Andersen Group Inc.
For the period ended Jun 30, 2026. Filed Aug 12, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 12, 2026
ANDG$65.00-1.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-12.
0001193125-26-219544
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-12.
0001193125-26-346921
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 138 previous paragraphs and 175 current paragraphs.
82 unchanged; 39 reworded; 44 added; 15 removed; 2 previous and 10 current paragraphs rearranged.
Tables are not compared: 16 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (44)
Current report
Revenue by region was:
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Clients
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People Metrics
Current report
In the second quarter of 2026, we revised our definition of Adjusted Net Income and Adjusted Net Income Margin to include all non-cash equity-based compensation, and in the last twelve months ended June 30, 2026, non-cash equity-based compensation expenses for LTIP Units and restricted stock units were added to conform to the current presentation. The change is intended to provide a more meaningful measure of our underlying operating performance by excluding equity-based compensation charges which are non-cash in nature and do not reflect our core operating results. The additional adjustments are consistent with our treatment of other equity-based compensation expenses and are intended to provide greater consistency in presentation. We applied the revised definition consistently to current and comparative periods, where applicable, to enhance period-to-period comparability. The impact of the revision is not material to previously disclosed figures.
Current report
In the second quarter of 2026, we revised our definition of Adjusted EBITDA and Adjusted EBITDA Margin to include all non-cash equity-based compensation, and in the last twelve months ended June 30, 2026, non-cash equity-based compensation expenses for LTIP Units and restricted stock units were added to conform to the current presentation. The change is intended to provide a more meaningful measure of our underlying operating performance by excluding equity-based compensation charges which are non-cash in nature and do not reflect our core operating results. The additional adjustments are consistent with our treatment of other equity-based compensation expenses and are intended to provide greater consistency in presentation. We applied the revised definition consistently to current and comparative periods, where applicable, to enhance period-to-period comparability. The impact of the revision is not material to previously disclosed figures.
Current report
(3)Profits interest units at AT Umbrella LLC (“LTIP Units”) are exchangeable for Class A common stock from Andersen Group Inc. During the three and six months ended June 30, 2026, we recognized $1.5 million and $2.4 million, respectively, of non-cash equity-based compensation expense associated with LTIP Units in cost of services, and $0.3 million and $0.3 million, respectively, in sales, general and administrative expense.
Current report
(4)Restricted stock issued to acquired firms represents shares of Class A common stock subject to a service period of 5 years. During each of the three and six months ended June 30, 2026, we recognized $0.8 million of non-cash equity-based compensation expense associated with restricted stock issued to acquired firms in cost of services.
Current report
(5)Restricted stock units granted to employees are subject to a vesting service period of 6 years. During the three and six months ended June 30, 2026, we recognized $2.7 million and $5.5 million, respectively, of non-cash equity-based compensation expense associated with restricted stock units issued to employees in cost of services, and $0.7 million and $1.5 million, respectively, in sales, general and administrative expense.
Current report
(6)In connection with the Reorganization Transactions, we incurred certain equity restructuring expenses as a result of the exchange of historical equity interests of the Management Holdcos for new Class H Aggregator Units and/or the combination of Class X Aggregator Units and Member Notes. The expense for these were incurred in December 2025.
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(1) NM—fluctuation in terms of percentage change is not meaningful.
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Revenue
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Our sales, general and administrative expenses during the three months ended June 30, 2026 decreased by $3.4 million, or 6.3%, to $50.5 million compared to $53.9 million during the three months ended June 30, 2025. The decrease was primarily related to equity-based compensation costs. We incurred $25.0 million of equity based compensation expense related to pre-IPO profits interest units during the three months ended June 30, 2025. During the three months ended June 30, 2026, we incurred expenses of $7.1 million resulting from grants of equity-based compensation. This decrease was offset partly by increased legal expenses as the three months ended June 30, 2025 incurred a gain on a reversal of a legal accrual of $9.5 million. Sales, general and administrative costs as a percentage of revenue decreased period-over-period from 30.6% for the three months ended June 30, 2025 to 23.2% for the three months ended June 30, 2026.
Current report
Interest income during the three months ended June 30, 2026 increased by $0.5 million, or 45.3%, to $1.5 million, compared to $1.0 million during the three months ended June 30, 2025. The increase in interest income is attributable to higher average balances held in interest-bearing cash and investment accounts.
Current report
Other income, net during the three months ended June 30, 2026 increased by $1.9 million, or 143.6%, to $3.1 million, compared to $1.3 million during the three months ended June 30, 2025. The increase was primarily attributable to a gain on bargain purchase recognized during the three months ended June 30, 2026 of $1.4 million.
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Income Tax Benefit
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Net Loss Attributable to Noncontrolling Interest
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Comparison of the Six Months Ended June 30, 2026 and 2025
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(1) NM—fluctuation in terms of percentage change is not meaningful.
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Revenue
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Our revenue during the six months ended June 30, 2026 increased by $74.3 million, or 19.4%, to $458.4 million, compared to $384.1 million during the six months ended June 30, 2025. Revenue growth was broad-based across all service lines, driven by client additions, higher volume, and service line expansion during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Inorganic growth also contributed $5.5 million to the increase in revenue during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
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Cost of services
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Our cost of services during the six months ended June 30, 2026 decreased by $3.3 million, or 1.0%, to $339.9 million compared to $343.2 million during the six months ended June 30, 2025. The decrease in cost of services was primarily attributable to the decrease in non-cash equity-based compensation in the second quarter of 2026 compared to the six months ended June 30, 2025, which had a large one-time expense incurred of $104.5 million related to pre-IPO profits interest units. This was offset partially by an increase in other personnel costs as a result of the organic and inorganic growth in the business and an increase in billable expenses from the growth in consulting client engagements. Cost of services as a percentage of revenue decreased period-over-period from 89.4% during the six months ended June 30, 2025 to 74.2% for the six months ended June 30, 2026.
