UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM |
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
Commission file number 001-43490
 |
(Exact name of registrant as specified in its charter) |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code | |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A common stock, par value $0.0001 per share |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes o No x
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was
required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”
and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| September 30, 2026 Form 10-Q | 2 |
Large accelerated filer | o | Accelerated filer | o | |
x | Smaller reporting company | |||
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes o No x
Class of Common Stock | Shares Outstanding as of November 2, 2026 | |
Class A Common Stock, $0.0001 par value per share | ||
Class B Common Stock, $0.0001 par value per share |
| September 30, 2026 Form 10-Q | i |
Explanatory Note
This quarterly report on Form 10-Q presents (i) the balance sheets of Accelevation Holdings Corp., the registrant, as of June 15,
2026 (the date of formation) and September 30, 2026 and (ii) the historical condensed consolidated financial information and data
as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and 2025 for
Accelevation LLC (the "Operating Company").
Accelevation Holdings Corp. (the “Company”, "we", or "us") was formed as a Delaware corporation on June 15, 2026 to be the
issuer for our initial public offering (the “initial public offering” or “IPO”), which closed on October 1, 2026. Separate statements of
operations, comprehensive income, changes in stockholder’s equity, and cash flows have not been presented for Accelevation
Holdings Corp. for the period from June 15, 2026 to September 30, 2026, because during that period, we did not engage in any
material business or other activities except in connection with our formation. All of our business operations are currently, and have
historically been, conducted through the Operating Company and its direct and indirect subsidiaries.
As a result of the Organizational Transactions (as defined below), which occurred in connection with the IPO, Accelevation
Holdings Corp. is a holding company and the sole managing member of Accelevation Holdings LLC, the direct parent of the
Operating Company beginning October 1, 2026. Accordingly, in future periodic reports, we will present the historical consolidated
financial information and data of Accelevation Holdings Corp., and will consolidate the financial information and data of the
Operating Company into our results.
Forward-Looking Statements
This Quarterly Report on Form 10-Q of Accelevation Holdings Corp. contains forward-looking statements that are subject to risks
and uncertainties. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are
forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial
condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements
by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,”
“estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and other words and terms
of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other
events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates
and financial results, our plans and objectives for future operations, growth or initiatives or strategies are forward-looking
statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially
from those that we expected, including:
•a reduction in demand or slowdown in the growth of drivers of data center demand;
•changes in data center industry dynamics, including increased siting constraints or community opposition;
•negative publicity about us or our industry;
•our dependence on a limited number of large-scale data center customers;
•our dependence on a concentrated base of hyperscale and colocation customers;
•our backlog being subject to unexpected adjustments and cancellations;
•our ability to compete effectively on speed-to-capacity, on-time delivery, customization, integration and price against
intense and increasing competition;
•our failure to anticipate and adapt to rapid changes in data center technologies and architectures;
•our failure to secure new contracts;
•our ability to identify, integrate and realize the expected benefits of acquisitions;
•limitations on our indemnification rights in acquisition agreements;
| September 30, 2026 Form 10-Q | ii |
•the success of our cost management strategies, vertically integrated operating model and modular infrastructure
platform;
•extended sales cycles and irregular customer ordering patterns;
•our exposure to cost overruns and schedule penalties under fixed-price or committed-schedule arrangements;
•our dependence on the continued service of our founders and key leaders and our ability to recruit and retain skilled
engineers, technicians and electricians;
•our ability to scale operations rapidly, including investment in workforce development, operating infrastructure and
cross-functional coordination;
•any equipment failure, capacity constraints, labor availability and safety incidents, including physical hazards inherent to
our industry;
•shortages, quality issues, price increases, transportation disruptions or government trade actions affecting raw materials
and components in our supply chain;
•our reliance on contractors and subcontractors to supplement our own capabilities and to conduct aspects of our
business;
•an economic downturn, tighter financing conditions or pricing challenges;
•geopolitical developments, trade policy shifts and macroeconomic volatility, including commodity price volatility;
seasonal variations in operations and demand that affect construction activity;
•business disruption, natural disasters, public health events or other catastrophic events;
•our failure to adequately protect our intellectual property and other proprietary rights;
•claims alleging infringement, misappropriation or violation of third-party intellectual property rights;
•our failure to obtain or maintain sufficient insurance at acceptable cost;
•changes in laws, regulations and standards applicable to our business;
•disruption in our customers’ markets from future AI-related legislation and regulation and the impact it may have on
demand for our products and services;
•product defects, installation errors or performance shortfalls resulting in warranty claims, reputational harm and liability;
•potential legal proceedings and disputes arising from our operations;
•misconduct or noncompliance by employees or subcontractors;
•our ability to comply with environmental, health and safety laws in our manufacturing facilities and at customer sites;
•our indebtedness and financing needs and the limitations our existing Credit Agreement imposes, and any future credit
agreements may impose, on us;
•our inability to remediate our material weaknesses, or our failure to develop and maintain effective internal control over
financial reporting;
•cybersecurity incidents or data privacy breaches;
•risks and uncertainties related to the development and use of AI, which may present business, compliance and
reputational risks; and
•other factors disclosed under “Risk Factors” in our prospectus filed with the Securities and Exchange Commission under
Rule 424(b)(4) on October 1, 2026.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition,
we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that
they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included
| September 30, 2026 Form 10-Q | iii |
in this Quarterly Report on Form 10-Q are made only as of the date hereof. We undertake no obligation to update or revise any
forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
| September 30, 2026 Form 10-Q | iv |
Table of Contents
PART I | Item 1. | Financial Information | |
Accelevation Holdings Corp. | |||
Condensed consolidated balance sheets (unaudited) | |||
Notes to the condensed consolidated financial statements (unaudited) | |||
Accelevation LLC | |||
Condensed consolidated balance sheets (unaudited) | |||
Condensed consolidated income statements (unaudited) | |||
Condensed consolidated statements of members' equity (unaudited) | |||
Condensed consolidated statements of cash flows (unaudited) | |||
Notes to the condensed consolidated financial statements (unaudited) | |||
Item 2. | Management's discussion and analysis of financial condition and results of operations | ||
Item 3. | Quantitative and qualitative disclosures about market risk | ||
Item 4. | Controls and Procedures | ||
PART II | Item 1. | Legal Proceedings | |
Item 1A. | Risk factors | ||
Item 2. | Unregistered sales of equity securities and use of proceeds | ||
Item 5. | Other information | ||
Item 6. | Exhibits | ||
Signatures |
| September 30, 2026 Form 10-Q | 1 |
Part I
Item 1. Financial Statements
Part I - Financial Information
Item 1. Financial Statements
Accelevation Holdings Corp.
Condensed Consolidated Balance Sheets (Unaudited)
September 30, 2026 | June 15, 2026 | |||
ASSETS | ||||
Total assets | $ | $ | ||
LIABILITIES AND STOCKHOLDER'S EQUITY | ||||
Total liabilities | ||||
Stockholder's equity | ||||
Receivable from Olympus Growth Fund VIII Parallel, L.P. | ( | ( | ||
Common stock, $ outstanding as of September 30, 2026 and June 15, 2026 | ||||
Total stockholder's equity | ||||
Total liabilities and stockholder's equity | $ | $ |
| September 30, 2026 Form 10-Q | 2 |
Part I
Item 1. Financial Statements
Accelevation Holdings Corp.
Notes to the Financial Statements
NOTE 1. ORGANIZATION
Accelevation Holdings Corp. (the “Company” or "we") was formed as a Delaware corporation on June 15, 2026, as a wholly-owned
subsidiary of Olympus Growth Fund VIII Parallel, L.P. The Company was formed for the purpose of completing a public offering
and related transactions in order to carry on the business of Accelevation LLC (the “Operating Company” or “Accelevation LLC”)
and its subsidiaries.
On October 1, 2026, we completed our initial public offering (the “IPO”), in which we sold 10,000,000 shares of the Company’s
Class A common stock, par value $0.0001 per share (“Class A common stock”) at a public offering price of $18.00 per share,
excluding 20,000,000 shares of Class A common stock sold by certain selling stockholders. See Note 5 - Subsequent Events for
disclosure regarding the IPO and related transactions.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statement are presented in conformity with accounting principles generally accepted in the United
States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
Separate statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows have not been
presented because there have been no activities in this entity as of September 30, 2026. The functional currency of the Company
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that
affect the amounts reported in our financial statement and the accompanying notes. Actual results could materially differ from
these estimates.
NOTE 3. COMMON STOCK
As of September 30, 2026 and June 15, 2026, we were authorized to issue 1,000 0.01
share, and had issued 1,000
NOTE 4. RECEIVABLE FROM OLYMPUS GROWTH FUND VIII PARALLEL, L.P.
In connection with the issuance of common stock to Olympus Growth Fund VIII Parallel, L.P., we recognized a receivable balance
of $10 . Receivables arising from the issuance of capital stock are recorded as subscriptions receivable and presented as a
deduction from stockholder’s equity until the receivable is settled in cash. As part of the IPO transactions, the shares held by
Olympus Growth Fund VIII Parallel, L.P. were redeemed and canceled. See Note 5 - Subsequent Events
NOTE 5. SUBSEQUENT EVENTS
The Company has evaluated subsequent events through November 13, 2026, the date the financial statements were issued.
Organizational Transactions and IPO
In connection with the consummation of the IPO on October 1, 2026, the Company and Accelevation LLC undertook certain
organizational transactions, including:
•The Company (i) formed Accelevation Holdings LLC (“Holdings LLC”) as the direct parent entity of Accelevation LLC,
with classes of common membership interests consisting of Series A Units and Series B Units of Holdings LLC (together,
the “LLC Units”), and (ii) was appointed as the sole managing member of Holdings LLC.
| September 30, 2026 Form 10-Q | 3 |
Part I
Item 1. Financial Statements
•The Company and Holdings LLC amended and restated the Accelevation LLC Operating Agreement to, among other
things, modify the capital structure of Accelevation LLC to be a wholly owned subsidiary of Holdings LLC.
•Funds affiliated with Olympus Partners, LP (the “Principal Stockholder”) and certain other holders of indirect interests in
Holdings LLC engaged in a series of transactions, which included one or more contributions, mergers or otherwise, that,
among other consequences, resulted in certain holders of an indirect interest in Holdings LLC exchanging a portion of
such interest in Holdings LLC for a direct or indirect interest in Accelevation Pubco Holdings LP (“Accelevation Pubco
Holdings”), which in turn contributed such interests in Holdings LLC to the Company in exchange for shares of Class A
common stock.
•The Company amended and restated its certificate of incorporation to, among other things, provide (i) for Class A
common stock, with each share of Class A common stock entitling its holder to one vote per share on all matters
presented to the Company’s stockholders generally and (ii) for Class B common stock, with each share of Class B
common stock entitling its holder to one vote per share on all matters presented to the Company’s stockholders
generally. Shares of Class A common stock and Class B common stock vote as a single class. The shares of Class B
common stock do not have any right to receive dividends or distributions upon the liquidation or winding up of the
Company.
•The Company issued 116,965,529 shares of Class B common stock to Accelevation Investment Holdings LLC
(“Investment Holdings”) on a one -to-one basis with the number of Series B Units in Holdings LLC it owns, for nominal
consideration.
•The Company and Holdings LLC entered into the Exchange Agreement with Investment Holdings and Instor Blocker, Inc.
(“Instor”), which is described in more detail below.
•The Company and Holdings LLC entered into the Tax Receivable Agreement (the “Tax Receivable Agreement”) with
Investment Holdings and Instor, which is described in more detail below.
•The Company issued 10,000,000 shares of its Class A common stock at the IPO price of $18.00 per share in exchange
for net proceeds of approximately $170.6 million, after deducting approximately $9.5 million of underwriting discounts
and commissions.
•The Company used such net proceeds to acquire 10,000,000 newly issued Series A Units in Holdings LLC.
As the sole managing member of Holdings LLC, the Company operates and controls all of the business and affairs of Holdings LLC
and conducts its business through Holdings LLC and its direct and indirect subsidiaries.
2026 Credit Agreement
In October, Accelevation LLC paid-off its existing credit facilities and entered into a new credit facility. Holdings LLC and
Accelevation LLC used the $400.0 million of proceeds from the new credit facility, cash on hand, and the net proceeds received
from the Company for the purchase of newly issued Series A Units in connection with the IPO (i) to repay approximately $651.5
million of outstanding borrowings under the prior credit facilities and (ii) to pay approximately $4.9 million of expenses incurred in
connection with the refinancing.
