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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our historical audited and unaudited consolidated financial statements and related notes and other information included elsewhere in this filing and our other filings with the SEC, including our unaudited condensed consolidated financial statements and the accompanying notes as of and for the three and six months ended June 30, 2026 and 2025 included in Part I, Item 1. “Financial Statements” in this Quarterly Report on Form 10-Q. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the section entitled “Forward-Looking Statements”, and elsewhere in this filing and our other filings with the SEC, including in Item 1A. Risk Factors in the 2025 Form 10-K and the Q1 2026 Form 10-Q. Overview Since our inception in 2012, our mission has been to help clients and communities meet their environmental goals and needs. According to data derived from a 2025 Environmental Industry Study prepared by Environmental Business International, Inc., or EBI, the global environmental industry is estimated to generate approximately $1.9 trillion in revenues in 2026, with $620.0 billion concentrated in the United States. Our Segments Historically, the Company had three business segments—Assessment, Permitting and Response, Measurement and Analysis and Remediation and Reuse. Effective in the first quarter of 2026, we realigned two of our reportable segments to reflect updates made to our organizational structure and operating model. As a result of these changes, we aggregated the Assessment, Permitting and Response and Remediation and Reuse segments into a newly created Consulting and Treatment segment. The Company's Measurement and Analysis and corporate segments were not affected by the realignment. We have conformed our presentation for all prior periods presented to reflect its revised segment reporting. See Notes 1 and 19 to our unaudited condensed consolidated financial statements included in Part 1, Item 1 “Financial Statements.” Consulting and Treatment The Consulting and Treatment segment provides environmental consulting, engineering, and implementation services to support clients in managing environmental objectives and regulatory requirements. Measurement and Analysis The Measurement and Analysis segment provides environmental testing and laboratory services, including the analysis of air, water, and soil. These segments collectively support clients across the lifecycle of their operations, from assessment and compliance to monitoring and remediation. These operating segments have been structured to align with how we view and manage the business with the full lifecycle of our clients’ targeted environmental objectives in mind. Within each segment, we cover service offerings within similar regulatory frameworks, internal operating structures and client types. Corporate activities not directly related to segment performance, including general corporate expenses, interest and taxes, are reported separately. Key Factors that Affect Our Business and Our Results Our operating results and financial performance are influenced by a variety of internal and external trends and other factors. Some of the more important factors are discussed briefly below. Acquisitions Although we did not consummate any acquisitions in the three and six months ended June 30, 2026, or the year ended 2025, we have been, and expect to continue to be, an acquisitive company. Acquisitions expanded our environmental service capabilities across our segments, our access to technology, as well as our geographic reach in the United States, Canada, and Australia. 25 As a result of our acquisitions, goodwill and other intangible assets represent a significant proportion of our total assets, and amortization of intangible assets has historically been a significant expense. Our historical financial statements also include other acquisition-related costs, including costs relating to external legal support, diligence and valuation services and other transaction and integration-related matters. In addition, in any year gains and losses from changes in the fair value of business acquisition contingencies such as earn-outs could be significant. The amount of each for the three and six months ended June 30, 2026 and 2025, was: Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2026 2025 2026 2025 Amortization expense $ 6,662 $ 7,326 $ 13,336 $ 15,716 Acquisition-related costs 137 325 218 1,036 Fair value changes in business acquisition contingencies 141 354 (697 ) 831 We expect that amortization of identifiable intangible assets and other acquisition-related costs, assuming we continue to acquire, will continue to be significant. During the three months ended June 30, 2026, we made a contingent consideration cash payment of $2.8 million for Epic Environmental Pty Ltd (Epic). During the three months ended June 30, 2025, we made contingent consideration payments of $4.0 million in cash related to earn-out payments for Epic. During the six months ended June 