Karman Holdings Inc.

1. Organization and Basis of Presentation

Description of Business

Karman Holdings Inc. (the “Company”) conducts business as Karman Space and Defense (“Karman”). Karman is headquartered in Huntington Beach, California. It currently operates through multiple subsidiaries in California, Washington, Oregon, Utah, Mississippi, Pennsylvania, South Carolina and Alabama, as well as Scotland, England and Poland.

Karman specializes in the rapid design, development and production of mission-critical, next-generation system solutions for launch vehicle, satellite, spacecraft, missile defense, hypersonic and Unmanned Aircraft Systems (“UAS”) customers. Karman’s integrated payload protection, propulsion, and hydro/aerodynamic interstage system solutions are deployed across a wide variety of existing and emerging programs supporting priority Department of War (“DoW”) and space sector initiatives.

Initial Public Offering

On February 12, 2025, the Company’s Registration Statement on Form S-1 (the “Registration Statement”) for its initial public offering (the “IPO”) was declared effective. Prior to the effectiveness of the Registration Statement, the Company was a Delaware limited liability company named TCFIII Spaceco Holdings LLC. On February 12, 2025, the Company converted into a Delaware corporation and changed its name to Karman Holdings Inc. Pursuant to the conversion, all outstanding equity interests and all outstanding P Units were converted into an aggregate of 123.8 million shares of common stock of Karman Holdings Inc.

On February 14, 2025, the Company completed the IPO of 26.5 million shares of its common stock at a public offering price of $22.00 per share, of which 8.4 million shares were sold by the Company. The aggregate net proceeds from the offering, after deducting underwriting discounts and commissions, payments to Phantom Unit holders and other offering expenses, were approximately $147.3 million. See Note 10 and Note 11 for additional information.

Basis of Presentation

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) applicable to Quarterly Reports on Form 10-Q. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete annual financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair statement of the Company’s financial position, results of operations, and cash flows. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10‑K for the fiscal year ended December 31, 2025. The results of operations for interim periods are not necessarily indicative of results to be expected for the full fiscal year.

2. Summary of Accounting Policies and Recent Accounting Pronouncements

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from these estimates. Management periodically evaluates estimates used in the preparation of the financial statements for continued reasonableness. Appropriate adjustments, if any, to estimates are made prospectively based upon such periodic evaluations. It is reasonably possible that changes may occur in the near term that would affect management’s estimates with respect to revenue recognition, estimates of cost to complete contracts, allowance for credit losses, stock-based compensation, accrued expenses, realization of tax assets and estimates of tax liabilities, useful life of property and equipment and valuation of net assets acquired in business combinations, and the impairment assessment of goodwill and intangible assets.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements Adopted

In July 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-05, Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which simplifies the application of the current expected credit loss model for current accounts receivable and current contract assets under ASC 606. The update is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company adopted ASU 2025-05 on January 1, 2026, and the adoption did not have a material impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires additional disclosure information about the types of expenses included in commonly presented expense captions, including tabular disaggregation of specified natural expense categories in relevant expense captions. The guidance also requires a qualitative description of amounts not separately disaggregated and disclosure of the total amount of selling expenses (and, in annual reporting periods, the definition of selling expenses). The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, which for the Company is the fiscal year ending December 31, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU on its financial statements and related disclosure.

3. Revenue

The Company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good to a customer. In most cases, goods provided under the Company’s contracts are accounted for as a single performance obligation due to the complex and integrated nature of its products. These contracts generally require significant integration of a group of goods to deliver a combined output. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not considered to be a separate performance obligation. Assets recognized from costs to obtain or fulfill a contract are not material. Payment terms are typically forty-five days, but may vary.

The Company generates revenue under a range of contract types including fixed-price, time and material and cost-plus-fixed-fee contracts. Substantially all revenue is recognized over time as control is transferred to the customer, measured with the input method based on costs incurred compared to estimated total costs at completion. In general, the Company’s contracts contain termination clauses that entitle the Company to payment for work performed to-date for goods that do not have an alternative use. Amounts recoverable in the event of terminations include reasonable profit margins. Control is effectively transferred as the Company performs its contractual obligations.

Remaining Performance Obligations

As of September 30, 2026, the Company elected to change its method of disclosing remaining performance obligations (“RPO”) to provide a more comprehensive view of its total contracted backlog and future revenue visibility. Historically, the Company utilized the practical expe dient available under ASC 606-10-50-14, which allowed for the exclusion of contracts with an original expected duration of one year or less. The RPO as of December 31, 2025 would have been $667.6 million under the new disclosure methodology. This change impacted disclosure only and had no effect on the Company’s condensed consolidated balance sheets, statement of operations and comprehensive income, or cash flows.

