Shoals Technologies Group, Inc.

Previous wording

Traditionally, and for the three and six months ended June 30, 2025, we primarily sold our EBOS solutions and components and OEM components to customers in the United States. Specifically, we primarily sold to engineering, procurement and construction firms (“EPCs”) for use in large solar projects designed to generate electricity and feed it directly into the electric grid, typically with a generation capacity of 1 megawatt (“MW”) or greater (“utility-scale solar”). These EPCs work with owners and developers of solar assets to build solar energy projects. However, given the mission critical nature of EBOS, the decision to use our products typically involves input from both the EPC and the owner/developer of the solar energy project. We are proud of the breadth of EPCs we have worked with. We believe that as of June 30, 2025, we have worked with 14 of the top 15 U.S. solar EPCs, per Wood Mackenzie data from 2022-2024.

Current wording

Traditionally, and for the three and nine months ended September 30, 2025, we primarily sold our EBOS solutions and components and OEM components to customers in the United States. Specifically, we primarily sold to engineering, procurement and construction firms (“EPCs”) for use in large solar projects designed to generate electricity and feed it directly into the electric grid, typically with a generation capacity of 1 megawatt (“MW”) or greater (“utility-scale solar”). These EPCs work with owners and developers of solar assets to build solar energy projects. However, given the mission critical nature of EBOS, the decision to use our products typically involves input from both the EPC and the owner/developer of the solar energy project. We are proud of the breadth of EPCs we have worked with. We believe that as of September 30, 2025, we have worked with 14 of the top 15 U.S. solar EPCs, per Wood Mackenzie data from 2022-2024.

Previous wording

We derived 74.2% of our revenue from the sale of system solutions for the six months ended June 30, 2025. For the same period, we derived substantially all of our revenue from customers in the U.S. As of June 30, 2025, we had $671.3 million of backlog and awarded orders, backlog of $260.9 million represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders of $410.4 million are orders we are in the process of documenting a contract for but for which a contract has not yet been signed. As of June 30, 2025, we believe approximately $247.1 million of backlog and $293.2 million of awarded orders have delivery dates in the next twelve months. Additionally, more than 13.3% of our June 30, 2025 backlog and awarded orders related to international projects. As of June 30, 2025, backlog and awarded orders increased by 4.4% relative to the same date last year and increased by 4.1% relative to March 31, 2025.

Current wording

We derived 77.1% of our revenue from the sale of system solutions for the nine months ended September 30, 2025. For the same period, we derived substantially all of our revenue from customers in the U.S. As of September 30, 2025, we had $720.9 million of backlog and awarded orders, backlog of $297.8 million represents signed purchase orders or contractual minimum purchase commitments with take-or-pay provisions and awarded orders of $423.1 million are orders we are in the process of documenting a contract for but for which a contract has not yet been signed. As of September 30, 2025, we believe approximately $297.8 million of backlog and $277.1 million of awarded orders have delivery dates in the next twelve months. Additionally, more than 11.5% of our September 30, 2025 backlog and awarded orders related to international projects. As of September 30, 2025, backlog and awarded orders increased by 21.0% relative to the same date last year and increased by 7.4% relative to June 30, 2025.

Previous wording

Beginning in March 2025, the current Presidential Administration (the “Administration”) imposed broad actions related to tariffs with global trading partners. On April 2, 2025, the Administration imposed significant tariffs, including a 10% tariff on most imports from other trading partners, as well as additional reciprocal tariffs on specific countries. On April 9, 2025, the Administration implemented a 90-day pause on tariffs for most countries, with an ability to negotiate trade deals with the United States. On July 31, 2025, the Administration announced modifications to reciprocal tariff rates, with rates on most goods in excess of 10% with specific exceptions. These rates will take effect on August 7, 2025. Negotiations with trading partners are ongoing by the Administration and future changes in tariff policies are possible. The imposition of tariffs have led to retaliatory tariffs and tariff countermeasures, and the Administration and U.S. trading partners have threatened further restrictions on trade.

