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Delivered revenue and adjusted EBITDA well ahead of guidance;

AI customer adoption more than doubled sequentially, delivering 80+ agentic campaigns and 4,000+ AI-powered deals;

Total Revenues Grew 11%, adjusted EBITDA increased 38% and free cash flow increased 47% year-over-year;

CTV, Mobile App and Emerging Revenues represented ~60% of total revenue;

Repurchased 2.1 million shares in Q2 2026, representing 4.2% of fully diluted shares1 as of June 30, 2026.

NO-HEADQUARTERS/REDWOOD CITY, Calif.--(BUSINESS WIRE)--PubMatic, Inc. (Nasdaq: PUBM), the leading AI-powered ad tech company delivering digital advertising performance, today reported financial results for the quarter ended June 30, 2026.

"The second quarter marked an important inflection point for PubMatic. We delivered double-digit revenue growth earlier than anticipated, expanded profitability and strengthened our competitive position across AgenticOS, CTV, and mobile app," said Rajeev Goel, co-founder and CEO at PubMatic. "AI is transforming how digital advertising is planned, activated and optimized, increasing the emphasis on performance advertising. Our AI-native infrastructure and proprietary intelligence consistently deliver better performance, faster execution and greater efficiency for customers. Every interaction strengthens that intelligence, creating a compounding advantage that is difficult to replicate. Further, we’re bringing new forms of advertising, new sources of demand and new intelligence onto our platform that will significantly expand our long-term market opportunities.”

Second Quarter 2026 Financial Highlights

Revenue in the second quarter of 2026 was $78.6 million, up 11% compared to the same period of 2025; GAAP net loss was $(1.2) million with a margin of (1)%, or $(0.03) per diluted share in the second quarter, compared to GAAP net loss of $(5.2) million with a margin of (7)%, or $(0.11) per diluted share in the same period of 2025; Adjusted EBITDA was $19.6 million, or 25% margin, an increase over $14.2 million, or 20% margin in the same period of 2025; Non-GAAP net income was $5.9 million, or $0.12 per non-GAAP diluted share in the second quarter, compared to non-GAAP net income of $2.5 million, or $0.05 per non-GAAP diluted share in the same period of 2025; Net cash provided by operating activities was $20.2 million, a 36% increase over $14.9 million in the same period of 2025; Free cash flow was $13.7 million, a 47% increase over $9.3 million in the same period of 2025; Ended the quarter with total cash, cash equivalents, and marketable securities of $137.5 million with no debt; and Through June 30, 2026, used $211.4 million in cash to repurchase 15.5 million shares of Class A common stock with $63.6 million available from the 2023 Repurchase Program. The section titled “Non-GAAP Financial Measures” below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.

"We delivered a remarkable quarter, exceeding our guidance on revenue and adjusted EBITDA. We returned to double-digit year-over-year revenue growth ahead of schedule: revenue grew 11%, adjusted EBITDA increased 38% and free cash flow increased 47%," said Steve Pantelick, CFO at PubMatic. “Over the past three years, targeted investment and innovation in the fastest-growing areas of digital advertising have fundamentally changed our business. Today, approximately 60% of our revenue comes from CTV, mobile app and emerging revenue streams, roughly double the level of three years ago. Based on this momentum and the strength of our AI-powered products, we anticipate continued double-digit year-over-year revenue growth and meaningful full-year margin expansion.”

Business Highlights

AgenticOS Drives Superior Open Internet Performance and Customer Adoption

Since launching in January 2026, PubMatic has delivered measurable performance gains for customers across more than 80 fully autonomous, end-to-end campaigns globally. This is up from over 30 campaigns a quarter ago, and now includes all five global agency holding companies. Over 4,000 AI-powered deals transacted to date, up from just over 1,000 deals a quarter ago. Level Agency increased ad spend with PubMatic after AgenticOS delivered more than 2x reach per dollar versus its incumbent DSP, while significantly accelerating campaign setup and activation time. Additionally, AgenticOS delivered retargeting at scale within days compared to the 1-2 months ramp typically required by DSP-led campaigns. Havas Media and Telefónica launched Spain's first fully agentic CTV campaign, achieving 18% lower CPM than target while exceeding impression goals by 23% using AgenticOS. Launched advanced guardrail architecture for AgenticOS, giving enterprise buyers configurable control over autonomous campaign execution with human approval workflows, presence-based controls, and full audit trails built directly into the execution layer, reducing barriers to scaling agentic advertising budgets across the platform. New Partnerships Fuel Our Intelligence Advantage

Recently partnered with Gracenote to bring real-time content intelligence, including contextual signals and live sports schedules, directly into the PubMatic platform. By embedding this data at the point of auction, coupled with our rich signal data and proprietary bidstream data, our AI-native infrastructure can make increasingly sophisticated decisions within the milliseconds available before every impression is served. Added premium inventory from marquee broadcaster Channel 4 in the UK to expand its access to advertising buyers. New AI-Powered Solutions Launched

Launched Decision Fabric, a containerization solution bringing buyer intelligence directly into the auction to improve advertising performance. Launch partners include MiQ, Chalice AI, SWYM.ai and InPowered, who can now run proprietary decision models natively within PubMatic's infrastructure. Expanded Into New Markets, Creating Incremental Growth Opportunities

Launched Creator Marketplace, enabling advertisers on PubMatic to connect to premium inventory and reach highly engaged audiences while giving creators new ways to monetize across the open internet. Programmatic trading desk Klever used AgenticOS to help a well-known direct-to-consumer brand expand beyond social channels into premium CTV, and delivered a 5x return on ad spend, which was double the client’s original objective. Diversified Revenue Mix and Expanded Reach On The Buy Side

Revenues in Q2 2026 from CTV, mobile app and emerging revenues represented approximately 60% of total revenue, roughly double the share of three years ago. Strength in CTV was led by the Americas, where revenue grew 25% year over year. Global CTV revenue grew 13% year-over-year and represented approximately 20% of total revenue. Q2 2026 revenue from mobile app grew over 40% year-over-year and accounted for approximately 25% of total revenue. Emerging revenues2 in Q2 2026 grew approximately 100% year over year and represented approximately 15% of total revenues in the quarter, which includes revenue from newly launched AI solutions. Ad spend from Activate grew more than 2X over Q2 2025, as buyers and publishers prioritized performance, control and transparency. Ad spend from mid-market focused DSPs grew over 25% year-over-year in Q2 2026. Supply Path Optimization represented over 55% of total activity on our platform in Q2 2026. Operating Priorities Drove Profitable Growth

Infrastructure optimization initiatives and investments drove nearly 92 trillion impressions processed in Q2 2026, an increase of 18% over Q2 2025. Cost of revenue per million impressions processed decreased 20% on a trailing twelve month period, as compared to the prior period. Financial Outlook

Our outlook assumes that general market conditions do not significantly deteriorate as it relates to current macroeconomic and geopolitical conditions.

For the third quarter of 2026, we expect the following:

Revenue to be in the range of $75 million to $77 million. Adjusted EBITDA to be in the range of $17.0 million to $19.0 million. Adjusted EBITDA expectation assumes a negative foreign currency exchange impact predominantly from Euro and Pound Sterling. Although we provide guidance for adjusted EBITDA, we are not able to provide guidance for net income (loss), the most directly comparable GAAP measure. Certain elements of the composition of GAAP net income (loss), including stock-based compensation expenses, are not predictable, making it impractical for us to provide guidance on net income or to reconcile our adjusted EBITDA guidance to net income without unreasonable efforts. For the same reason, we are unable to address the probable significance of the unavailable information.

Chief Financial Officer Planned Retirement Announced

In a separate release issued today, the Company announced that Steve Pantelick, Chief Financial Officer, plans to retire after fifteen years in the role. He will continue to serve as CFO into the first quarter of 2027, and then as a senior adviser through July 1, 2027, to support continuity and a smooth transition. The Company has initiated a search for his successor.

Conference Call and Webcast details

PubMatic will host a conference call to discuss its financial results on Thursday, August 6, 2026 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). A live webcast of the call can be accessed from PubMatic’s Investor Relations website at https://investors.pubmatic.com. An archived version of the webcast will be available from the same website after the call.

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. generally accepted accounting principles (GAAP), including, in particular operating income (loss), net cash provided by operating activities, and net loss, we believe that adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP earnings per share and free cash flow, each a non-GAAP measure, are useful in evaluating our operating performance. We define adjusted EBITDA as net loss adjusted for stock-based compensation expense, depreciation and amortization, litigation related expenses, interest income, and provision for (benefit from) income taxes. Adjusted EBITDA margin represents adjusted EBITDA calculated as a percentage of revenue. We define non-GAAP net income as net loss adjusted for stock-based compensation expense, litigation related expenses, and adjustments for income taxes. We define non-GAAP free cash flow as net cash provided by operating activities reduced by purchases of property and equipment and capitalized software development costs.

In addition to operating income (loss) and net loss, we use adjusted EBITDA and non-GAAP net income as measures of operational efficiency. We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of our business and in understanding and evaluating our operating results for the following reasons:

Adjusted EBITDA and non-GAAP net income are widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization, litigation related expenses, interest expense, and provision for (benefit from) income taxes that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired; and, Our management uses adjusted EBITDA and non-GAAP net income in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of operating performance and the effectiveness of our business strategies and in communications with our board of directors concerning our financial performance; and adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:

Adjusted EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; (b) the potentially dilutive impact of stock-based compensation; or (c) tax payments that may represent a reduction in cash available to us; Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and Non-GAAP net income does not include: (a) the potentially dilutive impact of stock-based compensation; (b) non-ordinary course litigation related expenses; or (c) income tax effects for stock-based compensation Because of these and other limitations, you should consider adjusted EBITDA and non-GAAP net income along with other GAAP-based financial performance measures, including net income and our GAAP financial results.

Forward Looking Statements

This press release contains “forward-looking statements” regarding our future business expectations, including our guidance relating to our revenue and adjusted EBITDA for the third quarter of 2026, our expectations regarding our adjusted EBITDA, free cash flow, free cash flow margin, capital expenditures, future adoption and deployment of our AI-enabled products, future market growth, and our long-term revenue growth. These forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions and may differ materially from actual results due to a variety of factors including: our dependency on the overall demand for advertising and the channels we rely on; our existing customers not expanding their usage of our platform, or our failure to attract new publishers and buyers; our ability to maintain and expand access to spend from buyers and valuable ad impressions from publishers; the rejection of the use of digital advertising by consumers through opt-in, opt-out or ad-blocking technologies or other means; our failure to innovate and develop new solutions that are adopted by publishers; geopolitical tensions and uncertainty, including the conflicts in Ukraine and the Middle East, and the related measures taken in response by the global community and disruptions to the international supply chain and global commerce; the impacts of inflation and tariffs as well as fiscal tightening; changes in currency exchange environments and continuing volatility in global capital markets; volatile interest rates; public health crises, including the resulting global economic uncertainty; limitations imposed on our collection, use or disclosure of data about advertisements, including as it may impact our use of Artificial Intelligence and additional AI laws and regulations are enacted globally; the lack of similar or better alternatives to the use of third-party cookies, mobile device IDs or other tracking technologies if such uses are restricted; any failure to scale our platform infrastructure to support anticipated growth and transaction volume; liabilities or fines due to publishers, buyers, and data providers not obtaining consents from consumers for us to process their personal data; any failure to comply with laws and regulations related to data privacy, data protection, information security, and consumer protection; and our ability to manage our growth. Moreover, we operate in a competitive and rapidly changing market, and new risks may emerge from time to time. For more information about risks and uncertainties associated with our business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our SEC filings, including but not limited to, our annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which are available on our investor relations website at https://investors.pubmatic.com and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. All information in this press release is as of August 6, 2026. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

About PubMatic

PubMatic is the leading AI-powered ad tech company delivering digital advertising performance. Through an intelligent, unified platform that connects buyers, publishers, data partners, and commerce media networks, PubMatic delivers superior performance with greater transparency, control, and efficiency. Since 2006, PubMatic has pioneered major advances in programmatic advertising, from enabling the first OpenRTB transactions to embedding AI-driven optimization and privacy-focused innovation across its platform. With omnichannel scale, proven reliability, and a track record of continuous innovation, PubMatic is building a more intelligent, profitable, and sustainable open internet. Built to Connect. Powered to Perform.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(unaudited)

  June 30,
2026

December 31,
2025

ASSETS

Current assets

Cash and cash equivalents

$

119,971

$

145,518

Marketable securities

17,536

—

Accounts receivable, net

383,197

358,240

Prepaid expenses and other current assets

17,162

18,889

Total current assets

537,866

522,647

Property, equipment and software, net

58,528

52,657

Operating lease right-of-use assets

34,518

38,149

Acquisition-related intangible assets, net

1,914

2,704

Goodwill

29,577

29,577

Deferred tax assets

32,128

30,986

Other assets, non-current

5,511

3,475

TOTAL ASSETS

$

700,042

$

680,195

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

390,046

$

343,619

Accrued liabilities

24,230

25,278

Operating lease liabilities, current

7,842

6,953

Total current liabilities

422,118

375,850

Operating lease liabilities, non-current

32,795

36,910

Other liabilities, non-current

6,401

4,846

TOTAL LIABILITIES

461,314

417,606

Stockholders' Equity

Common stock

7

7

Treasury stock

(223,977

)

(193,471

)

Additional paid-in capital

341,643

321,062

Accumulated other comprehensive income (loss)

(156

)

68

Retained earnings

121,211

134,923

TOTAL STOCKHOLDERS’ EQUITY

238,728

262,589

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

700,042

$

680,195

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)

  Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

Revenue

$

78,593

$

71,095

$

141,160

$

134,920

Cost of revenue(1)

25,877

26,612

51,971

52,200

Gross profit

52,716

44,483

89,189

82,720

Operating expenses:(1)

Technology and development

9,148

9,116

17,134

17,888

Sales and marketing

26,130

25,200

55,095

51,999

General and administrative

16,859

15,628

31,654

30,197

Total operating expenses

52,137

49,944

103,883

100,084

Operating income (loss)

579

(5,461

)

(14,694

)

(17,364

)

Total other income (expense), net

1,302

(609

)

1,464

(30

)

Income (loss) before income taxes

1,881

(6,070

)

(13,230

)

(17,394

)

Provision for (benefit from) income taxes

3,083

(862

)

482

(2,700

)

Net loss

$

(1,202

)

$

(5,208

)

$

(13,712

)

$

(14,694

)

Net income (loss) per share attributable to common stockholders:

Basic

$

(0.03

)

$

(0.11

)

$

(0.29

)

$

(0.31

)

Diluted

$

(0.03

)

$

(0.11

)

$

(0.29

)

$

(0.31

)

Weighted-average shares used to compute net loss per share attributable to common stockholders:

Basic

46,106

47,185

46,611

47,763

Diluted

46,106

47,185

46,611

47,763

STOCK BASED COMPENSATION EXPENSE

(In thousands)

(unaudited)

  Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

Cost of revenue

$

357

$

474

$

741

$

948

Technology and development

1,055

1,628

2,084

3,213

Sales and marketing

2,605

3,465

5,662

6,928

General and administrative

4,330

4,234

8,348

8,410

Total stock-based compensation

$

8,347

$

9,801

$

16,835

$

19,499

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

(unaudited)

  Six Months Ended June 30,

2026

2025

OPERATING ACTIVITIES:

Net loss

$

(13,712

)

$

(14,694

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

19,995

23,537

Stock-based compensation

16,835

19,499

Deferred income taxes

(1,143

)

(9,024

)

Accretion of discount on marketable securities

(110

)

(819

)

Non-cash lease expense

3,591

3,710

Other

(305

)

(278

)

Changes in operating assets and liabilities:

Accounts receivable

(24,957

)

41,412

Prepaid expenses and other current assets

4,046

(340

)

Accounts payable

36,558

(25,865

)

Accrued liabilities

(1,738

)

(5,559

)

Operating lease liabilities

(3,188

)

(1,328

)

Other liabilities, non-current

1,633

275

Net cash provided by operating activities

37,505

30,526

INVESTING ACTIVITIES:

Purchases of and deposits on property and equipment

(2,966

)

(2,781

)

Capitalized software development costs

(10,171

)

(11,180

)

Purchases of marketable securities

(17,429

)

(26,026

)

Proceeds from maturities of marketable securities

—

39,859

Purchase of equity investment

(3,500

)

—

Net cash used in investing activities

(34,066

)

(128

)

FINANCING ACTIVITIES:

Proceeds from issuance of common stock for employee stock purchase plan

1,054

1,357

Proceeds from exercise of stock options

884

1,174

Principal payments on finance lease obligations

(75

)

