Liberty Energy Inc.: Form 10-Q for the period ended Sep 30, 2025

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs, and expected performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of risks and uncertainties, including those described in “Cautionary Note Regarding Forward-Looking Statements,” the Annual Report under the heading “Item 1A. Risk Factors,” and in “Part II – Other Information, Item 1A. Risk Factors” included herein. We assume no obligation to update any of these forward-looking statements.

Overview

The Company, together with its subsidiaries, is a leading integrated energy services and technology company focused on providing innovative hydraulic fracturing services and related technologies to onshore oil and natural gas E&P companies. We offer customers hydraulic fracturing services, together with complementary services including wireline services, proppant delivery solutions, field gas processing and treating, CNG delivery, data analytics, related goods (including our sand mine operations), and technologies to facilitate lower emission completions, thereby helping our customers reduce their emissions profile. We have grown from one active hydraulic fracturing fleet in December 2011 to approximately 40 active fleets as of September 30, 2025. We provide our services primarily in the major oil and gas shale basins in North America and in the Northern Territory of Australia.

In early 2023, the Company launched Liberty Power Innovations LLC (“LPI”), an integrated alternative fuel and power solutions provider for remote applications. LPI provides CNG supply, field gas processing and treating, and well site fueling and logistics. LPI was formed to support the Company’s transition towards our next generation digiFleets℠ and dual fuel fleets, as CNG fueling services can be limited in the market, yet critical to maintaining highly efficient well site operations. Through the first nine months of 2025, LPI was primarily focused on supporting an industry transition to natural gas fueled technologies, serving as a key enabler of the next step of cost and emissions reductions in the oilfield. In January 2025, we announced LPI’s expansion into the distributed power business, where we expect to leverage our experience in providing electric power for our digiFrac℠ pumps into other areas inside and outside of the oilfield.

On March 3, 2025, we completed the acquisition of IMG Energy Solutions, a leading developer of distributed power systems, for cash consideration of approximately $19.6 million, subject to normal closing adjustments and net of cash received. The IMG Acquisition brings integrated capabilities across engineering design and development, construction management, enhanced software and monitoring systems, operations and marketing. We believe the IMG Acquisition will strengthen LPI by incorporating IMG Energy Solutions’s advanced engineering designs, software control systems, utility interconnection experience and power marketing expertise.

Business Strategy and Technical Innovation

We believe technical innovation and strong relationships with our customer and supplier bases distinguish us from our competitors and are the foundations of our business. We expect that E&P companies will continue to focus on technological innovation as completion complexity and fracture intensity of horizontal wells increases, particularly as customers are increasingly focused on reducing emissions from their completions operations. We remain proactive in developing innovative solutions to industry challenges, including developing: (i) our databases of U.S. unconventional wells to which we apply our proprietary multi-variable statistical analysis technologies to provide differential insight into fracture design optimization; (ii) our Liberty Quiet Fleet® design which significantly reduces noise levels compared to conventional hydraulic fracturing fleets; (iii) hydraulic fracturing fluid systems tailored to the specific reservoir properties in the basins in which we operate; (iv) our dual fuel dynamic gas blending (“DGB”) fleets that allow our engines to run diesel or a combination of diesel and natural gas, to optimize fuel use, reduce emissions and lower costs; (v) our digiFleets℠, comprising of digiFrac℠ and digiPrime℠ pumps and other complementary equipment, including power generation units (together “digiTechnologies℠”), our innovative, purpose-built electric and hybrid frac pumps that have approximately 25% lower CO2e emission profile than the Tier IV DGB; (vi) our wet sand handling technology which eliminates the need to dry sand, enabling the deployment of mobile mines nearer to wellsites; and (vii) the launch of LPI to support the transition to our digiFleets as well as the transition to lower costs and emissions in the oilfield. In addition, our integrated supply chain includes proppant, chemicals, equipment, natural gas fueling services, logistics and integrated software which we believe promotes wellsite efficiency and leads to more pumping hours and higher productivity throughout the year to better service our customers. In order to achieve our technological objectives, we carefully manage our liquidity and debt position to promote operational flexibility and invest in the business throughout the full commodity cycle in the regions we operate.

Recent Trends and Outlook

In response to macroeconomic uncertainty, oil producers opted to moderate activity after outperforming production expectations during the first half of the year, however, current activity levels are below those required to sustain North American oil production. Global oil oversupply is expected to peak during the first half of 2026 and many shale oil producers are targeting relatively flat oil production levels into 2026, which should require modest activity improvement from current levels sometime during the year to offset the natural declines of producing wells. Long-term gas demand continues to be on a favorable trajectory, with significant expected demand from LNG export capacity expansion and broader power markets. Together, this sets the backdrop for improving frac fundamentals later in 2026, assuming commodity prices remain supportive.

Lower industry activity and underutilized fleets in today’s frac markets are driving price pressure, primarily for conventional fleets. This slowdown is accelerating equipment attrition and fleet cannibalization, setting the stage for a more constructive supply and demand balance of industry frac fleets in the future. An improvement in frac activity coupled with tightening frac capacity would support better pricing dynamics.

Adjacent to the completions market, the Company expects increasing demand for power generation, as evidenced by large-scale long duration power commitments across the industry. AI compute load represents a meaningful long-term growth opportunity, and broader electrification trends and industrial reshoring efforts are also driving incremental, steady base load demand. At the same time, the grid is facing mounting reliability and capacity challenges driven by increased intermittent generation and a lack of investment in transmission infrastructure.

During the third quarter of 2025, the posted WTI price traded at an average of $65.78 per barrel (“Bbl”), as compared to the third quarter of 2024 average of $76.43 per Bbl, and the second quarter of 2025 average of $64.57 per Bbl. In addition, during the the third quarter of 2025, the Henry Hub price traded at an average of $3.03 per one million British thermal units (“MMBtu”), as compared to the second quarter of 2025 average of $3.19 per MMBtu, and the third quarter of 2024 average of $2.11 per MMBtu. Subsequent to September 30, 2025, the Henry Hub traded at an average of $3.27 per MMBtu through October 6, 2025. The average domestic onshore rig count for the United States and Canada was 703 rigs reported in the third quarter of 2025, down from the average in the third quarter of 2024 of 772, and up from the average in the second quarter of 2025 of 686, according to a report from Baker Hughes.

Results of Operations

Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024

(in thousands)

Revenue

Our revenue decreased $191.2 million, or 17%, to $947.4 million for the three months ended September 30, 2025 compared to $1.1 billion for the three months ended September 30, 2024. The decrease in revenue was primarily attributable to a decrease in service and materials pricing, along with reduced activity levels.

Cost of Services

Cost of services (exclusive of depreciation, depletion, and amortization) decreased $70.5 million, or 8%, to $769.8 million for the three months ended September 30, 2025 compared to $840.3 million for the three months ended September 30, 2024. The decrease in expense was primarily related to decreases in material volumes and personnel costs commensurate with the decrease in activity levels.

General and Administrative

General and administrative expenses were consistent between periods, decreasing $0.3 million, or 1%, to $58.3 million for the three months ended September 30, 2025 compared to $58.6 million for the three months ended September 30, 2024.

Depreciation, Depletion, and Amortization

Depreciation, depletion, and amortization expense decreased $3.4 million, or 3%, to $123.0 million for the three months ended September 30, 2025 compared to $126.4 million for the three months ended September 30, 2024. The decrease during the three months ended September 30, 2025 was primarily due to equipment reaching the end of its depreciable life, partially offset by an increase in finance leases.

(Gain) loss on Disposal of Assets, net

The Company recorded a gain on disposal of assets, net of $1.2 million for the three months ended September 30, 2025 compared to a $6.0 million loss for the three months ended September 30, 2024, as the Company disposed of used equipment that is no longer in use as part of normal course fleet and equipment management. Additionally, during the three months ended September 30, 2025, the Company received insurance proceeds related to losses recorded in prior periods.

Other (Income) Expense, net

The Company recognized other income, net of $57.5 million for the three months ended September 30, 2025 compared to $11.3 million expense, net for the three months ended September 30, 2024. Other (income) expense, net is comprised of gain on investments, net of $68.4 million related to investments in equity securities measured at fair value for the three months ended September 30, 2025, compared to $2.7 million loss, net during the three months ended September 30, 2024. Additionally, interest expense, net increased $2.3 million primarily as a result of the addition of finance lease liabilities, refer to “Liquidity and Capital Resources” below for further discussion of the Company’s finance leases.

Income Tax Expense

The Company recognized income tax expense of $12.0 million for the three months ended September 30, 2025, an effective rate of 21.8%, compared to $22.2 million for the three months ended September 30, 2024, an effective rate of 23.1%. The decrease in income tax expense was primarily attributable to the decrease in net income before income taxes, as discussed above.

Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024

(in thousands)

Revenue

Our revenue decreased $404.2 million, or 12%, to $3.0 billion for the nine months ended September 30, 2025 compared to $3.4 billion for the nine months ended September 30, 2024. The decrease in revenue was primarily attributable to a decrease in service and materials pricing, along with moderately reduced activity levels.

Cost of Services

Cost of services (exclusive of depreciation, depletion, and amortization) decreased $115.3 million, or 5%, to $2.3 billion for the nine months ended September 30, 2025 compared to $2.5 billion for the nine months ended September 30, 2024. The decrease in expense was primarily related to decreases in materials costs, partially offset by increased personnel costs.

General and Administrative

General and administrative expenses increased $13.1 million, or 8%, to $182.4 million for the nine months ended September 30, 2025 compared to $169.3 million for the nine months ended September 30, 2024. The increase was primarily attributable to increased stock-based compensation expense recognized during the first quarter of 2025 in connection with the resignation of Christopher A. Wright, the Company’s previous Chief Executive Officer and Chairman of the Board, from the Company upon his confirmation to the Secretary of Energy of the United States.

Transaction and Other Costs

Transaction and other costs were $0.8 million for the nine months ended September 30, 2025, with no such costs recorded for the nine months ended September 30, 2024, for costs related to the IMG Acquisition. See Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for further details.

Depreciation, Depletion, and Amortization

Depreciation, depletion, and amortization expense increased $7.2 million, or 2%, to $380.1 million for the nine months ended September 30, 2025 compared to $372.9 million for the nine months ended September 30, 2024. The increase in 2025 was due to additional finance leases entered into since the prior period for heavy equipment.

Loss on disposal of assets, net

The Company recognized a loss on disposal of assets, net of $7.8 million for the nine months ended September 30, 2025 compared to $6.1 million for the nine months ended September 30, 2024, as the Company disposed of used equipment that is no longer in use as part of normal course fleet and equipment management.

Other (Income) Expense, net

The Company recognized other income, net of $125.3 million for the nine months ended September 30, 2025 compared to $19.2 million expense, net for the nine months ended September 30, 2024. Other (income) expense, net is comprised of gain on investments, net of $155.9 million related to investments in equity securities measured at fair value for the nine months ended September 30, 2025, compared to a $4.5 million gain on investments during the nine months ended September 30, 2024. Interest expense, net increased $6.4 million primarily as a result of the addition of finance lease liabilities, refer to “Liquidity and Capital Resources” below for further discussion of the Company’s finance leases. Additionally, interest income—related party decreased $0.5 million related to a note receivable agreement executed in December 2022, amended in August 2023, and fully collected in March 2024.

Income Tax Expense

The Company recognized income tax expense of $43.9 million for the nine months ended September 30, 2025, an effective rate of 24.7%, compared to $81.2 million for the nine months ended September 30, 2024, an effective rate of 23.5%. The decrease in income tax expense was primarily attributable to the decrease in net income before income taxes, as discussed above.

Comparison of Non-GAAP Financial Measures

We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income before interest, income taxes, and depreciation, depletion, and amortization. We define Adjusted EBITDA as EBITDA adjusted to eliminate the effects of items such as non-cash stock-based compensation, new fleet or new basin start-up costs, fleet lay-down costs, gain or loss on the disposal of assets, net, bad debt reserves, transaction and other costs, the gain or loss on remeasurement of liability under our tax receivable agreements, the gain or loss on investments, net, and other non-recurring expenses that management does not consider in assessing ongoing performance.

Our Board, management, investors, and lenders use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, depletion, and amortization) and other items that impact the comparability of financial results from period to period. We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP.

Note Regarding Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial performance and results of operations. Net income is the GAAP financial measure most directly comparable to EBITDA and Adjusted EBITDA. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider EBITDA or Adjusted EBITDA in isolation or as substitutes for an analysis of our results as reported under GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

The following tables present a reconciliation of EBITDA and Adjusted EBITDA to our net income, which is the most directly comparable GAAP financial measure for the periods presented:

Three and Nine Months Ended September 30, 2025, Compared to Three and Nine Months Ended September 30, 2024: EBITDA and Adjusted EBITDA

(in thousands)

EBITDA was $188.9 million for the three months ended September 30, 2025 compared to $230.9 million for the three months ended September 30, 2024. Adjusted EBITDA was $127.7 million for the three months ended September 30, 2025 compared to $247.8 million for the three months ended September 30, 2024. The decreases in EBITDA and Adjusted EBITDA primarily resulted from lower pricing and changes in activity levels in 2025 as described above under the captions Revenue, Cost of Services, and General and Administrative for the Three Months Ended September 30, 2025, Compared to the Three Months Ended September 30, 2024.

EBITDA was $588.8 million for the nine months ended September 30, 2025 compared to $741.9 million for the nine months ended September 30, 2024. Adjusted EBITDA was $476.6 million for the nine months ended September 30, 2025 compared to $765.9 million for the nine months ended September 30, 2024. The decreases in EBITDA and Adjusted EBITDA primarily resulted from lower pricing and changes in activity levels in 2025 as described above under the captions Revenue, Cost of Services, and General and Administrative for the Nine Months Ended September 30, 2025, Compared to the Nine Months Ended September 30, 2024.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity consist of cash flows from operations and borrowings under our Revolving Credit Facility. While we believe that we can fund operations and current organic growth plans with these sources, we monitor the availability and cost of capital resources such as equity, debt, and lease financings that could be leveraged for current or future financial obligations including those related to acquisitions, capital expenditures, working capital, and other liquidity requirements. We may incur additional indebtedness or issue equity in order to meet our capital expenditure activities and liquidity requirements, as well as to fund organic and other growth opportunities that we pursue, including our expansion into the distributed power business and potential acquisitions. Specifically, we plan to raise significant funds through debt, equity or strategic alliances to support our current planned expansion of our power business. Our primary uses of capital have been capital expenditures to support growth, both organic and through acquisitions, and funding ongoing operations, including maintenance and fleet upgrades, as well as the repurchases of, and dividends on, shares of our Class A Common Stock.

Cash and cash equivalents decreased by $6.5 million to $13.5 million as of September 30, 2025 compared to $20.0 million as of December 31, 2024, while working capital excluding cash and current liabilities under debt and lease arrangements increased $64.0 million.

As of September 30, 2025, the Company was party to the Credit Agreement, which provides for a revolving line of credit up to $750.0 million. The Credit Agreement is subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory available to finance working capital needs. As of September 30, 2025, the borrowing base was calculated to be $399.1 million, and the Company had $253.0 million outstanding, in addition to letters of credit in the amount of $14.0 million, with $132.1 million of remaining availability.

The Credit Agreement contains financial covenants that we are required to maintain, in addition to covenants that restrict our ability to take certain actions. As of September 30, 2025, we were in compliance with all debt covenants.

Effective July 24, 2025, (i) the outstanding debt under the ABL Facility was repaid in full, (ii) the outstanding liabilities with respect to obligations under the ABL Facility were released and discharged, (iii) all liens, security interests and guaranties under the ABL Facility were released and terminated and (iv) all letters of credit issued and outstanding under the ABL Facility were continued as letters of credit issued and outstanding under the Revolving Credit Facility. Furthermore, also effective July 24, 2025, the Borrowers, the Company, JPMorgan Chase Bank, N.A. and other lender parties thereto entered into the Credit Agreement, which provides for, among other things, a Revolving Credit Facility with initial revolving commitments of $750.0 million, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory.

See Note 7—Debt to the accompanying unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for further details.

We have no material off balance sheet arrangements as of September 30, 2025, except for purchase commitments under supply agreements as disclosed above under Note 14—Commitments & Contingencies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report. As such, we are not materially exposed to any other financing, liquidity, market, or credit risk that could arise if we had engaged in such financing arrangements.

Share Repurchase Program

Under our share repurchase program, the Company is authorized to repurchase up to $750.0 million of outstanding Class A Common Stock through and including July 31, 2026. Shares may be repurchased from time to time for cash in open market transactions, through block trades, in privately negotiated transactions, through derivative transactions, or by other means in accordance with applicable federal securities laws. The timing and the amount of repurchases will be determined by the Company at its discretion based on an evaluation of market conditions, capital allocation alternatives and other factors. The share repurchase program does not require us to purchase any dollar amount or number of shares of our Class A Common Stock and may be modified, suspended, extended, or terminated at any time without prior notice. The Company expects to fund any repurchases by using cash on hand, borrowings under the Revolving Credit Facility, and expected free cash flow to be generated through the duration of the share repurchase program. The Company did not repurchase or retire any shares of Class A Common Stock under the share repurchase program during the three months ended September 30, 2025. During the nine months ended September 30, 2025, Company repurchased and retired shares of Class A Common Stock for $24.0 million under the share repurchase program.

Cash Flows

The following table summarizes our cash flows for the periods indicated:

(in thousands)

Analysis of Cash Flow Changes Between the Nine Months Ended September 30, 2025 and 2024

Operating Activities. Net cash provided by operating activities was $414.2 million for the nine months ended September 30, 2025, compared to $652.1 million for the nine months ended September 30, 2024. The $237.9 million decrease in cash from operating activities is attributable to a $404.2 million decrease in revenues, net of a $189.7 million decrease in cash operating expenses, interest expense, net, and income tax expense, and a $34.0 million decrease in cash from changes in working capital for the nine months ended September 30, 2025, compared to a $10.6 million decrease in cash from changes in working capital for the nine months ended September 30, 2024.

Investing Activities. Net cash used in investing activities was $302.3 million for the nine months ended September 30, 2025, compared to $455.0 million for the nine months ended September 30, 2024. Cash used in investing activities was lower during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 primarily due to a $57.4 million decrease in new equipment purchases and capitalized maintenance of existing equipment, as well as proceeds of

$80.8 million from the sale of shares of Oklo, higher proceeds from the sale of assets and a decrease in capital expenditures, including acquisitions. During the nine months ended September 30, 2025, the Company acquired IMG Energy Solutions for total cash consideration of approximately $15.2 million, net of cash received, after closing adjustments. Refer to Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to the IMG Acquisition.

Financing Activities. Net cash used in financing activities was $118.6 million for the nine months ended September 30, 2025, compared to $210.8 million for the nine months ended September 30, 2024. The $92.2 million decrease in cash used in financing activities was primarily due to $79.5 million increase in net borrowings and a $74.2 million decrease in share repurchases, offset by a $35.6 million increase in cash paid under the TRA liability, a $19.6 million increase in cash paid for finance leases, a $4.7 million increase in debt issuance costs, and $4.6 million increase in dividends paid.

Cash Requirements

Our material uses of cash consist primarily of obligations under long-term debt on the Revolving Credit Facility, TRAs, finance and operating leases for property and equipment, cash used to pay for repurchases of, and dividends on, shares of our Class A Common Stock, and purchase obligations as part of normal operations and our expansion into the distributed power business. Certain amounts included in our contractual obligations as of September 30, 2025 are based on our estimates and assumptions about these obligations, including pricing, volumes, and duration. We have no material off balance sheet arrangements as of September 30, 2025, except for purchase commitments for generation assets to support our distributed power business and under sand supply agreements of which $20.3 million is payable within 2025, and $3.9 million is payable thereafter. See Note 14—Commitments & Contingencies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for information regarding scheduled contractual sand supply obligations. During the three and nine months ended September 30, 2025, the Company expanded its equipment lease facilities resulting in the addition of $37.3 million and $87.9 million in new finance lease obligations, respectively. The terms on these new leases range from three to five years.

There have been no other material changes to cash requirements since the year ended December 31, 2024.

Income Taxes

The Company is a corporation and is subject to U.S. federal, state, and local income tax. The Company is also subject to Canada and Australia federal and provincial income tax on its foreign operations.

The effective global income tax rate applicable to the Company for the nine months ended September 30, 2025 was 24.7% compared to 23.5%, for the period ended September 30, 2024. The Company’s effective tax rate is greater than the statutory federal income tax rate of 21.0% due to state income taxes in the states the Company operates, as well as nondeductible executive compensation, partially offset by U.S. federal income tax credits. The Company recognized an income tax expense of $12.0 million and $43.9 million during the three and nine months ended September 30, 2025, respectively, and $22.2 million and $81.2 million for the three and nine months ended September 30, 2024, respectively.

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities, and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. As of September 30, 2025 and December 31, 2024, the Company’s net deferred tax liabilities were $180.9 million and $137.7 million, respectively.

Refer to Note 11— Income Taxes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to income tax expense.

Tax Receivable Agreements

Refer to Note 11— Income Taxes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to tax receivable agreements.

Critical Accounting Estimates

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP, which require us to make estimates and assumptions (see Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report and Note 2—Significant Accounting Policies and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in the Annual Report). A critical accounting estimate is one that requires our most difficult, subjective or complex estimates and assessments and is fundamental to our results of operations. We base our estimates on historical experience and on various other assumptions we believe to be reasonable according to the current facts and circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

There have been no material changes in our evaluation of our critical accounting policies and estimates since our Annual Report.

Our unaudited condensed consolidated financial statements are expressed in U.S. dollars. However, the Company conducts operations in Canada and Australia exposing us to market risks resulting from fluctuations in foreign currency exchange rates. The Canadian dollar and the Australian dollar are the functional currencies of the Company’s foreign subsidiaries as it is the primary currency within the economic environment in which the subsidiaries operate.

Changes in the exchange rates of the above foreign currencies can affect our revenues, earnings, and the carrying value of our assets and liabilities in our unaudited condensed consolidated balance sheets, either positively or negatively. Adjustments resulting from the translation of the subsidiary’s financial statements are reported in other comprehensive income. For the three and nine months ended September 30, 2025, the Company recorded a foreign currency translation loss of $2.4 million and gain of $3.7 million, respectively, to comprehensive income. For the three and nine months ended September 30, 2024, the Company recorded foreign currency translation gain of $1.6 million and loss of $3.8 million, respectively, to comprehensive income.

Other exposures to market risk have not changed materially since December 31, 2024. For quantitative and qualitative disclosures about market risk, in addition to foreign currency translation, see Part II, Item 7(a), “Quantitative and Qualitative Disclosures About Market Risk,” in the Annual Report.

In accordance with Rules 13a-15 and 15d-15 of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2025 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Our disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in the Annual Report and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results.

No other risk factors were identified in addition to the risk factors set forth in the Annual Report. There have been no material changes to the risk factors in the Annual Report.