Up-C Structure and Tax Receivable Agreement
The Company’s corporate structure following the IPO is commonly referred to as an umbrella partnership-C corporation (“Up-C”)
structure, which is often used by partnerships and limited liability companies undertaking an initial public offering. The Up-C
structure, together with the Tax Receivable Agreement, allows certain prior direct and indirect owners of Holdings LLC to continue
to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or “pass-through” entity, for
income tax purposes following the offering. One of these benefits is that future taxable income of Holdings LLC that is allocated to
such owners will be taxed on a flow-through basis and therefore will generally not be subject to corporate U.S. federal income
| September 30, 2026 Form 10-Q | 4 |
Part I
Item 1. Financial Statements
taxes at the entity level. The Tax Receivable Agreement, among other things, provides for the payment by the Company to holders
of Series B Units in Holdings LLC (the “TRA Rights Holders”) 85 % of the amount of certain tax savings (calculated using certain
assumptions), if any, that the Company actually realizes as a result of (i) certain increases in the tax basis of assets of Holdings LLC
and its subsidiaries resulting from purchases or exchanges of LLC Units, (ii) certain other tax attributes of Holdings LLC and its
subsidiaries that existed prior to the IPO and (iii) certain other tax benefits related to the Company’s entry into the Tax Receivable
Agreement, including tax benefits attributable to payments that the Company is required to make under the Tax Receivable
Agreement. The Company retains the benefit of the remaining 15 % of these tax savings, if any.
Exchange Rights of LLC Unitholders
In accordance with the Exchange Agreement, holders of Series B Units of Holdings LLC (or certain permitted transferees thereof)
are entitled to exchange their Series B Units of Holdings LLC for shares of the Company’s Class A common stock on a one -for-one
basis or, at the Company’s election, for cash, from a substantially concurrent public offering or private sale (based on the price of
the Company’s Class A common stock in such public offering or private sale). In connection with the election of an exchange of
Series B Units in Holdings LLC pursuant to the Exchange Agreement, an equivalent number of shares of the Company’s Class B
common stock must be delivered to the Company. Any shares of Class B common stock so delivered will be cancelled.
2026 Omnibus Incentive Plan
On September 29, 2026, the board of directors of the Company (the “Board”) adopted and approved the Accelevation Holdings
Corp. 2026 Omnibus Incentive Plan (the “2026 Plan”) which became effective in connection with the IPO. The 2026 Plan is
administered by the Compensation and Nominating Committee. The number of shares that may be issued under the 2026 Plan is
approximately 17.9 million, but the 2026 Plan provides for an annual increase each calendar year beginning in 2027, and ending
and including 2036, equal to the lesser of (a) 3 % of the aggregate number of shares of Class A common stock and Class B
common stock of the Company, in each case, outstanding on December 31 of the immediately preceding calendar year and (b)
such smaller number of shares of Class A common stock as is determined by the Board. The 2026 Plan allows the issuance of
stock options, stock appreciation rights, restricted stock units (“RSUs”), restricted stock, performance awards, and other stock
awards to directors, officers, and employees.
IPO Grants
In connection with the IPO on October 1, 2026, the Company issued awards under the 2026 Plan as follows:
•1.8 million RSUs to certain employees that vest according to terms set forth in their employment contracts or separate
agreements; and
•0.7 million RSUs to employees that vest over one year .
All RSUs have a grant date fair value of $16.59 per share.
| September 30, 2026 Form 10-Q | 5 |
Part I
Item 1. Financial Statements
Accelevation LLC
Condensed Consolidated Balance Sheets (Unaudited)
September 30, 2026 and December 31, 2025
(in thousands) | September 30, 2026 | December 31, 2025 | ||
ASSETS | ||||
Current assets | ||||
Cash and cash equivalents | $ | $ | ||
Accounts receivable, net of allowance for credit losses of $ | ||||
Contract assets | ||||
Inventories | ||||
Prepaid expenses and other current assets | ||||
Assets held for sale | ||||
Total current assets | ||||
Property, plant and equipment, net | ||||
Right-of-use assets - operating leases | ||||
Goodwill | ||||
Intangible assets, net | ||||
Other long-term assets | ||||
Total assets | ||||
LIABILITIES AND MEMBERS' EQUITY | ||||
Current liabilities | ||||
Accounts payable | ||||
Accrued expenses and other current liabilities | ||||
Contract liabilities | ||||
Related party payable | ||||
Current maturities of long-term debt | ||||
Current portion of operating lease liabilities | ||||
Liabilities held for sale | ||||
Total current liabilities | ||||
Other liabilities | ||||
Long-term debt, net | ||||
Operating lease liabilities, net | ||||
Other long-term liabilities | ||||
Total other liabilities | ||||
Commitments and contingencies (Note 12) | ||||
Members' equity | ||||
Members' equity | ||||
Members' notes receivable | ( | |||
Retained earnings | ||||
Total members' equity | ||||
Noncontrolling interest | ||||
Total equity | ||||
Total liabilities and equity | $ | $ |
| September 30, 2026 Form 10-Q | 6 |
Part I
Item 1. Financial Statements
Accelevation LLC
Condensed Consolidated Statements of Operations (Unaudited)
Three and Nine Months Ended September 30, 2026 and 2025
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||
Revenue | $ | $ | $ | $ | ||||
Cost of goods sold | ||||||||
Gross profit | ||||||||
Operating expenses: | ||||||||
Selling, general and administrative expenses | ||||||||
Amortization of intangible assets | ||||||||
Related party expenses | ||||||||
Impairment on assets held for sale | ||||||||
Total operating expenses | ||||||||
Operating income | ||||||||
Non-operating income (expenses) | ||||||||
Interest income | ||||||||
Interest expense | ( | ( | ( | ( | ||||
Other income (expenses), net | ( | |||||||
Total non-operating expense, net | ( | ( | ( | ( | ||||
Income before income taxes | ||||||||
(Benefit) provision for income taxes | ( | |||||||
Net income | ||||||||
Net income attributable to noncontrolling interest | ||||||||
Net income attributable to Accelevation LLC | $ | $ | $ | $ | ||||
| September 30, 2026 Form 10-Q | 7 |
Part I
Item 1. Financial Statements
Accelevation LLC
Condensed Consolidated Statements of Members' Equity (Unaudited)
Three Months Ended September 30, 2026 and 2025
(in thousands) | Members' Equity | Members' Notes Receivable | Retained Earnings | Noncontrolling Interest | Total | |||||
Three Months Ended | ||||||||||
Balance at July 1, 2026 | $ | $ | $ | $ | $ | |||||
Distributions to members | ( | — | — | — | ( | |||||
Notes receivable issued to members | — | ( | — | — | ( | |||||
Distributions to noncontrolling interest | — | — | — | ( | ( | |||||
Equity-based compensation expense | — | — | — | |||||||
Redemption of noncontrolling interest | ( | — | — | ( | ( | |||||
Net income | — | — | ||||||||
Balance at September 30, 2026 | $ | $( | $ | $ | $ |
(in thousands) | Members' Equity | Members' Notes Receivable | Retained Earnings (Deficit) | Noncontrolling Interest | Total | |||||
Three Months Ended | ||||||||||
Balance at July 1, 2025 | $ | $— | $( | $ | $ | |||||
Redemption of members' equity | ( | — | — | — | ( | |||||
Distributions to members | ( | — | — | — | ( | |||||
Equity-based compensation expense | — | — | — | |||||||
Net income | — | — | — | |||||||
Balance at September 30, 2025 | $ | $— | $ | $ | $ |
| September 30, 2026 Form 10-Q | 8 |
Part I
Item 1. Financial Statements
Accelevation LLC
Condensed Consolidated Statements of Members' Equity (Unaudited)
Nine Months Ended September 30, 2026 and 2025
(in thousands) | Members' Equity | Members' Notes Receivable | Retained Earnings | Noncontrolling Interest | Total | |||||
Nine Months Ended | ||||||||||
Balance at January 1, 2026 | $ | $ | $ | $ | $ | |||||
Redemption of members' equity | ( | — | — | — | ( | |||||
Distributions to members | ( | — | ( | — | ( | |||||
Notes receivable issued to members | — | ( | — | — | ( | |||||
Distributions to noncontrolling interest | — | — | — | ( | ( | |||||
Equity-based compensation expense | — | — | — | |||||||
Redemption of noncontrolling interest | ( | — | — | ( | ( | |||||
Net income | — | — | ||||||||
Balance at September 30, 2026 | $ | $( | $ | $ | $ |
(in thousands) | Members' Equity | Members' Notes Receivable | Retained Earnings | Noncontrolling Interest | Total | |||||
Nine Months Ended | ||||||||||
Balance at January 2, 2025 | $ | $— | $ | $ | $ | |||||
Issuance of members' equity upon change in control | — | ( | — | |||||||
Issuance of members' equity in connection with acquisitions | — | — | — | |||||||
Redemption of members' equity | ( | — | — | — | ( | |||||
Distributions to members | ( | — | — | — | ( | |||||
Equity-based compensation expense | — | — | — | |||||||
Net income | — | — | — | |||||||
Balance at September 30, 2025 | $ | $— | $ | $ | $ |
| September 30, 2026 Form 10-Q | 9 |
Part I
Item 1. Financial Statements
Accelevation LLC
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2026 and 2025
(in thousands) | September 30, 2026 | September 30, 2025 | ||
OPERATING ACTIVITIES | ||||
Net income | $ | $ | ||
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation | ||||
Amortization of intangibles | ||||
Equity-based compensation expense | ||||
Noncash operating lease expense | ||||
Provision for inventory obsolescence | ||||
Other noncash items | ||||
Changes in operating accounts, net of acquisitions: | ||||
Accounts receivable, net | ( | ( | ||
Contract assets | ( | ( | ||
Inventories | ( | ( | ||
Prepaid expenses and other current assets | ( | |||
Accounts payable | ||||
Accrued expenses and other current liabilities | ||||
Contract liabilities | ( | |||
Related party payable | ( | |||
Other assets and liabilities | ( | ( | ||
Net cash provided by (used in) operating activities | ( | |||
INVESTING ACTIVITIES | ||||
Purchases of property and equipment | ( | ( | ||
Payments for purchases of businesses, net of cash acquired | ( | |||
Proceeds from sale of a business, net of cash transferred | ||||
Net cash used in investing activities | ( | ( | ||
FINANCING ACTIVITIES | ||||
Proceeds from issuance of notes payable | ||||
Proceeds from revolving credit facility | ||||
Payments on term loan | ( | ( | ||
Payments on revolving credit facility | ( | ( | ||
Debt issuance costs paid | ( | ( | ||
Distributions to members | ( | ( | ||
Notes receivable issued to members | ( | |||
Payment of deferred offering costs | ( | |||
Redemption of noncontrolling interest | ( | |||
Proceeds from issuance of member units | ||||
Other financing activities | ( | ( | ||
Net cash provided by financing activities |
| September 30, 2026 Form 10-Q | 10 |
Part I
Item 1. Financial Statements
(in thousands) | September 30, 2026 | September 30, 2025 | ||
Change in cash and cash equivalents | ||||
Cash and cash equivalents, beginning of period | ||||
Cash, cash equivalents, and restricted cash, end of period | $ | $ | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||||
Interest paid | $ | $ | ||
Income taxes paid | ||||
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||
Fixed asset purchases included in accounts payable as of period-end | ||||
Deferred offering costs included in accounts payable as of period-end | ||||
Deferred offering costs included in related party payable as of period-end | ||||
Right-of-use assets obtained in exchange for new operating lease liabilities | ||||
Right-of-use assets obtained in exchange for new financing lease liabilities | ||||
Accrued distributions to members | ||||
Olympus rollover equity | ||||
Aura rollover equity | ||||
Earnest rollover equity |
| September 30, 2026 Form 10-Q | 11 |
Part I
Item 1. Financial Statements
Accelevation LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION |
Nature of Operations
Accelevation LLC and its subsidiaries (“Accelevation”, the “Company”, “we”, “our”, or “us”) are a vertically integrated provider of
data center infrastructure solutions. The Company’s solutions include the design, manufacture, and installation of customized
structural, electrical and mechanical systems for mission-critical infrastructure. Our comprehensive solution offerings include
containment systems, power distribution solutions, cable conveyance, caging and security, and structural systems, complemented
by a full suite of installation services, including licensed electrical fit-out, low-voltage installation, and infrastructure installation.
Initial Public Offering
On October 1, 2026, Accelevation Holdings Corp. (“Pubco”) completed its initial public offering (the “IPO”) of 10,000,000 shares of
its Class A common stock at the IPO price of $18.00 per share, excluding 20,000,000 shares of Class A common stock sold by
certain selling stockholders (the "Selling Stockholders"), in exchange for net proceeds of approximately $170.6 million, after
deducting approximately $9.5 million of underwriting discounts and commissions. Pubco used such net proceeds to acquire
in connection with organizational transactions executed in connection with the IPO (the “Organizational Transactions”).
Immediately following the completion of the IPO and Organizational Transactions, Pubco held an approximately 53 % interest in
Holdings LLC, and the Company was a wholly owned subsidiary of Holdings LLC.
