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

If we are unable to sustain our revenue growth rate, we may not achievebe orable to maintain profitability in the future.

If we are unable to maintain consistent revenue or revenue growth, our stock price could be volatile, and it may be difficult to achieve and maintain profitability.volatile. Our revenue for any prior quarterly or annual periods should not be relied upon as any indication of our future revenue or revenue growth.

Customers may use our platform for more advanced and frequent projects, resulting in usage growth for our platform. With such growth, we may need to devote additional resources to improving our software architecture, integrating with third-party systems, and maintaining infrastructure performance. In addition, we will need to continue to appropriately scale our internal business operations as well as grow our partner services systems, including our CustomerProfessional SuccessServices organization and operations, to serve our growing customer base, particularly as our customer base expands over time. Any failure of or delay in these efforts could cause impaired system performance and reduced customer satisfaction. These issues could reduce the attractiveness of our platform to customers, resulting in decreased sales to new customers, lower renewal rates by existing customers, the issuance of service credits, or requested refunds, any of which could hurt our revenue growth and our reputation. Even if we are able to upgrade our systems and expand our staff, any such expansion will be expensive and complex, requiring management time and attention. We could also face inefficiencies or operational failures as a result of our efforts to scale our infrastructure. Moreover, there are inherent risks associated with upgrading, improving, and expanding our information technology systems. We cannot be sure the expansion and improvements to our infrastructure and systems will be fully or effectively implemented on a timely basis, if at all. These efforts may reduce revenue and our margins and adversely impact our financial results.

•The introduction of products and technologies (including AI technologies) that represent an improvement over, or serve as a replacement or substitute for, or represent an improvement over, our platform;

Our main competitors fall into four categories: (1) providers of custom software and customer software solutions that address, or are developed to address, some of the use cases that can be addressed by applications developed on our platform; (2) providers of low-code development platforms; and (3) providers of one or more automation technologies, including BPM, case management, process mining, and RPA and (4) potential customers using their own internal technology departments to develop, build, and modify their own proprietary systems.

OurIn recentthe past, we have experienced significant corporate growthgrowth, which may not be indicative of our future growth and, if we continuegrow toin grow,the future, we may not be able to manage our growth effectively.

We have focused on scalingoptimizing our operations and headcount to ensure they remain in line with our growth plan and the size of our customer base, which we have significantly increased overin the lastpast several years. While we have expanded our operations and headcount in prior periods, such measures are not indicative of our future growth, and are subject to reversal in the other direction, as we have done at various times in the past. Our growth in the past has placed, and any future growth will place, a significant strain on our management, administrative, operational, and financial infrastructure. Our success will depend in part on our ability to manage thisany growth effectively, and we will need to continue to improve our operational, financial, and management controls and our reporting systems and procedures. Failure to effectively manage our growth could result in difficulty or delays in deploying our platform to customers, decreased efficiency, declines in quality or customer satisfaction, increases in costs, difficulties in introducing new features, or other operational difficulties. Any of these difficulties could adversely impact our business performance and results of operations.

We derive a materialsignificant portion of our revenue from a limited number of customers, and the loss of one or more of these customers could materially and adversely impact our business, results of operations, and financial condition.

Our customer base is concentrated. For example, during the years ended December 31, 2025, 2024, 2023, and 2022,2023, revenue from U.S. federal government agencies represented 25.3%, 23.9%, 21.3%, and 19.2%21.3% of our total revenue, respectively, and the top three U.S. federal government customers generated 3.9%, 4.0%, 4.2%, and 4.5%4.2% of our total revenue for the years ended December 31, 2025, 2024, 2023, and 2022,2023, respectively. Changes in the administration and their priorities may impact public sector budgets and funding for federal government agencies. Further,See nearlyour 12%risk factor below at “A portion of our subscriptionrevenue customersis spentgenerated morefrom thansubscriptions $1sold millionto ongovernmental ourentities softwareand inheavily 2024.regulated organizations, which are subject to a number of challenges and risks.” If we were to lose one or more of our significant customers and we were unable to recover the revenue from that customer from other customers, our revenue would significantly decline. In addition, revenue from significant customers may vary from period to period depending on the timing of renewing existing agreements or entering into new agreements. The loss of one or more of our significant customers could materially and adversely affect our business, results of operations, and financial condition.

Governmental demand and payment for our platform may also be impacted by public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for our platform. In addition, changes in the administration and their priorities could also affect public sector budgets and funding. The United States has previously experienced lapses in federal appropriations, and any such future lapses could negatively affect our business, results of operations, and financial condition. In addition, governmental and highly regulated entities impose compliance requirements that are complicated, make pricing readily available, subject continued business to unpredictable competitive processes, or are otherwise time-consuming and expensive to satisfy. InWe thealso Unitedmust States,comply applicablewith federallaws contractingand regulations change frequently, and the President may issue executive orders requiring federal contractors to adhere to new compliance requirements after a contract is signed. If we commit to meeting special standards or requirements and do not meet them, we could be subject to significant liability from our customers or regulators. Even if we do meet these special standards or requirements, the additional costs associated with providing our platform to government and highly regulated customers could harm our operating results. Moreover, changes in the underlying statutory and regulatory conditions that affect these types of customers could compromise our ability to efficiently provide them access to our platform and to grow or maintain our customer base. In addition, engaging in sales activities to foreign governments introduces additional compliance risks specificrelating to the U.S.formation, Foreign Corrupt Practices Act, the U.K. Bribery Act,administration, and otherperformance similarof statutorycontracts, requirementswhich prohibitingprovide briberypublic andsector corruptioncustomers with specific rights, many of which are not typically found in thecommercial jurisdictions in which we operate.contracts.

We have experienced losses in the past, and we may not achievebe orable to sustain profitability in the future.

We generated GAAP net income of $1.2 million in 2025 and GAAP net losses of $92.3 million, $111.4 million,million and $150.9$111.4 million in 2024, 2023,2024 and 2022,2023, respectively. As of December 31, 2024,2025, we had an accumulated deficit of $612.2$610.9 million. We will need to generate and sustain increased revenue levels in future periods in order to achieve or sustain profitability in the future. We also expect our costs to increase in future periods, which could negatively affect our future operating results if our revenue does not increase commensurately. For example, we intend to continue to expend funds to expand our sales and marketing operations, develop and enhance our platform, and expand into new markets. Our efforts to grow our business may be more costly than we expect, and we may not be able to increase our revenue enough to offset our higher operating expenses. We may incur significant losses in the future for a number of reasons, including the other risks described in this Annual Report on Form 10-K, unforeseen expenses, difficulties, complications or delays, and other unknown events. If we are unable to achieve and sustain profitability, our stock price may significantly decrease.

