Digital Turbine, Inc.

Previous wording

The following discussion should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q (this “Report”). The following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements involve substantial risks and uncertainties. When used in this Report, the words “anticipate,” “believe,” “estimate,” “expect,” “will,” “seek,” “should,” “could,” “can,” “would,” “may,” “might,” “intend,” “plan,” “target,” “project,” “contemplate,” “predict,” “suggest,” “potential,” and “continue” and the negative of these words and other similar expressions, as they relate to our management or us, are intended to identify such forward-looking statements. Our actual results, performance, or achievements could differ materially from those expressed in or implied by these forward-looking statements as a result of a variety of factors, including those set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, as well as those described elsewhere in this Report and in our other public filings. The risks included are not exhaustive and additional factors could adversely affect our business and financial performance. We operate in a very competitive and rapidly changing environment. New risk factors emerge from time-to-time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Historical operating results are not necessarily indicative of the trends in operating results for any future period. We do not undertake any obligation to update any forward-looking statements made in this Report. Accordingly, investors should use caution in relying on past forward-looking statements, which are estimates based on assumptions, known historical results and trends at the time they are made, to anticipate future results or trends. This Report and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Current wording

The following discussion should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q (this “Report”). The following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements involve substantial risks and uncertainties. When used in this Report, the words “anticipate,” “believe,” “estimate,” “expect,” “will,” “seek,” “should,” “could,” “can,” “would,” “may,” “might,” “intend,” “plan,” “target,” “project,” “contemplate,” “predict,” “suggest,” “potential,” and “continue” and the negative of these words and other similar expressions, as they relate to our management or us, are intended to identify such forward-looking statements. Our actual results, performance, or achievements could differ materially from those expressed in or implied by these forward-looking statements as a result of a variety of factors, including those set forth under “Risk Factors” under Part II, Item 1A in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026, as well as those described elsewhere in this Report and in our other public filings. The risks included are not exhaustive and additional factors could adversely affect our business and financial performance. We operate in a very competitive and rapidly changing environment. New risk factors emerge from time-to-time and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Historical operating results are not necessarily indicative of the trends in operating results for any future period. We do not undertake any obligation to update any forward-looking statements made in this Report. Accordingly, investors should use caution in relying on past forward-looking statements, which are estimates based on assumptions, known historical results and trends at the time they are made, to anticipate future results or trends. This Report and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

Previous wording

On April 20, 2026, the Company amended its Financing Agreement. The amendment reduced the liquidity covenant requirement for the period between April 1, 2026 and December 31, 2026 from $20,000 to $15,000 and modified the timing and amount of its exit and duration fees. The Company (i) paid a $5,000 amendment fee, capitalized as original debt discount to be amortized over the remaining term of the Financing Agreement; (ii) limited its remaining exit fees to $1,350; and (iii) limited future duration fees to $5,000, payable in cash, which will be waived if the Company prepays the principal of a certain tranche of the outstanding term loan by December 31, 2026. The exit fees were added to the outstanding principal balance on the Amendment Date.

Current wording

On April 20, 2026, the Company amended its Financing Agreement. The amendment reduced the liquidity covenant requirement for the period between April 1, 2026 and December 31, 2026 from $20.0 million to $15.0 million and modified the timing and amount of its exit and duration fees. The Company (i) paid a $5.0 million amendment fee, capitalized as original debt discount to be amortized over the remaining term of the Financing Agreement; (ii) limited its remaining exit fees to $1.4 million; and (iii) limited future duration fees to $5.0 million, payable in cash, which will be waived if the Company prepays the principal of a certain tranche of the outstanding term loan by December 31, 2026. The exit fees were added to the outstanding principal balance on the Amendment Date.

