Karman Holdings Inc.

Previous wording

You should read the following discussion in conjunction with our unaudited interim condensed consolidated financial statements, including the related notes thereto, contained within this Item 1 of this Quarterly Report. In addition to historical information, this discussion contains forward-looking statements that involve risks and uncertainties. You should read the sections of this Quarterly Report on Form 10-Q titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for a discussion of the factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. For purposes of this section, references to the “Company,” “Karman,” “we,” “us,” and “our” refer to TCFIII Spaceco Holdings and its other subsidiaries prior to the Corporate Conversion and to Karman Holdings Inc. or Karman Holdco and its consolidated subsidiaries for all periods following the Corporate Conversion.

Current wording

You should read the following discussion in conjunction with our unaudited interim condensed consolidated financial statements, including the related notes thereto, contained within Item 1 of this Quarterly Report on Form 10-Q. In addition to historical information, this discussion contains forward-looking statements that involve risks and uncertainties. You should read the sections of this Quarterly Report on Form 10-Q titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for a discussion of the factors that could cause our actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Previous wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements that are not historical facts including those that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements are included throughout this Quarterly Report on Form 10-Q and relate to matters such as our industry, business strategy, goals, and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, and other financial and operating information. We have used the words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words or similar terms and phrases to identify forward-looking statements in this Quarterly Report on Form 10-Q.

Current wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements that are not historical facts, including those that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements are included throughout this Quarterly Report on Form 10-Q and relate to matters such as our industry, business strategy, goals, and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources, and other financial and operating information. We have used the words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words or similar terms and phrases to identify forward-looking statements in this Quarterly Report on Form 10-Q.

Previous wording

servicing our indebtedness requires a significant amount of cash. Our ability to generate cash depends on many factors, and any failure to meet our debt service obligations could materially adversely affect our business, results of operations, prospects and financial condition;

Current wording

servicing our indebtedness requires a significant amount of cash, and any failure to meet our debt service obligations could materially adversely affect our business, results of operations, prospects and financial condition;

Previous wording

the other risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as amended, supplemented or superseded in our other reports filed with the Security and Exchange Commission (“SEC”), including under “Risk Factors” in Item 1A of our subsequent Quarterly Reports on Form 10-Q.

Current wording

the other risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, as amended, supplemented or superseded in our other reports filed with the Securities and Exchange Commission (“SEC”), including under “Risk Factors” in Item 1A of our subsequent Quarterly Reports on Form 10-Q.

Previous wording

We specialize in the rapid design, development and production of mission-critical, next-generation systems solutions that align with the U.S. Department of War’s core mission priorities and the nation’s accelerating demand for access to space. We deliver payload protection, propulsion and launch, and hydro/aerodynamic interstage systems to more than 150 prime contractors and programs. We estimate that no single program accounted for more than 11% of sales in the three and six months ended June 30, 2026 or in the three and six months ended June 30, 2025.

Current wording

We specialize in the rapid design, development and production of mission-critical, next-generation systems solutions that align with the U.S. Department of War’s core mission priorities and the nation’s accelerating demand for access to space. We deliver payload protection, propulsion and launch, and hydro/aerodynamic interstage systems to more than 150 prime contractors and programs. We estimate that no single program accounted for more than 11% of sales in the three and nine months ended September 30, 2026 or in the three and nine months ended September 30, 2025.

Previous wording

We generate our revenue primarily from the design, development and deployment of systems and subsystems (Propulsion Systems, Aerodynamic Interstage Systems, and Payload Protection and Deployment Systems) across four end markets (Hypersonic and Strategic Missile Defense, Missile and Integrated Defense Systems, Space and Launch and Maritime Defense Systems). We do not believe our revenue is subject to significant seasonal variations.

Current wording

We generate our revenue primarily from the design, development and deployment of systems and subsystems (Propulsion Systems, Aerodynamic Interstage Systems, and Payload Protection and Deployment Systems) across four end markets (Hypersonics and Strategic Missile Defense, Tactical Missiles and Integrated Defense Systems, Space and Launch and Maritime Defense Systems). We do not believe our revenue is subject to significant seasonal variations.

