Quinstreet reports $17.02 million net income for fiscal Q1 2027

Cover page 20 changes

2 unchanged paragraphs

For the Fiscal Year Ended June 30 , 2026

ANNUAL QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

1 unchanged paragraph

For the transition period from to

Commission File number: No. 001-34628

4 unchanged paragraphs

Foster City , California 94404

(Address of principal executive offices) including zip code)

6 unchanged paragraphs

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

2 unchanged paragraphs

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

5 unchanged paragraphs

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

1 unchanged paragraph

As of December 31, 2025, the aggregate market value of the voting stock held by non-affiliates of the registrant, based on the closing sale price of the Company's common stock as reported by the Nasdaq Global Select Market on such date, was $ 779,144,648 . For purposes of calculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding shares are held by non-affiliates, except for shares owned by each of our executive officers, directors and 5% or greater stockholders. In the case of 5% or greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances indicating that such stockholders exercise any control over our company. The determination of executive officer or affiliate status is not a conclusive determination for other purposes.

Documents Incorporated by Reference:

Portions of the registrant's definitive proxy statement relating to its 2026 annual stockholders' meeting are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated . Such proxy statement will be filed w ith the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

FOR THE FISCAL YEAR ENDED JUNE 30, 2026

Number of shares of common stock outstanding as of August 21, October 31, 2026: 57,086,409 57,292,931

PART I. FINANCIAL INFORMATION

Financial statements 93 changes

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm (PCAOB ID 238 )

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

CONDENSED CONSOLIDA TED BALANCE SHEETS

(In thousands, except share and per share data)

Cash and cash equivalents

Accounts receivable, net of allowances and reserves of $ 3,721 and $ 3,423 as of September 30, 2026 and June 30, 2026

Prepaid expenses and other assets

Total current assets

Property and equipment, net

Operating lease right-of-use assets

Intangible assets, net

Deferred tax assets, noncurrent

Other assets, noncurrent

Liabilities and Stockholders' Equity

Current liabilities:

Post-closing payments, current

Total current liabilities

Operating lease liabilities, noncurrent

Post-closing payments, noncurrent

Other liabilities, noncurrent

Commitments and contingencies (See Note 11)

Stockholders' equity:

Common stock: $ 0.001 par value; 100,000,000 shares authorized; 57,229,396 and 56,494,586 shares issued and outstanding as of September 30, 2026 and June 30, 2026

Additional paid-in capital

Accumulated other comprehensive loss

Total stockholders' equity

Total liabilities and stockholders' equity

See notes to condensed consolidated financial statements

Consolidated CONDENSED CONSOL IDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Loss) (In thousands, except per share data)

Operating expenses: (1)

General and administrative

Other income (expense), net

Income before income taxes

(Provision for) income taxes

Net income and comprehensive income

Net income per share:

Weighted-average shares used in computing net income per share:

(1) Cost of revenue and operating expenses include stock-based compensation expense as follows:

General and administrative

See notes to condensed consolidated financial statements

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

Balances at June 30, 2026

Issuance of common stock upon exercise of stock options

Release of restricted stock, net of share settlement

Issuance of common stock under the employee stock purchase plan

Stock-based compensation expense

Withholding taxes related to release of restricted stock, net of share settlement ( 8,408 ( 8,408

Share repurchase excise tax

Balances at September 30, 2026

Balances at June 30, 2025

Issuance of common stock upon exercise of stock options

Release of restricted stock, net of share settlement

Issuance of common stock under the employee stock purchase plan

Stock-based compensation expense

Withholding taxes related to release of restricted stock, net of share settlement ( 5,275 ( 5,275 ( 462,440 ( 7,142 ( 7,142 ( 462,440 ( 7,142

Balances at September 30, 2025

See notes to condensed consolidated financial statements

CONDENSED CONSOLIDATED S TATEMENTS OF CASH FLOWS

Cash Flows from Operating Activities

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

Stock-based compensation

Depreciation and amortization

Provision for sales returns and doubtful accounts receivable ( 54 ( 56

Deferred income taxes

Other adjustments, net

Changes in assets and liabilities:

Prepaid expenses and other assets

Net cash provided by operating activities

Cash Flows from Investing Activities

Capital expenditures

Internal software development costs

Net cash used in investing activities

Cash Flows from Financing Activities

Proceeds from exercise of stock options and issuance of common stock under employee stock purchase plan

Payment of withholding taxes related to release of restricted stock, net of share settlement ( 8,408 ( 5,275

Post-closing payments and contingent consideration related to acquisitions ( 4,614 ( 6,745

Net cash used in financing activities

and 13 more changes in the filing

Notes to the financial statements 130 changes

Report of Independent Regis tered Public Accounting Firm

To the Board of Directors and Stockholders of QuinStreet, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of QuinStreet Inc. and its subsidiaries (the "Company") as of June 30, 2026 and 2025, and the related consolidated statements of operations and comprehensive income (loss), of stockholders' equity and of cash flows for each of the three years in the period ended June 30, 2026, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company's consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management's Report on Internal Control over Financial Reporting, management has excluded Siren Group AG ("HomeBuddy") from its assessment of internal control over financial reporting as of June 30, 2026 because it was acquired by the Company in a purchase business combination during 2026. We have also excluded HomeBuddy from our audit of internal control over financial reporting. HomeBuddy is a wholly-owned subsidiary whose total assets and total revenues excluded from management's assessment and our audit of internal control over financial reporting represent 5.5% and 6.9%, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30, 2026.

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisition of HomeBuddy – Valuation of the Customer Relationships Intangible Asset

As described in Note 6 to the consolidated financial statements, on January 2, 2026, the Company completed the acquisition of HomeBuddy for the total purchase price of $179.7 million. Of the acquired intangible assets, $35.5 million of customer relationships was recorded. The fair value of the customer relationships was determined using the multi-period excess earnings method. The significant assumptions used by management in determining the preliminary fair value of the customer relationships intangible asset included revenue growth rates, gross margin, customer retention rate, and discount rate.

The principal considerations for our determination that performing procedures relating to the valuation of the customer relationships intangible asset acquired in the acquisition of HomeBuddy is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the customer relationships acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to gross margin and customer retention rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management's valuation of the customer relationships acquired. These procedures also included, among others (i) reading the purchase agreement; (ii) testing management's process for developing the fair value estimate of the customer relationships acquired; (iii) evaluating the appropriateness of the multi-period excess earnings method used by management; (iv) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings method; and (v) evaluating the reasonableness of the significant assumptions used by management related to gross margin and customer retention rate. Evaluating management's assumption related to gross margin involved considering (i) the current and past performance of the HomeBuddy business; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings method and (ii) the reasonableness of the customer retention rate assumption.

