Octave Intelligence plc 10-Q

ITEM 1. Financial Statements. 1 Table of Contents OCTAVE INTELLIGENCE PLC Condensed Consolidated Balance Sheets (Unaudited) In thousands (except per share amounts) As of June 30, 2026 December 31, 2025 ASSETS Current assets: Cash and cash equivalents $ 304,147 $ 156,069 Accounts receivable, net 375,640 400,686 Prepaids and other current assets 98,300 100,008 Total current assets 778,087 656,763 Property and equipment, net 23,417 54,642 Property and equipment held for sale 30,888 — Operating lease right-of-use assets 52,037 50,605 Goodwill 4,554,993 6,221,366 Intangible assets, net 1,161,836 1,649,408 Deferred income taxes 31,441 29,903 Other noncurrent assets 57,051 33,564 Total assets $ 6,689,750 $ 8,696,251 LIABILITIES Current liabilities: Accounts payable $ 54,834 $ 48,765 Accrued compensation 90,328 113,532 Deferred revenue 436,983 380,612 Operating lease liabilities 13,991 15,683 Other current liabilities 160,153 94,282 Total current liabilities 756,289 652,874 Long-term debt 621,284 — Operating lease liabilities - noncurrent 39,604 36,770 Deferred income taxes 152,584 269,152 Other noncurrent liabilities 40,039 59,820 Total liabilities 1,609,800 1,018,616 Commitments and contingencies (Note 12) EQUITY Preferred shares, $ 0.01 par value; 1,000,000 shares authorized; no shares issued — — Class A Ordinary Shares, $ 0.01 par value; 4,500,000 shares authorized 110 — Class B Ordinary Shares, $ 0.01 par value; 4,500,000 shares authorized 2,574 — Additional paid-in-capital 6,783,958 — Net investment by Hexagon — 7,749,558 Retained earnings ( 1,629,928 ) — Accumulated other comprehensive loss ( 76,764 ) ( 71,923 ) Total equity 5,079,950 7,677,635 Total liabilities and equity $ 6,689,750 $ 8,696,251 See the accompanying Notes to Condensed Consolidated Financial Statements. 2 Table of Contents OCTAVE INTELLIGENCE PLC Condensed Consolidated Statements of Operations (Unaudited) In thousands (except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Subscriptions $ 282,813 $ 267,334 $ 561,993 $ 526,166 Licenses 39,104 50,983 74,229 93,622 Subscriptions and licenses 321,917 318,317 636,222 619,788 Services and other 76,497 95,024 148,693 176,357 Total revenue 398,414 413,341 784,915 796,145 Cost of revenue: Cost of subscriptions and licenses 39,980 41,724 83,766 81,208 Cost of services and other 52,783 65,190 97,820 125,268 Total cost of revenue 92,763 106,914 181,586 206,476 Gross profit 305,651 306,427 603,329 589,669 Operating expenses: Research and development 54,578 46,442 102,064 89,844 Sales and marketing 99,973 97,903 196,493 186,541 General and administrative 39,469 43,467 82,061 79,859 Amortization of intangible assets 44,570 38,284 87,563 75,637 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 (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 Earnings per share - basic and diluted $ ( 7.34 ) $ 0.28 $ ( 7.16 ) $ 0.50 Weighted average ordinary shares outstanding - basic and diluted 268,438 268,438 268,438 268,438 See the accompanying Notes to Condensed Consolidated Financial Statements. 3 Table of Contents OCTAVE INTELLIGENCE PLC Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) In thousands Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income (loss) $ ( 1,970,678 ) $ 75,168 $ ( 1,923,297 ) $ 134,654 Other comprehensive income (loss), net of taxes: Foreign currency translation adjustments 2,797 30,335 ( 4,841 ) 46,516 Total other comprehensive income (loss), net of taxes 2,797 30,335 ( 4,841 ) 46,516 Comprehensive income (loss) $ ( 1,967,881 ) $ 105,503 $ ( 1,928,138 ) $ 181,170 See the accompanying Notes to Condensed Consolidated Financial Statements. 4 Table of Contents OCTAVE INTELLIGENCE PLC Condensed Consolidated Statements of Equity (Unaudited) In thousands Class A Ordinary Shares Class B Ordinary Shares Additional paid-in-capital Net investment by Hexagon Retained earnings Accumulated other comprehensive income (loss) Total equity Shares Amount Shares Amount Balance as of December 31, 2024 — $ — — $ — $ — $ 7,795,874 $ — $ ( 122,187 ) $ 7,673,687 Net income — — — — — 59,486 — — 59,486 Foreign currency translation adjustments — — — — — — — 16,181 16,181 Net transfers to Hexagon — — — — — ( 71,575 ) — — ( 71,575 ) Balance as of March 31, 2025 — $ — — $ — $ — $ 7,783,785 $ — $ ( 106,006 ) $ 7,677,779 Net income — — — — — 75,168 — — 75,168 Foreign currency translation adjustments — — — — — — — 30,335 30,335 Net transfers to Hexagon — — — — — ( 87,819 ) — — ( 87,819 ) Balance as of June 30, 2025 — $ — — $ — $ — $ 7,771,134 $ — $ ( 75,671 ) $ 7,695,463 Class A Ordinary Shares Class B Ordinary Shares Additional paid-in-capital Net investment by Hexagon Retained earnings Accumulated other comprehensive income (loss) Total equity Shares Amount Shares Amount Balance as of December 31, 2025 — $ — — $ — $ — $ 7,749,558 $ — $ ( 71,923 ) $ 7,677,635 Net income — — — — — 47,381 — — 47,381 Foreign currency translation adjustments — — — — — — — ( 7,638 ) ( 7,638 ) Net transfers to Hexagon — — — — — ( 56,753 ) — — ( 56,753 ) Balance as of March 31, 2026 — $ — — $ — $ — $ 7,740,186 $ — $ ( 79,561 ) $ 7,660,625 Net loss — — — — — ( 340,750 ) ( 1,629,928 ) — ( 1,970,678 ) Foreign currency translation adjustments — — — — — — — 2,797 2,797 Net transfers from Hexagon — — — — — 10,821 — — 10,821 Cash payment to Hexagon in connection with the Distribution — — — — — ( 625,000 ) — — ( 625,000 ) Issuance of Ordinary Shares in connection with the Distribution 11,025 110 257,413 2,574 6,782,573 ( 6,785,257 ) — — — Stock-based compensation expense — — — — 1,385 — — — 1,385 Balance as of June 30, 2026 11,025 $ 110 257,413 $ 2,574 $ 6,783,958 $ — $ ( 1,629,928 ) $ ( 76,764 ) $ 5,079,950 See the accompanying Notes to Condensed Consolidated Financial Statements. 5 Table of Contents OCTAVE INTELLIGENCE PLC Condensed Consolidated Statements of Cash Flows (Unaudited) In thousands Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net income (loss) $ ( 1,923,297 ) $ 134,654 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 93,416 81,648 Stock-based compensation expense 6,703 6,802 Deferred income taxes ( 97,472 ) 12,183 Impairment charges 2,134,660 — Remeasurement of contingent consideration reserves ( 2,622 ) ( 12,544 ) Restructuring charges ( 10,103 ) ( 975 ) Other ( 112 ) 1,546 Changes in assets and liabilities, net of effect from acquisitions: Accounts receivable 22,678 17,979 Prepaids and other current assets 2,382 ( 5,979 ) Accounts payable 4,080 ( 396 ) Accrued compensation ( 23,204 ) ( 14,969 ) Deferred revenue 31,492 29,972 Other assets and liabilities 2,277 ( 1,403 ) Net cash provided by operating activities 240,878 248,518 Cash flows from investing activities: Purchases of property and equipment ( 5,095 ) ( 3,540 ) Capitalization of software development costs ( 60,271 ) ( 66,443 ) Acquisitions, net of cash acquired ( 11,115 ) ( 16,751 ) Purchases of investments ( 15,000 ) — Proceeds from divestitures — 4,136 Other ( 773 ) ( 1,305 ) Net cash used in investing activities ( 92,254 ) ( 83,903 ) Cash flows from financing activities: Proceeds from issuance of term loans 524,420 — Proceeds from revolving credit facility 149,070 — Repayment of revolving credit facility ( 46,500 ) — Debt issuance costs ( 3,779 ) — Net transfers to Hexagon ( 16,048 ) ( 166,195 ) Cash payment to Hexagon in connection with the Distribution ( 625,000 ) — Payment of contingent consideration ( 606 ) — Proceeds from other short-term borrowings 22,903 — Net cash provided by (used in) financing activities 4,460 ( 166,195 ) Effect of foreign exchange rate changes on cash and cash equivalents ( 5,006 ) 6,015 Net increase in cash and cash equivalents 148,078 4,435 Cash and cash equivalents at beginning of period 156,069 97,214 Cash and cash equivalents at end of period $ 304,147 $ 101,649 See the accompanying Notes to Condensed Consolidated Financial Statements. 