What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-11 compared with 2025-11-10 · 72 added, 130 removed, 58 unchanged (78% of the section changed)

6 unchanged sentences

These factors include, without limitation, those set forth in the risk factors section included in the Company's Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission on March 16, 2026.

At Telos, we deliver efficient, adaptable, and secure solutions that protect people, organizations, and information across government and industry.

From cyber governance, risk and compliance ("GRC") with Xacta ® , to identity and biometric solutions, secure networks, and TSA PreCheck ® enrollment, we help customers stay ahead of evolving threats.

Telos Corporation empowers and protects the world’s most security-conscious organizations with efficient, adaptable, and secure solutions that safeguard people, systems, and information.

We deliver advanced capabilities across cyber governance, risk, and compliance ("GRC") with Xacta®;

identity and biometric solutions;

secure networks and communications;

and TSA PreCheck® enrollment services.

Our primary customers include the U.S.

federal government, large commercial organizations, state and local governments, and international customers.

Our deep domain expertise, cleared workforce, and proven technologies give us a unique position at the intersection of cybersecurity, identity, and network security.

Driven by purpose and guided by our core values, we build lasting partnerships, deliver superior solutions, and help create a more secure, interconnected world.

Recently, Telos launched Xacta.ai ™ , the artificial intelligence ("AI") capability at the core of the Xacta cyber GRC platform, dramatically reducing compliance time and effort.

Leveraging AI and rules-based logic, Xacta.ai delivers expert-level guidance and real-time insights, empowering organizations to move from reactive compliance to proactive risk management.

federal government, large commercial organizations, state and local governments, and global enterprises.

Telos helps customers stay ahead of evolving threats, accelerate compliance, and achieve mission success.

Driven by purpose and guided by our core values, we build trusted partnerships, deliver superior solutions, and help create a more secure, interconnected world.

Recently, Telos launched Xacta.ai TM , the artificial intelligence ("AI") capability at the core of the Xacta cyber GRC platform, dramatically reducing compliance time and effort.

Xacta.ai delivers expert-level guidance and real-time insights, empowering organizations to move from reactive compliance to proactive risk management.

Business Environment

Federal Government Budget

Our consolidated revenue is largely attributable to prime contracts or to subcontracts with a prime contractor engaged in work for the U.S.

federal government, with the remaining attributable to state and local governments, and commercial markets.

For the nine months ended September 30, 2025, we generated approximately 91% of our total revenue from contracts with U.S.

federal government agencies.

Our business performance is affected by the overall level of U.S.

federal government spending and the alignment of our offerings and capabilities with the budget priorities of the U.S.

Federal Government

federal government appropriations for fiscal year ("FY") 2025, which ran through September 30, 2025, were determined by a full-year continuing resolution.

While the Administration has submitted its FY2026 budget proposal outlining its priorities, partisan disagreements over federal spending levels, among other things, have stalled progress on the required appropriations bills.

On October 1, 2025, the federal government began to shut down as a result of congressional inaction on passing appropriations legislation for FY2026.

In a government shutdown, non-essential federal employees and contractors are furloughed until the impasse ends.

It is unclear when the impasse between congressional parties over the funding bill to reopen the government will end.

Although the impact on our operations has been modest to date, the shutdown presents practical challenges that can disrupt performance, including on fully funded agreements.

Many federal facilities are closed and, with furloughed government personnel, it can be difficult to deliver contract items, obtain required government reviews and approval, or receive timely direction.

In some cases, tasks cannot proceed if federal personnel are not available to supervise, inspect, or accept deliverables.

Where performance depends on access to government facilities, networks, systems, or personnel, the risk of significant delays increases regardless of funding availability.

In addition, many agencies are experiencing heightened administrative burdens and workforce actions, with ripple effects that can slow procurement, approvals, and program execution across the government, particularly at agencies operating without full‑year appropriations.

Delayed awards and contract starts, together with performance slowdowns, may shift revenue and cash collections to future periods, affect backlog burn rates, and increase days sales outstanding where customer acceptances or invoicing are delayed.

The duration and ultimate impact of the shutdown remain uncertain, and the magnitude and timing of any effects will depend on the length of the shutdown, agency-specific operating status, and the cadence at which procurements and approvals resume.

When funding and operations normalize, compressed procurement calendars and pent‑up demand may intensify competition and pricing pressure, and agencies may continue to favor incumbent extensions, which could affect our growth trajectory and margins.

