Liftoff Mobile, Inc.: Form 10-Q for the period ended Jun 30, 2026

You should read the following discussion and analysis of our results of operations and financial condition in conjunction with the unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that involve numerous risks and uncertainties. Known material factors that could affect our financial performance and actual results, and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this discussion or otherwise made by our management, are described in the “Risk Factors” section of our IPO Prospectus and the “Cautionary Note About Forward-Looking Statements” section of this Quarterly Report on Form 10-Q. Actual results may differ materially from those contained in any forward-looking statements. Unless the context otherwise requires, references in this section to “Liftoff,” “we,” “our,” “us,” and the “Company” refer to Liftoff Mobile, Inc. and its consolidated subsidiaries. Certain amounts have been calculated using actual, non-rounded figures; accordingly certain amounts and percentages may not recalculate precisely.

Overview

Liftoff is a mission-critical growth monetization engine for the app economy. Our AI-powered platform is designed to serve all verticals in the app ecosystem and is fully integrated to drive differentiated advertising performance for our customers across the app economy. We deliver profitable users for app advertisers and help to maximize advertising revenue for apps that monetize with ads. We are built to grow as our customers grow—our models are continually improving, which enables us to deliver better performance for our customers, expanding our market opportunity and strengthening our role in the app economy.

From the beginning, we designed our platform to serve all verticals in the app economy, enabling us to diversify our customer base and expand our market opportunity. We have developed broad vertical expertise spanning social media, finance, entertainment, and gaming, among other verticals, allowing us to address our customers’ unique goals and resulting in differentiated end-market diversification in our industry. As the mobile app landscape evolves and new and high-growth verticals emerge, we expect to be well-positioned to capture the opportunities that follow.

Our financial model is characterized by diversified and durable revenue, compounding revenue growth powered by our alignment with our customers’ success, and strong platform economics. Core Advertising revenue includes revenue from our current advertising platforms, which are predominantly powered by Cortex-backed demand solutions. Core Advertising represents the foundation of our business moving forward, reflecting our strategic focus on Cortex-enabled solutions and anticipated long-term growth within performance advertising. In 2024, we phased out certain Other offerings and began transitioning customers to Cortex, which resulted in an increase to our Core Advertising revenue with an offsetting impact to Other revenue.

Overview of Financial Results

For the three months ended June 30, 2026 and 2025, we generated:

• Revenue of $219.5 million and $162.1 million, respectively, representing a year-over-year increase of 35%;
• Core Advertising revenue of $218.6 million and $161.0 million, respectively, representing a year-over-year increase of 36%;
• Net loss of $(4.2) million and $(23.8) million, respectively, representing a year-over-year decrease of $19.6 million, with a net loss margin of (2)% and (15)%, respectively;
• Adjusted EBITDA of $132.3 million and $85.2 million, respectively, representing Adjusted EBITDA Margins of 60% and 53%, respectively, and a year-over-year increase of 55%.

For the six months ended June 30, 2026 and 2025, we generated:

• Revenue of $425.1 million and $312.1 million, respectively, representing a year-over-year increase of 36%;
• Core Advertising revenue of $423.3 million and $310.0 million, respectively, representing a year-over-year increase of 37%;
• Net income of $45.1 million and net loss of $(19.9) million, respectively, representing a year-over-year increase of $65.0 million, with a net income margin of 11% and a net loss margin of (6)%, respectively;
• Adjusted EBITDA of $252.4 million and $163.0 million, respectively, representing Adjusted EBITDA Margins of 59% and 52%, respectively, and a year-over-year increase of 55%.

See the section titled “—Non-GAAP Financial Information” for a description of Adjusted EBITDA and Adjusted EBITDA Margin and a reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to net income (loss) and net income (loss) margin, the most directly comparable financial measures calculated in accordance with GAAP.

Recent Developments

Initial Public Offering

Our registration statement on Form S-1 (the “IPO Registration Statement”) related to our initial public offering (“IPO”) was declared effective on June 3, 2026, and our common stock began trading on the Nasdaq Global Select Market on June 4, 2026. On June 5, 2026, we completed our IPO, in which we issued and sold 21.9 million shares of common stock, including 2.9 million shares of common stock pursuant to the underwriters’ exercise in full of their over-allotment option, at a public offering price of $23.00 per share. We received net proceeds of approximately $472.4 million after deducting underwriting discounts and commissions and before offering expenses. We used the proceeds to repay outstanding indebtedness totaling $409.2 million in aggregate principal amount, and intend to use the remainder for general corporate purposes, and to cover all of the expenses of the IPO. Refer to Note 4. Credit Agreements for additional details on the debt repayment.

Upon the effectiveness of the IPO registration statement, certain stock-based awards with performance-based vesting conditions tied to the IPO became probable of vesting, resulting in the recognition of stock-based compensation expense during the period in which the IPO occurred. Refer to Note 8. Stock-based Compensation for additional details.

Our Business Model

We generate revenue under a transaction-based model, where we optimize the purchase of mobile media inventory on behalf of advertisers. In each ad transaction that flows through our technology platform, we retain a portion of media spend as revenue, with the remainder passed to supply partners.

Mobile app advertisers use our platform to achieve key performance objectives such as return on ad spend (ROAS) or similar profitability-focused metrics. Advertisers set campaign objectives, and we optimize spend across our own SSP and third-party supply to maximize performance against those objectives. When we help customers meet or exceed targets, they typically sustain and increase spend, which in turn expands transaction volume on our platform. Additionally, publishers integrate our SDK to efficiently monetize their ad inventory, expanding the supply that fuels advertiser demand and spend on our platform.

While revenue from any specific customer can vary within and across periods based on their user acquisition strategies and the performance of their apps, our alignment with customer outcomes—combined with a large, diverse customer base—supports stable, compounding Core Advertising revenue growth.

Key Operating and Financial Metrics

We monitor the following key metrics to help us evaluate the health of our business, identify trends affecting our growth, formulate goals and objectives and make strategic decisions. We believe these non-GAAP and operational measures are useful in evaluating our performance, in addition to our financial results prepared in accordance with GAAP. See “Non-GAAP Financial Information” for additional information on non-GAAP financial measures and a reconciliation to the most comparable GAAP measures.

Core Advertising Revenue

Core Advertising revenue represents the vast majority of our total revenue and is derived from our current advertising platforms, which are predominantly powered by Cortex-backed demand solutions. Core Advertising represents the foundation of our business moving forward, reflecting our strategic focus on Cortex-enabled solutions and anticipated long-term growth within performance advertising.

We believe Core Advertising revenue, and its historical growth, is an important metric as it aligns with the rollout of Cortex in 2023 and is more representative of our growth potential versus total revenue in historical periods.

In 2023, Core Advertising revenue represented approximately 79% of our total revenue and increased to approximately 99% of our total revenue in 2025. For both the three and six months ended June 30, 2026, Core Advertising revenue represented approximately 100% of our total revenue. We expect Core Advertising revenue as a percentage of our total revenue to remain the primary contributor to our total revenue as customers increasingly opt into our Cortex-backed demand solutions.

