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

Our operations face certain risks that should be considered in evaluating our business. We manage and mitigate these risks on a proactive basis, using an enterprise risk management program. Nevertheless, the following risk factors, some of which may be beyond our control, could materially affect our business, financial condition, results of operations, brand and reputation, and may cause future results to be materially different thanfrom our current expectations. These risk factors are not intended to be all inclusive.

A significant portion of our business is subject to regulation and oversight by the USPS, posts in other major markets, and the governmental bodies that regulate the posts themselves. These postal authorities have the power to regulate some of our current products and services and to establish guidelines for postage rates. They also must approve many of our new product and service offerings before we can bring them to market. If new product and service offerings are not approved or there are significant conditions to approval, our ability to grow the business and in turn, our financial performance, could be adversely affected. Additionally, if favorable postage rates are reversed, regulations on existing productsproducts, rates or services are changed, legal or regulatory changes cause posts to change their operating models in a way that disadvantages our business, posts utilize their position in the market or their role as product regulator to limit competition in areas where the posts themselves offer solutions, or if we fall out of compliance with the posts’ regulations, our financial performance could be adversely affected.

Continuing declines in traditional mail volumes impact our financial results. An accelerated or sudden decline in mail volumes could result from one or more of the following factors: changes in communication technologies and their use; changes in frequency and quality of mail delivery from national posts; legislationchanges incentivizingin law that favor alternative means of communication, burdeningburden mail, or limitinglimit how the mail may be used; significant rate increases; or other external events affecting physical mail delivery. If we are not successful at meeting the continuing challenges faced in our mailing business, or if physical mail volumes experience an accelerated or sudden decline, our financial performance could be adversely affected.

Our SendTech Solutions segment faces competition from other mail equipment and solutions providers, companies that offer products and services as alternative means of message communications and those that offer online shipping and mailing products and services solutions. SendTech Solutions’ digital shipping business competes with technology providers ranging from large, established companies and national posts to smaller companies offering negotiated carrier rates. In addition, our financing operations face competition, in varying degrees, from large, diversified financial institutions, leasing companies, commercial finance companies, commercial banks and smaller specialized firms. If we are not able to differentiate ourselves from our competitors or effectively compete with them, the financial results of the segment may be adversely affected. Our Presort Services segment faces competition from regional and local presort providers, cooperatives of multiple local presort providers, consolidators and service bureaus that offer presort solutions as part of a larger bundle of outsourcing services and large volume mailers that have sufficient volumes and the capability to presort their own mailings in-house and could use excess capacity to offer presort services to others. We compete on the basis of a variety of factors, including price and the breadth and quality of our products and services. If we are not able to differentiate ourselves from our competitors or effectively compete onwith price, innovative service, delivery speed, tracking and reporting,them, we may lose clients and the financial results of thethese segmentsegments may be adversely affected.

Our SendTech Solutions segmentoperations reliesrely on third party suppliers for services and components for our mailing equipment, spare parts, supplies and services and for the hosting of our SaaS offerings. Our Presort segmentServices relies on third party suppliers to help us equip our facilitiesfacilities, provide warehouse support and toassist providewith serviceslogistical related to our operations and productivity initiatives.operations. In certain instances, we rely on single-sourced or limited-sourced suppliers around the world because of advantages in quality, price or lack of alternative sources. Like many other companies, we and our suppliers have experienced interruptionsinterruptions, delays and increased supply costs in the past, due to, among other things, volatility in the semiconductor industry, threats of strikes, rising inflationinflation, tariffs and geopolitical instability. AlthoughIf our 2024 financial results were not significantly impacted, these factors, at times, caused us towe experience longer wait times for supplies or increased costs. If these supply chain constraints in the future or these constraints were to worsenworsen, or,or if other unknown events cause our suppliers to not be able to provide their services, components or equipment to us in a timely and cost-effective manner, or, if the quality of the goods or services received were to deteriorate, our relationship with certain suppliers were to be terminated, or if the costs of using these third parties were to continue to increase and we were not able to find alternate suppliers, we could lose clients, incur significant disruptions in manufacturing and operations and increased costs (including higher freight and re-engineering costs) and delay automation and productivity initiatives in our facilities.costs.

