ITG, Inc./DE/ 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes included in our final prospectus dated June 30, 2026 and filed with the Securities and Exchange Commission (the "SEC") on July 2, 2026 relating to our Registration Statement on Form S-1 (File No. 333-296557) (the "Prospectus"). In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions about our business and operations. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under the sections of this Quarterly Report on Form 10-Q captioned “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” This section contains the presentation of Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion, which are not presented in accordance with GAAP. Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion are being presented because they provide the Company and investors with additional insight into our operational performance relative to earlier periods and relative to our competitors. We do not intend Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion to be substitutes for any GAAP financial information. Investors should use Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion in conjunction with net income (loss). Reconciliations of Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion to net income (loss) the most comparable GAAP measure to each, are provided in “—Non-GAAP Financial Measures.” Overview We are a preferred provider of mission critical services to the digital and other utility infrastructure industries throughout the United States. We deliver technology-enabled, end-to-end services supporting the planning, design, construction, operation, maintenance and expansion of the broadband networks that have become critical infrastructure and essential to modern life and economic activity. Demand for our services is growing rapidly. Our customers are: (i) accelerating the deployment of broadband networks to homes and businesses, (ii) building and upgrading connectivity and infrastructure to support the proliferation of data created by data centers, cloud computing and AI, (iii) upgrading and maintaining existing infrastructure to improve low latency performance and minimize downtime, (iv) outsourcing a growing share of network and utility services to a small number of larger providers for cost and efficiency and (v) accelerating public and private investment to modernize and expand existing networks and other utility infrastructure. We were founded and are led by seasoned industry veterans with backgrounds beginning as field technicians and extending to successful entrepreneurial and corporate leadership, committed to delivering the highest quality services to our customers. We believe that our national footprint, comprehensive end-to-end service offerings, and proprietary FUSE360 technology platform position us as a partner of choice for leading broadband service providers, fiber providers, wireless carriers, data center operators, and public and private utilities. We also believe that our business operations and intelligence technology platform, FUSE360, delivers real-time visibility into operational and performance metrics and provides our skilled workforce with a comprehensive digital training, safety and operational platform. We operate through two complementary service lines: Engineering & Maintenance ("E&M") and Infrastructure Deployment. Together, these service lines enable us to support customers through the full digital and other utility infrastructure lifecycle. Our E&M service line provides re-occurring, mission-critical services required by network owners to operate, maintain, optimize and expand their infrastructure. Select services include, but are not limited to: (i) planning, design, engineering, site acquisition and permitting to optimize and upgrade existing broadband networks and to develop new routes, (ii) drop-and-bury placement and installation of fiber / coaxial cables and supporting infrastructure from main distribution lines to the end-user’s home or business, (iii) installation, upgrades and troubleshooting service calls at residential and commercial locations, and (iv) normal-course coaxial and fiber replacements, pole moves and upgrades, line extensions, utility asset locating services, and planned and emergency repair work. Our Infrastructure Deployment service line provides large-scale network and fiber construction services for incumbent carriers, overbuilders, and data center operators and underground civil construction services for public and private utilities. Select services include, but are not limited to, aerial and underground builds, directional boring and trenching, conduit installation and wiring services, and 24 Table of Contents fiber backhaul. Infrastructure Deployment expands the installed base of network infrastructure and typically leads to long-duration E&M-related services, creating a complementary lifecycle revenue flywheel. Factors Affecting Results of Operations and Comparability Acquisition-related Activities 2026 Acquisition In April 2026, we acquired certain operations and assets from a locate services company. After being acquired by us, these operations generated immaterial incremental revenue, during the three and six months ended June 30, 2026. 