30, 2026, we made contingent consideration cash payments of $8.0 million and $2.8 million for Origins Laboratory, Inc and Epic, respectively. During the six months ended June 30, 2025, we made contingent consideration payments of $10.6 million, of which $4.0 million was paid in cash to Epic, and the remaining $6.6 million was paid in the Company's common stock, of which $4.8 million related to deferred consideration payments for the acquisition of Epic, and $1.8 million related to earn-out payments for SensibleIoT, LLC. In connection with certain of our acquisitions, we may make up to $7.0 million in aggregate earn-out payments between the years 2026 and 2027, of which up to $3.8 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $0.4 million may be paid, at our option, in cash or common stock. See Note 7 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.” Organic Growth We define organic growth as the change in revenues excluding revenues from (i) our environmental emergency response business, (ii) acquisitions for the first twelve months following the date of acquisition, and (iii) businesses held for sale, disposed of or discontinued. Management uses organic growth as one of the means by which it assesses our results of operations. Organic growth is not, however, a measure of revenue growth calculated in accordance with U.S. generally accepted accounting principles, or GAAP, and should be considered in conjunction with revenue growth calculated in accordance with GAAP. We have grown organically over the long term and expect to continue to do so. Revenue Mix Our segments and our business lines within each segment generate different levels of profitability and, accordingly, shifts in the mix of revenues between segments can impact our consolidated reported net income or loss, net income or loss margin, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin from quarter to quarter and year to year. Inter-company revenues between business lines within segments have been eliminated. See Note 19 to our unaudited condensed consolidated financial statements included in Part 1, Item 1 “Financial Statements.” Our revenues and certain expenses, including selling, general and administrative expense, vary from period to period due primarily to changes in organic growth, the incremental contribution from recent acquisitions and strategic decisions we may make from time to time. When we refer to changes driven by organic growth, we are referring to the contribution from businesses that have been part of Onterris for more than 12 months, with certain limited exclusions as discussed in greater detail above. In a given reporting period, when we refer to revenue changes driven by acquisitions, we are referring to the revenue contribution from any acquisition from its closing date through the first 12 months of that acquisition, at which point any subsequent revenue contribution therefrom would be organic. Financing Costs Financing costs are driven by interest incurred on our outstanding borrowings under the 2025 Credit Facility, as well as fees paid on the unutilized capacity of the facility and outstanding letters of credit issued under the facility. Interest is also incurred on outstanding borrowings under the Aircraft Loan and amounts outstanding under our capital lease facilities. Financing costs also include the amortization or write-offs of deferred debt issuance costs and amounts paid under our interest rate swaps. Amounts received related to our interest rate swaps are netted against financing costs. 26 Total debt, net of deferred debt issuance costs, at June 30, 2026 was $349.0 million, which was an increase of $60.8 million compared to December 31, 2025. The increase was primarily driven by an increase of $66.1 million outstanding under our revolving line of credit. Interest expense, net was $5.5 million and $10.9 million in the three and six months ended June 30, 2026, respectively, and $4.8 million and $9.8 million in the three and six months ended June 30, 2025, respectively. We expect interest expense to remain a significant cost as we continue to leverage our 2025 Credit Facility to support our operations, share repurchase activity, and future acquisitions. Our 2025 Credit Facility funded a portion of the redemption of the Series A-2 Preferred Stock in April and July 2025. In February 2025, we refinanced our 2021 Credit Facility and replaced it with a new 2025 Credit Facility. See Note 12 to our unaudited condensed consolidated financial statements included in Part 1, Item 1 “Financial Statements” and “Liquidity and Capital Resources.” Corporate and Operational Infrastructure Investments Our historical operating results reflect the impact of our ongoing investments in our corporate infrastructure to support our growth. We have made and expect to continue to make investments in our business platform that we believe have laid the foundation for continued growth. Investments in logistics, quality, risk management, sales and marketing, safety, human resources, research and development, finance