6 Table of Contents OCTAVE INTELLIGENCE PLC Notes to Condensed Consolidated Financial Statements (Unaudited) Dollars in thousands, unless noted otherwise NOTE 1. BACKGROUND AND BASIS OF PRESENTATION Background 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. 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 its platform, noting that different components of the software architecture are at various stages of technical integration and interoperability. 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 April 27, 2026, in connection with the Distribution, the Company entered into credit facilities with Bank of America, N.A. consisting of a $ 350.0 million U.S. dollar term loan facility, a € 150.0 million euro term loan facility, and a $ 500.0 million revolving credit facility. On May 22, 2026, the Company fully drew the term loan facilities 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. 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, resulting in the distribution of 268,437,788 of the Company's ordinary shares to Hexagon shareholders. 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. Following the Distribution, Octave is a public company and Hexagon has no continuing ownership interest. For purposes of governing the ongoing relationships between Hexagon and Octave after the Distribution, and to provide for an orderly transition, Hexagon and Octave entered into a Distribution Agreement, Tax Disaffiliation Agreement, Employee Matters Agreement, and Master Transition Services Agreement that outline the terms and conditions of the transactions and provide a framework for our relationship after the Distribution. 7 Table of Contents Basis of Presentation On May 22, 2026, the Company became a standalone publicly traded company, and its financial statements are presented on a consolidated basis from that date. Prior to the Distribution, the Company's historical financial statements were derived from Hexagon's consolidated financial statements and accounting records and were prepared on a standalone basis. The financial statements for all periods presented, including the historical results of the Company prior to May 22, 2026, are referred to herein as the "Condensed Consolidated Financial Statements" and have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). These Condensed Consolidated Financial Statements have been prepared on the same basis as the annual Combined Financial Statements for the three years ended December 31, 2025 included in the Information Statement attached as Exhibit 99.1 to Octave’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on May 12, 2026 (the “Information Statement”) and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair statement of the results of operations for the periods presented. The December 31, 2025 Condensed Consolidated Balance Sheet included herein is derived from the audited Combined Financial Statements included in the Information Statement. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results expected for the remainder of the fiscal year. These unaudited Condensed Consolidated Financial Statements and accompanying Notes should be read in conjunction with the audited Combined Financial Statements and accompanying Notes for the year ended December 31, 2025 included in the Information Statement. All intercompany transactions have been eliminated. Periods Prior to the Distribution Prior to the Distribution, the Condensed Consolidated Financial Statements include all revenues and costs directly attributable to the Company, including costs for facilities, functions and services used by or for the benefit of the Company. The Company had historically functioned together with the other businesses controlled by Hexagon. Accordingly, the Company relied on Hexagon's corporate overhead and other support functions for its business. Therefore, certain corporate overhead and shared costs had been allocated to the Company, including general and administrative expenses related to Hexagon support functions provided on a centralized basis, such as corporate communications, executive management, legal, human resources, treasury, finance, accounting, information technology, and the related benefit costs associated with such functions, including stock-based compensation. These expenses had been specifically identified, when possible, or allocated based on direct usage when identifiable, with the remainder allocated on a pro rata basis of revenue of the Company and Hexagon. The charges for these functions are included in Sales and marketing and General and administrative expenses in the Condensed Consolidated Statements of Operations. Management considers that such allocations had been made on a reasonable basis consistent with benefits received but may not necessarily be indicative of the costs that would have been incurred had the Company operated on a standalone basis for the periods presented prior to the Distribution. The Company is unable to quantify the amounts that it would have recorded during the historical periods on a standalone basis, as it is not practicable to do so. Prior to the Distribution, Hexagon utilized a centralized approach to managing its treasury operations. The cash and cash equivalents held by Hexagon at the corporate level were not specifically identifiable to the Company and therefore had not been reflected in the Company's Condensed Consolidated Balance Sheets prior to the Distribution. Cash and cash equivalents in the Condensed Consolidated Balance Sheets for periods prior to the Distribution represent cash and cash equivalents held by legal entities of the Company that were specifically attributable to the Company. Prior to the Distribution, Hexagon's external debt and related interest expense had not been attributed to the Company for the periods presented, as Hexagon's borrowings were neither directly attributable to the Company nor was the Company the legal obligor of such borrowings. 