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Item 2. Management’s Discussion and Analysis

2026-08-12 compared with 2026-06-04 · 232 added, 123 removed, 254 unchanged (58% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section should be read in conjunction with the Condensed Combined Financial Statements and accompanying Notes included under Item 1.

This section should be read in conjunction with the Condensed Consolidated Financial Statements and accompanying Notes included under Item 1.

Financial Statements of this Form 10-Q and the Combined Financial Statements and accompanying Notes and related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the three years ended December 31, 2025 included in the Information Statement.

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Business Overview

Octave provides a suite of software solutions that help organizations design, build, operate, and protect their physical assets, people, and critical infrastructure.

Octave Intelligence plc ("Octave" or the "Company") provides a suite of software solutions that help organizations design, build, operate, and protect their physical assets, people, and critical infrastructure.

These workflow environments often involve different teams, specialized tools, and large volumes of information that are difficult to integrate or interpret without context.

When data is organized into separate systems or isolated workflows, decision making slows down, quality issues are harder to identify, and teams may miss early signs of risk or system failure.

Our platform connects data, events, and workflows across these environments and applies context-aware intelligence to help customers understand what is happening, what may happen next, and how actions in one area affect conditions in another.

By providing a clearer picture of current and emerging conditions, our software helps optimize the performance and reliability of the systems that teams depend on so they can act quicker and reduce risk.

We refer to our suite of software solutions collectively as our platform, noting that different components of the software architecture are at various stages of technical integration and interoperability.

The Company’s platform connects data, events, and workflows across these environments and applies context-aware intelligence to help customers understand what is happening, what may happen next, and how actions in one area affect conditions in another.

By providing a clearer picture of current and emerging conditions, Octave’s software helps optimize the performance and reliability of the systems that teams depend on so they can act quicker and reduce risk.

Octave refers to its suite of software solutions collectively as our platform, noting that different components of the software architecture are at various stages of technical integration and interoperability.

Overview of Platform Environments

Octave’s software platform supports collaboration, improves continuity, and helps organizations reduce risk and strengthen the reliability of their systems across the following four core workflow environments:

Supports 3D modeling, engineering analysis, simulation, and geospatial intelligence.

This helps teams create information-rich digital representations that serve as the basis for downstream activities.

Connects engineering, procurement, fabrication, construction, and commissioning workflows.

This helps teams coordinate materials, track progress, manage changes, and improve cost and schedule predictability.

Unifies operational data, historical information, maintenance activities, quality systems, and worker tools.

This enables real-time insight, predictive intelligence, operational technology cyber security, and improved asset and system performance.

Supports public safety and physical security workflows.

This includes incident response, emergency management, situational awareness, digital security, and regulatory compliance.

Spin-off from Hexagon

On March 4, 2025, Hexagon announced that its board of directors had directed management to prepare for the spin-off of the Octave business into an independent, publicly-traded company through a tax-free, from both a U.S federal income and Swedish tax perspective, pro rata distribution of all the outstanding share capital of Octave to Hexagon shareholders via a Lex-ASEA distribution.

On March 4, 2025, Hexagon AB ("Hexagon") announced that its board of directors had directed management to prepare for the spin-off of the Octave business into an independent, publicly-traded company through a tax-free, from both a U.S.

federal income and Swedish tax perspective, pro rata distribution of all the outstanding share capital of Octave to Hexagon shareholders via a Lex-ASEA distribution.

Prior to the Distribution (as defined below), the Company was wholly owned by Hexagon.

On April 24, 2026, the general meeting of shareholders of Hexagon approved the Distribution of the Octave business into a separate publicly-traded company named Octave Intelligence plc.

On May 22, 2026, the spin-off was consummated by means of a tax-free pro rata distribution (the “Distribution”) wherein each Hexagon shareholder of record on May 22, 2026 (the “Record Date”) received one (1) Octave Class A Ordinary Share for every ten (10) Hexagon Class A Shares and one (1) Octave Class B Ordinary Share for every ten (10) Hexagon Class B Shares held.

Octave Class A Ordinary Shares were delivered to holders of Hexagon Class A Shares, Octave Class B Ordinary Shares were delivered to holders of Hexagon Class B Shares, other than affiliates of Hexagon, in the form of Swedish Depository Receipts (the “Octave SDRs”), and Octave Class B Ordinary Shares were delivered to holders of Hexagon Class B Shares that are Hexagon affiliates in book-entry form via Octave’s transfer agent.

Following the Distribution, Hexagon does not beneficially own any Octave ordinary shares.

Octave Class A Ordinary Shares were delivered to holders of Hexagon Class A Shares.

Octave Class B Ordinary Shares were delivered to holders of Hexagon Class B Shares other than Hexagon affiliates in the form of Swedish Depository Receipts (the “Octave SDRs”), and to Hexagon affiliates in book-entry form via Octave’s transfer agent.

Following the Distribution, the Company commenced "regular way" trading as an independent public company whereby Octave Class B Ordinary Shares were listed under the ticker symbol "OCTV" on the Nasdaq Global Select Market and the Octave SDRs were listed under the ticker symbol "OCTV SDB" on Nasdaq Stockholm.

