Perimeter Solutions, Inc. (PRM)
SIC breadcrumb: Manufacturing > Chemicals And Allied Products > SIC 2800 Chemicals & Allied Products
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1880319. Latest filing source: 0001880319-26-000013.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 652,862,000 | USD | 2025 | 2026-02-26 |
| Net income | -206,366,000 | USD | 2025 | 2026-02-26 |
| Assets | 2,653,007,000 | USD | 2025 | 2026-02-26 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001880319.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Revenue | 239,310,000 | 339,577,000 | 341,315,000 | 360,505,000 | 322,108,000 | 560,968,000 | 652,862,000 | |
| Net income | -42,037,000 | 24,249,000 | 20,629,000 | 91,758,000 | 67,486,000 | -5,905,000 | -206,366,000 | |
| Operating income | -5,777,000 | 71,476,000 | 80,621,000 | 130,065,000 | 94,450,000 | -3,767,000 | -200,930,000 | |
| Gross profit | 83,883,000 | 162,045,000 | 169,179,000 | 128,653,000 | 128,295,000 | 317,086,000 | 375,150,000 | |
| Diluted EPS | -0.79 | 0.46 | 0.39 | 0.52 | 0.41 | -0.04 | -1.37 | |
| Operating cash flow | -305,000 | 70,826,000 | 67,991,000 | -40,172,000 | 193,000 | 188,388,000 | 238,149,000 | |
| Capital expenditures | 8,859,000 | 7,497,000 | 8,282,000 | 8,613,000 | 9,435,000 | 15,531,000 | 29,591,000 | |
| Share buybacks | 0.00 | 0.00 | 49,341,000 | 64,066,000 | 14,420,000 | 40,370,000 | ||
| Assets | 1,138,206,000 | 2,578,383,000 | 2,456,616,000 | 2,315,422,000 | 2,416,394,000 | 2,653,007,000 | ||
| Liabilities | 846,784,000 | 1,496,765,000 | 1,317,716,000 | 1,163,127,000 | 1,259,124,000 | 1,519,688,000 | ||
| Stockholders' equity | 314,641,000 | 262,386,000 | 291,422,000 | 1,081,618,000 | 1,138,900,000 | 1,152,295,000 | 1,157,270,000 | 1,133,319,000 |
| Cash and cash equivalents | 22,478,000 | 225,554,000 | 126,750,000 | 47,276,000 | 198,456,000 | 325,927,000 | ||
| Free cash flow | -9,164,000 | 63,329,000 | 59,709,000 | -48,785,000 | -9,242,000 | 172,857,000 | 208,558,000 |
Ratios
| Metric | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|
| Net margin | -17.57% | 7.14% | 6.04% | 25.45% | 20.95% | -1.05% | -31.61% | |
| Operating margin | -2.41% | 21.05% | 23.62% | 36.08% | 29.32% | -0.67% | -30.78% | |
| Return on equity | -16.02% | 8.32% | 1.91% | 8.06% | 5.86% | -0.51% | -18.21% | |
| Return on assets | 2.13% | 0.80% | 3.74% | 2.91% | -0.24% | -7.78% | ||
| Liabilities / equity | 2.91 | 1.38 | 1.16 | 1.01 | 1.09 | 1.34 | ||
| Current ratio | 4.04 | 3.70 | 4.16 | 4.56 | 6.31 | 3.22 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001880319.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q2 | 2022-06-30 | 0.04 | reported discrete quarter | ||
| 2022-Q3 | 2022-09-30 | 0.45 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 0.06 | reported discrete quarter | ||
| 2023-Q2 | 2023-03-31 | 9,431,000 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 76,137,000 | 0.31 | reported discrete quarter | |
| 2023-Q3 | 2023-06-30 | 52,014,000 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 142,658,000 | 0.12 | reported discrete quarter | |
| 2023-Q4 | 2023-12-31 | 59,455,000 | -13,241,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 59,044,000 | -82,558,000 | -0.57 | reported discrete quarter |
| 2024-Q2 | 2024-03-31 | -82,558,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 127,276,000 | 0.14 | reported discrete quarter | |
| 2024-Q3 | 2024-06-30 | 21,650,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 288,417,000 | -0.61 | reported discrete quarter | |
| 2024-Q4 | 2024-12-31 | 86,231,000 | 144,170,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 72,030,000 | 56,686,000 | 0.36 | reported discrete quarter |
| 2025-Q2 | 2025-03-31 | 56,686,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 162,639,000 | -0.22 | reported discrete quarter | |
| 2025-Q3 | 2025-06-30 | -32,161,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | 315,443,000 | -0.62 | reported discrete quarter | |
| 2025-Q4 | 2025-12-31 | 102,750,000 | -140,231,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 125,069,000 | 72,936,000 | 0.44 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001880319-26-000037.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included in Part I, Item 1 of this quarterly report on Form 10‑Q for the quarter ended March 31, 2026 (this “Quarterly Report”). This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, such statements are subject to the “safe harbor” created by those sections and involve risks and uncertainties. Forward-looking statements are based on our management’s beliefs and assumptions and on information available to our management as of the date hereof. As a result of many factors, such as those set forth under “Item 1A. Risk Factors” included in our 2025 Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements, accordingly, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Overview Perimeter Solutions, Inc. (“we,” “us,” “our,” or the “Company”) is a leading provider of industrial products and services that support critical and complex customer missions across a range of niche applications. Our current operations span firefighting products, lubricant additives, electronic components and highly engineered machinery for the medical device industry. We develop products that address complex customer challenges where there is little margin for error. Our offerings are typically a small part of a much broader solution that serves a growing end market. Our goal is to meet customer needs better than any alternative in every market we serve. We aim to maximize our organic reinvestment into our business to best serve our customers and to support the rigorous application of our Operational Value Drivers: seeking out profitable new business, structurally improving operational productivity, and sharing in value creation through value-based pricing. These Operational Value Drivers are overseen by general managers that operate in our decentralized operating structure. These managers have full operational autonomy paired with accountability to deliver results for customers and stockholders, with strong alignment between compensation and results. We believe our Operational Value Drivers maximize our free cash flow. We then seek to maximize long-term per share equity value through a clear focus on the allocation of our capital as well as the management of our capital structure. We expect the combination of free cash flow and incremental borrowing capacity generates substantial capital available to allocate. We believe our capital allocation strategy, which prioritizes first high-return organic reinvestment opportunities, followed by opportunistic share repurchases, and finally the acquisition of new businesses, is a critical factor in achieving Perimeter’s dual purposes: serving our customers well while delivering private-equity-like stockholder returns. We conduct our operations globally, with approximately 76% of our 2025 annual revenues derived in the United States, approximately 10% in Europe and approximately 7% in Canada, with the remaining approximately 7% spread across various other countries. Our long‑term vision is to build a diversified portfolio of high-quality industrial businesses via re-investment in organic growth and further acquisitions. Whether built organically or acquired, we intend to apply our strategy centered on decentralized management, our Operational Value Drivers, and thoughtful capital allocation to ensure we serve our customers well while delivering on our returns promise to stockholders. Our business is organized and managed in two reporting segments: Fire Safety and Specialty Products. The Fire Safety segment is a formulator and manufacturer of fire management products that help our customers combat various types of fires, including wildland, industrial, structural, flammable liquids and other types of fires. Our Fire Safety segment also offers specialized equipment and services, typically in conjunction with our fire management products to support our customers’ firefighting operations. Our specialized equipment includes airbase retardant storage, mixing, and delivery equipment; mobile retardant bases; retardant ground application units; mobile foam equipment; and equipment that we custom design and manufacture to meet specific customer needs. Our service network can meet the emergency