The following management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to help you understand the business operations and financial condition of Versigent PLC (“Versigent”) for the three and six months ended June 30, 2026. This discussion should be read in conjunction with Item 1. Financial Statements. Our MD&A is presented in the following sections:
•Spin-Off from Aptiv
•Basis of Presentation
•Executive Overview
•Results of Operations
•Non-GAAP Measures
•Liquidity and Capital Resources
•Off-Balance Sheet Arrangements
•Critical Accounting Estimates
•Recently Issued Accounting Pronouncements
Within this MD&A, “Versigent,” the “Company,” “we,” “us” and “our” refer to Versigent PLC. “Aptiv” or “Former Parent” refers to Aptiv PLC. The Company’s ordinary shares are publicly traded on the New York Stock Exchange (“NYSE”) under the trading symbol “VGNT.”
Spin-Off from Aptiv
On January 22, 2025, Aptiv announced its intention to separate its Electrical Distribution Systems business by means of a Spin-Off (the “Separation” or “Spin-Off”). On April 1, 2026 (the “Distribution Date”), the Spin-Off, which created Versigent PLC, was completed in the form of a distribution of all of the ordinary shares of Versigent to holders of Aptiv’s ordinary shares on a pro rata basis. Each holder of record of Aptiv ordinary shares received one Versigent ordinary share for every three Aptiv ordinary shares held on March 17, 2026 (the “Record Date”). In lieu of fractional shares of Versigent, stockholders of the Company received cash. As a result of these transactions, all of the assets, liabilities, and legal entities comprising Aptiv’s Electrical Distribution Systems business are now owned directly, or indirectly through its subsidiaries, by Versigent.
As part of the Spin-Off, we entered into a number of agreements with Aptiv to govern the Separation and our relationship with the Former Parent following the Separation, including a Separation and Distribution Agreement, Transition Services Agreement, supply agreements, Tax Matters Agreement and Employee Matters Agreement. Refer to the Company’s Information Statement furnished with the Company’s Registration Statement on Form 10-12B/A filed on March 6, 2026 for a description of the material terms of these agreements. These agreements provided for the allocation between Versigent and the Former Parent’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationships between the Company and Former Parent after the Spin-Off.
Basis of Presentation
Prior to the Spin-Off on April 1, 2026, the historical financial statements of Versigent were prepared on a stand-alone combined basis and were derived from the Former Parent’s consolidated financial statements and accounting records as if the Electrical Distribution Systems segment of the Former Parent had been part of Versigent for all periods presented. Accordingly, for periods presented prior to April 1, 2026, our financial statements are presented on a combined basis and the periods subsequent to April 1, 2026 are presented on a consolidated basis (all periods hereinafter are referred to as the “consolidated financial statements”). The unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).
The Company’s historical financial statements for periods prior to the Spin-Off reflect an allocation of expenses related to certain corporate functions of the Former Parent, including senior management, legal, human resources, finance and accounting, treasury, information technology services and support, cash management, payroll processing, pension and benefit administration and other shared services. These costs were allocated using methodologies that management believes were reasonable for the item being allocated. Allocation methodologies included direct usage when identifiable, as well as the Company’s relative share of revenues, headcount or functional spend as a percentage of the total. However, the allocations are not indicative of the actual expenses that would have been incurred had the Company operated as a stand-alone publicly-traded company for the periods presented. Former Parent allocations are further described in Note 3. Related-Party Transactions to the consolidated financial statements.
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For periods prior to April 1, 2026, the consolidated financial statements principally represent the historical results of operations and assets and liabilities of the Former Parent’s Electrical Distribution Systems segment. They may not be indicative of Versigent’s future performance and do not necessarily reflect what Versigent’s consolidated results of operations, financial condition and cash flows would have been had Versigent operated as a separate, publicly traded company during the periods presented.
Executive Overview
Our Business
Versigent is a global leader in the design, development and manufacture of low voltage (“LV”) and high voltage (“HV”) electrical architectures. We are a global supplier of optimized vehicle architecture solutions to a broad customer base primarily comprised of original equipment manufacturers (“OEMs”) that manufacture increasingly software-defined, electrified and feature-rich vehicles. Our products provide the signal, power and data distribution that supports increased vehicle content and electrification and enables increased safety, reduced emissions, and enhanced vehicle connectivity.
We sell our extensive portfolio of optimized solutions for signal, power and data distribution to leading OEMs of both light vehicles (passenger cars, trucks and vans and sport-utility vehicles) and commercial vehicles (light-duty, medium-duty and heavy-duty trucks, commercial vans, buses and off-highway vehicles). We believe our ability to support the growing trends of increased electrification of passenger and commercial vehicles, the enablement of enhanced safety features and the consumer-driven demand for more in-vehicle electronics and features will provide continued opportunities for market share expansion and revenue growth.
