What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-06 · 191 added, 132 removed, 354 unchanged (48% of the section changed)

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changes in the global trade environment, including the continuation or imposition of import tariffs or other import restrictions;

geopolitical, macroeconomic and other market conditions unrelated to our operating performance including but not limited to a pandemic, the Russia-Ukraine war, attacks on shipping in the Red Sea, conflict in the Middle East (including, but not limited to, the war in Iran), changing trade policies, inflation and interest rates;

geopolitical, macroeconomic and other market conditions unrelated to our operating performance including but not limited to a pandemic, the Russia-Ukraine war, attacks on shipping in the Red Sea and Strait of Hormuz, conflict in the Middle East (including, but not limited to, the war in Iran), changing trade policies, inflation and interest rates;

our ability to convert our orders in backlog into revenue;

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delays, disruptions or quality control problems in our product development operations;

the development, deployment and commercialization of new products, including DuraTrack D2S TM , OmniTrack 2.0, the 60 degree variant of DuraTrack, and our ARRAY Atlas TM suite of foundation-to-tracker solutions;

our ability to retain our key personnel or failure to attract additional qualified personnel;

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changes to laws and regulations, including changes to tax laws and regulations, that are applied adversely to us or our customers;

our ability to successfully integrate APA Solar, LLC (“APA”) into our existing operations and realize the anticipated benefits or synergies of the acquisition;

our ability to complete the acquisition of Affordable Wire Management, LLC (“AWM”) on the anticipated terms and timetable, including the possibility that closing conditions may not be satisfied or waived;

our ability to successfully integrate APA Solar, LLC (“APA”) and AWM into our existing operations, realize the anticipated benefits or synergies of the acquisitions of APA and AWM and achieve strategic and other objectives relating to the acquisitions;

risks related to any unforeseen liabilities of AWM;

and other factors listed and described in more detail in the section captioned “Risk Factors” in this Quarterly Report, our 2025 Annual Report, and our other documents on file with the SEC.

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To avoid infringing on our U.S.

patent, our competitors must use

designs that we believe are inherently less efficient and reliable.

patent, our competitors must use designs that we believe are inherently less efficient and reliable.

For example, our largest competitor’s design requires one motor for each row of solar panels.

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In May 2026, we introduced DuraTrack D2S™, which is our next-generation dual-row tracker designed for key international markets, which combines patented passive wind stow technology, the terrain adaptability of OmniTrack®, and optimized control through SmarTrack® into a single flexible platform .

In July 2026, we introduced Atlas™, a new suite of foundation-to-tracker solutions designed exclusively for ARRAY trackers and APA foundations to enhance their technical interoperability.

Our corporate headquarters are located in Albuquerque, New Mexico.

We sell our products to solar developers, independent power producers, utilities, and engineering, procurement and construction companies (“EPCs”) that build solar energy projects, often under master supply agreements or multi-year procurement contracts.

During the three months ended March 31, 2026, we derived 95% and 5% of our revenues from customers in the U.S.

During the six months ended June 30, 2026, we derived 94% and 6% of our revenues from customers in the U.S.

and the rest of the world, respectively.

From the founding of Array through March 31, 2026, we have shipped approximately 99 gigawatts of trackers to customers worldwide.

From the founding of Array through June 30, 2026, we have shipped approximately 102 gigawatts of trackers to customers worldwide.

Acquisition of APA Solar

On August 14, 2025 (the “Closing Date”), the Company, through its indirect wholly owned subsidiary STINorland USA, Inc., a California corporation (“Buyer”), completed the acquisition of 100% of the issued and outstanding equity interests of APA (such acquisition, the “APA Acquisition”), pursuant to the terms of the equity purchase agreement, dated as of June 17, 2025, by and among the Company, Buyer, APA, SunHoldings, LLC, an Ohio limited liability company (“Seller”) and the guarantors party thereto (as amended, the “Purchase Agreement”).

On August 14, 2025 (the “Closing Date”), the Company, through its indirect wholly owned subsidiary STINorland USA, Inc., a California corporation (“APA Buyer”), completed the acquisition of 100% of the issued and outstanding equity interests of APA (such acquisition, the “APA Acquisition”), pursuant to the terms of the equity purchase agreement, dated as of June 17, 2025, by and among the Company, APA Buyer, APA, SunHoldings, LLC, an Ohio limited liability company (“APA Seller”) and the guarantors party thereto (as amended, the “APA Purchase Agreement”).

The cash paid as of the Closing Date was $159.9 million, net of $10.1 million in preliminary and customary purchase price adjustments, which includes $6.2 million to retire debt.

For GAAP purposes, the aggregate cash consideration paid was approximately $166.1 million, subject to final post-closing adjustment.

We expect to finalize customary post-closing adjustments by June 2026.

The Purchase Agreement also includes an earnout provision estimated to have a fair value of approximately $19.3 million as of the Closing Date (the “Earnout Consideration”), which is included in the purchase consideration, under which the Seller may receive shares of Company common stock, or equivalent cash value at the Buyer’s discretion, based upon APA’s achievement of certain financial performance targets during the three-year period ending on September 30, 2028.

GAAP purposes, the aggregate cash consideration paid was approximately $166.1 million, subject to final post-closing adjustment.

We expect to finalize customary post-closing adjustments by August 2026.

The APA Purchase Agreement also includes an earnout provision estimated to have a fair value of approximately $19.3 million as of the Closing Date (the “Earnout Consideration”), which is included in the

purchase consideration, under which the APA Seller may receive shares of Company common stock, or equivalent cash value at the Company’s discretion, based upon APA’s achievement of certain financial performance targets during the three-year period ending on September 30, 2028.

As a result, the purchase consideration for the APA Acquisition totaled approximately $185.4 million.

Subject to the terms and conditions set forth in the Purchase Agreement, the Company has also agreed to pay aggregate deferred purchase price consideration of approximately $40.0 million payable in three installments over a two-year period based on service within five business days after the first and second anniversaries from the Closing Date and as set forth in Note 3 - Acquisition (the “Deferred Consideration”).

Subject to the terms and conditions set forth in the APA Purchase Agreement, the Company has also agreed to pay aggregate deferred purchase price consideration of approximately $40.0 million payable in three installments over a two-year period based on service within five business days after the first and second anniversaries from the Closing Date and as set forth in Note 3 - Acquisition (the “Deferred Consideration”).

Each of the Earnout Consideration and Deferred Consideration are described in more detail below.

The Company is currently finalizing the valuation of the acquired assets and liabilities and assessing the related accounting impacts.

The amounts recorded as of March 31, 2026 are preliminary, as the Company is finalizing working capital, post-closing, and other customary adjustments.

The amounts recorded as of June 30, 2026 are preliminary, as the Company is finalizing working capital, post-closing, and other customary adjustments.

These preliminary estimates are subject to change within the measurement period (defined as the twelve months following the Closing Date) and related accounting adjustments may be materially different, as the Company obtains additional information on these matters and as additional information is made known during the post-acquisition measurement period.

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Expenses related to these operating lease agreements are allocated based on usage to Cost of product and service revenue or General and administrative expenses in the consolidated statements of operations.

Total costs related to these operating lease agreements were $0.7 million for the three months ended March 31, 2026.

Total costs related to these operating lease agreements were $0.7 million and $1.4 million for the three and six months ended June 30, 2026, respectively.

APA designs, engineers, and manufactures solar racking, mounting and foundation systems.

Integrating such systems into our business model through the acquisition of APA expands our product portfolio to better serve the evolving needs of the solar industry and our customers.

2.875% Convertible Senior Notes due 2031

On June 27, 2025, we completed a private placement of $345 million in aggregate principal amount of 2.875% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”), resulting in net proceeds of $334.6 million after deducting initial purchasers’ discounts and offering expenses.

The 2031 Convertible Notes were issued pursuant to an indenture, dated June 27, 2025, between the Company and U.S.

Bank Trust Company, National Association, as trustee.

The 2031 Convertible Notes are senior unsecured obligations of the Company and will mature on July 1, 2031, unless earlier converted redeemed or repurchased.

Interest is payable semiannually in arrears at a rate of 2.875% per year on January 1 and July 1 of each year, beginning on January 1, 2026.

Proposed Business Combination

On July 16, 2026, the Company and STINorland USA, Inc., a California corporation and an indirect wholly-owned subsidiary of the Company (the “AWM Buyer”), entered into an equity purchase agreement (the “AWM Purchase Agreement”) with Affordable Wire Management, LLC, a Delaware limited liability company (“AWM”),

DS Equity Holdings LLC, a Delaware limited liability company, Scott R.

Rand and Daniel R.

Smith, pursuant to which the AWM Buyer will acquire all of the issued and outstanding equity interests of AWM, a company that designs, manufactures, markets and sells wire management products for the utility scale photovoltaic or battery storage system industries (the “AWM Transaction”).

Under the terms of the AWM Purchase Agreement, the AWM Buyer has agreed to pay a base purchase price of $153.0 million, plus performance-based earn-out payments of up to $40.0 million and up to $10.0 million of deferred payments to Scott R.

Rand and Daniel R.

Smith contingent on their continued employment.

The AWM Transaction is expected to close in the third quarter of 2026, subject to receiving any required regulatory approvals and the satisfaction of other customary closing conditions.

Research and Development

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We expense these costs as incurred prior to a respective product being ready for commercial production.

R&D expense was $3.0 million and $2.4 million during the three months ended March 31, 2026 and 2025, respectively

R&D expense was $5.0 million and $2.5 million during the three months ended June 30, 2026 and 2025, respectively, and $8.0 million and $4.9 million during the six months ended June 30, 2026 and 2025, respectively.

Factors Affecting Results of Operations

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We have had customers delay planned installations or look to renegotiate power purchase agreements (“PPAs”) to improve project returns based on various rate environments.

For example, in anticipation of interest rate reductions and more favorable project

financing conditions later in 2024, some customers delayed installations.

While the Federal Reserve began lowering interest rates in the second half of 2024, the timing and impact of subsequent rate adjustments during 2025 continued to create additional considerations for our customers, and there are varying outlooks on whether additional rate cuts may occur.

While the Federal Reserve began lowering interest rates in the second half of 2024, the timing and impact of subsequent rate adjustments during 2025 and 2026 continued to create additional considerations for our customers, and there are varying outlooks on whether additional rate cuts may occur.

Customers must weigh this uncertainty in conjunction with other macroeconomic factors when assessing the returns and timing for relevant projects.

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• Macroeconomic factors.

There has been a rapid depreciation of the Brazilian Real in conjunction with existing pricing pressures on energy in the Brazilian market.

Due to these dynamics, the economic cases for the power purchase agreements, or PPAs, for many solar projects have become less attractive for our customers.

Many of the developers in Brazil of these projects continue to signal delays as they renegotiate the pricing of these PPAs.

In addition, our results will also be impacted by tax incentives we can recognize, for example the Brazil value-added tax benefit, Imposto sobre Circulação de Mercadorias e Servicos (“ICMS”), which will be fully phased out in 2033.

There had been a rapid depreciation of the Brazilian Real in prior periods;

however, in 2026 there has been significant appreciation of the Brazilian Real compared to the U.S.

Exchange rate volatility can have a significant impact on the economic cases for the PPAs for many solar projects.

In addition, our results will also be impacted by tax incentives we can recognize,

for example the Brazil value-added tax benefit, Imposto sobre Circulação de Mercadorias e Servicos, which will be fully phased out in 2033.

As a result, we are focused on reducing costs and better aligning our organization, including the size thereof, in Brazil with the current market conditions.

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• Local permitting .

If our customers cannot receive permitting for their projects, they are unable to begin and ultimately complete them in a timely manner.

If our customers cannot receive permits for their projects, they are unable to begin and ultimately complete them in a timely manner.

A dramatic increase in solar and battery storage sites has increased the average permitting time in many geographies in which our customers operate.

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While solar power is cost-competitive with conventional forms of generation in many U.S.

states even without the ITC, we believe previous step-downs in the ITC in past years have influenced the timing and quantity of some customers’ orders.

states even without the Federal Investment Tax Credit (“ITC”), we believe previous step-downs in the ITC in past years have influenced the timing and quantity of some customers’ orders.

On July 4, 2025, President Trump signed into law the OBBB, which includes changes to the energy tax credits.

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The credit is also disallowed for solar facilities that begin construction after December 31, 2025 that receive material assistance from a prohibited foreign entity.

On February 13, 2026, Treasury guidance was released clarifying methods for calculating material assistance from a prohibited foreign entity and requesting comments.

On August 15, 2025, Treasury and the IRS issued Notice 2025-42 consistent with the executive order, which eliminates the 5% safe harbor for utility-scale solar projects and only allows the physical work test to determine when a project begins construction.

On February 13, 2026, guidance from the U.S.

Department of the Treasury (“Treasury”) was released clarifying methods for calculating material assistance from a prohibited foreign entity and requesting comments.

On August 15, 2025, Treasury and the Internal Revenue Service (the “IRS”) issued Notice 2025-42 which eliminates the 5% safe harbor for utility-scale solar projects and only allows the physical work test to determine when a project begins construction.

If solar developers are unable to satisfy the physical work test, our business, financial condition, and results of operations could be adversely affected.

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We have determined that the statutory definitions for these components (which are reiterated in final regulations) apply to our tracker components.

W e have successfully negotiated, and we continue to successfully negotiate, agreements with key suppliers around sharing the economic benefits of section 45X credits associated with torque tube and structural fasteners.

W e have successfully negotiated, and we continue to successfully negotiate, agreements with key suppliers around sharing the economic benefits of

section 45X credits associated with torque tube and structural fasteners.

We continue to pursue additional agreements for splitting the economic benefits of section 45X with suppliers for parts we do not manufacture internally.

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On February 13, 2026, Treasury guidance was released that further clarified methods for calculating material assistance, and included a request for comments by March 30, 2026.

We anticipate forthcoming Treasury proposed rule will further clarify the potential impact of the foreign entity of concern limitations may have for credits claimed in 2026 and future years.

We anticipate forthcoming Treasury proposed rules will further clarify the potential impact that the foreign entity of concern limitations may have for credits claimed in 2026 and future years.

Domestic Content Safe Harbor Guidance

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In May 2024, the IRS issued Notice 2024-41 setting forth further guidance on the domestic content bonus tax credits, including a safe harbor method for calculating domestic content percentages.

On January 16, 2025, the IRS released Notice 2025-08, which modified Notice 2023-38 and Notice 2024-41, as well as introduced an updated elective safe harbor method for use in lieu of provisions of the adjusted percentage rule provided in Notice 2023-38 for calculating the domestic content bonus credit amounts applicable for certain

qualified facilities and energy projects.

Notice 2024-41 and Notice 2025-08 and the updated definitions described therein clarified certain pre-existing uncertainty in the industry, but also introduced new uncertainties.

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Impact of the Iran War

In March 2026, the U.S.

and Israel initiated military actions against targets in Iran.

In March 2026, the United States and Israel initiated military actions against targets in Iran.

In response, Iran retaliated with a series of attacks on key infrastructure in neighboring countries across the Middle East.

Further, Iran has committed to utilizing military intervention to close the Strait of Hormuz, which impacts a significant portion of global oil and natural gas supply.

An escalation by the U.S., Israel, Iran, or other countries, and any retaliatory measures by the U.S., Israel, Iran, or other countries, as applicable, in response, such as broader attacks on regional infrastructure, may impact costs, reduce our sales and earnings, or otherwise have an adverse effect on our operations.

For example, the disruption of the global oil supply through the Strait of Hormuz and the conflict between the U.S.

and Iran have driven up commodity prices and increased inflationary pressures, potentially affecting our transportation, manufacturing, distribution and other costs.

An escalation by the United States, Israel, Iran, or other countries, and any retaliatory measures by the United States, Israel, Iran, or other countries, as applicable, in response, such as broader attacks on regional infrastructure, may impact costs, reduce our sales and earnings, or otherwise have an adverse effect on our operations.

For example, the disruption of the global oil supply through the Strait of Hormuz and the conflict between the United States and Iran have driven up commodity prices and increased inflationary pressures, potentially affecting our transportation, manufacturing, distribution and other costs.

Furthermore, these events may also cause shipping delays, rerouted freight, port congestion, or higher logistics and insurance costs, which could disrupt the movement of, limit the availability of, or increase the cost of sourcing raw materials.

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Impact of Disruption of Key Shipping Lanes

At various times since 2023, we have seen disruptions of container shipping traffic through the Red Sea create port congestion, especially in Asia, and cause many shipping companies to pause shipments through the Suez Canal and the Red Sea as a result of attacks against commercial vessels in the area, affecting transit times, capacity, and shipping costs for routes connecting the rest of the world with Asia.

To address the persisting

challenges arising from prolonged transit times, we have increased our local sourcing efforts where feasible within certain regions.

We have seen disruptions of container shipping traffic through the Red Sea create port congestion, especially in Asia, and cause many shipping companies to pause shipments through the Suez Canal and the Red Sea as a result of attacks against commercial vessels in the area, affecting transit times, capacity, and shipping costs for routes connecting the rest of the world with Asia.

To address the persisting challenges arising from prolonged transit times, we have increased our local sourcing efforts where feasible within certain regions.

These measures aim to reduce delays to get the product to project sites on time.

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International Trade Commission (“USITC”) seeking the imposition of antidumping and countervailing duty (“AD/CVD”) tariffs on imports of crystalline solar photovoltaic (“CSPV”) cells and modules from India, Indonesia, and Laos.

In February 2026, USDOC issued preliminary affirmative CVD determinations and in April 2026, USDOC announced preliminary AD determinations.

In February 2026, USDOC issued preliminary affirmative CVD determinations and in April 2026, USDOC

announced preliminary AD determinations.

When combined, total preliminary AD/CVD rates now stand at approximately 234% for India, 121% to 178% for Indonesia, and 103% for Laos.

Final Commerce determinations are expected in July and September 2026, with a final injury determination from the ITC scheduled for October 2026 and issuance of duty orders, if affirmed, expected by late October 2026.

Final USDOC determinations are expected in September 2026.

On May 12, 2026, a group of U.S.

solar manufacturers filed a petition with USDOC for an anti-circumvention investigation regarding cells and modules from Ethiopia.

On June 18, 2026, a group of U.S.

solar manufacturers filed a petition with USDOC for an anti-circumvention investigation regarding imports of CSPV cells from Korea.

While we do not sell solar modules, the degree of our exposure is dependent on, among other things, the impact of the AD/CVD orders on the projects that are also intended to use our products, with such impact being largely out of our control.

Successive rounds of AD/CVD actions have the potential to constrain the supply of solar cells and modules available to U.S.

Successive rounds of AD/CVD and anti-circumvention actions have the potential to constrain the supply of solar cells and modules available to U.S.

project developers, contribute to rising module prices, and create an increasingly complex procurement environment for our customers.

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solar installations, demand for our tracker systems could be adversely impacted.

Section 232 Polysilicon Investigation

On July 1, 2025, USDOC initiated an investigation under Section 232 of the Trade Expansion Act of 1962 into the effects on national security of imports of polysilicon and its derivatives.

USDOC's report has been transmitted to the President, and a determination as to whether to impose tariffs, quotas, or other import restrictions remains pending.

While we do not manufacture or sell polysilicon, wafers, cells, or modules, the scope of any action taken could affect the cost and availability of solar components used on projects that are also intended to use our products.

Any such action would be layered on top of existing AD/CVD orders, Section 301 tariffs, and pending anti-circumvention proceedings, further increasing the cost and complexity of procurement for U.S.

project developers.

To the extent that these measures lead to project delays, cancellations, or reductions in the pace of U.S.

solar installations, demand for our tracker systems could be adversely impacted.

Trade Policy and Executive Orders

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Supreme Court ruled in Learning Resources, Inc.

Trump that the International Emergency Economic Powers Act ("IEEPA") does not authorize the President to impose tariffs, invalidating the "Reciprocal Tariffs" imposed on imports from most U.S.

trading partners as well as the tariffs on imports from Canada, Mexico, and China related to fentanyl trafficking.

Collection of all IEEPA-based tariffs ceased effective February 24, 2026.

The Trump Administration subsequently imposed a temporary 10% ad valorem import surcharge under Section 122 of the Trade Act of 1974, which is limited by statute to 150 days and is set to expire on July 24, 2026 absent congressional extension.

The legality of the Section 122 tariffs is the subject of pending litigation.

Concurrently, the U.S.

Trade Representative (“USTR”) initiated two accelerated investigations under Section 301 of the Trade Act of 1974 targeting excess manufacturing capacity and forced labor practices across dozens of economies.

Trump Administration officials have indicated that Section 301 investigations are intended to establish a more durable statutory basis for tariffs before the Section 122 authority expires.

The ultimate scope, rate, and duration of tariffs that may be imposed under Section 301 or other authorities remain uncertain.

Trump that the International Emergency Economic Powers Act ("IEEPA") does not authorize the President to impose tariffs.

The Court only ruled on IEEPA tariffs and did not invalidate or address tariffs imposed under other statutory authorities.

Following the ruling, the U.S.

Court of International Trade issued an order directing U.S.

Customs and Border Protection (“CBP”) to formalize a process for refunds.

On April 20, 2026, CBP launched an online portal (“CAPE”) that can be used to submit IEEPA tariff refund requests and began issuing refunds in mid-May.

All requests will be reviewed by CBP to determine validity prior to the issuance of refunds.

Although, CAPE is now available for most entries and refunds are issuing, CBP and the Department of Justice appealed the Court of International Trade’s order as applied to a subset of entries.

That appeal is currently pending.

As the situation continues to develop, we will continue to monitor developments regarding any remaining unrefunded entries.

After the Supreme Court’s ruling, the Trump Administration implemented various tariffs, invoking other statutory authorities.

On February 20, 2026, President Trump imposed a 10% ad va lorem import surcharge under Section 122 of the Trade Act of 1974 that became effective on February 24, 2026.

That tariff was limited by statute to 150 days and expired on July 24, 2026.

After an accelerated investigation under Section 301 of the Trade Act of 1974, targeting forced labor practices across dozens of economies, the U.S.

Trade Representat ive (“USTR”) announced new Section 301 tariffs targeting forced labor practices of 10% or 12.5% on the majority

of imports from 59 countries and the European Union, effective July 24, 2026.

Other Section 301 investigations that could lead to further tariffs remain ongoing.

Separately, on April 2, 2026, the President issued a proclamation significantly restructuring how Section 232 tariffs on steel, aluminum, and copper products are assessed.

Effective April 6, 2026, the prior methodology,

through which Section 232 duties on derivative articles were calculated based on the value of the metal content within a product, was replaced with a framework in which duties apply to the full customs value of the imported article.

Effective April 6, 2026, the prior methodology, through which Section 232 duties on derivative articles were calculated based on the value of the metal content within a product, was replaced with a framework in which duties apply to the full customs value of the imported article.

Under the new structure, articles made entirely or predominantly of steel, aluminum, or copper, with limited exceptions, are subject to a 50% duty on their full customs value, while derivative articles with significant metal content are subject to a 25% duty on their full customs value.

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We are continuing to evaluate the potential impact of the imposition of the announced tariffs, the new classification and duty treatment scheme, and any additional or retaliatory tariffs, to our business and financial condition.

While we do not believe that the tariffs announced by the U.S.

in 2025 and through the date of filing this Quarterly Report on Form 10-Q in 2026 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of new tariffs is subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.

While we do not believe that the tariffs announced by the United States in 2025 and through the date of filing this Quarterly Report on Form 10-Q in 2026 will have a material adverse effect upon our results of operations, financial condition, or liquidity, the actual impact of new tariffs is subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any countermeasures that the target countries may take and any mitigating actions that may become available.

Section 337 Investigation

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Customs and Border Protection to block imports of any TOPCon products found to infringe the asserted patent.

The USITC has not yet made any determination on the merits or set a target completion date.

An initial determination date is set for July 15, 2027.

TOPCon represents a significant share of the modules being procured by U.S.

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These operating metrics are utilized by our management to evaluate our business, measure our performance, identify trends affecting our business, and formulate projections.

The primary operating metric we use to evaluate our sales performance and to track market acceptance of our products is megawatts (“MWs”) shipped and specifically the change in MWs shipped from period to period.

The primary operating metric we use to evaluate our sales performance and to track market

acceptance of our products is megawatts (“MWs”) shipped and specifically the change in MWs shipped from period to period.

MWs are measured for each individual project and are calculated based on the respective project’s expected megawatt output once installed and fully operational.

We also utilize metrics related to price and cost of goods sold per MW, including average selling price (“ASP”) and cost per watt (“CPW”).

ASP is calculated by dividing total applicable revenues by total applicable MWs,

whereas CPW is calculated by dividing total applicable costs of goods sold by total applicable MWs.

ASP is calculated by dividing total applicable revenues by total applicable MWs, whereas CPW is calculated by dividing total applicable costs of goods sold by total applicable MWs.

These metrics enable us to evaluate trends in pricing, manufacturing cost, and customer profitability.

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We review and update the contract related estimates on an ongoing basis and recognize adjustments for any project specific facts and circumstances that could impact the measurement of the extent of progress, such as the total costs to complete the contracts, under the cumulative catch-up method.

Due to the relatively short duration of our outstanding performance obligations, and our ability to estimate the remaining costs to be incurred, which are substantially all material costs covered under our material supply agreements with our suppliers, we have not recorded any material catch-up adjustments for the periods presented that would have impacted revenues or EPS related to revisions in our measurement of remaining progress of our performance obligations.

Due to the relatively short duration of our outstanding performance obligations, and our ability to estimate the remaining costs to be incurred, which are substantially all material costs covered under our material supply agreements with our suppliers, we have not recorded any material catch-up adjustments for the periods presented that would have impacted revenues or earnings per share related to revisions in our measurement of remaining progress of our performance obligations.

Cost of Revenue and Gross Profit

Cost of product and service revenue consists primarily of product costs, including raw materials, purchased components, net of any incentives or rebates earned from our suppliers, salaries, wages and benefits of manufacturing personnel, freight, tariffs, customer support, product warranty, amortization of developed technology and backlog, and depreciation of manufacturing and testing equipment.

Our product costs are affected by (i) the underlying cost of raw materials, including steel and aluminum, (ii) component costs, including electric motors and gearboxes, (iii) technological innovation, and (iv) economies of scale and improvements in production processes and automation.

Our product costs are

(i) the underlying cost of raw materials, including steel and aluminum;

(ii) component costs, including electric motors and gearboxes;

(iii) technological innovation;

and (iv) economies of scale and improvements in production processes and automation.

We may experience disruptions to our supply chain and increased material and freight costs.

When possible, we modify our production schedules and processes

to mitigate the impact of these disruptions and cost increases on our margins.

When possible, we modify our production schedules and processes to mitigate the impact of these disruptions and cost increases on our margins.

We do not currently hedge against changes in the price of our raw materials.

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General and administrative expense consists primarily of salaries, benefits, and equity-based compensation related to our executive, sales, engineering, finance, human resources, information technology, and legal personnel, as well as travel, facility costs, marketing, provision for credit losses, professional fees, and third-party services.

The majority of our sales during the three months ended March 31, 2026 and 2025, were in the U.S.;

The majority of our sales during the six months ended June 30, 2026 and 2025, were in the United States;

however, we also have a sales presence in Spain, Brazil, and Australia.

We intend to continue to expand our sales presence and marketing efforts to additional countries.

Contingent consideration consists of the changes in fair value of the TRA entered into with a former indirect stockholder, concurrent with the acquisition of Array Technologies Patent Holdings Co., LLC by ATI Investment Parent, LLC, as well as the Earnout Consideration associated with the APA Purchase Agreement.

Contingent consideration consists of the changes in fair value of the TRA entered into with a former indirect stockholder, as well as the Earnout Consideration associated with the APA Purchase Agreement.

The TRA liability and Earnout Consideration were recorded at fair value and subsequent changes in the fair values are recognized in earnings.

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and other debt held by our STI Operations (“Other Debt”).

Gain on extinguishment of debts, net consists of the difference between the cash paid and the carrying value of repurchased 2028 Convertible Notes and the fully repaid Term Loan Facility.

We repurchased $100 million aggregate principal amount of the 2028 Convertible Notes and repaid the Term Loan Facility during the second quarter of 2025.

We are subject to U.S.

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The following table sets forth our consolidated statement of operations (in thousands, except percentages):

Three Months Ended March 31, Increase/(Decrease)

Three Months Ended June 30, Increase/(Decrease) Six Months Ended June 30, Increase/(Decrease)

2026 2025 $ % 2026 2025 $ %

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Foreign currency gain, net 529 1,343 (814) (61) % 690 2,032 (1,342) (66) %

Other income, net 31 23 8 35 %

Total other expense, net (2,984) (4,004) 1,020 (25) %

Gain on extinguishment of debts, net — 14,207 (14,207) (100) % — 14,207 (14,207) (100) %

Other expense, net (187) (79) (108) 137 % (156) (56) (100) 179 %

Total other (expense) income, net (3,042) 10,503 (13,545) (129) % (6,026) 6,499 (12,525) (193) %

Income before income tax expense

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The following table provides details on our operating results by reportable segment for the respective periods (in thousands, except percentages):

Three Months Ended March 31, Increase/(Decrease)

Three Months Ended June 30, Increase/(Decrease) Six Months Ended June 30, Increase/(Decrease)

2026 2025 $ % 2026 2025 $ %

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Total $ 99,604 $ 97,124 $ 2,480 3 % $ 162,608 $ 173,552 $ (10,944) (6) %

Comparison of the three months ended March 31, 2026 and 2025

Consolidated revenue decreased $79.0 million, or 26%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by increased revenue from Array Legacy Operations of 2% and decreased revenue from STI Operations of 93%.

Revenue from Array Legacy Operations, inclusive of incremental contributions from APA, increased by $4.2 million, or 2%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by an increase of approximately 3% in ASPs, reflecting price increases at the time when revenue contracts were executed.

Revenue from STI Operations decreased by $83.1 million, or 93% for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The decrease was primarily driven by a decrease of approximately 96% in volume due to macroeconomic issues.

Comparison of the three and six months ended June 30, 2026 and 2025

Consolidated revenue decreased by $20.2 million, or 6%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily driven by decreased revenue from STI Operations of 69%, partially offset by increased revenue from Array Legacy Operations of 10%.

Revenue from Array Legacy Operations, inclusive of incremental contributions from APA, increased by $28.4 million, or 10%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily driven by an increase of approximately 25% in ASPs, partially offset by a 12% decrease in volume.

Revenue from STI Operations decreased by $48.6 million, or 69% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

The decrease was primarily driven by a decrease of approximately 60% in volume and a decrease of approximately 26% in ASPs.

Consolidated revenue decreased $99.1 million, or 15%, for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily driven by decreased revenue from STI Operations of 83%, partially offset by increased revenue from Array Legacy Operations of 6%.

Revenue from Array Legacy Operations, inclusive of incremental contributions from APA, increased by $32.6 million, or 6%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily driven by an increase of approximately 15% in ASPs, partially offset by a 7% reduction in volume.

Revenue from STI Operations decreased by $131.7 million, or 83% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

The decrease was primarily driven by a decrease of approximately 82% in volume, as well as an approximately 4% reduction in ASPs.

Cost of Revenue and Gross Profit

Consolidated cost of revenue decreased by $65.5 million, or 29%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, in line with lower volume.

Consolidated gross profit decreased by $13.4 million, or 18%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Gross margin increased to 28.2% for the three months ended March 31, 2026, as compared to 25.3% during the same period in the prior year.

Array Legacy Operations gross profit, inclusive of incremental contributions from APA, decreased by $0.4 million, or 1%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, while gross margin decreased to 30.0% from 30.8% for the three months ended March 31, 2026 and 2025, respectively.

The decrease in gross margin was driven by a 4% increase in cost per watt, partially offset by a 3% increase in average selling prices.

The increase in cost per watt was attributable to 9% higher costs, partially offset by a 3% one-time incremental 45x benefit and 2% tariff relief.

STI Operations gross profit decreased by $13.0 million, or 121%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Gross margin for STI Operations decreased to (37.4)% from 12.1% for the three months ended March 31, 2026 and 2025, respectively, driven primarily by an increased cost per watt on lower volumes.

Consolidated cost of revenue decreased by $22.7 million, or 9%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, in line with lower volume.

Consolidated gross profit increased by $2.5 million, or 3% , for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Gross margin increased to 29.1% for the three months ended June 30, 2026, as compared to 26.8% during the same period in the prior year.

Array Legacy Operations gross profit, inclusive of incremental contributions from APA, increased by $14.5 million, or 17%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, while gross margin increased to 30.7% from 28.8% for the three months ended June 30, 2026 and 2025, respectively.

The increase in gross margin was driven by a 25% increase in ASPs, partially offset by a 21% increase in CPW.

STI Operations gross profit decreased by $12.0 million, or 91%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Gross margin for STI Operations decreased to 5.1% from 18.6% for the three months ended June 30, 2026 and 2025, respectively, driven by a 26% decrease in ASPs, partially offset by a 11% decrease in CPW.

Consolidated cost of revenue decreased by $88.2 million, or 18%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, in line with lower volume.

Consolidated gross profit decreased by $10.9 million, or 6%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Gross margin increased to 28.8% for the six months ended June 30, 2026, as compared to 26.1% during the same period in the prior year.

Array Legacy Operations gross profit, inclusive of incremental contributions from APA, increased by $14.1 million, or 9%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, while gross margin increased to 30.5% from 29.6% for the six months ended June 30, 2026 and 2025, respectively.

The increase in gross margin was driven by a 15% increase in ASPs, partially offset by a 14% increase in CPW.

STI Operations gross profit decreased by $25.0 million, or 105%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Gross margin for STI Operations decreased to (4.1)% from 15.0% for the six months ended June 30, 2026 and 2025, respectively, driven primarily by a 4% decrease in ASPs combined with a 20% increase in CPW.

Operating Expenses

Consolidated general and administrative expenses, inclusive of APA, increased by $6.5 million, or 15%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The increase was primarily due to increases of $2.7 million from personnel-related expenses and $5.0 million in acquisition-related deferred compensation, partially offset by a decrease of $1.3 million in professional services.

Change in the fair value of contingent consideration, inclusive of APA, resulted in a gain of $2.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a $0.3 million increase in the fair value of the TRA liability, which was more than offset by a $2.7 million decrease in the fair value of the Earnout Consideration.

Consolidated depreciation and amortization expense, inclusive of APA, increased by $2.7 million, or 51%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The increase was primarily due to $2.4 million of incremental depreciation and amortization contributed by APA for the three months ended March 31, 2026.

Other Income, Net

Other income, net was immaterial for the three months ended March 31, 2026 and 2025.

Other income, net primarily consists of miscellaneous income and expense items.

Consolidated general and administrative expenses, inclusive of APA, increased by $9.4 million, or 21%, and $15.8 million, or 18%, for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, respectively.

The increase during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily due to an increase of $9.3 million from personnel-related expenses.

The increase during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was due primarily to an increase of $16.9 million from personnel-related expenses and service-related expenses of $2.8 million, partially offset by reductions primarily related to bad debt expense of $1.9 million and legal and professional expenses of $1.6 million.

Change in the fair value of contingent consideration, inclusive of APA, resulted in a loss of $2.3 million and a gain of $0.1 million for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, respectively.

The incremental loss recognized during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily driven by an increase of $2.0 million in the fair value of the earnout liability, which impacts only the three months ended June 30, 2026 due to its recognition in the third quarter of 2025, along with fair value remeasurements of the TRA liability.

The incremental gain during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was driven by a decrease of $0.7 million in the fair value of the earnout liability during the six months ended June 30, 2026, along with fair value measurements of the TRA liability.

Consolidated depreciation and amortization expense, inclusive of APA, increased by $2.4 million, or 43%, and $5.2 million, or 47% for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, respectively.

Th e increase was primarily due to $2.4 million and $4.7 million of incremental depreciation and amortization contributed by APA for the three and six months ended June 30, 2026, respectively.

Other Expense, Net

Other expense, net was immaterial for the three and six months ended June 30, 2026 and 2025.

Other expense, net primarily consists of miscellaneous income and expense items.

Interest Income

Consolidated interest income decreased by $0.9 million, or 28%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily as a result of lower cash balance and lower yields on our cash management program.

Consolidated interest income decreased by $1.4 million, or 37%, and $2.3 million, or 33%, for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, respectively, primarily as a result of lower cash balance and associated lower yield on our cash management program.

Interest Expense

Consolidated interest expense decreased by $2.5 million, or 31%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to refinancing with lower interest debt and changes in interest rates on our variable rate obligations.

Consolidated interest expense decreased by $3.0 million, or 34%, and $5.5 million , or 32% , for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, respectively, primarily due to refinancing with lower interest debt.

Income Tax Expense

Consolidated income tax expense decreased by $4.4 million, or 67%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

The Company recorded Income tax expense of $2.1 million and $6.5 million for the three months ended March 31, 2026 and 2025, respectively.

Our effective tax rate was 51.6% and 28.1% for the three months ended March 31, 2026 and 2025, respectively.

The income tax expense for the three months ended March 31, 2026 was impacted favorably by a higher mix of U.S.

profits and tax credits recorded during the period.

Additionally, discrete tax items for the quarter resulted in a $1.3 million net tax expense related to equity-based compensation, tax reserve releases and a change in state deferred tax assets.

Consolidated income tax expense decreased by $6.2 million, or 46%, and $10.6 million, or 53%, for the three and six months ended June 30, 2026, respectively, compared to the three and six months ended June 30, 2025, respectively.

The Company recorded Income tax expense of $7.4 million and $9.5 million for the three and six months ended June 30, 2026, respectively, and $13.6 million and $20.2 million for the three and six months ended June 30, 2025, respectively.

Our effective tax rate was 23.3% and 26.5% for the three and six months ended June 30, 2026, respectively, and 23.9% and 25.1% for the three and six months ended June 30, 2025, respectively.

The income tax expense for the three and six months ended June 30, 2026 was impacted favorably by a higher mix of U.S.

profits and tax credits recorded during the periods.

Discrete tax items for the three and six months ended June 30, 2026 were $0.5 million and $1.8 million, respectively.

The income tax expense for the three and six months ended June 30, 2025 was impacted by higher profits in non-US jurisdictions.

Additionally, tax expense of $0.1 million and $1.2 million related to equity-based compensation was recorded discretely for the three and six months ended June 30, 2025, respectively.

Liquidity and Capital Resources

Cash Flows (in thousands)

Three Months Ended March 31,

Net cash used in operating activities

$ (29,421) $ (13,059)

Six Months Ended June 30,

Net cash provided by operating activities $ 91,858 $ 30,782

Net cash used in investing activities

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Based on our past performance and current expectations, we believe that operating cash flows will be sufficient to meet our liquidity needs in the next 12 months and beyond.

As of March 31, 2026, our cash balance was $200.7 million, of which $33.2 million was held outside the U.S., and our net working capital, including cash and cash equivalents, was $489.0 million.

As of June 30, 2026, our cash balance was $307.3 million, of which $25.8 million was held outside the United States, and our net working capital, including cash and cash equivalents, was $486.0 million.

We had $332.9 million available to us under our $370.0 million Revolving Credit Facility.

On February 18, 2026, Array Tech, Inc.

(the “Borrower”) entered into an amendment to the Credit Agreement (the “Fifth Amendment”), by and among the Borrower, the Company’s wholly-owned subsidiary ATI Investment Sub, Inc., as holdings (“Holdings”), Goldman Sachs Bank USA, as administrative agent and collateral agent, and the Lenders (as defined in the Fifth Amendment).

During the second quarter of 2026, the Company repaid in full the remaining balances in Other Debt.

As a result, Other Debt was fully extinguished and no longer outstanding as of June 30, 2026.

On February 18, 2026, Array Tech, Inc., the Company’s operating subsidiary, (the “Borrower”) entered into an amendment to the credit agreement (as amended, the “Credit Agreement”) governing the Company’s senior secured credit facility (the “Fifth Amendment”), by and among the Borrower, the Company’s wholly-owned subsidiary ATI Investment Sub, Inc., as guarantor (“Holdings”), Goldman Sachs Bank USA, as administrative agent and collateral agent, and the Lenders (as defined in the Fifth Amendment).

The Fifth Amendment:

(i) increases the revolving credit facility commitments under the original Credit Agreement from $166 million to $370.0 million;

(i) increases the revolving credit facility commitments under the Fourth Amendment from $166 million to $370.0 million;

(ii) extends the maturity of the revolving credit facility from October 14, 2028 to February 18,

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Convertible Notes

On December 3, 2021 and December 9, 2021, the Company completed a $425.0 million private offering ($375.0 million and $50.0 million, respectively), of its 1.00% Convertible Senior Notes due 2028 (the “2028 Convertible Notes”), resulting in net proceeds of $413.3 million ($364.7 million and $48.6 million, respectively), after deducting the original issue discount of 2.75% but before deducting initial purchasers’ discounts and offering expenses.

On December 3, 2021 and December 9, 2021, the Company completed a $425.0 million private offering ($375.0 million and $50.0 million, respectively), of 2028 Convertible Notes, resulting in net proceeds of $413.3 million ($364.7 million and $48.6 million, respectively), after deducting the original issue discount of 2.75% but before deducting initial purchasers’ discounts and offering expenses.

The 2028 Convertible Notes were issued pursuant to an indenture, dated December 3, 2021, between the Company and U.S.

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Interest is payable semiannually in arrears at a rate of 1.00% per year on June 1 and December 1 of each year, beginning on June 1, 2022.

On June 27, 2025, the Company issued aggregate principal amount of $345.0 million of its 2.875% Convertible Senior Notes due 2031 (the “2031 Convertible Notes” and, together with the 2028 Convertible Notes, the “Convertible Notes”) in a private placement.

On June 27, 2025, the Company issued aggregate principal amount of $345.0 million of 2031 Convertible Notes in a private placement.

The Company used approximately $78.4 million of the proceeds from the 2031 Convertible Notes to repurchase $100.0 million aggregate principal amount of the 2028 Convertible Notes.

The Company incurred $10.4 million of initial purchasers’ discounts and offering expenses, resulting in net proceeds of $334.6 million.

As of March 31, 2026, there was $321.1 million and $335.9 million

outstanding on the 2028 Convertible Notes and 2031 Convertible Notes, respectively, net of unamortized issuance costs.

As of June 30, 2026, there was $321.5 million and $336.3 million outstanding on the 2028 Convertible Notes and 2031 Convertible Notes, respectively, net of unamortized issuance costs.

The 2028 Convertible Notes and 2031 Convertible Notes are senior unsecured obligations of the Company and will mature on December 1, 2028, and July 1, 2031, respectively, unless earlier converted redeemed or repurchased.

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Operating Activities

For the three months ended March 31, 2026, cash used in operating activities was $29.4 million, attributable to net loss of $2.0 million and net cash outflow of $50.6 million from Changes in our operating assets and liabilities, partially offset by $19.2 million of non-cash adjustments, mainly consisting of depreciation and amortization expense, and equity-based compensation.

For the three months ended March 31, 2025, cash used in operating activities was $13.1 million, attributable to net income of $16.7 million and $19.0 million of non-cash adjustments, mainly consisting of depreciation and amortization expense, amortization of developed technology and backlog, and equity-based compensation, partially offset by a net cash outflow of $48.8 million from Changes in our operating assets and liabilities.

For the six months ended June 30, 2026, cash provided by operating activities was $91.9 million, attributable to net income of $26.3 million and $47.5 million of non-cash adjustments, mainly consisting of depreciation and amortization expense, equity-based compensation, and $18.0 million from changes in our operating assets and liabilities.

For the six months ended June 30, 2025, cash provided by operating activities was $30.8 million attributable to net income of $60.0 million and $25.1 million of non-cash adjustments, mainly consisting of depreciation and amortization expense and equity-based compensation, partially offset by a net cash outflow of $54.3 million from changes in our operating assets and liabilities.

Investing Activities

For the three months ended March 31, 2026 and 2025, net cash used in investing activities was $7.5 million and $2.4 million, respectively, primarily due to the purchase of property, plant and equipment.

For the six months ended June 30, 2026 and 2025, net cash used in investing activities was $15.1 million and $9.0 million, respectively, due to the purchase of property, plant and equipment.

Financing Activities

For the three months ended March 31, 2026, cash used in financing activities was $7.6 million.

This was primarily driven by a $27.4 million repayment of Other Debt and $2.6 million in TRA payments issued, partially offset by $24.2 million in proceeds from the issuance of Other Debt.

For the three months ended March 31, 2025, cash used in financing activities was $1.7 million.

This was primarily driven by a $7.3 million repayment of Other Debt, $1.1 million in payments on our Term Loan Facility, and $1.2 million in TRA payments issued, partially offset by $7.9 million in proceeds from the issuance of Other Debt.

For the six months ended June 30, 2026, cash used in financing activities was $17.1 million.

This was primarily driven by a $51.0 million repayment of Other Debt and $2.6 million in TRA payments issued, partially offset by $38.3 million of proceeds from the issuance of Other Debt.

For the six months ended June 30, 2025, cash used in financing activities was $12.8 million.

This was primarily driven by a $233.9 million repayment on our Term Loan Facility, $78.4 million repurchase of 2028 Convertible Notes, and $35.1 million premium paid in connection with the purchase of the 2031 Capped Calls, partially offset by an increase of $334.6 million from net proceeds from the issuance of 2031 Convertible Notes, after deducting initial purchasers’ discounts and offering expenses.

Contractual Obligations and Commitments

Information regarding our debt obligations, lease commitments and other commitments is provided in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Annual Report.

Other than as set forth below, there were no material changes in our contractual obligations and commitments as of March 31, 2026.

Other than as set forth below, there were no material changes in our contractual obligations and commitments as of June 30, 2026.

APA Acquisition Earnout Consideration and Deferred Consideration

As discussed in Note 3 – Acquisition in the accompanying notes to the consolidated financial statements, the Purchase Agreement includes provisions providing for the Earnout Consideration and the payment of the Deferred Consideration of approximately $40.0 million.

As discussed in Note 3 – Acquisition in the accompanying notes to the consolidated financial statements, the APA Purchase Agreement includes provisions providing for the Earnout Consideration and the payment of the Deferred Consideration of approximately $40.0 million.

Each of the Deferred Consideration and the Earnout Consideration are described in more detail below.

Earnout Consideration

The Purchase Agreement includes an earnout provision pursuant to which Seller may be granted shares of the Company’s common stock, or equivalent cash value at the Buyer’s discretion, based upon APA’s achievement of certain financial performance targets during the three-year period ending September 30, 2028.

The APA Purchase Agreement includes an earnout provision pursuant to which APA Seller may be granted shares of the Company’s common stock, or equivalent cash value at the Company’s discretion, based upon APA’s achievement of certain financial performance targets during the three-year period ending September 30, 2028.

The maximum number of shares payable as Earnout Consideration is 4,686,530 shares of common stock, which was determined by dividing $40 million by the volume weighted average price of the Company’s common stock for the 10 trading days immediately following the Closing Date.

The number of shares payable will be subject to reduction if the cumulative value of the Earnout Consideration earned (measured on each date such shares are issued) exceeds $90 million.

The Purchase Agreement provides that, to the extent the issuance of any Earnout Consideration or Deferred Consideration Shares would require stockholder approval under Nasdaq Listing Rule 5635(a), the Company will pay cash in lieu of issuing such shares, unless such stockholder approval has been obtained.

The principal Seller continues to assume the managerial responsibilities of APA.

The APA Purchase Agreement provides that, to the extent the issuance of any Earnout Consideration or Deferred Consideration Shares would require stockholder approval under Nasdaq Listing Rule 5635(a), the Company will pay cash in lieu of issuing such shares, unless such stockholder approval has been obtained.

The principal APA Seller continues to assume the managerial responsibilities of APA.

For a discussion of the accounting of the Earnout Consideration, see “ – Business Combinations” below.

Deferred Consideration

The Deferred Consideration which will be payable to Seller in three installments (each, a “Deferred Consideration Installment”):

The Deferred Consideration which will be payable to APA Seller in three installments (each, a “Deferred Consideration Installment”):

(i) within five business days after the first anniversary of the Closing Date, an amount equal to 50% of the Deferred Consideration;

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and (iii) within five business days after the second anniversary of the Closing Date, an amount equal to the remaining balance of the Deferred Consideration.

As more fully described in the Purchase Agreement, the Deferred Consideration Installments are subject to reduction if certain equity holders of Seller cease to be employees of the Company under certain circumstances.

As more fully described in the APA Purchase Agreement, the Deferred Consideration Installments are subject to reduction if certain equity holders of APA Seller cease to be

employees of the Company under certain circumstances.

Each Deferred Consideration Installment will, at the Company’s election, be paid;

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Series A Redeemable Perpetual Preferred Stock

On August 10, 2021, we entered into a Securities Purchase Agreement, pursuant to which we issued 400,000 shares of its Series A Redeemable Perpetual Preferred Stock (the “Series A Shares”) and 9,000,000 shares of our common stock for an aggregate purchase price of approximately $395.4 million.

On August 10, 2021, we entered into a Securities Purchase Agreement, pursuant to which we issued 400,000 shares of our Series A Redeemable Perpetual Preferred Stock (the “Series A Shares”) and 9,000,000 shares of our common stock for an aggregate purchase price of approximately $395.4 million.

On or prior to August 10, 2026, the fifth anniversary of the Closing, we may pay dividends on the Series A Shares either in:

(i) cash at the then-applicable Cash Regular Dividend Rate;

(ii) through accrual to the Liquidation Preference at the Accrued Regular Dividend Rate of 6.25%;

or (iii) a combination thereof.

Following August 10, 2026, dividends are payable only in cash.

To the extent we do not declare and pay such dividends in cash following August 10, 2026, the dividends accrue to the Liquidation Preference at the then-applicable Cash Regular Dividend Rate plus 200 basis points.

For more information related to the Series A Shares, see Note 9 – Redeemable Perpetual Preferred Stock , to the accompanying condensed consolidated financial statements.

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We are required to provide surety bonds to various parties as required for certain transactions initiated during the ordinary course of business to guarantee our performance in accordance with contractual or legal obligations.

As of March 31, 2026, we posted surety bonds in the total amount of approximately $230.8 million.

As of June 30, 2026, we posted surety bonds in the total amount of approximately $238.7 million.

These off-balance sheet arrangements do not adversely impact our liquidity or capital resources.

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To the extent there are material differences between our estimates and the actual results, our future results of operations will be affected.

For a description of the accounting policies that require the most significant judgment and estimates in the preparation of our condensed consolidated financial statements, refer to our 2025 Annual Report.

For a description of the accounting policies that require the most significant

judgment and estimates in the preparation of our condensed consolidated financial statements, refer to our 2025 Annual Report.

Business Combinations

We completed one business combination for purchase consideration of $185.4 million in 2025.

We completed the APA Acquisition in 2025 for initial cash consideration of $166.1 million, plus up to approximately $19.3 million in earnout consideration and approximately $40.0 million in deferred purchase price consideration.

In accordance with Accounting Standards Codification (“ASC”) Topic 805 Business Combinations , total consideration was first allocated to the fair value of assets acquired and liabilities assumed, with the excess being recorded as Goodwill.

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Earnout Consideration

As discussed, the Purchase Agreement includes a provision for the Earnout Consideration.

The number of shares payable will be subject to reduction if the cumulative value of the Earnout Consideration earned (measured on each date such shares are issued) exceeds $90 million.

The Purchase Agreement provides that, to the extent the issuance of any Earnout Consideration or Deferred Consideration Shares would require stockholder approval under Nasdaq

Listing Rule 5635(a), the Company will pay cash in lieu of issuing such shares, unless such stockholder approval has been obtained.

As discussed, the APA Purchase Agreement includes a provision for the Earnout Consideration.

The Earnout Consideration is accounted for as contingent consideration, and the fair value is estimated each reporting period.

As of March 31, 2026, the Earnout Consideration was estimated to have a fair value of $16.4 million using a Monte-Carlo simulation method.

As of June 30, 2026, the Earnout Consideration was estimated to have a fair value of $18.4 million using a Monte-Carlo simulation method.

Changes in fair value of the contingent liability are recognized in Changes in fair value of contingent consideration in the accompanying consolidated statements of operations.

Estimating the amount of payments that may be made under the Earnout Consideration is by nature imprecise.

The significant fair value inputs used to estimate the future expected Earnout Consideration payments to Seller include a discount rate, earnings forecasts, and actual and estimated future volatility in the Company’s stock price.

The significant fair value inputs used to estimate the future expected Earnout Consideration payments to APA Seller include a discount rate, earnings forecasts, and actual and estimated future volatility in the Company’s stock price.

Adoption of New and Recently Issued Accounting Pronouncements

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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