HMH Holding Inc

1. Basis of Presentation and Summary of Significant Accounting Policies

Description of Business

HMH Holding Inc. (“HMH,” the “Company,” “we,” “us” or “our”) is a leading global provider of offshore and onshore drilling equipment and services.

We were incorporated in the State of Delaware on April 29, 2024 as a holding entity with an intent to complete our initial public offering (“IPO”) and other related transactions in order to carry on business of HMH Holding B.V. ("HMH B.V."). HMH B.V. was operationally established with effect from October 1, 2021, through its acquisition of all shares in the MHWirth business from Akastor ASA and the Subsea Drilling Systems business from Baker Hughes Company. After these transactions, the shareholders of HMH B.V. were Baker Hughes Holdings LLC (50%), Akastor AS (25%) and Mercury HoldCo Inc. (25%). Baker Hughes Holdings LLC is a wholly owned subsidiary of Baker Hughes Company (together with Baker Hughes Holdings LLC, “Baker Hughes”), and Akastor AS and Mercury HoldCo Inc. are wholly owned subsidiaries of Akastor ASA (together with Akastor AS, Mercury HoldCo AS and Mercury HoldCo Inc., “Akastor”).

Initial Public Offering

On April 2, 2026, we completed our IPO of our Class A common stock, par value $0.01 per share (“Class A common stock”), and received net proceeds of approximately $197.8 million after deducting the underwriters’ discounts and offering fees of $12.6 million. We also granted the IPO underwriters a 30-day over-allotment option to purchase additional shares of Class A common stock on the same terms. On April 30, 2026, the underwriters partially exercised the option, resulting in additional net proceeds of $12.9 million, after deducting the underwriters’ discounts and offering fees of $0.8 million.

Corporate Reorganization

We used approximately $39.5 million of the net proceeds from the IPO as the cash consideration to purchase an aggregate of 2,100,000 voting Class A ordinary shares of HMH B.V., par value $0.01 per share (“B.V. Voting Class A Shares”), and 2,100,000 voting Class B ordinary shares of HMH B.V., par value $0.01 per share (“B.V. Voting Class B Shares” and, together with B.V. Voting Class A Shares, the “B.V. Voting Shares”), from Baker Hughes and Akastor (collectively referred to as the “Principal Stockholders”).

On April 2, 2026, we contributed all of the remaining net proceeds from the IPO to HMH B.V. in exchange for a number of B.V. Voting Class A Shares and B.V. Voting Class B Shares such that the number of B.V. Voting Class A Shares and B.V. Voting Class B Shares, respectively, held by the Company, taking into account the B.V. Voting Class A Shares and B.V. Voting Class B Shares acquired by the Company from the Principal Stockholders, equals the number of shares of Class A common stock sold by us in the IPO.

On May 5, 2026, we contributed all of the net proceeds from the underwriters’ exercise of the over-allotment option to HMH B.V. in exchange for an additional 685,844 B.V. Voting Class A Shares and 685,844 B.V. Voting Class B Shares. HMH B.V. used such additional net proceeds to purchase in equal proportion from Baker Hughes and Akastor, respectively, an aggregate number of shares of the Company’s Class B common stock, par value $0.01 per share (“Class B common stock”), non-voting Class A ordinary shares of HMH B.V. (“B.V. Non-Voting Class A Shares”) and non-voting Class B ordinary shares of HMH B.V. (“B.V. Non-Voting Class B Shares” and, together with the B.V. Non-Voting Class A Shares, the “B.V. Non-Voting Shares”), respectively, equal to the number of shares of the Company’s Class A common stock purchased by the underwriters pursuant to the exercise of the option.

After giving effect to these transactions, including the shares of the Company’s Class A common stock issuable upon the consummation of the IPO pursuant to equity awards granted to employees that vested in connection with the IPO, Baker Hughes and Akastor each owned 15,945,826 shares of the Company’s Class B common stock, collectively representing approximately 73% of the total voting power of our capital stock, and each owned 15,945,826 non-voting Class A ordinary shares of HMH B.V. and 15,945,826 non-voting Class B ordinary shares of HMH B.V., collectively representing approximately a 73% equity interest in HMH B.V. and 0% voting power of the equity in HMH B.V. Immediately following the underwriters’ exercise of the over-allotment option, the investors in the IPO, collectively, owned all of the shares of the Company’s Class A common stock, representing approximately 27% of the total voting power of our capital stock.