Current report
Sales, general and administrative
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Our sales, general and administrative expenses during the six months ended June 30, 2026 increased by $9.3 million, or 10.4%, to $98.5 million compared to $89.2 million during the six months ended June 30, 2025. The increase was primarily related to a large one-time reversal of a $9.5 million legal accrual in 2025 that did not recur in 2026. Sales, general and administrative costs as a percentage of revenue decreased period-over-period from 23.2% for the six months ended June 30, 2025 to 21.5% for the six months ended June 30, 2026.
Current report
Depreciation and amortization
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Interest income during the six months ended June 30, 2026 increased by $1.1 million, or 51.4%, to $3.4 million, compared to $2.2 million during the six months ended June 30, 2025. The increase in interest income is attributable to higher average balances held in interest-bearing cash and investment accounts.
Current report
Other income, net during the six months ended June 30, 2026 increased by $1.7 million, or 73.2%, to $4.0 million, compared to $2.3 million during the six months ended June 30, 2025. The increase was primarily attributable to a gain on bargain purchase recognized during the six months ended June 30, 2026 of $1.4 million.
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Income Tax Expense (Benefit)
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Working capital, which we define as current assets less current liabilities, was $220.0 million as of June 30, 2026, compared to $216.2 million as of December 31, 2025, an increase of $3.7 million. The increase was primarily driven by cash provided by operating activities of $65.8 million offset by principal payments on long-term debt and cash paid for business combinations. Working capital is not a measure defined under U.S. GAAP and may not be comparable to similarly titled measures used by other companies.
Current report
At June 30, 2026, the Holdover Note and Capital Account Notes have an aggregate principal balance of $301.2 million. See Note 9, “Long-Term Debt” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for further information.
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Revolving Line of Credit
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We previously maintained a $20.0 million revolving line of credit (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. ("JPMorgan"), which was collateralized by substantially all the assets of the Company. The Credit Agreement expired on June 30, 2026 in accordance with its terms and was not renewed. As such, no amount was outstanding on this line of credit as of June 30, 2026. As of December 31, 2025, we had one outstanding standby letter of credit of $1.3 million and no cash borrowings under the Credit Agreement.
Current report
Revolving Credit Facility
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In June 2026, we entered into a new credit agreement ("New Credit Agreement")with JPMorgan Chase Bank, N.A. (“JPMorgan”) which provides for up to $50.0 million asset-based revolving credit facility (the "Revolving Credit Facility"). Borrowing availability under the Revolving Credit Facility is determined by reference to an asset-based borrowing base, which includes up to 85% of certain accounts receivable, as reduced by certain reserves. The Revolving
Current report
Credit Facility matures in June 2029 and may be used for general corporate purposes, refinancing of existing debt, permitted acquisitions, and ongoing working capital needs.
Current report
The New Credit Agreement includes certain financial and liquidity covenants. The New Credit Agreement includes a springing minimum fixed charge coverage ratio (“FCCR”) requirement of 1.00x, tested monthly on a trailing twelve-month basis, that becomes effective if borrowing availability falls below 25% of the line cap (with a $6.0 million floor). We may make discretionary distributions, earnout payments, and subordinated debt principal payments only if: (i) pro forma availability exceeds 20% of the line cap (with a $4.5 million floor) and pro forma FCCR is 1.00x, or pro forma availability exceeds 25% of the line cap (with a $6.0 million floor); (ii) no existing or pro forma default exists; and (iii) the Lenders have received notice that the payment conditions are satisfied.
Current report
Permitted acquisitions are subject to the following conditions: (A) for domestic acquisitions, total consideration does not exceed $25 million; (B) for foreign acquisitions during an undrawn period, total consideration does not exceed $15 million per transaction and $75 million in the aggregate per annum; (C) for foreign acquisitions during a drawn period, total consideration does not exceed $15 million per transaction and $75 million in the aggregate per annum; (D) no existing or pro forma event of default exists; and (E) standard acquisition documentation and certifications are provided to JPMorgan.
Current report
Net cash flows used in financing activities were $133.7 million during the six months ended June 30, 2026 compared to $86.5 million during the six months ended June 30, 2025, an increase of $47.2 million. The increase was driven primarily by principal payments of $48.9 million on the Capital Account Notes and the Holdover Note during the six months ended June 30, 2026.
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Business Combinations
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We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not we have acquired inputs and processes that have the ability to create outputs, which would meet the requirements of a business. If determined to be a business combination, we account for the transaction under the acquisition method of accounting, which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree and establishes the acquisition date as the fair value measurement point. Accordingly, we recognize assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and noncontrolling interest in the acquiree based on the fair value estimates as of the date of acquisition. In accordance with ASC 805, Business Combinations, we recognize and measure goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. In cases where the fair value of identified net assets acquired exceeds consideration paid, we recognize a gain on bargain purchase.
Showing the first 40 of 44 passages. Open the source sections for the rest.
Removed paragraphs (15)
Previous report
Revenue by U.S. region was:
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Operating Expenses
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Interest Income
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Interest Expense
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Other Income, Net
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Operating Expenses
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Our sales, general and administrative expenses during the three months ended March 31, 2026 increased by $12.6 million, or 35.8%, to $48.0 million compared to $35.4 million during the three months ended March 31, 2025. The increase was primarily related to equity-based compensation costs of $4.4 million resulting from grants of equity-based units in connection with the IPO in December 2025, as well as a $2.2 million increase in salaries and related expenses in connection with our increased headcount year-over-year. We also incurred $1.3 million in increased technology expenses as a result of additional software which was implemented to adhere to various regulatory requirements in connection with the IPO. Sales, general and administrative costs as a percentage of revenue increased period-over-period from 17.0% for the three months ended March 31, 2025 to 19.9% for the three months ended March 31, 2026.