(70

)

Payments to acquire treasury stock

(30,500

)

(43,649

)

Net cash used in financing activities

(28,637

)

(41,188

)

NET DECREASE IN CASH AND CASH EQUIVALENTS

(25,198

)

(10,790

)

Effect of foreign currency on cash

(349

)

814

CASH AND CASH EQUIVALENTS - Beginning of year

145,518

100,452

CASH AND CASH EQUIVALENTS - End of year

$

119,971

$

90,476

RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED EBITDA AND NON-GAAP NET INCOME

(In thousands, except per share amounts)

(unaudited)

  Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

Reconciliation of net loss:

Net loss

$

(1,202

)

$

(5,208

)

$

(13,712

)

$

(14,694

)

Add back (deduct):

Stock-based compensation

8,347

9,801

16,835

19,499

Depreciation and amortization

10,007

11,861

19,995

23,537

Litigation related expenses(2)

594

—

1,032

—

Interest income

(1,213

)

(1,379

)

(2,428

)

(2,972

)

Provision for (benefit from) income taxes

3,083

(862

)

482

(2,700

)

Adjusted EBITDA

$

19,616

$

14,213

$

22,204

$

22,670

Revenue

$

78,593

$

71,095

$

141,160

$

134,920

Adjusted EBITDA margin

25

%

20

%

16

%

17

%

Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

Reconciliation of net loss per share:

Net loss

$

(1,202

)

$

(5,208

)

$

(13,712

)

$

(14,694

)

Add back (deduct):

Stock-based compensation

8,347

9,801

16,835

19,499

Litigation related expenses(2)

594

—

1,032

—

Adjustment for income taxes

(1,883

)

(2,068

)

(3,714

)

(4,123

)

Non-GAAP net income

$

5,856

$

2,525

$

441

$

682

GAAP diluted EPS

$

(0.03

)

$

(0.11

)

$

(0.29

)

$

(0.31

)

Non-GAAP diluted EPS

$

0.12

$

0.05

$

0.01

$

0.01

GAAP weighted average shares outstanding—diluted

46,106

47,185

46,611

47,763

Non-GAAP weighted average shares outstanding—diluted

49,936

50,539

49,809

51,498

Reported GAAP diluted loss per share for the three and six months ended June 30, 2026 and 2025 were calculated using basic share count. Non-GAAP diluted earnings per share for the three and six months ended June 30, 2026 and three and six months ended June 30, 2025 were calculated using diluted share count which includes approximately 4 million, 3 million, 3 million, and 4 million, respectively, of dilutive securities related to employee stock awards.

SUPPLEMENTAL CASH FLOW INFORMATION

COMPUTATION OF FREE CASH FLOW, A NON-GAAP MEASURE

(In thousands)

(unaudited)

  Three Months Ended June 30,

Six Months Ended June 30,

2026

2025

2026

2025

Reconciliation of cash provided by operating activities:

Net cash provided by operating activities

$

20,210

$

14,905

$

37,505

$

30,526

Less: Purchases of property and equipment

(2,955

)

(1,340

)

(2,966

)

(2,781

)

Less: Capitalized software development costs

(3,592

)

(4,300

)

(10,171

)

(11,180

)

Free cash flow

$

13,663

$

9,265

$

24,368

$

16,565

More News From PubMatic, Inc.

SAN FRANCISCO--(BUSINESS WIRE)--Cloudflare, Inc. (NYSE: NET), the leading connectivity cloud company, today announced financial results for its second quarter ended June 30, 2026.

“We delivered a stellar second quarter, highlighted by revenue accelerating to $696.1 million, up 36% year-over-year, and record growth in total paying customers, large customers, and developers on our platform,” said Matthew Prince, co-founder & CEO of Cloudflare. “As the web shifts to AI answer engines and agent-driven commerce, we are seeing a fundamental rewrite of the Internet for machine-to-machine traffic. Cloudflare sits at the center of this paradigm shift—building the infrastructure, controls, developer tools, and payment rails for the Agentic Internet. The business model of the web is changing, and no company is better positioned than Cloudflare to help define its future.”

Second Quarter Fiscal 2026 Financial Highlights

Revenue: Total revenue of $696.1 million, representing an increase of 36% year-over-year. Gross Profit: GAAP gross profit was $499.5 million, or 71.8% gross margin, compared to $383.6 million, or 74.9%, in the second quarter of 2025. Non-GAAP gross profit was $508.9 million, or 73.1% gross margin, compared to $390.7 million, or 76.3%, in the second quarter of 2025. Operating Income (Loss): GAAP loss from operations was $205.7 million, or 29.6% of revenue, compared to $67.3 million, or 13.1% of revenue, in the second quarter of 2025. Non-GAAP income from operations was $96.1 million, or 13.8% of revenue, compared to $72.3 million, or 14.1% of revenue, in the second quarter of 2025. Net Income (Loss): GAAP net loss was $170.0 million, compared to $50.4 million in the second quarter of 2025. GAAP net loss per basic and diluted share was $0.48, compared to $0.15 in the second quarter of 2025. Non-GAAP net income was $107.8 million, compared to $75.1 million in the second quarter of 2025. Non-GAAP net income per diluted share was $0.29, compared to $0.21 in the second quarter of 2025. Cash Flow: Net cash flow from operating activities was $117.6 million, compared to $99.8 million for the second quarter of 2025. Free cash flow was $56.4 million, or 8% of revenue, compared to $33.3 million, or 6% of revenue, in the second quarter of 2025. Cash, cash equivalents, and available-for-sale securities were $4,162.8 million as of June 30, 2026. The section titled "Non-GAAP Financial Information" below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.

Financial Outlook

For the third quarter of fiscal 2026, we expect:

Total revenue of $736.0 to $737.0 million Non-GAAP income from operations of $129.0 to $130.0 million Non-GAAP net income per share of $0.34, utilizing weighted average common shares outstanding of approximately 374 million For the full year fiscal 2026, we expect:

Total revenue of $2,864.0 to $2,870.0 million Non-GAAP income from operations of $443.0 to $445.0 million Non-GAAP net income per share of $1.25 to $1.26, utilizing weighted average common shares outstanding of approximately 374 million These statements are forward-looking and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

Conference Call Information

Cloudflare will host an investor conference call to discuss its second quarter ended June 30, 2026 earnings results today at 2:00 p.m. Pacific time (5:00 p.m. Eastern time). Interested parties can access the call by dialing (646) 968-2727 or toll-free at (888) 596-4244 with conference ID 3723782. A live webcast of the conference call will be accessible from the investor relations website at https://cloudflare.NET. A replay will be available approximately two hours after the conclusion of the live event and will remain available for approximately one year.

Supplemental Financial and Other Information

Supplemental financial and other information can be accessed through the Company’s investor relations website at https://cloudflare.NET.

Non-GAAP Financial Information

Cloudflare believes that the presentation of non-GAAP financial information provides important supplemental information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations. Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty of expenses that may be incurred in the future. For further information regarding why Cloudflare believes that these non-GAAP measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the “Explanation of Non-GAAP Financial Measures” section at the end of this press release.

Available Information

Cloudflare intends to use its press releases, website, investor relations website, news site, blog, X account, Facebook account, and Instagram account, in addition to filings made with the Securities and Exchange Commission (SEC) and public conference calls, as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “explore,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words, or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. However, not all forward-looking statements contain these identifying words. Forward-looking statements expressed or implied in this press release include, but are not limited to, statements regarding our future financial and operating performance, our reputation and performance in the market, general market trends, our estimated and projected revenue, non-GAAP income from operations and non-GAAP net income per share, shares outstanding, the benefits to customers from using our products, the expected functionality and performance of our products, the demand by customers for our products, our plans and objectives for future operations, growth, initiatives, or strategies, our market opportunity, the plan to further accelerate our evolution to an agentic AI-first operating model and the intent for the plan to align our organizational structure with this new operating model, the estimated reduction of our current workforce, the estimated charges in connection with this plan, including the primary components of such charges, the anticipated timing of the implementation of this plan and the timing of such charges, the expected benefits from this plan and related actions, and comments made by our CEO and others. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including: the impact of adverse macroeconomic conditions on our and our customers’, vendors’, and partners’ operations and future financial performance; the impact of conflicts and geopolitical tension around the world, particularly in Eastern Europe or the Middle East, or any worsening or expansion of those conflicts or tensions, as well as other geopolitical events such as elections and other governmental changes, threats of tariffs and other impediments to cross-border trade; our history of net losses; risks associated with managing our growth; our ability to attract and retain new customers (including new large customers); our ability to retain and upgrade paying customers and convert free customers to paying customers; our ability to expand the number of products we sell to paying customers; our ability to effectively increase sales to large customers; our ability to incorporate AI tools and automation to increase productivity and maintain operational efficiency; our ability to increase brand awareness; our ability to continue to innovate and develop new products and product features; our ability to generate demand for our products; our ability to effectively attract, train, and retain our sales force to be able to sell our existing and new products and product features; our sales team’s productivity; our ability to effectively attract, integrate and retain key personnel; problems with our internal systems, network, or data, including actual or perceived breaches or failures; rapidly evolving technological developments in the market, including advancements in AI; length of our sales cycles and the timing of payments by our customers; activities of our paying and free customers or the content of their websites and other Internet properties that use our network and products; foreign currency fluctuations; changes in the legal, tax, and regulatory environment applicable to our business; and other general market, political, economic, and business conditions. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, risks detailed in our filings with the SEC, including our Quarterly Report on Form 10-Q filed on May 8, 2026, as well as other filings that we may make from time to time with the SEC.

The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this press release to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

About Cloudflare

Cloudflare, Inc. (NYSE: NET) is the leading connectivity cloud company on a mission to help build a better Internet. It empowers organizations to make their employees, applications and networks faster and more secure everywhere, while reducing complexity and cost. Cloudflare’s connectivity cloud delivers the most full-featured, unified platform of cloud-native products and developer tools, so any organization can gain the control they need to work, develop, and accelerate their business.

Powered by one of the world’s largest and most interconnected networks, Cloudflare blocks billions of threats online for its customers every day. It is trusted by millions of organizations – from the largest brands to entrepreneurs and small businesses to nonprofits, humanitarian groups, and governments across the globe.

Learn more about Cloudflare’s connectivity cloud at cloudflare.com/connectivity-cloud. Learn more about the latest Internet trends and insights at radar.cloudflare.com.

CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

  Three Months Ended
June 30,

Six Months Ended
June 30,

2026

2025

2026

2025

Revenue

$

696,061

$

512,316

$

1,335,816

$

991,403

Cost of revenue(1)(2)

196,544

128,677

380,702

244,253

Gross profit

499,517

383,639

955,114

747,150

Operating expenses:

Sales and marketing(1)(2)(3)

276,122

219,359

547,722

433,370

Research and development(1)

159,486

134,557

310,458

249,646

General and administrative(1)(3)(5)(6)

118,912

96,987

213,931

184,645

Restructuring and other charges

150,693

—

150,693

—

Total operating expenses

705,213

450,903

1,222,804

867,661

Loss from operations

(205,696

)

(67,264

)

(267,690

)

(120,511

)

Non-operating income (expense):

Interest income

39,932

25,406

80,098

46,805

Interest expense(4)

(3,089

)

(1,524

)

(5,652

)

(2,967

)

Other income (expense), net

913

(3,907

)

3,903

(7,375

)

Total non-operating income, net

37,756

19,975

78,349

36,463

Loss before income taxes

(167,940

)

(47,289

)

(189,341

)

(84,048

)

Provision for income taxes

2,041

3,157

3,567

4,852

Net loss

$

(169,981

)

$

(50,446

)

$

(192,908

)

$

(88,900

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.48

)

$

(0.15

)

$

(0.55

)

$

(0.26

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

354,334

347,489

353,485

346,605

____________

(1) Includes stock-based compensation and related employer payroll taxes as follows:

Cost of revenue

$

4,311

$

3,693

$

8,455

$

6,599

Sales and marketing

41,246

36,818

84,070

67,023

Research and development

55,435

50,956

104,936

89,225

General and administrative

39,601

40,526

70,589

75,041

Total stock-based compensation and related employer payroll taxes

$

140,593

$

131,993

$

268,050

$

237,888

(2) Includes amortization of acquired intangible assets as follows:

Cost of revenue

$

5,050

$

3,329

$

11,011

$

6,182

Sales and marketing

2,391

417

3,641

805

Total amortization of acquired intangible assets

$

7,441

$

3,746

$

14,652

$

6,987

(3) Includes acquisition-related and other expenses as follows:

Sales and marketing

$

33

$

—

$

33

$

—

General and administrative

2,047

—

2,470

112

Total acquisition-related and other expenses

$

2,080

$

—

$

2,503

$

112

(4) Includes amortization of debt issuance costs as follows:

Interest expense

$

2,439

$

1,199

$

4,865

$

2,189

Total amortization of debt issuance costs

$

2,439

$

1,199

$

4,865

$

2,189

(5) Includes lease impairment charges as follows:

General and administrative

$

—

$

3,840

$

—

$

3,840

Total lease impairment charges

$

—

$

3,840

$

—

$

3,840

(6) Includes legal reserve and settlements as follows:

General and administrative

$

1,000

$

—

$

1,000

$

—

Total legal reserve and settlements

$

1,000

$

—

$

1,000

$

—

  CLOUDFLARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(unaudited)

  June 30,
2026

December 31,
2025

Assets

Current assets:

Cash and cash equivalents

$

1,663,773

$

943,536

Available-for-sale securities

2,499,025

3,157,715

Accounts receivable, net

422,945

382,488

Contract assets

27,187

23,531

Restricted cash short-term

12,163

9,364

Prepaid expenses and other current assets

153,282

128,203

Total current assets

4,778,375

4,644,837

Property and equipment, net

703,209

618,691

Goodwill

376,204

226,563

Acquired intangible assets, net

57,369

41,799

Operating lease right-of-use assets

247,675

237,646

Deferred contract acquisition costs, noncurrent

240,523

219,499

Restricted cash

—

1,457

Other noncurrent assets

70,772

45,764

Total assets

$

6,474,127

$

6,036,256

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

127,032

$

84,115

Accrued expenses and other current liabilities

165,788

109,054

Accrued compensation

151,528

111,005

Operating lease liabilities

78,239

70,901

Deferred revenue

812,187

684,207

Current portion of convertible senior notes, net

1,293,260

1,291,281

Total current liabilities

2,628,034

2,350,563

Convertible senior notes, net

1,977,006

1,974,120

Operating lease liabilities, noncurrent

180,845

182,025

Deferred revenue, noncurrent

40,252

41,088

Other noncurrent liabilities

27,970

29,337

Total liabilities

4,854,107

4,577,133

Stockholders’ Equity

Class A common stock; $0.001 par value; 2,250,000 shares authorized as of June 30, 2026 and December 31, 2025; 322,176 and 317,319 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

322

317

Class B common stock; $0.001 par value; 315,000 shares authorized as of June 30, 2026 and December 31, 2025; 33,755 and 34,568 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

33

34

Additional paid-in capital

3,027,713

2,651,420

Accumulated deficit

(1,397,815

)

(1,204,907

)

Accumulated other comprehensive income (loss)

(10,233

)

12,259

Total stockholders’ equity

1,620,020

1,459,123

Total liabilities and stockholders’ equity

$

6,474,127

$

6,036,256

  CLOUDFLARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

  Six Months Ended June 30,

2026

2025

Cash Flows from Operating Activities

Net loss

$

(192,908

)

$

(88,900

)

Adjustments to reconcile net loss to cash provided by operating activities:

Depreciation and amortization expense

123,170

87,688

Non-cash operating lease costs

41,696

29,872

Amortization of deferred contract acquisition costs

63,486

47,296

Stock-based compensation expense

274,113

217,912

Amortization of debt issuance costs

4,865

2,189

Net accretion of discounts and amortization of premiums on available-for-sale securities

(13,233

)

(11,987

)

Deferred income taxes

(7,013

)

(480

)

Provision for bad debt

5,157

7,815

Other

(6,814

)

3,227

Changes in operating assets and liabilities, net of effect of asset acquisitions and business combinations:

Accounts receivable, net

(45,614

)

1,431

Contract assets

(3,656

)

(4,707

)

Deferred contract acquisition costs

(84,510

)

(58,998

)

Prepaid expenses and other current assets

(60,612

)

(46,339

)

Other noncurrent assets

7,142

4,312

Accounts payable

1,205

(247

)

Accrued expenses and other current liabilities

48,699

758

Accrued compensation

40,523

(2,914

)

