APi Group Corp: Form 10-Q for the period ended Sep 30, 2026

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) section should be read in conjunction with the interim unaudited condensed consolidated financial statements (the "Interim Statements") and related notes included in this quarterly report, and the Company's 2025 audited annual consolidated financial statements, the related notes thereto and under the heading "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and other disclosures contained in our Annual Report on Form 10-K, including financial results for the year ended December 31, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those discussed in these forward-looking statements. Factors that might cause a difference include, but are not limited to, those discussed under the “Cautionary Note Regarding Forward Looking Statements” section of this quarterly report.

We prepare our financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”). To supplement our financial results presented in accordance with GAAP in this MD&A section, we present adjusted EBITDA, which is a non-GAAP financial measure, to assist readers in understanding our performance and provide an additional perspective on trends and underlying operating results on a period-to-period comparable basis. Non-GAAP financial measures either exclude or include amounts not reflected in the most directly comparable measure calculated and presented in accordance with GAAP. Where a non-GAAP financial measure is used, we have provided the most directly comparable measure calculated and presented in accordance with GAAP, a reconciliation to the GAAP measure and a discussion of the reasons why management believes this information is useful to it and may be useful to investors.

Unless the context otherwise requires, all references in this section to “APG,” the “Company,” “we,” “us,” and “our” refer to APi Group Corporation and its subsidiaries.

Overview

We are a global, market-leading business services company providing statutorily mandated and contracted services across our Safety Services and Specialty Services segments, including fire and life safety, electronic security, elevator and escalator, and infrastructure services. With more than 600 locations in over 20 countries, we are built on a century of expertise, a people-first culture, and our purpose of Building Great Leaders.

We operate our business under three primary operating segments, two of which aggregate into a single reportable segment, resulting in two reportable segments:

• Safety Services – A leading provider of safety services in North America, Europe, and Asia-Pacific, focusing on fire and life safety solutions, electronic security systems, and elevators and escalators, including design, installation, inspection, service, and monitoring of these systems. The work performed within this segment spans across a diverse mix of end markets with a focus on high tech services, advanced manufacturing, healthcare, fulfillment and distribution centers, and critical infrastructure.
• Specialty Services – A leading provider of a variety of specialty contracting, fabrication and distribution, and infrastructure and utility services. The work within this segment spans across a diverse mix of end markets with a focus on high tech services, healthcare, and critical infrastructure throughout North America.

We focus on growing our recurring revenue streams and repeat business from a diverse set of long-standing customers across a variety of end markets, which we believe provides us with stable cash flows and a platform for organic growth. We believe inspection, service, and monitoring revenues are generally more predictable through contractual arrangements with typical terms ranging from days to five years, with the majority having short durations and are often recurring due to consistent renewal rates and long-standing customer relationships.

For financial information about our segments see Note 17 – “Segment Information” to our condensed consolidated financial statements included herein.

RECENT DEVELOPMENTS AND CERTAIN FACTORS AND TRENDS AFFECTING OUR RESULTS OF OPERATIONS

Acquisitions

For information about our acquisition activity, see Note 3 – "Business Combinations" to our condensed consolidated financial statements included herein.

Economic, Industry, and Market Factors

We closely monitor the effects of general changes in economic and market conditions on our customers. General economic and market conditions can positively or negatively affect demand for our customers’ products and services, which can impact their planned capital and maintenance budgets in certain end markets. Market, regulatory, and industry factors could affect demand for our services. Availability of transportation and transmission capacity and fluctuations in market prices for energy and other fuel sources can also affect demand for our services for pipeline and power generation construction services. These fluctuations, as well as the highly competitive nature of our industries, have resulted, and may continue to result, in lower proposals and lower profit on the services we provide. Increased volatility in the global economy, and the increased tariffs on imported goods by the United States, Canada, and other countries, may also impact the financial results of some of our businesses. These tariffs have a direct impact on the cost of certain materials utilized in the services we provide and will increase the overall cost of projects which could lower project activity and impact the demand for our services. In the face of increased cost pressure on key materials or other market developments, we strive to maintain our profit margins through productivity improvements, cost reduction programs, pricing adjustments, and business streamlining efforts. Increased competition for skilled labor resources and higher labor costs can reduce our profitability and impact our ability to deliver timely service to our customers. We could experience supply chain disruptions, which could negatively impact the source and supply of materials needed to perform our work. In addition, fluctuations in foreign currencies may have an impact on our financial position and results of operations. However, we believe that our exposure to transactional gains or losses resulting from changes in foreign currencies is limited because our foreign operations primarily invoice and collect receivables in their respective local or functional currencies, and the expenses associated with these transactions are generally contracted and paid for in the same local currencies. In cases where operational transactions represent a material currency risk, we generally enter into cross-currency swaps. Refer to Note 8 – "Derivatives" to our condensed consolidated financial statements included in this quarterly report for additional information on our hedging activities. While we actively monitor economic, industry, and market factors that could affect our business, we cannot predict the effect that changes in such factors may have on our future consolidated results of operations, liquidity, and cash flows, and we may be unable to fully mitigate, or benefit from, such changes.

