Everforth Inc

Previous wording

Consolidated revenues for the quarter were $1.0 billion, down 1.3 percent year-over-year. The table below shows our revenues by segment for the three months ended June 30, 2026 and 2025 (in millions).

Current wording

Consolidated revenues for the quarter were $1.0 billion, up 2.0 percent year-over-year. The table below shows our revenues by segment for the three months ended September 30, 2026 and 2025 (in millions).

Previous wording

Commercial Segment revenues were approximately 70 percent of total revenues and were down 0.2 percent year-over-year. From an industry perspective, the decrease was mainly attributable to revenue decline from clients across Business Services and Financial Services, partially offset by year-over-year growth across TMT, Healthcare, and Consumer and Industrial. Federal Government Segment revenues were approximately 30 percent of total revenues and were down 1.7 percent year-over-year. The decrease was mainly attributable to revenue declines from Defense and Intelligence and Federal Civilian agencies, partially offset by increases in revenues from National Security agencies and other customers.

Current wording

Commercial Segment revenues were approximately 70 percent of total revenues and were up 1.2 percent year-over-year. From an industry perspective, the increase was attributable to higher revenue from clients across TMT and Business Services, partially offset by lower revenue from clients in Healthcare, Consumer and Industrial, and Financial Services. Federal Government Segment revenues were approximately 30 percent of total revenues and were up 3.8 percent year-over-year. The increase was driven by higher revenue from National Security and Federal Civilian agencies, partially offset by lower revenue from Defense and Intelligence agencies, and other clients.

Previous wording

Consolidated gross profit declined 3.0 percent year-over-year. Gross margin for the second quarter of 2026 was 28.3 percent, a compression of 40 basis points comp ared with the second quarter of 2025. Gross margin for the Commercial Segment was down 90 basis points year-over-year, primarily driven bybusiness mix related to a smaller contribution from some of our higher-margin solutions including permanent placement revenues, as well as changes in foreign currency exchange rates primarily related to our delivery center in Mexico. Gross margin for the Federal Government Segment was up 40 basis points year-over-year, driven by focused efforts to improve profitability across the contract portfolio.

Current wording

Consolidated gross profit declined 1.8 percent year-over-year. Gross margin for the third quarter of 2026 was 28.3 percent, a compression of 110 basis points compared with the third quarter of 2025. Gross margin for the Commercial Segment was down 130 basis points year-over-year. Contributing to the compression was (i) a lower mix of high-margin permanent placement revenues, (ii) changes in foreign currency exchange rates primarily related to our delivery center in Mexico, and (iii) a shift in solutions mix, with stronger growth in certain cloud and infrastructure services that carry lower gross margins than other offerings in our portfolio. Gross margin for the Federal Government Segment was down 50 basis points year-over-year primarily due to an increase in revenues from cost reimbursable contracts which carry a lower margin than our other contract types.

Previous wording

Selling, general, and administrative ("SG&A") expenses consist primarily of compensation expense for our field operations and corporate staff, information systems, rent, public company expenses, and other general and administrative expenses. SG&A expenses were $226.2 million, compared with $216.8 million in the second quarter of 2025. SG&A expenses in the second quarter of 2026 included $9.8 million in acquisition, integration, and strategic planning expenses, compared with $8.3 million in the second quarter of 2025.

Current wording

Selling, general, and administrative ("SG&A") expenses consist primarily of compensation expense for our field operations and corporate staff, information systems, rent, public company expenses, and other general and administrative expenses. SG&A expenses were $217.7 million, compared with $212.2 million in the third quarter of 2025. SG&A expenses included $8.3 million in acquisition, integration, and strategic planning expenses, compared with $4.2 million in the third quarter of 2025.

Previous wording

Amortization of intangible assets was $17.3 million, compared with $16.9 million in the second quarter of 2025. The increase relates to the effects of the Quinnox acquisition, partially offset by older intangibles reaching the end of their useful lives.

