V2X, Inc.

Previous wording

Our primary customer is the U.S. Department of War (DoW), also known as the Department of Defense under 10 U.S.C. § 111(a). For the six months ended July 3, 2026 and June 27, 2025, the Company had total revenue of $2.5 billion and $2.1 billion, respectively, the substantial majority of which was derived from U.S. government customers. For the six months ended July 3, 2026 and June 27, 2025, we generated approximately 34% and 43%, respectively, of our total revenue from the U.S. Army.

Current wording

Our primary customer is the U.S. Department of War (DoW), also known as the Department of Defense under 10 U.S.C. § 111(a). For the nine months ended October 2, 2026, and September 26, 2025, the Company had total revenue of $3.8 billion and $3.3 billion, respectively, the substantial majority of which was derived from U.S. government customers. For the nine months ended October 2, 2026, and September 26, 2025, we generated approximately 32% and 41%, respectively, of our total revenue from the U.S. Army.

Previous wording

Our revenue increased by $178.3 million, or 16.5%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025. Revenue increased primarily due to program ramp ups in global training and aerospace along with $101.6 million attributed to discrete activities to support a national security mission. Revenue from our programs in the U.S., Asia, and the Middle East increased by $165.1 million, $9.8 million, and $4.2 million, respectively, partially offset by a decrease in revenue from our programs in Europe of $0.8 million during the three months ended July 3, 2026 as compared to the three months ended June 27, 2025.

Current wording

Our revenue increased by $104.3 million, or 8.9%, for the three months ended October 2, 2026, as compared to the three months ended September 26, 2025. Revenue increased primarily due to program increases in aerospace and modernization, as well as a $128.9 million increase from discrete activities to support a national security mission, partially offset by reductions in the scope of work under our programs in the Middle East. Revenue from our programs in the U.S. and Asia increased by $209.4 million and $6.8 million, respectively, partially offset by a decrease in revenue from our programs in the Middle East and Europe of $104.1 million and $7.8 million, respectively, during the three months ended October 2, 2026, as compared to the three months ended September 26, 2025.

Previous wording

Operating income for the three and six months ended July 3, 2026 was $53.8 million and $97.9 million, respectively, an increase of $0.9 million and $10.7 million, or 1.6% and 12.2%, respectively, compared to the three and six months ended June 27, 2025. Operating income increased primarily due to the ramp up of several programs, partially offset by increased Selling, General and Administrative expenses (SG&A) and corporate expenses.

Current wording

Operating income for the three and nine months ended October 2, 2026, was $59.5 million and $157.4 million, respectively, an increase of $3.8 million and $14.5 million, or 6.8% and 10.1%, respectively, compared to the three and nine months ended September 26, 2025. Operating income increased primarily due to increases in revenue from several programs, as described above, partially offset by increased Selling, General and Administrative expenses (SG&A) and corporate expenses.

Previous wording

Further details related to consolidated financial results for the three and six months ended July 3, 2026, compared to the three and six months ended June 27, 2025, are contained in the "Discussion of Financial Results" section in this Quarterly Report on Form 10-Q.

Current wording

Further details related to consolidated financial results for the three and nine months ended October 2, 2026, compared to the three and nine months ended September 26, 2025, are contained in the "Discussion of Financial Results" section in this Quarterly Report on Form 10-Q.

Previous wording

The following table reflects contracts that accounted for more than 10% of total revenue:

Current wording

The following table reflects contracts that accounted for more than 10% of total revenue during the nine months ended October 2, 2026, and September 26, 2025:

Previous wording

The LOGCAP V - Kuwait Task Order was exercised through June 30, 2026 and provides services to support the Geographical Combatant Commands and Army Service Component Commands throughout the full range of military operations in the Kuwait region. On May 12, 2026, the U.S. Department of the Army notified the Company of its decision to reduce the scope of work being performed under this task order and to extend the contract with respect to the revised scope for an additional six months to December 31, 2026. The LOGCAP V - Kuwait Task Order contributed $182.4 million and $229.1 million of revenue for the six months ended July 3, 2026 and June 27, 2025, respectively. As a result of this modification, the Company reduced its backlog by $414.6 million. The Company continues to work with the U.S. Department of the Army to support them in the region, including through the current extension of the original task order for $22.6 million until the end of 2026, as well as through other contract vehicles. Management does not currently expect the reduction in scope of the LOGCAP V - Kuwait Task Order to have a material adverse effect on the Company's financial condition or results of operations, including revenue due to other programs ramp up as reflected in "Discussion of Financial Results"section.

