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Item 2. Management’s Discussion and Analysis

2026-05-06 compared with 2025-10-30 · 159 added, 176 removed, 109 unchanged (75% 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 September 30, 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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Perimeter Solutions, Inc.

(“we,” “us,” “our,” or the “Company”) is a global solutions provider for the Fire Safety and Specialty Products industries.

Approximately 79% of our 2024 annual revenues were derived in the United States, approximately 10% in Europe and approximately 6% in Canada with the remaining approximately 5% spread across various other countries.

(“we,” “us,” “our,” or the “Company”) is a leading provider of industrial products and services that support critical and complex customer missions across a range of niche applications.

Our current operations span firefighting products, lubricant additives, electronic components and highly engineered machinery for the medical device industry.

We develop products that address complex customer challenges where there is little margin for error.

Our offerings are typically a small part of a much broader solution that serves a growing end market.

Our goal is to meet customer needs better than any alternative in every market we serve.

We aim to maximize our organic reinvestment into our business to best serve our customers and to support the rigorous application of our Operational Value Drivers:

seeking out profitable new business, structurally improving operational productivity, and sharing in value creation through value-based pricing.

These Operational Value Drivers are overseen by general managers that operate in our decentralized operating structure.

These managers have full operational autonomy paired with accountability to deliver results for customers and stockholders, with strong alignment between compensation and results.

We believe our Operational Value Drivers maximize our free cash flow.

We then seek to maximize long-term per share equity value through a clear focus on the allocation of our capital as well as the management of our capital structure.

We expect the combination of free cash flow and incremental borrowing capacity generates substantial capital available to allocate.

We believe our capital allocation strategy, which prioritizes first high-return organic reinvestment opportunities, followed by opportunistic share repurchases, and finally the acquisition of new businesses, is a critical factor in achieving Perimeter’s dual purposes:

serving our customers well while delivering private-equity-like stockholder returns.

We conduct our operations globally, with approximately 76% of our 2025 annual revenues derived in the United States, approximately 10% in Europe and approximately 7% in Canada, with the remaining approximately 7% spread across various other countries.

Our long‑term vision is to build a diversified portfolio of high-quality industrial businesses via re-investment in organic growth and further acquisitions.

Whether built organically or acquired, we intend to apply our strategy centered on decentralized management, our Operational Value Drivers, and thoughtful capital allocation to ensure we serve our customers well while delivering on our returns promise to stockholders.

Our business is organized and managed in two reporting segments:

Fire Safety and Specialty Products.

The Fire Safety segment is a formulator and manufacturer of fire management products that help the Company’s customers combat various types of fires, including wildland, structural, flammable liquids and other types of fires.

The Company’s Fire Safety segment also offers specialized equipment and services, typically in conjunction with its fire management products to support firefighting operations.

The Company’s specialized equipment includes air base retardant storage, mixing, and delivery equipment;

The Fire Safety segment is a formulator and manufacturer of fire management products that help our customers combat various types of fires, including wildland, industrial, structural, flammable liquids and other types of fires.

Our Fire Safety segment also offers specialized equipment and services, typically in conjunction with our fire management products to support our customers’ firefighting operations.

Our specialized equipment includes airbase retardant storage, mixing, and delivery equipment;

mobile retardant bases;

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mobile foam equipment;

and equipment that it custom designs and manufactures to meet specific customer needs.

Significant end markets include primarily government-related entities and are dependent on approvals, qualifications, and permits granted by the respective governments and commercial customers around the world.

The Specialty Products segment includes operations that develop, produce and market products for non-fire safety markets.

The Company’s largest end market application for the Specialty Products segment is Phosphorus Pentasulfide (“P 2 S 5 ”) based lubricant additives.

and equipment that we custom design and manufacture to meet specific customer needs.

Our service network can meet the emergency resupply needs of approximately 150 air tanker bases in North America, as well as many other customer locations globally.

The Fire Safety segment is built on the premise of superior technology, exceptional responsiveness to our customers’

needs, and a “never-fail” service network.

The Fire Safety segment sells products to government agencies and commercial customers around the world.

Our Specialty Products segment develops, produces and markets products for non-fire safety markets.

The Specialty Products segment includes Phosphorus Derivatives, Inc., which produces Phosphorus Pentasulfide (“P 2 S 5 ”) based lubricant additives.

P 2 S 5 is also used in pesticide and mining chemicals applications, and emerging electric battery technologies.

The Specialty Products segment also includes Intelligent Manufacturing Solutions (“IMS”), which is a manufacturer of electronic or electro-mechanical components of larger solutions.