As described in Notes 2 and 3 to the consolidated financial statements, the Company derives revenue primarily from fees earned through the delivery of qualified inquiries such as clicks, leads, calls, applications, or customers. The Company recognizes revenue when the Company transfers promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has assessed the services promised in its contracts with clients and has identified one performance obligation, which is a series of distinct services. Depending on the client's needs, these services consist of a specified or an unlimited number of clicks, leads, calls, applications, or customers to be delivered over a period of time. The Company satisfies these performance obligations over time as the services are provided. The transaction price for any given period is fixed and no estimation of variable consideration is required. The Company does not promise to provide any other significant goods or services to its clients. The Company recorded total net revenue of $1.3 billion for the year ended June 30, 2026.

The principal considerations for our determination that performing procedures relating to revenue recognition is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to the Company's revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process. These procedures also included, among others (i) evaluating certain revenue transactions, on a sample basis, by recalculating the revenue recognized and by obtaining and inspecting source documents, including executed contracts, invoices, delivery documents, and cash receipts, where applicable; (ii) evaluating certain revenue transactions by testing the issuance and settlement of invoices and credit memos, tracing transactions not settled to a detailed listing of accounts receivable, and testing the completeness and accuracy of certain data provided by management; and (iii) confirming, on a sample basis, outstanding customer invoice balances as of year-end and obtaining and inspecting source documents, including executed contracts, invoices, delivery documents, and subsequent cash receipts, where applicable, for confirmations not returned.

/s/ PricewaterhouseCoopers LLP

San Jose, California

We have served as the Company's auditor since 2000.

CONSOLIDA TED BALANCE SHEETS

(In thousands, except share and per share data)

Cash and cash equivalents

Accounts receivable, net of allowances and reserves of $ 3,423 and $ 1,902 as of June 30, 2026 and 2025

Prepaid expenses and other assets

Total current assets

Property and equipment, net

Operating lease right-of-use assets

Intangible assets, net

Deferred tax assets, noncurrent

Other assets, noncurrent

Liabilities and Stockholders' Equity

Current liabilities:

Post-closing payments, current

Total current liabilities

Operating lease liabilities, noncurrent

Post-closing payments, noncurrent

Other liabilities, noncurrent

Commitments and contingencies (See Note 12)

Stockholders' equity:

Common stock: $ 0.001 par value; 100,000,000 shares authorized; 56,494,586 and 57,159,734 shares issued and outstanding as of June 30, 2026 and 2025

Additional paid-in capital

Accumulated other comprehensive loss

Total stockholders' equity

Total liabilities and stockholders' equity

See notes to consolidated financial statements

CONSOLIDATED S TATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

Fiscal Year Ended June 30,

Operating expenses: (1)

General and administrative

Operating income (loss)

Other income (expense), net

Income (loss) before income taxes

Benefit from (provision for) income taxes

Comprehensive income (loss):

Other comprehensive income (loss):

Foreign currency translation adjustment

Comprehensive income (loss)

Net income (loss) per share:

Weighted-average shares used in computing net income (loss) per share:

(1) Cost of revenue and operating expenses include stock-based compensation expense as follows:

General and administrative

See notes to consolidated financial statements

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

Balance at June 30, 2024

Issuance of common stock upon exercise of stock options

Release of restricted stock, net of share settlement

Issuance of common stock under the employee stock purchase plan

Stock-based compensation expense

Withholding taxes related to release of restricted stock, net of share settlement ( 13,224 ( 13,224

Balance at June 30, 2025

Issuance of common stock upon exercise of stock options

Release of restricted stock, net of share settlement

Issuance of common stock under the employee stock purchase plan

and 50 more changes in the filing

Note 1: The Company 1 change

QuinStreet, Inc. (the "Company") is a leader in performance marketplaces and technologies for the financial services and home services industries. The Company was incorporated in California in April 1999 and reincorporated in Delaware in December 2009. The Company specializes in customer acquisition for clients in high value, information-intensive markets or "verticals," including financial services and home services. The corporate headquarters are located in Foster City, California, with additional offices throughout the United States, India, Mexico, and Switzerland. The Th e majority of the Company's operations and revenue are in North America.

Note 2: Summary of Significant Accounting Policies 80 changes

Basis of Presentation

1 unchanged paragraph

Prior Period Reclassifications

Certain prior periods amounts have been reclassified to conform with current period presentation. Amounts previously presented as "Other Revenue" were reclassified into "Home Services" in the Disaggregation of Revenue table within Note 3, Revenue . Post-closing payment obligations previously classified within Other liabilities on the Consolidated Balance Sheets have been reclassified to their own categories. These reclassifications had no effect on previously reported totals for assets, liabilities, stockholders' equity, cash flows or net income.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. These estimates are based on information available as of the date of the financial statements; therefore, actual results could differ from those estimates.

The Company derives revenue primarily from fees earned through the delivery of qualified inquiries such as clicks, leads, calls, applications, or customers. The Company recognizes revenue when the Company transfers promised goods or services to clients in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company recognizes revenue pursuant to the five-step framework contained in ASC 606, Revenue from Contracts with Customers: (i) identify the contract with a client; (ii) identify the performance obligations in the contract, including whether they are distinct in the context of the contract; (iii) determine the transaction price, including the constraint on variable consideration; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies the performance obligations.

As part of determining whether a contract exists, probability of collection is assessed on a client-by-client basis at the outset of the contract. Clients are subjected to a credit review process that evaluates the clients' financial position and the ability and intention to pay. If it is determined from the outset of an arrangement that the client does not have the ability or intention to pay, the Company will conclude that a contract does not exist and will continuously reassess its evaluation until the Company is able to conclude that a contract does exist.

Generally, the Company's contracts specify the period of time as one month, but in some instances the term may be longer. However, for most of the Company's contracts with clients, either party can terminate the contract at any time without penalty. Consequently, enforceable rights and obligations only exist on a day-to-day basis, resulting in individual daily contracts during the specified term of the contract or until one party terminates the contract prior to the end of the specified term.

The Company has assessed the services promised in its contracts with clients and has identified one performance obligation, which is a series of distinct services. Depending on the client's needs, these services consist of a specified or an unlimited number of clicks, leads, calls, applications, customers, etc. (hereafter collectively referred to as "marketing results") to be delivered over a period of time. The Company satisfies these performance obligations over time as the services are provided. The Company does not promise to provide any other significant goods or services to its clients.

Transaction price is measured based on the consideration that the Company expects to receive from a contract with a client. The Company's contracts with clients contain variable consideration as the price for an individual marketing result varies on a day-to-day basis depending on the market-driven amount a client has committed to pay. However, because the Company ensures the stated period of its contracts does not generally span multiple reporting periods, the contractual amount within a period is based on the number of marketing results delivered within the period. Therefore, the transaction price for any given period is fixed and no estimation of variable consideration is required.