Fluctuations in transportation costs or disruptions to transportation services in our Presort Services segment could adversely affect client satisfaction or our financial performance.

In addition to our reliance on the USPS, our Presort Services segment relies upon third party transportation service providers to transport a significant portion of our mail volumes. The use of these providers is subject to risks, including our ability to negotiate acceptable terms,terms due to, increased competition during peak periods, capacity issues, increased fuel costs, labor shortages, performance problems, extreme weather, natural or man-made disasters, pandemics, or other unforeseen difficulties. Given our continued reliance upon these providers, any disruption to the timely supply of these services, any future unforeseen disruptions affecting the availability of these providers,services or any dramatic increase in the cost of these services or any deterioration of the performance of these services (each of which we have experienced, at times), have adversely affected or could adversely affect client satisfaction and our financial performance.

During the second quarterhalf of 2024,2025, we approved a worldwidevoluntary, costearly reductionretirement initiative in the U.S. and a globally targeted, involuntary restructuring initiative (the "2024 Plan"), which involvedtogether, the elimination“2025 of approximately 2,800 positions worldwide in 2024.Plan”). Such actions may cause us to experience a loss of continuity, experience and institutional knowledge, a reduction in productivity and efficiency, the unexpected loss of key employees and/or other retention issues during transitional periods. Such actions may also make hiringit more difficult to attract and retain qualified employees more difficult.employees.

The rapid growth of the ecommerce industry has resulted in ongoing competition for employees in the shipping, transportation, and logistics industry, including drivers and warehouse employees. At times, our Presort Services segment has experienced increased demand and competition for labor, especially for our facilities, driving up costs. We supplement our workforce with contingent hourly workers from staffing agencies on an as-needed basis; however, if we experience labor shortages, doand notare effectively manage our abilityunable to attract and utilize contingent workers, or if our staffing agencies terminate their relationship with us and we cannot find alternative providers, itwe could resultincur in increasedhigher costs and our operations could be adversely affect our operations.affected. Moreover, given the nature of our Presort Services employee base, if we cannot continue to maintain good relationships, we could experience increased employee dissatisfaction and turnover, which could result in increased operating costs and reduced operational flexibility.

We are subject to risks relating to claims arising from the Ecommerce Restructuring and related transactions.

On August 8, 2024, we entered into a series of transactions designed to facilitate an orderly wind-down of a majority of our Global Ecommerce reporting segment, including athe sale of 81% of the voting interests of DRF Logistics, LLC (“DRF Logistics”), which owned a majority of the Global Ecommerce segment’s net assets and operations (the “GEC Sale”). Subsequent toFollowing the GEC Sale, DRF Logistics and DRF LLC, a subsidiary of DRF Logistics (together, the “Ecommerce Debtors”), at the direction of their own governing bodies, filed voluntary petitions to commence Chapter 11 bankruptcy cases,cases. which weWe refer to, together withto the GEC SaleSale, the Chapter 11 cases and any associated transactions collectively as the “Ecommerce Restructuring.” On November 25, 2024, the Bankruptcy Court entered an order confirming the liquidation plan, and the timely and orderly wind-down of the Ecommerce Debtors is ongoing. Risks and uncertainties may continue to be associated with the Ecommerce Restructuring, including, among others, continuing claims asserted against the Company or its affiliates related to the Ecommerce Restructuring as described in Part I, Item 3, “Legal Proceedings.”

We have undergone recent changes in our senior management and in the composition of our Board of Directors. TheseLeadership changes, and potential future changes,transitions may create continuity risks and operational challenges toand could adversely affect our ability to operate the businesses and execute our strategy. In addition, suchThese changes may,also among other things,may create uncertainty among investors, customers, employees, and othersother concerningstakeholders regarding our future direction and performance, and could make it more difficult to attract and retain qualified personnel. Our senior management team is focused on initiatives to strengthen our business and improve long-term value for our shareholders. If we fail to effectively implement any of these initiatives or to do so on a timely basis, our business, results of operations, financial condition and cash flows could be adversely affected.

