What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 134 added, 60 removed, 143 unchanged (58% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this quarterly report on Form 10‑Q for the quarter ended March 31, 2025 (this “Quarterly Report”).

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, such statements are subject to the “safe harbor” created by those sections and involve risks and uncertainties.

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Each business unit has a business unit manager, who is responsible for achieving targeted financial and operational results.

Our focus is on maintaining our existing customers, expanding their utilization of our products and services, growing our business in the emerging technologies markets and growth through business acquisitions.

When analyzing changes in the Results of Operations section below, we define our base business as our existing operations plus operations of an acquired business once it has been owned for a full four quarters after the date of acquisition.

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Growth in Fire Safety

need for higher quantity of retardant use per acre and thereby necessitating an increase of the airtanker capacity.

We believe that our Fire Safety segment benefits from several secular growth drivers, including increasing fire severity, as measured by higher acres burned, longer fire seasons and a growing wildland urban interface resulting in a need for higher quantity of retardant use per acre and thereby necessitating an increase of the airtanker capacity.

We believe that these trends are prevalent in North America, as well as globally, and we expect these trends to continue and drive growth in demand for fire retardant products.

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Treating these areas ahead of the fire season can potentially stop ignitions from equipment failures or sparks.

We have invested and intend to continue investing in the expansion of our fire safety business through acquisitions in order to further grow our global customer base.

Weather Conditions and Climate Trends

Our business is highly dependent on the needs of government agencies to suppress fires.

As such, our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year.

Our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year.

Historically, sales of our products have been higher in the summer season in the northern hemisphere of each fiscal year due to weather patterns which are generally correlated to a higher prevalence of wildfires.

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Additionally, amid broader volatility in the global economy, certain raw materials and components used in our manufacturing processes may be subject to the recently announced tariffs on imported goods by the United States, Canada, and other countries.

However, tariffs have not had, and we do not currently expect tariffs to have, a material impact on our consolidated financial statements, as substantially all of the Company’s products sold in the United States are supported by domestic manufacturing capabilities.

However, tariffs have not had, and we do not currently expect tariffs to have, a material impact on our financial position or results of operations, as substantially all of the Company’s products sold in the United States are supported by domestic manufacturing capabilities.

The Company prioritizes sourcing raw materials domestically and continues to maintain alternative supply sources.

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Results of Operations

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

The following table sets forth our results of operations for each of the periods indicated (in thousands):

Three Months Ended March 31, Change

Three Months Ended June 30, Change

2025 2024 $ %

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Total operating expenses 127,722 28,249 99,473 352 %

Operating (loss) income (26,226) 45,018 (71,244) (158 %)

Other expense (income):

Interest expense, net 9,930 10,590 (660) (6 %)

Foreign currency (gain) loss (2,096) 224 (2,320) (1036 %)

Other (income) expense, net (212) 74 (286) (386 %)

Total other expense, net 7,622 10,888 (3,266) (30 %)

(Loss) income before income taxes (33,848) 34,130 (67,978) (199 %)

Income tax benefit (expense) 1,687 (12,480) 14,167 (114 %)

Net (loss) income $ (32,161) $ 21,650 $ (53,811) (249 %)

Net sales increased by $35.4 million for the three months ended June 30, 2025, compared to the same period in 2024.

Net sales in the Fire Safety segment increased by $21.7 million, representing higher fire retardant sales of $19.0 million and higher fire suppressant sales of $2.7 million.

Fire retardant sales increased $16.0 million in North America and increased $3.0 million in other geographies.

The increase in U.S.

fire retardant sales was driven by a return to normalized fire activity during the three months ended June 30, 2025, as compared to mild fire activity during the three months ended June 30, 2024.

Net sales in the Specialty Products segment increased $13.7 million, including a $9.3 million increase in revenue due to recently acquired businesses, and a $4.4 million increase in the base business.

The Company considers that revenue attributable to base business includes revenue from an acquired business that has been owned for a full four quarters after the date of acquisition.

Cost of Goods Sold.

Cost of goods sold increased $7.1 million for the three months ended June 30, 2025 compared to the same period in 2024.

The decrease in the Fire Safety segment of $0.7 million was primarily due to a $2.0 million decrease in material, manufacturing and freight costs offset by a $1.3 million increase in personnel related expenses.

