What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-30 compared with 2025-07-31 · 135 added, 138 removed, 357 unchanged (43% of the section changed)

27 unchanged sentences

R ECENT D EVELOPMENTS A ND C ERTAIN F ACTORS A ND T RENDS A FFECTING O UR R ESULTS O F O PERATIONS

On June 30, 2025, we executed a three-for-two stock split by a payment of a stock dividend of one-half of one share of common stock for each share of common stock.

For information about our acquisition activity, see Note 3 – "Business Combinations" to our condensed consolidated financial statements included herein.

On June 30, 2025, we executed a three-for-two stock split by issuing a stock dividend of one-half of one share of common stock for each share of common stock.

For additional information about our stock split, see Note 15 – "Shareholders' Equity and Redeemable Convertible Preferred Stock" to our condensed consolidated financial statements included herein.

During the six months ended June 30, 2025, we completed seven acquisitions for aggregated consideration transferred of $128, made up of cash paid at closing of $106, cash deposited into escrow of $13, and accrued consideration of $9.

For additional information about our acquisition activity, see Note 3 – "Business Combinations" to our condensed consolidated financial statements included herein.

Restructuring

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As of June 30, 2025, the Chubb restructuring program has ended and no additional expenses are expected.

During the six months ended June 30, 2025, we incurred no pre-tax restructuring costs within the Safety Services segment in connection with the Chubb restructuring program.

During the nine months ended September 30, 2025, we incurred no pre-tax restructuring costs within the Safety Services segment in connection with the Chubb restructuring program.

For additional information about our restructuring activity, see Note 4 – "Restructuring" to our condensed consolidated financial statements included herein.

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In cases where operational transactions represent a material currency risk, we generally enter into cross-currency swaps.

Refer to Note 8 – "Derivatives" to our condensed consolidated financial statements included in this quarterly report for additional information

on our hedging activities.

Refer to Note 8 – "Derivatives" to our condensed consolidated financial statements included in this quarterly report for additional information on our hedging activities.

While we actively monitor economic, industry and market factors that could affect our business, we cannot predict the effect that changes in such factors may have on our future consolidated results of operations, liquidity, and cash flows, and we may be unable to fully mitigate, or benefit from, such changes.

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There is a portion of amortization expense related to the backlog intangible assets reflected in cost of revenues in the condensed consolidated statements of operations.

Investment expense and other, net

Investment expense and other, net includes expense (income) from foreign currency forward contracts, cross-currency swaps, joint ventures, non-service pension cost, and other miscellaneous items.

Investment (income) expense and other, net

Investment (income) expense and other, net includes (income) expense from foreign currency forward contracts, cross-currency swaps, joint ventures, non-service pension cost, and other miscellaneous items.

Non-service pension cost reflects the sum of the components of pension expense not related to service expense, i.e.

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R ESULTS O F O PERATIONS

The following is a discussion of our financial condition and results of operations during the three and six months ended June 30, 2025 and the three and six months ended June 30, 2024.

The following is a discussion of our financial condition and results of operations during the three and nine months ended September 30, 2025 and the three and nine months ended September 30, 2024.

During 2025, the Company moved the HVAC business from the Safety Services segment to the Specialty Services segment, and prior period amounts in this discussion have been recast to reflect the current period presentation.

Three months ended June 30, 2025 compared to the three months ended June 30, 2024

Three Months Ended June 30, Change

Three months ended September 30, 2025 compared to the three months ended September 30, 2024

Three Months Ended September 30, Change

($ in millions) 2025 2024 $ %

10 unchanged sentences

Net income $ 93 $ 69 $ 24

Net revenues for the three months ended June 30, 2025 were $1,990 million compared to $1,730 million for the same period in 2024, an increase of $260 million or 15.0%.

The increase in net revenues was driven by acquisitions, strong project revenue growth, pricing improvements, and growth in inspection, service, and monitoring revenues.

The following table presents our gross profit (net revenues less cost of revenues) and gross margin (gross profit as a percentage of net revenues) for the three months ended June 30, 2025 and 2024, respectively:

Three Months Ended June 30, Change

Net revenues for the three months ended September 30, 2025 were $2,085 million compared to $1,826 million for the same period in 2024, an increase of $259 million or 14.2%.

The increase in net revenues was driven by growth in inspection, service, and monitoring revenues, strong growth in project revenues, acquisitions, and pricing improvements.

The following table presents our gross profit (net revenues less cost of revenues) and gross margin (gross profit as a percentage of net revenues) for the three months ended September 30, 2025 and 2024, respectively:

Three Months Ended September 30, Change

($ in millions) 2025 2024 $ %

1 unchanged sentence

Gross margin 31.3 % 31.1 %

Our gross profit for the three months ended June 30, 2025 was $615 million compared to $544 million for the same period in 2024, an increase of $71 million or 13.1%.

Gross margin for the three months ended June 30, 2025 was 30.9%, a decrease of 50 basis points compared to the prior year period.

