What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-30 · 106 added, 299 removed, 193 unchanged (68% of the section changed)

13 unchanged sentences

We have a winning leadership culture driven by entrepreneurial business leaders that deliver innovative solutions to our customers.

We operate our business under three primary operating segments, which aggregate to our two reportable segments:

• Safety Services – A leading provider of safety services in North America, Europe, and Asia-Pacific, focusing on end-to-end integrated occupancy systems (fire protection solutions, entry systems, and elevators and escalators), including design, installation, inspection, and service of these integrated systems.

The work performed within this segment spans across industries and facilities and includes commercial, education, healthcare, high tech, industrial, and special-hazard settings.

• Specialty Services – A leading provider of a variety of infrastructure services and specialized industrial plant services, which include maintenance and repair of critical infrastructure such as underground electric, gas, water, sewer, and telecommunications infrastructure, as well as design, installation, inspection, and service of Heating, Ventilation, and Air Conditioning (“HVAC”) systems.

Our services include engineering and design, fabrication, installation, maintenance service and repair, retrofitting and upgrading, pipeline infrastructure, access and road construction, supporting facilities, and performing ongoing integrity management and maintenance to customers within the energy industry.

Customers within this segment vary from private and public utilities, communications, healthcare, education, transportation, manufacturing, industrial plants and governmental agencies throughout North America.

In January 2025, due to a change in the way the businesses are managed, we realigned our segments by moving the HVAC business from Safety Services to Specialty Services.

As a result, beginning in January 2025, HVAC business leadership responsibility and full accountability was transferred to report through the Specialty Services segment and information for the HVAC business is combined with the Specialty Services segment within the information reviewed by the CODM.

As such, we have recast all historical segment information to reflect current period presentation.

We focus on growing our recurring revenues and repeat business from our diversified long-standing customers across a variety of end markets, which we believe provides us with stable cash flows and a platform for organic growth.

We believe maintenance and service revenues are generally more predictable through contractual arrangements with typical terms

ranging from days to three years, with the majority having short durations and are often recurring due to consistent renewal rates and long-standing customer relationships.

We operate our business under three primary operating segments, two of which aggregate into a single reportable segment, resulting in two reportable segments:

• Safety Services – A leading provider of safety services in North America, Europe, and Asia-Pacific, focusing on fire protection solutions, electronic security systems, and elevators and escalators, including design, installation, inspection, service, and monitoring of these systems.

The work performed within this segment spans across a diverse mix of end markets with a focus on high tech services, advanced manufacturing, healthcare, fulfillment and distribution centers, and critical infrastructure.

• Specialty Services – A leading provider of a variety of specialty contracting, fabrication and distribution, and infrastructure and utility services.

The work within this segment spans across a diverse mix of end markets with a focus on high tech services, healthcare, and critical infrastructure throughout North America.

We focus on growing our recurring revenue streams and repeat business from a diverse set of long-standing customers across a variety of end markets, which we believe provides us with stable cash flows and a platform for organic growth.

We believe inspection, service, and monitoring revenues are generally more predictable through contractual arrangements with typical terms ranging from days to five years, with the majority having short durations and are often recurring due to consistent renewal rates and long-standing customer relationships.

For financial information about our segments see Note 17 – “Segment Information” to our condensed consolidated financial statements included herein.

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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.

Restructuring

During 2022, we announced our multi-year Chubb restructuring program designed to drive efficiencies and synergies and optimize operating margin.

The Chubb restructuring program included expenses related to workforce reductions, lease termination costs, and other facility rationalization costs.

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

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.

Economic, Industry and Market Factors

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These fluctuations, as well as the highly competitive nature of our industries, have resulted, and may continue to result, in lower proposals and lower profit on the services we provide.

Increased volatility in the global economy, and the recently announced increased tariffs on imported goods by the United States, Canada, and other countries, may also impact the financial results of some of our businesses.

Increased volatility in the global economy, and the increased tariffs on imported goods by the United States, Canada, and other countries, may also impact the financial results of some of our businesses.