We also develop, manufacture and sell our solutions to a number of adjacent end markets, including agriculture, construction and grid and infrastructure, and have begun penetrating other industrial end markets, including off-grid power storage and robotics. With a proven portfolio of solutions, we expect to leverage our long-standing customer relationships, technical expertise within power, data and signal distribution, and capabilities built serving the global automotive industry to further penetrate these adjacent markets.
Business Strategy
Our strategy is to continue to develop market-relevant technologies that solve our OEM customers’ increasingly complex challenges and leverage our portfolio of signal, power and data solutions, global manufacturing capabilities, and lean and flexible cost structure to continue to penetrate the automotive, commercial vehicle and adjacent markets to deliver strong revenue growth, margin expansion, earnings and cash flow growth.
Trends, Uncertainties and Opportunities
Economic conditions. Our business is directly related to automotive sales and automotive vehicle production by our customers. Automotive sales depend on a number of factors, including global and regional economic conditions. Global vehicle production increased approximately 4% from 2024 to 2025, reflecting 10% growth in China and 1% in South America, partially offset by declines of 2% in North America and 1% in Europe. Refer to Note 20. Segment Reporting and Revenue for financial information concerning principal geographic areas.
Global inflationary pressures have, at times, both reduced consumer demand for automotive vehicles and increased the price of inputs to our products, which has adversely impacted our sales and profitability, and these trends have continued in 2026. Changes in trade policies, tariffs, and other geopolitical factors have affected and could continue to affect our operations and those of our OEM customers, potentially resulting in lower production volumes or shifts to higher-cost regions. Rising interest rates may also reduce vehicle demand through higher borrowing costs and tighter credit availability. Economic weakness may shift sales toward vehicles with lower content, which could adversely affect our profitability. Although our diversified footprint and flexible cost structure provide resilience, shifts in regional production or vehicle mix may negatively impact margins.
Global supply chain disruptions. Global supply chain disruptions have caused, and may continue to cause, production interruptions that affect our ability to meet OEM demand. Uncertainty driven by evolving trade policies has also increased volatility across the industry.
In addition, we continue to manage inventory levels to support customers’ vehicle production schedules. As of June 30, 2026 and December 31, 2025, we have not experienced significant raw material shortages; however, inventory levels have remained elevated due to recent OEM production volatility and cancellations. We are actively managing inventory to balance supply continuity and working capital efficiency.
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Key growth markets. We believe our global presence positions us to benefit from long-term growth in key markets. We continue to expand relationships with global and regional OEMs and leverage our footprint in best cost countries to support growth and margin improvement.
We maintain a strong presence in China, where automotive production grew 10% in 2025 following growth of 4% in 2024. While growth has moderated and market dynamics have become more volatile, long-term demand is supported by rising income levels and regulatory-driven content increases. Our China operations remain sensitive to economic conditions and increasing market share of domestic OEMs, which has pressured non-Chinese OEM production. Despite these dynamics, we expect continued long-term demand, including growth in electrified vehicles.
Market driven products. Our advanced portfolio of LV and HV signal, power and data distribution and charging solutions enables OEMs to meet increasingly stringent regulatory requirements and growing demand for vehicle content and technology. We expect to benefit from long-term industry trends, including electrification and increased vehicle complexity, and are investing in technologies that address our customers’ evolving needs while supporting diversification into adjacent markets. Key innovation priorities include cable and harness technologies and design and assembly automation for electrified, software-defined vehicles. While high-voltage electrification remains a key focus, some OEMs have recently delayed certain EV investments amid softer demand expectations, particularly in North America.
Global capabilities and risks. OEMs are increasingly standardizing platforms and regionalizing supply chains, favoring suppliers with global scale and flexible manufacturing capabilities. Our global footprint enables efficient production in best cost regions while supporting localized customer requirements.
Our operations are subject to risks associated with global business activities, including changes in trade policies, tariffs, tax regimes (including the Organisation for Economic Co-operation and Development (“OECD”) Pillar Two framework), labor regulations, and geopolitical conflicts. Changes to trade laws or increased restrictions on imports from key manufacturing regions could adversely affect our business.
While the impacts to the Company resulting from incremental tariffs have had limited impact to date, the future impact of any announced tariffs is subject to a number of factors, including the effective date and duration of such tariffs, changes in the amount, scope and nature of the tariffs in the future, any retaliatory responses to such actions that the target countries may take and any mitigating actions that may become available. We continue to monitor developments and implement mitigation strategies; however, their effectiveness cannot be assured.
Labor cost increases and potential regulatory reforms may increase operating costs. In addition, global conflicts and geopolitical tensions may disrupt supply chains, increase logistics costs, and impact demand.
