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Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2025
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements include the accounts of the Company as
well as its wholly owned subsidiaries and have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”). All significant intercompany balances
and transactions have been eliminated in consolidation.
The unaudited interim condensed consolidated financial statements have been prepared on the same
basis as the annual consolidated financial statements and, in the opinion of management, reflect all
adjustments, which include only normal recurring adjustments, necessary to a fair statement of the
Company’s consolidated financial position as of September 30, 2025, and the results of its operations for
the three and nine months ended September 30, 2025 and 2024 and cash flows for the nine months
ended September 30, 2025 and 2024. The condensed consolidated balance sheet at December 31,
2024, was derived from audited annual consolidated financial statements but does not contain all of the
footnote disclosures from the annual financial statements. These interim financial results are not
necessarily indicative of results expected for the full fiscal year or for any subsequent interim period and
should be read in conjunction with the annual consolidated financial statements included in the
Company’s registration statement on Form S-1 (File No. 333-288733), which became effective on August
7, 2025.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make
estimates and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Management used significant judgment when making estimates in the
determination of the fair value of its common stock and stock options, deferred income tax valuation
allowance, capitalized internal-use software, depreciation of property and equipment, allowance for credit
losses, revenue recognition, valuation of operating lease right-of-use (“ROU”) assets and operating lease
liabilities, and the fair value of convertible debt, common stock warrant liability and derivative liability.
Management evaluates its estimates and assumptions on an ongoing basis using historical experience
and other factors and adjusts those estimates and assumptions as facts and circumstances dictate.
Actual results could materially differ from those estimates.
Segment Information
The Company operates and manages its business as one reportable and operating segment, which is the
business of non-invasive CAD detection solutions. The Company’s Chief Executive Officer, who is the
Chief Operating Decision Maker (“CODM”), reviews financial information, including revenue and net loss,
presented on a consolidated basis for purposes of making operating decisions, allocating resources and
evaluating financial performance.
The Company’s measure of segment profit or loss is consolidated net loss, which is used by the CODM to
measure actual results versus expectations, set performance metrics, and develop the annual budget to
achieve the Company’s long-term objectives. Significant segment expenses within consolidated net loss
includes cost of revenue, research and development, and selling, general and administrative expenses,
which are each separately presented on the Company’s condensed consolidated statements of
operations and comprehensive loss. Other expense items that are presented on the condensed
consolidated statements of operations include interest income, interest expense, changes in fair value of
warrant liability, other income, net, and provision for income taxes.
The following table is representative of the significant expense categories regularly provided to the CODM
when managing the Company’s single reporting segment and includes a reconciliation to the consolidated
net loss shown in the condensed consolidated statements of operations and comprehensive loss for the
three and nine months ended September 30, 2025 and 2024 (in thousands):
Three Months Ended
September 30,
Nine Months Ended
September 30,
2025
2024
2025
2024
Revenue ................................................................
$46,276
$32,934
$126,904
$90,831
Less(1):
Cost of revenue ...............................................
10,861
7,997
30,770
22,632
Research and development expenses:
Research and development .....................
10,260
6,986
27,582
19,107
Regulatory and clinical ..............................
7,037
4,877
18,671
12,131
Selling, general and administrative
expenses:
Sales ............................................................
18,869
16,981
54,307
49,943
Marketing .....................................................
4,650
3,564
13,812
9,416
General and administrative .......................
9,698
7,458
28,078
22,766
Loss from operations ...........................................
(15,099)
(14,929)
(46,316)
(45,164)
Other income (expense), net(2) .....................
(35,726)
(4,211)
(45,991)
(18,239)
Provision for income taxes ............................
(30)
—
(89)
(48)
Segment net loss .................................................
$(50,855)
$(19,140)
(92,396)
$(63,451)
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
(2)Other income (expense), net represents the consolidated amounts for interest income, interest expense, change in fair value of
common stock warrant liability, change in fair value of derivative liability, loss on extinguishment of debt and other income (expense),
net as shown on the condensed consolidated statements of operations and comprehensive loss.
The Company derives revenue and has long-lived assets primarily in the United States of America.
Revenue by geography is further described in Note 3.
Cash, Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments that are readily convertible to known amounts of
cash and purchased with an original maturity of three months or less to be cash equivalents. Cash
equivalents consist primarily of amounts invested in money market accounts.