IMS has a flexible, vertically integrated production facility centered on its printed circuit board (“PCB”) line that allows it to acquire and produce a variety of product lines across a range of end markets, including large medical systems, communications infrastructure, energy infrastructure, defense systems, and industrial systems, with a substantial focus on aftermarket repair and replacement.

We operate five business units within our two reporting segments.

IMS has a flexible, vertically integrated production facility that allows it to acquire and produce a variety of product lines across a range of end markets, including communications infrastructure, energy infrastructure, defense systems, and industrial systems, with a substantial focus on aftermarket repair and replacement.

The Specialty Products segment also includes Medical Manufacturing Technologies, LLC (“MMT”), which provides highly engineered machinery and associated aftermarket consumables, parts, and services to support the production of complex medical devices as well as select highly engineered industrial and aerospace and defense use cases.

MMT’s capabilities include original equipment manufacturing, including application-specific equipment and automation solutions for medical devices such as complex catheters, guidewires and microcoils, as well as aftermarket parts, services, and consumables.

MMT’s full solution suite encompasses both original machinery and recurring aftermarket parts, services, and consumables.

MMT has a global footprint of manufacturing locations serving approximately 50 countries.

We operate six business units within our two reporting segments.

The business unit structure is meant to promote decentralized execution and accountability, and maintain the geography and product-specific focus and granularity necessary to drive continued improvement in our key operational value drivers.

Our key operational value drivers are profitable new business, pricing our products and services to the value they provide, and continued productivity improvements.

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

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Known Trends and Uncertainties

Growth in Fire Safety

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.

We are also working to grow our fire prevention and protection business, which is primarily focused on expanding use of ground-applications for long-term fire retardant.

This includes use of ground assets in response to active fires (protection), as well as proactive treatments around critical infrastructure and known high-risk areas (prevention).

The protection business expands on our existing aerial support to enhance the ability of customers to effectively fight active fires.

Fire prevention products can be used to prevent fire ignitions and protect property from potential fire danger by providing proactive retardant treatment in high-risk areas such as roadways, and critical infrastructure like electrical utilities and railroads.

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

Fire Safety Segment

The effective prevention, mitigation, and suppression of fires, including wildland, structural, and other types of fires, protects lives, homes and critical infrastructure while reducing harmful air quality levels caused by wildfire smoke and the release of CO₂ emissions into the environment.

Fire Safety products are mission critical and held to the highest quality standards given the extreme cost of failure.

Key trends in the Fire Safety industry include:

• Higher acres burned and longer fire seasons:

The USDA Forest Service data of the last 40 years shows that the acreage burned in the United States has increased over time.

The ten-year trailing average of acres burned in the United States has increased from a ten-year trailing average of 3.3 million acres burned in 1997, to a ten-year trailing average of 7.0 million acres burned in 2025.

fire season is also lengthening on a consistent basis.

According to a 2024 report published by U.S.

Department of Agriculture, the U.S.

fire season is on average 78 days longer than it was in the 1970s.

If acreage burned continues to increase and the fire season continues to lengthen, we expect the demand and usage of fire retardant to increase.

In addition, proactive initial attack strategies by government agencies can drive earlier and more consistent use of fire retardant throughout the fire season.

• Increasing wildland urban interfaces:

Urban development is pushing farther out of cities and into the wilderness for both primary and secondary residences.

As of 2020, the Wildland-Urban Interface (“WUI”) now includes 32% of all homes in the United States although it occupies 9.4% of the land area in the United States.

According to Proceedings of the National Academy of Sciences of the United States of America, when homes are built in the WUI, we expect that there will be more wildfires due to human ignitions, and wildfires that occur will pose a greater risk to lives and homes.

As the WUI expands and the number of homes at risk from wildland fires increases, we expect the use of retardant to protect property and life from threatening wildfires to increase.

• Increasing firefighting aircraft capacity and usage:

The size and capacity of the firefighting aircraft fleet is a key driver of the amount of fire retardant consumed annually because demand for retardant typically outpaces available aircraft capacity, as evidenced by data regarding the inability to fill aerial firefighting requests published by the National Interagency Fire Center.

Since 2010, U.S.

aircraft capacity increased significantly and is expected to further increase.

Increasing air tanker capacity and modernization is a global trend, with more, larger, and more sophisticated tankers being used in various parts of the world.

• Move toward Fluorine Free Firefighting Foams:

There is an accelerating transition in the fire suppression market towards products that do not contain intentionally added Per- and polyfluoroalkyl substances.

We expect Fluorine-Free Foams (“FFF”) to account for a growing percentage of the firefighting foam market over the next several years.

