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What changed in APi Group Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of APi Group Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+327 added−367 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in APi Group Corp's 2025 10-K

327 paragraphs added · 367 removed · 274 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

63 edited+14 added−18 removed41 unchanged
Biggest changeNearly all facilities that have existing life safety systems are required by law to have that system inspected on at least an annual basis. This strategy differentiates us from our peers and we believe ultimately creates a stickier client relationship that we believe leads to recurring revenue, higher margins, and growth opportunities. Attractive Industry Fundamentals.
Biggest changeThis strategy differentiates us from our peers and we believe this ultimately creates a stickier customer relationship that leads to recurring revenue, higher margins, and growth opportunities. Attractive Industry Fundamentals. We believe that the diversity of the end markets we serve and the regulatorily-driven demand for certain of our services will enable us to better withstand various economic cycles.
In some cases, laws and regulations outside of the U.S. impose different obligations or are more restrictive than those in the U.S. These regulations are administered by various regional, national, state, and local health and safety and environmental agencies and authorities.
In some cases, laws and regulations outside of the U.S. impose different obligations or are more restrictive than those in the U.S. These regulations are administered by various national, regional, state, and local health, safety, and environmental agencies and authorities.
We make available free of charge, through our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act and proxy statements for our annual meeting of stockholders, as soon as reasonably practicable after each such material is electronically filed with or furnished to the SEC.
We make available free of charge, through our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, all amendments and exhibits to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act and proxy statements for our annual meeting of stockholders, as soon as reasonably practicable after each such material is electronically filed with or furnished to the SEC.
Through our NSG team, we are able to quickly and efficiently allocate resources to meet customer needs. Insurance and Legal Proceedings The primary insured risks in our operations are bodily injury, property damage and workers’ compensation injury.
Through our NSG team, we are able to quickly and efficiently allocate resources to meet customer needs. Insurance and Legal Proceedings The primary insured risks in our operations are bodily injury, property damage and workers’ compensation claims.
We also have a stable cash flow profile driven by our focus on recurring services-based revenue and our asset-light business model, which requires minimal ongoing capital expenditures (which are typically less than 1.5% of total net revenues). The mission-critical nature of our services and regulatory-driven inspection requirements provide predictable, recurring revenue stream opportunities.
We also have a stable cash flow profile driven by our focus on recurring services-based revenue and our asset-light business model, which requires minimal ongoing capital expenditures (which are typically less than 1.5% of total net revenues). The mission-critical nature of our services and regulatorily-driven inspection requirements provide predictable, recurring revenue stream opportunities.
Our continued success will depend, in part, on our ability to continue to attract, motivate, retain, and reward high-quality, skilled employees. Health & Safety We have a safety culture that is grounded in our commitment to zero incidents. We have established safety standards covering the risks particular to our business, deployed through specific training and monitored by country-level inspection programs.
Our continued success will depend, in part, on our ability to continue to attract, motivate, retain, and reward high-quality, skilled employees. Health & Safety We have a safety culture that is grounded in our commitment to zero incidents. We have established safety standards covering the risks particular to our business, deployed through specific training and monitored by inspection programs.
Accelerate Growth through Acquisitions. We have a well-established acquisition platform with a track record of executing accretive acquisitions through our selective approach to targeting and assessing potential acquisitions that we believe align with our values and strategic priorities. We believe that the global markets and platforms in which we operate are fragmented and lend themselves to continued opportunistic acquisitions.
Supplement Growth through Acquisitions. We have a well-established acquisition platform with a track record of executing accretive acquisitions through our selective approach to targeting and assessing potential acquisitions that we believe align with our values and strategic priorities. We believe that the global markets and platforms in which we operate are fragmented and lend themselves to continued opportunistic acquisitions.
Our acquired businesses benefit from direct access to the APG network, which facilitates organizational sharing of knowledge and best practices, increases collaboration across our businesses, and develops cross-brand solutions which foster enhanced experience, quality, and efficiency. Differentiated Leadership Culture and Operating Model.
Our acquired businesses benefit from direct access to the APG network, which facilitates organizational sharing of knowledge and best practices, increases collaboration across our businesses, and develops cross-brand solutions which foster enhanced experiences, quality, and efficiency. Differentiated Leadership Culture and Operating Model.
These laws and regulations involve matters including compliance with codes or regulations governing our services, licensing and certification requirements, environmental and substance control, workplace safety, privacy, data use, data security and protection of personal information, data storage and retention, biometrics, intellectual property, advertising, marketing, distribution, electronic contracts and other communications, competition, taxation, economic or other trade prohibitions or sanctions, anti-corruption and political law compliance, securities law compliance, 7 Table of Contents and financial services.
These laws and regulations involve matters including compliance with codes or regulations governing our services, licensing and certification requirements, environmental and substance control, workplace safety, privacy, data use, data security and protection of personal information, data storage and retention, biometrics, intellectual property, advertising, marketing, distribution, electronic contracts and other communications, competition, taxation, economic or other trade prohibitions or sanctions, anti-corruption and political law compliance, securities law compliance, and financial services.
Our team of over one hundred safety professionals support the operations in each business to ensure industry safety standards are met and audits by safety professionals or certified organizations are utilized to assess the maturity of our safety management systems. Our rate of incidents recordable under the standards of the U.S.
Our team of over one hundred safety professionals support the operations in each business to ensure industry safety standards are met. Audits are conducted by our safety professionals and certified organizations are utilized to assess the maturity of our safety management systems. Our rate of incidents recordable under the standards of the U.S.
Growing and Developing our People Our number one value and priority is the safety, health and well-being of all of our approximately 29,000 team members, all of whom are critical to the execution of our strategies and achieving business success. 9 Table of Contents Talent Development and Engagement We believe our success in attracting and retaining qualified team members will be based on the quality of our training, leadership development and opportunities for growth and advancement.
Growing and Developing our People Our number one value and priority is the safety, health, and well-being of our approximately 29,000 team members, all of whom are critical to the execution of our strategies and achieving business success. 9 Table of Conten t s Talent Development and Engagement We believe our success in attracting and retaining qualified team members will be based on the quality of our training, leadership development and opportunities for growth and advancement.
Supply We have multiple supply sources in various markets at competitive pricing for substantially all of our raw material and installed components. The raw materials and various purchased components we use such as piping, steel, sheet metal, fire suppression/detection, elevator/escalator components, and HVAC equipment have generally been available in sufficient quantities in a timely manner.
Supply We have multiple supply sources in various markets at competitive pricing for substantially all of our raw material and installed components. The raw materials and various purchased components we use such as piping, steel, sheet metal, fire suppression/detection, elevator/escalator components, and Heating, Ventilation, and Air Conditioning ("HVAC") equipment have generally been available in sufficient quantities in a timely manner.
As these associations and government agencies continue to adopt new, more stringent regulations, the demand for our services increases. Deferred Infrastructure Investment. Following several years of deferred investment, the aging United States ("U.S.") infrastructure system requires significant maintenance, repair and retrofit services which has spurred demand in our industry.
As these associations and government agencies continue to adopt new, more stringent regulations, the demand for our services increases. 4 Table of Conten t s Deferred Infrastructure Investment. Following several years of deferred investment, the aging United States ("U.S.") infrastructure system requires significant maintenance, repair and retrofit services which has spurred demand in our industry.
Competitive Environment We operate in industries which are highly competitive and highly fragmented. There are relatively few barriers to entry in many of the industries in which we operate, and as a result, any organization that has adequate financial resources and access to technical expertise could become a competitor.
There are relatively few barriers to entry in many of the industries in which we operate, and as a result, any organization that has adequate financial resources and access to technical expertise could become a competitor.
We believe that one of our core pillars of success is our distinct leadership development culture predicated on Building Great Leaders ® , our cross-functional leadership development platform designed to enable independent company leadership, cultivate broad management skills, enhance organizational flexibility, and empower the next cohort of leaders across our businesses.
We believe that one of our core pillars of success is our distinct leadership development culture predicated on our purpose of Building Great Leaders ® , which is designed to enable independent company leadership, cultivate broad management skills, enhance organizational flexibility, and empower the next cohort of leaders across our businesses.
We employ a regional operating model designed to improve speed and responsiveness to our customers across our businesses, empower leadership of our businesses to drive business performance and execute key decisions, and foster cross-functional sharing of best practices.
We have a decentralized operating model designed to improve speed and responsiveness to our customers across our businesses, empower leadership of our businesses to drive business performance and execute key decisions, and foster cross-functional sharing of best practices.
Occupational Safety and Health Administration ("OSHA") per one hundred employees per year, also known as the OSHA recordable rate, was 0.97 during 2024 and 0.96 during 2023. Our rate of 0.97 is considerably less than the most recently published OSHA rate for our industry of 2.3.
Occupational Safety and Health Administration ("OSHA") per one hundred employees per year, also known as the OSHA recordable rate, was 0.87 during 2025 and 0.97 during 2024. Our rate of 0.87 is considerably less than the most recently published OSHA rate for our industry of 2.2.
We believe that, due to our differentiated operating model, diversified services offerings, historically strong organic growth, and disciplined acquisition strategy, we have an attractive financial performance profile. In addition, we support margin growth by leveraging our scale to benefit from procurement savings resulting from enhanced purchasing power and serving higher-margin, niche industries.
We believe that, due to our differentiated operating model, diversified services offerings, historically strong organic growth, and disciplined acquisition strategy, we have an attractive financial performance profile. In addition, we support margin expansion by leveraging our scale to benefit from procurement savings resulting from enhanced purchasing power and serving higher-margin, diverse set of end markets.
We believe that we can continue to grow our businesses organically and capture additional market share across each of our segments by focusing on growing maintenance, inspection, monitoring, and service revenue and maximizing cross-selling opportunities. • Grow Maintenance, Inspection, Monitoring, and Service Revenue - We believe that we can drive substantial organic growth by focusing on growing our maintenance, inspection, monitoring, and service revenue, which is a component of our business in each of our segments.
We believe that we can continue to grow our businesses organically and capture additional market share across each of our segments by focusing on the following: • Grow Inspection, Service, and Monitoring Revenue - We believe that we can drive substantial organic growth by focusing on growing our inspection, service, and monitoring revenue, which is a component of our business in each of our segments.
Executive Officers Set forth below is certain information relating to our current executive officers. Name Age Title Russell A. Becker 59 Chief Executive Officer and President Glenn David Jackola 45 Interim Chief Financial Officer Louis B. Lambert 49 Senior Vice President, General Counsel and Secretary Kristina M.
Executive Officers Set forth below is certain information relating to our current executive officers. Name Age Title Russell A. Becker 60 Chief Executive Officer and President Glenn David Jackola 46 Executive Vice President and Chief Financial Officer Louis B. Lambert 50 Senior Vice President, General Counsel and Secretary Kristina M.
We believe that our core strategies of driving organic growth and growth through accretive acquisitions, promoting sharing of best practices across all of our businesses, and leveraging our scale and services offerings place us in the position to capitalize on opportunities and trends in the industries we serve, grow our businesses, and advance our position in each of our markets.
We believe that our core strategies of driving sustainable organic growth, growing through accretive acquisitions, promoting the sharing of best practices across all of our businesses, and leveraging our scale and service offerings place us in a unique position to capitalize on opportunities in the industries we serve and advance our position in each of our markets.
Maintenance and services revenues are less cyclical and are reasonably recurring due to the consistent renewal rates and deep customer relationships. Our Business Strategy We intend to continue to grow our businesses, both organically and through acquisitions, and advance our position in each of the markets we serve by pursuing the following integrated business strategies: Drive Organic Growth.
Inspection, service, and monitoring revenue is less cyclical and reasonably recurring due to the consistent renewal rates and deep customer relationships. Our Business Strategy We intend to continue to grow our businesses, both organically and through acquisitions, and advance our position in each of the markets we serve by pursuing the following integrated business strategies: Drive Organic Growth.
We believe that we are one of the go-to-market leaders in each of the niche industries we serve, including the industry leader in life safety and security services, among the top five specialty contractors in North America, and a premier provider of services for elevator and escalator equipment.
We believe that we are one of the go-to-market leaders in each of the diverse set of end markets we serve, including the industry leader in life safety and electronic security services, among the top five specialty contractors in North America, and a premier provider of services for elevators and escalators.
Fluctuations in end-user demand, or in the supply of services within those industries, can affect demand for our services. As a result, our business may be adversely affected by industry declines or by delays in new projects. Variations or unanticipated changes in project schedules in connection with large projects can create fluctuations in net revenues.
Fluctuations in end-user demand, or in the supply of services within those industries, can affect demand for our services. As a result, our businesses may be adversely affected by industry declines or by delays in new projects.
Losses under all of these insurance programs are accrued based upon our estimate of the likely ultimate liability for claims reported and an estimate of claims incurred but not reported ("IBNR"), with assistance from third-party actuaries. In addition, in connection with the Chubb Acquisition, we agreed to accept the risk on certain pending claims against Chubb and certain IBNR claims.
Losses under all of these insurance programs are accrued based upon our estimate of the likely ultimate liability for claims reported and an estimate of claims incurred but not reported ("IBNR"), with assistance from third-party actuaries.
Customers are billed with varying frequency, the timing of which is generally dependent upon advance billing terms, milestone billings based on completion of certain phases of the work, or when services are provided.
The remainder of our work is generated pursuant to contracts for specific projects or jobs that require shorter-term services. Customers are billed with varying frequency, the timing of which is generally dependent upon advance billing terms, milestone billings based on completion of certain phases of the work, or when services are provided.
Morton 50 Senior Vice President and Chief People Officer 10 Table of Contents Russell A. Becker has served as a director of the Company since October 2019. Mr. Becker joined APi Group, Inc. in 2002 as its President and Chief Operating Officer and became its Chief Executive Officer in 2004. Prior to leading APi Group, Inc., Mr.
Morton 51 Senior Vice President and Chief People Officer 10 Table of Conten t s Russell A. Becker is the President and CEO and has served as a director of the Company since October 2019. Mr. Becker joined the Company in 2002 as President and Chief Operating Officer and became Chief Executive Officer in 2004.
Glenn David Jackola has served as Interim Chief Financial Officer since December 2024 and previously served as the Chief Financial Officer and Vice President of Transformation at APi International since November 2022.
Glenn David Jackola has served as Executive Vice President and Chief Financial Officer since March 2025 and previously served as Interim Chief Financial Officer beginning in December 2024. Prior to assuming these roles, Mr. Jackola served as Chief Financial Officer and Vice President of Transformation at APi International beginning in November 2022.
Prior to his current role, he held the position of Vice President, Controller and Chief Accounting Officer at the Company from March 2022 to November 2022, and as Vice President, Corporate Planning and Analysis since joining the Company in October 2021. Prior to joining the Company, Mr.
From March 2022 to November 2022, he served as Vice President, Controller, and Chief Accounting Officer, and prior to that as Vice President, Corporate Planning and Analysis from October 2021. Before joining the Company, Mr.
We operate our business under three primary operating segments, which aggregate to our two reportable segments: • Safety Services – A leading provider of safety services in North America, Europe, and Asia-Pacific, focusing on end-to-end integrated occupancy systems (fire protection solutions, Heating, Ventilation, and Air Conditioning (“HVAC”), entry systems, and elevators and escalators), including design, installation, inspection, and service of these integrated systems.
We operate our business under three primary operating segments, two of which are aggregated into a single reportable segment, resulting in two reportable segments: • Safety Services – A leading provider of safety services in North America, Europe, and Asia-Pacific, focusing on fire protection solutions, electronic security systems, and elevators and escalators, including design, installation, inspection, service, and monitoring of these systems.
This also empowers the leaders of our businesses to drive business performance and execute key decisions, while highlighting the significant focus we place on ensuring members of our team receive continuous investment in their development. Resilient Business Model with Multiple Levers to Navigate Downturns.
Moreover, we employ a decentralized operating model which improves speed and responsiveness to customers in industries with strict requirements. This also empowers the leaders of our businesses to drive business performance and execute key decisions, while highlighting the significant focus we place on ensuring members of our team receive continuous investment in their development.
We believe this presents attractive opportunities for us to drive growth in our businesses and enhance our market share positions. 5 Table of Contents Disciplined Acquisition Platform with History of Strategic Acquisitions. We have a disciplined acquisition platform through which we systematically target, execute, and integrate strategic acquisitions. Since 2005, we have completed over 125 acquisitions.
We believe this presents attractive opportunities for us to drive growth in our businesses and enhance our market share positions. 5 Table of Conten t s History of Disciplined and Strategic Acquisitions and Divestitures. We have a disciplined acquisition strategy and have completed 140 acquisitions since 2005.
Our priorities are unified around maintaining business continuity while identifying and implementing operational efficiencies, cost synergies, and integration of organizational processes to drive margin expansion.
Post acquisition, we prioritize maintaining business continuity while identifying and implementing our inspection-first strategy, operational efficiencies, cost synergies, and integration of organizational processes to drive margin expansion.
We believe that the diversity of end markets we serve and the regulatory-driven demand for certain of our services will enable us to better withstand various economic cycles. We believe that the industries in which we operate are subject to increasingly complex and evolving regulatory environments and have experienced pent-up demand resulting from years of deferred maintenance and retrofit investment.
We believe that the industries in which we operate are subject to increasingly complex and evolving regulatory environments and have experienced pent-up demand resulting from years of deferred maintenance and retrofit investment.