Engineering, design and development. Our history and culture of innovation have enabled us to develop significant intellectual property and design and development expertise to provide advanced technology solutions that meet the demands of our customers. We collaborate with OEMs, government agencies, and industry partners, with customers typically co-investing in engineering expenditures. Customer co-investment supports product development, accelerates the pace of innovation and reduces the risk associated with successful commercialization of technological breakthroughs. We also encourage “open innovation” and collaborate extensively with peers in the industry, government agencies and academic institutions. We continue to invest in research and development to support product innovation and long-term growth while maintaining disciplined capital allocation.
Pricing. Cost reduction initiatives adopted by our customers continue to drive pricing pressure, including contractual step-downs in component pricing over program life cycles. Our profitability depends on our ability to offset these reductions through operational efficiencies and cost savings. Inflationary pressures and evolving trade policies have increased costs; we continue to pursue price recoveries and contractual adjustments to mitigate these impacts.
We maintain a flexible cost structure, with a significant portion of our hourly workforce located in best cost countries and approximately 34% contingent labor as of June 30, 2026. We continue to optimize our manufacturing footprint and cost structure through restructuring and operational initiatives to align capacity with demand and support investment in advanced technologies.
OEM product recalls. Global vehicle recalls have increased above historical levels, driven by both OEM-initiated actions and regulatory oversight. While recall frameworks vary by country, increasing component standardization across markets may contribute to rising recall activity outside the United States. Heightened regulatory and consumer focus on safety is expected to keep recall levels elevated in the near term. Despite our robust quality programs and processes, sustained elevated recall activity could adversely affect our business.
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Results of Operations
Three and Six Months Ended June 30, 2026 versus Three and Six Months Ended June 30, 2025
The Company’s results of operations for the three and six months ended June 30, 2026 and 2025 were as follows:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Favorable/ (Unfavorable) 2026 2025 Favorable/ (Unfavorable)
(dollars in millions)
Net sales $ 2,444 $ 2,206 $ 238 $ 4,656 $ 4,230 $ 426
Cost of sales 2,123 1,943 (180) 4,091 3,718 (373)
Gross margin 321 13.1% 263 11.9% 58 565 12.1% 512 12.1% 53
Selling, general and administrative 100 104 4 197 209 12
Amortization — 1 1 1 1 —
Restructuring — 25 25 46 41 (5)
Separation costs 22 2 (20) 48 7 (41)
Operating income 199 131 68 273 254 19
Interest expense (36) (1) (35) (41) (3) (38)
Other expense, net (6) — (6) (7) (1) (6)
Income before income taxes and equity income 157 130 27 225 250 (25)
Income tax expense (46) (21) (25) (37) (50) 13
Income before equity income 111 109 2 188 200 (12)
Equity income, net of tax 5 3 2 9 8 1
Net income 116 112 4 197 208 (11)
Net (loss) income attributable to noncontrolling interest (2) 5 (7) 1 6 (5)
Net income attributable to Versigent $ 118 $ 107 $ 11 $ 196 $ 202 $ (6)
Net sales and Cost of sales
Net sales for the three months ended June 30, 2026 totaled $2,444 million, an increase of $238 million, or 11%, compared to the three months ended June 30, 2025. Cost of sales and cost of sales as a percentage of net sales were $2,123 million and 87%, respectively, during the three months ended June 30, 2026, compared to $1,943 million and 88%, respectively, during the three months ended June 30, 2025. The change in net sales, cost of sales, and gross profit for the three months ended June 30, 2026 was primarily driven by the impacts below.
Net Sales Cost of Sales Gross Profit
Three Months Ended June 30, 2025 $ 2,206 $ 1,943 $ 263
Volume 120 90 30
Pricing (18) — (18)
Foreign currency 40 29 11
Commodity impacts 96 105 (9)
Operational performance and other — (44) 44
Three Months Ended June 30, 2026 $ 2,444 $ 2,123 $ 321
Increasing volumes drove a 5% increase in sales for the period. This primarily reflects volume growth in North America and Asia Pacific, partially offset by volume declines in Europe, compared to a slight decrease in global automotive production. In addition, our net sales reflect higher customer pass-through due to higher commodity costs and foreign currency impacts, primarily related to the Euro and Chinese Yuan.
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Cost of sales increased $180 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Increases were driven primarily by volume increases and higher commodity prices, partially offset by operational cost reductions.
Net sales for the six months ended June 30, 2026 totaled $4,656 million, an increase of $426 million, or 10%, compared to the six months ended June 30, 2025. Cost of sales and cost of sales as a percentage of net sales were $4,091 million and 88%, respectively, during the six months ended June 30, 2026, compared to $3,718 million and 88%, respectively, during the six months ended June 30, 2025. The change in net sales, cost of sales, and gross profit for the six months ended June 30, 2026 was primarily driven by the impacts below.
