Innovex International, Inc.

Previous wording

The following discussion and analysis of the results of operations, financial condition and liquidity position of Innovex for the three and nine months ended September 30, 2025 and 2024 should be read in conjunction with (i) the accompanying unaudited Condensed Consolidated Financial Statements and the related notes included in Part I, Item 1 of this Quarterly Report and (ii) the audited Consolidated Financial Statements and related notes for the year ended December 31, 2024 included in our Annual Report.

Current wording

The following discussion and analysis of the results of operations, financial condition, and liquidity position of Innovex for the three months ended March 31, 2026 and 2025 should be read in conjunction with (i) the accompanying unaudited Condensed Consolidated Financial Statements and the related notes included in Part I, Item 1 of this Quarterly Report and (ii) the audited Consolidated Financial Statements and related notes for the year ended December 31, 2025 included in our Annual Report.

Previous wording

The following discussion and analysis contains forward-looking statements that are based on management’s current expectations, estimates and projections about Innovex’s business and operations, and involves risks and uncertainties. Actual results may differ materially from those currently anticipated and expressed in such forward-looking statements because of various factors, including those described in the sections titled “Risk Factors” in our Annual Report and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and “Cautionary Statement Regarding Forward-Looking Statements” and elsewhere in this Quarterly Report, all of which are difficult to predict.

Current wording

The following discussion and analysis contains forward-looking statements that are based on management’s current expectations, estimates and projections about Innovex’s business and operations, and involves risks and uncertainties. Actual results may differ materially from those currently anticipated and expressed in such forward-looking statements because of various factors, including those described in the sections titled “Risk Factors” in our Annual Report and “Cautionary Statement Regarding Forward-Looking Statements” and elsewhere in this Quarterly Report, all of which are difficult to predict.

Previous wording

We are a global company, and forthe nine months ended September 30, 2025, the U.S. and Canadian onshore (“NAM”) market made up approximately 53% of our revenue while the international and offshore (“International and Offshore”) markets constituted 47%. Within the NAM market, we have a strong presence in both the United States and Canada. The NAM market is core to us, and we maintain a robust sales and distribution infrastructure across the region. Our products have broad applicability in this market, particularly for horizontal or unconventional wells that have become prevalent methods of oil and natural gas development across the region. We are focused on significantly increasing our revenue from the International and Offshore markets, as these regions are typically subject to long-cycle investment horizons and exhibit relatively less cyclicality than the NAM market. The Middle East, and in particular Saudi Arabia, has been a key source of growth for Innovex. We also operate across Asia, Latin America, Europe and the Gulf of America, among other regions. To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales and manufacturing partners.

Current wording

We are a global company, and for the three months ended March 31, 2026, the U.S. and Canadian onshore (“NAM”) market made up approximately 57% of our revenue, while the international and offshore (“International and Offshore”) market constituted 43%. Within the NAM market, we have a strong presence in both the United States and Canada. The NAM market is core to us, and we maintain a robust sales and distribution infrastructure across the region. Our products have broad applicability in this market, particularly for horizontal or unconventional wells that have become prevalent methods of oil and natural gas development across the region. We are focused on significantly increasing our revenue from the International and Offshore markets, as these regions are typically subject to long-cycle investment horizons and exhibit relatively less cyclicality than the NAM market. The Middle East, and in particular Saudi Arabia, has been a key source of growth for Innovex. We also operate across Asia, Latin America, Europe and the Gulf of America, among other regions. To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales, and manufacturing partners.

Previous wording

We have a broad customer base, ranging from International Oil Companies, National Oil Companies, and exploration and production (“E&P”) companies as well as multinati onal and regional oilfield service companies. Once a new product has been commercialized or acquired, our global sales and distribution infrastructure enables us to scale and drive customer adoption quickly.

Current wording

We have a broad customer base, ranging from International Oil Companies, National Oil Companies, and exploration and production (“E&P”) companies, as well as multinational and regional oilfield service companies. Once a new product has been commercialized or acquired, our global sales and distribution infrastructure enables us to scale and drive customer adoption quickly.