Service inspections are often required by legislation or insurance mandates, providing a strong recurring revenue stream. Our broad geographic footprint reaches over 500 locations throughout over 20 countries and allows us to maintain relationships with local decision makers while also having the ability to execute multi-site services for national and international account customers.
Our broad geographic footprint reaches more than 500 locations throughout over 20 countries and allows us to maintain relationships with local decision makers while also having the ability to execute multi-site services for national and international account customers. Differentiated Business Model Focused on Growing Service Revenue.
We plan to capitalize on our broad base of installed projects, cross-selling opportunities, and customer relationships to continue to grow maintenance, inspection, monitoring, and service revenue. 6 Table of Contents • Maximize Cross-Selling Opportunities - With diverse businesses, a broad reach across a variety of different industries, geographies, and end markets, and a culture of collaboration, we believe that we have significant cross-selling opportunities to service more of the project life cycle and, once a project is completed, to continue to grow attractive recurring revenue streams.
This recurring engagement strengthens our role as a trusted partner and contributes to a robust pipeline of owner-direct project opportunities. • Maximize Cross-Selling Opportunities - With diverse businesses, a broad reach across a variety of different industries, geographies, and end markets, and a culture of collaboration, we believe that we have significant cross-selling opportunities to service more of the project life cycle and, once a project is completed, to continue to grow attractive recurring revenue streams.
Under the typical payment terms of master and other service agreements and contracts for specific projects, the customer makes progress payments based on quantifiable measures of performance as defined in the agreements. Some of our contracts include retainage provisions, under which a portion of the contract amount can be retained by the customer until final contract settlement.
Under the typical payment terms of master and other service agreements and contracts for specific projects, the customer makes progress payments based on quantifiable measures of performance as defined in the agreements.
The aim of these programs is to ensure that all employees are aware of and comply with safety standards we have established and all applicable laws, regulations and other requirements in the countries and jurisdictions in which we operate.
The aim of these programs is to ensure that all employees are properly trained on and comply with safety standards we have established and all applicable laws, regulations, and other requirements in the countries we operate. We have implemented our safety program, STEPS (Striving Toward Excellence and Professionalism in Safety), globally, which promotes safety culture awareness throughout our operations.
A portion of our revenue is derived from agreements with 8 Table of Contents customers that contain fixed price or per unit terms, and price is often an important factor in the contract award process for such work.
We compete based on a variety of factors, including price, service, technical expertise and experience, quality, safety record, response time, and reputation for customer service. A portion of our revenue is derived from agreements with customers that contain fixed price or per unit terms, and price is often an important factor in the contract award process for such work.
Becker served in a variety of roles at The Jamar Company, a subsidiary of APi Group, Inc., including as a Manager of Construction from 1995 to 1997 and as President from 1998 until he joined APi Group, Inc. in 2002. Mr.
Prior to leading the Company, Mr. Becker served in a variety of roles at The Jamar Company, a subsidiary of the Company, including as a Manager of Construction from 1995 to 1998 and as President from 1998 until 2002. Mr. Becker previously served as a Project Manager for Ryan Companies and as a Field Engineer with Cherne Contracting. Mr.
Our proactive approach to managing risk across our platform, recurring revenue services-focused business model, and highly variable cost structure provide significant flexibility to effectively navigate downturns. Our significant union labor force in the U.S. and subcontract labor force internationally allow us to flex our workforce capacity as market conditions dictate without incurring significant trailing costs or severance.
Our significant union labor force in the U.S. and subcontract labor force internationally allow us to flex our workforce capacity as market conditions dictate without incurring significant trailing costs or severance.
We believe that our revenue diversification across customers, end markets, geographies and projects, combined with our go-to-market strategy of selling inspection work first, regional approach to operating our businesses, operations in niche industries with strong cross-selling opportunities and recurring revenue potential, strong commitment to leadership development, long-standing customer relationships with a robust reputation in the industries we serve, and strong safety track record differentiates us from our competitors.
We believe that our revenue diversification across customers, end markets, geographies, and projects, combined with our inspection-first go-to-market strategy, decentralized operating model, enduring commitment to leadership development, long-standing customer relationships, and strong safety track record differentiates us from our competitors. We have a disciplined acquisition strategy and have completed 140 acquisitions since 2005.
We serve customers in both the public and private sectors, including commercial, industrial, distribution and fulfillment centers, manufacturing, education, healthcare, telecom, utilities, transmission and integrity, high tech, entertainment, government, and infrastructure. Our customers range from Fortune 500 companies with diverse, worldwide operations to single-location companies.
Customers We have long-standing relationships with many customers in each of the industries we serve. We serve customers in both the public and private sectors, including high tech services, advanced manufacturing, healthcare, fulfillment and distribution centers, critical infrastructure, commercial, industrial, education, telecom, utilities, transmission and integrity, entertainment, and government.
We have low customer concentration with no single customer accounting for more than 5% of our total net revenues for 2024. Our focus on providing high quality service promotes deep, long-term relationships with our customers which often results in continued opportunities for new business and a reliable source of recurring revenue for ongoing inspection, maintenance, and monitoring services.
Our focus on providing high quality service promotes deep, long-term relationships with our customers which often results in continued opportunities for new business and a reliable source of recurring revenue for our ongoing inspection, service, and monitoring services. We often provide services under master service and other service agreements, which can be multi-year agreements, subject to earlier termination.
We have repeat revenue from a diverse set of long-standing blue-chip customers who are spread across a variety of end markets and geographies with low concentration. Many of our customers have high creditworthiness in a direct service relationship or contracting role, providing stable cash flows and a platform for organic growth.
Repeat Revenue with Diverse Mix of Customers, End Markets, Geographies and Projects. We have repeat revenue from a diverse set of long-standing blue-chip customers who are spread across a variety of end markets and geographies with low concentration.
Lambert was Vice President and Assistant General Counsel for Polaris Inc., a powersports manufacturing company. Prior to joining APi, Mr. Lambert served as vice president, legal, and assistant secretary of Polaris Inc., where he had responsibility for corporate governance, SEC compliance, M&A, executive compensation, and was general counsel for multiple global business units. Prior to that, Mr.
Louis B. Lambert has served as Senior Vice President, General Counsel, and Secretary since joining the Company in July 2022. Before joining the Company, Mr. Lambert served as Vice President and Assistant General Counsel at Polaris Inc., where he was responsible for corporate governance, SEC compliance, M&A, executive compensation, and was General Counsel for various global business units. Previously, Mr.
Differentiated Business Model Focused on Growing Service Revenue. Our go-to-market strategy in life safety is to sell inspection work first, because we estimate that every dollar sold can lead to subsequent service work. In most cases, our inspection work is covered by statutory or insurance requirements.
Our go-to-market strategy in life safety is inspection-first, because we estimate that every dollar sold can lead to subsequent service work. In most cases, our inspection work is required by statutory or insurance obligations. Nearly all facilities that have existing life safety systems are required by law to have that system inspected on at least an annual basis.
It also allows each of our businesses to remain highly focused on best positioning itself within the categories in which it competes and reinforces strong accountability for operational and financial performance.
This structure promotes a business-owner mindset among our individual leaders and combines the personal attention of a small-to-medium-sized company with the strength and support of a global industry leader. It also allows each of our businesses to remain highly focused on best positioning itself within the markets in which it competes and reinforces strong accountability for operational and financial performance.
We believe that this culture will continue to support our decentralized operating model, which combines the personal attention of a small- to medium-sized company with the strength and support of an industry leader. Leverage Our Scale and Services Portfolio.
Our programmatic training and development curriculum focuses on a range of topics, from enhancing technical capabilities to developing soft skills, and decision-making training to enable independent company leadership. We believe that this culture will continue to support our decentralized operating model, which combines the personal attention of a small-to-medium-sized company with the strength and support of a global industry leader.
This culture of investing in leadership development at all levels of the organization has created an empowered, entrepreneurial atmosphere which facilitates organizational sharing of knowledge and best practices and enables the development of cross-brand solutions and innovation. Another important initiative is our field-based leadership programs.
This culture of investing in leadership development at all levels of the organization has created an empowered, entrepreneurial atmosphere. Another important initiative is our field-based leadership programs. We believe our approach to field leadership is different from our peers’ field-based programs, which tend to focus on technical competence as opposed to leadership.
We believe that our revenue diversification across customers, end markets, geographies, and projects, combined with our go-to-market strategy of selling inspection work first, regional approach to operating our businesses, specialty operations in niche markets, strong commitment to leadership development, long-standing customers with a robust reputation in the industries we serve, and strong safety track record differentiates us from our competitors.
We have strong revenue diversification across customers, end markets, geographies, and projects. Our go-to-market strategy of selling inspection work first, our focus on recurring revenue streams, and our regional approach to operating our businesses differentiate us from our competitors.
Additionally, we participate in an annual Safety Week which includes activities designed to elevate safety awareness, and we hold an annual competition to acknowledge and reward businesses exhibiting excellence in safety.
We are very focused on improving our fleet performance through defensive driver training, fleet technology, and company fleet assessments. Additionally, we participate in an annual industry sponsored Safety Week which includes activities designed to elevate safety awareness, and we hold an annual competition to acknowledge and reward businesses that exhibit excellent safety performance.
Government Regulation and Environmental Matters Our business activities are subject to regional, national, state, and local laws and regulations in each country in which we conduct business.
Some of our contracts 7 Table of Conten t s include retainage provisions, under which a portion of the contract amount can be retained by the customer until final contract settlement. Government Regulation and Environmental Matters Our business activities are subject to national, regional, state, and local laws and regulations in each country in which we conduct business.
Morton earned her bachelor’s degree from the University of St. Thomas and her master’s degree from the University of Minnesota. Available Information Our internet website address is www.apigroupcorp.com.
Thomas and her master’s degree in human resources and industrial relations from the University of Minnesota Carlson School of Business. Kristina also serves as the Chair of the Board of Trustees for the Washburn Center for Children. Available Information Our internet website address is www.apigroupcorp.com.
As a result of our strong global brand recognition, we believe we have better access to new business opportunities, allowing us to maintain and advance our market share positions. Repeat Revenue with Diverse Mix of Customers, End Markets, Geographies and Projects.
Additionally, we have strong cross-selling opportunities, commitment to leadership development, long-standing customer relationships, robust reputation in the industries we serve, as well as a strong safety track record. As a result of our global brand recognition, we believe we have better access to new business opportunities, allowing us to maintain and advance our market share positions.
Jackola received his bachelor’s degree in Economics from Carleton College and his Master of Business Administration in Finance from the University of Chicago Booth School of Business. Louis B. Lambert has served as Senior Vice President, General Counsel and Secretary of the Company since July 2022. Most recently, Mr.
Jackola served as Vice President of Finance - North America at James Hardie Building Products and held finance leadership roles of increasing responsibility, including Vice President of Finance - Europe, at Ecolab. Mr. Jackola holds a bachelor’s degree in economics from Carleton College and a Master of Business Administration in Finance from the University of Chicago Booth School of Business.
Lambert held increasingly senior legal roles at 3M Company and then General Mills, where he focused on global M&A, joint ventures, and various general counseling roles. Mr. Lambert began his career as an associate at Faegre & Benson (now Faegre Drinker) in its corporate finance group. Mr.
Lambert served in senior legal roles at 3M Company and General Mills. Mr. Lambert began his career as an associate at Faegre & Benson (now Faegre Drinker). Mr. Lambert earned his bachelor’s degree from the University of Michigan and his Juris Doctor from Rutgers School of Law—Newark. Kristina M.
Morton served as Vice President, Human Resources, Supply Chain and Global Operations for General Mills. During her 23-year tenure at General Mills, she also held roles in marketing, sales and supply chain, most recently leading 175 human resources professionals that supported 20,000 employees globally across 45 manufacturing facilities in the U.S. and Europe. Ms.
Morton has served as Senior Vice President and Chief People Officer since she joined the Company in February 2022. Before joining the Company, Ms. Morton served as Vice President of Human Resources, Supply Chain, and Global Operations for General Mills. During her 23-year tenure at General Mills, Ms.
After reviewing the businesses in our portfolio, we have made the decision to realign our segments beginning in 2025 by moving our HVAC business from Safety Services to Specialty Services. 4 Table of Contents Our Industry The industries in which we operate are highly fragmented and comprised of national, regional, and local companies that provide services to customers across various end markets and geographies.
The work within this segment spans across a diverse mix of end markets with a focus on high tech services, healthcare, and critical infrastructure throughout North America. Our Industry The industries in which we operate are highly fragmented and comprised of international, national, regional, and local companies that provide services to customers across various end markets and geographies.
Becker served as a project manager for Ryan Companies from 1993 to 1995 and as a field engineer with Cherne Contracting from 1991 to 1993. Since January 2019, Mr. Becker has served on the board of directors for Marvin Companies, a private company. Mr. Becker also serves on the advisory board for the Construction Management Program at Michigan Technical University.
Becker holds a bachelor’s and master’s degree in civil engineering from Michigan Technological University. Mr. Becker also serves on the board of directors for Marvin Companies, a private company and serves on the Advisory Board of the School of Engineering at Michigan Technological University.
In addition, we have multiple programs geared towards increasing everyone’s awareness of our safety culture and to empower employees to stop work if risks are unmanageable. We are very focused on improving our fleet performance through defensive driver training, fleet technology, and company fleet assessments.
The STEPS program is focused on proactive hazard identification and robust risk assessment before starting work. In addition, we have multiple programs geared towards increasing everyone’s awareness of our safety culture and to empower our teams to stop work and implement proper controls to minimize risk.
Through our selective approach, we identify and assess companies that we believe align with our strategic priorities and demonstrate key value drivers such as culture, geography, end markets, client base, leadership, and service capabilities.
We target companies that align with our strategic priorities and demonstrate key value drivers such as the geographies they serve, the culture, value, and fit of the business being acquired, the services they offer, and the financial profile of the business.
The work performed within this segment spans across industries and facilities and includes commercial, education, healthcare, high tech, industrial, and special-hazard settings. • Specialty Services – A leading provider of a variety of infrastructure services and specialized industrial plant services, which include maintenance and repair of critical infrastructure such as underground electric, gas, water, sewer, and telecommunications infrastructure.
The work performed within this segment spans across a diverse mix of end markets with a focus on high tech services, advanced manufacturing, healthcare, fulfillment and distribution centers, and critical infrastructure. • Specialty Services – A leading provider of a variety of specialty contracting, fabrication and distribution, and infrastructure and utility services.
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We have a disciplined acquisition platform which has historically provided strategic acquisitions that are integrated into our operations. Since 2005, we have completed over 125 acquisitions. We target companies that align with our strategic priorities and demonstrate key value drivers such as culture, geography, end markets and client base, capabilities, and leadership.
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A key component of our acquisition strategy is to strengthen and expand our existing service offerings in geographies where our capabilities in certain service offerings are limited. Post acquisition, we prioritize maintaining business continuity while identifying and implementing our inspection-first strategy, operational efficiencies, cost synergies, and integration of organizational processes to drive margin expansion.
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This structure promotes a business-owner mindset among our individual business leaders and combines the personal attention of a small- to medium-sized company with the strength and support of an industry leader.
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In addition, the growing adoption of artificial intelligence and high-performance computing is causing an increase in large-scale infrastructure projects, aligning with our end markets of high tech services and advanced manufacturing. Our Competitive Strengths We believe the following are our key competitive strengths: Benefits of Scale in a Fragmented Market with Limited Businesses of Size.
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Our services include engineering and design, fabrication, installation, maintenance service and repair, retrofitting and upgrading, pipeline infrastructure, access and road construction, supporting facilities, and performing ongoing integrity management and maintenance to customers within the energy industry. Customers within this segment vary from private and public utilities, communications, healthcare, education, transportation, manufacturing, industrial plants and governmental agencies throughout North America.
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Our scale provides meaningful advantages across our platform. We leverage shared technology, centralized back-office support, and common processes to drive consistency, efficiency, and quality in our service delivery. Our size also supports disciplined investment in leadership development and broader learning programs, enabling us to attract, develop, and retain talent at all levels of the organization.
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In addition, the growing strategic importance of semiconductor technology in industries like defense, automotive, and telecommunications has caused the U.S. to boost domestic semiconductor production and reduce reliance on foreign supply chains. The CHIPS and Science Act, passed in 2022, allocates funds for semiconductor research, development, and manufacturing, including $39 billion for building new U.S. facilities and equipment.
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We believe these scale-driven investments in our people, systems, and support functions enhance our ability to serve our customers, support growth, and improve long-term operating performance. Leading Market Positions in Diverse Set of Niche Industries.
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Our Competitive Strengths We believe that the following are our key competitive strengths: Leading Market Positions in Diverse Set of Niche Industries.
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Many of our customers have high creditworthiness in a direct service relationship or contracting role, providing stable cash flows and a platform for organic growth. Inspections are often required by legislation or insurance mandates, providing a strong recurring revenue stream.
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Each of our businesses maintains its identity, reputation, customer relationships and culture following acquisition while benefiting from the resources of the APG network, which we believe is an important differentiator.
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We target acquiring companies that align with our strategic priorities and demonstrate key value drivers such as the geographies they serve, the culture, value, and fit of the business being acquired, the services they offer, and the financial profile of the business.
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We believe our approach to field leadership is different from our peers’ field-based programs, which tend to focus on technical competence as opposed to leadership. Moreover, we employ a decentralized operating model which improves speed and responsiveness to customers in industries with strict requirements.
