ACUREN CORP

The comparability of our operating results for the three and six months ended June 30, 2025 (Successor) and June 30, 2024 (Predecessor) was impacted by the Acuren Acquisition. In the discussion of our results of operations for these periods, we may quantitatively disclose the impacts of the Acuren Acquisition to the extent they remain ascertainable.

The following table summarizes our results of operations for the periods indicated:

Comparison of the three months ended June 30, 2025 (Successor) to the three months ended June 30, 2024 (Predecessor)

Service revenue was $313.9 million for the three months ended June 30, 2025 (Successor), an increase of $4.6 million, or 1.5%, compared to $309.3 million during the three months ended June 30, 2024 (Predecessor). This year-over-year increase in service revenue was driven primarily by new customer wins, increased penetration with existing customers and higher volumes of callout work.

Cost of revenue was $239.8 million for the three months ended June 30, 2025 (Successor), an increase of $11.2 million, or 5.0%, compared to $228.7 million during the three months ended June 30, 2024 (Predecessor). This increase was primarily driven by higher direct costs to support increased volumes of run and maintain work and callouts, as well as higher direct depreciation expense related to the Acuren Acquisition and incremental labor and onboarding costs associated with new customer site wins.

The following table presents gross profit and gross profit margin, defined as gross profit as a percentage of service revenue, for the three months ended June 30, 2025 (Successor) and June 30, 2024 (Predecessor):

Acuren’s gross profit was $74.1 million for the three months ended June 30, 2025 (Successor), a decrease of $6.5 million, or 8.1%, compared to $80.6 million during the three months ended June 30, 2024 (Predecessor). This year-over-year decrease was primarily attributable to the absence of high-margin turnaround activity and changes to business mix during the three months ended June 30, 2025. These headwinds were partially offset by continued strength in callout activity and contributions from new customer wins during the current period.

The following table presents selling, general and administrative expenses (“SG&A expenses”) and SG&A expenses as a percentage of service revenue for the three months ended June 30, 2025 (Successor) and June 30, 2024 (Predecessor):

Acuren’s SG&A expenses were $55.2 million for the three months ended June 30, 2025 (Successor), a decrease of $5.6 million, or 9.3%, compared to $60.9 million during the three months ended June 30, 2024 (Predecessor). This decrease in SG&A expenses was primarily driven by lower share-based compensation expense during the three months ended June 30, 2025 (Successor). This was partially offset by higher amortization expense related to the step-up in intangible assets from the Acuren Acquisition, as well as increased employee-related and transaction-related costs.

Depreciation and amortization expense

Total depreciation expense for property and equipment and amortization expense for intangibles were recognized as follows:

This increase in depreciation and amortization expense of$9.9 million, or 50.2%, was due to the step-up in property and equipment and intangible assets from the Acuren Acquisition.

Interest expense, net

Interest expense, net was $15.5 million for the three months ended June 30, 2025 (Successor), a decrease of $2.1 million, or 12.1%, compared to $17.6 million during the three months ended June 30, 2024 (Predecessor). This decrease in interest expense, net was primarily driven by lower average interest rates compared to the prior year period.

Income taxes

Acuren recorded income tax expense of $3.9 million and $7.9 million for the three months ended June 30, 2025 (Successor) and June 30, 2024 (Predecessor), respectively. Income tax expense for the three months ended June 30, 2025 (Successor) was primarily driven by the valuation allowance of $11.1 million recorded against our interest limitation carryforwards. Income tax expense for three months ended June 30, 2024 (Predecessor) was driven by stock compensation expense recorded during the Predecessor period that was not deductible for tax purposes. See “Note 13. Income Taxes” for further discussion.

Comparison of the six months ended June 30, 2025 (Successor) to the six months ended June 30, 2024 (Predecessor)

Service revenue was $548.1 million for the six months ended June 30, 2025 (Successor), an increase of $15.8 million, or 3.0%, compared to $532.4 million during the six months ended June 30, 2024 (Predecessor). This year-over-year increase in service revenue was driven primarily by strong performance in run and maintain and callout work. This increase was partially offset by lower service revenue from non-recurring turnaround activity and the impact of adverse weather events in the U.S. during the first quarter of 2025.

Cost of revenue was $430.4 million for the six months ended June 30, 2025 (Successor), an increase of $34.5 million, or 8.7%, compared to $395.9 million during the six months ended June 30, 2024 (Predecessor). This increase was primarily driven by direct costs related to servicing the increased revenue base as well as increased depreciation expense related to the Acuren Acquisition.