The following table provides a reconciliation of cash, cash equivalents and restricted cash to the total
shown in the condensed consolidated statements of cash flows (in thousands):
September 30,
2025
2024
Cash and cash equivalents ...............................................................................
$291,167
$64,661
Restricted cash ....................................................................................................
4,475
4,467
Total cash, cash equivalents and restricted cash ..........................................
$295,642
$69,128
As of September 30, 2025 and December 31, 2024, restricted cash represents deposits held as security
in connection with the Company’s facility lease agreements.
Fair Value of Financial Instruments
The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value
is an exit price, representing the amount that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants. As such, fair value is a market-based
measurement that should be determined based on assumptions that market participants would use in
pricing an asset or a liability.
The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest
priority to valuations based upon unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs
that are significant to the valuation (Level 3 measurements). The accounting guidance establishes three
levels of the fair value hierarchy as follows:
Level 1 - Observable inputs, such as quoted prices in active markets for identical assets or liabilities;
Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or
liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities; and
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to
the fair value of the assets or liabilities.
Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of
input that is significant to the fair value measurement. The Company’s assessment of the significance of a
particular input to the fair value measurement in its entirety requires management to make judgments and
considers factors specific to the asset or liability.
As of September 30, 2025 and December 31, 2024, the carrying amounts of the Company’s financial
instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities,
approximate fair value due to their relatively short maturities and market interest rates, if applicable.
Management believes that the Company’s Term Loan (as defined in Note 8) and 2025 Convertible Notes
(as defined below in this Note 2) then outstanding bear interest at the prevailing market rates for
instruments with similar characteristics; accordingly, the carrying value of these instruments approximated
their fair value as of December 31, 2024. Fair value accounting is applied to the common stock warrant
liability and derivative liability. No derivative liability was outstanding as of September 30, 2025 or
December 31, 2024.
Concentration of Credit Risk and Significant Customers
Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash
equivalents, restricted cash and accounts receivable. The Company maintains bank deposits in federally
insured financial institutions, and these deposits may at times exceed federally insured limits. To date, the
Company has not experienced any losses on its cash deposits. The Company currently has full control of
its cash and cash equivalents balance.
No single customer represented more than 10% of the Company’s revenue during the three and nine
months ended September 30, 2025 and 2024.
No single customer represented more than 10% of the Company’s accounts receivable as of
September 30, 2025 and December 31, 2024.
Deferred Offering Costs
The Company capitalizes certain legal, accounting and other third-party fees that are directly associated
with in-process equity financings as deferred offering costs until such financings are consummated. After
consummation of the equity financing, these costs are recorded as a reduction of the proceeds from the
offering, either as a reduction of the carrying value of preferred stock or in stockholders’ equity (deficit) as
a reduction of additional paid-in capital generated as a result of the offering. As of September 30, 2025
and December 31, 2024, deferred offering costs of $0 and $413,000, respectively, were capitalized within
other non-current assets in the condensed consolidated balance sheets. The deferred offering costs were
reclassified as a reduction to equity as a result of the closing of the IPO in August 2025.
Leases
At the inception of a contractual arrangement, the Company determines whether the contract contains a
lease by assessing whether there is an identified asset and whether the contract conveys the right to
control the use of the identified asset in exchange for consideration over a period of time.
An ROU asset and corresponding lease liability are recorded on the condensed consolidated balance
sheets based on the present value of lease payments over the lease term. An ROU asset represents the
right to control the use of an identified asset over the lease term, and a lease liability represents the
obligation to make lease payments arising from the lease. Leases with an initial term of 12 months or less
are not recorded in the condensed consolidated balance sheets. The Company uses its incremental
borrowing rate to determine the present value of lease payments, as the discount rate implicit in the lease
is not readily available. The lease terms used to calculate the ROU asset and related lease liabilities
include options to extend or terminate the lease when it is reasonably certain that the Company will
exercise that option. The Company elected to account for contracts that contain lease and non-lease
components as a single lease component. For the three and nine months ended September 30, 2025 and
2024, the Company’s only leases were for its facilities, which are classified as operating leases with lease
expense recognized on a straight-line basis over the lease term. Variable lease costs, which primarily
consist of common area maintenance, taxes, and utility charges, are expensed as incurred. The
Company does not have any finance leases.