We continue to monitor these developments and to manage labor deployment, program schedules, and discretionary spending to mitigate potential impacts on operations and cash flows.

Other Economic and Regulatory Policies

Aside from the uncertainty in the budgetary environment, the Administration put in place a number of Executive Orders and actions that have affected, and could continue to affect, many businesses.

The Administration continuously evaluates federal agencies and existing government contracts, grants, and programs for affordability, efficiency, and alignment with U.S.

federal government objectives.

Further, the Administration has increased existing tariffs, imposed additional tariffs, and expanded tariffs on various goods imported from various countries.

Changes in international trade policies, including higher tariffs on imported goods and materials, may increase the procurement costs of certain IT hardware we use internally, on our contracts, or sell to our customers.

The ongoing and potential future reforms to the U.S.

federal government processes, including changes to procurement rules and regulations, could transform how contracts are awarded, negotiated, and managed.

These initiatives could further delay contract awards and/or result in modifications to the scope or terms of contracts we hold.

At the same time, the Administration's focus on efficiency, transparency, consolidation, and accountability could lead to certain traditionally government functions being transferred to private entities.

This potential transition of services to the private sector could benefit Telos, given our wide array of capabilities and advanced solutions.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.

The OBBBA includes significant changes to the Internal Revenue Code, with various provisions changing the U.S.

federal income tax regulations and modifications to the Inflation Reduction Act of 2022.

Further, the OBBBA significantly impacts the defense sector through substantial funding allocations and strategic investments, including specific investments in areas like AI, and provides the Department of Defense with extended time, until 2029, to make strategic investments in the defense industrial base.

Increased funding and improved tax treatment for research and development could boost targeted defense investments, scale commercial technologies for military use, and support related programs.

See Note 2 – Significant Accounting Policies on Income Taxes for additional information on key income tax provisions of the OBBBA.

We continue to monitor and assess the risk and opportunities presented to the Company, in light of ongoing political tensions and heightened global instability that we expect to persist in the near term.

Initiatives to reduce governmental spending, federal budget and debt ceiling action, and U.S.

federal government policy positions, including trade policy, tax reform and/or changes to the U.S.

government priorities, could materially impact federal spending broadly.

Our consolidated revenue is largely attributable to prime contracts or to subcontracts with prime contractors engaged in work for the U.S.

federal government, with the remaining revenue attributable to state and local governments, and commercial markets.

We generated approximately 93% and 89% of our total revenues from contracts with U.S.

government agencies in the first quarter of fiscal year ("FY") 2026 and 2025, respectively.

Our business performance is affected by the overall level of U.S.

government spending and the alignment of our offerings and capabilities with the budget priorities of the U.S.

While certain administration priorities, such as cybersecurity, national security and AI, present greater opportunity for our products and services, turmoil within the federal government, including personnel and leadership turnover and budgetary uncertainty, has had the effect of lengthening our sales cycle in certain cases.

We continuously monitor U.S.

federal budget, legislative, and contracting trends and activities, and align our capabilities in response to these developments.

Macroeconomic Conditions

During the current quarter, the global economy has continued to experience volatility arising from geopolitical developments and broader economic and financial factors, specifically including the ongoing conflict in Iran and the Middle East.

This volatility has resulted in, and may be expected to continue to result in, rising energy prices, supply chain disruptions, and inflationary pressures, among other consequences.

However, in part due to the importance of our offerings to our customers, the type of solutions we provide, and the nature of our largest customers, to date our business has not been materially impacted by these consequences.

If global volatility continues to increase and the conflict in the Middle East is prolonged or intensifies, the economic uncertainty inherent in such global instability may affect our results of operations.

Management continues to monitor this evolving geopolitical situation.

Financial Overview

Several key highlights of our financial performance in the third quarter ended September 30, 2025 are described below.

More details are presented in our "Results of Operations" section below.

• Revenue increased 116.3% year-over-year due to 153.5% growth in Security Solutions primarily due to the ongoing expansion of large programs in Telos ID.

Gross margin expanded 2,672 bps year-over-year primarily due to the impairment and restructuring charges taken in the third quarter of 2024.

• Operating expenses decreased due to the impairment loss on intangible assets of $6.4 million recorded in the third quarter of 2024, and the reduction in expenses as a result of the restructuring efforts taken in the third quarter of FY2024.