Customers Contributing More Than $100,000 of Core Advertising Revenue

We believe the growth in the number of customers contributing more than $100,000 of Core Advertising revenue is an important indicator of the health of our business highlighting our ability to meaningfully scale new customers and retain our existing customers by delivering strong performance. We monitor this as a measure of large-customer engagement and our ability to expand within accounts over time. These customers generate the vast majority of our Core Advertising revenue and associated growth. We expect to increase the revenue from customers who spend more than $100,000 on Core Advertising revenue over time.

We calculate this metric for a period by counting the number of unique customers whose Core Advertising revenue with us exceeded $100,000 on a trailing twelve-month basis as of each period end. This metric may fluctuate for several reasons, including the timing and effectiveness of new product launches and features, seasonality in advertising budgets and campaign activity, consolidation or churn within our customer base, and broader macroeconomic conditions that influence marketing spending. We expect this measure to continue to rise in the near term as we expand usage among existing customers and win additional large accounts.

For the twelve months ended June 30, 2026 and 2025, the number of customers contributing over $100,000 of LTM Core Advertising revenue was 391 and 341, respectively.

Adjusted EBITDA and Adjusted EBITDA Margin

Adjusted EBITDA for the three months ended June 30, 2026 increased by $47.1 million, or 55%, to $132.3 million (60% Adjusted EBITDA Margin), compared to $85.2 million (53% Adjusted EBITDA Margin) for the three months ended June 30, 2025. For the six months ended June 30, 2026, Adjusted EBITDA increased by $89.4 million, or 55%, to $252.4 million (59% Adjusted EBITDA Margin), compared to $163.0 million (52% Adjusted EBITDA Margin) for the six months ended June 30, 2025. For the three months ended June 30, 2026, the increase in Adjusted EBITDA was primarily driven by a $57.4 million increase in revenue, partially offset by $10.3 million of higher expenses. The expense increases were attributable to $5.9 million of infrastructure costs and bidding fees associated with increased volume through our platform. For the six months ended June 30, 2026, the increase in Adjusted EBITDA was primarily driven by a $113.1 million increase in revenue, partially offset by $23.7 million of higher expenses. The expense increases were attributable to $13.4 million of infrastructure costs and bidding fees associated with increased volume through our platform.

Free Cash Flow

Free Cash Flow for the twelve months ended June 30, 2026 increased by $108.1 million, or 142%, to $184.5 million, compared to $76.4 million for the twelve months ended June 30, 2025. The increase was primarily driven by an increase in net income and improved customer collections.

Key Factors Affecting Our Performance

We believe that the growth and financial performance of our business depend on many factors, including the key factors described below.

Retention and Expansion of our Existing Customers

Our future success is dependent on our ability to retain our existing customers and to expand their relationship across our platform. The performance of Liftoff-enabled campaigns, measured by ROAS or similar advertising performance metrics, wins incremental spending from customers when ROAS targets are met. Successful user acquisition expands our training data and consequently improves the performance of our Cortex models. As our models improve, our customers’ advertising outcomes improve accordingly. This increased performance drives measurable growth and therefore synchronously drives additional spending from our customers. As we continue to improve outcomes and launch new products, we believe there is significant opportunity to grow revenue from existing customers. A recent independent third-party survey conducted by Altman Solon as reflected in the Altman Solon Report, shows this elasticity in practice with 87% of advertisers indicating willingness to increase budgets at the lowest performance threshold surveyed (10% KPI over expected performance) increasing to 100% as performance increases (30% KPI over expected performance).

Acquisition of New Customers

Our future success relies in part on our ability to acquire new customers. We believe that there is a substantial opportunity to grow our customer base because we have what we believe to be the best-in-class mobile growth enablement solutions that will be increasingly in demand as mobile growth continues to be a critical part of nearly every enterprise’s strategy. We believe our early and scaled leadership in non-gaming verticals positions us well to capture secular trends as more digital budgets shift toward performance-based advertising and as new app categories emerge. Additionally, we believe we are well-positioned to expand our presence in regions where mobile adoption is rapidly accelerating. This is evidenced by approximately 60% of our revenue coming from outside of the Americas for both the three and six months ended June 30, 2026. Our global direct sales force is organized by regional teams covering all major markets, which enables us to tailor our GTM efforts to regional trends. We plan to continue investing in our sales and marketing efforts, which may impact our margins and profitability in the near-term as we invest in future growth.

Continued Investment in Technology Innovation

Our ability to deliver effective performance-based mobile advertising solutions depends heavily on our continued investment in AI infrastructure, data science, and bidding optimization. The recent migration from our legacy tech stack to Cortex, which integrates neural networks and machine learning to enhance campaign targeting, pricing, and conversion outcomes, illustrates our focus on innovation as a competitive differentiator. With this migration our performance will automatically increase over time as our models self-learn and improve on top of that as we make additional advancements. Innovation remains critical as it fuels our growth with strong performance for our advertiser customers and enables us to address evolving advertiser objectives, privacy frameworks, and competitive dynamics across the mobile ecosystem.

Accordingly, since we transitioned from our legacy linear regression models to Cortex from the fourth quarter of 2023 through early 2025 we substantially completed the migration of our legacy advertising technology platforms to Cortex, our next-generation technology stack. Cortex leverages advanced machine learning and AI capabilities to enhance campaign recommendations and optimize ad bidding performance. The migration did not result in changes to customer-facing interfaces or performance obligations.

Talent Acquisition and Operational Scaling

Our team is a key enabler of our platform and growth. As we scale Cortex and expand our customer relationships, we expect to continue hiring across engineering, data science, GTM, and operations. Additionally, we anticipate increased general and administrative expenses as a result of becoming a public company. We may also pursue team or company acquisitions to accelerate development in strategic product areas or enter new markets.

Seasonality

We believe our solutions are critical to our customers’ operations and are often treated as a core, performance-driven investment. Given our broad exposure to the app economy, while individual customers may have seasonal trends, we are not overexposed to any significant intra-year seasonal trends.

Macroeconomic Conditions

Broader economic conditions—including changes in interest rates, inflation, global ad spend, or app store policies—can influence advertiser behavior and publisher monetization. In particular, uncertainty around economic growth, digital marketing budgets, and user acquisition costs may lead to shifts in campaign strategy or volume. Geopolitical factors, regulatory changes (e.g., privacy or data attribution rules), or platform-level shifts from mobile operating systems can also impact advertiser performance and engagement. These factors may affect our growth, pricing power, or margins. Additionally, tensions between the United States and China, including tariffs and regulatory actions, may increase market uncertainty and negatively impact advertiser demand and business performance.