Previous wording

The Company, as a global company, is subject to negative impacts and risks related to prevailing macroeconomic conditions and significant events with macroeconomic impacts, including, but not limited to, the wars in Ukraine, Israel, Gaza, Iran, Lebanon and Syria, geopolitical tensions involving China including but not limited to various U.S. federal and state governmental agencies continued examination of the distribution and use of apps developed and/or published by China-based companies, market conditions related to inflation, recessionary concerns, fluctuating foreign currency exchange rates, increases in trade tariffs, changes in interest rates, uncertainty over liquidity concerns in the broader financial services industry, supply chain, including the continued global memory chip shortage associated with high AI demand, and energy market disruption issues. As a result of these macroeconomic conditions and uncertainties, certain of our customers have, and others may, defer or reduce their use of our services, which has had, and could in the future have, a negative impact on our net revenues. We have suspended our business activities in Russia and Belarus to the extent required by applicable law, but such suspension has not had, and we do not expect it to have, a material impact on our financial results. Despite our significant presence in the region, we do not expect the ongoing conflicts in Iran, Israel, Gaza, Lebanon, and Syria to have a material impact on our operations or our financial results. In addition, our borrowings outstanding under our Financing Agreement currently bear interest at variable rates and may continue to fluctuate as a result of changes in interest rates. We continuously monitor the direct and indirect impacts of these events on our business and financial results, as well as the overall global economy, and we anticipate that these macroeconomic events could continue to negatively impact our results of operation.

Current wording

The Company, as a global company, is subject to negative impacts and risks related to prevailing macroeconomic conditions and significant events with macroeconomic impacts, including, but not limited to, the wars in Israel, Gaza, Lebanon, Syria, Iran, Russia and Ukraine, geopolitical tensions involving China including but not limited to various U.S. federal and state governmental agencies continued examination of the distribution and use of apps developed and/or published by China-based companies, market conditions related to inflation, recessionary concerns and their impact on consumer confidence, fluctuating foreign currency exchange rates, increases in trade tariffs, changes in interest rates, uncertainty over liquidity concerns in the broader financial services industry, supply chain, including the continued global memory chip shortage associated with high AI demands, and energy market disruption issues. As a result of these macroeconomic conditions and uncertainties, certain of our customers have, and others may, defer or reduce their use of our services, which has had, and could in the future have, a negative impact on our business, financial condition, and results of operations. We have suspended our business activities in Russia and Belarus to the extent required by applicable law, but such suspension has not had, and we do not expect it to have, a material impact on our financial results. Despite our significant presence in the region, we do not expect the ongoing conflicts in Israel, Gaza, Lebanon, Syria, Iran, Russia and Ukraine to have a material impact on our operations or our financial results. In addition, our borrowings outstanding under our Financing Agreement currently bear interest at variable rates and may continue to fluctuate as a result of changes in interest rates. We continuously monitor the direct and indirect impacts of these events on our business and financial results, as well as the overall global economy, and we anticipate that these macroeconomic events could continue to negatively impact our business, financial condition, and results of operations.

Previous wording

Other direct costs of revenue are comprised primarily of hosting expenses directly related to the generation of revenue and bidding and platform fees associated with the Company’s exchange platform.

Current wording

Other direct costs of revenue are comprised primarily of hosting costs directly related to the generation of revenue and bidding and platform fees associated with the Company’s exchange platform. The Company anticipates hosting costs will continue to increase in absolute dollars, but remain relatively consistent as a percentage of revenues, in connection with increased usage to support its platform.

Previous wording

Product development expenses include the development and maintenance of the Company’s product suite and are primarily a function of employee-related costs, which include salaries, incentive compensation, and benefits as well as professional services fees, hosting expenses, and software costs. The Company capitalizes certain product development costs related to developing new functionality for our products, which may cause our product development expense to fluctuate from period to period.

Current wording

Product development expenses include the development and maintenance of the Company’s product suite and are primarily a function of employee-related costs, which include salaries, incentive compensation, and benefits as well as professional services fees, hosting costs, and software costs, which include AI-related costs. The Company capitalizes certain product development costs related to developing new functionality for our products, which may cause our product development expense to fluctuate from period to period.

Previous wording

On Device Solutions revenue increased by $14,548, or 15.2%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and was primarily driven by improved performance internationally. Revenue from application media increased by approximately $13,714 due to an increase in new device volumes and revenue-per-device internationally, partially offset by a decrease in new device sales and revenue-per-device in the U.S., in addition to increased activity of certain strategic demand contracts in the current period.