resupply needs of approximately 150 air tanker bases in North America, as well as many other customer locations globally. The Fire Safety segment is built on the premise of superior technology, exceptional responsiveness to our customers’ 26 Table of Contents needs, and a “never-fail” service network. The Fire Safety segment sells products to government agencies and commercial customers around the world. Our Specialty Products segment develops, produces and markets products for non-fire safety markets. The Specialty Products segment includes Phosphorus Derivatives, Inc., which produces Phosphorus Pentasulfide (“P2S5”) based lubricant additives. P2S5 is also used in pesticide and mining chemicals applications, and emerging electric battery technologies. The Specialty Products segment also includes Intelligent Manufacturing Solutions (“IMS”), which is a manufacturer of electronic or electro-mechanical components of larger solutions. IMS has a flexible, vertically integrated production facility that allows it to acquire and produce a variety of product lines across a range of end markets, including communications infrastructure, energy infrastructure, defense systems, and industrial systems, with a substantial focus on aftermarket repair and replacement. The Specialty Products segment also includes Medical Manufacturing Technologies, LLC (“MMT”), which provides highly engineered machinery and associated aftermarket consumables, parts, and services to support the production of complex medical devices as well as select highly engineered industrial and aerospace and defense use cases. MMT’s capabilities include original equipment manufacturing, including application-specific equipment and automation solutions for medical devices such as complex catheters, guidewires and microcoils, as well as aftermarket parts, services, and consumables. MMT’s full solution suite encompasses both original machinery and recurring aftermarket parts, services, and consumables. MMT has a global footprint of manufacturing locations serving approximately 50 countries. We operate six business units within our two reporting segments. The business unit structure is meant to promote decentralized execution and accountability, and maintain the geography and product-specific focus and granularity necessary to drive continued improvement in our key operational value drivers. Each business unit has a business unit manager, who is responsible for achieving targeted financial and operational results. Our focus is on maintaining our existing customers, expanding their utilization of our products and services, growing our business in the emerging technologies markets and growth through business acquisitions. When analyzing changes in the Results of Operations section below, we define our base business as our existing operations plus operations of an acquired business once it has been owned for a full four quarters after the date of acquisition. Known Trends and Uncertainties Fire Safety Segment The effective prevention, mitigation, and suppression of fires, including wildland, structural, and other types of fires, protects lives, homes and critical infrastructure while reducing harmful air quality levels caused by wildfire smoke and the release of CO₂ emissions into the environment. Fire Safety products are mission critical and held to the highest quality standards given the extreme cost of failure. Key trends in the Fire Safety industry include: •Higher acres burned and longer fire seasons: The USDA Forest Service data of the last 40 years shows that the acreage burned in the United States has increased over time. The ten-year trailing average of acres burned in the United States has increased from a ten-year trailing average of 3.3 million acres burned in 1997, to a ten-year trailing average of 7.0 million acres burned in 2025. The U.S. fire season is also lengthening on a consistent basis. According to a 2024 report published by U.S. Department of Agriculture, the U.S. fire season is on average 78 days longer than it was in the 1970s. If acreage burned continues to increase and the fire season continues to lengthen, we expect the demand and usage of fire retardant to increase. In addition, proactive initial attack strategies by government agencies can drive earlier and more consistent use of fire retardant throughout the fire season. •Increasing wildland urban interfaces: Urban development is pushing farther out of cities and into the wilderness for both primary and secondary residences. As of 2020, the Wildland-Urban Interface (“WUI”) now includes 32% of all homes in the United States although it occupies 9.4% of the land area in the United States. According to Proceedings of the National Academy of Sciences of the United States of America, when homes are built in the WUI, we expect that there will be more wildfires due to human ignitions, and wildfires that occur will pose a greater risk to lives and homes. As the WUI expands and the number of homes at risk from wildland fires increases, we expect the use of retardant to protect property and life from threatening wildfires to increase. 27 Table of Contents •Increasing firefighting aircraft capacity and usage: The size and capacity of the firefighting aircraft fleet is a key driver of the amount of fire retardant consumed annually because demand for retardant typically outpaces available aircraft capacity, as evidenced by data regarding the inability to fill aerial firefighting requests published by the National Interagency Fire Center. Since 2010, U.S. aircraft capacity increased significantly and is expected to further increase. Increasing air tanker capacity and modernization is a global trend, with more, larger, and more sophisticated tankers being used in various parts of the world. •Move toward Fluorine Free Firefighting Foams: There is an accelerating transition in the fire suppression market towards products that do not contain intentionally added Per- and polyfluoroalkyl substances. We expect Fluorine-Free Foams (“FFF”) to account for a growing percentage of the firefighting foam market over the next several years. We believe that we are a leader in the FFF market. Specialty Products Segment P2S5 is primarily used in the preparation of lubricant additives. The consumption of lubricant additives is driven by the social and economic trends globally of increased vehicle production and miles driven. The number of global miles driven has generally increased over time resulting in more engine wear and tear and increased demand for motor oil. Secondary markets for P2S5 include agricultural applications in the production of intermediates for pesticides and insecticides, flotation chemistry in the mining industry, for certain battery technologies, and for hydraulic and cutting fluids. IMS demand is primarily driven by recurring aftermarket repair and replacement needs for installed systems across its end markets. In our MMT business, demand for ou [Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with the audited consolidated financial statements and notes thereto included in this Annual Report. This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, such statements are subject to the “safe harbor” created by those sections and involve risks and uncertainties. Forward-looking statements are based on our management’s beliefs and assumptions and on information available to our management as of the date hereof. As a result of many factors, such as those set forth under Part I, Item 1A “Risk Factors” in this Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements, accordingly, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Overview
We are a leading provider of industrial products and services that support critical and complex customer missions across a range of niche applications. Our current operations span firefighting products, lubricant additives, electronic components and, following the acquisition of Medical Manufacturing Technologies, LLC (“MMT”) in January 2026, highly engineered machinery for the medical device industry. We develop products that address complex customer challenges where there is little margin for error. Our offerings are typically a small part of a much broader solution that serves a growing end market. Our goal is to meet customer needs better than any alternative in every market we serve.