Current wording

Beginning in March 2025, the current U.S. Presidential Administration (the “Administration”) unveiled broad actions related to tariffs with global trading partners. Subsequently, the Administration has imposed a series of significant tariffs, including a 10% tariff on most imports from other trading partners, as well as additional reciprocal tariffs on specific countries. Administration activity related to changes in tariff percentages and qualifying products, including active negotiations with trading partners and internal trade policy development, is ongoing. Future changes in tariff policies are possible. The Administration’s imposition of tariffs has led to retaliatory tariffs and tariff countermeasures, and the Administration and U.S. trading partners have threatened further restrictions on trade.

Previous wording

On July 4, 2025, President Donald Trump signed H.R. 1, which significantly modifies certain energy tax provisions aforementioned, in the IRA. Changes to the IRA made by H.R. 1 include an accelerated phaseout or termination of the PTC and TC for solar projects placed in service after 2027. There are also rules related to foreign entities of concern that make any solar projects owned or controlled by a prohibited foreign entity ineligible for certain tax credits. The removal of the incentives that drive demand for solar energy production could reduce the financial attractiveness of solar projects, leading to decreased demand for our products. Additionally, the uncertainty surrounding the future of these incentives could cause delays in project financing and execution, further impacting our sales volume and growth rate.

Current wording

On July 4, 2025, President Donald Trump signed H.R. 1, which significantly modifies certain energy tax provisions aforementioned, in the IRA. Changes to the IRA made by H.R. 1 include an accelerated phaseout or termination of the PTC and TC for solar projects placed in service after 2027. There are also rules related to foreign entities of concern that make any solar projects owned or controlled by a prohibited foreign entity ineligible for certain tax credits. The removal of the incentives that drive demand for solar energy production could reduce the financial attractiveness of solar projects, leading to decreased demand for our products.

Previous wording

Global inflationary pressures persisted during the first two quarters of 2025 and are expected to persist to a lesser extent during the remainder of 2025; however, the impact of inflation remains uncertain for the rest of 2025. Interest rates have remained generally higher when compared to historical rates, causing the interest rates associated with our Senior Secured Credit Agreement to be generally higher; however, interest rates did decline from their historically high levels during the course of 2024. Should interest rates rise, when combined with the implications of higher government deficits and debt, tighter monetary policy, political instability, and volatility and uncertainty in global trade, the Company’s costs for accessing capital are uncertain and may rise during our forecasted period.

Current wording

Global inflationary pressures persisted during the first three quarters of 2025 and are expected to persist to a lesser extent during the remainder of 2025; however, the impact of inflation remains uncertain for the rest of 2025. Interest rates have remained generally higher when compared to historical rates, causing the interest rates associated with our Senior Secured Credit Agreement to be generally higher; however, interest rates did decline from their historically high levels during the course of 2024. Should interest rates rise, when combined with the implications of higher government deficits and debt, evolving monetary policy, political instability, and volatility and uncertainty in global trade, the Company’s costs for accessing capital are uncertain and may rise during our forecasted period.

Previous wording

Our ability to obtain the raw materials required to manufacture our components and system solutions from domestic and international suppliers, as well as our ability to secure inbound logistics to and from our facilities, remained challenging during the first half of 2025, complicated by volatility in government policies and regulation concerning trade and ongoing political conflict. While the Company does not directly source a significant amount of raw materials from Europe, the Russia-Ukraine war has reduced the availability of certain materials that can be sourced in Europe and, as a result, increased global logistics costs for the procurement of some inputs and materials used in our products. We expect these trends to persist as challenges and conflicts remain in 2025.

Current wording

Our ability to obtain the raw materials required to manufacture our components and system solutions from domestic and international suppliers, as well as our ability to secure inbound logistics to and from our facilities, remained challenging during the first three quarters of 2025, complicated by volatility in government policies and regulation concerning trade and ongoing political conflict. While the Company does not directly source a significant amount of raw materials from Europe, the Russia-Ukraine war has reduced the availability of certain materials that can be sourced in Europe and, as a result, increased global logistics costs for the procurement of some inputs and materials used in our products. We expect these trends to persist as challenges and conflicts remain in 2025.