Current wording

ODS revenue for the three months ended September 30, 2026, increased by$19.1 million or 19.8% compared to the three months ended September 30, 2025. Revenue from application media increased by $20.1 million, primarily due to an increase in new device volumes and revenue-per-device internationally, partially offset by a decrease in new device sales in the U.S.

Previous wording

App Growth Platform revenue increased by $20,304, or 55.9%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, and was primarily driven by improved performance in the Asia Pacific and China regions. The increase was primarily a result of an increase in advertising exchange revenue of $14,342, which was largely due to the continued onboarding and growth of new publishers and demand partners.

Current wording

AGP revenue for the three months ended September 30, 2026, increased by $18.8 million or 42.0% compared to the three months ended September 30, 2025, and was primarily driven by improved performance internationally, with the majority of that increase in the Asia-Pacific and China region. The increase was primarily driven by higher advertising exchange revenue of approximately $13.6 million, which was largely due to the continued onboarding of new publishers and demand partners, and an increase in performance and brand advertising revenue by approximately $5.2 million primarily due to increased spend by major partners.

Previous wording

For the three months ended June 30, 2026, the Company recorded foreign exchange transaction gains of $681 compared to losses of $914 for the three months ended June 30, 2025. These amounts are primarily attributable to fluctuations in foreign exchange rates for trade accounts receivables and payables denominated in currencies other than the functional currency of foreign entities.

Current wording

Foreign exchange transaction (gain) loss. For the three months ended September 30, 2026, the Company recorded a foreign exchange transaction loss of$0.1 million in comparison to foreign exchange transaction gains of$1.1 million for the three months ended September 30, 2025. The changes were primarily attributable to fluctuations in foreign exchange rates for trade accounts receivable and payable denominated in currencies other than the functional currency of the Company’s foreign entities.

Previous wording

The following table sets forth our results of operations for the three months ended June 30, 2026 and 2025:

Current wording

Comparison of Our Results of Operations for the Six Months Ended September 30, 2026 to September 30, 2025:

Previous wording

For the three months ended June 30, 2026, other expense, net increased $8,426 to $9,094 compared to $668 for the three months ended June 30, 2025. The increase in other expense, net was primarily due to a non-cash fair value adjustment of $9,281 relating to the revaluation of one of the Company’s non-marketable, strategic equity investments. The increase was partially offset by a reduction in professional services fees associated with the Company's financing transactions, which were incurred in the three months ended June 30, 2025 and did not recur in the current period. For further description of the Company’s non-marketable equity investments, see Note 3—Fair Value Measurements in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Other Expense, net. For the six months ended September 30, 2026, the Company recorded other expense, net of$4.3 million, as compared toother expense, net of$1.9 million for the six months ended September 30, 2025. The increase of $2.4 million was primarily due to a non-cash fair value adjustment of $9.3 million relating to the revaluation of one of the Company’s non-marketable, strategic equity investments during the six months ended September 30, 2026, partially offset by a$4.7 million gain on the sale of the Exchange to a third party during the six months ended September 30, 2026 and $1.8 million ofcertain professional services fees associated with the Company’s equity and financing transactions undertaken during the six months ended September 30, 2025.

Previous wording

Income tax expense increased $4,381, or 209.3%, to $2,288 for the three months ended June 30, 2026 from a benefit of $2,093 for the three months ended June 30, 2025. The increase in our tax expense is primarily due to the reduction in our loss before taxes when comparing the two periods as well as changes to our valuation allowances and other discrete items.

Current wording

Income tax expense increased $5.6 million to an expense of $5.0 million for thesix months ended September 30, 2026, from a benefit of$0.6 million for the six months ended September 30, 2025. The increase is primarily due to the increase in income before taxesas well as changes to our valuation allowances and other discrete items when comparing the periods.