Operating lease liabilities

(45,567

)

(24,973

)

Deferred revenue

127,144

82,643

Other noncurrent liabilities

(1,379

)

(18

)

Net cash provided by operating activities

275,894

245,580

Cash Flows from Investing Activities

Purchases of property and equipment

(115,192

)

(145,786

)

Capitalized internal-use software

(20,244

)

(13,647

)

Asset acquisitions and business combinations, net of cash acquired

(75,098

)

(6,462

)

Purchases of available-for-sale securities

(783,933

)

(1,530,775

)

Maturities of available-for-sale securities

1,442,199

810,825

Other investing activities

1,636

382

Net cash provided by (used in) investing activities

449,368

(885,463

)

Cash Flows from Financing Activities

Proceeds from settlement of the 2025 capped calls

—

309,616

Gross proceeds from issuance of 2030 convertible senior notes

—

2,000,000

Purchases of capped calls related to the 2030 convertible senior notes

—

(283,400

)

Cash paid for issuance costs on 2030 convertible senior notes

—

(27,873

)

Proceeds from the exercise of stock options

9,815

17,942

Proceeds from the issuance of common stock for employee stock purchase plan

16,075

13,057

Payment of tax withholding obligation on RSU and PSU settlement

(29,473

)

(18,217

)

Payment of indemnity holdback

(100

)

—

Net cash provided by (used in) financing activities

(3,683

)

2,011,125

Net increase in cash, cash equivalents, and restricted cash

721,579

1,371,242

Cash, cash equivalents, and restricted cash, beginning of period

954,357

154,214

Cash, cash equivalents, and restricted cash, end of period

$

1,675,936

$

1,525,456

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

  Three Months Ended
June 30,

Six Months Ended
June 30,

2026

2025

2026

2025

Reconciliation of cost of revenue:

GAAP cost of revenue

$

196,544

$

128,677

$

380,702

$

244,253

Less: Stock-based compensation and related employer payroll taxes

(4,311

)

(3,693

)

(8,455

)

(6,599

)

Less: Amortization of acquired intangible assets

(5,050

)

(3,329

)

(11,011

)

(6,182

)

Non-GAAP cost of revenue

$

187,183

$

121,655

$

361,236

$

231,472

Reconciliation of gross profit:

GAAP gross profit

$

499,517

$

383,639

$

955,114

$

747,150

Add: Stock-based compensation and related employer payroll taxes

4,311

3,693

8,455

6,599

Add: Amortization of acquired intangible assets

5,050

3,329

11,011

6,182

Non-GAAP gross profit

$

508,878

$

390,661

$

974,580

$

759,931

GAAP gross margin

71.8

%

74.9

%

71.5

%

75.4

%

Non-GAAP gross margin

73.1

%

76.3

%

73.0

%

76.7

%

Reconciliation of operating expenses:

GAAP sales and marketing

$

276,122

$

219,359

$

547,722

$

433,370

Less: Stock-based compensation and related employer payroll taxes

(41,246

)

(36,818

)

(84,070

)

(67,023

)

Less: Amortization of acquired intangible assets

(2,391

)

(417

)

(3,641

)

(805

)

Less: Acquisition-related and other expenses

(33

)

—

(33

)

—

Non-GAAP sales and marketing

$

232,452

$

182,124

$

459,978

$

365,542

GAAP research and development

$

159,486

$

134,557

$

310,458

$

249,646

Less: Stock-based compensation and related employer payroll taxes

(55,435

)

(50,956

)

(104,936

)

(89,225

)

Non-GAAP research and development

$

104,051

$

83,601

$

205,522

$

160,421

GAAP general and administrative

$

118,912

$

96,987

$

213,931

$

184,645

Less: Stock-based compensation and related employer payroll taxes

(39,601

)

(40,526

)

(70,589

)

(75,041

)

Less: Acquisition-related and other expenses

(2,047

)

—

(2,470

)

(112

)

Less: Lease impairment charges

—

(3,840

)

—

(3,840

)

Less: Legal reserve and settlements

(1,000

)

—

(1,000

)

—

Non-GAAP general and administrative

$

76,264

$

52,621

$

139,872

$

105,652

GAAP restructuring and other charges

$

150,693

$

—

$

150,693

$

—

Less: Restructuring and other charges

(150,693

)

—

(150,693

)

—

Non-GAAP restructuring and other charges

$

—

$

—

$

—

$

—

Reconciliation of income (loss) from operations:

GAAP loss from operations

$

(205,696

)

$

(67,264

)

$

(267,690

)

$

(120,511

)

Add: Stock-based compensation and related employer payroll taxes

140,593

131,993

268,050

237,888

Add: Amortization of acquired intangible assets

7,441

3,746

14,652

6,987

Add: Acquisition-related and other expenses

2,080

—

2,503

112

Add: Lease impairment charges

—

3,840

—

3,840

Add: Legal reserve and settlements

1,000

—

1,000

—

Add: Restructuring and other charges

150,693

—

150,693

—

Non-GAAP income from operations

$

96,111

$

72,315

$

169,208

$

128,316

GAAP operating margin

(29.6

)%

(13.1

)%

(20.0

)%

(12.2

)%

Non-GAAP operating margin

13.8

%

14.1

%

12.7

%

12.9

%

  CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

  Three Months Ended
June 30,

Six Months Ended
June 30,

2026

2025

2026

2025

Reconciliation of interest expense:

GAAP interest expense

$

(3,089

)

$

(1,524

)

$

(5,652

)

$

(2,967

)

Add: Amortization of debt issuance costs

2,439

1,199

4,865

2,189

Non-GAAP interest expense

$

(650

)

$

(325

)

$

(787

)

$

(778

)

Reconciliation of provision for income taxes:

GAAP provision for income taxes

$

2,041

$

3,157

$

3,567

$

4,852

Income tax effect of non-GAAP adjustments

26,485

15,275

47,059

28,644

Non-GAAP provision for income taxes

$

28,526

$

18,432

$

50,626

$

33,496

Reconciliation of net income (loss) and net income (loss) per share:

GAAP net loss attributable to common stockholders

$

(169,981

)

$

(50,446

)

$

(192,908

)

$

(88,900

)

Add: Stock-based compensation and related employer payroll taxes

140,593

131,993

268,050

237,888

Add: Amortization of acquired intangible assets

7,441

3,746

14,652

6,987

Add: Acquisition-related and other expenses

2,080

—

2,503

112

Add: Amortization of debt issuance costs

2,439

1,199

4,865

2,189

Add: Lease impairment charges

—

3,840

—

3,840

Add: Legal reserve and settlements

1,000

—

1,000

—

Add: Restructuring and other charges

150,693

—

150,693

—

Income tax effect of non-GAAP adjustments

(26,485

)

(15,275

)

(47,059

)

(28,644

)

Non-GAAP net income

$

107,780

$

75,057

$

201,796

$

133,472

GAAP net loss per share, basic

$

(0.48

)

$

(0.15

)

$

(0.55

)

$

(0.26

)

GAAP net loss per share, diluted

$

(0.48

)

$

(0.15

)

$

(0.55

)

$

(0.26

)

Add: Stock-based compensation and related employer payroll taxes

0.40

0.38

0.76

0.69

Add: Amortization of acquired intangible assets

0.02

0.01

0.04

0.02

Add: Acquisition-related and other expenses

0.01

—

0.01

—

Add: Amortization of debt issuance costs

0.01

—

0.01

0.01

Add: Lease impairment charges

—

0.01

—

0.01

Add: Legal reserve and settlements

—

—

—

—

Add: Restructuring and other charges

0.43

—

0.43

—

Income tax effect of non-GAAP adjustments

(0.07

)

(0.04

)

(0.13

)

(0.08

)

Effect of dilutive shares

(0.03

)

—

(0.03

)

(0.02

)

Non-GAAP net income per share, diluted(1)

$

0.29

$

0.21

$

0.54

$

0.37

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic

354,334

347,489

353,485

346,605

Weighted-average shares used in computing non-GAAP net income per share attributable to common stockholders, diluted

373,683

365,264

374,672

363,962

____________

(1) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.

CLOUDFLARE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

  Three Months Ended
June 30,

Six Months Ended
June 30,

2026

2025

2026

2025

Free cash flow

Net cash provided by operating activities

$

117,564

$

99,796

$

275,894

$

245,580

Less: Purchases of property and equipment

(49,961

)

(59,897

)

(115,192

)

(145,786

)

Less: Capitalized internal-use software

(11,219

)

(6,619

)

(20,244

)

(13,647

)

Free cash flow

$

56,384

$

33,280

$

140,458

$

86,147

Net cash provided by (used in) investing activities

$

608,174

$

(793,025

)

$

449,368

$

(885,463

)

Net cash provided by (used in) financing activities

$

5,785

$

2,007,603

$

(3,683

)

$

2,011,125

Net cash provided by operating activities

(percentage of revenue)

17

%

19

%

21

%

25

%

Less: Purchases of property and equipment

(percentage of revenue)

(7

)%

(12

)%

(9

)%

(15

)%

Less: Capitalized internal-use software

(percentage of revenue)

(2

)%

(1

)%

(1

)%

(1

)%

Free cash flow margin(1)

8

%

6

%

11

%

9

%

____________

(1) Totals may not sum due to rounding. Figures are calculated based upon the respective underlying non-rounded data.

Explanation of Non-GAAP Financial Measures

In addition to our results determined in accordance with generally accepted accounting principles in the United States (U.S. GAAP), we believe the following non-GAAP measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In particular, free cash flow is not a substitute for cash provided by operating activities. Additionally, the utility of free cash flow as a measure of our liquidity is further limited as it does not represent the total increase or decrease in our cash balance for a given period. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. A reconciliation is provided above for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures, and not to rely on any single financial measure to evaluate our business.

Items Excluded from Non-GAAP Measures. We exclude stock-based compensation expense, which is a non-cash expense, from certain of our non-GAAP financial measures because we believe that excluding this item provides meaningful supplemental information regarding operational performance. We exclude employer payroll tax expenses related to stock-based compensation, which is a cash expense, from certain of our non-GAAP financial measures because such expenses are dependent upon the price of our Class A common stock and other factors that are beyond our control and do not correlate to the operation of our business. We exclude amortization of acquired intangible assets, which is a non-cash expense, related to business combinations from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. We exclude acquisition-related and other expenses from certain of our non-GAAP financial measures because such expenses are related to business combinations and have no direct correlation to the operation of our business. Acquisition-related and other expenses can be cash or non-cash expenses and include third-party transaction costs and compensation expense for key acquired personnel. We exclude lease impairment charges related to real estate leases, which is a non-cash expense, from certain of our non-GAAP financial measures because they are not indicative of our ongoing cost structure and core business performance. We exclude amortization of debt issuance costs, which is a non-cash expense, from certain of our non-GAAP financial measures because such expenses have no direct correlation to the operation of our business. We exclude legal reserve and settlements, which can be cash or non-cash expenses, from certain of our non-GAAP financial measures because they are not indicative of our ongoing cost structure and core business performance. We exclude restructuring and other charges, which can be cash or non-cash expenses, from certain of our non-GAAP financial measures because they are not indicative of our ongoing cost structure and core business performance.

Non-GAAP Gross Profit and Non-GAAP Gross Margin. We define non-GAAP gross profit and non-GAAP gross margin as U.S. GAAP gross profit and U.S. GAAP gross margin, respectively, excluding stock-based compensation and related employer payroll taxes and amortization of acquired intangible assets.

Non-GAAP Income from Operations and Non-GAAP Operating Margin. We define non-GAAP income from operations and non-GAAP operating margin as U.S. GAAP loss from operations and U.S. GAAP operating margin, respectively, excluding stock-based compensation expense and its related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses, lease impairment charges, legal reserve and settlements, and restructuring and other charges.

Non-GAAP Net Income and Non-GAAP Net Income per Share, Diluted. We define non-GAAP net income as GAAP net loss adjusted for stock-based compensation expense and its related employer payroll taxes, amortization of acquired intangible assets, acquisition-related and other expenses, amortization of issuance costs, lease impairment charges, legal reserve and settlements, restructuring and other charges, and a non-GAAP provision for (benefit from) income taxes. Generally, the difference between our GAAP and non-GAAP income tax expense (benefit) is primarily due to adjustments in stock-based compensation and related employer payroll taxes, amortization of acquired intangibles associated with business combinations, acquisition-related and other expenses, amortization of issuance costs, lease impairment charges, legal reserve and settlements, and restructuring and other charges. We define non-GAAP net income per share, diluted, as non-GAAP net income divided by the weighted-average common shares outstanding, adjusted for dilutive potential shares that were assumed outstanding during period. Currently, potential dilutive effect mainly consists of employee equity incentive plans and convertible senior notes. We believe that excluding these items from non-GAAP net income per share, diluted, provides management and investors with greater visibility into the underlying performance of our core business operating results.

Free Cash Flow and Free Cash Flow Margin. Free cash flow is a non-GAAP financial measure that we calculate as net cash provided by operating activities less cash used for purchases of property and equipment and capitalized internal-use software. Free cash flow margin is calculated as free cash flow divided by revenue. We believe that free cash flow and free cash flow margin are useful indicators of liquidity that provide information to management and investors about the amount of cash generated from our operations that, after the investments in property and equipment and capitalized internal-use software, can be used for strategic initiatives, including investing in our business, and strengthening our financial position. We believe that historical and future trends in free cash flow and free cash flow margin, even if negative, provide useful information about the amount of cash generated by our operating activities that is available (or not available) to be used for strategic initiatives. For example, if free cash flow is negative, we may need to access cash reserves or other sources of capital to invest in strategic initiatives. One limitation of free cash flow and free cash flow margin is that they do not reflect our future contractual commitments. Additionally, free cash flow does not represent the total increase or decrease in our cash balance for a given period.

More News From Cloudflare, Inc.

, /PRNewswire/ -- Consolidated Edison, Inc. (Con Edison) (NYSE: ED) today reported 2026 second quarter net income for common stock of $308 million or $0.83 a share compared with $246 million or $0.68 a share in the 2025 second quarter. Adjusted earnings (non-GAAP) were $308 million or $0.83 a share in the 2026 period compared with $240 million or $0.67 a share in the 2025 period. Adjusted earnings and adjusted earnings per share in the 2026 period exclude transaction costs associated with the strategic alternatives review of Con Edison's equity interests in Mountain Valley Pipeline, LLC (MVP) and Honeoye Storage Corporation (Honeoye). Adjusted earnings and adjusted earnings per share in the 2026 and 2025 periods exclude the effects of hypothetical liquidation at book value (HLBV) accounting for tax equity investments. Adjusted earnings and adjusted earnings per share in the 2025 period exclude accretion of the basis difference of Con Edison's equity interest in MVP, adjustments to the gain and other impacts related to the sale of all of the stock of its former subsidiary, Con Edison Clean Energy Businesses, Inc. (the Clean Energy Businesses) in 2023.

For the first six months of 2026, net income for common stock was $1,232 million or $3.37 a share compared with $1,038 million or $2.93 a share in the first six months of 2025. Adjusted earnings were $1,098 million or $3.00 a share in the 2026 period compared with $1,032 million or $2.91 a share in the 2025 period. Adjusted earnings and adjusted earnings per share in the 2026 period exclude transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye, the gain on the sale of Con Edison's equity interest in MVP and the effects of HLBV accounting for tax equity investments. Adjusted earnings and adjusted earnings per share in the 2026 and 2025 periods exclude accretion of the basis difference of Con Edison's equity interest in MVP. Adjusted earnings and adjusted earnings per share in the 2025 period exclude adjustments to the gain and other impacts related to the sale of all of the stock of the Clean Energy Businesses in 2023.

"Con Edison continues to deliver nation-leading electric service reliability, reflecting the strength of our business model, disciplined infrastructure investments, and the dedication and expertise of our workforce," said Tim Cawley, Chairman and CEO of Con Edison. "We are investing to further strengthen reliability and system resilience, including preparing our network for periods of extreme heat, and redoubling our efforts to keep our service affordable for all customers while continuing to support New York's clean energy transition. Our targeted investments benefit our customers, support economic growth, and provide a foundation for stable, long-term returns for investors."

"Our second-quarter results reflect the strength and resilience of our business and reinforce confidence in our long-term strategy," said Kirk Andrews, Senior Vice President and CFO of Con Edison. "Year-to-date results continue to be in line with expectations. Our vibrant market and the growing momentum for the electrification of buildings and transportation support our confidence that we will provide solid shareholder value for years to come. We expect to have 28 new substations in service by 2035, along with tens of billions of dollars in other capital investments we plan to make to meet our customers' need for energy."