If a marketing result delivered to a client does not meet the contractual requirements associated with that marketing result, the Company's contracts allow for clients to return a marketing result generally within 5-10 days of having received the marketing result. Such returns are factored into the amount billed to the client on a monthly basis and consequently result in a reduction to revenue in the same month the marketing result is delivered. No warranties are offered to the Company's clients.

The Company does not allocate transaction price as the Company has only one performance obligation and its contracts do not generally span multiple periods. Taxes collected from clients and remitted to governmental authorities are not included in revenue. The Company elected to use the practical expedient which allows the Company to record sales commissions as expense as incurred when the amortization period would have been one year or less.

The Company bills clients monthly in arrears for the marketing results delivered during the preceding month. The Company's standard payment terms are 30-60 days. Consequently, the Company does not have significant financing components in its arrangements.

Separately from the agreements the Company has with clients, the Company has agreements with Internet search companies, third-party publishers and strategic partners that it engages with to generate targeted marketing results for the Company's clients. The Company receives a fee from its clients and separately pays a fee to the Internet search companies, third-party publishers and strategic partners. The Company evaluates whether it is the principal (i.e., report revenue on a gross basis) or agent (i.e., report revenue on a net basis). In doing so, the Company first evaluates whether it controls the goods or services before they are transferred to the clients. If the Company controls the goods or services before they are transferred to the clients, the Company is the principal in the transaction. As a result, the fees paid by the Company's clients are recognized as revenue and the fees paid to its Internet search companies, third-party publishers and strategic partners are included in cost of revenue. If the Company does not control the goods or services before they are transferred to the clients, the Company is the agent in the transaction and recognizes revenue on a net basis. The Company has one subsidiary, CCM , which provides performance marketing agency and technology services to clients in financial services, education and other markets, recognizing revenue on a net basis. Determining whether the Company controls the goods or services before they are transferred to the clients may require judgment.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company's investment portfolio consists of money market funds. Cash is deposited with financial institutions that management believes are creditworthy. To date, the Company has not experienced any material losses on its investment portfolio.

The Company maintains co ntracts with its clients, most of which are cancelable with little or no prior notice. In addition, these contracts do not contain penalty provisions for cancellation before the end of the contract term. The Company had one client that accounted for 21 % of net revenue in fiscal year 2026 , two clients that accounted for 23 % and 12 % of net revenue in fiscal year 2025 , and one client that accounted for 12 % of net revenue in fiscal year 2024 . The Company had two clients that each accounted for 13 % of net accounts receivable as of June 30, 2026, and two clients that accounted for 16 % and 13 % of net accounts receivable as of June 30, 2025 . No other client accounted for 10 % or more of net revenue in fiscal years 2026, 2025 and 2024 , or 10 % or more of net accounts receivable as of June 30, 2026 and 2025.

Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company estimates and categorizes the fair value of its financial instruments by applying the following hierarchy:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to directly access.

Level 2 — Valuations based on quoted prices for similar assets or liabilities; valuations for interest-bearing securities based on non-daily quoted prices in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company's financial instruments consist principally of cash equivalents, accounts receivable, accounts payable, post-closing payments and contingent consideration related to acquisitions. The recorded values of the Company's accounts receivable and accounts payable approximate their current fair values due to the relatively short-term nature of these accounts. See Note 5, Fair Value Measurements, for additional information regarding fair value measurements.

Cash and Cash Equivalents

All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents on the Company's consolidated balance sheets.

Accounts Receivable and Allowances

The Company's accounts receivable are derived from clients located principally in the United States. The Company performs ongoing credit evaluation of its customers and generally does not require collateral. The Company makes estimates of expected credit losses for the allowance for doubtful accounts and allowance for unbilled receivables based upon its assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of its customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from customers.

The following table presents the changes in the Company's allowance for credit losses for the periods indicated (in thousands):

Fiscal Year Ended June 30,

Balance at beginning of the year

Write-offs charged against the allowance

(Benefit from) provision for credit losses

Balance at end of the year

The reven ue reserve was $ 2.9 million and $ 1.0 million as of June 30, 2026 and 2025. The total allowance for credit losses and revenue reserve was $ 3.4 million and $ 1.9 million as of June 30, 2026 and 2025.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization, and are depreciated on a straight-line basis over the estimated useful lives of the assets, as follows:

Furniture and fixtures

Leasehold improvements

the shorter of the lease term or the estimated useful lives of the improvements

Internal Software Development Costs

The Company incurs costs to develop software for internal use. The Company expenses all costs that relate to the planning and post-implementation phases of development as product development expense. Costs incurred in the development phase are capitalized and amortized over the product's estimated useful life if the product is expected to have a useful life beyond six months . Costs associated with repair or maintenance of existing sites or the developm ent of website content are included within cost of revenue in the Company's consolidated statements of operations and comprehensive income (loss) . The Company's policy is to amortize capitalized internal software development costs on a product-by-product basis using the straight-line method over the estimated economic life of the application, which is generally two years . The Company capitalized internal software development costs of $ 10.9 million and $ 9.3 million in fiscal years 2026 and 2025. Amortization of internal software development costs is reflected within cost of revenue in the Company's consolidated statements of operations and comprehensive income (loss) .

At the commencement date of a lease, the Company recognizes lease liabilities which represent its obligation to make lease payments, and right-of-use ("ROU") assets which represent its right to use the underlying asset during the lease term. The lease liability is measured at the present value of lease payments over the lease term. As the Company's leases typically do not provide an implicit rate, the Company uses an incremental borrowing rate based on the information available at the lease commencement date. The ROU asset is measured at cost, which includes the initial measurement of the lease liability and initial direct costs incurred by the Company and excludes lease incentives. Lease liabilities are recorded in accrued liabilities and operating lease liabilities, noncurrent. ROU assets are recorded in operating lease right-of-use assets.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. Lease agreements that contain both lease and non-lease components are generally accounted for separately. The Company does not recognize lease liabilities and ROU assets for short-term leases with terms of twelve months or less.

Acquisitions and Business Combinations

In each acquisition transaction, the Company assesses whether the transaction should follow accounting guidance applicable to an asset acquisition or a business combination. This assessment requires an evaluation of whether the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, resulting in an asset acquisition or, if not, resulting in a business combination. An asset acquisition is an acquisition of an asset, or a group of assets, that does not meet the definition of a business.

The Company accounts for asset acquisitions using the cost accumulation and allocation model, whereby the costs of the acquisition are allocated to the assets acquired on a relative fair value basis in accordance with the Company's accounting policies.

