Digital Turbine, Inc.

(in thousands, except share and per share amounts)

Note 1—Description of Business

Digital Turbine, Inc., through its subsidiaries (collectively “Digital Turbine,” or the “Company”), is a leading independent mobile growth platform that levels up the landscape for advertisers, publishers, carriers, and device original equipment manufacturers (“OEMs”). The Company offers end-to-end products and solutions leveraging proprietary technology to all participants in the mobile application ecosystem, enabling brand discovery and advertising, user acquisition and engagement, and operational efficiency for advertisers. In addition, the Company’s products and solutions provide monetization opportunities for OEMs, carriers, and application (“app” or “apps”) publishers and developers.

Note 2—Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements are prepared and presented in accordance with United States of America generally accepted accounting principles (“GAAP”) and the reporting regulations of the Securities and Exchange Commission (the “SEC”). They do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements include the accounts of Digital Turbine, Inc. and the accounts of itswholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the Company’s audited financial statements and related notes included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

Revision of Prior Period Financial Statements

During the preparation of the Company's condensed consolidated financial statements as of and for the three months ended June 30, 2026, the Company identified an immaterial error related to certain liabilities recognized in connection with a prior business combination. These liabilities were previously presented within other current liabilities and other non-current liabilities in the consolidated balance sheet as of March 31, 2026 and 2025. Upon further evaluation, the Company concluded that the liabilities did not meet the recognition criteria under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification ("ASC" or the “Codification”) Topic 805, Business Combinations(“ASC 805”), and therefore should not have been recognized as assumed liabilities as part of the acquisition accounting. The corresponding offset would have decreased goodwill, which was subsequently included in the impairment charge recognized during the year ended March 31, 2024. The correction of this error reduced other current liabilities by $3.7 million and other non-current liabilities by $4.4 million as of March 31, 2026 and 2025, resulting in a total decrease in liabilities of $8.2 million. The corresponding adjustment decreased accumulated deficit, and as a result, increased total stockholders' equity, by $8.2 million.

During the preparation of the Company's condensed consolidated financial statements as of and for the three and six months ended September 30, 2026, the Company identified an immaterial error resulting in incremental costs related to its contractual revenue share obligations, related to our On Device Solutions (“ODS”) and App Growth Platform (“AGP”) segments, that originated in prior periods. The immaterial errors relate to revenue derived from the Company’s use of technology that delivers applications to mobile devices that no longer receive software updates from device manufacturers and for revenue derived from the Company’s use of technology that places applications on mobile devices following the failure of prior application delivery attempts. The errors resulted in an understatement of revenue share expense and a corresponding understatement of accounts payable and accrued revenue share liabilities. The Company assessed the materiality of the misstatements both quantitatively and qualitatively and determined the correction of these errors to be immaterial to all prior consolidated financial statements taken as a whole and, therefore, amending previously filed reports to correct the errors was not required. However, the Company has revised the prior period amounts to correct the prior periods included in its condensed consolidated financial statements as summarized below. The Company will also revise the comparative periods in future filings to reflect the correction of the errors. The remainder of the notes to the Company’s consolidated financial statements have been updated and revised, as applicable, to reflect the impacts of the adjustments described above.

The following summarizes the revisions to the Company’s condensed consolidated financial statements for the periods presented in this report:

The correction of these errors did not impact the Company's previously reported net cash provided from operations or compliance with debt covenants and was not material to the previously reported interim and annual results of operations.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses during the reporting period. Significant estimates and assumptions reflected in the financial statements include:

•revenue recognition, including the determination of gross versus net revenue reporting,

•allowance for credit losses,

•stock-based compensation,

•fair value of acquired intangible assets and goodwill,

•useful lives of acquired intangible assets and property and equipment,

•incremental borrowing rates for right-of-use assets and lease liabilities,

•fair value of derivative liabilities, and

•tax valuation allowances.

These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ materially from management’s estimates using different assumptions or under different conditions.