For the year of 2026, Con Edison reaffirmed its adjusted earnings per share (non-GAAP) to be in the range of $6.00 to $6.20 per share. Adjusted earnings per share excludes the gain on the sale of Con Edison's equity interest in MVP ($(0.37) a share after-tax), accretion of the basis difference of Con Edison's equity interest in MVP ($(0.01) a share after-tax), transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye and the effects of HLBV accounting for tax equity investments, the amounts of which will not be determinable until year-end. Accordingly, the company is unable to provide equivalent measures determined in accordance with generally accepted accounting principles in the United States of America (GAAP).

See Attachment A to this press release for a reconciliation of Con Edison's reported earnings per share to adjusted earnings per share and reported net income for common stock to adjusted earnings for the three and six months ended June 30, 2026 and 2025. See Attachments B and C for the estimated effect of major factors resulting in variations in earnings per share and net income for common stock for the three and six months ended June 30, 2026 compared to the respective 2025 periods.

The company's 2026 Second Quarter Form 10-Q is being filed with the Securities and Exchange Commission. A second quarter 2026 earnings release presentation will be available at www.conedison.com. (Select "For Investors" and then select "Press Releases.")

This press release contains forward-looking statements that are intended to qualify for the safe-harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements of future expectations and not facts. Words such as "forecasts," "expects," "estimates," "anticipates," "intends," "believes," "plans," "will," "target," "guidance," "potential," "goal," "consider" and similar expressions identify forward-looking statements. The forward-looking statements reflect information available and assumptions at the time the statements are made, and accordingly speak only as of that time.

Actual results or developments might differ materially from those included in the forward-looking statements because of various factors such as those identified in reports Con Edison has filed with the Securities and Exchange Commission, including that Con Edison's subsidiaries are extensively regulated and may be subject to substantial penalties; its utility subsidiaries' rate plans may not provide a reasonable return; it may be adversely affected by changes to the utility subsidiaries' rate plans; the failure of, or damage to, its subsidiaries' facilities could adversely affect it; a cyber attack could adversely affect it; artificial intelligence is an emerging area of technology that has the potential to impact various aspects of its and its subsidiaries' business operations and customer interactions; the failure of processes and systems, the failure to retain and attract employees and contractors, and their negative performance could adversely affect it; it is exposed to risks from the environmental consequences of its subsidiaries' operations, including increased costs related to climate change; its ability to pay dividends or interest depends on dividends from its subsidiaries; changes to tax laws could adversely affect it; it requires access to capital markets to satisfy funding requirements; a disruption in the wholesale energy markets, increased commodity costs or failure by an energy supplier or customer could adversely affect it; it faces risks related to health epidemics and other outbreaks; its strategies may not be effective to address changes in the external business environment; it faces risks related to supply chain disruptions, inflation and the imposition of tariffs (or subsequent changes to tariffs once announced or implemented); and it also faces other risks that are beyond its control. This list of factors is not all-inclusive because it is not possible to predict all factors that could cause actual results or developments to differ from the forward-looking statements. Con Edison assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This press release also contains financial measures, adjusted earnings and adjusted earnings per share, that are not determined in accordance with GAAP. These non-GAAP financial measures should not be considered as an alternative to net income for common stock or net income per share, respectively, each of which is an indicator of financial performance determined in accordance with GAAP. Adjusted earnings and adjusted earnings per share exclude from net income for common stock and net income per share, respectively, certain items that Con Edison does not consider indicative of its ongoing financial performance such as the gain on the sale of Con Edison's equity interest in MVP, accretion of the basis difference of Con Edison's equity interest in MVP, transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye and the effects of HLBV accounting for tax equity investments. Management uses these non-GAAP financial measures to facilitate the analysis of Con Edison's financial performance as compared to its internal budgets and previous financial results and to communicate to investors and others Con Edison's expectations regarding its future earnings and dividends on its common stock. Management believes that these non-GAAP financial measures are also useful and meaningful to investors to facilitate their analysis of Con Edison's financial performance.

Consolidated Edison, Inc. is a holding company that provides a wide range of energy-related products and services to its customers through the following subsidiaries: Consolidated Edison Company of New York, Inc. (CECONY), a regulated utility providing electric service in New York City and New York's Westchester County, gas service in Manhattan, the Bronx, parts of Queens and parts of Westchester, and steam service in Manhattan; Orange and Rockland Utilities, Inc. (O&R), a regulated utility serving customers in a 1,300-square-mile area in southeastern New York State and northern New Jersey; and Con Edison Transmission, Inc., a regulated company primarily under the oversight of the Federal Energy Regulatory Commission, that develops and invests in electric transmission projects and owns interests in electric assets.

Attachment A

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

Earnings

per Share

Net Income for
Common Stock

(Millions of
Dollars)

Earnings

per Share

Net Income for
Common Stock

(Millions of
Dollars)

2026

2025

2026

2025

2026

2025

2026

2025

Reported earnings per share (basic) and net income for common stock (GAAP basis)

$0.83

$0.68

$308

$246

$3.37

$2.93

$1,232

$1,038

Loss and other impacts related to the sale of the Clean Energy Businesses in 2025 (pre-tax)

—

—

—

—

—

—

—

—

Income taxes

—

—

—

(1)

—

—

—

(1)

Loss and other impacts related to the sale of the Clean Energy Businesses in 2025 (net of tax)

—

—

—

(1)

—

—

—

(1)

Accretion of the basis difference of Con Edison's equity interest in MVP (pre-tax)

—

(0.01)

—

(3)

(0.01)

(0.02)

(3)

(6)

Income taxes (a)

—

—

—

1

—

—

1

1

Accretion of the basis difference of Con Edison's equity interest in MVP (net of tax)

—

(0.01)

—

(2)

(0.01)

(0.02)

(2)

(5)

Transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye (pre-tax)

—

—

1

—

0.01

—

4

—

Income taxes (b)

—

—

—

—

—

—

(1)

—

Transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye (net of tax)

—

—

1

—

0.01

—

3

—

Gain on the sale of Con Edison's equity interest in MVP (pre-tax)

—

—

—

—

(0.52)

—

(189)

—

Income taxes (c)

—

—

—

—

0.15

—

55

—

Gain on the sale of Con Edison's equity interest in MVP (net of tax)

—

—

—

—

(0.37)

—

(134)

—

HLBV effects (pre-tax)

—

—

(1)

(4)

—

—

(1)

—

Income taxes (d)

—

—

—

1

—

—

—

—

HLBV effects (net of tax)

—

—

(1)

(3)

—

—

(1)

—

Adjusted earnings per share and adjusted earnings (non-GAAP basis)

$0.83

$0.67

$308

$240

$3.00

$2.91

$1,098

$1,032

(a) 

The amount of income taxes was calculated using a combined federal and state income tax rate of 25% for the six months ended June 30, 2026 and 21% for the three and six months ended June 30, 2025.

(b) 

The amount of income taxes was calculated using a combined federal and state income tax rate of 26% for the three and six months ended June 30, 2026.

(c) 

The amount of income taxes was calculated using a combined federal and state income tax rate of 29% for the six months ended June 30, 2026.

(d) 

The amount of income taxes was calculated using a combined federal and state income tax rate of 26% for the three and six months ended June 30, 2026 and 23% for the three months ended June 30, 2025.

Attachment B

Variation for the Three Months Ended June 30, 2026 vs. 2025

Net Income for
Common Stock
(Net of Tax) 
(Millions of
Dollars)

Earnings

per Share

CECONY (a)

Higher electric rate base and timing of billing of rate increase

$25

$0.07

Higher gas rate base and timing of billing of rate increase

23

0.06

Lower other interest expense

9

0.03

Lower electric operations and maintenance expense

9

0.02

Higher income from allowance for funds used during construction

4

0.01

Dilutive effect of issuance of common shares

—

(0.02)

Other

4

0.01

Total CECONY

74

0.18

O&R (a)

Electric base rate increase

3

0.01

Gas base rate increase

2

—

Higher interest expense on long-term debt

(3)

(0.01)

Other

(2)

—

Total O&R

—

—

Con Edison Transmission

Accretion of the basis difference of Con Edison's equity interest in MVP

(2)

(0.01)

Transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye

(1)

—

Total Con Edison Transmission

(3)

(0.01)

Other, including parent company expenses (b)

Higher other interest expense

(2)

(0.01)

HLBV effects

(2)

—

Loss and other impacts related to the sale of the Clean Energy Businesses in 2025

(1)

—

Higher income tax expense

(1)

—

Other

(3)

(0.01)

Total Other, including parent company expenses

(9)

(0.02)

Total Reported (GAAP basis)

$62

$0.15

Accretion of the basis difference of Con Edison's equity interest in MVP

2

0.01

HLBV effects

2

—

Loss and other impacts related to the sale of the Clean Energy Businesses in 2025

1

—

Transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye

1

—

Total Adjusted (Non-GAAP basis)

$68

$0.16

(a)

Under the revenue decoupling mechanisms in the Utilities' New York electric and gas rate plans, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. The Utilities' gas and CECONY's steam sales are subject to a weather normalization clause, as a result of which, delivery revenues reflect normal weather conditions during the heating season. In general, the Utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison's results of operations.

(b) 

Other includes the parent company, Con Edison's tax equity investments and consolidation adjustments.

Attachment C

Variation for the Six Months Ended June 30, 2026 vs. 2025

Net Income for
Common Stock
(Net of Tax)
  (Millions of
Dollars)

Earnings

per Share

CECONY (a)

Higher electric rate base

33

0.09

Higher gas rate base

26

0.07

Higher income from allowance for funds used during construction

6

0.02

Dilutive effect of issuance of common shares

—

(0.09)

Other

(3)

(0.01)

Total CECONY

62

0.08

O&R (a)

Electric base rate increase

8

0.02

Gas base rate increase

4

0.01

Higher interest expense on long-term debt

(6)

(0.02)

Total O&R

6

0.01

Con Edison Transmission

Gain on the sale of Con Edison's equity interest in MVP

134

0.37

Transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye

(3)

(0.01)

Accretion of the basis difference of Con Edison's equity interest in MVP

(3)

(0.01)

Other

2

0.01

Total Con Edison Transmission

130

0.36

Other, including parent company expenses (b)

Higher income tax expense

(3)

(0.01)

Higher other interest expense

(2)

(0.01)

Loss and other impacts related to the sale of the Clean Energy Businesses in 2025

(1)

—

HLBV effects

1

—

Other

1

0.01

Total Other, including parent company expenses

(4)

(0.01)

Total Reported (GAAP basis)

$194

$0.44

Gain on the sale of Con Edison's equity interest in MVP

(134)

(0.37)

HLBV effects

(1)

—

Accretion of the basis difference of Con Edison's equity interest in MVP

3

0.01

Transaction costs associated with the strategic alternatives review of Con Edison's equity interests in MVP and Honeoye

3

0.01

Loss and other impacts related to the sale of the Clean Energy Businesses in 2025

1

—

Total Adjusted (Non-GAAP basis)

$66

$0.09

(a)

Under the revenue decoupling mechanisms in the Utilities' New York electric and gas rate plans, revenues are generally not affected by changes in delivery volumes from levels assumed when rates were approved. The Utilities' gas and CECONY's steam sales are subject to a weather normalization clause, as a result of which, delivery revenues reflect normal weather conditions during the heating season. In general, the Utilities recover on a current basis the fuel, gas purchased for resale and purchased power costs they incur in supplying energy to their full-service customers. Accordingly, such costs do not generally affect Con Edison's results of operations.

(b) 

Other includes the parent company, Con Edison's tax equity investments, consolidation adjustments and Broken Bow II, the deferred project that was classified as held for sale at December 31, 2024, the sale and transfer of which was completed in January 2025.

SOURCE Consolidated Edison, Inc.

, /PRNewswire/ -- Corteva, Inc. (NYSE: CTVA) announced today that Vylor Inc., a Delaware corporation and its wholly owned subsidiary ("Vylor"), has commenced private offers to exchange (with respect to each series, an "Exchange Offer" and together, the "Exchange Offers") any and all of the outstanding senior notes of the series listed in the table below issued by EIDP, Inc., a Delaware corporation and a wholly owned subsidiary of Corteva ("EIDP" and such notes, collectively, the "EIDP Notes"), to the extent held by eligible holders, for a corresponding series of notes to be newly issued by Vylor (collectively, the "Vylor Notes"). As previously disclosed, Corteva's Board of Directors is pursuing a plan to separate Corteva into two independent, publicly traded companies, one comprising its current crop protection business and the other comprising its current seed business to be owned and conducted, directly or indirectly, by Vylor (the "Separation"). The Exchange Offers and Consent Solicitations (as defined below) are being made in connection with the planned Separation. Each Exchange Offer and Consent Solicitation is conditioned upon, among other things, consummation of the Separation and the receipt, by the applicable Early Tender Deadline (as defined below), of the Requisite Consents (as defined below) to the Proposed EIDP Base Indenture Amendments (as defined below). The Separation is subject to the satisfaction or waiver of certain customary conditions, and Corteva's Board of Directors has the discretion to abandon or to alter the terms of the planned Separation. As publicly announced by Corteva on July 30, 2026, the Separation is currently expected to be consummated on or about October 1, 2026, subject to satisfaction or waiver of the conditions thereto.

The Exchange Offers and Consent Solicitations are being made upon the terms and conditions set forth in an exchange offer memorandum and consent solicitation statement, dated August 6, 2026 (the "Offering Memorandum"), copies of which will be made available to holders of the EIDP Notes eligible to participate in the Exchange Offers and Consent Solicitations.

The Vylor Notes will have the same interest payment dates, maturity date and interest rate as the EIDP Notes of the corresponding series. In addition to the Vylor Notes, eligible holders of EIDP Notes tendered by the applicable Early Tender Deadline and not validly withdrawn before the applicable Withdrawal Deadline (as defined below) will also receive the applicable Cash Consideration (as defined below). The following table sets forth the applicable Total Exchange Consideration (as defined below), which includes the Cash Consideration, and the applicable Exchange Consideration (as defined below) being offered for a series of EIDP Notes:

Total Exchange
Consideration for
EIDP Notes Validly
Tendered by the
Early Tender
Deadline and Not
Validly Withdrawn by
the Withdrawal
Deadline

Exchange
Consideration
for EIDP Notes
Validly
Tendered After
the Early
Tender
Deadline

Title of
Series of
EIDP
Notes

CUSIP No.
and ISIN of
EIDP Notes

Aggregate
Principal
Amount of
EIDP Notes
Outstanding

Vylor Notes
to be
Issued in
Exchange
for EIDP
Notes

Principal
Amount
of Vylor
Notes (1)

Cash
Consideration
(2)

Principal
Amount of
Vylor Notes
(3)

2.300% Senior Notes due 2030

263534CP2 US263534CP24

$

500,000,000

2.300% Senior Notes due 2030

$1,000

$2.50 to $5.00

$970

5.125% Senior Notes due 2032

263534CS6 US263534CS62

$

500,000,000

5.125% Senior Notes due 2032

$1,000

$2.50 to $5.00

$970

4.800% Senior Notes due 2033

263534CR8 US263534CR89

$

600,000,000

4.800% Senior Notes due 2033

$1,000

$2.50 to $5.00

$970

Principal amount of the applicable series of Vylor Notes issued in exchange for each $1,000 principal amount of EIDP Notes of the corresponding series validly tendered by the applicable Early Tender Deadline and not validly withdrawn by the applicable Withdrawal Deadline and accepted for exchange. Per $1,000 principal amount of the applicable series of EIDP Notes validly tendered by the applicable Early Tender Deadline and not validly withdrawn by the applicable Withdrawal Deadline and accepted for exchange, the applicable Cash Consideration will be an amount equal to the product of $2.50 multiplied by a fraction, the numerator of which is the aggregate principal amount of such series of EIDP Notes outstanding as of such Early Tender Deadline and the denominator of which is the aggregate principal amount of such series of EIDP Notes validly tendered by such Early Tender Deadline and not validly withdrawn by the applicable Withdrawal Deadline. As a result, the applicable Cash Consideration for a series of EIDP Notes will range from $2.50 per $1,000 principal amount (if all eligible holders of such series of EIDP Notes tender) to approximately $5.00 per $1,000 principal amount (if eligible holders of a simple majority of the aggregate principal amount of such series of EIDP Notes tender). The applicable Exchange Consideration does not include, and eligible holders tendering after the applicable Early Tender Deadline will not be eligible to receive, any Cash Consideration. The applicable Exchange Consideration involves the issuance of $970 principal amount of the applicable series of Vylor Notes, as opposed to $1,000 principal amount of such Vylor Notes, for each $1,000 principal amount of EIDP Notes of the corresponding series validly tendered after the applicable Early Tender Deadline and accepted for exchange. Concurrently with the Exchange Offers, Vylor is soliciting consents (with respect to the EIDP Base Indenture (as defined below) and the applicable EIDP Supplemental Indenture (as defined below) governing a series of EIDP Notes, a "Consent Solicitation" and together, the "Consent Solicitations") from eligible holders of EIDP Notes, on behalf of EIDP, to adopt certain proposed amendments to the base indenture (the "EIDP Base Indenture") and the supplemental indentures thereto (each, an "EIDP Supplemental Indenture") governing the EIDP Notes. The proposed amendments to the EIDP Base Indenture (the "Proposed EIDP Base Indenture Amendments") would eliminate substantially all of the restrictive covenants and events of default (other than payment-related and bankruptcy-related events of default) from the EIDP Base Indenture. Approval of the Proposed EIDP Base Indenture Amendments requires consents from the holders of at least a majority of the aggregate principal amount of all the EIDP Notes, voting as a single class (the "Requisite Consents"). The Exchange Offers are conditioned upon, among other things, receipt, by the applicable Early Tender Deadline, of the Requisite Consents to the Proposed EIDP Base Indenture Amendments. The proposed amendments with respect to each EIDP Supplemental Indenture (the "Proposed EIDP Supplemental Indenture Amendments" and, together with the Proposed EIDP Base Amendments, the "Proposed Amendments") would eliminate the offer to repurchase upon change of control provisions from the applicable EIDP Supplemental Indenture. Approval of the Proposed EIDP Supplemental Indenture Amendments requires consents from the holders of at least a majority of the aggregate principal amount of the applicable series of EIDP Notes (the "Majority Consents"). The Exchange Offers are not conditioned upon the receipt of the Majority Consents with respect to any EIDP Supplemental Indenture. When an eligible holder validly tenders their EIDP Notes in the applicable Exchange Offer, they are automatically treated as having validly delivered the related consents to the Proposed Amendments with respect to such EIDP Notes. Eligible holders will not be permitted to tender their EIDP Notes without delivering related consents or to deliver related consents without tendering their EIDP Notes.

