The following discussion of the Company’s financial condition and results of operations should be read in conjunction with the Company’s audited Consolidated Financial Statements of financial position as of December 31, 2025 and 2024 and for each year in the three year period ended December 31, 2025, included in this Annual Report that have been prepared in accordance with IFRS Accounting Standards, as well as with the information presented under “Presentation of Financial and Other Information” and “Selected Financial and Other Information of Gerdau.” Starting with the disclosure of the results of 2025, the Company began to disclose the information and results of its business segments as follows: ● Brazil Segment: includes the long, flat and special steel operations and the iron ore operation located in Brazil and joint ventures and associated companies located in Brazil; ● North America Segment: includes the long and specialty steel operations located in Canada and the United States and the joint ventures located in Canada and Mexico; and ● South America Segment: includes the operations in Argentina, Peru and Uruguay. With these changes, the information and results of the former Special Steel Segment, which included the special steel operations located in Brazil and the United States, are now disclosed jointly with the other segments, according to their geographic location, as the Brazil Segment and the North America Segment, respectively. This new format for disclosing information and results is in line with recent changes in the global steel industry scenario, which have led to an increasing regionalization of markets, business dynamics and local currencies of these operations, improving the presentation of Gerdau’s results in Brazil and North America, the main regions in which it operates. The comparative information of the segments presented in Financial Statements for the years ended on December 31, 2024 and December 31, 2023 has been adjusted to reflect this new composition. 50 Table of Contents The following discussion contains forward-looking statements that are based on management’s current expectations, estimates and projections and that involve risks and uncertainties. The Company’s actual results may differ materially from those discussed in the forward-looking statements because of various factors, including those described in the sections “Forward-Looking Statements” and “Risk Factors.” The primary factors affecting the Company’s results of operations include: ● Economic and political conditions in the countries in which Gerdau operates, especially Brazil and the U.S.; ● The fluctuations in the exchange rate between the Brazilian real and the U.S. dollar; ● The cyclical nature of supply and demand for steel products both inside and outside of Brazil, including the prices for steel products; ● The Company’s level of exports; and ● The Company’s production costs. Brazilian Economic Conditions The Company’s results and financial position depend largely on the situation of the Brazilian economy, most notably economic growth and its impact on steel demand, financing costs, the availability of financing and the exchange rates between Brazilian and foreign currencies. Since 2003, the Brazilian economy has become more stable, with significant improvement in the main indicators. The continuity of the macroeconomic policies focused on tax matters, the inflation-targeting system, the adoption of a floating foreign exchange rate, the increase in foreign investment and compliance with international financial agreements, including the full repayment of debt with the International Monetary Fund, contributed to the improved economic conditions in Brazil. In 2025, Brazilian GDP increased 2.3% (equivalent to US$ 2.5 trillion Nominal GDP) driven by the agriculture and services sectors. Inflation, as measured by the IPCA index, was 4.3%. The average CDI rate in the year was 14.3%. The Brazilian real appreciated by 11.1% against the U.S. dollar, ending the year at R$ 5.50 to US$ 1.00. In 2024, Brazilian GDP increased 3.4% (equivalent to US$ 2.2 trillion Nominal GDP) driven by services and industrial sectors. Inflation, as measured by the IPCA index, was 4.8%. The average CDI rate in the year was 10.9%. The Brazilian real depreciated by 27.9% against the U.S. dollar, ending the year at R$ 6.19 to US$ 1.00. In 2023, Brazilian GDP increased 2.9% (equivalent to US$ 1.9 trillion Nominal GDP) driven by services, industrial and agribusiness sectors. Inflation, as measured by the IPCA index, was 4.6%. The average CDI rate in the year was 13.0%. The Brazilian real appreciated by 7.1% against the U.S. dollar, ending the year at R$ 4.84 to US$ 1.00. The interest rates the Company pays depend on multiple drivers, such as movements in benchmark interest rates (often influenced by inflation), the ratings assigned by credit rating agencies that assess the Company, and the pricing of the Company’s debt securities traded in the secondary market. To reduce this exposure, the Company from time to time enters into hedging arrangements to mitigate rate fluctuations. 51 Table of Contents The table below presents GDP growth, inflation, interest rates and the foreign exchange rate between the U.S. dollar and the Brazilian real for the periods shown. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Actual GDP growth ​ 2.3 % ​ 3.4 % ​ 2.9 % Inflation (IGP-M) (1) ​ (1.1) % ​ 6.5 % ​ (3.2) % Inflation (IPCA) (2) ​ 4.3 % ​ 4.8 % ​ 4.6 % CDI rate (3) ​ 14.3 % ​ 10.9 % ​ 13.0 % Depreciation (appreciation) in the Brazilian real against the U.S. dollar ​ (11.1) % ​ 27.9 % ​ (7.1) % Foreign exchange rate at end of year — US$ 1.00 R$ 5.5024 R$ 6.1923 R$ 4.8413 Average foreign exchange rate — US$ 1.00 (4) R$ 5.5855 R$ 5.3895 R$ 4.9841 Sources: Getúlio Vargas Foundation, Central Bank of Brazil and Bloomberg (1) Inflation as measured by the General Market Price index (IGP-M) published by the Getúlio Vargas Foundation (FGV). (2) Inflation as measured by the Board Consumer Price Index (IPCA) measured by Brazilian Institute of Geography and Statistics (IBGE). (3) The CDI rate is equivalent to the average fixed rate of interbank deposits recorded during the day in Brazil (annualized monthly cumulative figure at end of period). (4) Average of the foreign exchange rates, according to the Brazilian Central Bank, on the last day of each month in the period indicated. U.S. Economic Conditions In view of the size of the Company’s operations in the United States, U.S. economic conditions have a significant effect on the Company’s results, particularly with regards to U.S. economic growth and the related effects on steel demand, financing costs and the availability of credit. In 2025, according to the IMF (International Monetary Fund) October 2025 report, the U.S. Real GDP increased by 2.0%. Inflation, as measured by the CPI, ended the year at 2.7% (December-to-December), with an average annual rate slightly higher due to mid-year volatility. The average Fed Funds rate (the interest rate established by the U.S. Federal Reserve) for 2025 was approximately 4.1%, reflecting a gradual decrease from the prior year as the Fed implemented three quarter-point rate cuts during the second half of the year. In 2024, according to the IMF (International Monetary Fund) October 2024 report, the U.S. Real GDP increased 2.8%. Inflation, as measured by the CPI, was 3.0%. The average Fed Funds rate (the interest rate established by the U.S. Federal Reserve) was 5.3%. In 2023, according to the IMF (International Monetary Fund) October 2023 report, the U.S. Real GDP increased 2.1%. Inflation, as measured by the CPI, was 4.1%. The average Fed Funds rate (the interest rate established by the U.S. Federal Reserve) was 5.5%. The table below presents actual U.S. Real GDP growth, inflation and interest rates for the periods indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Actual Real GDP growth (1) 2.0 % 2.8 % 2.1 % Inflation (CPI) (2) 2.7 % 3.0 % 4.1 % Fed Funds (3) 4.1 % 5.3 % 5.5 % ​ Sources: International Monetary Fund and Federal Reserve Statistical Release (1) Real GDP growth (annual percent change) published by the International Monetary Fund (IMF). (2) Consumer price index, average of consumer prices (annual percent change) published by the International Monetary Fund (IMF). The CPI is a survey of consumer prices for all urban consumers. (3) Fed Funds corresponds to the interest rate set by the U.S. Federal Reserve. 52 Table of Contents Impact of Fluctuations in Exchange Rates Gerdau’s results and its financial position are largely dependent on the state of the Brazilian economy, notably (i) economic growth and its impact on steel demand, (ii) financing costs and the availability of financing, and (iii) the rates of exchange between the Brazilian real and foreign currencies. A portion of Gerdau’s trade accounts receivable, trade accounts payable and debt is denominated in currencies other than the respective functional currencies of each subsidiary. The functional currency of the Brazilian operating subsidiaries is the Brazilian real. Brazilian subsidiaries have some of their assets and liabilities denominated in foreign currencies, mainly the U.S. dollar. The foreign exchange effect on translation of foreign subsidiaries is recorded directly in shareholders’ equity. Foreign exchange gains and losses on transactions, including the exchange gains and losses on some non-real denominated debt of the subsidiaries in Brazil are recognized in the income statement. However, gains and losses from debts contracted for acquisition of overseas investments are designated as a hedge of net investment in foreign subsidiaries and are also recorded directly in shareholders’ equity. The operations of Gerdau in Brazil have both liabilities and assets denominated in foreign currency, with the amount of assets exceeding the amount of liabilities. The effect of the valuation of the Brazilian real versus other currencies (mainly the U.S. dollar) has a net positive effect in our shareholders’ equity. The cyclical nature of supply and demand for steel products including the prices of steel products The prices of steel products are generally sensitive to changes in world and local demand, which in turn are affected by economic conditions in the world and in the specific country. The prices of steel products are also linked to available installed capacity. Most of the Company’s long rolled steel products, including rebars, merchant bars and common wire rods, are classified as commodities. However, a significant portion of the Company’s long-rolled products, such as special steel, wire products and drawn products, are not considered commodities due to differences in shape, chemical composition, quality and specifications, with all