The decrease was primarily driven by mix, partially offset by pricing improvements across the business.

Our gross profit for the three months ended September 30, 2025 was $652 million compared to $567 million for the same period in 2024, an increase of $85 million or 15.0%.

Gross margin for the three months ended September 30, 2025 was 31.3%, an increase of 20 basis points compared to the prior year period.

The increase was primarily driven by disciplined customer and project selection and pricing improvements, partially offset by mix.

Operating expenses

The following table presents operating expenses and operating margin (operating income as a percentage of net revenues) for the three months ended June 30, 2025 and 2024, respectively:

Three Months Ended June 30, Change

The following table presents operating expenses for the three months ended September 30, 2025 and 2024, respectively:

Three Months Ended September 30, Change

($ in millions) 2025 2024 $ %

4 unchanged sentences

Selling, general, and administrative expenses

Our SG&A expenses for the three months ended June 30, 2025 were $472 million compared to $418 million for the same period in 2024, an increase of $54 million.

SG&A expenses as a percentage of net revenues was 23.7% during the three months ended June 30, 2025 compared to 24.2% for the same period in 2024.

The increase in SG&A expenses was primarily driven by SG&A expenses from acquisitions completed, non-recurring systems and business enablement expenses, acquisition and divestiture costs that are non-recurring in nature, and costs to support growth in our Safety Services segment in the three months ended June 30, 2025 compared to 2024.

Our SG&A expenses excluding amortization for the three months ended June 30, 2025 were $417 million, or 21.0% of net revenues, compared to $366 million, or 21.2% of net revenues, for the same period of 2024.

The decrease in SG&A expenses excluding amortization as a percentage of net revenues is primarily due to improvements in operating leverage due to higher net revenues.

Our SG&A expenses for the three months ended September 30, 2025 were $489 million compared to $425 million for the same period in 2024, an increase of $64 million.

SG&A expenses as a percentage of net revenues was 23.5% during the three months ended September 30, 2025 compared to 23.3% for the same period in 2024.

The increase in SG&A expenses was primarily driven by non-recurring systems and business enablement expenses, investments to support growth, and SG&A expenses from acquisitions completed during the last year.

Our SG&A expenses excluding amortization for the three months ended September 30, 2025 were $433 million, or 20.8% of net revenues, compared to $368 million, or 20.2% of net revenues, for the same period of 2024.

The increase in SG&A expenses excluding amortization as a percentage of net revenues is primarily due to the factors discussed above.

See the discussion and reconciliation of our non-GAAP financial measures below.

Interest expense, net

Interest expense was $37 million and $35 million for the three months ended June 30, 2025 and 2024, respectively.

The increase in interest expense was primarily due to the discontinuation of benefit from certain derivatives, partially offset by a decrease in floating rates and impact of repricings.

Interest expense was $34 million and $41 million for the three months ended September 30, 2025 and 2024, respectively.

The decrease in interest expense was primarily due to a decrease in floating rates, partially offset by the discontinuation of benefits from certain derivatives.

Investment (income) expense and other, net

Investment (income) expense and other, net was $(2) million for the three months ended June 30, 2025 compared to $2 million of expense for the same period of 2024.

Investment (income) expense and other, net was $(1) million for the three months ended September 30, 2025 compared to $1 million of expense for the same period of 2024.

The change in investment (income) expense and other, net was primarily due to a gain associated with the impact of foreign currency exchange rates in the current year compared to a loss in the prior year.

Income tax provision

The effective tax rate for the three months ended June 30, 2025 was 28.7% compared to 22.4% in the same period of 2024.

The difference in the effective tax rate was driven by an increase in discrete and nondeductible permanent items.

The effective tax rate for the three months ended September 30, 2025 was 28.2% compared to 30.9% in the same period of 2024.

The difference in the effective tax rate was driven by discrete and nondeductible permanent items.

The difference between the effective tax rate and the statutory U.S.

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Net income and adjusted EBITDA

The following table presents net income and Adjusted EBITDA for the three months ended June 30, 2025 and 2024, respectively:

Three Months Ended June 30, Change

The following table presents net income and adjusted EBITDA for the three months ended September 30, 2025 and 2024, respectively:

Three Months Ended September 30, Change

($ in millions) 2025 2024 $ %

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Adjusted EBITDA as a % of net revenues 13.5 % 13.4 %

Our net income for the three months ended June 30, 2025 was $77 million compared to $69 million for the same period in 2024, an increase of $8 million.

The increase is attributable to net revenues growth previously referenced, partially offset by the increase in SG&A expenses discussed above.

Net income as a percentage of net revenues for the three months ended June 30, 2025 and 2024 was 3.9% and 4.0%, respectively.

Adjusted EBITDA for the three months ended June 30, 2025 was $272 million compared to $231 million for the same period in 2024, an increase of $41 million.

The growth in Adjusted EBITDA was driven by an increase in gross profit.