Current wording

The LOGCAP V - Kuwait Task Order was exercised through June 30, 2026, and provides services to support the Geographical Combatant Commands and Army Service Component Commands throughout the full range of military operations in the Kuwait region. On May 12, 2026, the U.S. Department of the Army notified us of its decision to reduce the scope of work being performed under this task order and to extend the contract with respect to the revised scope for an additional six months to December 31, 2026, for $22.6 million. The LOGCAP V - Kuwait Task Order contributed $193.9 million and $333.9 million of revenue for the nine months ended October 2, 2026, and September 26, 2025, respectively. As a result of this modification, we reduced our backlog by $414.6 million during the quarterly period ended July 3, 2026. We continue to work with the U.S. Department of the Army to support them in the region, including through the current extension of the original task order until the end of 2026, as well as through other contract vehicles. Our management does not currently expect the reduction in scope of the LOGCAP V - Kuwait Task Order to have a material adverse effect on our financial condition or results of operations, including revenue due to other programs ramp up as reflected in "Discussion of Financial Results"section.

Previous wording

Our contracts are multi-year contracts and typically include an initial period of one year or less with annual one-year or less option periods for the remaining contract period. The number of option periods vary by contract, and there is no guarantee that an option period will be exercised. The right to exercise an option period is at the sole discretion of the U.S. government when we are the prime contractor or of the prime contractor when we are a subcontractor. The U.S. government may also extend the term of a program by issuing extensions or bridge contracts, typically for periods of one year or less.

Current wording

Our contracts are multi-year contracts and typically include an initial period of one year or less with annual one-year or less option periods for the remaining contract period. The number of option periods varies by contract, and there is no guarantee that an option period will be exercised. The right to exercise an option period is at the sole discretion of the U.S. government when we are the prime contractor or of the prime contractor when we are a subcontractor. The U.S. government may also extend the term of a program by issuing extensions or bridge contracts, typically for periods of one year or less.

Previous wording

Funded orders (different from funded backlog) represent orders for which funding was received during the period. We received funded orders of $2.7 billion during the six months ended July 3, 2026, which was an increase of $540.2 million compared to the six months ended June 27, 2025.

Current wording

Funded orders (different from funded backlog) represent orders for which funding was received during the period. We received funded orders of $4.1 billion during the nine months ended October 2, 2026, which was an increase of $0.8 billion compared to the nine months ended September 26, 2025.

Previous wording

The U.S. government’s investment in services and capabilities in response to changing security challenges creates a complex and fluid business environment for V2X and other firms in this market. The U.S. continues to face substantial fiscal and economic challenges in addition to a varying political environment which could affect funding. The pace and depth of U.S. government acquisition reform and cost savings initiatives, combined with increased industry competitiveness to win long-term positions on key programs, could add pressure to revenue levels and profit margins. However, the Company expects the U.S. government will continue to place a high priority on national security and will continue to invest in affordable solutions. V2X believes that its capabilities should help its clients increase efficiency, reduce costs, improve readiness, and strengthen national security and, as a result, continue to allow for long-term profitable growth in the business. Further, the DoW budget remains the largest defense budget in the world and management believes the Company's addressable portion of the DoW budget offers substantial opportunity for growth.

Current wording

The U.S. government’s investment in services and capabilities in response to changing security challenges creates a complex and fluid business environment for V2X and other firms in this market. The U.S. continues to face substantial fiscal and economic challenges in addition to a varying political environment which could affect funding. The pace and depth of U.S. government acquisition reform and cost savings initiatives, combined with increased industry competitiveness to win long-term positions on key programs, could add pressure to revenue levels and profit margins. However, we expect the U.S. government will continue to place a high priority on national security and will continue to invest in affordable solutions. We believe that our capabilities should help our clients increase efficiency, reduce costs, improve readiness, and strengthen national security and, as a result, continue to allow for long-term profitable growth in our business. Further, the DoW budget remains the largest defense budget in the world and our management believes our addressable portion of the DoW budget offers substantial opportunity for growth.