and information technology and other areas enable us to support continued growth. These investments should allow us to improve our margins over time. Seasonality Due to the field-based nature of certain of our services, weather patterns generally impact our field-based teams’ ability to operate in the winter months. As a result, our operating results experience quarterly variability with generally lower revenues and lower earnings in the first and fourth quarters and higher overall revenues and earnings in the second and third quarters. As we continue to grow and expand into new geographies and service lines, quarterly variability may deviate from historical trends. Earnings Volatility In addition to the impact of seasonality on earnings, our environmental emergency response business exposes us to potentially significant revenue and earnings fluctuations tied to large environmental emergency response projects following an incident or natural disaster or more broad scale events. Total revenue from emergency response related services was $10.8 million and $48.5 million for the three months ended June 30, 2026 and 2025, respectively, and $18.9 million and $62.4 million for the six months ended June 30, 2026 and 2025, respectively. Demand for environmental emergency response services remains difficult to predict and as a result, we may have experienced revenues and earnings in prior years that are not indicative of future results, making those periods particularly difficult comparisons for future periods. Earnings volatility is also driven by the timing of large projects, particularly in our Consulting and Treatment segment, and the impact of acquisitions. As a result of these factors, and because demand for environmental services is not driven by specific or predictable patterns in one or more fiscal quarters, our business is better assessed based on annual results. 27 Results of Operations The Three and Six Months Ended June 30, 2026 Compared to the Three and Six Months Ended June 30, 2025 Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2026 2025 2026 2025 Revenues $ 186,661 $ 234,543 $ 355,179 $ 412,377 Cost of revenues (exclusive of depreciation and amortization) 104,401 132,802 205,869 241,208 Selling, general and administrative expense 62,961 73,683 124,283 139,915 Fair value changes in business acquisition contingencies 141 354 (697 ) 831 Depreciation and amortization 12,704 12,763 25,333 26,057 Income from operations 6,454 14,941 391 4,366 Other income, net 729 9,171 1,871 8,323 Interest expense, net (5,471 ) (4,768 ) (10,937 ) (9,833 ) Income (loss) before income taxes 1,712 19,344 (8,675 ) 2,856 Income tax expense 346 988 2,649 3,859 Net income (loss) $ 1,366 $ 18,356 $ (11,324 ) $ (1,003 ) Series A-2 dividend payment — (1,400 ) — (4,150 ) Net income (loss) attributable to common stockholders $ 1,366 $ 16,956 $ (11,324 ) $ (5,153 ) Weighted average common shares outstanding Basic 35,806 35,206 35,926 34,855 Diluted 38,714 43,455 35,926 34,855 Net income (loss) per share attributable to common stockholders Basic $ 0.04 $ 0.48 $ (0.32 ) $ (0.15 ) Diluted $ 0.04 $ 0.42 $ (0.32 ) $ (0.15 ) Revenues Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ % 2026 2025 $ % Revenues $ 186,661 $ 234,543 $ (47,882 ) (20.4 %) $ 355,179 $ 412,377 $ (57,198 ) (13.9 %) Revenue for the three months ended June 30, 2026 decreased $47.9 million or 20.4% as compared to the three months ended June 30, 2025. The decrease was driven by lower Consulting and Treatment revenues of $46.2 million and lower Measurement and Analysis revenues of $1.7 million. Revenue for the six months ended June 30, 2026 decreased $57.2 million or 13.9% as compared to the six months ended June 30, 2025. The decrease was driven by lower Consulting and Treatment revenues of $50.4 million and lower Measurement and Analysis revenues of $6.8 million. See “—Segment Results of Operations” below for revenue by segment analysis. Cost of Revenues Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ % 2026 2025 $ % Cost of revenues (exclusive of depreciation and amortization) $ 104,401 $ 132,802 $ (28,401 ) (21.4 %) $ 205,869 $ 241,208 $ (35,339 ) (14.7 %) Cost of revenue as a % of revenue 55.9 % 56.6 % 58.0 % 58.5 % 28 Cost of revenues consists of all direct costs required to provide services, including fixed and variable direct labor costs, equipment purchases, and rental and other outside services, field and lab supplies, vehicle costs and travel-related expenses. Variable costs of revenues generally follow the same trends as revenue, while fixed costs tend to change primarily as a result of acquisitions. Cost of revenues for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 decreased by $28.4 million or 21.4% driven primarily by the decrease in revenues. Cost of revenues as a percentage of revenue for the three months ended June 30, 2026 was 55.9%, compared to 56.6% for the three months ended June 30, 2025. This improvement was driven primarily by lower non-labor project costs as a percentage of revenues, partially offset by higher