APPF 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Our Products and SolutionsServices

New and evolving regulatory requirements may also impact our customers and their ability or willingness to utilize our products and services. For instance, we areconsistently monitoringmonitor FCRAregulatory rulemakingactivity effortsby the Federal Trade Commission (the "FTC"), by the Consumer Financial Protection Bureau ("CFPB"), and by various recently enacted and proposed state regulationsregulatory bodies applicable to tenant screening. TheseNew newor uncertain regulatory requirements may impact our ability to offer or our customers' ability and willingness to utilize certain of our services, which may impact our operating results.

We areare, and will continue to bebe, subject to risks arising from or related to the settlement of payment transactions, including with respect to prefunding and chargeback requests as well as human or processing errors. Users are ultimately responsible for fulfilling their obligations to fund transactions; however, in instances where there are returns or chargebacks, we attempt to collect these funds from our customers. If we are unable to collect such amounts from our customers, we bear the risk of loss for the amount of the return or chargeback. While we have not experienced material losses resulting from payment returns or chargebacks in the past, there can be no assurance that we will not experience significant losses in the future. Any increase in returns or chargebacks that we are not able to recover from our customers may adversely affect our business, financial condition and results of operations. In addition, if transactions or settlement reconciliations are not performed timely or are inaccurate due to human or processing errors, we could experience significant financial loss that could have an adverse effect on our businessbusiness, financial condition, and operating results.

Our electronic payment services business also exposes us to risk in connection with theft, fraud and other malicious activity by our employees, our third-party service providers’ employees, or third-parties who improperly gain access to our systemssystems, our customers’ systems, or our customers’third-party providers' systems. In the event of such activity, we may incur liability to compensate our customers, our customers' stakeholders, or third-party electronic payment service providers for losses incurred. In the past, third-party bad actors have gained improper access to our systems, our customers’ systems, and our third-party providers' systems, and we experienced financial loss as a result. While we takecontinually reasonableseek to improve the measures we take to secure our systems and payments infrastructure, it is not possible to entirely eliminate the risk of intentional wrongdoing. In the past, third-party bad actors have gained improper access to our systems and our customers’ systems and we experienced financial loss as a result. If third-party bad actors again gain access to ourany systemsof or our customers’these systems, or our employees or third-party service providers’ employees misuse our payment systems for malicious purposes, we could experience material financial loss that may adversely affect our operating results.

We do not directly access the payment card networks, such as Visa and MasterCard, that enable our acceptance of credit cards and debit cards, including some types of prepaid cards. Accordingly, we must rely on banks or other card payment processors to process transactions and must pay fees for their services. From time to time, payment card networks have increased, and may increase in the future, the interchange fees and assessments that they charge for each transaction which accesses their networks. Our card payment processors may have the right to pass any increases in interchange fees and assessments on to us and increase their own fees for processing. Any changes in interchange fees and assessments could increase our operating costs and reduce our operating income. In the past, federal regulators have required Visa and MasterCard to reduce interchange fees. Any material change in credit or debit card interchange rates, including changes in interchange fee limitations, could significantly reduce our Value Added Services revenue and have an adverse effect on our business and operating results.

Our card payment processors require us to comply with payment card network operating rules, including special operating rules for electronic payment service providers to merchants,merchants. and weWe have agreed to reimburse our processors for any fees or fines they are assessed by payment card networks as a result of any rule violations by us or our merchants. The payment card networks set and interpret the card operating rules. From time to time, the networks have alleged that various aspects of our business model violate these operating rules. In the past, all such allegations have been resolved favorably,favorably. If, however, if such allegations are not resolved favorably in the future, they may result in material fines and penalties or require changes in our business practices that may be costly. In addition, the payment card networks could adopt new operating rules or interpret or re-interpret existing rules that we or our processors might find difficult or even impossible to follow, or costly to implement. As a result, we could lose our ability to give customers and their residents the option of using payment cards to fund their payments. If we are unable to accept payment cards or are meaningfully limited in our ability to do so, our business and operating results would be adversely affected.

Our tenant screening services business is subject to a number of complex laws that are subject to varying interpretations, including the FCRA, the Fair Housing Act, and related federal and state regulations. The FCRA continues to be the subject of multiple class-based litigation proceedings, as well as numerous regulatory inquiries and enforcement actions. In addition, entities such as the FTC and the CFPB have the authority to promulgate rules and regulations that may impact our customers and our business and have made various public statements that tenant screening is an area of focus for such agencies. AlthoughWhile we attemptbelieve to structurethat our tenant screening services to comply with relevant laws and regulations, we arehave routinelybeen, and may in the future be, accused of not complying with such laws and regulationsregulations, and have beenbeen, and may again in the future bebe, found to be in violation of them. In addition, we have beenbeen, and expect in the future to bebe, subject to routine regulatory inquiries, enforcement actions, class-based litigation and/or indemnity demands.

Our potential liability in any enforcement action, class action lawsuit, or significant single plaintiff actionlawsuit could have a material impact on our business, especially given that certain applicable laws and regulations provide for fines or penalties on a per occurrence basis and we participate in a large number of tenant screening transactions. The existence of any such proceeding, whether meritorious or not, may adversely affect our ability to attract customers, result in the loss of existing customers, harm our reputation and cause us to incur defense costs or other expenses.

Our customers use our products to manage critical aspects of their businesses. Any errors, defects or other disruptions in our products, or the products of our third-party service providers upon which certain of our products are dependent, may result in loss of or damage to our customers’ data and disruption to our customers’ businesses, which could harm our reputation and subject us to potential liability. Such product problems could be caused by a variety of factors, including infrastructure changes, power or network outages, fire, flood or other natural disasters, human or software errors, viruses, security breaches, fraud or other malicious activity, spikes in customer usage or distributed denial of service attacks. In addition, we provide continuous updates to our products and these updates may contain undetected errors, defects or other disruptions when first introduced. In the past, we have discovered errors, defects, or other disruptions in our updates after they have been released, and similar problems may arise in the future. Real or perceived errors, defects, or other disruptions in our products or the products of our third-party service providers upon which certain of our products are dependent, could result in negative publicity, reputational harm, loss of customers, delay in market acceptance of our products and solutions,services, loss of competitive position, withholding or delay of payment to us, claims by customers for losses sustained by them and potential litigation or regulatory action. In any such event, we may be required to expend additional resources to help correct the problem or we may choose to expend additional resources to take corrective action even when not required. The costs incurred in correcting any material errors, defects or other disruptions could be substantial. In addition, we may not carry insurance sufficient to offset any losses that may result from claims arising from such errors, defects or other disruptions in our products.disruptions.