• Net loss improved by $25.9 million year-over-year to a $2.1 million loss.

• Cash flow from operations improved by $16.2 million year-over-year to $9.1 million, or 17.8% of revenue.

Several key highlights of our financial performance in the first quarter of 2026 are described below.

More details are presented in our "Results of Operations" section.

• Revenue increased 55.9% due to 78.1% growth in Security Solutions, driven primarily by the expansion of multiple large programs in Telos ID.

• Operating expenses decreased by $5.3 million, or 24.9%, year-over-year due to lower stock-based compensation and ongoing disciplined cost management.

• Net income expanded by $10.6 million, from a net loss of $8.6 million in the first quarter of 2025 to a net income of $2.0 million in the current quarter.

• Cash flow from operations improved by $2.6 million year-over-year from a $6.1 million inflow to an $8.7 million inflow, or 18.1% of revenue, primarily due to improved revenue and profitability.

• $2.2 million was deployed to repurchase approximately 0.5 million shares of the Company’s common stock at an average share price of $4.25 per share.

Results of Operations

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Consolidated Results of Operations

For the Three Months Ended For the Nine Months Ended

September 30, 2025 September 30, 2024 Dollar Change September 30, 2025 September 30, 2024 Dollar Change

For the Three Months Ended

March 31, 2026 March 31, 2025 Dollar Change

(dollars in thousands)

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Operating expenses as percentage of revenue 33.3 % 69.3 %

Operating loss (2,468) (28,864) 26,396 (21,373) (45,946) 24,573

Operating income (loss) 1,455 (9,022) 10,477

Other income 697 561 136

Interest expense (111) (147) 36

Loss before income taxes (2,093) (28,038) 25,945 (20,172) (43,139) 22,967

Provision for income taxes (21) (17) (4) (63) (51) (12)

Net loss $ (2,114) $ (28,055) $ 25,941 $ (20,235) $ (43,190) $ 22,955

Income (loss) before income taxes 2,041 (8,608) 10,649

(Provision for) benefit from income taxes (18) 4 (22)

Net income (loss) $ 2,023 $ (8,604) $ 10,627

Consolidated Results

Our business segments are driven by different factors, leading to revenue fluctuations and varying profitability.

The discussion of the changes in our revenue and gross margin is covered in greater detail in the following section, "Segment Results." We generate revenue from the delivery of products and services to our customers.

Our business segments have different factors driving revenue fluctuations and profitability.

The discussion of the changes in our revenue and profitability is covered in greater detail in the following section, "Segment Results." We generate revenue from the delivery of products and services to our customers.

Cost of sales, for both products and services, consists of labor, materials, subcontracting costs and an allocation of indirect costs.

Operating expenses

In the third quarter of 2025, operating expenses decreased by $9.0 million, or 28.1%, compared to the same quarter in 2024.

This was primarily due to the impairment loss on intangible assets of $6.4 million recorded in the third quarter of 2024, whereas there was none for the same quarter of this current year.

Research and development ("R&D") expenses decreased by $0.5 million, or 21.2%, in the third quarter of 2025, compared to the same period in 2024, primarily due to the lower amortization costs associated with the discontinued development of selected solutions in the third quarter of 2024.

Selling, general and administrative ("SG&A") expenses decreased by $2.1 million, or 9.1%, in the third quarter of 2025, compared to the same period in 2024.

These decreases were largely the result of lower labor costs due to the restructuring efforts taken in the third quarter of 2024.

For the nine months ended September 30, 2025, operating expenses decreased by $3.7 million, or 5.3%, compared to the same period in 2024.

An impairment loss on intangible assets of $6.4 million was recorded for the nine months ended September 30, 2024, whereas there was none for the same period of this current year.

R&D expenses decreased by $2.1 million, or 29.2%, for the nine months ended September 30, 2025, compared to the same period in 2024.

This was primarily due to lower amortization costs associated with the discontinued development of select solutions in the third quarter of 2024.

SG&A expenses increased by $4.7 million, or 8.4%, for the nine months ended September 30, 2025, compared to the same period in 2024.

This was due to higher stock-based compensation costs, partially offset by lower labor costs due to the restructuring efforts taken in the third quarter of 2024 and lower cash incentive compensation expense.