The emerging technologies described as AI, which include machine learning, applicationgenerative ofAI, including large language models, generative AI, and similar means of algorithm self-generationself-generation, have the ability to affect the market for our software by directing what are now human-orchestrated processes into machine-orchestrated processes. In recent years, AI technologies have been the subject of great interest to our customers and to followers of our markets, and these technologies have been showcased and subject to substantial interest among our customer base. Should we either fail to adopteffectively compete with, adopt, or integrate with emerging AI technologies that show benefits to our customerscustomers, or should AI technologies for code generation or application development reduce the demand for our process automation platform, we could struggle to continue to grow our business or lose business with existing customers to such technologies.

We have incorporated, and may continue to incorporate, AI in our products and services, and this incorporation of AI in our business and operations may become more significant over time. The use of generative AI, a technology that has evolved significantly over therecent years, exposes us to additional risksrisks, such as damagecompetitive, toreputational, our reputation, competitive position, business,operational, legal, regulatory and regulatoryother risks, andincluding additional costs. For example, generative AI has been known to produce false or “hallucinatory” inferences or output, and certainthe generativemodels, prompts, algorithms, and datasets on which AI usesrelies, machineas learningwell andas predictivethe analytics,content, whichanalyses, canor createother output generated thereby, may be invalid, inaccurate, incomplete,or biased or misleading content, unintended biases, andcontain other discriminatory or unexpected results, errors,errors or inadequacies, any of which may not be easily detectable by us or any of our related servicethird-party providers. While we make efforts to implement and use AI productstechnologies and servicesdesigned to improve the accuracy and reduce the chances of hallucinatory inferences or outputs, we cannot completely eliminate the chancesforegoing risks. Additionally, the use of inaccurateAI technologies by companies has resulted in, and may in the future result in, cybersecurity incidents and data privacy violations that implicate the confidential, proprietary, or falsepersonal outputs.information of users of such AI technologies. If any of our employees, contractors, vendors, or service providers use any third-party AI technologies in connection with our business or the products or services they provide to us, it may lead to the inadvertent disclosure or incorporation of our confidential, sensitive, or proprietary information into publicly available or other third-party training sets which may impact our ability to realize the benefit of, or adequately maintain, protect and enforce our intellectual property or sensitive or confidential information, harming our competitive position and business. Our ability to mitigate risks associated with disclosure of our proprietary, sensitive, or confidential information, including in connection with the use of AI, will depend on our implementation, maintenance, monitoring, and enforcement of appropriate technical and administrative safeguards, policies, and procedures governing the use of AI in our business. Moreover, given we rely on third partythird-party providers for the underlying large language modelmodels and other technology, as do many others in the software industry, we do not have full access to the underlying software code to address such issues. If the content,AI analyses,technologies that we or recommendations produced by any of our productsthird-party or services thatproviders use or incorporate generative AI are, or are perceived to be, deficient, inaccurate, biased, unethical or otherwise flawed, our reputation, competitive position and business may be materially and adversely affected.

In addition, new laws and regulations, or the interpretation of existing laws and regulations, in any of the jurisdictions we operate may affect our ability to leverage AI in any of our productsoperations, products, and services and may expose us to government enforcement or civil suits. As the legal and regulatory framework encompassing AI matures,evolves, it may result in increases in our operationaloperational, compliance, and development expenses that impact our ability to develop, earn revenue from, or utilize any products or services incorporating AI. Additionally,If ifwe anydo ofnot have sufficient rights to use the models, prompts, algorithms, and datasets on which our employees, contractors, vendors or service providers use any third-party software incorporating AI inand connectionmachine withlearning ourtechnologies businessrely, or the servicescontent, theyanalyses, providerecommendations or other output generated thereby, we could also incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights or contracts to us, it may lead to the inadvertent disclosure or incorporation of our confidential, sensitive or proprietary information into publicly available training sets which maywe impactare oura ability to realize the benefit of, or adequately maintain, protect and enforce our intellectual property or sensitive or confidential information, harming our competitive position and business. Our ability to mitigate risks associated with disclosure of our proprietary, sensitive or confidential information, including in connection with the use of AI, will depend on our implementation, maintenance, monitoring and enforcement of appropriate technical and administrative safeguards, policies, and procedures governing the use of AI in our business.party. In the U.S., a number of civil lawsuits have been initiated related to the foregoing and other concerns, any of which may, amongst other things, require us to limit the ways in which AI tools and technologies are trained, refined or implemented, and may affect our ability to develop or use products or services using or incorporating AI.

Furthermore, our competitors, customers, or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively. Given we rely on third partythird-party providers for the underlying large language modelmodels and other technology, our ability to differentiate our AI offeringsproducts or services from our competitors could be limited. Further, to the extent other, larger technology companies with greater resources and market power gain exclusive or advantageous access to large language model or other AI technology providers, our ability to offer competing AI products or services could be negatively impacted. The increasing use of generative AI by third parties may also negatively impact the integrity of our own proprietary data, data sets, and content databases if and to the extent any invalid, inaccurate, incomplete, misleading, biased, or otherwise flawed data produced by any such AI systemstechnologies may inadvertently be incorporated in our proprietary data, data sets, or content databases, negatively affecting our reputation,reputation and the value of our proprietary data, data sets, or content databases. As generative AI and other AI toolstechnologies are relatively new, sophisticated, and evolving quickly, we cannot predict all of the risks that may arise from our current or future use of AI in our business. Any of the foregoing and any similar issues, whether actual or perceived, could negatively impact our customers’ experience and diminish the perceived quality and value of our products and services. This in turn could damage our brand, reputation, competitive position, and business.