We believe that we are a leader in the FFF market.

Specialty Products Segment

P 2 S 5 is primarily used in the preparation of lubricant additives.

The consumption of lubricant additives is driven by the social and economic trends globally of increased vehicle production and miles driven.

The number of global miles driven has generally increased over time resulting in more engine wear and tear and increased demand for motor oil.

Secondary markets for P 2 S 5 include agricultural applications in the production of intermediates for pesticides and insecticides, flotation chemistry in the mining industry, for certain battery technologies, and for hydraulic and cutting fluids.

IMS demand is primarily driven by recurring aftermarket repair and replacement needs for installed systems across its end markets.

In our MMT business, demand for our machinery, parts, and consumables may be impacted by end user demand for medical procedures involving catheters and guidewires, and new medical device launch cadence by our customers.

Demand for engineered machinery may be impacted by capital investment plans by medical device manufacturers.

Weather Conditions and Climate Trends

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While these actions are designed to offset the impact of inflationary pressures, the Company cannot provide assurance that they will be successful in fully offsetting increased costs resulting from inflationary pressure.

In addition, interest payments for borrowings under the Company’s revolving credit facility are based on variable rates, and any continued increase in interest rates may reduce the Company’s cash flow available for other corporate purposes.

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.

In addition, interest payments for borrowings under the Company’s amended and restated revolving credit facility are based on variable rates, and any continued increase in interest rates may reduce the Company’s cash flow available for other corporate purposes.

Additionally, amid broader volatility in the global economy, certain raw materials and components used in our manufacturing processes may be subject to 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 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.

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Results of Operations

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

Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

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

Three Months Ended September 30, Change

Three Months Ended March 31, Change

2026 2025 $ %

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Gross profit 50,787 28,153 22,634 80 %

Operating expenses

Operating expenses (income):

Selling, general and administrative expense 23,061 16,299 6,762 41 %

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Other operating expense 9,018 561 8,457 1507 %

Total operating expenses 286,456 216,461 69,995 32 %

Operating loss (87,347) (35,239) (52,108) 148 %

Total operating income (21,700) (49,654) 27,954 (56 %)

Operating income 72,487 77,807 (5,320) (7 %)

Other expense (income):

Interest expense, net 24,356 9,644 14,712 153 %

Foreign currency loss (gain) 6 (1,354) 1,360 (100 %)

Foreign currency gain (1,351) (1,159) (192) 17 %

Other (income) expense, net (364) 143 (507) (355 %)

Total other expense, net 22,641 8,628 14,013 162 %

Loss before income taxes (97,150) (44,090) (53,060) 120 %

Income before income taxes 49,846 69,179 (19,333) (28 %)

Income tax benefit (expense) 23,090 (12,493) 35,583 (285 %)

Net loss $ (90,660) $ (89,167) $ (1,493) 2 %

Net sales increased by $27.0 million for the three months ended September 30, 2025, compared to the same period in 2024.

Net sales in the Fire Safety segment increased by $21.5 million, representing higher fire retardant sales of $9.1 million and higher fire suppressant sales of $12.4 million.

Fire retardant sales increased $3.6 million in North America and increased $5.5 million in other geographies.

In the United States, sales of fire retardant products rose despite a decline in total acres burned.

This increase primarily reflected a more proactive initial attack strategy by U.S.

agencies, and by continued successful implementation of the Company’s strategies on profitable new business.

Fire suppressant strength was primarily driven by increased sales to governmental agencies.

Net sales in the Specialty Products segment increased $5.5 million, including a $10.8 million increase in revenue due to recently acquired businesses, offset by a $5.3 million decrease in the base business due to unplanned downtime at our tolling facility in Sauget, Illinois, operated by Flexsys Chemical Company, that primarily serves our P 2 S 5 customers in North America.

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.

Net income $ 72,936 $ 56,686 $ 16,250 29 %

Net sales increased by $53.0 million for the three months ended March 31, 2026, compared to the same period in 2025.

Net sales in the Fire Safety segment increased by $8.3 million, representing higher fire suppressant sales of $13.4 million offset by lower fire retardant sales of $5.1 million.

Fire suppressant sales increased $7.2 million in North America and $6.2 million in other geographies.

Fire retardant sales decreased $7.5 million in North America, offset by an increase of $2.4 million in other geographies.

Net sales in the Specialty Products segment increased $44.7 million, including a $41.4 million increase in revenue due to recently acquired businesses and a $3.3 million increase in base businesses.

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

Cost of Goods Sold.

Cost of goods sold increased $9.1 million for the three months ended September 30, 2025 compared to the same period in 2024.