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In addition, we continuously evaluate our portfolio of businesses and to ensure our companies support our long-term strategy and growth targets and will restructure or divest those businesses that do not align. A key component of our acquisition strategy is to strengthen and expand our existing service offerings in geographies where our capabilities in certain services offerings are limited.
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Our programmatic training and development curriculum focuses on a range of topics, from enhancing technical capabilities to developing soft skills, and decision-making training to enable independent company leadership.
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Resilient Business Model with Multiple Levers to Navigate Downturns. Our proactive approach to managing risk across our platform, inspection and services-focused business model focused on recurring revenue, and highly variable cost structure provide significant flexibility to effectively navigate downturns.
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We believe that we can grow our businesses and increase our market position by leveraging our scale and broad portfolio of services offerings to capitalize on demand for single-source national and international providers.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese areas include underground environments and areas in proximity to rivers, lakes, and wetlands. Likewise, we perform directional drilling operations below certain environmentally-sensitive terrains and water bodies. It is possible that such directional drilling may cause a 24 Table of Contents surface fracture, resulting in the release of subsurface materials.
Biggest changeOur failure to comply with environmental laws could result in significant liabilities and increased environmental regulations could result in increased costs. We often perform services in and around environmentally-sensitive areas. These areas include underground environments and areas in proximity to rivers, lakes, and wetlands. Likewise, we perform directional drilling operations below certain environmentally-sensitive terrains and water bodies.
We believe that data privacy regulations and public expectations will continue to evolve, which may require us to incur additional expenses and which may heighten the risks associated with compromised information.
We believe that data privacy regulations and public expectations will continue to evolve, which may require us to incur additional expenses and may heighten the risks associated with compromised information.
Moreover, if we do not employ new technologies as quickly or efficiently as our competitors, or if our competitors develop or utilize more cost-effective or customer-preferred technologies, such as data analytics, artificial intelligence and other new and emerging technologies, that give them a competitive advantage in the proposal bidding and selection process, it could have a material adverse effect on our ability to win and retain business from customers.
Moreover, if we do not employ new technologies as quickly or efficiently as our competitors, or if our competitors develop or utilize more cost-effective or customer-preferred technologies, such as data analytics, artificial intelligence and other new and emerging technologies, that give them a competitive advantage in the proposal and selection process, it could have a material adverse effect on our ability to win and retain business from customers.
In addition, any distributions or dividends that may be made from to APG by its subsidiaries could be subject to restrictions on dividends or repatriation of earnings under applicable local law, monetary transfer restrictions, and foreign currency exchange regulations in the jurisdictions in which our subsidiaries operate, and we may not be able to repatriate income or capital in a tax efficient manner, if at all.
In addition, any distributions or dividends that may be made to APG by its subsidiaries could be subject to restrictions on dividends or repatriation of earnings under applicable local law, monetary transfer restrictions, and foreign currency exchange regulations in the jurisdictions in which our subsidiaries operate, and we may not be able to repatriate income or capital in a tax efficient manner, if at all.
These variations, along with other risks inherent in performing fixed price contracts, could cause actual project results to differ materially from our original estimates, which could result in lower margins than anticipated, or losses, which could reduce our profitability, cash flows and liquidity. A portion of our contracts allocate the risk of price increases in supplies to us.
These variations, along with other risks inherent in performing fixed price contracts, could cause actual project results to differ materially from our original estimates, which could result in lower margins than anticipated, or losses, which could reduce our profitability, cash flows, and liquidity. A portion of our contracts allocate the risk of price increases in supplies and materials to us.
In addition, the Credit Agreement governing the credit facilities contains covenants that restrict our operations. These covenants restrict, among other things, our ability to incur additional debt, grant liens, pay cash dividends, enter new lines of business, redeem our common stock, make certain investments and engage in certain merger, consolidation or asset sale transactions.
The Credit Agreement governing the credit facilities contains covenants that restrict our operations. These covenants restrict, among other things, our ability to incur additional debt, grant liens, pay cash dividends, enter new lines of business, redeem our common stock, make certain investments and engage in certain merger, consolidation, or asset sale transactions.
If we are unable to access the capital markets on favorable terms at the time a debt obligation becomes due in the future. The price and terms upon which we might receive such extensions or additional bank credit, if at all, could be more onerous than those contained in existing debt agreements.
If we are unable to access the capital markets on favorable terms at the time a debt obligation becomes due in the future, the price and terms upon which we might receive extensions or additional bank credit, if at all, could be more onerous than those contained in existing debt agreements.
Conversely, we have in the past, and may from time to time in the future, face a shortage of skilled workers. Any significant deterioration in employee relations, shortages of labor or increases in labors costs at any of our businesses could have a material adverse effect on our business, financial condition and results of operations.
Conversely, we have in the past, and may from time to time in the future, face a shortage of skilled workers. Any significant deterioration in employee relations, shortages of labor or increases in labor costs at any of our businesses could have a material adverse effect on our business, financial condition, and results of operations.
Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new U.S. presidential administration and Congress and what challenges budget and expenditure reductions and reforms on federal governmental processes will present for us, our customers and our industry generally.
Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the U.S. presidential administration and Congress and what challenges budget and expenditure reductions and reforms on federal governmental processes will present for us, our customers, and our industry generally.
For certain contracts, including where we have assumed responsibility for procuring materials for a project, we are exposed to market risk of increases in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in all of our operations.
For certain contracts, including those where we have assumed responsibility for procuring materials for a project, we are exposed to market risk of increases in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in all of our operations.
Additionally, if we do not effectively implement the ERP systems as planned or the systems do not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be delayed.
Additionally, if we do not effectively implement the systems as planned or the systems do not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be delayed.
Any disruptions, delays or deficiencies in the design and implementation or the ongoing maintenance of the new ERP systems could adversely affect our ability to provide the services and perform the business and reporting functions described above, and otherwise operate our business.
Any disruptions, delays, or deficiencies in the design and implementation or the ongoing maintenance of the new systems could adversely affect our ability to provide the services and perform the business and reporting functions described above and otherwise operate our business.
Accordingly, our business is and will in the future be subject to risks associated with doing business internationally, including: • laws and regulations that dictate how we conduct business; • changes or instability in a specific country’s or region’s political or economic conditions, including inflation or currency devaluation; 11 Table of Contents • political, financial market or economic instability relating to epidemics or pandemics; • laws and regulations that tax or otherwise restrict repatriation of earnings or other funds or otherwise limit distributions of capital; • changes to existing or new domestic or international tax laws; • trade protection measures, such as tariff increases, and import and export licensing and control requirements, which may, among other things, increase commodity prices of materials used as components of supplies or materials utilized in all of our operations, particularly in light of the stated trade policies of the new U.S. presidential administration; • potentially negative consequences from fluctuations in foreign currency exchange rates; • difficulties repatriating income or capital, whether due to temporary blocking, taxes, tariffs or otherwise, where income from work outside the United States in non-U.S. dollars exceed our local currency needs; • expropriation and governmental regulation restricting foreign ownership or requiring reversion or divestiture; • laws and regulations governing our employee relations, including occupational health and safety matters and employee compensation and benefits matters; • uncertainties regarding legal or judicial systems, including inconsistencies between and within laws, regulations and decrees, and judicial application thereof, and delays in the judicial process; • difficulty in recruiting and retaining trained personnel in our international operations; and • our ability to comply with, and the costs of compliance with, laws and regulations governing international business operations, including restrictions on transactions with certain countries, governments, entities and individuals subject to U.S. economic sanctions or export restrictions, and anti-bribery laws such as the Foreign Corrupt Practices Act and similar local anti-bribery laws.
Our business is, and will in the future, be subject to risks associated with doing business both domestically and internationally, including: • laws and regulations that dictate how we conduct business; • changes or instability in a specific country’s or region’s political or economic conditions, including inflation or currency devaluation; • political, financial market or economic instability relating to epidemics or pandemics; • laws and regulations that tax or otherwise restrict repatriation of earnings or other funds or otherwise limit distributions of capital; 11 Table of Conten t s • changes to existing or new domestic or international tax laws; • trade protection measures, such as tariff increases, and import and export licensing and control requirements, which may, among other things, increase commodity prices of materials used as components of supplies or materials utilized in all of our operations, particularly in light of the stated trade policies of the new U.S. presidential administration; • potentially negative consequences from fluctuations in foreign currency exchange rates; • difficulties repatriating income or capital, whether due to temporary blocking, taxes, tariffs or otherwise, where income from work outside the United States in non-U.S. dollars exceed our local currency needs; • expropriation and governmental regulation restricting foreign ownership or requiring reversion or divestiture; • laws and regulations governing our employee relations, including occupational health and safety matters and employee compensation and benefits matters; • uncertainties regarding legal or judicial systems, including inconsistencies between and within laws, regulations and decrees, and judicial application thereof, and delays in the judicial process; • difficulty in recruiting and retaining trained personnel in our international operations; and • our ability to comply with, and the costs of compliance with, laws and regulations governing international business operations, including restrictions on transactions with certain countries, governments, entities and individuals subject to U.S. economic sanctions or export restrictions, and anti-bribery laws such as the Foreign Corrupt Practices Act and similar local anti-bribery laws.
Moreover, certain of our customers, where permissible by law, may require or prefer a non-union workforce, and they may reduce the amount of work assigned to us if our non-union labor crews become unionized, which could negatively affect our financial condition, results of operations and cash flows. 20 Table of Contents R ISKS R ELATED T O O UR C USTOMER B ASE We serve customers who are involved in construction. technology, energy exploration, production and transportation, and adverse developments affecting activities in these industries, reduced demand for oil and natural gas products, or increased regulation of exploration and production, could have a material adverse effect on our results of operations.
Moreover, certain of our customers, where permissible by law, may require or prefer a non-union workforce, and they may reduce the amount of work assigned to us if our non-union labor crews become unionized, which could negatively affect our financial condition, results of operations and cash flows. 20 Table of Conten t s R ISKS R ELATED T O O UR C USTOMER B ASE We serve customers who are involved in construction, technology, energy exploration, production and transportation, and adverse developments affecting activities in these industries, reduced demand for oil and natural gas products, or increased regulation of exploration and production, could have a material adverse effect on our results of operations.
Our indebtedness may adversely affect our cash flow and our ability to operate our business and fulfill our obligations under our indebtedness. As of December 31, 2024, on a consolidated basis, we had $2,157 million in principal amount of debt outstanding under our credit facilities, $614 million of senior notes, and other indebtedness totaling approximately $5 million.
Our indebtedness may adversely affect our cash flow and our ability to operate our business and fulfill our obligations under our indebtedness. As of December 31, 2025, on a consolidated basis, we had $2,157 million in principal amount of debt outstanding under our credit facilities, $614 million of senior notes, and other indebtedness totaling approximately $5 million.
In December 2024, we entered into a non-binding agreement in principle with the Trustees of the two pension plans in the U.K. to proceed with wind-up of the plans contingent on certain conditions. If all conditions are met and we execute the final wind-up, it may have a non-cash impact on our results of operations.
In December 2024, we entered into a non-binding agreement in principle with the Trustees of the two pension plans in the U.K. to proceed with wind-up of the plans contingent on certain conditions. If all conditions are met and we execute the final wind-up, it would have a non-cash impact on our results of operations.
As of December 31, 2024, approximately 50% of our employees were covered by collective bargaining agreements in the U.S. or similar employment and labor obligations in other countries in which we conduct business. The terms of these agreements limit our discretion in the management of covered employees and our ability to nimbly implement changes to meet business needs.
As of December 31, 2025, approximately 50% of our employees were covered by collective bargaining agreements in the U.S. or similar employment and labor obligations in other countries in which we conduct business. The terms of these agreements limit our discretion in the management of covered employees and our ability to nimbly implement changes to meet business needs.
A judgement that is not covered by insurance or that is significantly in excess of our insurance coverage could materially adversely affect our financial condition or results of operations. We are exposed to workmanship warranty, casualty, negligence, construction defect, breach of contract, product liability, and other claims and legal proceedings.
A judgment that is not covered by insurance or that is significantly in excess of our insurance coverage could materially adversely affect our financial condition or results of operations. We are exposed to workmanship warranty, casualty, negligence, construction defect, breach of contract, product liability, and other claims and legal proceedings.
We are a decentralized company and place significant decision-making authority with our subsidiaries’ management, supported by certain integrated policies and processes. We believe our practice of conferring significant authority upon the management of our subsidiaries has been important to our successful growth and has allowed us to be responsive to opportunities and to our customers’ needs.
We are a decentralized company and place significant decision-making authority with our subsidiaries’ leadership, supported by certain integrated policies and processes. We believe our practice of conferring significant authority upon the leadership of our subsidiaries has been important to our successful growth and has allowed us to be responsive to opportunities and to our customers’ needs.
We are also exposed to increases in energy prices, including as they relate to gasoline prices for our rolling-stock fleet of approximately 11,700 vehicles. Additionally, the price of fuel required to run our vehicles and equipment is unpredictable and fluctuates based on events outside our control.
We are also exposed to increases in energy prices, including as they relate to gasoline prices for our rolling-stock fleet of approximately 12,700 vehicles. Additionally, the price of fuel required to run our vehicles and equipment is unpredictable and fluctuates based on events outside our control.
Any increase in fuel costs could materially reduce our profitability and liquidity to the extent we are not able to adjust our pricing for such expenses. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities would be recoverable.
Any increase in fuel costs could materially reduce our profitability and liquidity to the extent we are not able to adjust our pricing for such expenses. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that these increases would be recoverable.
Furthermore, because we derive revenue from projects awards that are subject to these uncertainties, our results of operations and cash flows can fluctuate materially from period to period. Our businesses are impacted by levels of construction activity and an economic downturn in that industry could materially and adversely affect our business.
Furthermore, because we derive revenue from project awards that are subject to these uncertainties, our results of operations and cash flows can fluctuate materially from period to period. Our businesses are impacted by levels of construction activity and an economic downturn in that industry could materially and adversely affect our business.
We cannot be sure that we will be able to successfully complete the integration process without substantial costs, delays, disruptions or other operational or financial problems. Failure to successfully integrate acquired businesses could adversely impact our business, financial condition, results of operations and cash flows.
We cannot be certain that we will be able to successfully complete the integration process without substantial costs, delays, disruptions or other operational or financial problems. Failure to successfully integrate acquired businesses could adversely impact our business, financial condition, results of operations and cash flows.
Generally, it is difficult to predict whether and when we will be awarded a new contract due to lengthy and complex bidding and selection processes, changes in existing or forecasted market conditions, customers’ access to financing, governmental regulations, permitting and environmental matters.
Generally, it is difficult to predict whether and when we will be awarded a new contract due to lengthy and complex proposal and selection processes, changes in existing or forecasted market conditions, customers’ access to financing, governmental regulations, permitting, and environmental matters.
Additionally, unknown or changing trends, risks or circumstances, such as increases in claims, a weakening economy, increases in medical costs, changes in case law or legislation, or changes in the nature of the work we perform, could render our current estimates and accruals inadequate.
Additionally, unknown or changing trends, risks, or circumstances, such as increases in claims or their magnitudes, a weakening economy, increases in medical costs, changes in case law or legislation, or changes in the nature of the work we perform, could render our current estimates and accruals inadequate.
We have in the past been, and may in the future be, subject to liabilities in connection with injury, death, or damage incurred in conjunction with our installation of products or provision of services regarding the inspection, maintenance or monitoring of products and systems installed by us or others.
We have in the past been, and may in the future be, subject to liabilities in connection with injury, death, or damage incurred in conjunction with our installation of products or provision of services regarding the inspection, service, or monitoring of products and systems installed by us or others.
We may have litigation in a variety of matters, some matters may be unpredictable or unanticipated, and the frequency and severity of litigation could increase. Because lawsuits are inherently unpredictable, assessing contingencies is highly subjective and requires judgements about future events.
We may have litigation in a variety of matters, some matters may be unpredictable or unanticipated, and the frequency and severity of litigation could increase. Because lawsuits are inherently unpredictable, assessing contingencies is highly subjective and requires judgments about future events.
The market price of our common stock on the NYSE may fluctuate as a result of several factors, including the following: • our operating and financial performance and prospects; • variations in our quarterly operating results or those of other companies in our industries; • volatility in our industries, the industries of our customers and suppliers and the securities markets; • risks relating to our businesses and industries, including those discussed above; • strategic actions by us or our competitors; • damage to our reputation, including as a result of issues relating to the quality or safety of the services we provide and systems we install; • actual or expected changes in our growth rates or our competitors’ growth rates; • investor perception of us, the industries in which we operate, the investment opportunity associated with the common stock and our future performance; • addition to or departure of our executive officers; • changes in financial estimates or publication of research reports by analysts regarding our common stock, other comparable companies, or our industries generally, or termination of coverage of our common stock by analysts; • our failure to meet estimates or forecasts made by analysts, if any; • trading volume of our common stock; • future sales of our common stock by us or our stockholders; • economic, legal and regulatory factors unrelated to our performance; • adverse or new pending litigation against us; or • issuance of future annual Series A Preferred Stock dividends, which are intended to be settled in common stock.
