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Item 1. Business

2026-03-11 compared with 2025-03-11 · 128 added, 179 removed, 394 unchanged (44% of the section changed)

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The following discussions should be read in conjunction with the sections of this Annual Report entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors.”

Mistras Group, Inc.

is a leading "one source" multinational provider of integrated technology-enabled asset integrity solutions, helping to maximize the safety and operational uptime for civilization’s most critical industrial and civil assets.

Backed by an innovative, data-driven asset protection portfolio, proprietary technologies, and a decades-long legacy of industry leadership, the Company helps customers with asset-intensive and mission critical infrastructure in the oil and gas, petrochemical, aerospace and defense, industrials, power generation and transmission (including alternative and renewable energy), other process industries and infrastructure, research and engineering and other industries towards achieving and maintaining operational excellence.

By supporting these customers that help fuel our vehicles and power our society;

inspecting components that are trusted for commercial, defense, and private space;

and building monitoring equipment to help avoid catastrophic incidents, the Company helps the world at large with its asset integrity risk mitigation.

The Company enhances value for its customers by integrating asset integrity protection throughout supply chains and centralizing integrity data through a suite of Industrial Internet of Things ("IoT")-connected digital software and monitoring solutions, including OneSuite™, which serves as an ecosystem platform, pulling together all of the Company’s software and data services capabilities, for the benefit of its customers.

The Company’s core capabilities also include non-destructive testing ("NDT") field inspections enhanced by advanced robotics, laboratory quality control, laboratory materials services, in-house laboratory assurance testing, sensing technologies and NDT equipment, asset and mechanical integrity engineering services, and light mechanical maintenance and access services.

Given the role our solutions play in enhancing the safe and efficient operation of our customers' infrastructure, we have historically provided a majority of our solutions to our customers on a regular, recurring basis.

We perform these services largely at our customers’ facilities, while primarily servicing our aerospace customers at our network of state-of-the-art, in-house laboratories.

These solutions typically include NDT and inspection services, and can also include a wide range of mechanical services, including heat tracing, pre-inspection insulation stripping, coating applications, re-insulation, engineering assessments and long-term condition-monitoring.

Under our business model, many customers outsource their inspection to us on a “run and maintain” basis.

We have established long-term relationships as a critical solutions provider to many of the leading companies with asset-intensive infrastructure in our target markets.

These markets include companies in the oil and gas, aerospace and defense, industrials, power generation and transmission (including alternative and renewable energy), other process industries and infrastructure, research and engineering and other industries.

We have focused on providing our advanced asset protection solutions to our customers using proprietary, technology-enabled software and testing instruments, including those developed by our Products and Systems segment.

In the past, we have made numerous acquisitions in an effort to grow our base of experienced, certified personnel, expand our service lines and technical capabilities, increase our geographical reach, complement our existing offerings, and leverage our fixed costs.

We have increased our capabilities and the size of our customer base through the development of applied technologies and managed support services, organic growth and the integration of acquired companies.

These acquisitions have provided us with additional service offerings, technologies, resources and customers, which we believe will enhance our advantages over our competition.

We believe long-term growth can be realized in our target markets.

Our business and financial results are impacted by world-wide macro- and micro-economic conditions generally, as well as those within our target markets.

Among other things, we expect the timing of our oil and gas customers inspection and maintenance expenditures to be impacted by oil price fluctuations.

We have continued providing our customers with an innovative asset protection software ecosystem through our MISTRAS OneSuite platform.

The OneSuite platform offers functions of MISTRAS' software and services brands as integrated applications on a cloud environment.

OneSuite serves as a single access portal for customers' data activities and provides access to 90 plus applications being offered on one centralized platform.

We have established long-term relationships as a critical solutions provider to many of the leading companies with asset-intensive and mission-critical infrastructure in our target markets.

These markets primarily consist of:

• Oil and Gas (Downstream, Midstream and Upstream)

• Aerospace and Defense

• Power Generation and Transmission

• Infrastructure, Research and Engineering

• Other Process Industries

• Petrochemical

A majority of our revenues are generated by deploying technicians and inspectors at our customers' locations.

A majority of our revenues from aerospace and defense as well as certain manufacturing customers are generated by performing inspections and testing at our various in-house laboratories.

Mistras Group, Inc., together with its subsidiaries (the "Company"), is a global leader in technology-enabled industrial asset integrity and laboratory testing solutions, serving critical industries including oil & gas, aerospace & defense, power & utilities, manufacturing, and civil infrastructure.

The Company provides a diversified portfolio of products and services, ranging from advanced non-destructive testing ("NDT") and pipeline inspections to real-time condition monitoring, maintenance planning, and specialized engineering, powered by a proprietary management software suite that centralizes integrity data for predictive analytics and benchmark analysis.

With a long-standing track record of innovation and deep industry expertise, the Company helps clients reduce risk, extend asset life, and optimize operational performance.

The Company enhances value for its customers by integrating asset integrity protection throughout supply chains and centralizing integrity data through a suite of Industrial Internet of Things ("IoT")-connected software and monitoring solutions, including OneSuite®, which serves as a cloud-based ecosystem that pulls together the Company’s software and data services capabilities.

This integrated approach enables customers to make data-driven decisions that improve asset reliability, enhance safety, reduce operational risk, and optimize performance across the asset lifecycle.