We depend on the security and integrity of our and our suppliers' information technology systems and those of certain third-party service providers and suppliers to support numerous business processes and activities, to service our clients, and to enable consumer transactions and postal services. There are numerous cybersecurity risks to these systems, including, but not limited to, individual and group criminal hackers, industrial espionage, denial of service attacks, ransomware and malware attacks, attacks on the software supply chain, and employee errors and/or malfeasance.malfeasance, phishing and other social engineering attacks, credential theft, insider threats and exploitation of vulnerabilities in third-party software and systems. These cyber threats are diverse and constantly evolving, especially given the advances in, and the rise of the use of, artificial intelligence, thereby increasing the difficulty of preventing, detecting, and successfully defending against them.them and may be more difficult to detect and mitigate, including as threat actors use artificial intelligence and other advanced tools to enhance attacks and impersonation tactics. Successful cybersecurity breaches could, among other things, disrupt our operations or degrade service delivery or result in the unauthorized disclosure, theft and misuse of company, client, consumer and employee sensitive and confidential information, all of which could adversely affect our financial performance. Cybersecurity breaches could result in legal claims or proceedings, financial liability to other parties, governmental investigations, regulatory enforcement actions and penalties, and damage to our brand and reputation. Although we maintain insurance coverage relating to cybersecurity incidents, we may incur costs or financial losses that are either not insured against or not fully covered through our insurance.insurance and such insurance may be subject to exclusions, sub-limits and retentions and may become more expensive or less available on acceptable terms. We and certain of our suppliers have experienced cybersecurity incidents in the past, and may experience additional incidents in the future. Despite the implementation of our cybersecurity processes, our security measures cannot guarantee that a significant cyberattack will not occur.occur Theor Companythat andwe ourwill suppliersbe haveable experiencedto certainprevent, cybersecuritydetect or respond to all incidents in thea past (e.g. the previously disclosed ransomware attacks we experienced in 2019timely and 2020).effective manner. Our goal is to prevent meaningful incursions and minimize the overall impact of those that occur. For more information on how the Company handles cybersecurity, see Item 1C. Cybersecurity.

Our businesses use, process, and store proprietary information and personal, sensitive, or confidential data relating to our business, clients, and employees. Privacy laws and similar regulations in many jurisdictions where we do business require that we take significant steps to safeguard that information, and these laws and regulations continue to evolve. The scope of the laws that may be applicable to us is often uncertain and may be conflicting, and the growth of our cloud-based services increases the scope and complexity of laws that might apply. In addition, new laws may add an array of requirements on how we handle or use information and increase our compliance obligations. For example, India's Digital Personal Data Protection Act of 2023, and implemented rules notified in 2025, established a framework regulating the processing of digital personal data. The European Union’s Artificial Intelligence Act, enactedwhich entered into force in August 20232024, butintroduces notadditional operationalrequirements untilfor thecertain rulesAI havesystems beenand set,practices isand will apply on a newphased legal framework designed to protect individuals' personal datatimeline, and regulatesmay howincrease compliance obligations for organizations processthat it,develop, anddeploy theor Europeanuse Union’sAI-enabled AI Act compliments and expands transparency requirements set out in the General Data Protection Regulation.tools. In the United States, a growing number of states have enacted different laws regarding personal information, privacy and artificial intelligence that impose significant new requirements on consumer personal information. In some instances (e.g., California), these laws also expand the definition of consumer personal information to include information related to employees and business contacts. Some of these state laws have established independent agencies with rule making and enforcement authority, whose initial guidance, actions, and regulations remaincontinue to be determinedevolve and tested,may addingbe additionaladopted layersor ofbecome uncertaintyeffective withon respecta tophased compliance.basis. Other countries or states have enacted and will continue to enact and amend laws or regulations in the future that have similar or additional requirements. Although we endeavor to continually monitor and assess the impact of these laws and regulations, and continually update our systems to protect our data and comply with these laws, their interpretation and enforcement are uncertain, subject to change, and may require substantial costs to monitor and implement. Failure to comply with data privacy and protection laws and regulations could also result in government enforcement actions (which could result in substantial civil and/or criminal penalties) and private litigation, which could adversely affect our reputation and financial performance.