of these factors affecting prices. Accordingly, there is no uniform pricing for these products. Over the past years, global steel prices have experienced notable volatility due to various macroeconomic factors, supply chain disruptions, and geopolitical events. In 2021, steel prices surged to record highs driven by strong post-pandemic recovery, supply constraints, and increased infrastructure spending in major economies such as the United States and China. Most of long rolled steel products saw sharp price increases due to heightened construction activity and supply shortages. However, in 2022, steel prices declined as demand weakened due to rising inflation, tighter monetary policies, and slowing economic growth, particularly in China, the world’s largest steel consumer. Additionally, the war in Ukraine disrupted global steel and raw material supply chains, leading to further market volatility. For instance, Turkish rebar export prices, a key reference point for the global rebar market, spiked in early 2022 due to supply concerns, but later softened as construction activity slowed. Other products, such as merchants bars and beams, widely used in industrial and manufacturing applications, also faced price corrections as steel mills increased production in response to high prices from the previous year. In 2023 and 2024, steel markets remained uncertain and saw a downward trend in international steel prices, mainly due to oversupply and a slow recovery in China’s real estate sector. Additionally, government interventions, such as export restrictions and import tariffs, further influenced pricing dynamics, affecting the competitiveness of steel producers worldwide. In 2025, the global steel market remained pressured, with prices generally stable to slightly lower compared to 2024. Persistent oversupply (particularly from China) continued to weigh on international markets, as exports stayed elevated amid a still-fragile recovery in the Chinese real estate sector. In the United States, domestic prices showed relative resilience supported by infrastructure spending and trade measures, although levels remained well below the 2021 peaks. Long steel products, such as rebar and merchant bars, experienced moderate volatility, largely reflecting regional construction trends and increased import penetration. Export levels — during periods of lower domestic demand for the Company’s products, the Company actively pursues export opportunities for its excess production to maintain capacity utilization rates and shipments. During periods of higher domestic demand for its products, export sales volumes may decline as the Company focuses on satisfying domestic demand. Gerdau exports products from Brazil to customers in other continents with whom we have long-established commercial relations. In 2025, exports were 18.2% higher than 2024, going from 1.1 to 1.3 million tonnes, which represented 21.4% of total shipments from Brazil operations. Export revenue totaled R$ 4,792 million in 2025 (R$ 3,822 million in 2024). 53 Table of Contents Production costs — raw materials account for the highest percentage of the Company’s production costs. Metallic inputs, which include scrap, pig iron, iron ore, coke and metallic alloys, represented approximately 47.4% of production costs in 2025, while Energy and Reducing Agents, which represent the cost of coal, electricity, oxygen, natural gas and fuel oil, accounted for 13.1%. Personnel totaled 12.6% of production costs and Specific Materials, which includes refractories, electrodes, rolling cylinders, rollers, guides, carburants and lime, were 10.2% of total production costs. The table below presents the production costs breakdown by business segment: Production Costs Breakdown in 2025, 2024 and 2023 (%) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ Brazil Business Segment ​ ​ ​ North America Business Segment ​ ​ ​ South America Business Segment % of costs ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Personnel and Others 17.8 ​ 18.1 ​ 18.4 ​ 16.8 ​ 15.3 ​ 18.4 ​ 19.4 ​ 18.6 ​ 17.2 ​ 13.1 ​ 14.1 ​ 13.2 Maintenance 7.1 ​ 7.2 ​ 7.6 ​ 4.9 ​ 4.5 ​ 6.1 ​ 9.0 ​ 10.6 ​ 10.6 ​ 4.0 ​ 5.5 ​ 4.9 Depreciation 4.0 ​ 4.0 ​ 3.9 ​ 6.0 ​ 4.9 ​ 5.4 ​ 4.0 ​ 3.1 ​ 2.6 ​ 2.0 ​ 1.7 ​ 1.3 Metallic Inputs 47.4 ​ 46.5 ​ 44.3 ​ 41.0 ​ 40.7 ​ 30.3 ​ 50.0 ​ 50.2 ​ 52.8 ​ 67.0 ​ 64.9 ​ 65.6 Energy and Reducing Agents 13.1 ​ 14.1 ​ 15.2 ​ 22.0 ​ 25.6 ​ 29.1 ​ 7.0 ​ 5.9 ​ 5.7 ​ 8.0 ​ 8.5 ​ 9.5 Specific Materials 10.2 ​ 10.2 ​ 10.7 ​ 10.0 ​ 9.0 ​ 10.7 ​ 11.0 ​ 11.6 ​ 11.1 ​ 5.0 ​ 5.3 ​ 5.5 Significant events affecting financial performance during 2025 In Brazil, the year was again marked by record steel import levels, totaling 6.4 million tonnes (including semi-finished products), a 7.4% year-over-year increase, according to Brazil Steel Institute data. The flat steel segment was the most affected, recording 29.6% higher imports throughout the year. This movement increased the steel oversupply in the domestic market, putting pressure on the local industry’s profitability and hindering shipment growth, despite a scenario of apparent consumption 3% higher than in 2024; Gerdau’s exports benefited from the devaluation of the Real, but the greater share of exports in the mix also contributed to the decline in Net sales in the period. The cost of goods sold was higher in 2025 versus 2024, driven by increased shipment volume and, mainly, by scheduled shutdowns and structural and operational adjustments necessary throughout the year to implement improvements and prepare for new investments at the Ouro Branco industrial unit. These factors temporarily raised fixed costs, raw materials, and maintenance. However, during the second half of the year, the industrial unit then recorded greater operational stability. In addition, the higher occupancy rate of mini mills contributed to cost dilution and efficiency gains, partially mitigating the effects seen earlier in the year. It is worth noting that, in 2024, costs of goods sold benefited from optimization initiatives and hibernations, which reduced the basis for comparison. Regarding the sectors in which Gerdau operates in Brazil, the construction sector had a firm performance in 2025, with estimated residential building launches growing by 29% compared to 2024, while sales increased by 5% in 2025. Higher family income, a lower unemployment rate, and improved public housing programs remained the highlights. The industry and manufacturing sectors had a stable year, with some steel-intensive segments presenting mixed results. While the light vehicle sector and green machinery achieved robust numbers, wind energy, heavy trucks, road transport equipment and white goods showed retractions in 2025 compared to 2024. 54 Table of Contents In North America, throughout 2025, the non-residential construction (especially data centers) and renewable energy sectors played a pivotal role in the North America shipment volumes, benefiting demand for downstream products, while we reduced volumes of rebar and semi-finished products, in line with our focus on a more profitable product mix. On the other hand, sectors demanding special steel faced more challenging dynamics. The automotive sector, for instance, remained impacted by uncertainties surrounding Section 232 tariffs developments and high interest rates, hindering the growth of light and heavy vehicle inventories in the region, while the oil and gas sector still shows signs of slowing down; Demand levels improved in 2025 driven by a strong customer preference for domestic materials, and by sectors with strong economic growth. The overall market remains uneven across different sectors of the economy, while the industrial sector was slower than previous years, non-residential construction, that also declined year-over-year, consumed a higher amount of steel, driven by AI infrastructure and renewable energy investments. According to US Census Bureau, total investments in construction (CPIP- Construction Put-in-Place) declined by approximately 2.0% through October 2025. The leading indicator for non-residential construction (ABI) remained under the expansion threshold for most of the year, closing 2025 at 48.5. The industrial sector demand was also pressured by the activity level, as shown by the Institute for Supply Management (ISM - PMI) index, which reached 44.9 points in December 2025, staying below 50 for the entire year. Finally, the overall increase in demand, growing preference for domestic materials and the strong activity in certain sectors of the economy have resulted in a favorable price environment for long steel in the U.S. In South America, steel production and shipments grew in 2025, fueled by increased volumes in the three countries where we operate; however, the key sectors served still showed weaker demand throughout the year. In Argentina, civil construction activity levels hit all-time lows, while in Uruguay, infrastructure works remained halted. On the other hand, in Peru, the order backlog remained resilient, driven by demand from the civil construction distribution sector. In the fourth quarter of 2025, due to the revision of the Capex investment plan for its industrial plants, representing a significant reduction compared to recent years, the level of asset utilization at certain industrial plants in the Brazil segment, and the expectation of a deterioration in economic conditions to a greater extent than that contemplated in previous period scenarios, tests performed on other long-lived assets identified impairment losses in fixed assets of the Brazil segment amounting to R$ 1,591,369, as compared to R$ 199,627 on December 31, 2024, resulting from recoverable value below the carrying amount. Also, in December 2025, the Company assessed the recoverability of goodwill in its business segments. The analyses carried out identified impairment losses in the Brazil segment in the amount of R$ 1,964,504. Therefore, the Company wrote off the entire goodwill of this segment in the amount of R$ 373,135, while the remaining portion of R$ 1,591,369 was recognized in fixed assets, as described in Note 29.2. No impairment losses were identified in 2024 and 2023. A. Results of Operations The following presentation of the Company’s operating results for the years ended on December 31, 2025, 2024 and 2023 is based on the Company’s Consolidated Financial Statements prepared in accordance with IFRS Accounting Standards included in this Annual Report. References to increases or decreases in any year or period are made in relation to the corresponding prior year or period, except when otherwise indicated. 