Each Exchange Offer and Consent Solicitation will expire at 5:00 p.m., New York City time, on September 3, 2026, unless extended or earlier terminated (such date and time, as they may be extended, the "Expiration Date"). Tenders of a series of EIDP Notes may be validly withdrawn at or prior to 5:00 p.m., New York City time, on August 19, 2026, unless extended or earlier terminated with respect to the applicable Exchange Offer (such date and time, as they may be extended, the "Withdrawal Deadline"), but tenders of such EIDP Notes not so validly withdrawn will thereafter be irrevocable, except in certain limited circumstances where additional withdrawal rights are required by law. A valid withdrawal of the applicable series of EIDP Notes at or prior to 5:00 p.m., New York City time, on August 19, 2026 (such date and time, as they may be extended to any date and time that is no later than the Withdrawal Deadline, the "Consent Revocation Deadline") will also constitute the revocation of the related consents. With respect to a series of EIDP Notes, consents may not be revoked after the applicable Consent Revocation Deadline. Vylor reserves the right to terminate, withdraw, amend or extend an Exchange Offer and Consent Solicitation in its sole discretion, subject to the terms and conditions set forth in the Offering Memorandum.

Subject to the terms and conditions set forth in the Offering Memorandum, for each $1,000 principal amount of the applicable series of EIDP Notes validly tendered in the applicable Exchange Offer by 5:00 p.m., New York City time, on August 19, 2026, unless extended or earlier terminated with respect to the applicable Exchange Offer and Consent Solicitation (such date and time, as they may be extended, the "Early Tender Deadline"), and not validly withdrawn by the applicable Withdrawal Deadline, each eligible holder of EIDP Notes will be eligible to receive (i) Vylor Notes of the corresponding series in an equal principal amount as such series of EIDP Notes tendered and accepted for exchange and (ii) a cash payment of an amount equal to the product of $2.50 multiplied by a fraction, the numerator of which is the aggregate principal amount of such series of EIDP Notes outstanding as of the applicable Early Tender Deadline and the denominator of which is the aggregate principal amount of such series of EIDP Notes validly tendered by such Early Tender Deadline and not validly withdrawn by the applicable Withdrawal Deadline (the "Cash Consideration" and, together with such amount of Vylor Notes, the "Total Exchange Consideration"). As a result, the applicable Cash Consideration for a series of EIDP Notes will range from $2.50 per $1,000 principal amount (if all eligible holders of such series of EIDP Notes tender) to approximately $5.00 per $1,000 principal amount (if eligible holders of a simple majority of the aggregate principal amount of such series of EIDP Notes tender).

Eligible holders who validly tender their EIDP Notes after the applicable Early Tender Deadline but on or prior to the Expiration Date will be eligible to receive $970 principal amount of the applicable series of Vylor Notes per $1,000 principal amount of the corresponding series of EIDP Notes validly tendered (the "Exchange Consideration") but no Cash Consideration.

In addition, all eligible holders whose EIDP Notes are validly tendered and accepted for exchange in the Exchange Offers and Consent Solicitations will receive a cash payment equal to the accrued and unpaid interest on their EIDP Notes accepted for exchange from the last interest payment date of the applicable EIDP Notes preceding the Settlement Date up to, but excluding, the Settlement Date.

Assuming the conditions to the Exchange Offers and Consent Solicitations are satisfied or (to the extent permitted) waived, settlement of the Exchange Offers is expected to occur on or about the second business day following the Expiration Date and substantially simultaneously with the consummation of the Separation, unless Vylor extends or terminates the Exchange Offers (such date and time, as the same may be extended, the "Settlement Date"). Accordingly, Vylor may, in its discretion, extend each of the Expiration Date and the Settlement Date as necessary to maintain such sequencing. Interest on the applicable series of Vylor Notes issued in the related Exchange Offer will accrue from (and including) the Issue Date (the date on which such Vylor Notes are issued in exchange for the corresponding series of EIDP Notes).

The Vylor Notes to be issued in the Exchange Offers will be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. No tender of EIDP Notes of any series will be accepted if it would result in the issuance of less than $2,000 principal amount of the corresponding series of Vylor Notes. If the principal amount of the applicable series of Vylor Notes that would otherwise be required to be delivered in exchange for a tender of the corresponding series of EIDP Notes would not equal $2,000 or an integral multiple of $1,000 in excess thereof, then the principal amount of such Vylor Notes will be rounded down to $2,000 or the nearest integral multiple of $1,000 in excess thereof, and Vylor will pay cash (in lieu of such Vylor Notes not delivered) equal to the remaining portion of the applicable Exchange Consideration for such corresponding series of EIDP Notes plus accrued and unpaid interest with respect to that portion to, but not including, the Settlement Date.

Vylor's obligation to accept and exchange any EIDP Notes validly tendered pursuant to the applicable Exchange Offer is subject to, and conditioned upon, the satisfaction or (to the extent permitted) waiver of certain conditions as set forth in the Offering Memorandum. Each Exchange Offer and Consent Solicitation is conditioned upon, among other things, (i) the consummation of the Separation and (ii) the receipt, by the applicable Early Tender Deadline, of the Requisite Consents to adopt the Proposed EIDP Base Indenture Amendments. Receipt of the Majority Consents to adopt the Proposed EIDP Supplemental Indenture Amendments is not a condition to the consummation of any of the Exchange Offers and Consent Solicitations. Other than the Separation (without the consummation of which the Exchange Offers and Consent Solicitations will not be consummated, neither the applicable Exchange Consideration nor the applicable Total Exchange Consideration will be delivered, and the Proposed Amendments contemplated by the Consent Solicitations will not become effective), Vylor may generally waive any condition with respect to the Exchange Offers and Consent Solicitations, in its sole discretion, at any time prior to the Expiration Date.

The Exchange Offers and Consent Solicitations are being made only to holders of EIDP Notes who satisfy the eligibility conditions described under "Disclaimer" below. Holders of EIDP Notes who desire a copy of the eligibility letter should contact D.F. King & Co., Inc., the information agent and exchange agent for the Exchange Offers and Consent Solicitations, by phone at (800) 283-9185 or by email at [email protected]. Banks and brokers should call (646) 461-2610. The eligibility letter may also be found here: www.dfking.com/vylor. D.F. King & Co., Inc. will also provide copies of the Offering Memorandum to eligible holders of EIDP Notes.

Holders of EIDP Notes are advised to check with any bank, securities broker or other intermediary through which they hold EIDP Notes as to when such intermediary needs to receive instructions from a holder in order for that holder to be able to participate in, or (in the circumstances in which revocation is permitted) revoke their instruction to participate in, the Exchange Offers and Consent Solicitations before the deadlines specified herein and in the Offering Memorandum. The deadlines set by each clearing system for the submission and withdrawal of exchange instructions will also be earlier than the relevant deadlines specified herein and in the Offering Memorandum.

Disclaimer

This press release is issued pursuant to Rule 135c under the Securities Act of 1933, as amended (the "Securities Act"). This press release is neither an offer to sell nor the solicitation of an offer to buy the Vylor Notes or any other securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any person to whom, such an offer, solicitation or sale is unlawful. The Exchange Offers and Consent Solicitations have not been and will not be registered under the Securities Act, or the securities laws of any other jurisdiction, and, accordingly, the Vylor Notes will be subject to transfer restrictions unless and until the Vylor Notes are registered or exchanged for registered notes. The Vylor Notes will be issued in reliance upon exemptions from, or in transactions not subject to, registration under the Securities Act. The Exchange Offers and Consent Solicitations are being made only to, and the Vylor Notes will be offered for exchange only to, holders of EIDP Notes who are (i) reasonably believed to be "qualified institutional buyers" (as defined in Rule 144A under the Securities Act) in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, and (ii) outside the United States, persons who are not, and who are not acting for the account or benefit of, "U.S. persons" (as defined in Rule 902 under the Securities Act) in compliance with Regulation S under the Securities Act. The Vylor Notes will not be offered or sold in the United States or to U.S. persons (as defined in Rule 902 under the Securities Act) unless the transaction is registered under the Securities Act, an exemption from the registration requirements of the Securities Act is available or the transaction is not subject to registration under the Securities Act.

The Exchange Offers and Consent Solicitations are being made only pursuant to the Offering Memorandum. The Offering Memorandum and other documents relating to the Exchange Offers and Consent Solicitations will be distributed only to holders of EIDP Notes who confirm that they are within the categories of eligible participants in the Exchange Offers and Consent Solicitations. None of Vylor, its directors or officers, the dealer managers and solicitation agents, the exchange agent, the information agent, the trustees for the Vylor Notes or the EIDP Notes, their respective affiliates, or any other person is making any recommendation as to whether holders should tender their EIDP Notes in the Exchange Offers or deliver related consents to the Proposed Amendments in the Consent Solicitations.

The complete terms and conditions of the Exchange Offers and Consent Solicitations are set forth in the Offering Memorandum. The Exchange Offers and Consent Solicitations are only being made pursuant to the Offering Memorandum. The Exchange Offers and Consent Solicitations are not being made to holders of EIDP Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS REGISTERED, RECOMMENDED OR APPROVED OF THE VYLOR NOTES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFERING MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

About Corteva

Corteva, Inc. (NYSE: CTVA) is a global pure-play agriculture company that combines industry-leading innovation, high-touch customer engagement and operational execution to profitably deliver solutions for the world's most pressing agriculture challenges. Corteva generates advantaged market preference through its unique distribution strategy, together with its balanced and globally diverse mix of seed, crop protection, and digital products and services. With some of the most recognized brands in agriculture and a technology pipeline well positioned to drive growth, the company is committed to maximizing productivity for farmers, while working with stakeholders throughout the food system as it fulfills its promise to enrich the lives of those who produce and those who consume, ensuring progress for generations to come. More information can be found at www.corteva.com.

Cautionary Statement on Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the U.S. federal securities laws about the Company, Vylor, EIDP, the Exchange Offers and Consent Solicitations and the Separation, including but not limited to all statements about the timing and consummation of the Exchange Offers and Consent Solicitations and the Separation, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current assumptions regarding future business and financial performance and, by their nature, address matters that are uncertain to different degrees. You can identify forward-looking statements by the use of words such as "plans," "expects," "will," "anticipates," "believes," "intends," "projects," "estimates," "outlook" or other words of similar meaning. These forward-looking statements are subject to risks and uncertainties that could cause actual results to be materially different from those set forth in such forward-looking statements, including but not limited to, the risk: (i) that general economic and capital markets conditions may adversely affect the Exchange Offers and Consent Solicitations or the Separation; (ii) that the conditions to the Exchange Offers and Consent Solicitations or the Separation, including the receipt of the Requisite Consents, may not be satisfied or waived; (iii) that any event, change or other circumstance could give rise to the termination of the Exchange Offers and Consent Solicitations and/or the Separation; (iv) of the effects that any termination of the Separation may have on the Company or its subsidiaries; (v) that legal proceedings may be instituted related to the Separation or otherwise; (vi) of unexpected costs, charges or expenses; and (vii) of other risks and uncertainties described in the Company's and EIDP's filings with the U.S. Securities and Exchange Commission (the "SEC"), including under the heading "Risk Factors" (Item 1A) in the Company's most recently filed Annual Report on Form 10-K and in the Company's subsequent Quarterly Reports on Form 10-Q, and in other documents that the Company or EIDP files or furnishes with the SEC. Neither the Company nor EIDP undertakes any obligation to update or revise any forward-looking statement, except as required by applicable law.

SOURCE Corteva Agriscience

Global Revenue and Billings down 1%

Loss from continuing operations was $1.5 million and Adjusted EBITDA was $14.8 million, at the high end of guidance

Project Foundry, our AI-native transformation, is beginning to deliver better outcomes for customers and faster execution across the company

Chicago, Illinois--(Newsfile Corp. - August 6, 2026) - Groupon, Inc. (NASDAQ: GRPN) today announced its financial results for the second quarter ended June 30, 2026. Results and a shareholder letter for the second quarter are posted on Groupon's Investor Relations site (investor.groupon.com). The Company has also filed its Form 10-Q with the Securities and Exchange Commission.

"Project Foundry, our AI-native redesign of how Groupon operates, remains the most consequential work underway at the company, and just over four months in we are extremely pleased with the progress we have made," said Dusan Senkypl, Chief Executive Officer of Groupon. "While Q2 fell slightly short on the top line, we entered the third quarter with momentum and expect growth to accelerate in the second half. We continue to make meaningful progress across our strategic bets, with organic channels returning to growth, managed channels continuing to improve and personalization scaling across our consumer platform, giving us confidence in our outlook for the second half of 2026."

Second Quarter 2026 Highlights

Global Revenue down 1% and Billings down 1% (down 1% FX-neutral) year-over-year.

North America Local Revenue down 2% and Local Billings down 1%, reflecting softness in Health, Beauty & Wellness, partially offset by strength in Things to Do and recovery within our organic and managed channels.

International Local Revenue up 8% and Local Billings up 2% (down 1% FX-neutral). Excluding Giftcloud, International Local Revenue up 9% and International Local Billings up 5%, driven by improved organic performance from our new consumer platform and an expansion of seasonally relevant supply across major International cities, led by our Health, Beauty & Wellness and Things to Do offerings.

Active customers grew 2% to 16.1 million, with growth in both North America and International Local categories.

Unit sales were 8.5 million, down 7% year-over-year, reflecting lower transaction volume in North America and International, partially offset by an increase in average order value as customers purchased higher-value local inventory.

Loss from continuing operations was $1.5 million, compared with income from continuing operations of $20.6 million in the prior year period.

Adjusted EBITDA, a non-GAAP financial measure, was positive $14.8 million, compared with positive $15.6 million in the prior year period.

Operating cash inflow from continuing operations was $18.1 million and free cash flow, a non-GAAP financial measure, was positive $15.0 million.

Cash and cash equivalents as of June 30, 2026 were $226.3 million.

The restructuring plan we announced in May is underway and on track. The payroll actions are estimated to result in $20.0 million to $25.0 million in annualized cost savings. We recorded $3.2 million of restructuring charges in the second quarter under our 2026 Restructuring Plan. The Company estimates total pre-tax charges of $7.0 million to $13.0 million, with a majority of the related headcount reductions expected by the end of the third quarter.