Previous wording

The U.S. government's Fiscal Year (FY) begins on October 1 and ends on September 30. On February 3, 2026, the President signed into law, H.R. 7148, the "Consolidated Appropriations Act, 2026," to end a partial government shutdown and fund the DoW and other federal agencies through FY 2026. The defense funding bill includes approximately $839 billion in appropriations. The OBBBA was signed into law by the President on July 4th, 2025, and allocates approximately $150 billion in mandatory funds to support defense and national security priorities that are available to be obligated through September 30, 2029. See Note 9, Income Taxes, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion relating to the OBBBA.

Current wording

The U.S. government's Fiscal Year (FY) begins on October 1 and ends on September 30. On February 3, 2026, the President signed into law, H.R. 7148, the "Consolidated Appropriations Act, 2026," to end a partial government shutdown and fund the DoW and other federal agencies through FY 2026. The defense funding bill includes approximately $839 billion in appropriations. The OBBBA was signed into law by the President on July 4, 2025, and allocates approximately $150 billion in mandatory funds to support defense and national security priorities that are available to be obligated through September 30, 2029. See Note 9, Income Taxes, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion relating to the OBBBA.

Previous wording

On April 21, 2026, the DoW released the President's FY 2027 defense budget which requests $1.45 trillion in total budgetary resources. While the FY 2027 budget request reflects a significant increase from FY 2026 levels, it has not yet been passed as law and we anticipate the federal budget will continue to be subject to debate and compromise shaped by, among other things, heightened political tensions, Congress, the debt ceiling, the global security environment, inflationary pressures, and other macroeconomic conditions. The result may shift funding priorities, which could have material impacts on our programs and defense spending broadly. Additionally, the Administration continues to assess government-wide procurement, staffing, and support activities, including the evaluation of mission priorities, acquisition methods, contract performance, and other factors, which could result in potential actions. Those actions remain uncertain and could result in impacts to our current and future financial performance and business prospects.

Current wording

On April 21, 2026, the DoW released the President's FY 2027 defense budget which requests $1.45 trillion in total budgetary resources. While the FY 2027 budget request reflects a significant increase from FY 2026 levels, it has not yet been passed as law. On September 2, 2026, a continuing resolution (CR) was enacted to provide funding for U.S. government operations, which includes DoW operations, through December 11, 2026. The CR generally funds U.S. government operations at FY 2026 funding levels. We anticipate the federal budget will continue to be subject to debate and compromise shaped by, among other things, heightened political tensions, Congress, the debt ceiling, the global security environment, inflationary pressures, and other macroeconomic conditions. The result may shift funding priorities, which could have material impacts on our programs and defense spending broadly. Additionally, the Administration continues to assess government-wide procurement, staffing, and support activities, including the evaluation of mission priorities, acquisition methods, contract performance, and other factors, which could result in potential actions. Those actions remain uncertain and could result in impacts to our current and future financial performance and business prospects.

Previous wording

While it is difficult to predict the specific course of future defense budgets, V2X believes the core functions the Company performs are mission-essential and spending to maintain readiness, improve performance, increase service life, lower cost, and modernize capabilities will continue to be a U.S. government priority. The Company's focus is on providing integrated solutions across the mission lifecycle that encompass (i) high impact readiness; (ii) integrated supply chain management; (iii) assured communications; (iv) mission solutions, including rapid response contingency efforts; and (v) platform renewal and modernization. The Company believes its capabilities enhance mission effectiveness, extend utility, lower cost, and improve security and mission outcomes. While customers may reduce the level of services required from us, the Company does not currently anticipate the complete elimination of these services, and the Company continues to focus on contract expansion and capturing new business opportunities.

Current wording

While it is difficult to predict the specific course of future defense budgets, we believe the core functions we perform are mission-essential and spending to maintain readiness, improve performance, increase service life, lower cost, and modernize capabilities will continue to be a U.S. government priority. Our focus is on providing integrated solutions across the mission lifecycle that encompass (i) high impact readiness; (ii) integrated supply chain management; (iii) assured communications; (iv) mission solutions, including rapid response contingency efforts; and (v) platform renewal and modernization. We believe our capabilities enhance mission effectiveness, extend utility, lower cost, and improve security and mission outcomes. While customers may reduce the level of services required from us, we do not currently anticipate the complete elimination of these services, and we continue to focus on contract expansion and capturing new business opportunities.

Previous wording

However, business conditions have become more challenging and uncertain due to macroeconomic and geopolitical conditions, including inflation and rising interest rates, as well as recent international events. For example, global hostilities could create additional demand for our products and services; however, any such demand, and the timing and extent of any incremental contract activity resulting from that demand, remains uncertain. Additionally, global hostilities could also impact our ability to deliver our products and services to customers. Further, we continue to closely monitor impacts to our business and operations in the Middle East, and the region at large due to the conflict in Iran. In addition, given the current level of inflation and geopolitical factors, the Company is monitoring the impact of rising costs on its active and future contracts and its financial results, and actively evaluating opportunities for cost reductions and deleveraging. The Company’s earnings and profitability may vary materially depending on the total mix of contracts. To date, the Company has not experienced broad-based increases from inflation or geopolitical hostilities, including as a result of tariffs, in the costs of its fixed-price and time and materials contracts that are material to the business. However, if the geopolitical conditions worsen or if the Company experiences greater than expected inflation in its supply chain and labor costs, then profit margins, and in particular, the profit margin from fixed-price and time and materials contracts, which represent a substantial portion of its contracts, could be adversely affected.

Current wording

However, business conditions have become more challenging and uncertain due to macroeconomic and geopolitical conditions, including inflation and rising interest rates, as well as recent international events. For example, global hostilities could create additional demand for our products and services; however, any such demand, and the timing and extent of any incremental contract activity resulting from that demand, remains uncertain. Additionally, global hostilities could also impact our ability to deliver our products and services to customers. Further, we continue to closely monitor impacts to our business and operations in the Middle East, and the region at large due to the conflict in Iran. In addition, given the current level of inflation and geopolitical factors, we are monitoring the impact of rising costs on our active and future contracts and our financial results, and actively evaluating opportunities for cost reductions and deleveraging. Our earnings and profitability may vary materially depending on the total mix of contracts. To date, we have not experienced broad-based increases from inflation or geopolitical hostilities, including as a result of tariffs, in the costs of our fixed-price and time and materials contracts that are material to our business. However, if the geopolitical conditions worsen or if we experience greater than expected inflation in our supply chain and labor costs, then profit margins, and in particular, our profit margin from fixed-price and time and materials contracts, which represent a substantial portion of our existing contracts, could be adversely affected.

Previous wording

The information provided above does not represent a complete list of trends and uncertainties that could impact the Company's business in either the near or long-term and should be considered along with the risk factors identified in Part I, "Item 1A. Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, and updated, as necessary, on subsequent Quarterly Reports on Form 10-Q, and the matters identified under the caption “Forward-Looking Statement Information" herein.

Current wording

The information provided above does not represent a complete list of trends and uncertainties that could impact our business in either the near or long-term and should be considered along with the risk factors identified in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025, and updated, as necessary, and the matters identified under the captions "Risk Factors" and “Forward-Looking Statement Information" herein.

Previous wording

Cost of revenue increased by $164.5 million, or 16.7%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025, consistent with the increase in revenue.

Current wording

Cost of revenue increased by $95.4 million, or 8.9%, for the three months ended October 2, 2026, as compared to the three months ended September 26, 2025, consistent with the increase in revenue.

Previous wording

SG&A expenses increased $30.8 million, or 35.6%, for the six months ended July 3, 2026 as compared to the six months ended June 27, 2025, primarily driven by higher operating costs associated with revenue growth, non-recurring integration initiatives, and expenses incurred to evaluate potential merger and acquisition opportunities as part of the Company's capital allocation strategy.

Current wording

SG&A expenses increased by $5.1 million, or 13.2%, for the three months ended October 2, 2026, as compared to the three months ended September 26, 2025, primarily driven by higher operating costs associated with revenue growth.

Previous wording

Operating income increased $0.9 million, or 1.6%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025. Operating income as a percentage of revenue was 4.3% for the three months ended July 3, 2026, compared to 4.9% for the three months ended June 27, 2025. The increase in operating income was primarily driven by the ramp up of several programs, as described above, partially offset by increased SG&A and corporate expenses.

Current wording

Operating income increased by $3.8 million, or 6.8%, for the three months ended October 2, 2026, as compared to the three months ended September 26, 2025. Operating income as a percentage of revenue was 4.7% for the three months ended October 2, 2026, as compared to 4.8% for the three months ended September 26, 2025. The increase in operating income was primarily driven by the increased revenue from several programs, as described above, partially offset by increased SG&A.

Previous wording

Aggregate cumulative adjustments increased operating income by $1.8 million for the three months ended July 3, 2026 and $1.4 million for the three months ended June 27, 2025. The aggregate cumulative adjustments for the three months ended July 3, 2026 and June 27, 2025 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

Current wording

Aggregate cumulative adjustments decreased operating income by $1.1 million for the three months ended October 2, 2026, and increased operating income by $2.5 million for the three months ended September 26, 2025. The aggregate cumulative adjustments for the three months ended October 2, 2026, and September 26, 2025, were related to changes in contract terms, program performance, customer changes in scope of work, and changes to estimates in the reported period.

Previous wording

Cost of revenue increased $375.0 million, or 19.5%, for the six months ended July 3, 2026 as compared to the six months ended June 27, 2025, consistent with the increase in revenue.

Current wording

Cost of revenue increased by $470.4 million, or 15.7%, for the nine months ended October 2, 2026, as compared to the nine months ended September 26, 2025, consistent with the increase in revenue.

Previous wording

SG&A expenses increased by $12.9 million, or 30.1%, for the three months ended July 3, 2026 as compared to the three months ended June 27, 2025, primarily driven by higher operating costs associated with revenue growth, non-recurring integration initiatives, and expenses incurred to evaluate potential merger and acquisition opportunities as part of the Company's capital allocation strategy.

Current wording

SG&A expenses increased by $35.9 million, or 28.7%, for the nine months ended October 2, 2026, as compared to the nine months ended September 26, 2025, primarily driven by higher operating costs associated with revenue growth, non-recurring integration initiatives, and expenses incurred to evaluate potential merger and acquisition opportunities as part of our capital allocation strategy.

Previous wording

Operating income increased $10.7 million, or 12.2%, for the six months ended July 3, 2026 as compared to the six months ended June 27, 2025. Operating income as a percentage of revenue was 3.9% for the six months ended July 3, 2026, compared to 4.2% for the six months ended June 27, 2025. The increase in operating income was primarily driven by the ramp up of several programs, as described above, partially offset by increased SG&A and corporate expenses.

Current wording

Operating income increased by $14.5 million, or 10.1%, for the nine months ended October 2, 2026, as compared to the nine months ended September 26, 2025. Operating income as a percentage of revenue was 4.2% for the nine months ended October 2, 2026, as compared to 4.4% for the nine months ended September 26, 2025. The increase in operating income was primarily driven by the increased revenue from several programs, as described above, partially offset by increased SG&A and corporate expenses.

Previous wording

Aggregate cumulative adjustments increased operating income by $0.7 million and $5.6 million for the six months ended July 3, 2026 and June 27, 2025, respectively. The aggregate cumulative adjustments for the six months ended July 3, 2026 and June 27, 2025 related to changes in contract terms, program performance, customer changes in scope of work and changes to estimates in the reported period.

Current wording

Aggregate cumulative adjustments decreased operating income by $0.4 million for the nine months ended October 2, 2026, and increased operating income by $8.1 million for the nine months ended September 26, 2025. The aggregate cumulative adjustments for the nine months ended October 2, 2026, and September 26, 2025, were related to changes in contract terms, program performance, customer changes in scope of work, and changes to estimates in the reported period.

Previous wording

The Company recorded a $1.7 million loss on extinguishment of debt for the six months ended July 3, 2026 and a $2.5 million loss on extinguishment of debt for the six months ended June 27, 2025. For further discussion see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements.

Current wording

The Company recorded a $1.7 million loss on extinguishment of debt for the nine months ended October 2, 2026, and a $2.5 million loss on extinguishment of debt for the nine months ended September 26, 2025. For further discussion see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements.

Previous wording

Interest expense, net for the three and six months ended July 3, 2026 and June 27, 2025 was as follows:

Current wording

Interest expense, net for the three and nine months ended October 2, 2026, and September 26, 2025, was as follows:

Previous wording

Interest income is related to interest earned on cash and cash equivalents. Interest expense is related to borrowings under our senior secured credit facilities, with the amortization of debt issuance costs, and derivative instruments used to hedge a portion of exposure to interest rate risk. Interest expense, net decreased $5.5 million for the six months ended July 3, 2026 compared to the six months ended June 27, 2025 primarily due to a decrease in our debt balance and increase in interest income. For further discussion of these amendments see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

Interest income is related to interest earned on cash and cash equivalents. Interest expense is related to borrowings under our senior secured credit facilities, with the amortization of debt issuance costs, and derivative instruments used to hedge a portion of exposure to interest rate risk. Interest expense, net decreased $9.9 million for the nine months ended October 2, 2026, compared to the nine months ended September 26, 2025, primarily due to a decrease in our debt balance and increase in interest income. For further discussion see Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

During the three and six months ended July 3, 2026, we incurred purchase discount fees, net of servicing fees, of $2.2 million and $4.6 million, respectively, related to the sale of accounts receivable through the MARPA Facility. During the three and six months ended June 27, 2025, we incurred purchase discount fees, net of servicing fees, of $2.6 million and $5.1 million, respectively, related to the sale of accounts receivable through the MARPA Facility. For a discussion of the MARPA Facility, see Note 12, Sale of Receivables, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Current wording

During the three and nine months ended October 2, 2026, we incurred purchase discount fees, net of servicing fees, of $2.4 million and $7.0 million, respectively, related to the sale of accounts receivable through the MARPA Facility. During the three and nine months ended September 26, 2025, we incurred purchase discount fees, net of servicing fees, of $3.0 million and $8.1 million, respectively, related to the sale of accounts receivable through the MARPA Facility. For a discussion of the MARPA Facility, see Note 12, Sale of Receivables, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

Previous wording

We recorded income tax expense of $7.7 million and $7.1 million for the three months ended July 3, 2026 and June 27, 2025, respectively, representing effective income tax rates of 23.1% and 24.0%, respectively. For the six months ended July 3, 2026 and June 27, 2025, we recorded income tax expense of $12.3 million and $9.0 million, respectively, representing effective income tax rates of 21.6% and 22.8%, respectively. The effective income tax rates vary from the federal statutory rate of 21.0% mainly due to state and foreign taxes, Net CFC Tested Income (NCTI), disallowed compensation deduction under Internal Revenue Code Section 162(m), offset by foreign derived intangible income deduction, available deductions not included in book income and income tax credits.

Current wording

We recorded income tax expense of $9.5 million and $8.1 million for the three months ended October 2, 2026, and September 26, 2025, respectively, representing effective income tax rates of 22.9% and 24.9%, respectively. For the nine months ended October 2, 2026, and September 26, 2025, we recorded income tax expense of $21.8 million and $17.2 million, respectively, representing effective income tax rates of 22.2% and 23.7%, respectively. The effective income tax rates vary from the federal statutory rate of 21.0% mainly due to state and foreign taxes, Net Controlled Foreign Corporation Tested Income (NCTI), disallowed compensation deduction under Internal Revenue Code Section 162(m), offset by foreign derived intangible income deduction, available deductions not included in book income and income tax credits.

Previous wording

We are not aware of any known trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, a material decrease in our liquidity. In addition, other than items discussed, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix of such resources.

Current wording

We are not aware of any known trends, demands, commitments, events or uncertainties that will result in, or that are reasonably likely to result in, a material decrease in our liquidity. In addition, other than items discussed herein, there are no known material trends, favorable or unfavorable, in our capital resources and no expected material changes in the mix of such resources.

Previous wording

Our major source of funding for 2026 and beyond is expected to be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt. We believe we have sufficient liquidity to fund operations, acquisitions, capital expenditures and scheduled debt repayments. We expect to fund our ongoing working capital, capital expenditure and financing requirements and pursue additional growth through new business development and potential acquisition opportunities by using cash flows from operations, cash on hand, credit facilities, and access to capital markets. When necessary, our revolving credit facility and MARPA Facility are available to satisfy short-term working capital requirements. See Note 5, Debt, and Note 12, Sale of Receivable, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Current wording

Our major source of funding for 2026 and beyond is expected to be our operating cash flow, our existing balances of cash and cash equivalents and proceeds from any issuances of debt or equity. We believe we have sufficient liquidity to fund operations, acquisitions, capital expenditures and scheduled debt repayments. We expect to fund our ongoing working capital, capital expenditure and financing requirements and pursue additional growth through new business development and potential acquisition opportunities by using cash flows from operations, cash on hand, credit facilities, and access to capital markets. When necessary, our revolving credit facility and MARPA Facility are available to satisfy short-term working capital requirements. See Note 5, Debt, and Note 12, Sale of Receivables, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

On January 2, 2025, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $899.8 million (the New Term Loans), in which the New Term Loans replace or refinance in full all the existing term loans outstanding under the First Lien Term Tranche in effect immediately prior to the amendment (the Existing Term Loans). See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Current wording

On January 2, 2025, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $899.8 million (the 2025 New Term Loans), in which the 2025 New Term Loans replaced or refinanced in full all the existing term loans outstanding under the First Lien Term Tranche in effect immediately prior to the amendment. See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