Impact of One Big Beautiful Bill Act (“OBBBA”)

The tax regimes we are subject to or operate under, including income and non-income taxes, are unsettled and may be subject to significant change. Changes in tax laws or tax rulings, or changes in interpretations of existing laws, could materially affect our financial position, results of operations, and cash flows. For example, the OBBBA was enacted in July 2025. The Company is currently evaluating the provisions of the OBBBA and their potential impact on its condensed consolidated financial statements, including cash taxes and its effective tax rate. Due to the complexity and timing of the enactment, the Company will continue to assess the impact of the OBBBA, including any interpretive guidance that may be issued by the U.S. Department of the Treasury or the Internal Revenue Service. Based on the assessment in the second quarter of 2026, there was no material impact to our income tax expense or effective tax rate.

Public Company Costs

In connection with our IPO, we incurred significant one-off costs such as accounting and other third-party fees which we recorded in general and administrative expenses on the condensed consolidated statements of operations.

As a result of becoming a public company, we expect to incur ongoing additional costs, including but not limited to personnel, legal, consulting, regulatory, insurance, accounting, investor relations, and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC and Nasdaq, requires public companies to implement specified corporate governance, disclosure controls and internal controls practices which we expect to increase our legal, regulatory, financial and insurance compliance costs and will make some activities more time-consuming and costly.

General Atlantic Investment

On June 30, 2025, General Atlantic acquired an approximate 14.5% minority stake, on a fully diluted basis, in the Company in the form of 425,000 shares of Series A Redeemable Convertible Preferred Stock, par value $0.0001 per share (the “Series A Redeemable Convertible Preferred Stock”), for a total cash consideration of $425.0 million. This investment was effected legally through a secondary purchase of (a) approximately 22.8 million shares of outstanding common equity from existing stockholders and (b) 1.8 million vested NSOs and SARs from employees of the Company ((a) and (b) together, the “2025 Equity Transactions”). The acquired common shares of 22.8 million were exchanged for 401,626 shares of Series A Redeemable Convertible Preferred Stock while a total of 23,374 shares of Series A Redeemable Convertible Preferred Stock were issued against the repurchase of 1.8 million vested options and SARs. The shares of repurchased common stock were retired.

In connection with the IPO, the Series A Redeemable Convertible Preferred Stock, by its terms, automatically converted into 24.0 million shares of our common stock at a conversion rate of 56.4972 shares per preferred share. In the event the Company makes a payment in respect of its existing earn-out obligations subsequent to conversion, the Company will deliver an incremental number of shares of common stock to those shareholders who held the Series A Redeemable Convertible Preferred Stock at the time they were converted into common stock prior to such earn-out obligation payment, subject to certain transfer rules and limitations, equal to the number of shares of common stock such former holders of Series A Redeemable Convertible Preferred Stock would have incrementally been entitled to upon conversion of such shares of Series A Redeemable Convertible Preferred Stock, had such earn-out payment been made by the Company prior to the conversion of such shares of Series A Redeemable Convertible Preferred Stock. If the earn-out obligation is earned in full and our stock is valued at that time at $24.02, which is the closing sales price of our shares of common stock on June 30, 2026, as reported on Nasdaq, we would have to issue 497,937 shares of common stock in satisfaction of our obligation to such former holders of Series A Redeemable Convertible Preferred Stock. See Note 5. Fair Value Disclosures to our condensed consolidated financial statements included elsewhere in this Quarterly Report for further details.

Components of Our Results of Operations

We operate as one operating and reportable segment.

Revenue

We generate revenue by facilitating advertisers’ purchase of digital advertising inventory through our platform. Our platform provides bidding and matching solutions that enable the placement of advertisers’ advertisements into publisher-owned inventory.

We recognize revenue at a point in time when the agreed-upon actions have been completed or the advertisement has been successfully displayed to a user. The amount of revenue recognized is based on the number of completions of agreed upon actions, such as user installations and impressions, or advertisements displayed and the contractually agreed price per advertising unit with customers, net of any consideration payable to publishers or third parties providing access to publisher inventory. Because we do not control the advertising inventory and are not primarily responsible for fulfillment, we act as an agent in these transactions and therefore report revenue on a net basis.

Cost of revenue, excluding depreciation and amortization

Cost of revenue, excluding depreciation and amortization, consists primarily of expenses incurred to deliver our advertising solutions to customers. These costs include server and data center hosting expenses and personnel-related expenses such as salaries, bonuses, employee benefits, stock-based compensation for members of our operations teams who support campaign delivery and platform functionality, and allocated facilities and information technology costs.

We expect our cost of revenue, excluding depreciation and amortization, to increase in absolute dollars over the long term as our business and revenue continue to grow.

General and administrative

General and administrative expenses consist primarily of costs incurred to support our business operations, including personnel-related expenses such as salaries, bonuses, employee benefits, and stock-based compensation for employees engaged in these activities. General and administrative expenses also include costs associated with third-party professional services such as consulting, legal, accounting fees, general employee-related expenses such as company travel, and allocated facilities and information technology costs.

We plan to continue to invest in our general and administrative function to support the growth of our business. Additionally, we expect to incur certain non-recurring professional fees and other expenses as part of our transition to becoming a publicly traded company, which we generally expect to be recorded as general and administrative expenses. Following the completion of our IPO on June 5, 2026, we have incurred, and expect to continue to incur additional expenses as a result of operating as a public company, including costs to comply with rules and regulations applicable to companies listed on a U.S. securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, investor relations and professional services. As a result, we expect general and administrative expenses to increase in absolute dollars.

Research and development

Research and development expenses consist primarily of costs incurred to design, develop, and enhance our platform, including personnel-related expenses such as salaries, bonuses, employee benefits, and stock-based compensation for employees engaged in these activities. Research and development expenses also include costs associated with software (inclusive of machine learning enhancements), information technology infrastructure related to the ongoing development and maintenance of internal-use software, third-party consulting services, and allocated facilities and information technology costs.

We expect to continue to invest in research and development to develop our technology platform to drive incremental value and growth. As a result, we expect research and development expenses to increase in absolute dollars.

Sales and marketing

Sales and marketing expenses consist primarily of personnel-related expenses such as salaries, commissions, bonuses, employee benefits, and stock-based compensation for employees engaged in sales, marketing, and relationship management functions. Sales and marketing expenses also include costs associated with marketing programs, such as online advertising, branding campaigns, customer events, other promotional activities aimed at acquiring and retaining advertisers and publishers, and allocated facilities and information technology costs.

We expect sales and marketing expenses to increase in absolute dollars but decline as a percentage of revenue in future periods. Sales and marketing expenses as a percentage of revenue may fluctuate from period to period due to changes in investment timing, customer acquisition dynamics, and intra-year seasonality of costs.

Depreciation and amortization

We depreciate and amortize property and equipment, including capitalized internal-use software, computer equipment, leasehold improvements, furniture and fixtures, developed technology, trademarks, and other definite-lived intangible assets.