Our business depends, in part, on our ability to satisfy our customers by providing a consistently high level of onboarding services and ongoing customer service. Once our solutionsservices are deployed, our customers depend on our customer service organization to resolve technical issues relating to their use of ourthe solutions.services. Increased demand for our support services may increase our costs without corresponding revenue, which could adversely affect our operating results. Further, our sales process is highly dependent on the ease of use of our solutions,products and services, our reputation and positive recommendations from our existing customers. Any failure to maintain high-quality and responsive customer service, or a market perception that we do not maintain high-quality and responsive customer service, could harm our reputation, cause us to lose customers and adversely impact our ability to sell our solutionsproducts and services to prospective customers.

Some of our property management customers require their renters to purchasemaintain rentalcertain insurance policies.coverage requirements. Through wholly owned and licensed subsidiaries, we make rentalrenters insurance policies available to these renters and, if our customers so elect, add uncovered units to a qualifying liability to landlord insurance policy via a licensed insurance broker. If our property management customers stop requiring renters to purchase rentalmaintain insurance policiescoverage because of regulatory or competitive pressures, demand for our insurance-related risk mitigation products may decline and our revenues and operating results could be adversely affected.

If we fail to maintain relationships with third-party service providers that enable certain functionality within our solutionsproducts and services or provide our customers with specialized technology and services, our business and operating results may be harmed.

Certain functionality of our services is provided, supported or enhanced by third-party service providers, including without limitation functions related to customer relationship management,CRM, cloud computing, texting, emailing, electronic payments, tenant screening, and insurance related offerings. Our customers are also able to integrate specialized, third-party technology and services through AppFolio Stack.Stack™. If our third-party service providers cease providing their products or making them available through AppFolio Stack,Stack™, our solutionsproducts and services and the demand for ourthem solutions wouldcould be adversely impacted and our business and operating results wouldcould be harmed. In addition, our competitors may be more successful than us in building cost-effective relationships with third parties that enhance their products and services, allow them to provide more competitive pricing, or offer other benefits to their customers. Acquisitions of our third-party service providers by our competitors or others could result in a decrease in the number of current and potential strategic partners willing to establish or maintain relationships with us, and could increase the price at which products or services are available to us. If we are unsuccessful in establishing or maintaining our relationships with third-party service providers, our ability to compete in the marketplace or to grow our customer base and revenue could be impaired, which could negatively impact our operating results.

We employ machine learning and AI technologies, including generative and agentic AI, in our product and service offerings. Research intointo, and continued development ofof, such technologies remains ongoing. As AI represents a rapidly evolving field, it inherently carries a spectrum of risks typical toof emerging technologies. We anticipate the enactment of new laws and regulations pertaining to AI use, potentially placing us under increased regulatory oversight, escalating litigation risks, and augmenting our existing obligations regarding confidentiality and privacy. Such developments could negatively impact our business operations. Moreover, AI technologies introduce heightened cybersecurity risks and ethical considerations, potentially affecting our reputation and operational performance. Threat actors are increasingly using AI to develop sophisticated cyberattacks, including deepfakes and social engineering. Should we introduce solutionsproducts or services that generate content that is misleading, inaccurate, biased, harmful or controversial due to perceived or actual societal impact, we may face potential harm to our brand and reputation, competitive disadvantages, orand legal liabilities. AI algorithms and training methodologies may be flawed.flawed, ineffective or inadequate. AI development or deployment practices by us or others could result in incidents that impair the acceptance of AI solutions or cause harm to individuals or society. Further, the legal landscape regarding intellectual property rights in AI technologies remains unsettled in the United States, both in legislation and judicial precedent. Consequently, our employmentuse of AI technologies and features might lead to allegations of infringement or misappropriation of third-party intellectual property rights. This risk is intensified by the current trend of entities swiftly seeking patents and other intellectual property protections in AI to gain a competitive edge. Additionally, generative and agentic AI has the capacity to yield inaccurate or misleading results, promote discriminatory outcomes, or perpetuate unintended biases, which risks are exacerbated by the speed and scale thatof adoption and utilization of AI has the ability to operate at across our customer base. Despite our efforts to implement measures and develop our AI tools in a manner that enhances accuracy, security and fairness, these issues may arise due to the direct interaction of users with generative and agentic AI models and the inherent unpredictability and power of these technologies. Litigation or government regulation related to the use of AI may also adversely impact our ability to develop and offer productsAI-based that use AI,products, as well as increase the cost and complexity of doing so. Potential government regulation related to AI use and ethics may also increase the burden and cost in this area. Failure to properly remediate AI usageuse or ethicsethical issues may causeundermine public confidence in AI to be undermined.AI. Such outcomes could result in reputational damage and adverse effects on our operational results.

If we are unable to ensure that our solutionsproducts and services keep pace with other technology, our solutionswe may become less competitive and our operating results may be harmed.

To remain competitive, we must continue to develop new product offerings, applications, features, and enhancements to our products. Maintaining adequate resources to meet the demands of our customers and the market is essential. If we are unable to develop our products and services, including through the development of emerging technologies, such as AI, we may miss market opportunities and our products may become less attractive to users. Our competitors may have or expend a greater amount of resources on improvement of technology, and our failure to maintain adequate development programs or compete effectively could materially and adversely affect our business.

If we are unable to ensure that our solutionsproducts and services interoperate with other technology, our solutionswe may become less competitive and our operating results may be harmed.

We depend on the interoperability of our platform with web browsers, and in the case of our mobile applications -applications, operating systems,systems that we do not control. Any changes in such web browsers or systems that degrade the functionality of our solutionsproducts and services or give preferential treatment to competitive services could adversely affect the adoption and use of our solutions.offerings. In addition, to deliver high quality solutions,products and services, we will need to continuously enhance and modify our functionality to keep pace with technical, contractual, and other changes in Internet-related hardware, mobile operating systems such as iOS and Android, browsers, communication, network and database technologies. We may not be successful in developing enhancements and modifications that operate effectively with these devices, operating systems, web browsers or other technologies or in bringing them to market in a timely manner. Furthermore, uncertainties regarding the timing or nature of new network platforms or technologies, and modifications to existing platforms or technologies, could increase our research and product development expenses. In the event that it is difficult for our customers to access and use our solutions,products and services, our solutionsofferings may become less competitive, and our operating results could be adversely affected.