Effect of Seasonality and Cyclical Nature of Business

Our net revenues and results of operations can be subject to variability stemming from seasonal and other variations. Seasonal variations can be influenced by weather conditions impacting customer spending patterns, contract award seasons, and project schedules, as well as the timing of holidays. Consequently, net revenues for our businesses are typically lower during the first and second quarters due to the prevalence of unfavorable weather conditions within our North American companies, which can cause project delays and affect productivity.

Additionally, the industries we serve can be cyclical. Fluctuations in end-user demand, or in the supply of services within those industries, can affect demand for our services. As a result, our businesses may be adversely affected by industry declines or by delays in new projects. Variations or unanticipated changes in project schedules in connection with large projects can create fluctuations in net revenues.

Recent Accounting Pronouncements

A summary of recent accounting pronouncements is included in Note 2 – “Recent Accounting Pronouncements” to our condensed consolidated financial statements included herein.

Quantifying Factors Affecting our Results of Operations

Where reasonably available, we quantify the material factors contributing to fluctuations in our results of operations. We do not separately quantify certain individual factors within the "Results of Operations" section below as these factors are highly interrelated and cannot be quantified without unreasonable effort.

To drive execution of our strategies, we empower our business leaders to evaluate opportunities based on expected margin, execution risk, and resource fit, and to determine which work the businesses do or do not perform. As a result, the effect of disciplined project and customer selection cannot be isolated from the pricing and mix of the work performed without use of subjective assumptions and therefore does not readily translate into a precise financial impact that can be reliably measured and quantified. For the same reason, we cannot reliably separate growth between inspection, service, and monitoring revenues and project revenues. Instead, we have provided qualitative disclosures regarding these factors.

DESCRIPTION OF KEY LINE ITEMS

Net revenues

Net revenues are generated from the sale of various types of contracted services, fabrication, and distribution. We derive net revenues primarily from services under contractual arrangements with durations ranging from days to five years, with the majority having short durations, and which may provide the customer with pricing options that include a combination of fixed, unit, or time and material pricing. Net revenues for fixed price agreements are generally recognized over time using the cost-to-cost method of accounting which measures progress based on the cost incurred to total expected cost in satisfying our performance obligation.

Net revenues from time and material contracts are recognized as the services are provided. Net revenues earned are based on total contract costs incurred plus an agreed upon markup. Net revenues for these cost-plus contracts are recognized over time on an input basis as labor hours are incurred, materials are utilized, and services are performed. Net revenues from wholesale or retail unit sales are recognized at a point-in-time upon shipment.

Cost of revenues

Cost of revenues consists of direct labor, materials, subcontract costs, and indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs, and depreciation costs. Labor costs are considered to be incurred as the work is performed. Subcontractor labor is recognized as the work is performed.

Gross profit

Our gross profit is influenced by direct labor, materials, and subcontract costs. Our profit margins are also influenced by raw material costs, contract mix, weather, and proper coordination with contract providers. Labor-intensive contracts usually drive higher margins than those contracts that include material, subcontract, and equipment costs.

Selling, general, and administrative ("SG&A") expenses

Selling expenses consist primarily of compensation and associated costs for sales and advertising, trade shows, and corporate marketing. General and administrative expenses consist primarily of compensation and associated costs for executive management, personnel, facility leases, impairment, administrative expenses associated with accounting, finance, legal, information systems, leadership development, human resources, and risk management, and overhead associated with these functions. General and administrative expenses also include outside professional fees and other corporate expenses.

Investment expense (income) and other, net

Investment expense (income) and other, net includes income and expense from foreign currency forward contracts, cross-currency swaps, joint ventures, non-service pension cost, and other miscellaneous items including gains or losses on extinguishment of debt. Non-service pension cost reflects the sum of the components of pension expense not related to service expense, i.e., interest expense, expected return on assets, and amortization of prior service costs, and actuarial gains and losses.

CRITICAL ACCOUNTING ESTIMATES

For information regarding our critical accounting estimates, see the “Critical Accounting Estimates” section of the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. There have been no material changes to our critical accounting estimates during the nine months ended September 30, 2026.

RESULTS OF OPERATIONS

The following is a discussion of our financial condition and results of operations during the three and nine months ended September 30, 2026 and 2025.

Three months ended September 30, 2026 compared to the three months ended September 30, 2025

($ in millions)

Net revenues

Net revenues for the three months ended September 30, 2026 were $2,554 million compared to $2,085 million for the same period in 2025, an increase of $469 million or 22.5%. Revenue from acquisitions completed in the last year contributed 6.9% to total net revenues growth, with the remaining 15.6% of growth primarily driven by growth in inspection, service, and monitoring revenues, growth in project revenues, and pricing improvements.

Gross profit margin

The following table presents gross profit (net revenues less cost of revenues) and gross profit margin (gross profit as a percentage of net revenues) for the three months ended September 30, 2026 and 2025:

($ in millions)

Gross profit for the three months ended September 30, 2026 was $770 million compared to $652 million for the same period in 2025, an increase of $118 million or 18.1%. Gross profit margin for the three months ended September 30, 2026 was 30.1%, a decrease of 120 basis points compared to the prior year period. Gross profit margin decreased due to project and business mix and rising material, fuel, and other expenses.

Operating expenses

The following table presents operating expenses for the three months ended September 30, 2026 and 2025:

($ in millions)

Selling, general, and administrative expenses

SG&A expenses for the three months ended September 30, 2026 were $568 million compared to $489 million for the same period in 2025, an increase of $79 million. SG&A expenses as a percentage of net revenues was 22.2% during the three months ended September 30, 2026 compared to 23.5% for the same period in 2025. Businesses that were acquired during the prior 12 months contributed $37 million to the increase in SG&A expenses. Amortization of intangible assets increased $22 million, with the remaining increase in SG&A expenses primarily caused by investments to support growth. SG&A expenses excluding amortization for the three months ended September 30, 2026 were $490 million, or 19.2% of net revenues, compared to $433 million, or 20.8% of net revenues, for the same period of 2025. The decrease in SG&A expenses excluding amortization as a percentage of net revenues was primarily due to revenue growth outpacing growth in expenses. See the discussion and reconciliation of our non-GAAP financial measures below.

Interest expense, net

Interest expense, net was $45 million and $34 million for the three months ended September 30, 2026 and 2025, respectively. The increase in interest expense, net was primarily driven by $11 million in interest expense resulting from increased borrowings outstanding during the period.

Investment expense (income) and other, net

Investment expense (income) and other, net was $2 million for the three months ended September 30, 2026 compared to $1 million of income for the same period of 2025. The change in investment expense (income) and other, net was primarily due to fluctuations in individually immaterial items, none of which were individually significant.

Income tax provision

The effective tax rate for the three months ended September 30, 2026 was 26.5% compared to 28.2% in the same period of 2025. Refer to Note 11 – “Income Taxes” to our condensed consolidated financial statements included herein.

Net income and adjusted EBITDA

The following table presents net income and adjusted EBITDA for the three months ended September 30, 2026 and 2025:

($ in millions)

Net income for the three months ended September 30, 2026 was $114 million compared to $93 million for the same period in 2025, an increase of $21 million. The net income improvement was primarily attributable to strong revenue growth, partially offset by rising material, fuel, and other expenses, and the increase in SG&A expenses discussed above. Net income as a percentage of net revenues for the three months ended September 30, 2026 was 4.5%, unchanged compared with the same period in the prior year. Adjusted EBITDA for the three months ended September 30, 2026 was $350 million compared to $281 million for the same period in 2025, an increase of $69 million. The growth in adjusted EBITDA was driven by the same factors discussed above.

Segment Results for the three months ended September 30, 2026 compared to the three months ended September 30, 2025

($ in millions)

($ in millions)

NM = Not meaningful

The following discussion breaks down the net revenues and segment earnings by reportable segment for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.

Safety Services

Safety Services net revenues for the three months ended September 30, 2026 increased by $259 million or 18.5% compared to the same period in 2025. Revenue from acquisitions completed in the last year contributed 9.8% to total net revenues growth, with the remaining 8.7% of growth primarily driven by growth in both inspection, service, and monitoring revenues and project revenues and pricing improvements.

Safety Services segment earnings as a percentage of net revenues for the three months ended September 30, 2026 and 2025 was approximately 16.9% and 16.8%, respectively. The increase was driven by strong revenue growth and favorable SG&A leverage, partially offset by project and business mix and rising material, fuel, and other expenses.

Specialty Services

Specialty Services net revenues for the three months ended September 30, 2026 increased by $210 million or 30.7% compared to the same period in 2025. The increase was driven by growth in both project and service revenues.

Specialty Services segment earnings as a percentage of net revenues for the three months ended September 30, 2026 and 2025 was approximately 12.5% and 11.9%, respectively. The increase was driven by disciplined customer and project selection and pricing improvements, as well as revenue growth and favorable SG&A leverage, partially offset by rising material, fuel, and other expenses.

Nine months ended September 30, 2026 compared to the nine months ended September 30, 2025

($ in millions)

Net revenues

Net revenues for the nine months ended September 30, 2026 were $6,790 million compared to $5,794 million for the same period in 2025, an increase of $996 million or 17.2%. Revenue from acquisitions completed in the last year contributed 3.7% to total net revenues growth, with the remaining 13.5% of growth primarily driven by growth in inspection, service, and monitoring revenues, growth in project revenues, and pricing improvements.