The Company’s core capabilities include NDT field inspections enhanced by advanced robotics, laboratory quality control, laboratory materials services, in-house laboratory assurance testing, sensing technologies and NDT equipment, asset and mechanical integrity engineering services, and light mechanical maintenance and access services.

Given the role the Company's solutions play in supporting the safe and efficient operation of customer infrastructure, the Company historically has provided a majority of its services on a recurring basis.

Services are primarily performed at customer facilities, with the exception of aerospace and defense customers, which are largely served through the Company’s network of state-of-the-art laboratories.

These services may include NDT and inspection services, as well as complementary mechanical services such as heat tracing, pre-inspection insulation stripping, coating applications, re-insulation, engineering assessments, and long-term condition-monitoring.

Under our operating model, many customers outsource inspection and integrity management activities to the Company on a “run and maintain” basis.

The Company maintains long-term relationships with leading asset-intensive operators across oil and gas, aerospace and defense, industrial, power generation and transmission, infrastructure, research and engineering, petrochemical, and other process industries.

The Company continues to invest in proprietary, technology-enabled software and testing instruments, including those developed within its Products and Systems segment.

Growth has been supported by selective acquisitions, organic expansion, and the integration of applied technologies and managed support services.

The Company believes long-term growth exists across its target markets, although results may be impacted by macro- and micro-economic conditions, supply chain disruptions, customer capital spending cycles, and commodity price fluctuations.

We generated revenues of $724.0 million, $729.6 million and $705.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.

We generated net income of $19.0 million, net loss of $17.4 million and net income of $6.6 million for the years ended December 31, 2024, 2023, and 2022, respectively.

We generated net income of $16.9 million, net income of $19.0 million and net loss of $17.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.

For the years ended December 31, 2025, 2024 and 2023, we generated approximately 81%, 81% and 82%, respectively, of our revenues from our North America segment.

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OUR SPECIALIZED SOLUTIONS

As a provider of asset protection solutions, we combine our industry-leading services, products, data management and analytical solutions technologies to provide a unique and custom-tailored solution for each customer’s individual asset protection needs, ranging from routine inspections to complex, plant-wide asset integrity management programs.

Field Inspections

Our field inspections portfolio includes traditional and advanced NDT techniques and inline inspection for pipelines.

We offer these solutions on an individual basis, or as parts of enterprise inspection and testing programs.

The Company delivers asset protection solutions that combine inspection services, products, data management, analytics, and engineering expertise.

Solutions range from routine inspections to enterprise-wide asset integrity management programs designed to support safety, compliance, and operational efficiency.

Field Services

The Company’s field services portfolio includes traditional and advanced NDT techniques.

These solutions are offered on an individual basis or as part of an enterprise inspection and testing program to our customers.

NDT is the examination of an asset without materially impacting its structural integrity.

The ability to inspect infrastructure assets and not interfere with their operating performance makes NDT a highly-attractive alternative to many traditional techniques, which may require shutting down an asset or entire facility.

Typical issues for which our technicians inspect include potential corrosion, cracking, pitting, leaking, faults and flaws in piping, storage tanks and pressure vessels, as well as a wide range of other industrial assets and public infrastructure.

Our automated data acquisition solutions utilize smart sensing and monitoring, robotic inspection systems, and digitized spot inspections to provide asset integrity data with greater insight into current and potentially future asset conditions.

Field inspection services lend themselves to integration with our other offerings, and as such have often served as the initial entry point to more advanced customer engagements that require additional solutions.

After an initial field inspection is performed, we are able to provide multiple supplemental solutions, such as maintenance services, engineering consulting and data analytical solutions services we provide, that further serve to solidify our relationships with our customers and drive additional revenue.

The ability to inspect mission-critical assets and not interfere with their operating performance makes NDT a highly-attractive alternative to many traditional techniques, which may require shutting down an asset or entire facility.

Typical issues inspected by MISTRAS technicians include potential corrosion, cracking, pitting, leaking, faults and flaws in piping, storage tanks and pressure vessels, as well as a wide range of other industrial assets and public infrastructure.

Asset inspections often require pre- and post-inspection industrial services, along with advanced access techniques to inspect and maintain equipment in at-height or subsea locations.

Typical ancillary services provided by MISTRAS technicians include coating, insulation, and mechanical and construction support, delivered via rope access, diving, or aerial lifts.

Automated data acquisition solutions use smart sensing and monitoring, robotic/unmanned inspection systems, and digitized spot inspections to deliver asset integrity data with greater insight into current and potentially future asset conditions.

Field inspections frequently serve as the entry point for broader engagements that may include engineering assessments, maintenance support, and data analytical solutions, driving additional revenue opportunities for the Company.

Data Analytical Solutions

The asset protection solutions that we provide throughout our customers’ asset lifecycles generate mechanical integrity data that needs to be effectively archived, managed, and analyzed.

A common difficulty that our customers face is the ability to easily access and analyze large volumes of data from multiple data collection and input sources.

We recognize that this data is most valuable to our customers when it is accessible and integrated (regardless of vendor, tool, or facility), and we have taken significant steps to digitalizing asset protection processes through our data analytical solutions product offerings.

Our data analytical solutions capabilities capture asset data to help our customers follow regulatory compliance, ensure mechanical integrity, and reduce unplanned outages.

We capture data using manned and automated techniques that minimize the impact on our customers' operations.