On March 31, 2025, the 2023 Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $237.5 million (the 2025 Term Loans), which replace or refinance in full all the existing term loans outstanding under the 2023 Credit Agreement in effect immediately prior to the amendment. The 2023 Credit Agreement was further amended to provide a new tranche of revolving credit commitments in an aggregate original principal amount of $500.0 million (the 2025 Revolver), which replace or refinance in full all the existing revolving credit loans and commitments outstanding under the 2023 Credit Agreement in effect immediately prior to the amendment. See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Current wording

On March 31, 2025, the 2023 Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $237.5 million (the 2025 Term Loans), which replaced or refinanced in full all the existing term loans outstanding under the 2023 Credit Agreement in effect immediately prior to the amendment. The 2023 Credit Agreement was further amended to provide a new tranche of revolving credit commitments in an aggregate original principal amount of $500.0 million (the 2025 Revolver), which replaced or refinanced in full all the existing revolving credit loans and commitments outstanding under the 2023 Credit Agreement in effect immediately prior to the amendment. See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

On May 29, 2026, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $868.5 million (the New Term Loans), in which the New Term Loans replace or refinance in full all the existing term loans outstanding under the First Lien Term Tranche in effect immediately prior to the amendment (the Existing Term Loans). The loans under the First Lien Credit Agreement, as amended (the First Lien Credit Agreement), amortize in an amount equal to approximately $2.2 million per quarter through September 30, 2030, with the balance of $829.4 million due on December 6, 2030. The replacement of the Existing Term Loans with the New Term Loans resulted in a loss on extinguishment of debt of $1.7 million in the Condensed Consolidated Statement of Income for the six months ended July 3, 2026. See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Current wording

On May 29, 2026, the First Lien Credit Agreement was amended to provide, among other things, a new tranche of term loans in an aggregate original principal amount of $868.5 million (the New Term Loans), in which the New Term Loans replaced or refinanced in full all the existing term loans outstanding under the First Lien Term Tranche in effect immediately prior to the amendment (the Existing Term Loans). The loans under the First Lien Credit Agreement, as amended (the First Lien Credit Agreement), amortize in an amount equal to approximately $2.2 million per quarter through September 30, 2030, with the balance of $829.4 million due on December 6, 2030. The replacement of the Existing Term Loans with the New Term Loans resulted in a loss on extinguishment of debt of $1.7 million in the Condensed Consolidated Statements of Income for the nine months ended October 2, 2026. See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

As of July 3, 2026, the carrying value of the First Lien Credit Agreement was $866.4 million, excluding deferred discount and unamortized deferred financing costs of $20.9 million. The estimated fair value of the First Lien Credit Agreement as of July 3, 2026 was $864.2 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2).

Current wording

As of October 2, 2026, the carrying value of the First Lien Credit Agreement was $864.2 million, excluding deferred discount and unamortized deferred financing costs of $19.7 million. The estimated fair value of the First Lien Credit Agreement as of October 2, 2026, was $863.1 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2).

Previous wording

As of July 3, 2026, there were no outstanding borrowings and $14.9 million of outstanding letters of credit under the 2025 Revolver. Availability under the 2025 Revolver was $485.1 million as of July 3, 2026. Unamortized deferred financing costs related to the 2025 Revolver of $3.5 million are included in other non-current assets in the Condensed Consolidated Balance Sheets. As of July 3, 2026, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate.

Current wording

As of October 2, 2026, there were no outstanding borrowings and $15.3 million of outstanding letters of credit under the 2025 Revolver. Availability under the 2025 Revolver was $484.7 million as of October 2, 2026. Unamortized deferred financing costs related to the 2025 Revolver of $3.3 million are included in other non-current assets in the Condensed Consolidated Balance Sheets. As of October 2, 2026, the fair value of the 2025 Revolver approximated the carrying value because the debt bears a floating interest rate.

Previous wording

As of July 3, 2026, the carrying value of the 2025 Term Loans was $220.1 million, excluding unamortized deferred financing costs of $1.5 million. The estimated fair value of the 2025 Term Loans as of July 3, 2026 was $220.2 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2). See Note 5. Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Current wording

As of October 2, 2026, the carrying value of the 2025 Term Loans was $208.6 million, excluding unamortized deferred financing costs of $1.4 million. The estimated fair value of the 2025 Term Loans as of October 2, 2026, was $208.9 million. The fair value is based on observable inputs of interest rates that are currently available to us for debt with similar terms and maturities for non-public debt (Level 2). See Note 5, Debt, in the Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for further discussion.

Previous wording

The cash presented on the Condensed Consolidated Balance Sheets consists of cash held by our wholly owned U.S. and international subsidiaries. Approximately $57.1 million of our $214.3 million in cash, cash equivalents and restricted cash as of July 3, 2026 is held by foreign subsidiaries and is not available to fund U.S. operations unless repatriated. We do not currently expect to repatriate undistributed earnings of foreign subsidiaries. We expect our U.S. domestic cash resources will be sufficient to fund our U.S. operating activities and cash commitments for financing activities.

Current wording

The cash presented on the Condensed Consolidated Balance Sheets consists of cash held by our wholly owned U.S. and international subsidiaries. Approximately $48.6 million of our $265.1 million in cash, cash equivalents and restricted cash as of October 2, 2026, is held by foreign subsidiaries and is not available to fund U.S. operations unless repatriated. We do not currently expect to repatriate undistributed earnings of foreign subsidiaries. We expect our U.S. domestic cash resources will be sufficient to fund our U.S. operating activities and cash commitments for financing activities.

Previous wording

Cash, accounts receivable, unbilled receivables, and accounts payable are the principal components of the Company's working capital and are generally driven by revenue with other short-term fluctuations related to payment practices by customers, sales of accounts receivable through the MARPA Facility and the timing of billings. Our receivables reflect amounts billed to customers, as well as the revenue that was recognized in the preceding month, which is normally billed the month following each balance sheet date. On May 28, 2026, the Government of Greenland drew $4.3 million on a letter of credit held by the Company related to prior year tax claims, which the Company has appealed. The Company has recorded this withdrawal by the Government of Greenland as receivables on the Company's Condensed Consolidated Balance Sheets as management currently believes that there is reasonable likelihood of this amount being recoverable.

Current wording

Cash, accounts receivable, unbilled receivables, and accounts payable are the principal components of our working capital and are generally driven by revenue with other short-term fluctuations related to payment practices by customers, sales of accounts receivable through the MARPA Facility and the timing of billings. Our receivables reflect amounts billed to customers, as well as the revenue that was recognized in the preceding month, which is normally billed the month following each balance sheet date. On May 28, 2026, the Government of Greenland drew $4.3 million on a letter of credit held by us related to prior year tax claims, which we have appealed. We have recorded this withdrawal by the Government of Greenland within other non-current assets on our Condensed Consolidated Balance Sheets, as management currently believes that there is reasonable likelihood of this amount being recoverable.

Previous wording

Net cash used in operating activities for the six months ended July 3, 2026 consisted of net cash outflows from the sale of receivables through the MARPA Facility of $142.9 million and net cash outflows in working capital accounts of $85.0 million, partially offset by non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $74.4 million, net income of $44.5 million, and net cash inflows in other long-term assets and liabilities of $0.6 million.

Current wording

Net cash used in operating activities for the nine months ended October 2, 2026, consisted of net cash outflows from the sale of receivables through the MARPA Facility of $133.0 million, net cash outflows in working capital accounts of $83.2 million, and net cash outflows in other long-term assets and liabilities of $12.6 million, partially offset by non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $111.4 million, and net income of $76.4 million.

Previous wording

Net cash used in operating activities for the six months ended June 27, 2025 consisted of net cash outflows in working capital accounts of $161.7 million and net cash outflows in other long-term assets and liabilities of $7.8 million, partially offset by non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $63.0 million, net income of $30.5 million and cash inflows from the sale of receivables through the MARPA Facility of $9.0 million.

Current wording

Net cash used in operating activities of $27.5 million for the nine months ended September 26, 2025, consisted of net cash outflows in working capital accounts of $180.6 million and other long-term assets and liabilities of $10.9 million, partially offset by non-cash net income adjusting items (primarily consisting of depreciation and amortization) of $91.9 million, net proceeds from the sale of receivables through the MARPA Facility of $17.0 million, and net income of $55.1 million.

Previous wording

Net cash used in investing activities for the six months ended July 3, 2026 consisted of $3.4 million of net capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.

Current wording

Net cash used in investing activities for the nine months ended October 2, 2026, consisted of $6.7 million of net capital expenditures for the purchase of software and hardware, vehicles and equipment related to ongoing operations.