Made progress across Project Foundry and our strategic bets to deepen customer engagement and drive durable growth: the rollout of our new consumer platform nears completion with conversion improving on nearly every surface, organic channels returned to growth, managed channels continued to improve, and we scaled new personalization and trust and quality capabilities.

Definitions and reconciliations of all non-GAAP financial measures and additional information regarding operating measures are included below in the section titled "Non-GAAP Financial Measures and Operating Metrics" and in the accompanying tables.

2026 Outlook1

For the third quarter and full year 2026, the Company expects:

As of August 6, 2026Q3 2026 Guidance
2026 GuidanceLow-end
High-end
Low-end
High-endBillings+4%
+6%
+3%
+5%Revenue$128M
$130M
$513M
$523M+4%
+6%
+3%
+5%Adjusted EBITDA$19M
$21M
$75M
$80MFree Cash FlowNegative
At least $60M1 We do not provide a reconciliation for non-GAAP estimates on a forward-looking basis where we are unable to provide a meaningful calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing or amount of various items that would impact the most directly comparable forward-looking U.S. GAAP financial measure that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. Forward-looking non-GAAP financial measures provided without the most directly comparable U.S. GAAP financial measures may vary materially from the corresponding U.S. GAAP financial measures. Reconciling items to the amounts above include foreign currency gains and losses, restructuring and other cost savings-related charges, investment-related activity such as observable price changes, gains and losses on discrete transactions, certain income tax items, and impairment or other charges.

The outlook above reflects management's current expectations for 2026 and includes forward-looking statements regarding the Company's anticipated financial performance and operating priorities. Actual results may differ materially as a result of risks and uncertainties described in Groupon's filings with the Securities and Exchange Commission, including its most recent Form 10-Q and Form 10-K.

For information about our guidance, refer to our earnings commentary that is posted on our investor relations website (investor.groupon.com).

Conference Call

A conference call will be webcast Friday, August 7, 2026 at 7:00 a.m. CT / 8:00 a.m. ET and will be available on Groupon's investor relations website at https://investor.groupon.com. This call will contain forward-looking statements and other material information regarding our financial and operating results.

Groupon encourages investors to use its investor relations website as a way of easily finding information about the Company. Groupon promptly makes available on this website, free of charge, the reports that the Company files or furnishes with the SEC, corporate governance information (including Groupon's Global Code of Conduct), and select press releases and social media postings. Groupon uses its investor relations website (investor.groupon.com) as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

About Groupon

Groupon (NASDAQ: GRPN) (www.groupon.com) is a trusted local marketplace where consumers go to buy services and experiences that make life more interesting and deliver boundless value. To find out more about Groupon, please visit press.groupon.com.

Non-GAAP Financial Measures and Operating Metrics

In addition to financial results reported in accordance with U.S. GAAP, we have provided the following non-GAAP financial measures: Foreign currency exchange rate neutral operating results, Adjusted EBITDA, and free cash flow. These non-GAAP financial measures, which are presented on a continuing operations basis, are intended to aid investors in better understanding our current financial performance and prospects for the future as seen through the eyes of management. We believe that these non-GAAP financial measures facilitate comparisons with our historical results and with the results of peer companies who present similar measures (although other companies may define non-GAAP measures differently than we define them, even when similar terms are used to identify such measures). However, these non-GAAP financial measures are not intended to be a substitute for those reported in accordance with U.S. GAAP. For reconciliations of these measures to the most applicable financial measures under U.S. GAAP, see "Non-GAAP Reconciliation Schedules" included in the tables accompanying this release.

We exclude the following items from one or more of our non-GAAP financial measures:

Stock-based compensation. We exclude stock-based compensation because it is primarily non-cash in nature and we believe that non-GAAP financial measures excluding this item provide meaningful supplemental information about our operating performance and liquidity.

Depreciation and amortization. We exclude depreciation and amortization expenses because they are non-cash in nature and we believe that non-GAAP financial measures excluding these items provide meaningful supplemental information about our operating performance and liquidity.

Income taxes, interest, and other non-operating items. Income taxes, interest, and other non-operating items include: income taxes, foreign currency gains and losses, loss on extinguishment of debt, interest income and interest expense. We exclude interest and other non-operating items from certain of our non-GAAP financial measures because we believe that excluding these items provides meaningful supplemental information about our core operating performance and facilitates comparisons to our historical operating results.

Special charges and credits. We exclude special charges and credits related to our 2026 Restructuring Plan, Italy Restructuring Plan, 2022 Restructuring Plan and 2020 Restructuring Plan, as well as gain on sale of assets, and gain on sale of business. We exclude special charges and credits from Adjusted EBITDA because we believe that excluding those items provides meaningful supplemental information about our core operating performance and facilitates comparisons with our historical results.

Descriptions of the non-GAAP financial measures included in this release and the accompanying tables are as follows:

Foreign currency exchange rate neutral operating results show current period operating results as if foreign currency exchange rates had remained the same as those in effect in the prior year period. Those measures are intended to facilitate comparisons to our historical performance.

Adjusted EBITDA is a non-GAAP performance measure that we define as Income (loss) from continuing operations excluding income taxes, interest and other non-operating items, depreciation and amortization, stock-based compensation and other special charges and credits, including items that are unusual in nature or infrequently occurring. Our definition of Adjusted EBITDA may differ from similar measures used by other companies, even when similar terms are used to identify such measures. Adjusted EBITDA is a key measure used by our management and Board to evaluate operating performance, generate future operating plans and make strategic decisions. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and Board. However, Adjusted EBITDA is not intended to be a substitute for Income (loss) from continuing operations.

Free cash flow is a non-GAAP liquidity measure that comprises Net cash provided by (used in) operating activities from continuing operations less purchases of property and equipment and capitalized software. We use free cash flow to conduct and evaluate our business because, although it is similar to Net cash provided by (used in) operating activities from continuing operations, we believe that it typically represents a more useful measure of cash flows because purchases of fixed assets, software developed for internal use and website development costs are necessary components of our ongoing operations. Free cash flow is not intended to represent the total increase or decrease in our cash balance for the applicable period.

Descriptions of the operating metrics included in this release and the accompanying tables are as follows:

Gross billings is the total dollar value of customer purchases of goods and services. Gross billings is presented net of customer refunds, order discounts and sales and related taxes. The substantial majority of our revenue transactions are comprised of sales of vouchers and similar transactions in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party merchant who will provide the related goods or services. For these transactions, gross billings differs from Revenue reported in our Condensed Consolidated Statements of Operations, which is presented net of the merchant's share of the transaction price. Gross billings is an indicator of our growth and business performance as it measures the dollar volume of transactions generated through our marketplaces. Tracking gross billings also allows us to monitor the percentage of gross billings that we are able to retain after payments to merchants.

Active customers are unique user accounts, identified by a distinct email address, that have made a purchase during the trailing twelve months ("TTM") either through one of our online marketplaces or directly with a merchant for which we earned a commission. We consider this metric to be an important indicator of our business performance as it helps us to understand how the number of customers actively purchasing our offerings is trending. Some customers could establish and make purchases from more than one account, so it is possible that our active customer metric may count certain customers more than once in a given period. We do not include consumers who solely make purchases with retailers using digital coupons accessed through our websites or mobile applications in our active customer metric, nor do we include consumers who solely make purchases of our inventory through third-party marketplaces with which we partner.

Units are the number of purchases during the reporting period, before refunds and cancellations, made either through one of our online marketplaces, a third-party marketplace, or directly with a merchant for which we earn a commission. We do not include purchases with retailers using digital coupons accessed through our websites or mobile applications in our units metric. We consider units to be an important indicator of the total volume of business conducted through our marketplaces.

Note on Forward-Looking Statements

The statements contained in this release that refer to plans and expectations for the next quarter, the full year or the future are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations and future liquidity. The words "may," "will," "should," "could," "expect," "anticipate," "believe," "estimate," "intend," "continue" and other similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include, but are not limited to, our ability to execute and achieve the expected benefits of our go-forward strategy, including our broader AI-native transformation; the risk that the anticipated benefits of our AI strategy may not be realized in the time frame we expect or at all and may have adverse effects on our operations, merchants and customers; the risk that our public statements regarding our AI strategy and deployment of AI agents are not adequately substantiated or are later viewed as inconsistent with our actual capabilities or results; execution of our business and marketing strategies; volatility in our operating results; challenges arising from our international operations, including fluctuations in currency exchange rates, tax, legal and regulatory developments in the jurisdictions in which we operate and geopolitical instability; global economic uncertainty, including as a result of inflationary pressures; any impact from U.S. and international financial reform legislation and regulations, and any potential trade protection measures, such as new or incremental tariffs and other trade policies; retaining and adding high quality merchants and third-party business partners; retaining existing customers and adding new customers; competing successfully in our industry; providing a strong mobile experience for our customers; managing refund risks; retaining and attracting members of our executive and management teams and other qualified employees and personnel; customer and merchant fraud; payment-related risks; our reliance on email, Internet search engines and mobile application marketplaces to drive traffic to our marketplace; cybersecurity breaches; maintaining and improving our information technology infrastructure; reliance on cloud-based computing platforms; the risks associated with our use and integration of AI and machine learning technologies; completing and realizing the anticipated benefits from acquisitions, dispositions, joint ventures and strategic investments; lack of control over minority investments; managing inventory and order fulfillment risks; claims related to product and service offerings; protecting our intellectual property; maintaining a strong brand; the impact of future and pending litigation; compliance with domestic and foreign laws and regulations, including the CARD Act, GDPR, CPRA, and other privacy-related laws and regulations of the Internet and e-commerce; classification of our independent contractors, agency workers, or employees; risks relating to information or content published or made available on our websites or service offerings we make available; exposure to greater than anticipated tax liabilities; adoption of tax laws; our ability to use our tax attributes; impacts if we become subject to the Bank Secrecy Act or other anti-money laundering or money transmission laws or regulations; our ability to raise capital if necessary; risks related to our access to capital and outstanding indebtedness, including our 2027 Notes and 2030 Notes; our Common Stock, including volatility in our stock price and financial markets; a potential economic slowdown; and those risks and other factors discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025 and Part II, Item 1A. Risk Factors in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and our other filings with the SEC. Moreover, we operate in a very competitive and rapidly changing environment, including with respect to emerging technologies such as AI, machine learning, and data analytics. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we make. Neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements for any reason after the date of this release to conform these statements to actual results or to future events or circumstances. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

As used herein, "Groupon," "the Company," "we," "our," "us" and similar terms include Groupon, Inc. and its subsidiaries, unless the context indicates otherwise.

Groupon, Inc.
Non-GAAP Reconciliation Schedules
(in thousands)
(unaudited)

The following is a quarterly reconciliation of Adjusted EBITDA to the most comparable U.S. GAAP performance measure, Income (loss) from continuing operations:

Q2 2025
 
Q3 2025
 
Q4 2025
 
Q1 2026
 
Q2 2026
Income (loss) from continuing operations$20,593
 $(117,782) $8,081
 $(12,589) $(1,456)Adjustments:
 
 
 
 
 
 
 
 
 
Stock-based compensation
8,782
 
11,109
 
10,189
 
11,911
 
8,330
Depreciation and amortization
4,423
 
4,301
 
4,267
 
4,191
 
4,060
Restructuring and related charges (credits)
(46) 
(64) 
(61) 
7
 
3,161
(Gain) on sale of business
(10,650) 
-
 
-
 
-
 
-
Loss on extinguishment of debt
-
 
99,925
 
-
 
-
 
-
Other (income) expense, net
(18,466) 
(1,197) 
(3,595) 
4,371
 
3,275
Provision (benefit) for income taxes
10,927
 
21,248
 
2,022
 
4,899
 
(2,536)Total adjustments
(5,030) 
135,322
 
12,822
 
25,379
 
16,290
Adjusted EBITDA$15,563
 $17,540
 $20,903
 $12,790
 $14,834
Free cash flow is a non-GAAP liquidity measure. The following is a reconciliation of free cash flow to the most comparable U.S. GAAP liquidity measure, Net cash provided by (used in) operating activities from continuing operations.

Q2 2025
 
Q3 2025
 
Q4 2025
 
Q1 2026
 
Q2 2026
Net cash provided by (used in) operating activities from continuing operations$28,419
 $(20,506) $56,607
 $(9,958) $18,127
Purchases of property and equipment and capitalized software from continuing operations
(3,230) 
(4,082) 
(3,575) 
(3,559) 
(3,105)Free cash flow$25,189
 $(24,588) $53,032
 $(13,517) $15,022

 
 
 
 
 
 
 
 
 
Net cash provided by (used in) investing activities from continuing operations$10,761
 $(3,024) $2,423
 $(3,559) $(3,105)Net cash provided by (used in) financing activities$(2,684) $(3,275) $(1,097) $(55,669) $(13,827)

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/308088

Source: Groupon

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Completion of Merger and Internalization

, /PRNewswire/ -- ACRES Commercial Realty Corp. (NYSE: ACR) (the "ACR" or "Company") announced today that it has completed its previously disclosed acquisition of ACRES Capital Corp. ("ACC") in an all-stock transaction (the "Merger") and transitioned from an externally-managed REIT to an internally-managed REIT (the "Internalization"). Upon closing of the Merger and Internalization, the Company issued approximately 7.5 million shares of ACR common stock to ACC stockholders as merger consideration and terminated the existing Management Agreement. The net increase in ACR common shares outstanding is approximately 6.3 million shares after giving effect to the elimination of ACR shares held by ACC in consolidation.

"The entire ACRES team is excited to have completed this transaction. Collectively, we will own over forty percent of ACR common shares and are highly motivated to drive value for all stakeholders. We believe this combination will enable the company to continue to meet the needs of our customers as they turn to ACRES for capital and service.  We look forward to the next phase of growth for the company," said Andrew Fentress Chairman of the Board and Mark Fogel President of ACRES Commercial Realty Corp.

Private Offering of Senior Secured Notes

The Company also announced today that it has completed a private placement of $200 million of 8.625% Senior Secured Notes due 2031 (the "Notes"), pursuant to a Note Purchase Agreement between the Company, the Purchasers party thereto and UMB Bank, N.A. (the "Collateral Agent"). The Company intends to use a portion of the proceeds from the sale of the Notes to repay in full its $150 million of 5.75% Senior Unsecured Notes upon their maturity in August 2026, with the remaining portion used for general corporate purposes.  

The Notes will mature on July 31, 2031 and will be secured on a first lien basis by the pledge of certain capital stock in its subsidiaries, residual equity interests in securitized financing vehicles and certain other CRE assets (the "Collateral"), and guaranteed by certain subsidiaries of the Company that granted security interests in the Collateral in favor of the Collateral Agent.

"We are pleased to announce the successful completion of this refinancing with Raymond James who has been a trusted advisor and partner since our acquisition of the ACR contract six years ago," said Andrew Fentress Chairman of the Board and Mark Fogel President of ACRES Commercial Realty Corp.

About ACRES Commercial Realty Corp.

ACRES Commercial Realty Corp. is a public commercial mortgage REIT that is primarily focused on originating, holding and managing commercial real estate mortgage loans and equity investments in commercial real estate properties through direct ownership and joint ventures. The Company is dedicated to nationwide middle market lending with a focus on multifamily, student housing, hospitality, industrial and office properties in top U.S. markets. For more information, please visit the Company's website at www.acresreit.com or contact investor relations at [email protected].

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "trend," "will," "continue," "expect," "intend," "anticipate," "estimate," "believe," "look forward" or other similar words or terms. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. Factors that can affect future results are discussed in the documents filed by the Company from time to time with U.S. Securities and Exchange Commission (the "SEC").  These risks and uncertainties include, but are not limited to, risks and uncertainties relating to the Company's ability to successfully manage the transition to self-management and the ability to achieve expected cost savings or other benefits of the Internalization and the timing thereof; unanticipated expenditures relating to or liabilities arising from the internalization; litigation or regulatory issues relating to the Internalization; the impact of the Internalization on the Company's common stock dividend, and the impact of the Internalization on relationships with, and potential difficulties retaining, the Company's executive officers, employees and directors on a go-forward basis. The foregoing list of factors is not exhaustive. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of some of the risks and important factors that could affect such forward-looking statements, please refer to the Company's most recent annual and quarterly reports and other filings filed with the SEC, which are available on the Company's website (www.acresreit.com). The Company undertakes no obligation to update or revise any forward-looking statement to reflect new or changing information or events after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

SOURCE ACRES Commercial Realty Corp.

NEW YORK--(BUSINESS WIRE)--Ziff Davis, Inc. (NASDAQ: ZD) (“Ziff Davis” or “the Company”) today reported unaudited financial results for the second quarter ended June 30, 2026.