55 Table of Contents The table below presents information for various income statement items and are expressed in both reais and as a percentage of net sales for each of the respective years: Year ended December 31, 2025, compared with years ended December 31, 2024 and 2023. GERDAU S.A. CONSOLIDATED STATEMENTS OF INCOME In thousands of Brazilian reais (R$) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Horizontal ​ Horizontal ​ ​ ​ ​ Vertical ​ ​ ​ Vertical ​ ​ ​ Vertical ​ Analysis ​ Analysis ​ ​ ​ ​ ​ 2025 ​ ​ ​ Analysis 2025 ​ ​ ​ 2024 ​ ​ ​ Analysis 2024 ​ ​ ​ 2023 ​ ​ ​ Analysis 2023 ​ ​ ​ 2025 x 2024 ​ 2024 x 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET SALES 69,858,532 ​ 100.0 % 67,026,656 ​ 100.0 % 68,916,447 ​ 100.0 % 4.2 % (2.7) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cost of sales (61,891,039) ​ (88.6) % (57,823,416) ​ (86.3) % (57,583,992) ​ (83.6) % 7.0 % 0.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ GROSS PROFIT 7,967,493 ​ 11.4 % 9,203,240 ​ 13.7 % 11,332,455 ​ 16.4 % (13.4) % (18.8) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selling expenses (782,351) ​ (1.1) % (762,560) ​ (1.1) % (716,195) ​ (1.0) % 2.6 % 6.5 % General and administrative expenses (1,338,443) ​ (1.9) % (1,404,059) ​ (2.1) % (1,491,441) ​ (2.2) % (4.7) % (5.9) % Other operating income 164,476 ​ 0.2 % 306,426 ​ 0.5 % 1,033,506 ​ 1.5 % (46.3) % (70.4) % Other operating expenses (392,976) ​ (0.6) % (999,002) ​ (1.5) % (522,476) ​ (0.8) % (60.7) % 91.2 % Recovery of Eletrobras Compulsory Loan — ​ — % 100,860 ​ 0.2 % — ​ — % (100.0) % — % Results in operations with subsidiary and joint ventures ​ — ​ — % 808,367 ​ 1.2 % — ​ — % (100.0) % — % Impairment of financial assets ​ (10,249) ​ — % (30,910) ​ — % (10,728) ​ — % (66.8) % 188.1 % Impairment of assets ​ (1,964,504) ​ (2.8) % (199,627) ​ (0.3) % — ​ — % 884.1 % — % Equity in earnings of unconsolidated companies 95,622 ​ 0.1 % 464,467 ​ 0.7 % 827,606 ​ 1.2 % (79.4) % (43.9) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCOME BEFORE FINANCIAL INCOME (EXPENSES) AND TAXES 3,739,068 ​ 5.4 % 7,487,202 ​ 11.2 % 10,452,727 ​ 15.2 % (50.1) % (28.4) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial income 693,610 ​ 1.0 % 726,154 ​ 1.1 % 903,019 ​ 1.3 % (4.5) % (19.6) % Financial expenses (2,073,372) ​ (3.0) % (1,508,339) ​ (2.3) % (1,396,789) ​ (2.0) % 37.5 % 8.0 % Exchange variations, net 210,767 ​ 0.3 % (1,064,401) ​ (1.6) % (850,375) ​ (1.2) % (119.8) % 25.2 % Tax credits monetary update ​ — ​ — % — ​ — % 253,002 ​ 0.4 % — % (100.0) % (Losses) Gains on financial instruments, net (45,626) ​ (0.1) % (176,901) ​ (0.3) % (14,979) ​ — % (74.2) % 1081.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INCOME BEFORE TAXES 2,524,447 ​ 3.6 % 5,463,715 ​ 8.2 % 9,346,605 ​ 13.6 % (53.8) % (41.5) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Current (1,119,427) ​ (1.6) % (1,159,640) ​ (1.7) % (1,810,459) ​ (2.6) % (3.5) % (35.9) % Deferred 13,418 ​ — % 294,987 ​ 0.4 % 837 ​ — % (95.5) % 35143.4 % Income and social contribution taxes (1,106,009) ​ (1.6) % (864,653) ​ (1.3) % (1,809,622) ​ (2.6) % 27.9 % (52.2) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NET INCOME 1,418,438 ​ 2.0 % 4,599,062 ​ 6.9 % 7,536,983 ​ 10.9 % (69.2) % (39.0) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ Vertical ​ ​ ​ Year ended ​ Vertical ​ ​ ​ Year ended ​ Vertical ​ ​ ​ Horizontal Horizontal Net Sales by Segment ​ December 31, ​ Analysis ​ December 31, ​ Analysis ​ December 31, ​ Analysis ​ Analysis Analysis (R$ Thousand) ​ ​ ​ 2025 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2023 ​ ​ ​ 2025 x 2024 ​ ​ ​ 2024 x 2023 Brazil 29,687,978 ​ 42.5 % 30,217,819 ​ 45.1 % 31,195,557 ​ 45.3 % (1.8) % (3.1) % North America 35,787,268 ​ 51.2 % 31,931,433 ​ 47.6 % 33,179,048 ​ 48.1 % 12.1 % (3.8) % South America 5,561,450 ​ 8.0 % 5,758,695 ​ 8.6 % 5,118,150 ​ 7.4 % (3.4) % 12.5 % Eliminations and Adjustments ​ (1,178,164) ​ (1.7) % (881,291) ​ (1.3) % (576,309) ​ (0.8) % 33.7 % 52.9 % Consolidated 69,858,532 ​ 100.0 % 67,026,656 ​ 100.0 % 68,916,446 ​ 100.0 % 4.2 % (2.7) % ​ 56 Table of Contents The year 2025 was marked by a challenging and volatile global steel environment. Key factors included an imbalance between supply and demand, as well as developments in trade policies adopted by major economies. In this context, the sector continues to face challenges due to production overcapacity, particularly from China, whose volumes are still directed to other markets, heightening international competition. Gerdau operations reflected distinct dynamics between regions where the Company operates. In North America, the rebalancing of supply and demand evolved more favorably, creating conditions for price recovery and stronger results throughout the year. Conversely in Brazil, domestic dynamics remained significantly impacted by steel oversupply, particularly imported steel, coupled with sector-specific dynamics, putting pressure on operations’ volumes and margins. Throughout 2025, the Company advanced initiatives that will enhance assets’ competitiveness and continue to work to reinforce fair competitive conditions in Brazil, with an emphasis on the pivotal role of trade defense measures in bolstering local industry. In 2025, Gerdau’s net sales totaled R$ 69.9 billion, 4.2% higher than in 2024, fueled by increased shipment volume and more favorable pricing environment in North America, which accounted for more than 50% of consolidated sales for the year. These factors offset the more challenging pricing scenario in the Brazilian market throughout 2025. In 2024, Gerdau’s net sales were R$ 67.0 billion, down 2.7% from 2023, reflecting the cooling of sales prices of the main product lines at North America Segment from the second half of 2024. This movement was partially offset by the depreciation of the real against the dollar (+7.9%) and the price increase in some product lines at Brazil Segment. The shipments in 2024 decreased 3.0% compared to 2023, reflecting the effects explained above. In Brazil Segment in 2025, net sales went down 1.8% from 2024, due to a fierce competitive environment in the domestic market, marked by rising steel imports and the entry of new capacity players, which pressured prices in the common long and flat steel segments throughout the year. Despite shipment volume growth, the greater share of exports in the mix also contributed to the decline in Net sales in the period. The net sales per tonne decreased 4.5% in 2025 when compared to 2024 due to effects of lower prices in the Brazilian domestic market in light of a scenario of steel oversupply. In Brazil Segment in 2024, net sales went down 3.1% from 2023. The decrease of 1.3% in volume of sales was a consequence of excessive steel imports in Brazil. The net sales per tonne decreased 1.9% in 2024 when compared to 2023 due to effects of lower prices in the Brazilian domestic market. In 2025, due to the steel improvement in the North America Segment, as explained above, net sales were 12.1% higher in 2025 compared to 2024, fueled by shipment volume growth of higher value-added products and the gradual price recovery across key product lines throughout 2025. The net sales per tonne increased 2.4% in 2025 when compared to 2024 supported by higher value-added products and the gradual price recovery across key product lines throughout 2025. In the North America Segment in 2024, net sales were R$31.9 billion, resulting in a decrease of 3.8% compared to 2023, which were R$33.2 billion. The volume of sales in 2024 was 4.6 million tonnes, 3.5% lower than 2023, which was 4.7 million tonnes. The net sales per tonne decreased in 2024 when compared to 2023 due to volatility in the North America market. In South America Segment, net sales in 2025 came 3.4% lower than in 2024, reflecting strong pressure on prices in the regions where the Company operates and the impact of inflation adjustments in Argentina, factors that ultimately offset the positive effect of increased shipments for the year. The net sales per tonne decreased 12.2% in 2025 when compared to 2024 due to lower prices in the Segment. In the South America Segment, net sales in 2024 were R$ 5.8 billion, compared to R$ 5.1 billion in 2023, an increase of 12.5% in the year. The volume of sales in 2024 was 1.0 million tonnes, 10.2% lower than 2023, which was 1.1 million tonnes. The net sales per tonne increased in 2024 when compared to 2023 due to effects of exchange rate in the results of this Segment. 57 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ Net sales, cost of sales and Gross Profit(*) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in R$ thousand) ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 x 2024 ​ ​ ​ ​ 2024 x 2023 Brazil Net sales 29,687,978 ​ 30,217,819 ​ 31,195,557 ​ (1.8) % (3.1) % ​ Cost of sales (27,807,111) ​ (26,319,344) ​ (27,593,565) ​ 5.7 % (4.6) % ​ Gross profit 1,880,867 ​ 3,898,475 ​ 3,601,992 ​ (51.8) % 8.2 % ​ Gross margin 6.3 % 12.9 % 11.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ North America Net sales 35,787,268 ​ 31,931,433 ​ 33,179,048 ​ 12.1 % (3.8) % ​ Cost of sales (30,299,734) ​ (27,434,949) ​ (26,629,584) ​ 10.4 % 3.0 % ​ Gross profit 5,487,534 ​ 4,496,484 ​ 6,549,465 ​ 22.0 % (31.3) % ​ Gross margin 15.3 % 14.1 % 19.7 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ South America Net sales 5,561,450 ​ 5,758,695 ​ 5,118,150 ​ (3.4) % 12.5 % ​ Cost of sales (4,964,009) ​ (4,930,715) ​ (4,014,010) ​ 0.7 % 22.8 % ​ Gross profit 597,441 ​ 827,980 ​ 1,104,140 ​ (27.8) % (25.0) % ​ Gross margin 10.7 % 14.4 % 21.6 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Elimination and adjustments Net sales (1,178,164) ​ (881,291) ​ (576,309) ​ 33.7 % 52.9 % ​ Cost of sales 1,179,815 ​ 861,592 ​ 653,167 ​ 36.9 % 31.9 % ​ Gross profit 1,651 ​ (19,699) ​ 76,858 ​ (108.4) % (125.6) % ​ ​ Gross margin ​ (0.1) % 2.2 % (13.3) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Net sales 69,858,532 ​ 67,026,656 ​ 68,916,447 ​ 4.2 % (2.7) % ​ Cost of sales (61,891,039) ​ (57,823,416) ​ (57,583,992) ​ 7.0 % 0.4 % ​ Gross profit 7,967,493 ​ 9,203,240 ​ 11,332,455 ​ (13.4) % (18.8) % ​ Gross margin 11.4 % 13.7 % 16.4 % ​ ​ ​ ​ (*) The information does not include data from joint ventures and associate companies. In 2025, Gerdau's cost of goods sold totaled R$61.9 billion, 7.0% higher than in 2024. Cost of goods sold per tonne increased 1.1%, driven by the U.S. dollar appreciation against the Brazilian real (+3.6%) and costs recorded throughout the year in Brazil’s operations, as explained above. These effects were partially mitigated by productivity gains and operational efficiency recorded in operations. In 2024, Gerdau’s cost of sales reached R$ 57.8 billion, stable comparing with 2023, to R$ 57.6 billion, impacted by the depreciation of the real against the dollar in the conversion of costs from foreign Segments, being offset by initiatives to reduce fixed costs and expenses, as