Other income decreased by $0.5 million, or 48.0%, for the third quarter of 2025, compared to the same period in 2024.

Similarly, other income decreased by $1.7 million, or 50.7%, for the nine months ended September 30, 2025, compared to the same period in 2024.

The decreases in other income for the three and nine months ended September 30, 2025, were primarily due to the change in dividend income from money market placements.

Operating expenses decreased by $5.3 million, or 24.9%, in the first quarter of 2026, compared to the same period in 2025.

Research and development ("R&D") expenses slightly declined by $0.2 million, or 13.6%, in the first quarter of 2026, compared to the same period in 2025.

Selling, general and administrative ("SG&A") expenses decreased by $5.1 million, or 25.8%, in the first quarter of 2026, compared to the same period in 2025, primarily due to lower stock-based compensation expenses.

Excluding stock-based compensation, reductions in R&D and SG&A expenses were due to ongoing cost discipline and restructuring.

As a percentage of revenue, overall operating expenses were 33.3% and 69.3% for the three months ended March 31, 2026, and 2025, respectively.

Other income increased by 24.2% in the first quarter of 2026, compared to the same period in 2025, primarily due to the refund in the current quarter of a prior year VAT claim that was previously determined to be uncollectible.

Segment Results

3 unchanged sentences

Security Solutions Segment - Financial Results

For the Three Months Ended For the Nine Months Ended

September 30, 2025 September 30, 2024 Dollar Change September 30, 2025 September 30, 2024 Dollar Change

For the Three Months Ended

March 31, 2026 March 31, 2025 Dollar Change

(dollars in thousands)

Revenue $ 45,970 $ 25,818 $ 20,152

Cost of sales (excluding impairment loss, depreciation and amortization) 24,838 9,201 15,637 57,557 26,505 31,052

Impairment loss on intangible assets — 5,333 (5,333) — 5,333 (5,333)

Cost of sales (excluding depreciation and amortization) 26,514 13,257 13,257

Depreciation and amortization 2,593 1,501 1,092

2 unchanged sentences

Gross margin 36.7 % 42.8 %

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

Security Solutions segment revenue for the third quarter of 2025 increased by $28.1 million, or 153.5%, compared to the same quarter in 2024, primarily due to the ongoing expansion of multiple large programs in Telos ID.

Security Solutions segment gross profit for the third quarter of 2025 increased by $17.0 million, or 734.9%, compared to the same quarter in 2024, due to higher segment revenue and higher segment gross margin.

Segment gross margin for the quarter increased from 12.6% in 2024 to 41.5% in 2025, due to the decrease in cost of sales related to the impairment loss on intangible assets taken in the third quarter of 2024, whereas there was none for this current quarter.

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

For the nine months ended September 30, 2025, Security Solutions segment revenue increased by $49.9 million, or 91.1%, compared to the same period in 2024, primarily due to the ongoing expansion of multiple large programs in Telos ID.

Segment gross profit for the nine months ended September 30, 2025 increased by $23.4 million, or 128.8%, compared to the same period in 2024, due to higher segment revenues and higher segment gross margin.

Year-to-date segment gross margin increased from 33.2% in 2024 to 39.7% in 2025, due to the decrease in cost of sales related to the impairment loss on intangible assets taken in 2024, whereas there was none in the current year, partially offset by unfavorable program mix.

For the quarter ended March 31, 2026, the Security Solutions segment revenue increased by 78.1%, compared to the same period in 2025, due to the expansion of multiple large programs in Telos ID.

For the quarter ended March 31, 2026, the Security Solutions segment gross profit increased by 52.5%, compared with the same period in 2025, due to higher segment revenues.

Segment gross margin decreased from 42.8% in 2025 to 36.7% in 2026, primarily due to revenue mix and higher non-cash infrastructure costs.

Table MD&A 3:

Secure Networks Segment - Financial Results

For the Three Months Ended For the Nine Months Ended

September 30, 2025 September 30, 2024 Dollar Change September 30, 2025 September 30, 2024 Dollar Change

For the Three Months Ended

March 31, 2026 March 31, 2025 Dollar Change

(dollars in thousands)

Revenue $ 1,772 $ 4,798 $ (3,026)

Cost of sales (excluding impairment loss, depreciation and amortization) 3,704 4,616 (912) 10,237 21,444 (11,207)

Cost of sales (excluding depreciation and amortization) 1,257 3,674 (2,417)

Depreciation and amortization 3 2 1

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Gross margin 28.9 % 23.4 %

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

Secure Networks segment revenue for the third quarter of 2025 decreased by $0.5 million, or 8.9%, compared to the same period in 2024, primarily due to the ramp down of several programs within the portfolio.