The following table presents gross profit and gross profit margin for the six months ended June 30, 2025 (Successor) and June 30, 2024 (Predecessor):

Acuren’s gross profit was $117.8 million for the six months ended June 30, 2025 (Successor), a decrease of $18.7 million, or 13.7%, compared to $136.5 million during the six months ended June 30, 2024 (Predecessor). This year-over-year decrease in gross profit was primarily attributable toadverse weather events in the U.S. during the first quarter of 2025, the timing of turnaround activity and a less favorable mix of work. The prior year period also benefited from certain one-time, higher margin projects that did not recur in 2025.

The following table presents SG&A expenses and SG&A expenses as a percentage of service revenue for the six months ended June 30, 2025 (Successor) and June 30, 2024 (Predecessor):

Acuren’s SG&A expenses were $107.7 million for the six months ended June 30, 2025 (Successor), an increase of $5.0 million, or 4.8%, compared to $102.7 million during the six months ended June 30, 2024 (Predecessor). This increase in SG&A expenses was driven primarilyby higher employee-related costs and increased amortization expense related to the step-up in intangible assets from the Acuren Acquisition.

Depreciation and amortization expense

Total depreciation expense for property and equipment and amortization expense for intangibles were recognized as follows:

This increase in depreciation and amortization expense of$19.4 million, or 50.0%, was primarily due to the step-up in property and equipment and intangible assets from the Acuren Acquisition.

Interest expense, net

Interest expense, net was $31.5 million for the six months ended June 30, 2025 (Successor), a decrease of $2.09 million, or 6.2%, compared to $33.6 million during the six months ended June 30, 2024 (Predecessor). This decrease in interest expense, net was primarily driven bylower average interest rates compared to the prior year period.

Income taxes

Acuren recorded income tax expense of $5.4 million and $7.2 million for the six months ended June 30, 2025 (Successor) and June 30, 2024 (Predecessor), resp ectively. Income tax expensefor the six months ended June 30, 2025 (Successor) was primarily driven by the valuation allowance of $11.1 million recorded against our interest limitation carryforwards. Income tax expense for the six months ended June 30, 2024 (Predecessor) was driven by stock compensation expense recorded during the Predecessor period that was not deductible for tax purposes. See “Note 13. Income Taxes” for further discussion.

Operating Segment Results

The following tables set forth summarized financial information about our reportable segments for the Successor and Predecessor periods indicated.

Comparison of the three months ended June 30, 2025 (Successor) to the three months ended June 30, 2024 (Predecessor)

United States

United States service revenue was $164.1 million for the three months ended June 30, 2025 (Successor), a decrease of $1.5 million, or 0.9%, compared to $165.6 million during the three months ended June 30, 2024 (Predecessor). This decrease was primarily driven by lower turnaround volumes and softness in the chemicals and refining end markets.

Segment gross profit was $37.8 million for the three months ended June 30, 2025 (Successor), a decrease of $6.3 million, or 14.2%, compared to $44.1 million during the three months ended June 30, 2024 (Predecessor). This decrease was primarily attributable to lower turnaround and project activity compared to the second quarter of 2024.

Canada

Canada service revenue was $150.3 million for the three months ended June 30, 2025 (Successor), an increase of $6.3 million, or 4.4%, compared to $144.0 million during the three months ended June 30, 2024 (Predecessor). This increase in service revenue was primarily driven by higher customer penetration and improved volumes in run and maintain and callout work, supported by growth in the energy processing and midstream energy infrastructure end markets.

Segment gross profit was $36.3 million for the three months ended June 30, 2025 (Successor), a decrease of$0.3 million, or 0.7%, compared to $36.5 million during the three months ended June 30, 2024 (Predecessor). This slight decrease was primarily due to a less favorable mix of work and the absence of one-time higher margin projects that benefited the prior year period.

Comparison of the six months ended June 30, 2025 (Successor) to the six months ended June 30, 2024 (Predecessor)

United States

United States service revenue was $311.8 million for the six months ended June 30, 2025 (Successor), an increase of $2.8 million, or 0.9%, compared to $308.9 million during the six months ended June 30, 2024 (Predecessor). This increase was primarily driven by improved run and maintain volumes and higher customer penetration, partially offset by adverse weather events in the first quarter of 2025 and reduced customer demand in the chemicals and refining end markets.

Segment gross profit was $65.9 million for the six months ended June 30, 2025 (Successor), a decrease of $15.2 million, or 18.7%, compared to $81.1 million during the six months ended June 30, 2024 (Predecessor). This decrease was primarily attributable to adverse weather events in the first quarter of 2025, lower turnaround and project volumes, and a less favorable mix of work compared to the prior-year period.