Segment Results for the three months ended June 30, 2025 compared to the three months ended June 30, 2024

Three Months Ended June 30, Change

Our net income for the three months ended September 30, 2025 was $93 million compared to $69 million for the same period in 2024, an increase of $24 million.

The increase is attributable to strong revenue growth and gross margin expansion previously referenced, partially offset by the increase in SG&A expenses discussed above.

Net income as a percentage of net revenues for the three months ended September 30, 2025 and 2024 was 4.5% and 3.8%, respectively.

Adjusted EBITDA for the three months ended September 30, 2025 was $281 million compared to $245 million for the same period in 2024, an increase of $36 million.

The growth in adjusted EBITDA was driven by the same factors that explained the increase in net income.

Segment Results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024

Three Months Ended September 30, Change

($ in millions) 2025 2024 $ %

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Segment Earnings

Three Months Ended June 30, Change

Three Months Ended September 30, Change

($ in millions) 2025 2024 $ %

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NM = Not meaningful

The following discussion breaks down the net revenues and segment earnings by operating segment for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

The following discussion breaks down the net revenues and segment earnings by operating segment for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Safety Services

Safety Services net revenues for the three months ended June 30, 2025 increased by $186 million or 15.8% compared to the same period in 2024.

The increase was driven by acquisitions completed in the last year, pricing improvements, and strong growth in both service and project revenues.

Safety Services segment earnings as a percentage of net revenues for the three months ended June 30, 2025 and 2024 was approximately 17.0% and 16.2%, respectively.

The increase was primarily due to disciplined customer and project selection and pricing improvements leading to margin expansion in both service and project revenues.

Safety Services net revenues for the three months ended September 30, 2025 increased by $187 million or 15.4% compared to the same period in 2024.

The increase was driven by growth in inspection, service, and monitoring revenues, strong growth in project revenues, acquisitions, and pricing improvements.

Safety Services segment earnings as a percentage of net revenues for the three months ended September 30, 2025 and 2024 was approximately 16.8% and 16.4%, respectively.

The increase was primarily due to disciplined customer and

project selection as well as pricing improvements leading to margin expansion in inspection, service, and monitoring revenues and project revenues, partially offset by investments to support growth.

Specialty Services

Specialty Services net revenues for the three months ended June 30, 2025 increased by $74 or 13.3% compared to the same period in 2024.

The increase was driven by strong project revenue growth.

Specialty Services segment earnings as a percentage of net revenues for the three months ended June 30, 2025 and 2024 was approximately 11.3% and 13.2%, respectively.

The decrease was driven by increased project starts, rising material costs, and weather, partially offset by favorable fixed cost absorption.

Six months ended June 30, 2025 compared to the six months ended June 30, 2024

Six Months Ended June 30, Change

Specialty Services net revenues for the three months ended September 30, 2025 increased by $71 or 11.6% compared to the same period in 2024.

The increase was driven by strong growth in project revenues.

Specialty Services segment earnings as a percentage of net revenues for the three months ended September 30, 2025 and 2024 was approximately 11.9% and 12.7%, respectively.

The decrease was primarily due to increased project starts, mix, and increased material costs.

Nine months ended September 30, 2025 compared to the nine months ended September 30, 2024

Nine Months Ended September 30, Change

($ in millions) 2025 2024 $ %

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Net income $ 205 $ 183 $ 22

Net revenues for the six months ended June 30, 2025 were $3,709 million compared to $3,331 million for the same period in 2024, an increase of $378 million or 11.3%.

The increase in net revenues was primarily driven by acquisitions, project revenue growth, pricing improvements, and growth in inspection, service, and monitoring revenues.

The following table presents our gross profit (net revenues less cost of revenues) and gross margin (gross profit as a percentage of net revenues) for the six months ended June 30, 2025 and 2024, respectively:

Six Months Ended June 30, Change

Net revenues for the nine months ended September 30, 2025 were $5,794 million compared to $5,157 million for the same period in 2024, an increase of $637 million or 12.4%.

The increase in net revenues was driven by growth in inspection, service, and monitoring revenues, strong growth in project revenues, acquisitions, and pricing improvements.

The following table presents our gross profit (net revenues less cost of revenues) and gross margin (gross profit as a percentage of net revenues) for the nine months ended September 30, 2025 and 2024, respectively:

Nine Months Ended September 30, Change

($ in millions) 2025 2024 $ %

1 unchanged sentence

Gross margin 31.2 % 31.1 %

Our gross profit for the six months ended June 30, 2025 was $1,157 million compared to $1,036 million for the same period in 2024, an increase of $121 million or 11.7%.

Gross margin for the six months ended June 30, 2025 was 31.2%, an increase of 10 basis points compared to the prior year period.

The increase was driven by gross margin expansion in our Safety Services segment, partially offset by mix, and a decline in project margins in our Specialty Services segment.

Our gross profit for the nine months ended September 30, 2025 was $1,809 million compared to $1,603 million for the same period in 2024, an increase of $206 million or 12.9%.