The $7.8 million increase in the Specialty Products segment was primarily due to $6.1 million from recently acquired businesses.

Selling, General and Administrative Expense.

Selling, general and administrative expense increased by $2.1 million for the three months ended June 30, 2025 compared to the same period in 2024.

The increase was primarily due to a $1.4 million increase in personnel related and stock-based compensation expenses.

Founder Advisory Fees - related party.

Founder advisory fees - related party represents the change in the fair value of the liability-classified Fixed Annual Advisory Amount and Variable Annual Advisory Amount (collectively, the “Annual Advisory Amounts”).

The increase in the fair value of the Annual Advisory Amounts for the three months ended June 30, 2025 of $96.9 million was primarily due to an increase in the Company’s average price per share from $9.67 at March 31, 2025 to $13.62 as of June 30, 2025.

The increase in the fair value of the Annual Advisory Amount for the three

months ended June 30, 2024 of $0.6 million was primarily due to an increase in the average price per share from $6.81 as of March 31, 2024, to $7.75 as of June 30, 2024.

Income Tax Benefit (Expense) .

Income tax benefit was $1.7 million for the three months ended June 30, 2025, compared to income tax expense of $12.5 million in the same period in 2024.

The change is primarily due to changes in earnings in jurisdictions that were not covered by a valuation allowance and the impact of non-deductible compensation and accrued withholding taxes on the annualized effective tax rate.

Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

The following table sets forth our results of operations for each of the periods indicated (in thousands):

Six Months Ended June 30, Change

2025 2024 $ %

Net sales $ 234,669 $ 186,320 $ 48,349 26 %

Cost of goods sold 105,020 92,351 12,669 14 %

Gross profit 129,649 93,969 35,680 38 %

Operating expenses

Selling, general and administrative expense 32,266 27,368 4,898 18 %

Amortization expense 28,703 27,526 1,177 4 %

Founders advisory fees - related party 16,270 68,921 (52,651) (76 %)

Other operating expense 829 — 829 — %

Total operating expenses 78,068 123,815 (45,747) (37 %)

Operating income (loss) 51,581 (29,846) 81,427 (273 %)

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Income (loss) before income taxes 35,331 (52,702) 88,033 (167 %)

Income tax (expense) benefit (12,493) 4,274 (16,767) (392 %)

Income tax expense (10,806) (8,206) (2,600) 32 %

Net income (loss) $ 24,525 $ (60,908) $ 85,433 (140 %)

Net sales increased by $13.0 million for the three months ended March 31, 2025, compared to the same period in 2024.

Net sales increased by $48.3 million for the six months ended June 30, 2025, compared to the same period in 2024.

Net sales in the Fire Safety segment increased by $33.7 million, representing higher fire retardant sales of $36.5 million, offset by lower fire suppressant sales of $2.8 million.

Fire retardant sales increased $30.2 million in North America and $6.3 million in other geographies.

The increase in North America fire retardant sales was driven by above average fire activity in multiple states, most notably in California, during the three months ended March 31, 2025.

Fire suppressant sales decreased $7.0 million in North America offset by $1.5 million increase in other geographies.

A significant launch of our Suppressants products occurred in the North American market in the first quarter of 2024 and the same level of sales did not repeat as no comparable product launch occurred in the first quarter of 2025.

Net sales in the Specialty Products segment increased $1.0 million, including a $7.5 million increase in revenue due to a recently acquired business, offset by a $6.5 million decrease in the base business due to unplanned plant downtime.

The increase in U.S.

fire retardant sales was driven by an increase in fire activity during the six months ended June 30, 2025, as compared to mild fire activity during the six months ended June 30, 2024.

Net sales in the Specialty Products segment increased $14.6 million, including a $16.9 million increase in revenue due to recently acquired businesses, offset by a $2.3 million decrease in the base business due to unplanned plant downtime.

The Company considers that revenue attributable to base business includes revenue from an acquired business that has been owned for a full four quarters after the date of acquisition.

Cost of Goods Sold.

Cost of goods sold increased $5.5 million for the three months ended March 31, 2025 compared to the same period in 2024.

The increase in the Fire Safety segment of $1.6 million was primarily due to a $0.4 million increase in material, manufacturing and freight costs and a $1.2 million increase in personnel related expenses, each as a result of increased sales.

The $3.9 million increase in the Specialty Products segment was primarily due to a $4.9 million increase from a recently acquired business, offset by a decrease in base business due to unplanned plant downtime.