2025 Acquisitions During 2025, we acquired certain operations and assets from the following businesses: (i) three immaterial acquisitions from March through July; (ii) in August from Vision Utility Services, Inc. (“Vision”); (iii) in September from Tilson Technology Management, Inc. and Tilson Middle Street Holding, LLC (together, “Tilson”); (iv) in October from Quasar, Inc. (“Quasar”); and (v) in November from Advantage Utilities LLC (“Advantage”). After being acquired by us, these operations generated incremental revenues of approximately $101.3 million and $171.8 million, during the three and six months ended June 30, 2026, respectively. For more information regarding these acquisitions, see Note 2 — Business Combinations in our condensed consolidated financial statements included elsewhere in this Quarterly Report. Recent Developments On July 2, 2026, ITG, Inc. (the "Corporation") closed an initial public offering (“IPO”) of 22,439,025 shares of Class A common stock at a public offering price of $16.00 per share. From the IPO, the Corporation received $338.4 million in proceeds, net of underwriting discounts and commissions, which was used to indirectly purchase 22,439,025 common units of membership interest of ITG Parent ("LLC Interests"), and ITG Parent primarily utilized the net proceeds it received from the sale of LLC Interests to the Corporation to repay borrowings under its revolving credit facility and term loan facility. The Corporation is the indirect sole managing member of ITG Parent and indirectly owns 39.02% of the economic interests of ITG Parent. Accordingly, the Corporation will consolidate the financial results of ITG Parent (including ITG Opco) and report non-controlling interest in the Corporation's consolidated financial statements related to the LLC Interests held by the Corporation's Class B common stockholders ("Continuing Equity Owners"). Customer Relationships and Contractual Arrangements We have established relationships with many of the largest national digital infrastructure and other utility providers, including local and regional operators, hyperscalers, and other private and public utilities. Our customer base is highly concentrated, with our top two customers accounting for approximately 57% and 61% of our total revenues during the six months ended June 30, 2026 and 2025, respectively and 53% and 61% for the three months ended June 30, 2026 and 2025, respectively. The following reflects the percentage of total revenues from customers who contributed at least 10% to our total revenues during the three and six months ended June 30, 2026 and 2025: For the Three Months Ended June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Comcast Corporation 33 % 33 % 35 % 35 % Charter Communications, Inc. 20 % 28 % 22 % 26 % We perform a majority of our services under master service agreements and other contracts that contain customer-specified service requirements. These agreements include discrete pricing for individual tasks. We generally possess multiple agreements with each of our significant customers. To the extent that such agreements specify exclusivity, there are often exceptions, including the ability of the customer to issue work orders valued above a specified dollar amount to other service providers, the performance of work with the customer’s own employees, and the use of other service providers when jointly placing facilities with another utility. Most of these agreements automatically renew each year, 25 Table of Contents however in many cases, a customer may terminate an agreement for convenience. Historically, multi-year master service agreements have been awarded through a mix of competitive bidding processes and bilateral, negotiated arrangements. We provide the remainder of our services pursuant to contracts for specific projects. These contracts may be long-term (with terms greater than one year) or short-term (with terms less than one year) and at times include retainage provisions under which the customer may withhold 5% to 10% of the invoiced amounts pending project completion and closeout. Seasonality and Fluctuations in Operating Results Our revenues and results of operations exhibit seasonality and are impacted by weather conditions as we perform a significant portion of our work outdoors. Consequently, seasonal winter conditions, including weather patterns and reduced daylight hours, may have an impact on operations primarily in the first quarter and, to a lesser extent, the fourth quarter. Additionally, extreme weather conditions such as major or extended winter storms, droughts and tornados, wildfires, and natural disasters, such as floods, hurricanes and tropical storms could also increase or decrease the demand for our services, or impact our ability to perform our services. Also, several holidays fall within the fourth quarter, which decreases the number of available workdays in this quarter. Because of these factors, we are most likely to experience reduced revenue and profitability during the first and fourth quarters compared to the second and third quarters. We may also experience variations in our profitability driven by a number of factors. These factors include variations and fluctuations in revenues, job specific costs, accruals for contingencies, equity-based compensation expense, the change in fair value of contingent liabilities, the valuation of intangibles and other long-lived assets, the employer portion of payroll taxes as a result of reaching statutory limits, and our effective tax rate. Accordingly, operating results for any