Gross margin for the nine months ended September 30, 2025 was 31.2%, an increase of 10 basis points compared to the prior year period.

The increase was primarily driven by disciplined customer and project selection and pricing improvements, partially offset by mix.

Operating expenses

The following table presents operating expenses and operating margin (operating income as a percentage of net revenues) for the six months ended June 30, 2025 and 2024, respectively:

Six Months Ended June 30, Change

The following table presents operating expenses for the nine months ended September 30, 2025 and 2024, respectively:

Nine Months Ended September 30, Change

($ in millions) 2025 2024 $ %

1 unchanged sentence

SG&A expense as a % of net revenues 24.5 % 23.9 %

Operating margin 6.1 % 6.8 %

SG&A expenses (excluding amortization) (non-GAAP) $ 1,251 $ 1,076 $ 175 16.3 %

1 unchanged sentence

Selling, general, and administrative expenses

Our SG&A expenses for the six months ended June 30, 2025 were $930 million compared to $810 million for the same period in 2024, an increase of $120 million.

SG&A expenses as a percentage of net revenues was 25.1% during the six months ended June 30, 2025 compared to 24.3% for the same period in 2024.

Our SG&A expenses excluding amortization for the six months ended June 30, 2025 were $818 million, or 22.1% of net revenues, compared to $708 million, or 21.3% of net revenues, for the same period of 2024.

Our SG&A expenses for the nine months ended September 30, 2025 were $1,419 million compared to $1,235 million for the same period in 2024, an increase of $184 million.

SG&A expenses as a percentage of net revenues was 24.5% during the nine months ended September 30, 2025 compared to 23.9% for the same period in 2024.

Our SG&A expenses excluding amortization for the nine months ended September 30, 2025 were $1,251 million, or 21.6% of net revenues, compared to $1,076 million, or 20.9% of net revenues, for the same period of 2024.

The increase in SG&A expenses excluding amortization as a percentage of net revenues is primarily due to the factors discussed above.

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Interest expense, net

Interest expense was $75 million and $69 million for the six months ended June 30, 2025 and 2024, respectively.

The increase in interest expense was primarily due to discontinuation of benefit from certain derivatives and investment of debt and equity proceeds of 2024, partially offset by a decrease in floating rates and the benefits from May 2024 and February 2025 repricings.

Interest expense was $109 million and $110 million for the nine months ended September 30, 2025 and 2024, respectively.

The decrease in interest expense was primarily due to a decrease in floating rates, partially offset by discontinuation of benefits from certain derivatives.

Investment (income) expense and other, net

Investment (income) expense and other, net was $(2) million for the six months ended June 30, 2025 compared to $5 million of expense for the same period of 2024.

Investment (income) expense and other, net was $(3) million for the nine months ended September 30, 2025 compared to $6 million of expense for the same period of 2024.

Income tax provision

The effective tax rate for the six months ended June 30, 2025 was 27.1% compared to 24.7% in the same period of 2024.

The difference in the effective tax rate was driven by an increase in discrete and nondeductible permanent items.

The effective tax rate for the nine months ended September 30, 2025 was 27.6% compared to 27.2% in the same period of 2024.

The difference in the effective tax rate was driven by discrete and nondeductible permanent items.

The difference between the effective tax rate and the statutory U.S.

1 unchanged sentence

Net income and adjusted EBITDA

The following table presents net income and Adjusted EBITDA for the six months ended June 30, 2025 and 2024, respectively:

Six Months Ended June 30, Change

The following table presents net income and adjusted EBITDA for the nine months ended September 30, 2025 and 2024, respectively:

Nine Months Ended September 30, Change

($ in millions) 2025 2024 $ %

3 unchanged sentences

Adjusted EBITDA as a % of net revenues 12.9 % 12.6 %

Our net income for the six months ended June 30, 2025 was $112 million compared to $114 million for the same period in 2024, a decrease of $2 million.

The decrease is attributable to non-recurring SG&A expenses discussed above.

Net income as a percentage of net revenues for the six months ended June 30, 2025 and 2024 was 3.0% and 3.4%, respectively.

Adjusted EBITDA for the six months ended June 30, 2025 was $465 million compared to $406 million for the same period in 2024, an increase of $59 million.

The Adjusted EBITDA improvement is attributable to acquisitions completed in our Safety Services segment, increase in net revenues, improved operating margin due to pricing improvements and disciplined project and customer selection.

Our net income for the nine months ended September 30, 2025 was $205 million compared to $183 million for the same period in 2024, a increase of $22 million.

The increase is attributable to strong revenue growth and gross margin expansion previously referenced, partially offset by the increase in SG&A expenses discussed above.

Net income as a percentage of net revenues for the nine months ended September 30, 2025 and 2024 was 3.5% and 3.5%, respectively.

Adjusted EBITDA for the nine months ended September 30, 2025 was $746 million compared to $651 million for the same period in 2024, an increase of $95 million.

The growth in adjusted EBITDA was driven by the same factors that explained the increase in net income.