well as asset optimization to boost the Company’s operational performance, mainly in Brazil, throughout 2024. In Brazil Segment in 2025, the cost of goods sold came 5.7% higher in 2025 versus 2024, driven by increased shipment volume and, mainly, by scheduled shutdowns and structural and operational adjustments necessary throughout the year to implement improvements and prepare for new investments at the Ouro Branco industrial unit. In Brazil Segment in 2024, the cost of sales decreased 4.6% compared to 2023, reflecting initiatives to reduce fixed costs and the continue increase in efficiency at the units in Brazil. However, this movement was offset by the increase in the price of some raw materials such as iron ore and pig iron. 58 Table of Contents In North America Segment in 2025, cost of goods sold in 2025 was 10.4% higher than in 2024 reflecting increased volumes. The cost per tonne in U.S. dollars was 2.8% lower, driven by higher capacity utilization, ongoing efforts to control fixed costs and productivity gains, and stable prices for raw materials such as scrap. In the North America Segment in 2024, the cost of sales increased 3.0% compared to 2023, due to the effect of exchange rate variation in the period, which offset the drop in the price of scrap. In South America Segment, the cost of goods sold remained stable, decreasing 0.7% in 2025 compared to 2024, despite increased shipment volumes, mainly driven by inflation adjustments and improved operational performance due to higher asset utilization rate, especially in Argentina. In the South America Segment in 2024, the cost of sales increased 22.8% compared to 2023, reflecting the effects of exchange rate and lower fixed costs dilution. Selling, General and Administrative Expenses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Expenses (*) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (R$ thousand) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 x 2024 ​ ​ ​ 2024 x 2023 Selling expenses 782,351 ​ 762,560 ​ 716,195 ​ 2.6 % 6.5 % General and administrative expenses 1,338,443 ​ 1,404,059 ​ 1,491,441 ​ (4.7) % (5.9) % Total 2,120,794 ​ 2,166,619 ​ 2,207,636 ​ (2.1) % (1.9) % Net sales 69,858,532 ​ 67,026,656 ​ 68,916,447 ​ 4.2 % (2.7) % % net sales 3.0 % 3.2 % 3.2 % ​ ​ ​ ​ ​ (*) The information does not include data from joint ventures and associate companies. Impairment of assets In the fourth quarter of 2025, due to the revision of the Capex investment plan for its industrial plants, representing a significant reduction compared to recent years, the level of asset utilization at certain industrial plants in the Brazil segment, and the expectation of a deterioration in economic conditions to a greater extent than that contemplated in previous period scenarios, tests performed on other long-lived assets identified impairment losses in fixed assets of the Brazil segment amounting to R$ 1,591,369 as compared to R$ 199,627 on December 31, 2024, resulting from recoverable value below the carrying amount. Also, in December 2025, the Company assessed the recoverability of goodwill in its business segments. The analyses carried out identified impairment losses in the Brazil segment in the amount of R$ 1,964,504. Therefore, the Company wrote off the entire goodwill of this segment in the amount of R$ 373,135. No impairment losses were identified in 2024 and 2023. Income before Financial Income (Expenses) and Taxes Income before financial income (expenses) and taxes was R$ 3,739 million in 2025, compared to income of R$ 7,487 million in 2024. The reduction in 2025, when compared to 2024, was mainly related to the decrease in gross profit, which was related to higher cost of sales in 2025. Income before financial income (expenses) and taxes was R$ 7,487 million in 2024, compared to income of R$ 10,453 million in 2023. The reduction in 2024, when compared to 2023, was mainly related to the decrease in gross profit, which was related to lower demand and sales in 2024. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Financial Income, Financial Expenses, Exchange Variation, net and Gains and Losses on Derivatives, net ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (R$ thousand) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 x 2024 ​ ​ ​ 2024 x 2023 Financial income 693,610 ​ 726,154 ​ 903,019 ​ (4.5) % (19.6) % Financial expenses (2,073,372) ​ (1,508,339) ​ (1,396,789) ​ 37.5 % 8.0 % Exchange rate variation, net ​ 210,767 ​ (1,064,401) ​ (850,375) ​ (119.8) % 25.2 % Tax credits monetary update — ​ — ​ 253,002 ​ — % (100.0) % (Losses) Gains on financial instruments, net (45,626) ​ (176,901) ​ (14,979) ​ (74.2) % 1081.0 % Total (1,214,621) ​ (2,023,487) ​ (1,106,122) ​ (40.0) % 82.9 % ​ 59 Table of Contents The Financial result for 2025 totaled R$ 1.2 billion, 40.0% lower than in 2024, reflecting variation of the U.S. dollar against the Brazilian real and other currencies in the countries where we operate, as well as inflation adjustments to non-monetary items in Argentina. In 2024, the financial result was negative by R$ 2,0 billion, 82.9% higher than 2023, mainly due to the depreciation of the real against the dollar and other currencies in the countries where Gerdau operates, as well as inflation adjustments on non-monetary items of subsidiaries in Argentina. Additionally, the reduction in financial income is explained by the lower cash position of the portion denominated in reais in 2024, reducing returns on financial investments. Income and Social Contribution Taxes Income tax and social contribution was an expense of R$ 1,106 million in 2025 compared to an expense of R$ 865 million in 2024. This increase in the expense is mainly related to the reduction in deferred income and social contribution taxes, which more than compensated the reduction of 3.5% in the current income and social contribution taxes expenses for the year of 2025, when compared to 2024. Income tax and social contribution was an expense of R$ 865 million in 2024 compared to an expense of R$ 1,810 million in 2023. This decrease in the expense is mainly related to the reduction in income before taxes, which resulted in a reduction of 52.2% in the current income and social contribution taxes expenses for the year of 2024, when compared to 2023. Net Income Net income of R$ 1.4 billion in 2025 was 69.2% lower than 2024, mainly related to the lower operational results, as well as the variation in the financial result. Net income of R$ 4.6 billion in 2024 was 39.0% lower than 2023, mainly related to the lower operational results, as well as the variation in the financial result. B. Liquidity and Capital Resources The table below presents information for the cash flow of the respective years: ​ 60 Table of Contents GERDAU S.A. CONSOLIDATED STATEMENTS OF CASH FLOWS for the years ended December 31, 2025, 2024 and 2023 In thousands of Brazilian reais (R$) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the years ended on ​ ​ ​ Horizontal Analysis ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ 2025 x 2024 ​ 2024 x 2023 ​ ​ ​ Cash flows from operating activities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income for the year 1,418,438 ​ 4,599,062 ​ 7,536,983 ​ (69.2) % (39.0) % Adjustments to reconcile net income for the year to net cash provided by operating activities ​ ​ ​ ​ ​ ​ ​ ​ Depreciation and amortization 3,683,585 ​ 3,126,247 ​ 3,047,212 ​ 17.8 % 2.6 % Impairment of assets ​ 1,964,504 ​ 199,627 ​ — ​ 884.1 % — % Equity in earnings of unconsolidated companies (95,622) ​ (464,467) ​ (827,606) ​ (79.4) % (43.9) % Exchange variation, net (210,767) ​ 1,064,401 ​ 850,375 ​ (119.8) % 25.2 % Losses on derivative financial instruments, net 45,626 ​ 176,901 ​ 14,979 ​ (74.2) % 1081.0 % Post-employment benefits 271,217 ​ 257,359 ​ 235,977 ​ 5.4 % 9.1 % Long-term incentive plans 149,210 ​ 152,414 ​ 157,979 ​ (2.1) % (3.5) % Income tax 1,106,009 ​ 864,653 ​ 1,809,622 ​ 27.9 % (52.2) % Losses on disposal of property, plant and equipment 75,397 ​ 45,859 ​ 27,525 ​ 64.4 % 66.6 % Gain from a bargain purchase ​ (41,306) ​ — ​ — ​ — % — % Results in operations with subsidiary and joint ventures ​ — ​ (808,367) ​ — ​ (100.0) % — % Impairment of financial assets ​ 10,249 ​ 30,910 ​ 10,728 ​ (66.8) % 188.1 % Provision of tax, civil, labor and environmental liabilities, net (40,432) ​ 210,305 ​ 160,245 ​ (119.2) % 31.2 % Tax credits recovery — ​ (100,860) ​ (1,098,218) ​ (100.0) % (90.8) % Interest income on short-term investments (166,307) ​ (274,291) ​ (481,624) ​ (39.4) % (43.0) % Interest expense on debt and debentures 1,274,472 ​ 796,933 ​ 840,069 ​ 59.9 % (5.1) % Interest expense on leases liabilities 122,321 ​ 129,137 ​ 127,787 ​ (5.3) % 1.1 % (Reversal) Provision for net realizable value adjustment in inventory, net 23,472 ​ (33,137) ​ 12,036 ​ (170.8) % (375.3) % ​ 9,590,066 9,972,686 ​ 12,424,069 ​ (3.8) % (19.7) % Changes in assets and liabilities ​ ​ ​ ​ ​ ​ ​ Decrease (Increase) in trade accounts receivable ​ 149,592 ​ 549,548 ​ (294,509) ​ (72.8) % (286.6) % Decrease in inventories 956,924 ​ 542,496 ​ 1,305,424 ​ 76.4 % (58.4) % Decrease in trade accounts payable (486,382) ​ (1,192,990) ​ (355,416) ​ (59.2) % 235.7 % Decrease (Increase) in other receivables 197,222 ​ 1,881,763 ​ (107,171) ​ (89.5) % (1855.9) % Decrease in other payables (203,599) ​ (407,073) ​ (434,100) ​ (50.0) % (6.2) % Dividends from associates and joint ventures 235,327 ​ 414,653 ​ 461,292 ​ (43.2) % (10.1) % Purchases of short-term investments (362,906) ​ (924,686) ​ (7,223,644) ​ (60.8) % (87.2) % Proceeds from maturities and sales of short-term investments 616,006 ​ 3,020,432 ​ 7,908,990 ​ (79.6) % (61.8) % Cash provided by operating activities 10,692,250 ​ 13,856,829 ​ 13,684,935 ​ (22.8) % 1.3 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest paid on loans and financing (1,461,147) ​ (946,936) ​ (858,301) ​ 54.3 % 10.3 % Interest paid on lease liabilities (122,321) ​ (129,137) ​ (127,787) ​ (5.3) % 1.1 % Income and social contribution taxes paid (1,121,328) ​ (1,399,513) ​ (1,560,137) ​ (19.9) % (10.3) % Net cash provided by operating activities 7,987,454 ​ 11,381,243 ​ 11,138,710 ​ (29.8) % 2.