Our business involves the storagestorage, processing and transmission of sensitive and proprietary data and personal information collected by or on behalf of our customers, the personal information of our employees, customers, and prospective customers and our proprietary financial, operational and strategic information. Cyber attacks, malicious Internet-basedinternet-based activity, online and offline fraud, and other similar activities may threaten the confidentiality, integrity, and availability of our information technology systems, or those of the third parties upon which we rely, along with the proprietary, confidential, and sensitive data stored in or processed by such systems. As our business grows, the number of individuals using our products, as well as the amount of information we collect, store, process, and processtransmit is increasing, and our brands are becoming more widely recognized, which makes us a greater target for malicious activity. We have incurred, and expect to continue to incur, significant expenses in connection with our efforts to keep our systems, products and networks protected and up to date. However, there can be no assurance that the security measures we employ will prevent malicious or unauthorized access to our systems or information. Furthermore, no security program can entirely eliminate the risk of human error, such as an employeeemployee's or contractor’s failure to follow one or more security protocols, which has previously occurred and we expect will occur again despite our efforts to train our employees and contractors on cybersecurity issues and enforce our security protocols. Additionally, with many of our employees continuing to work remotely, we face an increased risk of attempted security breaches and incidents. Therefore, despite our significant efforts to keep our systems, products and networks protected and up to date, we may be unable to anticipate new modes for cyber attacks, detect security incidents or react to them in a timely manner, or implement adequate preventive measures, any of which may expose us to a risk of loss, harm to our reputation, litigation, fines, penalties, and potential liability.

Computer malware, ransomware, viruses, social engineering (deepfakes, phishing, smishing and vishing attacks), denial of service or other attacks, employee theft or misuse, and increasingly sophisticated network attacks have become more prevalent in our industry, particularly against cloud service providers. The sophistication of these malicious attacks has also increased, and it appears that cyber crimes and cyber criminal networks, some of which may be state-supported, have been provided substantial resources and may target U.S. enterprises or our customers and their use of our products. Furthermore, the risk of state-supported and geopolitical-related cyber attacks may increase in connection with ongoing global geopolitical tensions. In the past, we have had to take corrective action against cyber attackers to protect our cloud environment. If our security measures are, or are believed to have been breached or otherwise to have failed as a result of third-party action, employee error, malfeasance or otherwise, our reputation could be damaged, our business may suffer, and we could incur significant liability.

In addition, some of our third-party service providers also collect, storestore, orprocess, processand transmit our sensitive information and our customers’ data on our behalf. These service providers have been,experienced cybersecurity incidents in the past involving such information and data, and we expect they will continue to be,be subject to similar threats of cyber attacks and other malicious Internet-basedinternet-based activities.activities in the future. Our contracts with these third parties may not provide us with adequate remedies in the event of such an incidentincident, which could also expose us to risk of loss, litigation, fines, penalties, and potential liability as well as reputational damage.

If our security measures, or the security measures of our third-party service providers, are breached as a result of wrongdoing or malicious activity on the part of our employees, our third-party service providers' employees, our customers’ employees, or any third party, or as a result of any human error or neglect, product defect or otherwise, and this results in the loss, theft, misuse, unauthorized disclosure, or unauthorized access to personal data or other sensitive information, we could incur liability to our customers, employees, and to individuals or organizations whose information was being stored by us or our customers, as well as duebe subject to fines, penalties, or actions from payment processing networks or by governmental bodies. If we experience a widespread security breach, our insurance coverage may not offset liabilities actually incurred and insurance may not continue to be available to us on reasonable terms, or at all. In addition, security breaches could result in reputational damage, adversely affect our ability to attract new customers and cause existing customers to reduce or discontinue the use of our products and solutions.services. Furthermore, the perception by our current or potential customers that our products could be vulnerable to exploitation or that our security measures are inadequate, even in the absence of a particular problem or threat, could reduce market acceptance of our products and solutionsservices and cause us to lose customers.

We collect, store, process, and transmit personal information relating to our employees, customers, prospective customers, and other individuals. Our customers use our platform to store and transmit a significant amount of personal information relating to their customers, vendors, employees and other industry participants. Federal, state,Federal and foreignstate government bodies and agencies have adopted, and are increasingly adopting, laws and regulations regarding the collection, storage, use, processing, security and transmission of personal information. For example, the California Consumer Privacy Act ("CCPA") requires certain privacy related disclosures and provides California consumers rights with respect to their personal information, including the right to request deletion of their personal information, the right to receive the personal information on record for them, the right to know what categories of personal information generally are maintained about them, as well as the right toand opt-out of certain sales of personal information and sharing of personal information for certain advertising purposes. The CCPA also granted a new state agency, the California Privacy Protection Agency, powers to adopt and enforce regulations interpreting the CCPA. In addition, theThe CCPA provides for civil penalties for violations, as well as a private right of action for certain data breaches that result in the loss of personal information. This private right of action may increase the likelihood of, and risks associated with, data breach litigation.

In addition to California, we are currently subject to comprehensive privacy laws across multiple statesstates, and in 20252026, will be subject to new comprehensive privacy laws in Delaware,Indiana, Iowa, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey,Kentucky, and Tennessee.Rhode Island. These new and existing privacy laws and regulations haveimpose increased,increasingly complex operational requirements and will likely continue to increase, the complexity of our data collection and processing practices and policies andincrease the cost of compliance to deliversupport the delivery our services. Additionally,We wehave incurred, and may incurin the future incur, substantial costs and expenses related to an increased exposure to regulatory enforcement and/or litigation. Despite our efforts, we cannot guarantee that we will be able to maintain full compliance with constantly evolving, and sometimes conflicting, data privacy laws in the jurisdictions in which we operate. If our privacy or data security measures fail to comply with current or future laws and regulations, we may be subject to claims, legal proceedings or other actions by individuals or governmental authorities based on privacy or data protection regulations and our privacy commitments to customers or others.

In addition to government regulation, privacyPrivacy advocates and industry groups may also propose various self-regulatory standards that may legally or contractually apply to our business. As new laws, regulations and industry standards take effect and we offer new services, we will need to understand and comply with various new requirements, which may impede our plans for growth or result in significant additional costs. These laws, regulations and industry standards have had, and will likely continue to have, negative effects on our business, including by increasing our costs and operating expenses, and/or delaying or impeding our deployment of new or existing core functionality or Value Added Services. Failure to comply with these laws, regulations and industry standards could result in negative publicity, subject us to fines or penalties, expose us to litigation, or result in demands that we modify or cease existing business practices. Furthermore, privacy concerns may cause residents, vendors, employees and other industry participants to resist providing the personal information necessary to allow our customers to use our applications effectively, which could reduce overall demand for our services. Any of these outcomes could adversely affect our business and operating results.

