York Space Systems Inc.

Previous wording

The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented. You should read the following discussion and analysis of the Company’s financial condition and results of operations together with "Risk Factors" in Item 1A of Part I of the 2025 Annual Report on Form 10-K, the section entitled "Special Note Regarding Forward-Looking Statements" and our unaudited condensed consolidated financial statements and related notes included in Item 1, Part I of this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements, including statements regarding our expectations for the future of our business and our liquidity and capital resources as well as other non-historical statements. These statements are based upon our current plans, expectations, and beliefs, and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “Risk Factors” in Item 1A of Part I of the 2025 Annual Report on Form 10-K and the section entitled “Special Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements.

Current wording

The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented. You should read the following discussion and analysis of the Company’s financial condition and results of operations together with "Risk Factors" in Item 1A of Part I of the 2025 Annual Report on Form 10-K, the section entitled "Special Note Regarding Forward-Looking Statements" and our unaudited condensed consolidated financial statements and related notes included in Item 1, of Part I of this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements, including statements regarding our expectations for the future of our business and our liquidity and capital resources as well as other non-historical statements. These statements are based upon our current plans, expectations, and beliefs, and are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “Risk Factors” in Item 1A of Part I of the 2025 Annual Report on Form 10-K and the section entitled “Special Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements.

Previous wording

On January 28, 2026, the Registration Statement on Form S-1 filed with respect to our IPO was declared effective and on January 29, 2026, our stock began trading on the New York Stock Exchange (the "NYSE") under the ticker “YSS”. Refer to Note 1 – Description of Business and Basis of Presentation of the accompanying notes to the unaudited condensed consolidated financial statements included in Part I of this Quarterly Report on Form 10-Q for additional information.

Current wording

On January 28, 2026, the Registration Statement on Form S-1 ("the Registration Statement") filed with respect to our IPO was declared effective and on January 29, 2026, our stock began trading on the "NYSE" under the ticker “YSS”. Refer to Note 1 – Description of Business and Basis of Presentation of the accompanying notes to the unaudited condensed consolidated financial statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information.

Previous wording

York is a leading, U.S.-based, national defense and commercial prime providing a comprehensive suite of mission-critical solutions for national security, government and commercial customers. York is one of the only space and defense primes with proprietary hardware and software capabilities designed to address customers’ complex mission requirements across the critical elements of the entire space ecosystem throughout the mission lifecycle. York is a partner of choice for our customers, with differentiated performance versus traditional primes based on price, speed to deployment, and sophistication of capabilities. For contracts which we have been awarded, our price per satellite has been approximately half the price per satellite of our competitors. We have also been the first to deliver and launch satellites for multiple PWSA programs. York is the first and only company to demonstrate Link-16 connectivity from space, highlighting our unique and innovative capabilities.

Current wording

York is a leading, U.S.-based, national defense and commercial prime providing a comprehensive suite of mission-critical solutions for national security, government and commercial customers. York is one of the only space and defense primes with proprietary hardware and software capabilities designed to address customers’ complex mission requirements across the critical elements of the entire space ecosystem throughout the mission lifecycle. York is a partner of choice for our customers, with differentiated performance versus traditional primes based on price, speed to deployment, and sophistication of capabilities. For contracts which we have been awarded, our price per satellite has been approximately half the price per satellite of our competitors. We have also been the first to deliver and launch satellites for multiple DoW programs. York is the first and only company to demonstrate Link-16 connectivity from space, highlighting our unique and innovative capabilities.

Previous wording

York is purpose built to address evolving national security space challenges and to adapt to the ongoing shift in the U.S. government’s mission needs and procurement processes, where economics, agility, rapid capabilities, and heritage drive customer decision making. We deliver mission-critical solutions in a zero-tolerance for error environment where systems must work, and we believe we are positioned to capture outsized growth in our core markets. York provides customers a vertically integrated, full technology stack of solutions including design, production, integration, and operation of spacecraft with turnkey offerings to manage spacecraft and constellations throughout their entire mission lifecycle. York has significant space heritage, having 74 missions with flight heritage, created 17 products with flight heritage, and logged over four million on-orbit hours. York’s position as a prime enables us to monetize the entire space vertical from launch to mission operations, from spacecraft to payloads, and from edge computing to data transfer.