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities ​ ​ ​ ​ ​ ​ ​ Purchases of property, plant and equipment (6,681,620) ​ (5,778,381) ​ (5,209,128) ​ 15.6 % 10.9 % Proceeds from sales of property, plant and equipment, investments and other intangibles 69,729 ​ 1,559,697 ​ 40,661 ​ (95.5) % 3735.9 % Additions in other intangibles (171,221) ​ (168,036) ​ (127,195) ​ 1.9 % 32.1 % Shares repurchase from joint venture ​ — ​ — ​ 47,006 ​ — % (100.0) % Payment for acquisition of company control (699,118) ​ (455,683) ​ — ​ 53.4 % — % Capital increase in associate and joint venture (91,436) ​ (191,947) ​ (524,185) ​ (52.4) % (63.4) % Net cash used by investing activities (7,573,666) ​ (5,034,350) ​ (5,772,841) ​ 50.4 % (12.8) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities ​ ​ ​ ​ ​ ​ ​ Purchases of Treasury stocks ​ (1,169,314) ​ (1,194,726) ​ — ​ (2.1) % — % Dividends and interest on capital paid (1,285,673) ​ (1,656,414) ​ (2,683,328) ​ (22.4) % (38.3) % Proceeds from loans and financing 9,221,436 ​ 3,918,019 ​ 1,776,684 ​ 135.4 % 120.5 % Payment of loans and financing (7,994,826) ​ (3,269,587) ​ (2,830,684) ​ 144.5 % 15.5 % Leasing payment (487,784) ​ (459,504) ​ (388,202) ​ 6.2 % 18.4 % Intercompany loans, net — ​ (24,992) ​ 102 ​ (100.0) % (24602.0) % Net cash used in financing activities (1,716,161) ​ (2,687,204) ​ (4,125,428) ​ (36.1) % (34.9) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exchange variation on cash and cash equivalents (536,270) ​ 1,102,479 ​ (710,659) ​ (148.6) % (255.1) % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (Decrease) Increase in cash and cash equivalents (1,838,643) ​ 4,762,168 ​ 529,782 ​ (138.6) % 798.9 % Cash and cash equivalents at beginning of year 7,767,813 ​ 3,005,645 ​ 2,475,863 ​ 158.4 % 21.4 % Cash and cash equivalents at end of year 5,929,170 ​ 7,767,813 ​ 3,005,645 ​ (23.7) % 158.4 % ​ ​ 61 Table of Contents Net cash provided by operating activities In 2025, net cash from operating activities was R$ 8.0 billion, 29.8% lower compared to 2024, mainly reflecting lower operational results and the high basis for comparison, as in 2024 the Company received nearly R$1.8 billion related to the judicial deposit from the case regarding the exclusion of ICMS tax from the PIS and COFINS calculation basis. In 2024, net cash from operating activities was R$ 11.4 billion, 2.2% higher compared to 2023. Despite a lower net income for the year, the net cash from operating was partially compensated by income taxes and tax credit recovery. Cash conversion cycle In December 2025, the cash conversion cycle (working capital divided by net revenue for the quarter) decreased to 77 days, compared to 85 days in December 2024, representing a reduction of 8 days compared to 2024. This was influenced by the Company’s efforts to optimize inventories, mainly raw materials, as well as the devaluation of the dollar against the real during the period. In December 2024, the cash conversion cycle was 85 days compared to 87 days in December 2023, reflecting higher net sales in 2024. Net cash used in investing activities Net cash used in investing activities increased in 2025 when compared to 2024, mainly due to higher capex expenditure in 2025 and the higher proceeds from sales of property, plant and equipment, investments, and other in 2024. Net cash used in investing activities decreased in 2024 when compared to 2023, mainly due to proceeds from sales of property, plant and equipment, investments, and other. Net cash used in financing activities Net cash used in financing activities decreased in 2025 compared to 2024, reflecting funds raised throughout the year (debentures, bonds, and bilateral loans with first-tier institutions) aimed at reinforcing cash and extending debt average maturity. These effects were partially offset by loan repayments during the period. Net cash used in financing activities decreased in 2024 compared to 2023, mainly due to proceeds from loans and financing related to the issuance of debentures aimed at reprofiling short-term debts with higher rates, as well as to lengthen the Company’s debt profile. This effect partially offset the net cash used for treasury share purchases, in line with the Buyback Program announced by the Company on July 31, 2024. Indebtedness The Company’s debt is used to finance investments in fixed assets, including the modernization and technological upgrade of its plants and the expansion of installed capacity, as well as for working capital, acquisitions and, depending on market conditions, short-term financial investments. (1) Working capital: trade accounts receivable, plus inventories, less suppliers (based on the balance of each account at the end of the year). (2) Cash conversion cycle: working capital, divided by net sales (of the last three months as of the date presented), multiplied by 90. ​ 62 Table of Contents The following table profiles the Company’s debt and debentures as of the years ended December 31, 2025, 2024 and 2023 (in thousands of Brazilian reais): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 CURRENT: 941,904 ​ 735,737 ​ 1,797,622 Short-term debt 897,295 ​ 697,049 ​ 1,783,201 Debentures 44,609 ​ 37,988 ​ 14,421 ​ ​ ​ ​ ​ ​ ​ NON-CURRENT: 13,240,247 ​ 12,901,447 ​ 9,095,686 ​ ​ ​ ​ ​ ​ ​ Long-term debt 8,877,457 ​ 9,110,972 ​ 8,296,474 Debentures 4,362,790 ​ 3,790,475 ​ 799,212 ​ ​ ​ ​ ​ ​ ​ TOTAL DEBT: 14,182,151 ​ 13,636,484 ​ 10,893,308 Total cash and cash equivalents and short-term investments 6,374,797 ​ 8,276,843 ​ 5,343,742 Brazil 1,019,968 ​ 2,234,748 ​ 2,618,434 Companies abroad 5,354,829 ​ 6,042,095 ​ 2,725,308 ​ ​ ​ ​ ​ ​ ​ NET DEBT (1) 7,807,354 ​ 5,359,641 ​ 5,549,566 (1) The calculation of net debt is made by subtracting cash and cash equivalents and short-term investments from total debt. Net debt is not a GAAP measure recognized under IFRS Accounting Standards and should not be considered in isolation from other financial measures. Other companies may calculate net debt differently and therefore this presentation of net debt may not be comparable to other similarly titled measures used by other companies. The Company uses “net debt” as indicator of indebtedness in its financial management. Total debt was R$ 14,182 million, R$ 13,636 million and R$10,893 million for the years ended December 31, 2025, 2024 and 2023, respectively. At the end of December 2025, the nominal weighted average cost of gross debt was CDI – 0.21% for the portion denominated in Brazilian real and 6.12% for the portion denominated in U.S. dollar. On December 31, 2025, the average gross debt term was 8.5 years, with the debt maturity schedule well balanced and well distributed over the coming years. ​ ​ ​ Gerdau S.A. ​ ​ ​ ​ Non-Current Amortization ​ ​ ​ (R$ thousand) 2027 1,778,633 2028 1,551,833 2029 1,547,660 2030 and after 8,362,121 Total 13,240,247 ​ Financial Agreements Below are the material financial agreements outstanding at year end 2025: Bonds The Company, through its subsidiaries, Gerdau Trade Inc. and GUSAP III LP, has issued bonds due in 2027, 2035 and 2044. The following companies guaranteed these transactions: Gerdau S.A., Gerdau Açominas S.A. and Gerdau Aços Longos S.A.. In June 2025, the Company’s subsidiary Gerdau Trade Inc. completed the issuance of a bond maturing in June 2035 in the aggregate principal amount of US$ 650 million (equivalent to R$ 3,624 million at the issuance date). A portion of the proceeds, totaling US$238 million (equivalent to R$ 1,316 million at the repurchase date), was used to repurchase a portion of the Company’s outstanding bonds originally maturing in October 2027. Additionally, in December 2025, the Company, through its subsidiary GUSAP III, executed the early redemption (“Make-Whole”) of all outstanding bonds maturing in 2030, totaling US$ 500 million in principal amount. 63 Table of Contents On December 31, 2025, the outstanding balance of these bonds was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Payment ​ ​ ​ Initial Amount ​ Outstanding Bond ​ ​ ​ Issuance Date ​ ​ ​ Maturity ​ ​ ​ Months ​ ​ ​ Coupon ​ ​ ​ (US$ million) ​ ​ ​ Balance (USD million) 2027 October 24th, 2017 October 24th, 2027 April & October 4.875% ​ 650 US$ 180 (R$ 988) 2035 June 09th, 2025 June 09th, 2035 June & December 5.750% ​ 650 US$ 650 (R$ 3,577) 2044 April 16th, 2014 April 16th, 2044 April & October 7.250% ​ 500 US$ 481 (R$ 2,647) ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL US$ 1,311 ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL R$ 7,212 ​ Debentures The Company concluded in 2025 the issuance of debentures with maturity of 7 years. In June 2025, the Company paid the debentures issued in 2019 at maturity, with total amount of R$ 800 million. On December 31, 2025, the outstanding balance of these debentures was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding ​ ​ ​ ​ ​ ​ Interest Payment ​ ​ ​ Initial Amount ​ Principal Debenture ​ Issuance Date ​ Due Date ​ Months ​ Coupon ​ (R$ million) ​ (R$ million) 2028 December 10th, 2024 December 10th, 2028 June & December CDI + 0.50% 1,500 1,500 2029 ​ May 29th, 2024 ​ May 29th, 2029 ​ May & November ​ CDI + 0.60% 1,500 1,500 2032 ​ June 04th, 2025 ​ June 04th, 2032 ​ June & December ​ CDI + 0.65% ​ 1,375 ​ 1,375 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ TOTAL ​ 4,375 ​ Other Financial Agreements The Company and its subsidiaries maintain other financing contracts, mainly bilateral bank loans. On December 31, 2025, the outstanding balance of these loans was R$ 2,261 million. See Note 15 - Short-Term Debt and Long-Term Debt in its Consolidated Financial Statements included herein for further details. Credit Lines In 2022, the Company concluded the roll-over of its senior unsecured working capital revolving facility with a total committed amount of US$ 875 million (equivalent to R$ 4,815 million) and final maturity in September 2027. On December 31, 2025, there were no outstanding loans under this facility. Exchange Rate The Company has designated a portion of its debt denominated in foreign currency and contracted by companies in Brazil as a hedge for a portion of the net investments in foreign subsidiaries. As a result, the effects from exchange variation gains or losses on the portion of debt designated for hedge accounting are also recognized in shareholders’ equity, in accordance with IFRS Accounting Standards. The subsidiaries that issued the debt are not subject to income taxes and as such there is no income tax effect on the exchange gains and losses on the debt. However, the subsidiaries have loaned the proceeds to other entities in Brazil with terms identical to those of the Ten - Year Bonds. The payable by the subsidiaries in Brazil to the foreign subsidiaries denominated in US dollars generates exchange gains (losses) that are taxable and results in income tax recognized in the income statement, while these exchange variances are eliminated in consolidation with the offsetting exchange gains (losses) recognized by the foreign subsidiaries. Starting from April 1, 2012, with the objective of eliminating the tax effect from the exchange variance of these debts, the Company designated part of its debt in foreign currency as a hedge for a portion of the investments in subsidiaries located outside Brazil. As a result, the effect of exchange rate changes on these debts in the amount of US$ 0.8 billion (equivalent to R$ 4.6 billion on December 31, 2025) (designated as a hedge) has been recognized in the Statement of Comprehensive Income. Derivatives Risk management objectives and strategies: The Company understands that it is subject to different market risks, such as fluctuations in exchange rates, interest rates and commodity prices. In order to carry out its strategy for profitable growth, the Company implements risk management strategies with the objective of mitigating such market risks. 