Our success and future growth depend, in part, upon the continued services of our executive officers and other key employees. To execute our growth plan and achieve our strategic objectives, we must continue to retain and hire highly qualified and motivated personnel across our organization. In particular, to continue to enhance our products and solutions,services, add new and innovative core functionality and/or Value Added Services, as well as develop new products, it will be critical for us to maintain and, over time, grow the current skill set and abilities of our research and product development organization. Further, for us to achieve broader market acceptance of our products and solutions,services, grow our customer base, and pursue new markets consistent with our strategic plan, we will need to maintain and, over time, grow the current skill set and abilities of all of our employees, including but not limited to those in our research and product development, sales, marketingmarketing, and customer service and support organizations. Competition for personnel is intense within our industry and there continues to be upward pressure on the compensation paidpaid, particularly with respect to thesepersonnel professionals.with backgrounds in AI and cybersecurity. Retaining, identifying, recruiting, and training qualified personnel is difficult and requires a significant investment of time and resources.

Many of the companies with which we compete for experienced personnel have greater name recognition and financial resources thanand wemay have.also employ a different compensation philosophy. As a result, we may haveexperience greater difficultychallenges retaining and hiring skilled personnel than our competitors. In addition, existing and prospective employees often consider the value of the equity awards they receive in connection with their employment. If the perceived value of our equity awards declines, we are unable to offer equity awards in competitive amounts, or if the price of our Class A common stock experiences significant volatility, this may adversely affect our ability to retain and recruit highly skilled employees. If we are unable to retain and attract the personnel necessary to execute our growth plan, we may be unable to achieve our strategic objectives and our operating results may suffer. In addition, from time-to-time there may be changes in our management team that may be disruptive to our business.

Our corporate culture has contributed to our success and, if we cannot continue to fosterpreserve this culture, we could lose the passion, creativity, teamwork, focus and innovation fostered by our culture.

We expect that our real estate industry customers will continue to account for a significant portionportion, or allall, of our revenuerevenues for the foreseeable future. Demand for our solutionsproducts and services could be affected by factors that are unique to and adversely affect the real estate industry and our customers within it. If the real estate industry declines, our customers may decide not to renew their subscriptions or they may cease using our Value Added Services to reduce costs to remain competitive. Higher interest rates may make it difficult or impossible for our customers to obtain financing and increase their cost of capital, which could negatively impact the demand for our solutionsproducts and services, increase customer attrition, and impact our operating results. In addition, we could lose real estate customers as a result of acquisitions or consolidations, bankruptcies or other financial difficulties facing our real estate customers, new or enhanced legal or regulatory regimes that negatively impact the real estate industry, andor conditions or trends specific to the real estate industryindustry, such as the economic factors that impact the rental market.market and rental occupancy rates.

Maintaining and enhancing our brands is critical to achieving widespread awareness and acceptance of our solutionsproducts and services as well as maintaining and expanding our customer base, which is a key component of our strategy. We expect the importance of brand recognition will increase,increase as competition for our products and services increases. If we do not continue to build awareness of our brands, we will be at a competitive disadvantage compared to companies whose brands are, or become, more recognizable than ours. Maintaining and enhancing our brands requires us to make substantial investments, and these investments may not result in commensurate increases in our revenue. In addition, new and existing technologies, industry trends, and laws that restrict online advertising or that affect our ability to customize and target advertising may require us to significantly increase our marketing costs to generate and capture demand and maintain our brand awareness, level of sales, and operating results. Moreover, our efforts to maintain and enhance our brands could be impacted by negative publicity or reputational harm from adverse events, such as lawsuits, customer or third-party-service provider disputes, or cybersecurity incidents. If we fail to successfully maintain and enhance our brands, or if we make investments that are not offset by increased revenue, our operating results could be adversely affected.

We have experienced, and anticipate that we will continue to experience, significant growth in the size, complexity, and diversity of our business. This growth has placed, and we expect that it will continue to place, a significant strain on our administrative, operational, financial and financialaccounting resources. Our future success depends, in part, on our ability to manage this growth effectively. For example, to grow our customer base and facilitate the continuous launch and refinement of our products and servicesservices, we invest significantly in our sales, marketing, research and product development organizationsorganizations, as well as software and systems to support the efficient operation of such organizations. There is no guarantee that these or similar investments to support our growth will be successful. If we are unable to manage our growth successfully and efficiently, it could result in increased costs and operating expenses without corresponding increases in revenue, which would adversely affect our operating results.

Customer demands are constantly changing in response to new technology and other market factors. To compete effectively, we must identify and innovate in the right technologies, accurately predict our customers’ evolving needs, and continually improve our own technology platform. If we fail to execute against any of the foregoing, our business, financial condition and operating results may be harmed. In addition, the widespread adoption of quickly evolving disruptive technology products, such as generative and agentic AI, may significantly impact the real estate industry, even if such products are not specifically designed to apply directly to the real estate industry. While we have introduced new generative and agentic AI products and are focused on enhancing the AI capabilities of our products and services and incorporating AI across existing products and services, there can be no assurance that our new or enhanced products and AI innovations will be successful, adopted or monetizable, or that we will innovate effectively to keep pace with the rapid evolution of AI across our offerings. The adoption of such new technologies could significantly reduce the number or demand of our customers, thereby reducing our revenue, which could materiallyadversely impact our business, financial condition and operating results.

The market for cloud-based business management solutions has relatively low barriers to entry and is global, highly competitive and continually evolving in response to a number of factors, including changes in technology, operational requirements, and laws and regulations. We compete with both other real estate industry cloud-based solution providers and providers of broad cloud-based solutions across multiple industries. We also face competition from numerous cloud-based solution providers that focus almost exclusively on one or more point solutions. Our competitors include established vendors, as well as newer entrants in the market. Our established competitors may have greater name recognition, longer operating histories, and significantly greater resources, which allowsmay allow them to respond more quickly and effectively to new or changing opportunities or challenges, technologies, operational requirements and industry standards. Our competitors who are new entrants to the market, and generally smaller, may have more nimble operations due to having fewer products and less overhead and may be willing to take legal and operational risks, which allowsmay allow them to launch products and meet customer demand more quickly and efficiently. Regardless of size, our current and potential competitors may develop, market and sell new technologies with comparable functionality to our solutions,products and services, which could cause us to lose customers, slow the rate of growth of new customers and/or cause us to decrease our prices to remain competitive. If we are unable to differentiate ourselves from our competitors and drive value for our customers or otherwise compete effectively against any of these competitive threats, our business, financial condition and results of operations could be harmed.

In addition, we have introducedintroduced, and expect to continue to introduceintroduce, variations to our pricing model that are intended to provide broader usage and better align the cost of our services to the value they provide our customers. Although we believe that these pricing changes will increase customer adoption and revenue, it is possible that they will not and may make our services less appealing, cause adoption friction, or that we could experience competitive pressure to adjust our pricing, which could negatively impact our business, revenue, and operating results.

