Bruker : Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

About this update from Bruker Corporation

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion of our financial condition and results of operations should be read in conjunction with our interim unaudited condensed consolidated financial statements and the notes to those statements included in Part 1, Item 1 of this Quarterly Report on Form 10-Q, and in conjunction with the audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2025. The dollar amounts listed in the tables presented in Management's Discussion and Analysis of Financial Condition and Results of Operations are in millions of U.S. Dollars. Any statements other than statements of historical fact contained in Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Quarterly Report on Form 10-Q may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Without limiting the foregoing, the words "believe," "anticipate," "plan," "expect," "seek," "may," "will," "intend," "estimate," "should" and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding: • the impact of supply chain challenges on our business and operations; • our cost savings initiatives; • our working capital requirements and the sufficiency of our cash, borrowings and proceeds of indebtedness to fund our operations and investment activities; • our plans to make capital investments; • the impact of changes to tax and accounting rules, and changes in law; • fluctuations in estimates impacting costs related to our self-funded health insurance plan; • our expectations regarding backlog and revenue; • our expectations and the impact of our restructuring initiatives or success of our acquisitions; • the impact of our global IT transformation activities; • the impact of foreign currency exchange rates and changes in commodity prices; and • any other statements that address events or developments that the Company intends or believes will or may occur in the future. Actual results may differ from those referred to in any forward-looking statements due to a number of factors, including, but not limited to, the risks described in Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2025 and in this Quarterly Report on Form 10-Q. We expressly disclaim any intent or obligation to update these forward-looking statements other than as required by law. We can experience quarter-to-quarter fluctuations in our operating results as a result of various factors, some of which are outside our control. The aforementioned various factors include: • general economic conditions, including inflation, the threat of recession, financial liquidity, currency volatility or devaluation, supply chain or manufacturing capabilities, uncertain economic conditions in the United States and abroad, and additional tariffs, including those imposed or that may be imposed or changed by the current presidential administration in the U.S. and uncertainties relating to the same; • geopolitical tensions, including those that have or may have impact on our customers, such as the conflict between Russia and Ukraine and related economic sanctions, conflicts in the Middle East and surrounding areas and hostilities involving Iran, the possible expansion of such conflicts and potential geopolitical consequences, the ongoing tensions between the United States and China, tariff and trade policy changes, and increasing potential conflict involving countries in Asia that are significant to the Company's supply chain operations, such as Taiwan and China; • the impacts of climate change and certain weather-related disruptions; • the timing of governmental stimulus programs and academic research budgets; • the time it takes between the date customer orders and deposits are received, systems are shipped and accepted by our customers and full payment is received; • foreign currency exchange rates; • the worldwide shortage of semiconductor chips, components and raw materials, such as copper; • changes in raw material, component and logistics costs; • the time it takes for us to receive critical materials to manufacture our products; • the time it takes to satisfy local customs requirements and other export/import requirements; • the time it takes for customers to construct or prepare their facilities for our products; • the time required to obtain governmental licenses; • our ability to achieve desired cost savings; • our ability to identify suitable acquisition targets and successfully integrate and manage acquired business; and • costs related to acquisitions of technology or businesses. Several of these factors have in the past affected and may continue to affect the amount and timing of revenue recognized on sales of our products and receipt of related payments and will likely continue to do so in the future. Accordingly, our operating results in any particular quarter may not necessarily be an indication of any future quarter's operating performance. OVERVIEW We are a developer, manufacturer and distributor of high-performance scientific instruments and analytical and diagnostic solutions that enable our customers to explore life and materials at microscopic, molecular and cellular levels. Our corporate headquarters are located in Billerica, Massachusetts. We maintain major research and development and manufacturing centers in Europe, Asia and North America and we have commercial offices located throughout the world. Bruker is organized into four reportable segments: the Bruker Scientific Instruments ("BSI") BioSpin Segment, the BSI CALID Segment, the BSI NANO Segment, and the Bruker Energy & Supercon Technologies ("BEST") Segment. Consolidated Results The following table presents a summary of our consolidated results as of the three months ended March 31, 2026, and 2025 (dollars in millions): Three Months Ended March 31, 2026 2025 GAAP Financial Measures: Revenue $ 823.4 $ 801.4 Revenue year-on-year growth rate 2.7 % 11.0 % Gross Profit $ 379.8 $ 391.2 Gross Profit Margin 46.1 % 48.8 % Operating Income $ 10.2 $ 31.8 Operating Income Margin 1.2 % 4.0 % Net cash provided by operating activities $ 71.2 $ 65.0 Non-GAAP Financial Measures (see "Non-GAAP Measures" below): Non-GAAP Constant-exchange rate ("CER") currency revenue $ 786.8 $ 811.8 Non-GAAP Constant-exchange rate ("CER") currency revenue year-on-year (decrease) growth rate (1.8 )% 12.5 % Non-GAAP Organic Revenue $ 766.0 $ 742.6 Non-GAAP Organic Revenue year-on-year (decrease) growth rate compared to prior year revenue (4.4 )% 2.9 % Non-GAAP Gross Profit $ 411.8 $ 410.9 Non-GAAP Gross Profit Margin 50.0 % 51.3 % Non-GAAP Operating Income $ 84.2 $ 101.7 Non-GAAP Operating Income Margin 10.2 % 12.7 % Non-GAAP Free Cash Flow $ 47.0 $ 39.0 Discussion of GAAP financial measures follows in the Results of Operations paragraphs. Non-GAAP Financial Measures Uses and definitions: Although our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP, we believe that describing revenue excluding the effects of foreign currency, and expenses excluding costs related to restructuring actions, impairment costs, acquisitions, integration and IT transformation expenses, amortization of acquired intangible assets, and other costs ("non-GAAP adjustments"), provides meaningful supplemental information regarding our performance but should not be considered in isolation from or as a replacement for the most directly comparable GAAP financial measures. We rely internally on certain measures that are not calculated according to GAAP. These measures include non-GAAP constant exchange rate ("CER") currency revenue growth, non-GAAP organic revenue growth, non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating margin, and non-GAAP free cash flow. Our management believes that these financial measures provide relevant and useful information that is widely used by equity analysts, investors, and competitors in our industry, as well as by our management, in assessing both consolidated and business unit performance and are useful measures to evaluate our continuing business. Additionally, management believes free cash flow is a useful measure to evaluate our business as it indicates the amount of cash generated after additions to property, plant, and equipment which is available for, among other things, investments in our business, acquisitions, share repurchases, dividends, and repayment of debt. We regularly use these non-GAAP financial measures internally to understand, manage, and evaluate our business results and make operating decisions. We also measure our employees and compensate them, in part, based on such non-GAAP measures and use this information for our planning and forecasting activities. These measures may also be useful to investors in evaluating the underlying operating performance of our business. The presentation of these non-GAAP financial measures is not intended to be a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and it may be different from non-GAAP financial measures used by other companies and therefore may not be comparable among companies. We define our non-GAAP financial measures as follows: • Non-GAAP CER currency revenue growth as GAAP revenue excluding the effect of changes in foreign currency translation rates. • Non-GAAP Organic revenue growth as GAAP revenue excluding the effect of changes in foreign currency translation rates and acquisitions. • Non-GAAP gross profit as GAAP gross profit excluding non-GAAP adjustments. • Non-GAAP gross profit margin as GAAP gross profit margin excluding the impact of non-GAAP adjustments. • Non-GAAP operating income as GAAP operating income excluding non-GAAP adjustments. • Non-GAAP operating income margin as GAAP operating income margin excluding the impact of non-GAAP adjustments. • Non-GAAP free cash flow as GAAP net cash provided by operating activities less additions to property, plant, and equipment. Reconciliations of GAAP to Non-GAAP financial measures: GAAP revenue to non-GAAP CER currency and non-GAAP organic revenue: Three Months Ended March 31, 2026 yoy growth (decline) (a) 2025 GAAP revenue $ 823.4 2.7% $ 801.4 Effect of changes in foreign currency translation rates 36.6 (10.4 ) Non-GAAP CER currency revenue $ 786.8 (1.8)% $ 811.8 Acquisitions 20.8 69.2 Non-GAAP Organic revenue $ 766.0 (4.4)% $ 742.6 (a) Year-over-year ( " yoy " ) growth rates are calculated as the percentage increase (or decrease) in respective line items relative to GAAP revenue in the comparable prior year. The non-GAAP CER revenue decline during the three months ended March 31, 2026, was driven primarily by weaker demand in the academic and government research and industrial markets for our analytical instruments, partially offset by higher revenue from semiconductor and hospital and clinical markets as well as the current year impact of recent acquisitions. GAAP gross profit and gross profit margin to non-GAAP gross profit and gross profit margin: Three Months Ended March 31, 2026 2025 Gross profit $ 379.8 46.1 % $ 391.2 48.8 % Non-GAAP adjustments: Restructuring costs 9.5 1.2 % 2.6 0.3 % Acquisition-related costs 3.4 0.4 % 2.3 0.3 % Purchased intangible amortization 16.7 2.0 % 14.0 1.7 % Intangible assets impairment charges 0.7 0.1 % - - Lease and fixed asset impairment charges 1.8 0.2 % 0.2 - Other costs (0.1 ) - 0.6 0.2 % Non-GAAP gross profit $ 411.8 50.0 % $ 410.9 51.3 % Non-GAAP gross profit remained relatively flat compared to the comparable period in the prior year as positive results of cost savings initiatives were offset by foreign exchange headwinds from a declining U.S. Dollar, lower revenue volume, and unfavorable sales mix. GAAP operating income and operating margin to non-GAAP operating income and operating margin: Three Months Ended March 31, 2026 2025 Operating income $ 10.2 1.2 % $ 31.8 4.0 % Non-GAAP adjustments: Restructuring costs 17.8 2.2 % 10.2 1.3 % Acquisition-related costs 7.5 0.9 % 8.6 1.1 % Purchased intangible amortization 32.5 3.9 % 27.3 3.4 % Acquisition-related litigation charges - - 18.6 2.3 % Intangible assets impairment charges 2.7 0.3 % 0.3 - Lease and fixed asset impairment charges 12.7 1.5 % 0.6 0.1 % Other costs 0.8 0.2 % 4.3 0.5 % Non-GAAP operating income $ 84.2 10.2 % $ 101.7 12.7 % The decrease in our non-GAAP operating margins during the three months ended March 31, 2026, was driven primarily by foreign exchange headwinds from a declining U.S. Dollar, lower revenue volume, and unfavorable revenue mix, partially offset by cost savings initiatives. GAAP Net operating cash flow to non-GAAP Free cash flow: Three Months Ended March 31, 2026 2025 Net cash provided by operating activities $ 71.2 $ 65.0 Less: purchases of property, plant and equipment (24.2 ) (26.0 ) Non-GAAP free cash flow $ 47.0 $ 39.0 For the three months ended March 31, 2026, our free cash flow increased by $8.0 million compared to the same period in 2025, driven by higher operating cashflow and lower capital expenditures. RESULTS OF OPERATIONS Three Months Ended March 31, 2026, compared to the Three Months Ended March 31, 2025. Consolidated Results The following table presents our results for the periods reported: Three Months Ended March 31, 2026 2025 Dollar Change Percentage Change Product revenue $ 646.4 $ 643.3 $ 3.1 0.5 % Service and other revenue 177.0 158.1 18.9 12.0 % Total revenue 823.4 801.4 22.0 2.7 % Cost of product revenue 347.6 322.3 25.3 7.8 % Cost of service and other revenue 96.0 87.9 8.1 9.2 % Total cost of revenue 443.6 410.2 33.4 8.1 % Gross profit 379.8 391.2 (11.4 ) (2.9 )% Operating expenses: Selling, general and administrative 242.1 225.4 16.7 7.4 % Research and development 101.3 97.1 4.2 4.3 % Other charges, net 26.2 36.9 (10.7 ) (29.0 )% Total operating expenses 369.6 359.4 10.2 2.8 % Operating income 10.2 31.8 (21.6 ) (67.9 )% Interest and other income (expense), net 11.7 (6.7 ) 18.4 (274.6 )% Income before income taxes, equity in (losses) income of unconsolidated investees, net of tax, and noncontrolling interests in consolidated subsidiaries 21.9 25.1 (3.2 ) (12.7 )% Income tax provision 2.5 8.7 (6.2 ) (71.3 )% Equity in (losses) income of unconsolidated investees, net of tax (3.7 ) 0.4 (4.1 ) (1025.0 )% Consolidated net income 15.7 16.8 (1.1 ) (6.5 )% Net income (loss) attributable to noncontrolling interests in consolidated subsidiaries 1.3 (0.6 ) 1.9 (316.7 )% Net income attributable to Bruker Corporation 14.4 17.4 (3.0 ) (17.2 )% Dividends on Series A Mandatory Convertible Preferred Stock 10.9 - 10.9 100.0 % Net income attributable to Bruker Corporation common shareholders $ 3.5 $ 17.4 $ (13.9 ) (79.9 )% Revenue The following table presents revenue, change in revenue, and revenue growth by reportable segment for the periods reported: Three Months Ended March 31, 2026 2025 Dollar Change Percentage Change BSI BioSpin $ 197.5 $ 207.8 $ (10.3 ) (5.0 )% BSI CALID 316.3 280.1 36.2 12.9 % BSI NANO 246.0 256.6 (10.6 ) (4.1 )% BEST 66.8 59.3 7.5 12.6 % Eliminations (a) (3.2 ) (2.4 ) (0.8 ) Total revenue $ 823.4 $ 801.4 $ 22.0 2.7 % (a) Represents product and service revenue between reportable segments. The overall revenue increase during the three months ended March 31, 2026, was driven mostly by foreign exchange tailwinds from a declining U.S. Dollar and the impact of recent acquisitions within the BSI CALID segment. The BSI BioSpin Segment decrease in revenue was primarily driven by weaker demand in the academic and government research market and GHz-class NMR system sales activity, with one GHz-class NMR system sold in Q1 2025 as compared to none in Q1 2026, partially offset by growth from Pre-Clinical Imaging, services, and software. The BSI CALID Segment revenue increase was driven by the impact of recent acquisitions, including Tofwerk AG ("Tofwerk"), as well as increased volumes from the Optics division and their applied market Security Detection business. BSI Nano Segment revenue decline was driven by weaker demand in the academic and government research and industrial markets for our analytical instruments partially offset by higher revenue from the semiconductor market. The BEST revenue increase was driven mainly by the low temperature superconductor business and higher revenue from the magnetic resonance imaging market. Geographically during the three months ended March 31, 2026, compared to the same period in 2025, our North American revenue decreased by 0.2% and European revenue increased by 12.8%, while Asia Pacific revenue decreased by 10.3% mostly driven by China. Gross Profit The following table presents gross profit and gross profit margins ("GPM") by reportable segment for the periods reported: Three Months Ended March 31, 2026 2025 Gross Profit GPM by Segment Gross Profit GPM by Segment BSI BioSpin $ 88.9 45.0 % $ 93.7 45.1 % BSI CALID 167.7 53.0 % 153.3 54.7 % BSI NANO 109.1 44.3 % 131.4 51.2 % BEST 14.1 21.1 % 12.8 21.6 % Total gross profit $ 379.8 46.1 % $ 391.2 48.8 % The decrease in total gross profit and gross profit margin during the three months ended March 31, 2026, was driven primarily by foreign exchange headwinds from a declining U.S. Dollar, lower revenue volume, and unfavorable revenue mix, partially offset by cost savings initiatives. Selling, General and Administrative Our selling, general and administrative expenses for the three months ended March 31, 2026, increased to 29.4% of total revenue, from 28.1% of total revenue for the comparable period in 2025. The increase as a percentage of revenue was primarily due to decline of CER and Organic revenue, increased costs associated with foreign exchange headwinds from a declining U.S. Dollar, partially offset by the impact of cost savings initiatives. Research and Development Our research and development expenses for the three months ended March 31, 2026, increased to 12.3% of total revenue from 12.1% of total revenue for the comparable period in 2025. We commit substantial resources, efforts, and capital to internal and collaborative research and development projects in order to provide innovative products and solutions to our customers. Additionally, we have been able to gain access to research and development capabilities through acquisitions, acquiring the intellectual property, technology, and expertise of the acquired companies. The increase in research and development costs as a percentage of revenue was primarily a result of increased costs associated with foreign exchange headwinds. Other Charges, Net Other charges, net for the three months ended March 31, 2026, decreased to $26.2 million compared to $36.9 million for the comparable period in 2025. The year over year decrease was primarily due to the acquisition-related litigation charges of $18.6 million in 2025 with no comparable charges in 2026, offset by an increase in long-lived asset impairment charges of $12.2 million as a result of the restructuring programs described in Note 10, Restructuring and Asset Impairments . Refer to Note 9 , Other Charges, Net for more details on our other charges, net costs. Operating Income The following table presents operating income and operating margins ("OM") by reportable segment for the periods reported: Three Months Ended March 31, 2026 2025 Operating Income OM by Segment Operating Income OM by Segment BSI BioSpin $ 16.0 8.1 % $ 23.7 11.4 % BSI CALID 40.7 12.9 % 40.2 14.4 % BSI NANO (21.8 ) (8.9 )% (7.0 ) (2.7 )% BEST 7.5 11.2 % 6.9 11.6 % Corporate, eliminations and other (a) (32.2 ) (32.0 ) Total operating income $ 10.2 1.2 % $ 31.8 4.0 % (a) Represents corporate costs and eliminations not allocated to the reportable segments. The decrease in total operating income and operating income margin was primarily due to unfavorable revenue mix which negatively impacted gross margins, increased restructuring costs and impairment charges, and foreign exchange headwinds from a declining U.S. Dollar. In August 2025, we announced a cost savings initiative aimed at reducing annualized costs by approximately $100 million to $120 million by the end of 2026. This cost savings initiative was implemented with the intention to improve operating income and operating margins on a company-wide basis. The reductions affect all parts of our business including supply chain, manufacturing, commercial operations, administrative functions, and research and development. Global Tariffs Early in 2025, the U.S. government imposed or increased tariffs on certain foreign imports into the United States from key trading partners, including Germany and Switzerland. On February 20, 2026, the U.S. Supreme Court struck down certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"), and the U.S. Court of International Trade ordered U.S. Customs and Border Protection ("CBP") to refund such tariffs, subject to potential appeal. On April 20, 2026, CBP launched an online portal for submitting IEEPA tariff refund requests. We have submitted Consolidated Administration and Processing of Entries ("CAPE") declarations seeking refunds for tariffs paid during fiscal 2025 and the first quarter of fiscal 2026; however, all claims remain subject to CBP review and validation. Because the timing and approval of any refunds are uncertain and contingent upon further legal, regulatory, and administrative developments, no receivable has been recognized as of March 31, 2026. Any approved refunds, if received, could be material. Various other tariff programs remain in effect. In February 2026 the U.S. imposed new temporary tariff measures currently scheduled to remain in place through July 2026 and it may impose additional tariffs or extend or expand existing programs. These tariff measures and the related uncertainty in global trade markets have contributed to lower-than-anticipated bookings, revenues, and profitability, and may continue to adversely affect our business for the foreseeable future. The magnitude and duration of these impacts are difficult to predict, as trade policies may change without notice. We continue to monitor these developments and assess their potential impact on our business, results of operations and financial condition. Interest and Other Income (Expense), Net The increase in interest and other income (expense), net in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily due to the gain on remeasurement of the previously held equity interest in Tofwerk of $12.2 million. On January 6, 2026, we acquired the remaining 60.0% interest in Tofwerk and remeasured to fair value the previously held 40.0% interest which was accounted for under the equity method. Refer to Note 3, Acquisitions for more details on the Tofwerk acquisition and Note 11, Interest and Other Income (Expense), net for more details on our interest and other income (expense), net. Income Tax Provision The effective tax rates for the three months ended March 31, 2026, and 2025 were 11.4% and 34.7%, respectively. The decrease in the Company's effective tax rate was primarily due to changes in jurisdictional mix and the impact of a nontaxable gain associated with the acquisition of Tofwerk ( refer to Note 3, Acquisitions for more information). The Organization for Economic Co-operation and Development ("OECD") introduced its Pillar Two Framework Model Rules, which provides guidance for a global minimum tax. Various countries have either enacted or are in the process of enacting legislation to implement this framework. Our income tax provision for the three months ended March 31, 2026, reflected currently enacted legislation and guidance related to the model rules. This enacted legislation and guidance did not have a material impact on our income tax provision for the three months ended March 31, 2026. The Company continues to monitor the countries in which it operates as they enact legislation implementing Pillar Two. LIQUIDITY AND CAPITAL RESOURCES Cash flows We anticipate that our existing cash and cash equivalents and credit facilities will be sufficient to support our operating and investing needs, and other liquidity needs for at least the next twelve months and the foreseeable future under the currently anticipated business conditions and macroeconomic environment. As of March 31, 2026, we had $133.4 million in cash and cash equivalents, of which $74.0 million was held in our foreign subsidiaries. The Company has access to the vast majority of its cash and cash equivalent balances held outside of the United States without incurring significant additional tax costs and therefore considers them available for use globally. The amount of funds held in the United States can fluctuate due to the timing of receipts and payments in the ordinary course of business and due to other reasons, such as acquisitions and borrowings. As part of our ongoing liquidity assessments, we regularly monitor the mix of domestic and foreign cash flows (both inflows and outflows). Our future cash requirements could be affected by acquisitions that we may complete, or the payment of common and preferred dividends in the future. Historically, we have used the liquidity generated from cash flow from operations, debt financings, and issuances of common and preferred stock to finance our growth and operating needs. In the future, there are no assurances that we will continue to generate cash flow from operations, that additional financing alternatives will be available to us, if required, or, if available, will be obtained on terms favorable to us. We aggregate all bank accounts that are subject to our notional cash pooling arrangement into a single balance on our consolidated balance sheets. Our notional cash pooling arrangement is managed by a third-party financial institution and as of March 31, 2026, based on the reporting maintained by our financial institution, it was in a positive position. The following table presents our cash flows from operating activities, investing activities and financing activities for the periods presented (in millions): Three Months Ended March 31, 2026 2025 Net cash provided by operating activities $ 71.2 $ 65.0 Net cash used in investing activities (39.7 ) (26.1 ) Net cash used in financing activities (204.9 ) (51.2 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 7.9 13.3 Net (decrease) increase in cash, cash equivalents and restricted cash $ (165.5 ) $ 1.0 Net cash provided by operating activities during the three months ended March 31, 2026, resulted primarily from consolidated net income adjusted for non-cash items of $95.4 million, and a change in operating assets and liabilities, net of acquisitions of $(24.2) million. Net cash provided by operating activities during the three months ended March 31, 2025, resulted primarily from consolidated net income adjusted for non-cash items of $55.7 million, and a change in operating assets and liabilities, net of acquisitions of $9.3 million. The increase in consolidated net income adjusted for non-cash items was primarily driven by the non-cash impairment charges related to intangible assets and other long lived assets primarily in our BSI NANO segment as a result of our BSI NANO restructuring plan described in Note 10, Restructuring and Asset Impairments , an increase in write-down of demonstration and other inventories, and timing of income taxes payable. The change in operating assets and liabilities, net of acquisitions, decreased primarily due to increased collections of receivables and an increase in inventory which was largely attributable to foreign currency movements. Net cash used in investing activities during the three months ended March 31, 2026, resulted primarily from purchases of property, plant and equipment of $24.2 million and acquisitions of $16.0 million. Net cash used in investing activities during the three months ended March 31, 2025, resulted primarily from purchases of property, plant and equipment of $26.0 million. Net cash used in investing activities during the three months ended March 31, 2026 increased compared to the comparable period in the prior year due to acquisitions, primarily due to the acquisition of Tofwerk, which closed in the first quarter of 2026. Net cash used in financing activities during the three months ended March 31, 2026, was primarily from repayments of long-term debt of $181.3 million and cash paid for dividends to our preferred and common shareholders of $18.6 million. Net cash used in financing activities during the three months ended March 31, 2025, was primarily from net repayments of our revolving line of credit of $28.0 million, repayments of long-term debt of $7.7 million, and cash paid for purchases of common stock under our repurchase program of $10.0 million, offset by proceeds from long-term debt of $2.9 million. During the first quarter of 2026, we repaid in full the outstanding balance in our 2024 term loan due in 2029. Additionally, during the year ended December 31, 2025, we raised proceeds via the issuance of equity in the form of the issuance of the Series A Mandatory Convertible Preferred Stock to pay down some of our outstanding debt obligations. As a result of such issuance, we also have certain obligations with respect to discretionary dividends to our preferred shareholders in addition to the discretionary dividends historically paid to our common shareholders. Credit Facilities As of March 31, 2026, we have total outstanding debt of $1.7 billion and a revolving credit facility that provides for up to $900.0 million of backup liquidity to finance working capital needs, refinance or reduce existing indebtedness, and for general corporate use. In addition, the facility provides for an uncommitted incremental facility whereby, under certain circumstances, we may, at our option, increase the amount of the revolving facility or incur term loans in an aggregate amount not to exceed $400.0 million. As of March 31, 2026, we were in compliance with all covenants of our debt agreements. For a summary of the fair and carrying values of our outstanding debt as of March 31, 2026, and December 31, 2025, refer to Note 15, Debt and Note 16, Fair Value of Financial Instruments to our unaudited condensed consolidated financial statements included in this report. For additional information on our outstanding debt and credit facility refer to Note 20 Debt , to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. Share Repurchase Program Pursuant to a share repurchase program approved by our Board of Directors and announced on May 12, 2023, we were permitted to purchase up to $500.0 million of shares of our common stock over a two-year period. During the three months ended March 31, 2025, the Company purchased a total of 200,731 shares at an aggregate cost of $10.0 million under the 2023 Repurchase Program. The 2023 Repurchase Program expired in May 2025 and has not been renewed. Issuance of Mandatory Convertible Preferred Stock On September 8, 2025, we issued 2,760,000 shares, or $690 million aggregate liquidation preference, of our 6.375% Mandatory Convertible Preferred Stock, Series A, par value $0.01 per share, (including 360,000 shares, or $90,000,000 aggregate liquidation preference, of Mandatory Convertible Preferred Stock issued upon exercise by the underwriters of over-allotment option in full) pursuant to a previously announced underwritten public offering. Dividends on the Mandatory Convertible Preferred Stock will be payable on a cumulative basis when, as and if declared by our Board of Directors, at an annual rate of 6.375% on the liquidation preference of $250 per share. If declared, these dividends will be paid in cash, or, subject to certain limitations, in shares of our common stock or, subject to certain limitations, in a combination of cash and shares of our common stock, at our election, on March 1, June 1, September 1 and December 1 of each year, which commenced on December 1, 2025, and ending on, and including, September 1, 2028. We used the proceeds from this issuance to repay (i) our term loan due December 2026 in full, (ii) outstanding borrowings under our 2024 amended and restated revolving credit agreement in full, and (iii) a portion of our term loan due March 2027. Refer to Note 21, Shareholder's Equity , in the Notes to our unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q for more information on our mandatory convertible preferred stock. CRITICAL ACCOUNTING POLICIES AND ESTIMATES There have been no material changes to our critical accounting policies and estimates since December 31, 2025. Refer to our Annual Report on Form 10-K for the year ended December 31, 2025, for a discussion of our critical accounting policies. RECENT ACCOUNTING PRONOUNCEMENTS Information regarding recent accounting standard changes and developments is incorporated by reference from Part I, Item 1, unaudited condensed consolidated financial statements, of this document and should be considered an integral part of this Item 2. Refer to Note 2, Recent Accounting Pronouncements in the Notes to the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q for recently adopted and issued accounting standards.

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