fiscal period are not necessarily indicative of results we may achieve for any subsequent fiscal period. Key Components of Our Results of Operations The following discussion describes certain line items in our consolidated statements of operations. Revenue We perform a significant amount of our services under master service agreements and other contracts that contain customer-specified service requirements. These agreements include discrete pricing for individual tasks including, for example, the placement of underground or aerial fiber, directional boring, and fiber splicing, each based on a specific unit of measure. Revenue is recognized over time as services are performed and customers simultaneously receive and consume the benefits we provide. Output measures, such as units delivered or milestones completed, are utilized to assess progress against specific contractual performance obligations for a portion of our services. For a majority of our services, revenue is recognized at a point in time as it is dependent upon successful completion of the performance obligations in the contract. Costs of Revenue Costs of earned revenues include all direct costs of providing services under our contracts, including costs for direct labor provided by employees, services by subcontractors, operation of capital equipment (excluding depreciation), fuel, direct materials, costs of insuring our risks, and other direct costs. Selling, General and Administrative Selling, general and administrative expenses primarily consist of employee compensation and related expenses, including performance-based compensation and equity-based compensation, legal, consulting and professional fees, information technology and development costs, provision for or recoveries of bad debt expense, acquisition and integration costs of businesses acquired, and other costs not directly related to the provision of our services under customer contracts. We incur information technology and development costs primarily to support and enhance our operating efficiency. Our executive management team and the senior management perform substantially all of our sales and marketing functions as part of their management responsibilities. 26 Table of Contents Depreciation and Amortization Our property and equipment primarily consist of vehicles, equipment and machinery, and computer hardware and software. We depreciate property and equipment on a straight-line basis over the estimated useful lives of the assets. In addition, we have intangible assets, including customer relationships, trade names, and non-compete intangibles, which we amortize on a straight-line basis over their estimated useful lives. Change in Fair Value of Contingent Liabilities The change in fair value of contingent liabilities consists of changes in the estimated amounts recorded for future payments for certain acquisitions. Interest Expense Interest expense consists of interest incurred on outstanding variable rate and fixed rate debt and certain other obligations and the amortization of debt issuance costs. Non-GAAP Financial Measures We present non-GAAP performance measures as we believe it is appropriate for investors to consider adjusted financial measures in addition to results in accordance with GAAP. Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, GAAP. We present Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion because we believe they assist investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use: (i) Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion as factors in evaluating management’s performance when determining incentive compensation; (ii) to evaluate the effectiveness of our business strategies; and (iii) because our Credit Agreement uses measures similar to Adjusted EBITDA to measure our compliance with certain covenants. Among other limitations, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; do not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations; and other companies in our industry may calculate Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion differently than we do, which limits their usefulness as comparative measures. Because of these limitations, Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion on a supplemental basis. You should review the reconciliation of net income to Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Free Cash Flow Conversion below and not rely on any single financial measure to evaluate our business. Our non-GAAP financial measures include: • Adjusted EBITDA – We define Adjusted EBITDA as net income plus or minus (i) interest expense, (ii) interest income, (iii) income tax (benefit) expense, (iv) depreciation expense, (v) amortization of intangibles, (vi) other expense, net, (vii) equity-based compensation, (viii) transaction costs, (ix) restructuring, integration and business optimization costs, and (x) change in fair value of contingent liabilities. • Adjusted EBITDA Margin – We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. • Free Cash Flow – We define Free Cash Flow as Adjusted EBITDA minus capital expenditures. • Free Cash Flow Conversion – We define Free Cash Flow Conversion as Free Cash Flow divided by Adjusted EBITDA. 