Term Loan
Prior to its repayment in August 2025, the Term Loan (as defined in Note 8) was accounted for at
amortized cost. Original debt issuance costs were deferred and presented as a reduction to the carrying
value of the Term Loan. Debt discount and debt issuance costs were amortized using the effective interest
method and recorded in interest expense within the condensed consolidated statements of operations
and comprehensive loss. See Note 8 for information about the repayment of the 2024 Term Loan and
termination of the 2024 Credit Agreement.
Upon repayment of the 2024 Term Loan, the remaining unamortized debt discount and debt issuance
costs were recognized as a loss on extinguishment of debt within the condensed consolidated statements
of operations and comprehensive loss.
2025 Convertible Notes
The Company issued convertible notes in January 2025 and March 2025 (the “2025 Convertible Notes”)
to various investors and certain employees (the “Requisite Holders”), which were accounted for at
amortized cost. Debt issuance costs were deferred and presented as a reduction to the carrying value of
the 2025 Convertible Notes prior to its conversion upon the IPO. The Company determined that certain
features of the 2025 Convertible Notes contained embedded derivatives that provided the Requisite
Holders with multiple settlement alternatives, and the embedded features that qualified as derivatives
were accounted for separately. Debt discount and debt issuance costs were amortized using the effective
interest method and recorded to interest expense within the condensed consolidated statements of
operations and comprehensive loss. The Company recognized the changes in fair value of the derivative
liability as changes in fair value of derivative liability within the condensed consolidated statements of
operations and comprehensive loss through the IPO date. Upon the closing of the Company’s IPO, the
aggregate principal balance of the 2025 Convertible Notes of $98.3 million converted into 6,470,743
shares of common stock, and the derivative liability balance of $24.6 million and the remaining
unamortized debt discount and debt issuance costs of $28.8 million were reclassified to additional paid-in
capital. Refer to Note 9 and Note 13 for additional information.
Common Stock Warrants
The Company’s warrants to purchase common stock that were issued in connection with the Term Loan
are classified as a liability. The warrants are recorded at fair value upon issuance and are subject to
remeasurement to fair value at each balance sheet date, with any changes in fair value recognized as a
change in fair value of common stock warrant within the condensed consolidated statements of
operations and comprehensive loss. Refer to Note 12 and Note 18 for additional information.
Embedded Derivatives
Prior to its refinancing in June 2024, the Term Loan (as defined in Note 8) contained certain prepayment
features, a default put option and default interest adjustment features that were determined to be
embedded derivatives requiring bifurcation and separate accounting as a single compound derivative, as
discussed in Note 13. The impact of bifurcation of the embedded derivative on the date of issuance was
reflected as a debt discount. The fair value of the derivative liability related to the Company’s Term Loan,
as discussed in Note 8, was estimated using a scenario-based analysis comparing the probability-
weighted present value of the Term Loan payoff at maturity with and without the bifurcated features. This
method isolates the value of the embedded derivative by measuring the difference in the host contract’s
value with and without the isolated features. The resulting cash flows are discounted at the Company’s
borrowing rate, as adjusted for fluctuations in the market interest rate from the inception of the Company’s
comparative borrowings to the reporting date, to measure the fair value of the embedded derivative. Until
its derecognition in June 2024, the derivative liability was remeasured to fair value at each reporting
period, and the related change was reflected as change in fair value of derivative liability on the
condensed consolidated statements of operations and comprehensive loss.
Prior to their conversion upon the IPO, the 2025 Convertible Notes contained certain settlement features
and default put options that were determined to be embedded derivatives requiring bifurcation and
separate accounting as a single compound derivative, as discussed in Note 13. The impact of the
bifurcation of the embedded derivatives on the date of issuances in January and March 2025 was
reflected as a debt discount. The fair value of the derivative liability related to the Company’s 2025
Convertible Notes, as discussed in Note 9, were estimated using a scenario-based analysis comparing
the probability-weighted present value of the 2025 Convertible Notes with and without the bifurcated
features. This method isolates the value of the embedded derivatives by measuring the difference in the
host contract’s value with and without the isolated features. To measure the fair value of the embedded
derivatives, the resulting cash flows were discounted using appropriate discount rates that reflect the
overall implied risk of the instruments based on their purchase prices and adjusted for fluctuations in the
market and Company interest rates when necessary. Prior to the Company’s IPO, the derivative liability
was remeasured to fair value at each reporting period and the related change was reflected as a change
in fair value of derivative liability on the condensed consolidated statements of operations and
comprehensive loss until the conversion of the 2025 Convertible Notes in connection with the IPO in
August 2025.