Current wording

York is purpose built to address evolving national security space challenges and to adapt to the ongoing shift in the U.S. government’s mission needs and procurement processes, where economics, agility, rapid capabilities, and heritage drive customer decision making. We deliver mission-critical solutions in a zero-tolerance for error environment where systems must work, and we believe we are well positioned to win awards to successfully leverage production capabilities at scale in our core markets. York provides customers a vertically integrated, full technology stack of solutions including design, production, integration, and operation of spacecraft with turnkey offerings to manage spacecraft and constellations throughout their entire mission lifecycle. York has significant space heritage, having 74 missions with flight heritage, created 17 products with flight heritage, and logged over four million on-orbit hours. York’s position as a prime enables us to monetize the entire space vertical from launch to mission operations, from spacecraft to payloads, and from edge computing to data transfer.

Previous wording

Our model allows us to capture recurring revenue driven by ongoing satellite-based software and services as well as hardware replacement cycles. Once spacecraft are fielded, we provide continuous operational support, downlink antenna usage, and proprietary software solutions, including on-spacecraft upgrades during the full orbital lifespan. Contracts have historically provided a fixed cost for software maintenance with upgrade options available for purchase. The expected replacement cycle for the current portfolio of space vehicles is approximately five to six years. Our full lifecycle solution and ongoing operational support distinguishes us from our competitors, positioning us to act as prime for the replacement and potential expansion of competitors’ aging constellations. As a result, we expect our recurring revenue to increase as the installed base of spacecraft in orbit grows, creating a highly visible revenue model, accelerating growth and increasing margins.

Current wording

Our model allows us to capture recurring revenue driven by ongoing satellite-based software and services as well as hardware replacement cycles. Once spacecraft are fielded, we provide continuous operational support, ground terminal usage, and proprietary software solutions, including on-spacecraft upgrades during the full orbital lifespan. Contracts have historically provided a fixed cost for software maintenance with upgrade options available for purchase. The expected replacement cycle for the current portfolio of space vehicles is approximately five to six years. Our full lifecycle solution and ongoing operational support distinguishes us from our competitors, positioning us to act as prime for the replacement and potential expansion of competitors’ aging constellations. As a result, we expect our recurring revenue to increase as the installed base of spacecraft in orbit grows, creating a highly visible revenue model, accelerating growth and increasing margins.

Previous wording

We have significant production capability and believe we will be able to meet demand to manufacture and test over 1,000 satellites annually, supporting our position as a leader in rapid, high volume spacecraft delivery. This investment in infrastructure is meant to create a durable competitive advantage, enabling us to capitalize on the rapidly growing space economy with the ability to reliably deliver spacecraft faster and more affordably than traditional primes.

Current wording

We have significant production capability and believe we will be able to meet demand to manufacture and test over 1,000 satellites annually, supporting our position as a leader in rapid, high volume spacecraft delivery. This investment in infrastructure and inventory is meant to create a durable competitive advantage, enabling us to capitalize on the rapidly growing space economy with the ability to reliably deliver spacecraft faster and more affordably than traditional primes.

Previous wording

On March 6, 2026, we entered into the Orbion Merger Agreement. Pursuant to the Orbion Merger Agreement, we acquired all of the issued and outstanding equity interests of Orbion in exchange for consideration consisting of cash totaling $11.2 million and 2,812,141 shares of the Company's common stock. Pursuant to the Orbion Merger Agreement, the number of shares delivered to the sellers was calculated using an agreed upon price of $34.00 per share. Orbion is a Michigan-based manufacturer of flight-proven electric propulsion systems. Refer to Note 4 – Acquisitions of the accompanying notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 in this Quarterly Report on Form 10-Q for additional information.