As the regulatory framework for machine learning technology, generative AIAI, and automated decision makingdecision-making evolves, our business, financial condition and results of operations may be adversely affected. The regulatory framework for AI and similar technologies, and automated decision making,decision-making, is changing rapidly. It is possible that new laws and regulations will be adopted in the United States and in non-U.S. jurisdictions, or that existing laws and regulations may be interpreted in ways that would affect the operation of our business, including our data analytics products and services and the way in which we use AI and similar technologies in our business. For example, the European Union’s proposed Artificial Intelligence Act will likely have a material impact on the way AI is regulated in the EU, including significant fines for violations related to offering prohibited AI systems or data governance, high-risk AI systems and for supplying incorrect, incomplete, or misleading information to EU and member-state authorities.

Our revenue and results of operations have historically varied from period to period, and we expect they will continue to do so as a result of a number of factors,factors which may occur, many of which are outside of our control, including:

In addition, we have historically experienced seasonality in terms of when we enter into agreements with customers. We typically enter into a significantly higher percentage of agreements with new customers, as well as renewal agreements with existing customers, in the fourth quarter. The increase in customer agreements for the fourth quarter is attributable to large enterprise account buyingaccount-buying patterns typical in the software industry. Furthermore, we usually enter into a significant portion of agreements with customers during the last month, and often the last two weeks, of each quarter. This seasonality is reflected to a much lesser extent, and sometimes is not immediately apparent, in revenue due to the fact we recognize cloud subscriptions revenue over the term of the subscription agreement, which is generally one to three years. We expect seasonality will continue to affect our operating results in the future and may reduce our ability to predict cash flow and optimize the timing of our operating expenses.

Our ability to successfully pursue our growth strategy also depends on our ability to attract, motivate, and retain our personnel. Competition for highly-qualified employees in all aspects of our business is intense. As a result of the COVID-19 pandemic, many more employers allowed remote work, which resulted in the market for employee talent becoming more national and some employees preferring remote work. As we have chosen to return to office-based work over time to benefit from the better culture and productivity we believe in-office work affords, we may not be able to attract and retain employees who would choose to work remotely, while we also still face hiring competition from companies with remote-based workforces who can hire without respect to office location. Our continued ability to compete effectively depends on our ability to attract new employees and to retain and motivate existing employees.

We may continue to need to reducechange or changereduce our pricing model to remain competitive.

The market for our platform is still evolving, and competitive dynamics may cause pricing levels to change as the market matures and as existing and new market participants introduce new types of solutions and different approaches to enable customers to address their needs. AsIn athe result,past, we mayhave bechanged forcedor to reducereduced the prices we charge for software and may continue to need to do so. In addition, we may be required to offer terms less favorable to us for new and renewing agreements. We generally sell our software on a per-user basis or through non-user-based single application licenses. We have changed, and expect we will continue to need to change, our pricing model from time to time. As competitors introduce new products that compete with ours or reduce their prices, we may be unable to attract new customers or retain existing customers based on our historical pricing. We also must determine the appropriate price to enable us to compete effectively internationally. Moreover, mid- to large-size enterprises may demand substantial price discounts as part of the negotiation of sales contracts. As a result, we may be required or choose to reduce our prices or change our pricing model, which could adversely affect our business, operating results, and financial condition.

Because we generally recognize revenue from cloud subscriptions ratably over the term of the subscription agreement, near termnear-term changes in sales may not be reflected immediately in our operating results.

We offer our solution primarily through multi-year cloud subscription agreements and generally recognize revenue ratably over the related subscription period. As a result, much of the revenue we report in each quarter is derived from the recognition of previously unbilled or deferred contract value relating to agreements entered into during prior periods. Accordingly, aan increase or decline in new or renewal subscription agreements in any quarter is not likely to be reflected immediately in our revenue results for that quarter. Such increases or declines, however, would negatively affect our revenue, and to a lesser extent, deferred revenue balance in future periods, and the effect of significant downturns in sales and market acceptance of our platform and potential changes in our rate of renewals may not be fully reflected in our results of operations until future periods.

We may not continue to achieve market acceptance of our pre-built solutions, which may adversely impact our financial results.

On May 9, 2022, a jury returned a verdict that Pegasystems, Inc., willfully and maliciously misappropriated trade secrets from us and awarded us $2.036 billion in damages for Pegasystems’ unjust enrichment for usage of our trade secrets. AOn judgeJanuary entered8, 2026, the Supreme Court of Virginia issued a finaldecision reversing the judgment onagainst that verdict on September 15, 2022Pegasystems and furtherremanding grantedfor usa $23.6new million in attorney’s fees as well as statutory post-judgment interest at an annual rate of 6%, or approximately $122.0 million per year.trial.

In September 2023, we obtained a judgment preservation insurance policy that would pay us up to $500.0 million in coverage to the extent the final judgment were reversed or reduced after all appeals and further litigation are exhausted. While we are proceeding to a retrial of the matters and believe strongly the final judgment should be reinstated byin the Virginiamerits Supremeof Court,our claims, we cannot guarantee itthe outcome of any legal proceedings, and continued litigation will besubject reinstated in its entirety or in part. In addition, while Pegasystems has made public assurances it could raise the funds necessaryus to paycosts, theincluding judgment,litigation itexpenses doesand not currently have the cash necessary to satisfy the full amountdiversion of themanagement finaltime. judgment, and we would be at risk of having to collect a substantial judgment as a creditor if Pegasystems is unable to raise the necessary funds when and if the final judgment becomes enforceable. Finally,Further, as with any insurance policy, our ability to collect judgment preservation insurance proceeds is subject to the financial soundness of the insurers underwriting our policy, as well as any denial of coverage under the policy. While we have not included any payment from Pegasystems or insurance proceeds in our financial statements or operational planning, any failure to collect on all or a portion of the judgment or the insurance proceeds may be viewed negatively and our stock price could decline.

We have a Senior Secured Credit Facilities Credit Agreement (as amended from time to time, the “Credit Agreement”) with First Citizens Bank & Trust Company, as administrative agent and collateral agent for the lenders thereto, which as of December 31, 2024,2025, provides for a five-year term loan facility with a maturity date of November 3, 2027, in an aggregate principal amount of $200.0 million and up to $100.0 million for a revolving credit facility, including a letter of credit sub-facility in the aggregate availability amount of $20.0 million and a swingline sub-facility in the aggregate availability amount of $10.0 million (as a sublimit of the revolving loan facility). Our obligations under the Credit Agreement are secured by substantially all of our assets.