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Interest Income
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Interest income during the three months ended March 31, 2026 increased by $0.7 million, or 56.6%, to $1.9 million, compared to $1.2 million during the three months ended March 31, 2025. The increase was primarily driven by increased interest from money market funds.
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Interest Expense
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Other Income, Net
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Other income, net during the three months ended March 31, 2026 decreased by $0.2 million, or 17.6%, to $0.8 million, compared to $1.0 million during the three months ended March 31, 2025.
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Income Tax Expense
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We maintain a $20.0 million revolving line of credit, which we refer to as the Credit Agreement, with JPMorgan Chase Bank, N.A., as successor-in-interest to First Republic Bank. The Credit Agreement is collateralized by substantially all of our assets. In February 2026, we amended the Credit Agreement to extend through June 2026. The extension also modified certain terms relating to covenant requirements.
Previous report
Net cash flows used in financing activities were $39.2 million during the three months ended March 31, 2026 compared to $12.1 million during the three months ended March 31, 2025, an increase of $27.1 million. Distributions increased during the three months ended March 31, 2026 to $24.4 million compared to $11.3 million during the three months ended March 31, 2025 due to an increase in distributions paid to Aggregator after the Reorganization Transactions and distributions paid to Aggregator in satisfaction of member tax liabilities. The increase was also driven by principal payments of $13.6 million on the CA Notes and the HO Note during the three months ended March 31, 2026.
Reworded paragraphs (39)
Previous wording
The following discussion is intended to assist in the understanding of our financial position at March 31, 2026 and December 31, 2025, results of operations for the three months ended March 31, 2026 and 2025, and cash flows for the three months ended March 31, 2026 and 2025, and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties and should be read in conjunction with the disclosures and information contained in “Special Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in Part I, Item 1A. "Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Current wording
The following discussion is intended to assist in the understanding of our financial position at June 30, 2026 and December 31, 2025, results of operations for the three and six months ended June 30, 2026 and 2025, and cash flows for the six months ended June 30, 2026 and 2025, and should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K for the year ended December 31, 2025. Some of the information contained in this discussion and analysis or set forth elsewhere, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties and should be read in conjunction with the disclosures and information contained in “Special Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q and in Part I, Item 1A. "Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Previous wording
We are a leading provider of independent tax, valuation and financial advisory services to individuals, wealthy families, businesses and institutional clients in the United States. From our roots as a tax advisory firm, we have strategically expanded our business to build an integrated platform of service offerings that enables us to solve our clients’ most complex challenges. We have achieved this by delivering market-leading technical expertise combined with practical advice, supported by our unique firm culture, integrated services offerings and our relationship with Andersen Global, a Swiss association of over 300 member and collaborating firms.
Current wording
We are a leading provider of independent tax, valuation and financial advisory services to individuals, wealthy families, businesses and institutional clients in the United States and internationally. From our roots as a tax advisory firm, we have strategically expanded our business to build an integrated platform of service offerings that enables us to solve our clients’ most complex challenges. We have achieved this by delivering market-leading technical expertise combined with practical advice, supported by our unique firm culture, integrated services offerings and our relationship with Andersen Global, a Swiss association of over 300 member and collaborating firms.
Previous wording
Andersen’s relationships with over 400 Andersen Global and Andersen Consulting member and collaborating firms provide opportunities for domestic and international expansion through closer partnerships and, future acquisitions and future business combinations. In May 2026, the Company announced it closed the acquisition of tax firms in Ireland and New Zealand, a tax firm and a consulting firm in Nigeria, and a tax firm and a law firm in Uruguay, expanding its presence across key developed and high-growth markets as it continues to scale its global platform. In addition, Andersen signed agreements for the acquisition of a tax firm in Switzerland and a business combination in Canada, both expected to close in the third quarter of 2026, subject to the satisfaction of certain closing conditions.
Current wording
Andersen’s relationships with over 400 Andersen Global and Andersen Consulting member and collaborating firms provide opportunities for domestic and international expansion through closer partnerships, future acquisitions and future business combinations. In the second quarter of 2026, the Company closed the acquisitions of tax firms in Ireland and New Zealand, a tax firm and a consulting firm in Nigeria, and a tax firm and a law firm in Uruguay, expanding its presence across key developed and high-growth markets as it continues to scale its global platform. In addition, in the third quarter of 2026, Andersen closed the acquisition of a tax firm in Switzerland and a business combination in Canada and entered into definitive agreements for the acquisitions of a tax and legal firm in Mexico, a tax firm in the United Kingdom and six consulting firms in the United States. These eight additional acquisitions are expected to close in the fourth quarter of 2026, subject to the satisfaction of certain closing conditions.
Previous wording
Revenue for the three months ended March 31, 2026 was $240.7 million, representing 15.7% year-over-year growth, driven by strong execution and continued demand across our core markets, as compared with $208.1 million of revenue for the three months ended March 31, 2025. Growth in 2026 was supported by client growth, higher volume and service line expansion. There were no large one-time 2026 revenue items, and all of our service lines grew revenues in the three months ended March 31, 2026 as compared with the three months ended March 31, 2025.
Current wording
Revenue for the three months ended June 30, 2026 was $217.7 million, representing 23.7% year-over-year growth as compared to $176.0 million for the three months ended June 30, 2025. Revenue for the six months ended June 30, 2026 was $458.4 million, representing 19.4% year-over-year growth as compared with $384.1 million for the six months ended June 30, 2025. Revenue growth in 2026 was driven by strong execution and continued demand across our core markets, client growth, higher volume and service line expansion along with inorganic growth from acquisitions closed in the second quarter of 2026. There were no large one-time 2026 revenue items, and all of our service lines grew revenues year-over-year.