The market price of our common stock on the New York Stock Exchange ("NYSE") may fluctuate as a result of several factors, including the following: • our operating and financial performance and prospects; • variations in our quarterly operating results or those of other companies in our industries; • volatility in our industries, the industries of our customers and suppliers and the securities markets; • risks relating to our businesses and industries, including those discussed above; • strategic actions by us or our competitors; • damage to our reputation, including as a result of issues relating to the quality or safety of the services we provide and systems we install; • actual or expected changes in our growth rates or our competitors’ growth rates; • investor perception of us, the industries in which we operate, the investment opportunity associated with the common stock and our future performance; • addition to or departure of our executive officers; • changes in financial estimates or publication of research reports by analysts regarding our common stock, other comparable companies, or our industries generally, or termination of coverage of our common stock by analysts; • our failure to meet estimates or forecasts made by analysts, if any; • trading volume of our common stock; • future sales of our common stock by us or our stockholders; • economic, legal, and regulatory factors unrelated to our performance; • adverse or new pending litigation against us; or • the conversion of Series A Preferred Stock into common stock at the end of 2026 and the issuance of annual Series A Preferred Stock dividends, which are intended to be settled in common stock.
The occurrence of accidents in the course of our 21 Table of Contents business could result in significant liabilities, employee turnover, increase the costs of our projects or harm our ability to perform under our contracts or enter into new customer contracts, all of which may subject us to liabilities, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover and could materially adversely affect our profitability and our financial condition.
The occurrence of accidents in the course of our business could result in significant liabilities, employee turnover, increase the costs of our projects or harm our ability to perform under our contracts or enter into new customer contracts, all of which may subject us to liabilities, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover and could materially adversely affect our profitability and our financial condition.
The issuance of common stock pursuant to the terms of the Preferred Stock will reduce (by the applicable proportion) the percentage stockholdings of those stockholders holding common stock prior to such issuance which may reduce your net return on your investment in our common stock.
The issuance of common stock pursuant to the terms of the Preferred Stock will reduce (by the applicable proportion) the percentage stock holdings of those stockholders holding common stock prior to such issuance which may reduce your net return on your investment in our common stock.
If these tanks were to leak, we could be responsible for the cost of remediation as well as potential fines. This work subjects us to various environmental laws and regulations, including those dealing with the handling and disposal of waste products, PCBs, industrial chemicals, fuel storage, water quality and air quality.
If these tanks were to leak, we could be responsible for the cost of remediation as well as potential fines. This work subjects us to various environmental laws and regulations, including those dealing with the handling and disposal of waste products, polychlorinated biphenyls, industrial chemicals, fuel storage, water quality, and air quality.
As of December 31, 2024, the Company had $1,840 million notional amount outstanding in interest rate swap agreements that exchange a variable rate of interest for a fixed rate over the term of the agreement.
As of December 31, 2025, the Company had $1,840 million notional amount outstanding in interest rate swap agreements that exchange a variable rate of interest for a fixed rate over the term of the agreement.
For example, it may: • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, dividends, innovation, and other general corporate purposes; • cause credit rating agencies to view our debt level negatively; • increase our vulnerability to general adverse economic and industry conditions; 16 Table of Contents • limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; • limit our ability to make strategic acquisitions, introduce new technologies or pursue business opportunities; and • place us at a competitive disadvantage compared to our competitors that have less indebtedness.
For example, it may: • require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, dividends, innovation, and other general corporate purposes; • cause credit rating agencies to view our debt level negatively; • increase our vulnerability to general adverse economic and industry conditions; • limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate; 15 Table of Conten t s • limit our ability to make strategic acquisitions, introduce new technologies or pursue business opportunities; and • place us at a competitive disadvantage compared to our competitors that have less indebtedness.
While we believe we have made reasonable estimates and assumptions to calculate the fair values of our reporting units which were based on facts and circumstances known at such time, it is possible that existing or new events may result in forecasted cash flows, revenue and earnings that differ from those that formed the basis of our estimates and assumptions, which could be materially different from our estimates and assumptions.
While we believe we have made reasonable estimates and judgments about the fair values of our reporting units which were based on facts and circumstances known at such time, it is possible that existing or new events may result in forecasted cash flows, revenue and earnings that differ from those that formed the basis of our estimates and assumptions, which could be materially different from our estimates and assumptions.
Any period of economic recession affecting the volume or size of those projects is likely to adversely impact our business. Many of the projects that require our services involve long timelines from conception to completion, and many of the services that we offer are 23 Table of Contents required later in the project’s lifecycle.
Any period of economic recession affecting the volume or size of those projects is likely to adversely impact our business. Many of the projects that require our services involve long timelines from conception to completion, and many of the services that we offer are required later in the project’s lifecycle.
Failure to consummate future acquisitions could negatively affect our business and growth strategies. 13 Table of Contents Under certain circumstances, it may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently into our current business operations, and we may not be able to do so successfully or within the anticipated costs or timeframe.
Failure to consummate future acquisitions could negatively affect our business and growth strategies. Under certain circumstances, it may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently into our current business operations, and we may not be able to do so successfully or within the anticipated costs or timeframe.
For example, in connection 26 Table of Contents with the Chubb Acquisition, in January 2022 we issued shares of Series B Preferred Stock which had quarterly dividend rights and were ultimately converted into common stock in February 2024.
For example, in connection with the Chubb Acquisition, in January 2022 we issued shares of Series B Preferred Stock which had quarterly dividend rights and were ultimately converted into common stock in February 2024.
Under the terms of our certificate of incorporation, our Board of Directors is authorized to create and issue one or more additional series of preferred stock, and, with respect to each series, to determine number of shares constituting the series and the designations and the powers, preferences and rights, and the qualifications, limitations and restrictions thereof, which may include dividend rights, conversion or exchange rights, voting rights, redemption rights and terms and liquidation preferences, without stockholder approval.
Under the terms of our certificate of incorporation, our Board of Directors is authorized to create and issue one or more additional series of preferred stock, and, with respect to each series, to determine number of shares constituting the series and the designations and the powers, preferences and rights, and the qualifications, limitations and restrictions thereof, which may include dividend rights, conversion or exchange rights, voting rights, redemption rights and terms and 26 Table of Conten t s liquidation preferences, without stockholder approval.
Competition in the market for labor could drive up our costs, reduce our profitability, or impact our ability to deliver timely service to our customers. 19 Table of Contents Our pension commitments and obligations to make cash contributions to meet our obligations in certain pension plans subject us to risks.
Competition in the market for labor could drive up our costs, reduce our profitability, or impact our ability to deliver timely service to our customers. 19 Table of Conten t s Our pension commitments and obligations to make cash contributions to meet our obligations in certain pension plans subject us to risks.
A significant actual or perceived risk of theft, loss, fraudulent use or misuse of customer, employee or other data, whether by us, our suppliers, vendors, customers or other third parties, as a result of employee error or malfeasance, or as a result of the imaging, software, security and other products we incorporate into the products we install or the services we provide, as well as non-compliance with applicable industry standards or our contractual or other legal obligations or privacy and information-security policies regarding such data, could result in costs, fines, litigation or regulatory actions, or could lead customers to seek the services of our competitors.
A significant actual or perceived risk of theft, loss, fraudulent use or misuse of customer, employee or other data, whether by us, our suppliers, vendors, customers or other third parties, as a result of employee error or malfeasance, or as a result of the imaging, software, security and other products we incorporate into the products we install or the services we provide as a result of vulnerabilities or misconfigurations in customer-site environments or in third-party components used in such systems, as well as non-compliance with applicable industry standards or our contractual or other legal obligations or privacy and information-security policies regarding such data, could result in costs, fines, litigation or regulatory actions, or could lead customers to seek the services of our competitors.
From time to time, we are subject to workmanship warranty, casualty, negligence, construction defect, breach of contract, product liability, and other claims and legal proceedings relating to the products we install that, if adversely determined, could adversely affect our consolidated financial condition, results of operations and cash flows.
From time to time, we are subject to workmanship warranty, casualty, negligence, construction defect, breach of contract, product liability, and other claims and legal proceedings relating to the products we install that, if adversely 22 Table of Conten t s determined, could adversely affect our consolidated financial condition, results of operations and cash flows.
As much of the work we perform is inspected by our customers for any defects in construction prior to acceptance of the project, the claims that we have historically received have not been substantial. Additionally, materials used in construction are often provided by the customer or are warranted against defects by the supplier.
As much of the work we perform is inspected by our customers for any defects in construction prior to acceptance of the project, the claims that we have historically received have not been substantial. Additionally, materials used in construction are often 23 Table of Conten t s provided by the customer or are warranted against defects by the supplier.
Further, despite our decentralized nature, a violation at one of our locations could impact other locations’ ability to propose on and perform government contracts. Additionally, because of our decentralized nature, we face risks in maintaining compliance with all local, state and federal government contracting requirements.
Further, despite our decentralized nature, a violation at one of our locations could impact other locations’ ability to propose on and perform government contracts. Additionally, because of our decentralized nature, we face risks in maintaining compliance with all local, state, and federal government contracting 18 Table of Conten t s requirements.
Certain of our businesses, along with numerous other third parties, are named as defendants in personal injury lawsuits based on alleged exposure to various hazardous materials, including asbestos and PFAS.
Certain of our businesses, along with numerous other third parties, are named as defendants in personal injury lawsuits based on alleged exposure to various hazardous materials, including asbestos and per- and poly-fluoroalkyl substances ("PFAS").
We have established security policies, processes and defenses designed to help identify and protect against intentional and unintentional misappropriation or corruption of our information technology systems, disruption of our operations or the secure operation of the systems we install.
We have established security policies, processes and defenses designed to help identify and protect against intentional and unintentional misappropriation or corruption of our information technology systems, our OT systems, disruption of our operations or the secure operation of the systems we install and may also maintain.
In addition, if serious accidents or fatalities occur, or if our safety records were to deteriorate, we may be restricted from proposing on certain work or obtaining new contracts, and certain existing contracts could be terminated. Our safety processes and procedures are monitored by various agencies and ratings bureaus.
In addition, if serious accidents or fatalities occur, or if our safety records were to deteriorate, we may be restricted from proposing on certain work or obtaining new contracts, and certain existing contracts could be terminated. Our safety processes and 21 Table of Conten t s procedures are monitored by various agencies and ratings bureaus.
Neither the Delaware nor the Securities Act forum provisions are intended by us to limit the forums available to our stockholders for actions or proceedings asserting claims arising under the Exchange Act. 27 Table of Contents Our stock price may be volatile and, as a result, you could lose a significant portion or all of your investment.
Neither the Delaware nor the Securities Act forum provisions are intended by us to limit the forums available to our stockholders for actions or proceedings asserting claims arising under the Exchange Act. 27 Table of Conten t s Our stock price may be volatile and, as a result, stockholders could lose a significant portion or all of their investment.
However, we cannot assure you that we will identify or successfully complete suitable acquisitions in the future or that completed acquisitions will be successful. Acquisitions that do not achieve the intended strategic or operational benefits could adversely affect our operating results and may result in an impairment charge.
However, we cannot assure you that we will identify or successfully complete suitable acquisitions in the future or that completed 13 Table of Conten t s acquisitions will be successful. Acquisitions that do not achieve the intended strategic or operational benefits could adversely affect our operating results and may result in an impairment charge.
Any impairment in the value of our goodwill would have an adverse non-cash impact on our results of operations and reduce our net worth. As of December 31, 2024, we had goodwill of $2,894 million, which is maintained in various reporting units.
Any impairment in the value of our goodwill would have an adverse non-cash impact on our results of operations and reduce our net worth. As of December 31, 2025, we had goodwill of $3,167 million, which is maintained in various reporting units.
In addition, we may not be able to successfully complete the implementations of the new ERP systems without experiencing difficulties, or even if successfully implemented, we may not fully realize the anticipated benefits.
In addition, we may not be able to successfully complete the 12 Table of Conten t s implementations of the new ERP systems without experiencing difficulties, or even if successfully implemented, we may not fully realize the anticipated benefits.
For example, in April 2024, we issued 12,650,000 shares of the Company’s common stock in a public underwritten offering and used the net proceeds to finance, in part, the acquisition of 100% of the equity interests of Elevated Facility Services Group ("Elevated") and for general corporate purposes.
For example, in April 2024, we issued 18,975,000 shares of the Company’s common stock in a public underwritten offering and used the net proceeds to finance, in part, the acquisition of 100% of the equity interests of Elevated and for general corporate purposes.
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP").
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America ("GAAP").
We perform work through various subsidiaries to the U.S. federal government through government contracts. We also undertake projects for non-governmental customers who receive some level of federal funding for those projects. Levels of U.S. federal government spending are difficult to predict and subject to significant risk.
We also undertake projects for non-governmental customers who receive some level of federal funding for those projects. Levels of U.S. federal government spending are difficult to predict and subject to significant risk.
Furthermore, the industries we serve can be cyclical in nature. Fluctuations in end-user demand within those industries, or in the supply of services within those industries, can affect demand for our services. As a result, our business 25 Table of Contents may be adversely affected by industry declines or by delays in new projects.
Fluctuations in end-user demand within those industries, or in the supply of services within those industries, can affect demand for our services. As a result, our business may be adversely affected by industry declines or by delays in new projects.
Despite these efforts, our information technology systems may be damaged, disrupted or shut down due to attacks by unauthorized access, malicious software, computer viruses, undetected intrusion, hardware failures or other events, and in these circumstances our disaster recovery plans may be ineffective or inadequate.
Despite these efforts, our information technology and OT systems may be damaged, disrupted or shut down as a result of unauthorized access, malicious software, computer viruses, undetected intrusion, hardware failures or other events, and our disaster recovery plans may be ineffective or inadequate in these circumstances.
In addition, we have various outstanding equity awards to employees and directors under the APi Group Corporation 2019 Equity Incentive Plan. As of December 31, 2024, we had 11,998,287 shares of common stock available under this Plan.
In addition, we have various outstanding equity awards to employees and directors under the APi Group Corporation 2019 Equity Incentive Plan. As of December 31, 2025, we had 15,787,149 shares of common stock available under this Plan.
Despite our efforts to protect that data, our business and systems may be vulnerable to material security breaches, theft, misplaced or lost data, programming errors, or errors that could potentially lead to compromising such data, improper use of our systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of information and operational disruptions.
Despite our efforts to protect that data, our business and systems may be vulnerable to material security breaches, theft, misplaced or lost data, programming errors, or errors that could potentially lead to compromising such data, improper use of our systems, software solutions or networks, unauthorized access, use, disclosure, modification or destruction of information and operational disruptions, which may involve customer systems we install, maintain, and access remotely for monitoring, service, or support.
Our results of operations, cash flows and liquidity could be adversely affected if a project manager or our personnel miscalculate the resources or time needed to complete a project with capped or fixed fees, or the resources or time needed to meet contractual milestones.
Our results of operations, cash flows and liquidity could be adversely affected if a project manager or our personnel miscalculate the resources or time needed to complete a project with capped or fixed fees, or the resources or time needed to meet contractual milestones, especially in those projects with larger durations or contract values than average.
Because we do not have direct control over the quality of such products manufactured or supplied by such third-party suppliers, we are exposed to risks relating to the quality of such products including the potential to be impacted by product recalls.
We rely on manufacturers and other suppliers to provide us with most of the products we install. Because we do not have direct control over the quality of such products manufactured or supplied by such third-party suppliers, we are exposed to risks relating to the quality of such products including the potential to be impacted by product recalls.
In addition to the disruptions that may occur from interruptions in our information technology systems, cybersecurity threats and sophisticated and targeted cyberattacks, including the potential use of artificial intelligence tools, pose a risk to our information technology systems and the systems that we design and install.
In addition to the disruptions that may occur from interruptions in our information technology systems, cybersecurity threats and sophisticated and targeted cyberattacks, including the potential use of artificial intelligence tools, pose a risk to our information technology systems, our OT systems, and the systems that we design and install, as well as technology installed at customer locations that we may be responsible for maintaining.
Because many of our services are intended to protect lives and real and personal property (e.g., alarm and fire safety systems, products and monitoring services) and many of our businesses perform services at large projects and industrial facilities where accidents or system failures could be disastrous and costly, we may have greater exposure to litigation risks than businesses that provide other services, whether as a result of employee acts or omissions, faulty construction or system failures.
Because many of our services are intended to protect lives and real and personal property (e.g., alarm and fire safety systems, products and monitoring services) and many of our businesses perform services at large projects and industrial facilities where accidents or system failures could be disastrous and costly, we may have greater exposure to litigation risk.
Interest payments for certain of our indebtedness, including borrowings under the credit facilities are based on floating rates. As a result, an increase in interest rates will reduce our cash flow available for other corporate purposes. Higher interest rates could also limit our ability to refinance existing indebtedness and increase interest costs on any indebtedness that is refinanced.
As a result, an increase in interest rates will reduce our cash flow available for other corporate purposes. Higher interest rates could also limit our ability to refinance existing indebtedness and increase interest costs on any indebtedness that is refinanced.
Our operations are conducted almost entirely through our subsidiaries, and our ability to generate cash to meet our obligations or to pay dividends is highly dependent on the earnings of, and receipt of funds from, our subsidiaries through dividends or intercompany loans.
Our operations are conducted almost entirely through our subsidiaries, and our ability to generate cash to meet our obligations is highly dependent on the earnings of, and receipt of funds from, our subsidiaries through dividends or intercompany loans. As a result, we are dependent on the income generated by our subsidiaries to meet our expenses and operating cash requirements.
These subsurface materials may contain contaminants in excess of amounts permitted by law, potentially exposing us to remediation costs and fines. Our work may also cause unanticipated environmental damage or risks to employees, customers, or public health.
It is possible that such directional drilling may cause a surface fracture, resulting in the release of subsurface materials. These subsurface materials may contain contaminants in excess of amounts permitted by law, potentially exposing us to remediation costs and fines. Our work may also cause unanticipated environmental damage or risks to employees, customers, or public health.