As a result of the IPO and Organizational Transactions being consummated on October 1, 2026, the financial statements do not
reflect the impact of the IPO. See additional disclosures in Note 15 – Subsequent Events of our condensed consolidated financial
statements.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”) and the rules and regulations of the Securities and Exchange
Commission (“SEC”) applicable to interim financial information including the instructions to Form 10-Q and Article 10 of Regulation
the opinion of management, all normal and recurring adjustments necessary for the fair presentation of the unaudited condensed
consolidated financial statements for the periods presented have been included in this Quarterly Report on Form 10-Q. Our results
of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the operating results
expected for the full year. Certain prior period amounts have been reclassified to conform to current period presentation.
Certain monetary amounts, percentages, and other figures included elsewhere in these financial statements have been subject to
rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures
that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may
not be the arithmetic aggregation of the percentages that precede them.
These condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated in consolidation.
| September 30, 2026 Form 10-Q | 12 |
Part I
Item 1. Financial Statements
Unaudited Interim Financial Information
These condensed consolidated financial statements, along with the financial data and other information included in the notes to
the financial statements, are unaudited. These condensed consolidated financial statements have been prepared on the same
basis as the audited annual financial statements and the notes thereto.
These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial
statements and notes thereto for the Company, as included in the prospectus dated September 29, 2026, and filed with the SEC
pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Prospectus”) on October 1, 2026.
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect (1) the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of
the date of the financial statements and (2) the reported amounts of revenues and expenses during the reporting periods.
Examples include, but are not limited to, estimates applied to recognize revenue over time for certain customer contracts, the
estimated fair value of and the amount of expense recognized for equity-based compensation awards, the allowance for credit
losses, the net realizable value of inventory, the discount rate applied to our leases, the depreciable lives of our long-lived assets,
the amortizable lives of our intangible assets, forecasts used to assess the carrying values of our long-lived assets and goodwill for
impairment, and our accrued expenses. We base our estimates and assumptions on historical experience, currently available
information and other facts and circumstances that we believe are reasonable. Actual results could differ from our estimates.
Deferred offering costs consist of direct and incremental expenses and fees related to the IPO. These direct and incremental
offering costs included in other long-term assets on the condensed consolidated balance sheets as of September 30, 2026, of
which $3.7 million had been paid. There were no deferred offering costs capitalized in other long-term assets in the consolidated
balance sheet as of December 31, 2025.
Customer Concentration
The Company had certain customers with revenue individually representing 10% or more of our total revenue, or with accounts
receivable balances individually representing 10% or more of our total accounts receivable, which are presented below.
and 2025:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Major Customer 1 | ||||||||
Major Customer 2 | ||||||||
Major Customer 3 | ||||||||
Major Customer 4 | ||||||||
Major Customer 5 | ||||||||
Total Major Customers | ||||||||
| September 30, 2026 Form 10-Q | 13 |
Part I
Item 1. Financial Statements
Accounts receivable from each major customer as a percentage of total accounts receivable as of September 30, 2026 and
December 31, 2025:
September 30, 2026 | December 31, 2025 | |||
Major Customer 1 | ||||
Major Customer 3 | ||||
Major Customer 6 | ||||
Major Customer 7 | ||||
Major Customer 8 | ||||
Total Major Customers |
The Company relies on third-party suppliers for the provision of many components and materials used in our infrastructure
products. Some of the enclosure components, specifically various trims, seals, and gaskets, are highly customized for our
Company and purchased by us from single sources. During the nine months ended September 30, 2026 and 2025, key single-
sourced components did not represent a material portion of our raw material purchases; however, these components still
represent critical components of certain of our product offerings. While we believe that we may be able to establish alternative
supply relationships for our single-sourced components, the loss of one of these supply relationships could cause a material
disruption to the delivery of our infrastructure products and therefore have a material effect on our business, financial condition and
operating results.
The Company’s income tax provision was approximately $0.3 million for the three months ended September 30, 2025, and $0.9
million and $0.6 million for the nine months ended September 30, 2026 and 2025, respectively. The income tax benefit for the three
months ended September 30, 2026 was not material.
As a result of the Company being a partnership, it is not directly subject to income taxes under the provisions of the Internal
Revenue Code. Therefore, taxable income or loss is reported to the individual partners for inclusion in their respective tax returns,
and no provision for federal income taxes has been included in the accompanying consolidated financial statements. Accelevation
is, however, subject to various entity level U.S. state taxes, and the tax provision for those state taxes are included in the
condensed consolidated financial statements.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”).
Accordingly, the Company is eligible to take advantage of certain exemptions from various reporting and financial disclosure
requirements that are applicable to other public companies that are not emerging growth companies.
Under the JOBS Act, an emerging growth company can take advantage of the extended transition period provided to private
companies for adopting and complying with new or revised accounting standards. The Company has elected to take advantage of
the extended transition period and, accordingly, will delay the adoption of accounting standards for which early adoption is both
permitted and elected until those standards would apply to private companies.
| September 30, 2026 Form 10-Q | 14 |
Part I
Item 1. Financial Statements
Standard | Description | Planned Date of Adoption | Effect on the Financial Statements and Disclosures |
ASU 2023-09, Improvements to Income Tax Disclosures | This update requires public entities to annually disclose specific categories in the rate reconciliation table of the income tax note, provide additional information for reconciling items that meet a quantitative threshold, and provide disaggregated information on income taxes paid by the Company. | December 31, 2026 | We are currently evaluating the impact of this guidance on our disclosures. |
ASU 2024-03, Income Statement—Reporting Comprehensive Income —Expense Disaggregation Disclosures | This update mandates (i) disaggregation of specified income statement expenses, (ii) qualitative descriptions for expenses not separately disaggregated, and (iii) disclosure of the total amount of selling expenses. | December 31, 2027 | We are currently evaluating the impact of this guidance on our financial statements and disclosures. |
ASU 2025-10, Government Grants (Topic 832) – Accounting for Government Grants Received by Business Entities | This update establishes authoritative guidance on how to recognize, measure, and present government grants received by business entities. The ASU may be applied using a modified prospective, modified retrospective or a full retrospective approach. | December 31, 2030 | We are currently evaluating the impact of this guidance on our financial statements and disclosures. |
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such
pronouncements will have a material impact on its condensed consolidated financial statements.
NOTE 2 – ACQUISITIONS |
Change in Control Transaction
As discussed in the Company’s audited annual consolidated financial statements, the Change in Control Transaction was
consummated on January 2, 2025, and has been accounted for using the acquisition method of accounting in accordance with
ASC 805. Upon consummation of the transaction, consideration of $480.6 million, consisting of $403.1 million of cash, rollover
equity with a fair value of $65.1 million, and non-cash consideration of $12.3 million was exchanged for all of Accelevation Holding
Company, LLC’s (“Predecessor”) outstanding equity. The fair value of the equity rollover consideration was determined on a
consistent basis with the price at which the same class of equity units were sold by Accelevation Topco LLC to raise a portion of
the cash used to consummate the Change in Control Transaction. The non-cash consideration relates to deferred tax liabilities that
are included in the buyer's basis and reflect additional goodwill pushed down to Accelevation LLC.
Transaction costs related to the Change in Control Transaction included amounts incurred by the acquiree, the sellers, and the
buyer. As more fully described in the Company’s audited consolidated financial statements and the notes thereto as of and for the
years ended December 31, 2025 and 2024 included in the Prospectus, the Company accounted for transaction costs based upon
the party to the transaction that incurred the costs and the nature and substance of the costs incurred.
| September 30, 2026 Form 10-Q | 15 |
Part I
Item 1. Financial Statements
•Acquiree's Transaction Expenses: Transaction expenses incurred by the acquiree were included in the Predecessor's
financial statements for the year ended December 31, 2024, unless the transaction expenses represent amounts that
were contingent upon the consummation of the transaction, in which case the transaction expenses have been
accounted for as Black-Line Adjustments, as further described in the Company’s audited consolidated financial
statements and the notes thereto for the years ended December 31, 2025 and 2024. Transaction expenses of the
acquiree accounted for as Black-Line Adjustments totaled $22.8 million.
•Buyer's Transaction Expenses: Transaction expenses related to legal advisors and other third-party transaction advisors
of the buyer, including a $4.6 million success fee that was contingent upon the closing of the transaction, have been
accounted for as acquirer transaction costs. Buyer transaction costs incurred and settled in conjunction with or
subsequent to the closing of transaction totaled $5.9 million, which amount was expensed as incurred and included in
Selling, General, and Administrative Expenses in the condensed consolidated statements of operations for the nine-
months ended September 30, 2025 in accordance with the required accounting treatment for acquirer transaction costs
under ASC 805. The buyer also incurred $3.8 million of transaction expenses prior to the closing of the transaction that
were settled in conjunction with or subsequent to the closing of the transactions. These costs were expensed as incurred
and recognized in the income statement of the buyer prior to the business combination and have been reflected in the
opening accumulated deficit balance as of January 2, 2025.
2025 Acquisition Transactions
SteelPro LLC and SteelPro Memphis, LLC
On October 6, 2025, the Company acquired 100 % of the outstanding equity interests of SteelPro LLC and SteelPro Memphis, LLC
(hereinafter, collectively “SteelPro”), a designer and fabricator of structural steel solutions for both commercial and industrial
markets. The purpose of this acquisition was to vertically integrate SteelPro, a supplier prior to consummation of the acquisition,
into the Company’s existing operations, as well as to expand the Company’s operating capacity.
The consideration paid to acquire SteelPro totaled $43.5 million, consisting of $35.4 million of cash and rollover equity with an
estimated fair value of $8.1 million as of the acquisition date. The estimated fair value of the Company’s equity issued was
determined based upon a third-party valuation of the Company’s equity at the acquisition date, as there is no active market for the
Company’s equity. In addition, the Company incurred approximately $1.0 million of third-party, acquisition-related costs, which
have been included in Selling, General, and Administrative Expenses in the Company’s condensed consolidated statements of
operations for the year ended December 31, 2025, the majority of which were incurred in the fourth quarter.
We accounted for the acquisition of SteelPro using the acquisition method, as prescribed by ASC 805, “Business
Combinations” (“ASC 805”). Accordingly, we recorded acquired assets and assumed liabilities at their estimated fair values as of
the date of the acquisition. We determined the fair values of the assets acquired and liabilities assumed using valuation
approaches and methodologies consistent with those described in ASC 820, “Fair Value Measurement” (“ASC 820”).
which the identifiable assets acquired and the liabilities assumed were recorded as of the acquisition date:
| September 30, 2026 Form 10-Q | 16 |
Part I
Item 1. Financial Statements
(in thousands) | October 6, 2025 |
Assets acquired: | |
Cash | $ |
Accounts receivable, net | |
Prepaid expenses and other current assets | |
Total current assets | |
Property, plant and equipment | |
ROU assets – operating leases | |
Intangible assets: | |
Trade name | |
Customer relationships | |
Order backlog | |
Goodwill | |
Total assets acquired | |
Liabilities assumed: | |
Accounts payable | |
Accrued expenses | |
Contract liabilities | |
Current portion of operating lease liabilities | |
Other current liabilities | |
Total current liabilities | |
Operating lease liabilities, net | |
Total liabilities assumed | |
Total identifiable net assets | $ |
The goodwill arising from this acquisition relates primarily to the assembled workforce and anticipated execution of targeted
growth and operation improvement strategies subsequent to the acquisition. Goodwill attributable to this acquisition is partially
deductible for tax purposes. The Company is able to deduct approximately $12.9 million of goodwill for tax purposes.
The fair value of accounts receivable acquired as part of the acquisition was $5.8 million. The gross contractual amount of
accounts receivable acquired was $5.9 million, of which approximately $0.1 million was expected to be uncollectible as of the
acquisition date.
acquisition of SteelPro:
Trade name | |
Customer relationships | |
Order backlog |
The estimated weighted-average useful life was 7.6 years for finite lived intangible assets.
| September 30, 2026 Form 10-Q | 17 |
Part I
Item 1. Financial Statements
Aura Energy, LLC
On January 29, 2025, the Company acquired 100 % of the assets of Aura Energy, LLC (“Aura”), a manufacturer of high-density
power distribution products. This acquisition enhances the Company’s data center power offerings, adding the design,
manufacture, and installation of custom power distribution units, remote power panels, and other UL-certified power distribution
solutions to the Company’s portfolio of Power Products and solutions.
estimated fair values:
(in thousands) | Amount |
Cash consideration | $ |
Rollover equity | |
Contingent consideration | |
Total fair value of consideration transferred | $ |
The estimated fair value of the rollover equity issued was determined based on the Company’s January 2, 2025 change-of-control
valuation, which management concluded approximated fair value at the January 29, 2025 acquisition date, as there is no active
market for the Company’s equity.
