Clearwater Analytics : Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Management's Discussion and Analysis of Financial Condition and Results of Operations and financial statements included in the Annual Report on Form 10-K. As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and in the section titled "Special Note Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q and those discussed in the section titled "Risk Factors" in the Annual Report on Form 10-K.

Overview

CWAN brings transparency to the opaque world of investment management with what we believe is the industry's most comprehensive single instance, multi-tenant technology platform. Our cloud-native AI-powered software allows clients to radically simplify their investment management operations, enabling them to focus on higher-value business functions such as asset allocation strategy and investment selection. Our front-to-back platform provides a single source of truth for global investments, made available daily or on-demand, instead of weekly or monthly. We give our clients confidence that they are making the most informed decisions about investment performance, regulatory compliance and risk.

Our offerings integrate portfolio management, OEMS, investment accounting, reconciliation, regulatory reporting, performance, compliance, and risk analytics. Serving leading insurers, asset managers, hedge funds, banks, corporations, and government entities, CWAN's powerful platform aggregates and normalizes data on over $10 trillion of global invested assets for over 2,500 clients as of December 31, 2025. We bring modern software to an industry that has long been dominated by difficult-to-use, high cost legacy technologies and processes, which often lack data integrity and traceability, and often require significant manual intervention. The strength of our platform is demonstrated by our industry leading NPS scores and gross revenue retention rate of at least 98% in 27 of the last 29 quarters.

We provide our clients with modern cloud-native software to replace these legacy systems. Our platform helps clients reduce cost, time, errors and risk and allows them to reallocate resources to other value-creating activities. Our software aggregates, reconciles and validates data from more than 4,900 daily data feeds and more than four million securities that have been modeled across multiple currencies, asset classes and countries. This cleansed and validated data runs through our proprietary solutions to provide clients with powerful analytics and daily or on-demand configurable reporting. We offer multi-asset class, multi-basis, multi-currency accounting and analytics that provide clients with a comprehensive view of their holdings and related performance. This allows our clients to make better, more timely decisions about their investment portfolios.

CWAN benefits from powerful network effects. With our single instance, multi-tenant architecture, every client, whether new or existing, enriches our global data set by making it more complete and accurate. Our software continually sources, ingests, models, reconciles and validates the terms, conditions and features of every investment security held by all of our clients. Through this continuous process, we are able to identify and adjudicate data discrepancies that otherwise could introduce error and risk into our clients' investment portfolios. We believe that a meaningful competitive advantage of this network effect is that we are increasingly seen as the best and most accurate source of investment management data and analytics in the industry. We believe that this architecture and consolidated dataset offers clients a unique ability to accelerate time-to-insight and efficiency through generative artificial intelligence ("GenAI"), artificial intelligence agents ("AI Agents") and other cutting-edge technologies embedded into the CWAN platform.

We primarily have a recurring revenue model, excluding revenue from professional services and license-related revenue. We charge clients fees based on various factors that include the scale and complexity of a client's assets managed on the CWAN platform, users, data connections, market data, and managed services, all of which vary by product. Our investment accounting solution is typically priced through a contracting structure we describe as Base+, which includes a base fee for a prospective or existing client's book of business plus an incremental fee for increases in assets on the platform. The Base+ structure is designed to limit the downside volatility in our asset-based fees. A majority of the assets priced through this model are high-grade fixed income and structured assets, which have traditionally had lower levels of volatility enabling our highly predictable revenue streams. Our pricing model allows CWAN to include annual increases in the base fee and enables us to charge additional fees for additional services provided for certain alternative asset classes (e.g., CWAN Private Funds, CWAN Private Credit) or additional products (e.g. Reporting, PMS, OEMS, Risk) should the client choose to utilize those services.

Recent Developments

Proposed Merger

On December 20, 2025, we entered into a definitive Merger Agreement pursuant to and subject to the terms and conditions of which we will be acquired by the Investor Group. For further details on this proposed transaction, see Note 1 "Organization and Description of Business" to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on the Form 10-Q.