We also maintain defined benefit pension plans outside of the U.S. Our non-U.S. defined benefit pension plans include both funded and unfunded plans. We completed a pension buy-in transaction during 2023 and entered into insurance contracts with a global insurance company for the funded plan in the U.K. (closed to new members and future benefit accrual).
We completed a pension buy-in transaction during 2023 and entered into insurance contracts with a global insurance company for the funded plan in the U.K. (closed to new members and future benefit accrual).
Our failure to implement such systems successfully, on time and on budget could have a material adverse effect on us.
Our failure to implement such systems successfully, on time and on budget could have a material adverse effect on our financial condition, operating results, and cash flows.
Prohibition against proposing on future government contracts could have an adverse effect on our consolidated financial condition and results of operations. 18 Table of Contents Changes in spending or budgetary priorities or delays in contract awards may materially adversely affect our business, financial condition and results of operations.
Prohibition against proposing on future government contracts could have an adverse effect on our consolidated financial condition and results of operations. Changes in spending or budgetary priorities or delays in contract awards may materially adversely affect our business, financial condition and results of operations. We perform work through various subsidiaries to the U.S. federal government through government contracts.
In 2024, we began implementing new enterprise resource planning (“ERP”) systems, which are designed in part to support our future growth and more fully optimize our existing processes by harmonizing our systems and phasing out legacy systems at various businesses we have acquired over the years, and will continue to implement the new systems in phases across our various entities on a worldwide basis over the next few years.
In 2024, we began implementing new enterprise resource planning (“ERP”) systems, which are designed to support future growth and further optimize our existing processes by harmonizing our systems and phasing out legacy systems at various businesses we have acquired over the years.
These acquisitions and investments could be unsuccessful or consume significant resources, which could adversely affect our operating results. We expect to continue to evaluate the acquisition of strategic businesses, service lines, and technologies with the potential to strengthen our industry position, enhance our existing offerings, or expand into adjacent industries.
We expect to continue to evaluate the acquisition of strategic businesses, service lines, and technologies with the potential to strengthen our industry position, enhance our existing offerings, or expand into adjacent industries.
For example, under the E.U. General Data Protection Regulation (“GDPR”) and U.K. General Data Protection Regulation ("UK GDPR") companies must meet certain requirements regarding the handling of personal data or face penalties of up to 4% of worldwide revenue.
This includes personal data collected, processed, or transmitted through systems installed at customer locations that we may maintain or monitor. For example, under the E.U. General Data Protection Regulation (“GDPR”) and U.K. General Data Protection Regulation ("UK GDPR") companies must meet certain requirements regarding the handling of personal data or face penalties of up to 4% of worldwide revenue.
If our estimates materially diverge from our realized liabilities, adjustments to our balance sheet may be required and these increased liabilities would be recorded in the period that the experience becomes known.
If our estimates materially diverge from our realized liabilities, adjustments to our balance sheet may be required and these increased liabilities would be recorded in the period that the experience becomes known. We carry a significant amount of goodwill, identifiable intangible assets, and fixed assets on our consolidated balance sheets.
For example, in August 2022, the U.S. Environmental Protection Agency (“EPA”) issued a proposal that, if enacted, would designate two types of per- and poly-fluoroalkyl substances ("PFAS") as hazardous substances, which could lead to legal claims or other liabilities.
For example, in August 2022, the U.S. Environmental Protection Agency (“EPA”) issued a proposal that, if enacted, would designate two types of PFAS as hazardous substances, which could lead to legal claims or other liabilities. In certain instances, we have obtained indemnification or covenants from third parties (including predecessors or lessors) for such clean-up and other obligations and liabilities.
If these investments do not perform well or are not managed properly and their values decline significantly, it could result in a coverage shortfall for these pension obligations and therefore significantly increase our pension obligations.
We also maintain defined benefit pension plans outside of the U.S. Our non-U.S. defined benefit pension plans include both funded and unfunded plans. If these investments do not perform well or are not managed properly and their values decline significantly, it could result in a coverage shortfall for these pension obligations and therefore significantly increase our pension obligations.
If any of our insurance carriers default on their obligations to provide insurance coverage by reason of its insolvency or for other reasons, our exposure to claims would increase and our profits would be adversely affected.
If any of our insurance carriers default on their obligations to provide insurance coverage by reason of its insolvency or for other reasons, our exposure to claims would increase and our profits would be adversely affected. Certain of our coverages are subject to large deductibles or have high self-insured retention amounts and our policies do not cover all possible claims.
Continued increases in healthcare costs or additional costs created by future health care reform laws adopted by Congress, state legislatures, or municipalities could adversely affect our consolidated results of operations and financial position. 29 Table of Contents We are subject to many laws and regulations in the jurisdictions in which we operate, and changes to such laws and regulations may result in additional costs and impact our operations.
Continued increases in healthcare costs or additional costs created by future health care reform laws adopted by Congress, state legislatures, or municipalities could adversely affect our consolidated results of operations and financial position.
Our use of revenue recognition over time could result in a reduction or reversal of previously recorded revenue or profits. A significant portion of our revenue is recognized over time by measuring progress toward complete satisfaction of performance obligations in the proportion that our actual costs bear to our estimated contract costs at completion.
A significant portion of our revenue is recognized over time by measuring progress toward complete satisfaction of performance obligations in the proportion that our actual costs bear to our estimated contract costs at completion. The earnings or losses recognized on individual contracts are based on estimates of contract revenue, costs, and profitability.
ERP implementations are complex, time-consuming, labor intensive, and involve substantial expenditures on system software and implementation activities. ERP implementations also require transformation of business and financial processes to realize the benefits of the ERP systems.
We will continue to implement the new systems in phases across our various entities on a worldwide basis over the next few years. ERP implementations are complex, time-consuming, labor intensive, and involve substantial expenditures on system software and implementation activities. ERP implementations also require transformation of business and financial processes to realize the benefits of the systems.
As a result, seasonal changes and adverse weather conditions can adversely affect our business operations through declines in demand for our services and alterations and delays in applicable schedules. Adverse weather conditions can reduce demand for our services and reduce sales or render our contracting operations less efficient resulting in under-utilization of crews and equipment and lower contract profitability.
As a result, seasonal changes and adverse weather conditions can adversely affect our business operations through declines in demand for our services and alterations and delays in applicable schedules.
The earnings or losses recognized on individual contracts are based on estimates of contract revenue, costs and profitability. We review our estimates of contract revenue, costs and profitability on an ongoing basis.
We review our estimates of contract revenue, costs, and profitability on an ongoing basis.
Competition for qualified personnel in our industries, especially with respect to specialized projects or unique skill sets in applicable trades, is intense. The loss of any of our executive officers or other key employees or the inability to identify, hire, train, retain, and manage skilled personnel, could harm our business. Increases in healthcare costs could adversely affect our financial results.
The loss of any of our executive officers or other key employees or the inability to identify, hire, train, retain, and manage skilled personnel could harm our business. 29 Table of Conten t s Increases in healthcare costs could adversely affect our financial results.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CISO and the cybersecurity team are committed to ongoing education and professional development, regularly participating in training programs and industry conferences to stay abreast of the latest cybersecurity trends, threats, and mitigation strategies.
Biggest changeThe CISO and his regional security leaders have a combined total of over 25 Information Technology and Cybersecurity certifications, including Certified Information Systems Security Professional, Certified Cloud Security Professional, and Certified Information Security Manager. 30 Table of Conten t s The CISO and the cybersecurity team are committed to ongoing education and professional development, regularly participating in training programs and industry conferences to stay abreast of the latest cybersecurity trends, threats, and mitigation strategies.
The CISO has appointed experienced security leaders over the North American and International regions to create additional alignment and collaboration. 30 Table of Contents Risk Management and Strategy Our cybersecurity risk management program primarily leverages the National Institute of Standards and Technology Cybersecurity Framework ("NIST CSF").
The CISO has appointed experienced security leaders over the North American and International regions to create additional alignment and collaboration. Risk Management and Strategy Our cybersecurity risk management program primarily leverages the National Institute of Standards and Technology Cybersecurity Framework ("NIST CSF").
For more information on our cybersecurity related risks, see Item 1A, "Risk Factors" of this Annual Report on Form 10-K.
For more information on our cybersecurity related risks, see Item 1A, "Risk Factors" of this Annual Report on Form 10-K. 31 Table of Conten t s
The CISO manages a team of professionals with broad cybersecurity experience and expertise. Our CISO has served in various roles in information technology and information security for over 20 years and holds an undergraduate degree in Information Systems from Xavier University and an MBA from Michigan State.
Our CISO has served in various roles in information technology and information security for over 20 years and holds an undergraduate degree in Information Systems from Xavier University and an MBA from Michigan State.
The responsibilities of the Chief Information Officer ("CIO") include overseeing cybersecurity measures with the global Chief Information Security Officer ("CISO"). The CIO's background includes nearly 19 years of IT leadership at a major medical technology company and experience in various industries such as financial services, manufacturing, oil and gas, and chemicals.
The responsibilities of the Chief Information Officer ("CIO") include overseeing cybersecurity measures with the global Chief Information Security Officer ("CISO"). The CIO's background includes over 25 years of IT leadership, including his role at a major medical device retailer and experience in various industries such as manufacturing, consumer packaged goods, and automotive.
He holds an undergraduate degree in Management Information Systems from Augsburg University and a Master of Business Administration from Carlson School of Management at the University of Minnesota. The CISO, who reports to our CIO, is generally responsible for management of cybersecurity risk and the protection and defense of our networks and systems.
He holds a Master of Science in Engineering from the Polytechnic University of Turin. The CISO, who reports to our CIO, is generally responsible for management of cybersecurity risk and the protection and defense of our networks and systems. The CISO manages a team of professionals with broad cybersecurity experience and expertise.
Removed
The CISO and his regional security leaders have a combined total of over 25 Information Technology and Cybersecurity certifications, including Certified Information Systems Security Professional, Certified Cloud Security Professional, and Certified Information Security Manager.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2024, we owned approximately 50 facilities and leased approximately 500 facilities in the U.S., France, the United Kingdom, 31 Table of Contents Australia, the Netherlands, and over 15 other countries. We believe that our existing facilities are sufficient for our current needs.
Biggest changeAs of December 31, 2025, we owned approximately 50 facilities and leased approximately 500 facilities in the U.S., France, the United Kingdom, Australia, the Netherlands, and over 15 other countries. We believe that our existing facilities are sufficient for our current needs.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES Information regarding mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Annual Report. 32 Table of Contents PART II
Biggest changeITEM 4. MINE SAFETY DISCLOSURES Information regarding mine safety violations and other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95.1 to this Annual Report. 32 Table of Conten t s PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn 2022, our Board of Directors authorized a stock repurchase program ("2022 SRP"), authorizing the purchase of up to an aggregate of $250 million of common stock through February 2024. During 2023, we repurchased 1,626,493 shares of common stock for approximately $41 million.
Biggest changeAs of December 31, 2025, we had $1 billion of authorized repurchases remaining under the 2025 SRP. 33 Table of Conten t s During 2024, our Board of Directors authorized the 2024 SRP to purchase up to an aggregate of $1 billion of shares of our common stock.
In addition, our Credit Agreement (as later defined), in certain situations, prohibits us from paying cash dividends or making other distributions on our common stock without prior consent of the lender.
In addition, our Credit Agreement, in certain situations, prohibits us from paying cash dividends or making other distributions on our common stock without prior consent of the lender.
Performance Graph The following graph summarizes the cumulative return on $100 invested in APG’s common stock, the S&P 500, the Russell 2000 Stock Index, and the common stock of a selected peer group of companies if invested on January 1, 2020 until December 31, 2024.
Performance Graph The following graph summarizes the cumulative return on $100 invested in APG’s common stock, the S&P 500, the Russell 2000 Stock Index, and the common stock of a selected peer group of companies if invested on January 1, 2021 until December 31, 2025.
We declared a pro rata Series B Preferred Stock dividend of $7 million, or 283,196 shares of common stock, during the year ended December 31, 2024 for the Series B Preferred Stock outstanding through February 28, 2024.
We declared a pro rata Series B Preferred Stock dividend of $7 million, or 424,794 shares of common stock, during the year ended December 31, 2024 for the Series B Preferred Stock outstanding through February 28, 2024.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES M ARKET AND D IVIDEND I NFORMATION Our common stock is listed on the NYSE under symbol “APG.” Common Stock As of February 19, 2025, there were approximately 15 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES M ARKET AND D IVIDEND I NFORMATION Our common stock is listed on the NYSE under symbol “APG.” Common Stock As of February 18, 2026, there were approximately 10 holders of record of our common stock.
Refer to Note 19 – “Shareholders’ Equity and Redeemable Convertible Preferred Stock” to our consolidated financial statements included in this Annual Report for additional information. Stock Repurchase Program On February 26, 2024, our Board of Directors authorized a stock repurchase program ("SRP") to purchase up to an aggregate of $1,000 million of shares of our common stock.
Refer to Note 19 – “Shareholders’ Equity and Redeemable Convertible Preferred Stock” to our consolidated financial statements included in this Annual Report for additional information. Stock Repurchase Program During the second quarter of 2025, our Board of Directors authorized a share repurchase program ("2025 SRP") to purchase up to $1 billion of shares of our common stock.
The peer group includes Cintas Corporation, Comfort Systems USA, Inc., Dycom Industries, Inc., EMCOR Group Inc., FirstService Corp, Johnson Controls International plc, MasTec Inc., Otis Worldwide, and Quanta Services, Inc. In 2024, FirstService Corp was added to the peer group to provide exposure to non-residential services including fire protection services.
The peer group includes Cintas Corporation, Comfort Systems USA, Inc., Dycom Industries, Inc., EMCOR Group Inc., FirstService Corp, Johnson Controls International plc, MasTec Inc., Otis Worldwide, and Quanta Services, Inc.
The 2022 SRP expired on February 29, 2024. 33 Table of Contents Issuer Purchases of Equity Securities The Company did not have any purchases of equity securities during the quarter ended December 31, 2024.
During the year ended December 31, 2024, we repurchased 24,390,240 shares of our common stock for approximately $600 million. Issuer Purchases of Equity Securities The Company did not have any purchases of equity securities during the quarter ended December 31, 2025.
Removed
Acquisitions pursuant to the SRP may be made from time to time through a combination of open market repurchases in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, privately negotiated transactions, accelerated share repurchase transactions, and/or other derivative transactions, at our discretion, as permitted by securities laws and other legal requirements.
Added
Stock Split During the second quarter of 2025, we executed a three-for-two stock split by issuing a stock dividend of one-half of one share of common stock for each share of common stock.
Removed
In connection with the SRP, we may enter into Rule 10b5-1 trading plans which would generally permit us to repurchase shares at times when we might otherwise be prevented from doing so under the securities laws.
Added
All references to the number of shares outstanding, issued shares, and per share amounts of the common stock have been restated to reflect the effect of the stock split for all historical periods presented. Refer to Note 19 – “Shareholders’ Equity and Redeemable Convertible Preferred Stock” to our consolidated financial statements included in this Annual Report for additional information.
Removed
This stock repurchase program will expire when the authorized amount is exhausted, unless otherwise modified or terminated by our Board of Directors at any time in its sole discretion. During the year ended December 31, 2024, we repurchased 16,260,160 shares of common stock for approximately $600 million.
Added
The timing, amount, and manner of any repurchases under the new repurchase program will be determined at the discretion of our leadership based on a number of factors, including the availability of capital, capital allocation alternatives, and market conditions for our common stock.
Removed
The repurchases during the year ended December 31, 2024 were related to the Series B Preferred Stock Conversion (see Note 19 – "Shareholders' Equity and Redeemable Convertible Preferred Stock" to our consolidated financial statements). As of December 31, 2024, we had approximately $400 million of authorized repurchases remaining under the SRP.
Added
The share repurchase program is open-ended and does not require our Company to acquire any specific number of shares.
Removed
Further, Dycom Industries, Inc. was added to the peer group and Jacob Engineering Group Inc. was removed from the peer group to better reflect the businesses of our Specialty Services segment. ITEM 6. [RESERVED] 34 Table of Contents
Added
It may be modified, suspended, extended, or terminated by our Company at any time without prior notice and may be executed through open-market purchases, privately negotiated transactions or otherwise, and we may enter into Rule 10b5-1 trading plans in connection with such repurchases. This new authorization replaces our previous share repurchase authorization announced in 2024 ("2024 SRP").
Added
Prior to the new authorization, we repurchased 3,095,573 shares of common stock for approximately $75 million under the 2024 SRP.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFinancing Activities Credit Agreement We have entered into a Credit Agreement by and among APi Group DE, Inc., our wholly-owned subsidiary, as borrower ("APi Group DE"), APG as a guarantor, the subsidiary guarantors from time to time party thereto, the lenders from time to time party thereto, and Citibank N.A., as administrative agent and as collateral agent (the “Credit Agreement”) which provides for: (1) a term loan facility, pursuant to which we incurred the $1,200 million term loan ("2019 Term Loan") used to fund a part of the cash portion of the purchase price in the APi Acquisition, and a $1,100 million seven-year 47 Table of Contents incremental term loan ("2021 Term Loan") used to fund a portion of the purchase price in the Chubb Acquisition, and (2) a $500 million Revolving Credit Facility of which up to $250 million can be used for the issuance of letters of credit.
Biggest changeFinancing Activities Credit Agreement We have entered into a Credit Agreement, which provides for: (1) a term loan facility, pursuant to which we incurred the $1,200 million term loan ("2019 Term Loan") used to fund a part of the cash portion of the purchase price in the APi Acquisition, and a $1,100 million seven-year incremental term loan ("2021 Term Loan") used to fund a portion of the purchase price in the Chubb acquisition, and (2) a $750 million Revolving Credit Facility (increased from $500 million during 2025) of which up to $250 million can be used for the issuance of letters of credit. 44 Table of Conten t s During the second quarter of 2025, we completed the Eighth Amendment to our credit agreement, which increased the Revolving Credit Facility from $500 million to $750 million, extended the facility's maturity to five years from the date of the Eighth Amendment, reduced the applicable margin by 75 basis points, and eliminated the credit spread adjustment.
In the face of increased pricing pressure on key materials or other market developments, we strive to maintain our profit margins through productivity improvements, cost reduction programs, pricing adjustments, and business streamlining efforts. Increased competition for skilled labor resources and higher labor costs can reduce our profitability and impact our ability to deliver timely service to our customers.
In the face of increased cost pressure on key materials or other market developments, we strive to maintain our profit margins through productivity improvements, cost reduction programs, pricing adjustments, and business streamlining efforts. Increased competition for skilled labor resources and higher labor costs can reduce our profitability and impact our ability to deliver timely service to our customers.
Senior Notes On June 22, 2021, APi Group DE completed a private offering of $350 million aggregate principal amount of 4.125% Senior Notes due 2029 (the “4.125% Senior Notes”), issued under an indenture, dated June 22, 2021. The 4.125% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain subsidiaries.
Senior Notes On June 22, 2021, APi Group DE completed a private offering of $350 million aggregate principal amount of 4.125% Senior Notes due 2029 (the “4.125% Senior Notes”), issued under an indenture, dated June 22, 2021. The 4.125% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries.
If the carrying amount exceeds fair value, then an impairment loss would be recognized in an amount equal to that excess, limited to the amount of goodwill allocated to that reporting unit. Quantitative testing performed is based on the estimated fair value using a combination of market and income approaches.
If the carrying amount exceeds fair value, then an impairment loss would be recognized in an amount equal to that excess, limited to the amount of goodwill allocated to that reporting unit. Quantitative testing is based on the estimated fair value using a combination of market and income approaches.
N ON -G AAP F INANCIAL M EASURES We supplement our reporting of consolidated financial information determined in accordance with GAAP with SG&A expenses (excluding amortization and impairment) and adjusted EBITDA (defined below), which are non-GAAP financial measures.
N ON -G AAP F INANCIAL M EASURES We supplement our reporting of consolidated financial information determined in accordance with GAAP with SG&A expenses (excluding amortization) and adjusted EBITDA (defined below), which are non-GAAP financial measures.
Fluctuations in end-user demand, or in the supply of services within those industries, can affect demand for our services. As a result, our business may be adversely affected by industry declines or by delays in new projects. Variations or unanticipated changes in project schedules in connection with large projects can create fluctuations in net revenues.
Fluctuations in end-user demand, or in the supply of services within those industries, can affect demand for our services. As a result, our businesses may be adversely affected by industry declines or by delays in new projects. Variations or unanticipated changes in project schedules in connection with large projects can create fluctuations in net revenues.
Estimated discount rates were determined using the weighted-average cost of capital for each reporting unit at the time of the analysis, taking into consideration the risks inherent within each reporting unit individually. For the year ended December 31, 2024, we performed our annual goodwill impairment assessment as of October 1, 2024.
Estimated discount rates were determined using the weighted-average cost of capital for each reporting unit at the time of the analysis, taking into consideration the risks inherent within each reporting unit individually. For the year ended December 31, 2025, we performed our annual goodwill impairment assessment as of October 1, 2025.
Contract assets are generally classified as current assets within the consolidated balance sheets. Contract liabilities from our long-term construction contracts arise when amounts invoiced to our customers exceed net revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advanced payments from our customers on certain contracts.
Contract assets are generally classified as current assets within the consolidated balance sheets. Contract liabilities from our long-term construction contracts arise when amounts invoiced to our customers exceed net revenues recognized under the cost-to-cost measure of progress. Contract liabilities additionally include advance payments from our customers on certain contracts.
The interest rate applicable to borrowings under the Revolving Credit Facility is, at our option, either (a) a base rate plus an applicable margin equal to 1.25% or (2) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.25% plus a CSA.
The interest rate applicable to borrowings under the Revolving Credit Facility is, at our option, either (a) a base rate plus an applicable margin equal to 0.25% or (2) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.25%.
Although we believe our calculations for tax returns are correct and the positions taken thereon are reasonable, the final outcome of income tax examinations could be materially different from our expectations and the estimates that are reflected in our consolidated financial statements, which could have a material effect on our results of operations, cash flows and liquidity. 52 Table of Contents
Although we believe our calculations for tax returns are correct and the positions taken thereon are reasonable, the final outcome of income tax examinations could be materially different from our expectations and the estimates that are reflected in our consolidated financial statements, which could have a material effect on our results of operations, cash flows and liquidity.
Material Cash Requirements from Known Contractual and Other Obligations Our material cash requirements from known contractual and other obligations primarily relate to the following, for which information on both a short-term and long-term basis is provided in the indicated notes to the consolidated financial statements and expected to be satisfied using cash generated from operations: • Operating and Finance Leases – See Note 12 – "Leases." • Debt – See Note 13 – "Debt" for future principal payments and interest rates on our debt instruments. • Tax Obligations – See Note 14 – "Income Taxes." • Pension obligations – See Note 16 – "Pension." 49 Table of Contents We make investments in our properties and equipment to enable continued expansion and effective performance of our business.
Material Cash Requirements from Known Contractual and Other Obligations Our material cash requirements from known contractual and other obligations primarily relate to the following, for which information on both a short-term and long-term basis is provided in the indicated notes to the consolidated financial statements and expected to be satisfied using cash generated from operations: • Operating and Finance Leases – See Note 12 – "Leases." • Debt – See Note 13 – "Debt" for future principal payments and interest rates on our debt instruments. • Tax Obligations – See Note 14 – "Income Taxes." We make investments in our properties and equipment to enable continued expansion and effective performance of our business.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and year-to-year comparisons of APG’s financial condition and results of operations for the years ended December 31, 2024 and 2023.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is a discussion and year-to-year comparisons of APG’s financial condition and results of operations for the years ended December 31, 2025 and 2024.
The principal limitation of these non-GAAP financial measures is that they exclude significant expenses that are required by GAAP to be recorded in our financial statements and may not be comparable to similarly titled measures of other companies due to potential differences in calculation methods.
The principal limitation of these non-GAAP financial measures is that they exclude significant expenses, gains, and other non-recurring items that are required by GAAP to be recorded in our financial statements and may not be comparable to similarly titled measures of other companies due to potential differences in calculation methods.
These performance obligations use the cost-to-cost input method to measure our progress towards complete satisfaction of the performance 50 Table of Contents obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on the contracts.
These performance obligations use the cost-to-cost input method to measure our progress towards complete satisfaction of the performance obligation as we believe it best depicts the transfer of control to the customer which occurs as we incur costs on the contracts.
Year ended December 31, 2023 versus year ended December 31, 2022 For a discussion of our Liquidity and Capital Resources for the fiscal year ended December 31, 2023 compared to the fiscal year ended December 31, 2022, refer to Part I, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 28, 2024.
Year ended December 31, 2024 versus year ended December 31, 2023 For a discussion of our Liquidity and Capital Resources for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023, refer to Part I, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 26, 2025.
These fluctuations, as well as the highly competitive nature of our industries, have resulted, and may 35 Table of Contents continue to result, in lower proposals and lower profit on the services we provide.
These fluctuations, as well as the highly competitive nature of our industries, have resulted, and may continue to result, in lower proposals and lower profit on the services we provide.
The 4.750% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries. The 4.750% Senior Notes will mature on October 15, 2029, unless earlier redeemed, and bear interest at a rate of 4.750% per year until maturity, payable semi-annually in arrears.
The 4.750% Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by us and certain of our subsidiaries. The 4.750% Senior Notes 45 Table of Conten t s will mature on October 15, 2029, unless earlier redeemed, and bear interest at a rate of 4.750% per year until maturity, payable semi-annually in arrears.
We have experienced supply chain disruptions, which have negatively impacted the source and supply of materials needed to perform our work. In addition, fluctuations in foreign currencies may have an impact on our financial position and results of operations.
We could experience supply chain disruptions, which could negatively impact the source and supply of materials needed to perform our work. In addition, fluctuations in foreign currencies may have an impact on our financial position and results of operations.
We have a winning leadership culture driven by entrepreneurial business leaders that deliver innovative solutions to our customers. We focus on growing our recurring revenues and repeat business from our diversified long-standing customers across a variety of end markets, which we believe provides us with stable cash flows and a platform for organic growth.
We have a winning leadership culture driven by entrepreneurial business leaders that deliver innovative solutions to our customers. We focus on growing our recurring revenue streams and repeat business from a diverse set of long-standing customers across a variety of end markets, which we believe provides us with stable cash flows and a platform for organic growth.
When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. The timing of revenue recognition may differ from the timing of invoicing to customers.
When the current estimate of total costs for a performance obligation indicates a loss, a provision for the entire estimated loss on the unsatisfied performance obligation is made in the period in which the loss becomes evident. 47 Table of Conten t s The timing of revenue recognition may differ from the timing of invoicing to customers.
(VGE II, and collectively with VGEM, "Viking" and collectively with the Blackstone, the "Series B Holders") pursuant to which Blackstone and Viking agreed to convert all of the outstanding shares of the Series B Preferred Stock that they hold, which represents all of the Series B Preferred Stock outstanding.
("VGEM") and Viking Global Equities II L.P. (VGE II, and collectively with VGEM, "Viking" and collectively with the Blackstone, the "Series B Holders") pursuant to which Blackstone and Viking agreed to convert all of the outstanding shares of the Series B Preferred Stock that they hold, which represents all of the Series B Preferred Stock outstanding.
Under the terms of the agreement, (i) the Series B Holders each agreed to exercise their respective right to convert all of their Series B Preferred Stock into common stock, resulting in a total of 800,000 shares of Series B Preferred Stock being converted into approximately 32,803,519 shares of common stock (inclusive of approximately 283,196 shares attributable to accrued and unpaid dividends thereon (the "Conversion Shares") and (ii) upon issuance of the Conversion Shares, we agreed to immediately repurchase one-half of the Conversion Shares, on a pro rata basis, from the Series B Holders for an aggregate purchase price of $600 million.
Under the terms of the agreement, (i) the Series B Holders each agreed to exercise their respective right to convert all of their Series B Preferred Stock into common stock, resulting in a total of 800,000 shares of Series B Preferred Stock being converted into approximately 49,205,279 shares of common stock (inclusive of approximately 424,794 shares attributable to accrued and unpaid dividends thereon (the "Conversion Shares") and (ii) upon issuance of the Conversion Shares, we agreed to immediately repurchase one-half of the Conversion Shares, on a pro rata basis, from the Series B Holders for an aggregate purchase price of $600 million.
We derive net revenues primarily from services under contractual arrangements with durations ranging from days to three years, with the majority having durations of less than six months, and which may provide the customer with pricing options that include a combination of fixed, unit, or time and material pricing.
We derive net revenues primarily from services under contractual arrangements with durations ranging from days to five years, 36 Table of Conten t s with the majority having durations of less than six months, and which may provide the customer with pricing options that include a combination of fixed, unit, or time and material pricing.
While we believe we have made reasonable estimates and assumptions to calculate the fair values of the reporting units, it is possible changes could occur. We will continue to monitor reporting units in 2025 for any triggering events or other indicators of impairment.
While we believe we have made reasonable estimates and judgments about the fair values of the reporting units, it is possible changes could occur. We will continue to monitor reporting units in 2026 for any triggering events or other indicators of impairment.
The Organization for Economic Co-operation and Development ("OECD") has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as "Pillar 2"), with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025.
The Organization for Economic Co-operation and Development (OECD) has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2), with rules effective beginning in 2024 and expanding in 2025.
Upon acquisition, these businesses were either combined into one of the existing components or managed on a stand-alone basis as an individual component. The components are aligned to one of our two reportable segments, Safety Services or Specialty Services.
We have recorded goodwill in connection with our historical acquisitions of businesses. Upon acquisition, these businesses were either combined into one of the existing components or managed on a stand-alone basis as an individual component. The components are aligned to one of our two reportable segments, Safety Services or Specialty Services.
The net proceeds from the Series B Preferred Stock issuance were used to fund a portion of the consideration for the Chubb Acquisition. On February 28, 2024, we entered into a Conversion and Repurchase Agreement with Juno Lower Holdings L.P. ("Juno Lower Holdings"), FD Juno Holdings L.P.
The net proceeds from the Series B Preferred Stock issuance were used to fund a portion of the consideration for the Chubb acquisition. During 2024, we entered into a Conversion and Repurchase Agreement with Juno Lower Holdings L.P. ("Juno Lower Holdings"), FD Juno Holdings L.P. ("FD Juno Holdings," and together with Juno Lower Holdings, "Blackstone"), Viking Global Equities Master Ltd.
Gross profit The following table presents our gross profit (net revenues less cost of revenues) and gross margin (gross profit as a percentage of net revenues) for the years ended December 31, 2024 and 2023, respectively: Year Ended December 31, Change ($ in millions) 2024 2023 $ % Gross profit $ 2,178 $ 1,940 $ 238 12.3 % Gross margin 31.0 % 28.0 % Our gross profit for the year ended December 31, 2024 was $2,178 million compared to $1,940 million for the year ended December 31, 2023, an increase of $238 million, or 12.3%.
Gross profit The following table presents our gross profit (net revenues less cost of revenues) and gross margin (gross profit as a percentage of net revenues) for the years ended December 31, 2025 and 2024, respectively: Year Ended December 31, Change ($ in millions) 2025 2024 $ % Gross profit $ 2,487 $ 2,178 $ 309 14.2 % Gross margin 31.4 % 31.0 % Our gross profit for the year ended December 31, 2025 was $2,487 million compared to $2,178 million for the year ended December 31, 2024, an increase of $309 million, or 14.2%.
We believe maintenance and service revenues are generally more predictable through contractual arrangements with typical terms ranging from days to three years, with the majority having short durations and are often recurring due to consistent renewal rates and long-standing customer relationships.
We believe inspection, service, and monitoring revenues are generally more predictable through contractual arrangements with typical terms ranging from days to five years, with the majority having durations of less than six months and are often recurring due to consistent renewal rates and long-standing customer relationships.
As of December 31, 2024, we had $277 million aggregate principal amount of 4.750% Senior Notes outstanding. Debt Covenants As of December 31, 2024 and 2023, we were in compliance with all covenants contained in the indentures governing the 4.125% Senior Notes and 4.750% Senior Notes and the Credit Agreement.
Debt Covenants We were in compliance with all covenants contained in the indentures governing the 4.125% Senior Notes, 4.750% Senior Notes, and the Credit Agreement as of December 31, 2025 and 2024.
We had total goodwill of $2,894 million as December 31, 2024. Based on the annual test, no goodwill impairment was indicated for any of the reporting units: North American Life Safety, International Life Safety, Heating, Ventilation and Air Conditioning ("HVAC"), Infrastructure/Utility, Fabrication, and Specialty Contracting.
We had total goodwill of $3,167 million as of December 31, 2025. Based on the annual test, no goodwill impairment was indicated for any of the reporting units: North American Life Safety, International Life Safety, Infrastructure and Utility, Fabrication and Distribution, and Specialty Contracting.
Investment expense (income) and other, net Investment expense (income) and other, net was $7 million and $(25) million for the years ended December 31, 2024 and 2023, respectively.
Investment expense (income) and other, net Investment expense (income) and other, net was $0 and $8 million for the years ended December 31, 2025 and 2024, respectively.
Gross profit Our gross profit is influenced by direct labor, materials, and subcontract costs. Our profit margins are also influenced by raw material costs, contract mix, weather, and proper coordination with contract providers.
Gross profit Our gross profit is influenced by direct labor, materials, and subcontract costs. Our profit margins are also influenced by raw material costs, contract mix, weather, and proper coordination with contract providers. Labor intensive contracts usually drive higher margins than those contracts that include material, subcontract, and equipment costs.
We believe this non-GAAP measure provides meaningful information and helps investors understand our operational selling, general, and administrative expenses excluding acquisition-related amortization expense and impairment charges to better enable investors to understand our financial results and assess our prospects for future performance. 44 Table of Contents The following tables present reconciliations of SG&A expenses to SG&A expenses (excluding amortization and impairment) for the periods indicated: Year Ended December 31, ($ in millions) 2024 2023 2022 Reported SG&A expenses $ 1,694 $ 1,581 $ 1,552 Adjustments to reconcile SG&A expenses to SG&A expenses (excluding amortization and impairment) Amortization expense (216) (197) (197) Impairment of goodwill, intangibles, and other assets — (12) — SG&A expenses (excluding amortization and impairment) $ 1,478 $ 1,372 $ 1,355 Adjusted EBITDA Adjusted Earnings before interest, taxes, depreciation and amortization after adjustments for non-recurring items (“Adjusted EBITDA”) is the measure of profitability used by management.
We believe this non-GAAP measure provides meaningful information and helps investors understand our core selling, general, and administrative expenses excluding acquisition-related amortization expense to better enable investors to understand our financial results and assess our prospects for future performance. 41 Table of Conten t s The following tables present reconciliations of SG&A expenses to SG&A expenses (excluding amortization) for the periods indicated: Year Ended December 31, ($ in millions) 2025 2024 Reported SG&A expenses $ 1,933 $ 1,694 Adjustments to reconcile SG&A expenses to SG&A expenses (excluding amortization) Amortization expense (228) (216) SG&A expenses (excluding amortization) $ 1,705 $ 1,478 Adjusted EBITDA Adjusted earnings before interest, taxes, depreciation, and amortization (“adjusted EBITDA”) is the measure of profitability used by management to manage the business.
The increase in cash provided by operating activities was primarily due to an increase in net income in the period. This increase in cash was also driven by lower working capital needs associated with the various services we provided in 2024 compared to 2023.
The increase in cash provided by operating activities was primarily due to an increase in net income and improvements in working capital efficiencies associated with the various services we provided in 2025 compared to 2024.
Investors are encouraged to review the following reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures and not to rely on any single financial measure to evaluate our business.
Investors are encouraged to review the following reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures and not to rely on any single financial measure to evaluate our business. SG&A expenses (excluding amortization) SG&A expenses (excluding amortization) is a measure of operating costs used by management to manage the business.
The following table presents a reconciliation of net income to Adjusted EBITDA for the periods indicated: Year Ended December 31, ($ in millions) 2024 2023 2022 Reported net income $ 250 $ 153 $ 73 Adjustments to reconcile net income to adjusted EBITDA: Interest expense, net 146 145 125 Income tax provision 80 79 20 Depreciation 80 79 77 Amortization 222 224 227 Contingent consideration and compensation 3 14 9 Non-service pension cost (benefit) 22 (12) (42) Inventory step-up — — 9 Business process transformation expenses 52 30 31 Acquisition related expenses 13 7 121 Loss (gain) on extinguishment of debt, net 1 7 (5) Restructuring program related costs 32 46 30 Other (8) 10 (2) Adjusted EBITDA $ 893 $ 782 $ 673 L IQUIDITY AND C APITAL R ESOURCES Overview Our primary sources of liquidity are cash flows from the operating activities of our consolidated subsidiaries, available cash and cash equivalents, our access to our $500 million five-year senior secured revolving credit facility (the “Revolving Credit Facility”), and the proceeds from debt and equity offerings.
The following table presents a reconciliation of net income to adjusted EBITDA for the periods indicated: Year Ended December 31, ($ in millions) 2025 2024 Reported net income $ 302 $ 250 Adjustments to reconcile net income to adjusted EBITDA: Interest expense, net 141 146 Income tax provision 111 80 Depreciation 85 80 Amortization 242 222 Contingent consideration and compensation 2 3 Non-service pension cost 19 22 Systems and business enablement 96 — Business process transformation expenses 4 52 Acquisition and divestiture related expenses 24 13 Restructuring program related costs 14 32 Other 1 (7) Adjusted EBITDA $ 1,041 $ 893 L IQUIDITY AND C APITAL R ESOURCES Overview Our primary sources of liquidity are cash flows from the operating activities of our consolidated subsidiaries, available cash and cash equivalents, our access to our $750 million five-year senior secured revolving credit facility (the “Revolving Credit Facility”) and the proceeds from debt and equity offerings.
We used the net proceeds from the sale of the 4.125% Senior Notes to 48 Table of Contents repay the previously outstanding term loan, prepay a portion of the 2019 Term Loan and for general corporate purposes.
We used the net proceeds from the sale of the 4.125% Senior Notes to repay a previously outstanding term loan, prepay a portion of the 2019 Term Loan and for general corporate purposes. As of December 31, 2025, we had $337 million aggregate principal amount of 4.125% Senior Notes outstanding.
Adjusted EBITDA for the years ended December 31, 2024 and 2023 was $893 million and $782 million, respectively, an increase of $111 million. The increase in Adjusted EBITDA was primarily driven by the factors previously discussed. See "Non-GAAP Financial Measures" below for a discussion and reconciliation of our non-GAAP financial measures.
Adjusted EBITDA for the years ended December 31, 2025 and 2024 was $1,041 million and $893 million, respectively, an increase of $148 million. The increase in adjusted EBITDA was driven by the same factors that explained the increase in net income. See "Non-GAAP Financial Measures" below for a discussion and reconciliation of our non-GAAP financial measures.
Adjustments include expenses that are non-recurring in nature and that may not be indicative of the Company’s core operating results, including business transformation and other expenses for the integration of acquired businesses, the impact and results of businesses classified as assets held-for-sale and divested, and one-time and other infrequent events such as impairment charges, restructuring costs, transaction and other costs related to acquisitions, and non-service pension cost or benefit.
Adjustments include expenses that are non-recurring in nature and that may not be indicative of the Company’s core operating results, including systems and business enablement expenses, business process transformation expenses, and one-time and other infrequent events such as impairment charges, restructuring costs, transaction and other costs related to acquisitions and divestitures, non-service pension cost, and miscellaneous capital market activities.
We perform the qualitative analysis by evaluating financial performance, macroeconomic conditions, and industry trends. Under the quantitative assessment, the estimated fair value of a reporting unit is compared with its carrying amount, including goodwill.
Accounting standards for testing goodwill for impairment require the application of either a qualitative or quantitative assessment to analyze whether or not goodwill has been impaired. We perform the qualitative analysis by evaluating financial performance, macroeconomic conditions, and industry trends. Under the quantitative assessment, the estimated fair value of a reporting unit is compared with its carrying amount, including goodwill.
As part of the transaction, we incurred approximately $550 million of incremental principal our 2021 Term Loan. The proceeds were used to repay the remaining $330 million of the 2019 Term Loan, repay $100 million of the Revolving Credit Facility outstanding, and for general corporate purposes, including to partially fund the Elevated acquisition.
In connection with this transaction, we added approximately $550 million of incremental principal on our 2021 Term Loan. The proceeds were used to fully repay the remaining $330 million balance of the 2019 Term Loan, to pay down $100 million outstanding under the Revolving Credit Facility, and for general corporate purposes, including partial funding of the Elevated acquisition.
SG&A expenses as a percentage of net revenues was 24.1% during the year ended December 31, 2024 compared to 22.8% in 2023. The increase in SG&A expenses was primarily driven by investments to support our Safety Services segment, SG&A expenses from acquisitions completed, and acquisitions costs in the year ended December 31, 2024.
SG&A expenses as a percentage of net revenues was 24.4% during the year ended December 31, 2025 compared to 24.1% in 2024. The increase in SG&A expenses was primarily driven by non-recurring systems and business enablement expenses, SG&A expenses from acquisitions completed during the last year, and investments to support growth.
Net income as a percentage of net revenues for the years ended December 31, 2024 and 2023 was 3.6% and 2.2%, respectively. The net income improvement is primarily attributable to significant gross margin expansion resulting from the factors mentioned above, partially offset by SG&A expenses discussed above.
Net income as a percentage of net revenues for the years ended December 31, 2025 and 2024 was 3.8% and 3.6%, respectively. The net income improvement is primarily attributable to strong revenue growth and gross margin expansion previously referenced and a decrease in interest expense, partially offset by the increase in SG&A expenses discussed above.
Investment expense (income) and other, net Investment expense (income) and other, net includes expense (income) from foreign currency forward contracts, cross-currency swaps, interest rate swaps agreements, joint ventures, non-service pension expense (benefit), and other miscellaneous items.
Investment expense (income) and other, net Investment expense (income) and other, net includes income and expense from foreign currency forward contracts, cross-currency swaps, joint ventures, non-service pension cost, and other miscellaneous items including loss (gains) on extinguishment of debt.
Net cash provided by (used in) financing activities Net cash provided by financing activities was $245 million for the year ended December 31, 2024 compared to $532 million used in financing activities in 2023. The increase in cash provided by financing activities was primarily driven by equity and debt issuances in 2024.
Net cash (used in) provided by financing activities Net cash used in financing activities was $121 million for the year ended December 31, 2025 compared to $245 million of cash provided by financing activities in 2024.
As of December 31, 2024, the amended interest rate applicable to the 2021 Term Loan was, at our option, either (a) a base rate plus an applicable margin equal to 1.00% or (b) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 2.00%. The 2021 Term Loan matures on January 3, 2029.
Additionally, we made a repayment of $100 million on the 2021 Term Loan. The amended interest rate applicable to the 2021 Term Loan is, at our option, either (a) a base rate plus an applicable margin equal to 0.75% or (b) a Term SOFR rate (adjusted for statutory reserves) plus an applicable margin equal to 1.75%.
We used the net proceeds from the sale of the 4.750% Senior Notes to finance a portion of the consideration for the Chubb Acquisition. During the year ended December 31, 2022, we repurchased $23 million of outstanding principal amount of the 4.750% Senior Notes and recognized a net gain of $3 million on the debt extinguishment.
We used the net proceeds from the sale of the 4.750% Senior Notes to finance a portion of the consideration for the Chubb acquisition. As of December 31, 2025, we had $277 million aggregate principal amount of 4.750% Senior Notes outstanding.
As of December 31, 2024, we had approximately $400 million of authorized repurchases remaining under the stock repurchase program. 46 Table of Contents Cash Flows Cash Flows The following table summarizes net cash flows with respect to our operating, investing, and financing activities for the periods indicated: Year Ended December 31, ($ in millions) 2024 2023 Net cash provided by operating activities $ 620 $ 514 Net cash used in investing activities (829) (115) Net cash provided by (used in) financing activities 245 (532) Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash (15) 6 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 21 $ (127) Cash, cash equivalents, and restricted cash, end of period $ 501 $ 480 Net cash provided by operating activities Net cash provided by operating activities was $620 million for the year ended December 31, 2024 compared to $514 million of cash provided in 2023.
During the year ended December 31, 2024, we repurchased 24,390,240 shares of our common stock for approximately $600 million. 43 Table of Conten t s Cash Flows The following table summarizes net cash flows with respect to our operating, investing, and financing activities for the periods indicated: Year Ended December 31, ($ in millions) 2025 2024 Net cash provided by operating activities $ 759 $ 620 Net cash used in investing activities (254) (829) Net cash (used in) provided by financing activities (121) 245 Effect of foreign currency exchange rate change on cash, cash equivalents, and restricted cash 28 (15) Net increase in cash, cash equivalents, and restricted cash $ 412 $ 21 Cash, cash equivalents, and restricted cash, end of period $ 913 $ 501 Net cash provided by operating activities Net cash provided by operating activities was $759 million for the year ended December 31, 2025 compared to $620 million of cash provided in 2024.
During the second quarter of 2024, we completed the Sixth Amendment to our credit agreement, upsizing and repricing the 2021 Term Loan and repaying the 2019 Term Loan. The repricing reduced the applicable margin on the 2021 Term Loan by 50 basis points and removed the credit spread adjustment ("CSA").
During the first quarter of 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan. The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points. During 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by $300 million.
Significant changes in the assumptions or estimates used in the underlying valuations, including the expected profitability or cash flows of an acquired business, could materially affect our operating results in the period such changes are recognized. 51 Table of Contents The Periodic Assessment of Potential Impairment of Goodwill Goodwill represents the excess of cost over the fair market value of net tangible and identifiable intangible assets of acquired businesses.
Significant changes in the assumptions or estimates used in the underlying valuations, including the expected profitability or cash flows of an acquired business, could materially affect our operating results in the period such changes are recognized.
C RITICAL A CCOUNTING E STIMATES The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported.
See Note 3 – “Recent Accounting Pronouncements” for further information regarding new accounting standards, including the anticipated dates of adoption and the effects on our consolidated financial position, results of operations or liquidity. 46 Table of Conten t s C RITICAL A CCOUNTING E STIMATES The preparation of financial statements and related disclosures in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported.
Operating Segment Results Net Revenues Year Ended December 31, Change ($ in millions) 2024 2023 $ % Safety Services $ 5,227 $ 4,871 $ 356 7.3 % Specialty Services 1,798 2,079 (281) (13.5 %) Corporate and Eliminations (7) (22) NM NM $ 7,018 $ 6,928 $ 90 1.3 % 39 Table of Contents Segment Earnings Year Ended December 31, Change ($ in millions) 2024 2023 $ % Safety Services $ 809 $ 664 $ 145 21.8 % Safety Services segment earnings as a % of net revenues 15.5 % 13.6 % Specialty Services $ 209 $ 239 $ (30) (12.6 %) Specialty Services segment earnings as a % of net revenues 11.6 % 11.5 % Corporate and Eliminations $ (125) $ (121) NM NM Adjusted EBITDA (non-GAAP) $ 893 $ 782 $ 111 14.2 % NM = Not meaningful The following discussion breaks down the net revenues and segment earnings by reportable segment for the years ended December 31, 2024 and 2023.
Segment Results Net Revenues Year Ended December 31, Change ($ in millions) 2025 2024 $ % Safety Services $ 5,456 $ 4,797 $ 659 13.7 % Specialty Services 2,460 2,229 231 10.4 % Corporate and Eliminations (5) (8) NM NM $ 7,911 $ 7,018 $ 893 12.7 % Segment Earnings Year Ended December 31, Change ($ in millions) 2025 2024 $ % Safety Services $ 916 $ 765 $ 151 19.7 % Safety Services segment earnings as a % of net revenues 16.8 % 15.9 % Specialty Services $ 264 $ 253 $ 11 4.3 % Specialty Services segment earnings as a % of net revenues 10.7 % 11.4 % Corporate and Eliminations $ (139) $ (125) NM NM Adjusted EBITDA (non-GAAP) $ 1,041 $ 893 $ 148 16.6 % NM = Not meaningful The following discussion breaks down the net revenues and segment earnings by reportable segment for the years ended December 31, 2025 and 2024.
Labor intensive contracts usually drive higher margins than those contracts that include material, subcontract, and equipment costs. 36 Table of Contents Selling, general, and administrative ("SG&A") expenses Selling expenses consist primarily of compensation and associated costs for sales and advertising, trade shows, and corporate marketing.
Selling, general, and administrative ("SG&A") expenses Selling expenses consist primarily of compensation and associated costs for sales and advertising, trade shows, and corporate marketing.
Selling, general, and administrative expenses The following table presents selling, general, and administrative expenses for the years ended December 31, 2024 and 2023, respectively: Year Ended December 31, Change ($ in millions) 2024 2023 $ % Selling, general, and administrative expenses $ 1,694 $ 1,581 $ 113 7.1 % SG&A expenses as a % of net revenues 24.1 % 22.8 % SG&A expenses (excluding amortization and impairment) (non-GAAP) $ 1,478 $ 1,372 $ 106 7.7 % SG&A expenses (excluding amortization and impairment) as a % of net revenues (non-GAAP) 21.1 % 19.8 % Our SG&A expenses for the year ended December 31, 2024, were $1,694 million compared to $1,581 million for 2023, an increase of $113 million.
The increase was primarily driven by disciplined customer and project selection and pricing improvements, partially offset by project revenues mix. 38 Table of Conten t s Selling, general, and administrative expenses The following table presents selling, general, and administrative expenses for the years ended December 31, 2025 and 2024, respectively: Year Ended December 31, Change ($ in millions) 2025 2024 $ % Selling, general, and administrative expenses $ 1,933 $ 1,694 $ 239 14.1 % SG&A expenses as a % of net revenues 24.4 % 24.1 % SG&A expenses (excluding amortization) (non-GAAP) $ 1,705 $ 1,478 $ 227 15.4 % SG&A expenses (excluding amortization) as a % of net revenues (non-GAAP) 21.6 % 21.1 % Our SG&A expenses for the year ended December 31, 2025, were $1,933 million compared to $1,694 million for 2024, an increase of $239 million.
Our SG&A expenses excluding amortization and impairment for the year ended December 31, 2024 was $1,478 million, or 21.1% of net revenues, compared to $1,372 million or 19.8% of net revenues for 2023, primarily due to the factors discussed above. See "Non-GAAP Financial Measures" below for a discussion and reconciliation of our non-GAAP financial measures.
Our SG&A expenses excluding amortization for the year ended December 31, 2025 were $1,705 million, or 21.6% of net revenues, compared to $1,478 million or 21.1% of net revenues for 2024. The increase in SG&A expenses excluding amortization as a percentage of net revenues is primarily due to the factors discussed above.
During the first quarter of 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by an aggregate principal amount equal to $300 million. The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion.
The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion. We also completed the Sixth Amendment to our credit agreement, refinancing the 2021 Term Loan by increasing its principal amount and lowering the interest margin by 50 basis points. The amendment also removed the credit spread adjustment.
Year Ended December 31, Change ($ in millions) 2024 2023 $ % Net revenues $ 7,018 $ 6,928 $ 90 1.3 % Cost of revenues 4,840 4,988 (148) (3.0 %) Gross profit 2,178 1,940 238 12.3 % Selling, general, and administrative expenses 1,694 1,581 113 7.1 % Operating income 484 359 125 34.8 % Interest expense, net 146 145 1 0.7 % Loss on extinguishment of debt, net 1 7 (6) (85.7 %) Investment expense (income) and other, net 7 (25) 32 NM Other expense, net 154 127 27 21.3 % Income before income taxes 330 232 98 42.2 % Income tax provision 80 79 1 1.3 % Net income $ 250 $ 153 $ 97 63.4 % NM = Not meaningful Year ended December 31, 2024 versus year ended December 31, 2023 Net revenues Net revenues for the year ended December 31, 2024 were $7,018 million compared to $6,928 million for the year ended December 31, 2023, an increase of $90 million or 1.3%.
Year Ended December 31, Change ($ in millions) 2025 2024 $ % Net revenues $ 7,911 $ 7,018 $ 893 12.7 % Cost of revenues 5,424 4,840 584 12.1 % Gross profit 2,487 2,178 309 14.2 % Selling, general, and administrative expenses 1,933 1,694 239 14.1 % Operating income 554 484 70 14.5 % Interest expense, net 141 146 (5) (3.4 %) Investment expense (income) and other, net — 8 (8) NM Other expense, net 141 154 (13) (8.4 %) Income before income taxes 413 330 83 25.2 % Income tax provision 111 80 31 38.8 % Net income $ 302 $ 250 $ 52 20.8 % NM = Not meaningful Year ended December 31, 2025 versus year ended December 31, 2024 Net revenues Net revenues for the year ended December 31, 2025 were $7,911 million compared to $7,018 million for the year ended December 31, 2024, an increase of $893 million or 12.7%.
Our capital expenditures were approximately $84 million and $86 million in the years ended December 31, 2024 and 2023, respectively. In 2022, our Board of Directors authorized a stock repurchase program, authorizing the purchase of up to an aggregate of $250 million, which expired in February 2024.
Our capital expenditures were $96 million and $84 million in the years ended December 31, 2025 and 2024, respectively. During the second quarter of 2025, our Board of Directors authorized a new share repurchase program ("2025 SRP") to purchase up to $1 billion of shares of our common stock.
During the first quarter of 2024, we completed the Fifth Amendment to our credit agreement, upsizing our 2021 Term Loan by $300 million. The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion.
The loan proceeds were directed as consideration for a portion of the purchase price for the Series B Preferred Stock Conversion. We also completed the Sixth Amendment to our credit agreement, refinancing the 2021 Term Loan by increasing its principal amount and lowering the interest margin by 50 basis points. The amendment also removed the credit spread adjustment.
As a result of the program's expiration, on February 26, 2024, our Board of Directors authorized a stock repurchase program to purchase up to an aggregate of $1,000 million of shares of our common stock.
During 2024, our Board of Directors authorized the 2024 SRP to purchase up to an aggregate of $1 billion of shares of our common stock.
The increase in cash used in financing activities in 2024 was partially offset by $437 million of payments on long-term borrowings and $600 million of share repurchases in connection with the conversion of the Series B Preferred Stock.
The cash used in financing activities for the year ended December 21, 2025, was driven by $75 million of share repurchases, $21 million of restricted shares tendered for taxes, and $18 million of payments of acquisition-related consideration, while in the year ended December 31, 2024, cash provided by financing activities was driven by $850 million of proceeds from the repricing of the 2021 Term Loan, and $458 million of proceeds from the issuance of common shares, partially offset by $437 million of payments on long-term borrowings and $600 million of share repurchases in connection with the conversion of the Series B Preferred Stock.
Specialty Services segment earnings as a percentage of net revenues for the years ended December 31, 2024 and 2023 was 11.6% and 11.5%, respectively.
The increase was driven by strong growth in project revenues. Specialty Services segment earnings as a percentage of net revenues for the years ended December 31, 2025 and 2024 was 10.7% and 11.4%, respectively. The decrease was driven primarily by increased project starts, mix, and increased material costs.
The increase in net revenues was attributable to the Safety Services and Specialty Services segments and was primarily driven by growth in inspection, service, and monitoring revenue.
The increase was primarily driven by growth in inspection, service, and monitoring revenues, strong growth in project revenues, acquisitions, and pricing improvements.
The increase was primarily the result of planned disciplined project and customer selection, pricing improvements, and improved mix of inspection, service, and monitoring revenue, which generates higher margins. Specialty Services Specialty Services net revenues for the years ended December 31, 2023 and 2022 were $2,079 million and $2,030 million, respectively.
The increase was primarily driven by disciplined customer and project selection as well as pricing improvements leading to margin expansion in inspection, service, and monitoring revenues and project revenues. Specialty Services Specialty Services net revenues for the years ended December 31, 2025 and 2024 were $2,460 million and $2,229 million, respectively.
Goodwill is not amortized but instead is annually tested for impairment, or more frequently if events or circumstances indicate that the carrying amount of goodwill may be impaired. We have recorded goodwill in connection with our historical acquisitions of businesses.
The Periodic Assessment of Potential Impairment of Goodwill Goodwill represents the excess of cost over the fair market value of net tangible and identifiable intangible assets of acquired businesses. Goodwill is not amortized but instead is annually tested for impairment, or more frequently if events or circumstances indicate that the carrying amount of goodwill may be impaired.
Although we believe we have sufficient resources to fund our future cash requirements, there are many factors with the potential to influence our cash flow position including weather, seasonality, commodity prices, market conditions, and inflation, over which we have no control. 45 Table of Contents As of December 31, 2024, we had $993 million of total liquidity, comprising $499 million in cash and cash equivalents and $494 million ($500 million less outstanding letters of credit of approximately $6 million, which reduces availability) of available borrowings under our Revolving Credit Facility.
Although we believe we have sufficient resources to fund our future cash requirements, there are many factors with the potential to influence our cash flow position including weather, seasonality, supply and material prices, market conditions, and inflation, over which we have no control.
Our first lien net leverage ratio as of December 31, 2024 was 1.6:1.0. During 2024, we made a repayment of $100 million to the 2021 Term Loan. As a result, as of December 31, 2024, we had no principal outstanding under the 2019 Term Loan and $2,157 million of principal outstanding under the 2021 Term Loan.
Our first lien net leverage ratio as of December 31, 2025 was 1.1:1.0. As of December 31, 2025, the 2021 Term Loan has $2,157 million remaining principal amount outstanding. We had no amounts outstanding under the Revolving Credit Facility, under which $745 million was available after giving effect to $5 million of outstanding letters of credit, which reduces availability.
The change was due to higher interest costs as a result of higher discount rates in 2024 compared to 2023. Income tax provision The effective tax rate for the year ended December 31, 2024 was 24.0% compared to an effective tax rate of 33.9% for the year ended December 31, 2023.
Income tax provision The effective tax rate for the year ended December 31, 2025 was 26.9% compared to an effective tax rate of 24.0% for the year ended December 31, 2024. The difference in the effective tax rate was driven by discrete and nondeductible permanent items.
Based on the early prepayments we have made, we do not owe any quarterly principal amounts for the remainder of the 2021 Term Loan. In February 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan. The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.
The 2021 Term Loan matures on January 3, 2029. Based on the early prepayments we have made, we do not owe any quarterly principal amounts for the remainder of the 2021 Term Loan.
In February 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan. The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points. We expect to continue to be able to access the capital markets through equity and debt offerings for liquidity purposes as needed.
We expect to continue to be able to access the capital markets through equity and debt offerings for liquidity purposes as needed.
The proceeds from this offering totaled approximately $458 million, net of related expenses. The net proceeds from this offering were used for general corporate purposes and to partially fund the Elevated acquisition. During the fourth quarter of 2024, we made a repayment of $100 million on the 2021 Term Loan.
Additionally, we made a repayment of $100 million on the 2021 Term Loan. During 2024, we issued 18,975,000 shares of Company common stock in a public underwritten offering. The proceeds from this offering totaled approximately $458 million, net of related expenses.
Goodwill is required to be evaluated for impairment at the reporting unit level, which represents the operating segment level or one level below the operating segment level for which discrete financial information is available.
Goodwill is required to be evaluated for impairment at the reporting unit level, which represents the operating segment level or one level below the operating segment level for which discrete financial information is available. 48 Table of Conten t s We perform our annual goodwill impairment assessment on October 1st each fiscal year, or more frequently if events or circumstances arise which indicate that goodwill may be impaired.
The increase was driven by increased inspection, service, and monitoring revenue. This increase was also due to continued strength in our end markets and strategic pricing improvements. Safety Services segment earnings as a percentage of net revenues was 13.6% and 12.2% for the years ended December 31, 2023 and 2022, respectively.
The increase was driven by growth in inspection, service, and monitoring revenues, acquisitions, strong growth in project revenues, and pricing improvements. 40 Table of Conten t s Safety Services segment earnings as a percentage of net revenues was 16.8% and 15.9% for the years ended December 31, 2025 and 2024, respectively.
The change in investment expense (income) and other, net was primarily due to an increase in non-service pension costs in the current year partially offset by an increase in earnings from joint ventures. The non-service pension expense (benefit) was $22 million and $(12) million for the years ended December 31, 2024 and 2023, respectively.
The change in investment expense (income) and other, net was primarily due to an increase in joint venture income and a decrease in non-service pension cost in the current year compared to the prior year.
Net income and Adjusted EBITDA The following table presents net income and Adjusted EBITDA for the years ended December 31, 2024 and 2023, respectively: Year Ended December 31, Change ($ in millions) 2024 2023 $ % Net income $ 250 $ 153 $ 97 63.4 % Adjusted EBITDA (non-GAAP) 893 782 111 14.2 % Net income as a % of net revenues 3.6 % 2.2 % Adjusted EBITDA as a % of net revenues 12.7 % 11.3 % Net income for the year ended December 31, 2024 was $250 million compared to $153 million for the year ended December 31, 2023, an increase of $97 million.
Based on current information, the Company has considered Pillar 2 tax within the provision for income taxes and does not expect Pillar 2 to have a material effect on its effective tax rate or consolidated financial statements. 39 Table of Conten t s Net income and adjusted EBITDA The following table presents net income and adjusted EBITDA for the years ended December 31, 2025 and 2024, respectively: Year Ended December 31, Change ($ in millions) 2025 2024 $ % Net income $ 302 $ 250 $ 52 20.8 % Adjusted EBITDA (non-GAAP) 1,041 893 148 16.6 % Net income as a % of net revenues 3.8 % 3.6 % Adjusted EBITDA as a % of net revenues 13.2 % 12.7 % Net income for the year ended December 31, 2025 was $302 million compared to $250 million for the year ended December 31, 2024, an increase of $52 million.
Non-service pension expense (benefit) reflects the sum of the components of pension expense not related to service expense, i.e. interest expense, expected return on assets, and amortizations of prior service expenses and actuarial gains and losses.
Non-service pension cost reflects the sum of the components of pension expense not related to service expense, i.e., interest expense, expected return on assets, and amortization of prior service costs and actuarial gains and losses. 37 Table of Conten t s R ESULTS OF O PERATIONS The following is a discussion of our financial condition and results of operations for the years ended December 31, 2025 and 2024.
Net cash used in investing activities Net cash used in investing activities was $829 million and $115 million in the years ended December 31, 2024 and 2023, respectively. During 2024, we completed the Elevated acquisition and several other acquisitions, resulting in the use of $778 million for acquisitions, compared to $83 million in 2023.
We had cash used in acquisitions, net of cash acquired of $186 million and $778 million in the years ended December 31, 2025 and 2024, respectively.
During 2023, we completed the Fourth Amendment to our credit agreement, repricing our 2019 Term Loan and 2021 Term Loan. The repricing reduced the applicable margin on all outstanding amounts by 25 basis points.
We used the net proceeds from this offering for general corporate purposes, including acquisitions and other business opportunities, capital expenditures and working capital. During the first quarter of 2025, we completed the Seventh Amendment to our credit agreement, repricing the 2021 Term Loan. The repricing reduced the applicable margin on the 2021 Term Loan by 25 basis points.
The proceeds were used to repay the remaining $330 million of the 2019 Term Loan, repay $100 million of the Revolving Credit Facility outstanding, and for general corporate purposes, including to partially fund the Elevated acquisition. During the second quarter of 2024, we issued 12,650,000 shares of Company common stock in a public underwritten offering.
In connection with this transaction, we added approximately $550 million of incremental principal on our 2021 Term Loan. The proceeds were used to fully repay the remaining $330 million balance of the 2019 Term Loan, to pay down $100 million outstanding under the Revolving Credit Facility, and for general corporate purposes, including partial funding of the Elevated acquisition.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur exposure to fluctuations in foreign currency exchange rates has increased as a result of our international presence and may continue to increase in the future if we continue to expand our operations outside of the U.S.
Biggest changeForeign currency translation gains (losses) totaled approximately $176 million, $(107) million, and $61 million for the years ended December 31, 2025, 2024, and 2023, respectively. We are exposed to fluctuations in foreign currency exchange rates due to our international presence. Our exposure may continue to increase in the future if we continue to expand our operations outside of the U.S.
In order to manage foreign currency risk related to transactions in foreign currencies and the intercompany financing structure, we entered into cross-currency swaps to manage the foreign currency risk of certain intercompany loans. We also use foreign currency forward contracts as a way to mitigate foreign currency exposure.
In order to manage foreign currency risk related to transactions in foreign currencies and the intercompany financing structure, we entered into cross-currency swaps to manage the foreign currency risk of certain transactions and intercompany loans. We also use foreign currency forward contracts as a way to mitigate foreign currency exposure.
We continually monitor the creditworthiness of our customers and maintain ongoing discussions with customers regarding contract status with respect to change orders and billing terms. Therefore, management believes it takes appropriate action to manage market and other risks, but there is no assurance management will be able to reasonably identify all risks with respect to the collectability of these assets.
We continually monitor the creditworthiness of our customers and maintain ongoing discussions with customers regarding contract status with respect to change orders and billing terms. Therefore, management believes it takes appropriate action to manage market and other risks, but there is no assurance we will be able to reasonably identify all risks with respect to the collectability of these assets.
See also “Revenue Recognition from Contracts with Customers” under Critical Accounting Estimates within Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, we are exposed to various supply chain risks, including market risk of fluctuations or availability of copper, steel, cable optic fiber, and other materials used as components of supplies or materials utilized in our operations.
See also “Revenue Recognition from Contracts with Customers” under Critical Accounting Estimates within Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” In addition, we are exposed to various supply chain risks, including the market risk of price fluctuations or availability of copper, steel, cable optic fiber, and other materials used as components of supplies or materials utilized in our operations.
These foreign currency transaction gains and losses, including hedging impacts, are classified in investment expense (income) and other, net, in the consolidated statements of operations and were a (loss) gain of $(2) million, $1 million, and $(2) million for the years ended December 31, 2024, 2023 and 2022, respectively.
These foreign currency transaction gains and losses, including hedging impacts, are classified in investment expense (income) and other, net, in the consolidated statements of operations and were a loss (gain) of $2 million, $2 million, and $(1) million for the years ended December 31, 2025, 2024 and 2023, respectively.
A one percentage point increase in the average interest rate on our floating rate debt at December 31, 2024 would increase future interest expense by approximately $10 million per year. Foreign Currency Risk We have operations in over 20 countries globally.
A one percentage point increase in the average interest rate on our floating rate debt at December 31, 2025 would increase future interest expense by approximately $10 million per year. Foreign Currency Risk We have operations in over 20 countries globally.
ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk As of December 31, 2024, our outstanding variable interest rate debt was primarily related to our $2,157 million 2021 Term Loan.
ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk As of December 31, 2025, our outstanding variable interest rate debt was primarily related to our $2,157 million 2021 Term Loan.
We are subject to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than the functional currencies. Such transactions were not material to our operations during the year ended December 31, 2024.
We are subject to fluctuations in foreign currency exchange rates when transactions are denominated in currencies other than the functional currencies. Such transactions were not material to our operations during the year ended December 31, 2025.
Revenues generated from foreign operations represented approximately 38% of our consolidated net revenues for the year ended December 31, 2024. Net revenues and expenses related to our foreign operations are, for the most part, denominated in the functional currency of the foreign operation, which minimizes the impact fluctuations in exchange rates would have on net income or loss.
Revenues generated from foreign operations represented approximately 35% of our consolidated net revenues for the year ended December 31, 2025. Net revenues and expenses related to our foreign operations are, for the most part, denominated in the functional currency of the foreign operation, which minimizes the impact fluctuations in exchange rates would have on net income or loss.
While we believe we can increase our contract prices to 53 Table of Contents adjust for some price increases in commodities, there can be no assurance that such price increases, if they were to occur, would be recoverable.
While we believe we can increase our contract prices to adjust for some price increases in commodities, there can be no assurance that such price increases, if they were to occur, would be recoverable.
The remaining floating rate portfolio will bear interest based on one-month SOFR plus 200 basis points. As of December 31, 2024, excluding letters of credit outstanding of $6 million, we had no outstanding revolving loans under our Credit Agreement.
The remaining floating rate portfolio bears interest based on one-month SOFR plus 175 basis points. As of 49 Table of Conten t s December 31, 2025, excluding letters of credit outstanding of $5 million, we had no amounts of outstanding revolving loans under our Credit Agreement.
Additionally, some of our fixed price contracts do not allow us to adjust prices and, as a result, increases in material costs could reduce profitability with respect to projects in progress. Significant declines in market prices for oil and gas and other fuel sources may also impact our operations.
Additionally, some of our fixed price contracts do not allow us to adjust prices and, as a result, increases in material costs could reduce profitability with respect to projects in progress. 50 Table of Conten t s
Removed
Foreign currency translation (losses) gains totaled approximately $(107) million, $61 million, and $(164) million for the years ended December 31, 2024, 2023, and 2022, respectively.
Removed
Prolonged periods of low oil and gas prices may result in projects being delayed or canceled and in a low oil and gas price environment, certain of our businesses could become less profitable or incur losses. 54 Table of Contents

Other APG 10-K year-over-year comparisons