Net Sales Cost of Sales Gross Profit
Six Months Ended June 30, 2025 $ 4,230 $ 3,718 $ 512
Volume 180 136 44
Pricing (12) — (12)
Foreign currency 106 109 (3)
Commodity impacts 152 192 (40)
Operational performance and other — (64) 64
Six Months Ended June 30, 2026 $ 4,656 $ 4,091 $ 565
Increasing volumes drove a 4% increase in sales for the period. This primarily reflects volume growth in North America and Asia Pacific, partially offset by volume declines in Europe, compared to a slight decrease in global automotive production. In addition, our net sales reflect higher customer pass-through due to higher commodity costs and foreign currency impacts, primarily related to the Euro and Chinese Yuan.
Cost of sales increased $373 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Increases were driven by higher volumes, increases in commodity prices and strengthening of foreign currencies, partially offset by operational cost reductions.
Selling, general and administrative expenses (SG&A)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Favorable/ (unfavorable) 2026 2025 Favorable/(unfavorable)
(dollars in millions) (dollars in millions)
Selling, general and administrative expenses $ 100 $ 104 $ 4 $ 197 $ 209 $ 12
Percentage of net sales 4.1 % 4.7 % 4.2 % 4.9 %
SG&A primarily includes administrative expenses, information technology costs, incentive compensation related costs and selling and marketing expenses. SG&A remained relatively flat during the three months ended June 30, 2026 compared to the same period in 2025. SG&A decreased during the six months ended June 30, 2026 compared to the same period in 2025, primarily due to a decrease in bad debt expense.
Amortization
Amortization expense was de minimis and $1 million for the three months ended June 30, 2026 and 2025, respectively. During both the six months ended June 30, 2026 and June 30, 2025, amortization expense was $1 million. Amortization expense reflects the non-cash charge related to definite-lived intangible assets. Amortization during the three and six months ended June 30, 2026 reflects the continued amortization of our intangible assets.
Restructuring
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Favorable/ (unfavorable) 2026 2025 Favorable/ (unfavorable)
(dollars in millions) (dollars in millions)
Restructuring $ — $ 25 $ 25 $ 46 $ 41 $ (5)
Percentage of net sales — % 1.1 % 1.0 % 1.0 %
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As part of the Company’s continued efforts to optimize its cost structure, it has undertaken several restructuring programs which include workforce reductions as well as plant closures. These programs are primarily focused on reducing global overhead costs, the continued rotation of our manufacturing footprint to best cost locations in Europe and aligning our manufacturing capacity with the current levels of automotive production in each region. Charges for the six months ended June 30, 2026 included the recognition of approximately $33 million for a program to downsize and close a European manufacturing site. Charges for the three and six months ended June 30, 2025, included the recognition of approximately $9 million and $22 million, respectively, for charges incurred to downsize European sites.
We expect to continue to incur additional restructuring expense in 2026 and beyond, primarily related to programs focused on reducing global overhead costs, the continued rotation of our manufacturing footprint to best cost locations in Europe and aligning manufacturing capacity with the levels of automotive production. Additionally, as we continue to operate in a cyclical industry that is impacted by movements in the global and regional economies, we continually evaluate opportunities to further adjust our cost structure and optimize our manufacturing footprint. The Company plans to implement additional restructuring activities in the future, if necessary, in order to align manufacturing capacity and other costs with prevailing regional automotive production levels and locations, to improve the efficiency and utilization of other locations and in order to increase investment in advanced technologies and engineering. Such future restructuring actions are dependent on market conditions, customer actions and other factors.
Refer to Note 9. Restructuring to the consolidated financial statements contained herein for additional information.
Separation costs
The Company incurred separation costs of $22 million and $2 million during the three months ended June 30, 2026 and 2025, respectively. During the the six months ended June 30, 2026 and 2025, the Company incurred separation costs of $48 million and $7 million, respectively. Separation costs for all periods include one-time expenses related to the planning and execution of the Separation. The Company expects to continue to incur additional expenses related to the Separation in 2026.
Interest expense
Interest expense was $36 million and $1 million for the three months ended June 30, 2026 and 2025, respectively. During the six months ended June 30, 2026 and 2025, interest expense was $41 million and $3 million, respectively. The increase during the three and six months ended June 30, 2026 compared to 2025 was related to the issuance of our Senior Notes and Credit Agreement in connection with the Separation. Refer to Note 10. Debt, to the consolidated financial statements contained herein for additional information.
Other expense, net
Other expense, net was $6 million and de minimis for the three months ended June 30, 2026 and 2025, respectively. Other expense, net was $7 million and $1 million for the six months ended June 30, 2026 and 2025, respectively. Other expense, net was comprised of the following:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Favorable/(unfavorable) 2026 2025 Favorable/(unfavorable)
(in millions) (in millions)
Interest income $ — $ 1 $ (1) $ 3 $ 2 $ 1
Components of net periodic benefit cost other than service cost (Note 11) (6) (2) (4) (15) (4) (11)
Other, net — 1 (1) 5 1 4
Other expense, net $ (6) $ — $ (6) $ (7) $ (1) $ (6)
Income Taxes
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Favorable/ (unfavorable) 2026 2025 Favorable/ (unfavorable)
(in millions) (in millions)
Income tax expense $ 46 $ 21 $ (25) $ 37 $ 50 $ 13
The Company’s tax rate is affected by the fact that it is a Swiss resident taxpayer, the tax rates in Switzerland and other jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction and the relative amount of
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losses or income for which no tax benefit or expense was recognized due to a valuation allowance. The Company’s effective tax rate is also impacted by the receipt of certain tax incentives and holidays that reduce the effective tax rate for certain subsidiaries below the statutory rate.