We aim to maximize our organic reinvestment into our business to best serve our customers and to support the rigorous application of our Operational Value Drivers: seeking out profitable new business, structurally improving operational productivity, and sharing in value creation through value-based pricing. These Operational Value Drivers are overseen by general managers that operate in our decentralized operating structure. These managers have full operational autonomy paired with accountability to deliver results for customers and stockholders, with strong alignment between compensation and results.
We believe our Operational Value Drivers maximize our free cash flow. We then seek to maximize long-term per share equity value through a clear focus on the allocation of our capital as well as the management of our capital structure. We expect the combination of free cash flow and incremental borrowing capacity generates substantial capital available to allocate. We believe our capital allocation strategy, which prioritizes first high-return organic reinvestment opportunities, followed by opportunistic share repurchases, and finally the acquisition of new businesses, is a critical factor in achieving Perimeter’s dual purposes: serving our customers well while delivering private-equity-like stockholder returns.
We conduct our operations globally, with approximately 76% of our annual revenues is derived in the United States, approximately 10% in Europe and approximately 7% in Canada, with the remaining approximately 7% spread across various other countries.
Our long‑term vision is to build a diversified portfolio of high-quality industrial businesses via re-investment in organic growth and further acquisitions. Whether built organically or acquired, we intend to apply our strategy centered on decentralized management, our Operational Value Drivers, and thoughtful capital allocation to ensure we serve our customers well while delivering on our returns promise to stockholders.
Our business is organized and managed in two reporting segments: Fire Safety and Specialty Products.
The Fire Safety segment is a formulator and manufacturer of fire management products that help our customers combat various types of fires, including wildland, industrial, structural, flammable liquids and other types of fires. Our Fire Safety segment also offers specialized equipment and services, typically in conjunction with our fire management products to support our customers’ firefighting operations. Our specialized equipment includes airbase retardant storage, mixing, and delivery equipment; mobile retardant bases; retardant ground application units; mobile foam equipment; and equipment that we custom design and manufacture to meet specific customer needs. Our service network can meet the emergency resupply needs of approximately 150 air tanker bases in North America, as well as many other customer locations globally. The Fire Safety segment is built on the premise of superior technology, exceptional responsiveness to our customers’ needs, and a “never-fail” service network. The Fire Safety segment sells products to government agencies and commercial customers around the world.
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Our Specialty Products segment develops, produces and markets products for non-fire safety markets. The Specialty Products segment includes Phosphorus Derivatives, Inc., which produces Phosphorus Pentasulfide (“P2S5”) based lubricant additives. P2S5 is also used in pesticide and mining chemicals applications, and emerging electric battery technologies. The Specialty Products segment also includes Intelligent Manufacturing Solutions (“IMS”), which is a manufacturer of electronic or electro-mechanical components of larger solutions. IMS has a flexible, vertically integrated production facility that allows it to acquire and produce a variety of product lines across a range of end markets, including communications infrastructure, energy infrastructure, defense systems, and industrial systems, with a substantial focus on aftermarket repair and replacement.
We completed the acquisition of MMT in January 2026, and we expect that MMT will be part of our Specialty Products Segment. MMT provides highly engineered machinery and associated aftermarket consumables, parts, and services to support the production of complex medical devices as well as select highly engineered industrial and aerospace and defense use cases. MMT’s capabilities include original equipment manufacturing, including application-specific equipment and automation solutions for medical devices such as complex catheters, guidewires and microcoils, as well as aftermarket parts, services, and consumables. MMT’s full solution suite encompasses both original machinery and recurring aftermarket parts, services, and consumables. MMT has a global footprint of manufacturing locations serving approximately 50 countries. We expect that the MMT Acquisition will result in various benefits, including strategic diversification into medical manufacturing, access to new original equipment manufacturer customer relationships, recurring aftermarket revenue streams, new opportunities for disciplined tuck‑in acquisitions and the application of our operating model to drive margin improvement and cash generation. Achieving the anticipated benefits of the MMT Acquisition is subject to a number of uncertainties, including whether our assets and businesses and the assets and businesses of MMT can be integrated in an efficient and effective manner.
We financed the MMT Acquisition primarily with the net proceeds from the $550 million offering of 6.250% senior secured notes due 2034 completed by its indirect wholly owned subsidiary, Perimeter Holdings, LLC, on January 2, 2026, together with cash on hand. The proceeds were used to pay the cash consideration for the acquisition and related fees and expenses.
