agilon health, inc.

Previous wording

Our business is transforming healthcare by empowering the primary care physicians (“PCPs”) to be the agent for change in the communities they serve. We believe that PCPs, with their intimate patient-physician relationships, are best positioned to drive meaningful change in quality, cost, and patient experience when provided with the right infrastructure and payment model. Through our combination of the agilon platform, a long-term partnership model with existing physician groups, and a growing network of like-minded physicians, we believe we are poised to revolutionize healthcare for seniors across communities throughout the United States. We believe our purpose-built model provides the necessary capabilities, capital, and business model for existing physician groups to create a Medicare-centric, globally capitated line of business. Our model operates by forming risk-bearing entities (“RBEs”) within local geographies, which enter into arrangements with payors providing for monthly payments to manage the total healthcare needs of our physician partners’ attributed patients (or, global capitation arrangements). The RBEs also contract with agilon to perform certain functions and enter into long-term professional service agreements with one or more anchor physician groups pursuant to which the anchor physician groups receive a base compensation rate and share in the savings from successfully improving quality of care and reducing costs.

Current wording

Our business is transforming healthcare by empowering primary care physicians (“PCPs”) to be the agent for change in the communities they serve. We believe that PCPs, with their intimate patient-physician relationships, are best positioned to drive meaningful change in quality, cost, and patient experience when provided with the right infrastructure and payment model. Through our combination of the agilon platform, a long-term partnership model with existing physician groups, and a growing network of like-minded physicians, we believe we are poised to revolutionize healthcare for seniors across communities throughout the United States. We believe our purpose-built model provides the necessary capabilities, capital, and business model for existing physician groups to create a Medicare-centric, globally capitated line of business. Our model operates by forming risk-bearing entities (“RBEs”) within local geographies, which enter into arrangements with payors providing for monthly payments to manage the total healthcare needs of our physician partners’ attributed patients (or, global capitation arrangements). The RBEs also contract with agilon to perform certain functions and enter into long-term professional service agreements with one or more anchor physician groups pursuant to which the anchor physician groups receive a base compensation rate and share in the savings from successfully improving quality of care and reducing costs.

Previous wording

MA members decreased 13% from March 31, 2025, which reflects previously disclosed market exits, as well as payor exits in certain markets resulting from a disciplined approach to contracting focused on profitability. Total members live on the agilon platform at March 31, 2026 include 426,300 MA members and 109,500 attributed CMS ACO Models (as defined below) beneficiaries.

Current wording

MA members decreased 12% from June 30, 2025, which reflects previously disclosed market exits, as well as payor exits in certain markets resulting from a disciplined approach to contracting focused on profitability. Total members live on the agilon platform at June 30, 2026 include 437,500 MA members and 112,200 attributed CMS ACO Models (as defined below) beneficiaries.

Previous wording

On March 30, 2026, we filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-25 reverse stock split of our issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each twenty-five shares of common stock issued and outstanding was automatically reclassified, combined, and converted into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to receive fractional shares automatically became entitled to receive cash in lieu of such fractional share. Proportional adjustments were made to the number of shares of common stock awarded and available for issuance under our equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of our outstanding stock options and other equity securities under our equity incentive plans. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock. All common stock, stock options, restricted stock units, and per share information presented within this Quarterly Report on From 10-Q have been adjusted to reflect the Reverse Stock Split on a retroactive basis for all periods presented.

Current wording

On March 30, 2026, we filed a Certificate of Amendment to our Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-25 reverse stock split of our issued and outstanding common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, each twenty-five shares of common stock issued and outstanding was automatically reclassified, combined, and converted into one share of common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who were otherwise entitled to receive fractional shares automatically became entitled to receive cash in lieu of such fractional share. Proportional adjustments were made to the number of shares of common stock awarded and available for issuance under our equity incentive plans, as well as the exercise price and the number of shares issuable upon the exercise or conversion of our outstanding stock options and other equity securities under our equity incentive plans. The Reverse Stock Split did not affect the number of authorized shares of common stock or the par value of the common stock. All common stock, stock options, restricted stock units, and per share information presented within this Quarterly Report on Form 10-Q have been adjusted to reflect the Reverse Stock Split on a retroactive basis for all periods presented.