64 Table of Contents The Company’s objective when entering into derivative transactions is always related to mitigation of market risks as stated in our policies and guidelines. All outstanding derivative financial instruments are monthly reviewed by the Finance Committee, which validates the fair value of such financial instruments. All gains and losses in derivative financial instruments are recognized by its fair value in the Consolidated Financial Statements of the Company. Policy for use of derivatives: according to internal policy, the financial result must arise from the generation of cash from its business and not gains from the financial market. The Company uses derivatives and other financial instruments to reduce the impact of market risks on its financial assets and liabilities or future cash flows and earnings. Gerdau has established policies to assess market risks and to approve the use of derivative financial instruments transactions related to those risks. The Company enters into derivative financial instruments to manage the above-mentioned market risks and never for speculative purposes. Policy for determining fair value: the fair value of the derivative financial instruments is determined using models and other valuation techniques, which involve future prices and curves discounted to present value as of the calculation date. Amounts are gross before taxes. Due to changes in market rates, these amounts can change up to the maturity or in situations of early settlement of transactions. The derivative financial instruments may include: interest rate swaps, cross currency/commodities swaps, currency options contracts and currency/commodities forward contracts. Dollar forward contracts: the Company entered into NDF operations (Non Deliverable Forward) in order to mitigate the foreign exchange risk on assets and liabilities denominated in foreign currencies, mainly U.S. dollar. The counterparties of these transactions are financial institutions with low credit risk. 65 Table of Contents The effects of financial instruments are classified as follow: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Notional value ​ Amount receivable ​ Amount payable Contracts ​ ​ ​ Position ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Currency forward contracts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturity in 2024 ​ buyed in US$ ​ — ​ — ​ US$ 34,2 million ​ — ​ — ​ — ​ — ​ — ​ 17,337 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commodity derivatives ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturity in 2024 ​ buyed in US$ ​ — ​ — ​ US$ 12,1 million ​ — ​ — ​ 32 ​ — ​ — ​ 1,349 Maturity in 2025 ​ buyed in US$ ​ US$ 1,1 million ​ US$ 4,3 million ​ — ​ — ​ — ​ — ​ — ​ 1,747 ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commodity contracts ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturity in 2026 ​ — ​ — ​ — ​ — ​ 20,113 ​ 16,921 ​ — ​ — ​ — ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Swaps IPCA x DI ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturity in 2024 ​ — ​ — ​ — ​ R$ 450.0 million ​ — ​ — ​ 734 ​ — ​ — ​ 356 Maturity in 2026 ​ CDI –1.10% ​ R$ 300 million ​ — ​ — ​ — ​ — ​ — ​ 2,192 ​ — ​ — Maturity in 2026 ​ CDI –0.90% ​ R$ 150 million ​ — ​ — ​ — ​ — ​ — ​ 1,114 ​ — ​ — Swaps USD x DI ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Maturity in 2026 ​ 107.9% CDI ​ US$ 30.6 million ​ US$ 30.6 million ​ US$ 30.6 million ​ 16,510 ​ 35,947 ​ — ​ — ​ — ​ 1,606 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total fair value of financial instruments ​ ​ ​ ​ ​ ​ ​ ​ 36,623 ​ 52,868 ​ 766 ​ 3,306 ​ 1,747 ​ 20,648 ​ ​ ​ ​ ​ ​ ​ ​ Fair value of derivatives ​ ​ ​ 2025 ​ ​ ​ 2024 ​ 2023 Current assets 36,623 ​ 16,921 ​ 766 Non-current assets ​ — ​ 35,947 ​ — ​ 36,623 ​ 52,868 ​ 766 Fair value of derivatives ​ ​ ​ ​ ​ Current liabilities 3,306 ​ 1,747 ​ 19,042 Non-current liabilities ​ — ​ — ​ 1,606 ​ 3,306 ​ 1,747 ​ 20,648 ​ ​ ​ ​ ​ ​ ​ Net Income 2025 ​ ​ ​ 2024 ​ 2023 Gains on financial instruments 22,107 ​ 86,743 ​ 39,895 Losses on financial instruments (67,733) ​ (263,644) ​ (54,874) ​ (45,626) ​ (176,901) ​ (14,979) Other comprehensive income ​ ​ ​ ​ ​ Gains on financial instruments — ​ — ​ 783 Losses on financial instruments — ​ (783) ​ — ​ ​ — ​ (783) ​ 783 ​ Capital Expenditures 2025 – Capital Expenditures In fiscal year 2025, capital expenditure on fixed assets was R$ 6.1 billion. Of this amount, 77% was allocated in Brazil Segment and the remaining 23% was allocated to other operations of Gerdau. Brazil Segment — a total of R$ 4,734 million was invested in this operation for capital expenditures. North America Segment — a total of R$ 1,227 million was invested in this operation for capital expenditures. South America Segment — a total of R$ 184 million was invested in this operation for capital expenditures. 66 Table of Contents 2024 – Capital Expenditures In fiscal year 2024, capital expenditure on fixed assets was R$ 6.2 billion. Of this amount, 73% was allocated in Brazil Segment and the remaining 27% was allocated to other operations of Gerdau. Brazil Segment — a total of R$ 4,501 million was invested in this operation for capital expenditures. North America Segment — a total of R$ 1,454 million was invested in this operation for capital expenditures. South America Segment — a total of R$ 225 million was invested in this operation for capital expenditures. 2023 – Capital Expenditures In fiscal year 2023, capital expenditure on fixed assets was R$ 5.7 billion. Of this amount, 66% was allocated in Brazil Segment and the remaining 34% was allocated to other operations of Gerdau. Brazil Segment — a total of R$ 3,770 million was invested in this operation for capital expenditures. North America Segment — a total of R$ 1,696 million was invested in this operation for capital expenditures. South America Segment — a total of R$ 217 million was invested in this operation for capital expenditures. C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENCES, ETC. All Gerdau mills have a Quality Management System supported by a wide array of quality control tools. Product development projects are headed by specialists who use quality tools such as “Six Sigma”, a set of statistical methods for improving the assessment of process variables, and the concept of “Quality Function Deployment”, a methodology through which technicians can identify and implement the customer requirements. Given this level of quality management, mills are ISO 9001 or ISO TS 16949 certified. In general, production, technical services and quality teams are responsible for developing new products to meet customer and market needs. Gerdau uses a Quality Management System developed in house that applies tests for product design, manufacturing processes and final-product specifications. A specially trained team and modern technologies also exist to assure the manufactured product high standards of quality. Gerdau’s technical specialists do planned visits, some are randomly selected, and some are scheduled visits, to its customers to check on the quality of the delivered products in order to seek the final user satisfaction for products purchased indirectly. Due to the specialized nature of its business, the Gerdau special steel mills are constantly investing in technological upgrading and in research and development. These mills are active in the automotive segment and maintain a technology department (Research and Development) responsible for new products and the optimization of existing processes. International machinery manufacturers and steel technology companies supply most of the sophisticated production equipment that Gerdau uses. These suppliers generally sign technology transfer agreements with the purchaser and provide extensive technical support and staff training for the installation and commissioning of the equipment. Gerdau has technology transfer and benchmarking agreements with worldwide recognized performance companies. As is common with mini mill steelmakers, Gerdau usually acquires technology in the market rather than develops new technology through intensive process research and development, since steelmaking technology is readily available for purchase. The Company is not dependent on patents or licenses or new manufacturing processes that are material to its business. See item “Information on the Extent of the Company’s Dependence” for further details. 67 Table of Contents D. TREND INFORMATION In 2025, Gerdau produced 12.1 million tonnes of steel, an increase of 3.6% more compared to 2024. Gerdau’s shipments reached 11.6 million tonnes, generating net sales of R$ 69.9 billion, 4.2% lower than in 2024. All Gerdau operations take place in the Americas. For 2026, Gerdau’s perspectives remain positive, mainly in the U.S., where demand has a positive trend in the solar energy, data centers, and infrastructure sectors, with customers reporting healthy backlog levels. However, the automotive sector continues to face more challenging dynamics, impacting the special steel segment. Additionally, the Company will closely monitor new developments in Section 232 tariffs and USMCA negotiations. In Brazil, moderate growth in demand is expected, in line with the IABR, with emphasis on infrastructure and civil construction. Nevertheless, the Company remains vigilant on the automotive sector, which may be impacted by a prolonged high-interest rate environment and the inflow of imported vehicles. The Company continues to invest in modernization and technology updates at its units, aiming to constantly improve the profitability and productivity of its assets. The use of technological enablers such as analytics, AI, and digital twins is also being considered by management, due to its potential for greater operational efficiency. Additionally, Gerdau remains focused on identifying opportunities for cost reduction across all units. E. CRITICAL ACCOUNTING ESTIMATES Critical accounting estimates are those that require ‘management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates that impact matters that are inherently uncertain. As the number of estimates and assumptions affecting the possible future resolution of the uncertainties increases, those judgments become even more subjective and complex. In the preparation of the Consolidated