Gross profit margin

The following table presents gross profit (net revenues less cost of revenues) and gross profit margin (gross profit as a percentage of net revenues) for the nine months ended September 30, 2026 and 2025:

($ in millions)

Gross profit for the nine months ended September 30, 2026 was $2,093 million compared to $1,809 million for the same period in 2025, an increase of $284 million or 15.7%. Gross profit margin for the nine months ended September 30, 2026 and 2025 was 30.8% and 31.2%, respectively. Gross profit margin decreased primarily due to project and business mix.

Operating expenses

The following table presents operating expenses for the nine months ended September 30, 2026 and 2025:

($ in millions)

Selling, general, and administrative expenses

SG&A expenses for the nine months ended September 30, 2026 were $1,613 million compared to $1,419 million for the same period in 2025, an increase of $194 million. SG&A expenses as a percentage of net revenues was 23.8% during the nine months ended September 30, 2026 compared to 24.5% for the same period in 2025. Businesses that were acquired during the prior 12 months contributed $63 million to the increase in SG&A expenses. SG&A was also driven by increases of $40 million in amortization of intangible assets and $21 million in non-recurring systems and business enablement expenses, with the remaining increase primarily caused by investments to support growth. SG&A expenses excluding amortization for the nine months ended September 30, 2026 were $1,405 million, or 20.7% of net revenues, compared to $1,251 million, or 21.6% of net revenues, for the same period of 2025. The decrease in SG&A expenses excluding amortization as a percentage of net revenues was primarily due to revenue growth outpacing growth in expenses. See the discussion and reconciliation of our non-GAAP financial measures below.

Interest expense, net

Interest expense, net was $111 million and $109 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in interest expense, net was primarily driven by $15 million in interest expense resulting from increased borrowings outstanding during the period, partially offset by $8 million in benefits from certain derivative transactions and $5 million in savings driven by a decrease in floating rates.

Investment expense (income) and other, net

Investment expense (income) and other, net was $5 million for the nine months ended September 30, 2026 compared to $3 million of income for the same period of 2025. The change in investment expense (income) and other, net was primarily due to a $3 million decrease in joint venture income compared to the prior year, $2 million of loss on the extinguishment of debt in the current year with no similar activity in the prior year, and a $1 million loss associated with the impact of foreign currency exchange rates compared to the prior year.

Income tax provision

The effective tax rate for the nine months ended September 30, 2026 was 25.7% compared to 27.6% in the same period of 2025. Refer to Note 11 – “Income Taxes” to our condensed consolidated financial statements included herein.

Net income and adjusted EBITDA

The following table presents net income and adjusted EBITDA for the nine months ended September 30, 2026 and 2025:

($ in millions)

Net income for the nine months ended September 30, 2026 was $270 million compared to $205 million for the same period in 2025, an increase of $65 million. The increase was primarily attributable to strong revenue growth, partially offset by the increase in SG&A expenses discussed above. Net income as a percentage of net revenues for the nine months ended September 30, 2026 and 2025 was 4.0% and 3.5%, respectively. Adjusted EBITDA for the nine months ended September 30, 2026 was $896 million compared to $746 million for the same period in 2025, an increase of $150 million. The growth in adjusted EBITDA was driven by the same factors discussed above.

Segment Results for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025

($ in millions)

46

($ in millions)

NM = Not meaningful

The following discussion breaks down the net revenues and segment earnings by reportable segment for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Safety Services

Safety Services net revenues for the nine months ended September 30, 2026 increased by $527 million or 13.1% compared to the same period in 2025. Revenue from acquisitions completed in the last year contributed 4.8% to total net revenues growth, with the remaining 8.3% of growth primarily driven by growth in inspection, service, and monitoring revenues, growth in project revenues, and pricing improvements.

Safety Services segment earnings as a percentage of net revenues for the nine months ended September 30, 2026 and 2025 was approximately 16.7% and 16.5%, respectively. The increase was primarily driven by disciplined customer and project selection, pricing improvements, and favorable SG&A leverage, partially offset by mix.

Specialty Services

Specialty Services net revenues for the nine months ended September 30, 2026 increased by $470 million or 26.6% compared to the same period in 2025. The increase was driven by growth in both project and service revenues.

Specialty Services segment earnings as a percentage of net revenues for the nine months ended September 30, 2026 and 2025 was approximately 10.9% and 10.3%, respectively. The increase was driven by disciplined customer and project selection and pricing improvements, resulting in margin expansion in service and project revenues, as well as revenue growth and favorable SG&A leverage.

Non-GAAP Financial Measures

We supplement our reporting of consolidated financial information determined in accordance with GAAP with SG&A expenses (excluding amortization) and adjusted EBITDA (defined below), which are non-GAAP financial measures. We use these non-GAAP financial measures to evaluate our performance, both internally and as compared with our peers, because they exclude certain items that may not be indicative of our core operating results. Management believes these measures are useful to investors because they (a) reflect the same tools management uses to assess performance and prospects, (b) facilitate peer comparison, (c) provide consistent period-to-period comparisons, and (d) in the case of adjusted EBITDA, determine certain elements of executive incentive compensation.

These non-GAAP financial measures, however, have limitations as analytical tools and should not be considered a substitute for, or superior to, GAAP financial measures. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses, gains, and other non-recurring items that are required by GAAP to be recorded in our financial statements and may not be comparable to similarly titled measures of other companies due to potential differences in calculation methods. In addition, these measures are subject to inherent limitations as they reflect the exercise of judgment by management about which items are excluded or included in determining these non-GAAP financial measures. Investors are encouraged to review the following reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures and not to rely on any single financial measure to evaluate our business.

SG&A expenses (excluding amortization)

SG&A expenses (excluding amortization) is a measure of operating costs used by management to manage the business. We believe this non-GAAP measure provides meaningful information and helps investors understand our core selling, general, and administrative expenses, excluding acquisition-related amortization expense, to better enable investors to understand our financial results and assess our prospects for future performance.

The following tables present reconciliations of SG&A expenses to SG&A expenses (excluding amortization) for the periods indicated:

($ in millions)

($ in millions)

Adjusted EBITDA

Adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) is the measure of profitability used by management to manage the business. Adjustments include expenses that are non-recurring in nature and that may not be indicative of the Company’s core operating results, including contingent consideration and compensation, non-service pension cost, systems and business enablement expenses, business process transformation expenses, acquisition and divestiture related expenses, restructuring program related costs, and other miscellaneous items. We supplement the reporting of our consolidated financial information with adjusted EBITDA. We believe this non-GAAP measure provides meaningful information and helps investors understand our financial results and assess our prospects for future performance.

The following tables present reconciliations of net income to adjusted EBITDA for the periods indicated:

($ in millions)

48

($ in millions)

(a) Adjustment to reflect the elimination of the expense attributable to one-time deferred consideration to prior owners of acquired businesses.

(b) Adjustment to reflect the elimination of non-service pension cost, which consists of interest cost, expected return on plan assets and amortization of actuarial gains/losses.

(c) Adjustment to reflect the elimination of non-recurring costs associated with an end-to-end business systems implementation and primarily consist of third-party consulting fees related to system design, deployment, integration, and change leadership across the organization.

(d) Adjustment to reflect the elimination of expenses associated with the integration and reorganization of newly acquired businesses and non-operational costs related to technology and business enhancements, including systems and process development costs.

(e) Adjustment to reflect the elimination of transaction costs, integration costs, and gains and losses related to potential and completed acquisitions and divestitures.

(f) Adjustment to reflect the elimination of expenses associated with restructuring programs and related costs.

(g) Adjustment includes miscellaneous non-recurring items, such as costs associated with debt refinancing and other capital market activities, and net gains related to building sales and facility exits.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our primary sources of liquidity are cash flows from the operating activities of our consolidated subsidiaries, available cash and cash equivalents, our access to our $1 billion five-year senior secured revolving credit facility (the "Revolving Credit Facility") and the proceeds from debt and equity offerings. We believe these sources will be sufficient to fund our liquidity requirements for at least the next twelve months. Although we believe we have sufficient resources to fund our future cash requirements, there are many factors with the potential to influence our cash flow position including weather, seasonality, commodity prices, market conditions, geopolitical issues, and inflation, over which we have no control.

As of September 30, 2026, we had $1,032 million of total liquidity, comprised of $373 million in cash and cash equivalents and $659 million ($1 billion less $335 million of outstanding borrowings and $6 million of outstanding letters of credit, which reduce availability) of available borrowings under our Revolving Credit Facility.

During the second quarter of 2026, we completed the Ninth Amendment to our credit agreement, upsizing and extending the Revolving Credit Facility, and extending the 2021 Term Loan. The amendment increased the Revolving Credit Facility by $250 million, from $750 million to $1 billion, increased the letter of credit sublimit from $250 million to $300 million, extended the maturity date of the Revolving Credit Facility to May 14, 2031, and extended the maturity date of the 2021 Term Loan to May 14, 2033.

During 2025, we completed the Eighth Amendment to our credit agreement, which increased the Revolving Credit Facility from $500 million to $750 million, extended the facility's maturity to five years from the date of the Eighth

Amendment, reduced the applicable margin by 75 basis points, and eliminated the credit spread adjustment. We also completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan. The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.

Our principal liquidity requirements have been, and we expect will continue to be, for working capital and general corporate purposes, including capital expenditures and debt service, identifying, executing, and integrating strategic acquisitions and business transformation transactions or initiatives, as well as any accrued consideration and compensation due to the sellers, including tax payments in connection therewith.

During 2025, our Board of Directors authorized a share repurchase program ("2025 SRP") to purchase up to $1 billion in shares of our common stock. The timing, amount, and manner of any repurchases under the new repurchase program will be determined at the discretion of our leadership based on a number of factors, including the availability of capital, capital allocation alternatives, and market conditions for our common stock. The share repurchase program is open-ended and does not require us to acquire any specific number of shares. It may be modified, suspended, extended, or terminated by us at any time without prior notice and may be executed through open-market purchases, privately negotiated transactions or otherwise, and we may enter into Rule 10b5-1 trading plans in connection with such repurchases. This new authorization replaces our previous share repurchase authorization announced in 2024 ("2024 SRP"). In 2025, prior to the new authorization, we repurchased 3,095,573 shares of common stock for approximately $75 million under the 2024 SRP. During the nine months ended September 30, 2026, we repurchased 6,338,563 shares of common stock for approximately $250 million. As of September 30, 2026, we had approximately $750 million of authorized repurchases remaining under the 2025 SRP.

Cash Flows

The following table summarizes net cash flows with respect to our operating, investing, and financing activities for the periods indicated:

($ in millions)

Net Cash Provided by Operating Activities

Net cash provided by operating activities was $393 million for the nine months ended September 30, 2026 compared to $377 million for the same period in 2025. The increase in cash provided by operating activities was primarily due to an increase in net income during the nine months ended September 30, 2026 compared to the same period of the prior year. Cash flow from operations is primarily driven by changes in the quantity of services provided and working capital needs associated with the various services we provide. Working capital is primarily affected by changes in total accounts receivable, accounts payable, accrued expenses, and contract assets and contract liabilities, all of which tend to be related and are affected by changes in the timing and volume of work performed.

Net Cash Used in Investing Activities

Net cash used in investing activities was $1,424 million for the nine months ended September 30, 2026 compared to $231 million for the same period in 2025. This increase was primarily driven by increased acquisition consideration in the current year. Cash used for acquisitions, net of cash acquired, was $1,356 million and $174 million in the nine months ended September 30, 2026 and 2025, respectively.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities was $500 million for the nine months ended September 30, 2026 compared to net cash used in financing activities of $116 million for the same period in 2025. The cash provided by financing activities for the nine months ended September 30, 2026 was primarily driven by $795 million in proceeds from long-term borrowings and $335 million of net short-term debt, offset by $310 million in payments on long-term borrowings, $252 million of share repurchases, $38 million of restricted shares tendered for taxes, and $14 million of payments of acquisition-related consideration, while in the nine months ended September 30, 2025, cash used in financing activities was driven by $75 million of share repurchases, $20 million of restricted shares tendered for taxes, and $16 million of payments of acquisition-related consideration.

Financing Activities

Credit Agreement

We have entered into a Credit Agreement by and among APi Group DE, Inc., our wholly-owned subsidiary, as borrower ("APi Group DE"), APG as a guarantor, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank N.A., as administrative agent and as collateral agent (the “Credit Agreement”) which provides for: (1) a term loan facility, pursuant to which we incurred the $2,147 million seven-year incremental term loan ("2021 Term Loan") (increased from $1,100 million in 2024 and 2025) used to fund a portion of the purchase price in the Chubb acquisition and to fully repay the balance of a previously outstanding term loan, and (2) a $1 billion Revolving Credit Facility (increased from $750 million in 2026) of which up to $300 million (increased from $250 million in 2026) can be used for the issuance of letters of credit.

During the second quarter of 2026, we completed the Ninth Amendment to our credit agreement, upsizing and extending the Revolving Credit Facility. The amendment increased the Revolving Credit Facility by $250 million from $750 million to $1 billion, increased the letter of credit sublimit from $250 million to $300 million, extended the maturity date of the Revolving Credit Facility to May 14, 2031, and extended the maturity date of the 2021 Term Loan to May 14, 2033.

During 2025, we completed the Eighth Amendment to our credit agreement, which increased the Revolving Credit Facility from $500 million to $750 million, extended the facility's maturity to five years from the date of the Eighth Amendment, reduced the applicable margin by 75 basis points, and eliminated the credit spread adjustment applicable to the Revolving Credit Facility. We also completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan. The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.

The amended interest rate applicable to the 2021 Term Loan is, at our option, either (a) a base rate plus an applicable margin equal to 0.75% or (b) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.75%. The 2021 Term Loan matures on May 14, 2033. Principal payments on the 2021 Term Loan will be made in quarterly installments on the last day of each fiscal quarter, for a total annual amount equal to 1.00% of the initial aggregate principal amount of the 2021 Term Loan.

The interest rate applicable to borrowings under the Revolving Credit Facility is, at our option, either (a) a base rate plus an applicable margin equal to 0.25% or (b) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.25%.

The Credit Agreement contains customary representations and warranties, and affirmative and negative covenants, including covenants that, among other things, restrict our, and our restricted subsidiaries’, ability to (i) incur additional indebtedness; (ii) pay dividends or make other distributions or repurchase or redeem capital stock; (iii) prepay, redeem or repurchase certain debt; (iv) make loans and investments; (v) sell, transfer and otherwise dispose of assets; (vi) incur or permit to exist certain liens; (vii) enter into transactions with affiliates; (viii) enter into agreements restricting subsidiaries’ ability to pay dividends; and (ix) consolidate, amalgamate, merge or sell all or substantially all assets. The Credit Agreement also contains customary events of default. Furthermore, with respect to the revolving credit facility, we must maintain a first lien net leverage ratio that does not exceed 3.75 to 1.00 for each fiscal quarter, if on the last day of any fiscal quarter the outstanding amount of all revolving loans and letter of credit obligations (excluding undrawn letters of credit up to $60 million) under the Credit Agreement is greater than 30% of the total revolving credit commitments thereunder subject to a right of cure. Our first lien net leverage ratio as of September 30, 2026 was 1.6:1.0.

As of September 30, 2026, the 2021 Term Loan has $2,147 million remaining principal amount outstanding and we had $335 million outstanding under the Revolving Credit Facility, under which $659 million was available after giving effect to $6 million of outstanding letters of credit, which reduces availability.

Senior Notes

On June 22, 2021, APi Group DE completed a private offering of $350 million aggregate principal amount of 4.125% Senior Notes due 2029 (the “4.125% Senior Notes”), issued under an indenture, dated June 22, 2021. The 4.125%

Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries. The 4.125% Senior Notes will mature on July 15, 2029, unless redeemed earlier, and bear interest at a rate of 4.125% per year until maturity, payable semi-annually in arrears. We used the net proceeds from the sale of the 4.125% Senior Notes to repay previously outstanding term loans and for general corporate purposes. As of September 30, 2026, we had $337 million aggregate principal amount of 4.125% Senior Notes outstanding.

On October 21, 2021, APi Group DE completed a private offering of $300 million aggregate principal amount of 4.750% Senior Notes due 2029 (the “4.750% Senior Notes”) issued under an indenture dated October 21, 2021, as supplemented by a supplemental indenture dated January 3, 2022. The 4.750% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries. The 4.750% Senior Notes will mature on October 15, 2029, unless earlier redeemed, and bear interest at a rate of 4.750% per year until maturity, payable semi-annually in arrears. We used the net proceeds from the sale of the 4.750% Senior Notes to finance a portion of the consideration for the Chubb acquisition. As of September 30, 2026, we had $277 million aggregate principal amount of 4.750% Senior Notes outstanding.

On May 14, 2026, APi Group DE completed a private offering of $500 million aggregate principal amount of 5.750% Senior Notes due 2034 (the "5.750% Senior Notes") issued under an indenture dated May 14, 2026. The 5.750% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries. The 5.750% Senior Notes will mature on June 1, 2034, unless redeemed earlier, and bear interest at a rate of 5.750% per year until maturity, payable semi-annually in arrears. We used the net proceeds from the offering for general corporate purposes, including funding previously announced acquisitions and related fees and expenses. As of September 30, 2026, we had $500 million aggregate principal amount of 5.750% Senior Notes outstanding.

Debt Covenants

We were in compliance with all covenants contained in the indentures governing the 4.125% Senior Notes, 4.750% Senior Notes, and Credit Agreement as of September 30, 2026 and December 31, 2025, and the 5.750% Senior Notes as of September 30, 2026.

Material Cash Requirements from Known Contractual and Other Obligations

Our material cash requirements from known contractual and other obligations primarily relate to the following, for which information on both a short-term and long-term basis is provided in the indicated notes to the Interim Statements and expected to be satisfied using cash generated from operations:

• Debt – See Note 10 – "Debt" for future principal payments and interest rates on our debt instruments.
• Tax Obligations – See Note 11 – "Income Taxes."
• Operating and Finance Leases – See Note 12 – "Leases" in the Annual Report on Form 10-K filed on February 25, 2026. We have not had material changes to our lease obligations during the nine months ended September 30, 2026.

We make investments in our properties and equipment to enable continued expansion and effective performance of our business. Our capital expenditures are typically less than 1.5% of annual net revenues.

Interest Rate Risk

As of September 30, 2026, our outstanding variable interest rate debt was primarily related to our $2,147 million 2021 Term Loan. To mitigate increases in variable interest rates, we have a $720 million interest rate swap, exchanging one-month SOFR for a rate of 3.59% per annum, maturing October 2026, and a $400 million interest rate swap exchanging one-month SOFR for a rate of 3.41% per annum, maturing January 2028. During 2024, we entered into a $720 million notional amount forward starting interest rate swap commencing in October 2026 and maturing in January 2029 that exchanges a variable rate of interest (SOFR) for an average fixed rate of interest of approximately 3.13% over the term of the agreement. The remaining floating rate portfolio bears interest based on one-month SOFR plus 175 basis points. As of September 30, 2026, excluding letters of credit outstanding of $6 million, we had $335 million of outstanding revolving loans under our Credit Agreement.

Foreign Currency Risk

We have operations in over 20 countries globally. Revenues generated from foreign operations represented approximately 31% of our consolidated net revenues for the three and nine months ended September 30, 2026. Net revenues and expenses related to our foreign operations are, for the most part, denominated in the functional currency of the foreign operation, which minimizes the impact fluctuations in exchange rates would have on net income or loss. We are subject to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than the functional currencies. Such transactions were not material to our operations during the nine months ended September 30, 2026. These foreign currency transaction gains and losses, including hedging impacts, are classified in investment expense (income) and other, net, in the condensed consolidated statements of operations and were a loss of $1 million and $2 million for the three months ended September 30, 2026 and 2025, respectively, and a loss of $2 million and $1 million for the nine months ended September 30, 2026 and 2025, respectively. These net foreign currency transaction gains and losses include derivative instruments designed to reduce foreign currency exchange rate risks. Translation gains or losses, which are recorded in accumulated other comprehensive loss in the condensed consolidated balance sheets, result from translation of the assets and liabilities of our foreign subsidiaries into U.S. dollars. Foreign currency translation (losses) gains totaled approximately $(1) million and $(15) million for the three months ended September 30, 2026 and 2025, respectively, and $(40) million and $172 million for the nine months ended September 30, 2026 and 2025, respectively.

Our exposure to fluctuations in foreign currency exchange rates has increased as a result of our international presence and may continue to increase in the future as we continue to expand our operations outside of the U.S. We seek to manage foreign currency exposure by minimizing our consolidated net asset and liability positions in currencies other than the functional currency of our foreign subsidiaries. However, we believe that our exposure to transactional gains or losses resulting from fluctuations in foreign currencies is limited because our foreign operations primarily invoice and collect receivables in their respective local or functional currencies, and the expenses associated with these transactions are generally contracted and paid for in the same local currencies. In order to manage foreign currency risk related to transactions in foreign currencies and the intercompany financing structure, we entered into cross-currency swaps to manage the foreign currency risk of certain intercompany loans. We also use foreign currency forward contracts as a way to mitigate foreign currency exposure.

Other Market Risk

We are also exposed to market risks impacting our customer base due to the potential related impact on accounts receivable or contract assets on uncompleted contracts. The amounts recorded may be at risk if our customers’ ability to pay these obligations is negatively impacted by economic conditions. We continually monitor the creditworthiness of our customers and maintain ongoing discussions with customers regarding contract status with respect to change orders and billing terms. Therefore, management believes it takes appropriate action to manage market and other risks, but there is no assurance management will be able to reasonably identify all risks with respect to the collectability of these assets. See also “Revenue Recognition from Contracts with Customers” under Critical Accounting Estimates within Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

In addition, we are exposed to various supply chain risks, including the market risk of price fluctuations or availability of copper, steel, cable optic fiber, and other materials used as components of supplies or materials utilized in our operations. We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our vehicle fleet. Disruptions in our supply chain can occur due to market inefficiencies but can also be driven by other events, like cybersecurity breaches, pandemics, or similar disruptive events. While we believe we can increase our contract prices to adjust for some price increases in commodities, there can be no assurance that such price increases, if they were to occur, would be recoverable. Additionally, some of our fixed price contracts do not allow us to adjust prices and, as a result, increases in material costs could reduce profitability with respect to projects in progress.

Significant declines in market prices for oil, gas, and other fuel sources may also impact our operations. Prolonged periods of low oil and gas prices may result in projects being delayed or canceled and in a low oil and gas price environment, certain of our businesses could become less profitable or incur losses.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934, as amended (the

“Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating such controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

As required by Rule 13a-15(b) of the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this quarterly report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of September 30, 2026.

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. However, our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures will prevent or detect all errors and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within our Company have been detected.

Changes in Internal Control over Financial Reporting

During 2026, we began a series of enterprise resource planning systems implementations. In connection with these implementations, we continue to review the design and operation of our internal control over financial reporting processes. Other than as described above, there were no changes in our internal control over financial reporting during the quarter ended September 30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no material changes to our risk factors contained in Part I, Item 1A. "Risk Factors" of our Form 10-K for the year ended December 31, 2025.