The contingent consideration (“Contingent Consideration”) consists of additional post-closing cash payments that shall be (1)
determined based upon agreed upon percentages of revenue generated from the sale of specified products during a 5-year period
beginning as of the acquisition date and ending on the fifth anniversary thereof (the “Earnout Period”) and (2) calculated and paid
annually to the sellers of Aura based upon qualifying non-GAAP revenue generated during each year comprising the Earnout
Period. There is no defined limit regarding the amount of Contingent Consideration that could potentially become payable to the
sellers of Aura on an annual basis or over the Earnout Period. The Company has concluded that the Contingent Consideration shall
be accounted for as part of the acquisition purchase consideration, as there are no continuing employment conditions associated
with earning the amounts payable under the arrangement.
The fair value of the Contingent Consideration has been determined based upon non-GAAP revenue projections and projections of
the Company’s related payment obligations to Aura’s sellers, discounted to reflect the present value of the projected payment
obligations. As the Contingent Consideration is both classified and recorded as a liability, it must be remeasured and recorded at
fair value on a recurring basis, and changes in the fair value of the liability are recorded to earnings in our condensed consolidated
statements of operations (refer to Note 10 – Fair Value Measurement).
In addition to purchase consideration, the Company incurred approximately $0.1 million of third-party, acquisition-related costs in
the first quarter of 2025, which were included in Selling, General, and Administrative Expenses in the Company’s consolidated
statements of operations for the nine-months ended September 30, 2025.
We accounted for the acquisition of Aura using the acquisition method, as prescribed by ASC 805. Accordingly, we recorded
acquired assets and assumed liabilities at their estimated fair values as of the date of the acquisition. We determined the fair values
of the assets acquired and liabilities assumed using valuation approaches and methodologies consistent with those described in
ASC 820.
| September 30, 2026 Form 10-Q | 18 |
Part I
Item 1. Financial Statements
which the identifiable assets acquired and liabilities assumed were recorded as of the acquisition date:
(in thousands) | January 29, 2025 |
Assets acquired: | |
Accounts receivable | $ |
Inventories | |
Total current assets | |
Property, plant and equipment | |
Other long-term assets | |
Intangible assets: | |
Trade name | |
Acquired technology | |
Non-compete arrangement | |
Goodwill | |
Total assets acquired | |
Liabilities assumed: | |
Accounts payable | |
Accrued expenses | |
Total current liabilities | |
Total liabilities assumed | |
Total identifiable net assets | $ |
The goodwill arising from this acquisition relates primarily to the assembled workforce and anticipated execution of targeted
growth and operation improvement strategies subsequent to the acquisition. Goodwill attributable to this acquisition is not
deductible for tax purposes until the Company fulfills its obligation pursuant to the contingent consideration arrangement.
acquisition of Aura:
Useful life | |
Trade name | |
Acquired technology | |
Non-compete arrangements |
The estimated weighted-average useful life was 7.9 years for finite lived intangible assets.
Our reported results of operations for the nine months ended September 30, 2025 include the results of Aura subsequent to the
acquisition date. Revenue and pre-tax income (loss) attributable to Aura for the nine months ended September 30, 2025 are not
separately disclosed because such amounts were immaterial and the operations of Aura were integrated into the Company's
existing operations following the acquisition, making separate identification impracticable.
| September 30, 2026 Form 10-Q | 19 |
Part I
Item 1. Financial Statements
Other Acquisition(s)
Earnest Solutions, LLC
On April 28, 2025, the Company acquired the assets of Earnest Solutions, LLC (“Earnest”), a respected power consulting, design,
integration and implementation firm. This acquisition enhances the Company’s ability to develop and deliver customer power
distribution solutions at scale for data center environments.
The consideration paid to acquire Earnest totaled $6.0 million, consisting of $1.0 million of cash and equity with an estimated fair
value of $5.0 million as of the acquisition date.
We accounted for the acquisition of Earnest using the acquisition method, as prescribed by ASC 805. Due to the limited operations
of Earnest prior to consummation of the acquisition, assets and liabilities recorded in accordance with ASC 805 were limited to a
non-compete intangible asset recorded at an estimated fair value of $0.2 million and goodwill of $5.8 million. The non-compete
intangible asset is being amortized over a period of 5 years.
Approximately $1.0 million of goodwill attributable to this acquisition is tax deductible.
Pro Forma Financial Information (unaudited)
The following unaudited pro forma financial information for the nine months ended September 30, 2025 gives effect to (1) the
Change in Control Transaction and (2) the acquisitions of Aura, Earnest and SteelPro, as if they had occurred on January 1, 2024.
The unaudited pro forma results of operations have been prepared for informational purposes only, and do not necessarily
represent what the results of operations would have been had the Change in Control Transaction and acquisitions been completed
on January 1, 2024. In addition, the unaudited pro forma results of operations are not intended to be a projection of future
operating results, do not reflect cost savings from operational efficiencies or synergies that could result from the acquisitions, and
do not reflect additional revenue opportunities that may result following the acquisitions.
costs recognized by each of the acquired businesses (excluding revenue attributable to sales to the Company, which has been
eliminated) for periods prior to their acquisition dates; (ii) depreciation and amortization that would have been recognized related to
the acquired property, plant, and equipment and intangible assets at their acquisition-date fair values, (iii) estimated incremental
interest expense associated with borrowings that were a source of funds for purchase consideration, and (iv) the estimated income
tax effect on the pro forma adjustments:
(in thousands) | Nine Months Ended September 30, 2025 | |
Revenue | $ | |
Net income |
NOTE 3 – DISPOSITIONS |
In November 2025, the Company, with the approval of those charged with governance, committed to a plan to sell Workplace
Modular Systems, LLC (“WMS”) – a subsidiary that manufactured configurable workstation solutions and was not deemed core to
the Company’s operations. As of December 31, 2025, WMS was available for immediate sale in its present condition, the Company
had both initiated an active plan to locate a buyer and received interest from a potential buyer, there were no expectations for a
significant change to the plan to sell WMS or that the plan would be withdrawn, and completion and recognition of the disposal of
WMS within one year was deemed probable. Accordingly, the assets and liabilities of WMS were reclassified and reported as
current assets or liabilities held for sale in the consolidated balance sheet as of December 31, 2025. WMS’s net assets were
reclassified to held for sale at their carrying value. No loss was recognized to measure WMS at the lower of its carrying value or
estimated fair value less costs to sell as of December 31, 2025.
| September 30, 2026 Form 10-Q | 20 |
Part I
Item 1. Financial Statements
During the first quarter of 2026, the Company recognized a loss of $2.1 million for the impairment of the long-lived assets of WMS
held for sale, which was based upon the final sale price of WMS less costs to sell. On April 24, 2026, the Company completed the
sale of WMS for $2.7 million. As a result of working capital changes after the impairment in the first quarter of 2026, we recognized
an incremental loss of $0.7 million within Selling, General and Administrative Expenses on the condensed consolidated statements
of operations in the second quarter of 2026.
The sale of this subsidiary has not been presented as a discontinued operation in the accompanying condensed consolidated
financial statements because the disposal does not represent a strategic shift that will have a major effect on the Company’s
operations and financial results.
(in thousands) | December 31, 2025 | |
Assets | ||
Accounts receivable, net | $ | |
Inventories, net | ||
Prepaid expenses and other current assets | ||
Total current assets held for sale | ||
Property, plant and equipment, net | ||
Right-of-use assets – operating leases | ||
Goodwill | ||
Other long-term assets | ||
Total assets held for sale | ||
Liabilities | ||
Accounts payable | ||
Accrued expenses and other current liabilities | ||
Current portion of operating lease liabilities | ||
Total current liabilities held for sale | ||
Operating lease liabilities, net | ||
Other long-term liabilities | ||
Total liabilities held for sale | $ |
| September 30, 2026 Form 10-Q | 21 |
Part I
Item 1. Financial Statements
NOTE 4 – REVENUE FROM CONTRACTS WITH CUSTOMERS |
Disaggregation of Revenue
nine months ended September 30, 2026 and 2025:
Timing of revenue and recognition | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||
Over a period of time | $ | $ | $ | $ | ||||
At a point in time | ||||||||
Total | $ | $ | $ | $ | ||||
The Company has determined that the nature, amount, timing, and uncertainty of revenue and cash flows are affected by the mix
of products sold.
Estimates of Progress Toward Completion
On a quarterly basis, the Company conducts its contract cost Estimate at Completion (“EAC”) process by reviewing the progress
and execution of outstanding performance obligations within its contracts. As part of this process, management reviews
information including, but not limited to, any outstanding key contract matters, progress towards completion and the related
project schedule, identified risks and opportunities, and the related changes in estimates of revenues and costs.
During the three and nine months ended September 30, 2026, changes in estimates of progress toward completion on
performance obligations recognized over time resulted in an unfavorable cumulative catch-up adjustment to revenue of $2.2 million
and $11.6 million, respectively. Cumulative catch-up adjustments recorded during the three and nine months ended September 30,
2025 were not
Loss Contract Reserves
During the nine months ended September 30, 2026 and 2025, the Company recognized provisional losses of $22.4 million and
$3.1 million, respectively, for which the total costs incurred exceeded the total estimates of the project's transaction price. As of
September 30, 2026 and 2025, the loss contract reserve balance was $2.9 million and $2.1 million, respectively.
Contract Balances
Revenue recognized during the nine months ended September 30, 2026 that was included in contract liabilities as of December 31,
2025 was $12.3 million. Revenue recognized during the nine months ended September 30, 2025 that was included in contract
liabilities as of December 31, 2024 was $15.2 million.
(in thousands) | September 30, 2026 | September 30, 2025 | ||
Beginning balance | $ | $ | ||
Net Change | ||||
Ending balance | $ | $ |
| September 30, 2026 Form 10-Q | 22 |
Part I
Item 1. Financial Statements
Changes in deferred revenue were as follows:
(in thousands) | September 30, 2026 | September 30, 2025 | ||
Beginning balance | $ | $ | ||
Additions to deferred revenue | ||||
Recognition of deferred revenue | ( | ( | ||
Ending balance | $ | $ |
Changes in contract assets and contract liabilities are primarily due to the timing of payments from customers and the Company's
satisfaction of performance obligations during the normal course of business.
Remaining Performance Obligations
The Company's contracts generally have original terms of one year or less, and the Company has elected the practical expedient
to exclude disclosures about remaining performance obligations for contracts with an original expected duration of one year or
NOTE 5 – INTANGIBLE ASSETS |
September 30, 2026 | December 31, 2025 | |||||||
(in thousands) | Gross Carrying Value | Accumulated Amortization | Gross Carrying Value | Accumulated Amortization | ||||
Customer relationships | $ | $( | $ | $( | ||||
Acquired technology | ( | ( | ||||||
Trade names | ( | ( | ||||||
Order backlog | ( | ( | ||||||
Non-compete arrangements | ( | ( | ||||||
Total intangible assets | $ | $( | $ | $( | ||||
2025:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||
Amortization of intangible assets | $ | $ | $ | $ | ||||
| September 30, 2026 Form 10-Q | 23 |
Part I
Item 1. Financial Statements
(in thousands) | Amortization | |
Remainder of 2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
Thereafter | ||
Total future amortization | $ |
In the third quarter of 2026, we finalized a plan to shift the use of the SteelPro facility acquired in 2025 from the operations in place
when the Company was acquired to a new use that supports existing Accelevation operations in the data center whitespace
market by the end of 2026. This triggered a change in the useful lives to four months for the SteelPro Trademark and Customer
Relationships with a remaining aggregate net book value of $11.2 million. As a result of this change, Amortization of Intangible
Assets increased $5.3 5.2 5.3
NOTE 6 – LONG-TERM DEBT |
(in thousands) | Maturity Date | Interest Rate | September 30, 2026 | December 31, 2025 | ||||
2025 Revolver | January 2, 2031 | Variable SOFR + Margin | $ | $ | ||||
2025 Term Loan | January 2, 2031 | Variable SOFR + Margin | ||||||
Delayed Draw Term Loan | January 2, 2031 | Variable SOFR + Margin | ||||||
$ | $ | |||||||
Less: Unamortized debt issuance costs | ( | ( | ||||||
Less: Current maturities | ( | ( | ||||||
Total long-term debt | $ | $ | ||||||
2025 Credit Agreement
On January 2, 2025, the Company, together with certain of its subsidiaries, entered into a senior secured credit agreement (as
amended, the “2025 Credit Agreement”) in order to repay the Company’s existing indebtedness and to finance the Change in
Control Transaction along with related transaction costs. The original terms provided for a term loan ("2025 Term Loan") of $200.0
million, a delayed draw term loan (“DDTL”) of up to $75.0 million, and a revolving credit facility ("2025 Revolver") of $50.0 million.
Following the amendments further described below, the Credit Agreement as of September 30, 2026 consisted of:
•2025 Term Loans of $602.9 million;
•Delayed Draw Term Loan capacity of up to $85.0 million; and
•Revolving Credit Facility limit of $60.0 million.