The Company’s effective tax rate for the three months ended June 30, 2026 and 2025 includes net discrete tax expenses of approximately $2 million and net discrete tax benefits of $6 million, respectively. The net discrete tax expense for the three months ended June 30, 2026 are primarily related to changes in reserves. The net discrete tax benefits for the three months ended June 30, 2025 are primarily related to provision to return adjustments and changes in valuation allowances.
The Company’s effective tax rate for the six months ended June 30, 2026 and 2025 includes net discrete tax benefits of approximately $22 million and net discrete tax benefits of $4 million, respectively. The net discrete tax benefits for the six months ended June 30, 2026 are primarily related to changes in reserves. The net discrete tax benefits for the six months ended June 30, 2025 are primarily related to provision to return adjustments and changes in valuation allowances.
On January 15, 2025, the OECD released Administrative Guidance (the “Guidance”) on Article 9.1 of the Global Anti-Base Erosion Model Rules (the “Model Rules”) which amends the Pillar Two Framework. Jurisdictions that have adopted the Framework may implement and administer their domestic laws consistent with the Model Rules and Guidance. The Guidance eliminates the tax basis in certain deferred tax assets including tax credit carryforwards for purposes of the global minimum tax established under the Framework. While the Guidance is applicable to the tax incentive granted to the Company’s Swiss subsidiary in 2023, a full valuation allowance against this attribute has been maintained since 2023. No other deferred tax assets are impacted by the Guidance. Therefore, the Guidance did not result in a change on the Company’s consolidated financial statements. No other deferred tax assets are impacted by the Guidance.
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law. The Act includes changes to U.S. tax law that were applicable to Versigent beginning in 2025, with additional provisions applying in subsequent years. Included in these changes are favorable adjustments to deductions for interest, qualified property, and research and development expenditures, as well as reforms to the international tax framework. The Act will not have a material impact on the Company’s consolidated financial statements.
Refer to Note 13. Income Taxes to the consolidated financial statements contained herein for additional information.
Equity Income, net of tax
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 Favorable/ (unfavorable) 2026 2025 Favorable/ (unfavorable)
(in millions) (in millions)
Equity income, net of tax 5 3 $ 2 9 8 $ 1
Equity income, net of tax reflects the Company’s interest in the results of ongoing operations of entities accounted for as equity method investments. Refer to Note 6. Investments in Affiliates to the unaudited consolidated interim financial statements included elsewhere in this information statement for additional information.
Non-GAAP Measures
We use both U.S. GAAP and non-GAAP financial measures for operational and financial decision making, and to assess Company performance.
Adjusted EBITDA is a non-GAAP measure, which is defined as net income before depreciation and amortization (including asset impairments), interest expense, income tax (expense) benefit, net (loss) income attributable to noncontrolling interest, other income (expense), net, equity income (loss), net of tax, restructuring, separation costs related to the Spin-Off, other acquisition and portfolio project costs (which includes costs incurred to integrate acquired businesses and to plan and execute product portfolio transformation actions, including business and product acquisitions and divestitures), and other special items. Not all companies use identical calculations of Adjusted EBITDA, therefore this presentation may not be comparable to other similarly titled measures of other companies. Adjusted EBITDA Margin is a non-GAAP measure, which is defined as Adjusted EBITDA as a percentage of net sales.
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Adjusted EBITDA
We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful measures in assessing the Company’s operational profitability or loss that, when reconciled to the corresponding U.S. GAAP measure, provide improved comparability between periods through the exclusion of certain items that we believe are not indicative of the Company’s core operating performance and that may obscure underlying business results and trends. We also use Adjusted EBITDA for internal reporting, planning and forecasting purposes.
Adjusted EBITDA and Adjusted EBITDA Margin should not be considered a substitute for results prepared in accordance with U.S. GAAP and should not be considered an alternative to net income (loss) attributable to Versigent and net income (loss) margin, which are the most directly comparable financial measures to Adjusted EBITDA and Adjusted EBITDA Margin that are prepared in accordance with U.S. GAAP. Adjusted EBITDA and Adjusted EBITDA Margin, as determined and measured by the Company, should also not be compared to similarly titled measures reported by other companies. EBITDA margin represents EBITDA as a percentage of net sales, and Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of net sales.