Previous wording

Operating expenses consist of general and administrative expenses as well as depreciation and amortization expense. Personnel-related costs are the most significant component of our operating expenses and include salaries, equity-based compensation, benefits, payroll taxes and commissions. The number of our full-time employees increased from 155 to 177 from June 30, 2024 to June 30, 2025, and we expect to hire new employees in the future to support our growth. The timing of these additional hires could materially affect our operating expenses in any particular period, both in absolute dollars and as a percentage of revenue.

Current wording

Operating expenses consist of general and administrative expenses as well as depreciation and amortization expense. Personnel-related costs are the most significant component of our operating expenses and include salaries, equity-based compensation, benefits, payroll taxes and commissions. The number of our full-time employees increased from 165 to 186 from September 30, 2024 to September 30, 2025, and we expect to hire new employees in the future to support our growth. The timing of these additional hires could materially affect our operating expenses in any particular period, both in absolute dollars and as a percentage of revenue.

Previous wording

Revenue increased by $11.6 million, or 11.7%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, driven by increased volume of products produced to meet utility scale solar project demands.

Current wording

Revenue increased by $33.6 million, or 32.9%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, driven by increased volume of products produced to meet utility scale solar project demands.

Previous wording

Cost of revenue increased by $10.4 million, or 17.5%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, driven by the increase in revenue. Gross profit as a percentage of revenue was 37.2% during the three months ended June 30, 2025, and 40.3% during the three months ended June 30, 2024. The decrease in gross profit as a percentage of revenue was driven by strategic pricing actions, volume discounts, and customer and product mix.

Current wording

Cost of revenue increased by $8.8 million, or 11.4%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024, driven by the increase in revenue. Gross profit as a percentage of revenue was 37.0% during the three months ended September 30, 2025, and 24.8% during the three months ended September 30, 2024. The increase in gross profit as a percentage of revenue was driven by an additional $13.3 million of expense for wire insulation shrinkback warranty expense recorded in the prior year.

Previous wording

General and administrative expenses increased $3.8 million, or 20.0%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase in general and administrative expenses was the result of a $3.0 million increase in general legal expenses for wire insulation shrinkback, intellectual property, and shareholder litigation matters.

Current wording

General and administrative expenses increased $10.7 million, or 57.0%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase in general and administrative expenses was the result of a $5.7 million increase in general legal expenses for wire insulation shrinkback, intellectual property, and shareholder litigation matters along with a $3.5 million increase in expenses related to cash and stock-based incentive compensation.

Previous wording

Depreciation and amortization expenses decreased by less than $0.1 million, or 2.6%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. Levels of intangible assets and property, plant, and equipment associated with operating expenses remained consistent period over period.

Current wording

Depreciation and amortization expenses increased by less than $0.1 million, or 2.3%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. Levels of intangible assets and property, plant, and equipment associated with operating expenses remained consistent period over period.

Previous wording

Interest expense, decreased by $1.0 million, or 31.5%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. This decrease was due to a decrease in the total weighted average outstanding balance of the Revolving Credit Facility during the three months ended June 30, 2025 compared to the three months ended June 30, 2024, and decreases in the federal funds effective rate as compared to the prior period.

Current wording

Interest expense, decreased by $0.3 million, or 10.7%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. This decrease was due to a decrease in the total weighted average outstanding balance of the Revolving Credit Facility during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, and decreases in the federal funds effective rate as compared to the prior period.

Previous wording

Income tax expense totaled $5.4 million for the six months ended June 30, 2025, as compared to income tax expense of $6.2 million for the six months ended June 30, 2024. Our effective income tax rate for the six months ended June 30, 2025 and 2024 was 28.5% and 27.1%, respectively. The change in our effective income tax rate was due to various discrete items, particularly RSU and PSU shortfalls and a state tax refund, during the six months ended June 30, 2025.

Current wording

Income tax expense totaled $4.0 million for the three months ended September 30, 2025, as compared to income tax expense of $1.7 million for the three months ended September 30, 2024. Our effective income tax rate for the three months ended September 30, 2025 and 2024 was 25.1% and 118.6%, respectively. The change in our effective income tax rate was due to various discrete items, particularly RSU and PSU shortfalls and changes in return to provision adjustments, during the three months ended September 30, 2025.