If we are unable to successfully expand sales of our solutionsproducts and services to new markets, our business, financial condition, and operating results may suffer.

Our growth strategy requires expanding sales of our solutionsproducts and services to new markets within the real estate space. These new markets include larger and mixed-use customers. Acceptance of our current and future solutionsproducts and services in new markets will depend on numerous factors, including our ability to provide more sophisticated functionality and features, the pricing of our solutionsproducts and services relative to competitive products,competitors, perceptions about the security, privacy and availability of our solutionsofferings relative to competitive products,products and services, and the time-to-market of updates and enhancements to our solutions.offerings. There is no guarantee we will be successful in achieving all or any of the foregoing. Additionally, sales to new markets will involve risks that are not present, or are present to a lesser extent, in sales to the markets we currently serve. Such risks may include new regulatory regimes, longer sale cycles, increased chance of litigation with customers, increased risk and impact of reputational harm, and increased competition. We may not be able to sufficiently mitigate such risks, which would impact our ability to successfully expand our business. If we are unable to successfully expand sales of our solutionsproducts and services to new markets, our revenue may increase at a slower rate than we expect and may even decline, which could adversely affect our business, financial condition and operating results.

For us to maintain or increase our revenue and improve our operating results, it is important that our existing customers continue to use our coreSubscription solutions,Services, as well as continue to use and increase their adoption and utilization of our Value Added Services. Our customers may not renew their subscriptions with us, continue to expand their adoption and utilization of our Value Added Services, or use our Value Added Services at all for a variety of reasons, including macroeconomic pressures on the real estate market, competitive displacement, andcustomer satisfaction or service, or reputational harm. If our existing customers do not renew their subscriptions and increase their adoption and utilization of our existing or newly developed Value Added Services, our revenue may increase at a slower rate than we expect and may even decline, which could adversely affect our financial condition and operating results. A reduction in the number of our existing customers, even if offset by an increase in new customers, could reduce our revenue and operating margins.

Our acquisition of other companies or technologies may subject us to risks.

We have acquired, and may in the future acquire, other companies (such as our acquisition of Move EZ, Inc. in 2024) or technologies to complement or expand our products and solutions,services, optimize our technical capabilities, enhance our ability to compete, or otherwise advance our strategic objectives. We have limited experience and success in acquiring other businesses and we may not be able to effectively integrate acquired assets, technologies, personnel and operations or achieve the anticipated synergies or other benefits from the acquired businessacquisition due to the inherent risks associated with acquisitions. If an acquisition fails to meet our expectations in terms of its contribution to our overall business strategy or results of operations, or if the costs of acquiring or integrating the acquired business exceed our estimates, our business, results of operations, strategic objectives, and financial condition may suffer. An acquisition may also divert the attention of management and disrupt our ongoing business operations.

Failure to protect our intellectual property rightsrights, including our code, proprietary technology and brands, could impair our abilitycompetitive to protect our proprietary technologyposition and our brands, which could harm our business.

We currently rely on patent, trademark, copyright and trade secret laws, trade secret protection, and confidentiality, invention assignment, license and other agreements with our employees, customers, third-party service providers and others to protect our intellectual property rightsrights, which are important to our future success. In addition, we utilize third-party platforms to host our code for version control and collaboration and rely on the security features made available by such platforms to prevent unauthorized access to our code. Our success and ability to compete depend, in part, on our ability to continue to protect our intellectual property, including our code, proprietary technology and brands. Despite our efforts, protecting our intellectual property rights and preventing infringement and unauthorized use of our intellectual property are inherently uncertain. If we are unable to adequately protect our intellectual property rights adequately or the security controls made available by our code hosting partners are compromised and our code is improperly accessed, which has previously occurred and could occur again in the future, our competitors could use the intellectual property we have developed to enhance their own products and services, which could harm our business. In addition, third parties may independently develop technologies or products that compete with ours, and we may be unable to prevent such competition. We cannot be certain that our means of protecting our intellectual property rights will be adequate or that our competitors will not independently develop similar technologies or products. To monitor and protect our intellectual property rights, we may be required to expend significant resources. Litigation brought to protect and enforce our intellectual property rights could be costly, time-consuming and distracting to management, and result in the impairment or loss of portions of our intellectual property or require us to pay costly royalties. Our failure to secure, protect and enforce our intellectual property rights could adversely affect our business, financial condition and operating results.

We may be sued by third parties for alleged infringement of their proprietaryintellectual property rights, which could cause us to incur significant expenses and require us to pay substantial damages.

Our success depends, in part, on us refraining from infringing upon the intellectual property rights of others. Our competitors, as well as a number of other entities and individuals, may legally own or claim to own intellectual property relating to our technology or solutions,products and services, including without limitation technology we develop and build internally and/or acquire. From time to time, our competitors or other third parties may claim that we are infringing upon their intellectual property rights. Any claims or litigation, regardless of merit, could cause us to incur significant expenses, distract management, and, if successfully asserted against us, could require that we pay substantial damages, settlement costs or ongoing royalty payments, require that we comply with other unfavorable license and other terms, or prevent us from offering our solutionsproducts and services in their current form, including due to the unavailability of commercially reasonable licensing terms.

Our solutionsproducts and services contain open source and third-party software, which may pose risks to our proprietary source code and/or introduce security vulnerabilities, and could have a materialan adverse impact on our business and operating results.

We useuse, and expect to continue to use, open source software in our solutionsproducts and expect to continue to do so in the future.services. The terms of many open source licenses to which we are subject have not been interpreted by United States or foreign courts, and there is a risk that these open source licenses could be construed in a manner that imposes unanticipated conditions, restrictions or costs on our ability to provide or distribute our solutions.products and services. Additionally, we may from time to time face claims from third parties alleging ownership of, or demanding release of, the open source software or of derivative works that we developed using such software, which could include our proprietary source code, or otherwise seeking to enforce the terms of the applicable open source license in a manner that would harm our business or competitive position. These claims could result in litigation, which could be costly for us to defend, and could require us to make our source code freely available, purchase a costly license or cease offering the implicated functionality unless and until we can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and product development resources, and we may not be able to complete it successfully or in a timely manner. In addition to risks related to license requirements, usageUse of certain open source software can also lead to greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or controls on the origin of software. We also useuse, and expect to continue to use, third-party commercial software in our solutionsproducts and expect to continue to do so in the future.services. Third-party commercial software orand open source software isare developed outside of our direct control and may introduce security vulnerabilities that may be difficult to anticipate or mitigate. Further, there is no guarantee that third-party software developers or open source software providers will continue to maintain and update the third-partytheir software that we use. Should development of in-use third-party software or open source software cease, significant engineering effort may be required to create an in-house solution. These risks could be difficult to eliminate or manage,manage and couldhave a materialan adverse impact on our business and operating results.