Key Factors Affecting Our Performance

The growth and future success of our business depends on many factors, including those described below.

•Adding New Clients in Established End Markets: Our future growth is dependent upon our ability to continue to add new clients, and in 2025 we added over 1,000 net new clients through organic growth and acquisitions. We are focused on continuing to increase our client base in our established client end-markets of corporations, insurance companies and asset managers, and doing so with increasingly large and sophisticated clients. As we add clients, it takes time to fully onboard their assets to the platform. Our revenue generally increases as assets are added to the platform, while the effort to serve the client is relatively consistent over time. Therefore, we expect revenues and gross margins to increase for a client as the client transitions from the onboarding process to a steady state once assets have been onboarded. In any period, our gross margins may fluctuate based on the relative size and number of clients that we are onboarding at that time.

•Expanding and Retaining Relationships with Existing Clients: Our future growth is dependent upon retaining our existing clients and expanding our relationships with these clients through increases in the amount of their assets on our platform. We have enjoyed consistent gross revenue retention rates of at least 98% in 27 of the past 29 quarters. The consistency in revenue retention creates predictability in our business and enables us to better plan our future investments. Our relationships with our clients expands as these clients add more assets to our platform, with our quarterly net revenue retention rates (as defined below under "-Key Operating Measures") between 114% and 109% in 2025. Clients may add assets as a result of acquiring new clients themselves or by acquiring new businesses or simply through organic growth, which produces additional assets that they manage using our platform. We believe that our client service model and technology platform are strong contributing factors in our attractive retention rates. As such, we expect to continue to invest in both our operations and research and development functions to maintain and increase our high levels of client satisfaction, which we believe will lead to strong client retention and expansion.

•International Expansion: We believe that the value provided by our platform is equally applicable to asset owners and asset managers outside of North America, and there is a significant opportunity to expand our client base and usage of our platform internationally. Our future growth is dependent upon our ability to successfully enter new international markets and to expand our client base in our current international markets. Our cost to acquire clients in international markets is currently greater than in North America because there is less awareness of the CWAN brand and our product capabilities, and we have to date invested less in sales and marketing internationally. For these reasons, we expect to invest more in sales and marketing in international markets relative to North America in order to achieve growth in these international markets.

•Adding New Clients in Adjacent or Nascent End-Markets: Our strategy is to also add new clients in our more nascent end-markets, which include state and local governments, pension funds, sovereign wealth funds, as well as endowments and foundations. Traditionally, our existing clients have been among our best resources for referring new clients to us, and we will continue to invest in sales and marketing to build awareness of our brand, engage prospective clients and drive adoption of our platform, particularly as it relates to expanding into new end-markets. As we establish our presence in new end-markets, we expect sales and marketing expenditures will be less efficient than in our established verticals and we will become increasingly more efficient at acquiring clients in new end-markets over time.

•Expanding Solutions and Broadening Innovation: Our future growth is dependent upon our continued expansion of our solutions in order to better retain our current clients and to develop new use cases that appeal to new clients. While we believe we will be able to reduce our research and development expenses as a percentage of revenues as we achieve greater scale, our priority is to maintain and grow our technological advantage over our competitors. As we identify opportunities to increase our technological and competitive

advantages, we may increase our investments in research and development at rates that are faster than our growth in revenues in order to enhance our long-term growth and profitability.

•Fluctuations in the Market Value of Assets on the Platform: Although we generally have a base fee and Base+ model, we also bill our clients monthly in arrears based on a basis point rate applied to our clients' assets on our platform, which can be influenced by general economic conditions. While 74% of the assets on our platform were high-grade fixed income securities and structured products as of December 31, 2025 and traditionally subject to lower levels of volatility, the value of our clients' assets on our platform varies on a daily basis due to changes in securities prices, cash flow needs, incremental buying and selling of assets and other strategic priorities of our clients. For these reasons, our revenue is subject to fluctuations based on economic conditions, including market conditions and the changing interest rate environment.

