fair value of the identifiable assets acquired, net of liabilities assumed, was recognized as goodwill. This goodwill primarily reflects the revenue-driven synergies expected from integrating EMD’s established marketing capabilities with the Company’s existing portfolio of offerings.

The resulting goodwill of $12.1 million is expected to be deductible for income tax purposes and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill recorded as part of the EMD Acquisition includes, but is not limited to: (1) the expected synergies EMD will bring to the Company’s portfolio while also unlocking new opportunities for growth, and (2) any intangible assets that do not qualify for separate recognition, such as the assembled workforce of EMD.

The Company recorded finite-lived intangible assets related to customer relationships and trademarks. The fair value of the customer relationships was determined using the multi-period excess earnings method under the income approach, and the fair value of the trademark was determined using the relief from royalty rate method under the income approach. The newly recognized intangible assets are being amortized over the estimated useful lives on a straight-line basis. The following table summarizes the estimated fair values and estimated useful lives for the identifiable intangible assets acquired as of the acquisition date:

Contract assets and liabilities were recorded under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) in accordance with ASU No. 2021-08; therefore, adjustments in contract assets and liabilities related to the estimated fair values of the acquired contract assets and liabilities were not required.

For the three and six months ended July 31, 2026, the Company’s consolidated results included $4.0 million of EMD’s revenue and $0.2 million of EMD’s net income.

Supplemental Unaudited Pro Forma Information

Pro forma information reflects adjustments that are expected to have a continuing impact on the Company’s results of operations and are directly attributable to the acquisition. The unaudited supplemental pro forma information above includes adjustments to reflect, among other things, direct transaction costs relating to the acquisition, the incremental intangible asset amortization to be incurred based on the preliminary values of each identifiable intangible asset, and to eliminate a portion of the interest expense related to liabilities, which were assumed by the Company upon completion of the acquisition. The unaudited supplemental pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the acquisitions taken place on the date indicated, or of the Company’s future consolidated statements of operations. The supplemental pro forma information presented above has been derived from the Company’s historical condensed consolidated financial statements and from the historical accounting records of the acquired businesses to which it gives effect.