See the discussion and reconciliation of our non-GAAP financial measures below.

Segment Results for the six months ended June 30, 2025 compared to the six months ended June 30, 2024

Six Months Ended June 30, Change

Segment Results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024

Nine Months Ended September 30, Change

($ in millions) 2025 2024 $ %

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Segment Earnings

Six Months Ended June 30, Change

Nine Months Ended September 30, Change

($ in millions) 2025 2024 $ %

Safety Services $ 667 $ 554 $ 113 20.4 %

Safety Services EBITDA as a % of net revenues 16.4 % 15.5 %

Safety Services segment earnings as a % of net revenues 16.5 % 15.8 %

Specialty Services $ 181 $ 194 $ (13) (6.7 %)

Specialty Services EBITDA as a % of net revenues 9.2 % 11.1 %

Specialty Services segment earnings as a % of net revenues 10.3 % 11.7 %

Corporate and Eliminations $ (102) $ (97) NM NM

$ 465 $ 406 $ 59 14.5 %

Adjusted EBITDA (non-GAAP) $ 746 $ 651 $ 95 14.6 %

NM = Not meaningful

The following discussion breaks down the net revenues and segment earnings by operating segment for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The following discussion breaks down the net revenues and segment earnings by operating segment for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Safety Services

Safety Services net revenues for the six months ended June 30, 2025 increased by $336 million or 14.7% compared to the same period in 2024.

The increase was primarily driven by revenue from acquisitions completed during the last year, pricing improvements, and growth in project and inspection, service, and monitoring revenues.

Safety Services segment earnings as a percentage of net revenues for the six months ended June 30, 2025 and 2024 was approximately 16.4% and 15.5%, respectively.

The increase was primarily due to disciplined customer and project selection, and pricing improvements leading to margin expansion in both service and project revenues.

Safety Services net revenues for the nine months ended September 30, 2025 increased by $523 million or 14.9% compared to the same period in 2024.

The increase was driven by growth in inspection, service, and monitoring revenues, strong growth in project revenues, acquisitions, and pricing improvements.

Safety Services segment earnings as a percentage of net revenues for the nine months ended September 30, 2025 and 2024 was approximately 16.5% and 15.8%, respectively.

The increase was primarily due to disciplined customer and project

selection as well as pricing improvements leading to margin expansion in inspection, service, and monitoring revenues and project revenues, partially offset by investments to support growth.

Specialty Services

Specialty Services net revenues for the six months ended June 30, 2025 increased by $41 or 3.9% compared to the same period in 2024.

The increase was driven by project revenue growth.

Specialty Services segment earnings as a percentage of net revenues for the six months ended June 30, 2025 and 2024 was approximately 9.2% and 11.1%, respectively.

The decrease was driven by mix and a decline in project margins, partially offset by favorable fixed cost absorption.

Specialty Services net revenues for the nine months ended September 30, 2025 increased by $112 or 6.8% compared to the same period in 2024.

The increase was driven by strong growth in project revenues.

Specialty Services segment earnings as a percentage of net revenues for the nine months ended September 30, 2025 and 2024 was approximately 10.3% and 11.7%, respectively.

The decrease was primarily due to increased project starts, mix, and increased material costs.

Non-GAAP Financial Measures

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The following tables present reconciliations of SG&A expenses to SG&A expenses (excluding amortization) for the periods indicated:

Three Months Ended June 30,

Three Months Ended September 30,

($ in millions) 2025 2024

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SG&A expenses (excluding amortization) $ 433 $ 368

Six Months Ended June 30,

Nine Months Ended September 30,

($ in millions) 2025 2024

5 unchanged sentences

Adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) is the measure of profitability used by management to manage the business.

Adjustments include expenses that are non-recurring in nature and that may not be indicative of the Company’s core operating results, including systems and business enablement expenses, business transformation expenses, and other expenses for the integration of acquired businesses, the impact and results of businesses classified as assets held-for-sale and divested, and one-time and other infrequent events such as impairment charges, restructuring costs, transaction and other costs related to acquisitions, and non-service pension cost.

Adjustments include expenses that are non-recurring in nature and that may not be indicative of the Company’s core operating results, including systems and business enablement expenses, business process transformation expenses, the impact and results of businesses classified as assets held-for-sale and divested, and one-time and other infrequent events such as impairment charges, restructuring costs, transaction and other costs related to acquisitions and divestitures, non-service pension cost, and miscellaneous capital market activities.

We supplement the reporting of our consolidated financial information with adjusted EBITDA.

1 unchanged sentence

The following table presents a reconciliation of net income to adjusted EBITDA for the periods indicated:

Three Months Ended June 30,

Three Months Ended September 30,

($ in millions) 2025 2024

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Adjusted EBITDA $ 281 $ 245

Six Months Ended June 30,

Nine Months Ended September 30,

($ in millions) 2025 2024

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Although we believe we have sufficient resources to fund our future cash requirements, there are many factors with the potential to influence our cash flow position including weather, seasonality, commodity prices, market conditions, and inflation, over which we have no control.