Previous wording

Revenue increased by $1.1 million, or 0.6%, for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, driven by increased volume of products produced to meet utility scale solar project demands.

Current wording

Revenue increased by $34.8 million, or 11.9%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, driven by increased volume of products produced to meet utility scale solar project demands.

Previous wording

Cost of revenue increased by $8.3 million, or 7.3%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, driven by the increase in revenue and increased costs of materials. Gross profit as a percentage of revenue was 36.3% during the six months ended June 30, 2025, and 40.2% during the six months ended June 30, 2024. The decrease in gross profit as a percentage of revenue was driven by strategic pricing actions, volume discounts, and customer and product mix.

Current wording

Cost of revenue increased by $17.0 million, or 8.9%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, driven by the increase in revenue and increased costs of materials. Gross profit as a percentage of revenue was 36.6% during the nine months ended September 30, 2025, and 34.8% during the nine months ended September 30, 2024. The increase in gross profit as a percentage of revenue was driven by an additional $13.3 million of expense for wire insulation shrinkback warranty expense recorded in the prior year along with some strategic pricing actions, volume discounts, and customer and product mix.

Previous wording

General and administrative expenses increased $2.8 million, or 6.6%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase in general and administrative expenses was the result of a $2.1 million increase in general legal expenses for wire insulation shrinkback, intellectual property, and shareholder litigation matters along with an increase of $0.5 million in information technology costs and $0.4 million in sales and marketing costs.

Current wording

General and administrative expenses increased $13.4 million, or 22.1%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase in general and administrative expenses was the result of a $7.7 million increase in general legal expenses for wire insulation shrinkback, intellectual property, and shareholder litigation matters along with an increase of $3.5 million in expenses related to incentive compensation.

Previous wording

Depreciation and amortization expenses decreased by less than $0.1 million, or 0.6%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. Levels of intangible assets and property, plant, and equipment associated with operating expenses remained consistent period over period.

Current wording

Depreciation and amortization expenses increased by less than $0.1 million, or 0.3%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. Levels of intangible assets and property, plant, and equipment associated with operating expenses remained consistent period over period.

Previous wording

Interest expense, decreased by $3.1 million, or 39.9%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. This decrease was due to a decrease in the total weighted average outstanding balance of the Term Loan Facility and Revolving Credit Facility during the six months ended June 30, 2025 compared to the six months ended June 30, 2024, as well as a decrease in borrowing rates applicable to the Senior Secured Credit Agreement and decreases in the federal funds effective rate as compared to the prior period.

Current wording

Interest expense, decreased by $3.4 million, or 31.4%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. This decrease was due to a decrease in the total weighted average outstanding balance of the Term Loan Facility and Revolving Credit Facility during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, as well as a decrease in borrowing rates applicable to the Senior Secured Credit Agreement and decreases in the federal funds effective rate as compared to the prior period.

Previous wording

Income tax expense totaled $3.1 million for the three months ended June 30, 2025, as compared to income tax expense of $3.7 million for the three months ended June 30, 2024. Our effective income tax rate for the three months ended June 30, 2025 and 2024 was 18.4% and 23.9%, respectively. The change in our effective income tax rate was due to various discrete items, particularly RSU and PSU shortfalls and a state tax refund, during the three months ended June 30, 2025.

Current wording

Income tax expense totaled $9.4 million for the nine months ended September 30, 2025, as compared to income tax expense of $7.9 million for the nine months ended September 30, 2024. Our effective income tax rate for the nine months ended September 30, 2025 and 2024 was 27.0% and 32.5%, respectively. The change in our effective income tax rate was due to various discrete items, particularly RSU and PSU shortfalls and a state tax refund, during the nine months ended September 30, 2025.

Previous wording

We define Adjusted Gross Profit as gross profit plus wire insulation shrinkback expenses. We define Adjusted Gross Profit Percentage as Adjusted Gross Profit divided by revenue. We define Adjusted EBITDA as net income plus/(minus) (i) interest expense, (ii) interest income, (iii) income tax expense, (iv) depreciation expense, (v) amortization of intangibles, (vi) equity-based compensation, (vii) gain on sale of asset (viii) wire insulation shrinkback expenses, and (ix) wire insulation shrinkback litigation expenses. We define Adjusted Net Income as net income plus (i) amortization of intangibles, (ii) amortization / write-off of deferred financing costs, (iii) equity-based compensation, (iv) gain on sale of asset (v) wire insulation shrinkback expenses, and (vi) wire insulation shrinkback litigation expenses, all net of applicable income taxes. We define Adjusted Diluted EPS as Adjusted Net Income divided by the diluted weighted average shares of Class A common stock outstanding for the applicable period.

