Arxis (NASDAQ: ARXS) lifts 2026 guidance after strong Q2 growth
Rhea-AI Filing Summary
Arxis, Inc. reported strong second quarter 2026 results, with revenue of $501 million, up 25% year-over-year, including 21% organic growth across Electronic and Mechanical Components. Demand was broad-based, led by Defense & Space, and favorable trends in Commercial Aerospace and Industrial Technology.
The company recorded a net loss of $4.9 million, improved from a $29.3 million loss, as stronger operations were offset by share-based compensation tied to its initial public offering. Adjusted EBITDA rose 38% to $211 million, and Adjusted EBITDA margin expanded 390 basis points to 42.2%, supported by volume growth, disciplined pricing, and productivity initiatives.
Cash generation was robust, with net cash from operating activities of $138 million and Free Cash Flow of $127 million, both sharply higher year-over-year. Arxis completed the MagCanica acquisition, agreed to acquire Omnetics, and closed the Blue Line acquisition. A term loan repricing is expected to save about $5 million of annual cash interest, helping reduce net leverage to 1.8x. Reflecting first-half performance and visibility backed by orders and acquisitions, Arxis raised full-year 2026 guidance to revenue of $1,960–$1,980 million and Adjusted EBITDA of $790–$800 million, implying an Adjusted EBITDA margin of approximately 40.4%.
Positive
- Revenue grew 25% year-over-year to $501 million, with 21% organic growth and broad-based strength across key end markets.
- Adjusted EBITDA increased 38% to $211 million, with margin expanding 390 bps to 42.2%, indicating improved operating efficiency.
- Free Cash Flow rose 261% to $127 million, and net cash from operating activities nearly tripled, strengthening internal funding capacity.
- Net leverage improved to 1.8x after debt reduction and a term loan repricing expected to save about $5 million of annual cash interest.
- The company raised full-year 2026 guidance, lifting revenue by $100 million at the midpoint and Adjusted EBITDA by $70 million with higher margin expectations.
Negative
- None.
Filing Explained
The post-IPO share structure affects ownership percentages; Blue Line closed, while Omnetics still needs approvals and closing.
This Form 8-K reports a specified material event—the unaudited second-quarter results—and records a post-reorganization and IPO share structure while the disclosed acquisitions are at different completion stages.
As of
MagCanica was completed on
For the six months ended
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
Free Cash Flow financial
Net Leverage financial
Tax Receivable Agreement financial
non-GAAP financial measures financial
Earnings Snapshot
For full-year 2026, Arxis guides to revenue of $1,960 to $1,980 million, Adjusted EBITDA of $790 to $800 million, and Adjusted EBITDA margin of approximately 40.4%.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On July 29, 2026, Arxis, Inc. (the “Company”) issued a press release announcing its unaudited financial results for the second quarter ended June 30, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated by reference.
Information in Exhibit 99.1 of this Form 8-K shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise incorporated by reference into any filing pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
Item 9.01 Financial Statements and Exhibits.
Exhibits.
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Exhibit No. |
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99.1 |
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Press Release Issued by Arxis, Inc. on July 29, 2026 |
104 |
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Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ARXIS, INC. |
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Date: |
July 29, 2026 |
By: |
/s/ Azad Badakhsh |
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Azad Badakhsh |
Exhibit 99.1
Arxis Reports Second Quarter 2026 Results; Raises Full-Year 2026 Guidance
BLOOMFIELD, Conn., July 29, 2026 – Arxis, Inc. (NASDAQ: ARXS) (the “Company” or “Arxis”), a leading designer and manufacturer of proprietary, mission-critical electronic and mechanical engineered components, today reported financial results for the second quarter ended June 30, 2026.
Second Quarter 2026 Highlights (all comparisons against the second quarter of 2025, unless otherwise noted):
Raising Full-Year 2026 Guidance (all comparisons against prior guidance midpoint, unless otherwise noted):
“We continued to execute our disciplined, repeatable acquisition strategy during the quarter with the acquisition of MagCanica and the announced acquisition of Omnetics. Today, we also completed the acquisition of Blue Line Engineering, further expanding our portfolio of highly engineered, mission-critical businesses and strengthening our precision sensing capabilities,” said Kevin Perhamus, President and Chief Executive Officer of Arxis.
“Operationally, revenue increased 25% year-over-year, including 21% organic growth, reflecting broad-based demand across our end markets, new business wins, favorable pricing realization, and continued momentum across both of our segments. Adjusted EBITDA(1) increased 38% year-over-year to $211 million, while Adjusted EBITDA margin(1) expanded 390 basis points to 42.2%. Margin expansion reflected the benefits of volume growth, disciplined pricing execution, ongoing productivity initiatives, and the operating leverage of our business model.”
“Our focus continues to be supporting our customers, investing in new business opportunities, expanding our content on existing and next-generation platforms, integrating acquired businesses, and executing our long-term value creation strategy. Given our strong first-half performance and improved visibility into the second half of the year, supported by secured purchase orders, completed acquisitions, and continued strength in underlying demand, we are raising our full-year guidance.”
(1) Additional detail on non-GAAP financial measures, including reconciliations, is provided in the appendix.
1
Second Quarter 2026 Unaudited Condensed Consolidated Results
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Three Months Ended June 30, |
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(Dollars in millions, except per share amounts) |
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2026 |
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2025 |
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Change |
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Revenue |
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$ |
501 |
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$ |
400 |
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25 |
% |
Net loss |
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$ |
(5 |
) |
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$ |
(29 |
) |
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NM |
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Net loss margin |
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(1.0 |
)% |
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(7.3 |
)% |
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NM |
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Diluted loss per share |
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$ |
(0.01 |
) |
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N/A |
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N/A |
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Adjusted EBITDA(1) |
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$ |
211 |
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$ |
154 |
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38 |
% |
Adjusted EBITDA margin(1) |
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42.2 |
% |
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38.4 |
% |
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390 bps |
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Adjusted Net Income(1) |
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$ |
113 |
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$ |
14 |
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726 |
% |
Adjusted Diluted Earnings Per Share(1) |
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$ |
0.28 |
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N/A |
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N/A |
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Net cash provided by operating activities |
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$ |
138 |
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$ |
48 |
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188 |
% |
Free Cash Flow(1) |
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$ |
127 |
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$ |
35 |
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261 |
% |
NM = not meaningful due to the small prior-year comparison base.
Revenue of $501 million increased 25% year-over-year, including 21% organic growth, reflecting broad-based strength across all of our key end markets. Both the Electronic Components and Mechanical Components segments delivered growth during the quarter, driven by strong demand in Defense & Space and continued favorable trends in Commercial Aerospace and Industrial Technology.
Net loss of ($5) million improved by $24 million year-over-year, with net loss margin of -1.0% compared to -7.3% in the prior-year period. The year-over-year improvement reflected stronger operating performance, while net income was offset by share-based compensation expense associated with the Company's initial public offering.
Adjusted EBITDA(1) increased 38% year-over-year to $211 million, while Adjusted EBITDA margin(1) expanded 390 basis points to 42.2%. The margin expansion was driven by strong operating leverage on higher volumes, favorable pricing realization, and continued execution of productivity and cost management initiatives.
Recent Acquisition Activity
As previously announced, Arxis completed the acquisition of MagCanica, LLC ("MagCanica") on June 1, 2026. MagCanica is a designer and manufacturer of non-contact, high-precision torque sensors that operate under extreme conditions.
Separately, on June 2, 2026, Arxis entered into a definitive agreement to acquire Omnetics Connector Corporation ("Omnetics"), a leading designer and manufacturer of proprietary high-reliability Micro-D-Sub and Nano-D-Sub connectors and interconnect systems used in critical defense and space, commercial aerospace, and medical applications. The transaction remains subject to customary regulatory approvals and closing conditions and is expected to close during the third quarter of 2026.
Subsequent to quarter end, on July 29, 2026, Arxis completed the acquisition of Blue Line Engineering Co. ("Blue Line"), a designer and manufacturer of high-reliability precision position sensors and motion-control systems.
Balance Sheet Update
During the quarter, Arxis completed a repricing of its term loan facility, reducing borrowing costs while preserving balance sheet flexibility.
The transaction is expected to generate approximately $5 million of annualized cash interest savings and further enhance free cash flow conversion. Following the repricing, Arxis ended the quarter with net leverage(1) of 1.8x, providing substantial capacity to continue executing its acquisition strategy.
(1) Additional detail on non-GAAP financial measures, including reconciliations, is provided in the appendix.
2
Full-Year 2026 Guidance
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Raising Full-Year Guidance |
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(Dollars in millions) |
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Current(3) |
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Prior |
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Change at Midpoint |
Revenue |
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$1,960 to $1,980 |
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$1,860 to $1,880 |
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+$100 |
Adjusted EBITDA(2) |
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$790 to $800 |
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$720 to $730 |
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+$70 |
Adjusted EBITDA margin(2) |
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~40.4% |
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~38.8% |
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+160 bps |
Conference Call and Webcast Information
Arxis will host an investor conference call to discuss its second quarter results at 9:00 a.m. ET on Thursday, July 30, 2026. A live webcast of the call, along with related presentation materials, will be available on the News & Events section of the Company’s website at https://ir.arxis.com. A replay of the webcast will be available for 30 days following the call.
About Arxis
Arxis is a leading designer and manufacturer of proprietary, mission-critical electronic and mechanical components for aerospace and defense, medical technology, and specialized industrial markets. Leveraging significant intellectual property and world-class engineering and operational capabilities, Arxis designs and delivers innovative solutions that address its customers' most complex performance needs. Arxis is a portfolio company of Arcline Investment Management. For more information, visit www.arxis.com.
About Arcline Investment Management
Arcline Investment Management is a private investment firm with over $30 billion in assets under management. Arcline seeks to build the next generation of Industrial Compounders – market-leading, mission-critical industrial platforms designed to consistently compound earnings over decades. For more information, visit www.arcline.com.
Non-GAAP Financial Measures
This press release includes certain “non-GAAP financial measures,” which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), including Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Diluted Earnings Per Share, Free Cash Flow, and Net Leverage. We use these non-GAAP financial measures to evaluate our business operations.
The non-GAAP financial measures presented in this press release are supplemental measures of our performance and our liquidity that we believe help investors understand our financial condition and operating results and assess our future prospects. We believe that presenting these non-GAAP financial measures, in addition to the corresponding U.S. GAAP financial measures, are important supplemental measures that exclude non-cash or other items that may not be indicative of or are unrelated to our core operating results and the overall health of our company. We believe that these non-GAAP financial measures provide investors greater transparency to the information used by management for its operational decision-making and allow investors to see our results “through the eyes of management.” We further believe that providing this information assists our investors in understanding our operating performance and the methodology used by management to evaluate and measure such performance. When read in conjunction with our U.S. GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as one basis for financial, operational, and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry.
We define Adjusted EBITDA as net income (loss) before interest expense, net, income tax expense (benefit), and depreciation and amortization, further adjusted for certain non-cash items that we may record each period, as well as non-recurring items such as transaction costs and other deal related expenses, acquisition and integration costs, restructuring costs, share-based compensation expense, and other income and expense adjustments that are non-recurring, non-operational, or not reflective of core operating performance, when applicable. We define Adjusted EBITDA margin as Adjusted EBITDA divided by Revenue. We believe that Adjusted EBITDA and Adjusted EBITDA margin are important metrics for management and investors as they remove the impact of
3
items that we do not believe are indicative of our core operating results or the overall health of our company and allows for consistent comparison of our operating results over time and relative to our peers.
We define Adjusted Net Income as net income (loss) adjusted to exclude amortization of intangible assets, acquisition and integration costs, restructuring costs, transaction and other deal related expenses, share-based compensation expense, and other items that management does not consider indicative of the Company’s core operating performance, together with the related income tax effects of these adjustments. Adjusted Diluted Earnings Per Share is calculated by dividing Adjusted Net Income attributable to common stockholders by the diluted weighted-average number of common shares outstanding during the applicable period. We believe Adjusted Net Income and Adjusted Diluted Earnings Per Share provide investors with useful supplemental measures for evaluating the Company’s underlying operating performance and comparing results across periods.
We define Free Cash Flow as net cash provided by (used in) operating activities less capital expenditures. We believe this measure allows management and investors to evaluate the capacity of our operations to generate cash that is available to service debt and make strategic investments and acquisitions.
We define Net Leverage as net debt divided by Adjusted EBITDA for the trailing twelve-month period. Net debt is calculated as total debt, less cash and cash equivalents. We believe this measure allows us to evaluate our capital structure, indebtedness, and ability to service debt.
Management recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. To compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with U.S. GAAP. The reconciliations to their most directly comparable U.S. GAAP financial measures follow. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business. Unless otherwise noted, tables are presented in U.S. dollars in thousands. Certain columns and rows within tables may not add due to the use of rounded numbers. Percentages presented in this report are calculated from the underlying numbers in thousands.
FORWARD-LOOKING STATEMENTS
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “guidance”, “will”, “may,” and negatives or derivatives of these or similar expressions.
These forward-looking statements reflect our current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties, and other factors, which could cause our actual results, performance, or achievements to differ materially from current expectations. Some of the risks, uncertainties, and other factors that may cause actual results to differ materially from those expressed or implied by forward-looking statements include, but are not limited to: the concentration of our business on the aerospace and defense industries; the unique business risks of supplying products to companies contracting with the U.S. government; the significant competition that we face; our industry’s rapid change; any decline or lower-than-anticipated growth of the markets into which we sell our products and services; cost overruns; the availability and pricing of certain components and raw materials from suppliers; inflation; our products may not operate as intended; our decentralized organizational structure; our indebtedness and the restrictive covenants under the agreements governing our indebtedness; our ability to comply with the extensive governmental regulation to which we are subject; our ability to maintain our government or industry approvals; product liability lawsuits and product recalls; our ability to obtain, maintain, protect and enforce our intellectual property and proprietary rights on which our business depends; our ability to realize the anticipated benefits from our recent reorganization; and the significant transaction costs that we have incurred and expect to continue to incur in connection with our recent reorganization and as a public company.
These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements, and these and other factors are more fully discussed under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company’s filings with the Securities and Exchange Commission, including those set forth in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026. We do not undertake any obligation to update or revise our forward-looking statements except as may be required by law or regulation. This press release also includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.
4
Contact:
Investor Relations
ir@arxis.com
+1 860-243-7100 (Select 1 for Arxis)
5
Table 1: Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share amounts)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenue |
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$ |
500,728 |
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|
$ |
400,444 |
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$ |
959,586 |
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|
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$ |
780,523 |
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Cost of revenue |
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238,127 |
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|
|
202,830 |
|
|
|
462,142 |
|
|
|
|
419,998 |
|
Gross profit |
|
|
262,601 |
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|
|
197,614 |
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|
|
497,444 |
|
|
|
|
360,525 |
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Selling, general and administrative expenses |
|
|
193,633 |
|
|
|
80,578 |
|
|
|
281,950 |
|
|
|
|
149,204 |
|
Amortization of intangible assets |
|
|
36,284 |
|
|
|
34,183 |
|
|
|
72,307 |
|
|
|
|
68,263 |
|
Operating income |
|
|
32,684 |
|
|
|
82,853 |
|
|
|
143,187 |
|
|
|
|
143,058 |
|
Interest expense, net |
|
|
39,427 |
|
|
|
57,356 |
|
|
|
83,385 |
|
|
|
|
125,616 |
|
Other income, net |
|
|
(5,329 |
) |
|
|
(3,589 |
) |
|
|
(7,796 |
) |
|
|
|
(4,818 |
) |
Net income (loss) before income taxes |
|
|
(1,414 |
) |
|
|
29,086 |
|
|
|
67,598 |
|
|
|
|
22,260 |
|
Income tax expense |
|
|
3,495 |
|
|
|
58,342 |
|
|
|
19,198 |
|
|
|
|
55,840 |
|
Net income (loss) |
|
$ |
(4,909 |
) |
|
$ |
(29,256 |
) |
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$ |
48,400 |
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|
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$ |
(33,580 |
) |
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|
|
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Net loss per common share, basic and diluted |
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$ |
(0.01 |
) |
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N/A |
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|
$ |
(0.01 |
) |
(1) |
|
N/A |
|
||
Weighted-average common shares outstanding, basic and diluted |
|
|
401,813,695 |
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(2) |
N/A |
|
|
|
401,813,695 |
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(2) |
|
N/A |
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6
Table 2: Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share amounts)
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June 30, 2026 |
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December 31, 2025 |
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Assets |
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|
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Current assets: |
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|
|
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|
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Cash and cash equivalents |
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$ |
494,693 |
|
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$ |
250,303 |
|
Accounts receivable, net |
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|
273,366 |
|
|
|
216,936 |
|
Contract assets |
|
|
81,441 |
|
|
|
67,780 |
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Inventories |
|
|
337,700 |
|
|
|
315,604 |
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Prepaid expenses and other current assets |
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48,123 |
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|
57,058 |
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Total current assets |
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1,235,323 |
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|
|
907,681 |
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Property, plant and equipment, net |
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|
405,485 |
|
|
|
397,929 |
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Intangible assets, net |
|
|
2,448,201 |
|
|
|
2,429,879 |
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Goodwill |
|
|
2,799,108 |
|
|
|
2,745,351 |
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Operating lease right-of-use assets, net |
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|
64,951 |
|
|
|
64,651 |
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Other assets |
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|
53,584 |
|
|
|
50,943 |
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Total assets |
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$ |
7,006,652 |
|
|
$ |
6,596,434 |
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Liabilities and stockholders' and members' equity |
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|
|
|
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|
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Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
67,094 |
|
|
$ |
56,467 |
|
Contract liabilities, current |
|
|
23,176 |
|
|
|
30,027 |
|
Operating lease liabilities, current |
|
|
11,091 |
|
|
|
10,584 |
|
Debt, current |
|
|
119 |
|
|
|
26,853 |
|
Accrued expenses and other current liabilities |
|
|
135,502 |
|
|
|
163,230 |
|
Total current liabilities |
|
|
236,982 |
|
|
|
287,161 |
|
Debt, noncurrent |
|
|
1,718,018 |
|
|
|
2,606,459 |
|
Contract liabilities, noncurrent |
|
|
1,270 |
|
|
|
1,414 |
|
Operating lease liabilities, noncurrent |
|
|
54,142 |
|
|
|
53,798 |
|
Deferred tax liabilities |
|
|
383,137 |
|
|
|
384,420 |
|
Other long-term liabilities |
|
|
145,545 |
|
|
|
139,124 |
|
Total liabilities |
|
|
2,539,094 |
|
|
|
3,472,376 |
|
|
|
|
|
|
|
|
||
Class A Common Stock, $0.01 par value, 3,500,000,000 shares authorized; 77,712,735 issued; 76,797,587 outstanding as of June 30, 2026 |
|
|
777 |
|
|
|
— |
|
Class B Common Stock, $0.01 par value, 3,500,000,000 shares authorized; 340,676,783 issued and outstanding as of June 30, 2026 |
|
|
3,407 |
|
|
|
— |
|
Class C Common Stock, $0.01 par value, 500,000,000 shares authorized; no shares issued or outstanding as of June 30, 2026 |
|
|
— |
|
|
|
— |
|
Convertible Common Stock, $0.01 par value, 1 share authorized; 1 share issued and outstanding as of June 30, 2026 |
|
|
— |
|
|
|
— |
|
Preferred stock, $0.01 par value, 500,000,000 shares authorized; no shares issued or outstanding as of June 30, 2026 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
4,512,250 |
|
|
|
— |
|
Accumulated deficit |
|
|
(16,112 |
) |
|
|
— |
|
Accumulated other comprehensive income |
|
|
1,875 |
|
|
|
— |
|
Treasury stock, at cost, 915,148 shares |
|
|
(34,639 |
) |
|
|
— |
|
Members’ equity |
|
|
— |
|
|
|
3,124,058 |
|
Total stockholders’ and members' equity |
|
|
4,467,558 |
|
|
|
3,124,058 |
|
Total liabilities and stockholders' and members' equity |
|
$ |
7,006,652 |
|
|
$ |
6,596,434 |
|
7
Table 3: Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flow from operating activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
48,400 |
|
|
$ |
(33,580 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
103,556 |
|
|
|
98,093 |
|
Amortization of deferred financing cost and accretion of paid-in-kind interest |
|
|
2,576 |
|
|
|
3,190 |
|
Amortization of inventory fair value adjustment |
|
|
1,437 |
|
|
|
18,177 |
|
Loss (gain) on sale and disposal of assets |
|
|
(101 |
) |
|
|
9,958 |
|
Share-based compensation expense |
|
|
102,064 |
|
|
|
4,536 |
|
Interest rate hedges change in fair value |
|
|
(4,637 |
) |
|
|
5,770 |
|
Deferred income taxes |
|
|
(1,004 |
) |
|
|
(2,143 |
) |
Loss on extinguishment of debt |
|
|
11,447 |
|
|
|
15,535 |
|
Changes in operating assets and liabilities, net of business acquisitions: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(52,034 |
) |
|
|
(27,301 |
) |
Inventories |
|
|
(17,859 |
) |
|
|
(32,954 |
) |
Prepaid expenses and other current assets |
|
|
9,096 |
|
|
|
(5,112 |
) |
Accounts payable |
|
|
11,119 |
|
|
|
(4,393 |
) |
Accrued expenses and other current liabilities |
|
|
(26,143 |
) |
|
|
17,732 |
|
Contract assets and liabilities |
|
|
(20,688 |
) |
|
|
(6,504 |
) |
All other assets and liabilities |
|
|
7,502 |
|
|
|
7,466 |
|
Other operating activities, net |
|
|
(377 |
) |
|
|
135 |
|
Net cash provided by (used in) operating activities |
|
|
174,354 |
|
|
|
68,605 |
|
Cash flow from investing activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(22,290 |
) |
|
|
(21,395 |
) |
Proceeds from sale and disposal of assets, net of cash sold |
|
|
147 |
|
|
|
2,187 |
|
Acquisition of businesses, net of cash acquired |
|
|
(185,817 |
) |
|
|
(152,639 |
) |
Net cash provided by (used in) investing activities |
|
|
(207,960 |
) |
|
|
(171,847 |
) |
Cash flow from financing activities: |
|
|
|
|
|
|
||
Net proceeds from issuance of common stock |
|
|
1,227,753 |
|
|
|
— |
|
Payments for taxes related to net share settlement of equity awards |
|
|
(34,639 |
) |
|
|
— |
|
Proceeds from issuance of debt |
|
|
25,000 |
|
|
|
2,784,000 |
|
Repayments of debt |
|
|
(952,809 |
) |
|
|
(2,598,348 |
) |
Payments of debt financing fees |
|
|
— |
|
|
|
(38,907 |
) |
Issuance of related party notes receivable |
|
|
— |
|
|
|
(3,000 |
) |
Settlement of related party notes receivable(1) |
|
|
5,426 |
|
|
|
1,500 |
|
Repayments of related party payables |
|
|
— |
|
|
|
(7,000 |
) |
Distributions |
|
|
(332 |
) |
|
|
(351,119 |
) |
Contributions |
|
|
11,344 |
|
|
|
385,000 |
|
Other financing activities, net |
|
|
(2,519 |
) |
|
|
(845 |
) |
Net cash provided by (used in) financing activities |
|
|
279,224 |
|
|
|
171,281 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(1,228 |
) |
|
|
(8,338 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
244,390 |
|
|
|
59,701 |
|
Cash and cash equivalents, beginning of the period |
|
|
250,303 |
|
|
|
110,838 |
|
Cash and cash equivalents, end of the period |
|
$ |
494,693 |
|
|
$ |
170,539 |
|
8
Table 4: Reconciliation of Net income (loss) to Adjusted EBITDA and Adjusted EBITDA Margin
(Unaudited, in thousands except for percentages)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income (loss) |
|
$ |
(4,909 |
) |
|
$ |
(29,256 |
) |
|
$ |
48,400 |
|
|
$ |
(33,580 |
) |
Interest expense, net |
|
|
39,427 |
|
|
|
57,356 |
|
|
|
83,385 |
|
|
|
125,616 |
|
Income tax expense (benefit) |
|
|
3,495 |
|
|
|
58,342 |
|
|
|
19,198 |
|
|
|
55,840 |
|
Depreciation and amortization |
|
|
52,028 |
|
|
|
49,099 |
|
|
|
103,556 |
|
|
|
98,093 |
|
Acquisition and integration costs(1) |
|
|
715 |
|
|
|
1,214 |
|
|
|
1,437 |
|
|
|
19,963 |
|
Restructuring costs(2) |
|
|
— |
|
|
|
738 |
|
|
|
270 |
|
|
|
2,475 |
|
Transaction and other deal related expenses(3) |
|
|
1,819 |
|
|
|
4,074 |
|
|
|
9,044 |
|
|
|
4,955 |
|
Share-based compensation expense(4) |
|
|
107,111 |
|
|
|
2,206 |
|
|
|
109,591 |
|
|
|
4,536 |
|
Other non-recurring adjustments(5) |
|
|
11,812 |
|
|
|
9,901 |
|
|
|
11,812 |
|
|
|
9,901 |
|
Adjusted EBITDA |
|
$ |
211,498 |
|
|
$ |
153,674 |
|
|
$ |
386,693 |
|
|
$ |
287,799 |
|
Revenue |
|
$ |
500,728 |
|
|
$ |
400,444 |
|
|
$ |
959,586 |
|
|
$ |
780,523 |
|
Adjusted EBITDA Margin |
|
|
42.2 |
% |
|
|
38.4 |
% |
|
|
40.3 |
% |
|
|
36.9 |
% |
9
Table 5: Reconciliation of Net income (loss) to Adjusted Net Income and Adjusted Diluted Earnings Per Share
(Unaudited, in thousands except share and per share amounts)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
|||||
Net income (loss) |
|
$ |
(4,909 |
) |
|
$ |
(29,256 |
) |
|
$ |
48,400 |
|
|
$ |
(33,580 |
) |
|
Amortization of intangible assets |
|
|
36,284 |
|
|
|
34,183 |
|
|
|
72,307 |
|
|
|
68,263 |
|
|
Acquisition and integration costs |
|
|
715 |
|
|
|
1,214 |
|
|
|
1,437 |
|
|
|
19,963 |
|
|
Restructuring costs |
|
|
— |
|
|
|
738 |
|
|
|
270 |
|
|
|
2,475 |
|
|
Transaction and other deal related expenses |
|
|
1,819 |
|
|
|
4,074 |
|
|
|
9,044 |
|
|
|
4,955 |
|
|
Share-based compensation expense |
|
|
107,111 |
|
|
|
2,206 |
|
|
|
109,591 |
|
|
|
4,536 |
|
|
Other non-recurring adjustments |
|
|
11,812 |
|
|
|
9,901 |
|
|
|
11,812 |
|
|
|
9,901 |
|
|
Tax adjustment(1) |
|
|
(39,625 |
) |
|
|
(9,359 |
) |
|
|
(51,361 |
) |
|
|
(19,696 |
) |
|
Adjusted Net Income |
|
$ |
113,207 |
|
|
$ |
13,701 |
|
|
$ |
201,500 |
|
|
$ |
56,817 |
|
|
Adjusted Net Income Post-IPO |
|
$ |
113,207 |
|
|
N/A |
|
|
$ |
113,207 |
|
(2) |
|
N/A |
|
||
Less: undistributed income allocated to participating securities |
|
|
— |
|
|
N/A |
|
|
|
— |
|
(2) |
|
N/A |
|
||
Adjusted Net Income attributable to common stockholders |
|
$ |
113,207 |
|
|
N/A |
|
|
$ |
113,207 |
|
|
N/A |
|
|||
Net loss per common share, basic and diluted |
|
$ |
(0.01 |
) |
|
N/A |
|
|
$ |
(0.01 |
) |
(2) |
|
N/A |
|
||
Adjusted Net Income per common share, diluted(3) |
|
$ |
0.28 |
|
|
N/A |
|
|
$ |
0.28 |
|
(2) |
|
N/A |
|
||
Adjusted weighted-average common shares outstanding, diluted(3) |
|
|
407,505,928 |
|
(4) |
N/A |
|
|
|
407,505,928 |
|
(4) |
N/A |
|
|||
10
Table 6: Reconciliation of Net cash provided by operating activities to Free Cash Flow
(Unaudited, in thousands)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net cash provided by operating activities |
|
$ |
137,885 |
|
|
$ |
47,843 |
|
|
$ |
174,354 |
|
|
$ |
68,605 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures |
|
|
(10,587 |
) |
|
|
(12,600 |
) |
|
|
(22,290 |
) |
|
|
(21,395 |
) |
Free Cash Flow |
|
$ |
127,298 |
|
|
$ |
35,244 |
|
|
$ |
152,064 |
|
|
$ |
47,210 |
|
11
Table 7: Net Leverage Reconciliation
(Unaudited, in thousands except for multiples)
|
|
June 30, 2026 |
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
|||
Total debt |
|
$ |
1,718,137 |
|
|
$ |
2,652,495 |
|
|
$ |
2,633,312 |
|
Add: Unamortized deferred financing costs |
|
|
15,523 |
|
|
|
27,225 |
|
|
|
28,159 |
|
Less: Cash and cash equivalents |
|
|
(494,693 |
) |
|
|
(238,918 |
) |
|
|
(250,303 |
) |
Total net debt |
|
$ |
1,238,967 |
|
|
$ |
2,440,802 |
|
|
$ |
2,411,168 |
|
Net income(1) |
|
|
127,969 |
|
|
|
103,622 |
|
|
|
45,989 |
|
Adjusted EBITDA(2) |
|
|
670,198 |
|
|
|
612,374 |
|
|
|
571,304 |
|
Total debt to net income |
|
13.4x |
|
|
25.6x |
|
|
57.3x |
|
|||
Net Leverage |
|
1.8x |
|
|
4.0x |
|
|
4.2x |
|
|||
12