Pursuant to the terms of the Credit Agreement, we are limited in our ability to incur additional indebtedness other than on the terms and conditions thereof. In addition, a failure to comply with the covenants under the Credit Agreement could result in an event of default by us and an acceleration of amounts due. If an event of default occurs that is not waived by the lenders, and the lenders accelerate any amounts due, we may not be able to make accelerated payments, we may not be able to refinance our debt, and the lender could seek to enforce their security interests in the collateral securing such indebtedness, which could have a material adverse effect on our business and results of operations.

In the past we have chosenchosen, and may continue to choose, to expand by acquiring businesses or technologies. Our ability as an organization to successfully acquire and integrate technologies or businesses is unproven. Acquisitions involve many risks, including the following:

Internationally, the GDPR continues to place robust obligations on data processors and controllers and heavier documentation requirements for data protection compliance programs by companies in general. In addition, absent appropriate safeguards or other circumstances, the GDPR generally restricts the transfer of personal data to non-adequate countries and/or organizations outside of the European Economic Area, or EEA, such as India, Australia, Mexico, and non-certified organizations in the United States, which the European Commission does not consider to provide an adequate level of data privacy and security. We are currently certified under the EU-US Data Privacy Framework (“EU-US DPF”). The EU-US DPF requires parties relying upon that legal mechanism to comply with obligations similar to those required under the GDPR, such as conducting transfer impact assessments to determine whether additional security measures are necessary to protect the at-issue personal data. Due to potential legal challenges, however, there exists some uncertainty regarding whether the new EU-US DPF will remain a valid mechanism for transfers of personal data out of the EEA.

Additionally, newRecent EU legislation which came into force in 2023legislation, such as the EU Data Act, which provides cancellation and portability rights to customers, the Artificial Intelligence Act (impacting the use and development of AI), and other legislation such as the Digital Operational Resilience Act (impacting contracts with customers in the financial and insurance sectors), the Digital Services Act (impacting online advertising), the Digital Markets Act (impacting those providing core platform services), the Data Governance Act (impacting public sector data), and the NIS2 Directive (impacting cybersecurity) impact our own activities, those of our regulated and public sector customers, and those of our significant partners such as AWS.

As of December 31, 2024,2025, we had gross U.S. federal and state net operating loss carryforwards, or NOLs, of $287.5$325.6 million and $297.5 million, respectively, available to offset future taxable income. NOLs generated in tax years ended on or prior to December 31, 2017 will substantially expire by 2037 if unused. As a result of certain provisions in the Tax Cuts and Jobs Act of 2017, or the TCJA, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, federal NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely but, in the case of tax years beginning after 2020, may only be used to offset 80% of our taxable income annually. Under the provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code, substantial changes in our ownership may limit the amount of pre-change NOLs that can be utilized annually in the future to offset taxable income. Section 382 of the Internal Revenue Code imposes limitations on a company’s ability to use NOLs if a company experiences a more-than-50-percent ownership change over a three-year testing period. Based upon our analysis as of December 31, 2024,2025, we have determined we do not expect these limitations to impair our ability to use our NOLs prior to expiration. However, if changes in our ownership occur in the future, our ability to use our NOLs may be further limited. For these reasons, we may not be able to utilize a material portion of the NOLs, even if we achieve profitability.NOLs.

The dual class structure of our common stock and the existing ownership of capital stock by Matt Calkins, our founder and Chief Executive Officer, has the effect of concentrating voting control with Mr. Calkins for the foreseeable future, which will limit the ability of others to influence corporate matters.

We do not intend to pay dividends on our common stock for the foreseeable futurefuture, so any returns will depend on appreciation in the price of our Class A common stock.

We have generated the majority of our revenue from sales of subscriptions, which include (1) cloud subscriptions bundled with maintenance and support and hosting services and (2) term license subscriptionssubscriptions, bundledand with(3) maintenance and support.support for license subscriptions. Our subscription contracts are priced based primarily on the number of users who access and utilize the applications built on our platform or, alternatively,platform, non-user-based single application licenses.licenses, or consumption-based pricing. Our subscription contract terms generally vary from one to three years with most providing for payment in advance on an annual, quarterly, or monthly basis. Due to the variability of our billing terms and the episodic nature of our customers purchasing additional subscriptions, we do not believe changes in our deferred revenue in a given period are directly correlated with our revenue growth.

We have invested in our Customerprofessional Successservices organization to help ensure customers are able to build and deploy applications on our platform. We also have several strategic partnerships, including with Accenture, Capgemini, Deloitte, EY,Indra Group, KPMG, PwC, and TCS,PwC, which allow them to refer customers to us in order to purchase software subscriptions. Our partners then provide professional services directly to the customers using our platform.software. Additionally, they often go to market with their own pre-built solutions using our platform, delivering software license revenue to us. We intend to continue focusingto oninvest addingin new customers with our strategic partners. In addition, over time we expectboth our professional services revenuegroup asand astrategic percentagepartnerships to drive increased adoption of total revenue to decline as we increasingly rely on strategic partners to help our customers deploy our software.platform. We believe our investment in professional services, including strategic partners building their practices around Appian, will drive increased adoption of our platform.

As of December 31, 2024, we had over 1,000 customers. Our customers primarily include financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation organizations. Generally, our sales team targets its efforts to organizations with over 2,000 employees and $2.0 billion in annual revenue. Revenue from U.S. federal government agencies represented 32.2%,25.3%, 29.1%,23.9%, and 26.1%21.3% of our total revenue in 2025, 2024, 2023, and 2022,2023, respectively. No single end-customer accounted for more than 10% of our total revenue in 2025, 2024, 2023, and 2022.2023.

We have experienced strong revenue growth, with revenue of $617.0$726.9 million, $545.4$617.0 million, and $468.0$545.4 million in 2025, 2024, 2023, and 2022,2023, respectively. Our subscriptions revenue was $490.6$576.5 million, $412.3$490.6 million, and $340.2$412.3 million in 2025, 2024, 2023, and 2022,2023, respectively, and includes sales of our cloud subscriptions, on-premises term license subscriptions, and maintenance and support. Our cloud subscriptions revenue was $368.0$437.4 million, $304.5$368.0 million, and $236.9$304.5 million in 2025, 2024, and 2023, and 2022, respectively.