Redeemable Convertible Preferred Stock
Prior to its IPO, the Company recorded redeemable convertible preferred stock at fair value on the dates
of issuance, net of issuance costs, which was classified outside of stockholders’ equity (deficit) because
the preferred shares were contingently redeemable upon the occurrence of an event that is outside of the
Company’s control. Upon the closing of the Company's IPO, all shares of convertible preferred stock then
outstanding automatically converted into an aggregate of 51,226,348 shares of common stock. Refer to
Note 10 for additional information.
Revenue Recognition
The Company sells its Heartflow Platform to medical providers in the United States and in select
international markets. The Company determines revenue recognition through the following steps:
•Identification of the contract, or contracts, with a customer;
•Identification of the performance obligations in the contract;
•Determination of the transaction price;
•Allocation of the transaction price to the performance obligations in the contract; and
•Recognition of revenue when, or as, the Company satisfies a performance obligation.
The Company identified a single performance obligation, which is comprised of a highly interdependent
bundle of goods or services that are not distinct on their own but are as a group and consists of providing
implementation services and the requested analysis, including an image file and related licenses and
support. Revenue recognition commences only after completion of installation, implementation and
training for new customer accounts. The Company’s service consists of providing a visualization of the
patient’s coronary arteries and enables physicians to create more effective treatment plans. This service
is normally billable upon delivery of the analysis to the physician. Payment terms are generally net 30
days.
Substantially all of the Company’s revenue is from usage-driven fees and generated on a “pay-per-click”
basis each time a physician orders the Company’s Heartflow FFRCT Analysis and Plaque Analysis.
Revenue is recognized when control of these services is transferred to the customer, at an amount that
reflects the consideration the Company expects to be entitled to receive in exchange for those services.
The Company recognizes usage-driven fee revenue upon delivery of the requested analysis to the
physician, which is when control of these services is transferred to the customer. The Company
recognizes revenue on a straight-line basis over the contract term for subscriptions where the customer
pays a fixed amount upfront for unlimited analyses. Contracts with customers typically include a fixed
amount of consideration and are generally cancellable with 30 days’ written notice.
The transaction price consists of fixed consideration and variable consideration related to utilization and
volume rebates for reimbursement claims from government and commercial payors which are known and
determinable based on the number of analyses delivered within each quarterly period. The transaction
price (inclusive of both fixed consideration and variable consideration that is not constrained) is
recognized as revenue when control transfers. The Company uses a portfolio approach to estimate
variable consideration using the expected value method.
Unbilled Receivables
Unbilled receivables generally represent revenue in which the Company has satisfied its performance
obligation prior to invoicing. The Company records unbilled receivables within accounts receivable, net on
the condensed consolidated balance sheets, based on the Company’s unconditional right to payment at
the end of the applicable period.
Contract Costs
Costs associated with product revenue include a flat rate commission per analysis and new customer site
commissions as well as implementation and onboarding costs. The Company capitalizes new customer
site commissions and certain contract fulfillment costs, which include implementation and onboarding
costs that are considered to be incremental to the acquisition of new customer contracts. Capitalized
contract fulfillment costs are amortized over an estimated period of benefit of two years and capitalized
new site commission costs are amortized over an estimated period of benefit of three years. The
estimated period of benefit is determined by evaluating average customer life, the nature of the related
benefit, and the specific facts and circumstances of the arrangements. The Company evaluates these
assumptions at least annually and periodically reviews whether events or changes in circumstances have
occurred that could impact the period of benefit.
The Company expenses flat rate commissions when incurred as commensurate with its usage-driven fee
revenue recognition and amortizes capitalized new customer site commissions to selling, general and
administrative expense in the condensed consolidated statements of operations and comprehensive loss.
The Company amortizes capitalized contract fulfillment costs to cost of revenue in the condensed
consolidated statements of operations and comprehensive loss. Short-term capitalized contract costs are
included in prepaid expenses and other current assets, and the long-term portion is included in other non-
current assets in the condensed consolidated balance sheets. 