These tariffs have a direct impact on the cost of certain materials utilized in the services we provide and will increase the overall cost of projects which could lower project activity and impact the demand for our services.

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Fluctuations in end-user demand, or in the supply of services within those industries, can affect demand for our services.

As a result, our business may be adversely affected by industry declines or by delays in new projects.

As a result, our businesses may be adversely affected by industry declines or by delays in new projects.

Variations or unanticipated changes in project schedules in connection with large projects can create fluctuations in net revenues.

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Net revenues are generated from the sale of various types of contracted services, fabrication, and distribution.

We derive net revenues primarily from services under contractual arrangements with durations ranging from days to three years, with the majority having durations of less than six months, and which may provide the customer with pricing options that include a combination of fixed, unit, or time and material pricing.

Net revenues for fixed price agreements are generally recognized over time using the cost-to-cost method of accounting which measures progress based on the cost incurred to total expected cost in satisfying our performance obligation.

We derive net revenues primarily from services under contractual arrangements with durations ranging from days to five years, with the majority having short durations, and which may provide the customer with pricing options that include a combination of fixed, unit, or time and material pricing.

Net revenues for fixed price agreements are generally recognized

over time using the cost-to-cost method of accounting which measures progress based on the cost incurred to total expected cost in satisfying our performance obligation.

Net revenues from time and material contracts are recognized as the services are provided.

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General and administrative expenses also include outside professional fees and other corporate expenses.

Amortization of intangible assets

Amortization expense reflects the charges incurred to amortize our finite-lived identifiable intangible assets, such as customer relationships, which are amortized over their estimated useful lives.

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 (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.

interest expense, expected return on assets, and amortizations of prior service expenses and actuarial gains and losses.

Investment expense and other, net

Investment expense and other, net includes income and expense from foreign currency forward contracts, cross-currency swaps, joint ventures, non-service pension cost, and other miscellaneous items including loss (gains) on extinguishment of debt.

Non-service pension cost reflects the sum of the components of pension expense not related to service expense, i.e., interest expense, expected return on assets, and amortization of prior service costs and actuarial gains and losses.

C RITICAL A CCOUNTING P OLICIES A ND E STIMATES

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

Three Months Ended September 30, Change

The following is a discussion of our financial condition and results of operations during the three months ended March 31, 2026 and the three months ended March 31, 2025.

Three months ended March 31, 2026 compared to the three months ended March 31, 2025

Three Months Ended March 31, Change

($ in millions) 2026 2025 $ %

5 unchanged sentences

Interest expense, net 30 38 (8) (21.1) %

Investment (income) expense and other, net (1) 1 (2) (200.0) %

Investment expense and other, net 2 — 2 NM

Other expense, net 32 38 (6) (15.8) %

2 unchanged sentences

Net income $ 57 $ 35 $ 22

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 $ %

Gross profit $ 652 $ 567 $ 85 15.0 %

Gross margin 31.3 % 31.1 %

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 for the three months ended September 30, 2025 and 2024, respectively:

Three Months Ended September 30, Change

($ in millions) 2025 2024 $ %

Selling, general, and administrative expenses $ 489 $ 425 $ 64 15.1 %

SG&A expenses as a % of net revenues 23.5 % 23.3 %

SG&A expenses (excluding amortization) (non-GAAP) $ 433 $ 368 $ 65 17.7 %

SG&A expenses (excluding amortization) as a % of net revenues (non-GAAP) 20.8 % 20.2 %

Selling, general, and administrative expenses

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 $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 $(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 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.

federal income tax rate of 21.0% is due to nondeductible permanent items, taxes on foreign earnings in jurisdictions that have higher tax rates, state taxes, and discrete items.

The Organization for Economic Co-operation and Development ("OECD") has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as "Pillar 2"), with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025.

While it is uncertain whether the U.S.

will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted the legislation, and other countries are in the process of introducing legislation to implement Pillar 2.

The Company continues to evaluate and monitor but does not expect for Pillar 2 to have a material impact on the effective tax rate or the consolidated financial statements.

Net income and adjusted EBITDA

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 $ %

Net income $ 93 $ 69 $ 24 34.8 %

Adjusted EBITDA (non-GAAP) 281 245 36 14.7 %

Net income as a % of net revenues 4.5 % 3.8 %

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

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 $ %

Safety Services $ 1,403 $ 1,216 $ 187 15.4 %

Specialty Services 683 612 71 11.6 %

Corporate and Eliminations (1) (2) NM NM

$ 2,085 $ 1,826 $ 259 14.2 %

Segment Earnings

Three Months Ended September 30, Change

($ in millions) 2025 2024 $ %

Safety Services $ 236 $ 199 $ 37 18.6 %

Safety Services segment earnings as a % of net revenues 16.8 % 16.4 %

Specialty Services $ 81 $ 78 $ 3 3.8 %

Specialty Services segment earnings as a % of net revenues 11.9 % 12.7 %

Corporate and Eliminations $ (36) $ (32) NM NM

Adjusted EBITDA (non-GAAP) $ 281 $ 245 $ 36 14.7 %

NM = Not meaningful

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 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 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 $ %

Net revenues $ 5,794 $ 5,157 $ 637 12.4 %

Cost of revenues 3,985 3,554 431 12.1 %

Gross profit 1,809 1,603 206 12.9 %

Selling, general, and administrative expenses 1,419 1,235 184 14.9 %

Operating income 390 368 22 6.0 %

Interest expense, net 109 110 (1) (0.9) %

Investment (income) expense and other, net (3) 6 9 (150.0) %

Other expense, net 106 116 (10) (8.6) %

Income before income taxes 284 252 32 12.7 %

Income tax provision 79 69 10 14.5 %

Net income $ 205 $ 183 $ 22

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

Net revenues for the three months ended March 31, 2026 were $1,982 million compared to $1,719 million for the same period in 2025, an increase of $263 million or 15.3%.

The increase in net revenues was driven by solid growth in inspection, service, and monitoring revenues, growth in project revenues, acquisitions, pricing improvements, and impacts of foreign exchange translation.

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 March 31, 2026 and 2025, respectively:

Three Months Ended March 31, Change

($ in millions) 2026 2025 $ %

1 unchanged sentence

Gross margin 31.3 % 31.5 %

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.

Gross profit for the three months ended March 31, 2026 was $620 million compared to $542 million for the same period in 2025, an increase of $78 million or 14.4%.

Gross margin for the three months ended March 31, 2026 was 31.3%, a decrease of 20 basis points compared to the prior year period.

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

Operating expenses

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

Nine Months Ended September 30, Change

The following table presents operating expenses for the three months ended March 31, 2026 and 2025, respectively:

Three Months Ended March 31, Change

($ in millions) 2026 2025 $ %

Selling, general, and administrative expenses $ 517 $ 458 $ 59 12.9 %

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

SG&A expenses as a % of net revenues 26.1 % 26.6 %

SG&A expenses (excluding amortization) (non-GAAP) $ 454 $ 401 $ 53 13.2 %

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Selling, general, and administrative expenses

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.

SG&A expenses for the three months ended March 31, 2026 were $517 million compared to $458 million for the same period in 2025, an increase of $59 million.

SG&A expenses as a percentage of net revenues was 26.1% during the three months ended March 31, 2026 compared to 26.6% for the same period in 2025.

The increase in SG&A expenses was primarily driven by non-recurring systems and business enablement expenses, SG&A expenses from acquisitions completed during the prior 12 months, and investments to support growth.

Our SG&A expenses excluding amortization for the three months ended March 31, 2026 were $454 million, or 22.9% of net revenues, compared to $401 million, or 23.3% of net revenues, for the same period of 2025.

The decrease in SG&A expenses excluding amortization as a percentage of net revenues is primarily due to strong revenue growth.

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

Interest expense, net

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 $(3) million for the nine months ended September 30, 2025 compared to $6 million of expense for the same period of 2024.

Interest expense was $30 million and $38 million for the three months ended March 31, 2026 and 2025, respectively.

The decrease in interest expense was primarily due to a decrease in floating rates and benefits from certain derivative transactions.

Investment expense and other, net

Investment expense and other, net was $2 million for the three months ended March 31, 2026 compared to $0 million of expense for the same period of 2025.

The change in investment expense and other, net was primarily due to a loss associated with the impact of foreign currency exchange rates and an increase in non-service pension cost in the current year compared to the prior year.

Income tax provision

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 effective tax rate for the three months ended March 31, 2026 was 19.9% compared to 23.4% in the same period of 2025.

The decrease in the effective tax rate between the periods was primarily due to the current year increase in windfall tax benefit for vested shares.

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

federal income tax rate of 21.0% is due to nondeductible permanent items, taxes on foreign earnings in jurisdictions that have higher tax rates, state taxes, and discrete items.

federal income tax rate of 21.0% for the three months ended March 31, 2026 and 2025 is due to the windfall tax benefit for vested shares partially offset by nondeductible permanent items, taxes on foreign earnings in jurisdictions that have higher tax rates, and state taxes.

Net income and adjusted EBITDA

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

The following table presents net income and adjusted EBITDA for the three months ended March 31, 2026 and 2025, respectively:

Three Months Ended March 31, Change

($ in millions) 2026 2025 $ %

3 unchanged sentences

Adjusted EBITDA as a % of net revenues 11.9 % 11.2 %

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

Nine Months Ended September 30, Change

Net income for the three months ended March 31, 2026 was $57 million compared to $35 million for the same period in 2025, an increase of $22 million.

The net income improvement is primarily attributable to strong revenue 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 March 31, 2026 and 2025 was 2.9% and 2.0%, respectively.

Adjusted EBITDA for the three months ended March 31, 2026 was $235 million compared to $193 million for the same period in 2025, an increase of $42 million.

The growth in adjusted EBITDA was driven by the same factors discussed above.

Segment Results for the three months ended March 31, 2026 compared to the three months ended March 31, 2025

Three Months Ended March 31, Change

($ in millions) 2026 2025 $ %

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Segment Earnings

Nine Months Ended September 30, Change

Three Months Ended March 31, Change

($ in millions) 2026 2025 $ %

6 unchanged sentences

NM = Not meaningful

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.

The following discussion breaks down the net revenues and segment earnings by reportable segment for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Safety Services

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.

Safety Services net revenues for the three months ended March 31, 2026 increased by $148 million or 11.7% compared to the same period in 2025.

The increase was driven by solid growth in inspection, service, and monitoring revenues, growth in project revenues, acquisitions, pricing improvements, and impacts of foreign exchange translation.

Safety Services segment earnings as a percentage of net revenues for the three months ended March 31, 2026 and 2025 was approximately 16.3% and 15.7%, respectively.

The increase was primarily driven by disciplined customer and

project selection and pricing improvements, resulting in margin expansion in inspection, service, and monitoring revenues and project revenues, and favorable SG&A leverage.

Specialty Services

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.

Specialty Services net revenues for the three months ended March 31, 2026 increased by $116 million or 25.6% compared to the same period in 2025.

The increase was driven by growth in both project and service revenues.

Specialty Services segment earnings as a percentage of net revenues for the three months ended March 31, 2026 and 2025 was approximately 6.9% and 6.4%, respectively.

The increase was primarily due to favorable fixed cost absorption, partially offset by mix.

Non-GAAP Financial Measures

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These non-GAAP financial measures, however, have limitations as analytical tools and should not be considered in isolation from, a substitute for, or superior to, the related financial information we report in accordance with GAAP.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses required by GAAP to be recorded in our financial statements and may not be comparable to similarly titled measures of other companies due to potential differences in calculation methods.

The principal limitation of these non-GAAP financial measures is that they exclude significant expenses, gains, and other non-recurring items that are required by GAAP to be recorded in our financial statements and may not be comparable to similarly titled measures of other companies due to potential differences in calculation methods.

In addition, these measures are subject to inherent limitations as they reflect the exercise of judgment by management about which items are excluded or included in determining these non-GAAP financial measures.

3 unchanged sentences

We believe this non-GAAP measure provides meaningful information and helps investors understand our core selling, general, and administrative expenses excluding acquisition-related amortization expense charges to better enable investors to understand our financial results and assess our prospects for future performance.

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

Three Months Ended September 30,

($ in millions) 2025 2024

Reported SG&A expenses $ 489 $ 425

Adjustments to reconcile to SG&A expenses to SG&A expenses (excluding amortization)

Amortization expense (56) (57)

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

Nine Months Ended September 30,

The following table presents a reconciliation of SG&A expenses to SG&A expenses (excluding amortization) for the periods indicated:

Three Months Ended March 31,

($ in millions) 2026 2025

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 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.

Adjustments include expenses that are non-recurring in nature and that may not be indicative of the Company’s core operating results, including contingent consideration and compensation, non-service pension cost, systems and business enablement expenses, business process transformation expenses, acquisition and divestiture related expenses, restructuring program related costs, and other miscellaneous items.

We supplement the

reporting of our consolidated financial information with adjusted EBITDA.

We believe this non-GAAP measure provides meaningful information and helps investors understand our financial results and assess our prospects for future performance.

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

Three Months Ended September 30,

($ in millions) 2025 2024

Reported net income

Adjustments to reconcile net income to adjusted EBITDA:

Interest expense, net 34 41

Income tax provision 37 31

Depreciation 21 21

Amortization 60 56

Contingent consideration and compensation 1 1

Non-service pension cost 5 7

Systems and business enablement 31 —

Business process transformation expenses — 13

Acquisition and divestiture related expenses (2) 2

Restructuring program related costs — 4

Adjusted EBITDA $ 281 $ 245

Nine Months Ended September 30,

Three Months Ended March 31,

($ in millions) 2026 2025

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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 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, 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.

During 2024, we issued 18,975,000 shares of Company common stock in a public underwritten offering.

The proceeds from this offering totaled approximately $458 million, net of related expenses.

We used the net proceeds from this offering for general corporate purposes, including acquisitions and other business opportunities, capital expenditures and working capital.

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

As of March 31, 2026, we had $1,390 million of total liquidity, comprised of $645 million in cash and cash equivalents and $745 million ($750 million less outstanding letters of credit of approximately $5 million, which reduce availability) of available borrowings under our Revolving Credit Facility.

During 2024, we completed the Sixth Amendment to our credit agreement, refinancing the 2021 Term Loan by increasing its principal amount by approximately $550 million, lowering the interest margin by 50 basis points, and removing the CSA.

We also completed our Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by an aggregate principal amount equal to $300.

During 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 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.

In April 2025, our Board of Directors authorized a new share repurchase program to purchase up to $1,000 million of shares of our common stock.

We also 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 the sellers, including tax payments in connection therewith.

During 2025, our Board of Directors authorized a share repurchase program ("2025 SRP") to purchase up to $1 billion of shares of our common stock.

The timing, amount and manner of any repurchases under the new repurchase program will be determined at the discretion of our leadership based on a number of factors, including the availability of capital, capital allocation alternatives, and market conditions for our common stock.

The share repurchase program is open-ended and does not require us to acquire any specific number of shares.

The share repurchase program is open-

ended and does not require us to acquire any specific number of shares.

It may be modified, suspended, extended, or terminated by us at any time without prior notice and may be executed through open-market purchases, privately negotiated transactions or otherwise, and we may enter into Rule 10b5-1 trading plans in connection with such repurchases.

This new authorization replaces our previous share repurchase authorization announced in 2024.

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

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.

This new authorization replaces our previous share repurchase authorization announced in 2024 ("2024 SRP").

In 2025, prior to the new authorization, we repurchased 3,095,573 shares of common stock for approximately $75 million under the 2024 SRP.

During the three months ended March 31, 2026, we did not repurchase any shares of common stock.

As of March 31, 2026, we had approximately $1 billion of authorized repurchases remaining under the 2025 SRP.

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

Nine Months Ended September 30,

Three Months Ended March 31,

($ in millions) 2026 2025

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Net cash used in investing activities (305) (14)

Net cash (used in) provided by financing activities (116) 348

Net cash used in by financing activities (42) (98)

Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash (6) 10

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

Net decrease in cash, cash equivalents, and restricted cash $ (268) $ (40)

Cash, cash equivalents, and restricted cash, end of period $ 645 $ 461

Net Cash Provided by Operating Activities

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.

Net cash provided by operating activities was $85 million for the three months ended March 31, 2026 compared to $62 million for the same period in 2025.

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 during the three months ended March 31, 2026 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.

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Net Cash Used in Investing Activities

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.

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 $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.

Net cash used in investing activities was $305 million for the three months ended March 31, 2026 compared to $14 million for the same period in 2025.

This increase is primarily driven by increased acquisition consideration in the current year.

We had cash used in acquisitions, net of cash acquired, of $289 million and $6 million in the three months ended March 31, 2026 and 2025, respectively.

Net Cash Used in Financing Activities

Net cash used in financing activities was $42 million for the three months ended March 31, 2026 compared to $98 million for the same period in 2025.

The cash used in financing activities for the three months ended March 31, 2026 was driven by $37 million of restricted shares tendered for taxes and $4 million of payments of acquisition-related consideration, while in the three months ended March 31, 2025, cash used in financing activities was driven by $75 million of share repurchases and $19 million of restricted shares tendered for taxes.

Financing Activities

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We have entered into a Credit Agreement by and among APi Group DE, Inc., our wholly-owned subsidiary, as borrower ("APi Group DE"), APG as a guarantor, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank N.A., as administrative agent and as collateral agent (the “Credit Agreement”) which provides for:

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

(1) a term loan facility, pursuant to which we incurred the $2,157 million seven-year incremental term loan ("2021 Term Loan") (increased from $1,100 million in 2024 and 2025) used to fund a portion of the purchase price in the

Chubb acquisition and to fully repay the balance of a previously outstanding term loan, 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 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.

We also 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 $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, 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.

We also completed our Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by an aggregate principal amount equal to $300.

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 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.

Our first lien net leverage ratio as of March 31, 2026 was 1.3:1.0.

As of March 31, 2026, the 2021 Term Loan has $2,157 million remaining principal amount outstanding.

We had no amounts outstanding under the Revolving Credit Facility, under which $745 million was available after giving effect to $5 million of outstanding letters of credit, which reduces availability.

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The 4.125% Senior Notes will mature on July 15, 2029, unless redeemed earlier, and bear interest at a rate of 4.125% per year until maturity, payable semi-annually in arrears.

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

We used the net proceeds from the sale of the 4.125% Senior Notes to repay previously outstanding term loans and for general corporate purposes.

As of March 31, 2026, 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 September 30, 2025, we had $277 million aggregate principal amount of 4.750% Senior Notes outstanding.

As of March 31, 2026, 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 September 30, 2025 and December 31, 2024.

Issuance and Conversion of Series B Preferred Stock

During 2022, we issued and sold 800,000 shares of our 5.5% Series B Redeemable Convertible Preferred Stock, par value $0.0001 per share (the "Series B Preferred Stock"), for an aggregate purchase price of $800 million, pursuant to securities purchase agreements entered into on July 26, 2021 with certain investors.

The net proceeds from the Series B Preferred Stock issuance were used to fund a portion of the consideration for the Chubb acquisition.

During 2024, we entered into a Conversion and Repurchase Agreement with Juno Lower Holdings L.P.