In light of ongoing macroeconomic uncertainty due to global events such as the conflicts in Israel, Gaza, Lebanon, Syria, Iran, Russia and Ukraine, inflation, fluctuations in the interest rate environment, disruptions in supply chains, including the continued global memory chip shortage resulting from high artificial intelligence (“AI”) demand, recessionary concerns impacting the markets in which the Company operates, geopolitical tensions with China, and others, management has considered the potential impacts on the Company’s critical and significant accounting estimates. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require the Company to update its estimates or judgments or revise the carrying value of its assets or liabilities as a result of such factors. Management's estimates may change as new events occur and additional information is obtained. Actual results could differ from estimates and any such differences may be material to the Company’s condensed consolidated financial statements.

Change in Presentation

The Company changed its presentation of its amortization of debt discount and issuance costs in its condensed consolidated statements of operations and comprehensive income (loss). Amortization of debt discount and issuance costs was previously presented as a separate line item and is now presented in interest expense, net. Accordingly, prior period amounts have been reclassified to conform to the current period presentation. This reclassification had no effect on net income (loss). See Note 9—Debt for additional information regarding our debt.

Summary of Significant Accounting Policies

With the exception of the policy described below, there have been no significant changes to the Company’s significant accounting policies as described in Note 2—Basis of Presentation and Summary of Significant Accounting Policies, of the notes to the consolidated financial statements included in its Annual Report on Form 10-K for the fiscal year ended March 31, 2026.

Performance-Based Restricted Stock Units with Market Conditions

During the three months ended September 30, 2026, the Company granted performance-based restricted stock units (“PSUs”) that included a market condition. The grant-date fair value of PSUs with market conditions is estimated using a Monte Carlo simulation model, which incorporates assumptions for expected volatility, risk-free interest rate, expected term, and dividend yield. Unlike awards with only performance or service conditions, compensation cost for awards with a market condition is recognized over the requisite service period regardless of whether the market condition is ultimately achieved, provided the service condition is met. The number of shares that ultimately vest depends on the outcome of the market condition at the end of the measurement period. See Note 10—Stock-Based Compensation for the assumptions used in the Monte Carlo simulation and additional information regarding these awards.

Recent Accounting Pronouncements Issued and Adopted

In July 2025, the FASB issued Accounting Standards Update (“ASU”) 2025-05 Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05") amending the guidance around estimation of credit losses on current accounts receivable and current contract assets to allow entities to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast. The Company adopted the ASU 2025-05, effective April 1, 2026, on a prospective basis and elected the practical expedient. The adoption did not have a material impact on the Company's condensed consolidated financial statements.

Recent Accounting Pronouncements Issued and Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses(“ASU 2024-03”), which requires disaggregated disclosures, in the notes to the consolidated financial statements, of certain categories of expenses that are included in expense line items on the face of the income statement. The amendments will be effective for annual periods beginning December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2024-03 and expects that its adoption will result in additional disclosures in its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06 Targeted Improvements to the Accounting for Internal-Use Software("ASU 2025-06") amending existing internal-use software guidance, changing the timing and thresholds for capitalizing these software costs. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted and can be applied on either a prospective, modified, or retrospective basis. The Company is currently evaluating ASU 2025-06 to determine its impact on the consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270): Narrow-Scope Improvements(“ASU 2025-11”), which clarifies the guidance in ASC Topic 270 Interim Reportingto improve the consistency of interim financial reporting. ASU 2025-11 provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements(“ASU 2025-12”) to address suggestions received from stakeholders on the Codification and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that are intended to make it easier to understand and apply. The amendments to this update are effective for fiscal years beginning after December 15, 2026 and interim periods within those annual reporting periods. The Company is currently evaluating the impact that the updated standard will have on its financial statements.

Note 3—Fair Value Measurements

Equity Securities Without Readily Determinable Fair Values

Occasionally, the Company may purchase certain non-marketable equity securities for strategic reasons. The Company did not make any such investments during the three or six months ended September 30, 2026 or in either of the years ended March 31, 2026 or 2025.