27 Table of Contents The following table reconciles net income, the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA and Free Cash Flow, and calculations of Adjusted EBITDA Margin and Free Cash Flow Conversion for the three and six months ended June 30, 2026 and 2025: ITG Parent, LLC For the Three Months Ended June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 (in thousands, except for percentages) Net income (loss) $ 1,788 $ 11,601 $ (11,370) $ 13,180 Interest expense 19,534 6,919 37,759 13,745 Income tax expense (benefit) 267 5,829 (746) 7,013 Depreciation expense 12,766 6,787 24,944 12,942 Amortization of intangibles 8,248 7,201 16,495 14,303 Other expense, net 1,008 1,042 1,927 2,030 Equity-based compensation 1,170 625 2,339 1,270 Transaction costs (1) 1,907 714 3,365 1,620 Restructuring, integration, and business optimization costs (2) 5,206 2,460 11,516 4,317 Change in fair value of contingent liabilities (3) 300 170 2,186 337 Adjusted EBITDA $ 52,194 $ 43,348 $ 88,415 $ 70,757 Adjusted EBITDA Margin 12.9% 14.8% 12.0% 13.7% Purchase of property and equipment $ 7,440 $ 16,163 $ 15,969 $ 28,627 Free Cash Flow $ 44,754 $ 27,185 $ 72,446 $ 42,130 Free Cash Flow Conversion 85.7% 62.7% 81.9% 59.5% _______________ (1) Represents professional, legal and advisory fees incurred in connection with acquisitions completed during the presented period. (2) Represents non-recurring expenses associated with the restructuring of management positions, start-up costs for new markets and service offerings and exiting locations that we do not expect will impact the go forward operations of the business. (3) Represents non-recurring earnout amounts accrued to certain sellers in connection with the acquisitions completed during the presented period. Results of Operations The following tables set forth our consolidated statements of operations for the three and six months ended June 30, 2026 and 2025. We have derived this data from our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2026 and 2025 included elsewhere in this Quarterly Report. This information should be read in conjunction with our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2026 and related notes included elsewhere in this Quarterly Report. The results of historical periods are not necessarily indicative of the results of operations for any future period. 28 Table of Contents ITG Parent, LLC For the Three Months Ended June 30, For the Six Months Ended June 30, (in thousands) 2026 2025 Increase / Decrease % Change 2026 2025 Increase / Decrease % Change Revenue $ 404,633 $ 292,405 $ 112,228 38.4% $ 738,555 $ 517,792 $ 220,763 42.6% Cost of revenue, excluding depreciation and amortization 332,581 237,091 95,490 40.3% 613,647 423,696 189,951 44.8% Selling, general and administrative 28,141 15,765 12,376 78.5% 53,713 30,546 23,167 75.8% Depreciation and amortization 21,014 13,988 7,026 50.2% 41,439 27,245 14,194 52.1% Change in fair value of contingent liabilities 300 170 130 76.5% 2,186 337 1,849 548.7% Total 382,036 267,014 115,022 43.1% 710,985 481,824 229,161 47.6% Interest expense (19,534) (6,919) (12,615) 182.3% (37,759) (13,745) (24,014) 174.7% Other expense, net (1,008) (1,042) 34 (3.3)% (1,927) (2,030) 103 (5.1)% Income (loss) before provision for income taxes 2,055 17,430 (15,375) (88.2)% (12,116) 20,193 (32,309) (160.0)% Provision for income taxes 267 5,829 (5,562) (95.4)% (746) 7,013 (7,759) (110.6)% Net income (loss) $ 1,788 $ 11,601 $ (9,813) (84.6)% $ (11,370) $ 13,180 $ (24,550) (186.3)% Comparison for Three Months ended June 30, 2026 and 2025 Revenue Revenue was $404.6 million during the three months ended June 30, 2026 compared to $292.4 million during the three months ended June 30, 2025. Revenue from businesses acquired in 2026 and 2025 were $101.3 million during the three months ended June 30, 2026. Acquired revenue represents revenue from acquired businesses that were not owned for the entire three months ended June 30, 2025. Excluding amounts generated by the acquired businesses, revenue increased by $14.5 million during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 as a result of the expansion of organic volume growth and geographic expansion across our E&M and Infrastructure Deployment service lines. Costs of Revenue Costs of revenue increased to $332.6 million, or 82.2% of revenue, during the three months ended June 30, 2026 compared to $237.1 million, or 81.1% of revenue, during the three months ended June 30, 2025. The primary components of the increase were a $67.1 million aggregate increase in direct labor and subcontractor expense to support the revenue growth, a $3.5 million increase in supplies and materials, a $4.2 million increase in fuel and vehicle maintenance costs and a $14.5 million increase in other direct costs that are generally passed through to the customer. Selling, General and Administrative Expenses Selling, general and administrative expenses increased to $28.1 million, or 7.0% of revenue, during the three months ended June 30, 2026 compared to $15.8 million, or 5.4% of revenue, during the three months ended June 30, 2025. The increase in selling, general and administrative expenses primarily resulted from a $1.7 million increase in legal and professional fees primarily as a result of the increase in the growth of the Company, $6.2 million increase in personnel costs due to increased employees to support our growth from acquisitions, $0.5 million in increased equity-based compensation expense due to additional unit grants and $2.2 million from software maintenance costs. Depreciation and Amortization Depreciation