If we or our third party service providers and suppliers encounter unforeseen interruptions or difficulties in the operation of our cloud-based applications, our business could be disrupted, our reputation and relationships may be harmed, and our financial performance could be adversely affected.

Our business relies upon the continuous and uninterrupted performance of our and our suppliers' cloud-based applications and systems and those of certain third-party service providers and suppliers to support numerous business processes, to service our clients and to support their transactions with their customers and postal services. Our applications and systems, and those of our partners,third-party service providers and suppliers, may be subject to interruptions due to technological errors, system capacity constraints, software errors or defects, human errors, computer or communications failures, power loss, adverse acts of nature and other unexpected events. We have business continuity and disaster recovery plans in place designed to protectreduce the impact on our business operations in case of such events and we also require our suppliers to have the same.same . and, where appropriate, contractually obligate certain third-party service providers and suppliers to maintain similar plans. Nonetheless, there can be no guarantee that these plans will function as designed.designed or will be sufficient to address all contingencies. If we are unable to limit interruptions or successfully correct them in a timely manner or at all, itsuch interruptions could result in lost revenue, loss of critical data, significant expenditures of capital, a delay or loss in market acceptance of our services and damage to our reputation, brand and relationships, any of which could have an adverse effect on our business and our financial performance.

Our operations and financial performance are impacted by the economic conditions in the United States and the other countries where we and our clients do business. Any significant or perceived weakening of these economies, reduction in business confidence orconfidence, change in business or consumer spending habits, concerns of a domestic or global recession, rising inflation or interest rates, limited availability of credit, or other macroeconomic events (including public health crises andcrises, severe weather eventsevents, government shutdowns or other disruptions in government operations), not within our control, may impact our clients’ businesses or reduce our clients’ demand for shipping and mailing products and services and thus, negatively affect our financial performance. These economic conditions, at times, have arisen and can arise suddenly, and the duration and full impact of such conditions can be difficult to predict, which could adversely impact our business, financial condition, and results of operations.

We provide competitive finance offerings and fund discretionary priorities, such as capital investments, strategic acquisitions, dividend payments and share repurchases through a combination of cash generated from operations, deposits held at the Bank and access to capital markets. Our ability to access U.S. capital markets and the associated cost of borrowing is dependent upon our credit ratings and is subject to capital market volatility. We maintain a revolving credit facility to provide funding inas the event we need it,needed, however, our ability to borrow under our revolving creditthis facility is subject to compliance with the covenants set forth in the credit agreement governing the revolving credit facility.

A significant decline in cash flows, or changes in our credit ratings, material capital market disruptions,disruptions or noncompliance with any of our debt covenants,covenants significantthat withdrawalsadversely byaffects depositorsour at the Bank, adverse changesability to ouraccess industrialcapital loan charter or an increase in our credit default swap spreadmarkets, could impact our ability to maintain adequate liquidity, which could impact our abilitycontinue to provide competitive finance offerings, repay or refinance maturing debt, and fund other strategic or discretionary activities, which couldand adversely affect our operational and financial performance.