Previous wording

Our business has produced strong returns on invested capital. Refer to “Non-GAAP Financial Measures” within this section for Return on Capital Employed, which is how we assess the effectiveness of our capital allocation over time. For the nine months ended September 30, 2025, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 10%, 15% and 19% of revenue, respectively. Over the same period, capital expenditures accounted for 4% of revenue, and we earned approximately $106.8 million in income from operations. For the nine months ended September 30, 2024, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 26%, 5% and 22% of revenue, respectively. Over the same period, capital expenditures accounted for 1% of revenue, and we earned approximately $22.2 million in income from operations. We believe that our global sales and distribution network, as well as our manufacturing capacity and vendor network, position us well to drive revenue growth and margin expansion. Refer to “Non-GAAP Financial Measures” within this section for the definitions of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed, as well as a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed to our most directly comparable financial measures calculated and presented in accordance with GAAP.

Current wording

Our business has produced strong returns on invested capital. Refer to “Non-GAAP Financial Measures” within this section for Return on Capital Employed, which is how we assess the effectiveness of our capital allocation over time. For the three months ended March 31, 2026, our net loss, loss from operations and Adjusted EBITDA were equivalent to approximately (7.0)%, (9.1)%, and 20.6% of revenue, respectively. Over the same period, capital expenditures accounted for 2.4% of revenue, and we recognized approximately $21.8 million in losses from operations. During the three months ended March 31, 2026 we established a legal contingency accrual due to the jury verdict in connection with the Impulse Litigation, which is a primary reason for the decrease in net income (loss) and income (loss) from operations for the three months ended March 31, 2026. For the three months ended March 31, 2025, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 6.1%, 9.1%, and 19.1% of revenue, respectively. Over the same period, capital expenditures accounted for 2.9% of revenue, and we earned approximately $21.9 million in income from operations. We believe that our global sales and distribution network, as well as our manufacturing capacity and vendor network, position us well to drive revenue growth and margin expansion. Refer to “Non-GAAP Financial Measures” within this section for the definitions of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed, as well as a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed to our most directly comparable financial measures calculated and presented in accordance with GAAP.

Previous wording

Our business is driven by the number of oil and natural gas wells drilled worldwide, which, in turn, is tied to the level of global spending of the oil and natural gas E&P industry. Rystad Energy, as of September 17, 2025, expects global upstream energy spending, excluding Iran, Venezuela, Cuba, Russia and China, to stay relatively flat through 2027, with approximately 32,000 wells being drilled annually. The pace of development activity is driven by expected well profitability and returns, which, in turn, are influenced by several factors, including current global oil and natural gas supply and demand balances, current and expected future prices for oil and natural gas and the perceived stability and sustainability of these commodity prices over time.

Current wording

Our business is driven by the number of oil and natural gas wells drilled worldwide, which is closely tied to global exploration and production spending. As of April 17, 2026, Rystad Energy expects global upstream energy spending, excluding Iran, Venezuela, Cuba, Russia, and China, to rise slightly by approximately 2% annually through 2028. Approximately 32,000 wells were drilled in 2025, and that number is expected to decline modestly to approximately 31,000 in 2026 and gradually recover toward approximately 32,000 wells annually by 2028. The pace of development activity is driven by expected well profitability and returns, which, in turn, are influenced by several factors, including current global oil and natural gas supply and demand balances, current and expected future prices for oil and natural gas and the perceived stability and sustainability of these commodity prices over time.

Previous wording

Our historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward, due to recent and future acquisitions. One way in which we have grown, and will continue to grow, our operations and financial results is through strategic acquisitions. In May 2023, Innovex Downhole Solutions, Inc. ("Legacy Innovex") acquired 20% of Downhole Well Solutions, LLC ("DWS"), a company that manufactures and rents engineered downhole tools designed to improve the performance of directional and horizontal drilling operations. In March of 2024, Legacy Innovex entered into an Agreement and Plan of Merger (the "Merger Agreement") with Dril-Quip, and the transactions contemplated under the Merger Agreement (the "Merger") were consummated on September 6, 2024. In November of 2024, we acquired the remaining 80% equity interest in DWS. In February 2025, we acquired SCF Machine Corporation ("SCF"), a Canadian-domiciled entity and parent company to SCF Machining Corporation Vietnam Company Limited, a Vietnam-based company. In May 2025, we acquired Citadel, a leading provider of differentiated downhole technologies. As a general matter, following an acquisition, our results of operations are affected by the results of the newly acquired business or operations, the purchase accounting for the acquisition, any debt incurred in connection with the acquisition and expenditures made to integrate the newly acquired business or operations. As a result of our acquisitions and the consolidation of our operating subsidiaries’ into the Company’s financial results, the periods presented in our historical financial statements may not be comparable to one another and our future results of operations and financial results may differ. Additionally, as a result of the Merger, we expect to incur recurring administrative expenses related to being a publicly traded corporation that are not reflected in the historical Legacy Innovex’s financial statements.

Current wording

Our historical financial condition and results of operations for the periods presented may not be comparable, either from period to period or going forward, due to recent and future acquisitions. One way in which we have grown, and will continue to grow, our operations and financial results is through strategic acquisitions. In February 2025, we acquired SCF Machining Corporation ("SCF"), a Canadian-domiciled entity and parent company to SCF Machining Corporation Vietnam Company Limited, a Vietnam-based company. In May 2025, we acquired Citadel Casing Solutions, LLC ("Citadel"), a leading provider of differentiated downhole technologies. As a general matter, following an acquisition, our results of operations are affected by the results of the newly acquired business or operations, the purchase accounting for the acquisition, any debt incurred in connection with the acquisition and expenditures made to integrate the newly acquired business or operations. As a result of our acquisitions and the consolidation of our operating subsidiaries’ into our financial results, the periods presented in our historical financial statements may not be comparable to one another and our future results of operations and financial results may differ.

Previous wording

Revenues. Our NAM market revenue for the three months ended September 30, 2025 was $131.9 million, an increase of $33.6 million from the three months ended September 30, 2024, primarily driven by an increase in market share and incremental business operations due to the acquisitions of DWS, SCF and Citadel. This was offset by a continued reduction in drilling activity in North America due to a decline in the North American onshore rig count during the comparative period. Our International and Offshore market revenue for the three months ended September 30, 2025, was $108.1 million, an increase of $54.6 million from the three months ended September 30, 2024, primarily driven by increased business operations due to the aforementioned acquisitions.

Current wording

Revenues Our NAM market revenue for the three months ended March 31, 2026 was $136.7 million, an increase of $16.2 million from the three months ended March 31, 2025, primarily driven by an increase in market share and incremental business operations due to the acquisition of Citadel. Our International and Offshore market revenue for the three months ended March 31, 2026, was $102.3 million, a decrease of $17.6 million from the three months ended March 31, 2025, primarily driven by a decrease in business operations from our Europe, Caspian, and Africa ("ECAF") geography.

Previous wording

Cost of revenues, exclusive of depreciation and amortization. Total cost of revenues for the three months ended September 30, 2025 was $164.1 million, an increase of $64.9 million from the three months ended September 30, 2024. The change was attributable to a $20.6 million increase in personnel expense and an increase in our product costs due to an increase in sales activity.

Current wording

Cost of revenues, exclusive of depreciation and amortization Total cost of revenues for the three months ended March 31, 2026 was $154.5 million, a decrease of $9.4 million from the three months ended March 31, 2025. The change was primarily attributable to a decrease in service costs, driven by lower direct salaries and wages costs.

Previous wording

Selling, general and administrative expenses. Selling, general and administrative expense for the three months ended September 30, 2025 was $35.6 million, a decrease of $2.4 million from the three months ended September 30, 2024. The change was primarily attributable to a decrease in stock based compensation and bad debt of $9.1 million, offset by an increase in salaries and wages, IT costs, and R&D costs of $7.6 million driven by an increase in headcount attributable to the acquisitions of DWS, SCF and Citadel.

Current wording

Selling, general and administrative expenses Selling, general and administrative expense for the three months ended March 31, 2026 was $41.7 million, an increase of $9.4 million from the three months ended March 31, 2025. The change was attributable to an increase of $13.4 million in bonuses, commissions, IT costs, and other business costs primarily attributable to the Citadel acquisition, as well as attorney and professional services costs related to the Impulse Litigation, offset by a decrease in salaries and wages of $4.2 million.

Previous wording

Gain on sale of assets. Gain on sale of assets for the three months ended September 30, 2025 and 2024 was $40.9 million and $0.2 million, respectively. The change was driven by the sale of our Eldridge Facility assets, which resulted in a gain, offset by normal variations associated with the sale of property and equipment during the period.

Current wording

(Gain) loss on sale of assets (Gain) loss on sale of assets for the three months ended March 31, 2026 and 2025 was $(2.0) million and $0.1 million, respectively. The change was driven by the sale of our rental tool assets, which resulted in a gain, offset by normal variations associated with the sale of property and equipment during the period.

Previous wording

Depreciation and amortization. Total depreciation and amortization expense for the three months ended September 30, 2025 was $15.4 million, an increase of $7.6 million from the three months ended September 30, 2024. The change was primarily due to additional depreciation for assets acquired related to our acquisitions.

Current wording

Depreciation and amortization Total depreciation and amortization expense for the three months ended March 31, 2026 was $16.2 million, an increase of $1.3 million from the three months ended March 31, 2025. The change was primarily due to additional depreciation for assets acquired related to our acquisition of Citadel.

Previous wording

Long-lived asset impairments. Long-lived asset impairment expense for the nine months ended September 30, 2025 was $3.4 million, a decrease of $0.1 million from the nine months ended September 30, 2024. The impairment expense was primarily related to (i) land and a building in Mexico acquired as part of the Merger that was held for sale at March 31, 2025 and marketed at an amount that was lower than the net book value, which ultimately resulted in an impairment expense of $2.9 million and (ii) declining market conditions associated with our anticipated sub-lease of the prior Dril-Quip corporate office.

Current wording

Impairment of long-lived assets Long-lived asset impairment expense for the three months ended March 31, 2025 was $2.9 million and was primarily related to real estate in Mexico acquired as part of the Merger that was held for sale at March 31, 2025 and marketed at an amount that was lower than the net book value, which ultimately resulted in an impairment expense of $2.9 million. There was no impairment recognized during the three months ended March 31, 2026.

Previous wording

Acquisition and integration costs. Acquisition and integration costs for the three months ended September 30, 2025 were $3.6 million, a decrease of $16.7 million from the three months ended September 30, 2024. The change was due to a reduction of costs incurred attributable to the Merger in 2024.

Current wording

Acquisition and integration costs Acquisition and integration costs for the three months ended March 31, 2026 were $1.6 million, a decrease of $2.7 million from the three months ended March 31, 2025. The change was due to a reduction of costs incurred in 2025 attributable to the acquisition activity and the Merger.

Previous wording

Interest expense. Total interest expense was $0.7 million for the three months ended September 30, 2025 and 2024. Interest expense is comparable during both periods due to similar average total debt and finance lease obligations during the comparative periods.

Current wording

Interest (income) expense, net Total interest (income) expense, net was $(0.4) million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively. Interest expense (income) varied slightly between the two periods due to a change in the mix of long-term debt and finance lease obligations.

Previous wording

Other income. Total other income for the three months ended September 30, 2025 was $0.3 million, a decrease of $0.6 million from the three months ended September 30, 2024. The change was primarily due to the net change in our foreign currency exchange gains (losses).

Current wording

Other expense (income), net Total other expense (income), net for the three months ended March 31, 2026 was $0.2 million, a decrease of $0.4 million from the three months ended March 31, 2025. The change was primarily due to the net change in our foreign currency exchange gains (losses).

Previous wording

Income tax expense. Our operations are subject to U.S. federal income tax at an entity level, as well as various state income and franchise taxes. In addition, our operations located in international jurisdictions are subject to local country income taxes. Income tax expense for the three months ended September 30, 2025 was $18.7 million, an increase of $21.3 million from the three months ended September 30, 2024. The change was primarily driven by changes in our mix of income before income taxes by geography and tax jurisdiction, discrete items recorded in the quarter, and other non-deductible expenses. For the three months ended September 30, 2025, income before income taxes was $58.0 million, a decrease of $22.0 million from the three months ended September 30, 2024.

Current wording

Income tax expense (benefit), net Our operations are subject to U.S. federal income tax at an entity level, as well as various state income and franchise taxes. In addition, our operations located in international jurisdictions are subject to local country income taxes. Income tax benefit for the three months ended March 31, 2026 was $4.9 million, a decrease of $11.5 million from the three months ended March 31, 2025. The change was primarily driven by the discrete items recorded during the three months ended March 31, 2026.

Previous wording

Our primary sources of liquidity are our existing cash, cash provided by operating activities, and borrowings under the Credit Agreement (as defined below). The Company maintains an open market share repurchase program under our existing share repurchase authorization and may repurchase shares from time to time based on management’s evaluation of market conditions, share price and other factors. As of September 30, 2025, we had cash and restricted cash of $163.4 million and availability under the Revolver (as defined herein) of $132.8 million. Our total indebtedness was $26.4 million as of September 30, 2025.

Current wording

Our primary sources of liquidity are our existing cash, cash provided by operating activities, and borrowings under the Credit Agreement (as defined below). We have a share repurchase program in place and may repurchase shares from time to time based on management’s evaluation of market conditions, share price, and other factors. As of March 31, 2026, we had cash and restricted cash of $200.7 million and availability under the Credit Agreement of $155.0 million. Our total indebtedness, including finance lease obligations, was $24.2 million as of March 31, 2026.

Previous wording

We have certain obligations related to debt maturities, finance leases and operating leases. As of September 30, 2025, we have $23.7 million of minimum non-cancelable lease obligations for the twelve months following September 30, 2025, comprised of $7.9 million of finance lease maturities and $15.8 million of operating lease obligations. We have an additional $78.6 million of minimum non-cancelable lease obligations for the periods after September 30, 2026, comprised of $25.8 million of finance lease maturities and $52.8 million of non-cancelable operating lease obligations. As of September 30, 2025, interest rates on our lease obligations range from 2.88% to 12.00%. In addition, all amounts borrowed under our Revolver become due and payable in 2030. For the nine months ended September 30, 2024, the Company’s effective interest rate on the term loan was approximately 8.85%. As of September 30, 2025, there were no borrowings under the term loan. For the nine months ended September 30, 2025, the effective interest rate on the Revolver was approximately 8.92%. For the nine months ended September 30, 2024, the effective interest rate on the Revolver was approximately 10.46%. As of September 30, 2025, there were no borrowings on the Revolver. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Current wording

We have certain obligations related to debt maturities, finance leases, and operating leases. As of March 31, 2026, we have $23.0 million of minimum non-cancelable lease obligations for the twelve months following March 31, 2026, comprised of $7.6 million of finance lease maturities and $15.4 million of operating lease obligations. We have an additional $70.5 million of minimum non-cancelable lease obligations for the periods after March 31, 2027, comprised of $23.0 million of finance lease maturities and $47.5 million of non-cancelable operating lease obligations. As of March 31, 2026, interest rates on our lease obligations range from 2.88% to 12.00%. In addition, all amounts borrowed, if any, under our Revolver (as defined below) become due and payable in 2030. There were no borrowings on the Credit Agreement as of March 31, 2026. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Previous wording

Statements of cash flows for entities with international operations that are local currency functional exclude the effects of the changes in foreign currency exchange rates that occur during any given period, as these are non-cash changes. As a result, changes reflected in certain lines in the Condensed Consolidated Statements of Cash Flows may not reflect the changes in corresponding lines in the Condensed Consolidated Balance Sheets.

Current wording

Statements of cash flows for entities with international operations that are local currency functional exclude the effects of the changes in foreign currency exchange rates that occur during any given period, as these are non-cash changes. As a result, changes reflected in certain lines in our Condensed Consolidated Statements of Cash Flows may not reflect the changes in corresponding lines in our Condensed Consolidated Balance Sheets.

Previous wording

Operating Activities. Net cash provided by operating activities for the nine months ended September 30, 2025 was $138.7 million, an increase of $81.6 million from the nine months ended September 30, 2024. The change was primarily driven by the following:

Current wording

Operating Activities Net cash provided by operating activities for the three months ended March 31, 2026 was $19.8 million, a decrease of $11.3 million from the three months ended March 31, 2025. The change was primarily driven by the following:

Previous wording

a decrease in net income of $39.2 million;

Current wording

a decrease in net income of $31.5 million;

Previous wording

changes in non-cash adjustments to net income from the comparative period, including an increase in (i) depreciation and amortization expense of $26.1 million, (ii) deferred taxes due to timing differences of $30.5 million, (iii) amortization of operating lease right-of-use assets of $3.5 million, and (iv) gains on property, equipment disposals of $40.6 million, offset by a decrease in the gain on bargain purchase associated with the Merger of $96 million; and

Current wording

changes in non-cash adjustments to net income from the comparative period, including an increase in (i) provision for legal settlement related to the Impulse Litigation of $48.8 million, (ii) gains on property, equipment disposals of $2.1 million, (iii) depreciation and amortization expense of $1.3 million, and (iv) stock-based compensation expense of $1.2 million, offset by a decrease in both deferred taxes due to timing differences of $2.6 million and impairment of long-lived assets of $2.9 million; and

Previous wording

the movement in operating assets and liabilities, net of assets acquired as part of the acquisitions.

Current wording

the movement in operating assets and liabilities, net of assets acquired as part of the acquisitions, with the change primarily driven by normal fluctuations in our working capital amounts.

Previous wording

Investing Activities. Net cash used in investing activities for the nine months ended September 30, 2025 was $8.8 million, an increase of $159.2 million from the net cash provided by investing activities for the nine months ended September 30, 2024. The change was primarily due to the cash used to fund both the SCF and Citadel acquisitions, offset by the proceeds from sale of the Eldridge Facility, for the nine months ended September 30, 2025 versus the cash acquired as part of the Merger for the nine months ended September 30, 2024.

Current wording

Investing Activities Net cash used in investing activities for the three months ended March 31, 2026 was $5.6 million, a decrease of $17.8 million from the three months ended March 31, 2025. The change was primarily due to the cash used to fund the SCF acquisition of $17.4 million for the three months ended March 31, 2025.

Previous wording

Financing Activities. Net cash used in financing activities for the nine months ended September 30, 2025 was $42.1 million, a decrease of $72.1 million from the nine months ended September 30, 2024. The change was primarily due to a decrease revolving credit facility borrowings and amounts paid for both dividends and taxes on settled equity awards of $80.4 million, offset by common stock repurchases of $9.3 million for the nine months ended September 30, 2025.

Current wording

Financing Activities Net cash used in financing activities for the three months ended March 31, 2026 was $16.9 million, an increase of $3.5 million from the three months ended March 31, 2025. The change was primarily due to a decrease in Revolver borrowings, Revolver repayments, and term loan repayments of $9.8 million, offset by an increase in our common stock repurchases of $13.5 million for the three months ended March 31, 2026.

Previous wording

The Company, as the borrower, entered into the Third Amended and Restated Revolving Credit, Guaranty and Security Agreement, dated as of February 27, 2025, to replace the Previous Credit Agreement and provide for a revolving credit facility of up to $200.0 million (the “Revolver” or the “Credit Agreement”). The Credit Agreement, among other things, (a) extended the maturity of the agreement from June 10, 2026 to February 27, 2030, (b) increased the maximum revolving amount from $110 million to $200 million, which may, subject to certain conditions, be increased to $250 million, (c) eliminated the term loan commitment and (d) provided for an applicable margin for interest on the loans to be based on availability, effective as of April 1, 2025. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Current wording

The Company, as the borrower, entered into the Third Amended and Restated Revolving Credit, Guaranty and Security Agreement, dated as of February 27, 2025, to provide for a revolving credit facility of up to $200.0 million (the “Revolver” or the “Credit Agreement”). The Credit Agreement, among other things, (a) extended the maturity of the agreement from June 10, 2026 to February 27, 2030, (b) increased the maximum revolving amount from $110 million to $200 million, which may, subject to certain conditions, be increased to $250 million, (c) eliminated the term loan commitment, and (d) provided for an applicable margin for interest on the loans to be based on availability, effective as of April 1, 2025. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Previous wording

We define Adjusted EBITDA (a non-GAAP measure) as net income before interest expense, income tax expense, depreciation and amortization, (gain)/loss on sale of assets and other expense, net, further adjusted to exclude certain items which we believe are not reflective of our ongoing performance or which are non-cash in nature. Management uses Adjusted EBITDA to assess the profitability of our business operations and to compare our operating performance to our competitors without regard to the impact of financing methods and capital structure and excluding costs that management believes do not reflect our ongoing operating performance, and for this reason we believe this measure will provide useful information to investors. We track Adjusted EBITDA on an absolute dollar basis and as a percentage of revenue, which we refer to as Adjusted EBITDA Margin.

Current wording

We define Adjusted EBITDA (a non-GAAP measure) as net income (loss) before interest (income) expense, net, income tax expense (benefit), net, depreciation and amortization, (gain) loss on sale of assets and other expense, net, further adjusted to exclude certain items which we believe are not reflective of our ongoing performance or which are non-cash in nature. Management uses Adjusted EBITDA to assess the profitability of our business operations and to compare our operating performance to our competitors without regard to the impact of financing methods and capital structure and excluding costs that management believes do not reflect our ongoing operating performance, and for this reason we believe this measure will provide useful information to investors. We track Adjusted EBITDA on an absolute dollar basis and as a percentage of revenue, which we refer to as Adjusted EBITDA Margin.

Previous wording

(2) For the three and nine months ended September 30, 2025, acquisition and integration costs consisted of legal, accounting, advisory fees, and other integration costs associated with the Merger, the acquisition of the remaining equity interest in DWS, and the acquisitions of SCF and Citadel. For the three and nine months ended September 30, 2024, acquisition and integration costs consisted of legal, accounting, advisory fees, and other integration costs associated with the Merger. These acquisition and integration costs are one-time in nature and represent expenses that we do not view as normal operating expenses necessary to operate our business.

Current wording

(2) For the three months ended March 31, 2026, acquisition and integration costs consisted of legal, accounting, advisory fees, move, severance, and other integration costs associated with the recent acquisitions. For the three months ended March 31, 2025, acquisition and integration costs consisted of legal, accounting, advisory fees, move, severance, and other integration costs associated with the Merger, the acquisition of the remaining equity interest in Downhole Well Solutions, LLC ("DWS"), and the acquisition of SCF. These acquisition and integration costs are one-time in nature and represent expenses that we do not view as normal operating expenses necessary to operate our business.

Previous wording

Adjusted EBITDA for the nine months ended September 30, 2025 was $136.2 million, an increase of $46.8 million from the nine months ended September 30, 2024.

Current wording

Adjusted EBITDA for the three months ended March 31, 2026 was $49.3 million, an increase of $3.4 million from the three months ended March 31, 2025.

Previous wording

We utilize Return on Capital Employed (“ROCE”) (a non-GAAP measure) to assess the effectiveness of our capital allocation over time and to compare our capital efficiency to our competitors, and for this reason we believe this measure will provide useful information to investors. We define ROCE as income from operations, before acquisition and integration costs and after tax (resulting in Adjusted Income from Operations, after tax) divided by average capital employed. Capital employed is defined as the combined values of debt and stockholders’ equity.

Current wording

We utilize Return on Capital Employed (“ROCE”) (a non-GAAP measure) to assess the effectiveness of our capital allocation over time and to compare our capital efficiency to our competitors, and for this reason we believe this measure will provide useful information to investors. We define ROCE as income from operations excluding acquisition and integration costs, litigation related expenses not reflective of our ongoing operating performance, and income tax expense (resulting in Adjusted Income from Operations, after tax) divided by average capital employed. Capital employed is defined as the combined values of debt and stockholders’ equity. We revised our definition of ROCE and Adjusted Income from Operations, after tax to exclude litigation related expenses not reflective of our ongoing operating performance, which for the twelve months ended March 31, 2026 is reflective of the costs related to the Impulse Litigation. In particular, we believe that the exclusion of the aforementioned litigation related expenses eliminated in calculating Adjusted Income from Operations, after tax and ROCE provides useful measures for period-to-period comparisons of our business. We did not revise prior years’ Adjusted Income from Operations, after tax or ROCE because there were no other charges similar in nature to these costs.

Previous wording

ROCE for the twelve months ended September 30, 2025 was 13%, an increase from the twelve months ended September 30, 2024.

Current wording

ROCE for the twelve months ended March 31, 2026 was 12%, remaining unchanged from the twelve months ended March 31, 2025.

Previous wording

Free Cash Flow for the nine months ended September 30, 2025 was $112.5 million, an increase of $61.3 million from the nine months ended September 30, 2024.

Current wording

Free Cash Flow for the three months ended March 31, 2026 was $14.0 million, a decrease of $10.0 million from the three months ended March 31, 2025.

Previous wording

The Company operates in one reportable segment as our chief operating decision maker (“CODM”) assesses performance and allocates resources based on financial information presented at a consolidated level.

Current wording

We operate in one reportable segment as our chief operating decision maker (“CODM”) assesses performance and allocates resources based on financial information presented at a consolidated level.