Acquisitions and Business Combinations

9 Months Ended

Sep. 30, 2026

Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]

Acquisitions and Business Combinations

Acquisitions and Business Combinations

During the nine months ended September 30, 2026, the Company completed the acquisitions and business combination of the following firms: (i) a tax firm in Ireland, (ii) a tax firm in New Zealand, (iii) a tax firm in Nigeria, (iv) a consulting firm in Nigeria, (v) a tax and an accounting firm in Uruguay, (vi) a law firm in Uruguay, (vii) a tax firm in Switzerland and (viii) a business combination of a regulated tax and accounting firm in Canada, which is a consolidated variable interest entity under a master services agreement. These acquisitions and business combination are not individually material to the Company's unaudited condensed consolidated financial statements.

The Company applied the acquisition method of accounting in accordance with ASC 805 and recognized assets acquired and liabilities assumed at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill or bargain purchase gain.

The purchase price allocation below is based upon provisional information and is subject to revision during the measurement period (up to one year from the acquisition date) as additional information concerning valuations is obtained. During the measurement period, as the Company obtains new information regarding facts and circumstances that existed as of the acquisition date that, if known, would have resulted in revised estimated values of those assets or liabilities, the Company will accordingly revise the provisional purchase price allocation.

The aggregate purchase price for these acquisitions was $25.0 million, made up of $9.2 million in cash paid at closing including the settlement of debt, $0.7 million for the settlement of pre-existing arrangements, $1.3 million in earnout liability and $13.8 million in deferred consideration. The estimated fair values of assets acquired and liabilities assumed are provisional and are based on the information that was available as of the acquisition dates. The Company expects to finalize the valuations and complete the purchase price allocations as soon as practicable but no later than one year from the acquisition dates.

The following table presents the preliminary allocation of the aggregate purchase price of these acquisitions (in thousands):

	Preliminary Allocation
Purchase price:
Cash paid including the settlement of debt	$	9,225
Settlement of pre-existing arrangements	679
Fair value of earnout liability	1,309
Fair value of deferred consideration	13,824
Total purchase price	$	25,037
Net assets acquired:
Cash and cash equivalents	6,153
Accounts receivable	10,747
Other current assets	2,049
Property and equipment	2,216
Operating lease right-of-use assets	7,319
Other noncurrent assets	175
Customer relationships	8,618
Liabilities assumed, current	(8,941)
Liabilities assumed, noncurrent	(39)
Operating lease liabilities, current	(841)
Operating lease liabilities, noncurrent	(6,389)
Bargain purchase gain	(1,420)
Goodwill	5,390
Total net assets acquired	$	25,037

As a result of these acquisitions, the Company recognized $5.4 million of goodwill, $8.6 million of customer relationships and a bargain purchase gain of $1.4 million. Goodwill represents the synergies and economies of scale expected from expanding into key developed and high-growth markets. Goodwill is not expected to be deductible for tax purposes. Customer relationships have an estimated useful life of 10 years. Pre-existing debt as part of the acquisitions was extinguished at closing and included within the preliminary allocation of the aggregate purchase price. As a result of comparing the purchase price to the fair value of the assets acquired and liabilities assumed, an initial $1.4 million bargain purchase gain from the Ireland firm, Nigeria consulting firm, and Nigeria tax firm was recognized. The bargain purchase gains are primarily due to negotiating economic consideration in the form of post-combination compensation arrangements with substantive service conditions.

In April 2026, the Company closed the acquisition of tax firms in Ireland and New Zealand, a tax firm and a consulting firm in Nigeria, and a tax firm and a law firm in Uruguay (collectively, the "April Transactions"). In addition, the business combination in Canada and acquisition of a tax firm in Switzerland both closed in July 2026 (collectively, the "July Transactions" and together with the April Transactions, the "Closed Transactions"). In connection with the Closed Transactions, the Company issued 822,214 shares of restricted Class A common stock for the April Transactions, 108,517 shares of restricted Class A common stock for the Canada business combination and 32,554 shares of restricted Class A common stock for the Switzerland acquisition for an aggregate of 963,285 shares of restricted Class A common stock. Vesting of the restricted Class A common stock is contingent on the recipients providing future service following the respective acquisition dates. Accordingly, the restricted Class A common stock is accounted for separately from the business combinations as compensation for post-combination services. See Note 12 for further details.

In connection with the April Transactions, the Company entered into other service-based payment arrangements, including contingent annual cash payments equal to 100% of the annual net profit generated by the acquired entity for each of the five consecutive twelve-month periods following the acquisition date. The Company also agreed to make cash payments based on the net working capital of the acquired entities in the April Transactions of $5.4 million recognized as

compensation expense over a three-year service period. In addition, service-based payments of $6.9 million, payable sixteen months after the close of the acquisitions, will be recognized as compensation expense over the related service period. These service-based payments require future service and continued employment with the Company and are accounted for separately from the business combinations as post-combination compensation expense and included in cost of services in the unaudited condensed consolidated statements of operations.

From the acquisition date of current period acquisitions and business combinations through September 30, 2026, these entities contributed $10.7 million and $16.2 million in revenue for the three and nine months ended September 30, 2026, respectively, which is included in the Company's unaudited condensed consolidated statements of operations. The results of operations of these acquisitions are included in the Company's unaudited condensed consolidated statements of operations from their respective dates of acquisition and were not material.

Pro forma results of operations for the acquisitions have not been presented because they are not material to the Company's unaudited condensed consolidated financial statements.