Adjusted EBITDA for the Three Months Ended June 30, 2026 versus the Three Months Ended June 30, 2025
The reconciliations of net income attributable to Versigent to Adjusted EBITDA for the three months ended June 30, 2026 and 2025 are as follows:
Three Months Ended June 30,
2026 2025
(dollars in millions)
$ Margin $ Margin
Net income attributable to Versigent $ 118 4.8% $ 107 4.9%
Interest expense 36 1
Income tax expense 46 21
Net (loss) income attributable to noncontrolling interest (2) 5
Depreciation and amortization 51 59
EBITDA $ 249 10.2% $ 193 8.7%
Other expense, net 6 —
Equity income, net (5) (3)
Restructuring — 25
Separation costs 22 2
Other acquisition and portfolio project costs — 1
Adjusted EBITDA $ 272 11.1% $ 218 9.9%
The following table presents the year-over-year change in net sales and Adjusted EBITDA for the three months ended June 30, 2026 versus 2025:
Net Sales Adjusted EBITDA
June 30, 2025 $ 2,206 $ 218
Volume 120 30
Pricing (18) (18)
Foreign currency 40 13
Commodity impacts 96 (9)
Operational performance and other — 38
June 30, 2026 $ 2,444 $ 272
As noted in the table above, the Company’s Adjusted EBITDA margin for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was 11.1% and 9.9%, respectively. The increase in the Company’s Adjusted EBITDA was primarily due to favorable volume and operational cost reductions.
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Adjusted EBITDA for the Six Months Ended June 30, 2026 versus the Six Months Ended June 30, 2025
The reconciliations of net income attributable to Versigent to Adjusted EBITDA for the six months ended June 30, 2026 and 2025 are as follows:
Six Months Ended June 30,
2026 2025
(dollars in millions)
$ Margin $ Margin
Net income attributable to Versigent $ 196 4.2 % $ 202 4.8 %
Interest expense 41 3
Income tax expense 37 50
Net income attributable to noncontrolling interest 1 6
Depreciation and amortization 112 111
EBITDA $ 387 8.3 % $ 372 8.8 %
Other expense, net 7 1
Equity income, net (9) (8)
Restructuring 46 41
Separation costs 48 7
Net gain on lease terminations (4) —
Other acquisition and portfolio project costs — 3
Adjusted EBITDA $ 475 10.2 % $ 416 9.8 %
The following table presents the year-over-year change in net sales and Adjusted EBITDA for the six months ended June 30, 2026 versus 2025:
Net Sales Adjusted EBITDA
June 30, 2025 $ 4,230 $ 416
Volume 180 44
Pricing (12) (12)
Foreign currency 106 (5)
Commodity impacts 152 (40)
Operational performance and other — 72
June 30, 2026 $ 4,656 $ 475
As noted in the table above, the Company’s Adjusted EBITDA margin for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was 10.2% and 9.8%, respectively. The increase in the Company’s Adjusted EBITDA was primarily due to favorable volume and operational cost reductions offset by unfavorable commodity pricing impacts.
Liquidity and Capital Resources
Overview of Capital Structure
The Company’s liquidity requirements are primarily to fund our business operations, including capital expenditures, working capital requirements, operational restructuring activities and to fund debt service requirements. Our primary sources of liquidity are cash flows from operations, our existing cash balance, and as necessary, borrowings under credit facilities and issuance of long-term debt. To the extent we generate discretionary cash flow we may consider using this additional cash flow for optional prepayments, redemptions or repurchases of existing indebtedness (including through open market purchases), undertake new capital investment projects, strategic acquisitions, return capital to shareholders and/or general corporate purposes. We will also routinely monitor the markets and may opportunistically issue debt or equity to refinance existing debt or fund capital resources.
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As of June 30, 2026, we had cash and cash equivalents of $554 million and net debt (defined as outstanding debt less cash and cash equivalents) of $1,670 million. The following table summarizes our available liquidity, which includes cash, cash equivalents and funds available under our significant committed credit facilities, as of June 30, 2026:
June 30, 2026
(in millions)
Cash and cash equivalents $ 554
Revolving Credit Facility, unutilized portion 850
Total available liquidity $ 1,404
We expect existing cash, available liquidity and cash flows from operations to continue to be sufficient to fund our global operating activities, including restructuring payments, capital expenditures, debt obligations and separation activities.
We also continue to expect to be able to move funds between different countries to manage our global liquidity needs without material adverse tax implications, subject to current monetary policies. We utilize a combination of strategies, including dividends, cash pooling arrangements, intercompany loan repayments and other distributions and advances to provide the funds necessary to meet our global liquidity needs. As of June 30, 2026, the Company’s cash and cash equivalents held by our non-U.S. subsidiaries totaled approximately $545 million. If additional non-U.S. cash was needed for our U.S. operations, we would utilize a combination of the strategies mentioned above.