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These statements, therefore, should be read in conjunction with the consolidated financial statements and related notes of HMH B.V. for the year ended December 31, 2025 included in the final prospectus of HMH Holding dated March 31, 2026 and filed with the SEC on April 1, 2026.

The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q reflect all normal and recurring adjustments which, in the opinion of management, are necessary for a fair presentation of our consolidated financial position as of September 30, 2026 and December 31, 2025 and the consolidated results of operations and cash flows for the three and nine months ended September 30, 2026 and 2025. The unaudited results of operations for the interim periods reported are not necessarily indicative of results to be expected for the full year.

Immediately following the closing of the IPO, we are the successor to HMH B.V. for financial reporting purposes. Subsequent to the IPO, the Company’s sole material asset is its equity interest in HMH B.V. As the sole managing member and holder of 100% of the voting interest of HMH

B.V., we operate and control all of its business and affairs and therefore consolidate its results for financial reporting purposes. The reorganization transactions are accounted for as a reorganization of entities under common control. Accordingly, the condensed consolidated financial statements have been retrospectively presented to reflect the assets and liabilities received in the Corporate Reorganization at HMH B.V.'s historical carrying amounts, as if the common control transaction had occurred on January 1, 2025, the earliest period presented.

Certain amounts in prior periods have been reclassified to conform with current period presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Although management believes these assumptions to be reasonable, given historical experience, actual amounts and results could differ from these estimates. Estimates are used for, but are not limited to, determining the following: allowance for credit losses and inventory valuation reserves; recoverability of long-lived assets; revenue recognition on long-term contracts; valuation of goodwill; useful lives used in depreciation and amortization; income taxes and related valuation allowances; accruals for contingencies; actuarial assumptions to determine costs and liabilities related to employee benefit plans; stock-based compensation expense; valuation of derivatives; and the fair value of assets acquired and liabilities assumed in business combinations.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected.

Offering Costs

In connection with our IPO, HMH B.V. and its affiliates incurred accounting, legal and other costs, which were reimbursed by us. We recognized deferred offering costs of $21.3 million and $26.2 million in Prepaids and other current assetsin our Condensed Consolidated Balance Sheets as of December 31, 2025 and at the IPO date of April 2, 2026, respectively. Such capitalized deferred offering costs were reclassified and recorded as a reduction of the gross proceeds against additional paid-in capital within shareholders’ equity upon the closing of the IPO on April 2, 2026. Accordingly, there wereno deferred offering costs capitalized as of September 30, 2026.

Share-based Compensation

We account for share-based compensation awards granted to employees, directors, and non-employees in accordance with ASC 718, Compensation—Stock Compensation based on the estimated grant date fair value and recognize the expense over the requisite service period, net of actual forfeitures. The fair value of restricted stock awards and restricted stock units (“RSUs”) is determined based on the closing price of our Class A common stock on the date of grant and the fair value of performance share units (“PSUs”) is measured using a Monte Carlo simulation model.

The fair value of RSUs and PSUs granted prior to the IPO was determined with the assistance of independent third-party valuations. These awards were contingent upon a liquidity event, which is defined as an IPO or a change of control (each as defined in the applicable award agreement) of the Company and the completion of a service period. The performance condition related to these awards was met upon the commencement of trading of our Class A common stock on The Nasdaq Global Select Market. For the three months ended September 30, 2026, we recognized share-based compensation of $2.3 million. For the nine months ended September 30, 2026, we recognized $25.1 million, which included $22.5 million related to pre-IPO share-based awards.

Concentration Risk

During the three months ended September 30, 2026, one customer accounted for approximately 11.4% of total revenue compared to one customer accounting for approximately 22.9% during the three months ended September 30, 2025. During the nine months ended September 30, 2026, two customers accounted for approximately 11.9% and 10.7% of total revenue compared to one customer accounting for 17.3% during the nine months ended September 30, 2025. The revenue associated with these customers was included in both Equipment and System Solutions (“ESS”) and Pressure Control Systems (“PCS”) revenue.

As of September 30, 2026, two customers accounted for approximately 19.3% and 10.0% of current accounts receivable. As of December 31, 2025, one customer accounted for approximately 11.2% of current accounts receivable. The Company expects to maintain its relationship with these customers.

New Accounting Standards to be Adopted

As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (the “JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. The JOBS Act does not preclude an EGC from early adopting new or revised accounting standards codification. The Company has elected to use extended transition periods permissible under the JOBS Act, while also early adopting certain accounting pronouncements. The adoption dates discussed below reflect these elections.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 provide for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for the Company prospectively for all annual periods beginning after December 15, 2025. The Company is currently evaluating the impact of this standard on its disclosures.