The increase in the Fire Safety segment of $1.5 million was primarily due to a $1.2 million increase in personnel related expenses.

The $7.6 million increase in the Specialty Products segment was primarily due to $7.4 million from recently acquired businesses.

Cost of goods sold increased $30.4 million for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to recently acquired businesses.

Selling, General and Administrative Expense.

Selling, general and administrative expense increased by $5.0 million for the three months ended September 30, 2025 compared to the same period in 2024.

The increase was primarily due to a $3.3 million increase in stock-based compensation expense.

Selling, general and administrative expense increased by $6.8 million for the three months ended March 31, 2026 compared to the same period in 2025, primarily due to recently acquired businesses.

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 September 30, 2025 of $247.7 million was primarily due to an increase in the Company’s average price per share from

$13.62 as of June 30, 2025 to $21.89 as of September 30, 2025.

The increase in the fair value of the Annual Advisory Amount for the three months ended September 30, 2024 of $184.2 million was primarily due to an increase in the average price per share from $7.75 as of June 30, 2024, to $12.85 as of September 30, 2024.

Income Tax Benefit (Expense) .

Income tax benefit was $6.5 million for the three months ended September 30, 2025, compared to income tax expense of $45.1 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.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

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

Nine Months Ended September 30, Change

2025 2024 $ %

Net sales $ 550,112 $ 474,737 $ 75,375 16 %

Cost of goods sold 221,354 199,546 21,808 11 %

Gross profit 328,758 275,191 53,567 19 %

Operating expenses

Selling, general and administrative expense 55,743 45,888 9,855 21 %

Amortization expense 43,902 41,291 2,611 6 %

Founders advisory fees - related party 263,954 253,097 10,857 4 %

The decrease in the fair value of the Annual Advisory Amounts for the three months ended March 31, 2026 of $76.4 million was primarily due to a decrease in the Company’s average price per share from $27.89 as of December 31, 2025 to $21.93 as of March 31, 2026.

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 as of December 31, 2024, to $9.67 as of March 31, 2025.

Other Operating Expense.

Total operating expenses 364,524 340,276 24,248 7 %

Operating loss (35,766) (65,085) 29,319 (45 %)

Other expense (income):

Other operating expense increased $8.5 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to costs related to the Company’s acquisition of MMT in January 2026.

Interest Expense, net.

Foreign currency (gain) loss (3,249) 163 (3,412) (2093 %)

Other (income) expense, net (142) 252 (394) (156 %)

Total other expense, net 26,053 31,707 (5,654) (18 %)

Loss before income taxes (61,819) (96,792) 34,973 (36 %)

Income tax expense (4,316) (53,283) 48,967 (92 %)

Net loss $ (66,135) $ (150,075) $ 83,940 (56 %)

Net sales increased by $75.4 million for the nine months ended September 30, 2025, compared to the same period in 2024.

Net sales in the Fire Safety segment increased by $55.3 million, representing higher fire retardant sales of $45.6 million and higher fire suppressant sales of $9.7 million.

Fire retardant sales increased $33.8 million in North America and increased $11.8 million in other geographies.

In the United States, sales of fire retardant products rose despite a decline in total acres burned.

This increase primarily reflected a more proactive initial attack strategy by U.S.

agencies, and by continued successful implementation of the Company’s strategies on profitable new business.

Fire suppressant sales increased $5.5 million in North America driven by increased sales to governmental agencies and increased $4.2 million in other geographies.

Net sales in the Specialty Products segment increased $20.1 million, including a $27.7 million increase in revenue due to recently acquired businesses, offset by a $7.6 million decrease in the base business due to unplanned downtime at our tolling facility in Sauget, Illinois, operated by Flexsys Chemical Company, that primarily serves our P 2 S 5 customers in North America.

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 $21.8 million for the nine months ended September 30, 2025 compared to the same period in 2024.

The increase in the Fire Safety segment of $2.4 million was primarily due to a $3.6 million increase in personnel related expenses, offset by a $1.2 million decrease in material, manufacturing and freight costs.

The $19.4 million increase in the Specialty Products segment was primarily due to $18.3 million from recently acquired businesses.

Selling, General and Administrative Expense.

Selling, general and administrative expense increased by $9.9 million for the nine months ended September 30, 2025 compared to the same period in 2024.

The increase was primarily due to a $3.5 million increase in stock-based compensation expense and a $6.9 million increase in other personnel related expenses.

Founder Advisory Fees - related party.

The increase in the fair value of the Annual Advisory Amounts for the nine months ended September 30, 2025 of $264.0 million was primarily due to an increase in the Company’s average price per share from $12.85 as of December 31, 2024 to $21.89 as of September 30, 2025.