Financial Statements, the Company has relied on estimates and assumptions derived from historical experience and various other factors that it deems reasonable and significant. Although these estimates and assumptions are reviewed by the Company in the normal course of business, the presentation of its financial position and results of operations often requires making judgments regarding the effects of inherently uncertain matters on the carrying value of its assets and liabilities. Actual results may differ from estimates based on different variables, assumptions or conditions. In order to provide an understanding of how the Company forms its judgments about future events, including the variables and assumptions underlying the estimates, the Company presents below the subjects that demand critical accounting estimates: ● revenue recognition; ● the recoverable amount of goodwill and long-lived assets; ● provisions for tax, civil and labor claims; ● recoverability of deferred tax assets; ● estimates in selecting interest rates, return on assets, mortality tables and expectations for salary increases; and ● long-term incentive plans through the selection of the valuation model and rates. Revenue recognition Net sales are presented net of taxes and discounts. The significant judgment made by the Company is presented in Note 2.17 and regarding revenue recognition it considers that such recognition is derived from the sole performance obligation to transfer its products or services in accordance with contracts and commercial agreements. The transfer of control and the fulfillment of the Company’s performance obligation occur at the same time, at which time the revenue of sale of goods and services is recognized by the Company. It is also considered that the buyer obtains the benefits of the acquisitions, the potential cash flows, and the amount of revenue (transaction price) can be reliably measured, and the consideration must be transferred, meaning that the Company is likely to receive the consideration to which it is entitled in exchange for the products or services. 68 Table of Contents For the Company’s operations, generally the revenue recognition criteria are met when its products are delivered to its customers (CIF term) or to a carrier that will transport the goods to its customers (FOB term) and these are the times when the Company has generally fulfilled its performance obligations. Revenue is measured by the transaction price of the consideration received or receivable, an amount to which the Company expects to be entitled. The Company’s products follow industry production standards for its applications. Historically, only a small portion of the Company’s products are returned or have claims filed against the sale as result of quality complaints or other problems. Claims may be one of the following: product shipped and billed to an end customer that did not meet industry quality standards, such as physical defects in the goods, goods shipped to the wrong location or goods shipped outside acceptable time parameters. The Company estimates the consideration for such claims and reduces the amount of revenue recognized. The warranties and claims arise when the product fails on the criteria mentioned above. Sales-related warranties associated with the goods cannot be purchased separately and they serve as an assurance that the products sold comply with agreed specifications. Accordingly, the Company accounts for warranties in accordance with IAS 37. Warranties and claims represent immaterial amounts to the Company. The recoverable amount of goodwill and long-lived assets At each balance sheet date, the Company performs an assessment to determine whether there is evidence that the carrying amount of long-lived assets might be impaired. If such evidence is identified, the recoverable amount of the assets is estimated by the Company. The recoverable amount of an asset is determined as the higher of: (a) its fair value less estimated costs to selling and (b) its value in use. The value in use is measured based on discounted cash flows (before taxes) derived from the continuous use of the asset until the end of its estimated useful life. Regardless of whether or not there is any indication that the carrying amount of the asset may be impaired, the balances of goodwill arising from business combinations and intangible assets with indefinite useful lives are tested for impairment at least once a year in December. When the carrying amount of the asset exceeds its recoverable amount, the Company recognizes a reduction in the book value of the asset (Impairment). The reduction to the recoverable amount of the asset is recorded as an expense. Goodwill impairment, after recognized, is not allowed to be reversed, even if circumstances that resulted in the impairment changes. Other assets impairment may be reversed if circumstances that resulted in the impairment no longer exists, but in these circumstances the reversal of impairment is limited to the residual depreciated balance of the asset at the time of the reversal, determined as if the impairment had not been recorded. If actual results are not consistent with estimates and assumptions used in estimating future cash flows and asset fair values, the Company may be exposed to losses that could be material. The Company performs tests for impairment of assets, notably goodwill and other long-lived assets, based on projections of discounted cash flows, which take into account assumptions such as: cost of capital, growth rate and adjustments applied to flows in perpetuity, methodology for working capital determination, investment plans, and long-term economic-financial forecasts. The impairment test of these assets are assessed based on the analysis of facts or circumstances that may indicate the need to perform the impairment test and are performed at least annually, for groups of cash generating units containing goodwill, in December, or whenever changes in events or circumstances indicate that the goodwill and other long-lived assets may be impaired. To determine the recoverable amount of each cash generating unit, the Company uses the discounted cash flow method, using as basis, financial and economic projections for each one. The projections are prepared by taking into consideration observed changes in the economic scenario in the market where the Company operates, as well as assumptions with respect to future results and the historical profitability of each segment. The Company maintains its monitoring of the steel market in order to identify any deterioration, significant drop in demand from steel consuming sectors (notably automotive and construction), stoppage of industrial plants or significant changes in the economy or financial market that result in increased perception of risk or reduction of liquidity and refinancing capacity. 69 Table of Contents Goodwill impairment test The Company has three operating segments, which represents the lowest level in which goodwill is monitored by the Company. Goodwill balances by business segment are presented in Note 11 of the Consolidated Financial Statements contained herein. In December 2025, the Company assessed the recoverability of goodwill in its business segments. The analyses carried out identified impairment losses in the Brazil segment in the amount of R$ 1,964,504. Therefore, the Company wrote off the entire goodwill of this segment in the amount of R$ 373,135, while the remaining portion of R$ 1,591,369 was recognized in fixed assets. No impairment losses were identified in 2024 and 2023. The period for projecting the cash flows for the goodwill impairment test was five years. The assumptions used to determine the value in use based on the discounted cash flow method include analysis prepared in dollars, such as: projected cash flows based on management estimates for future cash flows, exchange rates, discount rates and growth rates. The cash flow projections already reflect a competitive scenario, as well as macroeconomic challenges in some geographies in which the Company operates. The perpetuity was calculated considering stable operating margins, levels of working capital and investments. The perpetuity growth rates considered in the fourth quarter of 2024 test were: a) North America: 3% (3% in December 2024); b) South America: 3% (3% in December 2024); and c) Brazil: 3% (3% in December 2024). The post-tax discount rates used were determined taking into consideration market information available on the date of performing the impairment test. The Company adopted distinct rates for each business segment tested with the purpose of reflecting the differences among the markets in which each segment operates, as well as the risks associated to each of them. The post-tax discount rates used were: a) North America: 10.75% (10.50% in December 2024); b) South America: 13.25% (14.75% in December 2024); and c) Brazil 11.75% (11.75% in December 2024). As required by the accounting standard, the Company made a calculation to determine the discount rates, before income tax and social contribution (gross rate of tax effects) and this calculation resulted in the following discount rates for each segment: a) North America 13.46% (13.28% in December 2024); b) South America: 19.04% (22.14% in December 2024); and c) Brazil: 14.68% (15.16% in December 2024). Discounted cash flows are compared to the book value of each segment and result in the recoverable amount that exceeded book value as shown below: a) North America: R$ 9,584 million (R$ 5,824 million in 2024); and b) South America: R$ 913 million (R$ 1,435 million in 2024). In the Brazil segment, the recoverable amount was below the carrying amount by R$ 1,965 million (exceeded the carrying amount by R$ 5,293 million in 2024). The Company performed a sensitivity analysis in the assumptions of discount rate and perpetuity growth rate, due to the potential impact in the discounted cash flows. An increase of 0.5 percentage points in the discount rate of each segment’s cash flow would result in a recoverable amount that exceeded book value as shown below: a) North America: R$ 7,465 million (R$ 3,642 million in 2024) and b) South America: R$ 724 million (R$ 1,247 million in 2024). In the Brazil segment, the recoverable amount would be below the book value by R$ 3,456 million (it would exceed the book value by R$ 3,424 million in 2024). On the other hand, a decrease of 0.5 percentage points in the perpetuity growth rate of the cash flow of each business segment would result in a recoverable amount that exceeded book value as shown below: a) North America: R$ 8,046 million (R$ 4,220 million in 2024) and b) South America: R$ 790 million (R$ 1,326 million in 2024). In the Brazil segment, the recoverable amount would be below the book value by R$ 3,008 million (it would exceed the book value by R$ 3,962 million in 2024). 