Customers can access our collected data for all facilities, structures, and assets that we manage from one easy to use dashboard, which enables customers to evaluate trending and benchmarking across multiple sites seamlessly.

Customer data is managed in our asset protection software ecosystem, OneSuite.

Our OneSuite software platform offers functions of our popular software and services brands as integrated applications in a cloud environment.

Our OneSuite software platform serves as a single access portal for customers' data activities and provides access to 90 plus integrated applications being offered in one centralized platform.

Many customers take advantage of our data analytics capabilities that utilize technology to automatically generate insights and actionable recommendations that can be implemented to improve our customers' overall productivity.

Our managed services integrate our data capabilities with data analysts, field personnel and engineers to provide a comprehensive solution to our customers that reduces our customers' overall costs.

Our customers within the oil and gas and petrochemical industries take advantage of our industry-leading application Plant Condition Management Software ("PCMS®").

This application is one of the most widely used asset integrity management systems (“AIMS”).

We estimate that our PCMS application is currently used by approximately 50% of the U.S.

refiners, as well as by leading midstream pipeline energy companies and major oil and gas companies in Canada and Europe.

This allows us to provide our customers with industry-leading insights across all of their facilities and enables us to provide additional software and solutions to these customers and perform recurring maintenance where necessary.

Our pipeline customers utilize our Onstream® services and New Century® software platform to capture, manage and analyze pipeline integrity data in the midstream and upstream sectors of the oil and gas industry.

We provide among the most comprehensive, data-driven pipeline protection solutions available to the industry.

Our proprietary pipeline data analysis solutions enable deep integration of inline inspection ("ILI") big data with real-time risk analytics and business intelligence ("BI") to provide capabilities for supporting pipeline integrity, which we believe provides us with an important competitive advantage.

Our wind, power and infrastructure customers implement our online condition-monitoring solutions that provide real-time reports and analysis of infrastructure to alert facility personnel to damages before critical failures occur, while our flexible, IIoT compatible, cloud-based online monitoring portal centralizes and analyzes all collected monitoring data.

These monitoring solutions are often installed in hazardous or hard-to-reach locations, helping to enhance safety by reducing the need to send technicians into unsafe locations.

In-house Laboratory Testing

Our network of in-house laboratories located across North America and Europe offers quality assurance and quality control ("QA/QC") solutions for new and existing metal and alloy components, materials, and composites.

Our in-house laboratories work with our customers to test and measure utilized components throughout their lifetimes, from preparation and production to post-processing and in-service component monitoring.

Our laboratory QA/QC solutions help to meet customer needs throughout their manufacturing cycles, with a focus on optimizing production logistics.

Our in-house laboratory solutions include:

• Non-destructive evaluation/inspection ("NDE"/"NDI")

• Destructive testing ("DT")

• Metallurgical testing

• Chemical analysis testing

• Mechanical services

• Machining services

• Pre-machining

• Casting repair solutions

• Finishing services

We often inspect and test components prior to assembly to screen for defects and discontinuities introduced in the manufacturing process.

Our laboratories hold a wide variety of certifications, such as:

Nadcap (formerly NADCAP, the National Aerospace and Defense Contractors Accreditation Program), AS9100/ISO-9001, Federal Aviation Administration Repair Station, and the International Traffic in Arms Regulations/Export Administration Regulations, that allow us to perform inspections which meet or exceed stringent regulatory and manufacturers' requirements.

With these certifications come a comprehensive range of approvals from prime contractors of major projects, militaries and internationally-renowned original equipment manufacturers ("OEMs") from many of our key markets, including the oil and gas, aerospace and defense, power generation and industrial markets.

Asset protection services generate significant volumes of mechanical integrity data that must be archived, managed, and analyzed to support regulatory compliance and risk-based decision-making.

Customers often face challenges consolidating data across assets, facilities, and inspection methods.

Customer data is managed within the Company’s asset protection software ecosystem, OneSuite, which provides a centralized, cloud-based platform for accessing, visualizing, and analyzing asset integrity data.

OneSuite integrates more than 90 applications that support trending, benchmarking, reporting, and analytics across assets and facilities, enabling customers to gain enterprise-level visibility into asset condition and performance.

The Company’s data analytical solutions include industry-leading applications such as Plant Condition Management Software (“PCMS®”), one of the most widely-used asset integrity management systems (“AIMS”).

Approximately 50% of U.S.

as well as midstream pipeline operators and energy companies in Canada and Europe utilize PCMS.

PCMS supports asset integrity management, inspection planning, compliance documentation, and long-term condition assessment across facilities.

Pipeline customers use MISTRAS’ Onstream Pipeline Inspection inline inspection (“ILI”) services and New Century Software platform to capture, manage, and analyze pipeline integrity data.

These solutions enable integration of inline inspection ILI data with risk analytics and business intelligence tools to support integrity assessments, prioritization, and compliance activities.

MISTRAS also provides online condition monitoring solutions for customers in wind, power, and infrastructure markets.

These solutions deliver real-time monitoring and analysis, often in hazardous or hard-to-reach environments, and support early detection of damage or degradation while enhancing safety by reducing the need for on-site inspections.

Many customers leverage the Company’s managed data and analytical services, which combine software platforms with engineering, analytical, and field expertise.

These services generate actionable insights, support maintenance planning, reduce unplanned outages, and improve overall operational efficiency for our customers.

