Restructuring and integration expense

9 Months Ended

Sep. 30, 2025

Restructuring and Related Activities [Abstract]


NOTE 8: RESTRUCTURING AND INTEGRATION EXPENSE

Restructuring and integration expense consists of costs related to initiatives aimed at driving earnings and cash flow growth, including costs related to the consolidation and migration of certain applications and processes. These costs consist primarily of consulting, project management services, internal labor, and other items such as facility closure and consolidation costs. Additionally, we have recorded employee severance costs across functional areas. Restructuring and integration expense is not allocated to our reportable business segments.

We are actively pursuing initiatives designed to support our growth strategy and to increase our efficiency, including several initiatives that we collectively refer to as our North Star program. The goal of this program is to enhance shareholder value by (1) accelerating our adjusted EBITDA growth, (2) increasing cash flow, (3) reducing debt, and (4) improving our leverage ratio. North Star is a comprehensive, multi-year plan that balances cost reduction and growth opportunities. On the cost reduction front, we concentrated on optimizing our organizational framework and enhancing our infrastructure and operational processes. The major components of our organizational restructuring have been completed, involving the integration of comparable roles, flattening management layers, and broadening supervisory responsibilities. We are also leveraging technology and automated processes to digitize and improve the efficiency of our operations. Additionally, we are expanding our operational

capacity by centralizing back-office activities and utilizing talent from the global workforce. The associated restructuring and integration expense, which consisted primarily of consulting and employee severance costs, was approximately $15,000 during the nine months ended September 30, 2025 and approximately $33,000 during the nine months ended September 30, 2024. To date, we have incurred expense of approximately $110,000, and we anticipate that we will incur approximately $5,000 of additional North Star restructuring and integration expense in the fourth quarter of 2025.

Restructuring and integration expense is reflected on the consolidated statements of comprehensive income as follows:


	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Total cost of revenue	$	24	$	234	$	965	$	1,132
Operating expenses	2,910		11,031		14,625		35,899
Restructuring and integration expense	$	2,934	$	11,265	$	15,590	$	37,031

Restructuring and integration expense for each period was comprised of the following:


	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2025		2024		2025		2024
Employee severance benefits	$	1,580	$	902	$	7,651	$	2,459
External consulting and other costs	324		8,614		3,584		25,733
Internal labor	597		381		2,297		1,602
Other	433		1,368		2,058		7,237
Restructuring and integration expense	$	2,934	$	11,265	$	15,590	$	37,031

Our restructuring and integration accruals are included in accrued liabilities on the consolidated balance sheets. These accruals represent the anticipated cash payments necessary to fulfill the remaining severance obligations for employees who have already been terminated, as well as those expected to be terminated under our various initiatives. We expect that the majority of employee reductions and the associated severance payments will be completed by mid-2026.

Changes in our restructuring and integration accruals were as follows:


(in thousands)	Employee severance benefits
Balance, December 31, 2024	$	3,755
Charges	8,109
Reversals	(458)
Payments	(7,517)
Balance, September 30, 2025	$	3,889

The charges and reversals shown in the rollforward of our restructuring and integration accruals exclude items that are expensed as incurred, as these items are not included in accrued liabilities on the consolidated balance sheets.