The Company accounts for business combinations using the acquisition method, which requires that the total consideration for each acquired business be allocated to the assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. The excess of the purchase price over the fair values of these identifiable assets and liabilities is recorded as goodwill. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

In determining the fair value of assets acquired and liabilities assumed in a business combination, the Company used the income approach to value its most significant acquired asset. Significant assumptions relating to the Company's estimates in the income approach include base revenue, revenue growth rate net of client attrition, projected gross margin, discount rates, projected operating expenses and the future effective income tax rates. The valuations of our acquired businesses have been performed by a third-party valuation specialist under the Company management's supervision. The Company believes that the estimated fair value assigned to the assets acquired and liabilities assumed are based on reasonable assumptions and estimates that marketplace participants would use. However, such assumptions are inherently uncertain and actual results could differ from those estimates. Future changes in our assumptions or the interrelationship of those assumptions may negatively impact future valuations. In future measurements of fair value, adverse changes in discounted cash flow assumptions could result in an impairment of goodwill or intangible assets that would require a non-cash charge to the consolidated statements of operations and comprehensive income (loss) and may have a material effect on our financial condition and operating results.

Acquisition related costs in a business combination are not considered part of the consideration, and are expensed as operating expense as incurred. Contingent consideration, if any, is measured at fair value initially on the acquisition date as well as subsequently at the end of each reporting period until settlement at the end of the assessment period. The Company includes the results of operations of the businesses acquired as of the beginning of the acquisition dates.

Amortization of intangible assets acquired in business combinations is recognized over their estimated useful lives and recorded in either cost of revenue or operating expenses based on the nature of the underlying asset.

The Company conducts a test for the impairment of goodwill at the reporting unit level on at least an annual basis and whenever there are events or changes in circumstances that would more likely than not reduce the estimated fair value of a reporting unit below its carrying value. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Significant judgments required to estimate the fair value of reporting units include estimating future cash flows and determining appropriate discount rates, growth rates, an appropriate control premium and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit which could trigger impairment.

The Company performs its annual goodwill impairment test on April 30 and conducts a qualitative assessment to determine whether it is necessary to perform a quantitative goodwill impairment test. In assessing the qualitative factors, the Company considers the impact of key factors such as changes in the general economic cond itions, changes in industry and competitive environment, stock price, actual revenue performance compared to previous years, forecasts and cash flow generation. The Company had one reporting unit for purposes of allocating and testing goodwill for fiscal year 2026 . Based on the results of the qualitative assessment completed as of April 30, 2026, there were no indicators of impairment.

The Company evaluates long-lived assets, such as property and equipment and purchased intangible assets with finite lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If necessary, a quantitative test is performed that requires the applicatio n of judgment when assessing the fair value of an asset. When the Company identifies an impairment, it reduces the carrying amount of the asset to its estimated fair value based on a discounted cash flow approach or, when available and appropriate, to comparable market values. As of April 30, 2026, the Company evaluated its long-lived assets and concluded there were no indicators of impairment. The weig hted-average useful life of intangible assets was 5.9 years as of June 30, 2026 .

Investments in Equity Securities

The Company's investments in equity securities, which are reported within other assets, noncurrent, on the consolidated balance sheets, include investments in privately held companies without readily determinable market values. The Company adjusts the carrying value of its investments in equity securities to fair value when transactions for identical or similar investments of the same issuer are observable. All gains and losses on investments in equity securities, realized and unrealized, are recognized within other (expense) income, net on the Company's consolidated statements of operations and comprehensive income (loss) .

The Company applies the equity method of accounting for investments in other entities when it exercises significant influence. Under the equity method, the Company's share of each investee's profit or loss is recognized within other (expense) income, net on the Company's consolidated statements of operations and comprehensive income (loss) .

The Company applies the fair value measurement alternative for investments in other entities when it holds less than 20 % ownership in the entity and does not exercise significant influence. These investments consist of equity holdings in non-public companies and are recorded within other assets, noncurrent, on the consolidated balance sheets.

The Company regularly reviews investments accounted for under the equity method and the fair value measurement alternative for possible impairment, which generally involves an analysis of the facts and changes in circumstances influencing the investment, expectations of the entity's cash flows and capital needs, and the viability of its business model. The evaluation for impairment of investments in equity securities considers qualitative factors, including the financial condition and specific events related to an investee that may indicate the fair value of the investment is less than its carrying value. No impairment charges for investments in equity securities were recorded for fiscal years 2026 and 2025 .

The Company accounts for income taxes using an asset and liability approach to record deferred taxes. The Company's deferred income tax assets represent temporary differences between the financial statement carrying amount and the tax basis of existing assets and liabilities that will result in deductible amounts in future years, including net loss carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets and liabilities are expected to be realized or settled. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized. The Company regularly assesses the realizability of our deferred tax assets. Judgment is required to determine whether a valuation allowance is necessary and the amount of such valuation allowance, if appropriate. The Company considers all available evidence, both positive and negative to determine, based on the weight of available evidence, whether it is more likely than not that some or all of the deferred tax assets will not be realized. In evaluating the need, or continued need, for a valuation allowance the Company considers, among other things, the nature, frequency and severity of current and cumulative taxable income or losses, forecasts of future profitability, and the duration of statutory carryforward periods. The Company's judgments regarding future profitability may change due to future market conditions, changes in U.S. or international tax laws and other factors.

The Company recognizes tax benefits from an uncertain tax position only if it is more likely than not, based on the technical merits of the position, that the tax position will be sustained on examination by the tax authorities. The tax benefits recognized in the financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Interest and penalties related to unrecognized tax benefits are recognized within income tax expense .

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), or decision making group, in deciding how to allocate resources and in assessing performance. The Company's CODM, its chief executive officer, reviews financial information presented on a consolidated basis, and no expense or operating income is evaluated at a segment level. Given the consolidated level of review by the Company's chief executive officer, the Company operates as one reportable segment.

Foreign Currency Translation

The Company's foreign operations are subject to exchange rate fluctuations. The majority of the Company's sales and expenses are denominated in U.S. dollars. The functional currency for the majority of the Company's foreign subsidiaries is the U.S. dollar. For these subsidiaries, assets and liabilities denominated in foreign currency are remeasured into U.S. dollars at current exchange rates for monetary assets and liabilities and historical exchange rates for nonmonetary assets and liabilities. Net revenue, cost of revenue and expenses are generally remeasured at average exchange rates in effect during each period. Gains and losses from foreign currency remeasurement are included in other (expense) income, net in the Company's consolidated statements of operations and comprehensive income (loss). Certain foreign subsidiaries designate the local currency as their functional currency. For those subsidiaries, the assets and liabilities are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at average exchange rates for the period. The foreign currency translation adjustments are included in accumulated other comprehensive income (loss) as a separate component of stockholders' equity. Foreign currency transaction gains and losses are recorded within other (expense) income, net in the Company's consolidated statements of operations and comprehensive income (loss) and were not material for any period presented.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and foreign currency translation adjustments from those subsidiaries not using the U.S. dollar as their functional currency. Comprehensive income (loss) is disclosed as part of the statements of operations and comprehensive income (loss).