In November 2024, the FASB issued ASU No. 2024-03, “Disaggregation of Income Statement Expenses (Subtopic 220-40).” The ASU requires public entities to disaggregate, in a tabular presentation, certain income statement expenses into different categories, such as purchases of inventory, employee compensation, depreciation and intangible asset amortization. The guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and may be applied retrospectively. The Company is currently evaluating the impact of adopting the new ASU on its consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”). Under the new guidance, internal-use software costs are capitalized when management has authorized and committed to funding the project and it is probable that the software will be completed and used for its intended function. ASU 2025-06 is effective for the Company for annual reporting periods beginning after December 15, 2027, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting the new ASU on its consolidated financial statements and related disclosures.

In November 2025, the FASB issued ASU 2025-09, “Hedge Accounting Improvements” (“ASU 2025-09”). The new guidance provides targeted improvements to the hedge accounting guidance to primarily address cash flow hedging, but also impacts certain fair value and net investment hedges, including (i) permitting designation of variable price components of forecasted purchases or sales of nonfinancial assets when clearly and closely related to the underlying asset, (ii) allowing groups of forecasted transactions with similar risk exposures (including those based on different interest rate indexes) to be hedged together, and (iii) introducing a model for cash flow hedges of forecasted interest payments on “choose-your-rate” debt instruments that permits a borrower to change the designated interest rate index and/or tenor without automatically discontinuing hedge accounting. ASU 2025-09 is effective for the Company for annual reporting periods beginning after December 15, 2027, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-09 on its consolidated financial statements and related disclosures.

2. Business Combinations

The Company accounted for the Deepwater Riser Services, LLC (“DWR”) acquisition and the Deep Blue Oil & Gas Limited (“Deep Blue”) acquisition as business combinations and allocated the total purchase price to assets acquired, liabilities and contingent consideration assumed based on their fair values at the date of acquisition.

Deepwater Riser Services, LLC

On September 21, 2026, we completed the acquisition of DWR, a Louisiana based company specializing in riser inspection, recertification, refurbishment and storage business in the U.S. Gulf of America for a purchase consideration of $14.5 million, inclusive of working capital of $1.4 million.

The following table provides the allocation of the purchase price to major classes of assets and liabilities (in thousands):

Goodwill generated from this business combination is primarily attributable to expected synergies from the transaction and incremental revenue. The goodwill is expected to be deductible for U.S. income tax purposes.

Deep Blue Oil & Gas Limited

On October 1, 2025, we completed the acquisition of Deep Blue, a UK‑based company specializing in managed‑pressure‑drilling (“MPD”) systems. Deep Blue holds a portfolio of patents and proprietary technology with applications in offshore drilling, including advanced MPD control and sealing systems.

The following table provides the allocation of the purchase price to major classes of assets and liabilities assumed in USD as of the acquisition date, translated at the exchange rate on the acquisition date. The goodwill reflected below increased by £0.6 million ($0.8 million) from December 31, 2025, which resulted from working capital measurement period adjustments.

(a). The contingent consideration consists of deferred payments by the Company to the acquiree’s prior equity holders for three years, contingent on meeting specific earnings and operational targets.

3. Inventories

Inventories, net of reserves of $97.0 million and $99.9 million as of September 30, 2026 and December 31, 2025, respectively, consisted of the following:

Inventory write-downs for the three and nine months ended September 30, 2026 were $2.2 million and $2.6 million, respectively, compared to $3.6 million and $6.6 million for the three and nine months ended September 30, 2025, respectively.

4. Goodwill

The changes in carrying value of goodwill are detailed by segment below:

(a). Goodwill acquired in the DWR acquisition was assigned to the ESS segment. Additionally, the ESS segment includes purchase price adjustment of $0.8 million, related to working capital measurement period adjustments for the Deep Blue acquisition. See Note 2—“Business Combinations” for more information.

5. Financial Instruments

The following tables set forth the Company’s financial instruments that are measured at fair value on a recurring basis by level within the fair value hierarchy:

(a). The fair value (Level 3) of the seller’s receivable against Akastor AS on proceeds from the sales or liquidation of Step Oiltools B.V. has been remeasured to zero as of September 30, 2026 and December 31, 2025.

