On July 31, 2026, the Company committed to a reorganization (the "Plan") to better align the Company’s personnel with its strategic priorities, improve operational efficiency, and position the Company for continued growth.


 

The Plan involves the reduction of approximately 10% of the Company’s total workforce. The Company estimates that it will incur approximately $16 million to $20 million in net cash restructuring charges in the third quarter of 2026, partially offset by a reversal of approximately $9 million to $12 million in non-cash stock-based compensation expense as discussed below, resulting in an expected impact to net income of $6 million to $9 million. The Company expects that most cash payments and expenses related to the reduction in personnel will be incurred by the end of the third quarter of 2026, and that the implementation of the Plan will be substantially complete by the end of the third quarter of 2026.


 

With respect to stock-based compensation, also as part of the Plan, the Company allowed a portion of the affected employees’ stock awards to vest that otherwise would have required continued service. However, as a result of the reversal of stock-based compensation expense that had been previously recognized (under the accelerated attribution method, generally) for the forfeited portions of the impacted employees’ stock awards, the Company expects the Plan will result in a net reduction to stock-based compensation expense of approximately $9 million to $12 million, most of which will be recognized in the third quarter of 2026.


 

The Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur as a result of or in connection with the implementation of the Plan. The Company intends to exclude the net impact of the Plan from its non-GAAP financial measures, including Adjusted EBITDA and Adjusted EBITDA margin.