The Company is subject to the possibility of various loss contingencies arising in the ordinary course of business. Management considers the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as its ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. The Company regularly evaluates current information available to its management to determine whether such accruals should be adjusted and whether new accruals are required.

From time to time, the Company is involved in disputes, litigation and other legal actions. The Company records a charge equal to at least the minimum estimated liability for a loss contingency only when both of the following conditions are met: (i) information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements, and (ii) the range of loss can be reasonably estimated. The actual liability in any such matters may be materially different from the Company's estimates, which could result in the need to adjust the liability and record additional expenses.

Stock-Based Compensation

The Company measures and records the expense related to stock-based transactions based on the fair values of stock-based payment awards, as determined on the date of grant. The fair value of restricted stock units with a service condition ("service-based RSU") is determined based on the closing price of the Company's common stock on the date of grant. To estimate the fair value of stock options and purchase rights granted under the employee stock purchase plan ("ESPP"), the Company selected the Black-Scholes option pricing model. The fair value of restricted stock units with a service and performance condition ("performance-based RSU") is determined based on the closing price of the Company's common stock on the date of grant. Grant date as defined by ASC 718 is determined when the components that comprise the performance targets have been fully established. If a grant date has not been established, the compensation expense associated with the performance-based RSUs is re-measured at each reporting date based on the closing price of the Company's common stock at each reporting date until the grant date has been established. In applying these models, the Company's determination of the fair value of the award is affected by assumptions regarding a number of subjective variables. These variables include, but are not limited to, the Company's expected stock price volatility over the term of the award and the employees' actual and projected stock option exercise and pre-vesting employment termination behaviors.

The Company recognizes stock-based compensation expense for options and service-based RSUs using the straight-line method, and for performance-based RSUs using the graded vesting method, based on awards ultimately expected to vest. The Company recognizes stock-based compensation expense for the purchase rights granted under the ESPP using the straight-line method over the offering period. The Company estimates future forfeitures at the date of grant. On an annual basis, the Company assesses changes to its estimate of expected forfeitures based on recent forfeiture activity. The effect of adjustments made to the forfeiture rates, if any, is recognized in the period that change is made. See Note 13, Stock Benefit Plans , for additional information regarding stock-based compensation.

The Company sponsors a 401(k) defined contribution pla n covering all U.S. employees. There were no employer contributions under this plan in fiscal years 2026 and 2025 .

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances and transactions have been eliminated in consolidation.

Unaudited Interim Financial Information

The accompanying condensed consolidated financial statements and the notes to the condensed consolidated financial statements as of September 30, 2026 and for the three months ended September 30, 2026 and 2025 are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2026, as filed with the SEC on August 26, 2026. The condensed consolidated balance sheet at June 30, 2026 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the Company's condensed consolidated balance sheet at September 30, 2026, its condensed consolidated statements of operations and comprehensive income, stockholders' equity for the three months ended September 30, 2026 and 2025 and condensed consolidated statements of cash flows for the three months ended September 30, 2026 and 2025. The results of operations for the three months ended September 30, 2026 are not necessarily indicative of the results to be expected for the fiscal year ending June 30, 2027, or any other future period.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of commitments and contingencies at the date of the financial statements and reported amounts of revenue and expenses during the period. On an ongoing basis, management evaluates these estimates, judgments and assumptions, including those related to revenue recognition, stock-based compensation, goodwill, long-lived assets, contingencies, credit losses of accounts receivable, and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. In addition, the Company may engage third-party valuation specialists to assist with the preparation of certain of its valuations. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from those estimates, and such differences could affect the results of operations reported in future periods.

The significant accounting policies are described in Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2026. There have been no material changes to the significant accounting policies as of and for the three months ended September 30, 2026 .

1 unchanged paragraph

Accounting Pronouncements Already Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09) to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We adopted this guidance for the year ended June 30, 2026 , on a prospective basis, which resulted in additional disclosure in the notes to the consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

2 unchanged paragraphs

ASUs not included in the Company's disclosures were assessed and determined to be not applicable and not material to the Company's condensed consolidated financial statements or disclosures.

Note 3: Revenue 7 changes

2 unchanged paragraphs

Fiscal Year Ended June 30,

The contract liabilities, which represent client deposits from the Company's contracts with its clients and deferred revenue, were $ 1.4 1.6 million and $ 1.3 1.4 million as of June September 30, 2026 and June 30, 2025. 2026.

The Company's contract liabilities result from payments received in advance of revenue recognition and advance consideration received from clients, which precede the Company's satisfaction of the associated performance obligation. The changes in the liability balances during the fiscal year three months ended June September 30, 2026 was related to advance consideration received from clients of $ 16.7 2.0 million, offset by revenue recognized of $ 16.6 1.7 million.

Accounts Receivable and Allowances

The allowance for credit losses on accounts receivable was $ 0.6 million and $ 0.5 million as of September 30, 2026 and June 30, 2026 . The revenue reserve was $ 3.1 million and $ 2.9 million as of September 30, 2026 and June 30, 2026 . The total allowance for credit losses and revenue reserve was $ 3.7 million and $ 3.4 million as of September 30, 2026 and June 30, 2026.

Concentrations of Credit Risk

The Company had one client that accounted for 19 % of net revenue for the three months ended September 30, 2026 . The Company had one cli ent that accounted for 21 % of net revenue for the three months ended September 30, 2025 . The Company had two clients that accounted for 19 % and 11 % of net accounts receivable as of September 30, 2026 , and two clients that each accounted for 13 % of net accounts receivable as of June 30, 2026 .

Note 5: Fair Value Measurements 17 changes

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the reporting date. The Company estimates and categorizes the fair value of its financial instruments by applying the following hierarchy:

Level 1 — Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to directly access.

Level 2 — Valuations based on quoted prices for similar assets or liabilities; valuations for interest-bearing securities based on non-daily quoted prices in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities.

Level 3 — Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company's financial instruments consist principally of cash equivalents, accounts receivable, accounts payable, post-closing payments and contingent consideration related to acquisitions. The recorded values of the Company's accounts receivable and accounts payable approximate their current fair values due to the relatively short-term nature of these accounts.