We have invested in developing our platform, expanding our sales and marketing and research and development capabilities, and providing general and administrative resources to support our growth. AsIn a2025, result,we recorded net income of $1.2 million while in 2024 and 2023, we incurred net losses of $92.3 million,million and $111.4 million, andrespectively. $150.9 millionFurthermore, in 2024, 2023,2025 and 2022, respectively. In 2024, cash provided by operations was $62.9 million and $6.9 million, respectively, while cash used by operations totaled $110.4 million andin $106.62023. millionWe intend to continue to invest in 2023our andbusiness 2022,to respectively.take advantage of our market opportunity.

At the same time, we believe the costs we incur to retain customers and drive additional purchases of software are lower than our customer acquisition costs on a relative basis. Over time, we expect a large portion of our customers to renew their subscriptions and purchase additional subscriptions as they continue to build more applications and add more users to our platform. Over the last three completed fiscal years, we had an average cloud subscription gross revenue renewal rate of 98%, which is calculated by dividing (i) the cloud subscriptions revenue from renewing cloud customers in the current 12-month period that were cloud customers during the entirety of the prior 12-month period, giving effect to price increases but excluding additional cloud subscriptions for additional users, or upsells, by (ii) our cloud subscriptions revenue from all cloud customers in the corresponding prior 12-month period that were cloud customers during the entirety of such prior 12-month period.

•Market Adoption of Our Platform - Our ability to grow our customer base and drive market adoption of our platform is affected by the pace at which organizations digitallyautomate transform.processes. We expect our revenue growth will be primarily driven by the pace of adoption and penetration of our platform. We offer a leading customprocess softwareautomation platform and intend to continue to invest to expand our customer base. The degree to which prospective customers recognize the need for our software platform and its ability to enable their organizations to digitallyautomate transform,processes, and subsequently allocate budget dollars to purchase our software, will drive our ability to acquire new customers and increase sales to existing customers, which, in turn, will affect our future financial performance.

•Growth of Our Customer Base - We believe we have a substantial opportunity to grow our customer base. We define a customer as an entity with an active subscription or maintenance and support contract or a legacy perpetual license as of the specified measurement date. Furthermore, we define a new customer as an entity that has entered into its first active subscription or maintenance and support contract within one calendar year of the specified measurement date. We have aggressively invested, and intend to continue to invest, in our sales team in order to drive sales to new customers. We continue to make investments to enhance the expertise of our sales and marketing organization within our key industry verticals of financial services, government, life sciences, insurance, and insurance.manufacturing. In 2024,2025, we generated overapproximately 77%80% of our subscriptions revenue from customers in these verticals. In addition, we have established relationships with strategic partners who work with organizations undergoing digitalprocess transformations.automations. Our ability to continue to grow our customer base is dependent, in part, upon our ability to differentiate ourselves within the increasingly competitive markets in which we participate.

•Further Penetration of Existing Customers - Our sales team seeks to generate additional revenue from existing customers by adding new users or application licenses. In addition, we encourage our customers to upgrade to higher service tiers in order to take advantage of incremental functionality. We offer three service tiers ranging from a standard package with entry level features to our platform.premium offering that includes access to features such as process mining and full AI integration. Many of our customers begin by building a single application and then grow to build dozens of applications on our platform. Generally, the development of new applications on our platform results in the expansion of our user base within an organization and a corresponding increase in revenue. As a result of this “land and expand” strategy, we have generated significant additional revenue from our customer base. Our ability to increase sales to existing customers will depend on a number of factors, including the size of our sales and professional services teams, customers’ level of satisfaction with our platform and professional services, pricing, economic conditions, and our customers’ overall spending levels.

•Investments in Growth - We have made, and plan to continue to make, investments for long-term growth, including investing in our platform and infrastructure to continuously maximize their power and speed, meet the evolving needs of our customers, and take advantage of our market opportunity. We will continue to prioritize investments in revenue generating areas and limit growth in corporate functions. In addition, we will continue to grow and leverage our product development center in India to gain efficiencies in research and development spending. We may pursue strategic acquisitions that enhance our product offerings. We also intend to continue to invest in sales and marketing as we further expand our sales teams, increase our marketing activities, and grow our international operations.

We have historically experienced seasonality in terms of when we enter into agreements with customers. We typically enter into a significantly higher percentage of agreements with new customers, as well as renewal agreements with existing customers, in the fourth quarter. The increase in customer agreements for the fourth quarter is attributable to large enterprise account buyingaccount-buying patterns typical in the software industry. Furthermore, we usually enter into a significant portion of agreements with customers during the last month of each quarter and often the last two weeks of each quarter. However, we recognize the majority of our subscriptions revenue ratably over the terms of our subscription agreements. As a result, a substantial portion of the subscriptions revenue we report in each period will be derived from the recognition of deferred revenue relating to agreements entered into during previous periods. Consequently, aan increase or decline in new sales or renewals in any one period may not be immediately reflected in our revenue results for that period. Such a decline,changes, however, will negatively affect our revenue in future periods. Accordingly, the effect of significant downturns in sales, the market acceptance of our platform, or potential changes in our rate of renewals may not be fully reflected in our results of operations until future periods.

While we will continue to recognize the majority of our subscriptions revenue ratably over the terms of our subscription agreements, we may experience greater variability and reduced comparability of our quarterly revenue and results with respect to the timing and nature of our term license subscription agreements due to the upfront revenue recognition. See Note 3 to the consolidated financial statements for further details on our revenue recognition policies.

Cloud SubscriptionsNet Annualized Recurring Revenue Retention(“ARR”) RateExpansion

We generate revenue primarily through sales of subscriptions to our platform as well as professional services. We typically sell our software on a per-user basis or through non-user-based single application licenses. We generally bill customers and collect payment for subscriptions to our platform in advance on an annual, quarterly, or monthly basis. In certain instances, we have had customers pay their entire contract value up front.

Subscriptions revenue is primarily derived from cloud subscriptions bundled with maintenance and support and hosting services and on-premises termservices, license subscriptionssubscriptions, bundled withand maintenance and support.support for license subscriptions. Our maintenance and support agreements provide customers with the right to unspecified software upgrades, maintenance updates,releases and patches released during the term of the maintenance and support agreement on a when-and-if-available basis, and rights to technical support. On-premises term licenseLicense subscriptions are offered when the customer prefers to self-manage the deployment of our platform within their own infrastructure. When our platform is delivered as a cloud subscription, we manage operational needs in third-party hosted data centers.