Previous wording
We monitor the following key financial and business metrics to evaluate our business, measure our performance and make strategic decisions:
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We monitor the following key financial and operational metrics to evaluate our business, measure our performance and make strategic decisions:
Previous wording
We generate our revenue from providing tax and financial advisory services to our clients. During the three months ended March 31, 2026 and 2025, the substantial majority of our revenue was generated on a time and materials basis and, to a lesser extent, on a fixed fee basis and contingent fee basis. In the future, our revenue and profitability could vary materially depending on changes in the nature of services provided, as well as the stage of performance at which the right to receive fees is finally determined. We provide services in four primary areas:
Current wording
We generate our revenue from providing tax and financial advisory services to our clients. During the three and six months ended June 30, 2026 and 2025, the substantial majority of our revenue was generated on a time and materials basis and, to a lesser extent, on a fixed fee basis and contingent fee basis. In the future, our revenue and profitability could vary materially depending on changes in the nature of services provided, as well as the stage of performance at which the right to receive fees is finally determined. We provide services in four primary areas:
Previous wording
During the three months ended March 31, 2026, our revenue increased by 15.7% to $240.7 million from$208.1 million during the three months ended March 31, 2025. Revenue consists of professional services revenue and reimbursable expenses, which primarily include travel and out-of-pocket costs that are billable to clients.
Current wording
During the three months ended June 30, 2026, our revenue increased by 23.7% to $217.7 million from $176.0 million during the three months ended June 30, 2025. During the six months ended June 30, 2026, our revenue increased by 19.4% to $458.4 million from $384.1 million during the six months ended June 30, 2025. Revenue consists of professional services revenue and reimbursable expenses, which primarily includes contracted costs from third parties that are billable to clients.
Previous wording
Since our founding, we have expanded our geographic reach across the United States, serving clients from 27 offices as of March 31, 2026. While our offices are primarily situated in major metropolitan areas, our expansive presence across the United States allows us to adapt to regional market fluctuations and capitalize on localized opportunities. Geographic revenue contribution is derived from the assigned office of each employee working on an engagement. This regional allocation typically aligns with the region in which the client is located, but in some cases, the client may be in a region different from the location of the office or employees.
Current wording
Since our founding, we have expanded our geographic reach across the United States, serving clients from 28 offices as of June 30, 2026. While our offices are primarily situated in major metropolitan areas, our expansive presence across the United States allows us to adapt to regional market fluctuations and capitalize on localized opportunities. Geographic revenue contribution is derived from the assigned office of each employee working on an engagement. This regional allocation typically aligns with the region in which the client is located, but in some cases, the client may be in a region different from the location of the office or employees. In the second quarter of 2026, we also expanded internationally as part of our inorganic growth strategy.
Previous wording
Client groups will often comprise multiple client engagements with different entities or individuals, such as multiple subsidiaries of an entity, multiple principals within a single private equity fund or multiple individuals or trusts within a single wealthy family. Across our client groups, we had over 18,970 client engagements during the three months ended March 31, 2026, representing an increase of approximately 2% from the over 18,600 client engagements we served during the three months ended March 31, 2025.
Current wording
Client groups will often comprise multiple client engagements with different entities or individuals, such as multiple subsidiaries of an entity, multiple principals within a single private equity fund or multiple individuals or trusts within a single wealthy family. We evaluate our portfolio of client groups and client engagements on a periodic basis using a variety of quality-based metrics and may, from time-to-time, modify, consolidate or discontinue client relationships or client engagements.
Previous wording
Our workforce, which excludes temporary staff, consists of predominantly client serving professionals, and grew to 2,271 total employees as of March 31, 2026. During the three months ended March 31, 2026, attrition, excluding involuntary terminations, increased by 1.5% to 15.7% from 14.2% during the three months ended March 31, 2025.
Current wording
Our workforce, which excludes temporary staff, consists of predominantly client serving professionals, and grew to 2,690 total employees as of June 30, 2026. As of June 30, 2026, our annualized attrition rate, excluding international acquisitions, increased by 1.5 percentage points to 15.7% from 14.2% as of December 31, 2025.
Previous wording
As of March 31, 2026, our workforce had a balanced distribution of tenure, reflecting a blend of experienced professionals and newer talent. Our 2,271 total employees included 323 Managing Directors as of March 31, 2026.
Current wording
As of June 30, 2026, our workforce had a balanced distribution of tenure, reflecting a blend of experienced professionals and newer talent. Our 2,690 total employees included 349 Managing Directors as of June 30, 2026.
Previous wording
We define Adjusted Net Income as net income plus expenses related to transaction activities, including costs related to planned mergers, acquisitions, and business combinations, non-recurring equity restructuring costs and non-cash equity-based compensation expense associated with equity interests that were issued in anticipation of, and in connection with, the IPO. We define Adjusted Net Income Margin as Adjusted Net Income divided by revenue. We believe Adjusted Net Income and Adjusted Net Income Margin enhance an investor’s understanding of our financial and operating performance because they exclude transaction-related costs allowing for greater transparency into what measures we use in operating our business and measuring our performance. In addition, these measures enable comparison of financial trends and results between periods. The following table reflects the reconciliation of net income to Adjusted Net Income and Adjusted Net Income Margin for each of the periods indicated:
Current wording
We define Adjusted Net Income as net income plus expenses related to transaction activities, including costs related to planned mergers, acquisitions, and business combinations, non-recurring equity restructuring costs and non-cash equity-based compensation expense. We define Adjusted Net Income Margin as Adjusted Net Income divided by revenue. We believe Adjusted Net Income and Adjusted Net Income Margin enhance an investor’s understanding of our financial and operating performance because they exclude transaction-related costs allowing for greater transparency into what measures we use in operating our business and measuring our performance. In addition, these measures enable comparison of financial trends and results between periods.
Previous wording
We define EBITDA as net income plus income tax expense, interest expense, and depreciation and amortization less interest income. We define Adjusted EBITDA as EBITDA with adjustments to exclude results from expenses related to transaction activities, including costs related to planned mergers, acquisitions, and business combinations and non-cash equity-based compensation expense associated with equity interests that were issued in anticipation of, and in connection with, the IPO. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. The following table is a reconciliation of net income to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for each of the periods indicated:
Current wording
We define EBITDA as net income plus income tax expense, interest expense, and depreciation and amortization less interest income. We define Adjusted EBITDA as EBITDA with adjustments to exclude results from expenses related to transaction activities, including costs related to planned mergers, acquisitions, and business combinations, non-cash equity-based compensation expense and non-recurring equity restructuring costs. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue.