In-house Lab Services

MISTRAS operates a network of in-house laboratories across North America and Europe that provide quality assurance and quality control (“QA/QC”) solutions for new and existing metal and alloy components, materials, and composites.

The Company’s laboratories support customers throughout the component lifecycle, from preparation and production through post-processing and in-service monitoring, with a focus on meeting manufacturing and regulatory requirements and optimizing production logistics.

In-house laboratory services include non-destructive evaluation and inspection (“NDE”/“NDI”), destructive testing (“DT”), metallurgical testing, chemical analysis, mechanical and machining services, pre-machining, casting repair solutions, and finishing services.

MISTRAS laboratories hold a wide variety of certifications, such as:

Nadcap (formerly NADCAP, the National Aerospace and Defense Contractors Accreditation Program), AS9100/ISO-9001, Federal Aviation Administration Repair Station, and the International Traffic in Arms Regulations/Export Administration Regulations, which allow the Company to perform inspections that meet or exceed stringent regulatory and manufacturers' requirements.

With these certifications come a comprehensive range of approvals from prime contractors of major projects, militaries and internationally-renowned original equipment manufacturers ("OEMs") from many key markets, including oil and gas, aerospace and defense, power generation, and industrial markets.

We perform maintenance and light mechanical services to prepare assets for inspection and to return them to working condition post inspection.

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ASSET PROTECTION INDUSTRY OVERVIEW

Asset protection plays a crucial role in assuring the integrity and reliability of critical infrastructure.

As an asset protection solutions provider, we seek to maximize the uptime and safety of critical infrastructure, by helping customers to detect, locate, mitigate, and prevent damages such as corrosion, cracks, leaks, manufacturing flaws and other concerns to operating and structural integrity.

In addition to these core utilities, the storage and analysis of collected inspection and MI data is also a key aspect of asset protection.

NDT has historically been a prominent solution in the asset protection industry due to its capacity to detect defects without compromising the structural integrity of the tested materials or equipment.

Traditionally, the supply of NDT inspection services has been provided by many relatively small vendors, who provide services in a more localized geographic region.

A trend has emerged, however, for customers to increasingly engage a select few vendors capable of providing a wider spectrum of asset protection solutions for global infrastructure, in addition to an increased demand for advanced non-destructive testing ("ANDT") solutions and data acquisition software, both of which require a highly-trained workforce.

Due to these trends, those vendors offering integrated solutions, scalable operations, skilled personnel and a global footprint are expected to have a distinct competitive advantage.

Moreover, we believe that vendors that are able to effectively deliver both advanced solutions and data analytics, by virtue of their access to customers’ data, create a significant barrier to entry for competitors, leading to the opportunity to further create significant recurring revenues.

Key Dynamics of the Asset Protection Industry

Asset protection plays a critical role in maintaining the integrity, reliability, and availability of mission-critical infrastructure across asset-intensive industries.

Asset protection solutions are used to detect, mitigate, and prevent degradation mechanisms such as corrosion, cracking, leaks, and manufacturing defects that may impact safety, regulatory compliance, or operational performance.

Demand for asset protection solutions is driven by aging infrastructure, regulatory requirements, increasing safety and environmental expectations, and the growing complexity of industrial assets.

Many customers operate assets beyond their original design life, requiring ongoing inspection, testing, and monitoring to support continued operation.

NDT has historically been a foundational element of the asset protection industry due to its ability to assess asset condition without disrupting operations.

In recent years, customers have increasingly adopted advanced non-destructive testing solutions, automation, robotics, and digital monitoring technologies to improve inspection efficiency, data quality, and safety outcomes.

At the same time, the volume and importance of inspection and mechanical integrity data have increased.

Customers are

seeking solutions that enable centralized data management, support regulatory compliance, and facilitate risk-based decision-making across their assets and facilities.

The asset protection industry has traditionally consisted of many localized service providers.

However, customers are increasingly consolidating programs with service providers capable of delivering integrated inspection, data, and analytical solutions at scale.

Service providers with advanced technology capabilities, a skilled workforce, and a global footprint are positioned to support recurring, long-term asset integrity programs.

We believe the following represent key dynamics of the asset protection industry, and that the market available to us will continue to grow as these macro-market trends continue to develop:

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This has resulted in the significant aging and increased utilization of existing infrastructure in our target markets.

Because aging infrastructure requires more frequent inspection and maintenance in comparison to new infrastructure, companies and public authorities continue to spend on asset protection to ensure their aging infrastructure assets continue to operate effectively.

Because aging infrastructure requires more frequent inspection and maintenance in comparison to new infrastructure, companies and public authorities continue to spend on asset protection services to ensure their aging infrastructure assets continue to operate effectively.

Outsourcing of Non-Core Activities and Technical Resource Constraints .

Due to the increasing sophistication and automation of asset protection programs, a decreasing supply of skilled professionals and increasing governmental regulations, companies are increasingly outsourcing NDT to third-party providers with advanced solution portfolios, engineering expertise and trained workforces.

Due to the increasing sophistication and automation of asset protection programs, a decreasing supply of skilled professionals and increasing governmental regulations, companies are increasingly outsourcing NDT to third-party service providers with advanced solution portfolios, engineering expertise and trained workforces.

Increasing Corrosion from Low-Quality Inputs .

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Crude Oil Prices.

