What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-30 compared with 2026-04-30 · 215 added, 101 removed, 198 unchanged (61% of the section changed)

10 unchanged sentences

Unless the context otherwise requires, all references in this section to “APG,” the “Company,” “we,” “us,” and “our” refer to APi Group Corporation and its subsidiaries.

We are a global, market-leading business services provider of fire and life safety, security, elevator and escalator, and specialty services with a substantial recurring revenue base and over 500 locations worldwide.

We provide statutorily mandated and other contracted services to a strong base of long-standing customers across industries.

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

We are a global, market-leading business services company providing statutorily mandated and contracted services across our Safety Services and Specialty Services segments, including fire and life safety, electronic security, elevator and escalator, and infrastructure services.

With more than 600 locations in over 20 countries, we are built on a century of expertise, a people-first culture, and our purpose of Building Great Leaders.

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.

• Safety Services – A leading provider of safety services in North America, Europe, and Asia-Pacific, focusing on fire and life safety 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.

35 unchanged sentences

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 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.

13 unchanged sentences

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

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.

Investment expense (income) and other, net

Investment expense (income) 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 gains or losses 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

For information regarding our Critical Accounting Policies, see the “Critical Accounting Policies” section of the “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, 2025.

C RITICAL A CCOUNTING E STIMATES

For information regarding our critical accounting estimates, see the “Critical Accounting Estimates” section of the “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, 2025.

There have been no material changes to our critical accounting estimates during the six months ended June 30, 2026.

R ESULTS O F O PERATIONS

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

The following is a discussion of our financial condition and results of operations during the three and six months ended June 30, 2026 and 2025 .

Three months ended June 30, 2026 compared to the three months ended June 30, 2025

Three Months Ended June 30, Change

($ in millions) 2026 2025 $ %

5 unchanged sentences

Interest expense, net 36 37 (1) (2.7) %

Investment expense and other, net 2 — 2 NM

Investment expense (income) and other, net 1 (2) 3 (150.0) %

Other expense, net 37 35 2 5.7 %

2 unchanged sentences

Net income $ 99 $ 77 $ 22

NM = Not meaningful

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

Net revenues for the three months ended June 30, 2026 were $2,254 million compared to $1,990 million for the same period in 2025, an increase of $264 million or 13.3%.

The increase in net revenues was driven by solid growth in inspection, service, and monitoring revenues, robust growth in project revenues, revenues from acquisitions completed in the prior 12 months, and pricing improvements.

The following table presents 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, 2026 and 2025, respectively:

Three Months Ended June 30, Change

($ in millions) 2026 2025 $ %

1 unchanged sentence

Gross margin 31.2 % 30.9 %

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.

Gross profit for the three months ended June 30, 2026 was $703 million compared to $615 million for the same period in 2025, an increase of $88 million or 14.3%.

Gross margin for the three months ended June 30, 2026 was 31.2%, an increase of 30 basis points compared to the prior year period.

Margins increased in both project and service revenues, driven by disciplined customer and project selection and pricing improvements, offset by project and business mix.

Operating expenses

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

Three Months Ended March 31, Change

The following table presents operating expenses for the three months ended June 30, 2026 and 2025, respectively:

Three Months Ended June 30, Change

($ in millions) 2026 2025 $ %

4 unchanged sentences

Selling, general, and administrative expenses

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.

SG&A expenses for the three months ended June 30, 2026 were $528 million compared to $472 million for the same period in 2025, an increase of $56 million.

SG&A expenses as a percentage of net revenues was 23.4% during the three months ended June 30, 2026 compared to 23.7% for the same period in 2025.

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

SG&A expenses excluding amortization for the three months ended June 30, 2026 were $461 million, or 20.5% of net revenues, compared to $417 million, or 21.0% 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 revenue growth outpacing growth in expenses.

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

Interest expense, net

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.

Interest expense, net was $36 million and $37 million for the three months ended June 30, 2026 and 2025, respectively.

The decrease in interest expense, net was primarily driven by a decrease in floating rates and benefits from certain derivative transactions, offset by an increased volume of outstanding debt.

Investment expense (income) and other, net

Investment expense (income) and other, net was $1 million for the three months ended June 30, 2026 compared to $2 million of income for the same period of 2025.