Prior to the acquisition of MMT in January 2026, we operated five business units within our two reporting segments. The business unit structure is meant to promote decentralized execution and accountability, and maintain the geography- and product-specific focus and granularity necessary to drive continued improvement in our key operational value drivers. Each business unit has a business unit manager, who is responsible for achieving targeted financial and operational results.
Our focus is on maintaining our existing customers, expanding their utilization of our products and services, growing our business in the emerging technologies markets and growth through business acquisitions. When analyzing changes in the Results of Operations section below, we define our base business as our existing operations plus operations of an acquired business once it has been owned for a full four quarters after the date of acquisition.
Known Trends and Uncertainties
Fire Safety Segment
The effective prevention, mitigation, and suppression of fires, including wildland, structural, and other types of fires, protects lives, homes and critical infrastructure while reducing harmful air quality levels caused by wildfire smoke and the release of CO₂ emissions into the environment. Fire Safety products are mission critical and held to the highest quality standards given the extreme cost of failure.
Key trends in the Fire Safety industry include:
•Higher acres burned and longer fire seasons: The USDA Forest Service data of the last 40 years shows that the acreage burned in the United States has increased over time. The ten-year trailing average of acres burned in the United States has increased from a ten-year trailing average of 3.3 million acres burned in 1997, to a ten-year trailing average of 7.0 million acres burned in 2025. The U.S. fire season is also lengthening on a consistent basis. According to a 2024 report published by U.S. Department of Agriculture, the U.S. fire season is on average 78 days longer than it was in the 1970s. If acreage burned continues to increase and the fire season continues to lengthen, we expect the demand and usage of fire retardant to increase. In addition, proactive initial attack strategies by government agencies can drive earlier and more consistent use of fire retardant throughout the fire season.
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•Increasing wildland urban interfaces: Urban development is pushing farther out of cities and into the wilderness for both primary and secondary residences. As of 2020, the Wildland-Urban Interface (“WUI”) now includes 32% of all homes in the United States although it occupies 9.4% of the land area in the United States. According to Proceedings of the National Academy of Sciences of the United States of America, when homes are built in the WUI, we expect that there will be more wildfires due to human ignitions, and wildfires that occur will pose a greater risk to lives and homes. As the WUI expands and the number of homes at risk from wildland fires increases, we expect the use of retardant to protect property and life from threatening wildfires to increase.
•Increasing firefighting aircraft capacity and usage: The size and capacity of the firefighting aircraft fleet is a key driver of the amount of fire retardant consumed annually because demand for retardant typically outpaces available aircraft capacity, as evidenced by data regarding the inability to fill aerial firefighting requests published by the National Interagency Fire Center. Since 2010, U.S. aircraft capacity increased significantly and is expected to further increase. Increasing air tanker capacity and modernization is a global trend, with more, larger, and more sophisticated tankers being used in various parts of the world.
•Move toward Fluorine Free Firefighting Foams: There is an accelerating transition in the fire suppression market towards products that do not contain intentionally added Per- and polyfluoroalkyl substances. We expect Fluorine-Free Foams (“FFF”) to account for a growing percentage of the firefighting foam market over the next several years. We believe that we are a leader in the FFF market.
Specialty Products Segment
P2S5 is primarily used in the preparation of lubricant additives. The consumption of lubricant additives is driven by the social and economic trends globally of increased vehicle production and miles driven. The number of global miles driven has generally increased over time resulting in more engine wear and tear and increased demand for motor oil. Secondary markets for P2S5 include agricultural applications in the production of intermediates for pesticides and insecticides, flotation chemistry in the mining industry, for certain battery technologies, and for hydraulic and cutting fluids. IMS demand is primarily driven by recurring aftermarket repair and replacement needs for installed systems across its end markets.
Weather Conditions and Climate Trends
Our financial condition and results of operations are significantly impacted by weather as well as environmental and other factors affecting climate change, which impact the number and severity of fires in any given year. Historically, sales of our products have been higher in the summer season in the northern hemisphere of each fiscal year due to weather patterns which are generally correlated to a higher prevalence of wildfires. This is in part offset by the disbursement of our operations in both the northern and southern hemispheres, where the summer seasons alternate.
Global Economic Environment
In recent years, the global economy and labor markets have experienced significant inflationary pressures attributable to ongoing economic recovery and supply chain issues, in part due to the impacts of the conflicts in Ukraine and the Middle East. While the Company has limited exposure in regions with active conflicts, it continues to monitor and take actions with its customers and suppliers to mitigate the impact of these inflationary pressures in the future. Actions to mitigate inflationary pressures with suppliers include aggregation of purchase requirements to achieve optimal volume benefits, negotiation of cost-reductions and identification of more cost competitive suppliers. While these actions are designed to offset the impact of inflationary pressures, the Company cannot provide assurance that they will be successful in fully offsetting increased costs resulting from inflationary pressure. In addition, interest payments for borrowings under the Company’s revolving credit facility are based on variable rates, and any continued increase in interest rates may reduce the Company’s cash flow available for other corporate purposes.
Additionally, amid broader volatility in the global economy, certain raw materials and components used in our manufacturing processes may be subject to announced tariffs on imported goods by the United States, Canada, and other countries. However, tariffs have not had, and we do not currently expect tariffs to have, a material impact on our financial position or results of operations, as substantially all of the Company’s products sold in the United States are supported by domestic manufacturing capabilities. The Company prioritizes sourcing raw materials domestically and continues to maintain alternative supply sources. Although the ultimate impact of tariff policies, coupled with broader macroeconomic challenges, remains uncertain, the Company is actively monitoring developments to identify necessary actions to maintain its competitiveness and adapt to changing economic conditions.
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Results of Operations
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024
The following table sets forth our results of operations for the years ended December 31, 2025 and December 31, 2024 (in thousands):
Year Ended December 31,
Change
2025
2024
$
%
Net sales
$
652,862
$
560,968
$
91,894
16
%
Cost of goods sold
277,712
243,882
33,830
14
%
Gross profit
375,150
317,086
58,064
18
%
Operating expenses
Selling, general and administrative expense
77,575
66,901
10,674
16
%
Amortization expense
59,696
55,032
4,664
8
%
Founders advisory fees - related party
435,163
198,308
236,855
119
%
Other operating expense
3,646
612
3,034
496
%
Total operating expenses
576,080
320,853
255,227
80
%
Operating loss
(200,930)
(3,767)
(197,163)
5234
%
Other expense (income):
Interest expense, net
39,135
40,461
(1,326)
(3
%)
Foreign currency (gain) loss
(3,038)
2,443
(5,481)
(224
%)
Other (income) expense, net
(780)
192
(972)
(506
%)
Total other expense, net
35,317
43,096
(7,779)
(18
%)
Loss before income taxes
(236,247)
(46,863)
(189,384)
404
%
Income tax benefit
29,881
40,958
(11,077)
(27
%)
Net loss
$
(206,366)
$
(5,905)
$
(200,461)
3395
%
Net Sales. Net sales increased by $91.9 million for the year ended December 31, 2025, compared to the same period in 2024. Net sales in the Fire Safety segment increased $52.7 million, representing higher fire retardant sales of $30.9 million, and higher fire suppressant sales of $21.8 million. Fire retardant sales increased $12.6 million in North America and $18.3 million in other geographies. In the United States, sales of fire retardant products rose despite a decline in total acres burned. This increase primarily reflected a more proactive initial attack strategy by U.S. agencies, and the continued successful implementation of the Company’s strategies on profitable new business. Fire Suppressant sales increased $19.0 million in North America, primarily driven by increased sales to governmental agencies, and increased $2.8 million in other geographies. Net sales in the Specialty Products segment increased $39.2 million, including a $41.2 million increase in revenue due to recently acquired businesses, offset by a $2.0 million decrease in the base business primarily due to unplanned downtime at our tolling facility in Sauget, Illinois, operated by Flexsys Chemical Company, that primarily serves our P2S5 customers in North America. The Company considers that revenue attributable to base business includes revenue from an acquired business that has been owned for a full four quarters after the date of acquisition.
Cost of Goods Sold. Cost of goods sold increased by $33.8 million for the year ended December 31, 2025 compared to the same period in 2024. Cost of goods sold increased in the Fire Safety segment by $1.3 million and increased by $32.5 million in the Specialty Products segment, which was primarily due to an increase of $28.4 million from recently acquired businesses.
Selling, General and Administrative Expense. Selling, general and administrative expense increased by $10.7 million for the year ended December 31, 2025 compared to the same period in 2024. The increase was primarily due to a $4.0 million increase in stock-based compensation expense and an $8.6 million increase in other personnel-related expenses, which was primarily related to recently acquired businesses.
Founder advisory fees - related party. The founder advisory fees - related party represents the change in the fair value of the liability-classified Fixed Annual Advisory Amount and Variable Annual Advisory Amount (collectively, the “Annual Advisory Amounts”). The increase in the fair value of the Annual Advisory Amounts for the year ended December 31, 2025 of $435.2 million was primarily due to an increase in the Company’s average price per share from $12.85 as of December 31, 2024 to $27.89 as of December 31, 2025. The increase in the fair value of the Annual Advisory
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Amounts for the year ended December 31, 2024 of $198.3 million was primarily due to an increase in the Company’s average price per share from $4.51 as of December 31, 2023 to $12.85 as of December 31, 2024.
Income Tax Benefit. Income tax benefit decreased by $11.1 million for the year ended December 31, 2025 compared to the same period in 2024. The decrease is primarily due to changes in earnings in jurisdictions that were not covered by a valuation allowance and the impact of non-deductible compensation and accrued withholding taxes on the effective tax rate.
Business Segments
Segment Adjusted earnings before interest, taxes, depreciation and amortization (“Segment Adjusted EBITDA”) is defined as income (loss) before income taxes plus net interest and other financing expenses, and depreciation and amortization, adjusted on a consistent basis for certain non-recurring, unusual or non-operational items. These items include (i) restructuring, (ii) acquisition related costs, (iii) founder advisory fee expenses, (iv) stock-based compensation expense and (v) foreign currency (gain) loss. We use Segment Adjusted EBITDA, to evaluate operating performance by segment, for business planning purposes and to allocate resources. The following tables provide information for our net sales and Segment Adjusted EBITDA (in thousands):
Year Ended December 31, 2025
Year Ended December 31, 2024
Fire Safety
Specialty
Products
Total
Fire Safety
Specialty
Products
Total
Net sales
$
488,941
$
163,921
$
652,862
$
436,274
$
124,694
$
560,968
Segment Adjusted EBITDA
$
290,487
$
41,203
$
331,690
$
240,121
$
40,173
$
280,294
Segment Adjusted EBITDA for our Fire Safety segment increased by $50.4 million for the year ended December 31, 2025 compared with the same period in 2024. The increase was primarily due to higher net sales, as described above. Costs grew at a slower pace than revenues due to strong cost control, product mix and fixed costs leverage.
Segment Adjusted EBITDA for our Specialty Products segment for the year ended December 31, 2025 was relatively flat compared to the same period in 2024 as contributions from recently acquired businesses were partially offset by unplanned downtime at the Sauget, Illinois tolling facility, as discussed above, which caused higher costs despite lower revenue.
The following table provides a reconciliation of financial measures that are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) to Non-GAAP measures. The Company believes that these non-GAAP financial measures are useful to investors because they provide investors with a better understanding of the Company’s past financial performance and future results. The Company’s management uses these non-GAAP financial measures when it internally evaluates the performance of its business and makes operating decisions, including internal operating budgeting, performance measurement, and discretionary compensation. Segment Adjusted EBITDA should not be considered an alternative to net income (loss), operating income (loss), cash flows provided by (used in) operating activities or any other measure of financial performance or liquidity presented in accordance with U.S. GAAP (in thousands).
(Unaudited)
Year Ended December 31, 2025
Year Ended December 31, 2024
Fire Safety
Specialty
Products
Total
Fire Safety
Specialty
Products
Total
Loss before income taxes
$
(182,537)
$
(53,710)
$
(236,247)
$
(35,277)
$
(11,586)
$
(46,863)
Depreciation and amortization
55,397
18,635
74,032
51,365
14,353
65,718
Interest and financing expense
24,059
15,076
39,135
39,547
914
40,461
Founders advisory fees - related party
381,106
54,057
435,163
169,886
28,422
198,308
Non-recurring expenses (1)
955
1,465
2,420
5,559
1,207
6,766
Acquisition costs
98
3,480
3,578
—
612
612
Stock-based compensation expense
12,207
4,440
16,647
8,545
4,304
12,849
Foreign currency (gain) loss
(798)
(2,240)
(3,038)
496
1,947
2,443
Segment Adjusted EBITDA
$
290,487
$
41,203
$
331,690
$
240,121
$
40,173
$
280,294
(1) For the year ended December 31, 2025, $1.1 million was related to restructuring and other non-recurring costs, $0.7 million was related to litigation costs arising from a contractual dispute regarding control of the P2S5 facility, which is currently operated by Flexsys Chemical Company, and $0.6 million was related to the Redomiciliation Transaction. For the year ended December 31, 2024, $6.6 million was related to the Redomiciliation Transaction and other non-recurring Luxembourg related costs and $0.2 million was related to other non-recurring costs.
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Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023
For a detailed discussion of our consolidated results of operations for December 31, 2024 compared to December 31, 2023, refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 20, 2025.
Liquidity and Capital Resources
We have historically funded our operations primarily through cash flows from operations, borrowings under our amended and restated revolving credit facility, and the issuance of debt and equity securities. However, future cash flows are subject to a number of variables, including the length and severity of the fire season, growth of the wildland urban interface and the availability of air tanker capacity, and higher costs from inflation, all of which could negatively impact revenues, earnings and cash flows, and potentially our liquidity if we do not moderate our expenditures accordingly.
We have the following financing arrangements in place to, among other things, fund our operations and supplement our liquidity position.
Revolving Credit Facility
On December 19, 2025, a wholly owned subsidiary of the Company entered into a credit agreement for its five-year revolving credit facility (the “Amended and Restated Revolving Credit Facility”), which provides for a senior secured revolving credit facility in an aggregate principal amount of up to $200.0 million. The Amended and Restated Revolving Credit Facility matures on December 19, 2030. The Amended and Restated Revolving Credit Facility includes a $40.0 million swingline sub-facility and a $50.0 million letter of credit sub-facility. The Company incurred $2.2 million of deferred finance fees as a result of the Amended and Restated Revolving Credit Facility for the year ended December 31, 2025.
Borrowings under the Amended and Restated Revolving Credit Facility bear interest at a rate equal to (i) an applicable margin, plus (ii) at the Company’s option, either (x) Secured Overnight Financing Rate for the applicable corresponding tenor (“Term SOFR”) as published by CME Group Benchmark Administration, subject to a Floor of 1.00% or (y) a base rate determined by reference to the highest of (a) the prime commercial lending rate published by the Wall Street Journal, (b) the federal funds rate plus 0.50%, (c) the one-month Term SOFR rate plus 1.00% and (d) 1.00%. The applicable margin is 2.75% in the case of Term SOFR-based loans and 1.75% in the case of base rate-based loans, with two step-ups of 0.25% each based upon the achievement of certain leverage ratios.
As of December 31, 2025, the Company did not have any outstanding borrowings under the Amended and Restated Revolving Credit Facility and was in compliance with all covenants, including the financial covenants.
Senior Notes
On November 9, 2021, a wholly owned subsidiary of the Company assumed $675.0 million principal amount of 5.00% senior secured notes due October 30, 2029 (the “2029 Notes”), under an indenture dated as of October 22, 2021. The 2029 Notes bear interest at an annual rate of 5.00%. Interest on the 2029 Notes is payable in cash semi-annually in arrears on April 30 and October 30 of each year.
On January 2, 2026, Perimeter Holdings, LLC (“Perimeter Holdings”), an indirect wholly owned subsidiary of the Company, completed its offering of $550 million in aggregate principal amount of 6.250% senior secured notes due 2034 (the “2034 Notes”) in transactions that were exempt from the registration requirements of the Securities Act. The 2034 Notes were issued under an indenture, dated as of January 2, 2026. The 2034 Notes mature on January 15, 2034, and bear interest at a rate of 6.250% per annum, payable in cash semi-annually in arrears on January 15 and July 15 of each year, commencing on July 15, 2026. The Company used the net proceeds of the 2034 Notes, together with cash on hand, to pay the cash consideration for the acquisition of MMT and related fees and expenses.
The 2029 Notes and the 2034 Notes are general, secured, senior obligations of Perimeter Holdings; rank equally in right of payment with all existing and future senior indebtedness of Perimeter Holdings (including, without limitation, the
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Amended and Restated Revolving Credit Facility); and together with the Amended and Restated Revolving Credit Facility, are effectively senior to all existing and future indebtedness that is not secured by the collateral.
The 2029 Notes and the 2034 Notes are subject to customary negative covenants, including but not limited to, certain limitations, including among other things, the ability to declare or pay dividends or make certain other payments, purchase, redeem or otherwise acquire or retire for value any equity interests or otherwise make any restricted payments, conduct certain asset sales, make certain restricted investments; incur certain indebtedness, grant certain liens, enter into certain transactions with affiliates, and consolidate, merge or transfer all or substantially all of the assets of our subsidiaries on a consolidated basis. The indentures governing the 2029 Notes and the 2034 Notes also contain customary events of default and remedies (including acceleration). As of December 31, 2025, the Company was in compliance with all covenants, including financial covenants.
For additional information about our long-term debt, refer to Note 7, “Long-Term Debt and Preferred Stock” and Note 18, “Subsequent Events” in the notes to the consolidated financial statements included in this Annual Report.
Share Repurchase Plan
Under the Share Repurchase Plan, we are authorized to repurchase, from time-to-time, shares of our Common Stock through open market purchases, in privately negotiated transactions or in such other manner as permitted by securities law and as determined by management at such time and in such amounts as management may decide. The Share Repurchase Plan does not obligate us to repurchase any specific number of shares and may be modified, suspended or discontinued at any time. The timing, manner, price and amount of any repurchases are determined by management in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions.
On August 6, 2025, the Board re-established the limit for Common Stock repurchases at $100.0 million. The Company expects to periodically re-establish the limit for Common Stock repurchases based on subsequent repurchase activity.
The approximate dollar value of shares that may yet be repurchased under the Share Repurchase Plan was $100.0 million as of December 31, 2025. During the years ended December 31, 2025 and 2024, the Company repurchased 3,774,675 and 2,988,291 shares, respectively. The repurchased shares are recorded at cost and are being held in treasury.
For additional information about our Share Repurchase Plan, refer to Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities,” and Note 10, “Equity,” in the notes to the consolidated financial statements included in this Annual Report.
Founder Advisory Agreement
On December 12, 2019, EverArc and the EverArc Founder Entity entered into the Founder Advisory Agreement (as assumed by the Company) to provide incentives to the EverArc Founders to achieve the Company’s objectives. In exchange for the services provided to the Company, including strategic and capital allocation advice, the EverArc Founder Entity is entitled to receive both a Fixed Annual Advisory Amount and a Variable Annual Advisory Amount until the years ending December 31, 2027 and 2031, respectively. Under the Founder Advisory Agreement, at the election of the EverArc Founder Entity, at least 50% of the Advisory Amounts will be paid in shares of Common Stock and the remainder in cash.
The Fixed Annual Advisory Amount is equal to 2,357,061 shares of Common Stock (1.5% of 157,137,410 shares outstanding as of November 9, 2021) for each year through December 31, 2027 and valued using the period end volume weighted average closing share price of the Company’s Common Stock for ten consecutive trading days. The Variable Annual Advisory Amount for each year through December 31, 2031 is based on the appreciation of the market price of the Company’s Common Stock if such market price exceeds certain trading price minimums at the end of each reporting period and is valued using a Monte Carlo simulation model. Because up to 50% of the aggregate shares could be settled through a cash payment, 50% are classified as a liability and the remaining 50% is classified within equity. For Advisory Amounts classified within equity, the Company does not subsequently remeasure the fair value. For the Advisory Amounts classified as a liability, the Company remeasures the fair value at each reporting date. As a result, the compensation expense recorded by the Company in the future will depend upon changes in the fair value of the liability-classified Advisory Amounts.
As of December 31, 2025, the Advisory Amounts payable to the EverArc Founder Entity over the remaining term of the Founder Advisory Agreement, excluding the portion payable for the 2025 Annual Advisory Amount, was $881.4 million. The fair value of the Fixed Annual Advisory Amount was calculated to be $131.3 million based on the period end
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volume weighted average closing share price for ten consecutive trading days of Common Stock of $27.89 and the fair value of the Variable Annual Advisory Amount was determined to be $750.1 million using a Monte Carlo simulation model.
For 2025, the EverArc Founder Entity is entitled to receive a Fixed Annual Advisory Amount of 2,357,061 shares of Common Stock or a value of $65.7 million, based on an average price of $27.89 per share (the “2025 Fixed Amount”). The EverArc Founder Entity is also entitled to receive a Variable Annual Advisory Amount for 2025 of 14,462,123 shares of Common Stock, or a value of $403.4 million (the “2025 Variable Amount” and together with the 2025 Fixed Amount, the “2025 Advisory Amounts”). The EverArc Founder Entity elected to receive approximately 79.6% of the 2025 Advisory Amounts in shares of Common Stock (13,387,002 Common Shares) and approximately 20.4% of the 2025 Advisory Amounts in cash ($95.7 million). To satisfy the 2025 Advisory Amounts, the Company paid $95.7 million in cash on February 19, 2026 and expects to issue 13,387,002 shares of Common Stock in the first quarter of 2026.
For additional information about the Founder Advisory Agreement, refer to Note 13, “Related Parties,” in the notes to the consolidated financial statements included in this Annual Report.
We believe that our existing cash and cash equivalents of approximately $325.9 million, net cash flows generated from operations, availability under the Amended and Restated Revolving Credit Facility as of December 31, 2025, and proceeds from the 2034 Notes will be sufficient to meet our current capital expenditures, working capital, founders’ advisory fee payments, debt service requirements, and consideration payable for the MMT acquisition for at least 12 months from the filing date of this Annual Report. Our fiscal year 2026 capital expenditure authorization is approximately $35 million, which we expect will cover both our maintenance and growth capital expenditure requirements. We may also utilize borrowings available to us under various other financing sources, including the issuance of equity and/or debt securities through public offerings or private placements, to fund our acquisitions, pay the 2025 Advisory Amounts and meet long-term liquidity needs. Our ability to complete future offerings of equity or debt securities and the timing of these offerings will depend upon various factors including prevailing market conditions and our financial condition.
Cash flows
The summary of our cash flows is as follows (in thousands):
Year Ended December 31,
2025
2024
Cash provided by (used in):
Operating activities
$
238,149
$
188,388
Investing activities
(106,817)
(42,940)
Financing activities
(8,971)
8,349
Effect of foreign currency on cash and cash equivalents
5,110
(2,617)
Net change in cash and cash equivalents
$
127,471
$
151,180
Operating Activities
Cash provided by operating activities was $238.1 million and $188.4 million for the years ended December 31, 2025 and 2024, respectively. For the year ended December 31, 2025, the primary components of operating cash flows were net loss of $206.4 million, non-cash charges of $464.9 million and net operating asset investments of $20.4 million. For the year ended December 31, 2024, the primary components of operating cash flows were net loss of $5.9 million, non-cash charges of $193.7 million and net operating asset reductions of $0.6 million. The non-cash charges for the years ended December 31, 2025 and 2024 were primarily related to Founders advisory fees, offset by deferred income taxes.
Investing Activities
Cash used in investing activities was $106.8 million and $42.9 million for the years ended December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, we purchased businesses for $62.0 million, purchased property and equipment of $29.6 million, and purchased intangible assets of $15.2 million. During the year ended December 31, 2024, we purchased a business for $32.8 million and purchased property and equipment of $15.5 million
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offset by proceeds from short-term investments of $5.4 million upon settlement of a Euro denominated certificate of deposit.
Financing Activities
Cash (used in) provided by financing activities was $(9.0) million and $8.3 million for the years ended December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, we repurchased shares of outstanding Common Stock for $40.4 million, paid $2.2 million for credit facility financing fees, and made $0.9 million in principal payments on finance lease obligations offset by $34.5 million in proceeds from exercises of options. During the year ended December 31, 2024, we repurchased outstanding Ordinary Shares for $14.4 million and made $0.7 million in principal payments on finance lease obligations offset by $23.5 million in proceeds from exercises of warrants.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023
For a detailed discussion of our Liquidity and Capital Resources for December 31, 2024 compared to December 31, 2023, refer to Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 20, 2025.
Critical Accounting Estimates and Policies
Our consolidated financial statements have been prepared in conformity with U.S. GAAP, which often requires the judgment of management in the selection and application of certain accounting principles and methods. The preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities and expenses. On an ongoing basis, we evaluate these estimates and judgments. We based our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results could, therefore, differ materially from these estimates under different assumptions or conditions.
We have identified the following estimates as our most critical accounting estimates, which are those that are most important to aid in fully understanding and evaluating the Company’s financial condition and results of operations, and that require management’s most subjective and complex judgments. Information regarding our other significant accounting estimates and policies are described in more detail in Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” in the notes to the consolidated financial statements included in this Annual Report. We believe that the following accounting estimates and policies are most critical to the judgments and estimates used in the preparation of the consolidated financial statements.
Stock-Based Compensation
We have granted equity-based awards consisting of performance-based non-qualified stock options ("PBNQSO") to key employees, officers and directors. The PBNQSO are subject to performance conditions such that the number of awards that ultimately vest depends on the calculation of annual operational performance per diluted share (“AOP”) during the performance period compared to targets established at the award date. The probability assessments of achieving the AOP targets is determined using estimated Adjusted EBITDA, net debt and diluted shares. The Company recognizes compensation costs related to PBNQSO granted to employees and non-employees based on the estimated fair value of the awards on the date of grant using the Hull-White model as this model considers the future movement in the price of the Company’s shares of Common Stock and option holders’ behavior with respect to option exercises.
The Hull-White model requires us to make assumptions and judgments about the variables used in the calculation, including the sub-optimal exercise factor, drift rate, the blended volatility based on the Company’s trading history of its shares of Common Stock and on the trading history from the common stock of a set of comparable publicly listed companies, risk-free interest rate, and expected dividends. Changes in assumptions made on the risk-free interest rate and expected volatility can materially impact the estimate of fair value and ultimately how much stock-based compensation expense is recognized.
Service-based restricted stock units are valued using the market price of our shares of Common Stock on the grant date. The grant date fair value of the restricted stock units is expensed on a straight-line basis over the applicable vesting period.
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Under the Founder Advisory Agreement, in exchange for the services provided to the Company, including strategic and capital allocation advice, the EverArc Founders Entity is entitled to receive both a Fixed Annual Advisory Amount and a Variable Annual Advisory Amount until the years ending December 31, 2027 and 2031, respectively. At the election of the EverArc Founders Entity, at least 50% of the Advisory Amounts will be paid in shares of Common Stock and the remainder in cash. The Fixed Annual Advisory Amount will be equal to 2,357,061 shares of Common Stock (1.5% of 157,137,410 shares outstanding as of November 9, 2021) for each year through December 31, 2027 and valued using the period end volume weighted average closing price of the Company’s shares of Common Stock for ten consecutive trading days. The Variable Annual Advisory Amount for each year through December 31, 2031 is based on the appreciation of the market price of the Company’s shares of Common Stock if such market price exceeds certain trading price minimums at the end of each reporting period. This liability is estimated at the end of each reporting period using a Monte Carlo simulation model, which requires the input of certain assumptions, including the volatility based on the Company’s trading history of its shares of Common Stock, risk-free interest rate, and expected dividends. Changes in assumptions made on the risk-free interest rate and expected volatility can materially impact the estimate of fair value and ultimately how much founder advisory fee expense is recognized.
Business Combinations
We account for our business combinations using the acquisition accounting method, which requires us to determine and recognize assets acquired and liabilities assumed at their acquisition date fair value, including any contingent consideration and the recognition of acquisition-related costs in the consolidated statements of operations and comprehensive (loss) income.
Accounting for business combinations requires us to make significant estimates and assumptions at the acquisition date, including estimates of the fair value of acquired inventory, property and equipment, identifiable intangible assets, contractual obligations assumed, preacquisition contingencies, if applicable, and equity issued. Significant assumptions relevant to the determination of the fair value of the assets acquired and liabilities assumed may from time to time include, but are not limited to, future expected cash flows, discount rates, royalty rates, and other assumptions. The approach to valuing an initial contingent consideration associated with the purchase price also uses similar unobservable factors such as projected revenues and expenses over the term of the contingent earn-out period, discounted for the period over which the initial contingent consideration is measured, and relevant volatility rates. Based upon these assumptions, the initial contingent consideration is then valued using a Monte Carlo simulation. These significant assumptions are based on company specific information and projections, which are not observable in the market and, therefore, are considered Level 2 and Level 3 measurements. These significant assumptions are forward-looking and could be affected by future changes in economic and market conditions.
We generally use third-party qualified consultants to assist management in determining the fair value of assets acquired and liabilities assumed. This includes, when necessary, assistance with the determination of economic useful lives and valuation of property, plant and equipment and identifiable intangible assets. The purchase price allocation process also entails us to refine these estimates over a measurement period not to exceed one year to reflect new information obtained surrounding facts and circumstances existing at acquisition date. The excess of the purchase price over the fair value of the identified assets acquired and liabilities assumed is recorded as goodwill.
New Accounting Standards
For information about new accounting standards, see Note 2, “Summary of Significant Accounting Policies and Recent Accounting Pronouncements” in the notes to the consolidated financial statements included in this Annual Report.