As of June 30, 2025, we had $1,176 million of total liquidity, comprising $432 million in cash and cash equivalents and $744 million ($750 million less outstanding letters of credit of approximately $6 million, which reduce availability) of available borrowings under our Revolving Credit Facility.

As of September 30, 2025, we had $1,299 million of total liquidity, comprising $555 million in cash and cash equivalents and $744 million ($750 million less outstanding letters of credit of approximately $6 million, which reduce availability) of available borrowings under our Revolving Credit Facility.

During 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by $300 million.

The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion.

We also completed the Sixth Amendment to our credit agreement, repaying the 2019 Term Loan and refinancing the 2021 Term Loan through an upsizing and repricing.

We incurred approximately $550 million of incremental principal on our 2021 Term Loan.

The proceeds were used to repay the remaining $330 million of the 2019 Term Loan, repay $100 million of the Revolving Credit Facility outstanding, and for general corporate purposes, including to partially fund the Elevated acquisition.

We also completed the Sixth Amendment to our credit agreement, refinancing the 2021 Term Loan by increasing its principal amount and lowering the interest margin by 50 basis points.

The amendment also removed the credit spread adjustment.

In connection with this transaction, we added approximately $550 million of incremental principal on our 2021 Term Loan.

The proceeds were used to fully repay the remaining $330 million balance of the 2019 Term Loan, to pay down $100 million outstanding under the Revolving Credit Facility, and for general corporate purposes, including partial funding of the Elevated acquisition.

Additionally, we made a repayment of $100 million on the 2021 Term Loan.

4 unchanged sentences

The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.

During the second quarter of 2025, we completed the Eighth Amendment to our credit agreement, refinancing and upsizing the Revolving Credit Facility.

The amendment increased the Revolving Credit Facility by $250, from $500 to $750, and extended the maturity date to the fifth anniversary of the Eighth Amendment.

The amendment also reduced the applicable margin by 75 basis points and removed the credit spread adjustment.

During the second quarter of 2025, we completed the Eighth Amendment to our credit agreement, which increased the Revolving Credit Facility from $500 million to $750 million, extended the facility's maturity to five years from the date of the Eighth Amendment, reduced the applicable margin by 75 basis points, and eliminated the credit spread adjustment.

Our principal liquidity requirements have been, and we expect will continue to be, for working capital and general corporate purposes, including capital expenditures and debt service, identifying, executing, and integrating strategic acquisitions and business transformation transactions or initiatives, as well as any accrued consideration and compensation due to selling shareholders, including tax payments in connection therewith.

5 unchanged sentences

During 2024, we repurchased 24,390,240 shares of common stock for approximately $600 million.

During the six months ended June 30, 2025, we repurchased 3,095,573 shares of common stock for approximately $75 million.

As of June 30, 2025, we had approximately $1,000 million of authorized repurchases remaining under the SRP.

During the nine months ended September 30, 2025, we repurchased 3,095,573 shares of common stock for approximately $75 million.

As of September 30, 2025, we had approximately $1,000 million of authorized repurchases remaining under the SRP.

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

Six Months Ended June 30,

Nine Months Ended September 30,

($ in millions) 2025 2024

3 unchanged sentences

Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash 25 4

Net decrease in cash, cash equivalents, and restricted cash $ (68) $ (154)

Net increase in cash, cash equivalents, and restricted cash $ 55 $ 9

Cash, cash equivalents, and restricted cash, end of period $ 556 $ 489

Net Cash Provided by Operating Activities

Net cash provided by operating activities was $145 million for the six months ended June 30, 2025 compared to $117 million for the same period in 2024.

The increase in cash provided by operating activities is primarily due to improvements in working capital efficiencies associated with the various services we provided in the six months ended June 30, 2025 compared to the same period of the prior year.

Cash flow from operations is primarily driven by changes in the mix and timing of demand for our services and working capital needs associated with the various services we provide.

Net cash provided by operating activities was $377 million for the nine months ended September 30, 2025 compared to $337 million for the same period in 2024.

The increase in cash provided by operating activities is primarily due to an increase in net income and improvements in working capital efficiencies associated with the various services we provided in the nine months ended September 30, 2025 compared to the same period of the prior year.

Cash flow from operations is primarily driven by changes in the quantity of services provided and working capital needs associated with the various services we provide.

Working capital is primarily affected by changes in total accounts receivable, accounts payable, accrued expenses, and contract assets and contract liabilities, all of which tend to be related and are affected by changes in the timing and volume of work performed.

Net Cash Used in Investing Activities

Net cash used in investing activities was $140 million for the six months ended June 30, 2025 compared to $623 million for the same period in 2024.

Net cash used in investing activities was $231 million for the nine months ended September 30, 2025 compared to $680 million for the same period in 2024.

This decrease is primarily driven by decreased acquisition consideration in the current year.