The change in investment expense (income) and other, net was primarily due to a loss on the extinguishment of debt in the current year with no similar activity in the prior year.

Income tax provision

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 effective tax rate for the three months ended June 30, 2026 was 28.0% compared to 28.7% in the same period of 2025.

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

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

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.

federal income tax rate of 21.0% for the three months ended June 30, 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 three months ended March 31, 2026 and 2025, respectively:

Three Months Ended March 31, Change

The following table presents net income and adjusted EBITDA for the three months ended June 30, 2026 and 2025, respectively:

Three Months Ended June 30, Change

($ in millions) 2026 2025 $ %

3 unchanged sentences

Adjusted EBITDA as a % of net revenues 13.8 % 13.7 %

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.

Net income for the three months ended June 30, 2026 was $99 million compared to $77 million for the same period in 2025, an increase of $22 million.

The net income improvement is primarily attributable to strong revenue growth, 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, 2026 and 2025 was 4.4% and 3.9%, respectively.

Adjusted EBITDA for the three months ended June 30, 2026 was $311 million compared to $272 million for the same period in 2025, an increase of $39 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

Segment Results for the three months ended June 30, 2026 compared to the three months ended June 30, 2025

Three Months Ended June 30, Change

($ in millions) 2026 2025 $ %

4 unchanged sentences

Segment Earnings

Three Months Ended March 31, Change

Three Months Ended June 30, Change

($ in millions) 2026 2025 $ %

6 unchanged sentences

NM = Not meaningful

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.

The following discussion breaks down the net revenues and segment earnings by reportable segment for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Safety Services

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.

Safety Services net revenues for the three months ended June 30, 2026 increased by $120 million or 8.8% 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.

Safety Services segment earnings as a percentage of net revenues for the three months ended June 30, 2026 was approximately 17.0%, unchanged compared to prior year, driven by disciplined customer and project selection and pricing improvements, resulting in margin expansion in inspection, service, and monitoring revenues and project revenues, partially offset by mix and increased SG&A expenses.

Specialty Services

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.

Specialty Services net revenues for the three months ended June 30, 2026 increased by $144 million or 22.9% compared to the same period in 2025.

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

Specialty Services segment earnings as a percentage of net revenues for the three months ended June 30, 2026 and 2025 was approximately 11.9% and 11.3%, respectively.

The increase was primarily driven by disciplined customer and project selection and pricing improvements, resulting in margin expansion in service and project revenues, partially offset by SG&A expenses, including variable compensation expense.

Six months ended June 30, 2026 compared to the six months ended June 30, 2025

Six Months Ended June 30, Change

($ in millions) 2026 2025 $ %

Net revenues $ 4,236 $ 3,709 $ 527 14.2 %

Cost of revenues 2,913 2,552 361 14.1 %

Gross profit 1,323 1,157 166 14.3 %

Selling, general, and administrative expenses 1,045 930 115 12.4 %

Operating income 278 227 51 22.5 %

Interest expense, net 66 75 (9) (12.0) %

Investment expense (income) and other, net 3 (2) (5) (250.0) %

Other expense, net 69 73 (4) (5.5) %

Income before income taxes 209 154 55 35.7 %

Income tax provision 53 42 11 26.2 %

Net income $ 156 $ 112 $ 44

Net revenues for the six months ended June 30, 2026 were $4,236 million compared to $3,709 million for the same period in 2025, an increase of $527 million or 14.2%.

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

The following table presents 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, 2026 and 2025, respectively:

Six Months Ended June 30, Change

($ in millions) 2026 2025 $ %

Gross profit $ 1,323 $ 1,157 $ 166 14.3 %

Gross margin 31.2 % 31.2 %

Gross profit for the six months ended June 30, 2026 was $1,323 million compared to $1,157 million for the same period in 2025, an increase of $166 million or 14.3%.

Gross margin for the six months ended June 30, 2026 was 31.2%, unchanged compared to the prior year period.

Margins increased in both project and service revenues, driven by disciplined customer and project selection and pricing improvements, offset by project and business mix.