Segment gross profit for Secure Networks for the third quarter of 2025 increased by $0.4 million, or 51.3%, compared with the same period in 2024.

Likewise, segment gross margin for the quarter increased from 15.3% in 2024 to 25.4% in 2025 primarily due to revenue mix.

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

Secure Network segment revenue for the nine months ended September 30, 2025, decreased by $13.8 million, or 51.0%, compared to the same period in 2024, primarily due to the ramp down of several programs within the portfolio without corresponding new business wins to backfill completed programs.

Segment gross profit for the nine months ended September 30, 2025, decreased by $2.6 million, or 46.2%, compared to the same period in 2024, due to lower segment revenue.

Year-to-date segment gross margin increased from 20.7% in 2024 to 22.7% in 2025, primarily due to the results of revenue mix.

For the quarter ended March 31, 2026, the Secure Networks segment revenue decreased by 63.1%, compared to the same period in 2025, primarily due to the continued ramp down of several programs within the portfolio without corresponding new business wins to backfill completed programs.

For the quarter ended March 31, 2026, the Secure Networks segment gross profit decreased by 54.4%, compared with the same period in 2025, due to lower revenue.

By contrast, segment gross margin expanded from 23.4% in the first quarter of 2025 to 28.9% in the first quarter of 2026, primarily due to program mix.

Liquidity and Capital Resources

Our primary sources of liquidity are cash on hand, future operating cash flows, and, if needed, borrowings under our $30.0 million revolving credit facility, with an available expansion feature of up to $30.0 million of additional revolver facility.

While a variety of factors related to sources and uses of cash, such as timeliness of accounts receivable collections, vendor credit terms, or significant collateral requirements, ultimately impact our liquidity, such factors may or may not have a direct impact on our liquidity.

As of September 30, 2025, we had cash and cash equivalents of $59.1 million and our working capital was $65.6 million.

Our primary sources of liquidity are cash on hand, future operating cash flows, and, if needed, sale of receivables under the Factoring Agreement and/or borrowings under our $15.0 million revolving credit facility with a maturity date of December 30, 2026, and with an available expansion feature of up to $15.0 million of additional revolver facility.

A variety of factors related to sources and uses of cash, such as timeliness of accounts receivable collections, vendor credit terms, or significant collateral requirements, ultimately impact our liquidity.

As of March 31, 2026, we had cash and cash equivalents of $50.2 million and our working capital was $58.6 million.

We place a strong emphasis on liquidity management.

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Our overall financial position and liquidity are strong.

Although no assurances can be given, we believe the available cash balances and access to our revolving credit facility are sufficient to maintain the liquidity we require to meet our operating, investing and financing needs for the next 12 months.

Although no assurances can be given, we believe available cash balances and access to our revolving credit facility and Factoring Agreement are sufficient to maintain the liquidity we require to meet our operating, investing and financing needs for the next 12 months.

Table MD&A 4:

Net Change in Cash, Cash Equivalents, and Restricted Cash

For the Nine Months Ended

September 30, 2025 September 30, 2024

For the Three Months Ended

March 31, 2026 March 31, 2025

(in thousands)

Net cash provided by (used in) operating activities $ 22,202 $ (15,420)

Net cash provided by operating activities $ 8,656 $ 6,106

Net cash used in investing activities (2,277) (2,337)

1 unchanged sentence

Net change in cash, cash equivalents, and restricted cash $ (2,950) $ 3,213

Net cash provided by operating activities for the nine months ended September 30, 2025, was $22.2 million, an increase of $37.6 million compared to the same period in 2024.

The increase is attributable to favorable changes in working capital, primarily driven by timing of receipts from customers and the timing of payments to vendors, coupled with higher cash earnings (i.e., net loss, excluding non-cash items that do not impact cash flows from operating activities).

Net cash used in investing activities for the nine months ended September 30, 2025, decreased by $5.3 million, compared to the same period of the prior year, primarily due to the cash outflow from the purchase of an investment of $3.0 million in 2024, with no similar transaction in 2025, coupled by a decrease of $2.3 million in capital expenditures in 2025.

Net cash used in financing activities for the nine months ended September 30, 2025, increased by $8.9 million, compared to the same period in 2024.

This is primarily attributable to the repurchase of common stock for $7.6 million in 2025 under the share repurchase program (See Note 12 – Share Repurchases ), with no similar activity in 2024, and an increase in payment of tax withholding related to net share settlement of equity awards by $1.1 million in fiscal year 2025.

Net cash provided by operating activities for the three months ended March 31, 2026, was $8.7 million, an increase of $2.6 million compared to the same period in 2025.

The change is attributable to favorable changes in working capital, primarily driven by the timing of receipts from customers, and the timing of payments to vendors, coupled with higher cash earnings (i.e., net income (loss), excluding non-cash items that do not impact cash flows from operating activities).

Net cash used in investing activities for the three months ended March 31, 2026, slightly decreased by $0.1 million, compared to the same period of the prior year, primarily due to decreases in capital expenditures.

Net cash used in financing activities for the three months ended March 31, 2026, increased by $8.8 million, compared to the same period in 2025.

This is primarily attributable to the repurchases of common stock under the share repurchase program (see Note 11 – Share Repurchases ) amounting to $2.2 million in the first quarter of 2026 , with no similar activity in 2025, and an increase in payment of tax withholding related to net share settlement of equity awards by $6.5 million in fiscal year 2026.

Critical Accounting Policies and Estimates

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Actual results could differ from those estimates.

Our 2024 Form 10-K, as filed with the SEC on March 10, 2025, includes a summary of critical accounting policies and estimates we believe are the most important to aid in understanding our financial results.

Stock-Based Compensation

The stock-based compensation expense related to the stock options, RSUs and PSUs awarded under the Amended and Restated 2016 Omnibus Long-Term Incentive Plan (the “2016 LTIP”) is recognized ratably over the requisite service period.

For awards with performance conditions, stock-based compensation expense is estimated at each reporting date using management’s expectation of the probable achievement of the specific performance targets and recognized over the requisite service period for each tranche on a graded-vesting basis.

Stock-based compensation expense for PSUs with market conditions is recognized based on the grant-date fair value calculated using the Monte Carlo model, as described below, or sooner if the market conditions are achieved.

The fair value of the PSUs is equal to the closing stock price on the date of the grant or the fair value of the award on the grant date, as determined through an independent valuation for PSUs with market conditions.

Estimating the fair value of PSUs with market condition, using the Monte Carlo simulation valuation model, requires assumptions as to the fair value of the underlying common stock, the estimated performance period, expected volatility, risk-free rate, and derived service period.

See Note 11 – Stock-Based Compensation for additional information.

We test for goodwill impairment at the reporting unit level.

Between annual evaluations, if events occur or circumstances change that would more-likely-than-not reduce the fair value of the reporting units below its carrying amount, then impairment must be evaluated.

When evaluating goodwill for impairment, we first assess qualitative factors which could include, but are not limited to, macroeconomic conditions, industry and market conditions, overall company financial performance and events affecting the reporting units or the Company as a whole.

If the financial performance of our Secure Networks reporting segment remains at the current level for a sustained period of time, and after considering other qualitative factors, there may be a triggering event indicating goodwill may be impaired in our Secure Networks reporting unit.

Accordingly, management may need to perform a quantitative impairment test over the Secure Networks reporting unit to determine if an impairment loss should be recorded, which may have an adverse impact on our results of operations.

Based on the result of our interim qualitative assessment, we determined that it is more-likely-than-not that the estimated fair value of the reporting units exceeds their carrying value and thus, no impairment charges were taken during the three and nine months ended September 30, 2025.

Other critical accounting policies and estimates include revenue recognition, goodwill and long-lived assets, and income taxes, as discussed in our 2024 Form 10-K.

There have been no changes to these critical accounting policies and estimates that have had a material impact on our reported amounts of assets, liabilities, revenues, or expenses during the nine months ended September 30, 2025.

The 2025 Form 10-K, as filed with the SEC on March 16, 2026, includes a summary of the critical accounting policies we believe are the most important to aid in understanding our financial results.

There have been no changes to those critical accounting policies that have had a material impact on our reported amounts of assets, liabilities, revenues, or expenses during the three months ended March 31, 2026.

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