Cost of goods sold increased $12.7 million for the six months ended June 30, 2025 compared to the same period in 2024.

The increase in the Fire Safety segment of $0.9 million was primarily due to a $2.4 million increase in personnel related expenses, offset by a $1.5 million decrease in material, manufacturing and freight costs.

The $11.8 million increase in the Specialty Products segment was primarily due to $11.0 million from recently acquired businesses.

Selling, General and Administrative Expense.

Selling, general and administrative expense increased by $2.8 million for the three months ended March 31, 2025 compared to the same period in 2024.

The increase was primarily due to a $3.4 million increase in personnel related and share-based compensation expenses, offset by a $0.6 million decrease in professional fees, and other costs.

Selling, general and administrative expense increased by $4.9 million for the six months ended June 30, 2025 compared to the same period in 2024.

The increase was primarily due to a $4.8 million increase in personnel related and stock-based compensation expenses.

Founder Advisory Fees - related party.

The decrease in the fair value of the Annual Advisory Amounts for the three months ended

March 31, 2025 of $80.6 million was primarily due to a decrease in the Company’s average price per share from $12.85 at December 31, 2024 to $9.67 as of March 31, 2025.

The increase in the fair value of the Annual Advisory Amount for the three months ended March 31, 2024 of $68.3 million was primarily due to an increase in the average price per share from $4.51 as of December 31, 2023, to $6.81 as of March 31, 2024.

The increase in the fair value of the Annual Advisory Amounts for the six months ended June 30, 2025 of $16.3 million was primarily due to an increase in the Company’s average price per share from $12.85 at December 31, 2024 to $13.62 as of June 30, 2025.

The increase in the fair value of the Annual Advisory Amount for the six months ended June 30, 2024 of $68.9 million was primarily due to an increase in the average price per share from $4.51 as of December 31, 2023, to $7.75 as of June 30, 2024.

Foreign Currency (gain) loss.

Foreign currency gain of $3.3 million for the six months ended June 30, 2025 reflects weakening of the U.S.

dollar, primarily against the Euro.

Foreign currency loss of $1.5 million for the six months ended June 30, 2024 reflects strengthening of the U.S.

dollar, primarily against the Euro.

Income Tax Expense.

Income tax expense increased by $16.8 million for the three months ended March 31, 2025 compared to the same period in 2024.

The increase is due primarily to changes in earnings in certain jurisdictions.

Income tax expense was $10.8 million for the six months ended June 30, 2025, compared to income tax expense of $8.2 million in the same period in 2024.

Business Segments

We use segment net sales and segment adjusted earnings before interest, taxes, depreciation and amortization (“Segment Adjusted EBITDA”) to evaluate operating performance by segment, for business planning purposes and to allocate resources.

The following tables provide information for our net sales and Segment Adjusted EBITDA (in thousands) for the three months ended March 31, 2025 compared to the same periods in 2024:

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

Fire Safety Specialty Products Fire Safety Specialty Products

Segment Adjusted EBITDA is defined as income (loss) before income taxes plus net interest and other financing expenses, and depreciation and amortization, adjusted on a consistent basis for certain non-recurring, unusual or non-operational items.

These items include (i) restructuring and transaction related costs (ii) founder advisory fee expenses, (iii) stock-based compensation expense and (iv) foreign currency loss (gain).

We use Segment Adjusted EBITDA to evaluate operating performance by segment for business planning purposes and to allocate resources.

The following tables provide information for our net sales and Segment Adjusted EBITDA (in thousands) for the three and six months ended June 30, 2025 compared to the same periods in 2024:

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

Fire Safety Specialty Products Total Fire Safety Specialty Products Total

Net sales $ 120,284 $ 42,355 $ 162,639 $ 98,538 $ 28,738 $ 127,276

Segment Adjusted EBITDA $ 77,659 $ 13,679 $ 91,338 $ 55,639 $ 9,269 $ 64,908

Adjusted EBITDA for our Fire Safety segment increased by $10.3 million during the three months ended March 31, 2025 compared with the same period in 2024.

Adjusted EBITDA for our Fire Safety segment increased by $22.0 million during the three months ended June 30, 2025 compared with the same period in 2024.

The increase was primarily due to higher net sales, as described above.