Dividends
In April 2026, our Board of Directors approved a dividend policy under which the Company intends to return a portion of future earnings to shareholders through a regular dividend. On August 3, the Company's Board of Directors declared a quarterly cash dividend of $0.13 per share, payable on September 18, 2026 to shareholders of record at the close of business on September 4, 2026. The declaration and payment of future dividends are subject to the discretion of the Company’s Board of Directors and will depend on the Company’s financial condition, results of operations, cash requirements, and other factors deemed relevant by the Board of Directors, and there can be no assurance that the Board of Directors will declare a dividend in the future.
Share Repurchase Program
In April 2026, our Board of Directors approved a new stock repurchase program that allows the Company to convert a portion of its ordinary shares into redeemable shares from time to time, in an aggregate amount not to exceed $250 million. We will determine the timing and amount of repurchases based on our assessment of various factors including excess cash flow, liquidity, economic and market conditions, our assessment of prospects for our business, legal requirements, and other factors. The timing and amount of these purchases, if any, may change.
Credit Agreement
On November 26, 2025, Versigent PLC and its wholly-owned subsidiaries Cyprium Corporation (“Cyprium U.S.”) and Cyprium Holdings Luxembourg S.À.R.L (“Cyprium Luxembourg”), entered into a credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Administrative Agent”), with respect to $1.35 billion in senior secured credit facilities. The Credit Agreement consists of a senior secured five-year $500 million term loan facility (the “Term Loan A Facility”) and a five-year $850 million senior secured revolving credit facility (the “Revolving Credit Facility”, together with the Term Loan A Facility, the “Credit Facilities”) with the lenders party thereto and JPMorgan Chase Bank, N.A. The Credit Facilities became available to Versigent PLC in connection with the Spin-Off. Approximately $15 million in debt issuance costs were incurred in connection with the Credit Agreement.
As of June 30, 2026, Versigent had no amounts outstanding under the Revolving Credit Facility and no letters of credit have been issued under the Credit Agreement. Letters of credit issued under the Credit Agreement reduce availability under the Revolving Credit Facility.
The Credit Facilities are subject to an interest rate, at our option, of either (a) the Alternate Base Rate (“ABR” as defined in the Credit Agreement), or (b) the Term Benchmark Rate (the “Term SOFR”, “Adjusted EURIBOR”, “Adjusted Term CORRA”, or “Adjusted TIIE Rate”, each as defined in the Credit Agreement) or (c) Daily Simple RFR (“RFR Loan” as defined in the Credit Agreement), in each case, plus an applicable margin that is based on our total leverage ratio (the ratio of Consolidated Total Indebtedness to Consolidated Adjusted EBITDA, each as defined in the Credit Agreement). Interest is payable no less than quarterly. We may elect to change the selected interest rate over the term of the Credit Facilities in accordance with the provisions of the Credit Agreement.
The applicable interest rate margins for the Credit Facilities will increase or decrease from time to time between 1.25% and 2.00% per annum (for Term Benchmark and RFR loans) and between 0.25% and 1.00% per annum (for ABR loans), in each case based upon changes to our total leverage ratio. Accordingly, the interest rates for the Credit Facilities will fluctuate
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during the term of the Credit Agreement. The Credit Agreement also requires that we pay certain facility fees on the aggregate commitments under the Revolving Credit Facility and certain letter of credit issuance and fronting fees.
Letters of credit are available for issuance under the Credit Agreement on terms and conditions customary for financings of this type, which issuances will reduce availability under the Revolving Credit Facility.
We are obligated to make quarterly principal payments throughout the term of the Term Loan A Facility. Borrowings under the Credit Agreement are prepayable at our option without premium or penalty, subject to customary increased cost provisions.
The Credit Agreement contains certain covenants that limit, among other things, the Company’s (and the Company’s subsidiaries’) ability to incur certain additional indebtedness, liens, restricted payments, investments, asset dispositions, affiliate transactions, and amendments of certain indebtedness. In addition, the Credit Agreement requires that we maintain a total leverage ratio of not greater than 4.25:1.00 for the first four quarters following the availability date, 4.00:1.00 for the fifth through eighth quarters following the availability date, and 3.75:1.00 for all quarters thereafter, and an Interest Coverage Ratio (the ratio of Consolidated Adjusted EBITDA to Ratio Interest Expense, each as defined in the Credit Agreement) of at least 3.00:1.00. The Credit Agreement contains provisions pursuant to which, based upon our achievement of certain corporate credit ratings, certain covenants and/or our obligation to provide collateral to secure the Credit Facilities, will be suspended.