As of September 30, 2026, the remaining availability under the DDTL was $22.7 million and the remaining availability under the
2025 Revolver was $60.0 million.
| September 30, 2026 Form 10-Q | 24 |
Part I
Item 1. Financial Statements
The Company incurs a 0.50 % per annum commitment fee, payable quarterly. The 2025 Term Loans and DDTLs require quarterly
principal payments, equal to 0.25
Amendments
•On September 5, 2025, the Company entered into an amendment to the Credit Agreement (“Amendment No. 1”), which
provided for (i) $20.0 million of incremental term loans and (ii) $10.0 million of incremental revolving credit commitments,
increasing the total revolving commitments to $60.0 million.
•On February 13, 2026, the Company entered into a third amendment to the Credit Agreement, which provided for
incremental term loans of $40.0 million. The Company paid a 1 % upfront fee on the aggregate proceeds received. The
proceeds from the incremental term loans were used to repay revolving credit borrowings outstanding as of February 13,
2026.
•In June 2026, the Company executed an amendment to the Credit Agreement ("Amendment No. 4"). Amendment No. 4
provided incremental term loans of $346.0 million and an additional $10.0 million in DDTL commitments. The Company
paid a 1.5 % fee on the proceeds received, which were primarily used to fund a distribution and notes to certain
members in the amount of $299.4 million, repay $20.0 million of debt on the 2025 Revolving Credit Facility, and provide
funds for operating and capital needs. See additional discussion of the distributions in Note 14 – Related-Party
Transactions.
•In August 2026, the Company drew $14.5 million on the DDTL to purchase a consolidated VIE and repay its loan of $7.0
million.
Interest Rates
Borrowings under the 2025 Credit Agreement bear interest, at the Company’s option, at either a Benchmark Rate (based on Term
SOFR, subject to a floor) or an Alternate Base Rate (“ABR”), plus an applicable margin. The applicable margin is determined based
on the Secured Debt to consolidated EBITDA ratio.
As of September 30, 2026 and 2025 the Company’s applicable margin was 3.5 % and 5.0 %, respectively.
Covenants
The 2025 Credit Agreement contains customary affirmative and negative covenants, including restrictions on additional
indebtedness, liens, asset sales, investments, restricted payments, and transactions with affiliates. The 2025 Credit Agreement
also includes financial covenants requiring the Company to maintain a maximum Secured Debt to EBITDA ratio, tested quarterly.
Management is not aware of any violations of the covenants at September 30, 2026 or December 31, 2025.
2026 Credit Agreement
In October 2026 we entered into a new debt facility (the "2026 Credit Agreement") consisting of (i) a $250.0 million senior secured
term loan facility and (ii) a $400.0 million senior secured revolving credit facility (the "Revolver"), which matures in October 2031.
The facility bears interest at a rate equal to SOFR plus 2.25 % for term SOFR borrowings or plus 1.25 % for Base Rate borrowings
until the delivery of the compliance certificate for the quarter ending June 30, 2027. After that date, the spread for Term SOFR
loans will range from 1.50 % to 2.50 %, and the spread for Base Rate loans will range from 0.50 % to 1.50 %, both based on the
leverage ratio calculated under the 2026 Credit Agreement. Unused amounts under the Revolver will be charged a commitment fee
of 0.30 % until the delivery of the compliance certificate for the quarter ending June 30, 2027, and 0.20 % to 0.35 % thereafter
based on the same leverage ratio calculation. The Term Loan requires quarterly principal payments of $3.1 million beginning March
2027.
The 2026 Credit Agreement contains customary affirmative and negative covenants, including (i) a maximum total net leverage ratio
of 4.00 to 1.00 and (ii) a minimum fixed charge coverage ratio of 1.25 to 1.00, each tested quarterly beginning with the quarter
ended March 31, 2027.
| September 30, 2026 Form 10-Q | 25 |
Part I
Item 1. Financial Statements
October Activity
On October 1, 2026, we used IPO proceeds of $170.6 million to pay down a portion of the 2025 Credit Agreement. At the closing
of the 2026 Credit Agreement, we used the $250.0 million of Term Loan proceeds, $150.0 million of Revolver proceeds, and cash
on hand to repay the remaining borrowings under the 2025 Credit Agreement in full. As a result, we wrote off the remaining debt
issuance costs of $9.8 million to interest expense in October.
Loan Maturities
long-term debt are as follows:
(in thousands) | ||
Remainder of 2026 | $ | |
2027 | ||
2028 | ||
2029 | ||
2030 | ||
Thereafter | ||
Total maturities | $ |
NOTE 7 – LEASES |
Significant Leases Commenced or Executed in 2026
In the second quarter of 2026, the Company's lease commenced for a manufacturing facility of approximately 286,000 square feet.
The lease term is for 124 months and undiscounted minimum lease payments related to this facility, which escalate over the term
of the lease, total $23.0 million. In the same period, we executed a lease for an additional 286,000 square feet of manufacturing
space with a term of 124 months to commence after the later of one year from the effective date or when leasehold improvements
have been substantially completed. Total minimum undiscounted lease payments will be $25.5 million. For both leases, we have
have not included the option period within the lease term or in the future minimum lease payments below.
Additionally, in July 2026 our amended lease to expand our headquarters commenced. The lease term is for ten years and
undiscounted minimum lease payments related to this facility, which escalate over the term of the lease, total $6.4 million. The
lease includes an option to be extended for an additional five years beyond the current committed lease term, which is not
included in the lease term or future minimum lease payments below.
The “Quantitative Disclosures” that follow do not include information related to the Company’s leases that have not yet
commenced.
Quantitative Disclosures
While our leases primarily consist of operating leases, for which the carrying values of the related right-of-use ("ROU") assets and
lease liabilities are reported on our Consolidated Balance Sheets, the Company also has finance leases related to equipment. As of
September 30, 2026 and December 31, 2025, the carrying amounts of our finance lease ROU assets and liabilities were immaterial.
| September 30, 2026 Form 10-Q | 26 |
Part I
Item 1. Financial Statements
reconciliation of the minimum lease payments to the operating lease and finance lease liability balances recognized on our
Consolidated Balance Sheets as of September 30, 2026, are as follows:
(in thousands) | Operating Leases | Finance Leases | ||
Remainder of 2026 | $ | $ | ||
2027 | ||||
2028 | ||||
2029 | ||||
2030 | ||||
Thereafter | ||||
Total future undiscounted lease payments | ||||
Less: Imputed interest | ||||
Present value of lease liabilities | $ | $ |
2025, were as follows:
September 30, 2026 | September 30, 2025 | |||||||
Operating Leases | Finance Leases | Operating Leases | Finance Leases | |||||
Weighted-average remaining lease term (in years) | ||||||||
Weighted-average discount rate | ||||||||
NOTE 8 – EQUITY-BASED COMPENSATION |
Pre-IPO Awards
During the nine months ended September 30, 2026, we granted employee incentive units ("Series P Units") in Accelevation Topco
LLC (“Topco”), a parent entity to Accelevation LLC, including units for which grant agreements were executed during the year
ended December 31, 2025. For accounting purposes, units were deemed to be granted when the annual earnings-based
performance target was established by management and the Board and communicated to the employees. For financial reporting
purposes, compensation amounts paid to our employees by Topco are deemed to be our expenses and akin to a capital
contribution from Topco. The grant-date fair value of the units granted was estimated to be approximately $3.7 million, which was
expected to be recognized as expense over the next 3.6 to 4.5 years. Prior to the modification discussed below, we recognized
expense of $1.9 million in the first nine months of 2026.
Effective October 1, 2026, we modified the Series P Units. Under these modified terms, which took effect upon consummation of
the IPO, the revised performance conditions are linked to certain stockholder sell-downs of their ownership interests in the
Company. Upon the triggering of the performance conditions, Series P Unit holders are entitled to the partial settlement of their
right to distributions under the Series P Unit awards in cash, shares, or a combination of cash and shares. These changes to the
| September 30, 2026 Form 10-Q | 27 |
Part I
Item 1. Financial Statements
timing and manner in which the Series P Units are settled superseded many of the original terms of the awards and the 2025
Accelevation Incentive Plan (2025).
Management concluded that the settlement obligation under the Series P Units modified performance conditions were not
applicable until the October 2026 effective date of the IPO and the modified agreement. Future expense will not be triggered or
recognized until it is deemed probable that the performance condition will be achieved, which occurs with certain stockholders'
future sell-downs. Accordingly, upon modification, all issued Series P Units are deemed to have been granted.
NOTE 9 – OTHER FINANCIAL INFORMATION |
(in thousands) | September 30, 2026 | December 31, 2025 | ||
Raw materials | $ | $ | ||
Work in process | ||||
Finished goods | ||||
Total inventories | $ | $ |
The Company recorded reserves for excess and obsolete inventory of $3.1 million and $2.2 million as of September 30, 2026 and
December 31, 2025, respectively.
(in thousands) | September 30, 2026 | December 31, 2025 | ||
Land | $ | $ | ||
Building | ||||
Building improvements | ||||
Machinery and equipment | ||||
Vehicle, trucks and trailers | ||||
Office furniture and fixtures | ||||
Software | ||||
Leasehold improvements | ||||
Construction in progress | ||||
Less: Accumulated depreciation | ( | ( | ||
Total property, plant and equipment, net | $ | $ |
| September 30, 2026 Form 10-Q | 28 |
Part I
Item 1. Financial Statements
(in thousands) | September 30, 2026 | December 31, 2025 | ||
Accrued payroll | $ | $ | ||
Accrued commissions | ||||
Accrued interest | ||||
Current portion of derivative liability | ||||
Loss contract reserve | ||||
Other accrued expenses | ||||
Total accrued expenses and other current liabilities | $ | $ |
NOTE 10 – FAIR VALUE MEASUREMENT |
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly
transaction between market participants at the measurement date. Fair value measurements consider market data, as well as
assumptions that market participants would use in pricing an asset or liability, when such data is available. GAAP (1) establishes a
three-level fair value hierarchy which defines and prioritizes the inputs that shall be used when measuring fair value and (2) requires
that valuation techniques maximize the use of observable inputs and minimize use of unobservable inputs. Inputs used to measure
fair value are defined in the three-level fair value hierarchy as follows:
•Level 1 – Observable inputs that are based on unadjusted quoted prices in active markets for identical assets and
liabilities.
•Level 2 - Observable inputs other than Level 1 quoted prices, such as quoted market prices for similar assets and
liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and
other inputs that are observable or can be corroborated by observable market data.
•Level 3 - Unobservable inputs that are supported by little or no market activity.
Assets and liabilities that are measured at fair value are classified in their entirety based upon the lowest level of input that is
significant to the fair value measurement.
Our cash and cash equivalents, accounts receivable, accounts payable, related party payables, and accrued expenses and other
current liabilities are carried at cost, which approximated fair value for these financial instruments as of September 30, 2026 and
December 31, 2025, due to their short-term nature.
Our outstanding third-party, long-term debt as of September 30, 2026 is classified as Level 2 in the fair value hierarchy and is
carried at cost. The carrying value of the 2025 Credit Facility as of September 30, 2026 and December 31, 2025 has been deemed
to approximate fair value due to the debt’s variable interest rate that adjusts with market fluctuations in the benchmark rate upon
which the interest rate is determined.
| September 30, 2026 Form 10-Q | 29 |
Part I
Item 1. Financial Statements
Recurring Fair Value Measurements
Our acquisition earnout and interest rate swap derivatives are measured and recognized at fair value on a recurring basis. Fair
value measurements that occurred as of September 30, 2026 and December 31, 2025 were as follows:
September 30, 2026 | December 31, 2025 | |||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||
Acquisition earnout | $ | $ | $ | $ | $ | $ | ||||||
Interest rate swaps | ||||||||||||
Acquisition Earnout
The Company measures the contingent consideration related to the January 29, 2025 acquisition of Aura (refer to Note 2 –
Acquisitions) at fair value on a recurring basis. Measurement of the fair value of this liability is characterized as Level 3 in the fair
value hierarchy due to the use of a discounted cash flow model that incorporates unobservable inputs, consisting primarily of
future non-GAAP revenue projections for the remaining term of approximately 3.5 years, and discount rates applied to adjust for
forecast risk and time value of money. Changes in future non-GAAP revenue projections and/or the applied discount rates over the
term of this arrangement could result in material changes to the estimated fair value of this liability. Furthermore, this liability may
ultimately be settled for an amount that differs from its carrying amount. The following table summarizes the changes in the fair
value of the contingent consideration liability during the nine months ended September 30, 2026:
(in thousands) | Change in Level 3 Liability |
Balance as of December 31, 2025 | $ |
Earnout payments made | ( |
Change in fair value(1) | |
Balance as of September 30, 2026 | $ |
(1)The change in fair value of the contingent consideration liability is included in Selling, General, and Administrative
Expenses on the condensed consolidated statements of operations.