We classify financial instruments in our Condensed Consolidated Balance Sheets based on the maturity date of these instruments. As of December 31, 2025, the fair value of our financial instruments is presented in Other current receivables and Other current liabilitiesin our Condensed Consolidated Balance Sheets.

The carrying value of cash and cash equivalents, current receivables, accounts payable and accrued expenses approximates fair value based on the short-term nature of these accounts.

Designated Hedges

The following table presents the notional amounts and maturity profile of derivative instruments designated as cash flow hedges as of December 31, 2025. All designated hedging contracts expired during the nine months ended September 30, 2026, andno designated hedging instruments were outstanding as of September 30, 2026. Valuation techniques and inputs for forward contracts are based on quoted forward exchange rates.

Non-Designated Hedges

The table below presents the notional value of the non-designated derivative financial instruments and a maturity analysis of the related derivatives’ cash flows. Valuation techniques and inputs for forward contracts are based on the quoted forward exchange rate.

For the three and nine months ended September 30, 2026, we recorded a (gain) loss of $2.1 million and $3.6 million, respectively, related to non-designated hedges in Other non-operating income (loss), net in our Condensed Consolidated Statements of Income, compared to (gain) loss of $0.20 million for both the three and nine months ended September 30, 2025.

6. Other Current Liabilities

Other current liabilities consisted of the following:

7. Leases

The following table sets forth supplemental Condensed Consolidated Balance Sheets information related to leases:

For the three and nine months ended September 30, 2026, we recognized operating lease cost of $2.7 million and $8.2 million, respectively, and $2.9 million and $8.3 million for the three and nine months ended September 30, 2025, respectively, in our Condensed Consolidated Statements of Income.

8. Debt

Below are the contractual terms of the Company’s interest-bearing loans and borrowings that are measured at amortized cost. The carrying values of the Company’s short-term and long-term debt consisted of the following:

(a). Expired on March 26, 2026, with the Company retaining a one-year period from each respective withdrawal date to remit payment.

Fair Values

As of September 30, 2026 and December 31, 2025, the fair value of the 7.875% Senior Secured Bonds due 2028 was $204.0 million and $204.5 million, respectively. The fair value was determined using a market approach based on observable inputs. For the remaining debt instruments, the book values of each instrument approximate its respective fair value, as these interest rates are variable in nature and are reflective of market rates.

9. Revenue from Contracts with Customers

Disaggregated Revenue

The Company disaggregates revenue from contracts with customers by revenue type for both its ESS and PCS segments, as it believes this best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors.

The following tables present revenue from contracts with customers:

(a). Product revenue includes related party revenue.

The following table presents the timing of revenue recognition:

Contract assets consisted of the following:

Contract liabilities consisted of the following:

Revenue recognized during the nine months ended September 30, 2026 and 2025 that was included in the contract liabilities balance at the beginning of such periods was $35.0 million and $46.4 million, respectively.

Transaction Price Allocated to the Remaining Performance Obligations

As of September 30, 2026, the aggregate amount of the transaction price allocated to the unsatisfied or partially unsatisfied performance obligations was $434.0 million. As of September 30, 2026, the Company expected to recognize substantially all of the revenue from the total remaining performance obligations over the next 12 months. Contract modifications could affect both the timing to complete as well as the amount to be received as the Company fulfills the related remaining performance obligations.

10. Accrued Expenses

Accrued expenses consisted of the following:

(a). Costs of future estimated expenditures for environmental remediation liabilities are not discounted to their present value due to the timing of the future expenditures not being reliably determinable. The environmental remediation liability is related to two plants.

The following table describes the changes to the Company’s warranty liability:

We recognized warranty expense of $0.4 million and $1.2 million for the three and nine months ended September 30, 2026, respectively, and $1.5 million and $4.2 million for the three and nine months ended September 30, 2025, respectively. These expenses were recorded in our Condensed Consolidated Statements of Income within Total cost of sales.

11. Other Liabilities

Other liabilities consisted of the following:

(a). Other long-term liabilities include $3.7 million of contingent consideration related to the Drillform acquisition, as of both September 30, 2026, and December 31, 2025.

12. Equity

Prior to the IPO, the capital structure of HMH B.V. consisted of two different classes of ordinary shares,100 Class A ordinary shares and 100 Class B ordinary shares at €1.00 par value each. Baker Hughes and Akastor as Principal Stockholders owned all of the equity interests in HMH B.V.