Current wording

On May 15, 2026, we entered into the Solestial Merger Agreement. The transaction closed on June 4, 2026. Pursuant to the Solestial Merger Agreement, we acquired all of the issued and outstanding equity interests of Solestial, Inc. in exchange for consideration consisting of cash totaling $15.5 million and approximately 1.7 million shares of the Company's common stock. Pursuant to the Solestial Merger Agreement, the number of shares delivered to the sellers was calculated using an agreed upon price of $34.00 per share. Solestial is headquartered in Tempe, Arizona and is the only space solar provider with self-healing silicon technology proven on orbit, enabling performance while maintaining a path to high-volume manufacturing. Refer to Note 4 – Acquisitions of the accompanying notes to the unaudited condensed consolidated financial statements included in Item 1 of Part 1 in this Quarterly Report on Form 10-Q for additional information.

Previous wording

To continue gaining market share and attracting customers, we plan to continue investing in our infrastructure to expand our production capabilities, including our satellite-based services, and to create a durable competitive advantage with the goal of enabling us to capitalize on the rapidly growing space economy. Our growth opportunity is dependent on our continued ability to expand our addressable market, win space data network, space-based sensing and targeting, as well as Golden Dome missions, and to develop our portfolio of products and services related to our offerings. We intend to expand our operations and offerings significantly, but any difficulties in achieving or effectively managing our growth could have a negative effect on our operating results.

Current wording

To continue gaining market share and attracting customers, we plan to continue investing in our infrastructure to expand our production capabilities, including our satellite-based services, and to create a durable competitive advantage with the goal of enabling us to capitalize on the rapidly growing space economy. Our growth opportunity is dependent on our continued ability to expand our addressable market, including but not limited to, space data network, space-based sensing and targeting, as well as Golden Dome missions, and to develop our portfolio of products and services related to our offerings. We intend to expand our operations and offerings significantly, but any difficulties in achieving or effectively managing our growth could have a negative effect on our operating results.

Previous wording

We consider strategic acquisitions of businesses and other investments to expand our software and services footprint, deepen vertical integration, and accelerate entry into adjacent mission areas, with the goal of expanding our current portfolio and accessing new customers and technologies. We target companies that not only enhance our technical capabilities but also embed us more deeply into our customers’ mission workflows. By integrating strategic acquisitions with our strong internal execution, we aim to build a broader product and service offering with a goal of enhancing our growth and market share. We also may explore the divestiture of businesses that no longer meet our needs or strategy or that could perform better outside of our organization. These strategic transactions may be costly, time consuming and challenging to consummate and/or integrate with our existing businesses, and may result in fluctuations in our operating results and financial position across periods that may be unrelated to our underlying performance. Any particular acquisition or other investment we make could prove less successful than anticipated and have a negative effect on our business.

Current wording

We consider strategic acquisitions of businesses and other investments to expand our software and services footprint, deepen vertical integration, and accelerate entry into adjacent mission areas, with the goal of expanding our current portfolio and accessing new customers and technologies. We target companies that not only enhance our technical capabilities but also embed us more deeply into our customers’ mission workflows. By integrating strategic acquisitions with our strong internal execution, we aim to build a broader product and service offering with a goal of enhancing our growth and market share. These strategic transactions are costly, time consuming and challenging to consummate and/or integrate with our existing businesses, and may result in fluctuations in our operating results and financial position across periods that may be unrelated to our underlying performance. A portion of the consideration of the acquisitions we have completed recently has consisted of shares of our common stock, which dilute existing stockholders. Any particular acquisition or other investment we make could prove less successful than anticipated, cause further stockholder dilution and have a negative effect on our business.