We are subject to taxes in the U.S. and in the foreign jurisdictions where we do business. Due to continuing global fiscal challenges and political conditions, tax laws and enforcement approaches have been and may continue to be subject to significant change. Changes in tax laws may be on a prospective or retroactive basis and could have a material impact on our tax expense and cash flows. The Organization for Economic Co-operation and Development (OECD) has set forth a Two-Pillar Solution fundamentally overhauling the international tax rules. Pillar One focuses on reallocation of profits while Pillar Two applies a global minimum corporate tax. The OECD has set forthissued Model Rules and anongoing ambitiousadministrative timelineguidance to ensuresupport implementation and coordination of these initiatives, and a number of jurisdictions have enacted or are implementing rules based on the effectiveOECD implementationframework, ofincluding the Two-PillarPillar Solution.Two global minimum tax. Although some jurisdictions have issued guidance or passed tax laws based on the OECD Model Rules, the final nature, timing and extent of any such tax reforms or other legislative or regulatory actions is(including unpredictable,their scope, interpretation, implementation, enforcement and interaction with other jurisdictions’ rules) are evolving and it is difficult to assess their overall effect. However,These thesedevelopments changescould increase our compliance and reporting obligations and, depending on the jurisdictions in which we operate and the interaction among applicable rules, could result in double tax, increase our effectiveincremental tax rateexpense (including “top-up” taxes), potential double taxation and adversely impact our financial results and cash flows. We continuously monitor developments and evaluate the impact these new rules are anticipated to have on our tax rate.

In recent years, the United States increased tariffs for certain goods, which triggered other nations to also increase tariffs on certain of their goods. These increased tariffs resulted in additional costs on certain components used in some of our SendTech products. In addition, there iscontinues currentlyto be significant uncertainty about the future relationship between the United States and various other countries, including changes arising as a result of the new presidential administrationcountries with respect to trade policies, treaties, tariffs, taxes, and other limitations on cross-border operations. Changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements could have an adverse effect on our business, prospects, financial condition and operating results, the extent of which cannot be predicted with certainty at this time.

We value constructive input from investors and regularly engage with our stockholders regarding strategy and performance. Although ourOur Board of Directors and management team are committed to acting in the best interests of all our stockholders,stockholders; however, there is no assurance that the results of actions taken by our Board of Directors and management team will be successful.

We operate in two segments: SendTech Solutions and Presort Services. Management measures segment profitability and performance by deducting fromas segment revenuerevenues less the related costs and expenses attributable to the segment. Segment results exclude interest, taxes, corporate expenses, restructuring charges,charges and other items not allocated to athe business segment.segments.

SendTech Solutions provides clients with physical and digital shipping and mailing technology solutions and other applications to help simplify and save on the sending, tracking and receiving of letters, parcels and flats, as well as supplies and maintenance services for these offerings. We offer financing alternatives that enable clients to finance Company and other manufacturers' equipment and product purchases, a revolving credit solution that enablesallows clients to make meter rental payments and purchase postage, services and supplies, and an interest-bearing deposit solution to clients whothat prefer to prepay postage. We also offer financing alternatives that enable clients to finance or lease other manufacturers’ equipmentpostage and providemeet working capital.capital needs.

SendTech Solutions revenue decreased $191$98 million in 20232025 compared to the2024. prior year. Business servicesProducts revenue declined $124 million primarily driven by a $128 million reduction in revenue due to the change in revenue presentation for digital delivery services, which was partially offset by growth in enterprise shipping subscriptions. Equipment sales declined $31$66 million primarily due to customers opting to extend leases of their existing advanced-technology equipment rather than purchase new equipment.equipment, Supportthe servicesimpact of the prior year product migration and a significant deal in the prior year. Services revenue declined $27$19 million primarily due to the declining meter populationpopulation. Financing and continuing shift to cloud-enabled products. Suppliesother revenue declined $6$13 million primarily driven by athe decliningimpact meterof population.the Financingprior revenueyear declinedproduct $3migration and mix of business. Revenue in 2025 includes an unfavorable adjustment of $4 million primarily duerelated to $6prior millionperiods of(see lowerNote lease1 extensionsto andthe lowerConsolidated lateFinancial feesStatements offor $1further million, partially offset by higher investment income of $7 million.information).

Adjusted segment EBIT was $408$412 million in 20232025, which includes the $4 million charge from the unfavorable revenue adjustment related to prior periods compared to $402$385 million for the prior year.

