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 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.

Current wording

The following discussion and analysis of the results of operations, financial condition, and liquidity position of Innovex for the three and six months ended June 30, 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

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.

Current wording

We are a global company, and for the six months ended June 30, 2026, the U.S. and Canadian onshore (“NAM”) market made up approximately 55% of our revenue, while the international and offshore (“International and Offshore”) market constituted 45%. 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

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.

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 six months ended June 30, 2026, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 1.7%, 2.5%, and 20.1% of revenue, respectively. Over the same period, capital expenditures accounted for 2.6% of revenue, and we recognized approximately $12.0 million in income from operations. For the six months ended June 30, 2025, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 6.0%, 10.0%, and 20.0% of revenue, respectively. Over the same period, capital expenditures accounted for 3% of revenue, and we earned approximately $44.5 million in income from operations. During the six months ended June 30, 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 and income from operations for the six months ended June 30, 2026. 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

On April 10, 2026, we acquired Drilling Innovative Solutions, LLC (“DIS”) for $11.5 million in cash, subject to post-closing adjustments, resulting in DIS becoming a wholly owned subsidiary of Innovex. In addition, we have an earn-out obligation subject to the achievement of revenue targets that allow for payments to the previous owners of up to $4 million over the next two years. DIS manufactures and distributes unique patented products to the oil and gas industry, including float valves and plug cement retainers, with a proven track record of helping operators realize significant savings through innovative solutions. Through integrating DIS’ product offering and expertise into our broader platform, we expect to enhance our portfolio of “big-impact, small ticket” products, allowing us to deliver additional value to our global customer base.

Current wording

On April 10, 2026, we acquired Drilling Innovative Solutions, LLC (“DIS”) for a total purchase consideration of $17.6 million, which includes $4 million of earnout obligations subject to the achievement of revenue targets over the next two years, resulting in DIS becoming a wholly owned subsidiary of Innovex. DIS manufactures and distributes unique patented products to the oil and gas industry, including float valves and plug cement retainers, with a proven track record of helping operators realize significant savings through innovative solutions. Through integrating DIS’ product offering and expertise into our broader platform, we expect to enhance our portfolio of “big-impact, small ticket” products, allowing us to deliver additional value to our global customer base.

Previous 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.

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 June 25, 2026, Rystad Energy expects global upstream energy spending, excluding Iran, Venezuela, Cuba, Russia, and China, to decline slightly by approximately 1% in 2026 before increasing by approximately 6% in 2027 and a further approximately 2% in 2028. Approximately 33,000 wells were drilled in 2025, and that number is expected to remain relatively stable at approximately 33,000 wells annually through 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

The oil and natural gas industry has historically been characterized by volatility in commodity prices and in the level of drilling and production activity, which are driven by a variety of market forces, including geopolitical instability, climate related initiatives, OPEC+ actions, among others. We expect that the growing energy demands of data centers, driven by the prevalence of Artificial Intelligence, will continue to contribute to the consumption of natural gas for power generation. The global demand for oil and natural gas has consistently increased historically, and we believe that multiple years of under investment in oil and natural gas development has left the industry with a limited amount of spare production capacity. Additionally, public E&P operators have adopted a more conservative approach to capital spending in response to stockholders’ desire for increased return of capital. We believe that these factors have laid a foundation to support oil and natural gas prices and will lead to a sustained spending cycle and stable activity levels by our customers in the near and medium-term.

Current wording

The oil and natural gas industry has historically been characterized by volatility in commodity prices and in the level of drilling and production activity, which are driven by a variety of market forces, including geopolitical instability (including, most recently, the Iran conflict), climate-related initiatives, OPEC+ actions, among others. We expect that the growing energy demands of data centers, driven by the prevalence of Artificial Intelligence, will continue to contribute to the consumption of natural gas for power generation. The global demand for oil and natural gas has consistently increased historically, and we believe that multiple years of underinvestment in oil and natural gas development have left the industry with limited spare production capacity. Additionally, public E&P operators have adopted a more conservative approach to capital spending in response to stockholders’ desire for increased return of capital. We believe that these factors have laid a foundation to support oil and natural gas prices and will lead to a sustained spending cycle and stable activity levels by our customers in the near and medium-term.

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 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.

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. In April 2026, we acquired DIS, a leading supplier of niche downhole tools. In July 2026, we acquired TCO Group, a leading provider of advanced well completion 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

(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.

Current wording

Gain on sale of assets, net Gain on sale of assets, net for the three months ended June 30, 2026 was $9.9 million, an increase of $9.4 million from the three months ended June 30, 2025. The change was driven by the sale of our rental tool assets and the sale of a building in Mineral Wells, TX, which resulted in a gain, offset by normal variations associated with the sale of property during the period.

Previous 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.

Current wording

Depreciation and amortization Total depreciation and amortization expense for the three months ended June 30, 2026 was $16.2 million, an increase of $1.2 million from the three months ended June 30, 2025. The change was primarily due to additional depreciation for assets acquired related to the Citadel and DIS acquisitions.

Previous 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.

Current wording

Acquisition and integration costs Acquisition and integration costs for the three months ended June 30, 2026 were $1.6 million, a decrease of $3.5 million from the three months ended June 30, 2025. The change was due to a reduction of acquisitions in 2026, and therefore a reduction in costs due to acquisition and integration activities as compared to 2025 and 2024.

Previous wording

Provision for legal settlement Provision for legal settlement expense for the three months ended March 31, 2026 was $48.8 million and entirely related to the Impulse Litigation, as discussed further in Note 16. Commitments and Contingencies.

Current wording

Provision for legal settlement Provision for legal settlement expense for the three months ended June 30, 2026 was $2.8 million, an increase of $2.8 million from the three months ended June 30, 2025. The change was entirely related to the Impulse Litigation, as discussed further in Note 16. Commitments and Contingencies.

Previous 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.

Current wording

Interest (income) expense, net Total interest (income) expense, net was $(0.7) million and $0.6 million for the three months ended June 30, 2026 and 2025, respectively. Interest (income) expense varied between the two periods due to interest received on our cash deposits.

Previous 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).

Current wording

Other income, net Total other income, net for the three months ended June 30, 2026 was $1.0 million, an increase of $0.9 million from the three months ended June 30, 2025. The change was primarily due to the net change in our foreign currency exchange gains (losses).

Previous 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.

Current 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 June 30, 2026 was $10.4 million, an increase of $3.5 million from the three months ended June 30, 2025. The change was primarily driven by the discrete items recorded during the three months ended June 30, 2026.

Previous 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.

Current wording

Revenues Our NAM market revenue for the six months ended June 30, 2026 was $268.1 million, an increase of $27.7 million from the six months ended June 30, 2025, primarily driven by an increase in market share and incremental business operations due to the acquisition of Citadel in May of 2025. Our International and Offshore market revenue for the six months ended June 30, 2026 was $215.8 million, a decrease of $8.4 million from the six months ended June 30, 2025, primarily driven by a decrease in business operations from our Europe, Caspian, and Africa regions.

Previous 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.

Current wording

Cost of revenues, exclusive of depreciation and amortization Total cost of revenues for the six months ended June 30, 2026 was $315.8 million, a decrease of $0.7 million from the six months ended June 30, 2025. The change was primarily attributable to a decrease in salaries and wages costs.

Previous 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.

Current wording

Impairment of long-lived assets Long-lived asset impairment expense for the six months ended June 30, 2025 was $3.4 million and was primarily related to (i) real estate in Mexico acquired as part of the Merger that was held for sale at June 30, 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) the impairment of a lease $0.5 million. There was no impairment recognized during the three and six months ended June 30, 2026.

Previous wording

Net income (loss) Net loss for the three months ended March 31, 2026 was $16.7 million, a decrease of $31.5 million from the three months ended March 31, 2025, primarily as a result of the provision for legal settlement related to the Impulse Litigation recorded for the three months ended March 31, 2026 in addition to the other factors discussed above.

Current wording

Net income Net income for the six months ended June 30, 2026 was $8.4 million, a decrease of $21.7 million from the six months ended June 30, 2025, primarily as a result of the provision for legal settlement related to the Impulse Litigation recorded for the six months ended June 30, 2026 in addition to the other factors discussed above.

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). 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.

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 June 30, 2026, we had cash and restricted cash of $222.1 million and availability under the Credit Agreement of $156.5 million. Our total indebtedness, including finance lease obligations, was $25.1 million as of June 30, 2026.

Previous 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.

Current wording

We have certain obligations related to debt maturities, finance leases, and operating leases. As of June 30, 2026, we have $22.8 million of minimum non-cancelable lease obligations for the twelve months following June 30, 2026, comprised of $7.5 million of finance lease maturities and $15.4 million of operating lease obligations. We have an additional $68.1 million of minimum non-cancelable lease obligations for the periods after June 30, 2027, comprised of $23.9 million of finance lease maturities and $44.2 million of non-cancelable operating lease obligations. As of June 30, 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 June 30, 2026. For the three and six months ended June 30, 2025, the effective interest rate on the Revolver was approximately 5.63% and 6.94%, respectively. Refer to Note 10. Debt of our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for additional information.

Previous 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:

Current wording

Operating Activities Net cash provided by operating activities for the six months ended June 30, 2026 was $56.9 million, a decrease of $33.4 million from the six months ended June 30, 2025. The change was primarily driven by the following:

Previous wording

a decrease in net income of $31.5 million;

Current wording

a decrease in net income of $21.7 million;

Previous 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

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 $51.6 million, (ii) gains on property, equipment disposals of $11.4 million, (iii) depreciation and amortization expense of $2.5 million, and (iv) stock-based compensation expense of $0.8 million, offset by a decrease in impairment of long-lived assets of $3.4 million; and

Previous 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.

Current wording

Investing Activities Net cash used in investing activities for the six months ended June 30, 2026 was $18.8 million, a decrease of $67.5 million from the six months ended June 30, 2025. The change was primarily due to the cash used to fund the SCF and Citadel acquisitions, net of cash acquired of $80.6 million for the six months ended June 30, 2025 that was offset by the cash used to fund the DIS acquisition, net of cash acquired of $12.0 million for the six months ended June 30, 2026.

Previous 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.

Current wording

Financing Activities Net cash used in financing activities for the six months ended June 30, 2026 was $19.3 million, an increase of $8.3 million from the six months ended June 30, 2025. The change was primarily due to a decrease in Revolver borrowings, Revolver repayments, and term loan repayments of $3.6 million and an increase in our common stock repurchases of $4.8 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.

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 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 $110.0 million to $200.0 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

As of March 31, 2025 and March 31, 2026, we had $15.6 million and no borrowings outstanding under the Revolver, respectively.

Current wording

As of June 30, 2026 and June 30, 2025, we had no borrowings outstanding and $29.0 million of borrowings outstanding under the Revolver, respectively.

Previous 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.

Current wording

(2) For the three and six months ended June 30, 2026, acquisition and integration costs consisted of legal, accounting, advisory fees, move, severance, and other integration costs associated with the recent acquisition activities. For the three and six months ended June 30, 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"), the acquisition of SCF, and the acquisition of Citadel. 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

(5) Reflects transaction costs associated with the secondary offering in February 2026.

Current wording

(5) Reflects transaction costs associated with the secondary offering.

Previous 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.

Current wording

Adjusted EBITDA for the six months ended June 30, 2026 was $97.3 million, an increase of $4.7 million from the six months ended June 30, 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 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.

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. In the first quarter of 2026, 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 June 30, 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

(1) As defined in our reconciliation of the GAAP financial measure of net income (loss) and net income (loss) as a percentage of revenue to Adjusted EBITDA and Adjusted EBITDA Margin above.

Current wording

(1) As defined in our reconciliation of the GAAP financial measure of net income and net income as a percentage of revenue to Adjusted EBITDA and Adjusted EBITDA Margin above.

Previous wording

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

Current wording

ROCE for the twelve months ended June 30, 2026 was 12%, a decrease from the twelve months ended June 30, 2025.

Previous 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.

Current wording

Free Cash Flow for the six months ended June 30, 2026 was $44.4 million, a decrease of $31.5 million from the six months ended June 30, 2025.