expense was $12.8 million, or 3.2% of revenue, during the three months ended June 30, 2026, compared to $6.8 million, or 2.3% of revenues, during the three months ended June 30, 2025. The increase in depreciation expense during the three months ended June 30, 2026 was primarily due to the property and equipment acquired in 29 Table of Contents business combinations. Amortization expense was $8.2 million and $7.2 million during the three months ended June 30, 2026 and the three months ended June 30, 2025, respectively. The increase in amortization expense during the three months ended June 30, 2026 is due to the increase in amortizing intangibles from acquired businesses. Change in Fair Value of Contingent Liabilities The change in fair value of contingent liabilities increased to $0.3 million during the three months ended June 30, 2026 from $0.2 million during the three months ended June 30, 2025. Interest Expense Interest expense increased to $19.5 million during the three months ended June 30, 2026 from $6.9 million during the three months ended June 30, 2025 primarily as a result of higher outstanding borrowings over the comparative periods related to our refinancing in 2025. Other Expense, Net Other expense, net was $1.0 million during the three months ended June 30, 2026 and 2025. Provision for Income Taxes The following table presents our provision for income taxes and effective income tax rate for the three months ended June 30, 2026 and 2025: For the Three Months Ended June 30, 2026 2025 (in thousands) Provision for income taxes $ 267 $ 5,829 Effective income tax rate 13.0 % 33.4 % Our effective income tax rate differs from the statutory rate primarily due to the income tax expense from states where work was performed offset by net income attributable to non-taxable entities. Net Income As a result of the factors discussed above, our net income decreased by $9.8 million to $1.8 million for the three months ended June 30, 2026 as compared to net income of $11.6 million for the three months ended June 30, 2025. Comparison for Six Months Ended June 30, 2026 and 2025 Revenue Revenue was $738.6 million for the six months ended June 30, 2026 compared to $517.8 million for the six months ended June 30, 2025. Revenue from businesses acquired in 2026 and 2025 were $171.8 million during the six months ended June 30, 2026. Acquired revenue represents revenue from acquired businesses that were not owned for the full six months ended June 30, 2025. Excluding amounts generated by the acquired businesses, revenue increased by $52.8 million during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 as a result of the expansion of organic volume growth and geographic expansion across our E&M and Infrastructure Deployment service lines. Costs of Revenue Costs of revenue increased to $613.6 million, or 83.1% of revenue, during the six months ended June 30, 2026 compared to $423.7 million, or 81.8% of revenue, during the six months ended June 30, 2025. The primary components of the increase were a $139.8 million aggregate increase in direct labor and subcontractor expense to support the revenue 30 Table of Contents growth, a $4.7 million increase in supplies and materials, a $6.2 million increase in fuel and vehicle maintenance costs and a $26.7 million increase in other direct costs that are generally passed through to the customer. Selling, General and Administrative Expenses Selling, general and administrative expenses increased to $53.7 million, or 7.3% of revenue, during the six months ended June 30, 2026 compared to $30.5 million, or 5.9% of revenue, during the six months ended June 30, 2025. The increase in total selling, general and administrative expenses primarily resulted from a $2.2 million increase in legal and professional fees primarily to support the administrative growth, $14.2 million due to increase personnel costs from increased employees to support our growth from acquisitions, $1.0 million in increased equity-based compensation expense due to additional unit grants and $3.8 million from software maintenance costs. Depreciation and Amortization Depreciation expense was $24.9 million, or 3.4% of revenue, during the six months ended June 30, 2026, compared to $12.9 million, or 2.5% of revenue, during the six months ended June 30, 2025. The increase in depreciation expense was primarily due to the property and equipment acquired in business combinations. Amortization expense was $16.5 million and $14.3 million during the six months ended June 30, 2026 and 2025, respectively. The increase in amortization expense during 2026 is due to the increase in amortizing intangibles from acquired businesses. Change in Fair Value of Contingent Liabilities The change in fair value of contingent liabilities to $2.2 million during the six months ended June 30, 2026 from $0.3 million during the six months ended June 30, 2025 was due to the change in fair value of $1.6 million on a 2024 acquisition earnout. Interest Expense Interest expense increased to $37.8 million during the six months ended June 30, 2026 from $13.7 million during the six months ended June 30, 2025 primarily as a result of higher outstanding borrowings over the comparative periods. Other Expense, Net The change in other expense, net during the six months ended June 30, 2026 to $1.9 million from $2.0 million during the six months ended June 30, 2025 was not significant. Provision for Income Taxes The following table presents our provision for income taxes and effective income tax rate for June 30, 2026 and 2025: For the Six Months Ended June 30, 2026 2025 (in thousands) Provision for income taxes $ (746) $ 7,013 Effective income tax rate 6.2 % 34.7 % Our effective income tax rate differs from the statutory rate primarily due to the income tax expense from states where work was performed offset by net income attributable to non-taxable entities. Net Income (Loss) As a result of the factors discussed above, our net income decreased by $24.6 million, or 186.3%, from a net income of $13.2 million during the six months ended June 30, 2025 as compared to a net loss of $(11.4) million for the six months ended June 30, 2026. 