As of September 30, 2026, the Company had$1.5 billion of RPO. The Company expects to recognize approximately 15% of the remaining performance obligations as revenue in the fourth quarter of 2026,36% in 2027, and 49% thereafter.

Contract Estimates

The Company generally recognizes revenue over time using the input method, measured by the percentage of total costs incurred to-date relative to estimated total anticipated costs for each contract. This method is used because the Company considers total costs to be the best available measure of progress toward satisfaction of its performance obligations. Use of the input method requires the Company to make reasonable estimates regarding the costs associated with the design, manufacture, and delivery of its products.

The Company estimates profit on these contracts as the difference between total estimated revenue and total estimated costs at completion (“EAC”) and recognizes profit as costs are incurred. Significant judgment is used to estimate total costs at completion. Cost estimates are largely based on negotiated or estimated purchase contract terms, historical performance and trends, and other economic conditions. Unforeseen events and circumstances can alter the estimate of the costs and potential benefits associated with a particular contract.

The nature of the Company’s business can give rise to significant contract modifications, which can impact performance obligations and transaction price. A contract modification exists when the parties to a contract agree to a change in the scope and/or price of a contract. Contracts are often modified for changes in contract specifications or requirements. Most of the Company’s contract modifications are for goods that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative catch-up adjustment in the period they are identified.

Changes in contract estimates, including those arising from contract modifications, may result in the recognition of revenue in the current period for performance obligations satisfied or partially satisfied in prior periods or the reversal of previously recognized revenue. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the total loss in the condensed consolidated statement of operations and comprehensive income in the period in which it is identified.

Contract Assets and Liabilities

The timing of Company billings is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when products are provided. Billing can occur prior to revenue recognition, resulting in deferred revenue, or subsequent to revenue recognition, resulting in unbilled revenue. “Contract assets” represent revenue recognized in excess of amounts billed. These contract assets are not considered a significant financing component of the Company’s contracts, as the payment terms are intended to protect the customer in the event the Company does not fulfill its obligations under the contract. “Contract liabilities” represent amounts billed in excess of revenue recognized. Contract liabilities are not a significant financing component, as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements.

The following table summarizes the Company’s contract assets and liabilities:

Changes in contract assets and contract liabilities are primarily due to the timing of payments from customers and the Company satisfying performance obligations during the normal course of business. The amount of revenue recognized from changes in the transaction price associated with performance obligations satisfied during the nine months ended September 30, 2026 and 2025 were not material. The following table summarizes the changes in contract assets and contract liabilities for the nine months ended September 30, 2026 and 2025:

Disaggregation of Revenue

The following table presents the Company’s disaggregated revenue by end-markets for the three and nine months ended September 30,2026 and 2025, respectively. Substantially all of the Company’s customers are government or commercial enterprises based in the United States.

4. Supplemental Financial Statement Data

Inventory

The Company determines the cost basis for inventory using the lower of cost or net realizable value. Cost is determined by using the weighted average method. The following table summarizes the Company’s inventory:

Accounts Receivable and Credit Loss Reserves

Accounts receivable are comprised of unsecured amounts due from customers and presented net of any allowance for credit losses. The Company recognizes its estimate of expected losses on accounts receivable within the scope of the current expected credit losses (“CECL”) model. The Company assesses the collectability of its outstanding receivables and estimates the need for an allowance by considering historical losses, the age of the receivable balance, the credit quality of the Company’s customers, current economic conditions, and other factors that may affect the customers’ ability to pay.

The following tables summarize the accounts receivable as of September 30, 2026 and December 31, 2025, and the change in allowance for credit losses for the nine months ended September 30, 2026 and 2025:

Concentration of Credit Risk

For the nine months ended September 30, 2026, the Company had two customers with greater than 10% of the Company’s revenue and these customers accounted for approximately 30% of accounts receivable as of September 30, 2026. For the nine months ended September 30, 2025, the Companyhad three customers with greater than 10% of the Company’s revenues. These customers comprised 26.1%,11.9% and 10.3% of the Company’s total revenues. These three customers accounted for approximately 48% of accounts receivable as of December 31,2025.

Property and Equipment

Property and equipment consisted of the following as of September 30, 2026 and December 31, 2025:

Depreciation expense for the three months ended September 30, 2026 and 2025 was$4.4 million and$3.2 million, respectively, of which,$3.6 million and$2.8 million was recorded in cost of goods sold, respectively, and the remainder in operating expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

Depreciation expense for the nine months ended September 30, 2026 and 2025 was$11.8 million and$9.0 million, respectively, of which,$9.6 million and$8.3 million was recorded in cost of goods sold, respectively, and the remainder in operating expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

Business Combinations

MTI Acquisition

On April 2, 2025 (the “MTI Acquisition Date”), the Company, through its indirect wholly-owned subsidiary Karman Parent LLC (“Karman Parent”), acquired all the issued and outstanding membership interests and other equity interests of MTI Metal Technology Inc. (“MTI”), pursuant to the terms of a Securities Purchase Agreement in exchange for cash consideration (the “MTI Acquisition”). The acquisition of MTI expands the Company’s capabilities in advanced materials and is expected to strengthen its position in the strategic missile defense market through enhanced product offerings and customer relationships.