Immediately following the Distribution, there were 11,025,000 Octave Class A Ordinary Shares and 257,412,788 Octave Class B Ordinary Shares, for a total of 268,437,788 Octave ordinary shares, outstanding.

Non-affiliate Hexagon shareholders on the Record Date received Octave Class B Shares via 210,003,594 Octave SDRs delivered through Euroclear Sweden that are listed on Nasdaq Stockholm under the ticker symbol “OCTV SDB,” while affiliates of Hexagon received 47,409,194 Octave Class B Shares in book entry form via Octave’s transfer agent.

Of the initial 210,003,594 Octave SDRs delivered in respect of the initial distribution, 5,713,266 Octave SDRs were converted at the request of the holders thereof into Octave Class B Shares delivered on May 28, 2026.

From time to time, holders of Octave SDRs may convert such interests into Octave Class B Shares pursuant to the procedures established in the General Terms and Conditions for the Octave SDRs, as previously disclosed.

The Octave Class B Shares are listed under the ticker symbol “OCTV” on the Nasdaq Global Select Market in New York.

Relationship with Hexagon

The Condensed Combined Financial Statements included herein are derived from Hexagon’s historical accounting records and presented on a standalone basis as if the Octave operations had been conducted independently from Hexagon.

The Condensed Combined Financial Statements are prepared in accordance with U.S.

Holders of Hexagon Class B Shares other than Hexagon affiliates on the Record Date received Octave Class B Shares via 210,003,594 Octave SDRs delivered through Euroclear Sweden while Hexagon affiliates received 47,409,194 Octave Class B Shares in book entry form via Octave’s transfer agent.

As of August 7, 2026, 167,780,741 Octave SDRs were outstanding in respect of the Class B Shares and 89,632,047 Octave Class B Shares were held directly by Octave shareholders.

Relationship with Hexagon Prior to the Distribution

Prior to the Distribution, the Condensed Consolidated Financial Statements included in this Form 10-Q were derived from Hexagon’s historical accounting records and presented on a standalone basis as if the Octave operations had been conducted independently from Hexagon.

The Condensed Consolidated Financial Statements were prepared in accordance with U.S.

GAAP and Hexagon’s historical accounting policies, by aggregating financial information from the components of Octave’s and Hexagon’s accounting records directly attributable to Octave.

The Condensed Combined Financial Statements include all revenues and costs directly attributable to the Octave business.

The Condensed Consolidated Financial Statements include all revenues and costs directly attributable to the Octave business.

Historically, Hexagon provided certain corporate functions to Octave and costs associated with these functions were allocated to Octave.

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however, they may not be indicative of the actual expense that would have been incurred had Octave been operating as a standalone company for the periods presented.

Actual costs that may have been incurred if Octave had been a standalone company would depend on a number of factors, including the organizational structure, pricing power, whether functions were outsourced or performed by employees, and strategic decisions made in areas such as information technology and corporate infrastructure.

In connection with the Distribution, we entered into certain agreements with Hexagon, including a Distribution Agreement, Tax Disaffiliation Agreement, Employee Matters Agreement, and Master Transition Services Agreement.

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The expenses for the services may vary from the historical costs directly billed and allocated to us for the same services.

We expect to continue to incur certain costs in connection with our establishment as a standalone public entity (the “Separation-Related Costs”).

The Separation-Related Costs include non-recurring expenses associated with the separation and stand-up of functions required to operate as a standalone public entity.

These non-recurring costs relate primarily to applicable employee related costs, system separation and implementation costs, business and facilities separation, development of our brand and other matters.

The Separation-Related Costs are expected to continue through at least fiscal year 2027.

Additionally, we will incur increased costs as a result of becoming an independent, publicly-traded company, primarily from establishing or expanding the corporate support for our businesses, including information technology, human resources, treasury, tax, internal audit, risk management, equity-based compensation programs, accounting and financial reporting, investor relations, governance, legal, procurement and other services.

We expect to continue to incur certain stand-up costs in connection with our establishment as a standalone public entity following the Distribution through fiscal year 2027.

Stand-up costs include expenses associated with the stand-up of functions required to operate as a standalone public entity, these costs primarily relate to system implementation expenses, legal and consulting costs, development of our brand and other matters.

Impact of Foreign Currency Exchange on Results of Operations

Our operations are internationally diversified, and our results of operations have been, and we expect in the future will be, affected by changes in foreign currency exchange rates.

For the three months ended March 31, 2026, and 2025, approximately 54% and 49%, respectively, of our total revenues and 36% and 41%, respectively, of our total operating expenses were denominated in a currency other than the U.S.

The proportion of total revenue and operating expenses (excluding goodwill and indefinite-life intangible asset impairment charges) denominated in a currency other than the U.S.

dollar are as follows:

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Revenue 55 % 50 % 54 % 50 %

Operating expenses 39 % 40 % 38 % 40 %

Our most significant currencies outside of the U.S.

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We identify the effects of foreign currency on our operations and present constant currency information because we believe exchange rates are an important factor in understanding period-over-period comparisons and enhance the understanding of our results and evaluations of our performance.

Refer to the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.

See the “Non-GAAP Financial Measures” section for additional information, including our definition and our use of constant currency.

We generate revenue through subscriptions, perpetual licenses, professional services and other offerings.

