Commitments and Contingencies

9 Months Ended

Sep. 30, 2025

Commitments and Contingencies Disclosure [Abstract]


8. Commitments and Contingencies

Leases

We have operating leases for corporate offices and subleased offices. As of September 30, 2025, we did not have any operating leases that had not yet commenced.

Release from Washington, DC lease

In February 2025, we made a one-time cash release payment of $28.0 million to the lessor in connection with a release from our lease for office space in Washington, DC (which was acquired as part of our acquisition of EVERFI in December 2021). Due to our remote-first workforce strategy, we had not used the office space since February 2023 and had subleased a portion of the space. During the nine months ended September 30, 2025, we recorded a loss on lease termination of $24.3 million in general and administrative expense.

The following table summarizes the components of our lease expense:


	Three months ended September 30,				Nine months ended September 30,
(dollars in thousands)	2025		2024		2025		2024
Operating lease cost(1)	$	450	$	1,417	$	1,390	$	5,028
Variable lease cost	218		271		570		883
Sublease income	(244)		(914)		(1,413)		(2,518)
Net lease cost	$	424	$	774	$	547	$	3,393

(1)Includes short-term lease costs, which were immaterial.

Maturities of our operating lease liabilities as of September 30, 2025 were as follows:






Years ending December 31, (dollars in thousands)	Operating leases
2025 - remaining	$	517
2026	1,928
2027	1,898
2028	1,729
2029	1,019

Thereafter	509
Total lease payments	7,600
Less: Amount representing interest	(983)
Present value of future payments	$	6,617

Other commitments

The term loans under the 2024 Credit Facilities require periodic principal payments. The balance of the term loans and any amounts drawn on the revolving credit loans are due upon maturity of the 2024 Credit Facilities in April 2029. The Real Estate Loans also require periodic principal payments and the balance of the Real Estate Loans are due upon maturity in April 2038.

We have contractual obligations for third-party technology used in our solutions and for other services we purchase as part of our normal operations. In certain cases, these arrangements require a minimum annual purchase commitment by us. As of September 30, 2025, the remaining aggregate minimum purchase commitment under these arrangements was approximately $157.8 million through 2030.

Solution and service indemnifications

In the ordinary course of business, we provide certain indemnifications of varying scope to customers against claims of intellectual property infringement made by third parties arising from the use of our solutions or services. We have not identified any losses that might be covered by these indemnifications.

Legal proceedings

We are subject to legal proceedings and claims that arise in the ordinary course of business, as well as certain other non-ordinary course proceedings, claims and investigations, as described below. We make a provision for a loss contingency when it is both probable that a material liability has been incurred and the amount of the loss can be reasonably estimated. If only a range of estimated losses can be determined, we accrue an amount within the range that, in our judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, we accrue the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, we disclose such an estimate, if material. If such a loss or range of losses is not reasonably estimable, we disclose that fact. We review any such loss contingency provisions at least quarterly and adjust them to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. We recognize insurance recoveries, if any, when they are probable of receipt. All associated costs due to third-party service providers and consultants, including legal fees, are expensed as incurred.

Legal proceedings are inherently unpredictable. However, we believe that we have valid defenses with respect to the legal matters pending or threatened against us and intend to defend ourselves vigorously against all claims asserted. It is possible that our consolidated financial position, results of operations or cash flows could be materially negatively affected in any particular period by an unfavorable resolution of one or more of such legal proceedings.

Security incident

As previously disclosed, we are subject to risks and uncertainties as a result of a ransomware attack against us in May 2020 in which a cybercriminal removed a copy of a subset of data from our self-hosted environment (the "Security Incident"). For the three months ended September 30, 2025, we incurred insignificant net pre-tax expenses related to the Security Incident for ongoing legal fees. For the nine months ended September 30, 2025, we incurred net pre-tax expenses of $2.8 million related to the Security Incident for ongoing legal fees and recorded accruals for loss contingencies of $1.1 million. During the nine months ended September 30, 2025, we had net cash outlays of $4.3 million related to the Security Incident for ongoing legal fees and $1.8 million paid during the third quarter of 2025 related to previously recorded accruals for loss contingencies related to the Security Incident. As of September 30, 2025, we do not have any recorded liabilities for loss contingencies related to the Security Incident.

In the three months ended September 30, 2025, we paid an insignificant settlement amount to the plaintiffs in the previously disclosed multi-district litigation filed in the United States District Court of South Carolina. On September 22, 2025, that court issued an order definitively closing that case. As a result, all customer constituent class actions related to the Security Incident are now resolved and closed. In addition, as previously reported, insurance companies representing various customers’ interests through subrogation claims contacted us, and certain insurance companies filed subrogation claims in court. A subset of insurance carriers has appealed a dismissal of their claims to the Delaware Supreme Court. These appeals are the only customer claims currently pending. For more information about the completed government investigations and related actions, see Note 11 to our audited consolidated financial statements contained in our Annual Report on Form 10-K filed with the SEC on February 21, 2025 and Note 8 to our unaudited, condensed consolidated financial statements contained in our Quarterly Report on Form 10-Q filed with the SEC on April 30, 2025.