Operating expenses

The following table presents operating expenses for the six months ended June 30, 2026 and 2025, respectively:

Six Months Ended June 30, Change

($ in millions) 2026 2025 $ %

Selling, general, and administrative expenses $ 1,045 $ 930 $ 115 12.4 %

SG&A expense as a % of net revenues 24.7 % 25.1 %

SG&A expenses (excluding amortization) (non-GAAP) $ 915 $ 818 $ 97 11.9 %

SG&A expenses (excluding amortization) as a % of net revenues (non-GAAP) 21.6 % 22.1 %

Selling, general, and administrative expenses

SG&A expenses for the six months ended June 30, 2026 were $1,045 million compared to $930 million for the same period in 2025, an increase of $115 million.

SG&A expenses as a percentage of net revenues was 24.7% during the six

months ended June 30, 2026 compared to 25.1% for the same period in 2025.

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

SG&A expenses excluding amortization for the six months ended June 30, 2026 were $915 million, or 21.6% of net revenues, compared to $818 million, or 22.1% 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 revenue growth outpacing growth in expenses.

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

Interest expense, net

Interest expense, net was $66 million and $75 million for the six months ended June 30, 2026 and 2025, respectively.

The decrease in interest expense, net was primarily driven by a decrease in floating rates and benefits from certain derivative transactions, offset by an increased volume of outstanding debt.

Investment expense (income) and other, net

Investment expense (income) and other, net was $3 million for the six months ended June 30, 2026 compared to $2 million of income for the same period of 2025.

The change in investment expense (income) and other, net was primarily due to a loss on the extinguishment of debt in the current year with no similar activity in the prior year and a loss associated with the impact of foreign currency exchange rates compared to the prior year.

Income tax provision

The effective tax rate for the six months ended June 30, 2026 was 25.2% compared to 27.1% in the same period of 2025.

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 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 six months ended June 30, 2026 and 2025, respectively:

Six Months Ended June 30, Change

($ in millions) 2026 2025 $ %

Net income $ 156 $ 112 $ 44 39.3 %

Adjusted EBITDA (non-GAAP) 546 465 81 17.4 %

Net income as a % of net revenues 3.7 % 3.0 %

Adjusted EBITDA as a % of net revenues 12.9 % 12.5 %

Net income for the six months ended June 30, 2026 was $156 million compared to $112 million for the same period in 2025, an increase of $44 million.

The increase is attributable to strong revenue growth, partially offset by the increase in SG&A expenses discussed above.

Net income as a percentage of net revenues for the six months ended June 30, 2026 and 2025 was 3.7% and 3.0%, respectively.

Adjusted EBITDA for the six months ended June 30, 2026 was $546 million compared to $465 million for the same period in 2025, an increase of $81 million.

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

Segment Results for the six months ended June 30, 2026 compared to the six months ended June 30, 2025

Six Months Ended June 30, Change

($ in millions) 2026 2025 $ %

Safety Services $ 2,897 $ 2,629 $ 268 10.2 %

Specialty Services 1,342 1,082 260 24.0 %

Corporate and Eliminations (3) (2) NM NM

$ 4,236 $ 3,709 $ 527 14.2 %

Segment Earnings

Six Months Ended June 30, Change

($ in millions) 2026 2025 $ %

Safety Services $ 482 $ 431 $ 51 11.8 %

Safety Services segment earnings as a % of net revenues 16.6 % 16.4 %

Specialty Services $ 131 $ 100 $ 31 31.0 %

Specialty Services segment earnings as a % of net revenues 9.8 % 9.2 %

Corporate and Eliminations $ (67) $ (66) NM NM

Adjusted EBITDA (non-GAAP) $ 546 $ 465 $ 81 17.4 %

NM = Not meaningful

The following discussion breaks down the net revenues and segment earnings by reportable segment for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Safety Services

Safety Services net revenues for the six months ended June 30, 2026 increased by $268 million or 10.2% 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 six months ended June 30, 2026 and 2025 was approximately 16.6% and 16.4%, 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, partially offset by mix and increased SG&A expenses.

Specialty Services

Specialty Services net revenues for the six months ended June 30, 2026 increased by $260 million or 24.0% compared to the same period in 2025.

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

Specialty Services segment earnings as a percentage of net revenues for the six months ended June 30, 2026 and 2025 was approximately 9.8% and 9.2%, respectively.

The increase was driven by disciplined customer and project selection and pricing improvements, resulting in margin expansion in service and project revenues, partially offset by SG&A expenses.

Non-GAAP Financial Measures

1 unchanged sentence

We use these non-GAAP financial measures to evaluate our performance, both internally and as compared with our peers, because they exclude certain items that may not be indicative of our core operating results.