70 Table of Contents It is important to note that significant events or changes in the outlook may lead to losses due to goodwill recoverability. A combination of the above-mentioned sensitivities in the cash flow of each segment would result in an impairment value exceeding the book value as shown below: a) North America: R$ 6,130 million (R$ 2,255 million in 2024) and b) South America: R$ 614 million (R$ 1,149 million in 2024). In the Brazil segment, the recoverable amount would be below the book value by R$ 4,374 million (it would exceed the book value by R$ 2,253 million in 2024). Other assets impairment test In the fourth quarter of 2025, due to the revision of the Capex investment plan for its industrial plants, representing a significant reduction compared to recent years, the level of asset utilization at certain industrial plants in the Brazil segment, and the expectation of a deterioration in economic conditions to a greater extent than that contemplated in previous period scenarios, tests performed on other long-lived assets identified impairment losses in fixed assets of the Brazil segment amounting to R$ 1,591,369 (R$ 199,627 in 2024), resulting from recoverable value below the carrying amount. These losses were determined based on the difference between the carrying amount of assets and its recoverable amount, which represents their value in use (the greater of the fair value less disposal expenses or their value in use). These losses were recorded as an expense, in the “Impairment of assets” line in the Consolidated Statements of Income. The post-tax discount rates used for this test are the same as presented in Note 29.1 of the goodwill impairment test on the Consolidated Financial Statements contained herein. The Company will maintain over the next year its constant monitoring of the steel market in order to identify any deterioration, significant drop in demand from steel consuming sectors (notably automotive and construction), stoppage of industrial plants or activities significant changes in the economy or financial market that result in increased perception of risk or reduction of liquidity and refinancing capacity. Although the projections made by the Company provide a more challenging scenario than that in recent years, the events mentioned above, if manifested in a greater intensity than that anticipated in the assumptions made by management, may lead the Company to revise its projections of value in use and eventually result in impairment losses. Provisions for tax, civil and labor claims The significant judgment is related to recognition and measurement of provisions. Information regarding provisions for tax, civil and labor liabilities is presented in Note 19 of the Consolidated Financial Statements contained herein. The Company recognizes provisions for liabilities and probable losses that have been incurred when it has a present obligation as a result of past events, it is probable that the Company will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. The table below informs amounts of tax, labor and civil provisions: ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 a) Tax provisions 1,928,918 ​ 1,925,237 b) Labor provisions 326,315 ​ 369,041 c) Civil provisions 37,179 ​ 34,571 ​ 2,292,412 ​ 2,328,849 ​ a) Tax Provisions Tax provisions refer mainly to disputes related to ICMS, IPI, Income tax and social contribution, social security contributions, offsetting of PIS and COFINS credits and incidence of PIS and COFINS on other revenues. b) Labor Provisions The Company is party to a group of individual and collective labor and/or administrative lawsuits involving various labor amounts and the provision arises from unfavorable decisions and/or the probability of loss in the ordinary course of proceedings with the expectation of outflow of financial resources by the Company. c) Civil Provisions The Company is party to a group of civil, arbitration and/or administrative lawsuits involving various claims and the provision arises from unfavorable decisions and/or probable losses in the ordinary course of proceedings with the expectation of outflow of financial resources for the Company. 71 Table of Contents Recoverability of Deferred Tax Assets The amount of the deferred income and social contribution tax asset is revised at each Consolidated Financial Statement date and reduced by the amount that is no longer probable of being realized based on future taxable income. Deferred income and social contribution tax assets and liabilities are calculated using tax rates applicable to taxable income in the years in which those temporary differences are expected to be realized. Future taxable income may be higher or lower than estimates made when determining whether it is necessary to record a tax asset and the amount to be recorded. The realization of deferred tax assets for tax loss carryforwards are supported by projections of taxable income based on technical feasibility studies submitted annually to the Company’s Board of Directors. These studies consider historical profitability of the Company and its subsidiaries and expectation of continuous profitability and estimated the recovery of deferred tax assets over future years. The other tax credits arising from temporary differences, mainly tax contingencies, and provision for losses, were recognized according to their estimate of realization, and are consistent with recoverability described above. Due to the lack of expectation to use tax losses, negative social contribution base and deferred exchange variation arising from some operations in Brazil, the Company did not recognize a portion of tax assets of R$ 907,295 (R$ 300,763 on December 31, 2024), which do not have an expiration date. The subsidiaries abroad had R$ 701,413 (R$ 849,200 as of December 31, 2024) of tax credits on capital losses for which deferred tax assets have not been recognized and which expire between 2029 and 2035 and also several Unrecognized tax loss carryforwards from state credits in the United States in the amount of R$ 291,979 (R$ 326,966 as of December 31, 2024), which expire at various dates between 2025 and 2038. Estimates in selecting interest rates, return on assets, mortality tables and expectations for salary increases Actuarial gains and losses are recorded in the period in which they are originated and are recorded in the statement of comprehensive income. The Company recognizes its obligations related to employee benefit plans and related costs, net of plan assets, in accordance with the following practices: ● The cost of pension and other post-employment benefits provided to employees is actuarially determined using the projected unit of credit method and management’s best estimate of expected investment performance for funded plans, salary increase, retirement age of employees and expected health care costs. The discount rate used for determining future benefit obligations is an estimate of the interest rate in effect at the balance sheet date on high-quality fixed-income investments with maturities that match the expected maturity of obligations. ● Pension plan assets are stated at fair value. ● Gain and losses related to the curtailment and settlement of the defined benefit plans are recognized when the curtailment or settlement occurs, and they are based on actuarial evaluation done by independent actuaries. In accounting for pension and post-retirement benefits, several statistical and other factors that attempt to anticipate future events are used to calculate plan expenses and liabilities. These factors include discount rate assumptions, return on plan assets, future increases in health care costs, and rate of future compensation increases. In addition, actuarial computations include other factors whose measurement involves judgment such as withdrawal, turnover, and mortality rates. The actuarial assumptions used by the Company may differ materially from actual results in future periods due to changing market and economic conditions, regulatory events, judicial rulings, higher or lower withdrawal rates, or longer or shorter participant life spans. 72 Table of Contents The tables below show a summary of the assumptions used to calculate the defined benefit plans in 2025 and 2024, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ Brazilian Plan ​ ​ ​ North American Plan Average discount rate ​ 11.15% ​ 4.75% to 5.42% Rate of increase in compensation ​ Not applicable ​ Not applicable Mortality table ​ AT-2000 per sex ​ RP-2012 and MP-2017&2021 Mortality table of disabled ​ AT-2000 per sex ​ Not applicable Rate of rotation ​ Null ​ Based on age and/or the service ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ ​ Brazilian Plan ​ ​ ​ North American Plan Average discount rate ​ 11.07% ​ 4.58% to 5.62% Rate of increase in compensation ​ Not applicable ​ 3.00% Mortality table ​ AT-2000 per sex ​ RP-2006 and MP-2024 Mortality table of disabled ​ AT-2000 per sex ​ RP-2006 and MP-2024 Rate of rotation ​ Null ​ Based on age and/or the service ​ Quantitative information regarding pension and post-retirement benefits amounts recognized are presented in Note 21 of the Consolidated Financial Statements contained herein. Long-term incentive plans through the selection of the valuation model and rates The Company settles its Long-term incentive plans by delivering its own shares, which are held in treasury until the exercise of the options by the employees. Additionally, the Company granted the following long-term incentive plans: Restricted Shares and Performance Shares, as presented in Note 26 of the Consolidated Financial Statements contained herein. Quantity Summary of Restricted Shares and Performance Shares: ​ ​ ​ ​ Balance on January 1, 2023 10,812,887 Granted 7,697,990 Share Bonus ​ 664,433 Cancelled (2,192,635) Exercised (2,674,136) Balance on December 31, 2023 14,308,539 Granted 5,739,213 Share Bonus ​ 2,910,064 Cancelled (2,581,216) Exercised (4,093,375) Balance on December 31, 2024 16,283,225 Granted 8,028,770 Cancelled (1,320,055) Exercised (6,018,081) Balance on December 31, 2025 ​ 16,973,859 ​ The Company recognizes the cost of the long-term incentive plan through Restricted Shares and Performance Shares based on the fair value of the options granted on the grant date during the vesting period of each grant. The fair value of the options granted is equivalent to the fair value of the services provided to the Company. As of December 31, 2025, the Company has a total of 25,317,258 Preferred Shares in treasury and, according to Note 23 of the Consolidated Financial Statements contained herein, these shares may be used for serving this plan. ​ 73 Table of Contents