6 unchanged paragraphs

All highly liquid investments with maturities of three months or less at the date of purchase are classified as cash equivalents on the Company's condensed consolidated balance sheets. The valuation technique used to measure the fair value of money market funds included using quoted prices in active markets for identical assets and are classified as Level 1 within the fair value hierarchy.

1 unchanged paragraph

The post-closing payments are future payments related to the acquisition of Siren Group AG ("HomeBuddy") in fiscal year 2026, and Aqua Vida, LLC ("AquaVida") in fiscal year 2024. The final installment payments for Modernize and BestCompany, totaling $ 5.5 million and $ 2.0 million, were made during the fiscal year 2026. As the fair value of the Company's post-closing payments was determined based on installments stipulated in the terms of the acquisition a greements agreements and discount rates observable in the market, the post-closing payments are classified as Level 2 within the fair value hierarchy. See Note 6, Acquisitions , for further details related to the HomeBuddy acquisition.

1 unchanged paragraph

The Company reassesses the estimated fair value of the contingent consideration at the end of each reporting period based on the information available at the time. The Company recorded a net increase of $ 4.7 million to the fair value of the contingent consideration of AquaVida in fiscal year 2026, which is included in general and administrative expenses on the Company's consolidated statements of operations and comprehensive income (loss). The fair value of the contingent consideration of AquaVida decreased from $ 13.6 million to $ 11.5 million as of June 30, 2026 .

The following table presents the changes in the contingent consideration (in thousands):

Balance at June 30, 2024

Changes in fair value during period

Payments made during the period

Balance at June 30, 2025

Changes in fair value during period

Payments made during the period

Balance at June 30, 2026

The contingent consideration consists of the estimated fair value of future payments related to the Company's acquisition of AquaV ida. AquaVida. The AquaVida contingent consideration is based upon a percentage of margin achieved and is uncapped over a four-year period. The Company paid $ 6.7 million during the fourth quarter of fiscal year 2026 for the second earnout payment based on actual margin results. The fair value of the contingent consideration is determined using the real options technique which incorporates various estimates, includin g including projected net revenue, projected media margin, volatility and discount rates. As certain of these inputs are not observable in the market, the contingent consideration is classified as a Level 3 instrument. Significant changes in the projected net revenue, projected media margin, or discount rates would have a material impact on the fair value of the contingent consideration. The change in contingent consideration liability from the acquisition date to the final amount paid will be recognized in earnings at each reporting date. Changes in the fair value of the contingent consideration of AquaVida are recorded included in earnings general and administrative expenses on the Company's condensed consolidated statements of operations and comprehensive income. (loss). There were no changes to the fair value of the contingent consideration of AquaVida for the three months ended September 30, 2026 .

Note 6: Acquisitions 13 changes

4 unchanged paragraphs

The Company entered into continuation of service agreements with certain HomeBuddy personnel for continued service post-acquisition. The retention bonuses are treated as post-combination compensation expense, vest over 6 , 12 , or 18 month periods, and are contingent upon continued employment with the Company. Retention bonus expense was $ 3.1 million for fiscal year 2026 and was recognized within cost of revenue and operating expenses in the consolidated statements of operations.

The acquisition was accounted for as a business combination and the results of operations of HomeBuddy have been included in the Company's results of operations from January 2, 2026. Transaction costs related to the acquisition, consisting of advisory, accounting, and legal fees, were $ 3.5 million for fiscal year 2026 and were recognized within general and administrative expenses in the consolidated statements of operations.

4 unchanged paragraphs

Preliminary as of January 2, 2026

Measurement Period Adjustments: (1)

Preliminary as of September 30, 2026

7 unchanged paragraphs

(1) The Company recorded measurement period adjustments to withholding tax and deferred tax liabilities based on new information about facts and circumstances that existed as of the acquisition date. The offset of these adjustments was recorded to goodwill.

7 unchanged paragraphs

The following table represents the amount of net revenue and net income from operations related to the HomeBuddy acquisition which has been included in the consolidated statements of operations for the periods indicated subsequent to the acquisition date (in thousands):

Fiscal Year Ended June 30, 2026

The unaudited pro forma financial information in the table below summarizes the combined results of operations for the Company and the acquired business of HomeBuddy as though this acquisition had occurred as of the beginning of fiscal year 2025. The unaudited pro forma financial information is presented for illustrative purposes only and does not necessarily reflect what the combined company's results of operations would have been had the acquisition occurred as of the beginning of fiscal year 2025, nor is it necessarily indicative of the future results of operations of the combined company (in thousands):

Fiscal Year Ended June 30, 2026

Fiscal Year Ended June 30, 2025

The pro forma financial information presented above has been calculated after adjusting the results of QuinStreet, Inc. and HomeBuddy to reflect certain business combination and one-time accounting effects such as fair value adjustment of amortization expense from acquired intangible assets, interest expense on the amounts drawn under the Revolving Credit Facility to finance the acquisition, accretion of post-closing acquisition payments, and acquisition costs. The historical consolidated financial information has been adjusted in the pro forma combined financial results to give effect to pro forma events that are directly attributable to the business combination, reasonably estimable and factually supportable.

The unaudited pro forma financial information above includes a nonrecurring significant adjustment made to account for certain costs incurred as if the acquisition had been completed as of the beginning of fiscal year 2025. Transaction costs of $ 3.5 million were excluded from the unaudited pro forma financial information for fiscal year 2026, but included for fiscal year 2025 .

Note 7: Goodwill and Intangible Assets, Net 16 changes

The changes in the carrying amount of goodwill for the three months ended September 30, 2026 were as follows (in thousands):

Balance as of June 30, 2026

Measurement period adjustments (1)

Balance as of September 30, 2026

(1) The Company recorded measurement period adjustment to withholding tax liabilities based on new information about facts and circumstances that existed as of the acquisition date. The offset of this adjustment was recorded to goodwill .

There were no impair ments to goodwill during the three months ended September 30, 2026.

5 unchanged paragraphs

Amortization of intangible assets was $ 11.7 million, $ 9.5 million and $ 10.7 million for fiscal years 2026, 2025 and 2024.

Amortization of intangible assets was $ 2.8 million and $ 2.3 million for the three months ended September 30, 2026 and 2025.

Future amortiza tion amortization expense for fo r the Company's intangible assets as of June September 30, 2026 was as follows (in thousands):

1 unchanged paragraph

T he changes in the carrying amount of goodwill for the fiscal year 2026 were as follows (in thousands):

Balance as of June 30, 2025

Measurement period adjustments

Balance as of June 30, 2026

Goodwill acquired is associated with the acquisition of HomeBuddy completed in fiscal year 2026. See Note 6, Acquisitions, for further details related to the HomeBuddy acquisition.

There was no goodwill impairment recognized during fiscal years 2026 and 2025 .