Current wording

We define Adjusted Gross Profit as gross profit plus wire insulation shrinkback expenses. We define Adjusted Gross Profit Percentage as Adjusted Gross Profit divided by revenue. We define Adjusted EBITDA as net income plus/(minus) (i) interest expense, (ii) interest income, (iii) income tax expense, (iv) depreciation expense, (v) amortization of intangibles, (vi) equity-based compensation, (vii) gain on sale of asset (viii) wire insulation shrinkback expenses, (ix) wire insulation shrinkback litigation expenses, and (x) plant optimization expenses. We define Adjusted Net Income as net income plus (i) amortization of intangibles, (ii) amortization / write-off of deferred financing costs, (iii) equity-based compensation, (iv) gain on sale of asset (v) wire insulation shrinkback expenses, (vi) wire insulation shrinkback litigation expenses, and (vii) plant optimization expenses, all net of applicable income taxes. We define Adjusted Diluted EPS as Adjusted Net Income divided by the diluted weighted average shares of Class A common stock outstanding for the applicable period.

Previous wording

(a)For the three and six months ended June 30, 2025, represents no wire insulation shrinkback warranty expenses related to the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback, nor any inventory write-downs of wire in connection with wire insulation shrinkback. For the three and six months ended June 30, 2024 represents $0.5 million of inventory write-downs of wire in connection with the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback. We consider expenses incurred in connection with the identification, repair and replacement of the impacted wire harnesses distinct from normal, ongoing service identification, repair and replacement expenses that would be reflected under ongoing warranty expenses within the operation of our business, which we do not exclude from our non-GAAP measures. In the future, we also intend to exclude from our non-GAAP measures the benefit of liability releases, if any. We believe excluding expenses from these discrete liability events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 8 - Warranty Liability, in our condensed consolidated financial statements included in this Form 10-Q for more information.

Current wording

(a)For the three and nine months ended September 30, 2025, represents no wire insulation shrinkback warranty expenses related to the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback, nor any inventory write-downs of wire in connection with wire insulation shrinkback. For the three and nine months ended September 30, 2024, represents (i) $13.3 million of wire insulation shrinkback warranty expenses related to the identification, repair and replacement of a subset of wire harnesses presenting unacceptable levels of wire insulation shrinkback, (ii) zero and $0.5 million, respectively, of inventory write-downs of wire in connection with wire insulation shrinkback. We consider expenses incurred in connection with the identification, repair and replacement of the impacted wire harnesses distinct from normal, ongoing service identification, repair and replacement expenses that would be reflected under ongoing warranty expenses within the operation of our business, which we do not exclude from our non-GAAP measures. In the future, we also intend to exclude from our non-GAAP measures the benefit of liability releases, if any. We believe excluding expenses from these discrete liability events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 8 - Warranty Liability, in our condensed consolidated financial statements included in this Form 10-Q for more information.

Previous wording

(b)For the three and six months ended June 30, 2025, represents $2.5 million and $5.1 million, respectively, of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. For the three and six months ended June 30, 2024, represents $1.3 million and $2.2 million of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. We consider this litigation distinct from ordinary course legal matters given the expected magnitude of the expenses, the nature of the allegations in the Company’s complaint, the amount of damages sought, and the impact of the matter underlying the litigation on the Company’s financial results. In the future, we also intend to exclude from our non-GAAP measures the benefit of recovery, if any. We believe excluding expenses from these discrete litigation events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 13 - Commitments and Contingencies, in our condensed consolidated financial statements included in this Form 10-Q for more information.