Amendment and Restatement of Certificate of Incorporation

In connection with the reorganization, the certificate of incorporation of HMH was amended and restated, among other things, to provide for the authorization of (i)1,000,000,000 shares of Class A common stock, (ii)500,000,000 shares of Class B common stock and (iii)10,000,000 shares of preferred stock.

The holders of Class A common stock have both voting and economic rights, including rights to dividends and liquidation proceeds. In contrast, holders of Class B common stock have voting rights only and are not entitled to dividends or liquidation distributions.

Reorganization and Initial Public Offering

The following is a summary of the securities reclassified in connection with the reorganization transactions and IPO:

•HMH B.V. underwent a 346,774.96 for 1 stock split, after which Baker Hughes owned 17,338,748 B.V. Voting Class A Shares and 17,338,748 B.V. Voting Class B Shares and Akastor owned 17,338,748 B.V. Voting Class A Shares and 17,338,748 B.V. Voting Class B Shares.

•HMH B.V. recapitalized to convert (i)32,577,496 B.V. Voting Class A Shares to B.V. Non-Voting Class A Shares and (ii)32,577,496 B.V. Voting Class B Shares to B.V. Non-Voting Class B Shares.

•HMH and the Principal Stockholders entered into an exchange agreement under which the Principal Stockholders may, subject to certain limitations, exchange their HMH B.V. non‑voting Class A and Class B ordinary shares, together with an equivalent number of shares of Class B common stock in HMH, for shares of Class A common stock on aone‑for‑one basis or, at the Company's election, for cash.

•On April 2, 2026, HMH completed the IPO of 10,520,000 shares of Class A common stock, and received net proceeds of approximately $197.8 million after deducting the underwriters’ discounts and offering fees of $12.6 million. HMH also granted the IPO underwriters a 30-day over-allotment option to purchase additional shares of Class A common stock on the same terms. On April 30, 2026, the underwriters partially exercised the option for 685,844 shares of Class A common stock, resulting in additional net proceeds of $12.9 million, after deducting the underwriters’ discounts and offering fees of $0.8 million.

•HMH used approximately $39.5 million of the net proceeds from the IPO as the cash consideration to purchase an aggregate of 2,100,000 B.V. Voting Class A Shares and 2,100,000 B.V. Voting Class B Shares from the Principal Stockholders, and the Principal Stockholders received 32,577,496 shares of Class B common stock in HMH in exchange for relinquishing voting rights on 32,577,496 of their B.V. Voting Class A Shares and 32,577,496 of their B.V. Voting Class B Shares.

•HMH contributed the remaining net proceeds from the IPO to HMH B.V. in exchange for B.V. Voting Shares, consisting of 8,420,000 B.V. Voting Class A Shares and 8,420,000 B.V. Voting Class B Shares, such that, after the exchange, HMH held, after taking into account the B.V. Voting Shares acquired from the Principal Stockholders, one B.V. Voting Class A Share and one B.V. Voting Class B Share, respectively, for each share of our Class A common stock outstanding following the IPO and reorganization.

•On May 5, 2026, HMH contributed all of the net proceeds from the underwriters’ exercise of the over-allotment option of $12.9 million to HMH B.V. in exchange for an additional 685,844 B.V. Voting Class A Shares and 685,844 B.V. Voting Class B Shares. HMH B.V. used such additional net proceeds to purchase in equal proportion from the Principal Stockholders an aggregate number of shares of the Company's Class B common stock, B.V. Non-Voting Class A Shares and B.V. Non-Voting Class B Shares equal to the number of shares of the Company’s Class A common stock purchased by the underwriters pursuant to the exercise of the over-allotment option.

After giving effect to these transactions, including 836,781 shares of the Company’s Class A common stock issuable upon the consummation of the IPO pursuant to equity awards granted to employees that vested in connection with the IPO, Baker Hughes and Akastor each owned 15,945,826 shares of the Company’s Class B common stock, collectively representing approximately 73% of the total voting power of the Company’s capital stock, and each owned 15,945,826 B.V. Non-Voting Class A Shares and 15,945,826 B.V. Non-Voting Class B Shares, collectively representing an approximately 73% equity interest in HMH B.V. and 0% voting power of the equity in HMH B.V.