•Expansion of Usage with Existing Clients: With the acquisitions of Enfusion, Beacon and Bistro in 2025, we believe there are opportunities to further expand our relationships with existing clients through cross-selling related or complementary functionalities or services that continue to improve their investment management workflows and technology infrastructure. As we continue to execute and maximize each standalone businesses' potential, we believe that there is a significant opportunity to expand usage from our existing clients as we provide value-adding capabilities and services to support their strategies to evolve and expand into new markets. We expect our revenues from existing clients to continue to increase as they broaden their use of our solutions and expand utilization into other investment groups within their organizations.

Key Components of Results of Operations

The following discussion describes certain line items in our condensed consolidated statements of operations.

Revenue

We generate revenue from fees derived from providing clients with access to the solutions and services on our SaaS platform. Sales of our offerings include a right to use our software in a hosted environment without taking possession of the software. A large number of our contracts are generally cancellable with 30 days' notice without penalty. We generally invoice clients monthly in arrears based on a percentage of the average daily value of assets within a client's accounts on our platform during that month, or based on a fixed monthly base fee. Payment terms may vary by contract but generally include a requirement of payment within 30 days following the month in which services are provided. Fees invoiced in advance of the delivery of the Company's performance obligations are deemed set-up activities and are deferred as a material right and recognized over time, typically 12 months.

Cost of Revenue

Cost of revenue consists of expenses related to delivery of revenue-generating services, including expenses associated with client services, onboarding, reconciliation and agreements related to the purchase of data used in the provision of our services. Salary and benefits for certain personnel associated with supporting these functions, in addition to allocated overhead, amortization of developed technology intangible assets, and depreciation for facilities, are also included in cost of revenue.

Operating Expenses

Research and development expense consists primarily of salary and benefits for our development staff as well as contractors' fees and other costs associated with the enhancement of our offering, ensuring operational stability and performance and development of new offerings.

Sales and marketing expense consists of the costs of personnel involved in the sales and marketing process, sales commissions, advertising and promotional materials, sales facilities expenses, the cost of trade shows and seminars, and amortization of client relationships intangible assets.

General and administrative expense consists primarily of personnel costs for IT, finance, administration, human resources and general management, amortization of trade name intangible assets, as well as expenses from legal, corporate technology and accounting service providers.

Interest Expense

Interest expense reflects interest accrued on our outstanding borrowings during the course of the applicable period. The accrual of interest varies depending on the timing and amount of borrowings and repayments during the period as well as fluctuations in interest rates.

Other Income, Net

Other income, net consists of gains and losses of foreign currency and investments, and interest income. Interest income relates to interest received on our cash and cash equivalents based on interest rates in the course of the applicable period, and interest received from other investments.

Provision for (Benefit from) Income Taxes

Provision for (benefit from) income taxes consists of income taxes related to federal, state, and foreign jurisdictions where we conduct our business. Our effective tax rate may increase in the future as our ownership in CWAN Holdings increases via exchanges from historical partners. In addition, our discrete items may not be consistent from period to period and could cause volatility in our effective tax rate.

Key Operating Measures

We consider certain operating measures, such as annualized recurring revenue, gross retention rates and net retention rates, in measuring the performance of our business. The following table summarizes these operating measures as of the dates presented:

			First Quarter						Second Quarter						Third Quarter						Fourth Quarter
2026
Annualized recurring revenue (in thousands)			$	871,814
Gross revenue retention rate			97		%
Net revenue retention rate			108		%
2025
Annualized recurring revenue (in thousands)			$	493,852					$	783,450					$	807,479					$	840,962
Gross revenue retention rate			98		%				98		%				98		%				98		%
Net revenue retention rate			114		%				110		%				108		%				109		%

Annualized Recurring Revenue

Annualized recurring revenue is calculated at the end of a period by dividing the recurring revenue in the last month of such period by the number of days in the month and multiplying by 365.