Current wording

(b)For the three and nine months ended September 30, 2025, represents $6.8 million and $11.9 million, respectively, of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. For the three and nine months ended September 30, 2024, represents $2.3 million and $4.5 million of expenses incurred in connection with the lawsuit initiated by the Company against the supplier of the defective wire. We consider this litigation distinct from ordinary course legal matters given the expected magnitude of the expenses, the nature of the allegations in the Company’s complaint, the amount of damages sought, and the impact of the matter underlying the litigation on the Company’s financial results. In the future, we also intend to exclude from our non-GAAP measures the benefit of recovery, if any. We believe excluding expenses from these discrete litigation events provides investors with a better view of the operating performance of our business and allows for comparability through periods. See Note 13 - Commitments and Contingencies, in our condensed consolidated financial statements included in this Form 10-Q for more information.

Previous wording

(c)Shoals Technologies Group, Inc. is subject to U.S. Federal income taxes, in addition to state and local taxes. Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax. The adjustment to the provision for income tax reflects the effective tax rates below.

Current wording

(d)Shoals Technologies Group, Inc. is subject to U.S. Federal income taxes, in addition to state and local taxes. Represents the estimated tax impact of all Adjusted Net Income add-backs, excluding those which represent permanent differences between book versus tax. The adjustment to the provision for income tax reflects the effective tax rates below.

Previous wording

We generated cash from operating activities of $1.7 million during the six months ended June 30, 2025, as compared to cash provided by operating activities of $50.7 million during the six months ended June 30, 2024. As of June 30, 2025, our cash and cash equivalents were $4.7 million, a decrease from $23.5 million as of December 31, 2024. As of June 30, 2025 we had outstanding borrowings of $131.8 million, a $10.0 million decrease from outstanding borrowings of $141.8 million as of December 31, 2024. As of June 30, 2025, we also had $68.2 million available for additional borrowings under our $200.0 million Revolving Credit Facility.

Current wording

We generated cash from operating activities of $21.2 million during the nine months ended September 30, 2025, as compared to cash provided by operating activities of $66.4 million during the nine months ended September 30, 2024. As of September 30, 2025, our cash and cash equivalents were $8.6 million, a decrease from $23.5 million as of December 31, 2024. As of September 30, 2025 we had outstanding borrowings of $126.8 million, a $15.0 million decrease from outstanding borrowings of $141.8 million as of December 31, 2024. As of September 30, 2025, we also had $71.5 million available for additional borrowings under our $200.0 million Revolving Credit Facility.

Previous wording

The Company did not repurchase any shares of its common stock under the Repurchase Program during the six months ended June 30, 2025. As of June 30, 2025, the Company was authorized to repurchase up to $125 million of the Company’s common stock under the Repurchase Program.

Current wording

The Company did not repurchase any shares of its common stock under the Repurchase Program during the nine months ended September 30, 2025. As of September 30, 2025, the Company was authorized to repurchase up to $125 million of the Company’s common stock under the Repurchase Program.

Previous wording

During the six months ended June 30, 2025, we also used approximately $20.7 million of cash to pay for expenses related to the identification, repair and replacement of the wire harnesses impacted in connection with the wire insulation shrinkback matter. We expect to continue spending significant amounts of cash in connection thereof. For more information, see Note 8 - Warranty Liability in our condensed consolidated financial statements.

Current wording

During the nine months ended September 30, 2025, we also used approximately $32.6 million of cash to pay for expenses related to the identification, repair and replacement of the wire harnesses impacted in connection with the wire insulation shrinkback matter. We expect to continue spending significant amounts of cash in connection thereof. For more information, see Note 8 - Warranty Liability in our condensed consolidated financial statements.

Previous wording

For the six months ended June 30, 2025, cash provided by operating activities was $1.7 million, primarily due to operating results that included $13.6 million of net income, which included $16.5 million of non-cash expense, along with cash inflows in unbilled receivables of $11.0 million, accounts payable of $6.1 million, and accrued expenses of $3.9 million. These cash inflows were offset by cash outflows of $25.3 million related to accounts receivable, $21.5 million of warranty liability, and $2.4 million and $1.5 million in other assets, and inventory, respectively.