Previous wording
(1)Transaction costs include certain legal, accounting and consulting costs incurred related to planned mergers, acquisitions, and business combinations during the three months ended March 31, 2026 and certain legal, accounting and consulting costs incurred for public company readiness not eligible for capitalization and related to the planned restructuring during the three months ended March 31, 2025.
Current wording
(1)Transaction costs include certain legal, accounting and consulting costs incurred related to planned mergers, acquisitions, and business combinations during the three and six months ended June 30, 2026 and certain legal, accounting and consulting costs incurred for public company readiness not eligible for capitalization and related to the planned restructuring during the three and six months ended June 30, 2025.
Previous wording
(2)Equity-based compensation expense associated with the vesting of Class X Aggregator Units consists of non-cash expenses associated with the vesting of Class X Aggregator Units, which were part of the Reorganization Transactions and described in Note 13, “Equity-based Compensation—Class X Aggregator Units” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report. We recognized $37.5 million of non-cash equity-based compensation expense associated with Class X Aggregator Units in cost of services and $3.6 million in sales, general and administrative expense during the three months ended March 31, 2026.
Current wording
(2)Equity-based compensation expense associated with the vesting of Class X Aggregator Units consists of non-cash expenses associated with the vesting of Class X Aggregator Units, which were part of the Reorganization Transactions and described in Note 12, “Equity-based Compensation—Class X Aggregator Units” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report. During the three and six months ended June 30, 2026, we recognized $36.2 million and $73.7 million, respectively, of non-cash equity-based compensation expense associated with Class X Aggregator Units in cost of services, and $6.1 million and $9.7 million, respectively, in sales, general and administrative expense.
Previous wording
Our busiest periods typically align with U.S. tax filing deadlines, particularly the months leading up to April 15th for individual and corporate tax filings and the extension deadlines in October. During these peak times, we typically experience a substantial increase in client engagements and workload, which has historically driven an increase in billable hours and revenue in the first and third quarters of the year.
Current wording
Our busiest periods typically align with U.S. tax filing deadlines, particularly the months leading up to March 15th for corporate tax filings, April 15th for individual tax filings, and the extension deadlines in September and October. During these peak times, we typically experience a substantial increase in client engagements and workload, which has historically driven an increase in billable hours and revenue in the first and third quarters of the year.
Previous wording
Interest expense consists primarily of interest related to the CA Notes and the HO Note. We expect to incur lower interest expense in the future related to the CA Notes and the HO Note as principal amounts are paid down.
Current wording
Interest expense consists primarily of interest related to the Capital Account Notes and the Holdover Note. We expect to incur lower interest expense in the future related to the Capital Account Notes and the Holdover Note as principal amounts are paid down.
Previous wording
Our revenue during the three months ended March 31, 2026 increased by $32.7 million, or 15.7%, to $240.7 million, compared to $208.1 million during the three months ended March 31, 2025. Revenue growth was broad-based across all service lines, driven by client additions, higher volume, and service line expansion during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
Our revenue during the three months ended June 30, 2026 increased by $41.7 million, or 23.7%, to $217.7 million, compared to $176.0 million during the three months ended June 30, 2025. Revenue growth was broad-based across all service lines, driven by client additions, higher volume, and service line expansion during the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Inorganic growth also contributed $5.5 million to the increase in revenue during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous wording
Our cost of services during the three months ended March 31, 2026 increased by $48.4 million, or 41.0%, to $166.4 million compared to $118.0 million during the three months ended March 31, 2025. The increase in cost of services was primarily attributable to $41.2 million in non-cash equity-based compensation in the first quarter of 2026 resulting from new Class X Umbrella Units, LTIP Units and RSUs granted in connection with the IPO and Reorganization Transactions. Other personnel costs increased by $7.3 million as our headcount scaled to meet higher demand for our services. Cost of services as a percentage of revenue increased period-over-period from 56.7% during the three months ended March 31, 2025 to 69.1% for the three months ended March 31, 2026.
Current wording
Our cost of services during the three months ended June 30, 2026 decreased by $51.7 million, or 22.9%, to $173.6 million compared to $225.2 million during the three months ended June 30, 2025. The decrease in cost of services was primarily attributable to a large one-time expense related to pre-IPO profits interest units during the three months ended June 30, 2025 of $104.5 million. We incurred $41.2 million in non-cash equity-based compensation in the second quarter of 2026 resulting from Class X Aggregator Units, LTIP Units, RSUs and restricted shares of Class A common stock granted. This decrease was offset partly by organic and inorganic growth. Cost of services as a percentage of revenue decreased period-over-period from 128.0% during the three months ended June 30, 2025 to 79.7% for the three months ended June 30, 2026.
Previous wording
Interest expense for the three months ended March 31, 2026 was approximately $6.2 million, and was $0.1 million for the three months ended March 31, 2025. The increase was attributable to the CA Notes and HO Note incurred in connection with the IPO and Reorganization Transactions described in Note 1, “Organization and Business Description” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.
Current wording
Interest expense for the three months ended June 30, 2026 was approximately $5.9 million, and was $0.1 million for the three months ended June 30, 2025. The increase was attributable to the Capital Account Notes and Holdover Note incurred in connection with the IPO and Reorganization Transactions described in Note 1, “Organization and Business Description” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.
Previous wording
For the three months ended March 31, 2026 and 2025, we recorded an income tax provision of $2.8 million and $4.1 million, respectively on pre-tax income of $20.6 million and $54.7 million respectively. Our effective tax rate for the three months ended March 31, 2026 was 13.7% compared to 7.5%, for the three months ended March 31, 2025. The effective tax rate for the three months ended March 31, 2026 differed from the U.S. statutory rate of 21.0% primarily due to non-controlling interest as Andersen Group Inc. is only subject to income tax on its allocable share of partnership income from AT Umbrella LLC and state and local income taxes. The effective tax rate for the three months ended March 31, 2025 differed from the U.S. statutory rate of 21.0% primarily related to income not subject to entity level tax as we were taxed as a partnership and compensation expense recorded for accounting purposes related to profit interest units that are not deductible for tax purposes and certain state and local entity level taxes.
Current wording
For the three months ended June 30, 2026 and 2025, we recorded an income tax benefit of $0.1 million and $7.0 million, respectively, on pre-tax loss of $10.2 million and $103.0 million respectively. Our effective tax rate for the three months ended June 30, 2026 was 0.7% compared to 6.8% for the three months ended June 30, 2025. The effective tax rate for the three months ended June 30, 2026 differed from the U.S. statutory rate of 21.0% primarily due to non-controlling interest as Andersen Group Inc. is only subject to income tax on its allocable share of partnership income from AT Umbrella LLC and state and local income taxes. The effective tax rate for the three months ended June 30, 2025 differed from the U.S. statutory rate of 21.0% primarily related to income not subject to entity level tax as we were taxed as a partnership and compensation expense recorded for accounting purposes related to profit interest units that are not deductible for tax purposes and certain state and local entity level taxes.
Previous wording
The net income attributable to the noncontrolling interest of AT Umbrella LLC for the three months ended March 31, 2026 was $17.2 million, which is 88.6% of the earnings of AT Umbrella LLC for the three months ended March 31, 2026.
Current wording
The net loss attributable to the noncontrolling interest of AT Umbrella LLC for the three months ended June 30, 2026 was $9.1 million, which was 88.1% of the earnings of AT Umbrella LLC for the three months ended June 30, 2026.
Previous wording
Our depreciation and amortization expenses during the three months ended March 31, 2026 increased by $0.2 million or 8.5%, to $2.3 million compared to $2.1 million during the three months ended March 31, 2025. Depreciation and amortization costs as a percentage of revenue remained relatively consistent period-over-period at 0.9% compared to 1.0%.
Current wording
Our depreciation and amortization expenses during the six months ended June 30, 2026 increased by $0.7 million or 16.1%, to $4.8 million compared to $4.1 million during the six months ended June 30, 2025. Depreciation and amortization costs as a percentage of revenue remained relatively consistent period-over-period at 1.0% compared to 1.1%.
Previous wording
Historically, we have generated sufficient cash to fund our operations, capital expenditures and discretionary funding needs through cash generated from our operating activities. As of March 31, 2026, cash and cash equivalents were $206.8 million and investments in treasury securities were $5.1 million.
Current wording
Historically, we have generated sufficient cash to fund our operations, capital expenditures and discretionary funding needs through cash generated from our operating activities. As of June 30, 2026, cash and cash equivalents were $175.6 million and investments in treasury securities were $2.1 million.
Previous wording
We believe that our existing cash and cash equivalents, cash flows from operations and the net proceeds from the IPO will be sufficient to meet our current and longer-term working capital, investments and other general corporate funding requirements. Substantially all of our cash is held in the United States where there are no significant regulatory restrictions or material tax effects on the free flow of funds among entities in our corporate structure.
Current wording
We believe that our existing cash and cash equivalents and cash flows from operations will be sufficient to meet our current and longer-term working capital, investments and other general corporate funding requirements. Substantially all of our cash is held in the United States where there are no significant regulatory restrictions or material tax effects on the free flow of funds among entities in our corporate structure.
Previous wording
In connection with the Reorganization Transactions, the Company entered into a Tax Receivable Agreement (TRA) with certain pre-IPO owners. Under the TRA, we are required to pay to Aggregator 85% of the cash tax savings, if any, that we realize or are deemed to realize as a result of (i) increases in tax basis of AT Umbrella LLC’s assets resulting from purchases or exchanges of Class X Umbrella Units for our Class A common stock and (ii) certain other tax benefits, including payments made under the TRA. The TRA includes assumptions that may result in payments exceeding actual tax savings.
Current wording
In connection with the Reorganization Transactions, we entered into a Tax Receivable Agreement (TRA) with certain pre-IPO owners. Under the TRA, we are required to pay to Aggregator 85% of the cash tax savings, if any, that we realize or are deemed to realize as a result of (i) increases in tax basis of AT Umbrella LLC’s assets resulting from purchases or exchanges of Class X Umbrella Units for our Class A common stock and (ii) certain other tax benefits, including payments made under the TRA. The TRA includes assumptions that may result in payments exceeding actual tax savings.
Previous wording
During the three months ended March 31, 2026, we paid distributions to the Aggregator of $18.1 million related to members' tax obligations, members’ undistributed capital and allocated income prior to the IPO and Reorganization Transactions.
Current wording
During the six months ended June 30, 2026, we paid distributions to Aggregator of $41.9 million related to members' tax obligations, members’ undistributed capital and allocated income declared prior to the IPO and Reorganization Transactions.
Previous wording
The AT Umbrella LLC Agreement requires cash distributions to the holders of economic interests in AT Umbrella LLC (including holders of Class X Umbrella Units, LTIP Units, the CA Notes and the HO Note) for purposes of funding their (or in the case of Aggregator, its members’) tax obligations in respect of the taxable income of AT Umbrella LLC that is allocated to them. During the three months ended March 31, 2026, AT Umbrella LLC paid distributions to Aggregator of $6.3 million in satisfaction of member tax liabilities.