project labor costs as a percentage of revenue, both due to project mix. Cost of revenues for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 decreased by $35.3 million or 14.7% driven primarily by the decrease in revenues. Cost of revenues as a percentage of revenue for the six months ended June 30, 2026 was 58.0%, compared to 58.5% for the six months ended June 30, 2025. This improvement was driven primarily by lower non-labor project costs as a percentage of revenues, partially offset by higher project labor costs as a percentage of revenue, both due to project mix. Selling, General and Administrative Expense Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ % 2026 2025 $ % Selling, general and administrative expense $ 62,961 $ 73,683 $ (10,722 ) (14.6 %) $ 124,283 $ 139,915 $ (15,632 ) (11.2 %) Selling, general and administrative expense consists of general corporate overhead, including executive, legal, finance, safety, risk management, human resource, marketing and information technology related costs, as well as indirect operational costs of labor, rent, insurance and stock-based compensation. Selling, general and administrative expense for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 decreased $10.7 million or 14.6% primarily due to $5.7 million in lower labor costs, which included lower bonus accruals, a $5.9 million year-over-year change in bad debt expense primarily driven by aged receivables from the City of Tustin in the prior year period, and lower stock-based compensation expense of $1.2 million, partially offset by higher IT expenses. Selling, general and administrative expense as a percentage of revenues increased to 33.7% from 31.4% in the comparable period primarily as a result of lower revenue. Selling, general and administrative expense for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 decreased $15.6 million or 11.2% primarily due to $8.4 million in lower labor costs, which included lower bonus accruals, a $6.9 million year-over-year change in bad debt expense primarily driven by aged receivables from the City of Tustin in the prior year period, and lower stock-based compensation expense of $4.5 million, partially offset by higher IT expenses. Selling, general and administrative expense as a percentage of revenues increased to 35.0% from 33.9% in the comparable period primarily as a result of lower revenue. See Part I, Item 3. “Quantitative and Qualitative Disclosures About Market Risk” for additional information regarding the impact of inflation on our business. Depreciation and Amortization Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ % 2026 2025 $ % Depreciation and amortization $ 12,704 $ 12,763 $ (59 ) (0.5 %) $ 25,333 $ 26,057 $ (724 ) (2.8 %) Depreciation and Amortization for the three and six months ended June 30, 2026 remained relatively consistent with the three and six months ended June 30, 2025 primarily due to the absence of significant changes in the underlying property and equipment and intangible asset base. See Notes 5 and 6 to our unaudited condensed consolidated financial statements included in Part 1, Item 1. “Financial Statements.” 29 Other Income, Net Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ % 2026 2025 $ % Other income, net $ 729 $ 9,171 $ (8,442 ) (92 %) $ 1,871 $ 8,323 $ (6,452 ) (78 %) Other income, net for the three months ended June 30, 2026 was comprised of fair value gains of $0.5 million on our interest rate swaps and $0.1 million on our foreign currency forward contracts. Other income, net for the three months ended June 30, 2025 was comprised of a fair value gain of $10.0 million related to the Series A-2 preferred stock conversion option, partially offset by losses of $0.7 million related to a fair value adjustment on our interest rate swaps. Other income, net for the six months ended June 30, 2026 was comprised of fair value gains of $1.2 million on our interest rate swaps and $0.5 million on our foreign currency forward contracts. Other income, net for the six months ended June 30, 2025 was comprised of a fair value gain of $9.7 million related to the Series A-2 preferred stock conversion option, partially offset by losses of $1.6 million related to a fair value adjustment on our interest rate swaps. See Notes 13 and 15 to our unaudited condensed consolidated financial statements included in Part 1, Item 1. “Financial Statements.” Interest Expense, Net Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ % 2026 2025 $ % Interest expense, net $ (5,471 ) $ (4,768 ) $ (703 ) 14.7 % $ (10,937 ) $ (9,833 ) $ (1,104 ) 11.2 % Interest expense, net for the three and six months ended June 30, 2026 increased compared to the three and six months ended June 30, 2025 primarily due to higher debt balances during the current year periods. Weighted average interest rates, after giving effect to the impact of the interest rate swaps, as of June 30, 2026 and June 30, 2025 were 5.5% and 5.4%, respectively. See “—Key Factors that Affect Our Business and Our Results—Financing Costs” and Notes 12 and 13 