Derivatives
In September 2025, the Company entered into certain interest rate swap derivatives with a notional amount of $200.0 million and a
secured overnight financing rate ("SOFR") yield curves at the reporting date and are classified in Level 2. Counterparties to these
contracts are highly rated financial institutions.
At September 30, 2026, the fair value of the undesignated interest rate swap agreements was approximately $2.0 million, recorded
in Accrued Expenses and Other Current Liabilities on the condensed consolidated balance sheets, and the Company recognized a
loss of $0.6 million and $2.0 million in Interest Expense in the condensed consolidated statements of operations for the three and
NOTE 11 – SEGMENT INFORMATION |
The Company has identified its Chief Executive Officer as its chief operating decision maker (“CODM”), as that term has been
defined in GAAP. The Company’s Chief Executive Officer reviews financial information presented on a consolidated basis for
purposes of assessing financial performance and allocating resources and, accordingly, the Company’s operations are comprised
| September 30, 2026 Form 10-Q | 30 |
Part I
Item 1. Financial Statements
of a single operating segment and single reportable segment. The following table summarizes significant expenses reviewed by the
CODM on a regular basis for purposes of assessing our financial performance and allocating resources.
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||
Revenue | $ | $ | $ | $ | ||||
Significant expenses | ||||||||
Material costs | ||||||||
Labor costs | ||||||||
Other cost of goods sold | ||||||||
Gross profit | ||||||||
Operating expenses: | ||||||||
Wages and benefits | ||||||||
Other selling, general, and administrative (1) | ||||||||
Amortization of intangible assets | ||||||||
Related party expenses | ||||||||
Impairment on assets held for sale | ||||||||
Total operating expenses | ||||||||
Operating income | ||||||||
Interest income | ||||||||
Interest expense | ( | ( | ( | ( | ||||
Other income (expenses), net | ( | |||||||
Total non-operating expense, net | ( | ( | ( | ( | ||||
Income before income taxes | ||||||||
(Benefit) provision for income taxes | ( | |||||||
Net income | $ | $ | $ | $ | ||||
(1)Other selling, general, and administrative expenses primarily consist of facilities expenses that do not relate to our
manufacturing operations such as sales and marketing expenses, costs related to the IPO, and other general
administrative expenses.
All of the Company’s long-lived assets are located in the United States, and all of the Company’s revenue is generated in the
United States.
NOTE 12 – COMMITMENTS AND CONTINGENCIES |
Non-cancelable Purchase Commitments
In the ordinary course of business, the Company enters into non-cancelable purchase commitments with various parties to
purchase primarily software, payroll, and cloud related-based services. As of September 30, 2026 the Company had outstanding
non-cancelable purchase commitments in the amount of $1.1 million.
| September 30, 2026 Form 10-Q | 31 |
Part I
Item 1. Financial Statements
Legal and Other
The Company may be subject to various claims and legal proceedings that arise in the course of its business activities.
Management believes that any liability that may ultimately result from the resolution of these matters will not have a material effect
on the financial condition or results of operations of the Company.
NOTE 13 – VARIABLE INTEREST ENTITIES |
In connection with the acquisition of SteelPro, on October 6, 2025, the Company entered into an arrangement with Fox Red to
lease the manufacturing facilities used by SteelPro in Houston, MS. Fox Red is a related party because it is owned by an individual
in executive management of the Company. The Company concluded that it held an implicit variable interest in the entity through
the lease agreement and an implicit commitment to provide funding to expand the manufacturing premises. As a result, the
Company concluded that Fox Red met the requirements for consolidation pursuant to the VIE sub-sections of ASC 810.
In August 2026, we purchased the land, building, and improvements from Fox Red for $14.5 million, which included repayment of a
consolidated loan in the amount of $7.0 million. Because Fox Red was consolidated as a variable interest entity immediately prior
to the transaction, the transaction did not result in the recognition of a gain or loss or a remeasurement of the property and instead
was recorded as an equity transaction. We recorded a redemption of all Non-controlling Interest as Fox Red would no longer
represent non-controlling interest, and we recorded the remaining payment as a reduction to Members' Equity.
Total payments made to the VIE were approximately $2.4 million during the nine months ended September 30, 2026. Of this
amount, $1.4 million was advanced as a prepayment for construction in progress related to the expansion of the Houston, MS
manufacturing facility but was reimbursed in the same period (refer to Note 6 – Long-Term Debt). The remaining amounts were
payments under the lease agreement. The VIE made distributions totaling $0.9 million during the nine months ended
September 30, 2026.
the VIE:
(in thousands) | December 31, 2025 | |
Land | $ | |
Building and building improvements, net of accumulated depreciation of $ | ||
Total assets | $ |
NOTE 14 – RELATED-PARTY TRANSACTIONS |
Management Agreement
The Company operated under a management service agreement with the Company’s majority owner, whereby the majority owner
provided general management services, assistance with financing of acquisitions, strategic planning, and other agreed-upon
services. As part of the agreement, the Company paid an annual management fee of $1.0 million. Additionally, the majority owner
received reimbursement of expenses. The Company incurred approximately $0.3
ended September 30, 2026 and 2025 and $0.8
2025. This agreement was terminated in conjunction with the IPO.
| September 30, 2026 Form 10-Q | 32 |
Part I
Item 1. Financial Statements
IPO Professional Services
During the three and nine months ended September 30, 2026, the Company incurred approximately $1.7 million and $8.8 million of
professional service fees payable to an affiliate providing services related to the IPO. For the three and nine months ended
September 30, 2026, $0.4 million and $6.6 million, respectively, were recorded as Related Party Expenses in the condensed
consolidated statements of operations, and $2.2 million was recorded as deferred offering costs within Other Long-Term Assets on
the condensed consolidated balance sheets as of September 30, 2026 (refer to Note 1 – Description of Business and Basis of
Presentation). As of September 30, 2026, we had $0.4 million of invoices to be paid recorded in Related Party Payable on our
condensed consolidated balance sheets.
Distributions
During 2026, we have paid distributions to members of $296.3 million. In July 2026 we announced to the Series P Unit holders that
they would be eligible to participate in a distribution. The cash distribution to Series P Unit holders represents an advance against
future distributions or future sale proceeds that the holders may otherwise be entitled to receive. If a Series P Unit holder's
employment terminates before the Series P Unit distributions are earned in connection with future distributions or future sales, or if
the units are otherwise forfeited or repurchased for no consideration under the terms of the Accelevation Equity Incentive Plan
(2025), the holder is required to repay the cash distribution. The final distribution made to Series P Unit holders in July 2026 was
$22.1 million. Based on the terms of the distribution, we present the amount as Notes Receivable from Members within equity on
the condensed consolidated balance sheets. Total cash paid for distributions to members for the nine months ended
September 30, 2026, including the Notes Receivable from Members, was $318.4 million. Total distributions paid for the nine
months ended September 30, 2025 were $16.9 million.
The Company accrued $16.9 million of distributions to be paid to Company members as of December 31, 2025 as Related Party
NOTE 15 – SUBSEQUENT EVENTS |
Subsequent events have been evaluated through November 13, 2026, which is the date the condensed consolidated financial
statements were issued.
IPO of Accelevation Holdings Corp.
On October 1, 2026, Pubco completed its IPO of 10,000,000 shares of its Class A common stock at the IPO price of $18.00 per
share, excluding 20,000,000 shares of Class A common stock sold by certain selling stockholders, in exchange for net proceeds of
approximately $170.6 million, after deducting approximately $9.5 million of underwriting discounts and commissions. Pubco used
such net proceeds to acquire 10,000,000 newly issued Series A Units in Accelevation Holdings LLC (“Holdings LLC”), the
Company’s direct parent. Immediately following the completion of the IPO and related organizational transactions, Pubco held an
approximately 53 % interest in Holdings LLC, and the Company was a wholly owned subsidiary of Holdings LLC.
Organizational Transactions
In connection with the consummation of the IPO on October 1, 2026, Pubco and the Company undertook certain organizational
transactions, including:
•Pubco (i) formed Holdings LLC as the direct parent entity of the Company, with classes of common membership
interests consisting of Series A Units and Series B Units of Holdings LLC (together, the “LLC Units”), and (ii) was
appointed as the sole managing member of Holdings LLC.
•Pubco and Holdings LLC amended and restated the Company’s Operating Agreement to, among other things, modify
the capital structure of the Company to be a wholly owned subsidiary of Holdings LLC.
| September 30, 2026 Form 10-Q | 33 |
Part I
Item 1. Financial Statements
•Pubco and Holdings LLC entered into the Exchange Agreement with Accelevation Investment Holdings LLC (“Investment
Holdings”) and Instor Blocker, Inc. (“Instor”), pursuant to which Investment Holdings (or its permitted transferees) is
entitled to exchange Series B Units of Holdings LLC, together with an equal number of shares of Class B common stock
of Pubco, for shares of Class A common stock of Pubco on a one -for-one basis or, at Pubco’s election, for cash, from a
substantially concurrent public offering or private sale (based on the price of Pubco’s Class A common stock in such
public offering or private sale).
•Pubco and Holdings LLC entered into the Tax Receivable Agreement with Investment Holdings and Instor that requires
the payment by Pubco to Investment Holdings of collectively 85 % of certain tax savings, if any, in U.S. federal, state and
local income taxes that Pubco actually realizes (or, under certain circumstances, is deemed to realize).
Additional Items
In October, we also undertook the following actions:
•Entered into a new credit agreement and made draws on the Revolver (see discussion in Note 6 – Long-Term Debt)
•Paid employee cash bonuses totaling approximately $27.1 million in connection with the IPO using funds contributed by
certain selling stockholders, including employee 401(k) contributions of $6.0 million that will vest on the second
anniversary of employment.
| September 30, 2026 Form 10-Q | 34 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) summarizes the
significant factors affecting the consolidated operating results, financial condition, liquidity and cash flows of the Company as of
and for the periods presented below. The following discussion and analysis of our financial condition and results of operations
should be read together with the sections entitled “Forward-Looking Statements” and the unaudited condensed consolidated
financial statements of Accelevation Holdings Corp. as of the periods set forth therein and of Accelevation LLC as of and for the
three and nine months ended September 30, 2026 and related notes included elsewhere in this Quarterly Report on Form 10-Q as
well as the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and the audited consolidated financial statements and related notes thereto of Accelevation Holdings Corp. and
Accelevation LLC included in our prospectus, dated September 29, 2026 filed with the Securities and Exchange Commission (the
"SEC") pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Prospectus”) on October 1, 2026 in
connection with our initial public offering (“IPO”).
The following discussion contains forward-looking statements related to our current plans, estimates and assumptions, and events
and financial trends that may affect our future operating results or financial position. We may use terminology such as “aim,”
“anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,”
“may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar
expressions to identify forward-looking statements. The forward-looking statements contained herein involve risks and
uncertainties. Actual results and timing of selected events could differ materially from those discussed or implied by the forward-
looking statements as a result of various factors, including those discussed below and detailed elsewhere in this Quarterly Report
on Form 10-Q and our Prospectus, particularly in the sections entitled “Risk Factors” and “Forward-Looking Statements.”
Overview
We are a vertically integrated infrastructure platform that designs, manufactures and installs power distribution and white space
infrastructure products for mission-critical environments. We help hyperscale, colocation, AI, cloud and other large-scale data
center customers accelerate deployment through integrated, factory-built solutions designed for speed, scalability and deployment
certainty. As customers race to bring new compute capacity online, white space infrastructure is becoming more complex and
demanding than ever before. AI-driven deployments require greater power density, more advanced cooling architectures, liquid-
cooling readiness and tighter coordination across power, cooling and structural systems, while chip architectures, power
requirements, cooling methods and customer-specific standards continue to evolve. Customers increasingly need partners that
can move quickly, adapt in real time and coordinate across design, manufacturing, power, cooling, structure and installation, while
existing catalog-based approaches are often not built for the speed, customization or accountability required in next-generation
data center deployments.
Our Power Products portfolio, including branch circuit whips, RPPs, HD-RPPs, PDUs, related monitoring technologies and
adjacent upstream power distribution products, is a core element of our integrated white space solutions platform. These products
may be sold on a standalone basis, but are increasingly integrated with our modular infrastructure, thermal management and field
services capabilities to deliver a more complete, coordinated solution for data center customers.
We believe Accelevation is optimally positioned to address customer needs through our vertically integrated “Design. Manufacture.
Install.” operating model. By bringing engineering, manufacturing, electrical scope, installation and project coordination together
under a single platform, we provide customers with a unified partner across an expanding portion of the white space infrastructure
stack. We believe this model reduces deployment complexity, improves schedule control, accelerates installation timelines and
enables faster adaptation to evolving customer requirements and changing job-site conditions.