Remaining Performance Obligations
Revenue allocated to remaining performance obligations represents the transaction price allocated to
performance obligations that are unsatisfied, or partially unsatisfied. It includes contract liabilities and
amounts that will be invoiced and recognized as revenue in future periods and does not include contracts
where the customer is not committed. The customer is considered not committed when they are able to
terminate for convenience without payment of a substantive penalty under the contract. Additionally, as a
practical expedient, the Company has not disclosed the value of unsatisfied performance obligations for
contracts with an original expected length of one year or less.
Contract Liabilities
The Company records contract liabilities when billings or payments are received in advance of revenue
recognition from subscription services. The contract liabilities balance is reduced as the revenue
recognition criteria is met, generally within 12 months. Once services are available to customers, the
Company records amounts due in accounts receivable, net and contract liabilities within accrued
expenses and other current liabilities on the condensed consolidated balance sheets. To the extent the
Company bills customers in advance of the billing period commencement date, the accounts receivable
and corresponding contract liabilities amount are netted to zero on the condensed consolidated balance
sheets, unless such amounts have been paid as of the balance sheet date.
Cost of Revenue
Cost of revenue includes, but is not limited to, personnel and related expenses, stock-based
compensation costs, third-party hosting fees, amortization of capitalized internal-use software,
amortization of contract fulfillment costs as well as royalties associated with technology licenses used in
connection with the delivery of the Company’s Heartflow Platform and allocated overhead, including rent,
equipment, depreciation, technology services and utilities, related to the Company’s production team. The
role of the production team is to support the Company’s patient case volume revenue by performing
defined quality-related activities on CCTA scans submitted by its customers for analysis. The production
team also supports activities in the Company’s clinical trials and research and development, which are
allocated as research and development expense.
Stock-Based Compensation
The Company accounts for share-based payments at fair value. The grant date fair value of options
granted is measured using the Black-Scholes option pricing model. Option awards vest based on the
satisfaction of a service requirement, and stock-based compensation expense is recorded on a straight-
line basis over the applicable service period, which is generally four years. For performance-based stock
options, the Company will assess the probability of performance conditions being achieved in each
reporting period. The amount of stock-based compensation expense recognized in any one period related
to performance-based stock options can vary based on the achievement or anticipated achievement of
the performance conditions. Forfeitures are recognized in the period in which the forfeiture occurs.
The Company accounts for stock-based compensation for restricted stock units at their fair value, based
on the closing market price of the Company’s common stock on the date of grant. These costs are
recognized on a straight-line basis over the requisite service period, which is usually the vesting period.
The Company accounts for stock-based compensation for its employee stock purchase plan based on the
estimated fair value of the options on the date of grant. The Company estimates the grant date fair value
using the Black-Scholes option pricing model for each purchase period. These costs are recognized on a
straight-line basis over the offering period.
Income Taxes
The Company accounts for income taxes under the asset and liability method. Under this method,
deferred tax assets and liabilities are determined based on the temporary differences between the
financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in
which the differences are expected to reverse. As a result of the history of net operating losses, the
Company has provided for a full valuation allowance against the deferred tax assets for assets that are
not more-likely-than-not to be realized.
The Company applies a comprehensive model for the recognition, measurement, presentation and
disclosure in the condensed consolidated financial statements of any uncertain tax positions that have
been taken or are expected to be taken on a tax return using a two-step approach. The first step is to
evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of
available evidence indicates that it is more likely than not that the tax position will be sustained upon
examination by the relevant taxing authorities, based on the technical merits of the position. For tax
positions that are more likely than not to be sustained upon audit, the second step is to measure the tax
benefit in the financial statements as the largest benefit that has a greater than 50% likelihood of being
sustained upon settlement. Significant judgment is required to evaluate uncertain tax positions. Changes
in facts and circumstances could have a material impact on the Company’s effective tax rate and results
of operations. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits
as a component of provision for income taxes in the condensed consolidated statements of operations
and comprehensive loss.
Comprehensive Loss
Comprehensive loss is comprised of net loss and foreign currency translation gains and losses.