The MTI Acquisition met the requirements to be considered a business combination under ASC 805. The assets and liabilities acquired, effected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the MTI Acquisition Date. The Company recorded the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the acquisition date as required under ASC 805.

The MTI Acquisition was funded with borrowings under the Company’s Credit Agreement and was accounted for using the acquisition method of accounting. The fair value of the total purchase consideration transferred was $82.3 million. The MTI Acquisition does not have any contingent consideration arrangements.

The Company also incurred $1.4 million of direct acquisition-related expenses, recognized as general and administrative expenses on the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2025. No acquisition-related expenses were recorded for the three and nine months ended September 30, 2026.

The accounting for the MTI Acquisition was completed during the quarter ended March 31, 2026. The following table sets forth the allocation of the fair value of the assets acquired and liabilities assumed in connection with the MTI Acquisition. No material adjustments were recognized during the measurement period.

The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill and is fully deductible for tax purposes. The components of goodwill do not qualify as a separately recognized intangible asset.

Below is a summary of the intangible assets acquired in the MTI Acquisition:

The fair value of know-how was determined using the relief-from-royalty method, and the fair values of customer relationships and backlog were determined using the multi-period excess earnings method (“MPEEM”). In total, the intangible assets acquired subject to amortization have a weighted average useful life of 11.0 years.

Supplemental pro forma results of operations are not presented because they are not material to the condensed consolidated results of operations.

ISP Acquisition

On May 28, 2025 (the “ISP Acquisition Date”), the Company completed its acquisition of Industrial Solid Propulsion (“ISP”) pursuant to a Securities Purchase Agreement (the “ISP Agreement”), under which the Company purchased all issued and outstanding equity interests in ISP and related real estate of ISP, for approximately $50 million in cash,147,842 shares of common stock of the Company and a $5.0 million potential earnout (the “Earnout”), subject to satisfaction or waiver of certain customary closing adjustments. The ISP Agreement contains customary representations, warranties and covenants of the parties. The acquisition of ISP expands the Company’s capabilities in small-diameter solid propellant and energetic propulsion systems, strengthening its position in the UAS and missile defense markets through proprietary technologies and integrated manufacturing expertise.

The ISP Acquisition met the requirements to be considered a business combination under ASC 805. The assets and liabilities acquired, effected for adjustments to reflect fair values assigned to assets purchased and liabilities assumed, and results of operations, are included in the Company’s condensed consolidated financial statements from the ISP Acquisition Date. The Company recorded the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the acquisition date as required under ASC 805.

The ISP Acquisition was funded with incremental borrowings under the Company’s Credit Agreement and was accounted for using the acquisition method of accounting. The fair value of the total purchase consideration transferred was $58.6 million, of which $49.0 million represents cash consideration, $5.7 million represents the fair value of the equity consideration as of the ISP Acquisition Date and $3.9 million represents the fair value of the Earnout, which was recorded in other current liabilities on the condensed consolidated balance sheets. The earnout liability was estimated using a Monte Carlo simulation under a risk-neutral framework, based on the average present value of the simulated earnout payments. The Earnout provides for a cash payment equal to $5.0 million to the seller of ISP, contingent upon the achi evement of a specified Adjusted EBITDA threshold for the twelve months ended December 31, 2025, as defined in the ISP Agreement. As of December 31, 2025, the Company determined that the Adjusted EBITDA target was not achieved and therefore will not be paid. Accordingly, the Earnout no longer had any value, and the related contingent consideration liability was reduced tozero as of December 31, 2025, with the change in fair value recognized as other income on the consolidated statements of operations and comprehensive income.

The Company also incurred $1.2 million of direct acquisition-related expenses, recognized as general and administrative expenses on the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2025. No acquisition-related expenses were recorded for the three or nine months ended September 30, 2026.

The following table sets forth the acquisition date fair value of the assets acquired and liabilities assumed in connection with the acquisition:

The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill and is fully deductible for tax purposes. The components of goodwill do not qualify as a separately recognized intangible asset.

Below is a summary of the intangible assets acquired in the ISP Acquisition:

The fair value of know-how was determined using the relief-from-royalty method, and the fair values of customer relationships and backlog were determined using the MPEEM. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 10.7 years.

Supplemental pro forma results of operations are not presented because they are not material to the condensed consolidated results of operations.