On October 1, 2026, Accelevation Holdings Corp. (“Pubco”) completed its initial public offering (the “IPO”) of 10,000,000 shares of
its Class A common stock at the IPO price of $18.00 per share, excluding 20,000,000 shares of Class A common stock sold by
certain selling stockholders, in exchange for net proceeds of approximately $170.6 million, after deducting approximately $9.5
| September 30, 2026 Form 10-Q | 35 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
million of underwriting discounts and commissions. Pubco used such net proceeds to acquire 10,000,000 newly issued Series A
Units in Accelevation Holdings LLC (“Holdings LLC”), the Company’s direct parent. Immediately following the completion of the
IPO and related organizational transactions, Pubco held an approximately 53% interest in Holdings LLC, and the Company was a
wholly owned subsidiary of Holdings LLC.
Key Factors Affecting Our Performance
We believe that the performance of our business and our future success depend upon several critical factors. While each presents
significant opportunities, they also pose important challenges that we must successfully address to sustain growth and improve
our results of operations.
Data Center Capital Investment and AI-Driven Demand
We derive substantially all of our revenue from our offerings sold into the data center industry. Demand for our products is being
driven by the rapid growth of cloud computing, AI and broader digital workloads driving significant investment in new data center
capacity. AI workloads, including model training, inference, generative AI and machine learning applications require greater
compute intensity and power density than traditional enterprise workloads. At the same time, cloud migration, cybersecurity,
analytics, software development, streaming, connected devices and other digital workloads continue to create a baseline source of
demand independent of AI. Levels of investment in new data center capacity are influenced by the pace of innovation in compute
architectures, the availability of power and land in target markets, the cost and availability of capital and the regulatory environment
for new construction.
Customer Concentration and Hyperscale Program Cadence
A significant portion of our revenue is generated from a relatively small number of hyperscale and colocation customers, and we
expect this concentration to persist. Our revenue in any given quarter or year can be materially affected by the pace at which
individual customers release purchase orders on multi-building campus programs and by their decisions to accelerate, delay or
reallocate phases of those programs. As we secure additional framework arrangements with major hyperscale operators, we
believe the size and lead-time visibility of our backlog should improve, although period-to-period results may continue to reflect
program irregularities.
Product Offering Mix and Impact on Margins
The profit margins we earn vary based on the mix between Infrastructure Solutions and Power Products, the proportion of revenue
derived from on-site installation and integration services, the size and manufacturing content of individual orders and the degree of
customization. We typically earn higher gross margins on engineered, factory-finished products (including our SkyBridge modular
platform, high-density RPPs and Power Products integrated into modular deployments) than on installed services and certain
resold or pass-through items. As we continue to shift work from the field into controlled manufacturing environments through
greater modular and prefabricated content, we expect to improve operating leverage across our platform. Our overall gross
margins can vary meaningfully between periods based on offering mix related to projects completed within a particular period.
Cost of Raw Material and Labor Inputs
Our largest raw material exposures are structural steel, copper, aluminum and the electrical components used in our Power
Products, including busbars, electrical accessories and monitoring electronics. Steel and copper prices are subject to significant
volatility, and our component supply is exposed to global supply chain conditions and to the imposition of tariffs on imported
goods. The cost of hourly manufacturing labor in the markets where our facilities are located, including southwest Ohio, Mississippi
and Virginia also affects our profit margins, particularly as we add personnel to support capacity expansion. Our profit margins are
influenced by our ability to pass through changes in raw material and component costs to our customers, by the structure of our
supply agreements, and by our ability to manage inventory levels through periods of volatile pricing.
| September 30, 2026 Form 10-Q | 36 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Capacity Expansion and Utilization
We have undertaken a significant expansion of our manufacturing footprint to address the demand we are seeing from hyperscale
and colocation customers. This rapid expansion has been relatively capital-light, and we have purpose-built this footprint to
support hyperscalers’ specific needs, with fast and flexible production lines, domestic manufacturing, shorter supply chains and
the ability to innovate and adjust products quickly. Higher capacity utilization across our facilities typically improves our gross
margins through better fixed-cost absorption, while periods of rapid capacity additions can temporarily compress margins as new
facilities ramp. We continue to add capacity on a regular cadence to stay ahead of customer demand, and we believe continued
investments in automation, robotics and welding efficiency initiatives can increase throughput, reduce lead times and further
improve margins.
Our profit margins also benefit from the degree to which we manufacture the key sub-assemblies of our products in-house rather
than rely on third-party suppliers; for example, we fabricate our TechFrame and SkyBridge structural systems and build our RPPs
and branch circuit whips at our own facilities. Changes in our capacity utilization and the level of in-house versus purchased
content in our products can influence our pricing and gross margins in any given period.
Key Business Metrics
We review the following key metrics to evaluate our business, measure our performance, identify trends affecting our business,
formulate business plans and make strategic decisions. Certain of these measures are not financial measures calculated in
accordance with GAAP and should not be considered as substitutes for financial measures that have been calculated in
accordance with GAAP. Refer to the subsequent discussion of “Non-GAAP Financial Measures and Performance Metrics” for
additional information regarding the calculation of each non-GAAP measure and why they have been determined to be meaningful
to investors, reconciliations of non-GAAP measures to the most directly comparable GAAP financial measures, and explanations of
our performance metrics.
| September 30, 2026 Form 10-Q | 37 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following table sets forth certain financial highlights for the periods indicated:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||
GAAP Results | ||||||||
Revenue | $202,224 | $121,888 | $639,675 | $280,518 | ||||
Cost of goods sold | $143,063 | $79,755 | 464,364 | 190,091 | ||||
Gross margin | 29.3% | 34.6% | 27.4% | 32.2% | ||||
Net income | $3,153 | $13,646 | 22,478 | 4,935 | ||||
Net income margin | 1.6% | 11.2% | 3.5% | 1.8% | ||||
Net cash provided by (used in) operating activities | $62,506 | $(645) | 58,265 | (5,576) | ||||
Non-GAAP Results and Key Metrics | ||||||||
Adjusted EBITDA | $37,740 | $28,863 | $106,110 | $55,663 | ||||
Adjusted EBITDA Margin | 18.7% | 23.7% | 16.6% | 19.8% | ||||
Adjusted Net Income | $20,922 | $22,495 | $70,965 | $37,313 | ||||
Adjusted Net Income Margin | 10.3% | 18.5% | 11.1% | 13.3% | ||||
Free Cash Flow | $55,006 | $(3,274) | $39,228 | $(13,989) | ||||
Bookings | 768,921 | 165,674 | 1,898,338 | 608,339 | ||||
Book-to-bill ratio | 0.0 | 0.0 | 0.0 | 0.0 | ||||
September 30, 2026 | September 30, 2025 | |||||||
Backlog | $1,677,990 | $390,988 | ||||||
Trends and Factors Impacting Our Results of Operations
Impacts of Expansion and Integration of Product Offerings and Related Growth
After June 30, 2024, we began to experience significant growth in the revenue generated from customized solutions that include
the integration and installation of several of our product offerings. These solutions typically reflect larger scale projects, with higher
contract values, for which revenue is recognized over time as costs are incurred. This shift results in contract values and progress
on delivery against contracts having a significantly greater impact on reported revenue than contract volume.
Expansion of Internal Labor and Manufacturing Capacity
In response to the growth we experienced beginning in 2024, we significantly increased the size of our manufacturing and delivery
workforce, including through the use of contract labor. This increase in the size of our workforce has resulted in, and we expect will
continue to result in, an increase in labor costs (wages and benefits) recognized in costs of goods sold in our consolidated
statements of operations compared to historical reporting periods.
Additionally, we have expanded the manufacturing capacity of our operations. During the first half of fiscal year 2025, the lease of a
newly constructed, over 264,000 square foot manufacturing facility commenced, representing our largest manufacturing facility
and lease commitment at the time of lease commencement. In May 2026, the lease of an additional newly constructed, over
286,000 square foot manufacturing facility commenced. We have also executed a lease for an additional 286,000 square foot
manufacturing facility that is expected to commence in 2027. These leases, combined with the associated fixed asset purchases,
| September 30, 2026 Form 10-Q | 38 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
represent an increase in fixed overhead costs that will continue to impact costs of goods sold in our consolidated statements of
operations.
We will continue to increase the size of our workforce and manufacturing capacity commensurate with the growing demand for our
products. The timing of our hiring and leasing could impact our gross profit and/or gross profit margin in future periods.
Activities Related to Our IPO
During the nine months ended September 30, 2026, we began to incur significant third-party legal, accounting, audit and
consulting costs related to the IPO and the increased regulatory, governance and reporting requirements to which we will be
subject as a publicly-traded company. We expect these costs to continue as we expand the executive management team,
continue to establish a governance structure, invest in additional internal resources, expand insurance coverage, and issue awards
under our equity incentive plan. During the fourth quarter of 2026, we expect to incur $45.0 to $50.0 million of expense for cash
bonuses and stock compensation costs related to the IPO. In the same period, the Company expects to incur $2.0 to $3.0 million
of public company readiness costs.
2025 Transactions
During the year ended December 31, 2025, we (i) experienced a change in control on January 2, 2025 (the “Change in Control
Transaction”) and (ii) consummated various acquisitions as part of our vertical integration strategy. A description of the
acquisitions, as well as their financial effects, is as follows:
•On January 29, 2025, we acquired 100% of the assets of Aura Energy, LLC (“Aura”), a manufacturer of high-density
power distribution products. Total consideration for this acquisition was $18.7 million, consisting of $5.3 million of cash,
rollover equity with an acquisition-date estimated fair value of $5.3 million and contingent consideration, to be settled
over a period of five years, with an acquisition-date estimated fair value of $8.2 million. The purpose of this acquisition
was to enhance our data center power offerings, adding the design, manufacture and installation of custom power
distribution units, remote power panels and other UL-certified power distribution solutions to our portfolio of Power
Products and solutions. At the time of acquisition, Aura was pre-revenue, and this acquisition did not contribute
materially to our reported revenue or costs of goods sold between the date of acquisition and December 31, 2025. The
acquisition of Aura has contributed to an increase in our reported selling, general and administrative expense (“SG&A”)—
primarily wages and benefits—for the periods subsequent to the acquisition date. These cost increases related to the
acquisition of Aura will continue to be a part of our cost structure in future reporting periods.
•On April 28, 2025, we acquired the assets of Earnest Solutions, LLC (“Earnest”), a power consulting, design, integration
and implementation firm. Total consideration for this acquisition was $6.0 million, which we made to enhance our ability
to develop and deliver customer power distribution solutions at scale for data center environments.
•On October 6, 2025, we acquired SteelPro LLC and SteelPro Memphis, LLC (collectively “SteelPro”), a designer and
fabricator of structural steel solutions for both commercial and industrial markets. Total consideration for this acquisition
was $43.5 million, consisting of $35.4 million of cash and rollover equity with an acquisition-date estimated fair value of
$8.1 million. The purpose of this acquisition was to vertically integrate SteelPro, a supplier prior to consummation of the
acquisition, into our existing operations, as well as to expand our operating capacity. The acquisition of SteelPro
contributed to an increase in our reported costs of goods sold and selling, general and administrative expense—primarily
wages and benefits and depreciation expense—for the periods subsequent to the acquisition date. Our reported results
of operations for the year ended December 31, 2025 include $5.9 million and $0.8 million of revenue and net loss,
respectively, related to the operations of SteelPro subsequent to the acquisition date.
In addition to the financial effects described above, acquisition-related costs recognized during the year ended December 31, 2025
in connection with the consummation of the Change in Control Transaction and the acquisitions of Aura, Earnest and SteelPro
totaled $7.1 million. See Note 2 – Acquisitions to our condensed consolidated financial statements.
| September 30, 2026 Form 10-Q | 39 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Key Components of Results of Operations
The following discussion describes certain line items in our consolidated statements of operations.
Revenue
Revenue consists of amounts earned from the manufacture and sale of customized infrastructure solutions, as well as amounts
earned from the sale and delivery of standard products. We recognize revenue related to our customized infrastructure solutions
contracts on an over-time basis, and recognize revenue related to our standard product contracts as of a point in time. Contract
values attributable to our customized infrastructure solution contracts are generally significantly higher than the contract values
attributable to our standard products. This is due to the substantially greater amount of materials, labor, customization and
integration of our products, increased complexity and longer periods of delivery, inclusive of installation periods, attributable to the
delivery of our customized infrastructure solutions. Due to the significantly higher contract values, period-over-period changes in
the volume or size of our customized infrastructure solutions contracts can have a materially greater impact on our reported
revenue. Point-in-time revenue is more significantly impacted by the volume of the standard products that we deliver, whether due
to an increase in the number of contracts executed or the volume of our standard products that we deliver per contract.