•global supply chain issues adversely impacting our third partythird-party suppliers' ability to provide us with products and services

Effective January 1, 2026, we are excluding from Adjusted segment EBIT expense related to the U.S. and Canada pension plans from Adjusted segment EBIT asthat we have taken steps to terminate these plans.terminate. Prior periods were not recast.

Within SendTech Solutions, we provide clients withoffer physical and digital shipping and mailing technology solutions and other applications to help companies simplify and save on the sending, tracking and receiving of letters, parcels and flats, as well as supplies and maintenance services for these offerings. We also offer financing alternativesoptions thatfor enablethe clients to finance equipment and product purchases, to financepurchase or lease of Pitney Bowes' or other manufacturers’ equipment andor to provide working capital,capital. aWe also offer an unsecured revolving credit solution that enables clients to make meter rental payments and purchase postage, services and supplies, and an interest-bearing deposit solution to clients who prefer to prepay postage.

Gross margin increased $2$8 million and gross margin percentage increased slightly to 67.5%69.2% from 66.4%66.1% compared to the prior year period primarily driven by thefavorable unfavorableproduct revenuemix adjustmentand ofa $4$5 million tariff refund in the first quarter of 2025 and product mix.2026.

Selling, general and administrative ("SG&A") expense declined $15 million compared to the prior period primarily driven by lower employee-related expenses of $5$6 million, lower professional and outsourcing fees of $4$2 million andmillion, lower marketing expenses of $2 million, lower depreciation and amortization expense of $2 million and lower equipment maintenance expense of $1 million.

Adjusted segment EBIT was $114$123 million in the firstsecond quarter of 2026 compared to $97$101 million for the prior year period, which includes the $4 million charge from the unfavorable revenue adjustment related to prior periods.period.

Revenue decreased $14$8 million in the firstsecond quarter of 2026 compared to the prior year period primarily due to a 6%3% decline in total mail volumes driven by a broader market decline.decline, client losses from the first half of 2025 and pricing actions. The processing of First Class Mail andFlats, First Class FlatsMail and Marketing Mail contributed revenue decreases of $10$3 million, $3 million and $4$2 million, respectively.

Gross margin decreased $16$17 million and gross margin percentage decreased to 35.1%26.3% from 41.2%36.0% in the prior period primarily due to lower revenue andrevenue, increased transportation and fuel costs of $7 million and higher employee-related benefits of $3 million.

SG&A expense wasdecreased relatively$1 flatmillion compared to the prior year period.

Adjusted segment EBIT was $39$20 million in the firstsecond quarter of 2026 compared to $55$36 million in the prior year period.

Corporate expenses for the firstsecond quarter of 2026 decreased $10$8 million compared to the prior year period primarily due to lower employee-relateddepreciation expensesexpense drivenof by$3 actionsmillion, takenlower underinsurance ourexpense restructuringof plans.$2 million, lower outsourcing and professional fees of $2 million and lower excise tax of $1 million.

SG&A expense decreased $33$42 million in the firstsecond quarter of 2026 compared to the prior year period. In addition to the changes in segment SG&A expense previously discussed, SG&A also declined $12$18 million due to lower non-cash foreign currency revaluation gains/losses on intercompany loans partially offset by higher corporate strategic review costs of $5 million.loans.

Restructuring charges increaseddecreased $4$10 million in the second quarter of 2026 and $7 million in the first quarterhalf of 2026 compared to the prior year periodperiods primarily due to a reduction in the number of actions taken during the current quarteryear compared to the prior year.

TotalWe interest expense represents interest expense on our debt,allocate a portion of total interest expense to finance interest expense which is allocatedincluded toin Cost of financing and other. Total interest expense is as follows:

Total interest expense was flat in the second quarter of 2026 compared to the prior year period and declined $2 million in the first quarterhalf of 2026 compared to the prior year period primarily due to lower effective interest rates partially offset by higher outstanding debt. The decline in interest expense allocated to finance interest was driven primarily by a decline in finance receivables.

Other components of net pension and postretirement cost increased $9$10 million in the second quarter of 2026 and $19 million in the first quarterhalf of 2026 compared to the prior year periodperiods primarily due to the lower expected return on pension plan assets year over year driven by the U.S. and Canada buy-in contracts. The amount of other components of net pension and postretirement cost recognized each year will vary based on actuarial assumptions and actual results of our pension plans. See Note 11 to the Condensed Consolidated Financial Statements for further information.

Other expense (income)

For full year 2026, we continue to expect low to mid-single digit decline in revenue driven by the continued secular decline in mailing. We expect lowAdjusted EBIT to mid-singlebe a low-single digit decline into EBITlow-single anddigit EBIT margin,growth, primarily driven by expectedhigher transportation costs and competitive pricing pressures in Presort Services,pressures, partially offset by lower worldwide operating costs from previous and continued cost-cutting actions,actions includingand savingsstronger underthan expected results for the 2025first Plan.half of 2026.

Our principal source of liquidity is our cash generated from operations and access to credit markets, including borrowing capacity under our revolving credit facility. At MarchJune 31,30, 2026, we had cash and cash equivalents of $303$267 million, which includes $42$58 million held at our foreign subsidiaries used to support their liquidity needs. At this time, we believe that existing cash and cash equivalents, cash generated from operations and borrowing capacity under our revolving credit facility will be sufficient to fund our cash needs and meet our debt obligations for the next 12 months.

Cash flows from operating activities for the first quarterhalf of 2026 improved $61$102 million compared to the prior year period primarily due to higher net income and changes in working capital, primarily driven in part by lower variableaccrued compensationliability payments and collectionsinventory of accountsspending and financehigher receivables.receivable collections.

Cash flows from investing activities for the first quarterhalf of 2026 improved $36$47 million compared to the prior year period primarily due to lower investments in loan receivables of $39$65 million partially offset by an $8 million reimbursement in the prior year for the DIP Facility, lower cash from investment activities of $5$7 million and lower capital expenditures of $4 million.

Cash flows from financing activities for the first quarterhalf of 2026 improved $69$21 million compared to the prior year periodperiod. primarilyNet duecash from debt activities increased $70 million as we received net proceeds of $41 million in 2026 compared to thenet issuancerepayments of an additional $150$29 million in 2025. Cash flows from financing activities also benefited from higher proceeds from stock option exercises of the$29 Marchmillion 2029and Notes, prior yearlower fees paid to redeem/refinance debt of $21$15 millionmillion. andThese favorableimprovements changes in customer account deposits at PB Bank of $18 million,were partially offset by higher common stock repurchases of $121 million and higher dividend payments of $2$98 million.

We paid dividends of $13$27 million in the first quarterhalf of 2026. Each quarter, our Board of Directors considers whether to approve the payment of a dividend. We currently expect to continue paying a quarterly dividend; however, no assurances can be given.

In the first quarter of 2026, we issued an additional aggregate $150 million of the Notes due March 2029.2029 The additional notes havewith identical terms to the previouslyprior outstandingnotes outstanding. In the second quarter of 2026, we borrowed an additional $150 million under the Term Loan due March 2028 and extended the maturity date to March 2031. The proceeds of the additional term loan borrowing were used to repay the Notes due March 2029.2027.

The conversion rate and conversion price were updated in the period as a result of an increase in our dividend, and is now 70.293770.3835 shares of common stock per $1,000 principal amountamount, andor $14.23$14.21 per share of common stock, respectively,share, subject to adjustment. Conversions of the Convertible Notes will be settled by paying cash up to the aggregate principal amount of the Convertible Notes being converted and by delivering shares of our common stock in respect of the remainder, if any, of our conversion obligation in excess of the aggregate principal amount of the Convertible Notes being converted.

At MarchJune 31,30, 2026, there are no off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our financial condition, results of operations or liquidity.