During the six months ended June 30, 2025, we had cash used in acquisitions, net of cash acquired, of $111 million and $606 million in the six months ended June 30, 2025 and 2024, respectively.

We had cash used in acquisitions, net of cash acquired, of $174 million and $647 million in the nine months ended September 30, 2025 and 2024, respectively.

Net Cash (Used in) Provided by Financing Activities

Net cash used in financing activities was $101 million for the six months ended June 30, 2025 compared to $357 million of cash provided by financing activities for the same period in 2024.

The cash used in financing activities for the six months ended June 30, 2025 was driven by $75 million of share repurchases and $20 million of restricted shares tendered for taxes, while in the six months ended June 30, 2024, cash provided by financing activities was driven by $850 million of proceeds from the repricing transactions of the 2021 Term Loan, and $458 million of proceeds from the issuance of common shares, partially offset by $334 million of payments on long-term borrowings and $600 million of payments for conversion of the Series B Preferred Stock.

Net cash used in financing activities was $116 million for the nine months ended September 30, 2025 compared to $348 million of cash provided by financing activities for the same period in 2024.

The cash used in financing activities for the

nine months ended September 30, 2025 was driven by $75 million of share repurchases, $20 million of restricted shares tendered for taxes, and $16 million of payments of acquisition-related consideration, while in the nine months ended September 30, 2024, cash provided by financing activities was driven by $850 million of proceeds from the repricing transactions of the 2021 Term Loan, and $458 million of proceeds from the issuance of common shares, partially offset by $334 million of payments on long-term borrowings and $600 million of payments for conversion of the Series B Preferred Stock.

Financing Activities

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(1) a term loan facility, pursuant to which we incurred the $1,200 million term loan ("2019 Term Loan") used to fund a part of the cash portion of the purchase price in the APi Acquisition, and a $1,100 million seven-year incremental term loan ("2021 Term Loan") used to fund a portion of the purchase price in the Chubb acquisition, and (2) a $750 million Revolving Credit Facility (increased from $500 million in 2025) of which up to $250 million can be used for the issuance of letters of credit.

During the second quarter of 2025, we completed the Eighth Amendment to our credit agreement, refinancing and upsizing the Revolving Credit Facility.

The amendment increased the Revolving Credit Facility by $250 million, from $500

million to $750 million, and extended the maturity date to the fifth anniversary of the Eighth Amendment.

The amendment also reduced the applicable margin by 75 basis points and removed the credit spread adjustment.

During the first quarter of 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan.

The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.

During 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by an aggregate principal amount equal to $300 million.

During 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by $300 million.

The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion.

During 2024, we also completed the Sixth Amendment to our credit agreement, upsizing and repricing the 2021 Term Loan and repaying the 2019 Term Loan.

The repricing reduced the applicable margin on the 2021 Term Loan by 50 basis points and removed the credit spread adjustment ("CSA").

As part of this transaction, we incurred approximately $550 million of incremental principal on our 2021 Term Loan.

During 2024, we also made a $100 million repayment on the 2021 Term Loan.

We also completed the Sixth Amendment to our credit agreement, refinancing the 2021 Term Loan by increasing its principal amount and lowering the interest margin by 50 basis points.

The amendment also removed the credit spread adjustment.

In connection with this transaction, we added approximately $550 million of incremental principal on our 2021 Term Loan.

Additionally, we made a repayment of $100 million on the 2021 Term Loan.

The amended interest rate applicable to the 2021 Term Loan is, at our option, either (a) a base rate plus an applicable margin equal to 0.75% or (b) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.75%.

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Furthermore, with respect to the revolving credit facility, we must maintain a first lien net leverage ratio that does not exceed (i) 4.00 to 1.00 for each fiscal quarter ending in 2021, and (ii) 3.75 to 1.00 for each fiscal quarter ending thereafter, if on the last day of any fiscal quarter the outstanding amount of all revolving loans and letter of credit obligations (excluding undrawn letters of credit up to $40 million) under the Credit Agreement is greater than 30% of the total revolving credit commitments thereunder subject to a right of cure.

Our first lien net leverage ratio as of June 30, 2025 was 1.6:1.0.

As of June 30, 2025, the 2021 Term Loan has $2,157 million remaining principal amount outstanding.

Our first lien net leverage ratio as of September 30, 2025 was 1.4:1.0.

As of September 30, 2025, the 2021 Term Loan has $2,157 million remaining principal amount outstanding.

We had no amounts outstanding under the Revolving Credit Facility, under which $744 million was available after giving effect to $6 million of outstanding letters of credit, which reduces availability.

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We used the net proceeds from the sale of the 4.125% Senior Notes to repay a previously outstanding term loan, prepay a portion of the 2019 Term Loan and for general corporate purposes.

As of June 30, 2025, we had $337 million aggregate principal amount of 4.125% Senior Notes outstanding.

As of September 30, 2025, we had $337 million aggregate principal amount of 4.125% Senior Notes outstanding.