Volatility in the energy sector has been profound during the 2015-2022 period with moderation occurring in 2023.

The collapse of world oil prices in 2015 and 2016 undermined industry expansion.

While energy prices recovered in 2017 and 2018, they once more declined, and subsequently rebounded in the second half of 2021 and the first half of 2022 with near record high prices and crack spreads.

This resulted in refineries delaying turnarounds during 2022 until oil prices decreased and

stabilized in the second half of 2022.

The stabilization continued throughout 2023 without major peaks and fluctuations as seen in prior periods.

The on-going war in Ukraine and the conflict in the Middle East between Israel and Hamas, coupled with continued macroeconomic uncertainty throughout 2024, are expected to continue to significantly influence oil prices for the foreseeable future.

Volatility in the energy sector has been significant over the past decade.

The decline in global crude oil prices in 2015 and 2016 constrained industry expansion, followed by a recovery in 2017 and 2018.

Prices declined again during the early stages of the COVID-19 pandemic before rebounding in the second half of 2021 and the first half of 2022 to elevated levels.

These conditions contributed to the deferral of certain refinery turnarounds in 2022 until market conditions moderated later that year.

During 2023 and 2024, crude oil prices were generally more stable relative to prior periods, and this trend continued into 2025, although energy markets remained influenced by geopolitical developments, including the war in Ukraine and conflict in the Middle East, including the recent conflict between the U.S.

and Iran, the imposition of U.S.

tariffs, trade restrictions and the responses from other countries, as well as broader macroeconomic conditions.

Expanding Pipeline Integrity Regulations:

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Collaborating with Our Customers .

We have historically expanded our asset protection solution portfolio in response to our customers’ unique performance specifications.

We have historically expanded our asset protection solutions portfolio in response to our customers’ unique performance specifications.

Our technology packages have often been developed in close cooperation and partnership with key customers and industry organizations.

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Our Growth Strategy

Our growth strategy emphasizes the following key elements:

The Company's growth strategy emphasizes the following key elements:

Continue to Digitalize Asset Protection Data and Processes:

We place a data-centric focus on asset protection, enabling our customers to ease some of their biggest areas of concern (particularly the timely and accurate transfer of asset integrity data from the field to the data management systems, as well as the data’s visibility and accessibility once uploaded).

We expect that the demand for our data analytical solutions which provides big data intelligence and remote data visibility will continue to grow, and we are investing in data analytical solutions that help our customers visualize and generate actionable insight from their asset integrity data, regardless of data input.

We are also actively seeking to optimize our customers’ asset protection workflows and processes, by creating digital paths between data applications to increase data visibility and reduce manual data entry and human error.

We have provided value added services to our customer, and unlocked long-term value for our customers when our digital solutions are combined with our traditional testing and inspection services.

The bundling of these services provide meaningful value and insight to our customers and show the breadth and depth of our technologies, which differentiates us from our competitors.

The Company places a data-centric focus on asset protection, enabling customers to ease areas of concern through the ability to make data-driven decisions, particularly related to the timely and accurate transfer of asset integrity data from the field to data management systems and the visibility and accessibility of that data once uploaded.

The Company expects demand for data analytical solutions that provide big data intelligence and remote data visibility to continue to grow and continues to invest in capabilities that help customers visualize and generate actionable insights from asset integrity data, regardless of data source.

The Company is also focused on optimizing asset protection workflows by creating digital connections between applications to increase data visibility and reduce manual data entry and human error.

By combining digital solutions with traditional testing and inspection services, the Company delivers value-added services that unlock long-term customer value and demonstrate the breadth and depth of its technologies.

Expand Our Focus in the Aerospace and Defense Industries:

We believe that the introduction of next-generation airframes, aircraft engines and the increasing demand of private space flight has created an inherent demand for inspection, testing, machining and mechanical services required for the production of parts.

The recent interest in the use of additive manufacturing techniques to create components also necessitates advanced inspection and testing solutions.

We remain optimistic about the growth of the defense industry as the useful lives of legacy systems in the industry are extended and next generation systems are brought online.

As a result, we are uniquely positioned to serve this industry by providing inspection and testing services to meet the demands of our customers.

The Company believes that the introduction of next-generation airframes, aircraft engines, and the increasing demand for private space flight have created sustained demand for inspection, testing, machining, and mechanical services required for part production.

MISTRAS also sees increased adoption of additive manufacturing techniques driving demand for advanced inspection and testing solutions.

The Company remains optimistic about growth in the defense industry as legacy systems are extended and next-generation platforms are deployed, positioning MISTRAS to support evolving customer requirements through its inspection and testing capabilities.

Expand Our Focus in the Pipeline Integrity Industry:

We intend to continue broadening our solutions for the pipeline market.

Recent industry regulations significantly expanded pipeline integrity management regulations, requiring pipeline owner/operators to inspect, document, and assess the risk of operating conditions for existing lines.

This provides us with the opportunity to provide asset protection solutions for both the new construction and integrity phases.

In 2019, we acquired a company that provides pipeline integrity management software and services to energy transportation companies.

We acquired an inline inspection provider in 2018 and have implemented our PCMS software for several pipeline operators to support their integrity data management.

These digital assets increase our ability to provide meaningful insights to customers in an efficient manner that creates value to our customers, which many of our competitors are unable to offer.

Expanding our Mechanical Services Portfolio.