Previous wording

Our general and administrative (“G&A”) expenses include salaries, fringe benefits (such as health insurance, retirement plans, vacation and sick days), and other expenses related to selling, marketing and proposal activities, certain administrative costs, operational overhead expenses, share-based compensation expenses and amortization of acquired intangible assets. Some G&A expenses relate to marketing and business development activities that support both ongoing business areas as well as new and emerging market areas. These activities can be directly associated with developing requirements for applications of capabilities created in our business development activities as well as managing human capital. G&A expenses are an important financial metric that we analyze to help us evaluate the contribution of our selling, marketing and proposal activities to revenue generation.

Current wording

Our general and administrative (“G&A”) expenses include salaries, fringe benefits (such as health insurance, retirement plans, vacation and sick days), and other expenses related to selling, marketing and proposal activities, certain administrative costs, operational overhead expenses, stock-based compensation expenses and amortization of acquired intangible assets. Some G&A expenses relate to marketing and business development activities that support both ongoing business areas, as well as new and emerging market areas. These activities can be directly associated with developing requirements for applications of capabilities created in our business development activities, as well as managing human capital. G&A expenses are an important financial metric that we analyze to help us evaluate the contribution of our selling, marketing and proposal activities to revenue generation.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Comparison of the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

The increase in revenue for the three and six months ended June 30, 2026 as compared to the same period in the prior year, was primarily attributable to growth across all end-markets as additional detail below. The results of operations include the following disaggregation of revenue by end market:

Current wording

The results of operations include the following disaggregation of revenue by end market. The increase in revenue for the three and nine months ended September 30, 2026 as compared to the same periods in the prior year was described as follows:

Previous wording

Revenue in Maritime Defense Systems for the three and six months ended June 30, 2025 was previously included within other end markets.

Current wording

(1) Revenue in Maritime Defense Systems for the three and nine months ended September 30, 2025 was previously included within other end markets.

Previous wording

Growth in Hypersonics and Strategic Missile Defense revenue for the three and six months ended June 30, 2026 from the comparable period in the prior year, was primarily driven by growth in key interceptor program production and increased production associated with a new surface-to-surface missile system.

Current wording

Growth in Hypersonics and Strategic Missile Defense revenue for the three and nine months ended September 30, 2026 from the comparable periods in the prior year was primarily driven by an increase in the production of key interceptor programs associated with Munitions Advisory Council priorities, and increased production for a new surface-to-surface missile system.

Previous wording

Growth in Space and Launch revenue for the three and six months ended June 30, 2026 from the comparable periods in the prior year, was primarily driven by content supporting both legacy and emerging launch providers, partially offset by customer order timing associated with shifting launch schedules.

Current wording

A decline in Space and Launch revenue for the three months ended September 30, 2026 from the comparable period in the prior year was primarily driven by customer order timing associated with shifting launch schedules, partially offset by increased content from liquid-fueled space and launch programs. Growth in Space and Launch revenue for the nine months ended September 30, 2026 from the comparable period in the prior year was primarily driven by the timing of orders from emerging space launch and legacy providers associated with shifting launch schedules.

Previous wording

Growth in Tactical Missiles and Integrated Defense Systems for the three and six months ended June 30, 2026 from the comparable period in the prior year, was primarily driven by strength in core production programs, including unmanned aircraft systems and counter-UAS, and emerging programs transitioning to production.

Current wording

Growth in Tactical Missiles and Integrated Defense Systems for the three and nine months ended September 30, 2026 from the comparable periods in the prior year, was primarily driven by an increase in core production programs, including unmanned aircraft systems and counter-UAS, and emerging programs transitioning to production, partially offset by a quarterly decline in a high-volume program.

Previous wording

Growth in Maritime Defense Systems for the three and six months ended June 30, 2026 from the comparable period in the prior year was primarily driven by legacy and next generation submarine programs..