Current wording

Amortization of intangible assets was $17.3 million, compared with $16.8 million in the third quarter of 2025. The increase relates to the effects of the Quinnox acquisition, partially offset by older intangibles reaching the end of their useful lives.

Previous wording

Interest expense, net, which consists primarily of cash-based interest expense, amortization and adjustments to deferred loan costs, and interest income, was $20.4 million, up from $18.2 million in the second quarter of 2025. The increase was due to higher outstanding borrowings. The weighted-average outstanding borrowings and cash-based interest rates in the second quarter of 2026 and 2025 were $1.49 billion and 5.3 percent, and $1.28 billion and 5.6 percent, respectively.

Current wording

Interest expense, net, which consists primarily of cash-based interest expense, amortization and adjustments to deferred loan costs, and interest income, was $20.2 million, up from $17.4 million in the third quarter of 2025. The increase was due to higher outstanding borrowings. The weighted-average outstanding borrowings and cash-based interest rates in the third quarter of 2026 and 2025 were $1.45 billion and 5.3 percent, and $1.22 billion and 5.7 percent, respectively.

Previous wording

The provision for income taxes was $6.5 million, down from $12.1 million in the second quarter of 2025 due to lower income before income taxes. The effective tax rate was 31.4 percent, up from 29.2 percent in the second quarter of 2025. The increase in the effective tax rate reflects higher foreign income taxes, the non-renewal of the Work Opportunity Tax Credit ("WOTC"), and lower income before income taxes.

Current wording

The provision for income taxes was $13.3 million, up from $12.4 million in the third quarter of 2025, despite lower income before income taxes. The effective tax rate was 36.5 percent, up from 24.6 percent in the third quarter of 2025. The increase in the effective tax rate reflects higher foreign income taxes, the non-renewal of the Work Opportunity Tax Credit ("WOTC"), and lower income before income taxes.

Previous wording

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2026 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2025

Current wording

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 COMPARED WITH THE NINE MONTHS ENDED SEPTEMBER 30, 2025

Previous wording

Revenues for the first six months of the year were $2.0 billion, down 0.7 percent year-over-year. The table below shows our revenues by segment for the six months ended June 30, 2026 and 2025 (in millions).

Current wording

Revenues for the first nine months of the year were $3.0 billion, up 0.2 percent year-over-year. The table below shows our revenues by segment for the nine months ended September 30, 2026 and 2025 (in millions).

Previous wording

Commercial Segment revenues were approximately 70 percent of total revenues and were down 0.9 percent year-over-year. From an industry perspective, the decreasewas attributable to reduced revenue from clients across Business Services, Financial Services, Consumer and Industrial, and Healthcare, partially offset by year-over-year revenue growth in TMT. Federal Government Segment revenues were approximately 30 percent of total revenues and were down 2.3 percent year-over-year. The decrease was mainly attributable to reduced revenue from Defense and Intelligence and Federal Civilian agencies, partially offset by increases in revenues from National Security agencies and other customers.

Current wording

Commercial Segment revenues were approximately 70 percent of total revenues and were stable year-over-year. Revenue growth in TMT more than offset declines in Business Services, Financial Services and Healthcare, while Consumer and Industrial remained relatively flat year-over-year. Federal Government Segment revenues were approximately 30 percent of total revenues and were also stable year-over-year. The increase was attributable to revenue increases from National Security agencies, offset by lower revenue from Defense and Intelligence and Federal Civilian agencies, and other clients.

Previous wording

The table below shows gross profit and gross margin by segment for the six months ended June 30, 2026 and 2025 (in millions).

Current wording

The table below shows gross profit and gross margin by segment for the nine months ended September 30, 2026 and 2025 (in millions).