Our revenue base is well-diversified across account types, industries, and geographic regions.

Excluding the impact of acquisitions, our primary sources of revenue growth come from increased subscriptions revenue within our long-standing client base, particularly through expanded usage of existing solutions, as well as adoption of new product offerings by those clients and subscriptions from new customers.

We anticipate subscriptions will continue to represent a significant majority of new arrangements, including customers migrating from existing license arrangements to subscription services, in future periods.

Excluding the impact of acquisitions, our primary sources of revenue growth come from increased subscriptions revenue, focused on SaaS solutions, within our long-standing client base, particularly through expanded usage of existing solutions, as well as adoption of new product offerings by those clients and subscriptions from new customers.

We anticipate subscriptions will continue to represent a significant majority of new arrangements, including customers migrating from existing perpetual license arrangements to subscriptions.

Due to the ratable recognition of subscriptions revenue, growth in subscriptions revenue will lag behind the growth of subscription orders and will impact the comparative growth of our reported revenue on a quarter-over-quarter basis.

Goodwill and Indefinite-Life Intangible Asset Impairment

Following the commencement of regular-way trading of our Class B Ordinary Shares, our observed market capitalization has remained below our carrying value.

Management concluded the market capitalization, together with current capital market conditions, to be a triggering event requiring an interim goodwill impairment assessment as of June 30, 2026.

Based on the results of the quantitative goodwill impairment test, the carrying amount of our single reporting unit exceeded its estimated fair value.

Accordingly, we recognized a non-cash goodwill impairment charge of $1,671 million during the three and six months ended June 30, 2026.

The charge was recorded in Other operating expense (income), net in the Condensed Consolidated Statements of Operations.

In addition, following the Hexagon shareholders’ approval of the Distribution on April 24, 2026, we initiated the phase out of legacy brands and transition of the Octave business to a unified Octave brand.

As such, we performed an assessment of the useful life estimates of all trademarks which have historically been carried as indefinite-life intangible assets in the Condensed Consolidated Balance Sheets.

In completing this assessment, we concluded all trademark assets should no longer be carried as indefinite-life intangible assets, but rather determined each to have a finite useful life.

As such, we performed a quantitative impairment test which consisted of a comparison of the fair value of our trademarks with the carrying amount, and in all cases where the carrying amount exceeded its fair value, an impairment charge was recognized in an amount equal to the excess.

Accordingly, during the three months ended June 30, 2026, we recognized a non-cash impairment charge of $463.7 million.

The charge was recorded in Other operating expense (income), net in the Condensed Consolidated Statements of Operations.

These impairment charges materially affected our reported operating results for the three and six months ended June 30, 2026 and reduced the carrying amounts of goodwill and intangible assets on our balance sheet.

The impairment charges did not result in any current cash expenditure and did not affect our cash flows from operating activities or compliance with the financial covenants under our Credit Agreement.

These charges are not indicative of our current operating performance or cash generation.

RESULTS OF OPERATIONS

The following table sets forth our results of operations for the periods presented:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Subscriptions $ 282,813 $ 267,334 $ 561,993 $ 526,166

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Amortization of intangible assets 44,570 38,284 87,563 75,637

Other operating expense, net 4,453 3,553

Other operating expense (income), net 2,136,986 (16,529) 2,141,439 (12,976)

Total operating expenses 2,375,576 209,567 2,609,620 418,905

Income from operations 63,634 73,904

Other income, net 348 551

Income before income tax 63,982 74,455

Provision for income taxes 16,601 14,969

Net income $ 47,381 $ 59,486

Income (loss) from operations (2,069,925) 96,860 (2,006,291) 170,764

Other income (expense), net 3,754 (340) 4,102 211

Interest expense, net (1,757) — (1,757) —

Income (loss) before income tax (2,067,928) 96,520 (2,003,946) 170,975

Provision (benefit) for income taxes (97,250) 21,352 (80,649) 36,321

Net income (loss) $ (1,970,678) $ 75,168 $ (1,923,297) $ 134,654

The volume, mix, and duration of contract types starting or renewing in any given period may have a material impact on revenue in the period, and as a result can impact the comparability of reported revenue period-over-period.

Revenue by type is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Subscription licenses $ 72,549 $ 73,647 $ 144,911 $ 147,814

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Revenue by type, as a percentage of total revenue, is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Subscription licenses 18 % 18 % 18 % 19 %

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Subscriptions

71 % 65 % 72 % 66 %

10 % 12 % 9 % 12 %

Services and other

19 % 23 % 19 % 22 %

Total revenue 100 % 100 % 100 % 100 %

Revenue by geographic region, based upon the location of the end customer, is as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

United States $ 151,159 $ 171,983 $ 297,051 $ 332,472

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Operations in Ireland, our country of domicile, are not material in all periods presented.

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Revenue increased by $3.7 million or 1%, primarily due to organic sales increases and from favorable currency impacts, this was partially offset by impacts of the divestiture of non-core businesses which resulted in a 4% negative impact over the prior year.

Revenue in EMIA grew 10%, while revenue in Americas and APAC declined by 4% and 2%, respectively.

Subscriptions revenue growth was the primary driver for the overall portfolio, led by SaaS sales which grew 25% with continued demand for SaaS offerings, followed by maintenance subscription growth of 5% from a focus on annual increases to contract values, partially offset by a slight decline in subscription licenses of 2% due to market headwinds.

Licenses sales slowed with an 18% decline due to a customer demand shift to SaaS and subscription licenses.

Services and other declined by 11% due to the divestiture of non-core businesses that occurred during the second and third quarters of the prior year.

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

Revenue decreased by $14.9 million or 4% in absolute terms, and by 1% on an organic constant currency basis.

Divestitures of non-core businesses in t he prior year contributed a negative impact on growth of 4% and currency contributed a positive impact of 1%.

Revenue in EMIA grew 9%, driven by strong growth in subscriptions offset by a decline in license sales.

Revenue in Americas declined 12%, driven by d ivestitures of non-core businesses in the prior year and lower license sales, reflecting the ongoing shift in customer demand towards SaaS.

Revenue in APAC declined 4% driven by lower license sales.

Overall, subscriptions revenue growth was the primary driver for the overall portfolio, led by SaaS revenues which grew 23%, reflecting strong demand for SaaS offerings particularly across the Build and Operate product portfolios.

Maintenance subscription and subscription licenses revenues were largely flat compared to the prior year.

Licenses sales declined 23% due to the customer demand shift to SaaS and macro factors impacting certain energy markets and capital projects, and the timing of large orders in the Protect product portfolio.

Services and other declined 19% due to the divestiture of non-core businesses in the prior year and fewer projects with customizations.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Revenue decreased by $11.2 million or 1% in absolute terms, and flat on an organic constant currency basis.

Divestitures of non-core businesses in the prior year contributed to a negative impact on growth of 4% and currency contributed a positive impact of 2%.

Revenue in EMIA grew 9% driven by strong growth in subscriptions offset by a decline in license sales.

R evenue in Americas declined 8% driven by d ivestitures of non-core businesses in the prior year and lower license sales, reflecting the ongoing shift in customer demand towards SaaS .

Revenue in APAC declined 3% driven by lower license sales .

Overall, subscriptions revenue growth was the primary driver for the overall portfolio, led by SaaS revenues which grew 24%, reflecting strong demand for SaaS offerings, particularly across the Build and Operate product portfolios.

Maintenance subscriptions grew 2% and subscription licenses sales declined 2%, reflecting higher customer large project activity in the prior year.

Licenses sales declined 21% due to the customer demand shift to SaaS, macro factors impacting energy markets and the timing of large orders in the Protect product portfolio.

Services and other declined 16% due to the divestiture of non-core businesses in the prior year and fewer projects requiring customizations.

Cost of Revenue and Operating Expenses

Management continuously assesses our cost structure to ensure an optimal balance of personnel necessary to support revenue levels, investment in innovation and the associated infrastructure necessary to support business operations and continuity, including investments in certain public company functions necessary to operate as a standalone business.

Management continuously assesses our cost structure to ensure an optimal balance of personnel necessary to support customer activity, investment in innovation and the associated infrastructure necessary to support business operations and continuity, including investments in certain public company functions necessary to operate as a standalone business.

Cost of Revenue

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Total cost of revenue

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Gross profit percentage

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Cost of revenue decreased by $10.7 million or 11%, primarily due to the reduction in services and other labor and associated delivery costs that supported the divestiture of non-core businesses.

This was partially offset by an increase in cloud platform costs associated with public cloud infrastructure providers and general labor costs.

As a result, gross profit margin improved from 74% to 77%, and when coupled with the growth in revenue, gross profit increased by $14.4 million or 5%.

77 % 74 % 77 % 74 %

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

Cost of revenue decreased by $14.2 million or 13%, primarily due to the reduction in services and other labor and associated delivery costs that supported the non-core businesses divested in the prior year.

This decrease was partially offset by an increase in cloud platform costs associated with public cloud infrastructure providers and general labor costs.

As a result, gross profit decreased by $0.8 million, despite gross profit margin increasing from 74% to 77%.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Cost of revenue decreased by $24.9 million or 12%, primarily due to the reduction in services and other labor and associated delivery costs that supported the non-core businesses divested in the prior year.

This decrease was partially offset by an increase in cloud platform costs associated with public cloud infrastructure providers and general labor costs.

As a result, gross profit margin improved from 74% to 77%, and gross profit increased by $13.7 million or 2%.

Research and Development Expenses

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Research and development

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Percentage of total revenue

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Research and development expenses increased by $4.1 million or 9%, primarily due to higher salaries and wages driven by wage inflation, increased hiring of technical personnel, and greater investments in development tools to support development efforts.

Capitalization of software development costs declined as a proportion of overall expenditures.

14 % 11 % 13 % 11 %

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

Research and development expenses increased by $8.1 million or 18%, primarily due to a $4.9 million decline in the capitalization of software development costs relative to overall expenditures as product release cycles shorten and labor costs declined.

Overall research and development labor costs have declined as a result of cost saving actions taken in the second half of 2025, but have been reinvested in tools which further improve artificial intelligence offerings and accelerate development delivery and quality.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Research and development expenses increased by $12.2 million or 14%, primarily due to a $6.1 million decline in the capitalization of software development costs relative to overall expenditures as product release cycles shorten.

Overall research and development labor costs have remained stable as cost savings actions taken in the second half of 2025 have offset wage inflation.

Investments continue in tools which further improve artificial intelligence offerings and accelerate development delivery and quality.

Sales and Marketing Expenses

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Sales and marketing

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Percentage of total revenue

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Sales and marketing expenses increased by $7.9 million or 9%, primarily due to higher salaries and wages driven by increased marketing costs, wage inflation, additional hiring of sales and sales support personnel, and increased investments in sales enablement technology.

25 % 24 % 25 % 23 %

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

Sales and marketing expenses increased by $2.1 million or 2%, primarily due to higher salaries and wages from annual salary increases, an increase in outbound marketing costs and higher sales commissions expenses.

This increase was partially offset by overall headcount reductions compared to the prior year as a result of cost savings actions taken in the second half of 2025.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Sales and marketing expenses increased by $10.0 million or 5%, primarily due to higher salaries and wages from annual salary increases, an increase in outbound marketing costs, additional hiring of sales and sales support personnel, and increased investments in sales enablement technology.

This increase was partially offset by overall headcount reductions compared to the prior year as a result of cost savings actions taken in the second half of 2025.

General and Administrative Expenses

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

General and administrative $ 39,469 $ 43,467 $ 82,061 $ 79,859

Percentage of total revenue 10 % 11 % 10 % 10 %

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

General and administrative expenses increased by $6.2 million or 17%, primarily due to higher salaries and wages driven by wage inflation, increased hiring to support public company functions, an increase in the allowance for doubtful accounts, and a general increase in information technology costs.

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

General and administrative expenses decreased by $4.0 million or 9%, primarily due to lower allocations of general corporate expenses from Hexagon coinciding with the spin-off completion and a reduction in overall headcount costs compared to the prior year as a result of cost savings actions taken in the second half of 2025.

This decrease was partially offset by increased investments in public company functions and information technology.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

General and administrative expenses increased by $2.2 million or 3%, primarily due to higher salaries and wages driven by annual salary increases, increased hiring to support public company functions, and investment in information technology.

This increase was partially offset by savings achieved through cost savings actions undertaken in the second half of 2025.

Amortization of Intangible Assets

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Amortization of intangible assets $ 44,570 $ 38,284 $ 87,563 $ 75,637

Percentage of total revenue 11 % 9 % 11 % 10 %

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Amortization of intangible assets increased by $5.6 million or 15%, primarily due to incremental new releases of developed product solutions for sale.

Other Operating Expense, Net

Three Months Ended March 31,

Other operating expense, net $ 4,453 $ 3,553

Percentage of total revenue 1 % 1 %

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Other operating expense increased by $0.9 million or 25%, primarily due to an increase in restructuring charges associated with certain cost reduction actions to offset investments in public company functions, partially offset by a decrease in contingent consideration fair value remeasurement gains.

Other Income, Net

Three Months Ended March 31,

Other income, net $ 348 $ 551

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Other income, net has remained relatively flat for the three months ended March 31, 2026 and 2025.

Provision for Income Taxes

Three Months Ended March 31,

Income before income taxes $ 63,982 $ 74,455

Provision for income taxes $ 16,601 $ 14,969

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

Amortization of intangible assets increased by $6.3 million or 16%, primarily due to an increase in incremental new releases of developed product solutions for sale and the initial amortization of trademarks following management’s conclusion that all historical trademark assets have a finite useful life starting in the second quarter of 2026.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Amortization of intangible assets increased by $11.9 million or 16%, primarily due to an increase in incremental new releases of developed product solutions for sale and the initial amortization of trademarks following management’s conclusion that all historical trademark assets have a finite useful life starting in the second quarter of 2026.

Other Operating Expense (Income), Net

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Other operating expense (income), net $ 2,136,986 $ (16,529) $ 2,141,439 $ (12,976)

Percentage of total revenue n/m (4) % n/m (2) %

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

Other operating expense (income), net increased by $2,153.5 million, primarily due to the current period impairment charges recognized on goodwill of $1,671.0 million and indefinite-life intangible assets of $463.7 million.

Additionally, there was a decrease in contingent consideration fair value remeasurement gains recognized compared to the prior year period.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Other operating expense (income), net increased by $2,154.4 million, primarily due to the current period impairment charges recognized on goodwill of $1,671.0 million and indefinite-life intangible assets of $463.7 million.

Additionally, there was a decrease in contingent consideration fair value remeasurement gains recognized compared to the prior year period.

Other Income (Expense), Net

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Other income (expense), net $ 3,754 $ (340) $ 4,102 $ 211

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

Other income (expense), net increased by $4.1 million, primarily due to currency translation gains recognized in the current period.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Other income (expense), net increased by $3.9 million, primarily due to currency translation gains recognized in the current period.

Interest Expense, net

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Interest expense, net $ (1,757) $ — $ (1,757) $ —

For the three and six months ended June 30, 2026 compared with the three and six months ended June 30, 2025

Interest expense, net increased to $1.8 million, primarily due to principal interest and amortization of debt issuance costs on the Term Loans and Revolving Credit Facility of $3.4 million.