Our professional services revenue is comprised of fees for consulting services, including application development, deployment assistance, and training related to our platform. Over time, we expect professional services revenue as a percentage of total revenue to decrease as the usage of our partner network expands.

Cost of subscriptions revenue consists primarily of fees paid to our third-party managed hosting providers and other third-party service providers, personnel costs, including payroll and benefits for our technology operations andoperations, customer support and information security teams, amortization of acquired technology, and allocated overhead costs. We expect cost of revenue to continue to increase in absolute dollars for the foreseeable future as our customer base grows.

Gross profit and gross margin (defined as gross profit as a percentage of total revenue), have been, and will continue to be, affected by various factors, including the mix of cloud subscriptions and on-premises term license subscriptions, the mix of total subscriptions revenue and professional services revenue, subscription pricing, the costs associated with third-party hosting providers, and the extent to which we expand or reduce our professional services to support future changes in our growth. Our gross margin may fluctuate from period to period based on the precedingaforementioned factors.

Professional services gross margin is affected by the growth in our professional services revenue as compared to the growth in, and timing of, the costs of our Customerprofessional Successservices organization as we continue to invest in the growth of our business as well as by consultant utilization rates. Professional services gross margin is also impacted by the amount of services performed by subcontractors and partners as opposed to internal resources. In 2025, we expectThe professional services grossmargins margin to be consistent with 2024; however, the margin remainsare subject to fluctuation based on the factors discussed above.

Operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel-related costs such as salaries, bonuses, commissions, payroll tax payments, severance costs, and stock-based compensation expense are the most significant components of each of these expense categories. Other components of each category include professional fees for third-party services such as legal, software development resources, contractors, and cloud computing services. In addition, operating expenses include allocated overhead costs, which are primarily comprised of facility costs such as rent, employee medical benefits, employee relations expense, and certain information technology costs.

In general, our operating expenses are expected to continue to increase in absolute dollars as we invest resources in enhancing our product and growing our business, although such growth is expected to be at a more measured rate than prior years. In 2024, our total employee headcount decreased from 2,257 employees at December 31, 2023 to 2,033 employees at December 31, 2024. In 2025, we expect overall headcounts to rise slightly as we hire new employees in key growth areas while maintaining headcounts at or near current levels in non-customer facing teams.

Sales and marketing expense primarily includes personnel costs, including salaries, bonuses, commissions, stock-based compensation, and other personnel costs related to sales teams. Additional major expenses in this category include travel and entertainment, marketing activities and promotional events, subcontracting fees, and allocated overhead costs. We are focused on increasing the efficiency of our sales force and marketing activities by enhancing account targeting, messaging, field sales operations, and sales training in order to accelerate the adoption of our platform.

The number of employees in sales and marketing functions decreased from 666 at December 31, 2023 to 509 at December 31, 2024. While headcount declined in 2024 due to changes in our go-to-market functions, we expect sales and marketing headcount to marginally increase from current levels in 2025 due to expected growth in our principal markets and strategic growth areas. Furthermore, weWe expect sales and marketing expense to increase in absolute dollars as we continue to invest in acquiring new customers, further expand usage of our platform within our existing customer base, and broaden our efforts to build on our brand reputation andas well as increase market awareness of our platform.

Research and development expense consists primarily of personnel costs for our employees who develop and enhance our platform, including salaries, bonuses, stock-based compensation, and other personnel costs. Also included are non-personnel costs such as subcontracting, consulting, professional fees to third party development resources, certaincloud informationcomputing technologyand software expenses, and allocated overhead costs.

Our research and development efforts are focused on enhancing the capabilities, speed, and power of our software platform. TheIn number2022, ofwe employeesopened ina research and development functions increased from 681 at December 31, 2023 to 702 at December 31, 2024. Most of this increase was attributable to continued expansion at ournew product development center in India that we opened in August 2022.India. Although we expect research and development expense to continue to increase in absolute dollarsdollars, as such costs are critical to maintain and improve the quality of applications and our competitive position, we believe our product development center will result in cost efficienciessavings over time.

General and administrative expense consists primarily of personnel costs, including salaries, bonuses, stock-based compensation, and other personnel costs for our administrative, legal, information technology, human resources, financefinance, and accounting teams as well as our senior executives. Additional expenses included in this category are non-personnel costs such as travel-related expenses, information security costs related to the protection of our internal systems, contracting and professional fees for such services as audits, taxation, and legal, insurance and other corporate expenses, including allocated overhead costs, and bad debt expenses.

Other Non-Operating (Income) Expense

Other Expense (Income), Expense, Net

Other expense (income), expense, net, consists primarily of gains and losses related to changes in foreign currency exchange rates, interest income on our cash and cash equivalents and investments, and other sources of income or expense not related to our core business operations.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “will,” “would,” or the negative or plural of these words or similar expressions or variations, including statements regarding our expectations regarding customer renewals and our future financial and operating performance, expansion of the usage of partners to perform professional services, the increase of our subscriptions revenue as a percentage of total revenue, the fluctuation of gross margin on a quarterly basis, our future capital requirements, and our ability to meet our financial covenants under our Credit Agreement. Such forward-looking statements are subject to a number of risks, uncertainties, assumptions, and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein and those discussed in the section titled “Risk Factors,” set forth in Part I, Item 1A of our Annual Report on Form 10-K filed with the SEC on February 19, 2026 and in our other filings with the SEC. Forward-looking statements should not be relied on as predictions of future events. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

We have invested in our professional services organization to help ensure customers are able to build and deploy applications on our platform. We also have several strategic partnerships, including with Accenture, Capgemini, Deloitte, Indra Group, KPMG, PwC, and PwC,TCS, which allow them to refer customers to us in order to purchase software subscriptions. Our partners then provide professional services directly to the customers using our software. Additionally, they often go to market with their own pre-built solutions using our platform, delivering software license revenue to us. We intend to continue to invest in both our professional services group and strategic partnerships to drive increased adoption of our platform. We believe our investment in professional services, including strategic partners building their practices around Appian, will drive increased adoption of our platform.

Our customers primarily include financial services, government, life sciences, insurance, manufacturing, energy, healthcare, telecommunications, and transportation organizations. Generally, our sales team targets its efforts at organizations with over 2,000 employees and $2.0 billion in annual revenue. For the three and six months ended MarchJune 31,30, 20262026, revenue generated from U.S. federal government agencies was 26.1% and 26.0% of total revenue, respectively. For the three and six months ended June 30, 2025, revenue generated from U.S. federal government agencies was 25.8%25.9% and 23.9%24.9% of total revenue, respectively. No single end-customer accounted for more than 10% of our total revenue in the three and six months ended MarchJune 31,30, 2026 or 2025.

We offer our platform globally. Our platform supports multiple languages to facilitate collaboration and address challenges in multinational organizations. In the three and six months ended MarchJune 31,30, 20262026, 38.2% and 2025, 37.6% and 36.2%,37.9%, respectively, of our total revenue was generated from customers outside of the United States.States as compared to 38.4% and 37.3% in the three and six months ended June 30, 2025, respectively. As of MarchJune 31,30, 2026, we operated in 16 countries. We believe we have a significant opportunity to continue to grow our international footprint, and we are investing in new geographies, including through investment in direct and indirect sales channels, professional services, and customer support and implementation partners.

Cloud subscriptions revenue includes cloud subscriptions bundled with maintenance and support and hosting services. Our cloud subscriptions revenue for any customer is primarily determined by the number of users who access and utilize the applications built on our platform or by the number of application licenses purchased, as well as the price paid. We believe increasing cloud subscriptions revenue is an indicator of the demand for our platform, the pace at which the market for our solutions is growing, the productivity of our sales team and strategic relationships in growing our customer base, and our ability to further penetrate our existing customer base.

We believe cloud net ARR expansion provides real-time insight into the growth of our existing customer base and is indicative of our success in the renewal and expansion of cloud subscription agreements with existing customers. To calculate this metric, we define ARR on a customer level as monthly recurring cloud subscriptions revenue multiplied by 12. We then compare the period-end ARR of the previous year’s customer cohort to their ARR at the end of the current period. The cloud net ARR expansion represents the ratio between these two periods. NoteThe forcloud purposesnet ofARR the calculation, a customer is defined pursuant to our updated methodology, and theexpansion calculation is performed on a constant currency basis.

Operating expenses consist of sales and marketing, research and development, and general and administrative expenses. Personnel-related costs such as salaries, bonuses, commissions, payroll tax payments, and stock-based compensation expense are the most significant components of each of these expense categories. Other components of eachthese categorycategories includeinclude, as applicable, professional fees for third-party services such as legal, software developmentdevelopment, resources, contractors,subcontracting, and cloud computing services.in Inaddition addition, operating expenses includeto allocated overhead costs, which are primarily comprised of facility costs such as rent, employee medical benefits, employee relations expense, and information technology costs.

In general, our operating expenses are expected to continue to increase in absolute dollars as we invest resources in enhancing our product and growing our business, although such growth is expected to be at a more measured rate than prior years.business.

Our research and development efforts are focused on enhancing the capabilities, speed, and power of our software platform. InWe 2022,also we openedhave a new product development center in India. Although we expect research and development expense to continue to increase in absolute dollars, as such costs are critical to maintain and improve the quality of applications and our competitive position, we believe our product development center will continue to result in cost savings over time.

Other Income,Expense (Income), Net

Other income,expense (income), net consists primarily of gains and losses related to changes in foreign currency exchange rates, interest income on our cash and cash equivalents and investments, and other sources of income or expense not related to our core business operations.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Total revenue increased $35.8$32.6 million, or 21.5%,19.1%, in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 due to an increase in our subscriptions revenue of $26.0$25.0 million coupled with an increase in our professional services revenue of $9.8$7.6 million. The increase in subscriptions revenue was driven by a $24.7$24.8 million increase in cloud subscriptions revenue and a $1.3$0.3 million increase in other subscriptions revenue. With respect to new versus existing customers, there was a $5.1$4.7 million increase in subscriptions revenue from sales to new customers, while the remaining $20.8$20.4 million of the increase was attributable to expanded deployments, price increases on renewals, and corresponding sales of additional subscriptions to existing customers. The increase in professional services revenue was due primarily to a $5.7$5.1 million increase in revenue from sales to new customers along with a $4.1$2.5 million increase in sales to existing customers.

Cost of revenue increased $10.4$9.6 million, or 23.5%,19.5%, in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025, primarily due to a $3.6 million increase in hosting costs coupled with a $3.6$5.0 million increase in professional services and product support personnel costs coupled with a $2.7 million increase in hosting costs and a $2.3$1.2 million increase in contractor costs. Professional services and product support personnel costs increased due to an increase in salaries and a 19% increase in headcount from June 30, 2025 to June 30, 2026. Hosting costs increased due to an increase in sales of our cloud offering during the three months ended MarchJune 31,30, 2026, while contractor costs increased due to an increase in the usage of subcontractors for professional services engagements. Professional services and product support personnel costs increased due to an increase in salaries and an 18% increase in headcount from March 31, 2025 to March 31, 2026.

Sales and marketing expense increased $8.3$8.0 million, or 14.8%,12.8%, in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025, primarily due to a $5.4$5.2 million increase in sales and marketing personnel costs, a $1.5$1.1 million increase in marketing expenses, and a $1.0 million increase in travel and entertainment costs, and a $1.1 million increase in marketing expenses.costs. Sales and marketing personnel costs increased due to a 9%13% increase in headcount from MarchJune 31,30, 2025 to MarchJune 31,30, 2026. TravelMarketing expenses increased due to higher spend on marketing materials and events relative to the prior year. In addition, travel and entertainment expenses increased due to increases in airfare and lodging associated with a higher number of in-person events and engagements relative to the prior year. In addition, marketing expenses increased due to higher spend on marketing materials and events relative to the prior year.

Research and development expense increased $4.5$4.7 million, or 10.7%,10.9%, in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025. This change is primarily attributable to a $2.6$4.1 million increase in research and development personnel costs and a $0.8$1.0 million increase in cloud computing and software costs. Research and development personnel costs increased due to a 6%7% increase in headcount period over period in addition to a $0.7 million increase in stock compensation expense.period.

General and administrative expense increased $8.6$4.9 million, or 34.3%,17.6%, in the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 primarily due to a $5.9$4.6 million increase in professional fees and a $2.4$0.7 million increase in general and administrative personnel costs. These increases were partially offset by a $0.8$1.6 million decrease in insurance expense. The increase in professional fees was the result of a net $5.2$3.8 million increase in legal fees associated with our litigation against Pegasystems. Personnel costs increased largely due to an increase in salaries and ana 18%17% increase in headcount from MarchJune 31,30, 2025 to MarchJune 31,30, 2026 coupled with a $0.7 million increase in stock compensation expense.2026. Insurance expense decreased due to a $1.0$1.2 million decrease in amortization expense related to our judgment preservation insurance policy due to a change in the estimated amortization period.

Other Income,Expense (Income), Net

Other income,expense, net was $0.1$0.8 million in the three months ended MarchJune 31,30, 2026 compared to $5.7other income, net $17.6 million in the three months ended MarchJune 31,30, 2025. This change was primarily due to $1.5$2.3 million in foreign exchange losses in the three months ended MarchJune 31,30, 2026 as compared to $4.1$15.6 million in foreign exchange gains in the three months ended MarchJune 31,30, 2025.

Interest expense decreased by $1.1$1.5 million in the three months ended MarchJune 31,30, 2026 as compared to the corresponding period in 2025 primarily due to a lower effective interest rate and lower outstanding principal compared to the prior year period.

Income tax expense decreasedincreased by $0.1$0.2 million in the three months ended MarchJune 31,30, 2026 as compared to the corresponding period in 2025. This change was primarily driven by decreasedincreased pre-taxU.S. bookstate incometaxes in certain international subsidiaries forduring the three months ended MarchJune 31,30, 2026.

Our non-GAAP financial performance measures include the following: non-GAAP subscriptions cost of revenue, non-GAAP professional services cost of revenue, non-GAAP total cost of revenue, non-GAAP sales and marketing expense, non-GAAP research and development expense, non-GAAP general and administrative expense, non-GAAP total operating expense, non-GAAP operating income (loss), income, non-GAAP non-operating (expense) income, non-GAAP income tax expense (benefit), non-GAAP net income (loss), income, and non-GAAP net income (loss) income per share, basic and diluted. These non-GAAP financial performance measures exclude the effect of stock-based compensation expense, unrealized foreign exchange rate gains and losses, certain non-ordinary litigation-related expenses consisting of legal and other professional fees associated with the Pegasystems cases (net of insurance reimbursements), or Litigation Expense, amortization of the judgment preservation insurance policy, or JPI Amortization, and lease impairments and lease-related charges associated with actions taken to reduce the footprint of our leased office spaces, or Lease Impairment and Lease-Related Charges. While some of these items may be recurring in nature and should not be disregarded in the evaluation of our earnings performance, it is useful to exclude such items when analyzing current results and trends compared to other periods as these items can vary significantly from period to period depending on specific underlying transactions or events that may occur. Therefore, while we may incur or recognize these types of expenses in the future, we believe removing these items for purposes of calculating our non-GAAP financial measures provides investors with a more focused presentation of our ongoing operating performance.

We also discuss adjusted EBITDA, a non-GAAP financial performance measure we believe offers a useful view of the overall operation of our business. We define adjusted EBITDA as net loss before (1) other income,expense (income), net, (2) interest expense, (3) income tax expense, (4) depreciation expense and amortization of intangible assets, (5) stock-based compensation expense, (6) Litigation Expense, (7) JPI Amortization, and (8) Lease Impairment and Lease-Related Charges. The most directly comparable GAAP financial measure to adjusted EBITDA is net loss. Users should consider the limitations of using adjusted EBITDA, including the fact this measure does not provide a complete depiction of our operating performance. Adjusted EBITDA is not intended to purport to be an alternative to net loss as a measure of operating performance or to cash flows from operating activities as a measure of liquidity.

The following table reconciles GAAP net loss to adjusted EBITDA for the three and six months ended MarchJune 31,30, 2026 and 2025 (in thousands):

The following table presents selected financial information and statistics pertaining to liquidity and capital resources as of MarchJune 31,30, 2026 and December 31, 2025:

1 On May 5, 2026, the Board of Directors approved an additional $50.0 million for the Share Repurchase Program, bringing the total aggregate authorization under the program to $100.0 million. All other terms and conditions of the Share Repurchase Program remain unchanged.

Furthermore, we have a non-cancellable cloud hosting arrangement with AWS that contains provisions for minimum purchase commitments. Specifically, purchase commitments under the agreement total $220.0 million over five years. The agreement, which was originated in July 2021 and amended in October 2024, currently contains minimum annual spending requirements of $44.0 million from November 2024 to October 2029. Spending under this agreement for the three and six months ended MarchJune 31,30, 2026 totaled $17.2 million and $33.4 million, respectively. Spending under this agreement for the three and six months ended June 30, 2025 totaled $16.2$12.9 million and $10.4$23.3 million, respectively. We expect to meet our minimum annual spending requirement during the term of the arrangement.

Net cash provided by operating activities was $48.8$60.9 million for the threesix months ended MarchJune 31,30, 2026 as compared to $45.0$43.0 million of net cash provided by operating activities for the threesix months ended MarchJune 31,30, 2025. The increase in net cash provided by operating activities was primarily driven by increased cash collections stemming from strong contract bookings in the fourth quarter of 2025 and throughout the first threesix months of 2026, as well as our continuing cost management activities.

Net cash usedprovided by investing activities was $5.3$1.7 million for the threesix months ended MarchJune 31,30, 2026 as compared to $24.1$33.1 million in net cash used by investing activities for the threesix months ended MarchJune 31,30, 2025. This change was primarily driven by a $26.2$21.1 million increase in proceeds from the maturity of investments.investments Thiscoupled increase was partially offset bywith a $7.8$14.4 million decrease in purchases of short-term investments.

Net cash used by financing activities was $28.8$76.3 million for the threesix months ended MarchJune 31,30, 2026 as compared to $5.5$19.0 million of net cash used by financing activities for the threesix months ended MarchJune 31,30, 2025. The increase in net cash used by financing activities was primarily due to a $21.8$55.7 million increase in repurchases of common stock and a $1.9 million increase in payments for employee taxes related to the net share settlement of equity awards during the threesix months ended MarchJune 31,30, 2026.