8 Table of Contents For those transactions between the Company and Hexagon that were historically settled in cash, such balances were reflected in the Condensed Consolidated Balance Sheets as due from related parties or due to related parties. The total net effect of the settlement of intercompany transactions not historically settled in cash are reflected in the Condensed Consolidated Statements of Cash Flows as a financing activity and in the Condensed Consolidated Balance Sheets as Net investment by Hexagon, with the difference between the amounts presented in the Condensed Consolidated Statements of Equity and the Condensed Consolidated Statements of Cash Flows being attributable to stock-based compensation and net assets distributed from Hexagon. Net investment by Hexagon in the Condensed Consolidated Balance Sheets represents Hexagon's historical investment in the Company, the accumulated net earnings after taxes, and the net effect of transactions with and allocations from Hexagon. Prior to the Distribution, income tax expense and tax balances were calculated on a separate return basis. The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if the Company was a separate taxpayer and a standalone company, even though the Company filed as part of Hexagon's tax group in certain jurisdictions prior to the Distribution. Periods Following the Distribution Following the Distribution on May 22, 2026, the Company operates as an independent publicly traded company and its financial statements reflect the Company's results of operations, financial position and cash flows on a standalone consolidated basis. Certain functions previously provided by Hexagon continue to be provided under the Master Transition Services Agreement or are being performed using the Company's own resources or third-party service providers. The Company incurred certain costs in its establishment as a standalone public company and expects to incur ongoing additional costs associated with operating as an independent, publicly traded company. Unless otherwise noted, all amounts in these Condensed Consolidated Financial Statements are presented in U.S. dollars and in thousands. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies of the Company are set forth in Note 2, “Summary of Significant Accounting Policies” within the Company’s audited Combined Financial Statements as of December 31, 2025 included in the Information Statement. Updates to Significant Accounting Policies Assets Held for Sale : A long-lived asset (or disposal group) is classified as held for sale in the period in which all of the held-for-sale criteria are met. Assets held for sale are measured at the lower of carrying value or fair value less cost to sell. Depreciation and amortization cease upon classification as held for sale. See Note 15, “Subsequent Events” for further discussion. Goodwill : The Company performed an interim goodwill impairment test following a triggering event that indicated the carrying amount may not be fully recoverable. This impairment test resulted in a current period non-cash impairment charge. See Note 5, "Goodwill and intangible assets" for further discussion. Intangible Assets, Net : The Company performed an assessment of the useful life estimates of all trademarks which have historically been carried as indefinite-life intangible assets following the phase out of legacy brands and transition of the Octave business to a unified Octave brand. This assessment resulted in a current period non-cash impairment charge and conclusion that all trademark assets should no longer be carried as indefinite-life intangible assets, but rather have a finite two year useful life. See Note 5, "Goodwill and intangible assets" for further discussion. 9 Table of Contents Recent Accounting Pronouncements The Company considers the applicability and impact of all Accounting Standards Updates (“ASU”) issued by the Financial Accounting Standards Board (“FASB”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have a minimal impact on the Company’s Consolidated Financial Statements and related disclosures. In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 is intended to update the guidance in Topic 270 by improving navigability of the required interim disclosures, clarifying when that guidance is applicable and adding a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for the Company for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2025-11 on its Consolidated Financial Statements and related disclosures. In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). The amendments in ASU 2025-06 remove the concept of development stages and introduce a principles-based model for capitalizing internal-use software costs, including those related to agile and cloud-based development. The guidance also consolidates website development costs under ASC 350-40 and enhances disclosure requirements related to software development activities. ASU 2025-06 is effective for the Company for annual reporting periods beginning after December 15, 2027, and interim periods within those annual periods, and should be applied prospectively, with optional retrospective or modified retrospective transition methods. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU 2025-06 on its Consolidated Financial Statements and related disclosures. In November 2024, the FASB issued ASU No. 2024-03, Income Statements-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"), which requires enhanced disclosure of income statement expense categories to improve transparency and provide financial statement users with more detailed information about the nature, amount, and timing of expenses impacting financial performance. ASU 2024-03 is effective for the Company for the annual reporting period beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2024-03 may be adopted either on a prospective basis to financial statements issued for reporting periods after the effective date or on a retrospective basis to all periods presented. The Company is currently evaluating the impact of the adoption of ASU 2024-03; however, other than additional disclosure, the Company does not expect a change to the Consolidated Financial Statements. Recently Adopted Accounting Standards In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . This ASU provides entities with a practical expedient to simplify the estimation of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC 606 by allowing entities to assume that current conditions as of the balance sheet date will not change over the remaining life of such assets. The Company adopted ASU 2025-05 during the three months ended March 31, 2026. The adoption did not have a material impact on the Company’s Consolidated Financial Statements or related disclosures. 10 Table of Contents NOTE 3. REVENUE FROM CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The Company’s revenue based on the timing of revenue recognition is as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Recurring revenue (1) $ 282,813 $ 267,334 $ 561,993 $ 526,166 Non-recurring revenue (2) 115,601 146,007 222,922 269,979 Total revenue $ 398,414 $ 413,341 $ 784,915 $ 796,145 ___________________________ (1) Includes monthly subscription licenses, SaaS-based subscriptions and maintenance subscriptions. (2) Includes perpetual software licenses and services and other revenue. The Company’s revenue consists of the following revenue streams: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenue: Subscription licenses $ 72,549 $ 73,647 $ 144,911 $ 147,814 SaaS 87,225 70,999 171,894 138,848 Maintenance subscription 123,039 122,688 245,188 239,504 Subscriptions 282,813 267,334 561,993 526,166 Licenses 39,104 50,983 74,229 93,622 Subscriptions and licenses 321,917 318,317 636,222 619,788 Services and other 76,497 95,024 148,693 176,357 Total revenue $ 398,414 $ 413,341 $ 784,915 $ 796,145 Revenue by geographic region, based upon the location of the end customer, are as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Americas: (1) United States $ 151,159 $ 171,983 $ 297,051 $ 332,472 Other Americas 33,552 38,073 75,405 73,984 EMIA (2) 156,498 143,693 302,018 275,893 APAC (3) 57,205 59,592 110,441 113,796 Total revenue $ 398,414 $ 413,341 $ 784,915 $ 796,145 ___________________________ (1) Americas includes the United States, Canada, and Latin America. (2) EMIA includes Europe, Middle East, India, and Africa. (3) APAC includes the Asia-Pacific region, excluding India. Operations in Ireland, our country of domicile, are not material in all periods presented. 11 Table of Contents Contract Balances As of June 30, 2026 and December 31, 2025, the Company's contract assets relate to performance obligations completed in advance of the right to invoice and are included in Prepaids and other current assets in the Condensed Consolidated Balance Sheets. Contract assets were not material as of June 30, 2026, or December 31, 2025. Deferred revenue consists of billings made or payments received in advance of revenue recognition from subscriptions and services. The primary changes in the Company’s deferred revenue are due to the performance under the contracts and new billings made or payments received in advance of revenue recognition from service, installation, and support. The satisfaction of performance obligations typically lags behind payments received under revenue recognition from contracts with customers. Deferred revenues are short-term in nature and are generally recognized as revenue within 12 months. As of June 30, 2026 and December 31, 2025, total deferred revenue was $ 452.9 million and $ 426.1 million, respectively, and is included within Deferred revenue and Other noncurrent liabilities on the Condensed Consolidated Balance Sheets. Changes in the Company’s total deferred revenue balances primarily relate to additional deferrals through new billings and reduced deferrals through revenue recognition. For the six months ended June 30, 2026, the Company recognized $ 283.3 million of revenue that was included in the December 31, 2025 deferred revenue balance. For the six months ended June 30, 2025, the Company recognized $ 213.4 million of revenue that was included in the December 31, 2024 deferred revenue balance. Remaining Performance Obligations The Company’s contracts with customers include amounts allocated to performance obligations that will be satisfied at a later date. As of June 30, 2026, amounts allocated to these remaining performance obligations are $ 452.9 million, of which the Company expects to recognize approximately 96 % over the next 12 months with the remaining amount thereafter. NOTE 4. ACQUISITIONS AND DIVESTITURES 2026 Acquisitions For the six months ended June 30, 2026, the Company completed two business combinations for aggregate cash consideration of $ 11.1 million, net of cash acquired. The contingent consideration for these acquisitions was $ 2.9 million. The total purchase consideration was allocated as follows: $ 2.9 million to acquired intangible assets, $ 8.6 million to goodwill, and $ 0.4 million to net tangible liabilities. The acquired intangible assets consisted primarily of customer relationships and developed technology, which were valued using the income approach. Of the goodwill recognized with these acquisitions, $ 0.8 million is expected to be deductible for tax purposes. The Company’s transaction costs related to these 2026 acquisitions were not material. The financial results of these acquisitions were included in the Condensed Consolidated Financial Statements from the acquisition dates. 2025 Acquisitions For the six months ended June 30, 2025, the Company completed two business combinations for aggregate cash consideration of $ 16.8 million, net of cash acquired. The total purchase consideration was allocated as follows: $ 2.9 million to acquired intangible assets, $ 13.8 million to goodwill, and $ 0.1 million to net tangible assets. The acquired intangible assets consisted primarily of customer relationships and trademarks, which were valued using the income approach. Of the goodwill recognized with these acquisitions, $ 1.7 million is expected to be deductible for tax purposes. The Company’s transaction costs related to these 2025 acquisitions were not material. The financial results of these acquisitions were included in the Condensed Consolidated Financial Statements from the acquisition dates. 12 Table of Contents 2025 Divestitures For the six months ended June 30, 2025, the Company divested one non-core business for total cash proceeds of $ 4.1 million. The divested business included $ 4.5 million of net assets. The Company recorded a loss on divestiture of approximately $ 0.4 million, which is included in Other income (expense), net. The Company’s transaction costs related to the 2025 divestiture were not material. Contingent Consideration Some of the Company’s acquisitions contain contingent consideration which is based on the acquired company’s earnings for a predetermined period. These contingent consideration liabilities are included in Other current liabilities and Other noncurrent liabilities in the Condensed Consolidated Balance Sheets, depending on the expected timing of settlement. Additions to contingent consideration recognized in connection with acquisitions are non-cash in nature. Payments of contingent consideration are cash in nature. Change in fair value is recognized in Other operating expense (income), net in the Condensed Consolidated Statements of Operations. Activity related to the Company’s contingent consideration is as follows: Balance as of December 31, 2024 $ 61,017 Additions — Payments — Change in fair value ( 12,544 ) Balance as of June 30, 2025 $ 48,473 Balance as of December 31, 2025 $ 6,067 Additions 2,888 Payments ( 606 ) Change in fair value ( 2,622 ) Balance as of June 30, 2026 $ 5,727 NOTE 5. GOODWILL AND INTANGIBLE ASSETS Goodwill The changes in the carrying amount of goodwill are as follows: Balance as of December 31, 2025 $ 6,221,366 Acquisitions 8,556 Impairment ( 1,671,000 ) Foreign currency translation adjustments ( 3,929 ) Balance as of June 30, 2026 (1) $ 4,554,993 _________________________ (1) The carrying amount of goodwill is presented net of accumulated impairment losses of $ 1,671.0 million. Goodwill Impairment Following the commencement of regular-way trading of the Company’s Class B Ordinary Shares, the Company’s market capitalization remained below the Company’s carrying value. Management considered 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. 