Depreciation and amortization expense may fluctuate over time depending on the timing and volume of capital expenditures, the capitalization of internally developed software, and changes in our acquired intangible asset base due to business combinations or impairment assessments. Additionally, we periodically review our long-lived assets for indicators of impairment and may record accelerated amortization or write-downs when warranted.

Interest expense, net

Interest expense, net consists primarily of expenses associated with our outstanding debt, including accretion of debt discount, and changes in fair value of interest rate swaps accounted for as a cash flow hedge related to the stream of variable interest payments associated with a portion of our outstanding debt.

Post-conversion earnout share liability revaluation

The post-conversion earnout share liability revaluation consists of derivative liabilities that are remeasured at each reporting period at fair value.

The Company determined the fair value of the post-conversion earnout share liability by using a Monte Carlo simulation analysis to quantify the estimated liabilities as of the report date, and, as the overall arrangement is long-term in nature, applying a discount rate that captures the risks associated with the payment of the obligations.

The significant unobservable inputs used in the fair value measurements are estimates of Liftoff’s equity value prior to the IPO, the volatility of Liftoff’s equity, timing to expected liquidity event, and probability of expected liquidity event.

Contingent consideration revaluation

Contingent consideration revaluation reflects changes in the fair value of an earn-out liability associated with a prior business combination. This liability is measured at fair value each reporting period and may fluctuate due to changes in assumptions such as forecasted financial performance, timing of liquidity events, volatility, discount rates, and other market-based inputs. The contingent consideration is payable once our majority stockholder disposes of all of their common shares or once they reach a targeted return on invested capital.

The revaluation is a non-cash expense that does not impact our operating results or cash flows, but it can introduce volatility to our net income or loss in future periods. We expect periodic remeasurements to continue until the related contingent consideration obligation is settled.

Loss on debt extinguishment

In connection with the prepayment of principal under the Term Loan Facility of $409.2 million, the Company recognized a loss on extinguishment of debt of approximately $7.4 million, which consisted of a write-off of unamortized issuance costs.

Other (expense) income, net

Other (expense) income, net consists primarily of foreign currency exchange gains and losses relating to transactions denominated in currencies other than the U.S. dollar.

Income tax (expense) benefit

The Company is subject to income taxes in the United States and various foreign jurisdictions in which it does business. Additionally, certain foreign earnings may also be taxable in the United States. Accordingly, our effective tax rate will vary depending on the jurisdictional mix of income or loss before income taxes, changes in tax laws, and future changes in our assessment of the ability to realize our deferred tax assets.

Realization of our deferred tax assets is dependent primarily on the generation of future taxable income. In considering the need for a valuation allowance, we consider all available evidence to estimate if sufficient taxable income will be generated in the future to utilize the existing deferred tax assets by jurisdiction. This consideration includes a variety of factors such as historical and projected future taxable income and prudent and feasible tax planning strategies.

The Company has accounted for OBBBA tax measures which took effect in 2026 on its condensed consolidated financial statements, including cash taxes and its effective tax rate. Based on the assessment in the second quarter of 2026, there was no material impact to our income tax expense or effective tax rate for the quarter ended June 30, 2026 and we do not expect the impact to be material to our full year 2026 effective tax rate. Due to the complexity and timing of the enactment, the Company will continue to assess the impact of the OBBBA, including any interpretive guidance that may be issued by the U.S. Department of the Treasury or the Internal Revenue Service.

Comparison of Our Results of Operations

Comparison of the Three Months Ended June 30, 2026 and the Three Months Ended June 30, 2025

The following table sets forth, for the periods indicated, selected condensed consolidated statements of operations data and the period-over-period change expressed in a dollar amount and as a percentage. Historical results are not necessarily indicative of the results expected for any future period. Variances that are not meaningful (“NM”) are not presented in the table below.

(in thousands, except percentages)

The following table sets forth the components of our condensed consolidated statements of operations for the periods presented as a percentage of revenue:

33

Revenue

Revenue for the three months ended June 30, 2026 increased by $57.4 million, or 35%, to $219.5 million, compared to $162.1 million for the three months ended June 30, 2025. The increase was driven by growth from our Core Advertising platform due to improved performance delivered by Cortex. Core Advertising growth was driven 58% by expansion from existing customers and 42% by new customers acquired over the past twelve months. This reflects increased customer spending as the market grew and performance improved through ongoing product enhancements, driving higher revenue on the Core Advertising platform. For the three months ended June 30, 2025, Core Advertising revenue represented approximately 99% of our total revenue and increased to approximately 100% of our total revenue for the three months ended June 30, 2026.

Cost of revenue, excluding depreciation and amortization

Cost of revenue, excluding depreciation and amortization for the three months ended June 30, 2026 increased by $3.6 million, or 14%, to $29.0 million, compared to $25.5 million for the three months ended June 30, 2025. The increase was primarily driven by a $3.4 million increase in infrastructure and bidding fees associated with higher volume through our platform.

General and administrative

General and administrative expenses for the three months ended June 30, 2026, decreased by $23.4 million, or 40%, to $35.0 million, compared to $58.4 million for the three months ended June 30, 2025. The decrease was primarily driven by $39.5 million in fees, services, and bonuses incurred in the three months ended June 30, 2025, related to the General Atlantic minority investment. This was partially offset by $15.1 million of higher personnel-related expenses consisting of $13.7 million in stock-based compensation and $1.4 million in wages, and $4.2 million in costs in preparation of becoming a public company which were not capitalizable.

Research and development

Research and development expenses for the three months ended June 30, 2026, decreased by $2.4 million, or 7%, to $34.5 million, compared to $36.9 million for the three months ended June 30, 2025. The decrease was primarily driven by $7.9 million of stock-based compensation expense incurred in the three months ended June 30, 2025, related to the General Atlantic investment. This was partially offset by $2.4 million of investment in Cortex compute infrastructure and $3.8 million in personnel-related expenses. Change in personnel-related expenses was primarily driven by increases of $4.7 million in stock-based compensation and $2.1 million in wages, which were partially offset by a $3.2 million increase in capitalized software expenses.

Sales and marketing

Sales and marketing expenses for the three months ended June 30, 2026, increased by $4.4 million, or 28%, to $20.6 million, compared to $16.1 million for the three months ended June 30, 2025. The increase was primarily driven by $3.3 million in higher personnel-related expenses consisting of $2.0 million in stock-based compensation and $1.1 million in wages.

Depreciation and amortization

Depreciation and amortization for the three months ended June 30, 2026 decreased by $2.2 million, or 9%, to $23.0 million, compared to $25.1 million for three months ended June 30, 2025. The decrease was primarily attributable to a $5.3 million decrease in amortization expense as certain acquired intangible assets became fully amortized, partially offset by a $3.1 million increase in amortization expense on capitalized software assets.

Interest expense, net

Interest expense, net for the three months ended June 30, 2026 increased by $3.3 million, or 11%, to $33.3 million, compared to $30.0 million for the three months ended June 30, 2025. The increase was primarily driven by a $2.6 million decrease in interest income on hedges, driven by lower interest rates relative to our fixed-rate interest rate swaps and a $2.2 million increase in interest expense associated with the incremental borrowing under the amended credit facility in September 2025, partially offset by a $1.1 million increase in interest earned on deposits due to higher cash balances.

Post-conversion earnout share liability revaluation

Post-conversion earnout share liability revaluation for the three months ended June 30, 2026 was a $0.1 million gain, which was primarily driven by dilution to the former holder of the Company’s Series A Redeemable Convertible Preferred Stock as a result of the IPO, which is a key input into the valuation model.

Contingent consideration revaluation

Contingent consideration revaluation for the three months ended June 30, 2026 was a $17.5 million loss, compared to a $3.3 million gain for the three months ended June 30, 2025. The increase in the revaluation loss was primarily driven by an increase in the value of the Company during the three months ended June 30, 2026, as compared to a decrease in the value of the Company during the three months ended June 30, 2025, which is a key input into the valuation model.

Loss on debt extinguishment

Loss on debt extinguishment for the three months ended June 30, 2026 was $7.4 million, which consisted of a write-off of unamortized issuance costs related to the prepayment of $409.2 million in aggregate principal of the Term Loan Facility in June 2026. There was no loss on debt extinguishment recorded in the three months ended June 30, 2025.

Other (expense) income, net

Other (expense) income, net for three months ended June 30, 2026 decreased by $1.1 million, or 92%, to $(0.1) million, compared to $(1.1) million for three months ended June 30, 2025. The decrease was primarily driven by a $0.4 million decrease in realized losses and a $0.6 million decrease in unrealized losses.

Income tax (expense) benefit

For the three months ended June 30, 2026, the Company recorded income tax expense of $23.5 million, resulting in an effective tax rate of 122.0%. Income tax expense increased by $27.5 million while the effective tax rate increased by 107.5 pts, when compared to $4.0 million of income tax benefit and effective tax rate of 14.5% for the three months ended June 30, 2025. The increase in income tax expense was primarily driven by limitations on the deductibility of stock-based compensation for executive officers following the Company’s transition to public company status and the remeasurement of certain deferred tax liabilities in foreign jurisdictions. Also in the three months ended June 30, 2025, there was a discrete compensation benefit as a result of the General Atlantic investment.

Comparison of the Six Months Ended June 30, 2026 and the Six Months Ended June 30, 2025

The following table sets forth, for the periods indicated, selected condensed consolidated statements of operations data and the period-over-period change expressed in a dollar amount and as a percentage. Historical results are not necessarily indicative of the results expected for any future period. Variances that are not meaningful (“NM”) are not presented in the table below.

(in thousands, except percentages)

The following table sets forth the components of our condensed consolidated statements of operations for the periods presented as a percentage of revenue:

36

Revenue

Revenue for the six months ended June 30, 2026 increased by $113.1 million, or 36%, to $425.1 million, compared to $312.1 million for the six months ended June 30, 2025. The increase was driven by growth from our Core Advertising platform due to improved performance delivered by Cortex. Core Advertising growth was driven 66% by expansion from existing customers and 34% by new customers acquired over the past twelve months. For the six months ended June 30, 2025, Core Advertising revenue represented approximately 99% of our total revenue and increased to approximately 100% of our total revenue for the six months ended June 30, 2026.

Cost of revenue, excluding depreciation and amortization

Cost of revenue, excluding depreciation and amortization for the six months ended June 30, 2026 increased by $8.1 million, or 16%, to $57.0 million, compared to $49.0 million for the six months ended June 30, 2025. The increase was primarily driven by a $7.7 million increase in infrastructure and bidding fees associated with higher volume through our platform.

General and administrative

General and administrative expenses for the six months ended June 30, 2026, decreased by $19.3 million, or 24% to $59.8 million, compared to $79.1 million for the six months ended June 30, 2025. The decrease was primarily driven by $39.5 million in fees, services, and bonuses related to the General Atlantic minority investment in the prior period, without a comparable transaction in the current period. This was partially offset by $16.8 million of higher personnel-related expenses, primarily stock-based compensation, and $6.0 million of costs incurred in preparation for becoming a public company in the current period which were not capitalizable.

Research and development

Research and development expenses for the six months ended June 30, 2026, increased by $4.0 million or 7%, to $61.9 million, compared to $57.8 million for the six months ended June 30, 2025. The increase was primarily driven by $6.7 million of higher personnel-related expenses, due to increased headcount, wages, and stock-based compensation, partially offset by higher capitalized software costs, as well as $5.3 million of investment in Cortex compute infrastructure. This was partially offset by $7.9 million of stock-based compensation expense related to the General Atlantic investment recognized during the six months ended June 30, 2025.

Sales and marketing

Sales and marketing expenses for the six months ended June 30, 2026, increased by $7.9 million, or 26%, to $38.3 million, compared to $30.4 million for the six months ended June 30, 2025. The increase was primarily driven by $5.8 million of higher personnel-related expenses, including wages and stock-based compensation.

Depreciation and amortization

Depreciation and amortization for the six months ended June 30, 2026 decreased by $5.9 million, or 12%, to $44.7 million, compared to $50.7 million for six months ended June 30, 2025. The decrease was primarily attributable to an $11.0 million decrease in amortization expense as certain acquired intangible assets became fully amortized, partially offset by a $5.1 million increase in amortization expense on capitalized software assets.

Interest expense, net

Interest expense, net for the six months ended June 30, 2026 increased by $8.7 million, or 15%, to $68.3 million, compared to $59.6 million for the six months ended June 30, 2025. The increase was primarily driven by a $4.9 million decrease in interest income on hedges, driven by lower interest rates relative to our fixed-rate interest rate swaps and a $5.6 million increase in interest expense associated with the incremental borrowing under the amended credit facility in September 2025, partially offset by a $1.0 million decrease in amortization of issuance costs.

Post-conversion earnout share liability revaluation

Post-conversion earnout share liability revaluation for the six months ended June 30, 2026 was a $2.7 million gain, which was primarily driven by dilution to the former holder of the Company’s Series A Redeemable Convertible Preferred Stock as a result of the IPO, which is a key input into the valuation model.

Contingent consideration revaluation

Contingent consideration revaluation for the six months ended June 30, 2026 was a $12.6 million loss, compared to a $5.1 million loss for the six months ended June 30, 2025. The increase in the revaluation loss was primarily driven by a greater increase in the value of the Company during the six months ended June 30, 2026, as compared to the increase in the value of the Company during the six months ended June 30, 2025, which is a key input into the valuation model.

Loss on debt extinguishment

Loss on debt extinguishment for the six months ended June 30, 2026 was $7.4 million, which consisted of a write-off of unamortized issuance costs related to the prepayment of $409.2 million in aggregate principal of the Term Loan Facility in June 2026. There was no loss on debt extinguishment recorded in the six months ended June 30, 2025.

Other (expense) income, net

Other (expense) income, net for six months ended June 30, 2026 decreased by $0.8 million, or 80%, to $(0.2) million, compared to $(1.0) million for six months ended June 30, 2025. The decrease was primarily driven by a $0.9 million decrease in unrealized losses.

Income tax (expense) benefit

For the six months ended June 30, 2026, the Company recorded income tax expense of $32.4 million, resulting in an effective tax rate of 41.8%. Income tax expense increased by $33.2 million while the effective tax rate increased by 38.1 pts, when compared to $0.8 million of income tax benefit and effective tax rate of 3.7% for the six months ended June 30, 2025. The increase in income tax expense was primarily driven by higher global pretax income, new stock based compensation deduction limitations as a public company, the remeasurement of certain deferred tax liabilities in foreign jurisdictions, and an increase in anticipated valuation allowance.

Non-GAAP Financial Information

Adjusted EBITDA and Adjusted EBITDA Margin

We report our financial results in accordance with GAAP, however, management believes that Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP measures, provide users of our financial information with useful supplemental information enabling a comparison of our performance across periods. We believe Adjusted EBITDA and Adjusted EBITDA Margin provide visibility to the underlying continuing operating performance of our business. Management uses Adjusted EBITDA and Adjusted EBITDA Margin to evaluate and manage the performance of our business, make resource allocation decisions, and compensate key personnel as they provide further understanding with respect to the results of our operations.

We define Adjusted EBITDA as net income (loss) adjusted for interest expense, net, income tax expense, depreciation and amortization expense, stock-based compensation, other expenses, net, and further adjusted for certain items that impact comparison of the performance of our businesses either period-over period or with other businesses as more fully described below. We also disclose Adjusted EBITDA Margin, which is calculated as Adjusted EBITDA divided by revenue.

Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures and are presented for supplemental informational purposes only and should not be considered as alternatives or substitutes to financial information presented in accordance with GAAP. These measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations that are necessary to run our business. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Thus, our Adjusted EBITDA and Adjusted EBITDA Margin should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP. Some of the limitations and other factors to consider include:

• Adjusted EBITDA and Adjusted EBITDA Margin exclude the recurring, non-cash expenses of depreciation and amortization of property and equipment, capitalized internal-use software, and definite-lived intangible assets, and although these are non-cash expenses, the assets being depreciated and amortized may have to be replaced in the future;
• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect changes in or cash requirements for our working capital needs;
• Adjusted EBITDA and Adjusted EBITDA Margin exclude stock-based compensation expense, which has been, and will continue to be for the foreseeable future, an important part of how we attract and retain our employees and a significant recurring expense in our business;
• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect the interest expense, net or the cash requirements to service interest or principal payments on our indebtedness;
• Adjusted EBITDA and Adjusted EBITDA Margin exclude the non-cash charges related to debt extinguishments, impairments of primarily capitalized internal-use software, and revaluation of contingent consideration, as these impact the comparability of our business across periods and do not relate to the continuing operating performance of our business;
• Adjusted EBITDA and Adjusted EBITDA Margin exclude costs related to IPO, integration, non-recurring transactions and expenses, and reorganization severance costs, as these impact the comparability of our business across periods and do not relate to the continuing operating performance of our business;
• Adjusted EBITDA and Adjusted EBITDA Margin do not reflect our income tax expense provision; and
• Adjusted EBITDA and Adjusted EBITDA Margin exclude other expenses, net, which primarily relate to non-operating foreign exchange gains and losses.

Adjusted EBITDA is not a liquidity measure and should not be considered as discretionary cash available to us to reinvest in the growth of our business or to distribute to stockholders or as a measure of cash that will be available to us to meet our obligations.

To properly and prudently evaluate our business, we encourage you to review the financial statements included elsewhere in this Quarterly Report on Form 10-Q, and not rely on a single financial measure to evaluate our business. We also strongly urge you to review the reconciliation to the corresponding GAAP financial measures set forth in this Quarterly Report on Form 10-Q.

The following table reconciles net income (loss) and net income (loss) margin, the most comparable GAAP financial measures to Adjusted EBITDA and Adjusted EBITDA Margin, respectively, for the periods presented:

(in thousands, except percentages)

(a) Stock-based compensation includes $3.9 million and $2.9 million related to the vesting and payment of the 2021, 2024, and 2025 Distributions to employee equity holders for the three months ended June 30, 2026 and 2025, respectively, as well as $8.2 million and $6.1 million for the six months ended June 30, 2026 and 2025, respectively. Distributions of this nature are not expected to reoccur as a public company. Refer to Note 8. Stock-based Compensation to our condensed consolidated financial statements for further detail.

(b) Represents reorganization costs associated with the integration of legacy Liftoff and Vungle operations following the 2021 merger. As a result of the Company’s integration activities, the Company undertook multiple defined reduction-in-force programs to eliminate duplicative roles and streamline the Company’s workforce across all functions. The costs came primarily in the form of severance and professional service costs associated with such operating model redesign, including severance related expenses and professional fees. Reorganization costs relating to these integration activities are expected to be minimal following the 2025 fiscal year.

(c) Represents costs for transaction-related services, such as investment banking, legal, accounting, and diligence, primarily incurred in connection with capital markets activities, including debt refinancing efforts and General Atlantic’s investment.

(d) Represents non-recurring third-party professional fees in preparation of becoming a public company that were not capitalizable.

(e) Consisted of a write-off of $7.4 million of unamortized issuance costs.

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities less purchase and capitalization of property, equipment and software. We subtract purchase and capitalization of property, equipment and software in our calculation of Free Cash Flow as we believe these expenditures represent ongoing investments required to support and grow our business. Our definition may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish Free Cash Flow or similar metrics. Thus, our Free Cash Flow, which is a non-GAAP measure, should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.

Free Cash Flow is a measure of liquidity that provides useful information to our management, investors and others in understanding and evaluating the strength of our liquidity and future ability to generate cash that can be used for strategic opportunities, including investing in our business. Free Cash Flow has certain limitations in that it does not represent our residual cash flow for discretionary expenditures and our non-discretionary commitments. Free Cash Flow is not necessarily a measure of our ability to fund our cash needs.

The following table reconciles net cash provided by operating activities, the most comparable GAAP financial measure to Free Cash Flow for the periods presented:

(in thousands)

Liquidity and Capital Resources

Overview

We have financed our operations, capital expenditures and strategic acquisitions primarily through utilization of cash generated from operations, as well as borrowings under our credit facilities. As of June 30, 2026, we had $305.4 million of cash and cash equivalents compared to $133.3 million as of December 31, 2025.

We believe that cash expected to be provided by operating activities, together with our cash on hand and the availability of borrowings under our new Revolving Credit Facility (defined below), will be sufficient to meet our liquidity requirements for at least the next 12 months. Our ability to generate sufficient cash flows from operations is, however, subject to many risks and uncertainties, including future economic trends and conditions, demand for our products and services, foreign currency exchange rates and other risks and uncertainties applicable to our business.