You should not rely on our prior revenue growth as an indication of our future revenue growth. While we have experienced significant revenue growth in prior periods, we expect itour revenue growth rate to decline over the long term due to increasing competition, a decrease in the growth rate of our overall marketmarket, orthe maturation of our business, and other reasons.

To implement our business and growth strategy, we have made and will continue to make substantial investments across our organization and, as a result, our expenses may increase significantly impacting profitability. For example, we intend to continue to make substantial investments in, among other things: our research and product development organization to both enhance the ease of use and functionality of our solutions and develop new products and services; our sales and marketing organization, including expansion of our sales and marketing programs, to increase the size of our customer base and increase adoption and utilization of new and existing Value Added Services by our new and existing customers; and maintaining and expanding our technology infrastructure and operational support to promote the security and availability of our products and solutions.services. Even if we are successful in growing our customer base and increasing revenue from new and existing customers, we may not be able to generate additional revenue in an amount that is sufficient to keep pace with our expenses.

Our quarterly results, including the levels of our revenue, costs, operating expenses, and operating margins, may fluctuate significantly in the future, and period-to-period comparisons of our results may not be meaningful. ForThe example,other risks discussed in this "Risk Factors" section may contribute to the variability of our quarterly results. Additionally, we typically experience seasonality in our Value Added Services revenue due to seasonally higher leasing activities in the second quarter, which results in a sequential increase in revenue in the first, second, and third quarters and a sequential decline in revenue in the fourth quarter. Accordingly, the results of any one quarter should not be relied upon as an indication of our future performance. See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional details regarding the seasonality of our revenue.

We are a technology leader powering the future of the real estate industry.estate. We provide a cloud-based platform on which our customers operate their businesses. We help our customers navigate an increasingly interconnected and growing network of stakeholders in their business ecosystems, including property managers, property investors, potential residents, residents, and vendors. We also provide key functionality related to critical transactions across the real estate lifecycle, including screening potential residents, sending and receiving payments, and providing insurance-related risk mitigation services. Our services enable our customers to connect communities, increase operational efficiency, deliver exceptional customer experiences, and improve financial and operational performance.

Our coreSubscription solutionsServices and certain of our Value Added Services are offered on a subscription basis. The subscription fees for our coreSubscription solutionsServices vary by property type and are designed to scale with the size of our customers’ businesses. We recognize revenue for subscription-based services on a straight-line basis over the contract term beginning on the date that our service is made available. We generally invoice monthly or, to a lesser extent, annually in advance of a subscription period.

We also offer certain Value Added Services, which are not covered by our subscription fees, on a per-use basis. Usage-based fees are charged either as a percentage of the transaction amount (e.g., for certain of our electronic payment services) or on a flat fee per transaction basisbasis, generally with no minimum usage commitments (e.g., for our tenant screening and risk mitigation services). We recognize revenue for usage-based services in the period the service is rendered. Our payments services fees are recorded gross of any interchange and payment processing related fees. We generally invoice our usage-based services on a monthly basis or collect the fee at the time of service. A significant majority of our Value Added Services revenue comes from the use of our electronic payment services, tenant screening services, and risk mitigation services.

In addition, we charge our customers for assistance onboarding onto our coreSubscription solutionsServices and for certain other non-recurring services. We generally invoice for these other services in advance of the services being completed and recognize revenue in the period the service is rendered. We also generate revenue from the legacy customers of businesses we acquire that provide standalone services outside of our platform. Revenue derived from these services is recorded in Other revenue. As of December 31, 20242025 and 2023,2024, we had 20,78422,096 and 19,73720,784 property management customers, respectively.

Cost of Revenue (Exclusive of Depreciation and Amortization). Many of our Value Added Services are facilitated by third-party service providers. Cost of revenue paid to these third-party service providers includes, without limitation, the cost of electronic interchange and payment processing-related services to support our payments services, the cost of credit reporting services for our tenant screening services, and various costs associated with our risk mitigation service providers. These third-party costs vary both in amount and as a percentpercentage of revenue for each Value Added Service offering. Cost of revenue also includes personnel-related costs for our employees focused on customer service and the support of our operations (including salaries, cash bonuses, benefits, and stock-based compensation), platform infrastructure costs (such as data center operations and hosting-related costs), and allocated shared and other costs. Cost of revenue excludes depreciation of property and equipment, amortization of capitalized software development costs and amortization of intangible assets.

Sales and Marketing. Sales and marketing expense consists of personnel-related costs for our employees focused on sales and marketing (including salaries, sales commissions, cash bonuses, benefits, and stock-based compensation), costs associated with sales and marketing activities, and allocated shared and other costs. Marketing activities include advertising, online lead generation, lead nurturing, customer and industry events, and the creation of industry-related content and collateral. We focus our sales and marketing efforts on generating awareness of our softwareproducts solutions,and services, creating sales leads, establishing and promoting our brands, and cultivating an educated community of successful and vocal customers.

Research and Product Development. Research and product development expense consists of personnel-related costs for our employees focused on research and product development (including salaries, cash bonuses, benefits, and stock-based compensation), fees for third-party development resources, and allocated shared and other costs. Our research and product development efforts are focused on expanding functionality and the ease of use of our existing software solutionsproducts and services by adding new core functionality, Value Added Services and other improvements, as well as developing new products and services. We capitalize our software development costs that meet the criteria for capitalization. Amortization of capitalized software development costs is included in depreciation and amortization expense.

Provision for (Benefitbenefit from) provision for income taxes. Provision for (Benefitbenefit from) provision for income taxes consists of federal and state income taxes in the United States.

The increase in revenue for the year ended December 31, 2024,2025, compared to the prior year, was primarily attributable to an increase in the usage of our electronic payment, tenant screening, and risk mitigation services.services by property managers and residents. During the year ended December 31, 2024,2025, we experienced growth of 6%8% in the number of property management units under management compared to the prior year, which drove growth in both the number users and usage of our subscriptionSubscription Services and usage-basedValue services.Added Services.

We expect sales and marketing expense for the year ending December 31, 20252026 to slightlystay increaserelatively flat as a percentage of revenue compared to the year ended December 31, 2024 as we increase awareness and presence through targeted go-to-market investment.2025.

Research and product development expense for the year ended December 31, 20242025 increased compared to the prior year.year The increase was mainlyprimarily due to a $4.8$22.8 million riseincrease in personnel-related costs, including cash bonusesstock-based and stock-basedperformance-based compensation. These costs,compensation, net of capitalized software development costs, werecosts driven by headcount growthgrowth, andcombined higher salaries as we continued to invest in innovation. Additionally, there waswith a $4.2$2.3 million increase in allocatedsoftware sharedspending to support our research and otherdevelopment costs,activities, largely due to higher technology expense. The increase in personnel costs was partially offset by $3.4 million in severance and related expenses from a workforce reduction infor the thirdyear quarterended ofDecember 2023.31, For additional information, see Note 17, Workforce Reduction, of the Notes to Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.2025.

We expect research and product development expenses for the year ending December 31, 20252026 to decreasestay relatively flat as a percentage of revenue compared to the year ended December 31, 2024, as we continue to leverage headcount efficiencies.2025.

We expect general and administrative expenses for the year ending December 31, 20252026 to decreasestay relatively flat as a percentage of revenue compared to the year ended December 31, 2024, as we continue to leverage headcount efficiencies.2025.

Depreciation and amortization expense for the year ended December 31, 20242025 decreased,increased, compared to the prior year, primarily due to decreased amortization expenseof associated with capitalized software development andthe intangible balances.assets recognized from the acquisition of Move EZ, Inc. in the fourth quarter of 2024.

Interest income for the year ended December 31, 20242025 increased,decreased, compared to the prior year, primarily due to higherthe interest rates and purchasessale of available-for-sale investment securities.securities and lower interest rates.

Provision for (Benefitbenefit from) provision for income taxes

The decreaseincrease in our effective tax rate for the year ended December 31, 2024,2025, as compared to the prior year, is primarily due to the tax benefits recognized in the prior year related to the valuation allowance release against our federal and state deferred tax assets, whichas waswell partiallyas offsetlower by higherexcess tax expensebenefits duefrom tostock-based acompensation significantand increaseresearch inand ourdevelopment pre-taxtax income.credits.

Our principal sources of liquidity continue to be cash, cash equivalents, and investment securities, as well as cash flows generated from our operations. As of December 31, 2024,2025, ourwe had $251.2 million in cash, cash and cash equivalentsequivalents, and investment securities had an aggregate balance of $278.2 million.securities. We have financed our operations primarily through cash generated from operations. We believe that our existing cash and cash equivalents, investment securities, and cash generated from operating activities will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months.

Our future capital requirements depend on many factors, including continued market acceptance of our software solutionsproducts and services; changes in the number of our customers,customers; adoption and utilization of our Value Added Services by new and existing customers; the timing and extent of the introduction of new core functionality, products and Value Added Services; and the timing and extent of our investments across our organization.organization, including acquisitions of businesses and technologies.

As of December 31, 2024,2025, our non-cancelable purchase commitments for business operations totaled $57.5$31.3 million, which are due primarily over the next three years. Operating lease obligations totalassociated $50.4with leased facilities totaled $38.2 million as of December 31, 2024 associated with leased facilities2025 and have varying maturities with $32.9$44.8 million due over the next five years.

OurDuring the first quarter of 2025, we substantially exhausted the shares of Class A common stock remaining available for purchase under the $100 million share repurchase program authorized by our Board of Directors hasin 2019 (the "2019 Stock Repurchase Program"). On April 23, 2025, our Board authorized the repurchase of up to $100.0$300.0 million of shares of our Class A common stock from time to time.time Topursuant date, we have repurchased $4.2 million of our Class A common stock underto the Share2025 Stock Repurchase Program. For additionalmore information regarding our Sharerepurchases under the 2019 Stock Repurchase Program and the 2025 Stock Repurchase Program, seerefer to Note 13,12, Stockholders' Equity, of the Notes toour Consolidated Financial Statement included in Part II, Item 8Statements of this Annual Report.

Cash Provided by Operating Activities

Our primary source of operating cash inflows is cash collected from our customers in connection with their use of our coreSubscription solutionsServices and Value Added Services. Our primary uses of cash from operating activities are for personnel-related expenditures and third-party costs incurred to support the delivery of our software solutions.products and services.

The net increase in cash provided by operating activities for the year ended December 31, 2024,2025, compared to the prior year, was primarily due to a higher increase in cash collections from customers relative to the increase in operating expenditures during the year ended December 31, 2024.expenditures.

Cash Used in Investing Activities

Cash provided by (used in) investing activities is generally composed of the cash paid in business acquisition, net of cash acquired, purchases of investment securities, maturities and sales of investment securities, purchases of property and equipment, business acquisition, net of cash acquired, and additions to capitalized software development.

The net increase in cash usedprovided inby investing activities for the year ended December 31, 2024,2025, compared to the prior year, was primarily due to higher purchasessales and maturities of available-for-sale investment securities and thelower purchases of available-for-sale investment securities. We used $77.4 million of cash paid infor a business acquisition,acquisition netin 2024 and $75.0 million of cash acquired.for a long-term investment in 2025. For additional information regarding the business combination,acquisition and long-term investment, see Note 74, Investment Securities and Fair Value Measurements, and Note 7, Business Combination, of the Notes toour Consolidated Financial Statements included in Part II, Item 8 of this Annual Report.

Cash Used in Financing Activities

Cash used in financing activities is generally composed of net share settlements for employee tax withholdings associated with the vesting of equity awards and repurchases of our Class A common stock offset by proceeds from the exercise of stock options.options and issuance of common stock under our employee stock purchase plan.

The net increase in cash used in financing activities for the year ended December 31, 2024,2025, compared to the prior year, was primarily due to an increase in net share settlements for employee tax withholdings associated with the vestingrepurchases of equityour awards.Class A common stock.

An investment in our Class A common stock involves risks. Before making an investment decision, you should carefully consider all of the information in this Quarterly Report, including in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Condensed Consolidated Financial Statements and related notes. In addition, you should carefully consider the risks and uncertainties described in the section entitled “Risk Factors” in our Annual Report, which was filed with the SEC on February 5, 2026. If any of the identified risks are realized, our business, financial condition, operating results, cash flows and prospects could be materially and adversely affected. In that case, the trading price of our Class A common stock may decline. In addition, other risks of which we are currently unaware, or which we do not currently view as material, could have a material adverse effect on our business, financial condition, operating results, cash flows and prospects. As of the date of this Quarterly Report, there have been no material changes to the risk factors previously disclosed under the section entitled "Risk Factors" in Part I, Item IA1A of our Annual Report.

Financial Highlights for the FirstSecond Quarter of 2026

•Total property management units under management grew 8% year-over-year to 9.59.6 million.