2027 (remaining nine months)

Note 8: Debt 2 changes

2 unchanged paragraphs

The Financing Agreement includes customary financial and nonfinancial covenants, including a maximum Consolidated Total Net Leverage Ratio (with a temporary step‑up following certain material acquisitions) and a minimum Consolidated Interest Coverage Ratio (as defined in the Financing Agreement). The Company was in compliance with all covenants as of June September 30, 2026.

On January 2, 2026, the Company borrowed $ 70.0 million under the Revolving Credit Facility. As of June September 30, 2026 , $ 70.0 million was outstanding and was classified as noncurrent debt as the principal was not contractually due within 12 months, and unused commitments were $ 80.0 million.

2 unchanged paragraphs

Note 9: Income Taxes 65 changes

The components of income (loss) before income taxes were as follows (in thousands):

Fiscal Year Ended June 30,

The components of the provision for (benefit from) income taxes were as follows (in thousands):

Fiscal Year Ended June 30,

Total current provision for income taxes

Total deferred (benefit from) provision for income taxes

Total (benefit from) provision for income taxes

The following table represents a reconciliation of the statutory federal rate and the Company's effective tax rate (after the adoption of ASU 2023-09) for the year ended June 30, 2026 (in thousands):

Fiscal Year Ended June 30, 2026

Income taxes at statutory federal rate

State and local taxes, net of federal income tax effect

Effect of cross-border tax laws

Global intangible low-taxed income

Changes in valuation allowance

Nontaxable or nondeductible items

Other nontaxable or nondeductible items

Stock based compensation

Section 162(m) compensation limitation

Changes in unrecognized tax benefits

Effective income tax (benefit)

California, Florida, and New York make up the majority (greater than 50%) of the state income tax expense, net of federal income tax effect, category.

For the years ended June 30, 2025 and June 30, 2024, prior to the adoption of ASU 2023-09, the reconciliation between the statutory federal income tax expense and the Company's effective income tax expense was as follows (in thousands):

Fiscal Year Ended June 30,

Statutory federal income tax expense (benefit)

States taxes, net of federal benefit

Foreign rate differential

Stock-based compensation (benefit) expense

Change in valuation allowance

Research and development credits

Disqualified compensation expense

Uncertain tax position

Foreign deferred adjustment

Effective income tax expense

The amounts of cash income taxes paid by the Company are as follows (in thousands):

The components of the noncurrent deferred tax assets and liabilities, net were as follows (in thousands):

Noncurrent deferred tax assets:

Reserves and accruals

Stock-based compensation expense

Operating lease liabilities

Research and development capitalized cost

Contingent consideration liability

Total noncurrent deferred tax assets

Less: valuation allowance — long-term

Total noncurrent deferred tax assets, net of valuation allowance

Noncurrent deferred tax liabilities:

Operating lease right-of-use assets

Total noncurrent deferred tax liabilities

Net deferred tax assets (liabilities)

The Company has a net d eferred tax asset balance of $ 47.3 million and a net deferred tax liability balance of $ 4.8 million as of June 30, 2026 within the assets and liabilities, noncurrent on the Company's consolidated balance sheet. As of 2025, the Company had a deferred tax liability of $ 3.7 million included within other liabilities, noncurrent on the Company's consolidated balance sheet. In 2026, the Company had a net deferred tax asset primarily related to net operating loss carryforwards, tax credits and capitalized research expenditures and a net deferred tax liability related to the intangible basis difference with respect to the acquisition of HomeBuddy. In 2025, the net deferred tax liability is related to indefinite lived deferred tax liabilities unable to be offset with deferred tax assets. The Company evaluated the need for a valuation allowance by considering among other things, the nature, frequency and severity of current and cumulative losses, reversal of taxable temporary differences, tax planning strategies, forecasts of future profitability, and the duration of statutory carryforward periods. In the second quarter of fiscal year 2026, due to the preponderance of positive evidence, including the Company's cumulative profit before taxes and future forecasts of continued profitability in the United States, the Company determined that sufficient positive evidence existed to conclude that substantially all of its valuation allowance was no longer needed. Accordingly, the Company released the valuation allowance for the majority of its federal and state deferred tax assets. The Company continues to maintain a valuation allowance related to its deferred tax assets for its capital loss carryforwards, California research and development tax credits and foreign net operating losses. If there are unfavorable changes to actual operating results or to projections of future income, the Company may determine that it is more likely than not that such deferred tax assets may not be realizable. The Company has a valuation allowance of approximately $ 8.7 million and $ 69.3 million as of June 30, 2026 and 2025 .

As of June 30, 2026 and 2025, the Company had a federal operating loss carryforward of approximately $ 75.4 million and $ 105.4 million. As of June 30, 2026 and 2025, the Company's state operating loss carryforward was approximately $ 68.0 million and $ 82.8 million. With the exception of $ 68.6 million of federal net operating losses that can be carried forward indefinitely, the federal and state net operating losses, if not used, will begin to expire on June 30, 2038 and June 30, 2026 , respectively. However, the Company currently expects to fully utilize the federal net operating losses generated in fiscal year 2018 during the next fiscal year and therefore does not expect such losses to expire. Further, based on current forecasts of future taxable income, management expects to realize the benefits of the remaining net operating loss carryforwards before the applicable expiration dates. The operating loss carryforward in the India jurisdiction was approximately $ 0.5 million which will begin to expire on June 30, 2027 . The Company has federal and California research and development tax credit carryforwards of approximately $ 15.2 million and $ 13.8 million to offset future taxable income. The federal research and development tax credits, if not used, will begin to expire on June 30, 2034 , while the state tax credit carryforwards do not have an expiration date and may be carried forward indefinitely .

Utilization of the operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of operating loss carryforwards and credits before utilization.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits was as follows (in thousands):

Fiscal Year Ended June 30,

Balance at beginning of the year

Gross increases - current period tax positions

Gross decreases - prior period tax positions

Gross increases - prior period tax positions

Balance at end of the year

The Company's policy is to include interest and penalties related to unrecognized tax benefits within the Company's provision for (benefit from) income taxes. As of June 30, 2026, the Company has accrued $ 1.8 million for interest and penalties related to the unrecognized tax benefits. The balance of interest and penalties is recorded as other liabilities, noncurrent on the Company's consolidated balance sheet .

As of June 30, 2026, unrecognized tax benefits of $ 1.1 million, if recognized, would affect the Company's effective tax rate. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months .

The Company files income tax returns in the United States, various U.S. states and certain foreign jurisdictions and is no longer subject to U.S. federal, state and local, or non-U.S., income tax examinations by tax authorities for years before fiscal 2014. As of June 30, 2026, the tax years 2014 through 2026 remain open in the U.S., and the tax years 2021 through 2026 remain open in various foreign jurisdictions. The Company believes that adequate amounts have been reserved for any adjustments that may ultimately result from our examinations .