Previous wording

Cost of Revenues—primarily consists of direct material and labor costs, which include salaries, bonuses, and benefits directly attributable to fulfilling our obligations under customer contracts, and related overhead. Overhead costs primarily include allocable amounts of rent, software subscriptions, depreciation and amortization expense on assets used directly in revenue producing activities, indirect materials, and production and test administrative expenses. We expect our cost of revenues to increase in absolute dollars in future periods as we enter into more contracts and make strategic acquisitions and investments.

Current wording

Cost of Revenues—primarily consists of direct material and labor costs, which include salaries, bonuses, and benefits directly attributable to fulfilling our obligations under customer contracts, and related overhead. Overhead costs primarily include allocable amounts of rent, software subscriptions, depreciation and amortization expense on assets used directly in revenue producing activities, indirect materials, and production and test administrative expenses. Our cost of revenues in absolute dollars moves directionally as we perform under current contracts as well as being impacted by strategic acquisitions and investments.

Previous wording

Income Tax Benefit—includes the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amount and the tax basis of assets and liabilities, along with net operating loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.

Current wording

Income Tax (Expense) Benefit—includes the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amount and the tax basis of assets and liabilities, along with net operating loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse.

Previous wording

Gross profit decreased by $2.4 million, or 10%, to $22.2 million for the three months ended March 31, 2026, as compared to $24.6 million for the three months ended March 31, 2025. As a percentage of revenues, gross margin was 19% and 23% for the three months ended March 31, 2026 and 2025, respectively. The period-over-period decrease in gross margin as a percentage of revenues was primarily attributed to net unfavorable EAC adjustments during the three months ended March 31, 2026, as compared to a net favorable EAC adjustment for the same period in 2025.

Current wording

Gross profit increased by $12.7 million, or 133%, to $22.2 million for the three months ended June 30, 2026, as compared to $9.5 million for the three months ended June 30, 2025. As a percentage of revenues, gross margin was 24% and 11% for the three months ended June 30, 2026 and 2025, respectively. The period-over-period increase in gross margin as a percentage of revenues was primarily attributed to lower net unfavorable EAC adjustments during the three months ended June 30, 2026, as compared to the same period in 2025.

Previous wording

SG&A expenses increased by $9.9 million, or 37%, to $36.7 million for the three months ended March 31, 2026, as compared to $26.8 million for the three months ended March 31, 2025. The period-over-period increase in SG&A expenses was primarily attributed to increases in compensation and other employee-related costs, as well as professional fees for audit, tax and legal services as well as the impact of the acquisition of ATLAS.

Current wording

SG&A expenses increased by $15.0 million, or 58%, to $40.8 million for the three months ended June 30, 2026, as compared to $25.8 million for the three months ended June 30, 2025. The period-over-period increase in SG&A expenses was primarily attributed to increases in compensation and other employee-related costs, professional fees for audit, tax and legal services, higher advertising expenses and the impact of the Company's acquisition activity.

Previous wording

Stock-based compensation expense was $84.7 million for the three months ended March 31, 2026, as compared to $0 for the three months ended March 31, 2025. See Note 10 – Stock-based Compensation of the accompanying notes to the unaudited condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information related to our stock compensation.

Current wording

Stock-based compensation expense was $10.9 million for the three months ended June 30, 2026, as compared to $0 for the three months ended June 30, 2025. See Note 10 – Stock-based Compensation of the accompanying notes to the unaudited condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information related to our stock compensation.

Previous wording

Transactions costs were $5.9 million for the three months ended March 31, 2026, as compared to $0 for the three months ended March 31, 2025. Transaction costs relate to the Company’s acquisition activity and one-time IPO offering costs.

Current wording

Transactions costs were $6.0 million for the three months ended June 30, 2026, as compared to $0.1 million for the three months ended June 30, 2025. Transaction costs relate to the Company’s acquisition activity.

Previous wording

Interest income increased by $4.1 million, or 754%, to $4.6 million for the three months ended March 31, 2026, as compared to $0.5 million for the three months ended March 31, 2025. The period-over-period increase in interest income was primarily driven by higher cash and cash equivalent balances, as well as higher market interest rates that increased yields on those balances.

