GLOO

Business Context and Reporting Period

Company: Gloo Holdings, Inc. (formerly Gloo Holdings, LLC)

Reporting Period: Quarterly period ended October 31, 2025 (Nine months ended October 31, 2025)

Business Overview: Gloo operates a technology platform serving the "faith and flourishing ecosystem," connecting Network Capability Providers (NCPs) with Churches and Frontline Organizations (CFLs). Revenue streams include subscriptions, marketplace sales, advertising, and platform solutions. The company recently completed a Corporate Reorganization and Initial Public Offering (IPO) in November 2025, subsequent to the reporting period.

Key Financial Metrics

Liquidity: Net cash used in operating activities was $63.0 million for the nine months ended October 31, 2025. Net cash provided by financing activities was $81.6 million, primarily from debt issuances.

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased 431.6% year-over-year for the quarter and 265.0% for the nine-month period. This was driven by a 225.7% increase in Platform Revenue (primarily advertising and subscriptions) and a significant increase in Platform Solutions Revenue due to new acquisitions.
• Expense Expansion: Operating expenses increased 214.5% for the quarter and 138.3% for the nine-month period. General and Administrative expenses surged 521.5% (quarter) and 282.8% (nine months), largely due to personnel increases, acquisition transaction fees, and IPO-related costs.
• Acquisitions: The company completed six acquisitions during the nine-month period, including Sermons Tech, Igniter Group, Barna, CNCL, Servant, and Masterworks. These acquisitions significantly contributed to revenue but also increased operating costs and goodwill.
• Debt Structure: The company amended its Senior Secured Notes to Senior Secured Convertible Notes, increasing principal capacity and incurring a $7.5 million loss on debt extinguishment during the nine-month period.

Guidance, Outlook, Risks, and Unusual Items

• Going Concern: Management has concluded there is substantial doubt about the company's ability to continue as a going concern for at least 12 months from the date of issuance, citing recurring operating losses, negative cash flows, and dependence on external financing. This assessment was made prior to the November 2025 IPO.
• Subsequent Events: In November 2025, the company completed its IPO, raising net proceeds of approximately $72.3 million. Additionally, $143.1 million of Senior Secured Convertible Notes automatically converted into Class B common stock upon the IPO closing.
• Material Weaknesses: The company identified three material weaknesses in internal control over financial reporting, including ineffective IT general controls, improper segregation of duties, and lack of precise financial close controls.
• Unusual Items:
  • Loss on Change in Fair Value: A $9.1 million loss (quarter) and $20.5 million loss (nine months) related to financial instruments, primarily due to the exchange of Senior Secured Notes.
  • Equity Method Gains: A $2.9 million gain (quarter) and $2.8 million gain (nine months) from the remeasurement of previously held equity interests in Sermons Tech upon consolidation.
• Outlook: The company plans to continue investing in AI capabilities, cross-selling brands, and strategic acquisitions. Future profitability depends on scaling the platform and managing the high cost of growth.

Investor Verification Checklist

• Going Concern Status: Verify the impact of the November 2025 IPO proceeds on the previously disclosed "substantial doubt" regarding the company's ability to continue as a going concern.
• Debt Conversion: Confirm the final terms and dilution impact of the $143.1 million debt conversion into equity that occurred immediately following the reporting period.
• Internal Controls: Review the remediation plan for the identified material weaknesses in internal controls over financial reporting and assess the timeline for achieving effective controls.
• Acquisition Integration: Evaluate the integration progress and revenue contribution of the six acquisitions completed in the nine-month period, particularly Masterworks and Midwestern.
• Related Party Transactions: Scrutinize the significant related party debt (approx. $141 million in non-current debt from related parties) and the terms of the Senior Secured Convertible Notes held by affiliates.