This increase was partially offset by $1.6 million of interest income earned on cash balances once Octave was no longer included in Hexagon's centralized treasury operations.

Provision (Benefit) for Income Taxes

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Income (loss) before income taxes $ (2,067,928) $ 96,520 $ (2,003,946) $ 170,975

Provision (benefit) for income taxes $ (97,250) $ 21,352 $ (80,649) $ 36,321

Effective tax rate 5 % 22 % 4 % 21 %

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

For the three months ended March 31, 2026, the effective tax rate was higher as compared to the three months ended March 31, 2025, primarily due to the jurisdictional mix of earnings and effects of cross-border transactions in preparation for the Distribution.

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025

For the three months ended June 30, 2026, the effective tax rate was lower as compared to the three months ended June 30, 2025, primarily due to the non-deductible nature of the Company’s goodwill impairment charge taken during the period as well as jurisdictional mix of earnings and effects of cross-border transactions in preparation for the Distribution.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

For the six months ended June 30, 2026, the effective tax rate was lower as compared to the six months ended June 30, 2025, primarily due to the non-deductible nature of the Company’s goodwill impairment charge taken during the period as well as jurisdictional mix of earnings and effects of cross-border transactions in preparation for the Distribution.

NON-GAAP FINANCIAL MEASURES

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The non-GAAP financial measures we use are as follows:

Adjusted Income from Operations—Income from Operations

Adjusted income from operations is defined as Income from operations adjusted for amortization of acquired intangibles;

Adjusted Income from Operations—Income (Loss) from Operations

Adjusted income from operations is defined as Income (loss) from operations adjusted for amortization of acquired intangibles;

amortization of developed technologies;

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and select other non-recurring items.

Adjusted Net Income—Net Income

Adjusted net income is defined as Net income adjusted for amortization of acquired intangibles;

Adjusted Net Income—Net Income (Loss)

Adjusted net income is defined as Net income (loss) adjusted for amortization of acquired intangibles;

amortization of developed technologies;

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and a corresponding adjustment to income tax expense for the impact of these adjustments.

Adjusted Earnings per Share—Earnings per Share

Adjusted earnings per share is defined as Adjusted net income divided by the weighted-average number of ordinary shares outstanding during the period, presented on a diluted basis.

Free Cash Flow—Cash Flow from Operations

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We believe the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of other companies in our industry.

Stand-up costs include expenses associated with the spin-off and stand up of functions required to operate as a standalone public entity, these costs primarily relate to system implementation expenses, legal and consulting costs, development of our brand and other matters.

We believe the assessment of our operations excluding these costs is relevant to our assessment of internal operations and comparisons to the performance of other companies in our industry.

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NON-GAAP FINANCIAL MEASURES

Three Months Ended March 31,

Income from operations $ 63,634 $ 73,904

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Income (loss) from operations $ (2,069,925) $ 96,860 $ (2,006,291) $ 170,764

Amortization of acquired intangibles

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Stock-based compensation expense

3,221 3,273 6,703 6,802

Impairment charges

2,134,660 — 2,134,660 —

Acquisition costs and charges

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Restructuring charges

1,625 657 5,352 4,040

Stand-up costs 1,436 356 2,504 356

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Adjusted operating margin 29 % 31 % 30 % 31 %

Net income $ 47,381 $ 59,486

Net income (loss) $ (1,970,678) $ 75,168 $ (1,923,297) $ 134,654

Amortization of acquired intangibles

3 unchanged sentences

Stock-based compensation expense

3,221 3,273 6,703 6,802

Impairment charges

2,134,660 — 2,134,660 —

Acquisition costs and charges

1 unchanged sentence

Restructuring charges

1,625 657 5,352 4,040

Stand-up costs 1,436 356 2,504 356

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Adjusted net income $ 95,412 $ 98,298 $ 184,432 $ 191,877

Earnings per share $ (7.34) $ 0.28 $ (7.16) $ 0.50

Adjustments 7.70 0.08 7.85 0.21

Adjusted earnings per share $ 0.36 $ 0.36 $ 0.69 $ 0.71

Cash flow from operations $ 125,433 $ 123,009 $ 240,878 $ 248,518

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Capitalization of software development costs

(7) (8) (8) % (8) %

Free cash flow margin 23 % 21 % 22 % 22 %

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dollars is affected by changes in foreign currency exchange rates.

We use constant currency to evaluate the underlying performance of the business, and we believe it is helpful for investors to present operating results on a comparable basis period-over-period to evaluate its underlying performance.

In reporting period-over-period results, we calculate the effects of foreign currency fluctuations and constant currency information by translating current and prior period results on a functional currency basis to our reporting currency using the prior period average foreign currency exchange rates from which the transaction occurred.

Reconciliation of revenue to revenue in constant currency for the three months ended March 31, 2026:

Three months ended March 31, 2026 Three months ended March 31, 2025

Actual Impact of Foreign Exchanges at 2025 Rates Constant Currency Actual Impact of Foreign Exchanges at 2025 Rates Constant Currency

Reconciliation of revenue to revenue in constant currency for the three and six months ended June 30, 2026:

Three months ended June 30, 2026 Six months ended June 30, 2026

Actual Impact of Foreign Exchanges at 2025 Rates Constant Currency % as Reported Organic % CC growth Actual Impact of Foreign Exchanges at 2025 Rates Constant Currency % as Reported Organic % CC growth

Subscriptions

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$ 398,414 $ 4,141 $ 394,273 (4) % (1) % $ 784,915 $ 18,604 $ 766,311 (1) % — %

For the three months ended June 30, 2026 compared with the three months ended June 30, 2025, organic constant currency decline was 1% with a currency impact of positive 1%, and for the six months ended June 30, 2026 compared with the six months ended June 30, 2025, organic constant currency change was flat with a currency impact of positive 2%.

LIQUIDITY AND CAPITAL RESOURCES

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We have historically generated positive cash flow from operations;

however, as part of Hexagon, Octave has been dependent upon Hexagon for all of its working capital and financing requirements.

however, prior to the Distribution, Octave was dependent upon Hexagon for all working capital and financing requirements.

Hexagon uses a centralized approach to cash management and financing of its operations.

Accordingly, a substantial portion of Octave’s cash accounts are regularly cleared to Hexagon at Hexagon’s discretion, and Hexagon funds its operating and investing activities as needed.

Accordingly, a substantial portion of Octave’s cash accounts were regularly cleared to Hexagon at Hexagon’s discretion, and Hexagon funds its operating and investing activities as needed.

This arrangement is not reflective of the manner in which the Octave business would have been able to finance its operations had it been a standalone business separate from Hexagon during the periods presented.

Transfers of cash between Hexagon and Octave are included within Net transfers (to) from Parent in the Condensed Combined Statements of Cash Flows and the Condensed Combined Statements of Equity.

Revolving Credit Facility and Term Loan Facility

In connection with the Distribution, on April 27, 2026, the Company entered into a senior unsecured credit facility (the “Credit Agreement”) consisting of (a) a five‑year senior unsecured multi-currency revolving credit facility in an aggregate principal amount of up to $500 million (the “Revolving Credit Facility”) and (b) a four‑year senior unsecured term loan facility (the “Term Loan Facility” and, together with the Revolving Credit Facility, the “Credit Facilities”) consisting of (i) a U.S.

dollar-denominated term loan in an amount of up to $350 million and (ii) a euro-denominated term loan in an amount of up to €150 million.

Borrowings under the Credit Facilities bear interest, at the Company’s option, at variable rates based on Term Secured Overnight Financing Rate (“SOFR”) or an alternative base rate for loans denominated in U.S.

dollars, Euro Interbank Offered Rate (“EURIBOR”) for loans denominated in euro or Daily Simple Sterling Overnight Index Average (“SONIA”) for Revolving Credit Facility loans denominated in pounds sterling, in each case plus an applicable margin.

The applicable margin varies based on the Company’s consolidated leverage ratio and ranges from (i) 125 to 175 basis points in the case of Term SOFR loans, EURIBOR loans and Daily Simple SONIA loans and (ii) 25 to 75 basis points in the case of loans bearing interest at the alternative base rate.

Under the Credit Agreement, the Company is required to maintain a maximum consolidated leverage ratio as of the end of each fiscal quarter of no more than 3.50 to 1.00.

The Company may elect to increase the maximum permitted consolidated leverage ratio to 4.00 to 1.00 for the fiscal quarter during which a material acquisition occurs and for the following three fiscal quarters.

The Credit Agreement includes representations and warranties, events of default and affirmative and negative covenants that are customary for similar financings, including, among other things and subject to certain significant exceptions, limitations on liens, indebtedness, mergers and asset sales, as well as customary reporting and compliance obligations.

In connection with the Distribution, on the Distribution date the Company fully drew the Term Loan Facility and borrowed approximately $120 million and €25 million under the Revolving Credit Facility.

The proceeds from the borrowings under the Credit Facilities were used to fund a cash payment of $625 million to Hexagon in connection with the Distribution.

Prior to the Distribution, transfers of cash between Hexagon and Octave are included within Net transfers (to) from Hexagon in the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Equity.

Sources of Current Liquidity

On April 27, 2026, in connection with the Distribution, the Company entered into a senior unsecured credit agreement (the “Credit Agreement”) with Bank of America, N.A., as Administrative Agent, establishing a $350.0 million U.S.

dollar term loan facility (the “USD Term Loan”), a €150.0 million euro term loan facility (the “EUR Term Loan”, and together with the USD Term Loan, the “Term Loans”), and a $500.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loans, the “Credit Facilities”).

On May 22, 2026, the Company fully drew the Term Loans and borrowed under the Revolving Credit Facility.

The proceeds from these borrowings were used to fund a cash payment of $625.0 million to Hexagon in connection with the Distribution.

Borrowings under the Credit Facilities bear interest at variable rates based on Term Secured Overnight Financing Rate for U.S.

dollar-denominated loans and Euro Interbank Offered Rate for euro-denominated loans, in each case plus an applicable margin ranging from 125 to 175 basis points based on the Company's consolidated leverage ratio.

Commitment fees on the undrawn Revolving Credit Facility balance accrue at 15 to 25 basis points per annum.

The Credit Agreement requires the Company to maintain a maximum consolidated leverage ratio (net debt to EBITDA as defined in the Credit Agreement) of 3.5 to 1.0 as of the end of each fiscal quarter.

The Company may elect to increase the maximum permitted leverage ratio to 4.0 to 1.0 for the fiscal quarter during which a material acquisition occurs and for the three immediately following fiscal quarters, subject to a minimum two-quarter interval before any subsequent election.

As of June 30, 2026, the Company was in compliance with all covenants under the Credit Agreement.

CASH FLOW ACTIVITY

Summarized cash flow information for the three months ended March 31, 2026 and 2025 is as follows:

Three Months Ended March 31,

Summarized cash flow information for the six months ended June 30, 2026 and 2025 is as follows:

Six Months Ended June 30,

Net cash provided by operating activities

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$ (92,254) $ (83,903)

Net cash used in financing activities

Net cash provided by (used in) financing activities

$ 4,460 $ (166,195)

Operating Activities

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Net cash provided by operating activities decreased by $10.1 million, primarily due to a decrease in net income of $12.1 million.

The decrease in non-cash adjustments of $9.0 million was largely offset by an increase in net cash flows from the change in operating assets and liabilities of $11.0 million.

The decrease in non-cash adjustments was primarily driven by an increase in depreciation and amortization, partially offset by the timing of restructuring charges and movement in deferred income tax expense.

The increase in net cash flows from the change in operating assets and liabilities was primarily due to timing of collections on receivables and the timing of cash disbursements for operating assets and liabilities, partially offset by timing of recognition of deferred revenue.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Net cash provided by operating activities decreased by $7.6 million, primarily due to lower net income after adjusting for non-cash items and increased current period payout of restructuring charges.

This was partially offset by favorable changes in operating assets and liabilities.

Investing Activities

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Net cash used in investing activities decreased by $12.5 million primarily due to the absence of an acquisition completed in the current period as compared to aggregate consideration paid, net of cash acquired, of $11.7 million in the prior period.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Net cash used in investing activities increased by $8.4 million, primarily due to an investment of $15.0 million and the absence of proceeds from divestitures received during the prior-year period of $4.1 million.

These increases were partially offset by lower capitalization of software development costs of $6.2 million and lower cash paid for acquisitions of $6.2 million.

Financing Activities

For the three months ended March 31, 2026 compared with the three months ended March 31, 2025

Net cash used in financing activities decreased by $14.3 million primarily due to a decrease in net transfers to Hexagon.

For the six months ended June 30, 2026 compared with the six months ended June 30, 2025

Net cash provided by (used in) financing activities increased by $170.7 million primarily due to proceeds from the Term Loans of $524.4 million, proceeds from the Revolving Credit Facility, net of repayments, of $102.6 million, proceeds from other short-term borrowings of $22.9 million, and a reduction in the net transfers to Hexagon of $150.1 million made during the period.

These increases were substantially offset by the $625.0 million cash payment to Hexagon in connection with the Distribution.

Cash and Cash Requirements

As of March 31, 2026 and December 31, 2025, our cash and cash equivalents totaled $175.5 million and $156.1 million, respectively.

As of June 30, 2026 and December 31, 2025, Cash and cash equivalents totaled $304.1 million and $156.1 million, respectively.

Our ability to generate positive cash flows from operations is dependent on general economic conditions, and the competitive environment in our industry, and is subject to the business and other risk factors described in the section of this Form 10-Q titled “Risk Factors” and under the section titled “Risk Factors” in the Information Statement.

If we are unable to generate sufficient cash flows from operations or otherwise comply with the terms of any external borrowings, we may be required to seek additional financing alternatives.

We believe that we have sufficient liquidity based on our current cash position, cash flows from operations and expected future financing to meet our expected payments related to our material cash requirements for at least the next 12 months.

We believe that our existing cash and cash equivalents, cash expected to be generated from operations and available borrowing capacity under the revolving credit facility provided by our Credit Agreement will be sufficient to meet our anticipated cash requirements for at least the next 12 months.

Cash and Cash Equivalents Held by non-U.S.

Cash and cash equivalents held by the Company’s non-U.S.

subsidiaries as of March 31, 2026 and December 31, 2025 were $155.1 million and $141.8 million, respectively.

As of June 30, 2026 and December 31, 2025, Cash and cash equivalents held by the Company’s non-U.S.

subsidiaries were $220.0 million and $141.8 million, respectively.

Off-Balance Sheet Arrangements

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CRITICAL ACCOUNTING ESTIMATES

There were no material changes in critical accounting estimates from those disclosed in the Information Statement section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The preparation of our Condensed Consolidated Financial Statements in accordance with U.S.

GAAP is based on the selection and application of accounting policies that require us to make significant estimates and assumptions about the effects of matters that are inherently uncertain.

Except for the Updates to Significant Accounting Policies discussed in Note 2, “Summary of Significant Accounting Policies,” there were no material changes in critical accounting estimates from those disclosed in the Information Statement section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

OTHER MATTERS

See Note 2, “Summary of Significant Accounting Policies,” of the Condensed Combined Financial Statements for a discussion of recent accounting pronouncements.

See Note 2, “Summary of Significant Accounting Policies,” of the Condensed Consolidated Financial Statements for a discussion of recent accounting pronouncements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis