Avantor, Inc.

1. Nature of operations and presentation of financial statements

We are a global manufacturer and distributor that provides products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year.

We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies.

Principles of consolidation

All intercompany balances and transactions have been eliminated from the financial statements.

Use of estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates.

2. New accounting standards

Income Taxes

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which amends the existing income taxes guidance (ASC Topic 740) to require additional disclosures surrounding annual rate reconciliation, income taxes paid and other income tax related disclosures.

The amendments in this update are effective for annual periods beginning after December 15, 2024. The Company will first apply this standard to its annual disclosures for the year ending December 31, 2025, which we expect will result in additional disclosures in the Company’s income taxes note to its financial statements, primarily through additional disclosures surrounding the annual rate reconciliation and income taxes paid.

Disaggregation of Income Statement Expenses (DISE)

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (DISE), requiring additional disclosure of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

The amendments in this update are effective for annual periods beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of this standard on our financial statements.

Other

There were no other new accounting standards that we expect to have a material impact on our financial position or results of operations upon adoption.

3. Earnings per share

The following table presents the reconciliation of basic and diluted loss per share for the three and nine months ended September 30, 2025:

The following table presents the reconciliation of basic and diluted earnings per share for the three and nine months ended September 30, 2024:

Certain stock options and RSUs are not included in the diluted earnings (loss) per share calculation when the effect would have been anti-dilutive. The number of anti-dilutive shares not included were 15.5 million and 14.5 million for the three and nine months ended September 30, 2025, respectively, and 4.7 million and 6.1 million for the three and nine months ended September 30, 2024, respectively.

4. Segment financial information

Our reporting segment structure consists oftwo reportable business segments: Laboratory Solutions and Bioscience Production. Within our reportable segments, we sell materials & consumables, equipment & instrumentation and services & specialty procurement to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries. Corporate costs are managed on a standalone basis, certain of which are allocated to our reportable segments.

Adjusted Operating Income is used by the CODM as the measure to evaluate segment profitability. The CODM uses this metric predominantly in the annual budget, forecasting and performance monitoring processes.

The following table presents information by reportable segment:

1. Adjusted cost of sales excludes $0.1 million and $8.4 million of non-GAAP adjustments, for the three months ended September 30, 2025 and September 30, 2024, respectively, and $0.4 million and $11.1 million of non-GAAP adjustments for the nine months ended September 30, 2025 and September 30, 2024, respectively, primarily related to restructuring and severance charges, as described in more detail within the non-GAAP reconciliation presented below.

2. Adjusted operating expenses excludes $886.0 million and $141.8 million of non-GAAP adjustments for the three months ended September 30, 2025 and September 30, 2024, respectively and $1,104.5 million and $352.7 million of non-GAAP adjustments for the nine months ended September 30, 2025 and September 30, 2024, respectively, primarily related to amortization, impairment charges, transformation expenses, restructuring and severance charges, as described in more detail within the non-GAAP reconciliation presented below.

The following table presents depreciation and amortization by reportable segment:

Information about our segments’ assets and capital expenditures is not disclosed because this information is not provided to our CODM.

The amounts above exclude inter-segment activity because it is not material. All of the net sales presented for each segment are from external customers.

The following table presents the reconciliation of Adjusted Operating Income, our segment profitability measure, to (Loss) income before income taxes, the nearest measurement under GAAP:

1. Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. These expenses represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

2. Represents charges and legal costs, net of recoveries, in connection with certain litigation and other contingencies that are unrelated to our core operations and not reflective of on-going business and operating results.

3. Represents other stock-based compensation expense (benefit), a purchase price adjustment related to the sale of our Clinical Services business in 2024, and $6.1 million of severance and transition costs associated with the replacement of our Chief Executive Officer.

4. As described in note 7.

The following table presents net sales by product category:

5. Supplemental disclosures of cash flow information

The following table presents supplemental disclosures of cash balances:

6. Inventory

The following table presents the components of inventory:

7. Goodwill and other intangible assets

Goodwill

We review goodwill for impairment annually on October 1st, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

As a result of sustained decreases in our publicly quoted share price and market capitalization as well as changes in the operating results of our Distribution reporting unit, formerly referred to as our Buy Sell Lab reporting unit, we conducted an interim test of our goodwill as of September 30, 2025.

We estimate the fair value of reporting units using a weighted average of two valuation methods based on a discounted cash flows method and a guideline public company method. These valuation methods require management to make various assumptions, including, but not limited to, future profitability, cash flows, including revenues, gross margin, SG&A expenses, capital expenditures, and investments in debt free net working capital, current market assumptions for the discount rates, weighting of valuation methods and the selection of comparable publicly traded companies. Variations in any of these assumptions could result in materially different calculations of fair value.

Based on the results of the impairment test, the carrying amount of our Distribution reporting unit exceeded its fair value, resulting in a non-deductible, non-cash goodwill impairment charge of $785.0 million, which was recorded in the consolidated statement of operations for the three months ended September 30, 2025. We did not identify impairment of any other long-lived assets in this reporting unit. The remaining reporting units tested were not impaired, as their estimated fair values exceeded their respective carrying amounts as of the interim testing date.

Following the impairment charge, the carrying value of the Distribution reporting unit is equal to its estimated fair value. Recognition of additional impairment charges may be required in future periods if market conditions, projected results, or other valuation assumptions deteriorate further.

The following tables present changes in goodwill by reportable segment for the nine months ended September 30, 2025:

Other intangible assets

The following table presents the components of other intangible assets:

1. As of September 30, 2025 and December 31, 2024, accumulated impairment losses on Customer relationships were $65.9 million and on Other were $40.5 million, totaling $106.4 million.

2. Restructuring

The following table presents restructuring and severance expenses by plan:

Restructuring and severance charges are classified as SG&A expenses or cost of sales depending on the nature of the expense.

2024 restructuring program

The 2024 restructuring program is a part of the Company’s multi-year cost transformation initiative designed to right-size the Company’s cost base and optimize its footprint and organizational structure with a focus on driving cost improvement and productivity. No material charges have been incurred under this plan during 2025, and we do not expect to incur any material charges in the future.

The following table presents information about expenses under the 2024 restructuring program for the periods covered under this report in which the plan was active:

Other charges in the table above primarily relate to the write-downs of the carrying value of assets that we plan to dispose of under the program.

The following table presents changes to accrued employee severance and related expenses under the 2024 restructuring program, which are primarily classified as employee-related current liabilities:

9. Commitments and contingencies

Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products and litigation. The ultimate resolution of contingencies is subject to significant uncertainty, and it is reasonably possible that contingencies could be decided unfavorably against us.

Environmental laws and regulations

Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability. Matters to be disclosed are as follows:

The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. At September 30, 2025, our accrued obligation under this order is $2.3 million, which is calculated based on expected cash payments discounted at rates ranging from 3.6% to 4.8% between 2025 and 2045. The undiscounted amount of that obligation is $3.5 million. We are indemnified against any losses incurred in this matter as stipulated through the agreement and guaranty referenced in our Annual Report.

In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At September 30, 2025, our balance sheet includes a liability of $1.2 million for remediation and monitoring costs. That liability is estimated primarily on discounted expected remediation payments and is not materially different from its undiscounted amount.

Manufacture and sale of products

Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings.

We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements.

We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

Litigation

At September 30, 2025, there was no outstanding litigation that we believe would result in material losses if decided against us, and we do not believe that there are any unasserted matters that are reasonably possible to result in a material loss.

10. Debt

The following table presents information about our debt:

1. SOFR includes credit spread adjustment.

Interest expense, net includes interest income of $11.9 million and $26.8 million for the three months ended September 30, 2025 and September 30, 2024, respectively, and $30.8 million and $62.6 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. The interest income primarily relates to income on our interest rate swaps and cross currency swaps discussed in note 15.

Credit facilities

The following table presents availability under our credit facilities:

Capacity under the receivables facility is calculated as the lower of eligible borrowing base or facility limit of $400.0 million. Eligible borrowing base is determined as total available accounts receivable, less ineligible accounts receivable and other adjustments. At September 30, 2025, total available accounts receivable under the receivables facility were $500.6 million.

Senior secured credit facilities

On April 2, 2024, we amended the credit agreement to reprice the U.S. Dollar term loan under our senior secured credit facilities. Pursuant to the agreement, the interest rate applicable to the U.S. Dollar term loan reduced from SOFR plus a spread of 2.25% per annum to SOFR plus a spread of 2.00% per annum. The principal amount of U.S. Dollar term loan outstanding immediately prior to the amendment and the outstanding principal amount of U.S. Dollar term loan immediately following the amendment each totaled $772.4 million. The final stated maturity of the U.S. Dollar term loan remains November 8, 2027. The costs to complete the amendment were not material.

During the quarter ended September 30, 2025, we made an optional prepayment of $457.4 million on our 2.625% secured notes that mature on November 1, 2025. Loss on extinguishment of debt recorded in connection with this prepayment was immaterial.

Debt covenants

During the quarter ended September 30, 2025, our debt agreements included representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities included a financial covenant that would become applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. In that circumstance, we would not have been permitted to have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined in our credit agreements (as in effect during the quarter ended September 30, 2025). As we had not drawn more than 35% of our revolving credit facility in this period, this covenant was not applicable at September 30, 2025.

Transactions subsequent to period-end

In October 2025, we issued €400.0 million and €550.0 million of senior secured term loans, maturing in October 2030 and October 2032, respectively. These loans bear interest at EURIBOR plus 150 basis points and EURIBOR plus 250 basis points, respectively. The proceeds from these issuances, along with cash on hand, were used to repay our outstanding U.S. dollar term loans B-6, Euro term loans B-4, Euro term loans B-5, the remaining 2.625% secured notes, and the receivables facility.

In connection with the refinancing, we amended our revolving credit facility to obtain an additional $425.0 million in available funding, increasing the total availability under the facility to $1,400.0 million. The revolving credit facility will mature in October 2030. Both the newly issued senior secured term loans and the amended revolving credit facility include covenants that we consider to be usual and customary. As part of the refinancing and addition of the new €400.0 million term loan, (i) the leverage-based financial covenant in the credit facility agreement became a full-time financial maintenance covenant, whereas previously it had been a “springing covenant”, as described in the section above, and (ii) a new consolidated interest coverage ratio financial maintenance covenant was added to the credit facilities agreement, in both cases on usual and customary terms for facility agreements governing these types of senior secured term loan and revolving credit facilities.

Also in October 2025, we terminated both our receivables facility and outstanding interest rate swap with a notional value of $100.0 million. The costs associated with terminating these arrangements were not material.

In accordance with ASC 470-10-45-14 and ASC 855, we reclassified the 2.625% secured notes and Euro term loans B-5 from current liabilities to noncurrent liabilities in the accompanying balance sheet as of September 30, 2025, as the refinancing was completed prior to the issuance of these financial statements.

11. Accumulated other comprehensive income (loss)

The following table presents changes in the components of AOCI:

The reclassifications effects shown above were immaterial to the financial statements and were made to either cost of sales, SG&A expense, other income (expense) or interest expense depending upon the nature of the underlying transaction. The income tax effects in the three and nine months ended September 30, 2025 on foreign currency translation were due to our cross-currency swap discussed in note 15.

12. Stock-based compensation

The following table presents the components of stock-based compensation expense:

At September 30, 2025, unvested awards have remaining expense of $78.3 million to be recognized over a weighted average period of 1.6 years.

Stock options

The following table presents information about outstanding stock options:

During the nine months ended September 30, 2025, we granted stock options that have a contractual life often years and will vest annually over three years, subject to the recipient continuously providing service to us through each such date.

RSUs

The following table presents information about unvested RSUs:

During the nine months ended September 30, 2025, we granted RSUs that will vest annually overone tothree years, as specified in the terms of the underlying grant agreements, subject to the recipient continuously providing service to us throughout the vesting period. Certain of those awards contain performance and market conditions that impact the number of shares that will ultimately vest. We recorded expense on such awards of $(5.4) million and $1.8 million for the three months ended September 30, 2025 and September 30, 2024, respectively, and $1.6 million and $6.6 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. The expense reversal for the three months ended September 30, 2025 was primarily driven by the forfeiture of awards following the departure of certain executives.

13. Other income or expense, net

The following table presents the components of other income or expense, net:

Other income or expense for the nine months ended September 30, 2025 primarily relates to pension termination costs and the expected returns on defined benefit plan assets.

As described in our Annual Report, we approved the termination of one of our two U.S. Pension Plans in 2024. The pension liability for this plan was partially settled in December 2024 through lump sum distribution payments made to plan participants.

The remaining pension liability was settled in the first quarter of 2025, primarily through the purchase of annuity contracts totaling $97.7 million. As a result of the settlement, we recorded $16.3 million of pension termination costs for the nine months ended September 30, 2025, which were primarily recognized in other income or expense.

The remaining pension surplus from the plan, approximately $48.0 million, will be used by the Company as prescribed by applicable regulations to fund a Qualified Replacement Plan, which will primarily fund future contributions to the Avantor U.S. 401(k) defined contribution plan.

14. Income taxes

The following table presents the relationship between income tax expense and (loss) income before income taxes:

Income tax expense in the quarter is based upon the estimated income for the full year. The composition of the income in different countries and adjustments, if any, in the applicable quarterly periods influences our expense.

The relationship between pre-tax income and income tax expense is affected by the impact of losses for which we cannot claim a tax benefit, non-deductible expenses and other items that increase tax expense without a relationship to income, such as withholding taxes and changes with respect to uncertain tax positions.

The change in the effective tax rate for the three and nine months ended September 30, 2025, when compared to the three and nine months ended September 30, 2024, is primarily due to a goodwill impairment charge recorded in the third quarter of 2025 related to our Distribution reporting unit, as described in note 7, and a year-to-date shortfall in the tax deduction arising from the exercise of stock options, in comparison to the related tax expense previously taken on such instruments.

On July 4, 2025, the U.S. enacted H.R. 1, commonly referred to as the One Big Beautiful Bill Act (“Act”). As a result of the Act, we anticipate a reduction in our current cash tax obligations of approximately $40.0 million due to changes to several provisions, including the reinstatement of immediate expensing for domestic research and development expenditures, the extension of 100% bonus depreciation for qualified properties and the relaxation of limitations on the deductibility of business interest expense. The impact on income tax expense resulting from the Act is expected to be immaterial.

15. Derivative and hedging activities

Hedging instruments:

We engage in hedging activities to reduce our exposure to foreign currency exchange rates and interest rates. Our hedging activities are designed to manage specific risks according to our strategies, as summarized below, which may change from time to time. Our hedging activities consist of the following:

•Economic hedges —We are exposed to changes in foreign currency exchange rates on certain of our euro-denominated term loans and notes that move inversely from our portfolio of euro- denominated intercompany loans. The currency effects for these non-derivative instruments are recorded through earnings in the period of change and substantially offset one another;

•Other hedging activities —Certain of our subsidiaries hedge short-term foreign currency denominated business transactions, external debt and intercompany financing transactions using foreign currency forward contracts. These activities were not material to our consolidated financial statements.

Cash flow hedges of interest rate risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an immaterial amount will be reclassified as an increase to interest expense.

During the quarter ended September 30, 2024, the hedging relationship between our $750.0 million notional value interest rate swap and underlying hedged item became ineffective as the hedged forecast transaction was deemed no longer probable of occurring. Due to the ineffectiveness, hedge accounting was discontinued.

As of September 30, 2025, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

Effect of cash flow hedge accounting on AOCI

The table below presents the effect of cash flow hedge accounting on AOCI for the three and nine months ended September 30, 2025 and September 30, 2024.

Effect of cash flow hedge accounting on the income statement

The table below presents the effect of our derivative financial instruments on the statement of operations for the three and nine months ended September 30, 2025 and September 30, 2024.

Net investment hedges

We are exposed to fluctuations in foreign exchange rates on investments we hold in foreign entities, specifically our net investment in EUR functional currency consolidated subsidiaries, against the risk of changes in the EUR-USD exchange rate.

For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings in the event the hedged net investment is either sold or substantially liquidated.

As of September 30, 2025, we had the following outstanding foreign currency derivatives that were used to hedge its net investments in foreign operations:

As of December 31, 2024, we held a cross-currency swap with a notional amount of $750.0 million, maturing in April 2025. In April 2025, we completed a transaction to effectively amend and extend the cross-currency swap maturing in April 2025. The liability position of the original cross-currency swap was blended and extended into three separate cross-currency swap agreements, each with a notional amount of $250.0 million, maturing in April 2027, April 2028, and April 2029, respectively.

Effect of net investment hedges on AOCI and the income statement

The table below presents the effect of our net investment hedges on AOCI and the statement of operations for the three and nine months ended September 30, 2025 and September 30, 2024.

The Company did not reclassify any other deferred gains or losses related to cash flow hedges from accumulated other comprehensive income (loss) to earnings for the three and nine months ended September 30, 2025 and September 30, 2024 other than those mentioned above.

The table below presents the fair value of our derivative financial instruments as well as their classification on the Balance Sheet as of September 30, 2025 and December 31, 2024:

Non-derivative financial instruments which are designated as hedging instruments:

We designated all of our outstanding €400.0 million 3.875% senior unsecured notes, issued on July 17, 2020, and maturing on July 15, 2028, as a hedge of our net investment in certain of our European operations. For instruments that are designated and qualify as net investment hedges, the foreign currency transactional gains or losses are reported as a component of AOCI.

In October 2024, the Company de-designated these outstanding €400.0 million 3.875% senior unsecured notes as a hedge of our net investment in certain of our European operations. The de-designation had no impact on earnings as the accumulated gain on the net investment hedge is only reclassified into earnings upon a liquidation event or deconsolidation of a hedged foreign subsidiary.

The accumulated gain related to the foreign currency denominated debt previously designated as a net investment hedge classified in the foreign currency translation adjustment component of AOCI was $6.0 million as of September 30, 2025 and December 31, 2024.

The amount of loss related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive income or loss for the three and nine months ended September 30, 2025 and September 30, 2024 are presented below:

16. Financial instruments and fair value measurements

Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and debt.

Assets and liabilities for which fair value is only disclosed

The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1 measurement. The carrying amounts for trade accounts receivable and accounts payable approximated fair value due to their short-term nature and are Level 2 measurements.

The following table presents the gross amounts, which exclude unamortized deferred financing costs, and the fair values of debt instruments:

The fair values of debt instruments are based on standard pricing models that take into account the present value of future cash flows, and in some cases private trading data, which are Level 2 measurements.

Certain financial and non-financial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in specific circumstances, such as when indicators of impairment are present. As discussed in note 7, during the third quarter of 2025, goodwill associated with our Distribution reporting unit was determined to be impaired. As a result, the carrying amount was reduced to its estimated fair value of $3,500.0 million, resulting in an impairment charge of $785.0 million. We estimated the fair value of the Distribution reporting unit using Level 3 inputs under the fair value hierarchy, which included a discounted cash flow analysis.

17. Subsequent events

In October 2025, our Board of Directors authorized the repurchase of up to $500.0 million of our common stock, exclusive of fees, commissions and related transaction expenses. Repurchases may be funded through our available cash, borrowings under existing credit facilities or other financing arrangements approved by the Board of Directors. Management is authorized to repurchase our common stock on the open market or in privately negotiated transactions, through one or more Rule 10b5-1 trading plans, Rule 10b-18 repurchase programs, accelerated share repurchase programs, including any collateral arrangements, or a combination thereof. The timing, manner, price and amount of repurchases will be determined by management depending upon economic, market and other conditions. The repurchase program may be modified, suspended, or terminated at any time. Repurchases under the program will be held as treasury shares.