Previous wording

As previously disclosed in our Current Report on Form 8-K filed on April 27, 2026, on April 24, 2026, the Company entered into an employment agreement with Tim O’Rourke, pursuant to which he will serve as the Company’s Chief Executive Officer and President, reporting to the Board of Directors, with an expected commencement date of May 7, 2026. Effective as of his commencement date, the Board also appointed Mr. O’Rourke to serve as a Class III director.

Current wording

As previously disclosed in our Current Report on Form 8-K filed on April 27, 2026, on April 24, 2026, the Company entered into an employment agreement with Tim O’Rourke, pursuant to which he began to serve as the Company’s Chief Executive Officer and President, reporting to the Board of Directors, on May 7, 2026. Effective as of his commencement date, the Board also appointed Mr. O’Rourke to serve as a Class III director.

Previous wording

(1)Represents physician compensation expense related to surplus sharing and other care management expenses that help to create medical cost efficiency. Includes costs in geographies that are in implementation and are not yet generating revenue and investments to grow existing markets. For the three months ended March 31, 2026 and 2025, costs incurred in implementing geographies were $0.6 million and $(1.2) million, respectively.

Current wording

(1)Represents physician incentive expense related to surplus sharing and other care management expenses that help to create medical cost efficiency. Includes costs in geographies that are in implementation and are not yet generating revenue and investments to grow existing markets. For the three months ended June 30, 2026 and 2025, costs incurred in implementing geographies were $0.7 million and $0.2 million, respectively. For the six months ended June 30, 2026 and 2025, costs incurred in implementing geographies were $1.3 million and $(1.0) million, respectively.

Previous wording

Medical services revenue constitutes substantially all our total revenue for the three months ended March 31, 2026 and 2025.

Current wording

Medical services revenue constitutes substantially all our total revenue for the three and six months ended June 30, 2026 and 2025.

Previous wording

Other medical expenses include: (i) partner physician compensation expense and (ii) other provider costs. Partner physician compensation expense represents obligations to our physician partners corresponding to a portion of the surplus generated in our geographies, which is a function of medical services revenues less the sum of medical services expenses, other provider costs and market operating costs, for the respective geography. Physician payment obligations are reconciled quarterly, and settlement payments are typically issued to providers on an annual basis in arrears, with interim payments issued periodically. Other provider costs include payments to support physician-patient engagement, certain other medical costs, and other care management expenses that help to create medical cost efficiency. Other provider costs include costs incurred for geographies that are in implementation and are not yet generating revenue.

Current wording

Other medical expenses include: (i) partner physician incentive expense and (ii) other provider costs. Partner physician incentive expense represents obligations to our physician partners corresponding to a portion of the surplus generated in our geographies, which is a function of medical services revenues less the sum of medical services expenses, other provider costs and market operating costs, for the respective geography. Physician payment obligations are reconciled quarterly, and settlement payments are typically issued to providers on an annual basis in arrears, with interim payments issued periodically. Other provider costs include payments to support physician-patient engagement, certain other medical costs, and other care management expenses that help to create medical cost efficiency. Other provider costs include costs incurred for geographies that are in implementation and are not yet generating revenue.

Previous wording

Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025

Current wording

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

Previous wording

Medical services revenue decreased by $111.3 million, or 7%, for the three months ended March 31, 2026 compared to the same period in 2025. The medical services revenue decrease was driven by market exits, as well as payor exits resulting from our disciplined contracting initiatives. The average MA membership decline of 13% was affected by our measured approach to growth, previously disclosed market exits which were finalized as of January 1, 2026, and payor exits in certain markets which were a result of our disciplined and profitability-focused contracting efforts. The decline in medical services revenue was partially offset by more constructive rates for 2026 from both CMS funding driven by higher premium yield, increased expectations for risk adjustment contribution, more favorable percentage of premium as a result of payor contract negotiations, and a new payor relationship in an existing geography.

Current wording

Medical services revenue increased by $100.9 million, or 7%, for the three months ended June 30, 2026 compared to the same period in 2025. The increase in medical services revenue for the three months ended June 30, 2026 was driven by higher premium yield as a result of constructive rates for 2026 from CMS funding, increased expectations for risk adjustment contribution, more favorable percentage of premium as a result of payor contract negotiations, and a new payor relationship in an existing geography. During the three months ended June 30, 2026, PMPM capitation rates increased 19% compared to the same period in 2025. The increase in medical services revenue was partially offset by an average MA membership decline of 10% as a result of our measured approach to growth, previously disclosed market exits which were finalized as of January 1, 2026, and payor exits in certain markets which were a result of our disciplined and profitability-focused contracting efforts.

Previous wording

Medical services expense decreased by $132.2 million, or 9%, for the three months ended March 31, 2026 compared to the same period in 2025 due primarily to a decline in average MA membership of 13%, which was affected by our measured approach to growth, previously disclosed market exits which were finalized as of January 1, 2026, and payor exits in certain markets which were a result of our disciplined and profitability-focused contracting efforts. Additionally, medical services expense benefited from positive claims development in the second half of 2025. The decline in MA membership was partially offset by an increase in average medical services expense per member of 5% primarily from higher cost trends. Based on our current census data, cost trends for the three months ended March 31, 2026 remained in line with what has been stated by our payor partners and others in our industry.

Current wording

Medical services expense decreased by $281.2 million, or 10%, for the six months ended June 30, 2026 compared to the same period in 2025 due primarily to a decline in average MA membership of 12% as a result of our measured approach to growth, previously disclosed market exits which were finalized as of January 1, 2026, and payor exits in certain markets which were a result of our disciplined and profitability-focused contracting efforts. Additionally, medical services expense for the six months ended June 30, 2026 benefited from positive claims development from 2025. The decline in MA membership was partially offset by an increase in average medical services expense per member of 2% primarily from higher year-over-year cost trends in 2026. Based on our current census data, cost trends for the six months ended June 30, 2026 remained in line with what has been stated by our payor partners and others in our industry.

Previous wording

Other medical expenses increased by $5.6 million, or 7%, for the three months ended March 31, 2026 compared to the same period in 2025. Partner physician incentive expense, which is primarily a function of medical services revenues less the sum of medical services expenses, increased by $14.5 million to $58.5 million in 2026 compared to $44.0 million in the same period in 2025 as a result of the higher margins generated in certain of our geographies during 2026, which were a result of our disciplined and profitability-focused contracting efforts. Other provider costs decreased by $8.9 million to $27.3 million in 2026 compared to $36.2 million in the same period in 2025 primarily as a result of a decline in additional compensation to support physician-patient engagement and other care management expenses.

Current wording

Other medical expenses increased by $89.2 million for the three months ended June 30, 2026 compared to the same period in 2025. Partner physician incentive expense, which is primarily a function of medical services revenues less the sum of medical services expenses, increased by $94.6 million to $59.7 million in 2026 compared to $(34.9) million in the same period in 2025 as a result of the higher margins generated in certain of our geographies during 2026, which were a result of our disciplined and profitability-focused contracting efforts, compared to losses generated in certain of our geographies during the same period in 2025. Other provider costs decreased by $5.4 million to $31.7 million in 2026 compared to $37.1 million in the same period in 2025 primarily as a result of a decline in additional compensation to support physician-patient engagement and other care management expenses.

Previous wording

General and administrative expenses decreased $11.7 million, or 18%, for the three months ended March 31, 2026 compared to the same period in 2025. Operating costs to support our live geographies and enterprise functions (platform support costs) decreased to $37.6 million in 2026, compared to $44.2 million in the same period in 2025 as a result of our cost management initiatives. Investments to support geography entry decreased to $1.7 million in 2026, compared to $6.6 million in the same period in 2025 due to decreased costs associated with our geographies that are expected to become operational in subsequent calendar years and the expansion within existing geographies. Stock-based compensation expense decreased $10.5 million for the three months ended March 31, 2026, compared to the same period in 2025 primarily as the performance conditions on certain performance-based equity awards were deemed not probable, and thus the related costs were reversed. Costs incurred for severance and transaction-related costs increased by $10.3 million to $8.7 million in 2026 compared to $(1.6) million in the same period in 2025 as a result of our cost management initiatives.