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.” Income Tax Expense Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ % 2026 2025 $ % Income tax expense $ 346 $ 988 $ (642 ) (65.0 %) $ 2,649 $ 3,859 $ (1,210 ) (31.4 %) The income tax expense for the three and six months ended June 30, 2026 decreased compared to the three and six months ended June 30, 2025 primarily due to the impact of available indefinite-lived deferred tax assets on the calculation of deferred income tax. 30 Segment Results of Operations The Three and Six Months Ended June 30, 2026 Compared to the Three and Six Months Ended June 30, 2025 The information below presents segment results in line with the new reporting segment structure effective in the first quarter of 2026. Prior year information has been recast to reflect the change in reporting segment structure. Three Months Ended June 30, 2026 2025 (in thousands, except %) Segment Revenues Segment Adjusted EBITDA(1) Segment Adjusted EBITDA Margin(2) Segment Revenues Segment Adjusted EBITDA(1) Segment Adjusted EBITDA Margin(2) Consulting and Treatment $ 125,597 $ 27,885 22.2 % $ 171,748 $ 37,585 21.9 % Measurement and Analysis 61,064 15,977 26.2 62,795 18,298 29.1 Total Reportable Segments $ 186,661 $ 43,862 23.5 % $ 234,543 $ 55,883 23.8 % Corporate and Other $ (11,982 ) (6.4 )% $ (16,298 ) (6.9 )% Six Months Ended June 30, 2026 2025 (in thousands, except %) Segment Revenues Segment Adjusted EBITDA(1) Segment Adjusted EBITDA Margin(2) Segment Revenues Segment Adjusted EBITDA(1) Segment Adjusted EBITDA Margin(2) Consulting and Treatment $ 240,184 $ 48,018 20.0 % $ 290,552 $ 54,084 18.6 % Measurement and Analysis 114,995 25,914 22.5 121,825 32,071 26.3 Total Reportable Segments $ 355,179 $ 73,932 20.8 % $ 412,377 $ 86,155 20.9 % Corporate and Other $ (24,229 ) (6.8 )% $ (27,540 ) (6.7 )% (1)For purposes of evaluating segment profit, the Company’s Chief Operating Decision Maker reviews Segment Adjusted EBITDA as a basis for making the decisions to allocate resources and assess performance. See Note 19 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.” (2)Represents Segment Adjusted EBITDA as a percentage of segment revenues. Revenues Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ % 2026 2025 $ % Consulting and Treatment $ 125,597 $ 171,748 $ (46,151 ) (26.9 )% $ 240,184 $ 290,552 $ (50,368 ) (17.3 )% Measurement and Analysis 61,064 62,795 (1,731 ) (2.8 ) 114,995 121,825 (6,830 ) (5.6 ) Total Reportable Segments $ 186,661 $ 234,543 $ (47,882 ) (20.4 )% $ 355,179 $ 412,377 $ (57,198 ) (13.9 )% Consulting and Treatment segment revenues for the three months ended June 30, 2026 decreased compared to the three months ended June 30, 2025 primarily as a result of lower environmental emergency response revenues of $37.7 million, lower recovery services revenue tied to environmental events of $11.2 million, a $1.0 million decrease in revenues from exited European operations, which were exited in the fourth quarter of 2025, and lower renewables revenues of $0.9 million, which was wound down by the end of 2025. These decreases were partially offset by higher core consulting revenues of $3.5 million driven by growth in our United States and Australian markets. Environmental emergency response revenues were $10.8 million in the three months ended June 30, 2026, compared to $48.5 million in the three months ended June 30, 2025. Consulting and Treatment segment revenues for the six months ended June 30, 2026 decreased compared to the six months ended June 30, 2025 primarily as a result of lower environmental emergency response revenues of $43.5 million, lower recovery services revenue tied to environmental events of $6.1 million, lower treatment revenues of $3.9 million due to project mix, which included a $2.0 million decrease in revenues from exited European operations, which were exited in the fourth quarter of 2025, and lower renewables revenues of $1.5 million, which was wound down by the end of 2025. These decreases were partially offset by higher core consulting revenues of $4.6 million driven by growth in our United States and Australian markets. Environmental emergency response revenues were $18.9 million in the six months ended June 30, 2026, 31 compared to $62.4 million in the six months ended June 30, 2025. The three and six months ended June 30, 2025 included $53.6 million in revenue from a single response event, which did not recur in the current period. Measurement and Analysis segment revenues for the three months ended June 30, 2026 decreased compared to the three months ended June 30, 2025 primarily due to a decrease in field services revenues of $3.5 million, partially offset by an increase in lab testing revenues of $1.0 million, which recovered from weather impacts in the first quarter. Measurement and Analysis segment revenues for the six months ended June 30, 2026 decreased compared to the six months ended June 30, 2025 primarily due to a decrease in field services revenues of $7.7 million, which included the impact of adverse weather conditions in the first quarter of 2026. Segment Adjusted EBITDA Three Months Ended June 30, Change Six Months Ended June 30, Change (in thousands, except %) 2026 2025 $ Margin % 2026 2025 $ Margin % Consulting and Treatment $ 27,885 $ 37,585 $ (9,700 ) 0.3 % $ 48,018 $ 54,084 $ (6,066 ) 1.4 % Measurement and Analysis 15,977 18,298 (2,321 ) (3.0 ) 25,914 32,071 (6,157 ) (3.8 ) Total Reportable Segments $ 43,862 $ 55,883 $ (12,021 ) (0.3 )% $ 73,932 $ 86,155 $ (12,223 ) (0.1 )% Corporate and Other $ (11,982 ) $ (16,298 ) $ 4,316 $ (24,229 ) $ (27,540 ) $ 3,311 Consulting and Treatment Segment Adjusted EBITDA for the three and six months ended June 30, 2026 decreased compared to the three and six months ended June 30, 2025 primarily as a result of lower revenues, partially offset by improved Segment Adjusted EBITDA margin. Segment Adjusted EBITDA margin for the three and six months ended June 30, 2026 increased to 22.2% and 20.0%, respectively, from 21.9% and 18.6% in the prior year periods due to significantly higher margins in our consulting and water treatment businesses driven by project mix and improved operational efficiency in the current year periods, and losses in the prior year periods related to our renewables business, partially offset by decreases in high margin emergency response revenues in the current year. Measurement and Analysis Segment Adjusted EBITDA for the three and six months ended June 30, 2026 decreased compared to the three and six months ended June 30, 2025 as a result of lower revenues and lower Segment Adjusted EBITDA margin. Segment Adjusted EBITDA margin for the three and six months ended June 30, 2026 decreased to 26.2% and 22.5%, respectively, from 29.1% and 26.3% in the prior year periods, driven by project mix and lower operating leverage resulting from lower revenues in the current year periods. Corporate and other costs for the three and six months ended June 30, 2026 when compared to the three and six months ended June 30, 2025 decreased primarily due to lower bonus accrual in the current year, partially offset by higher IT infrastructure and marketing costs. Liquidity and Capital Resources Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, other commitments and contractual obligations. We consider liquidity in terms of cash flows from operations and other sources, including availability under our 2025 Credit Facility, and their sufficiency to fund our operating and investing activities. Our principal sources of liquidity have been cash generated by operating activities, borrowings under our senior secured credit facilities, other borrowing arrangements, and proceeds from the issuance of common stock. Historically, we have financed our operations and acquisitions from a combination of cash generated from operations, periodic borrowings under senior secured credit facilities, and proceeds from the issuance of common and preferred stock. Our primary cash needs are for day to day operations, to fund working capital requirements, to fund our acquisition strategy and any related cash earn-out obligations, to pay interest and principal on our indebtedness and to make capital expenditures. Historically, our cash needs also included the payment of dividends on our Series A-2 preferred stock and, more recently, we have begun repurchasing shares of common stock pursuant to our share repurchase program. Additionally, in connection with certain acquisitions, we agree to earn-out provisions and other purchase price adjustments that may require future payments. We may make up to $7.0 million in aggregate earn-out payments between the years 2026 and 2027 in connection with certain of our acquisitions of which up to $3.8 million may be paid only in cash, up to $2.8 million may be paid only in common stock and up to $0.4 million may be paid in cash or, at our option, in common stock. See Note 7 to our unaudited condensed consolidated financial statements included in Part 1, Item 1. “Financial Statements.” As of June 30, 2026, we had $148.1 million available under the 2025 Credit Facility (after giving effect to any outstanding letters of credit, and subject to borrowing base limitations), and 32 $12.7 million of cash on hand. In April and July 2025, we redeemed the remaining $122.2 million in aggregate stated value of the outstanding Series A-2 preferred stock using cash and borrowings under our revolving line of credit. We expect to continue to fund our liquidity requirements, including any cash earn-out payments that may be required in connection with acquisitions, through cash generated from operations and borrowings under our 2025 Credit Facility. We believe these sources will be sufficient to fund our cash needs in the short-term and long-term. Cash Flows The following table summarizes our cash flows for the periods presented: Six Months Ended June 30, (in thousands) 2026 2025 Net cash provided by (used in): Operating activities $ (5,481 ) $ 27,398 Investing activities (11,124 ) (7,932 ) Financing activities 18,266 (21,261 ) Change in cash, cash equivalents and restricted cash $ 1,661 $ (1,795 ) Operating Activities Cash flows from operating activities can fluctuate from period-to-period as earnings, working capital needs and the timing of payments for contingent consideration, taxes, bonus payments and other operating items impact reported cash flows. For the six months ended June 30, 2026, net cash used in operating activities was $5.5 million compared to net cash provided by operating activities of $27.4 million for the six months ended June 30, 2025. The period-over-period decrease of $32.9 million was primarily due to a decrease in earnings before non-cash items of $21.4 million and a higher increase in working capital of $11.6 million (comprised of an increase in working capital in the current year period of $37.8 million compared to an increase in working capital of $26.2 million in the prior year period). Working capital (which excludes contingent consideration payments and changes in right-of-use assets) increased by $37.8 million in the six months ended June 30, 2026, primarily due to 1) a decrease in accrued payroll and benefits of $22.2 million, primarily due to the payment of accrued annual bonus in March 2026 of $27.7 million, representing a $16.0 million increase compared to the prior year bonus payment due to outperformance in 2025 2) a $17.4 million decrease in accounts payable and other accrued liabilities due to the timing of vendor payments, and 3) a $13.5 million increase in prepaid expenses and other current assets primarily due to an increase in deferred tax assets and prepaid software costs. These drivers were partially offset by a decrease in accounts receivable of $15.0 million due to a year-to-date decrease in revenue of $57.2 million compared to the prior-year period and a decrease in days sales outstanding due to improved collections. Working capital increased by $26.2 million in the six months ended June 30, 2025, primarily due to an increase in accounts receivable of $27.4 million driven by significantly higher revenues in the second quarter of 2025, partially offset by a $3.1 million increase in accrued payroll, as a result of higher bonus accruals. Investing Activities For the six months ended June 30, 2026, net cash used in investing activities was $11.1 million, primarily driven by cash paid for the purchases of property and equipment of $11.3 million. For the six months ended June 30, 2025, net cash used in investing activities was $7.9 million, driven by cash paid for the purchases of property and equipment of $5.1 million, and $2.8 million in proprietary software development costs. Financing Activities For the six months ended June 30, 2026, net cash provided by financing activities was $18.3 million. Cash provided by financing activities was driven by borrowing under our 2025 Credit Facility of $258.4 million, partially offset by repayments of borrowings of $196.8 million, repurchases of common stock of $30.0 million, and payments for contingent consideration of $10.8 million. For the six months ended June 30, 2025, net cash used in financing activities was $21.3 million. Cash used in financing activities was driven by repayments of borrowing of $364.5 million, a partial redemption of the Series A-2 preferred stock of $60.0 million, a payment for contingent consideration of $4.4 million, repayments of finance leases of $6.1 million, dividends on the Series A-2 preferred stock of $2.8 million, and payment of financing cost of $2.0 million, partially offset by borrowing under our credit facilities of $416.0 million. 33 Credit Facilities See Note 12 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements” for details on the 2025 Credit Facility. Series A-2 Preferred Stock In April and July 2025, we redeemed the remaining $122.2 million aggregate stated value of the outstanding Series A-2 preferred stock. See Note 15 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements” for details on the Series A-2 Preferred Stock. Stock Repurchase Program On May 6, 2025, the Board of Directors approved a stock repurchase program of up to $40.0 million. The repurchase program does not have a set expiration date. During the three and six months ended June 30, 2026, the Company repurchased 1,251,450 and 1,627,763 shares of its common stock for approximately $20.0 million and $30.0 million, respectively, inclusive of transaction fees. As of June 30, 2026, approximately $10.0 million of the authorized capacity under the repurchase program remained available for future repurchases. See Note 16 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements” for details on the stock repurchase program. Critical Accounting Policies and Estimates Our 2025 Form 10-K includes a summary of the critical accounting policies and estimates we believe are the most important to aid in understanding our financial results. There have been no material changes to those critical accounting policies and estimates as disclosed therein, other than as described in Note 2 to our unaudited condensed consolidated financial statements included in Part I, Item 1. “Financial Statements.”