We believe that performing mechanical services to complement inspections, such as removing and reapplying insulation or preparing surfaces for coating or painting, is an important market differentiator for us.

This is particularly true, for example, when considering the cost-efficiencies our customers realize when our rope access technicians perform these services at height without the use of scaffolding.

Many of our customers already require these services, but utilize multiple vendors to do so, creating an opportunity for us to provide greater value to a customer base that increasingly requires enhanced speed and efficiency.

The Company intends to continue broadening its solutions for the pipeline market.

Recent regulatory developments have expanded pipeline integrity management requirements, increasing the need for inspection, documentation, and risk assessment of existing infrastructure.

This environment creates opportunities for MISTRAS to support customers across both new construction and integrity management phases.

The Company has strengthened its capabilities through prior acquisitions of pipeline integrity management software and inline inspection providers and through the deployment of PCMS software for pipeline operators, enhancing MISTRAS’ ability to deliver integrated, data-driven insights efficiently.

Expand our Mechanical Services Portfolio:

The Company believes that providing mechanical services that complement inspection activities, such as insulation removal and replacement or surface preparation for coating or painting, represents an important market differentiator.

Many customers already require these services but rely on multiple vendors, creating opportunities for MISTRAS to deliver greater value through integrated service delivery and improved efficiency.

Continue to Develop Technology-Enabled and Digital Asset Protection Solutions:

We intend to maintain and enhance our technological leadership by continuing to invest in developing new technology, applications and data services.

The release of our OneSuite ecosystem underscores our dedication to continue deepening synergies between our solutions to provide our customers with uniquely-integrated offerings, which we believe makes us a more attractive partner for customers seeking to centralize their asset protection.

We have actively continued to develop technologies that enhance the flow of data throughout

multiple operational phases and facilities, through our integrated pipeline integrity data portfolio, and our cloud-based monitoring data portal.

Our focus is to provide our customers with a comprehensive solution for all of their asset protection needs.

As several of the industries in which we serve face cost pressures, we continue to position ourselves to be a trusted partner to improve our customers' operational efficiency by reducing their costs and increasing the uptime for their assets, while remaining compliant with regulatory standards.

We achieve this through a number of our services, including software, data services, engineering & consulting, providing sensors and real-time continuous monitoring services.

When customers chose to use a variety of these services we are able to reduce their annual maintenance budgets by optimizing uptime for their assets.

We are focused on further developing our services to help differentiate us against our competitors.

We are also focused on expanding our customer base to provide our services and address the needs of customers in the industries we serve and industries we are looking to expand into in the future.

The Company intends to maintain and enhance its technological leadership through continued investment in new technologies, applications, and data services.

The OneSuite ecosystem reflects MISTRAS’ focus on deepening integration across solutions to deliver unified offerings for customers seeking to centralize asset protection activities.

Ongoing development efforts include technologies that improve data

flow across operational phases and facilities, supported by integrated pipeline integrity data solutions and cloud-based monitoring platforms.

Expand our Solution Offerings to Existing Customers:

We believe that branching into adjacent, complementary services, such as mechanical services, increases our value proposition and our ability to capture additional business.

Many of our customers are multinational corporations with asset protection requirements at multiple locations.

We believe that expanding our solution offerings and merging and visualizing data across facilities for enterprise data analysis, combined with the trend of customers outsourcing asset protection to service providers with integrated offerings, provides opportunities for significant additional recurring revenues.

We continue to remain focused on further developing our inspection and testing services to our current customer base and diversifying the end markets we serve.

We are also focused on growing our capabilities and services that can provide a stronger value proposition to our customers.

The Company believes that expanding into adjacent and complementary services increases its value proposition and ability to capture additional business.

Many customers operate assets across multiple locations and increasingly seek integrated solutions that consolidate data and services at an enterprise level.

MISTRAS believes that expanding solution offerings and enabling cross-facility data visibility supports additional recurring revenue opportunities and deeper customer relationships.

The Company remains focused on strengthening its inspection and testing services while diversifying the end markets it serves.

Continue to Expand Our Customer Base into New End Markets:

We believe we have significant opportunities to expand our customer base in relatively new end markets, including the renewable energy industry, specifically, wind and other alternative energy, natural gas transportation industries, data centers, pipeline integrity and additive manufacturing.

The expansion of our addressable markets is being driven by the increased recognition and adoption of advanced asset protection technologies (such as unmanned drone inspection devices, robotics, etc.) that are supplanting traditional methods.

The Company believes there are significant opportunities to expand into emerging and adjacent end markets, including renewable energy, alternative power generation, natural gas transportation, data centers, pipeline integrity, and additive manufacturing.

MISTRAS expects growth in these markets to be supported by increased adoption of advanced asset protection technologies, including robotics, automation, and unmanned inspection tools, which are increasingly replacing traditional inspection methods.

Capitalize on Acquisitions:

We have completed several acquisitions to supplement and enhance our solutions, add new customers, expand our sales channels and accelerate our expected growth.

Due to our focus on organic revenue growth and restrictions related to the debt covenants in our credit facility, we do not expect to make any acquisitions in 2025 other than small acquisitions with the approval from the lenders under our credit facility.

However, we expect to make selective acquisitions beyond 2025.

The Company has completed acquisitions to enhance its solutions, expand its customer base, and extend its geographic reach.

Due to a focus on organic growth and constraints under existing debt covenants, MISTRAS does not expect to complete acquisitions in 2026 other than limited transactions subject to lender approval.

Beyond 2026, the Company expects to pursue selective acquisitions aligned with its strategic and financial objectives.

We have three operating segments:

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Field Services revenue is comprised of revenue derived primarily by technicians performing asset inspections and maintenance services for our customers at locations other than our properties.

Shop Laboratory revenue is comprised of quality assurance inspections of components and materials at our in-house laboratory facilities.

Laboratories revenue is comprised of quality assurance inspections of components and materials at our in-house laboratory facilities.

Other revenue is comprised of locations that perform both asset inspection services and testing of components and materials at our in-house laboratories.

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Excerpted below are forecasts from various Energy Information Administration ("EIA") outlook reports, which are subject to change based on these factors:

Electricity generation from coal is projected to continue to fall throughout the mid to late 2020s and the decrease will be partially offset by an increase in the forecast of combined utility-scale solar and wind generation, along with other sources.

Electricity generation from coal is projected to continue declining through the mid to late 2020s, partially offset by growth in utility-scale solar, wind, and other renewable sources.

These trends, along with continued investment in infrastructure integrity, refining efficiency, and energy transition initiatives, are expected to influence customer spending patterns and demand for the Company’s inspection and asset protection services.

The EIA noted U.S.

crude oil production averaged 12.9 million barrels per day (bpd) in 2023, rose to an average 13.2 million bpd in 2024 and rose again in 2025 to an average 13.6 million bpd in 2025.

The EIA forecasts production to continue to increase to an average of 13.5 million bpd in 2025.

The EIA forecasts production to remain relatively flat at an average of 13.5 million bpd in 2026.

We supply oil and gas asset protection solutions to downstream (refining), midstream (transportation and storage) and upstream (exploration and production) operations of our customers.

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Aerospace and Defense

The aerospace industry continued to experience increased backlog and production levels in 2024, with such levels approaching and exceeding pre-COVID-19 levels for certain OEMs throughout 2024.

The aerospace industry continued to experience increased backlog and production levels in 2025, with such levels approaching and exceeding pre-COVID-19 pandemic levels for certain OEMs throughout 2025.

We serve this rapidly growing target market by providing a full range of inspection, testing, machining, mechanical, finishing, additive manufacturing and equipment solutions, for which we are Nadcap certified.

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We have provided testing and structural health monitoring and data analytical solutions on bridges and structures worldwide, including some of the largest and most well-known bridges in the United States and United Kingdom.

In addition to structural applications, we also perform testing and ongoing monitoring for data centers, ensuring the reliability and operational continuity of these critical facilities.

Our sensors continuously monitor these assets, alerting owner/operators when defects are detected.

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Most of our revenues are derived from our U.S., Canadian and European operations and we do not have operations in Russia, and we do not do business in Russia, Ukraine or other areas which are impacted by the on going war between Russian and Ukraine.

See Note 2-Revenue and Note 19-Segment Disclosure to our audited consolidated financial statements in this Annual Report for further disclosure of our revenues, long-lived assets and other financial information regarding our international operations.

See Note 2 - Revenue

and Note 18 - Segment Disclosure to our audited consolidated financial statements in this Annual Report for further disclosure of our revenues, long-lived assets and other financial information regarding our international operations.

Sales and Marketing

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We believe that few, if any, of our competitors currently provide the full range of asset protection and NDT products, PCMS and the traditional and advanced services solutions that we offer.

Our competition with respect to NDT services include Acuren, SGS Group, the Team IHT Segment and APPLUS RTD.

Our competition with respect to NDT services include TIC Solutions, SGS Group, the Team IHT Segment and APPLUS RTD.

In addition, in our in-house laboratory testing services, particularly within the aerospace and defense end market, we compete with Element Materials Technology.

Our competition with respect to PCMS includes UltraPIPE, Lloyd’s Register Capstone, Inc.

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Research and Development

Our R&D is principally conducted by engineers and scientists at our Princeton Junction, New Jersey headquarters, and supplemented by other employees in the United States and throughout the world, including Canada, France, Greece the United Kingdom, Brazil and the Netherlands.

Our total professional staff includes employees who hold Ph.D.’s and engineers and employees who hold Level III certification, the highest level of certification from the American Society of Non-Destructive Testing ("ASNT").

We make strategic R&D investments in our data analytical solutions technologies that support integration with our other solution offerings to enhance cost- and time-efficiencies, maximize uptime and safety and improve the flow of data from field

technicians to inspection databases.

Our research and development ("R&D") is principally conducted by engineers and scientists at our Princeton Junction, New Jersey headquarters, and supplemented by other employees in the United States and throughout the world, including Canada, France, Greece the United Kingdom, Brazil and the Netherlands.

Our total professional staff includes employees who hold

Ph.D.’s and engineers and employees who hold Level III certification, the highest level of certification from the American Society of Non-Destructive Testing ("ASNT").

These strategic investments enable us to enhance our service offerings to customers and provide valuable insights and predictive analysis.

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• Development of permanently embedded inspection systems to provide continuous, online, in-service monitoring of critical structural components.

Research and development expenses are reflected in our Consolidated Statements of Income (Loss) as research and engineering expenses.

R&D expenses are reflected in our Consolidated Statements of Income (Loss) as research and engineering expenses.