13 Table of Contents As a result, the Company performed a quantitative goodwill impairment test by comparing the carrying amount of its single reporting unit to its estimated fair value. The Company’s estimated fair value was determined using a combination of income and market approaches. The income approach consisted of a discounted cash flow analysis which required judgment in developing projections about future revenue growth, operating margins, capital expenditures, and the appropriate discount rate, all of which serve as key assumptions. The market approaches included guideline public company and guideline transaction methods, as well as consideration of the Company’s observed market capitalization as of June 30, 2026. To corroborate the Company’s estimated fair value, a reconciliation to the Company’s market capitalization as of June 30, 2026 was performed and concluded that the implied control premium was reasonable as compared to relevant market transactions in similar industries. Based on the results of the quantitative goodwill impairment test, the carrying amount of the Company’s single reporting unit exceeded its estimated fair value. Accordingly, the Company recognized a non-cash goodwill impairment charge of $ 1,671.0 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. The goodwill impairment charge did not result in any current cash expenditure and did not affect the Company’s cash flows from operating activities or compliance with the financial covenants under the Company’s Credit Agreement. Intangible Assets Components of intangible assets other than goodwill are as follows: June 30, 2026 December 31, 2025 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-life intangibles: Developed technology $ 572,827 $ ( 280,937 ) $ 291,890 $ 574,250 $ ( 266,368 ) $ 307,882 Customer relationships 646,116 ( 185,307 ) 460,809 652,028 ( 176,158 ) 475,870 Capitalized development expenses 981,703 ( 597,502 ) 384,201 921,399 ( 546,111 ) 375,288 Other Intangible Assets 71,893 ( 63,986 ) 7,907 78,007 ( 68,873 ) 9,134 Trademarks 17,769 ( 740 ) 17,029 — — — Total definite-life intangibles 2,290,308 ( 1,128,472 ) 1,161,836 2,225,684 ( 1,057,510 ) 1,168,174 Indefinite-life intangibles: Trademarks — — — 481,234 — 481,234 Total Intangible assets $ 2,290,308 $ ( 1,128,472 ) $ 1,161,836 $ 2,706,918 $ ( 1,057,510 ) $ 1,649,408 The aggregate amortization expense for definite-life intangible assets is reflected in the Condensed Consolidated Statements of Operations as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of subscriptions and licenses $ 295 $ 286 $ 581 $ 571 Amortization of intangible assets 44,570 38,284 87,563 75,637 Total amortization expense $ 44,865 $ 38,570 $ 88,144 $ 76,208 14 Table of Contents Indefinite-Life Intangible Asset Impairment - Transition to a Unified Octave Brand Following the Hexagon shareholders’ approval of the Distribution on April 24, 2026, management initiated the phase out of legacy brands and transition of the Octave business to a unified Octave brand. As such, the Company 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 and had a carrying amount of $ 481.2 million as of December 31, 2025. In completing this assessment, management 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, management performed a quantitative impairment test subsequent t o such approval. The fair value of the trademarks was estimated using the relief-from-royalty method, a form of the income approach. The quantitative impairment test consisted of a comparison of the fair value of the Company’s 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. For each trademark, after the impairment charge was recognized, the adjusted carrying amount of the intangible asset serves as its new accounting basis which will be amortized prospectively over its remaining useful life of two years . During the three months ended June 30, 2026, the Company 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. The indefinite-life impairment charge did not result in any current cash expenditure and did not affect the Company’s cash flows from operating activities or compliance with the financial covenants under the Company’s Credit Agreement. Capitalized Development Expenses For the three months ended June 30, 2026 and 2025, total costs capitalized were $ 29.2 million and $ 34.0 million, respectively. For the six months ended June 30, 2026 and 2025, total costs capitalized were $ 60.3 million and $ 66.4 million, respectively. For the three months ended June 30, 2026 and 2025, the related amortization recorded within Amortization of intangible assets in the Condensed Consolidated Statements of Operations was $ 24.9 million and $ 20.0 million, respectively. For the six months ended June 30, 2026 and 2025, the related amortization recorded within Amortization of intangible assets in the Condensed Consolidated Statements of Operations was $ 50.2 million and $ 39.1 million, respectively. Goodwill and Indefinite-Life Intangible Asset Impairment The Company recorded goodwill and indefinite-life intangible asset impairment charges during the period within Other operating expense (income), net in the Condensed Consolidated Statements of Operations. A summary of components within this account are as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Goodwill impairment $ 1,671,000 $ — $ 1,671,000 $ — Indefinite-life intangible asset impairment 463,660 — 463,660 — Other operating expense (income) 2,326 ( 16,529 ) 6,779 ( 12,976 ) Total Other operating expense (income), net $ 2,136,986 $ ( 16,529 ) $ 2,141,439 $ ( 12,976 ) 15 Table of Contents NOTE 6. OTHER BALANCE SHEET COMPONENTS A summary of certain balance sheet components is as follows: As of June 30, 2026 December 31, 2025 Accounts receivable, net: Trade receivables $ 305,772 $ 340,360 Unbilled receivables 91,427 80,741 Allowance for doubtful accounts ( 21,559 ) ( 20,415 ) Total Accounts receivable, net $ 375,640 $ 400,686 Prepaids and other current assets: Prepaid expenses $ 82,322 $ 82,950 Other current assets 15,978 17,058 Total Prepaids and other current assets $ 98,300 $ 100,008 Other current liabilities: Accrued expenses $ 67,167 $ 55,184 Income tax payable (1) 53,649 — Accrued indirect taxes 9,448 18,904 Restructuring reserve 3,672 13,775 Other current liabilities 3,314 6,419 Other short-term borrowings 22,903 — Total Other current liabilities $ 160,153 $ 94,282 _________________________ (1) In preparation for the spin-off, Hexagon transferred certain assets and liabilities to Octave, including income tax payable balances which were generated by both Octave and Hexagon businesses prior to the Distribution. NOTE 7. DEBT Credit Facilities In connection with the Distribution, on April 27, 2026, the Company entered into a senior unsecured credit agreement (the “Credit Agreement”) with Bank of America, N.A. as Administrative Agent, establishing the following facilities: • a four-year senior unsecured U.S. dollar-denominated term loan facility in a principal amount of $ 350.0 million (the “USD Term Loan”); • a four-year senior unsecured euro-denominated term loan facility in a principal amount of € 150.0 million (the “EUR Term Loan” and, together with the USD Term Loan, the “Term Loans”); and • a five-year senior unsecured revolving credit facility, including two one-year extension options subject to lender consent, in an aggregate principal amount of up to $ 500.0 million (the “Revolving Credit Facility” and, together with the Term Loans, the “Credit Facilities”), including a $ 50.0 million letter of credit sub-limit and a $ 50.0 million swingline loan sub-limit. The Credit Agreement also provides for an incremental facility permitting additional commitments of up to $ 250.0 million, subject to certain conditions. The Term Loans were drawn in full on May 22, 2026. 16 Table of Contents Outstanding Borrowings The Company’s outstanding debt obligations are as follows: As of Stated Interest Rate as of June 30, 2026 Maturity June 30, 2026 December 31, 2025 USD Term Loan 4.9 % 2030 $ 350,000 $ — EUR Term Loan 3.4 % 2030 171,114 — Revolving Credit Facility - USD 4.9 % 2031 73,500 — Revolving Credit Facility - EUR 3.4 % 2031 28,520 — Other short-term borrowings 22,903 — Total principal $ 646,037 $ — Less: Unamortized debt issuance costs 1,850 — Less: Other short-term borrowings 22,903 — Total Long-term debt, net $ 621,284 $ — Amounts outstanding under the Credit Facilities bear interest at variable rates based on Term Secured Overnight Financing Rate (“Term SOFR”) for U.S. dollar-denominated loans and Euro Interbank Offered Rate (“EURIBOR”) 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. For the three and six months ended June 30, 2026, interest expense, including principal interest and amortization of debt issuance costs, was $ 3.4 million and is included in Interest expense, net in the Condensed Consolidated Statements of Operations. Financial Covenant 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. The Credit Agreement also contains affirmative and negative covenants customary for financings of this type, including limitations on liens, indebtedness, fundamental changes and asset dispositions. As of June 30, 2026, the Company was in compliance with all covenants under the Credit Agreement. Fair Value The Company utilized Level 2 inputs, as defined in the ASC 820 fair value hierarchy, to measure the fair value of the Long-term debt, which, as of June 30, 2026 was $ 621.2 million. Management’s fair value estimates were based on quoted benchmark interest rates (Term SOFR and EURIBOR) plus a market-based credit spread consistent with the Company’s credit profile and observable market data for comparable borrowers. 17 Table of Contents NOTE 8. LEASES The Company’s operating lease portfolio includes office facilities and automobiles. The majority of the Company’s leases have remaining lease terms of one year to 10 years, some of which include options to extend the leases for five years or more. A portion of the Company’s real estate leases is subject to annual changes in the Consumer Price Index (“CPI”). The changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments is incurred. For the three months ended June 30, 2026 and 2025, operating lease expense, which includes immaterial amounts of short-term leases and variable lease costs, was $ 4.9 million and $ 5.2 million, respectively. For the six months ended June 30, 2026 and 2025, operating lease expense, which includes immaterial amounts of short-term leases and variable lease costs, was $ 9.5 million and $ 10.0 million, respectively. Lease term and discount rate information related to operating leases are as follows: As of June 30, 2026 December 31, 2025 Weighted-average remaining lease term (in years) 7.2 7.2 Weighted-average discount rate 5.1 % 4.0 % Supplemental cash flow information related to operating leases is as follows: Six Months Ended June 30, 2026 2025 Cash paid for amounts included in operating lease liabilities $ 11,193 $ 10,840 Right-of-use assets obtained in exchange for operating lease obligations $ 17,594 $ 5,634 NOTE 9. EMPLOYEE BENEFIT PLANS Periods Prior to the Distribution Prior to the Distribution, the Company’s employees participated in Hexagon's equity compensation plans. All awards granted under these plans were based on Hexagon's ordinary shares. As such, stock-based compensation expense was allocated to the Company based upon the portion of Hexagon's equity compensation plans in which the Company's employees participated. These amounts are not necessarily indicative of future stock-based compensation expense and do not reflect what the Company would have experienced as an independent company for the periods presented prior to the Distribution. Stock-based Compensation Compensation cost recognized in the Condensed Consolidated Statements of Operations pertaining to stock-based compensation arrangements is as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenue $ 288 $ 269 $ 602 $ 558 Sales and marketing 985 1,068 2,055 2,237 General and administrative 1,281 1,249 2,655 2,580 Research and development 667 687 1,391 1,427 Total stock-based compensation expense $ 3,221 $ 3,273 $ 6,703 $ 6,802 18 Table of Contents Executive Annual Incentive Plan On May 20, 2026, the Compensation Committee approved and adopted the Octave Intelligence plc Executive Annual Incentive Plan (the “ Incentive Plan”), effective as of January 1, 2026. The Incentive Plan provides participants, including the Company’s named executive officers, with the opportunity to earn annual cash incentive awards, as determined by the Compensation Committee. Under the Incentive Plan, the Compensation Committee will establish individual target awards and performance goals for each performance period. Awards are contingent upon the achievement of the applicable performance goals established by the Compensation Committee and may be adjusted, reduced or increased in the Compensation Committee’s discretion, subject to the terms of the Incentive Plan. Long-term Incentive Plan On April 27, 2026, the Company’s shareholder approved the Octave Intelligence plc Long-Term Incentive Plan (the "2026 Plan"), which the Board of Directors subsequently approved on May 6, 2026. The 2026 Plan provides eligible participants, including the Company’s employees, non-employee directors and consultants, with the opportunity to receive equity-based and cash-based awards, as determined by the Compensation Committee. Under the 2026 Plan, the Compensation Committee may grant share options, share appreciation rights, restricted shares, restricted share units, dividend equivalent rights and other share-based or cash-based awards, in each case in respect of the Company’s Class B Ordinary Shares and subject to the vesting, performance and other terms and conditions established in the applicable award agreement. A total of up to 18,308,160 Class B Ordinary Shares is reserved for issuance under the 2026 Plan, subject to equitable adjustment in the event of certain changes in the Company’s capitalization. Employee Share Purchase Plan On April 27, 2026, the Company’s shareholder approved the Octave Intelligence plc Employee Share Purchase Plan (the “ESPP”), which the Board of Directors subsequently approved on May 6, 2026. The ESPP allows eligible employees to purchase Class B Ordinary Shares through payroll deductions of up to 15 % of eligible pay. Shares may be purchased on the last trading day of each six-month offering period at 85 % of the lower of (i) the share price on the first trading day of the offering period and (ii) the share price on the purchase date. A total of up to 2,684,377 Class B Ordinary Shares is reserved for issuance under the ESPP, subject to equitable adjustment in the event of certain changes in the Company’s capitalization. Defined Contribution Plans Certain employees of the Company participate in various defined contribution plans. For the three months ended June 30, 2026 and 2025, defined contribution plan costs were $ 8.5 million and $ 8.7 million, respectively. For the six months ended June 30, 2026 and 2025, defined contribution plan costs were $ 15.7 million and $ 18.1 million, respectively. 19 Table of Contents NOTE 10. INCOME TAXES Provision (Benefit) for Income Taxes The Provision (benefit) for income taxes for interim periods is calculated using an estimate of the annual effective income tax rate for the full year to be applied to the respective interim period, taking into account year-to-date results and projected full year results as well as separate consideration for the effect of significant, infrequent or unusual items. Estimating the Provision (benefit) for income taxes involves a significant amount of management judgment regarding interpretation of relevant facts and laws in the jurisdictions in which the Company operates. Future changes in applicable laws, projected levels of taxable income and tax planning could change the effective tax rate and tax balances recorded by the Company. In addition, tax authorities periodically review income tax returns filed by the Company and can raise issues regarding its filing positions, timing and amount of income or deductions, and the allocation of income among the jurisdictions in which the Company operates. Changes in any of these estimates could have a material impact on the Company’s Provision (benefit) for income taxes. For the three months ended June 30, 2026 and 2025, the effective tax rate wa s 5 % and 22 %, respectively. For the six months ended June 30, 2026 and 2025, the effective tax rate was 4 % and 21 %, respectively. The difference between the effective tax rate and the statutory tax rate primarily relates 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. Tax Legislation In July 2025, Public Law 119-21, commonly referred to as the One Big Beautiful Bill Act (“OBBBA”), was enacted in the United States. The OBBBA introduces several significant changes, including the permanent extension and modification of certain expiring provisions of the Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions taking effect in tax year 2025 and others phased in through 2027. There were no material impacts of this legislation on the Company's Condensed Consolidated Financial Statements to date; however, management will continue to evaluate the full impact of these legislative changes as more guidance becomes available. Other Items The Company is currently under examination by the Internal Revenue Service (the “IRS”) for the years 2014 through 2020. In May 2026, the Company received draft notices of proposed adjustment (“NOPA”) from the IRS for the years 2019 and 2020, which relate primarily to tax method changes, net operating loss carryback claims, and Base Erosion and Anti-Abuse Tax (BEAT) liability on sales-based royalties. In June 2026, the Company received a final Revenue Agent Report (“RAR”) which assessed an adjustment to the refund requested of $ 31.0 million. The Company disagrees with the final assessment, has informed the IRS audit team of its intent to contest the RAR, and has been in communication with its advisors to begin the rebuttal process. This matter is subject to an agreed-upon cost-sharing arrangement with Hexagon pursuant to the Tax Disaffiliation Agreement entered into in connection with the Distribution. During the second quarter of 2026, the Company identified an error in the calculation of the income tax provision, including the split between current and deferred income taxes. Management determined the error was not material to any previously issued or current period financial statements. Accordingly, the Company recorded a correction in the current quarter to Deferred tax liabilities of $ 33.4 million with a corresponding offset in Net transfers (to) from Hexagon in the Condensed Consolidated Statements of Equity. Supplemental cash flow information related to taxes is as follows: Six Months Ended June 30, 2026 2025 Income taxes paid, net of refunds $ 16,705 $ 1,712 20 Table of Contents NOTE 11. RESTRUCTURING CHARGES From time to time, the Company has initiated various restructuring plans in an effort to better align its resources with its business strategy. For the three and six months ended June 30, 2026 and 2025, the charges incurred were primarily comprised of severance payments and termination benefits related to headcount reductions and are included in Other operating expense (income), net in the Condensed Consolidated Statements of Operations. Activities resulting from restructuring plans are as follows: Balance as of December 31, 2024 $ 6,764 Charges 4,040 Utilization ( 5,015 ) Balance as of June 30, 2025 $ 5,789 Balance as of December 31, 2025 $ 13,775 Charges 5,352 Utilization ( 15,455 ) Balance as of June 30, 2026 $ 3,672 All liabilities for restructuring charges under these plans are included in Other current liabilities in the Condensed Consolidated Balance Sheets as of June 30, 2026 as the Company expects to make cash payments to settle most of these liabilities throughout 2026. NOTE 12. COMMITMENTS AND CONTINGENCIES The Company is subject to routine legal proceedings, as well as demands, claims and threatened litigation that arise in the normal course of the business. The ultimate outcome of any litigation is often uncertain and unfavorable outcomes could have a negative impact on the results of operations and financial condition. The Company regularly reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount or the range of loss can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the Company’s judgments using the best information available at the time. Actions currently pending are in various stages and no material judgments or decisions have been rendered by hearing boards or courts in connection with such actions. The Company does not believe the outcome of these matters, individually or in the aggregate, will have a material effect on the Condensed Consolidated Financial Statements. NOTE 13. RELATED PARTY TRANSACTIONS Allocation of Corporate Expenses Prior to the Distribution, the Company's Condensed Consolidated Statements of Operations included expense allocations for certain corporate functions and support services provided by Hexagon on a centralized basis, including accounting and financial reporting, treasury, tax, legal, human resources, information technology, and other shared services. These expenses were allocated to the Company based on direct usage when specifically identifiable, with the remainder allocated on a pro rata basis of revenue of the Company and Hexagon. Management considers these allocations to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during the periods presented; however, these allocations may not be indicative of the actual expenses that would have been incurred had the Company been a standalone company. All such amounts have been deemed to have been incurred and settled in the period in which the costs were recorded and are included within Net investment by Hexagon on the Condensed Consolidated Balance Sheets. 21 Table of Contents For the three months ended June 30, 2026 and 2025, allocations of general corporate expenses were $ 0.9 million and $ 2.7 million, respectively. For the six months ended June 30, 2026 and 2025, allocations of general corporate expenses were $ 2.6 million and $ 5.3 million, respectively. Cash Payment to Hexagon On May 22, 2026, in connection with the Distribution, the Company made a cash payment of $ 625.0 million to Hexagon, funded with proceeds from the Credit Facilities. Net Investment by Hexagon Prior to the Distribution, Net investment by Hexagon in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Equity represented Hexagon's historical investment in the Company, the accumulated net earnings after taxes, and the net effect of transactions with and allocations from Hexagon. As a result of the Distribution, Net investment by Hexagon in the Condensed Consolidated Balance Sheets was settled on May 22, 2026. Accordingly, there was no balance in Net investment by Hexagon as of June 30, 2026. Related Party Sales One or more members of the Company’s Board of Directors is an executive officer of an entity whose parent company also controls certain customers of the Company. Any such Director does not control, and is not a director or executive officer of any entity that controls, any of those customers. The Company believes sales to those customers are and have been conducted in the ordinary course of business and on arm’s-length terms. NOTE 14. EARNINGS PER SHARE On May 22, 2026, the Distribution date, 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 shares, each with a par value of $ 0.01 per share, were distributed to Hexagon shareholders of record as of May 22, 2026, the Record Date. This share amount is utilized for the calculation of basic and diluted earnings per share for all periods presented prior to the Distribution. For the three and six months ended June 30, 2026 and 2025, these shares are treated as issued and outstanding for purposes of calculating historical earnings per share. Basic and diluted earnings per share are the same for Octave Class A Ordinary Shares and Octave Class B Ordinary Shares as both rank pari passu in all respects except for voting rights. No Octave equity awards were outstanding during any period presented; accordingly, basic and diluted earnings per share are the same for all periods presented. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income (loss) $ ( 1,970,678 ) $ 75,168 $ ( 1,923,297 ) $ 134,654 Weighted average ordinary shares outstanding - basic and diluted 268,438 268,438 268,438 268,438 Earnings per share - basic and diluted $ ( 7.34 ) $ 0.28 $ ( 7.16 ) $ 0.50 22 Table of Contents NOTE 15. SUBSEQUENT EVENTS Sale Lease-back Transaction On April 21, 2026, the Company became bound to effect a sale-leaseback transaction pursuant to which it will sell its corporate headquarters located in Madison, Alabama, which serves as Octave’s principal executive offices, for gross proceeds of approximately $ 57.3 million subject to customary closing procedures. As of June 30, 2026, the assets associated with this transaction were classified as Property and equipment held for sale in the Condensed Consolidated Balance Sheets. The sale closed on July 1, 2026, and concurrently with the closing of the sale, Octave entered into a lease agreement with the third-party purchaser that allows Octave to continue to use a portion of the facilities. While the accounting treatment for this transaction has not been finalized, management expects to record a gain on sale of approximately $ 26.4 million during the third quarter of this year. The Company utilized the gross proceeds from this transaction to repay borrowings under the Revolving Credit Facility. Capital Reduction On July 23, 2026, the High Court of Ireland approved the capital reduction of the Company's share capital (which includes share premium) in an amount of $ 6.0 billion (the "Capital Reduction"). The Capital Reduction establishes distributable reserves under the Irish Companies Act, which are a prerequisite for the Company to effect share repurchases, pay dividends, or make other distributions to shareholders. No share repurchase program or dividend has been authorized by the Board of Directors as of the date of this filing. 23 Table of Contents