Current wording

Maritime Defense Systems revenue for the three and nine months ended September 30, 2026 was primarily driven by legacy and next generation submarine and surface vessel programs.

Previous wording

Cost of goods sold increased by $35.8 million or 52.5%, and $62.4 million, or 48.5%, for the three and six months ended June 30, 2026 and 2025, from the comparable period in the prior year. The increase was primarily driven by increased spending on materials and labor to support production growth.

Current wording

Cost of goods sold increased by $43.6 million, or 60.7%, and $106.0 million, or 52.9%, for the three and nine months ended September 30, 2026, respectively, from the comparable periods in the prior year. The increase was primarily driven by increased spending on materials and labor to support revenue growth and increased shipments.

Previous wording

General and administrative expenses increased by $11.9 million, or 61.3% for the three months ended June 30, 2026 from the comparable period of the prior year, was primarily driven by higher employee compensation of approximately $7.5 million due to acquisitions and workforce expansion, as well as higher operating costs incurred to support continued growth of our business.

Current wording

General and administrative expenses increased by $21.5 million, or 107.6% for the three months ended September 30, 2026 from the comparable period in the prior year, which was primarily driven by higher employee compensation of approximately $6.5 million due to acquisitions and workforce expansion, as well as higher operating costs incurred to support the continued growth of our business.

Previous wording

General and administrative expenses increased by $17.3 million, or 40.4%, for the six months ended June 30, 2026 from the comparative period of the prior year. The increase was primarily driven by an increase in payroll of approximately $12.0 million and increased professional fees primarily related to transaction expenses and integration efforts. The increase was partially offset by the decrease of approximately $6.6 million in share-based compensation expenses resulting from P units and Phantom Units that fully vested in connection with the completion of the Company’s IPO in February 2025.

Current wording

General and administrative expenses increased by $38.8 million, or 61.8%, for the nine months ended September 30, 2026 from the comparable period in the prior year. The increase was primarily driven by an increase in payroll of approximately $18.5 million and increased professional fees related to transaction expenses and integration efforts. The increase was partially offset by the decrease of approximately $8.1 million in stock-based compensation expenses resulting from P Units and Phantom Units that fully vested in connection with the completion of the Company’s IPO in February 2025.

Previous wording

Depreciation and amortization expense increased by $4.6 million, or 61.2%, and $12.2 million, or 88.8%, for the three and six months ended June 30, 2026, respectively, as compared to the corresponding periods of the prior year. The increase was primarily due to amortization of intangible assets acquired in the Seemann Acquisition, completed in the first quarter of 2026, and incremental depreciation and amortization on intangible assets and fixed assets acquired in the second quarter of 2025, which resulted in a full quarter and two full quarters of additional expenses in the three months and six months ended June 30, 2026, respectively.

Current wording

Depreciation and amortization expense increased by $4.8 million, or 58.5%, and $16.9 million, or 77.5%, for the three and nine months ended September 30, 2026, respectively, as compared to the comparable periods in the prior year. The increase was primarily due to the amortization of intangible assets acquired in the acquisition of Seemann Composites, LLC and Materials Sciences LLC (the “Seemann Acquisition”), which was completed in the first quarter of 2026, and incremental depreciation and amortization on intangible assets and fixed assets acquired in the second quarter of 2025.

Previous wording

Interest expense, net increased by $3.4 million, or 28.5%, and $4.7 million, or 20.0%, for the three and six months ended June 30, 2026 from the comparative period of the prior year, which was primarily driven by higher principal balance, partially offset by lower interest rate. For additional information related to debt, see Note 7, Debt, in the Notes to the conndensed consolidated financial statements.

Current wording

Interest expense, net increased by $8.0 million, or 79.9%, and $12.7 million, or 38.0%, for the three and nine months ended September 30, 2026 from the comparable periods in the prior year, which was primarily driven by increased indebtedness under our term loans, and partially offset by lower interest rates. For additional information, see Note 7, Debt, in the Notes to the condensed consolidated financial statements.