Canada

Canada service revenue was $237.3 million for the six months ended June 30, 2025 (Successor), an increase of $13.1 million, or 5.9%, compared to $224.2 million during the six months ended June 30, 2024 (Predecessor). This increase in service revenue was primarily driven by higher customer penetration and improved volumes in run and maintain and callout work, supported by growth in the energy processing and midstream energy infrastructure end markets.

Segment gross profit was $51.8 million for the six months ended June 30, 2025 (Successor), a decrease of $3.5 million, or 6.4%, compared to $55.4 million during the six months ended June 30, 2024 (Predecessor). This decrease was primarily due to a less favorable mix of work and the absence of one-time higher margin projects that benefited the prior year period.

Liquidity and Capital Resources

Overview

Overall, we believe that available cash and cash equivalents, cash flows generated from future operations, access to capital markets, and availability under the Revolving Credit Facility are sufficient to fund our operations, service our indebtedness, and maintain compliance with our debt covenants over the next 12 months. Our uses of available cash, borrowing capacity, cash flows from operations and financing arrangements are used to invest in capital expe nditures to support our growth, repay debt maturities as they become due, and complete integration activities. Our principal liquidity requirements are for working capital and general corporate purposes, including capital expenditures and debt service, as well as to execute and integrate strategic acquisitions.

Financing

We havea $775.0 million seven-year senior secured Term Loan under the Term Loan Facility and a $75.0 million five-year senior secured revolving credit facility, of which up to $20.0 millioncan be used for the issuance of letters of credit. As of June 30, 2025 (Successor), wehad $769.2 millionof indebtedness outstanding under the Term Loan and no amounts outstanding under the Revolving Credit Facility. For discussion of the First Amendment to our Credit Agreement, see “Note 11. Debt.”

For discussion of the covenants contained in the Credit Agreement governing our Revolving Credit Facility, see “Note 11. Debt” of the notes to our unaudited condensed consolidated financial statements. As of June 30, 2025 (Successor), we were in compliance with these covenants.

ASP Acuren entered into a credit agreement on December 20, 2019, as amended (the “2019 Credit Agreement”) that provided for a term loan and a revolving credit faci lity of $715.0 million and $75.0 million, respectively. In connection with the Acuren Acquisition on July 30, 2024, the 2019 Credit Agreement was repaid in full.

Cash Flows

The following table summarizes net cash flows with respect to Acuren’s operating, investing and financing activities for the periods indicated:

Operating activities

Net cash provided by operating activities for the six months ended June 30, 2025 (Successor) was $26.3 million, an increase of $35.1 million compared to cash used in operating activities of $8.8 million during the six months ended June 30, 2024 (Predecessor). This increase in operating cash flow was primarily driven by favorable changes in working capital, partially offset by lower gross profit and higher SG&A expenses.

Investing activities

For the six months ended June 30, 2025 (Successor), net cash used in investing activities was $28.4 million, a decrease of $28.2 million compared to net cash used in investing activities of $56.6 million for the six months ended June 30, 2024 (Predecessor) as a result of less cash used in acquisitions.

Financing activities

For the six months ended June 30, 2025 (Successor), net cash used in financing activities was $10.3 million, consisting primarily of payments on the Term Loan, as well as principal payments on finance leases and payments of debt issuance costs. For the six months ended June 30, 2024 (Predecessor), net cash provided by financing activities was $8.8 million, consisting primarily of borrowings under the 2019 Credit Agreement, partially offset by repayments of borrowings under the 2019 Credit Agreement and principal payments on finance leases.

Effect of exchange rate changes

For the six months ended June 30, 2025 (Successor) and six months ended June 30, 2024 (Predecessor), the effect of foreign exchange rate changes on cash was $3.3 million and $0.4 million, respectively. The impact of exchange rates on cash and cash equivalents is primarily attributable to fluctuations in the U.S. Dollar exchange rate against the Canadian Dollar.

Off-Balance Sheet Arrangements

During the six months ended June 30, 2025 (Successor) or the six months ended June 30, 2024 (Predecessor), we did not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Recently Issued Accounting Pronouncements

See “Note 1. Basis of Presentation and Significant Accounting Policies” of the notes to our unaudited condensed consolidated financial statements for disclosures regarding recently issued accounting pronouncements and the critical accounting policies related to our business.

Critical Accounting Estimates

There have been no significant changes to our critical accounting policies and estimates from the information provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the 2024 Annual Report.