Management believes these measures are useful to investors since they (a) permit investors to view our performance using the same tools that management uses to evaluate our past performance and prospects for future performance, (b) permit investors to compare us with our peers, (c) in the case of adjusted EBITDA, determine certain elements of management’s incentive compensation, and (d) provide consistent period-to-period comparisons of the results.

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.

Management believes these measures are useful to investors because they (a) reflect the same tools management uses to assess performance and prospects, (b) facilitate peer comparison, (c) provide consistent period-to-period comparisons, and (d) in the case of adjusted EBITDA, determine certain elements of executive incentive compensation.

These non-GAAP financial measures, however, have limitations as analytical tools and should not be considered a substitute for, or superior to, GAAP financial measures.

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.

3 unchanged sentences

SG&A expenses (excluding amortization) is a measure of operating costs used by management to manage the business.

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

Three Months Ended March 31,

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, 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 June 30,

($ in millions) 2026 2025

3 unchanged sentences

SG&A expenses (excluding amortization) $ 461 $ 417

Six Months Ended June 30,

($ in millions) 2026 2025

Reported SG&A expenses $ 1,045 $ 930

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

Amortization expense (130) (112)

SG&A expenses (excluding amortization) $ 915 $ 818

Adjusted EBITDA

1 unchanged sentence

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 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 March 31,

The following tables present reconciliations of net income to adjusted EBITDA for the periods indicated:

Three Months Ended June 30,

($ in millions) 2026 2025

8 unchanged sentences

Systems and business enablement 25 18

Acquisition and divestiture related expenses 9 11

Restructuring program related costs — 11

Adjusted EBITDA $ 311 $ 272

Six Months Ended June 30,

($ in millions) 2026 2025

Reported net income

Adjustments to reconcile net income to adjusted EBITDA:

Interest expense, net 66 75

Income tax provision 53 42

Depreciation 42 42

Amortization 131 119

Contingent consideration and compensation (1) 1

Non-service pension cost 10 9

Systems and business enablement 52 30

Business process transformation expenses — 4

3 unchanged sentences

L IQUIDITY A ND C APITAL R ESOURCES

Our primary sources of liquidity are cash flows from the operating activities of our consolidated subsidiaries, available cash and cash equivalents, our access to our $750 million five-year senior secured revolving credit facility (the "Revolving Credit Facility") and the proceeds from debt and equity offerings.

Our primary sources of liquidity are cash flows from the operating activities of our consolidated subsidiaries, available cash and cash equivalents, our access to our $1 billion five-year senior secured revolving credit facility (the "Revolving Credit Facility") and the proceeds from debt and equity offerings.

We believe these sources will be sufficient to fund our liquidity requirements for at least the next twelve months.

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 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.

As of June 30, 2026, we had $1,565 million of total liquidity, comprised of $851 million in cash and cash equivalents and $714 million ($1 billion less $280 million of outstanding borrowings and outstanding letters of credit of approximately $6 million, which reduce availability) of available borrowings under our Revolving Credit Facility.

During the second quarter of 2026, we completed the Ninth Amendment to our credit agreement, upsizing and extending the Revolving Credit Facility, and extending the 2021 Term Loan.

The amendment increased the Revolving Credit Facility by $250 million, from $750 million to $1 billion, increased the letter of credit sublimit from $250 million to $300 million, extended the maturity date of the Revolving Credit Facility to May 14, 2031, and extended the maturity date of the 2021 Term Loan to May 14, 2033.

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.

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.

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

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.

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

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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.

During the six months ended June 30, 2026, we repurchased 1,586,704 shares of common stock for approximately $66 million under the 2025 SRP.

As of June 30, 2026, we had approximately $934 million 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:

Three Months Ended March 31,

Six Months Ended June 30,

($ in millions) 2026 2025

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Net cash used in investing activities (861) (140)

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

Net cash provided by (used in) financing activities 639 (101)

Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash (8) 28

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Net Cash Provided by Operating Activities

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.

Net cash provided by operating activities was $168 million for the six months ended June 30, 2026 compared to $145 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 six months ended June 30, 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 $305 million for the three months ended March 31, 2026 compared to $14 million for the same period in 2025.