Previous wording

Consolidated gross profit declined 3.1 percent year-over-year. Gross margin for the first six months of 2026 was 27.9 percent, a compression of 70 basis points from the first six months of 2025. Gross margin for the Commercial Segment was down 120 basis points year-over-year, primarily driven by business mix related to a smaller contribution from some of our higher-margin solutions including permanent placement revenues, as well as changes in foreign currency exchange rates primarily related to our delivery center in Mexico. Gross margin for the Federal Government Segment was up 30 basis points year-over-year, driven by focused efforts to improve profitability across the contract portfolio.

Current wording

Consolidated gross profit declined 2.6 percent year-over-year. Gross margin for the first nine months of 2026 was 28.0 percent, a compression of 90 basis points from the first nine months of 2025. Gross margin for the Commercial Segment was down 110 basis points year-over-year. Contributing to the compression was (i) a lower mix of high-margin permanent placement revenues, (ii) changes in foreign exchange rates primarily related to our delivery center in Mexico, and (iii) a shift in solutions mix, with stronger growth in certain cloud and infrastructure services that carry lower gross margins than other offerings in our portfolio. Gross margin for the Federal Government Segment was down 10 basis points year-over-year primarily due to an increase in revenues from cost reimbursable contracts, partially offset by focused efforts to improve profitability across the contract portfolio.

Previous wording

SG&A expenses were $450.6 million, compared with $431.3 million in the first six months of 2025. SG&A expenses in the firstsix months of 2026 included $22.6 million in acquisition, integration, and strategic planning expenses, compared with $11.6 million in the first six months of 2025.

Current wording

SG&A expenses were $668.3 million, compared with $643.5 million in the first nine months of 2025. SG&A expenses in the first nine months of 2026 included $30.9 million in acquisition, integration, and strategic planning expenses, compared with $15.8 million in the first nine months of 2025. The increase primarily relates to costs for strategic initiatives including updates to our go-to market strategy, outsourcing of certain back-office functions, and an enterprise resource planning system implementation.

Previous wording

Amortization of intangible assets was $31.8 million, compared with $31.2 million in the first six months of 2025. The increase relates to the effects of the Quinnox acquisition, partially offset by older intangibles that have reached the end of their useful lives.

Current wording

Amortization of intangible assets was $49.1 million, compared with $48.0 million in the first nine months of 2025. The increase relates to the effects of the Quinnox acquisition, partially offset by older intangibles that have reached the end of their useful lives.

Previous wording

Interest expense, net was $37.5 million, up from $33.6 million in the first six months of 2025. The weighted-average outstanding borrowings and cash-based interest rates in the first six months of 2026 and 2025 were $1.38 billion and 5.3 percent, and $1.20 billion and 5.6 percent, respectively.

Current wording

Interest expense, net was $57.7 million, up from $51.0 million in the first nine months of 2025. The increase was due to higher outstanding borrowings. The weighted-average outstanding borrowings and cash-based interest rates in the first nine months of 2026 and 2025 were$1.41 billion and 5.3 percent, and $1.21 billion and 5.6 percent, respectively.

Previous wording

The provision for income taxes was $11.6 million, down from $22.4 million in the first six months of 2025 due to lower income before income taxes. The effective tax rate was 37.1 percent, up from 30.9 percent in the first six months of 2025. The increase in the effective tax rate reflects higher foreign income taxes, the non-renewal of the WOTC, and lower income before income taxes.

Current wording

The provision for income taxes was $24.9 million, down from $34.8 million in the first nine months of 2025 due to lower income before income taxes. The effective tax rate was 36.8 percent, up from 28.3 percent in the first nine months of 2025. The increase in the effective tax rate reflects higher foreign income taxes, the non-renewal of the WOTC, and lower income before income taxes.

Previous wording

Our working capital, which is current assets less current liabilities, at June 30, 2026, was $523.2 million, and our cash and cash equivalents were $152.9 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to meet our working capital and capital expenditure needs. At June 30, 2026, we had approximately $180.0 million available under the $500.0 million revolving credit facility. We believe that our cash and cash equivalents on hand, expected operating cash flows, and availability under our revolving credit facility will be sufficient to fulfill our obligations, working capital requirements, and capital expenditures for the next 12 months and beyond.