Five Axis Acquisition

On October 28, 2025 (the “Five Axis Acquisition Date”), the Company, through its wholly owned subsidiary, Karman Space & Defense LLC, completed the acquisition of all of the issued and outstanding capital stock of Five Axis Industries, Inc. (“Five Axis”) pursuant to a Securities Purchase Agreement, under which the Company purchased all issued and outstanding equity interests in Five Axis, for approximately $90.7 million in cash and 68,625 shares of common stock (the “Five Axis Acquisition”). Five Axis designs and manufactures specialized nozzle and fuel systems for launch vehicle engines. Its products support the performance and operation of both current and next-generation propulsion systems. The acquisition of Five Axis strengthens the Company’s core competency in the engineering and manufacturing of mission-critical subsystems for the space and launch end market.

The Five Axis Acquisition met the requirements to be accounted for as a business combination under ASC 805. Five Axis’ assets and liabilities have been adjusted for preliminary estimates of fair value, and its results of operations have been included in the Company’s condensed consolidated financial statements from the Five Axis Acquisition Date. The purchase price was allocated to tangible and identifiable intangible assets based on their estimated fair values at the Five Axis Acquisition Date.

The Five Axis Acquisition was funded with incremental borrowings under the Company’s Credit Agreement and was accounted for using the acquisition method of accounting. The Five Axis Acquisition does not have any contingent consideration arrangements.

Acquisition-related costs have been expensed as incurred and are included in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income. No acquisition-related expenses were recorded for the three or nine months ended September 30, 2026 or 2025.

The following table sets forth the acquisition date fair value of the assets acquired and liabilities assumed in connection with the Five Axis Acquisition:

The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill, which is not deductible for tax purposes. Goodwill reflects expected synergies from the combined operations, specialized processes and procedures, and the assembled workforce. The components of goodwill do not qualify as a separately recognized intangible asset.

Below is a summary of the intangible assets acquired in the Five Axis Acquisition:

The fair values of customer relationships and backlog were determined using the MPEEM. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 13.0 years.

Supplemental pro forma results of operations are not presented because they are not material to the condensed consolidated statements of operations and comprehensive income.

Seemann Acquisition

On February 3, 2026 (the “Seemann Acquisition Date”), the Company, through a wholly owned subsidiary, completed the acquisition of all of the issued and outstanding membership interests of Seemann Composites, LLC and Materials Sciences LLC (together, “Seemann”) pursuant to a Securities Purchase Agreement dated December 31, 2025 (the “Seemann Acquisition”), for approximately (i) $215.9 million in cash and (ii) shares of common stock of the Company with an aggregate value equal to $17.0 million, of which $1.7 million was withheld to cover Seemann’s income tax liability. Seemann provides advanced composite systems and materials solutions for maritime defense applications. The Company believes the acquisition of Seemann expands its capabilities in the maritime defense end market and strengthens its portfolio supporting high-priority, funded U.S. Navy programs.

The Seemann Acquisition met the requirements to be accounted for as a business combination under ASC 805. Seemann’s assets and liabilities have been adjusted for preliminary estimates of fair value, and its results of operations have been included in the Company’s condensed consolidated financial statements from the Seemann Acquisition Date. The purchase price was allocated to tangible and identifiable intangible assets based on their estimated fair values at the Seemann Acquisition Date.

The Seemann Acquisition was accounted for using the acquisition method of accounting. The Seemann Acquisition was funded with incremental borrowings under the Company’s Credit Agreement. The total consideration transferred was $232.9 million. The Seemann Acquisition does not have any contingent consideration arrangements.

The Company incurred $4.0 million of direct acquisition-related expenses, of which $2.0 million was recognized in the prior year and the remaining $2.0 million was recognized asgeneral and administrative expenses on the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2026.

As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the Seemann Acquisition Date). The following table reflects the preliminary acquisition date fair value of the assets acquired and liabilities assumed in connection with the Seemann Acquisition:

The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill and is fully deductible for tax purposes. Goodwill reflects expected synergies from the combined operations, specialized processes and procedures, and the assembled workforce. The components of goodwill do not qualify as a separately recognized intangible asset. Goodwill is allocated to the Company’s single reporting segment.

Below is a summary of the intangible assets acquired in the Seemann Acquisition:

The fair values of trade names and know-how were determined using the relief-from-royalty method, and the fair values of the customer contracts and backlog were determined using the MPEEM. All intangible assets are subject to amortization. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 7.3 years.

Revenue attributable to the Seemann Acquisition and included in the Company’s condensed consolidated financial statements was$39.5 million and $102.5 million for the three and nine months ended September 30, 2026, respectively. Supplemental pro forma information is not presented, as it is impracticable to obtain the information due to the lack of availability of historical GAAP financial data.

Walker Acquisition

On August 28, 2026 (the “Walker Acquisition Date”), the Company, through its wholly owned subsidiary, Karman Space & Defense LLC, completed the acquisition of all of the issued share capital of Walker Precision Holdings Limited (“Walker”) pursuant to the Share Purchase Agreement dated July 18, 2026 (the “Walker Acquisition”). Walker is a precision manufacturing and engineering company that produces complex machined components, assemblies, and related engineering solutions primarily for the aerospace and defense sectors. The Company believes the acquisition of Walker expands its capabilities in missile and air defense applications and establishes its international presence in Europe.

The Walker Acquisition met the requirements to be accounted for as a business combination under ASC 805. Walker’s assets and liabilities have been adjusted for preliminary estimates of fair value, and its results of operations have been included in the Company’s consolidated financial statements from the Walker Acquisition Date. The purchase price was allocated to tangible and identifiable intangible assets based on their estimated fair values at the Walker Acquisition Date.

The Walker Acquisition was accounted for using the acquisition method of accounting. The acquisition was funded with incremental borrowings under the Company’s Credit Agreement. The total consideration transferred was $99.0 million and paid in cash.

The Company also incurred $2.4 million of direct acquisition-related expenses, recognized asgeneral and administrative expenses on the condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2026.

As of September 30, 2026, the Company had not finalized the determination of fair value of certain tangible and intangible assets acquired and liabilities assumed and goodwill. As such, the assessment of fair value of assets acquired and liabilities assumed is preliminary and was based on information that was available at the time the condensed consolidated financial statements were prepared. The finalization of the purchase accounting assessment could result in material changes in the Company’s determination of the fair value of assets acquired and liabilities assumed, which will be recorded as measurement period adjustments in the period in which they are identified, up to 12 months from the Walker Acquisition Date. The following table sets forth the preliminary acquisition date fair value of the assets acquired and liabilities assumed in connection with the Walker Acquisition:

The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets was recorded as goodwill, which is not expected to be deductible for tax purposes. Goodwill reflects expected synergies from the combined operations, specialized processes and procedures, and the assembled workforce. The components of goodwill do not qualify as a separately recognized intangible asset. Goodwill is allocated to the Company’s single reporting segment.

Below is a summary of the intangible assets acquired in the Walker Acquisition:

The fair value of know-how was determined using the relief-from-royalty method, and the fair value of customer relationships and backlog were determined using the MPEEM. All intangible assets are subject to amortization. In total, the intangible assets acquired subject to amortization have a weighted average useful life of 15.1 years.

Revenue attributable to the Walker Acquisition and included in the Company’s condensed consolidated financial statements was $4.0 millionfor each of the three and nine months ended September 30, 2026.

The supplemental pro forma revenue information has been prepared using the historical financial information of Karman and Walker combined, assuming the transaction occurred on January 1, 2025. The supplemental pro forma financial information does not necessarily represent what the combined companies’ revenue would have been had the acquisition of Walker been completed on January 1, 2025, nor is it intended to be a projection of future operating results of the combined company. The pro forma earnings of Walker are not material to the financial statements for thethree and nine months ended September 30, 2026 and 2025.

Goodwill and Intangible Assets

The table below summarizes the changes in the Company’s goodwill balances:

The table below summarizes the carrying amounts of the Company’s identifiable intangible assets as of September 30, 2026 and December 31, 2025, respectively:

Amortization expense was$9.9 million and$6.0 million for the three months ended September 30, 2026 and 2025, respectively, which was recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

Amortization expense was$30.0 million and$15.9 million for the nine months ended September 30, 2026 and 2025, respectively, which was recorded in general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

Debt

The Company’s debt obligations consisted of the following as of September 30, 2026 and December 31, 2025:

On April 1, 2025, the Company entered into a Credit Agreement, by and among the Company, the lenders from time to time party thereto and Citibank, N.A., as administrative agent (the “Original Credit Agreement”). The Original Credit Agreement provided for (i) a revolving credit facility in an aggregate principal amount of $50 million(the “Revolving Credit Facility”) and (ii) a term loan facility in anaggregate principal amount of $300 million (the “Term Loan Facility” and, together with the Revolving Credit Facility, the “Senior Credit Facility”). The maturity date of the Revolving Credit Facility is April 1, 2030, and the maturity date of the Term Loan Facility is April 1, 2032. The obligations under the Original Credit Agreement are secured by a lien on substantially all of the assets of the Company and certain of its direct and indirect subsidiaries. Loans under the Senior Credit Facility may be denominated only in U.S. dollars.

On May 27, 2025, the Company entered into that certain First Amendment to Credit Agreement (the “First Amendment”), which amends the Original Credit Agreement. The First Amendment provided for an incremental term loan in an aggregate principal amount of $75 million, thereby increasing the aggregate principal amount of the Term Loan Facility.

On October 24, 2025, the Company entered into that certain Second Amendment to Credit Agreement (the “Second Amendment”), which amends the Original Credit Agreement. The Second Amendment provided for an incremental term loan in an aggregate principal amount of $130 million, thereby increasing the aggregate principal amount of the Term Loan Facility.

On February 2, 2026, the Company entered into that certain Third Amendment to Credit Agreement (the “Third Amendment”), which amends the Original Credit Agreement. Under the Third Amendment, the Company (i) refinanced the Term Loan Facility in an aggregate principal amount of $502.8 million to reduce the interest rate applicable thereto by 75 basis points to SOFR plus 2.75% and (ii) reduced the interest rate applicable to the Revolving Credit Facility by 75 basis points for each level of its leverage-based pricing grid, the highest of such levels being set at SOFR plus 2.50%. In addition, following the refinancing of the Term Loan Facility, the Company increased the principal amount of the Term Loan Facility by $265.0 million, for an aggregate principal amount of $767.8 million.

On March 9, 2026, the Company entered into that certain Fourth Amendment to Credit Agreement (the “Fourth Amendment”), which amends the Original Credit Agreement. Under the Fourth Amendment, the Company (i) increased the Revolving Credit Facility commitments by $100 million to an aggregate principal amount of $150 million and (ii) removed the cap on Revolving Credit Facility commitments, which was previously $50 million.

On August 3, 2026, the Company entered into that certain Fifth Amendment to Credit Agreement (the “Fifth Amendment”), which amends the Original Credit Agreement. Under the Fifth Amendment, the Company (i) refinanced the Term Loan Facility in an aggregate principal amount of $764 million to reduce the interest rate applicable thereto by 50 basis points to SOFR plus 2.25% and (ii) reduced the interest rate applicable to the Revolving Credit Facility by 50 basis points for each level of its leverage-based pricing grid, the highest of such levels being set at SOFR plus 2.00%.

On August 26, 2026, the Company entered into that certain Sixth Amendment to Credit Agreement (the “Sixth Amendment”), which amends the Original Credit Agreement (as amended by the First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment and Sixth Amendment, the “Credit Agreement”). Under the Sixth Amendment, the Company increased the principal amount of the Term Loan Facility by $100 million, for an aggregate principal amount of $864 million.

The amendments to the Credit Agreement are accounted for as debt modifications. During the three and nine months ended September 30, 2026, the Company incurred debt issuance costs of $1.4 million and $4.0 million, respectively, in connection with the amendments. For the three and nine months ended September 30, 2025, the Company recorded debt issuance costs of $0 and $6.5 million, respectively. The Company recorded a loss on debt extinguishments of $2.6 million, which is recorded in interest expense, net within the condensed consolidated statements of operations and comprehensive income, during thethree and nine months ended September 30, 2026. No loss on debt extinguishments was recorded for thethree and nine months ended September 30, 2025.

During the three months ended September 30, 2026, the Company recorded a $3.3 million out-of-period adjustment to correct the prior capitalization of debt issuance costs that should have been expensed in connection with the Third Amendment during the three months ended March 31, 2026. The Company evaluated the impact of the error and out-of-period adjustment and concluded it was not material to the current or any previously issued interim condensed consolidated financial statements.

The Credit Agreement requires the Company to comply with a springing financial covenant that is tested on the last day of any fiscal quarter, if and when the outstanding principal amount drawn under the Revolving Credit Facility exceeds an applicable threshold. If the financial covenant is then in effect, the Company is required to maintain a Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement) of less than or equal to 6.50 to 1.00. As there wasno outstanding balance on the Revolving Credit Facility as of September 30, 2026, the springing financial covenant did not apply.

Interest rates were 6.06% and 7.50% as of September 30, 2026 and December 31, 2025. No accrued interest was recorded under the Senior Credit Facility as of September 30, 2026 and December 31, 2025.

As of September 30, 2026, the outstanding principal amount under the Term Loan Facility was $861.8 million. The Company did not draw from the Revolving Credit Facility during the nine months ended September 30, 2026, and there was no outstanding balance on the Revolving Credit Facility as of September 30, 2026.

Lease Obligations

The Company has certain property leases for facilities of the Company’s subsidiaries. Total lease payments amounted to$4.0 million and$3.2 million for the three months ended September 30, 2026 and 2025, respectively. Total lease payments amounted to$11.2 million and$9.6 million for the nine months ended September 30, 2026 and 2025, respectively.

Consolidated Lease Summary

On a consolidated basis, lease activity for thethree and nine months ended September 30, 2026 and 2025 was as follows:

Amortization of right-of-use (“ROU”) assets is included in the depreciation and amortization expense line of the accompanying condensed consolidated statements of operations and comprehensive income.

On a consolidated basis, supplemental cash flow information for thenine months ended September 30, 2026 and 2025 was as follows:

Retirement Plans

Employee Benefit Plan

The Company maintains a 401(k) plan for all employees who have completed three months of service and have reached age 18. Qualified employees may contribute up to 90% of their pre-tax annual compensation to this plan, not to exceed the dollar limit set by law. The Company may make discretionary matching contributions and discretionary non-elective contributions to this plan. For thethree months ended September 30, 2026 and 2025, there were contributions of $1.3 million and $1.0 million made to the plan, respectively. For the nine months ended September 30, 2026 and 2025, there were contributions of $4.1 million and $2.8 million made to the plan, respectively. Retirement plan contribution expense is included within either cost of goods sold or general and administrative expenses on the condensed consolidated statements of operations and comprehensive income, depending on the nature of the employee’s work.

Stockholders’ Equity and Membership Units

Prior to the IPO, the Company issued membership units in conjunction with purchases of subsidiaries and to reflect further investment in the Company’s operations. The Company issued Class A, Class B and Class C units with substantially identical rights, privileges and liquidation preferences. Pursuant to the Third Amended and Restated Limited Liability Company Agreement of TCFIII Spaceco Holdings LLC, such membership units entitled unitholders to share in the proceeds from capital transactions, including a sale of the Company, and granted them voting rights on matters requiring the consent of the members. In connection with the IPO in February 2025, all of the outstanding membership units were converted on a 0.68-for-1 basis into 112,566,039 shares of common stock of the Company.

On July 25, 2025, the Company consummated the underwritten public offering of 21,000,000 shares of its common stock by certain selling stockholders at a public offering price of $49.00 per share, less underwriting discounts and commissions, pursuant to the Company’s registration statement on Form S-1 (File No. 333-288809) (the “2025 Secondary Offering”). The underwriters in the 2025 Secondary Offering were granted a 30-day option to purchase up to an additional 3,150,000 shares of common stock from certain selling stockholders, which was fully exercised on July 24, 2025. No shares were sold by the Company in the 2025 Secondary Offering, and the Company didnot receive any proceeds from the sale of common stock by the selling stockholders.

On June 1, 2026, the Company consummated the underwritten public offering of 14,000,000 shares of its common stock by certain selling stockholders at a public offering price of $61.00 per share, less underwriting discounts and commissions, pursuant to the Company’s registration statement on Form S-3 (File No. 333-296304) (the “2026 Secondary Offering”). No shares were sold by the Company in the 2026 Secondary Offering, and the Company didnot receive any proceeds from the sale of common stock by the selling stockholders.

Stock-Based Compensation

2025 Stock Incentive Plan

The 2025 Stock Incentive Plan (the “2025 Plan”) was adopted by the Board of Directors on February 12, 2025 and approved by the Company’s stockholders on February 12, 2025. The 2025 Plan provides for the grant of stock options (including incentive stock options and non-qualified stock options), stock appreciation rights, restricted stock, restricted stock units, performance-based awards, other stock-based awards, or any combination thereof. Employees, directors or consultants of the Company or any of its subsidiaries or affiliates are eligible to receive an award under the 2025 Plan, to the extent that an offer of such award is permitted by applicable law, stock market or exchange rules, and regulations or accounting or tax rules and regulations. Each award will be set forth in a separate grant notice or agreement and will indicate the type and terms and conditions of the award.

The following tables present the Company’s stock-based compensation and related expense for equity-settled awards by type (i.e., restricted stock units (“RSUs”), restricted stock unit awards with performance conditions or market conditions (“PSUs”)) and by financial statement line, as well as the related tax benefit included in the Company’s condensed consolidated statements of operations and comprehensive income:

Compensation expense related to RSUs and PSUs will generally be amortized on a straight-line basis over the remaining average service period. The following table presents the unamortized compensation expense and weighted average service period of all unvested outstanding awards as of September 30, 2026:

(1) Weighted average service period assumes the performance metrics are met for the PSUs.

The following table summarizes RSU and PSU activity under the Company’s incentive plans:

RSUs and PSUs are generally settled in an equal number of shares of the Company’s common stock at the time of vesting of the units.

P Units and Phantom Units

The Company historically, through Spaceco Management Equity LLC (the “Management Company”) under the Spaceco Management Equity LLC Equity Incentive Plan (the “Equity Incentive Plan”) and the Transaction Bonuses plan (the “Phantom Plan”), granted P Units and Phantom Units to certain employees of the Company and its subsidiaries in exchange for their services to the Company. These Units were fully vested in connection with the completion of the Company’s IPO in February 2025. During the nine months ended September 30, 2025, $8.1 million in stock-based compensation wasrecognized in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income related to the P Units and Phantom Units.

Net Income Per Share

Net income per share was computed as follows:

Segment Reporting

ASC Subtopic 280-10, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available. This information is regularly evaluated by the chief operating decision maker (“CODM”) to allocate resources and assess performance. The Company’s

Chief Executive Officer (“CEO”) serves as the CODM and reviews financial information on a single-segment basis to make operational decisions and assess financial performance.

On March 23, 2026, the Company appointed a new CEO, who serves as the CODM. The CODM continues to evaluate the Company’s performance on asingle-segment basis, using consolidated net income. Segment assets continued to be measured as total consolidated assets, as reported on the condensed consolidated balance sheet.

The following table summarizes the Company’s revenue, net income and significant expenses:

General and administrative expenses include employee compensation and benefits of$15.5 million and$9.0 million for the three months ended September 30, 2026 and 2025, respectively, and$41.9 million and$23.4 million for the nine months ended September 30, 2026 and 2025, respectively.

Capital expenditures, which include purchases of property, plant, and equipment, are assessed and managed at the enterprise level. Refer to “Cash flows from investing activities” in the condensed consolidated statement of cash flows for the amount of cash paid for capital expenditures.

Income Tax Expense (Benefit)

The following table summarizes the Company’s income tax expense and effective tax rate for thethree and nine months ended September 30, 2026 and 2025:

The Company calculates its interim tax provision using its best estimate of the annual effective tax rate. During the three months ended September 30, 2026, the Company completed two years of a multi-year study of its U.S. federal research and development (“R&D”) tax credits, identifying additional qualifying R&D expenditures that resulted in a $7.8 million net income tax benefit attributed to prior years, net of associated uncertain tax position reserve. Additionally, based on the same study, the Company revised its current year estimate of R&D tax credits by an additional $7.4 million, net of unrecognized tax benefits, to update its best estimate of the annual effective tax rate for the year ending December 31, 2026. As a result, the Company’s effective income tax rate is(57.1)% and(3.7)% for the three and nine months ended September 30, 2026, respectively.

The Company is currently in the process of completing U.S. federal and state R&D tax credit studies for 2023 and 2024 tax years, as well as completing its 2025 state R&D study, which is expected to be completed in the fourth quarter of 2026. While timing of completion is uncertain, the Company expects the resulting income tax benefits recognized to be material to its financial statements. The Company expects to record these income tax benefits within the next twelve months as the studies are completed.

For the nine months ended September 30, 2026, in addition to the aforementioned benefit related to incremental R&D credits, the effectivetax rate included a benefit related to the revaluation of the Company’s state deferred tax liabilities arising from the changes in the combined state tax rate following the Seemann Acquisition.

As a result of the Walker Acquisition, the Company is subject to U.S. federal income tax on certain earnings of its foreign subsidiaries that are treated as controlled foreign corporations (“CFCs”) under the Global Intangible Low-Taxed Income (GILTI) regime, which was amended and renamed as Net CFC Tested Income (NCTI) under the One Big Beautiful Bill Act (Public Law 119-21), enacted July 4, 2025. The Company has elected to treat the tax effects of NCTI as a period cost in accordance with ASC 740, Income Taxes, and accordingly, recognizes any related tax expense in the period in which the tax arises, andno deferred tax assets or liabilities will be recognized for temporary differences that are expected to affect future NCTI calculations. No NCTI expense was recorded in the three and nine months ended September 30, 2026.

Additionally, the Company hasnot recognized a deferred tax liability on the excess of book over tax basis in its investment in the foreign subsidiaries acquired in the Walker Acquisition, as the Company intends to reinvest those earnings indefinitely outside the United States. It is not practicable to determine the unrecognized deferred tax liability related to this difference.

Commitments and Contingencies

In the course of doing business, the Company enters into various agreements. These agreements typically include commitments and indemnifications, which could create a liability for the Company in the event of damages or injuries related to providing these services. Management believes the Company is adequately insured. However, future claims related to these agreements could significantly affect the Company’s financial results if a loss is incurred as a result of these agreements.

The Company is subject from time to time to various claims and legal proceedings incident to its business. The Company accrues a liability for legal contingencies when it is both probable that a liability has been incurred and the amount of loss is reasonably estimable. The Company reviews these accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. For certain matters, the liability is not probable, or the amount cannot be reasonably estimated, and therefore, accruals have not been made. In addition, in accordance with the relevant authoritative guidance, for any matters in which the likelihood of a material loss is at least reasonably possible, the Company will provide disclosure of the possible loss or range of loss. If a reasonable estimate cannot be made, however, the Company will provide disclosure to that effect. As of September 30, 2026 and December 31, 2025, the Company has no material reserves for legal contingencies and does not believe that the resolution of any known legal matters will have a material adverse effect on the Company’s financial position, cash flows or results of operations; however, it is possible that unexpected further developments on these or similar matters could result in a charge that might be material to the Company’s financial position, cash flows or results of operations.