On October 21, 2021, a wholly-owned subsidiary of the Company completed a private offering of $300 million aggregate principal amount of 4.750% Senior Notes due 2029 (the “4.750% Senior Notes”) issued under an indenture dated October 21, 2021, as supplemented by a supplemental indenture dated January 3, 2022.

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We used the net proceeds from the sale of the 4.750% Senior Notes to finance a portion of the consideration for the Chubb acquisition.

As of June 30, 2025, we had $277 million aggregate principal amount of 4.750% Senior Notes outstanding.

As of September 30, 2025, we had $277 million aggregate principal amount of 4.750% Senior Notes outstanding.

Debt Covenants

We were in compliance with all covenants contained in the indentures governing the 4.125% Senior Notes and 4.750% Senior Notes and Credit Agreement as of June 30, 2025 and December 31, 2024.

We were in compliance with all covenants contained in the indentures governing the 4.125% Senior Notes and 4.750% Senior Notes and Credit Agreement as of September 30, 2025 and December 31, 2024.

Issuance and Conversion of Series B Preferred Stock

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• Operating and Finance Leases – See Note 12 – "Leases" in the Annual Report on Form 10-K filed on February 26, 2025.

We have not had material changes to our lease obligations during the six months ended June 30, 2025.

We have not had material changes to our lease obligations during the nine months ended September 30, 2025.

We make investments in our properties and equipment to enable continued expansion and effective performance of our business.

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Interest Rate Risk

As of June 30, 2025, our outstanding variable interest rate debt was primarily related to our $2,157 million 2021 Term Loan.

As of September 30, 2025, our outstanding variable interest rate debt was primarily related to our $2,157 million 2021 Term Loan.

To mitigate increases in variable interest rates, we have a $720 million interest rate swap, exchanging one-month SOFR for a rate of 3.59% per annum, maturing October 2026, and a $400 million interest rate swap exchanging one-month SOFR for a rate of 3.41% per annum, maturing January 2028.

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The remaining floating rate portfolio bears interest based on one-month SOFR plus 175 basis points.

As of June 30, 2025, excluding letters of credit outstanding of $6 million, we had no amounts of outstanding revolving loans under our Credit Agreement.

As of September 30, 2025, excluding letters of credit outstanding of $6 million, we had no amounts of outstanding revolving loans under our Credit Agreement.

Foreign Currency Risk

We have operations in over 20 countries globally.

Revenues generated from foreign operations represented approximately 35% of our consolidated net revenues for the three and six months ended June 30, 2025.

Revenues generated from foreign operations represented approximately 35% of our consolidated net revenues for the three and nine months ended September 30, 2025.

Net revenues and expenses related to our foreign operations are, for the most part, denominated in the functional currency of the foreign operation, which minimizes the impact fluctuations in exchange rates would have on net income or loss.

We are subject to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than the functional currencies.

Such transactions were not material to our operations during the three months ended June 30, 2025.

These foreign currency transaction gains and losses, including hedging impacts, are classified in investment income and other, net, in the condensed consolidated statements of operations and were a gain (loss) of $1 million and $(1) million for the three months ended June 30, 2025 and 2024, respectively and a gain (loss) of $1 million and $(2) million for the six months ended June 30, 2025 and 2024, respectively.

Such transactions were not material to our operations during the three months ended September 30, 2025.

These foreign currency transaction gains and losses, including hedging impacts, are classified in investment (income) expense and other, net, in the condensed consolidated statements of operations and were a loss (gain) of $2 million and $(1) million for the three months ended September 30, 2025 and 2024, respectively and a loss of $1 million for the nine months ended September 30, 2025 and 2024.

These net foreign currency transaction gains and losses include derivative instruments designed to reduce foreign currency exchange rate risks.

Translation gains or losses, which are recorded in accumulated other comprehensive loss in the condensed consolidated balance sheets, result from translation of the assets and liabilities of our foreign subsidiaries into U.S.

Foreign currency translation gains (losses) totaled approximately $128 million and $(1) million for the three months ended June 30, 2025 and 2024, respectively, and $187 million and $(43) million for the six months ended June 30, 2025 and 2024, respectively.

Foreign currency translation (losses) gains totaled approximately $(15) million and $69 million for the three months ended September 30, 2025 and 2024, respectively, and $172 million and $26 million for the nine months ended September 30, 2025 and 2024, respectively.

Our exposure to fluctuations in foreign currency exchange rates has increased as a result of our international presence and may continue to increase in the future if we continue to expand our operations outside of the U.S.

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We continually monitor the creditworthiness of our customers and maintain ongoing discussions with customers regarding contract status with respect to change orders and billing terms.

Therefore, management believes it takes appropriate action to manage market and other risks, but there is no assurance management will be able to reasonably identify all risks with respect to the collectability of these assets.

Therefore, management believes it takes appropriate action to manage market and other risks, but there is no

assurance management will be able to reasonably identify all risks with respect to the collectability of these assets.

See also “Revenue Recognition from Contracts with Customers” under Critical Accounting Estimates within Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis