Commitments and Contingencies
Leases and Other Commitments
See Note 7, “Leases,” to these consolidated financial statements for additional detail on the Company’s operating and finance lease commitments arising from these agreements.
Additionally, the Company has contractual commitments relating to cloud platform hosting and service purchase commitments as well as computer software licenses used to facilitate company operations. These commitments, that are noncancellable and expire within one to four years after December 31, 2025, are as follows (in thousands):
| | | | | | | | |
| Purchase obligations | | As of
December 31, 2025 |
| | |
| 2026 | | $ | 24,564 | |
| 2027 | | 23,473 | |
| 2028 | | 22,791 | |
| 2029 | | 11,070 | |
| Thereafter | | — | |
| Total | | $ | 81,898 | |
Litigation
From time to time, the Company is involved in various legal proceedings arising from the normal course of business activities. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties.
On September 19, 2023, a purported stockholder class action lawsuit was filed against the Company and certain of its current and former officers in the United States District Court in the Southern District of New York, alleging violations under Sections 10(b) and 20(a) of the Exchange Act. The complaint alleges that the Company made materially false or misleading statements about the factors that were driving its revenue growth between July 21, 2021 and August 11, 2022. The complaint seeks an unspecified amount of damages, interest, attorneys’ fees, expert fees, costs, and other relief as the court may deem just and proper. On December 12, 2023, the Court appointed a lead plaintiff and lead counsel. On January 8, 2024, the Court transferred the case to the United States District Court in the Western District of Texas. On March 8, 2024, the lead plaintiff filed an amended complaint. On May 10, 2024, the Company filed a motion to dismiss the amended complaint, which was fully briefed as of August 12, 2024. On January 30, 2025, the Court issued an order granting in part and denying in part the Company’s motion to dismiss. On February 27, 2025, the Company filed a motion for reconsideration on the Court’s order denying in part the Company’s motion to dismiss, which was denied on April 9, 2025.
On December 19, 2025, without admitting liability in connection with the matter described above, the Company has agreed to a settlement amount of $11.5 million, subject to court approval, recorded as an accrued legal loss and a corresponding insurance recovery asset of $8.0 million on the consolidated balance sheet as of December 31, 2025. The net impact of $3.5 million is recorded within general and administrative expenses on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2025. The determination that the recorded insurance recovery receivable is probable of collection is based on the terms of the applicable insurance policies, accrued amounts to resolve, and communications with the insurers.