On July 4, 2025, U.S. legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14" ("The Act") was signed into law. The Act, among other things, extended key provisions of the 2017 Tax Cuts and Jobs Act and introduced targeted changes to the U.S. federal income tax regime. Key provisions include permanently restoring bonus depreciation allowances, permanent changes in the limitations for deducting business interest expense and permanent reintroduction of expensing of US research and development costs. The impact on current and deferred taxes for tax law changes is reported in operating income in the first quarter of fiscal year 2026, the period including the enactment date. The Company has evaluated the impact of The Act on its results of operations and has recognized the related tax impacts in fiscal year 2026 which includes the period of enactment .

The Company's provision for income taxes for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any. Each quarter the Company updates its estimate of the annual effective tax rate and makes a year-to-date adjustment to the provision. The Company recorded a provision for income taxes of $ 4.1 million and $ 0.2 million for the three months ended September 30, 2026 and 2025. The tax provision for the three months ended September 30, 2026 was primarily related to U.S. federal, state, and foreign income taxes, primarily in Switzerland, which are partially offset by discrete tax benefits of $ 1.1 million related to excess tax benefits from stock-based compensation. The tax provision for the three months ended September 30, 2025 was primarily related to foreign operations, tax amortization of goodwill, and state income taxes.

The Company performed an assessment on the likelihood of realizing the benefits of its deferred tax assets. As of the second quarter of fiscal year 2026, due to the preponderance of positive evidence, including the Company's projected cumulative profit before taxes and future forecasts of continued profitability for the United States, the Company determined that sufficient positive evidence existed to conclude that substantially all of its valuation allowance was no longer needed and that it is more likely than not that the Company would be able to utilize the majority of the deferred tax assets. Accordingly, the Company released the valuation allowance on the majority of its federal and state deferred tax assets during fiscal year 2026. As of September 30, 2026, the Company continues to conclude that it is more likely than not that these deferred tax assets will be realized. The Company continues to maintain a valuation allowance related to its deferred tax assets for its foreign entities, federal and state capital loss carryforwards and California research and development tax credits.

Additionally, in the event that the Company experiences an ownership change within the meaning of Section 382 of the Internal Revenue Code, the Company's ability to utilize net operating losses, tax credits and other tax attributes may be limited.

Note 10: Leases 7 changes

The Company has operating leases primarily for its office facilities. The leases expire at various dates through fiscal year 2032, some of which include options to renew, with renewal terms of up to 5 years . T he Company does not include any renewal options in the lease terms for calculating lease liability, as the renewal options allow the Company to maintain operational flexibility and the Company is not reasonably certain that it will exercise these renewal options at the time of the lease commencement.

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The implicit rate within each lease is not readily determinable and therefore the Company uses its incremental borrowing rate at the lease commencement date to determine the present value of the lease payments. The determination of the incremental borrowing rate requires judgment. The Company determined its incremental borrowing rate for each lease using indicative bank borrowing rates, adjusted for various factors including level of collateralization, term and currency to align with the terms of a lease.

Maturities of operating lease liabilities as of June September 30, 2026 were as follows (in thousands):

Fiscal Year Ending Ended June 30,

2027 (remaining nine months)

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Note 11: Commitments and Contingencies 2 changes

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The Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company's request in such capacity. The term of the indemnification period is for the officer or director's lifetime. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer insurance policy that limits its exposure and enables the Company to recover a portion of any future amounts under certain circumstances and subject to deductibles and exclusions. As a result of its insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is not material. Accordingly, the Company had no liabilities recorded for these agreements as of June September 30, 2026 and 2025. June 30, 2026.

In the ordinary course of its business, the Company from time to time enters into standard indemnification provisions in its agreements with its clients. Pursuant to these provisions, the Company may be obligated to indemnify its clients for certain losses suffered or incurred, including losses arising from violations of applicable law by the Company or by its third-party publishers, losses arising from actions or omissions of the Company or its third-party publishers, and for third-party claims that a Company product infringed upon any United States patent, copyr ight, copyright or other intellectual property rights. Where practicable, the Company limits its liabilities under such indemnities. Subject to these limitations, the term of such indemnification provisions is generally coterminous with the corresponding agreements and survives for the duration of the applicable statute of limitations after termination of the agreement. agreem ent. The potential amount of future payments to defend lawsuits or settle indemnified claims under these indemnification provisions is generally limited and the Company believes the estimated fair value of these indemnity provisions is not material. Accordingly, the Company had no liabilities recorded for these agreements as of June September 30, 2026 and 2025. June 30, 2026.

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Note 13: Segment Information 7 changes

Fiscal Year Ended June 30,

The Company manages its operations as a single o perating segment for the purpose of assessing performance and making operating decisions. The Company's CODM Chief Operating Decision Maker is the chief executive officer , who manages operations based on financial information provided on a consolidated basis to assess performance and decide how to allocate resources.

As a single reportable operating segment entity, the Company's segment performance measure is net income, (loss), which is used to monitor budget versus actual results. Segment income from operations includes all geographic revenues, related cost of net revenues and operating expenses directly attributable to the reportable segment.

The significant components of segment costs and expenses, along with a reconciliation to net income (loss) are presented below (in thousands):

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Fiscal Year Ended June 30,

(3) Other segment cost and expense primarily includes non-cash depreciation, amortization, stock-based compensation and other non-recurring expenses, as well as interest and income taxes, which are included in net income. (loss).

The following tables summarize the net ne t revenue and long-lived assets by geographic area (in thousands):

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MD&A 142 changes

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and the notes thereto included elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report, particularly in the sections titled "Cautionary Note on Forward-Looking Statements" and "Risk Factors."

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, filed with the SEC.

This Quarterly Report on Form 10-Q contains "forward-looking statements" that involve risks and uncertainties, as well as assumptions that, if they do not materialize or if they prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The statements contained in this Quarterly Report on Form 10-Q that are not purely historical are 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. Forward-looking statements are often identified by the use of words such as, but not limited to, "anticipate," "believe," "expect," "can," "continue," "could," "estimate," "expect," "intend," "outlook," "may," "will," "plan," "project," "seek," "should," "target," "will," "would," and similar expressions or variations intended to identify forward-looking statements. These statements reflect the beliefs and assumptions of our management based on information currently available to management. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified in "Part II — Item 1A. Risk Factors" below, and those discussed in the sections titled "Cautionary Note On Forward-Looking Statements" and "Risk Factors" included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026, and in other documents we file from time to time with the SEC. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

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Market risk 2 changes

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Controls and procedures 12 changes

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