Current wording

For the nine months ended September 30, 2025, cash provided by operating activities was $21.2 million, primarily due to operating results that included $25.5 million of net income, which included $26.9 million of non-cash expense, along with cash inflows in unbilled receivables of $13.1 million, accounts payable of $12.6 million, accrued expenses of $11.7 million, deferred revenue of $7.4 million, and other assets of $2.5 million. These cash inflows were offset by cash outflows of $39.3 million related to accounts receivable, $33.7 million of warranty liability, and $5.5 million in inventory.

Previous wording

For the six months ended June 30, 2024, cash provided by operating activities was $50.7 million, primarily due to operating results that included $16.6 million of net income, which included $26.5 million of non-cash expense, along with a decrease in accounts receivable and unbilled receivables of $38.0 million. These cash inflows were offset by a decrease of $11.9 million in accounts payable and accrued expenses driven by payment of 2023 bonuses during March 2024 and a reduction in accrued interest, cash outflows of $9.0 million related to the warranty liability, an increase of $7.7 million in inventory, and a decrease of $1.0 million in deferred revenue.

Current wording

For the nine months ended September 30, 2024, cash provided by operating activities was $66.4 million, primarily due to operating results that included $16.3 million of net income, which included $47.6 million of non-cash expense, along with decreases in accounts receivable and unbilled receivables of $38.2 million. These cash inflows were offset by cash outflows of $15.4 million related to the warranty liability as well as an increase in inventory of $14.6 million, an increase in other assets of $2.7 million, a decrease in accounts payable and accrued expenses of $1.4 million, and a decrease of $1.7 million in deferred revenue.

Previous wording

For the six months ended June 30, 2025, net cash used investing activities was $10.3 million, which was attributable to the purchase of $15.4 million in property and equipment, offset by the proceeds from the sale of property and equipment of $5.1 million.

Current wording

For the nine months ended September 30, 2025, net cash used investing activities was $20.8 million, which was attributable to the purchase of $25.9 million in property and equipment, offset by the proceeds from the sale of property and equipment of $5.1 million.

Previous wording

For the six months ended June 30, 2024, net cash used in investing activities was $4.5 million, which was primarily attributable to the purchase of property and equipment.

Current wording

For the nine months ended September 30, 2024, net cash used in investing activities was $6.9 million, which was primarily attributable to the purchase of property and equipment.

Previous wording

For the six months ended June 30, 2025, net cash used in financing activities was $10.2 million, due to $40.0 million in payments on the Revolving Credit Facility, offset by $30.0 million in borrowings, and $0.3 million in taxes paid related to net share settled equity awards.

Current wording

For the nine months ended September 30, 2025, net cash used in financing activities was $15.3 million, due to $65.0 million in payments on the Revolving Credit Facility, offset by $50.0 million in borrowings, and $0.3 million in taxes paid related to net share settled equity awards.

Previous wording

For the six months ended June 30, 2024, net cash used in financing activities was $65.7 million, primarily due to $143.8 million in principal payments on the Term Loan Facility, $25.2 million paid to repurchase the Company’s Class A common stock under the ASR, $2.6 million of deferred financing costs paid in connection with the amendment to the Senior Secured Credit Agreement, and $0.9 million in taxes related to net share settled equity awards. These cash outflows are offset by $106.8 million in net proceeds on the Revolving Credit Facility.

Current wording

For the nine months ended September 30, 2024, net cash used in financing activities was $71.1 million, primarily due to $143.8 million in principal payments on the Term Loan Facility, $25.3 million paid to repurchase the Company’s Class A Common Stock under the ASR, $2.6 million of deferred financing costs paid in connection with the amendment to the Senior Secured Credit Agreement, and $1.2 million in taxes related to net share settled equity awards. These cash outflows are offset by $101.8 million in net proceeds on the Revolving Credit Facility.

Previous wording

Although our market capitalization declined in the first quarter of 2025, we do not believe that it is more likely than not that the fair value of our single reporting unit is less than the carrying value. Throughout the second quarter of 2025, our stock price and market capitalization remained at levels that support this conclusion.

Current wording

Although our market capitalization declined in the first quarter of 2025, we do not believe that it is more likely than not that the fair value of our single reporting unit is less than the carrying value. Throughout the second and third quarters of 2025, our stock price and market capitalization remained at levels that support this conclusion.