Current wording

Interest income increased by $4.0 million, to $4.2 million for the three months ended June 30, 2026, as compared to $0.2 million for the three months ended June 30, 2025. The period-over-period increase in interest income was primarily driven by higher cash and cash equivalent balances, as well as higher market interest rates that increased yields on those balances.

Previous wording

Other (expense) income, net decreased by $6.3 million to $6.2 million of other (expense) for the three months ended March 31, 2026, as compared to $0.1 million of other income for the three months ended March 31, 2025. This period-over-period decrease was driven by a decrease in unrealized loss on foreign exchange derivative instruments as well as a loss from our investment in Orbion.

Current wording

Other (expense) income, net decreased by $0.3 million to $0.9 million of other income for the three months ended June 30, 2026, as compared to $1.2 million of other income for the three months ended June 30, 2025. This period-over-period decrease was driven by a decrease in unrealized loss on foreign exchange derivative instruments offset with a gain from our investment in Solestial.

Previous wording

Income tax benefit decreased by $1.2 million to $0.1 million for the three months ended March 31, 2026, as compared to $1.3 million for the three months ended March 31, 2025. The decrease in the income tax benefit is primarily due to the valuation allowance of U.S. Federal and U.S. State deferred tax assets.

Current wording

Income tax benefit decreased by $3.0 million to $0.3 million income tax expense for the three months ended June 30, 2026, as compared to $2.7 million income tax benefit for the three months ended June 30, 2025. The decrease in the income tax (expense) benefit is primarily due to the valuation allowance of U.S. Federal and U.S. State deferred tax assets.

Previous wording

Two contracts accounted for 48% and 37%, respectively, of the gross favorable EAC adjustment for the three months ended March 31, 2026 which were primarily due to lower‑than‑anticipated labor, materials, and subcontractor costs required to meet customer requirements in our sale of satellites. In contrast, two contracts accounted for 64% and 36% respectively, of the gross unfavorable EAC adjustment for the three months ended March 31, 2026. The adjustments were primarily due to additional unplanned labor, materials and subcontractor costs. One contract accounted for 100% of the gross unfavorable EAC adjustment for the period ended March 31, 2025, due to a change in the estimated total transaction price resulting from a contract modification. Refer to Note 3 - Revenues of the accompanying notes to the unaudited condensed consolidated financial statements included in Item 1 of Part I in this Quarterly Report on Form 10-Q for additional information related to our net EAC adjustments.

Current wording

Two contracts accounted for 60% and 28%, respectively, of the gross favorable EAC adjustment for the six months ended June 30, 2026 which were primarily due to lower‑than‑anticipated labor, materials, and subcontractor costs required to meet customer requirements in our sale of satellites. In contrast, two contracts accounted for 64% and 36% respectively, of the gross unfavorable EAC adjustment for the six months ended June 30, 2026, primarily due to additional unplanned labor, materials and subcontractor costs. Two contracts accounted for 49% and 33% of the gross unfavorable EAC adjustment for the six months ended June 30, 2025, due to additional unplanned labor, materials and subcontractor costs. Refer to Note 3 - Revenues of the accompanying notes to the unaudited condensed consolidated financial statements included in Item 1 of Part I in this Quarterly Report on Form 10-Q for additional information related to our net EAC adjustments.

Previous wording

Revenue increased by $10.1 million, or 9%, to $116.3 million during the three months ended March 31, 2026, as compared to $106.3 million during the three months ended March 31, 2025. The period-over-period increase in revenue was primarily related to increases in progress towards completion and achievement of certain milestones during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, partially offset by a decrease in progress as a significant project nears completion during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The period-over-period increase in revenue was largely driven by existing contracts, with 85% of the revenue growth related to contracts that were already in place at March 31, 2025. Refer to Note 3 - Revenues of the accompanying notes to the unaudited condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information related to our net EAC adjustments.