Current wording

General and administrative expenses increased $20.5 million, or 17%, for the six months ended June 30, 2026 compared to the same period in 2025. Operating costs to support our live geographies and enterprise functions (platform support costs) decreased to $80.3 million in 2026, compared to $81.7 million in the same period in 2025 as a result of our cost management initiatives. Operating costs to support our live geographies and enterprise functions as a percentage of revenue remain flat at 3% for the six months ended June 30, 2026 compared to the same period in 2025. Investments to support geography entry decreased to $4.6 million in 2026, compared to $10.8 million in the same period in 2025 due to decreased costs associated with the expansion within existing geographies. Stock-based compensation expense decreased $2.0 million for the six months ended June 30, 2026, compared to the same period in 2025 primarily as the performance conditions on certain performance-based equity awards were deemed not probable, and thus the related costs were reversed. Costs incurred for severance and transaction-related costs increased by $30.1 million to $27.7 million in 2026 compared to $(2.4) million in the same period in 2025 as a result of our cost management initiatives.

Previous wording

Income (loss) from equity method investments remained relatively flat for the three months ended March 31, 2026 compared to the same period in 2025. Our CMS ACO Models investees recognized an increase in operating expenses during the three months ended March 31, 2026 compared to the same period in 2025 as a result of additional services we provided, which began in the fourth quarter of 2025. The decrease in income (loss) from equity method investments was partially offset by an increase in gross profit from our CMS ACO Models investees during the three months ended March 31, 2026 compared to the same period in 2025.

Current wording

Income (loss) from equity method investments decreased $13.9 million to $4.1 million for the six months ended June 30, 2026 compared to $18.1 million in the same period in 2025. Our CMS ACO Models investees recognized an increase in operating expenses during the six months ended June 30, 2026 compared to the same period in 2025 as a result of additional services we provided, which began in the fourth quarter of 2025. The decrease in income (loss) from equity method investments was partially offset by an increase in gross profit from our CMS ACO Models investees during the six months ended June 30, 2026 compared to the same period in 2025.

Previous wording

Other income (expense), net increased by $6.8 million, or 73%, for the three months ended March 31, 2026 compared to the same period in 2025 primarily from the increase in income related to additional services rendered to our CMS ACO Models investments recognized beginning in the fourth quarter of 2025.

Current wording

Other income (expense), net increased by $7.1 million, or 91%, for the three months ended June 30, 2026 compared to the same period in 2025 primarily from the increase in income related to additional services rendered to our CMS ACO Models investments recognized beginning in the fourth quarter of 2025.

Previous wording

Total discontinued operations relate to the sale of our Hawaii operations in October 2023. Total discontinued operations for the three months ended March 31, 2026 and 2025 relate to the release of a contingent obligation from our Hawaii operations.

Current wording

Total discontinued operations relate to the sale of our Hawaii operations in October 2023. Total discontinued operations for the six months ended June 30, 2026 and 2025 relate to the release of a contingent obligation from our Hawaii operations.

Previous wording

As of March 31, 2026, we had cash and cash equivalents and restricted cash of $211.6 million and investments in marketable securities of $91.4 million.

Current wording

As of June 30, 2026, we had cash and cash equivalents and restricted cash of $178.8 million and investments in marketable securities of $78.4 million.

Previous wording

From time to time, we may incur operating losses and may generate negative cash flows from operations. As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business. Our primary uses of cash include payments for medical claims and other medical expenses, including physician compensation expense, general and administrative expenses, costs associated with the development of new geographies and expansion of existing geographies, debt service and capital expenditures. Final reconciliation and receipt of amounts due from payors are typically settled in arrears, following completion of the contractual program year.

Current wording

From time to time, we may incur operating losses and may generate negative cash flows from operations. As a result, we may require additional capital resources in the future to execute strategic initiatives to grow our business. Our primary uses of cash include payments for medical claims and other medical expenses, including partner physician incentive expense, general and administrative expenses, costs associated with the development of new geographies and expansion of existing geographies, debt service and capital expenditures. Final reconciliation and receipt of amounts due from payors are typically settled in arrears, following completion of the contractual program year.