Non-controlling Interest

Following the reorganization and the IPO, HMH consolidates the full results of HMH B.V. and its subsidiaries. The portion of the net assets and results of HMH B.V. attributable to the economic interests retained by the Principal Stockholders through their B.V. non‑voting shares is presented as non-controlling interest in the Company's consolidated financial statements. Upon the reorganization, the Company recognized a non-controlling interest of approximately $642.1 million, with a corresponding adjustment to the Condensed Consolidated Statements of Changes in Equity. The non-controlling interest is subsequently adjusted for the Principal Stockholders’ proportionate share of net income and other comprehensive income of HMH B.V. and is reduced as Principal Stockholders exercise their exchange rights, at which point the corresponding economic interest is reclassified from non-controlling interest to equity attributable to HMH Holding Inc.

The following table summarizes the change in ownership of HMH B.V.:

(a). Includes the impact of incremental vesting of equity-based awards during the third quarter of 2026.

As of September 30, 2026, the 63,783,304 total B.V. Non-Voting Class A Shares and B.V. Non-Voting Class B Shares together with 31,891,652 shares of the Company’s Class B common stock could be exchanged for 31,891,652 shares of the Company’s Class A common stock.

Treasury Stock

Repurchases of the Company's Class A common stock are included in treasury stock at the cost of shares repurchased.

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income (loss) consisted of the following:

13. Share-based Compensation

Pre-IPO Plans

Prior to the IPO, the Board of Directors of the Company (the “Board”) established the founders’ phantom equity award, the 2022 long-term incentive program, the 2023 long-term incentive program, the 2024 long-term incentive program and the 2025 long-term incentive program (collectively, the “Pre-IPO Plans”) as award programs for management and certain key personnel to entitle them to compensation when certain strategic goals are met. The 2026 Plan (as defined herein) replaced the Pre-IPO Plans, and no additional awards will be granted under those historical plans. In connection with the closing of the IPO, all outstanding equity awards previously granted under the Pre-IPO Plans were replaced with substantially similar awards under the 2026 Plan (the “Replacement Awards”).

2026 Long-term Incentive Plan

On March 31, 2026, the Board approved the HMH Holding Inc. 2026 Long-Term Incentive Plan (the “2026 Plan”), which became effective upon the closing of the IPO. The 2026 Plan authorizes the grant of incentive stock options, RSUs, and other equity-based awards to eligible employees, non-employee directors, and consultants. As of September 30, 2026, the Company has reserved a maximum of 2.2 million shares of Class A common stock for issuance under the 2026 Plan, of which approximately 1.4 million shares are available for issuance of future awards. This share reserve includes an evergreen provision allowing for an annual increase of up to 5% of outstanding shares, effective on the first day of each fiscal year at the discretion of the Board. The Company has reserved an additional 1,500,714 shares of Class A common stock for issuance under the 2026 Plan to be used exclusively to satisfy the obligations under the Replacement Awards.

Share-based compensation cost

The following table summarizes total share-based compensation expense by financial statement line item:

(a). For the nine months ended September 30, 2026, total share-based compensation cost included $22.5 million related to pre-IPO share based awards recognized upon consummation of the IPO.

As of September 30, 2026, there was approximately $16.3 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under both the Pre-IPO Plans and the 2026 Plan. This cost is expected to be recognized over a weighted-average period of 2.30 years.

Restricted stock:

RSUs generally vest over athree-year period, with fair value determined by the closing market price of the Company’s Class A common stock on the date of grant. The following table presents a summary of RSU activity for the nine months ended September 30, 2026:

(a). Includes 0.9 million shares vested upon consummation of the IPO.

(b). During the three and nine months ended September 30, 2026, the total grant date fair value of restricted stock unit awards that vested was $2.6 million and $16.1 million, respectively.

Performance share units:

PSUs generally cliff vest three years from the date of grant, with their grant-date fair value measured utilizing a Monte Carlo simulation model. For the 2026 PSU grant, the number of shares of Class A common stock issuable is determined by comparing the Company’s Total Shareholder Return Compound Annual Growth Rate (TSR CAGR) against the TSR CAGR of the peer group over athree-year performance period ending December 31,

2028. Initial payouts range from 0% to 200% of target. The following table presents a summary of PSU activity for the nine months ended September 30, 2026:

(a). Includes 0.2 million shares vested upon consummation of the IPO.

(b). During the three and nine months ended September 30, 2026, the total grant date fair value of performance share units that vested was $2.3 million and $4.5 million, respectively.