“With the successful sale of our Connectivity business, our significant share repurchases, and our robust free cash flow, Ziff Davis is in a very strong financial position,” said Vivek Shah, CEO of Ziff Davis. “We are focused on deploying capital strategically to maximize long-term shareholder returns.”

SECOND QUARTER 2026 RESULTS

During the second quarter of 2026, the Company completed the sale of its Connectivity business. The results of the Connectivity business are classified as discontinued operations for all periods presented in this press release. Unless otherwise noted, all amounts, percentages, and any discussion in this press release reflect the results from continuing operations, except for the Statements of Cash Flows and Free cash flow, which are presented on a combined continuing and discontinued operations basis. Furthermore, upon the classification of Connectivity as a discontinued operation, the Company determined that Connectivity was no longer a reportable segment.

Revenues (1) decreased to $286.7 million compared to $294.8 million for Q2 2025. Operating (loss) income decreased to an operating loss of $(44.7) million compared to operating income of $13.8 million for Q2 2025. This includes a $54.8 million goodwill impairment recognized in Q2 2026 compared to none in Q2 2025. Net (loss) income from continuing operations (2) decreased to $(52.2) million compared to $14.3 million for Q2 2025. Net (loss) income per diluted share from continuing operations (2) decreased to $(1.43) compared to $0.34 for Q2 2025. Adjusted EBITDA (3) decreased to $76.8 million compared to $79.8 million for Q2 2025. Adjusted net income (2) (3) decreased to $37.8 million compared to $38.1 million for Q2 2025. Adjusted net income per diluted share (2) (3) (or “Adjusted diluted EPS”) increased 13.2% to $1.03 compared to $0.91 for Q2 2025. Net cash provided by operating activities from continuing and discontinued operations increased 55.9% to $89.0 million compared to $57.1 million in Q2 2025. Free cash flow from continuing and discontinued operations (3) increased 100.3% to $54.0 million compared to $26.9 million in Q2 2025. Ziff Davis completed the sale of its Connectivity division for total proceeds of approximately $1,216.1 million, consisting of approximately $1,179.1 million cash received at closing, or $1,134.1 million net of cash divested, and $37.0 million held in escrow. Ziff Davis deployed approximately $9.2 million for current and prior year acquisitions during the quarter and $121.5 million related to share repurchases in Q2 2026. The following table reflects results from continuing operations, except for Net cash provided by operating activities and Free cash flow which are on combined basis of continuing and discontinued operations, for the three and six months ended June 30, 2026 and 2025, respectively (in millions, except per share amounts).

(Unaudited)

Three months ended June 30,

% Change

Six months ended June 30,

% Change

2026

2025

2026

2025

Revenues (1)

Technology & Shopping

$

76.7

$

80.8

(5.0

)%

$

147.9

$

162.4

(9.0

)%

Gaming & Entertainment

$

46.6

$

46.2

0.9

%

$

87.4

$

84.3

3.7

%

Health & Wellness

$

94.7

$

99.5

(4.8

)%

$

180.6

$

185.2

(2.5

)%

Cybersecurity & Martech

$

68.7

$

68.3

0.5

%

$

138.5

$

135.7

2.1

%

Total revenues (1)

$

286.7

$

294.8

(2.7

)%

$

554.4

$

567.6

(2.3

)%

Operating (loss) income

$

(44.7

)

$

13.8

NM (4)

$

(41.8

)

$

28.2

NM (4)

Operating (loss) income margin

(15.6

)%

4.7

%

(20.3

)%

(7.5

)%

5.0

%

(12.5

)%

Net (loss) income from continuing operations (2)

$

(52.2

)

$

14.3

NM (4)

$

(52.9

)

$

24.1

NM (4)

Net (loss) income per diluted share from continuing operations (2)

$

(1.43

)

$

0.34

NM (4)

$

(1.43

)

$

0.57

NM (4)

Adjusted EBITDA (3)

$

76.8

$

79.8

(3.7

)%

$

140.2

$

151.2

(7.3

)%

Adjusted EBITDA margin (3)

26.8

%

27.1

%

(0.3

)%

25.3

%

26.6

%

(1.3

)%

Adjusted net income (2)(3)

$

37.8

$

38.1

(0.6

)%

$

65.4

$

71.1

(8.0

)%

Adjusted diluted EPS (2)(3)

$

1.03

$

0.91

13.2

%

$

1.75

$

1.68

4.2

%

Net cash provided by operating activities from continuing and discontinued operations

$

89.0

$

57.1

55.9

%

$

118.9

$

77.7

53.1

%

Free cash flow from continuing and discontinued operations (3)

$

54.0

$

26.9

100.3

%

$

50.8

$

21.9

131.5

%

Notes:

(1)

The revenues associated with each of the reportable segments may have been rounded when presented independently so they foot precisely to Total Revenues.

(2)

GAAP effective tax rates were approximately (1.8)% and (0.8)% for the three months ended June 30, 2026 and 2025, respectively, and (6.6)% and 22.3% for the six months ended June 30, 2026 and 2025, respectively. Adjusted effective tax rates were approximately 23.9% and 24.2% for the three months ended June 30, 2026 and 2025, respectively, and 23.9% and 23.9% for the six months ended June 30, 2026 and 2025, respectively.

(3)

For definitions of non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures refer to section “Non-GAAP Financial Measures” further in this release.

(4)

NM: Not meaningful.

EARNINGS CONFERENCE CALL AND AUDIO WEBCAST

Ziff Davis will host a live audio webcast and conference call discussing its second quarter 2026 financial results on Friday, August 7, 2026, at 8:30AM ET. The live webcast and call will be accessible by phone by dialing (844) 985-2014 or via www.ziffdavis.com. Following the event, the audio recording and presentation materials will be archived and made available at www.ziffdavis.com.

ABOUT ZIFF DAVIS

Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, shopping, gaming and entertainment, health and wellness, cybersecurity, and martech. For more information, visit www.ziffdavis.com.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995: Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including those contained in Vivek Shah’s quote. These forward-looking statements are based on management’s current expectations or beliefs and are subject to numerous assumptions, risks, and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These factors and uncertainties include, among other items: the Company’s ability to grow advertising, licensing, and subscription revenues, profitability, and cash flows, particularly in light of an uncertain U.S. or worldwide economy, including the possibility of economic downturn or recession; the Company’s ability to make interest and debt payments; the Company’s ability to identify, close, and successfully transition acquisitions or divestitures; the Company’s ability to realize the anticipated benefits from the divestiture of the Connectivity business; customer growth and retention; the Company’s ability to create compelling content; our reliance on third-party platforms; the threat of content piracy and developments related to artificial intelligence; increased competition and rapid technological changes; variability of the Company’s revenue based on changing conditions in particular industries and the economy generally; protection of the Company’s proprietary technology; the risk of alleged infringement by the Company of intellectual property of others; the risk of losing critical third-party vendors or key personnel; the risks associated with fraudulent activity, system failure, or a security breach; risks related to our ability to adhere to our internal controls and procedures; the risk of adverse changes in the U.S. or international regulatory environments, including but not limited to the imposition or increase of taxes or regulatory-related fees; the risks related to supply chain disruptions, increased tariffs and trade protection measures, inflationary conditions, and rising interest rates; the risk of liability for legal and other claims; our ability to consummate a sale of one or more of our business lines pursuant to our announced review of potential value-creating opportunities; and the numerous other factors set forth in the Company’ filings with the Securities and Exchange Commission (“SEC”). For a more detailed description of the risk factors and uncertainties affecting the Company, refer to our most recent Annual Report on Form 10-K and the other reports filed by the Company from time-to-time with the SEC, each of which is available at www.sec.gov. The forward-looking statements provided in this press release, including those contained in Vivek Shah’s quote are based on limited information available to the Company at this time, which is subject to change. Although management’s expectations may change after the date of this press release, the Company undertakes no obligation to revise or update these statements.

  ZIFF DAVIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED, IN THOUSANDS)

  June 30, 2026

December 31, 2025

ASSETS

Cash and cash equivalents

$

1,606,112

$

573,777

Accounts receivable, net of allowances of $6,343 and $8,141, respectively

418,846

623,441

Prepaid expenses and other current assets

59,804

81,964

Current assets - discontinued operations

—

91,217

Total current assets

2,084,762

1,370,399

Long-term investments

99,936

93,228

Property and equipment, net of accumulated depreciation of $419,396 and $382,187, respectively

171,481

162,130

Intangible assets, net

293,773

338,178

Goodwill

1,291,002

1,346,964

Deferred income taxes

5,444

5,107

Other assets

51,629

24,523

Noncurrent assets - discontinued operations

—

322,777

TOTAL ASSETS

$

3,998,027

$

3,663,306

LIABILITIES AND STOCKHOLDERS’ EQUITY

Accounts payable and accrued expenses

$

489,554

$

696,918

Income taxes payable, current

185,637

7,345

Deferred revenue, current

126,974

129,700

Current portion of long-term debt

148,937

148,685

Other current liabilities

12,228

16,089

Current liabilities - discontinued operations

—

76,216

Total current liabilities

963,330

1,074,953

Long-term debt

718,703

717,815

Deferred revenue, noncurrent

5,903

6,518

Liability for uncertain tax positions

19,619

19,733

Deferred income taxes

20,773

41,116

Other noncurrent liabilities

32,241

33,055

Noncurrent liabilities - discontinued operations

—

16,541

TOTAL LIABILITIES

1,760,569

1,909,731

Common stock

350

384

Additional paid-in capital

436,450

472,723

Retained earnings

1,867,704

1,337,542

Accumulated other comprehensive loss

(67,046

)

(57,074

)

TOTAL STOCKHOLDERS’ EQUITY

2,237,458

1,753,575

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

3,998,027

$

3,663,306

  ZIFF DAVIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)

  Three months ended June 30,

Six months ended June 30,

2026

2025

2026

2025

Total revenues

$

286,738

$

294,803

$

554,379

$

567,619

Operating costs and expenses:

Direct costs

45,711

40,663

90,028

81,064

Sales and marketing

122,172

127,044

237,405

239,455

Research, development, and engineering

14,369

14,197

28,006

28,117

General, administrative, and other related costs

47,496

48,794

94,140

91,957

Depreciation and amortization

46,874

50,335

91,752

98,787

Goodwill impairment

54,839

—

54,839

—

Total operating costs and expenses

331,461

281,033

596,170

539,380

Operating (loss) income

(44,723

)

13,770

(41,791

)

28,239

Interest expense, net

(5,770

)

(6,584

)

(12,666

)

(12,778

)

Gain on investments, net

—

4,340

—

4,340

Other (loss) income, net

(586

)

(2,402

)

102

(3,877

)

(Loss) income from continuing operations before income tax expense and income from equity method investment

(51,079

)

9,124

(54,355

)

15,924

Income tax (expense) benefit

(941

)

69

(3,578

)

(3,549

)

(Loss) income from equity method investment, net of tax

(133

)

5,115

5,005

11,745

Net (loss) income from continuing operations

(52,153

)

14,308

(52,928

)

24,120

Net income from discontinued operations, net of tax

676,614

12,035

699,650

26,462

Net income

$

624,461

$

26,343

$

646,722

$

50,582

Net (loss) income per common share from continuing operations:

Basic

$

(1.43

)

$

0.34

$

(1.43

)

$

0.57

Diluted

$

(1.43

)

$

0.34

$

(1.43

)

$

0.57

Net income per common share from discontinued operations:

Basic

$

18.60

$

0.29

$

18.92

$

0.63

Diluted

$

18.60

$

0.29

$

18.92

$

0.63

Net income per common share:

Basic

$

17.16

$

0.63

$

17.49

$

1.20

Diluted

$

17.16

$

0.63

$

17.49

$

1.20

Weighted average shares outstanding:

Basic

36,381,271

41,732,800

36,985,872

42,143,165

Diluted

36,381,271

41,750,114

36,985,872

42,257,116

  ZIFF DAVIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED, IN THOUSANDS)

  Six months ended June 30,

2026

2025

Cash flows from operating activities:

Net income

$

646,722

$

50,582

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

96,656

113,438

Non-cash operating lease costs

3

4,325

Share-based compensation

23,897

21,479

Provision for credit losses on accounts receivable

1,994

1,012

Deferred income taxes, net

(22,542

)

(7,320

)

Gain on sale of businesses

(860,597

)

—

Goodwill impairment

54,839

—

Changes in fair value of contingent consideration

124

(2,318

)

Income from equity method investments, net of tax

(5,005

)

(11,745

)

Gain on investments, net

—

(4,340

)

Other

3,826

1,701

Decrease (increase) in:

Accounts receivable

204,820

147,417

Prepaid expenses and other current assets

(2,972

)

(523

)

Other assets

3,480

1,900

Increase (decrease) in:

Accounts payable and accrued expenses

(230,206

)

(209,583

)

Income taxes payable

204,345

(21,482

)

Deferred revenue

7,402

464

Other current liabilities

(7,870

)

(7,320

)

Net cash provided by operating activities

118,916

77,687

Cash flows from investing activities:

Purchases of property and equipment

(68,126

)

(55,752

)

Acquisitions, net of cash received

(8,030

)

(50,345

)

Distribution from equity method investment

—

9,196

Proceeds from sale of equity investments

—

25,250

Proceeds from sale of businesses, net of cash divested

1,134,081

—

Other

(209

)

51

Net cash provided by (used in) investing activities

1,057,716

(71,600

)

Cash flows from financing activities:

Repurchase of common stock

(173,058

)

(68,834

)

Issuance of common stock under employee stock purchase plan

3,477

3,751

Deferred payments for acquisitions

(1,162

)

(213

)

Other

(3,041

)

(1,592

)

Net cash used in financing activities

(173,784

)

(66,888

)

Effect of exchange rate changes on cash and cash equivalents

(3,747

)

12,180

Net change in cash and cash equivalents

999,101

(48,621

)

Cash and cash equivalents at beginning of period

607,011

505,880

Cash and cash equivalents at beginning of period associated with discontinued operations

33,234

18,380

Cash and cash equivalents at beginning of period associated with continuing operations

573,777

487,500

Cash and cash equivalents at end of period

1,606,112

457,259

Cash and cash equivalents at end of period associated with discontinued operations

—

18,141

Cash and cash equivalents at end of period associated with continuing operations

$

1,606,112

$

439,118

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we use the following non-GAAP financial measures: Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income (loss), Adjusted net income (loss) per diluted share, Free cash flow from continuing and discontinued operations, and Adjusted effective tax rate (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these non-GAAP financial measures for financial and operational decision making and as means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results or, in certain cases, may be non-cash in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making, (2) certain measures are used to determine the amount of annual incentive compensation paid to our named executive officers, and (3) they are used by the analyst community to help them analyze the health of our business.

These non-GAAP financial measures are not measures presented in accordance with GAAP, and our use of these terms may vary from that of other companies, limiting their usefulness for comparison purposes. These non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. These non-GAAP financial measures have limitations in that they do not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP.

Non-GAAP financial measures exclude the certain items listed below. We believe that excluding these items from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peers, many of which exclude similar items. We believe that non-GAAP financial measures provide meaningful supplemental information regarding operational performance. We further believe these measures are useful to investors in that they allow for greater transparency of certain line items in the Company’s financial statements.

Adjusted EBITDA is defined as Net income (loss) from continuing operations with adjustments to reflect the addition or elimination of certain items including, but not limited to:

Interest expense, net. Interest expense is generated primarily from interest due on outstanding debt, partially offset by interest income generated from the interest earned on cash, cash equivalents, and investments; (Gain) loss on debt extinguishment, net. This is a non-cash expense that relates to extinguishments of long-term debt obligations. We believe this (gain) loss does not represent recurring core business operating results of the Company; (Gain) loss on sale of businesses. This gain or loss relates to the sales of businesses and does not represent recurring core business operating results of the Company; (Gain) loss on investments, net. This item includes realized gains and losses, unrealized gains and losses, and impairment charges on debt and equity investments. The amount of gain or loss depends on the share price for investments with readily determinable fair value and on observable price changes for investments without a readily determinable fair value, and does not represent core business operating results of the Company; Provision for credit losses on investments. This is a non-cash expense that includes changes in the provision for credit losses on investments of the Company in debt and equity instruments and does not represent recurring core business operating results of the Company; Other (income) loss, net. This income or expense relates to other non-operating items and does not represent recurring core business operating results of the Company; Income tax (benefit) expense. This benefit or expense depends on the pre-tax loss or income of the Company, statutory tax rates, tax regulations, and different tax rates in various jurisdictions in which the Company operates and which the Company does not have the control over; (Income) loss from equity method investment, net of tax. This is a non-cash income or expense as it relates primarily to our investment in OCV Fund I, LP (the “OCV Fund”). We believe that gain or loss resulting from our equity method investment does not represent core business operating results of the Company; Depreciation and amortization. This is a non-cash expense at it relates to use and associated reduction in value of certain assets including equipment, fixtures, and certain capitalized internal-use software and website development costs, and identifiable definite-lived intangible assets of the acquired businesses; Share-based compensation. This is a non-cash expense as it relates to awards granted under the various share-based incentive plans of the Company. We view the economic cost of share-based awards to be the dilution to our share base; Transaction, integration, and other charges. This includes expenses associated with the acquisition or disposal of certain businesses, lease agreement terminations, retention bonuses, and other transaction-specific items, as well as certain other items, such as severance, adjustments to contingent consideration, third-party debt modification costs, litigation costs from discrete, complex, or unusual proceedings, and legal settlements. These expenses do not represent core business operating results of the Company; Long-lived asset impairments and other charges. These expenses are incurred in connection with impaired long-lived assets, including right-of-use (“ROU”) assets of the Company. Associated expenses are comprised of insurance, utility, and other charges related to assets that are no longer in use, and partially offset by the sublease income earned. These expenses do not represent core business operating results of the Company; and Goodwill impairment. This is a non-cash expense that is recorded when the carrying value of the reporting unit exceeds its fair value and does not represent core business operating results of the Company. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Total Revenues.

Adjusted net income (loss) is defined as Net income (loss) from continuing operations with adjustments to reflect the addition or elimination of certain statement of operations items including, but not limited to:

Interest, net. This reflects the difference between the imputed and coupon interest expense associated with the 4.625% Senior Notes and a charge that the Company determined to be penalty interest associated with the 1.75% Convertible Notes, offset in part by a certain interest income earned by the Company. These net expenses do not represent core business operating results of the Company; (Gain) loss on debt extinguishment, net. This is a non-cash expense that relates to extinguishments of long-term debt obligations. We believe this gain or loss does not represent recurring core business operating results of the Company; (Gain) loss on sale of businesses. This gain or loss relates to the sales of businesses and does not represent recurring core business operating results of the Company; (Gain) loss on investments, net. This item includes realized gains and losses, unrealized gains and losses, and impairment charges on debt and equity investments. The amount of gain or loss depends on the share price for investments with readily determinable fair value and on observable price changes for investments without a readily determinable fair value, and does not represent core business operating results of the Company; Provision for credit losses on investments. This is a non-cash expense that includes changes in the provision for credit losses on investments of the Company in debt and equity instruments and does not represent recurring core business operating results of the Company; (Income) loss from equity method investment, net of tax. This is a non-cash income or expense as it relates primarily to our investment in the OCV Fund. We believe that gains or losses resulting from our equity method investment do not represent core business operating results of the Company; Amortization. Includes the amortization of patents and intangible assets that we acquired. This is a non-cash expense as it primarily relates to identifiable definite-lived intangible assets of the acquired businesses. We believe that acquired intangible assets represent cost incurred by the acquiree to build value prior to the acquisition and the amortization of this cost does not represent core business operating results of the Company; Share-based compensation. This is a non-cash expense as it relates to awards granted under the various share-based incentive plans of the Company. We view the economic cost of share-based awards to be the dilution to our share base; Transaction, integration, and other charges. This includes expenses associated with the acquisition or disposal of certain businesses, lease agreement terminations, retention bonuses, and other transaction-specific items, as well as certain other items, such as severance, adjustments to contingent consideration, third-party debt modification costs, litigation costs from discrete, complex, or unusual proceedings, and legal settlements. These expenses do not represent core business operating results of the Company; Long-lived asset impairments and other charges. These expenses are incurred in connection with impaired long-lived assets, including ROU assets of the Company. Associated expenses are comprised of insurance, utility, and other charges related to assets that are no longer in use, and partially offset by the sublease income earned. These expenses do not represent core business operating results of the Company; and Goodwill impairment. This is a non-cash expense that is recorded when the carrying value of the reporting unit exceeds its fair value and does not represent core business operating results of the Company. Adjusted net income (loss) per diluted share is calculated by dividing Adjusted net income (loss) from continuing operations by the diluted weighted average shares of common stock outstanding excluding the effect of convertible debt dilution.

Free cash flow from continuing and discontinued operations is defined as Net cash provided by operating activities, which includes both continuing and discontinued operations, less purchases of property and equipment, plus changes in contingent consideration (if any).

Adjusted effective tax rate is calculated based upon the GAAP effective tax rate with adjustments for the tax applicable to non-GAAP adjustments to Net income (loss) from continuing operations, generally based upon the effective marginal tax rate of each adjustment.

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

  The following table sets forth a reconciliation of Net (loss) income from continuing operations to Adjusted EBITDA:

  Three months ended June 30,

Six months ended June 30,

2026

2025

2026

2025

Net (loss) income from continuing operations

$

(52,153

)

$

14,308

$

(52,928

)

$

24,120

Interest expense, net

5,770

6,584

12,666

12,778

Gain on investment, net

—

(4,340

)

—

(4,340

)

Other loss (income), net

586

2,402

(102

)

3,877

Income tax (benefit) expense

941

(69

)

3,578

3,549

Income (loss) from equity method investment, net of tax

133

(5,115

)

(5,005

)

(11,745

)

Depreciation and amortization

46,874

50,334

91,752

98,787

Share-based compensation

11,520

10,848

20,068

19,930

Transaction, integration, and other charges

5,092

3,980

11,724

3,339

Long-lived asset impairments and other charges

3,242

851

3,609

871

Goodwill impairment

54,839

—

54,839

—

Adjusted EBITDA

$

76,844

$

79,783

$

140,201

$

151,166

  ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

  The following tables set forth Revenues and a reconciliation of Operating (loss) income to Adjusted EBITDA by segment:

Three months ended June 30, 2026

Technology &
Shopping

Gaming &
Entertainment

Health &
Wellness

Cybersecurity &
Martech

Corporate

Total

Revenues

$

76,757

$

46,619

$

94,658

$

68,704

$

—

$

286,738

Operating (loss) income

$

(3,306

)

$

9,017

$

(42,291

)

$

13,378

$

(21,521

)

$

(44,723

)

Depreciation and amortization

20,500

3,385

13,440

9,372

177

46,874

Share-based compensation

1,681

658

2,095

1,366

5,720

11,520

Transaction, integration, and other charges

897

177

378

(656

)

4,296

5,092

Long-lived asset impairments and other charges

66

1,302

1,734

140

—

3,242

Goodwill impairment

—

—

54,839

—

—

54,839

Adjusted EBITDA

$

19,838

$

14,539

$

30,195

$

23,600

$

(11,328

)

$

76,844

  Three months ended June 30, 2025

Technology &
Shopping

Gaming &
Entertainment

Health &
Wellness

Cybersecurity &
Martech

Corporate (1)

Total

Revenues

$

80,776

$

46,226

$

99,452

$

68,349

$

—

$

294,803

Operating (loss) income

$

(7,944

)

$

11,255

$

16,018

$

12,235

$

(17,794

)

$

13,770

Depreciation and amortization

23,049

3,054

14,371

9,821

39

50,334

Share-based compensation

1,437

449

1,626

1,135

6,201

10,848

Transaction, integration, and other charges

1,720

331

771

79

1,079

3,980

Long-lived asset impairments and other charges

4

100

653

99

(5

)

851

Adjusted EBITDA

$

18,266

$

15,189

$

33,439

$

23,369

$

(10,480

)

$

79,783

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

  The following tables set forth a reconciliation of Net (loss) income from continuing operations to Adjusted net income with adjustments presented on after-tax basis:

  Three months ended June 30,

2026

Per diluted
share (1)

2025

Per diluted
share (1)

Net (loss) income from continuing operations

$

(52,153

)

$

(1.43

)

$

14,308

$

0.34

Interest, net

75

—

61

—

Gain on investments, net

—

—

(4,340

)

(0.10

)

Income from equity method investment, net

133

—

(5,115

)

(0.13

)

Amortization

19,249

0.52

22,397

0.54

Share-based compensation

9,120

0.25

7,051

0.17

Transaction, integration, and other charges

4,116

0.11

3,045

0.07

Long-lived asset impairment and other charges

2,468

0.07

676

0.02

Goodwill impairment

54,839

1.49

—

—

Adjusted net income

$

37,847

$

1.03

$

38,083

$

0.91

  Six months ended June 30,

2026

Per diluted
share (1)

2025

Per diluted
share (1)

Net (loss) income from continuing operations

$

(52,928

)

$

(1.43

)

$

24,120

$

0.57

Interest, net

170

—

122

—

Gain on investments, net

—

—

(4,340

)

(0.10

)

Income from equity method investment, net

(5,005

)

(0.13

)

(11,745

)

(0.29

)

Amortization

38,812

1.04

43,504

1.03

Share-based compensation

16,710

0.45

16,277

0.39

Transaction, integration, and other charges

10,021

0.27

2,438

0.06

Long-lived asset impairment and other charges

2,774

0.07

703

0.02

Goodwill impairment

54,839

1.47

—

—

Adjusted net income

$

65,393

$

1.75

$

71,079

$

1.68

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

  The following are the adjustments to certain statement of operations items used to derive Adjusted net income, which we believe provide useful information about our operating results and enhance the overall understanding of past financial performance and future prospects of the Company.

  Three months ended June 30, 2026

GAAP amount

Adjustments

Adjusted
non-GAAP
amount

Interest, net

(Income) loss
from equity
method
investments, net

Amortization

Share-based
compensation

Transaction,
integration, and
other
charges

Long-lived asset
impairments and
other charges

Goodwill
impairment

Direct costs

$

(45,711

)

$

—

$

—

$

—

$

81

$

122

$

—

$

—

$

(45,508

)

Sales and marketing

$

(122,172

)

—

—

—

1,444

771

—

—

$

(119,957

)

Research, development, and engineering

$

(14,369

)

—

—

—

980

479

—

—

$

(12,910

)

General, administrative, and other related costs

$

(47,496

)

—

—

—

9,015

3,722

3,242

—

$

(31,517

)

Depreciation and amortization

$

(46,874

)

—

—

25,769

—

—

—

—

$

(21,105

)

Goodwill impairment

$

(54,839

)

—

—

—

—

—

—

54,839

$

—

Interest expense, net

$

(5,770

)

100

—

—

—

—

—

—

$

(5,670

)

Other loss, net

$

(586

)

—

—

—

—

281

—

—

$

(305

)

Income tax expense (1)

$

(941

)

(25

)

—

(6,520

)

(2,400

)

(1,259

)

(774

)

—

$

(11,919

)

Income from equity method investment, net of tax

$

(133

)

—

133

—

—

—

—

—

$

—

Total non-GAAP adjustments

$

75

$

133

$

19,249

$

9,120

$

4,116

$

2,468

$

54,839

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

  Three months ended June 30, 2025

GAAP amount

Adjustments

Adjusted
non-GAAP
amount

Interest, net

(Gain) loss
on investments, net

(Income) loss
from equity
method
investments, net

Amortization

Share-based
compensation

Transaction,
integration, and
other charges

Long-lived asset
impairments and
other charges

Direct costs

$

(40,663

)

$

—

$

—

$

—

$

—

$

46

$

(3

)

$

—

$

(40,620

)

Sales and marketing

$

(127,044

)

—

—

—

—

1,062

1,240

—

$

(124,742

)

Research, development, and engineering

$

(14,197

)

—

—

—

—

810

288

—

$

(13,099

)

General, administrative, and other related costs

$

(48,794

)

—

—

—

—

8,930

2,455

851

$

(36,558

)

Depreciation and amortization

$

(50,335

)

—

—

—

29,727

—

—

—

$

(20,608

)

Interest expense, net

$

(6,584

)

82

—

—

—

—

—

—

$

(6,502

)

Gain on investments, net

$

4,340

—

(4,340

)

—

—

—

—

—

$

—

Other loss, net

$

(2,402

)

—

—

—

—

—

—

—

$

(2,402

)

Income tax expense (1)

$

69

(21

)

—

—

(7,330

)

(3,797

)

(935

)

(175

)

$

(12,189

)

Income from equity method investment, net of tax

$

5,115

—

—

(5,115

)

—

—

—

—

$

—

Total non-GAAP adjustments

$

61

$

(4,340

)

$

(5,115

)

$

22,397

$

7,051

$

3,045

$

676

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

  Six months ended June 30, 2026

GAAP amount

Adjustments

Adjusted non-
GAAP amount

Interest, net

(Income) loss
from equity
method
investments, net

Amortization

Share-based
compensation

Transaction,
integration, and
other charges

Long-lived asset
impairments and
other charges

Goodwill
impairment

Direct costs

$

(90,028

)

$

—

$

—

$

—

$

133

$

212

$

—

$

—

$

(89,683

)

Sales and marketing

$

(237,405

)

—

—

—

2,433

2,246

—

—

$

(232,726

)

Research, development, and engineering

$

(28,006

)

—

—

—

1,658

1,310

—

—

$

(25,038

)

General, administrative, and other related costs

$

(94,140

)

—

—

—

15,844

7,961

3,609

—

$

(66,726

)

Depreciation and amortization

$

(91,752

)

—

—

49,316

—

—

—

—

$

(42,436

)

Goodwill impairment

$

(54,839

)

—

—

—

—

—

—

54,839

$

—

Interest expense, net

$

(12,666

)

226

—

—

—

—

—

—

$

(12,440

)

Other income, net

$

102

—

—

—

—

515

—

—

$

617

Income tax expense (1)

$

(3,578

)

(56

)

—

(10,504

)

(3,358

)

(2,223

)

(835

)

—

$

(20,554

)

Loss from equity method investment, net

$

5,005

—

(5,005

)

—

—

—

—

—

$

—

Total non-GAAP adjustments

$

170

$

(5,005

)

$

38,812

$

16,710

$

10,021

$

2,774

$

54,839

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

  Six months ended June 30, 2025

GAAP amount

Adjustments

Adjusted non-GAAP amount

Interest, net

(Gain) loss on investments, net

(Income) loss from equity method investments, net

Amortization

Share-based compensation

Transaction, integration, and other charges

Long-lived asset impairments and other charges

Direct costs

$

(81,064

)

$

—

$

—

$

—

$

—

$

98

$

57

$

—

$

(80,909

)

Sales and marketing

$

(239,455

)

—

—

—

—

1,860

2,143

—

$

(235,452

)

Research, development, and engineering

$

(28,117

)

—

—

—

—

1,491

223

—

$

(26,403

)

General, administrative, and other related costs

$

(91,957

)

—

—

—

—

16,481

915

871

$

(73,690

)

Depreciation and amortization

$

(98,787

)

—

—

—

57,504

—

—

—

$

(41,283

)

Interest expense, net

$

(12,778

)

163

—

—

—

—

—

—

$

(12,615

)

Gain on investments, net

$

4,340

—

(4,340

)

—

—

—

—

—

$

—

Other loss, net

$

(3,877

)

—

—

—

—

—

—

—

$

(3,877

)

Income tax expense (1)

$

(3,549

)

(41

)

—

—

(14,000

)

(3,653

)

(900

)

(168

)

$

(22,311

)

Income from equity method investment, net

$

11,745

—

—

(11,745

)

—

—

—

—

$

—

Total non-GAAP adjustments

$

122

$

(4,340

)

$

(11,745

)

$

43,504

$

16,277

$

2,438

$

703

ZIFF DAVIS, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(UNAUDITED, IN THOUSANDS)

  The following tables set forth a reconciliation of Net cash provided by operating activities from continuing and discontinued operations to Free cash flow from continuing and discontinued operations:

2026

Q1

Q2

Q3

Q4

Full Year

Net cash provided by operating activities from continuing and discontinued operations

$

29,953

$

88,963

$

—

$

—

$

118,916

Less: Purchases of property and equipment

(33,127

)

(34,999

)

—

—

(68,126

)

Free cash flow from continuing and discontinued operations

$

(3,174

)

$

53,964

$

—

$

—

$

50,790

  2025

Q1

Q2

Q3

Q4

Full Year

Net cash provided by operating activities from continuing and discontinued operations

$

20,613

$

57,074

$

138,299

$

191,082

$

407,068

Less: Purchases of property and equipment

(25,619

)

(30,133

)

(30,136

)

(33,310

)

(119,198

)

Free cash flow from continuing and discontinued operations

$

(5,006

)

$

26,941

$

108,163

$

157,772

$

287,870

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