The increase in the fair value of the Annual Advisory Amount for the nine months ended September 30, 2024 of $253.1 million was primarily due to an increase in the average price per share from $4.51 as of December 31, 2023, to $12.85 as of September 30, 2024.

Foreign Currency (gain) loss.

Foreign currency gain of $3.2 million for the nine months ended September 30, 2025 reflects weakening of the U.S.

dollar, primarily against the Euro.

Foreign currency loss of $0.2 million for the nine months ended September 30, 2024 reflects strengthening of the U.S.

dollar, primarily against the Euro.

Income Tax Expense.

Income tax expense was $4.3 million for the nine months ended September 30, 2025, compared to income tax expense of $53.3 million in the same period in 2024.

Interest expense, net increased $14.7 million for the three months ended March 31, 2026, compared to the same period in 2025, primarily due to higher average debt outstanding resulting from the Company’s offering of the 2034 Notes in January 2026.

Income Tax Benefit (Expense) .

Income tax benefit was $23.1 million for the three months ended March 31, 2026, compared to income tax expense of $12.5 million for the same period in 2025.

The change is primarily due to increased benefits from stock-based compensation and non-deductible compensation.

Business Segments

Segment Adjusted EBITDA is defined as (loss) income 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, (ii) acquisition related costs, (iii) founder advisory fee expenses, (iv) stock-based compensation expense and (v) foreign currency loss (gain).

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, (ii) acquisition related costs, (iii) founder advisory fee expenses, (iv) stock-based compensation expense, (v) purchase accounting impact and (vi) 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 nine months ended September 30, 2025 compared to the same periods in 2024:

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024

The following tables provide information for our net sales and Segment Adjusted EBITDA (in thousands) for the three months ended March 31, 2026 compared to the same period in 2025:

Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

Fire Safety Specialty

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Segment Adjusted EBITDA $ 18,691 $ 22,468 $ 41,159 $ 10,085 $ 7,998 $ 18,083

Segment Adjusted EBITDA for our Fire Safety segment increased by $19.7 million during the three months ended September 30, 2025 compared with the same period in 2024.

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

Segment Adjusted EBITDA for our Specialty Products segment decreased by $3.8 million during the three months ended September 30, 2025 compared with the same period in 2024 due to the reasons described above.

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Fire Safety Specialty Products Total Fire Safety Specialty Products Total

Net sales $ 430,831 $ 119,281 $ 550,112 $ 375,538 $ 99,199 $ 474,737

Segment Adjusted EBITDA $ 264,954 $ 30,784 $ 295,738 $ 212,877 $ 34,543 $ 247,420

Segment Adjusted EBITDA for our Fire Safety segment increased by $52.1 million during the nine months ended September 30, 2025 compared with the same period in 2024.

Segment Adjusted EBITDA for our Fire Safety segment increased by $8.6 million during the three months ended March 31, 2026 compared with the same period in 2025.

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

Segment Adjusted EBITDA for our Specialty Products segment decreased by $3.8 million during the nine months ended September 30, 2025 compared with the same period in 2024 due to the reasons described above.

Costs grew at a slower pace than revenues due to strong cost control, product mix and fixed costs leverage.

Segment Adjusted EBITDA for our Specialty Products segment increased by $14.5 million during the three months ended March 31, 2026 compared with the same period in 2025.

The increase was primarily due to contributions from recently acquired businesses.

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.

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GAAP (in thousands):

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

(Unaudited) Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

Fire Safety Specialty

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Products Total

Loss before income taxes $ (62,022) $ (35,128) $ (97,150) $ (27,398) $ (16,692) $ (44,090)

Income (loss) before income taxes $ 62,127 $ (12,281) $ 49,846 $ 58,878 $ 10,301 $ 69,179

Depreciation and amortization 14,492 12,647 27,139 12,765 4,128 16,893

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Stock-based compensation expense 716 1,882 2,598 1,576 1,095 2,671

Foreign currency loss (gain) 42 (36) 6 95 (1,449) (1,354)

Segment Adjusted EBITDA $ 177,210 $ 9,107 $ 186,317 $ 157,479 $ 12,897 $ 170,376

(1) For the three months ended September 30, 2025 $0.6 million was related to restructuring and other non-recurring costs.

For the three months ended September 30, 2024, $1.7 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.