In the future, we may attempt to raise additional capital through the sale of equity securities or through equity-linked or debt financing arrangements. If we raise additional funds by issuing equity or equity-linked securities, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of additional indebtedness, we may be subject to increased fixed payment obligations and could also be subject to additional restrictive covenants, such as limitations on our ability to incur additional debt, 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 unfavorable to equity investors.

As market conditions warrant, we and our equity holders, which include members of our management and our Principal Stockholders, may from time to time seek to repay loans that we have borrowed, including the loans under our 2021 Credit Agreement (as defined below), in privately negotiated or open market transactions, by tender offer or otherwise, and such repurchases may be at prices below par. Subject to any applicable limitations contained in the agreements governing our indebtedness, any purchases made by us may be funded by the use of cash on our balance sheet or the incurrence of new secured or unsecured debt, including borrowings under our credit facilities. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. Any such purchases may be with respect to a substantial amount of a particular class or series of debt, with the attendant reduction in the trading liquidity of such class or series. In addition, any such purchases made at prices below the “adjusted issue price” (as defined for U.S. federal income tax purposes) may result in taxable cancellation of indebtedness income to us, which amounts may be material, and in related adverse tax consequences to us.

Indebtedness

Senior Secured Credit Facilities

On September 30, 2021, we entered into a credit agreement (as amended from time to time, the “2021 Credit Agreement”) that provides for a term loan facility and a revolving credit facility (collectively, the “Credit Facility”). On September 8, 2025, the Company amended the 2021 Credit Agreement (the “2025 Amendment”). Pursuant to the 2025 Amendment, we refinanced all outstanding borrowings under the 2021 Credit Agreement and increased the aggregate principal amount to $1,855.0 million (the “Term Loan Facility”). Additionally, we terminated the previous revolving credit facility and established a new revolving credit facility (the “Revolving Credit Facility”) with a borrowing capacity of $195.5 million. The maturity dates for the Term Loan Facility and Revolving Credit Facility are September 8, 2032 and September 8, 2030, respectively. Furthermore, the unused balance on the Revolving Credit Facility is subject to an unused commitment fee ranging from 0.25% to 0.50% per annum based on our leverage ratio. We may prepay the Term Loan Facility in whole or in part at any time without penalty. On June 29, 2026, the Company used IPO proceeds to prepay approximately $409.2 million in aggregate principal of the Term Loan Facility. The Company recognized a loss on extinguishment of debt of $7.4 million related to the write-off of unamortized debt issuance costs associated with the extinguished debt. For additional information, refer to Note 4. Credit Agreements.

As of June 30, 2026, we were in compliance with all covenants contained in the 2021 Credit Agreement, as amended.

Cash Flow Information

Cash Flows for the Six Months Ended June 30, 2026 and the Six Months Ended June 30, 2025

The following table sets forth the major components of our condensed consolidated statements of cash flows for the periods presented:

(in thousands)

Cash Flows provided by Operating Activities

Net cash provided by operating activities was $151.5 million for the six months ended June 30, 2026, compared to $77.9 million for the six months ended June 30, 2025, an increase of $73.6 million. Cash flows from operating activities consist primarily of net income (loss) adjusted for working capital and certain non-cash items. Non-cash items include items such as depreciation and amortization expense, stock-based compensation, and changes in deferred income taxes.

Net cash provided by operating activities for the six months ended June 30, 2026 primarily consists of net income of $45.1 million adjusted for certain non-cash items and changes in net operating assets and liabilities including $44.7 million of depreciation and amortization, $26.6 million of stock-based compensation, $13.0 million of deferred income taxes, and contingent consideration revaluation of $12.6 million.

Net cash provided by operating activities for the six months ended June 30, 2025 primarily consists of net loss of $19.9 million adjusted for certain non-cash items and changes in net operating assets and liabilities including $50.7 million in depreciation and amortization, $4.0 million in stock-based compensation, and an increase in accounts payable and accrued liabilities amounting to $108.1 million, partially offset by an increase in accounts receivable amounting to $63.8 million.

The improvement in cash flows from operating activities during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by growth in net income and improved customer collections.

Cash Flows used in Investing Activities

Net cash used in investing activities was $27.2 million for the six months ended June 30, 2026, compared to $24.9 million for the six months ended June 30, 2025, an increase of $2.3 million. Net cash used in investing activities primarily consists of capital expenditures for capitalized internal-use software, which was the driver of the increase year-over-year.

Cash Flows provided by Financing Activities

Net cash provided by financing activities was $47.9 million for the six months ended June 30, 2026, compared to $25.2 million for the six months ended June 30, 2025, an increase of $22.6 million. Net cash provided by financing activities consists primarily of equity transactions and capital raising activities, such as net proceeds from our IPO, and the payment of debt principal.

Net cash provided by financing activities for the six months ended June 30, 2026 was primarily driven by the net proceeds of $472.4 million from our IPO, partially offset by the payment of debt principal on our Term Loan Facility amounting to $418.4 million.

Net cash provided by financing activities for the six months ended June 30, 2025 was primarily driven by proceeds from the issuance of preferred stock and post-conversion earnout share liability amounting to $409.5 million and $5.4 million, respectively. These inflows were partially offset by the repurchase of common stock and payment of debt, amounting to $383.4 million and $7.6 million, respectively.

Material Cash Requirements

The following table summarizes current and long-term material cash requirements as of June 30, 2026, which we expect to fund primarily with operating cash flows:

(in thousands)

Uncertain Tax Positions

As of June 30, 2026, we had approximately $49.6 million of recorded liabilities and related interest and penalties pertaining to uncertain tax positions. We are unable to make a reasonable estimate as to when cash settlement with the tax authorities might occur due to the uncertainties related to these tax matters. Payments of these liabilities would result from settlements with taxing authorities.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Estimates

Our significant accounting policies are discussed in Note 2. Summary of Significant Accounting Policies in the Notes to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to areas involving a significant level of estimation uncertainty and have had or are likely to have a material impact on our financial statements. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, operating results, and cash flows will be affected.

Other than as set forth below, 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 our Management’s Discussion and Analysis of Financial Condition and Results of Operations set forth in our IPO Prospectus.

Stock-based Compensation

2021 Stock Incentive Plan — On March 17, 2021, the Company adopted the Booster Parent Holdings, Inc. 2021 Stock Incentive Plan (the “2021 Stock Incentive Plan”). Following the effectiveness of the Omnibus Incentive Plan upon the completion of the IPO, the Company ceased granting awards under the 2021 Stock Incentive Plan, and no new equity awards have been or will be issued thereunder. However, all outstanding awards granted under the 2021 Stock Incentive Plan will continue to be governed by the 2021 Stock Incentive Plan and the applicable award agreements.

The Company has granted both NSOs and SARs that vest in quarterly or annual installments over a two-to-four-year period. In certain cases, these awards also contain one year cliff vesting provisions.

No stock options were granted during the six months ended June 30, 2026.

Fair Value — Assumptions used in the Black-Scholes option pricing model for SARs granted under the 2021 Stock Incentive Plan as of June 30, 2026 were as follows on a weighted average basis:

(1) As of June 30, 2026.

Distributions — On October 4, 2021, the Company declared a distribution to employees and other holders of outstanding shares and/or stock-based compensation awards (whether vested or unvested) issued prior to August 21, 2021 (the “2021 Distribution”). Similar distributions were also declared on November 11, 2024 (the “2024 Distribution”) and September 12, 2025 (the “2025 Distribution”). Any equity classified awards that were unvested as of the 2021, 2024, and 2025 Distribution approval dates of October 4, 2021, November 11, 2024, and September 12, 2025, respectively, were subject to a partial modification in connection with the 2021, 2024 and 2025 Distributions that created a corresponding liability award in the amount of $5.19, $2.12, and $2.12 per outstanding option for the 2021, 2024, and 2025 Distributions, respectively. Liability classified awards were also eligible to receive the 2021, 2024, and 2025 Distributions, as their awards vested in the future, and as such a corresponding liability will continue to be accounted for in the amount of $5.19, $2.12, and $2.12 per outstanding SAR for the 2021, 2024, and 2025 Distributions, respectively.

Valuation of Shares

Prior to the IPO, given the absence of a public trading market for our shares, and in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide, Valuation of Privately Held-Company Equity Securities Issued as Compensation, our board of directors exercised its reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of fair value of our shares, including:

• independent third-party valuations of our shares;
• our capital resources and financial condition;
• the likelihood and timing of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions;
• our historical operating and financial performance as well as our estimates of future financial performance;
• valuations of comparable companies;
• the status of our development, product introduction, and sales efforts;
• the relative lack of marketability of our shares;
• industry information such as market growth and volume and macro-economic events; and
• additional objective and subjective factors relating to our business.

In valuing our shares, our board of directors determined the fair value of our shares using both the income and market approach valuation methods. The income approach estimates value based on the expectation of future cash flows that a company will generate. The market approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business.

Applying these valuation approaches involves the use of estimates, judgments and assumptions that are highly complex and subjective, including our expected future revenue and expenses, the determination of discount rates, valuation multiples, the selection of comparable public companies and the probability of future events. Changes in any or all of these estimates and assumptions impact our valuation. Such changes may have a material impact on our condensed consolidated financial statements. Following the IPO, it is no longer necessary to determine the fair value of our shares, as our shares are traded in the public market.

Redeemable Convertible Preferred Stock

Prior to the completion of the IPO, the Company’s Series A Redeemable Convertible Preferred Stock was classified as mezzanine equity in the condensed consolidated financial statements because it was redeemable upon the occurrence of certain deemed liquidation events that were not solely within the Company’s control. The Series A Redeemable Convertible Preferred Stock was initially recognized at fair value upon issuance and was subsequently adjusted to its redemption value at each reporting date if it became currently redeemable or probable of becoming redeemable. In connection with the IPO, all outstanding shares of Series A Redeemable Convertible Preferred Stock automatically converted into 24,011,299 shares of the Company’s common stock.

Recent Accounting Pronouncements

See Note 2. Summary of Significant Accounting Policies to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included in this Quarterly Report on Form 10-Q.

We are exposed to market risk from changes in exchange rates, interest rates and inflation. All of these market risks arise in the ordinary course of business, as we do not engage in speculative trading activities. The following discussion provides additional information regarding these risks.

Foreign Currency and Exchange Risk

Although a substantial portion of our revenue and cash flows is generated in U.S. dollars within the United States, we also operate internationally and generate a portion of revenue and cash in foreign currencies. Our expenses are generally denominated in the currencies in which our operations are located, primarily the U.S. Dollar, Singapore Dollar, British Pound, Brazilian Real, and Euro.

Our international operations expose us to fluctuations in foreign currency exchange rates. While our global presence continues to expand, the majority of our cash flows are denominated in U.S. dollars. As a result, changes in exchange rates have not historically had a material impact on our results of operations, and we have not engaged in hedging activities to mitigate this risk. However, as our international business grows, exchange rate fluctuations could have a more significant effect on our future operating results.

Interest Rate Risk

Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. We are exposed to changes in the level of interest rates for our floating rate debt and for any potential refinance of any indebtedness that may be required. Our floating rate debt requires payments based on a variable interest rate index. As a result, increases in interest rates may reduce our net income by increasing the cost of our debt under our 2021 Credit Agreement, to the extent not offset by the effectiveness of our hedging arrangements.

We may enter into hedging arrangements with respect to floating interest rate borrowings under the 2021 Credit Agreement. As of June 30, 2026, we had outstanding interest rate contracts with an aggregate notional amount of $850.0 million designated as cash flow hedges of interest rate risk. As of June 30, 2026, a hypothetical 1.0% annual increase in the applicable average interest rates would have resulted in an estimated $5.9 million increase in interest expense, on an annualized basis.

Evaluation of Disclosure Controls and Procedures

Management, with the participation of the Company’s principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, due to the material weakness described below, the Company’s disclosure controls and procedures were not effective to provide reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and (ii) accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

We previously identified a material weakness in our internal control over financial reporting. If our remediation of such material weakness is not effective, or if we experience additional material weaknesses in the future or otherwise fail to develop and maintain effective internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired.

The material weakness identified pertained to the lack of effectively designed, implemented, and maintained IT general controls over applications that support our financial reporting processes. Specifically, the material weakness related to a lack of formalized, designed, and implemented IT controls and associated segregation of duties, including a lack of sufficient IT resources and personnel to address the risks associated with the IT environment.

While management has made improvements to our control environment and IT processes to support our growing operations, the identified material weakness remains unremediated. We expect our remediation efforts to continue to take place in 2026, and to include the following:

• designing, developing, and deploying an enhanced IT General Controls (“ITGC”) framework, including the implementation of a number of processes and tools to enable the effectiveness and consistent execution of these controls;
• continuing to implement ITGCs to manage logical access and program changes within our IT environment that support key business processes;
• continuing to implement processes and controls to better manage and monitor our segregation of duties, including enhancing the usage of technology and tools for segregation of duties within the Company’s systems, applications, and tools; and
• continuing to expand both our internal resources, and collaboration with third party controls advisors, with the appropriate level of expertise to implement, monitor, and maintain effectively designed and operating ITGCs.

The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. The material weakness cannot be considered remediated until the newly designed control activity operates for a sufficient period of time and management has concluded, through testing, that the control is operating effectively.

Changes in Internal Control over Financial Reporting

Other than the remediation measures described above, there were no changes in our internal controls over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls

Management, including our principal executive officer and principal financial officer, recognizes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives. However, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that its objectives will be met, and the effectiveness of any internal control over financial reporting is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.