("Juno Lower Holdings"), FD Juno Holdings L.P.

("FD Juno Holdings", and together with Juno Lower Holdings, "Blackstone"), Viking Global Equities Master Ltd.

("VGEM") and Viking Global Equities II L.P.

(VGE II, and collectively with VGEM, "Viking" and collectively with the Blackstone, the "Series B Holders") pursuant to which Blackstone and Viking agreed to convert all of the outstanding shares of the Series B Preferred Stock that they hold, which represents all of the Series B Preferred Stock outstanding.

The transactions contemplated by the agreement (the "Series B Preferred Stock Conversion") were also consummated on February 28, 2024.

Under the terms of the agreement, (i) the Series B Holders each agreed to exercise their respective right to convert all of their Series B Preferred Stock into common stock, resulting in a total of 800,000 shares of Series B Preferred Stock being converted into approximately 49,205,279 shares of common stock (inclusive of approximately 424,794 shares attributable to accrued and unpaid dividends thereon (the "Conversion Shares") and (ii) upon issuance of the Conversion Shares, we agreed to immediately repurchase one-half of the Conversion Shares, on a pro rata basis, from the Series B Holders for an aggregate purchase price of $600 million.

The repurchase price was financed by (i) an incremental term facility of $300 million and (ii) cash and available credit from the balance sheet.

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 March 31, 2026 and December 31, 2025.

Material Cash Requirements from Known Contractual and Other Obligations

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• Tax Obligations – See Note 11 – "Income Taxes."

• Pension obligations – See Note 12 – "Employee Benefit Plans."

• Operating and Finance Leases – See Note 12 – "Leases" in the Annual Report on Form 10-K filed on February 25, 2026.

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

We have not had material changes to our lease obligations during the three months ended March 31, 2026.

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

Our capital expenditures are typically less than 1.5% of annual net revenues.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

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.

During 2024, we entered into a $720 million notional amount forward starting interest rate swap commencing in October 2026 and maturing in January 2029 that exchanges a variable rate of interest (SOFR) for an average fixed rate of interest of approximately 3.13% over the term of the agreement.

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

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 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 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 (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.

We seek to manage foreign currency exposure by minimizing our consolidated net assets and liability positions in currencies other than the functional currency of our foreign subsidiaries.

However, we believe that our exposure to transactional gains or losses resulting from fluctuations in foreign currencies is limited because our foreign operations primarily invoice and collect receivables in their respective local or functional currencies, and the expenses associated with these transactions are generally contracted and paid for in the same local currencies.

In order to manage foreign currency risk related to transactions in foreign currencies and the intercompany financing structure, we entered into cross-currency swaps to manage the foreign currency risk of certain intercompany loans.

We also use foreign currency forward contracts as a way to mitigate foreign currency exposure.

Other Market Risk

We are also exposed to market risks impacting our customer base due to the potential related impact on accounts receivable or contract assets on uncompleted contracts.

The amounts recorded may be at risk if our customers’ ability to pay these obligations is negatively impacted by economic conditions.

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.

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.

In addition, we are exposed to various supply chain risks, including the market risk of price fluctuations or availability of copper, steel, cable optic fiber, and other materials used as components of supplies or materials utilized in our operations.

We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our vehicle fleet.

Disruptions in our supply chain can occur due to market inefficiencies but can also be driven by other events, like cybersecurity breaches, pandemics, or similar disruptive events.

While we believe we can increase our contract prices to adjust for some price increases in commodities, there can be no assurance that such price increases, if they were to occur, would be recoverable.

Additionally, some of our fixed price contracts do not allow us to adjust prices and, as a result, increases in material costs could reduce profitability with respect to projects in progress.

Significant declines in market prices for oil, gas, and other fuel sources may also impact our operations.

Prolonged periods of low oil and gas prices may result in projects being delayed or canceled and in a low oil and gas price environment, certain of our businesses could become less profitable or incur losses.

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