(Unaudited) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024

Fire Safety Specialty

Products Total Fire Safety Specialty

Products Total

Loss before income taxes $ (30,212) $ (31,607) $ (61,819) $ (81,432) $ (15,360) $ (96,792)

Depreciation and amortization 40,818 12,792 53,610 38,507 10,708 49,215

Interest and financing expense 18,090 11,354 29,444 29,860 1,432 31,292

Founders advisory fees - related party 227,000 36,954 263,954 217,663 35,434 253,097

Non-recurring expenses (1)

Purchase accounting impact (2)

— 5,590 5,590 — — —

Acquisition costs 98 764 862 — — —

Stock-based compensation expense 8,817 2,611 11,428 5,813 2,235 8,048

Foreign currency (gain) loss (2,351) 1,000 (1,351) 5 (1,164) (1,159)

Segment Adjusted EBITDA $ 18,691 $ 22,468 $ 41,159 $ 10,085 $ 7,998 $ 18,083

(1) For the nine months ended September 30, 2025 $0.4 million was related to the Redomiciliation Transaction and $1.1 million was related to restructuring and other non-recurring costs.

For the nine months ended September 30, 2024, $2.2 million was related to the Redomiciliation Transaction and other non-recurring Luxembourg related costs and $0.2 million was related to other non-recurring costs.

(1) For the three months ended March 31, 2026, $0.3 million was related to litigation costs arising from a contractual dispute regarding control of the P 2 S 5 facility, which is currently operated by Flexsys Chemical Company, and $0.1 million was related to restructuring and other non-recurring costs.

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

(2) For the three months ended March 31, 2026, $5.6 million was primarily related to the impact of purchase accounting on the cost of inventory sold.

The inventory acquired received a purchase accounting step-up in basis.

Liquidity and Capital Resources

We have historically funded our operations primarily through cash flows from operations, borrowings under our revolving credit facility, and the issuance of debt and equity securities.

We have historically funded our operations primarily through cash flows from operations, borrowings under our amended and restated revolving credit facility, and the issuance of debt and equity securities.

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 $340.6 million, net cash flows generated from operations and availability under the Revolving Credit Facility as of September 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 September 30, 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 $91.6 million, net cash flows generated from operations and availability under the Amended and Restated Revolving Credit Facility as of March 31, 2026 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, 2026, we expect our remaining fiscal year 2026 capital expenditure budget to cover both our maintenance and growth capital expenditures.

We may also raise capital through 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.

Our ability to complete future offerings of equity or debt securities and the timing of these offerings will depend upon various factors including prevailing market conditions and our financial condition.

W e have the following financing arrangements in place to, among other things, fund our operations and supplement our liquidity position.

We have the following financing arrangements in place to, among other things, fund our operations and supplement our liquidity position.

Revolving Credit Facility

On November 9, 2021, a wholly owned subsidiary of the Company entered into a five-year revolving credit facility (the “ Revolving Credit Facility ”), which provides for a senior secured revolving credit facility in an aggregate principal amount of up to $100.0 million.

The Revolving Credit Facility matures on November 9, 2026.

The Revolving Credit Facility includes a $20.0 million swingline sub-facility and a $25.0 million letter of credit sub-facility.

All borrowings under the Revolving Credit Facility are subject to the satisfaction of customary conditions, including the absence of a default and the accuracy of representations and warranties, subject to certain exceptions.

Borrowings under the Revolving Credit Facility bear interest at a rate equal to (i) an applicable margin, plus (ii) at Perimeter Holding LLC’s option, either (x) Secured Overnight Financing Rate for the applicable corresponding tenor (“Term SOFR”) as published by CME Group Benchmark Administration, adjusted for certain additional costs or (y) a base rate determined by reference to the highest of (a) the prime commercial lending rate published by the Wall Street Journal, (b) the federal funds rate plus 0.50% (c) the one-month Term SOFR rate plus 1.00% and (d) a minimum floor of 1.00%.

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 September 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”).

The Senior Notes bear interest at an annual rate of 5.00%.

Interest on the Senior Notes is payable in cash semi-annually in arrears on April 30 and October 30 of each year.

The Senior Notes are general, secured, senior obligations of Perimeter Holdings, LLC;

rank equally in right of payment with all existing and future senior indebtedness of Perimeter Holdings, LLC (including, without limitation, the Revolving Credit Facility);

and together with the Revolving Credit Facility, are effectively senior to all existing and future indebtedness of Perimeter Holdings, LLC that is not secured by the collateral.

On December 19, 2025, a wholly owned subsidiary of the Company entered into a credit agreement for its five-year revolving credit facility (the “Amended and Restated Revolving Credit Facility”), which provides for a senior secured revolving credit facility in an aggregate principal amount of up to $200.0 million.

The Amended and Restated Revolving Credit Facility matures on December 19, 2030.