Current wording
The AT Umbrella LLC Agreement requires cash distributions to the holders of economic interests in AT Umbrella LLC (including holders of Class X Umbrella Units, LTIP Units, the Capital Account Notes and the Holdover Note) for purposes of funding their (or in the case of Aggregator, its members’) tax obligations in respect of the taxable income of AT Umbrella LLC that is allocated to them. During the six months ended June 30, 2026, AT Umbrella LLC paid distributions to Aggregator of $41.7 million in satisfaction of member tax liabilities.
Previous wording
In connection with the Reorganization Transactions, AT Umbrella LLC issued two types of promissory notes to Aggregator representing (1) the HO Note and (2) the CA Notes. The HO Note were issued at an initial principal amount of $162.3 million and accrues interest at 7.63% payable over eight years. The CA Notes were issued at an aggregate initial principal amount of $187.8 million and accrue interest between 6.31% to 7.50% payable over two to seven years. See Note 9, “Long-Term Debt” and Note 19, "Subsequent Events" to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for further information.
Current wording
In connection with the Reorganization Transactions, AT Umbrella LLC issued two types of promissory notes to Aggregator representing (1) the Holdover Note and (2) the Capital Account Notes. The Holdover Note was issued at an initial principal amount of $162.3 million and accrues interest at 7.63% payable over eight years. The Capital Account Notes were issued at an aggregate initial principal amount of $187.8 million and accrue interest between 6.31% to 7.50% payable over two to seven years.
Previous wording
As of March 31, 2026, the Credit Agreement included a sublimit of $5.0 million for standby letters of credit. Borrowings under the Credit Agreement bear interest at the Prime rate with a floor of 5.0%. As of each March 31, 2026 and December 31, 2025, we had outstanding standby letters of credit of $1.3 million. We had no cash borrowings under the Credit Agreement as of March 31, 2026 or December 31, 2025. Our outstanding letter of credit is subject to a commitment fee of 1.5% per annum.
Current wording
The Revolving Credit Facility includes a sublimit of $5.0 million for letters of credit, and the interest rate for cash borrowings equal to Term Secured Overnight Financing Rate ("SOFR") plus 1.75%. As of June 30, 2026, we had outstanding standby letters of credit of $1.3 million. We had no cash borrowings as of June 30, 2026. Our outstanding letter of credit is subject to a commitment fee of 0.25% per annum. These fees are included in sales, general and administrative expenses and are immaterial for the three and six months ended June 30, 2026.
Previous wording
The Credit Agreement includes certain financial and liquidity covenants, which require us to maintain a net after tax profit of not less than $1.00 each year; prohibit us from having certain indebtedness outstanding, subject to certain exceptions; require us to maintain unencumbered liquid assets (other than the security interest granted to the lender) equal to at least (i) the sum of all outstanding indebtedness under the Credit Agreement (collectively, the Liquidity Indebtedness) and (ii) 1.25 times the aggregate amount of all Liquidity Indebtedness; and prohibit us from loaning money to any person, subject to certain exceptions including loans to employees and to member firms of Andersen Global, so long as each such loan is on arm’s length terms and (i) matures within seven years, and does not have an outstanding principal balance in excess of $1,000,000 individually or $5,000,000 in the aggregate for loans to employees and (ii) matures within eleven years and does not have an outstanding principal balance in excess of $10,000,000 individually or $15,000,000 in the aggregate for loans to any member firm of Andersen Global. During the three months ended March 31, 2026 and 2025, the Company had no uncured events of default with respect to the financial covenants required by the Credit Agreement.
Current wording
During the three and six months ended June 30, 2026, we had no uncured events of default with respect to the financial covenants required by the New Credit Agreement.
Previous wording
Cash Flows for the Three Months Ended March 31, 2026 and 2025
Current wording
Cash Flows for the Six Months Ended June 30, 2026 and 2025
Previous wording
Cash flows from operating, investing and financing activities for the three months ended March 31, 2026 and 2025 were as follows:
Current wording
Cash flows from operating, investing and financing activities for the six months ended June 30, 2026 and 2025 were as follows:
Previous wording
Net cash flows used in operating activities were $3.9 million during the three months ended March 31, 2026 compared to net cash flows provided by operating activities of $11.2 million during the three months ended March 31, 2025, a decrease of $15.1 million. The decrease was driven by a decrease in net income during the three months ended March 31, 2026 to $17.7 million compared to $50.6 million during the three months ended March 31, 2025, which was offset by net inflows from non-cash equity based compensation of $45.6 million for the three months ended March 31, 2026. The decrease in net cash flows was also driven by increased outflows from operating assets and liabilities, primarily attributable to an increase in accounts receivable of $91.4 million for the three months ended March 31, 2026 due to revenue growth compared to an increase in accounts receivable of $64.0 million during the three months ended March 31, 2025.
Current wording
Net cash flows provided by operating activities were $65.8 million during the six months ended June 30, 2026 compared to net cash flows provided by operating activities of $61.9 million during the six months ended June 30, 2025, an increase of $3.9 million. The increase was driven by an increase in net income during the six months ended June 30, 2026 to $7.6 million compared to a net loss of $45.4 million during the six months ended June 30, 2025 and offset by lower equity-based compensation added back during the six months ended June 30, 2026.
Previous wording
Net cash flows used in investing activities were $0.4 million during the three months ended March 31, 2026 compared to net cash provided by investing activities of $8.1 million during the three months ended March 31, 2025, a decrease of $8.5 million. The decrease was primarily driven by a decrease in proceeds from held-to-maturity debt securities due to the lower balances carried in these investments during the three months ended March 31, 2026.
Current wording
Net cash flows used in investing activities were $6.7 million during the six months ended June 30, 2026 compared to net cash provided by investing activities of $15.6 million during the six months ended June 30, 2025, a decrease of $22.3 million. The decrease was primarily driven by increased capital expenditures during the six months ended June 30, 2026 and fewer proceeds from maturity of investments.
Previous wording
Our critical accounting estimates are disclosed in the Critical Accounting Estimates section in Part II, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2025. Since December 31, 2025, there have been no material changes to our critical accounting estimates.
Current wording
Our critical accounting estimates are disclosed in the Critical Accounting Estimates section in Part II, “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2025. Since December 31, 2025, there have been no material changes to our critical accounting estimates, except as follows:
Previous wording
Our operating lease commitments include corporate office space. As of March 31, 2026, we had fixed lease payment obligations of $144.2 million, with $6.9 million to be paid during the remainder of 2026 and the remainder thereafter.
Current wording
Our operating lease commitments include corporate office space. As of June 30, 2026, we have recorded lease liabilities associated with lease payment obligations of $113.1 million, with $9.7 million considered current and the remainder noncurrent.
Previous wording
Management of Andersen Global has established a program to allocate certain global management, business development and other costs to its member firms. We fund these costs on behalf of Andersen Global and allocate a portion to be reimbursed by non-U.S. member firms. Our sales, general and administrative expenses in the unaudited condensed consolidated statements of operations include amounts for our share of cost allocations for Andersen Global with respect to global business development initiatives. As of March 31, 2026 and December 31, 2025, amounts due from member firms related to the program included in prepaid expenses and other current assets were $5.2 million and $4.3 million, respectively, and amounts due to member firms related to the program included in other current liabilities were $0.8 million and $0.6 million, respectively. See Note 15, “Transactions with Related Parties—Andersen Global Commitments” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional details.
Current wording
Management of Andersen Global has established a program to allocate certain global management, business development and other costs to its member firms. We fund these costs on behalf of Andersen Global and allocate a portion to be reimbursed by non-U.S. member firms. Our sales, general and administrative expenses in the unaudited condensed consolidated statements of operations include amounts for our share of cost allocations for Andersen Global with respect to global business development initiatives. As of June 30, 2026 and December 31, 2025, amounts due from member firms related to the program included in prepaid expenses and other current assets were $12.9 million and $4.3 million, respectively, and amounts due to member firms related to the program included in other current liabilities were $5.3 million and $0.6 million, respectively. See Note 14, “Transactions with Related Parties—Andersen Global Commitments” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report for additional details.
Previous wording
We are party to an agreement to use certain professional services training facilities (the Training Center Agreement) for a limited number of days per year. The minimum future commitment as of March 31, 2026 under the Training Center Agreement is approximately $5.2 million through 2030.
Current wording
We are party to an agreement to use certain professional services training facilities (the Training Center Agreement) for a limited number of days per year. The minimum future commitment as of June 30, 2026 under the Training Center Agreement is approximately $4.3 million through 2030.
Rearranged current paragraphs (10)
Current report — wording carried from elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report — wording carried from elsewhere
The following table reflects the reconciliation of net (loss) income to Adjusted Net Income and Adjusted Net Income Margin for each of the periods indicated:
Current report — wording carried from elsewhere
The following table is a reconciliation of net (loss) income to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for each of the periods indicated:
Current report — wording carried from elsewhere
Our depreciation and amortization expenses during the three months ended June 30, 2026 increased by $0.5 million or 23.9%, to $2.5 million compared to $2.0 million during the three months ended June 30, 2025. Depreciation and amortization costs as a percentage of revenue remained consistent period-over-period at 1.2%.
Current report — wording carried from elsewhere
The following table summarizes our consolidated results of operations for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
The following table sets forth our consolidated results of operations expressed as a percentage of revenue:
Current report — wording carried from elsewhere
Interest expense for the six months ended June 30, 2026 was approximately $12.1 million, and was $0.2 million for the six months ended June 30, 2025. The increase was attributable to the Capital Account Notes and Holdover Note incurred in connection with the IPO and Reorganization Transactions described in Note 1, “Organization and Business Description” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report.
Current report — wording carried from elsewhere
For the six months ended June 30, 2026 and 2025, we recorded an income tax provision of $2.7 million and an income tax benefit of $2.8 million, respectively, on pre-tax income of $10.4 million and pre-tax loss of $48.2 million respectively. Our effective tax rate for the six months ended June 30, 2026 was 26.4% compared to 5.9%, for the six months ended June 30, 2025. The effective tax rate for the six months ended June 30, 2026 differed from the U.S. statutory rate of 21.0% primarily due to non-controlling interest as Andersen Group Inc. is only subject to income tax on its allocable share of partnership income from AT Umbrella LLC and state and local income taxes. The effective tax rate for the six months ended June 30, 2025 differed from the U.S. statutory rate of 21.0% primarily related to income not subject to entity level tax as we were taxed as a partnership and compensation expense recorded for accounting purposes related to profit interest units that are not deductible for tax purposes and certain state and local entity level taxes.
Current report — wording carried from elsewhere
As of June 30, 2026, our conclusion regarding the realizability of our US deferred tax assets did not change and we continued to conclude that substantially all of its investment in AT Umbrella LLC is not realizable on a more-likely-than-not basis as the investment in AT Umbrella LLC is capital in nature.
Current report — wording carried from elsewhere
The net income attributable to the noncontrolling interest of AT Umbrella LLC for the six months ended June 30, 2026 was $8.2 million, which was 89.1% of the earnings of AT Umbrella LLC for the six months ended June 30, 2026.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
(1)Transaction costs include certain legal, accounting and consulting costs incurred related to planned mergers, acquisitions, and business combinations during the three months ended March 31, 2026 and certain legal, accounting and consulting costs incurred for public company readiness not eligible for capitalization and related to the planned restructuring during the three months ended March 31, 2025.
Previous report — wording carried elsewhere
(2)Equity-based compensation expense associated with the vesting of Class X Aggregator Units consists of non-cash expenses associated with the vesting of Class X Aggregator Units, which were part of the Reorganization Transactions and described in Note 13, “Equity-based Compensation—Class X Aggregator Units” to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report. We recognized $37.5 million of non-cash equity-based compensation expense associated with Class X Aggregator Units in cost of services and $3.6 million in sales, general and administrative expense during the three months March 31, 2026.