Cyprium U.S. and Cyprium Luxembourg are each borrowers under the Credit Agreement, under which such borrowings are guaranteed by Versigent PLC. Additional subsidiaries of Versigent PLC may be added as co-borrowers or guarantors under the Credit Agreement from time to time on the terms and conditions set forth in the Credit Agreement. The obligations of each borrower under the Credit Agreement will be jointly and severally guaranteed by each other borrower and by certain of our existing and future direct and indirect subsidiaries, subject to certain exceptions customary for financings of this type. All obligations of the borrowers and the guarantors will be secured by certain assets of such borrowers and guarantors, including a perfected first-priority pledge of all of the capital stock in Versigent PLC.
Loans under the Term Loan A Facility bear interest, at Versigent’s option, at either (a) ABR or (b) Term Benchmark Rate and RFR (the “Benchmark Loans”) plus in either case a percentage per annum as set forth in the table below (the “Term Loan Applicable Rate”). The rates under the Term Loan A Facility on the specified dates are set forth below:
June 30, 2026 December 31, 2025
ABR plus Benchmark Loans plus ABR plus Benchmark Loans plus
Term Loan A 0.50 % 1.50 % N/A N/A
The Credit Agreement also contains events of default customary for financings of this type. The Company is in compliance with the Credit Agreement covenants.
Senior Unsecured Notes
On March 18, 2026, Cyprium U.S. and Cyprium Luxembourg issued $800 million aggregate principal amount of their 6.125% senior notes due 2031 (the “2031 Notes”) and $800 million aggregate principal amount of their 6.375% senior notes due 2034 (the “2034 Notes” and, together with the 2031 Notes, the “Notes”). The Notes were sold to investors in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended. Approximately $23 million in debt issuance costs were incurred in connection with the issuance of the Notes.
The 2031 Notes will mature on April 15, 2031 and were priced at 100% of par, resulting in a yield to maturity of 6.125%. Interest is payable semi-annually on April 15 and October 15 of each year to holders of record at close of business on April 1 or October 1 immediately preceding the interest payment date.
The 2034 Notes will mature on April 15, 2034 and were priced at 100% of par, resulting in a yield to maturity of 6.375%. Interest is payable semi-annually on April 15 and October 15 of each year to holders of record at close of business on April 1 or October 1 immediately preceding the interest payment date.
The notes are guaranteed, jointly and severally, on an unsecured basis, by each of our current and future domestic subsidiaries that guarantee our Credit Facilities, as described above. The proceeds from the Notes, together with the proceeds from the borrowings under the Credit Agreement, were used to fund a $1,894 million dividend to the Former Parent, with remaining proceeds used for general corporate purposes.
Other Financing
Finance leases and other—As of June 30, 2026 and December 31, 2025, approximately $151 million and $61 million, respectively, of other debt primarily issued by certain non-U.S. subsidiaries and finance lease obligations of Versigent were outstanding.
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Dividends from Equity Investments
No dividends were received from the Company’s equity method investments during the three months ended June 30, 2026, compared to $8 million received during the three months ended June 30, 2025. During the six months ended June 30, 2026, Versigent received dividends of $2 million, compared to $8 million received during the six months ended June 30, 2025. The dividends were recognized as a reduction to the investment and represented a return on investment included in cash flows from operating activities.
Cash Flows
Operating activities—Net cash provided by operating activities totaled $194 million and $190 million for the six months ended June 30, 2026 and 2025, respectively. Cash flows provided by operating activities for the six months ended June 30, 2026 consisted primarily of net earnings of $197 million, increased by $151 million for non-cash charges for depreciation, share-based compensation and pension costs, partially offset by $156 million related to changes in operating assets and liabilities, net of restructuring and pension contributions. Cash flows provided by operating activities for the six months ended June 30, 2025 consisted primarily of net earnings of $208 million, increased by $133 million for non-cash charges for depreciation, share-based compensation and pension costs, partially offset by $152 million related to changes in operating assets and liabilities, net of restructuring and pension contributions.
Investing activities—Net cash used in investing activities totaled $117 million and $79 million for the six months ended June 30, 2026 and 2025, respectively, and consisted of capital expenditures.
Financing activities—Net cash provided by financing activities totaled $203 million and $1 million for the six months ended June 30, 2026 and 2025, respectively. Cash flows provided by financing activities for the six months ended June 30, 2026 primarily included $2,063 million in proceeds from issuance of senior notes and credit agreement, net of issuance costs, offset by a $1,894 million cash distribution paid to Former Parent in connection with the Separation. Cash flows provided by financing activities for the six months ended June 30, 2025 primarily included $134 million of cash transferred from Former Parent offset by repayments under short-term debt agreements.
Off-Balance Sheet Arrangements
We do not engage in any off-balance sheet financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Estimates
There have been no significant changes in our critical accounting estimates during the three and six months ended June 30, 2026.
Recently Issued Accounting Pronouncements
The information concerning recently issued accounting pronouncements contained in Note 2. Significant Accounting Policies to the unaudited consolidated financial statements included in Part I, Item 1 of this report is incorporated herein by reference.
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