Previous wording

Our primary sources of liquidity are our cash and cash equivalents, cash from operations, and borrowings under the Financing Agreement. As of June 30, 2026, we had unrestricted cash of approximately $42,930 and restricted cash of approximately $276. For the three months ended June 30, 2026, the Company generated a net loss of $11,329 and cash from operating activities of $17,859.

Current wording

Our primary sources of liquidity are our cash and cash equivalents, cash from operations, and borrowings under the Financing Agreement. As of September 30, 2026, we had unrestricted cash of approximately $51.4 million and restricted cash of approximately $0.3 million. For the six months ended September 30, 2026, the Company generated a net loss of $3.0 million and cash from operating activities of $36.7 million.

Previous wording

Our principal cash requirements for the twelve-month period following this Report primarily consist of refinancing certain loan tranches under the Financing Agreement and payment of interest and required principal payments thereunder in addition to employee-related costs, contractual payment obligations, including office leases, cloud hosting costs, capital expenditures, minimum commitments under hosting agreements (see Liquidity and Capital Resources—Hosting Agreements below), cash outlays for income taxes, and cash requirements to fund working capital.

Current wording

Our principal cash requirements for the twelve-month period following this Report primarily consist of payment of interest and required principal payments thereunder in addition to employee-related costs, contractual payment obligations, including office leases, cloud hosting costs, capital expenditures, minimum commitments under hosting agreements (see Liquidity and Capital Resources—Hosting Agreements below), cash outlays for income taxes, and cash requirements to fund working capital.

Previous wording

We may from time to time seek to refinance existing indebtedness or raise additional capital through equity or debt financing arrangements in order to optimize our capital structure and reduce borrowing costs. Under the Financing Agreement, the Company is required to pay duration fees of $5,000 if one of the two remaining tranches of term loans is not repaid by December 31, 2026. See Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for a discussion of the exit and duration fees. If we successfully refinance such loans on acceptable terms, we believe our existing cash and cash equivalents, cash flow from operations, and ability to access debt financing arrangements would be sufficient to meet our working capital and other business requirements for at least 12 months from the filing date of this Report. However, our ability to meet our debt service obligations and to fund working capital, capital expenditures, and investments in our business will depend upon our future performance and our ability to access capital markets and refinance such loans, as well as financial, business, and other factors affecting our operations, many of which are beyond our control. These factors include general and regional economic, financial, competitive, legislative, regulatory, and other factors such as the U.S. and global economic climate uncertainty, the impact of tariffs, the state of the equity and debt markets and the ability to raise capital in such markets, health epidemics, economic and macroeconomic factors like labor shortages, supply chain disruptions, and inflation, and geopolitical developments, including the conflicts in Ukraine, Iran, Israel, Gaza, Lebanon and Syria and the political climate related to China. We cannot guarantee we will generate sufficient cash flow from operations, or that future borrowings or capital markets transactions will be available, in amounts sufficient to enable us to pay our debt, refinance our existing indebtedness or to fund our other liquidity needs. We have been and are continuing to explore various cost-saving opportunities, and we intend to continue seeking opportunities to generate additional revenue through operations. There can be no assurance that we will be successful in our plans described above. If we are unable to effectively implement additional cost reductions, generate additional revenue or refinance existing indebtedness or raise additional capital through equity or debt financing arrangements, we may be forced to delay, reduce or eliminate some or all of our strategic operational efforts and product and service expansion, and our business, financial condition and results of operations could be materially and adversely affected. See Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026 for additional information related to the foregoing risks.

Current wording

We are evaluating opportunities to refinance our existing indebtedness and may also seek to raise additional capital through equity or debt financing arrangements in order to optimize our capital structure and reduce borrowing costs. Under the Financing Agreement, the Company is required to pay duration fees of $5.0 million if one of the two remaining tranches of term loans is not repaid by December 31, 2026. See Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for a discussion of the exit and duration fees. We believe our existing cash and cash equivalents, cash flow from operations, and ability to access debt financing arrangements would be sufficient to meet our working capital and other business requirements for at least 12 months from the filing date of this Report. However, our ability to meet our debt service obligations and to fund working capital, capital expenditures, and investments in our business will depend upon our future performance and our ability to access capital markets and refinance such loans, as well as financial, business, and other factors affecting our operations, many of which are beyond our control. These factors include general and regional economic, financial, competitive, legislative, regulatory, and other factors such as the U.S. and global economic climate uncertainty, the impact of tariffs, the state of the equity and debt markets and the ability to raise capital in such markets, health epidemics, economic and macroeconomic factors like labor shortages, supply chain disruptions, inflation, changes in interest rates and their impact on borrowing costs, consumer confidence levels, and geopolitical developments, including the conflicts in Israel, Gaza, Lebanon, Syria, Iran, Russia and Ukraine, and the political climate related to China. We cannot guarantee we will generate sufficient cash flow from operations, or that future borrowings or capital markets transactions will be available, in amounts sufficient to enable us to pay our debt, refinance our existing indebtedness or to fund our other liquidity needs. We have been and are continuing to explore various cost-saving opportunities, and we intend to continue seeking opportunities to generate additional revenue through operations. There can be no assurance that we will be successful in our plans described above. If we are unable to effectively implement additional cost reductions, generate additional revenue or refinance existing indebtedness or raise additional capital through equity or debt financing arrangements, we may be forced to delay, reduce or eliminate some or all of our strategic operational efforts and product and service expansion, and our business, financial condition and results of operations could be materially and adversely affected. See Part I, Item 1A, “Risk Factors,” in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2026 for additio…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Our outstanding secured indebtedness under the Financing Agreement was $387,800 as of June 30, 2026. The term loans under the Financing Agreement are fully borrowed and there is no further borrowing capacity under the Financing Agreement. The maturity date of the Financing Agreement is August 29, 2029, and the outstanding balance is classified as long-term debt, net of original debt discount of $14,704, debt issuance costs of $6,966, unamortized exit and duration fees of $13,267, and the current portion of long-term debt of $9,375 on our consolidated balance sheet as of June 30, 2026. For further description of the terms of the Financing Agreement, see Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Our outstanding secured indebtedness under the Financing Agreement was $385.5 million as of September 30, 2026. The term loans under the Financing Agreement are fully borrowed and there is no further borrowing capacity under the Financing Agreement. The maturity date of the Financing Agreement is August 29, 2029, and the outstanding balance is classified as long-term debt, net of original debt discount of $14.5 million, debt issuance costs of $6.4 million, unamortized exit and duration fees of $10.9 million, and the current portion of long-term debt of $9.4 million on our consolidated balance sheet as of September 30, 2026. For further description of the terms of the Financing Agreement, see Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Our Financing Agreement also contains a maximum leverage ratio and minimum liquidity amount. If we fail to satisfy these covenants, the lender may declare a default, which could lead to acceleration of the debt maturity. Any such default would have a material adverse effect on us.

Current wording

Our Financing Agreement also contains a maximum leverage ratio and minimum liquidity amount. If we fail to satisfy these covenants, the lender may declare a default, which could lead to acceleration of the debt maturity. Any such default would have a material adverse effect on us. In addition, the Financing Agreement contains certain mandatory prepayment provisions, including from proceeds raised from equity issuances and, beginning in fiscal year 2027, 50% of any excess cash flow.

Previous wording

As described above, we may from time to time seek to refinance existing indebtedness or raise additional capital through equity or debt financing arrangements in order to optimize our capital structure and reduce borrowing costs. If we raise additional funds by issuing equity or equity-linked securities, it may be at a price and on terms and conditions that are less favorable to the Company, and the ownership of our existing stockholders will be diluted. If we raise additional financing by incurring new indebtedness, we may be subject to increased interest rates, increased fixed payment obligations, and could also be subject to additional restrictive covenants and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could be less favorable to the Company. We cannot guarantee that we will be able to refinance any of our indebtedness or enter into equity or equity-linked financing arrangements on commercially reasonable terms, or at all.

Current wording

As described above, we are evaluating opportunities to refinance our existing indebtedness and may also seek to raise additional capital through equity or debt financing arrangements in order to optimize our capital structure and reduce borrowing costs. If we raise additional funds by issuing equity or equity-linked securities, it may be at a price and on terms and conditions that are less favorable to the Company, and the ownership of our existing stockholders will be diluted. If we raise additional financing by incurring new indebtedness, we may be subject to increased interest rates, increased fixed payment obligations, and could also be subject to additional restrictive covenants and other operating restrictions that could adversely impact our ability to conduct our business. Any future indebtedness we incur may result in terms that could be less favorable to the Company. We cannot guarantee that we will be able to refinance any of our indebtedness or enter into equity or equity-linked financing arrangements on commercially reasonable terms, or at all.

Previous wording

If the Company is unable to refinance certain loan tranches under the Financing Agreement by December 31, 2026, the Company will be required to pay duration fees in the amount of $5,000. See Note 9— Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for a discussion of the exit and duration fees.

Current wording

If the Company is unable to refinance certain loan tranches under the Financing Agreement by December 31, 2026, the Company will be required to pay duration fees in the amount of $5.0 million. In addition, the liquidity covenant reverts to$20.0 million on January 1, 2027 through the maturity of the Financing Agreement and the 50% excess cash flow sweep will begin January 1, 2027. See Note 9— Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q for a discussion of the exit and duration fees, liquidity covenant and cash flow sweep requirements.

Previous wording

We enter into hosting agreements with service providers, and, in some cases, those agreements include minimum commitments that require us to purchase a minimum amount of service over a specified time period (“the minimum commitment period”). The minimum commitment period is generally one year in duration, and the hosting agreements include multiple minimum commitment periods. Our minimum purchase commitments under these hosting agreements total approximately $37,469 for the remaining nine months of fiscal year 2027 and $144,000 over the next three fiscal years through March 31, 2030. See Note 13—Commitments and Contingencies in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Current wording

We enter into hosting agreements with service providers, and, in some cases, those agreements include minimum commitments that require us to purchase a minimum amount of service over a specified time period (“the minimum commitment period”). The minimum commitment period is generally one year in duration, and the hosting agreements include multiple minimum commitment periods. Our minimum purchase commitments under these hosting agreements total approximately $25.5 million for the remaining six months of fiscal year 2027 and $144.0 million over the next three fiscal years through March 31, 2030. See Note 13—Commitments and Contingencies in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

Our cash flows from operating activities are primarily driven by revenue generated from user acquisition and advertising activity, offset by the cash costs of operations, and are significantly influenced by the timing of and fluctuations in receipts from customers and payments to our carrier and publisher partners as well as other vendors. If we cannot increase our revenue levels and manage costs appropriately, our future cash flows from operating activities may be negatively affected. Cash provided by operating activities was $17,859 and $8,788 for the three months ended June 30, 2026 and 2025, respectively.

Current wording

Our cash flows from operating activities are primarily driven by revenue generated from user acquisition and advertising activity, offset by the cash costs of operations, and are significantly influenced by the timing of and fluctuations in receipts from customers and payments to our carrier and publisher partners as well as other vendors. If we cannot increase our revenue levels and manage costs appropriately, our future cash flows from operating activities may be negatively affected. Cash provided by operating activities was $36.7 million and $23.2 million for the six months ended September 30, 2026 and 2025, respectively.

Previous wording

The increase of $9,071 in net cash provided by operating activities during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was due primarily to the $27,722 increase in operating income, partially offset by decreases in non-cash depreciation and amortization expenses and stock-based compensation expense of $6,532 and $3,819 respectively. Additionally, our operating cash flows were affected by increases in cash paid for income taxes and interest in the amounts of $4,440 and $2,920, respectively.

Current wording

The increase of $13.5 million in net cash provided by operating activities during the six months ended September 30, 2026 as compared to the six months ended September 30, 2025 was due primarily to the $39.6 million increase in operating income, partially offset by an increase to our net change in operating assets and liabilities of $10.9 million and decreases in stock-based compensation expense and depreciation and amortization expense of $7.3 million and $4.4 million, respectively, when comparing the six months ended September 30, 2026 to 2025. The change in operating assets and liabilities represented a use of cash of $20.6 million and $9.6 million for the six months ended September 30, 2026 and 2025, respectively. Additionally, our operating cash flows were affected by increases in cash paid for income taxes of $5.1 million.

Previous wording

Our primary investing activities consist of purchases of property and equipment, sales of assets, capital expenditures in support of creating and enhancing our technology infrastructure, and to a lesser extent acquisitions of businesses. Net cash used in investing activities decreased by $5,637 when comparing the three months ended June 30, 2026 to 2025, and this decrease was primarily due to $4,700 of proceeds from the sale of the Exchange during the three months ended June 30, 2026. There was no comparable transaction during the three months ended June 30, 2025.

Current wording

Our primary investing activities consist of purchases of property and equipment, sales of assets, capital expenditures in support of creating and enhancing our technology infrastructure, and to a lesser extent acquisitions of businesses. Net cash used in investing activities decreased by $4.5 million when comparing the six months ended September 30, 2026 to 2025, and this decrease was primarily due to $4.7 million of proceeds from the sale of the Exchange during the six months ended September 30, 2026. There was no comparable transaction during the six months ended September 30, 2025.

Previous wording

Net cash used in financing activities increased $1,234 during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily as a result of higher principal payments on the Company’s long-term debt in the amount of $4,700 and a $5,000 payment for original issue discount in connection with our amendment to the Financing Agreement, partially offset by a decrease of $9,298 in payments relating to debt issuance costs. Additionally, proceeds from options exercised decreased by $1,279 when comparing the two periods. Principal payments for the three months ended June 30, 2026 included $4,700 resulting from the sale of the Exchange. For further description of the terms of and amendment to the Financing Agreement, see Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Net cash used in financing activities increased $2.9 million during the six months ended September 30, 2026 as compared to the six months ended September 30, 2025. The net financing cash outflow of $11.1 million for the six months ended September 30, 2026 primarily included principal payments on the Company’s long-term debt of $7.0 million, partially funded by the $4.7 million proceeds from the sale of the Exchange, and a $5.0 million payment for original issue discount in connection with our amendment to the Financing Agreement. The net financing cash outflow of $8.2 million for the six months ended September 30, 2025 included the Company’s repayment of its Amended and Restated Credit Agreement with Bank of America and the payment of debt issuance costs associated with the Financing Agreement of $421.1 million and $19.9 million, respectively, partially offset by proceeds from the Company’s Financing Agreement and At-the-Market equity sales offering in the amounts of $418.7 million and $13.6 million. For further description of the terms of and amendment to the Financing Agreement, see Note 9—Debt in the notes to the condensed consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

During the three months ended June 30, 2026 and 2025, the Company withheld and retired shares of common stock to satisfy $271 and $144, respectively, of statutory withholding tax requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees related to the settlement of restricted and performance stock units during the relevant periods. These shares are treated as common stock repurchases in our condensed consolidated financial statements.

Current wording

During the six months ended September 30, 2026 and 2025, the Company withheld and retired shares of common stock to satisfy $0.4 million and $0.3 million, respectively, of statutory withholding tax requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees related to the settlement of restricted and performance stock units during the relevant periods. These shares are treated as common stock repurchases in our condensed consolidated financial statements.

Previous wording

There have been no material changes to our critical accounting estimates during the three months ended June 30, 2026, as compared to those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies,” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. For additional information on all of our significant accounting policies, see Note 2—Basis of Presentation and Summary of Significant Accounting Policies, in the notes to the condensed consolidated financial statements in our Annual Report on Form 10-K for the year ended March 31, 2026.

Current wording

Other than described above for the PSUs with a market-based performance criteria, there have been no material changes to our critical accounting estimates during the six months ended September 30, 2026, as compared to those disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies,” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. For additional information on all of our significant accounting policies, see Note 2—Basis of Presentation and Summary of Significant Accounting Policies, in the notes to the condensed consolidated financial statements in our Annual Report on Form 10-K for the year ended March 31, 2026.