31 Table of Contents Liquidity and Capital Resources The following table shows our cash flows from operating activities, investing activities and financing activities (in thousands): For the Six Months Ended June 30, 2026 2025 Statement of Cash Flows Data: Net cash (used in) provided by operating activities $ (47,042) $ 11,745 Net cash used in investing activities $ (18,184) $ (35,836) Net cash provided by financing activities $ 63,993 $ 17,570 We finance our operations primarily with operating cash flows and short and long-term borrowings. Our ability to generate positive cash flow from operations is dependent upon the amount of net income that we generate before depreciation and amortization expense and other non-cash items. Based on our past performance and current expectations, we believe operating cash flows will be sufficient to meet our future cash needs for the next twelve months. Our indebtedness provides additional sources of short and long-term liquidity to fund operations. As of June 30, 2026, our cash and cash equivalents were $2.5 million. As of June 30, 2026, we had outstanding borrowings of $651.8 million under our Credit Agreement, dated as of July 9, 2025, with Banco Santander, S.A., New York Branch, as administrative agent, U.S. Bank National Association, as collateral agent, and the lenders and letter of credit issuers party thereto from time to time (our "Credit Agreement"), and $112.0 million outstanding under the revolving credit facility provided for under our Credit Agreement (the "Revolving Credit Facility"). As of June 30, 2026, there was approximately $8.8 million in letters of credit outstanding and approximately $64.2 million available for borrowing under the Revolving Credit Facility. Our level of indebtedness increases the risk that we may be unable to generate sufficient cash flow to pay amounts due in respect of our indebtedness. Despite substantial levels of indebtedness, we and our subsidiaries have the ability to incur more indebtedness. Our indebtedness could have other important consequences to you and significant effects on our business. In addition, the Credit Agreement contains and the agreements evidencing or governing our future indebtedness may contain, restrictive covenants that will limit our ability to engage in activities that may be in our long-term best interests. Our failure to comply with those covenants is not fully within our control and could result in an event of default which, if not cured or waived, could result in the acceleration of all of our indebtedness and trigger adverse consequences. See “Risk Factors—Risks Related to Indebtedness—Our level of indebtedness requires us to dedicate a substantial portion of our cash flow from operations to make payments on our indebtedness and could adversely affect our financial flexibility and our competitive position” on page 47 of the Prospectus, which risk factor is incorporated herein by reference. Operating Activities During the six months ended June 30, 2026, net cash used in operating activities was $47.0 million. Changes in working capital (excluding cash) used $92.0 million of operating cash flow during the six months ended June 30, 2026. Working capital changes that used operating cash flow during the six months ended June 30, 2026 included an increase in contract assets of $87.7 million, an increase in prepaid and other current assets of $7.0 million, a decrease in operating lease liabilities of $8.0 million, an increase in accounts receivable of $6.2 million and a $3.0 million payment of contingent liabilities. Working capital changes that provided operating cash flow during the six months ended June 30, 2026 included an increase in accounts payable and accrued expenses of $20.0 million. During the six months ended June 30, 2025, net cash provided by operating activities was $11.7 million. Changes in working capital (excluding cash) used $32.0 million of operating cash flow during the six months ended June 30, 2025. Working capital changes that used operating cash flow during the six months ended June 30, 2025 included an increase in contract assets of $7.3 million, an increase in accounts receivable of $12.9 million, a decrease in operating lease liabilities of $3.9 million and a decrease in accounts payable and accrued expenses of $8.3 million. The primary non-cash items in cash flows from operating activities during the current and prior periods are depreciation, amortization of intangible assets, non-cash lease expense, equity-based compensation, amortization of debt 32 Table of Contents issuance costs, deferred income taxes, gain or loss on sale of fixed assets and change in fair value of the contingent liabilities, net of payments. Investing Activities Net cash used in investing activities was $18.2 million during the six months ended June 30, 2026. Capital expenditures of $16.0 million were for the replacement of certain vehicles and equipment used for new work opportunities. Additionally, the Company paid cash of $3.4 million related to the acquisition of the assets of an entity. Proceeds from sale of assets were $1.2 million. Net cash used in investing activities was $35.8 million during the six months ended June 30, 2025. Capital expenditures of $28.6 million were for the replacement of certain vehicles and equipment used for new work opportunities. Additionally, the Company paid cash of $8.4 million related to the acquisition of the assets of an entity. Proceeds from sale of assets were $1.2 million. Financing Activities Net cash provided by financing activities was $64.0 million during the six months ended June 30, 2026. During the six months ended June 30, 2026, borrowings under our Revolving Credit Facility were a net of $82.0 million. We repaid $8.3 million of borrowings outstanding under the Credit Agreement. In addition, we repaid approximately $12.8 million of our equipment loans and borrowed an additional $11.3 million of equipment loans. Payments made toward amounts due under previous acquisitions, for finance leases and distributions to members totaled $8.3 million. Net cash provided by financing activities was $17.6 million during the six months ended June 30, 2025. During the six months ended June 30, 2025, borrowings under our Revolving Credit Facility were a net of $13.5 million. We repaid $11.8 million of payments under our previous credit agreement. We borrowed $22.3 million to purchase certain equipment and repaid $6.1 million for our equipment loans. Next Twelve Month Backlog The following sets forth our Next Twelve Month ("NTM") Backlog as of June 30, 2026 and December 31, 2025 (in thousands): As of June 30, 2026 As of December 31, 2025 NTM Backlog $ 1,516,970 $ 1,330,664 Our NTM Backlog represents the estimated amount of revenue we expect to realize from services to be performed pursuant to master service agreements (" MSAs") and other contractual arrangements over the next 12 months. Our management estimates of NTM Backlog are based on contract values, customer-provided schedules / general timing guidelines, historical activity levels, and management’s understanding of the scope and timing of expected work. A significant portion of our NTM Backlog is attributable to MSAs and other service agreements, none of which require our customers to purchase a minimum amount of services and are cancelable on short or no advance notice. The balance of our NTM Backlog is our estimate of work to be completed under contracts for specific projects. Estimated backlog for work under MSAs and other service agreements is determined based on historical trends, anticipated seasonal impacts, experience from similar projects and estimates of customer demand based on communication with our customers, which estimates may prove inaccurate. Timing of revenue for construction and installation projects included in our NTM Backlog can be subject to change as a result of customer, regulatory or other delays or cancellations. These effects, among others, could cause estimated revenue to be realized in periods later than originally expected, or not at all. From time to time, we experience postponements, cancellations and reductions in expected future work due to changes in our customers’ spending plans, changes or delays in customers’ obtaining funding either from capital markets and/or government programs, market volatility, changes in governmental permitting, regulatory delays and/or other factors. In addition, contract revenues reflected in our NTM Backlog may be realized in different periods from those previously anticipated due to these factors as well as project accelerations or delays due to various reasons, including, but not limited to, scheduling changes, commercial issues, such as permitting, engineering revisions, job site conditions and adverse weather. 33 Table of Contents There can be no assurance as to our customers’ requirements or that actual results will be consistent with the estimates included in our forecasts. As a result, our NTM Backlog as of any particular date is an uncertain indicator of future revenue and earnings. In addition, contracts included in our NTM Backlog may not be profitable. If our NTM Backlog fails to materialize, or if amounts in our NTM Backlog are unprofitable, our results of operations, cash flows, liquidity and financial condition could be materially and adversely affected. Debt Obligations For a description of our debt obligations see Note 7 – Debt in our condensed consolidated financial statements included elsewhere in this Quarterly Report. Critical Accounting Estimates For a discussion of our critical accounting estimates, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—“Critical Accounting Estimates” beginning on page 108 of the Prospectus. There have been no material changes to these estimates during the six-month period ended June 30, 2026. Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in our market risk exposures or in our risk management policies as disclosed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures about Market Risk on page 109 of the Prospectus.