Previous wording

Other (income) expense for each of the three and six months ended June 30, 2026 and 2025 was immaterial.

Current wording

Other income (expense) for each of the three and nine months ended September 30, 2026 and 2025 was immaterial.

Previous wording

The provision for income taxes was $6.1 million and $5.1 million for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate was 21.8% and 71.7% for the six months ended June 30, 2026 and 2025, respectively. The higher effective tax rate in the prior-year period was attributable to discrete items, including the change in entity classification, non-deductible executive compensation, and interest and penalties related to prior year tax returns and uncertain tax positions.

Current wording

The high effective tax rate in the prior-year periods was attributable to discrete items, including the change in entity classification, non-deductible executive compensation, and interest and penalties related to prior-year tax returns and uncertain tax positions. For additional information regarding income tax expenses, see Note 14, Income Tax Expense (Benefit), in the Notes to the Condensed Consolidated Financial Statements.

Previous wording

We measure our business using both key financial and operating data including key performance indicators (“KPIs”) and non-GAAP financial measures and use the following metrics to manage our business, monitor results of operations and ensure proper allocation of capital: (i) Revenue, (ii) Backlog, (iii) EBITDA, (iv) Adjusted EBITDA and (v) Adjusted EBITDA Margin. We believe that these financial performance metrics represent the primary drivers of value enhancement, balancing both short and long-term indicators of increased shareholder value. These are the metrics we use to measure our results and evaluate our business and related contract performance.

Current wording

We measure our business using both key financial and operating data, including key performance indicators (“KPIs”) and financial measures that are not calculated or presented in accordance with accounting principles generally accepted in the United States (“GAAP”). We use the following metrics to manage our business, monitor results of operations and ensure proper allocation of capital: (i) Revenue, (ii) Backlog, (iii) EBITDA, (iv) Adjusted EBITDA, (v) Adjusted EBITDA Margin and (vi) Free Cash Flow. We believe that these financial performance metrics represent the primary drivers of value enhancement, balancing both short and long-term indicators of increased stockholder value. These are the metrics we use to measure our results and evaluate our business and related contract performance.

Previous wording

Backlog - Represents the total value or current estimated value of existing contracts, less amounts previously invoiced. Contract types include but are not limited to purchase orders, long term agreements and contractual authorization to proceed. (Backlog was previously referred to as funded backlog. No changes were made to the historical dollar amounts presented in the table above.)

Current wording

(1) Represents the total value or current estimated value of existing contracts, less amounts previously invoiced. Contract types include, but are not limited to, purchase orders, long-term agreements and contractual authorizations to proceed. Backlog was previously referred to as funded backlog. No changes were made to the historical dollar amounts presented in the table above.

Previous wording

Note on non-GAAP financial measures: Throughout the discussion of our results of operations we use non-GAAP financial measures including EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, as measures of our overall performance. Definitions and reconciliations of these measures to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP are included below.

Current wording

(2) Throughout the discussion of our results of operations, we use non-GAAP financial measures including EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow, as measures of our overall performance. Definitions and reconciliations of these measures to the most directly comparable financial measure calculated and presented in accordance with GAAP are included below.

Previous wording

Adjusted EBITDA Margin - Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by revenue. Adjusted EBITDA and Adjusted EBITDA Margin are not measures calculated in accordance with U.S. GAAP, and they should not be considered an alternative to any financial measures that were calculated under U.S. GAAP.

Current wording

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Free Cash Flow are not measures calculated in accordance with GAAP, and they should not be considered an alternative to any financial measures that are calculated under GAAP.

Previous wording

We believe the non-GAAP financial measures will help investors understand our financial condition and operating results and assess our future prospects. We believe these non-GAAP financial measures, each of which is discussed in greater detail below, are important supplemental measures because they exclude unusual or non-recurring items as well as non-cash items that are unrelated to or may not be indicative of our ongoing operating results. Further, when read in conjunction with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as a tool to help make financial, operational and planning decisions. We may use non-GAAP financial metrics in certain Management compensation plans, debt covenants, internal budgetary decision making, and other resource allocation decisions. These measures are often used by analysts and other interested parties to evaluate companies in our industry by providing more comparable measures that are less affected by factors such as capital structure.

Current wording

We believe the non-GAAP financial measures will help investors understand our financial condition and operating results and assess our future prospects. We believe these non-GAAP financial measures, each of which is discussed in greater detail below, are important supplemental measures because they exclude unusual or non-recurring items as well as non-cash items that are unrelated to or may not be indicative of our underlying business performance. Further, when read in conjunction with our GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as a tool to help make financial, operational and planning decisions. We may use non-GAAP financial measures in certain management compensation plans, debt covenants, internal budgetary decision-making, and other resource allocation decisions. These measures are often used by analysts and other interested parties to evaluate companies in our industry by providing more comparable measures that are less affected by factors such as capital structure.

Previous wording

We recognize that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not, and readers should not, consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business.

Current wording

We recognize that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not, and readers should not, consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with GAAP. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business.

Previous wording

Adjusted EBITDA refers to EBITDA plus, as applicable for each period, adjustments for certain items management believes are not indicative of ongoing operations. Adjusted EBITDA excludes non-cash share-based compensation expenses. Additionally, Adjusted EBITDA excludes certain nonrecurring costs that management excludes in contemplation of budget decisions and are not costs of operating the business, such as entity wide re-branding initiatives or acquisition integration costs, and lender and administrative agent fees associated with discrete amendments. Lastly, Adjusted EBITDA excludes other non-recurring costs including gains or losses from disposition of assets, non-cash impairment losses, non-recurring transaction expenses and other charges or gains that the Company believes are not part of the ongoing operations of its business. The resulting expense or benefit from these other non-recurring costs is inconsistent in amount and frequency.

Current wording

Adjusted EBITDA refers to EBITDA plus, as applicable for each period, adjustments for certain items management believes are not indicative of the underlying business performance. Adjusted EBITDA excludes non-cash stock-based compensation expenses. Additionally, Adjusted EBITDA excludes certain nonrecurring costs that management excludes in contemplation of budget decisions and are not costs of operating the business, such as entity-wide rebranding initiatives or acquisition integration costs, and lender and administrative agent fees associated with discrete amendments. Lastly, Adjusted EBITDA excludes other non-recurring costs including gains or losses from disposition of assets, non-cash impairment losses, non-recurring transaction expenses and other charges or gains that the Company believes are not part of the ongoing operations of its business. The resulting expense or benefit from these other non-recurring costs is inconsistent in amount and frequency.

Previous wording

Adjusted EBITDA and Adjusted EBITDA Margin are used to facilitate a comparison of the ordinary, ongoing and customary course of our operations on a consistent basis from period to period and provide an additional understanding of factors and trends affecting our business. Adjusted EBITDA and Adjusted EBITDA Margin are driven by changes in volume, performance, contract mix and general and administrative expenses and investment levels. Performance, as used in this definition, refers to changes in profitability and is primarily based on adjustments to estimates at completion on individual contracts. These adjustments result from increases or decreases to the estimated value of the contract, the estimated costs to complete the contract, or both. These measures therefore assist management and our board and may be useful to investors in comparing our operating performance consistently over time as they remove the impact of our capital structure, asset base and items outside the control of the management team and expenses that do not relate to our core operations. Adjusted EBITDA and Adjusted EBITDA Margin may not be comparable to similarly titled non-GAAP measures used by other companies as other companies may have calculated the measures differently.

Current wording

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are driven by changes in volume, performance, contract mix and general and administrative expenses and investment levels. Performance, as used in this definition, refers to changes in profitability and is primarily based on adjustments to estimates at completion on individual contracts. These adjustments result from increases or decreases to the estimated value of the contract, the estimated costs to complete the contract, or both.

Previous wording

Adjusted EPS represents GAAP net income per fully diluted share, excluding transaction related expenses, integration expenses and non-recurring costs, lender and administrative agent fees and share-based compensation as they are not representative of our operating performance.

Current wording

Adjusted EPS represents GAAP net income per fully diluted share, excluding transaction-related expenses, integration expenses and non-recurring restructuring costs, lender and administrative agent fees, stock-based compensation and other charges or gains that we believe are not part of the ongoing operations of our business, as they are not representative of our business performance.

Previous wording

Includes depreciation of property, plant and equipment, amortization of intangible assets and right-of-use assets. Depreciation expense includes allocated depreciation from cost of goods sold of $3.1 million and $2.8 million for the three months ended June 30, 2026 and 2025, respectively, and $6.0 million and $5.5 million for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(1) Includes depreciation of property, plant and equipment, amortization of intangible assets and right-of-use assets. Depreciation expense includes allocated depreciation from cost of goods sold of $3.6 million and $2.8 million for the three months ended September 30, 2026 and 2025, respectively, and $9.6 million and $8.3 million for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

Represents legal and due diligence fees incurred in connection with planned and completed acquisitions, which are required to be expensed as incurred. For the three and six months ended June 30, 2026, these expenses are primarily related to the Seemann acquisition. For the three and six months ended June 30, 2025, these expenses are primarily related to the MTI and ISP acquisitions. Additionally, the Company incurred certain professional service fees related to its IPO that did not meet the requirements to be deferred issuance costs. These costs are considered non-recurring and outside the ordinary course of business, and therefore are not indicative of ongoing operating performance, which was reflected in the six months ended June 30, 2025.

Current wording

(2) Represents legal and due diligence fees incurred in connection with planned and completed acquisitions, which are required to be expensed as incurred. For the three months ended September 30, 2026, the expenses were primarily related to the acquisition of Walker Precision Holdings Limited (“Walker”). For the nine months ended September 30, 2026, these expenses were primarily related to the acquisitions of Walker, Seemann Composites, LLC and Materials Sciences LLC. For the three and nine months ended September 30, 2025, these expenses related to our underwritten secondary offering in July 2025 and the acquisitions of MTI Metal Technology Inc. and Industrial Solid Propulsion. Additionally, we incurred certain professional service fees related to our IPO that did not meet the requirements to be deferred issuance costs. We believe these expenses are not indicative of our underlying business performance.

Previous wording

Reflects non-recurring lender fees associated with discrete amendments to the Company’s credit agreement, separate from ongoing administrative fees.

Current wording

(4) Reflects lender fees associated with discrete amendments to our credit agreement, separate from ongoing administrative fees. These costs are infrequent, and we believe these costs are not indicative of our underlying business performance.

Previous wording

Reflects share-based compensation expenses. For the three and six months ended June 30, 2026, these expenses related to the Company’s RSUs and PSUs. For the six months ended June 30, 2025, these expenses related to the Company’s P Units and Phantom Units. These Units were fully vested in connection with the completion of the Company’s IPO in February 2025.

Current wording

(5) Reflects stock-based compensation expenses. For the three and nine months ended September 30, 2026, these expenses related to our RSUs and PSUs. For the nine months ended September 30, 2025, these expenses related to our P Units and Phantom Units. These units were fully vested in connection with the completion of our IPO in February 2025.

Previous wording

Although we use EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS as measures to assess the performance of our business and for the other purposes set forth above, the use of non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are:

Current wording

Although we use EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS as measures to assess the performance of our business and for the other purposes set forth above, the use of non-GAAP financial measures as analytical tools has limitations, and you should not consider any of them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with GAAP. Some of these limitations are:

Previous wording

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and the cash requirements for such replacements are not reflected in EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin;

Current wording

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and the cash requirements for such replacements are not reflected in EBITDA, Adjusted EBITDA or Adjusted EBITDA Margin;

Previous wording

Because of these limitations, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS should not be considered as measures of cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS in isolation and specifically by using other U.S. GAAP measures, such as net sales and operating profit, to measure our operating performance. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS are not measurements of financial performance under U.S. GAAP, and they should not be considered as alternatives to net income/(loss) or cash flow from operations determined in accordance with U.S. GAAP. Our calculations of EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS may not be comparable to the calculations of similarly titled measures reported by other companies.

Current wording

Because of these limitations, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS should not be considered as measures of cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin or Adjusted EPS in isolation and specifically by using other GAAP measures, such as net sales and operating profit, to measure our operating performance. EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EPS are not measurements of financial performance under GAAP, and they should not be considered as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. Our calculations of EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS may not be comparable to the calculations of similarly titled measures reported by other companies.

Previous wording

We believe that our cash and cash equivalents as of June 30, 2026, together with available borrowings under the Citibank Credit Agreement and expected net cash provided by operating activities will be sufficient to fund our cash requirements for at least the next twelve months. As we continue to grow our business, including by any acquisitions we may make, we may in the future require additional working capital.

Current wording

We believe that our cash and cash equivalents as of September 30, 2026, together with available borrowings under the Credit Agreement and expected net cash provided by operating activities will be sufficient to fund our cash requirements for at least the next twelve months. As we continue to grow our business, including by any acquisitions we may make, we may in the future require additional working capital.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2026 was $3.0 million , primarily consisting of net income of $21.8 million, non-cash item of $32.7 million and a net change in our operating assets and liabilities of $57.5 million. Change in our operating assets and liabilities was primarily driven by an increase in contract assets of $24.9 million, a decrease in contract liabilities of $0.3 million, which was mainly due to initial and subsequent measurement of contracts with customers, changes in business volume, and progress of existing contracts. Change in our operating assets and liabilities was also driven by an increase in accounts receivable of $25.5 million , partially offset by a decrease in accounts payable, accruals and income tax payable of $0.8 million, which was mainly driven by timing of other payments.

Current wording

Net cash provided by operating activities for the nine months ended September 30, 2026 was $23.8 million, primarily consisting of net income of $42.7 million, non-cash items of $49.5 million and a net change in our operating assets and liabilities of $68.5 million. The change in our operating assets and liabilities was primarily driven by an increase in contract assets of $46.0 million, which was partially offset by an increase in contract liabilities of $8.1 million that was mainly due to initial and subsequent measurement of contracts with customers, changes in business volume and progress of existing contracts. The change in our operating assets and liabilities was also driven by an increase in accounts receivable of $28.1 million , partially offset by an increase in accounts payable, accruals and income tax payable of $14.6 million that was primarily due to the timing of other payments.

Previous wording

Net cash used in operating activities for the six months ended June 30, 2025 was $31.0 million, primarily consisting of net income of $2.0 million, non-cash items of $23.3 million and a net change in our operating assets and liabilities of $56.3 million. Change in our operating assets and liabilities was primarily driven by an increase in contract assets of $26.4 million, a decrease in contract liabilities of $10.1 million, which was mainly due to initial and subsequent measurement of contracts with customers, changes in business volume, and progress of existing contracts. Change in our operating assets and liabilities was also driven by a decrease in accounts payable, accruals and income tax payable of $18.9 million, which was mainly due to timing of payments.

Current wording

Net cash used in operating activities for the nine months ended September 30, 2025 was $30.8 million, primarily consisting of net income of $9.7 million, non-cash items of $40.3 million and a net change in our operating assets and liabilities of $80.8 million. The change in our operating assets and liabilities was primarily driven by an increase in contract assets of $39.8 million, which was partially offset by a decrease in contract liabilities of $11.2 million that was mainly due to initial and subsequent measurement of contracts with customers, changes in business volume, and progress of existing contracts. The change in our operating assets and liabilities was also driven by a decrease in accounts payable, accruals and income tax payable of $26.7 million, which was mainly due to timing of payments.