As of September 30, 2026 and March 31, 2026, the carrying value of the Company’s investments in equity securities without readily determinable fair values totaled $18.0 million and $27.6 million, respectively, and is included in other non-current assets in the condensed consolidated balance sheet. These equity securities without readily determinable fair values represent the Company’s strategic investments in alternative app stores.

As the non-marketable equity securities are investments in privately held companies without a readily determinable fair value, the Company applied the principles of FASB ASC Topic 321-10, Investments - Equity Securities, and elected the measurement alternative to account for these investments. Under the measurement alternative, the carrying value of the non-marketable equity securities is adjusted based on price changes from observable transactions of identical or similar securities of the same issuer or for impairment. Any changes in carrying value are recorded within other (income) expense, net in the Company's condensed consolidated statements of operations and comprehensive income (loss). During the three months ended June 30, 2026, the Company identified an observable transaction indicating a decline in fair value for one of its strategic equity investments and recorded a non-cash adjustment to fair value of $9.3 million accordingly. The Company did not make any adjustments to the carrying value of equity securities without readily determinable fair values during the three months ended September 30, 2026 or the three and six months ended September 30, 2025.

Fair Value Measurements

The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2. Significant other inputs that are directly or indirectly observable in the marketplace.

Level 3. Significant unobservable inputs which are supported by little or no market activity.

As of September 30, 2026 and March 31, 2026, the carrying value of our long-term debt approximates its estimated fair value as the interest rate on the debt agreements is adjusted for changes in the market rates. See Note 9—Debt for additional information regarding our debt.

The fair value of the Company’s non-financial assets and liabilities, which include goodwill, intangible assets, property and equipment, non-marketable equity securities, as described above, and contingent consideration are measured on a non-recurring basis. Fair value adjustments are made in the period an impairment charge is recognized. The fair value of non-financial assets and liabilities is classified as Level 3 within the fair value hierarchy due to the significant unobservable inputs developed using company-specific information. During the three months ended June 30, 2026, the Company recorded a non-cash fair value adjustment of $9.3 million to a certain non-marketable equity security.

Note 4—Segment Information

Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”) in making decisions regarding resource allocation and assessing performance. The Company has determined that its Chief Executive Officer is the CODM. The Company reports its results of operations through the followingtwo segments, each of which represents an operating and reportable segment, as follows:

•On Device Solutions (“ODS”) -This segment generates revenue from the delivery of mobile application media or content to end users with solutions for all participants in the mobile application ecosystem that want to connect with end users and consumers who hold the device. This includes mobile carriers and device OEMs that participate in the app economy, app publishers and developers, and brands and advertising agencies. This segment's product offerings are enabled through relationships with mobile device carriers and OEMs.

•App Growth Platform (“AGP”) -AGP customers are primarily advertisers and publishers, and the segment provides platforms that allow mobile app publishers and developers to monetize their monthly active users via display, native, and video advertising. The AGP platforms allow demand side platforms (“DSPs”), advertisers, agencies, and publishers to buy and sell digital ad impressions, primarily through programmatic, real-time bidding auctions and, in some cases, through direct-bought/sold advertiser budgets. The segment also provides brand and performance advertising products to advertisers and agencies.

The Company’s CODM evaluates the performance of the segments and makes resource allocation decisions based on segment net revenue and segment profit. The Company’s CODM regularly reviews the revenue share by segment and treats it as a significant segment expense.

Segment net revenue and revenue share are exclusive of certain activities and expenses that are not allocated to specific segments and are reported on a consolidated basis. In addition, operating expenses are evaluated on a consolidated basis and are not disaggregated or analyzed by segment within the Company’s internal reporting, as shown in the reconciling table below.

A summary of segment information is as follows:

The reporting package provided to the Company’s CODM does not include the measure of assets by segment, as that information is not reviewed by the CODM when assessing segment performance or allocating resources.

Geographic Area Information

The Company’s segments operate in the following regions: the U.S. and Canada, Europe, the Middle East and Africa (“EMEA”), Asia Pacific and China (“APAC”) and Mexico, Central America and South America (“LATAM”).

Long-lived assets, excluding deferred tax assets, by region follow:

The Company had no significant long-lived assets in LATAM as of September 30, 2026 and March 31, 2026.

Net revenue by geography is based on the billing addresses of the Company’s customers and a reconciliation of disaggregated revenue by segment follows:

Note 5—Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by segment for the six months ended September 30, 2026 were as follows:

Accumulated goodwill impairment on our consolidated balance sheet was $336.6 million at both September 30, 2026 and March 31, 2026.

Intangible Assets

The components of intangible assets, net as of September 30, 2026 and March 31, 2026 were as follows:

The Company recorded amortization expense, in general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss), as follows:

As of September 30, 2026, estimated amortization expense for future fiscal years is expected to be as follows (in thousands):

The expected amortization expense is an estimate. Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets, future changes to expected asset lives of intangible assets and other events.

Note 6—Accounts Receivable

Accounts receivable consisted of the following:

All unbilled receivables as of September 30, 2026 are expected to be billed and collected, subject to the allowance for credit losses, within twelve months.

Allowance for Credit Losses

The changes to the allowance for credit losses on accounts receivable for the six months ended September 30, 2026 were as follows (in thousands):

The Company recorded credit loss expense, in general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss), as follows:

Note 7—Property and Equipment

Property and equipment, including software, consisted of the following:

Depreciation and amortization expense was as follows:

Cloud Computing Arrangements

The net carrying value of capitalized implementation costs related to cloud computing arrangements that were incurred during the application development stage were as follows:

The current amount is reported in other current assets, and the non-current amount is recorded in other non-current assets on the condensed consolidated balance sheet.

Amortization expenses for the implementation costs of cloud-based computing arrangements, in general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss), as follows:

Note 8—Other Current Liabilities

Other current liabilities consisted of the following:

During the three months ended June 30, 2026, the Company entered into an agreement with a third party to sell its dormant exchange (the “Exchange”), originally acquired in connection with the AdColony acquisition in 2021, for total cash consideration of $4.7 million (the “Consideration”). The Company deferred the Consideration as the transfer of the Exchange was not completed by June 30, 2026. The Consideration was recorded in other current liabilities within the Company’s condensed consolidated balance sheet. Upon completion of the transfer of the Exchange, the Company recognized the gain of $4.7 million during the three months ended September 30, 2026 in other (income) expense, net on the condensed consolidated statements of operations and comprehensive income (loss).

Note 9—Debt

The following table summarizes borrowings under the Company’s debt obligations and the associated interest rates:

Financing Agreement

On August 29, 2025 (the “Closing Date”), the Company and certain wholly owned subsidiaries of the Company, as guarantors (the “Guarantors”), entered into a Financing Agreement (the “Financing Agreement”) with Blue Torch Finance LLC, as both administrative and collateral agent, and the lenders from time to time party thereto (“Lenders”), pursuant to which the Lenders made loans and other extensions to the Company under certain term loan credit facilities on the terms and conditions as set forth therein. The proceeds from the Financing Agreement were used to repay in full the outstanding balance under and terminate the Company’s amended and restated credit agreement with Bank of America, who served as lender and administrative agent.

The Financing Agreement (i) has afour-year term from the Closing Date and (ii) provides forthree separate tranches of term loans in an aggregate principal amount of $430.0 million (the “Loans”), all of which were borrowed in full by the Company on the Closing Date. The Loans are secured by substantially all of the assets by Company and Guarantors, subject to certain exceptions. Since the Closing Date, the Company repaid in full a term loan tranche in the aggregate amount of $55.0 million using proceeds from the Company's At-the-Market equity sales offering, which was subsequently terminated.

Pursuant to the Financing Agreement, the Company issued warrants to the lenders providing the term loans. The Company recorded the warrants as a liability at their full fair value and allocated the remaining proceeds from the incremental borrowings of the Financing Agreement to the term loans, net of a discount.

The Loans accrue interest, at the Company’s option, at a term Secured Overnight Financing Rate (“SOFR rate”) or a reference rate for U.S. dollar borrowings, plus an applicable margin. The applicable margin for Loans accruing interest at the term SOFR rate ranges from 7.50% to 8.00% and ranges from 6.50% to 7.00% for loans accruing interest at the reference rate. The outstanding principal amount of the Loans is subject to scheduled repayment as follows: (i) on the last day of each fiscal quarter, beginning September 30, 2026, until the maturity of the Loans, the Company will repay the outstanding principal amount of term loans in an amount equal to $2.3 million in the aggregate across the remainingtwo tranches and (ii) on the maturity date, the Company will pay the remaining aggregate outstanding principal amount, including all accrued and unpaid interest thereon. As of September 30, 2026, $9.4 million was recorded as the current portion of long-term debt on the Company’s consolidated balance sheet, with the remainder of the principal of the Loans recorded as long-term debt, net.

On April 20, 2026 (the “Amendment Date”), 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 liquidity covenant reverts to $20.0 million on January 1, 2027 through the maturity of the Financing Agreement. 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.

The Financing Agreement requires certain exit and duration fees which are earned on various contractual dates through December 31, 2026 and a portion of these fees are added to the outstanding principal balance when due. As of September 30, 2026, the Company has added total exit fees of $5.9 million and duration fees of $10.8 million to its principal balance. The Company uses the effective interest method to recognize the exit and duration fees over the term of the debt. The effective interest rate for the period from the date of issuance through September 30, 2026, on the affected tranche was 17.38%. As of September 30, 2026, the Company may be required to pay $5.0 million in duration fees should the principal of a certain tranche remain unpaid as of December 31, 2026.

The table below summarizes the changes in the Company’s unamortized exit and duration fees during the six months ended September 30, 2026 (in thousands):

As of September 30, 2026, the future principal payments by fiscal year, for the outstanding debt, inclusive of both exit and duration fees, are as follows (in thousands):

The Financing Agreement contains various customary affirmative and negative covenants, as well as financial covenants. The Financing Agreement requires the Company to maintain (i) a maximum leverage ratio with step-downs every fiscal quarter and (ii) minimum liquidity of (A) $10.0 million from the Closing Date until March 31, 2026 and (B) $15.0 million from and after April 1, 2026 until December 2026, of which no less than $5.0 million must be maintained within the U.S. The liquidity covenant reverts to $20.0 million on January 1, 2027 through the maturity of the Financing Agreement. 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 flows.

As of September 30, 2026, the Company was in compliance with all covenants under the Financing Agreement.

Warrants to Purchase Common Stock

In connection with the Financing Agreement, on the Closing Date, the Company issued warrants (the “August 2025 Warrants”) to purchase an aggregate of 824,421 shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), to certain affiliates of the Lenders (in such capacity, the “August Holders”) at an exercise price of $4.84 per share (the “Exercise Price”), which is equal to the 30-day volume-weighted average price per share of Common Stock ending on and including the trading day immediately preceding the Closing Date. In addition, the Company issued, on September 15, 2025, an additional warrant to purchase an aggregate of 397,997 shares of Common Stock to an affiliate of a Lender (in such capacity, the “September Holder” and, together with the August Holders, the “Holders”) at the Exercise Price (the “September 2025 Warrant” and, together with the August 2025 Warrants, the “2025 Warrants”).

The 2025 Warrants expire on March 1, 2030. The Exercise Price and the number of shares underlying the 2025 Warrants are subject to adjustment in the event of specified events, including a subdivision or combination of the Common Stock, a reclassification of the Common Stock, certain change of control transactions, certain rights offerings or specified dividend payments, subject to certain limitations as set forth in the 2025 Warrants. Upon exercise, the aggregate exercise price may be paid, at each warrant holder’s election, in cash or on a net issuance basis, based upon the fair market value of the Common Stock at the time of exercise.

The Warrants provide certain customary registration rights with respect to the resale of shares of Common Stock underlying 2025 Warrants held by or issuable to the holders from time to time. The 2025 Warrants also contain customary indemnity and contribution obligations in connection with such registration.

The Company uses the Black-Scholes option valuation model for estimating fair value of common stock warrants. The table below is a summary of changes in the fair value of the Company’s valuations for the derivative liability for the six months ended September 30, 2026 (in thousands):

Interest expense, net

The components of the Company’s interest expense, net were as follows:

Note 10—Stock-Based Compensation

2020 Equity Incentive Plan of Digital Turbine, Inc.

On September 15, 2020, the Company’s stockholders approved the 2020 Equity Incentive Plan of Digital Turbine, Inc. (the “2020 Plan”), pursuant to which the Company may grant equity incentive awards to directors, employees, and other eligible participants. The 2020 Plan became effective on September 15, 2020, and has a term often years. A total of 12,000,000 shares of common stock were reserved for grant under the 2020 Plan. The types of awards that may be granted under the 2020 Plan include incentive and non-qualified stock options, stock appreciation rights, restricted stock, and restricted stock units. Stock options may be either incentive stock options, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or non-qualified stock options.

Our stockholders approved amendments to the 2020 Plan on August 27, 2024 and August 25, 2026 to increase the number of shares of common stock reserved for issuance by 8,560,000 and 10,630,000 shares, respectively. Following the 2026 amendment, the total number of shares reserved for issuance under the 2020 Plan increased to 31,190,000 shares, in addition to certain other changes. As of September 30, 2026,11,498,025 shares of common stock were available for issuance as future awards under the 2020 Plan.

Stock Options

Stock options are granted with an exercise price no lower than the fair market value at the grant date. They typically encompass a vesting period oftwo tothree years and a contractual term often years. Share-based compensation expense for stock options is recognized on a straight-line basis over the requisite vesting period, determined by the grant-date fair value for the portion of the award expected to vest. The Company employs the Black-Scholes options pricing model to estimate the fair value of its stock options. The Company may issue either new shares or treasury shares upon exercise of these awards.

The following table summarizes stock option activity for the six months ended September 30, 2026:

At September 30, 2026, total unrecognized stock-based compensation expense related to unvested stock options, net of estimated forfeitures, was $2.1 million, with an expected remaining weighted-average recognition period of 1.56 years.

Restricted Stock

Awards of restricted stock units are grants of time-based restricted stock units (“RSUs”) that are issued at no cost to the recipient. The stock-based compensation expense for these awards is determined using the fair market value of the Company’s common stock on the date of the grant. No capital transaction occurs until the units vest, at which time they are converted to restricted or unrestricted stock. Compensation expense for RSUs with a time condition is recognized on a straight-line basis over the requisite service period.

Restricted stock awards (“RSAs”) are awards of common stock that are legally issued and outstanding. RSAs are subject to time-based restrictions on transfer and unvested portions are generally subject to a risk of forfeiture if the award recipient ceases providing services to the Company prior to the lapse of the restrictions. The stock-based compensation expense for these awards is determined using the fair market value of the Company’s common stock on the date of the grant. The RSAs have time conditions and in some cases, once the stock vests, the individual is restricted from selling the shares of stock for a certain defined period, from three months toone year, depending on the terms of the RSA.

The following table summarizes RSU and RSA activity for the six months ended September 30, 2026:

At September 30, 2026, total unrecognized stock-based compensation expense related to RSUs and RSAs was $18.1 million, with an expected remaining weighted-average recognition period of 2.27 years.

Performance-Based Stock Units

The Company periodically grants PSUs, at no cost to the recipient, to certain key employees that are subject to the achievement of specified internal performance metrics over a specified performance period. The terms and conditions of the PSUs generally allow for vesting of the awards ranging between forfeiture and up to 200% of target. Stock-based compensation expense for PSUs with a performance condition is determined using the fair market value of the Company’s common stock on the date of the grant and recognized on a straight-line basis based on the most likely attainment scenario over the performance period. The most likely attainment scenario is reevaluated each period.

During the three months ended September 30, 2026, the Company granted 191,716 PSUs subject to both a market condition and service condition requiring continued employment through June 15, 2029. The market condition is based on the Company’s total shareholder return (“TSR”) relative to the TSR of a defined peer group over the measurement period, with vesting ranging from 0% to 150% of the target number of shares depending on the Company’s relative TSR ranking. The grant-date fair value of these awards was estimated using a Monte Carlo simulation model.

The following table summarizes the assumptions and related grant-date fair value of the PSUs subject to market conditions granted during the three months ended September 30, 2026:

The following table summarizes the PSU activity for the six months ended September 30, 2026:

(1) Includes 191,716 of PSUs with a market condition valued using a Monte Carlo simulation, with an average grant-date fair value of $12.04 per share.

At September 30, 2026, total unrecognized stock-based compensation expense related to PSUs was $5.2 million, with an expected remaining weighted-average recognition period of 2.46 years. This amount excludes $1.3 million of unrecognized compensation cost related to 328,981 unvested shares for which the performance conditions are not considered probable of achievement.

Shares Withheld for Tax Purposes

For RSUs, RSAs and PSUs, the number of shares issued on the date of vesting is generally net of statutory withholding requirements that we pay in cash to the appropriate taxing authorities on behalf of our employees. For the six months ended September 30, 2026 and 2025, we withheld and retired approximately 55,632 and 72,600 shares to satisfy $0.4 million and $0.3 million of employees’ tax obligations, respectively. These shares are treated as common stock repurchases in our condensed consolidated financial statements.

Stock-Based Compensation Expense

Stock-based compensation expense, within general and administrative expenses on the condensed consolidated statements of operations and comprehensive income (loss), was as follows:

Note 11—Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock:

When calculating diluted net income (loss) per share, the Company is required under ASC Topic 260 Earnings Per Share (“ASC 260”) to adjust net income (loss) for the effect of items relating to dilutive potential common shares. The Company has identified its unvested restricted stock units, performance stock units, and stock options, in addition to the 2025 Warrants (as described further in Note 9—Debt), as potentially dilutive securities.

For the three months ended September 30, 2026, the Company adjusted its reported net income by the effect of unrealized gain on derivatives in the amount of $2.2 million, as the 2025 Warrants were in the money and considered dilutive shares in the earnings per share calculation. For the three months ended September 30, 2025 and six months ended September 30, 2026 and 2025, the Company excluded the impact of the unrealized loss on derivatives for its 2025 Warrants, notwithstanding the warrants being in the money, because the Company remained in a net loss position and the warrant holders do not share in the Company’s net loss under the two-class method.

Anti-dilutive outstanding securities were excluded from the computation of diluted net income (loss) per share, as follows:

Note 12—Income Taxes

The Company’s provision for income taxes as a percentage of pre-tax income (loss) (“effective tax rate”) is based on a current estimate of the annual effective income tax rate, adjusted to reflect the impact of discrete items. n accordance with ASC 740 Accounting for Income Taxes, jurisdictions forecasting losses that are not benefited due to valuation allowances are not included in the Company’s forecasted effective tax rate.

The difference between the effective tax rate and the statutory tax rate for the three months ended September 30, 2026 and 2025 are primarily related to foreign income tax rate differences. The difference between the effective tax rate and the statutory tax rate for the six months ended September 30, 2026 and 2025 are primarily related to foreign income tax rate differences and a valuation allowance on net operating loss carryforwards.

Note 13—Commitments and Contingencies

Hosting Agreements

The Company enters into hosting agreements with service providers and in some cases, those agreements include minimum commitments that require the Company to purchase a minimum amount of service over a specified time period (“the minimum commitment period”). The minimum commitment period is generallyone-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.

Legal Matters

The Company may be involved in various claims, suits, assessments, investigations, and legal proceedings that arise from time to time in the ordinary course of its business. The Company accrues a liability when it is both probable a liability has been incurred and the amount of the loss can be reasonably estimated. The Company reviews these accruals at least quarterly and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period such determination is made. For some matters, the amount of liability is not probable, or the amount cannot be reasonably estimated and, therefore, accruals have not been made.