Current wording

Our working capital, which is current assets less current liabilities, at September 30, 2026, was $528.5 million, and our cash and cash equivalents were $147.5 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to meet our working capital and capital expenditure needs. At September 30, 2026, we had approximately $227.0 million available under the $600.0 million revolving credit facility. We believe that our cash and cash equivalents on hand, expected operating cash flows, and availability under our revolving credit facility will be sufficient to fulfill our obligations, working capital requirements, and capital expenditures for the next 12 months and beyond.

Previous wording

Net cash provided by operating activities was $70.7 million for the first six months of 2026, compared with $141.7 million in the same period of 2025. Net cash provided by operating activities before changes in operating assets and liabilities was $112.4 million, compared with $137.5 million in the same period of 2025. Changes in operating assets and liabilities resulted in net cash usage of $41.7 million for the first six months of 2026, compared with net cash provided of $4.2 million in the same period of 2025. This year-over-year change primarily related to an increase in accounts receivable days sales outstanding in the first six months of 2026.

Current wording

Net cash provided by operating activities was $129.4 million for the first nine months of 2026, compared with $225.6 million in the same period of 2025. Net cash provided by operating activities before changes in operating assets and liabilities was $178.9 million, compared with $217.9 million in the same period of 2025. Changes in operating assets and liabilities resulted in net cash usage of$49.5 million for the first nine months of 2026, compared with net cash provided of $7.7 million in the same period of 2025. This year-over-year change primarily related to an increase in accounts receivable days sales outstanding in the first nine months of 2026.

Previous wording

Net cash used in investing activities for the first six months of 2026 was $298.9 million, comprised of $283.6 million used to acquire Quinnox and $15.3 million used for capital expenditures. Net cash used in investing activities for the first six months of 2025 was $325.4 million, comprised of $306.1 million used to acquire TopBloc and $19.3 million used for capital expenditures.

Current wording

Net cash used in investing activities for the first nine months of 2026 was $311.1 million, comprised of $283.6 million used to acquire Quinnox and $27.5 million used for capital expenditures. Net cash used in investing activities for the first nine months of 2025 was $337.3 million, comprised of $306.1 million used to acquire TopBloc and $31.2 million used for capital expenditures.

Previous wording

Net cash provided by financing activities was $220.3 million for the first six months of 2026 and included net borrowings under the senior secured credit facility totaling $269.2 million, offset by $50.5 million used to repurchase the Company's common stock. Net cash provided by financing activities in the first six months of the prior year was $116.3 million and included net borrowings under the senior secured credit facility totaling $177.5 million, offset by $59.9 million used to repurchase the Company's common stock.

Current wording

Net cash provided by financing activities was $168.8 million for the first nine months of 2026 and included net borrowings under the senior secured credit facility totaling $225.5 million, offset by $50.5 million used to repurchase the Company's common stock. Net cash provided by financing activities in the first nine months of the prior year was $31.8 million and included net borrowings under the senior secured credit facility totaling $134.6 million, offset by $105.9 million used to repurchase the Company's common stock.

Previous wording

For details on the (i) senior secured credit facility, comprised of a revolving credit facility, term loan A, and term loan B, and (ii) unsecured senior notes, see Note 5. Long-Term Debt in Part I, Item 1 in this Quarterly Report on Form 10-Q.

Current wording

For details on the (i) senior secured credit facility, comprised of a revolving credit facility, and term loan B, and (ii) unsecured senior notes, see Note 5. Long-Term Debt in Part I, Item 1 in this Quarterly Report on Form 10-Q.

Previous wording

There were no material changes to our critical accounting policies and estimates during thesecond quarter of 2026 compared with those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2025 10-K.

Current wording

There were no material changes to our critical accounting policies and estimates during thethird quarter of 2026 compared with those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2025 10-K.