The Amended and Restated Revolving Credit Facility includes a $40.0 million swingline sub-facility and a $50.0 million letter of credit sub-facility.

Borrowings under the Amended and Restated Revolving Credit Facility bear interest at a rate equal to (i) an applicable margin, plus (ii) at the Company’s option, either (x) Secured Overnight Financing Rate for the applicable corresponding tenor (“Term SOFR”) as published by CME Group Benchmark Administration, subject to a Floor of 1.00% or (y) a base rate determined by reference to the highest of (a) the prime commercial lending rate published by the Wall Street Journal, (b) the federal funds rate plus 0.50%, (c) the one-month Term SOFR rate plus 1.00% and (d) 1.00%.

The applicable margin is 2.75% in the case of Term SOFR-based loans and 1.75% in the case of base rate-based loans, with two step-ups of 0.25% each based upon the achievement of certain leverage ratios.

As of March 31, 2026, the Company did not have any outstanding borrowings under the Amended and Restated Revolving Credit Facility and was in compliance with all covenants, including the financial covenants.

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

The 2029 Notes bear interest at an annual rate of 5.00%.

Interest on the 2029 Notes is payable in cash semi-annually in arrears on April 30 and October 30 of each year.

On January 2, 2026, Perimeter Holdings, completed its offering of $550 million in aggregate principal amount of 6.250% senior secured notes due 2034 (the “2034 Notes”) in transactions that were exempt from the registration requirements of the Securities Act.

The 2034 Notes were issued under an indenture, dated as of January 2, 2026.

The 2034 Notes mature on January 15, 2034, and bear interest at a rate of 6.250% per annum, payable in cash semi-annually in arrears on January 15 and July 15 of each year, commencing on July 15, 2026.

The Company used the net proceeds of the 2034 Notes, together with cash on hand, to pay the cash consideration for the acquisition of MMT and related fees and expenses.

The 2029 and the 2034 Notes are general, secured, senior obligations of Perimeter Holdings;

rank equally in right of payment with all existing and future senior indebtedness of Perimeter Holdings (including, without limitation, the Amended and Restated Revolving Credit Facility);

and together with the Amended and Restated Revolving Credit Facility, are effectively senior to all existing and future indebtedness that is not secured by the collateral.

The 2029 Notes and the 2034 Notes are subject to customary negative covenants, including but not limited to, certain limitations, including among other things, the ability to declare or pay dividends or make certain other payments, purchase, redeem or otherwise acquire or retire for value any equity interests or otherwise make any restricted payments, conduct certain asset sales, make certain restricted investments;

incur certain indebtedness, grant certain liens, enter into certain transactions with affiliates, and consolidate, merge or transfer all or substantially all of the assets of our subsidiaries on a consolidated basis.

The indentures governing the 2029 Notes and the 2034 Notes also contain customary events of default and remedies (including acceleration).

As of March 31, 2026, the Company was in compliance with all covenants, including financial covenants.

Debt issuance costs incurred in connection with securing the 2029 Notes and the 2034 Notes were capitalized and are amortized using the effective interest method over the term of the 2029 Notes and the 2034 Notes and included in interest expense in the accompanying condensed consolidated statements of operations and comprehensive income.

The unamortized portion of the debt issuance costs is included as a reduction to the carrying value of the 2029 Notes and the 2034 Notes which have been recorded as long-term debt, net in the accompanying condensed consolidated balance sheets.

The Company incurred $10.1 million of debt issuance costs as a result of the 2034 Notes for the three months ended March 31, 2026.

For additional information about our long-term debt, refer to Note 7, “Long-Term Debt and Preferred Stock,” in the notes to the condensed consolidated financial statements included in this Quarterly Report.

Share Repurchase Plan

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.

Under the 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 securities law 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 econ omic and market conditions.

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.

The approximate dollar value of shares that may yet be repurchased under the Share Repurchase Plan was $100.0

million as of September 30, 2025.

During the three months ended September 30, 2025, the Company did not repurchase any shares under its Share Repurchase Plan.

For the nine months ended September 30, 2025, the Company repurchased 3,774,675 shares under the Share Repurchase Plan .

During the three and nine months ended September 30, 2024, the Company repurchased 399 and 2,988,291 shares, respectively.

The Company expects to periodically re-establish the limit for Common Stock repurchases.

The approximate dollar value of shares that may yet be repurchased under the Share Repurchase Plan was $100.0 million as of March 31, 2026.

During the three months ended March 31, 2026, the Company did not repurchase any shares

under its Share Repurchase Plan.