The Company estimated the grant date fair value of PSU awards using the following weighted average assumptions:

14. Employee Benefit Expenses

The components of net periodic cost recognized in Selling, general and administrative expenses in our Condensed Consolidated Statements of Income consisted of the following:

15. Income Taxes

Provision for Income Taxes

We recorded a tax provision of $7.2 million and $8.5 million for the three and nine months ended September 30, 2026, respectively, compared to tax provisions of $4.3 million and $14.8 million for the corresponding prior year periods, respectively. The increase in our tax provisions for the three months ended September 30, 2026 was primarily attributable to shifts in the Company’s geographic mix of income, which unfavorably altered our estimated annual effective tax rate. The decreases in our tax provisions for the nine months ended September 30, 2026 were primarily attributable to stock compensation expenses recorded in 2026 upon completion of the IPO and shifts in the Company’s geographic mix of income, which unfavorably altered our estimated annual effective tax rate. Consequently, our effective tax rate shifted to 41.0% and 48.1% for the three and nine months ended September 30, 2026, respectively, compared to 21.5% and 31.9% for the same periods in 2025, respectively.

These fluctuating effective rates were heavily driven by valuation allowances on losses in certain foreign jurisdictions where tax benefits cannot currently be realized, along with the ongoing impacts of localized withholding taxes, statutory jurisdictional rate differentials, and pass-through non-controlling interests related to U.S. income taxed at the owner level. For the nine months ended September 30, 2026, our income tax included the impact of a $22.5 million stock-based compensation expense related to pre-IPO stock-based awards and certain related transaction costs.

Tax Receivable Agreement

On April 2, 2026, the Company entered into a Tax Receivable Agreement (the “TRA”) with HMH B.V. and the Principal Stockholders. The TRA requires the Company to pay 85% of the net cash savings, if any, actually realized or deemed to be realized in certain circumstances to the Principal Stockholders in connection with U.S. federal, state, local and foreign income taxes and franchise taxes resulting from (i) acquisitions of B.V. Voting

Shares from the Principal Stockholders by the Company in connection with the IPO, (ii) the acquisition of B.V. Non-Voting Shares from the Principal Stockholders using the net proceeds from any future offering, (iii) redemptions or exchanges of B.V. Non-Voting Shares by the Principal Stockholders and the corresponding number of shares of the Company’s Class B common stock for shares of the Company’s Class A common stock or cash or (iv) tax benefits related to imputed interest deemed arising as a result of payments made under the TRA.

During the nine months ended September 30, 2026, the Company recorded a TRA liability of $3.8 million. The Company also recorded a deferred tax liability of $2.0 million, resulting from the difference between the book and tax basis of the Company’s investment in HMH B.V. which was reflected in Additional paid-in capital in our Condensed Consolidated Balance Sheetas of September 30, 2026.

16. Commitments and Contingencies

We are involved in various claims and legal actions arising in the ordinary course of business. A liability is recognized in our consolidated financial statements when a loss is considered probable and amounts can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, we will disclose the nature of the claim and, if possible, an estimate of the loss or range of loss. We believe it is remote that outcomes of such known matters would have a material adverse impact on our consolidated financial position, results of operations or liquidity.

Restructuring

The Company has taken a substantial workforce decrease and reorganization in recent years, driven by the desire to increase efficiency and flexibility and rationalize its footprint. In January 2025, the Company initiated a restructuring plan primarily focused on global workforce reductions and the reorganization of facilities in Horten and Fornebu, Norway. In 2026, the Company expanded the scope of this restructuring plan to include the reorganization of its operations in Mexico and the Mobile facility in the U.S. These initiatives impacted 210 individuals, comprising 110 employees in Norway,60 employees in Mexico,25 employees in Germany and 15 employees in the U.S.

We recognized restructuring and other expenses of $2.2 million and $7.2 million for the three and nine months ended September 30, 2026, respectively, compared to $0.1 million and $4.4 million for the three and nine months ended September 30, 2025. Restructuring and other expenses for the three and nine months ended September 30, 2026 included $0.2 million in right-of-use (ROU) asset impairment charges for both periods. For the three and nine months ended September 30, 2025, restructuring and other expenses included none and $1.8 million in ROU asset impairment charges, respectively.

The following table summarizes the changes to the Company’s provision balance for restructuring and other charges:

Other

In the normal course of business with customers, vendors and others, the Company has issued various bank guarantees, such as advance payment guarantees, surety bonds, performance guarantees, bid bonds, customs and tax guarantees to guarantee the Company’s performance as it relates to contracts with customers, contract bidding, customs duties, tax appeals and obligations in various jurisdictions. As of September 30, 2026, the Company had outstanding bank guarantees of $25.3 million. As of September 30, 2026, none of these guarantees either has, or is likely to have, a material impact on the Company’s financial position, results of operations or cash flows as the Company expects to comply with the underlying performance requirements.