Net cash used in investing activities was $861 million for the six months ended June 30, 2026 compared to $140 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.

We had cash used in acquisitions, net of cash acquired, of $816 million and $111 million in the six months ended June 30, 2026 and 2025, respectively.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities was $639 million for the six months ended June 30, 2026 compared to net cash used in financing activities of $101 million for the same period in 2025.

The cash provided by financing activities for the six months ended June 30, 2026 was driven by $795 million in proceeds from long-term borrowings and $280 million of net short-term debt, offset by $303 million in payments on long-term borrowings, $66 million of share repurchases, $38 million of restricted shares tendered for taxes, and $13 million of payments of acquisition-related consideration, while in the six months ended June 30, 2025, cash used in financing activities was driven by $75 million of share repurchases, $20 million of restricted shares tendered for taxes, and $2 million of payments of acquisition-related consideration.

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 $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.

(1) a term loan facility, pursuant to which we incurred the $2,152 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 $1 billion Revolving Credit Facility (increased from $750 million in 2026) of which up to $300 million (increased from $250 million in 2026) can be used for the issuance of letters of credit.

During the second quarter of 2026, we completed the Ninth Amendment to our credit agreement, upsizing and extending the Revolving Credit Facility.

The amendment increased the Revolving Credit Facility by $250 million from $750 million to $1 billion, increased the letter of credit sublimit from $250 million to $300 million, extended the maturity date of the Revolving Credit Facility to May 14, 2031, and extended the maturity date of the 2021 Term Loan to May 14, 2033.

We also completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan.

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

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

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%.

The 2021 Term Loan matures on January 3, 2029.

Based on the early prepayments we have made, we do not owe any quarterly principal amounts for the remainder of the 2021 Term Loan.

The 2021 Term Loan matures on May 14, 2033.

Principal payments on the 2021 Term Loan will be made in quarterly installments on the last day of each fiscal quarter, for a total annual amount equal to 1.00% of the initial aggregate principal amount of the 2021 Term Loan.

The interest rate applicable to borrowings under the Revolving Credit Facility is, at our option, either (a) a base rate plus an applicable margin equal to 0.25% or (2) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.25%.

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The Credit Agreement also contains customary events of default.

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 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.

Furthermore, with respect to the revolving credit facility, we must maintain a first lien net leverage ratio that does not exceed 3.75 to 1.00 for each fiscal quarter, 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 $60 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, 2026 was 1.3:1.0.

As of June 30, 2026, the 2021 Term Loan has $2,152 million remaining principal amount outstanding and we had $280 million outstanding under the Revolving Credit Facility, under which $714 million was available after giving effect to $6 million of outstanding letters of credit, which reduces availability.

On June 22, 2021, APi Group DE completed a private offering of $350 million aggregate principal amount of 4.125% Senior Notes due 2029 (the “4.125% Senior Notes”), issued under an indenture, dated June 22, 2021.

The 4.125% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries.

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.

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 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.

As of June 30, 2026, we had $337 million aggregate principal amount of 4.125% Senior Notes outstanding.

On October 21, 2021, APi Group DE 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.

The 4.750% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries.

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

As of June 30, 2026, we had $277 million aggregate principal amount of 4.750% Senior Notes outstanding.

On May 14, 2026, APi Group DE completed a private offering of $500 million aggregate principal amount of 5.750% Senior Notes due 2034 (the "5.750% Senior Notes") issued under an indenture dated May 14, 2026.

The 5.750% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries.

The 5.750% Senior Notes will mature on June 1, 2034, unless redeemed earlier, and bear interest at a rate of 5.750% per year until maturity, payable semi-annually in arrears.

We intend to use the net proceeds from the offering for general corporate purposes, including funding previously announced acquisitions and related fees and expenses.

As of June 30, 2026, we had $500 million aggregate principal amount of 5.750% 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 March 31, 2026 and December 31, 2025.

We were in compliance with all covenants contained in the indentures governing the 4.125% Senior Notes, 4.750% Senior Notes, and Credit Agreement as of June 30, 2026 and December 31, 2025, and the 5.750% Senior Notes as of June 30, 2026.

Material Cash Requirements from Known Contractual and Other Obligations

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• 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 three months ended March 31, 2026.

We have not had material changes to our lease obligations during the six months ended June 30, 2026.

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

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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