During the three months ended March 31, 2025, the Company repurchased 888,454 shares.

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

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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.

For 2024, the average price of the Company’s Common Stock was $12.85 per share.

The EverArc Founder Entity was entitled to receive the Fixed Annual Advisory Amount of 2,357,061 shares of Common Stock or a value of $30.3 million, based on an average price of $12.85 per share of Common Stock (the “2024 Fixed Amount”).

The EverArc Founder Entity was not entitled to receive the Variable Annual Advisory Amount for 2024, as the average price of $12.85 per share of Common Stock for 2024 was lower than the previous highest average price of $13.63 per Ordinary Share established in 2021.

Per the Founder Advisory Agreement, the EverArc Founder Entity elected to receive approximately 78% of the 2024 Fixed Amount in Common Stock (1,837,304 shares of Common Stock) and approximately 22% of the 2024 Fixed Amount in cash ($6.7 million).

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 2025, the EverArc Founder Entity was entitled to receive a Fixed Annual Advisory Amount of 2,357,061 shares of Common Stock or a value of $65.7 million, based on an average price of $27.89 per share (the “2025 Fixed Amount”).

The EverArc Founder Entity was also entitled to receive a Variable Annual Advisory Amount for 2025 of 14,462,123 shares of Common Stock, or a value of $403.4 million (the “2025 Variable Amount” and together with the 2025 Fixed Amount, the “2025 Advisory Amounts”).

The EverArc Founder Entity elected to receive approximately 79.6% of the 2025 Advisory Amounts in shares of Common Stock (13,387,003 Common Shares) and approximately 20.4% of the 2025 Advisory Amounts in cash ($95.7 million).

To satisfy the 2025 Advisory Amounts, the Company paid $95.7 million in cash on February 19, 2026 and issued 13,387,003 shares of Common Stock on March 3, 2026.

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):

Nine Months Ended September 30,

Cash provided by (used in):

Three Months Ended March 31,

Cash (used in) provided by:

Operating activities $ (88,961) $ 23,746

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Operating Activities

Net cash provided by operating activities was $219.5 million and $194.4 million for the nine months ended September 30, 2025 and 2024, respectively.

For the nine months ended September 30, 2025, the primary components of operating cash flows were net loss of $66.1 million, non-cash charges of $279.2 million and net operating asset reductions of $6.4 million.

For the nine months ended September 30, 2024, the primary components of operating cash flows were a net loss of $150.1 million, non-cash charges of $321.7 million and net operating asset reductions of $22.8 million.

Cash used in operating activities was $89.0 million for the three months ended March 31, 2026 and cash provided by operating activities was $23.7 million for the three months ended March 31, 2025.

For the three months ended March 31, 2026, the primary components of operating cash flows were net income of $72.9 million, non-cash benefits of $69.9 million and net operating asset investments of $92.0 million.

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.

Investing Activities

Net cash used in investing activities was $59.8 million for the nine months ended September 30, 2025.

During the nine months ended September 30, 2025, we purchased property and equipment of $22.6 million, purchased intangible assets of $15.2 million, and purchased businesses for $22.0 million.

Net cash used in investing activities was $3.7 million for the nine months ended September 30, 2024.

During the nine months ended September 30, 2024, the Company

purchased property and equipment of $9.1 million offset by proceeds from short-term investments of $5.4 million upon settlement of a Euro denominated certificate of deposit.

Cash used in investing activities was $688.1 million and $14.8 million for the three months ended March 31, 2026 and 2025, respectively.

During the three months ended March 31, 2026, we purchased a business for $682.3 million and purchased property and equipment of $5.8 million.

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.

Financing Activities

Net cash used in financing activities was $21.6 million and $14.9 million for the nine months ended September 30, 2025 and 2024, respectively.

During the nine months ended September 30, 2025, we repurchased shares of outstanding Common Stock for $40.4 million and made $0.7 million in principal payments on finance lease obligations offset by proceeds received from exercises of options of $19.5 million.

During the nine months ended September 30, 2024, we repurchased outstanding Ordinary Shares for $14.4 million and made $0.5 million in principal payments on finance lease obligations.

Cash provided by financing activities was $542.8 million for the three months ended March 31, 2026 and cash used in financing activities was $8.4 million for the three months ended March 31, 2025.

During the three months ended March 31, 2026, we received proceeds from an issuance of long term debt of $550.0 million and received proceeds from exercises of options of $3.0 million, offset by payment of debt issuance costs of $10.1 million and $0.1 million in principal payments on finance lease obligations.

During the three months 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.

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 2025 Annual Report filed on Form 10-K with the SEC on February 26, 2026.

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