Our company-sponsored research and engineering expenses were approximately $1.0 million, $1.1 million and $1.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.

While we have historically funded most of our research and development expenditures, from time to time we also receive customer-sponsored research and development funding.

While we have historically funded most of our R&D expenditures, from time to time we also receive customer-sponsored R&D funding.

Most of the projects are in our target markets, however, a few of the projects could lead to other future market opportunities.

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• Transformer Clinic™

Many elements of our asset protection solutions involve proprietary know-how, technology or data that are not covered by patents or patent applications because they are not patentable or would be difficult to enforce, including technical processes,

algorithms and procedures.

We believe that this proprietary know-how, technology and data is the most important component of our intellectual property used in our asset protection solutions and is a primary differentiator of our solutions from those of our competitors.

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We evaluate and address the environmental impact of our operations by assessing properties in order to avoid future liabilities and comply with environmental, legal and regulatory requirements.

See “Risk Factors” in Item 1A for a discussion of risks relating to federal, state, local and international laws and regulations applicable to our business.

Executive Officers

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Gennaro D'Alterio 54 Executive Vice President, Chief Commercial Officer

Keefe 68 Executive Vice President, General Counsel and Secretary

Smith 55 Executive Vice President and President of Services***

*On December 5, 2024, our Board, in furtherance of its management succession planning, appointed Natalia Shuman, as the Company’s President and Chief Executive Officer, and Mr.

Stamatakis will continue as the Executive Chairman of the Company effective as of January 1, 2025.

Stamatakis served as our Chairman of the Board and Interim President and Chief Executive Officer until December 31, 2024.

**On December 12, 2024, we announced the appointment of Hani Hammad to the position of Executive Vice President and Chief Operating Officer effective as of January 1, 2025.

***On February 7, 2025, we terminated the employment of John A.

Smith, our Executive Vice President and President of Services.

Eileen Coggins 60 Executive Vice President and Chief Legal Officer*

*On September 15, 2025, Eileen Coggins joined Mistras as Executive Vice President and Chief Legal Officer and assumed the role of General Counsel and Secretary as of November 15, 2025.

Manuel "Manny" N.

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Stamatakis resigned from all the committees of the Board and as our lead director.

Stamatakis currently chairs the Project Phoenix Steering Committee, an initiative for which he is both the chief architect and driving force.

Stamatakis chaired the Project Phoenix Steering Committee, an initiative for which he was both the chief architect and driving force.

Stamatakis currently serves as our Executive Chairman of the Board following Ms.

Shuman’s appointment as President and Chief Executive Office of Mistras, effective January 1, 2025.

An accomplished entrepreneur for over 30 years, Mr.

Stamatakis is an executive officer of Capital Management Enterprises, Inc., a financial services and employee benefits consulting firm based in Pennsylvania.

Stamatakis has held multiple board and chairmanship positions over the years, including Chairman of the Delaware River Port Authority, The Drexel College of Medicine, the Pennsylvania Supreme Court Investment Advisory Board, and the Philadelphia Shipyard Development

Corporation which was the catalyst to bringing shipbuilding back to the Philadelphia region.

He earned a B.S.

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He is certified in LEAN enterprise and manufacturing, is member of the Hydraulic Institute and the International Desalination Association, and serves on the Board of the Aquatic Animal Life Support Operators organization.

Keefe joined Mistras in December 2009.

Prior to joining Mistras, Mr.

Keefe worked at International Fight League, a then publicly-traded sports promotion company, from 2007 until 2009, in various executive positions.

From 1990 until 2006, Mr.

Keefe served in various legal roles with Lucent Technologies and AT&T, the last four years of which he served as Vice President, Corporate and Securities Law and Assistant Secretary.

Keefe received a Bachelor of Science in Business Administration (Accounting) from Seton Hall University and a J.D.

from Seton Hall University School of Law.

Smith joined Mistras in 2008 and has held various positions, including Vice President of Operations, then became Senior Vice President of Operations in 2018 before becoming Executive Vice President and President of Services on October 1, 2023.

Smith began his career as a NDT technician with CONAM Inspection and Engineering Services before launching his own business, Elite Inspection Services Company ("Elite").

He owned and operated Elite for 16 years, until Mistras acquired Elite in 2008.

During his NDT career, Mr.

Smith held multiple certifications from the American Society for Nondestructive Testing (ASNT).

Eileen Coggins joined Mistras on September 15, 2025, as Chief Legal Officer and assumed the role of General Counsel and Secretary as of November 15, 2025.

She brings extensive experience as a senior legal officer across regulated industries, including public companies, private enterprises, and private equity–backed organizations.

Coggins has held senior leadership roles at AmeriHealth Caritas, Univita Health Inc., and Genesis HealthCare Corp.

At AmeriHealth Caritas, she expanded the legal function while helping drive revenue growth from $6 billion to more than $23 billion.

She also oversaw legal, regulatory, and government affairs at Univita Health, and guided governance through major transactions at Genesis HealthCare, including a company sale and tax-exempt spin-off.

She holds a Juris Doctor from Widener University School of Law and a Bachelor of Arts from West Chester University.

Coggins also serves on the Boards of Share Food Inc., as Vice Chair and Chair of the Nominating and Governance Committee, and Casa Farnase.

Our Website and Available Information

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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-K

Item 1. Business