Current wording

Revenue increased by $18.8 million, or 10%, to $208.9 million during the six months ended June 30, 2026, as compared to $190.1 million during the six months ended June 30, 2025. The period-over-period increase in revenue was primarily driven by increases in progress towards completion and achievement of certain milestones and revenue generated from recently acquired businesses during the six months ended June 30, 2026, as compared to the six months ended June 30, 2025. These increases were partially offset by a decrease in progress as a significant project was completed during the six months ended June 30, 2026. The period-over-period increase in revenue was largely driven by existing contracts, with 55% of the revenue growth related to contracts that were already in place at June 30, 2025. Refer to Note 3 - Revenues of the accompanying notes to the unaudited condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q for additional information related to our net EAC adjustments.

Previous wording

Cost of revenues increased by $12.5 million, or 15%, to $94.2 million for the three months ended March 31, 2026, as compared to $81.7 million for the three months ended March 31, 2025. The period-over-period increase in cost of revenues was primarily driven by increases of $5.3 million in direct materials and subcontractor costs related to larger contracts that have increased progress towards the design and build of satellites during the period. Other increases were attributed to depreciation and amortization of $3.2 million, direct labor costs of $2.4 million, and other overhead costs of $1.6 million as well as the impact of the acquisition of ATLAS.

Current wording

Cost of revenues increased by $8.6 million, or 6%, to $164.6 million for the six months ended June 30, 2026, as compared to $156.0 million for the six months ended June 30, 2025. The period-over-period increase in cost of revenues was primarily driven by increases of $5.9 million in direct labor related to larger contracts that have increased progress towards the design and build of satellites during the period. Other increases were attributed to depreciation and amortization of $4.0 million, other overhead costs of $3.7 million and the impact of the Company's acquisition activity partially offset by a decrease in direct materials and subcontractor costs of $5.0 million.

Previous wording

R&D increased by $0.9 million, or 20%, to $5.3 million for the three months ended March 31, 2026, as compared to $4.4 million for the three months ended March 31, 2025. The period-over-period increase in R&D costs was primarily driven by increases in compensation and other employee-related costs.

Current wording

R&D increased by $1.8 million, or 19%, to $11.1 million for the six months ended June 30, 2026, as compared to $9.3 million for the six months ended June 30, 2025. The period-over-period increase in R&D costs was primarily driven by increases in compensation and other employee-related costs and R&D activities of recently acquired businesses subsequent to their dates of acquisition.

Previous wording

Contribution margin increased by $4.8 million to $40.1 million for the three months ended March 31, 2026, as compared to $35.3 million for the three months ended March 31, 2025. The period-over-period increase in non-GAAP contribution margin was primarily attributed to increased volume of production on certain contracts with more favorable contribution margins. This increase was partially offset by net unfavorable EAC adjustments for loss contracts for the three months ended March 31, 2026 compared to net favorable EAC adjustments for the three months ended March 31, 2025.

Current wording

Contribution margin increased by $19.0 million to $39.3 million for the three months ended June 30, 2026, as compared to $20.3 million for the three months ended June 30, 2025. The period-over-period increase in non-GAAP contribution margin was primarily attributed to increased volume of production on certain contracts with more favorable contribution margins. This increase was partially offset by net unfavorable EAC adjustments for the three months ended June 30, 2026.

Previous wording

EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with GAAP. Net loss is the most directly comparable GAAP measure to Adjusted EBITDA. These non-GAAP financial measures are used to supplement the financial information presented on a GAAP basis and should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis.

Current wording

EBITDA and Adjusted EBITDA are financial measures that are not calculated in accordance with GAAP. Net loss is the most directly comparable GAAP measure to Adjusted EBITDA. These non-GAAP financial measures are used to supplement the financial information presented on a GAAP basis and should not be considered in isolation or as a substitute for the relevant GAAP measures and should be read in conjunction with information presented on a GAAP basis. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Previous wording

We define EBITDA as net income (loss) adjusted for interest expense, interest income, income tax benefit, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for changes in the fair value of derivatives, transaction costs, gains or losses on foreign exchange, and other non-recurring items.

Current wording

We define EBITDA as net income (loss) adjusted for interest expense, interest income, income tax (expense) benefit, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for changes in the fair value of derivatives, transaction costs, gains or losses on foreign exchange, and other non-recurring items.

Previous wording

(2)Other includes loss on initial Orbion investment, net gain on foreign exchange and one-time non-cash expense.

Current wording

(2)Other includes a gain and loss on the initial investments for Solestial and Orbion, respectively, net gain on foreign exchange and one-time non-cash expense.

Previous wording

As of March 31, 2026, our cash and cash equivalents were $655.7 million, our financial debt was $149.1 million, and our $150.0 million Revolving Credit Facility was undrawn. We have a limited history of operations and have incurred negative cash flows from operating activities and losses from operations in the past as reflected in the accumulated deficit of $383.9 million as of March 31, 2026. We believe that our cash will be adequate to meet our liquidity requirements for at least the next 12 months. Our future long-term capital requirements will depend on several factors, including our ability to generate positive cash flow from operations. We may raise additional capital, whether in the public or private markets, and are currently examining different alternatives. If financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our level of investment in service development or scale back our operations, which could have a material adverse impact on our business and financial prospects, seek protection under insolvency laws, or cease our operations altogether.

Current wording

As of June 30, 2026, our cash and cash equivalents were $534.0 million, our financial debt was $148.1 million, and our $150.0 million Revolving Credit Facility was undrawn. We have a limited history of operations and have incurred negative cash flows from operating activities and losses from operations in the past as reflected in the accumulated deficit of $423.2 million as of June 30, 2026. We believe that our cash will be adequate to meet our liquidity requirements for at least the next 12 months. Our future long-term capital requirements will depend on several factors, including our ability to generate positive cash flow from operations, our growth initiatives and our acquisitions activity. We may raise additional capital, whether in the public or private markets, as conditions warrant. If financing is not available, or if the terms of financing are less desirable than we expect, we may be forced to decrease our level of investment in service development or scale back our operations, which could have a material adverse impact on our business and financial prospects, seek protection under insolvency laws, or cease our operations altogether.

Previous wording

We lease buildings that are used in production and for administrative activities. All of our leases are classified as operating leases with various expiration dates through 2036. Our total remaining fixed lease payment obligations as of March 31, 2026 and December 31, 2025 are $44.8 million and $38.8 million, respectively, with $7.1 million due in less than one year from March 31, 2026.

Current wording

We lease buildings that are used in production and for administrative activities. Our leases are classified as operating and financing leases with various expiration dates through 2036. Our total remaining fixed lease payment obligations as of June 30, 2026 and December 31, 2025 are $46.3 million and $38.8 million, respectively, with $9.0 million due in less than one year from June 30, 2026.

Previous wording

Prior to the consummation of the IPO, the Company entered into the TRA with the TRA Holders. The TRA requires the Company to make payments to the TRA Holders in an amount equal to 85% of certain tax savings (or expected tax savings) in respect of certain tax attributes of the Company. At the date of the IPO and as of March 31, 2026, the realization of those benefits is uncertain, and as such, the Company does not believe payment of TRA benefits is probable. Accordingly, the Company does not anticipate recording the TRA liability until such time as payments become probable. As of March 31, 2026, the Company estimates the TRA attributes were approximately $346 million. See Note 8 - Accounting for Income Taxes of the accompanying notes to the unaudited condensed financial statements in Part I in this Quarterly Report on Form 10-Q for additional information related to the TRA.

Current wording

Prior to the consummation of the IPO, the Company entered into the TRA with the TRA Holders. The TRA requires the Company to make payments to the TRA Holders in an amount equal to 85% of certain tax savings (or expected tax savings) in respect of certain tax attributes of the Company. At the date of the IPO and as of June 30, 2026, the realization of those benefits is uncertain, and as such, the Company does not believe payment of TRA benefits is probable. Accordingly, the Company does not anticipate recording the TRA liability until such time as payments become probable. As of June 30, 2026, the Company estimates the TRA attributes were approximately $347.0 million. See Note 8 - Accounting for Income Taxes of the accompanying notes to the unaudited condensed financial statements in Item 1 of Part I in this Quarterly Report on Form 10-Q for additional information related to the TRA.

Previous wording

The table below summarizes certain information from the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025:

Current wording

The table below summarizes certain information from the unaudited condensed consolidated statements of cash flows for the six months ended June 30, 2026 and 2025:

Previous wording

Net cash used in operating activities increased by $5.0 million, or 6%, to $84.5 million during the three months ended March 31, 2026, as compared to $79.5 million of cash used in operating activities during the three months ended March 31, 2025.

Current wording

Net cash used in operating activities increased by $86.8 million, or 87%, to $186.6 million during the six months ended June 30, 2026, as compared to $99.8 million of cash used in operating activities during the six months ended June 30, 2025.

Previous wording

Changes in working capital declined by $1.3 million, or 2%, primarily attributable to the timing of cash receipts and cash payments for the period. This is particularly driven by offsetting cash flows from changes in contract assets and contract liabilities, as well as cash outflows for inventory that were offset by aggregate changes in other working capital balances. We actively manage our contract assets and contract liabilities, along with the related billing and collection efforts.

Current wording

Changes in working capital increased by $82.8 million, or 94%, primarily attributable to the timing of cash receipts and cash payments for the period. Net cash used in operating activities was primarily attributable to increases in accounts receivable, contract assets, and inventories, as well as a decrease in contract liabilities resulting from the recognition of previously deferred revenue. These uses of cash were partially offset by increases in accounts payable and accrued expenses. We actively manage our contract assets and contract liabilities, along with the related billing and collection efforts.

Previous wording

The net increase in non-cash adjustments between the three months ended March 31, 2026 and the three months ended March 31, 2025, was primarily driven by a $84.7 million increase in stock-based compensation expense, a $5.9 million increase in other non-cash expenses, and a $4.1 million increase in amortization and depreciation.

Current wording

The net increase in non-cash adjustments between the six months ended June 30, 2026 and the six months ended June 30, 2025, was primarily driven by a $95.6 million increase in stock-based compensation expense, a $6.7 million increase in other non-cash expenses, and a $6.7 million increase in amortization and depreciation.

Previous wording

Net cash used in investing activities increased by $7.4 million, or 202%, to $11.1 million for the three months ended March 31, 2026, as compared to $3.7 million for the three months ended March 31, 2025, primarily due to cash used to fund our acquisition of Orbion of $10.8 million, our $3.2 million equity investment. This increase is partially offset by cash proceeds from settlement of notes receivable of $5.0 million.

Current wording

Net cash used in investing activities increased by $21.0 million, to $29.7 million for the six months ended June 30, 2026, as compared to $8.8 million for the six months ended June 30, 2025, primarily due to cash used to fund our acquisitions of Orbion and Solestial. This increase is partially offset by cash proceeds from settlement of notes receivable of $5.0 million.

Previous wording

Net cash provided by financing activities was $588.7 million for the three months ended March 31, 2026, as compared to $0 for the three months ended March 31, 2025, primarily due to proceeds from issuance of the Company's common stock in connection with the IPO, net of underwriting discounts and commissions and other offering costs, of $589.6 million. This is partially offset by the repayment of principal on the Term Loan Facility of $0.9 million.

Current wording

Net cash provided by financing activities was $587.8 million for the six months ended June 30, 2026, as compared to $25.0 million for the six months ended June 30, 2025, primarily due to proceeds from issuance of the Company's common stock in connection with the IPO, net of underwriting discounts and commissions and other offering costs, of $589.6 million.