Foreign Currency
The functional currency of the Company’s foreign subsidiaries is the local currency except for HeartFlow
International Sarl, which was the U.S. Dollar. For all non-functional currency balances, the
remeasurement of such balances to the functional currency results in either a foreign exchange
transaction gain or loss, which is recorded within other income, net within the condensed consolidated
statements of operations and comprehensive loss. The Company recognized foreign exchange
transaction loss of $(342,000) and $(587,000) during the three months ended September 30, 2025 and
2024, respectively, and $(95,000) and $(782,000) during the nine months ended September 30, 2025 and
2024, respectively. The Company recognized $205,000 and $(405,000) during the three months ended
September 30, 2025 and 2024, respectively, and $260,000 and $(504,000) during the nine months ended
September 30, 2025 and 2024, respectively, of foreign currency translation gain (loss) in the statements
of comprehensive loss related to foreign subsidiaries which have local functional currencies.
Net Loss Per Share
Basic net loss per common share is calculated by dividing the net loss by the weighted-average number
of shares of common stock outstanding during the period, without consideration of potentially dilutive
securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average
number of shares of common stock and potentially dilutive securities outstanding for the period. For
purposes of the diluted net loss per share calculation, the redeemable convertible preferred stock,
common stock warrants and stock options are considered to be potentially dilutive securities.
Basic and diluted net loss per share is presented in conformity with the two-class method required for
participating securities as the redeemable convertible preferred stock and common stock subject to
repurchase are considered participating securities. The Company’s participating securities do not have a
contractual obligation to share in the Company’s losses. As such, the net loss is attributed entirely to
common stockholders. Diluted net loss per share is the same as basic net loss per share because the
effects of potentially dilutive items were anti-dilutive given the Company’s net loss position during the
three and nine months ended September 30, 2025 and 2024.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards
Board (“FASB”) or other standard setting bodies and adopted by the Company as of the specified
effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our
Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to
complying with new or revised accounting standards, which means that when a standard is issued or
revised and it has different application dates for public and nonpublic companies, the Company will adopt
the new or revised standard at the time nonpublic companies adopt the new or revised standard and will
do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition
period or (ii) no longer qualifies as an emerging growth company. The Company may choose to early
adopt any new or revised accounting standards whenever such early adoption is permitted for nonpublic
companies.
Recent Accounting Pronouncements Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income
Tax Disclosures, which requires enhanced income tax disclosures, including specific categories and
disaggregation of information in the effective tax rate reconciliation, disaggregated information related to
income taxes paid, income or loss from continuing operations before income tax expense or benefit, and
income tax expense or benefit from continuing operations. This guidance is effective for annual periods
beginning after December 15, 2024. The adoption of ASU 2023-09 is expected to have a disclosure only
impact on the Company’s consolidated financial statements for the year ended December 31, 2025.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive
Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement
Expenses, which requires more detailed disclosures about specified categories of expenses (including
employee compensation, depreciation, and amortization) included in certain expense captions presented
on the face of the income statement. This ASU is effective for fiscal years beginning after December 15,
2026, and for interim periods within fiscal years beginning after December 15, 2027, with early adoption
permitted. The amendments may be applied either (i) prospectively to financial statements issued for
reporting periods after the effective date of this ASU or (ii) retrospectively to all prior periods presented in
the financial statements. The Company is currently evaluating the impact of this pronouncement on the
disclosures in its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326):
Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical
expedient related to the estimation of expected credit losses for current accounts receivable and current
contract assets that arise from transactions accounted for under Accounting Standards Codification Topic
606: Revenue from Contracts with Customers. The practical expedient permits an entity to assume that
current conditions as of the balance sheet date do not change for the remaining life of the current
accounts receivable and current contract assets. This ASU is effective for fiscal years beginning after
December 15, 2025 on a prospective basis, and for interim periods within fiscal years beginning after
December 15, 2025, with early adoption permitted. The Company is currently evaluating the impact of the
adoption of this pronouncement on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use
Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which
amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40 by
removing all references to project development stages and provides new guidance on how to evaluate
whether the probable-to-complete recognition threshold has been met to begin capitalizing software
costs. This ASU is effective for fiscal years beginning after December 15, 2027 and for interim periods
within fiscal years beginning after December 15, 2027, with early adoption permitted. The ASU may be
applied on a prospective, retrospective or modified prospective basis. The Company is currently
evaluating the impact of the adoption of this pronouncement on its consolidated financial statements.