Previous wording

Our ability to pay dividends to holders of our common stock is significantly limited as a practical matter by our growth plans as well as the Credit Facility insofar as we may seek to pay dividends out of funds made available to us by agilon health management, inc. or its subsidiaries because the Credit Facility restricts agilon health management, inc.’s ability to pay dividends or make loans to us. The borrower on the Credit Facility is agilon health management, inc., our wholly-owned subsidiary. The Credit Facility is guaranteed by certain of our subsidiaries, including those identified as variable interest entities, and contain customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios.

Current wording

Our ability to pay dividends to holders of our common stock is significantly limited as a practical matter by our growth plans as well as the Credit Facility insofar as we may seek to pay dividends out of funds made available to us by agilon health management, inc. or its subsidiaries because the Credit Facility restricts agilon health management, inc.’s ability to pay dividends or make loans to us. The borrower on the Credit Facility is agilon health management, inc., our wholly-owned subsidiary. The Credit Facility is guaranteed by certain of our subsidiaries, including those identified as variable interest entities, and contains customary covenants including, among other things, limitations on restricted payments including: (i) dividends and distributions from restricted subsidiaries, (ii) requirements of minimum financial ratios, and (iii) limitation on additional borrowings based on certain financial ratios.

Previous wording

Net cash provided by operating activities was $23.7 million for the three months ended March 31, 2026 compared to $32.0 million of net cash used in operating activities for the three months ended March 31, 2025. The change in net cash from operating activities was primarily a result of the increase in medical margin and timing of settlements with payors. Our cash flow from operations is dependent upon the number of members on our platform, the timing of settlements with payors, and the level of operating and general and administrative expenses necessary to operate and grow our business, among other factors.

Current wording

Net cash used in operating activities was $33.6 million for the six months ended June 30, 2026 compared to $67.1 million for the six months ended June 30, 2025. The change in net cash used in operating activities was primarily a result of the increase in medical margin, partially offset by increased provider costs, including partner physician incentive expenses, and timing of settlements with payors. Our cash flow from operations is dependent upon the number of members on our platform, the timing of settlements with payors, and the level of operating and general and administrative expenses necessary to operate and grow our business, among other factors.

Previous wording

Net cash provided by investing activities was $19.3 million for the three months ended March 31, 2026 compared to $23.1 million of net cash used in investing activities for the three months ended March 31, 2025. During the three months ended March 31, 2026, we received net proceeds from the maturities of marketable securities and repayments of loans receivables of $22.4 million and made investments of $3.1 million primarily for the acquisition of intangible assets and property and equipment. During the three months ended March 31, 2025, we received net proceeds from the maturities of marketable securities of $35.3 million and made investments of $58.4 million primarily for marketable securities, and the acquisition of intangible assets and property and equipment.

Current wording

Net cash provided by investing activities was $39.2 million for the six months ended June 30, 2026 compared to $47.4 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, we received net proceeds from the maturities of marketable securities and repayments of loans receivables of $46.6 million and made investments of $7.4 million primarily for the acquisition of intangible assets and property and equipment. During the six months ended June 30, 2025, we received proceeds from the maturities of marketable securities of $125.3 million and made investments of $78.0 million primarily for marketable securities, and the acquisition of intangible assets and property and equipment.

Previous wording

Net cash used in financing activities was $5.1 million for the three months ended March 31, 2026, and was primarily related to the repayment of debt, compared to net cash used in financing activities of $0.2 million for the three months ended March 31, 2025, primarily for the payments for equity issuances.

Current wording

Net cash used in financing activities was $0.5 million for the six months ended June 30, 2026 was primarily related to the repayment of debt, partially offset by proceeds from stock option exercises. Net cash used in financing activities of $2.7 million for the six months ended June 30, 2025 was primarily related to the payments for equity issuances.

Previous wording

Amendment to Credit Agreement, dated as of February 12, 2026 (the “Third Amendment”), and the Fourth Amendment to Credit Agreement, dated as of April 9, 2026, the “Credit Agreement”), which includes: (i) a secured term loan facility (the “Secured Term Loan Facility”) and (ii) a senior secured revolving credit facility (the “Secured Revolving Facility,” and together with the Secured Term Loan Facility, the “Credit Facility”). The Third Amendment, among other changes, (a) extended the stated maturity date from February 18, 2026 to February 18, 2028; (b) amended certain covenant “baskets” to be measured as a percentage of EBITDA rather than, or as an alternative to, Consolidated Total Assets; (c) required that we maintain a minimum of $50.0 million in Total Cash as of the end of each Business Day; (d) conditioned certain payments, including dividends, to Holdings under the available amount “basket” on us achieving positive EBITDA for two consecutive trailing four-quarter periods each ending after the Third Amendment effective date; (e) required that any reduction in outstanding letters of credit be accompanied by a corresponding prepayment of term loans; (f) reduced the aggregate amount of revolving credit commitments from $100.0 million to $90.0 million; and (g) required cash collateralization at 103% of the amount of each letter of credit outstanding. Concurrently with the effectiveness of the Third Amendment, we executed and delivered an unsecured guaranty of management’s obligations under the Credit Agreement. All capitalized terms used herein, but not defined herein, shall have the meanings ascribed to such terms in the Third Amendment.

Current wording

On February 18, 2021, we executed a credit facility agreement (as amended by the First Amendment to Credit Agreement, dated as of March 1, 2021, the Second Amendment to Credit Agreement, dated as of May 25, 2023, the Third Amendment to Credit Agreement, dated as of February 12, 2026 (the “Third Amendment”), and the Fourth Amendment to Credit Agreement, dated as of April 9, 2026, the “Credit Agreement”), which includes: (i) a secured term loan facility (the “Secured Term Loan Facility”) and (ii) a senior secured revolving credit facility (the “Secured Revolving Facility,” and together with the Secured Term Loan Facility, the “Credit Facility”). The Third Amendment, among other changes, (a) extended the stated maturity date from February 18, 2026 to February 18, 2028; (b) amended certain covenant “baskets” to be measured as a percentage of EBITDA rather than, or as an alternative to, Consolidated Total Assets; (c) required that we maintain a minimum of $50.0 million in Total Cash as of the end of each Business Day; (d) conditioned certain payments, including dividends, to Holdings under the available amount “basket” on us achieving positive EBITDA for two consecutive trailing four-quarter periods each ending after the Third Amendment effective date; (e) required that any reduction in outstanding letters of credit be accompanied by a corresponding prepayment of term loans; (f) reduced the aggregate amount of revolving credit commitments from $100.0 million to $90.0 million; and (g) required cash collateralization at 103% of the amount of each letter of credit outstanding. Concurrently with the effectiveness of the Third Amendment, we executed and delivered an unsecured guaranty of management’s obligations under the Credit Agreement. All capitalized terms used herein, but not defined herein, shall have the meanings ascribed to such terms in the Third Amendment.

Previous wording

As of March 31, 2026, we had 16.6 million shares of common stock outstanding. See “—Overview and Recent Developments” above for information related to the Reverse Stock Split.

Current wording

As of June 30, 2026, we had 16.8 million shares of common stock outstanding. See “—Overview and Recent Developments” above for information related to the Reverse Stock Split.

Previous wording

Management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our historical experience, known trends and events, and various other assumptions that we believe are reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our condensed consolidated financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 in Part II, Item 7 “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting Policies” and Note 2 to the Condensed Consolidated Financial Statements. There have been no significant changes to our critical accounting policies during 2026.

Current wording

Management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. We base estimates on the best information available to us at the time, our historical experience, known trends and events, and various other assumptions that we believe are reasonable under the circumstances. These estimates affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions or other matters had been different, it is possible that different accounting would have been applied, resulting in a different presentation of our condensed consolidated financial statements. From time to time, we re-evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current estimates and assumptions about matters that are inherently uncertain. A summary of our critical accounting policies is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 in Part II, Item 7 “Management’s Discussion and Analysis of Financial Conditions and Results of Operations - Critical Accounting