17. Related Party Transactions

The following tables set forth a summary of transactions and balances with significant related parties:

18. Segment Information

Operating segments are defined as components of an entity for which separate financial information is available and evaluated on a regular basis by the Chief Operating Decision Maker (“CODM”) to allocate resources and assess performance. As of September 30, 2026 and 2025, the Company hadtwo operating segments, ESS and PCS. The Company has identified its reportable segments based on the nature of the products and services, markets served and pricing and go-to-market strategies.

•ESS is a supplier of drilling solutions and complete topside drilling packages and services to both onshore and offshore oil and gas customers. Key product offerings consist of overhaul, equipment installation and commissioning, services account management, 24/7 technical support, logistics, engineering upgrades, spare parts supply and training and condition-based maintenance. The ESS segment is derived from the acquisition of MHWirth AS.

•PCS is a supplier of integrated drilling products and services. Key product offerings consist of blowout preventer systems, controls and drilling riser equipment, spare parts supply for rig operations and maintenance programs, overhaul and recertification and reactivation of rigs and technical and operational rig support. The PCS segment is derived from the acquisition of Subsea Drilling Systems.

In addition to its reportable segments, the Company has corporate operations (Headquarters) which include general corporate expenses. Headquarters includes certain corporate stewardship items discussed below necessary to reconcile the reportable segments to the Company’s total amounts.

The CODM, who is the Company’s Chief Executive Officer, uses segment operating income as the primary financial measure to evaluate segment performance. Segment operating income is defined as income before taxes (excluding certain corporate stewardship costs which are not allocable to the segments, such as legal, certain corporate finance functions and centrally managed initiatives, other non-operating items, and depreciation and amortization related to certain long-lived assets, including the headquarters office space), net other operating expenses (income), net foreign currency gain (loss), net other non-operating income (loss), and net interest income (expense). Inter-segment pricing is determined on an arm’s length basis. The CODM uses segment operating income in the budget and forecasting process and to monitor budget versus actual results, which are used in assessing the performance of the segments and to allocate resources to the segments. Segment assets are not reported to, or used by, the CODM to allocate resources to or assess performance of the Company’s segments.

The following table presents the reconciliation of reportable segment revenues:

The following table presents the reconciliation of segment performance:

(a)As the CODM does not regularly review intersegment revenue, it is excluded from the determination of total segment operating income. The CODM uses revenue from external customers to assess performance and allocate resources.

(b)Restructuring and other expenses consist of severance costs primarily related to workforce reductions and impairment of right-of-use assets.

(c)Unallocated corporate costs include certain centralized corporate stewardship costs that are not allocable to the segments and are included in Selling, general and administrative expenses in our Condensed Consolidated Statements of Income.

19. Earnings per Share

Basic earnings per share is calculated by dividing the net income (loss) attributable to the Company during the period by the weighted average number of shares of Class A common stock outstanding during the same period. For the periods following the IPO, shares of Class B common stock are excluded from the computation of basic and diluted earnings per share, as these shares represent nonparticipating securities with no rights to dividends or earnings.

For periods prior to the IPO, we treated the Corporate Reorganization as a merger of entities under common control and retrospectively reflected earnings per share as though these transactions occurred at the earliest period presented. We allocated historical net income (loss) between Class A common stockholders and non-controlling interests based on their respective share ownership, with Class A and Class B share equivalents calculated from the HMH B.V. shares held by the Principal Stockholders.

The calculation of basic and diluted weighted average shares used for calculating earnings (loss) per share for the three and nine months ended September 30, 2025 does not include the 11.2 million shares of Class A common stock sold in the IPO.

The following table reconciles the figures used to calculate basic and diluted net income per share for common stock:

We apply the treasury stock method to certain equity-based compensation awards and the "if-converted" method to determine the dilutive impact of the associated exchange rights on weighted-average common shares outstanding.

The following table details the actual potential common shares excluded from the diluted share calculation because their effect would be anti-dilutive:

As of September 30, 2026, the 63,783,304 total B.V. Non-Voting Class A Shares and B.V. Non-Voting Class B Shares together with 31,891,652 shares of the Company’s Class B common stock could be exchanged for 31,891,652 shares of the Company’s Class A common stock.