•GAAP operating income wasgrew $50.731% to $53 million, or 19.4%18.8% of revenue, compared to GAAP operating income of $33.8$41 million, or 15.5%17.2% of revenue in Q1Q2 2025.

•Non-GAAP operating income wasgrew $71.524% to $76 million, or 27.3%27.1% of revenue, compared to non-GAAP operating income of $53.0$62 million, or 24.3%26.2% of revenue in Q1Q2 2025.

Property management units under management. We believe that our ability to increase our number of property management units under management is an indicator of our market penetration, growth, and potential future business opportunities. We define property management units under management as active or committed units under management at the period end date. We had 9.59.6 million and 8.88.9 million property management units under management as of MarchJune 31,30, 2026 and 2025, respectively.

As of MarchJune 31,30, 2026 and 2025, we had 22,52022,751 and 21,10521,403 property management customers, respectively.

The increase in revenue for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year, was primarily attributable to an increase in the usage of our payments, tenant screening, and risk mitigation services. During the three and six months ended MarchJune 31,30, 2026, we also experienced growth of 8% in the number of property management units under management compared to the same periodperiods in the prior year, which drove growth in users of our Subscription Services and Value Added Services.

Cost of revenue (exclusive of depreciation and amortization) increased for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year. The increase was primarily driven by higher third-party service provider costs of $14.6$15.6 million and $30.2 million, respectively, due to increased adoption and usage of our Value Added Services for the respective three-monththree and six-month periods.

Sales and marketing expense increased for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year. The increase was primarily due to a $4.5$5.2 million and $9.7 million increase in personnel-related costs, including stock-based and performance-based compensation, to support growth in the business, combined with a $1.1 million increase in advertising and promotion expense due to increased targeted go-to-market investment, for the respective three-monththree and six-month periods.

Research and product development expense increased for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in the prior year. The increase was primarily due to a $4.8$3.5 million and $8.4 million increase in personnel-related costs, including stock-based and performance-based compensation, net of capitalized software development costs driven by headcount growth, for the respective three-monththree and six-month periods.

Depreciation and amortization expense for the three and six months ended MarchJune 31,30, 2026 decreased, compared to the same periodperiods in the prior year as various assets have reached the end of their useful life.

Interest income for the three and six months ended MarchJune 31,30, 2026 decreased, compared to the same periodperiods in the prior year, primarily due to the sale of available-for-sale investment securities and lower interest rates.

For the three and six months ended MarchJune 31,30, 2026, we recorded income tax expense of $10.7$12.9 million and $23.5 million, representing an effective tax rate of 20.1%.23.7% and 21.9%, respectively. Our effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to research & development tax credits, partially offset by state income taxes and non-deductible officers' compensation.compensation partially offset by tax benefits from research and development tax credits. For the three and six months ended MarchJune 31,30, 2025, our effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to excess tax benefits from stock-based compensation and research &and development tax credits, partially offset by state income taxes and non-deductible officers' compensation.

The increase in our effective tax rate for the three and six months ended MarchJune 31,30, 2026, as compared to the same periodperiods in 2025, is primarily driven by higher pre-tax income and a decrease in excess tax benefits from stock-based compensation.

Our principal sources of liquidity continue to be cash, cash equivalents, and investment securities, as well as cash flows generated from our operations. As of MarchJune 31,30, 2026, we had $151.7$221.7 million in cash, cash equivalents, and investment securities. We have financed our operations primarily through cash generated from operations.

In addition, to optimize our capital structure, on September 30, 2025, we entered into the Credit Facility which provides for a $150.0 million senior secured revolving credit facility, including sublimits of $25.0 million for letters of credit and $25.0 million for swingline loans, and is scheduled to mature on September 30, 2030. We did not draw on the Credit Facility during the firstsix quartermonths ofended June 30, 2026, and as of MarchJune 31,30, 2026, we had no outstanding borrowings under the Credit Facility and were in compliance with the covenants under the Credit Facility. For more information regarding the Credit Facility, refer to "Credit Facility" in Note 6, Commitments and Contingencies, of our Condensed Consolidated Financial Statements.

During the first quarter of 2026, we repurchased 702,502 shares of our Class A common stock under the 2025 Stock Repurchase Program at an average purchase price of $177.95 per share, inclusive of broker commissions, for an aggregate repurchase price of $125.0 million, which was recorded as a reduction to stockholders' equity. We did not repurchase any shares of Class A common stock under the 2025 Stock Repurchase Program during the second quarter of 2026. As of MarchJune 31,30, 2026, the amount remaining available for repurchases under the 2025 Stock Repurchase Program was $125.0 million. For more information regarding our share repurchases, refer to Note 7, Share Repurchase Program, of our Condensed Consolidated Financial Statements of this Quarterly Report.

The net increase in cash provided by operating activities for the threesix months ended MarchJune 31,30, 2026, compared to the same period in the prior year, was primarily due to higher cash collections from customers relative to the increase in operating expenditures.

Cash provided by investing activities is generally composed of the cash paid in purchases of investment securities, maturities and sales of investment securities, purchases of property and equipment, purchases of long-term investments, business acquisition, net of cash acquired, and additions to capitalized software development.

The net increase in cash provided by investing activities for the threesix months ended MarchJune 31,30, 2026, compared to the same period in the prior year, was primarily due to higher sales and maturities of investment securities, and lower purchases of available-for-salelong-term investmentinvestments securities.in 2026. For additional information, see Note 4. Investment Securities and Fair Value Measurements, of our Condensed Consolidated Financial Statements.

The net increasedecrease in cash used in financing activities for the threesix months ended MarchJune 31,30, 2026, compared to the same period in the prior year, was primarily due to lower repurchases of our Class A common stock.

To supplement our Condensed Consolidated Financial Statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"),GAAP, this AnnualQuarterly Report contains information regarding our non-GAAP income from operations ("Non-GAAP Operating Income") and non-GAAP operating margin ("Non-GAAP Operating Margin"),Margin, each of which constitutes a non-GAAP financial measure. We use these non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

Our non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies may calculate non-GAAP financial results differently. In addition, there are limitations in using non-GAAP financial measures because non-GAAP financial measures are not prepared in accordance with GAAP and can exclude expenses that may have a material impact on our reported financial results. As such, non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. A reconciliation of income from operations, the most comparable GAAP measure, to Non-GAAP operatingOperating incomeIncome and operating margin, the most comparable GAAP measure, to Non-GAAP Operating Margin, is provided in the table below. We encourage investors to review the reconciliation of these historical non-GAAP financial measures to their most directly comparable GAAP financial measures.