Adjusted EBITDA for our Specialty Products segment decreased by $4.4 million during the three months ended March 31, 2025 compared with the same period in 2024.

The decrease was primarily due to higher cost of goods sold, as described above.

Adjusted EBITDA for our Specialty Products segment increased by $4.4 million during the three months ended June 30, 2025 compared with the same period in 2024.

The increase was primarily due to higher net sales, as described above.

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Fire Safety Specialty Products Total Fire Safety Specialty Products Total

Net sales $ 157,447 $ 77,222 $ 234,669 $ 123,693 $ 62,627 $ 186,320

Segment Adjusted EBITDA $ 87,744 $ 21,677 $ 109,421 $ 55,398 $ 21,646 $ 77,044

Adjusted EBITDA for our Fire Safety segment increased by $32.3 million during the six months ended June 30, 2025 compared with the same period in 2024.

The increase was primarily due to higher net sales, as described above.

Adjusted EBITDA for our Specialty Products segment was relatively flat during the six months ended June 30, 2025 compared with the same period in 2024 for the reasons described above.

The following table provides a reconciliation of financial measures that are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) to Non-GAAP measures.

The Company believes that these non-GAAP financial measures are useful to investors because they provide investors with a better understanding of the Company’s past financial performance and future results.

The Company’s management uses

these non-GAAP financial measures when it internally evaluates the performance of its business and makes operating decisions, including internal operating budgeting, performance measurement, and discretionary compensation.

Segment Adjusted EBITDA should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with U.S.

GAAP (in thousands).

(Unaudited) Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

(Unaudited) Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

Fire Safety Specialty

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Products Total

(Loss) income before income taxes $ (27,068) $ (6,780) $ (33,848) $ 30,377 $ 3,753 $ 34,130

Depreciation and amortization 13,620 4,304 17,924 12,798 3,561 16,359

Interest and financing expense 6,180 3,750 9,930 9,897 693 10,590

Founders advisory fees - related party 83,319 13,564 96,883 507 81 588

Non-recurring expenses (1)

123 184 307 14 9 23

Stock-based compensation expense 2,007 231 2,238 2,067 927 2,994

Foreign currency (gain) loss (522) (1,574) (2,096) (21) 245 224

Segment Adjusted EBITDA $ 77,659 $ 13,679 $ 91,338 $ 55,639 $ 9,269 $ 64,908

(1) For the three months ended June 30, 2025, $0.2 million was related to acquisition costs and $0.1 million was related to other non-recurring costs.

(Unaudited) Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Fire Safety Specialty

Products Total Fire Safety Specialty

Products Total

Income (loss) before income taxes $ 31,810 $ 3,521 $ 35,331 $ (54,034) $ 1,332 $ (52,702)

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357 1,418 1,775 389 174 563

Share-based compensation expense 1,576 1,095 2,671 1,449 293 1,742

Foreign currency loss (gain) 5 (1,164) (1,159) 576 717 1,293

Stock-based compensation expense 3,583 1,326 4,909 3,516 1,220 4,736

Foreign currency (gain) loss (517) (2,738) (3,255) 555 962 1,517

Segment Adjusted EBITDA $ 87,744 $ 21,677 $ 109,421 $ 55,398 $ 21,646 $ 77,044

(1) For the three months ended March 31, 2025, $0.6 million was related to acquisition costs, $0.4 million was related to the Redomiciliation Transaction and $0.5 million was related to restructuring and other non-recurring costs.

For the three months ended March 31, 2024, $0.5 million was related to restructuring and other non-recurring costs.

(1) For the six months ended June 30, 2025, $0.8 million was related to acquisition costs, $0.4 million was related to the Redomiciliation Transaction and $0.6 million was related to restructuring and other non-recurring costs.

For the six months ended June 30, 2024, $0.5 million was related to the Redomiciliation Transaction and other non-recurring Luxembourg related costs, and $0.1 million was related to other non-recurring costs.

Liquidity and Capital Resources

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However, future cash flows are subject to a number of variables, including the length and severity of the fire season, growth of the wildland urban interface and the availability of air tanker capacity, and higher costs from inflation, all of which could negatively impact revenues, earnings and cash flows, and potentially our liquidity if we do not moderate our expenditures accordingly.

We believe that our existing cash and cash equivalents of approximately $200 million, net cash flows generated from operations and availability under the Revolving Credit Facility as of March 31, 2025 will be sufficient to meet our

current capital expenditures, working capital, and debt service requirements for at least 12 months from the filing date of this Quarterly Report.

As of March 31, 2025, we expect our remaining fiscal year 2025 capital expenditure budget to cover both our maintenance and growth capital expenditures.

We believe that our existing cash and cash equivalents of $140.7 million, net cash flows generated from operations and availability under the Revolving Credit Facility as of June 30, 2025 will be sufficient to meet our current capital expenditures, working capital, and debt service requirements for at least 12 months from the filing date of this Quarterly Report.

As of June 30, 2025, we expect our remaining fiscal year 2025 capital expenditure budget to cover both our maintenance and growth capital expenditures.

We may also utilize borrowings under other various financing sources available to us, including the issuance of equity and/or debt securities through public offerings or private placements, to fund our acquisitions, the Annual Advisory Amounts and long-term liquidity needs.

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The applicable margin is 3.25% in the case of Term SOFR-based loans and 2.25% in the case of base rate-based loans, with two step downs of 0.25% each based upon the achievement of certain leverage ratios.

As of March 31, 2025, the Company did not have any outstanding borrowings under the Revolving Credit Facility and was in compliance with all covenants.

As of June 30, 2025, the Company did not have any outstanding borrowings under the Revolving Credit Facility and was in compliance with all covenants.

On November 9, 2021, a wholly owned subsidiary of the Company assumed $675.0 million principal amount of 5.00% senior secured notes due October 30, 2029 (the “Senior Notes”) , under an indenture dated as of October 22, 2021 (“Indenture”).

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Share Repurchase Plan

Under the Share Repurchase Plan, we are authorized to repurchase, from time-to-time, shares of our Common Stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by the securities laws and as determined by management at such time and in such amounts as management may decide.

Under our share repurchase plan (the “Share Repurchase Plan”), we are authorized to repurchase, from time-to-time, shares of our Common Stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by the securities laws and as determined by management at such time and in such amounts as management may decide.

The Share Repurchase Plan does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time.

The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions.

On February 21, 2024, the Board re-established the limit for Common Stock repurchases at $100.0 million.

The approximate dollar value of shares that may yet be repurchased under the Share Repurchase Plan was $89.0 million as of

March 31, 2025.

We repurchased 888,454 and 2,969,357 shares during the three months ended March 31, 2025 and 2024, respectively.

On May 7, 2025, the Board re-established the limit for Common Stock repurchases at $100.0 million.

The approximate dollar value of shares that may yet be repurchased under the Share Repurchase Plan was $78.3 million as of June 30, 2025.

We repurchased 2,886,221 and 3,774,675 shares during the three and six months ended June 30, 2025.

For the comparable period in 2024, we repurchased 18,535 and 2,987,892 shares, respectively.

The repurchased shares were recorded at cost and are being held in treasury.

On August 6, 2025, the Board re-established the limit for Common Stock repurchases at $100.0 million.

The Company expects to periodically re-establish the limit for Common Stock repurchases based on subsequent repurchase activity.

Founder Advisory Agreement

On November 9, 2021, the Company assumed the advisory agreement entered into on December 12, 2019 by EverArc (“Founder Advisory Agreement”) with EverArc Founders, LLC, a Delaware limited liability company (“EverArc Founder Entity”), pursuant to which the EverArc Founder Entity, for the services provided to the Company, including strategic and capital allocation advice, is entitled to receive both a fixed amount (the “Fixed Annual Advisory Amount”) and a variable amount (the “Variable Annual Advisory Amount,” each an “Advisory Amount” and collectively, the “Advisory Amounts”) until the years ending December 31, 2027 and 2031, respectively.

Founder Entity”), pursuant to which the EverArc Founder Entity, for the services provided to the Company, including strategic and capital allocation advice, is entitled to receive both a fixed amount (the “Fixed Annual Advisory Amount”) and a variable amount (the “Variable Annual Advisory Amount,” each an “Advisory Amount” and collectively, the “Advisory Amounts”) until the years ending December 31, 2027 and 2031, respectively.

Under the Founder Advisory Agreement, at the election of the EverArc Founder Entity, at least 50% of the Advisory Amounts will be paid in shares of Common Stock and the remainder in cash.

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On February 18, 2025, the Company issued 1,837,304 shares of Common Stock and paid $6.7 million in cash in satisfaction of the 2024 Fixed Amount.

For additional information about the Founder Advisory Agreement, refer to Note 11, “Stock-Based Compensation” and Note 13, “Related Parties,” in the notes to the condensed consolidated financial statements included in this Quarterly Report .

For additional information about the Founder Advisory Agreement, refer to Note 11, “Stock-Based Compensation,” Note 12 “Fair Value Measurements” and Note 13, “Related Parties,” in the notes to the condensed consolidated financial statements included in this Quarterly Report .

The summary of our cash flows is as follows (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Cash provided by (used in):

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Operating Activities

Net cash provided by o perating activities was $23.7 million and $2.8 million for the three months ended March 31, 2025 and 2024, respectively.

For the three months ended March 31, 2025, the primary components of operating cash flows were net income of $56.7 million, non-cash benefits of $49.6 million and net operating asset reductions of $16.6 million.

For the three months ended March 31, 2024, the primary components of operating cash flows were net loss of $82.6 million, non-cash charges of $86.6 million , and net operating asset investments of $1.2 million .

The net operating asset reduction for the three months ended March 31, 2025 was primarily related to accounts receivable.

Net cash provided by o perating activities was $20.9 million and $11.4 million for the six months ended June 30, 2025 and 2024, respectively.

For the six months ended June 30, 2025, the primary components of operating cash flows were net income of $24.5 million, non-cash charges of $48.9 million and net operating asset investments of $52.5 million.

For the six months ended June 30, 2024, the primary components of operating cash flows were a net loss of $60.9 million, non-cash charges of $110.2 million and net operating asset investments of $37.9 million.

Investing Activities

Cash used in investing activities was $14.8 million and $0.5 million for the three months ended March 31, 2025 and 2024, respectively.

During the three months ended March 31, 2025, we purchased a business for $10.0 million and purchased property and equipment of $4.8 million.

During the three months ended March 31, 2024, we purchased property and equipment of $1.6 million offset by cash received from maturity of Euro denominated certificate of deposit of $1.1 million.

Cash used in investing activities was $42.8 million for the six months ended June 30, 2025.

During the six months ended June 30, 2025, we purchased property and equipment of $17.6 million, purchased intangible assets of $15.2 million, and purchased a business for $10.0 million.

Cash provided by investing activities was $0.2 million for the six months ended June 30, 2024.

During the six months ended June 30, 2024, we received cash from the maturity of Euro denominated certificate of deposit of $5.4 million, offset by the purchase of property and equipment of $5.2 million.

Financing Activities

Cash used in financing activities was $8.4 million and $14.5 million for the three months ended March 31, 2025 and 2024, respectively.

During the quarter ended March 31, 2025, we repurchased shares of outstanding Common Stock for $8.2 million, and made $0.2 million in principal payments on finance lease obligations.

During the three months ended March 31, 2024, we repurchased outstanding Ordinary Shares for $14.3 million and made $0.2 million in principal payments on finance lease obligations.

Cash used in financing activities was $40.6 million and $14.8 million for the six months ended June 30, 2025 and 2024, respectively.

During the six months ended June 30, 2025, we repurchased shares of outstanding Common Stock for $40.4 million, received proceeds from exercises of options of $0.3 million and made $0.5 million in principal payments on

finance lease obligations.

During the six months ended June 30, 2024, we repurchased outstanding Ordinary Shares for $14.4 million and made $0.4 million in principal payments on finance lease obligations.

Critical Accounting Estimates and Policies

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Our significant accounting policies and estimates are consistent with those discussed in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” of our consolidated financial statements included in our 2024 Annual Report filed on Form 10-K with the SEC on February 20, 2025.

Significant estimates made by management in connection with the preparation of the accompanying condensed consolidated financial statements include the useful lives of long-lived and intangible assets, the fair value of financial assets and liabilities, stock options, founder advisory fees and realizability of deferred tax assets.

Significant estimates made by management in connection with the preparation of the accompanying condensed consolidated financial statements include the fair value of purchase consideration and assets acquired and liabilities assumed in a business combination, the useful lives of long-lived assets, the fair value of financial assets and liabilities, indefinite life intangible assets, stock options, and founder advisory fees.

We are not presently aware of any events or circumstances that would require us to update our estimates, assumptions or revise the carrying value of our assets or liabilities.

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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