Because a substantial majority of the assets on our platform are fixed income securities that typically have low levels of volatility with respect to their market value, the growth in annualized recurring revenue is generally not attributable to the fluctuating market value of the assets on our platform. Rather, the growth in annualized recurring revenue is due to an increase in the number of clients using our offering as well as from onboarding more assets of our existing clients onto our platform.

Annualized recurring revenue increased 76.5% from March 31, 2025 to March 31, 2026 on account of growth in our client base, both organically through new clients brought onto our core CWAN platform, as well as inorganically through customers gained from acquired entities, as well as changes to our existing clients' assets on our core CWAN platform and increasing revenue which is not related to assets on our platform.

Gross Revenue Retention Rate

Gross revenue retention rate represents annual contract value ("ACV") at the beginning of the 12-month period ended on the reporting date less client attrition over the prior 12-month period, divided by ACV at the beginning of the 12-month period, expressed as a percentage. ACV is comprised of annualized recurring revenue plus contracted-not-billed revenue, which represents the estimated annual contracted revenue for new and existing client opportunities prior to revenue recognition. In order to arrive at total ACV, we include contracted-not-billed revenue, as it is contracted revenue that has not been recognized but that we expect to produce recognized revenue in the future. Client attrition occurs when a client provides a contract termination notice. The amount of client attrition is calculated as the reduction in annualized revenue of the client at the time of the notice and is recorded in the month the final billing occurs. In the case of client attrition where contracted-not-billed revenue is still present for a client, both annualized recurring revenue and contracted-not-billed revenue associated with such client are deducted from ACV.

Gross revenue retention rates have remained consistently at least 98% in 27 of the past 29 quarters. We believe the extremely consistent and high gross revenue retention rate is a testament to the value proposition that our leading solution offers. From the second quarter of 2025, the retention rates included the effects from the acquired entities.

Net Revenue Retention Rate

Net revenue retention rate is the percentage of recurring revenue retained from clients on the platform for 12 months and includes changes from the addition, removal or value of assets on our platform, contractual changes that have an impact to annualized recurring revenues and lost revenue from client attrition. We calculate net revenue retention rate as of a period end by starting with the annualized recurring revenue from clients as of the 12 months prior to such period end. We then calculate the annualized recurring revenue from these clients as of the current period end. We then divide the total current period end annualized recurring revenue by the 12-month prior period end annualized recurring revenue to arrive at the net revenue retention rate.

As of March 31, 2026, the net revenue retention rate was 108% compared to 114% as of March 31, 2025. Our relationships with our clients expand as these clients add more assets to our platform, with our quarterly net revenue retention rates between 108% and 114% in 2025. From the second quarter of 2025, the retention rates included the effects from the acquired entities. Excluding the effects from the acquired entities, net revenue retention was 111% in the first quarter of 2026.

Non-GAAP Financial Measures

We also consider certain non-GAAP financial measures that are not prepared in accordance with U.S. GAAP, such as Adjusted EBITDA and Adjusted EBITDA Margin, in measuring the performance of our business. The non-GAAP measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies. However, we believe that this non-GAAP information is useful as an additional means for investors to evaluate our operating performance, when reviewed in conjunction with our GAAP financial statements. These measures should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP, and because these amounts are not determined in accordance with GAAP, they should not be used exclusively in evaluating our business and operations. In addition, undue reliance should not be placed upon non-GAAP or operating information because this information is neither standardized across companies nor subjected to the same control activities and audit procedures that produce our GAAP financial results.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA and Adjusted EBITDA Margin are supplemental performance measures that our management uses to assess our operating performance. We define Adjusted EBITDA as net income (loss) plus (i) interest expense, (ii) depreciation and amortization, (iii) equity-based compensation expense and related payroll taxes, (iv) transaction expenses, (v) provision for (benefit from) income taxes, and (vi) other income, net. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.

The following table reconciles net income (loss) to Adjusted EBITDA and includes amounts expressed as a percentage of revenue for the periods indicated.

			Three Months Ended March 31,
			2026												2025
			(in thousands, except percentages)
Net income (loss)			$	(2,796)					(1		%)				$	6,936					5		%
Adjustments:
Interest expense			12,646						5		%				919						1		%
Depreciation and amortization			29,557						13		%				3,146						2		%
Equity-based compensation expense and related payroll taxes			32,827						15		%				27,562						22		%
Transaction expenses(1)			6,051						3		%				7,280						6		%
Provision for (benefit from) income taxes			(809)						0		%				1,550						1		%
Other income, net			(51)						0		%				(2,323)						(2		%)
Adjusted EBITDA			$	77,425					35		%				$	45,070					35		%
Revenue			$	221,228					100		%				$	126,864					100		%

(1) Transaction expenses primarily consist of professional & legal fees and administrative costs for the Proposed Transaction and closed acquisitions.

Results of Operations

The following tables set forth our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):

			Three Months Ended March 31,
			2026						2025
			(in thousands)
Revenue			$	221,228					$	126,864
Cost of revenue(1)			75,681						33,924
Gross profit			145,547						92,940
Operating expenses:
Research and development(1)			57,050						37,400
Sales and marketing(1)			46,241						19,631
General and administrative(1)			33,266						28,827
Total operating expenses			136,557						85,858
Income from operations			8,990						7,082
Interest expense			12,646						919
Other income, net			(51)						(2,323)
Income (loss) before income taxes			(3,605)						8,486
Provision for (benefit from) income taxes			(809)						1,550
Net income (loss)			(2,796)						6,936
Less: Net income (loss) attributable to non-controlling interests			(20)						426
Net income (loss) attributable to Clearwater Analytics Holdings, Inc.			$	(2,776)					$	6,510

(1)Amounts include equity-based compensation as follows:

Cost of revenue			$	4,323					$	3,464
Operating expenses:
Research and development			7,065						8,698
Sales and marketing			8,793						4,009
General and administrative			8,394						7,541
Total equity-based compensation expense			$	28,575					$	23,712

The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of revenue for the periods indicated.

			Three Months Ended March 31,
			2026						2025
Revenue			100		%				100		%
Cost of revenue			34		%				27		%
Gross profit			66		%				73		%
Operating expenses:
Research and development			26		%				29		%
Sales and marketing			21		%				15		%
General and administrative			15		%				23		%
Total operating expenses			62		%				68		%
Income from operations			4		%				6		%
Interest expense			6		%				1		%
Other income, net			0		%				(2		%)
Income (loss) before income taxes			(2		%)				7		%
Provision for (benefit from) income taxes			0		%				1		%
Net income (loss)			(1		%)				5		%

Comparison of the three months ended March 31, 2026 and 2025 (unaudited)

Revenue

						Three Months Ended March 31,
(In thousands, except percentages)						2026						2025						$ Change						% Change
Revenue						$	221,228					$	126,864					$	94,364					74		%

Revenue increased $94.4 million for the three months ended March 31, 2026 as compared to the corresponding period in 2025. The increase was due a growth in our customer base, both organically through new clients brought onto our core CWAN platform, as well as inorganically through customers gained from acquired entities, as well as changes to our existing clients' assets on our core CWAN platform and increasing revenue which is not related to assets on our platform. Average assets on our platform that were billed to new and existing clients increased 16% for the three months ended March 31, 2026, as compared to the corresponding period in 2025. Average basis point rate billed to clients increased by 0.6% for the three months ended March 31, 2026, compared to the corresponding period in 2025.

Cost of Revenue

			Three Months Ended March 31,
(In thousands, except percentages)			2026						2025						$ Change						% Change
Equity-based compensation			$	4,323					$	3,464					$	859					25		%
All other cost of revenue			71,358						30,460						40,898						134		%
Total cost of revenue			$	75,681					$	33,924					$	41,757					123		%
Percent of revenue			34		%				27		%

Cost of revenue changed as follows:

			Change From 2025 to 2026 QTD
			(in thousands)
Increased depreciation and amortization			$	19,231
Increased payroll and related costs			13,572
Increased data costs			4,735
Increased technology costs			1,442
Increased facility costs			1,119
Increased equity-based compensation			859
Other items			799
Total change			$	41,757

The increase in cost of revenue for the three months ended March 31, 2026 was primarily due to increased depreciation and amortization of acquired intangible assets from acquisitions, increased payroll and related costs as a result of headcount growth from acquisitions, increases in merit-based compensation, and changes in our employee base leading to higher compensation. In addition, cost of revenue increased due to higher data costs for acquiring vendor data contracts, increased technology costs from higher utilization of third-party cloud computing services and other third-party IT services, increased allocation of facilities cost due to the acquisition of additional office spaces, and increased equity-based compensation due to grants of additional awards to employees.

Operating Expenses

Research and Development

						Three Months Ended March 31,
(In thousands, except percentages)						2026						2025						$ Change						% Change
Equity-based compensation						$	7,065					$	8,698					$	(1,633)					(19		%)
All other research and development						49,985						28,702						21,283						74		%
Total research and development						$	57,050					$	37,400					$	19,650					53		%
Percent of revenue						26		%				29		%

Research and development expenses changed as follows:

			Change From 2025 to 2026 QTD
			(in thousands)
Increased payroll and related costs			$	15,923
Increased technology cost			2,432
Increased outside services and contractors costs			1,178
Increased facility costs			1,080
Increased depreciation and amortization			632
Decreased equity-based compensation			(1,633)
Other items			38
Total change			$	19,650

The increase in research and development expenses for the three months ended March 31, 2026 was primarily due to increased payroll and related costs as a result of headcount growth from acquisitions, increases in merit-based compensation, changes in our employee base leading to higher compensation, and increased equity-related payroll taxes for vested equity awards. In addition, research and development expenses increased due to increased technology costs from higher utilization of third-party cloud computing services and other third-party IT services, increased outside services and contractors costs related to acquisitions, and increased allocation of facilities cost due to the acquisition of additional office spaces. These increases were partially offset by decreased equity-based compensation due to the movement of certain key personnel from the research and development team to the sales and marketing team with a change in responsibilities.

Sales and Marketing

						Three Months Ended March 31,
(In thousands, except percentages)						2026						2025						$ Change						% Change
Equity-based compensation						$	8,793					$	4,009					$	4,784					119		%
All other sales and marketing						37,448						15,622						21,826						140		%
Total sales and marketing						$	46,241					$	19,631					$	26,610					136		%
Percent of revenue						21		%				15		%

Sales and marketing expense changed as follows:

			Change From 2025 to 2026 QTD
			(in thousands)
Increased payroll and related costs			$	12,313
Increased depreciation and amortization			6,143
Increased equity-based compensation			4,784
Increased outside services and contractors			1,357
Increased marketing expense			1,080
Increased facility costs			416
Other items			517
Total change			$	26,610

The increase in sales and marketing expense for the three months ended March 31, 2026 was primarily due to increased payroll and related costs as a result of headcount growth from acquisitions and increases in merit-based compensation, increased depreciation and amortization of acquired intangible assets, and increased equity-based compensation due to grants of additional awards to employees, and movement of certain key personnel from the research and development team to the sales and marketing team with a change in responsibilities. In addition, sales and marketing

expenses increased due to increased outside services and contractors costs related to acquisitions, increased marketing expense related to advertising and conferences, and increased allocation of facilities cost due to additional office spaces.

General and Administrative

						Three Months Ended March 31,
(In thousands, except percentages)						2026						2025						$ Change						% Change
Equity-based compensation						$	8,394					$	7,541					$	853					11		%
All other general and administrative						24,872						21,286						3,586						17		%
Total general and administrative						$	33,266					$	28,827					$	4,439					15		%
Percent of revenue						15		%				23		%

General and administrative expenses changed as follows:

			Change From 2025 to 2026 QTD
			(in thousands)
Increased payroll and related costs			$	2,185
Increased technology costs			1,242
Increased facility costs			855
Increased equity-based compensation			853
Increased depreciation and amortization			405
Decreased outside services and contractors			(1,956)
Other items			855
Total change			$	4,439

The increase in general and administrative expense for the three months ended March 31, 2026 was primarily due to increased payroll and related costs due to headcount growth from acquisitions, increases in merit-based compensation, increased technology costs from higher utilization of third-party cloud computing services and other third-party IT services, increased allocation of facilities cost due to additional office spaces, increased equity-based compensation due to grants of additional awards to employees, and increased depreciation and amortization of acquired intangible assets. These increases were partially offset by decreased outside services and contractors, as higher costs were incurred in the corresponding period in 2025 related to legal, consulting and accounting professional services supporting the acquisitions.

Non-Operating (Income) Expenses

						Three Months Ended March 31,
(In thousands, except percentages)						2026						2025						$ Change						% Change
Interest expense						$	12,646					$	919					$	11,727					1,276		%
Other income, net						$	(51)					$	(2,323)					$	(2,272)					(98		%)

Interest expense increased in the three months ended March 31, 2026, mainly due to the newly obtained borrowings under the 2025 Credit Agreement with an average aggregate principal outstanding balance of $840.5 million, and the weighted average interest rate was 5.78% in the three months ended March 31, 2026.

Other income, net primarily related to interest income has reduced significantly due to utilization of surplus funds for acquisitions, foreign exchange gains and losses which is driven by fluctuations in exchange rates, and gains and losses related to our investments.

Provision for (Benefit from) Income Taxes

						Three Months Ended March 31,
(In thousands, except percentages)						2026						2025						$ Change						% Change
Provision for (benefit from) income taxes						$	(809)					$	1,550					$	(2,359)					(152		%)

The provision for (benefit from) income taxes for the three months ended March 31, 2026 decreased due to the year to date and forecasted pretax loss for the year, as compared to pretax profit in the corresponding periods in 2025. The pretax loss is largely attributable to one time expenses related to acquisitions, amortization of intangibles from acquisitions, as well as increased interest expense from debt incurred to fund acquisitions.

Liquidity and Capital Resources

To date, we have primarily financed our operations through cash flows from operations and financing activities.

As of March 31, 2026, we had total cash and cash equivalents of $81.5 million. Cash equivalents primarily consist of highly-liquid investments in money market funds.

We believe our existing cash and cash equivalents, together with cash expected to be generated from operations, borrowings available under our 2025 Revolving Facility, and our access to capital markets, will be sufficient to meet our operating working capital, capital expenditure and debt repayment requirements over the next 12 months. Our future financing requirements will depend on many factors, including our growth rate, revenue retention rates, the timing and extent of spending to support development of our platform and any future investments or acquisitions we may make.

The following table shows our cash flows from operating activities, investing activities and financing activities for the stated periods:

			Three Months Ended March 31,
			2026						2025
			(in thousands)
Net cash provided by operating activities			$	17,675					$	24,500
Net cash (used in) provided by investing activities			(6,440)						99,525
Net cash used in financing activities			(19,248)						(27,249)
Effect of exchange rate changes on cash and cash equivalents			(1,725)						1,033
Change in cash and cash equivalents during the period			$	(9,738)					$	97,809

Cash Flows from Operating Activities

Net cash provided by operating activities of $17.7 million during the three months ended March 31, 2026 was primarily the result of our net loss adjusted by non-cash charges, including equity-based compensation, operating lease expense, and depreciation and amortization of $61.7 million, which was partially offset by a decrease in changes in operating assets and liabilities of $44.0 million. Cash flows resulting from changes in operating assets and liabilities includes decreased accrued expenses and other liabilities of $32.8 million primarily due to payments of 2025 accrued bonus, increased prepaid expenses and other assets of $4.1 million due to the timing of prepaid subscriptions with software vendors, increased deferred contract costs of $3.0 million in line with increased revenue arrangements.

Net cash provided by operating activities of $24.5 million during the three months ended March 31, 2025 was primarily the result of our net income plus non-cash charges, including equity-based compensation, operating lease expense and depreciation and amortization, offset by changes in operating assets and liabilities that decreased operating cash flow by $13.9 million. Accounts receivable increased $5.3 million, which comprised of $0.3 million from growth in revenues and $5 million from aging of receivable balances for certain customers due to short-term deterioration in days sales outstanding which we continue to believe are collectible. Prepaid expenses and other assets increased $2.6 million due to timing of prepaid subscriptions with software vendors. Accrued expenses and other liabilities decreased $5.1 million primarily due to 2024 bonus payment, partially offset by increase in professional legal services fees in connection with the Bistro, Enfusion and Beacon acquisitions and accrued bonus for 2025.

Cash Flows from Investing Activities

Net cash used in investing activities of $6.4 million during the three months ended March 31, 2026 was primarily due to purchases of property, equipment and software primarily to support our business growth.

Net cash provided by investing activities of $99.5 million during the three months ended March 31, 2025 was primarily due to $89.5 million of proceeds from sale of available-for-sale investments in preparation for utilizing cash in the closing of the business combinations in April 2025, and $16.2 million of proceeds from maturities of investments, which was offset by $4.7 million in purchases of held-to-maturity investments and $1.5 million in purchases of property, equipment and software.

Cash Flows from Financing Activities

Net cash used in financing activities of $19.2 million during the three months ended March 31, 2026 was primarily due to $17.0 million repayment of borrowings, and $2.2 million payment of tax withholding on behalf of employees related to net share settlement.

Net cash used in financing activities of $27.2 million during the three months ended March 31, 2025 comprises of $24.4 million for payment of tax withholding on behalf of employees related to net share settlement, $2.1 million for payment of debt issuance costs, and $0.7 million repayment of borrowings.

Critical Accounting Policies and Estimates

Management's discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements and related notes, which have been prepared in accordance with GAAP. We review the accounting policies used in reporting our financial results on a regular basis. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent liabilities.

On an ongoing basis, we evaluate the process we use to develop estimates. We base our estimates on historical experience and on other information that we believe is reasonable for making judgments at the time the estimates are made. Actual results may differ from our estimates due to actual outcomes being different from those on which we based our assumptions.

There have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in the Annual Report under the caption "Critical Accounting Estimates" in Management's Discussion and Analysis of Financial Condition and Results of Operations, set forth in Part II, Item 7.

Recent Adopted Accounting Pronouncement

In July 2025, the FASB issued ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU relates to estimating credit losses under CECL for current accounts receivable and current contract assets arising from revenue transactions accounted for under ASC 606, Revenue from Contracts with Customers, including those acquired in a transaction accounted for under ASC 805, Business Combinations. The Company adopted ASC 2025-05 for the year ending December 31, 2026, and applied the new requirements prospectively to the current interim period. The adoption did not have a material impact on our condensed consolidated financial statements.

Recent Issued Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40), which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted. The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which increases the operability of

the recognition guidance considering different methods of software development. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270)-Narrow-Scope Improvements, which clarifies current interim disclosure requirements and provides additional required interim disclosure guidance. The ASU is effective for interim and annual periods beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted. The Company is currently in the process of evaluating the impact of this pronouncement on our related disclosures.