Customized Infrastructure Solutions
Customized infrastructure solutions consist of integrated “white space” systems that may include any combination of structural
infrastructure for power, cooling and fiber/cable conveyance, thermal containment, design, installation and lifecycle services and
certain third-party monitoring components. These customized infrastructure solutions are by their nature, generally, delivered over
a longer term. The promise to manufacture and install an integrated white space is considered a single performance obligation, for
which we recognize revenue over time using the cost-to-cost method (an input method). Under the cost-to-cost method, progress
on a contract is measured based on costs incurred relative to total estimated costs to complete the contract, as control has been
deemed to transfer continuously to the customer as we perform, these arrangements have been deemed to have no alternative
use, and we have an enforceable right to payment upon customer termination.
Standard Products
Standard products primarily consist of access panels, containment panels and systems, doors, including dual sliding doors and
Power Products, such as power panels and branch circuit whips, sold on a standalone basis under contracts that do not require
significant customization and have shorter manufacturing and delivery cycles. Revenue for these products is recognized at a point
in time when control transfers to the customer, which generally occurs upon shipment or delivery, depending on contractual
shipping terms.
Costs of Goods Sold—Cost of goods sold consists primarily of direct costs and allocated indirect costs related to the sale of our
products. Direct costs include purchased materials, labor, and shipping, as well as other costs directly related to the execution of a
specific contract. Indirect costs include manufacturing facility lease costs, depreciation and overhead expenses. Our reported
costs of goods sold are affected by our sales volumes, the cost of raw materials, including steel, aluminum, copper, electrical
components, polycarbonate and other key raw materials, the cost of components, fuel costs and other items. We currently do not
hedge against changes in the price of raw materials.
Selling, General and Administrative Expenses—Selling, general and administrative expenses consist primarily of salaries,
commissions expense, share based compensation, employee benefits and payroll taxes related to our executives and our sales,
finance, accounting, human resources, IT, engineering and legal organizations, travel expenses, corporate office facility costs,
marketing expenses, costs incurred for professional services and other costs that do not relate directly to the manufacturing of our
products. Costs incurred for professional services include audit, legal, tax and consulting fees.
Related Party Expenses—Related party expenses consist of fees and expense reimbursements paid to our Principal Stockholder
under management services agreements. Related party expenses also include costs incurred for services provided by (i) entities
that have been deemed affiliates (e.g., based upon common ownership) or (ii) entities for which it has been determined that either
| September 30, 2026 Form 10-Q | 40 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
we or the entity has the ability to exert significant influence (e.g., due to common management team members or familial
relationships).
Results of Operations for the Three Months Ended September 30, 2026 and 2025
The following table summarizes our results of operations for the three months ended September 30, 2026 and September 30,
2025, and the changes between those periods. The period-to-period comparisons of our historical results are not necessarily
indicative of the results that may be expected in the future, including for the reasons described above under “Trends and Factors
Impacting Our Results of Operations”.
(Unaudited) | ||||||||
Three Months Ended September 30, | ||||||||
(in thousands) | 2026 | 2025 | $ Change | % Change | ||||
Revenue | $202,224 | $121,888 | $80,336 | 65.9% | ||||
Cost of goods sold | 143,063 | 79,755 | 63,308 | 79.4% | ||||
Gross profit | 59,161 | 42,133 | 17,028 | 40.4% | ||||
Operating expenses: | ||||||||
Selling, general, and administrative expenses | 26,561 | 15,766 | 10,795 | 68.5% | ||||
Amortization of intangible assets | 13,765 | 8,040 | 5,725 | 71.2% | ||||
Related party expenses | 640 | 256 | 384 | 150.0% | ||||
Total operating expenses | 40,966 | 24,062 | 16,904 | 70.3% | ||||
Operating income | 18,195 | 18,071 | 124 | 0.7% | ||||
Other income (expense) | ||||||||
Interest income | 657 | 123 | 534 | 434.1% | ||||
Interest expense | (16,046) | (5,673) | (10,373) | 182.8% | ||||
Other expenses, net | 345 | 1,409 | (1,064) | (75.5)% | ||||
Total non-operating expense, net | (15,044) | (4,141) | (10,903) | 263.3% | ||||
Income before income taxes | 3,151 | 13,930 | (10,779) | (77.4)% | ||||
(Benefit) provision for income taxes | (2) | 284 | (286) | (100.7)% | ||||
Net income | 3,153 | 13,646 | (10,493) | (76.9)% | ||||
Net income attributable to non-controlling interest | 222 | — | 222 | n/m | ||||
Net income attributable to Accelevation LLC | $2,931 | $13,646 | $(10,715) | (78.5)% | ||||
______________
n/m – Used here and throughout this MD&A to denote amounts determined to be not meaningful, as they would reflect
percentages determined based upon (i) division by $0, (ii) comparisons of amounts with opposite signs, or (iii) amounts
exceeding certain limitations.
| September 30, 2026 Form 10-Q | 41 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Revenue
Three Months Ended September 30, | Change | |||||||||||
(in thousands) | 2026 | % of Total | 2025 | % of Total | $ | % | ||||||
Over-time revenue | $180,076 | 89.0% | $105,018 | 86.2% | $75,058 | 71.5% | ||||||
Point-in-time revenue | 22,148 | 11.0% | 16,870 | 13.8% | 5,278 | 31.3% | ||||||
Total revenue | $202,224 | 100.0% | $121,888 | 100.0% | $80,336 | 65.9% | ||||||
For the three months ended September 30, 2026, revenue increased $80.3 million, or 65.9%, as compared to the three months
ended September 30, 2025. This increase in revenue for the three months ended September 30, 2026 was made up of (i) a $75.1
million, or 71.5%, increase in over-time revenue attributable to customized infrastructure solutions recognized on an over-time
basis and (ii) a $5.3 million, or 31.3%, increase in revenue attributable to standard products recognized on a point-in-time basis.
The $75.1 million increase in revenue attributable to our customized infrastructure solutions for the three months ended
September 30, 2026 was driven by both (i) an increase of 135.0% in the number of active customized infrastructure solutions
contracts for which revenue was recognized during the three months ended September 30, 2026 and (ii) generally higher average
contract values. Aggregate contract value for contracts under which over-time revenue was recognized during the three months
ended September 30, 2026 was $1.5 billion versus $539.9 million for the same prior-year period. The increase in the volume of
active customized infrastructure solutions contracts during the three months ended September 30, 2026 was expected as this is a
growing part of our business and corresponds with greater demand for integrated product and delivery models that require the
involvement of fewer individual vendors and aligns with our growing order backlog. The increase in average customized
infrastructure solutions contract values during the three months ended September 30, 2026 was due to an increase in the scale of
customer projects, expanded offerings within our solutions and additional manufacturing capacity.
The amount of over-time revenue recognized at the individual contract level is based upon our estimates of progress towards
contract completion using the cost-to-cost method, as further described under “Revenue Recognition” within our discussion of
“Critical Accounting Policies and Estimates”. As of both September 30, 2026 and September 30, 2025, a substantial portion of the
contracts under which we recognized revenue during the period had significantly larger aggregate contract values remaining to be
recognized in future periods. Over-time revenue recognized in future periods will continue to reflect the impacts of both (a) changes
in the number and size of the underlying contracts and (b) the measurement of progress against the underlying contracts.
The $5.3 million increase in our point-in-time revenue for the three months ended September 30, 2026, as compared to the three
months ended September 30, 2025, was substantially driven by an increase in revenue from our power and containment products
sold on a standalone basis. For the three months ended September 30, 2026, contract values for these products were significantly
greater due to higher volumes within orders.
Cost of goods sold
Three Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Material costs | $84,029 | $40,064 | $43,965 | 109.7% | ||||
Labor costs | 40,332 | 32,106 | 8,226 | 25.6% | ||||
Other costs of goods sold | 18,702 | 7,585 | 11,117 | 146.6% | ||||
Total cost of goods sold | $143,063 | $79,755 | $63,308 | 79.4% | ||||
| September 30, 2026 Form 10-Q | 42 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
For the three months ended September 30, 2026, cost of goods sold increased $63.3 million, or 79.4%, as compared to the three
months ended September 30, 2025. This increase in cost of goods sold for the three months ended September 30, 2026 was most
significantly driven by the 65.9% growth in revenue recognized for the same periods. In addition:
•Material costs increased $44.0 million, or 109.7%, for the three months ended September 30, 2026, as compared to the
three months ended September 30, 2025. The increase in materials costs for the period, was due primarily to the growth
in revenue, with additional increase driven by less favorable material mix within projects.
•Labor costs increased $8.2 million, or 25.6%, for the three months ended September 30, 2026, as compared to the three
months ended September 30, 2025. The increase reflects the growing installation labor needs and higher headcount for
the increased revenue and over-time costs specifically. The third quarter of 2025 reflected an increase in labor costs due
to the timing of installation work needs as well as increased hiring in the period.
•Other costs of goods sold increased $11.1 million, or 146.6%, for the three months ended September 30, 2026, as
compared to the three months ended September 30, 2025. The increase primarily relates to an increase in travel costs
largely related to the increase in our customized infrastructure solution projects, which require more travel to job sites;
and increased equipment and facility costs due to our expanded manufacturing footprint and job site needs.
Gross profit and gross profit margin
Three Months Ended September 30, | Change | |||||||
(dollars in thousands) | 2026 | 2025 | $ | % | ||||
Gross profit | $59,161 | $42,133 | $17,028 | 40.4% | ||||
Gross profit margin | 29.3% | 34.6% | ||||||
For the three months ended September 30, 2026, gross profit increased $17.0 million, or 40.4%, as compared to the three months
ended September 30, 2025. This increase was primarily driven by the 65.9% increase in revenue for the same periods. Margin
declined as a result of the changes in cost of goods sold noted above.
Selling, general and administrative expenses
Three Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Wages and benefit costs | $15,659 | $11,799 | $3,860 | 32.7% | ||||
Professional services fees | 2,366 | 844 | 1,522 | 180.3% | ||||
Acquisition- and transaction-related costs | 3,000 | 67 | 2,933 | n/m | ||||
Other | 5,536 | 3,056 | 2,480 | 81.2% | ||||
Total selling, general and administrative expenses | $26,561 | $15,766 | $10,795 | 68.5% | ||||
For the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, selling, general
and administrative costs increased $10.8 million or 68.5% largely as a result of:
•The $3.9 million increase in wages and benefits costs and other increases of $2.5 million, impacted by (i) an increase in
performance bonuses expense related to revenue growth; (ii) a significant increase in ordinary salaries, wages, and
benefits expense due to increased headcount; (iii) equity awards; and (iv) additional facility and technology costs related
to the expanded workforce.
| September 30, 2026 Form 10-Q | 43 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
•Professional services increase of $1.5 million and transaction-related costs of $3.0 million driven by third-party
professional fees incurred in connection with and in preparation for the IPO, including higher accounting, audit and tax
fees; and
•Acquisition-related cost incurred for the three months ended September 30, 2025 that were substantially replaced by
IPO-related costs for the three months ended September 30, 2026.
Amortization of intangible assets
Three Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Amortization of intangible assets | $13,765 | $8,040 | $5,725 | 71.2% | ||||
The $5.7 million increase in amortization expense for the three months ended September 30, 2026, as compared to the same year-
ago period, primarily relates to a plan to shift the use of the SteelPro facility acquired in 2025 from the operations in place when the
Company was acquired to a new use that supports existing Accelevation data center whitespace operations by the end of the
year. This triggered a change in the useful lives to four months for the SteelPro Trademark and Customer Relationships with an
aggregate net book value of $11.2 million.
Non-operating expense
Three Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Interest income | $657 | $123 | $534 | 434.1% | ||||
Interest expense | (16,046) | (5,673) | (10,373) | 182.8% | ||||
Other income, net | 345 | 1,409 | (1,064) | n/m | ||||
Total non-operating expense, net | $(15,044) | $(4,141) | $(10,903) | 263.3% | ||||
The $10.4 million increase in interest expense for the three months ended September 30, 2026, compared to the prior year,
primarily relates to a significant increase in our outstanding debt balance as of September 30, 2026, as compared to
September 30, 2025, with the borrowings occurring throughout the twelve-month period between. Additionally, we were impacted
by higher interest rates.
Results of Operations for the Nine Months Ended September 30, 2026 and 2025
The following table summarizes our results of operations for the nine months ended September 30, 2026 and September 30, 2025,
and the changes between those periods. The period-to-period comparisons of our historical results are not necessarily indicative
| September 30, 2026 Form 10-Q | 44 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
of the results that may be expected in the future, including for the reasons described above under “Trends and Factors Impacting
Our Results of Operations”.
(Unaudited) | ||||||||
Nine Months Ended September 30, | ||||||||
(in thousands) | 2026 | 2025 | $ Change | % Change | ||||
Revenue | $639,675 | $280,518 | $359,157 | 128.0% | ||||
Cost of goods sold | 464,364 | 190,091 | 274,273 | 144.3% | ||||
Gross profit | 175,311 | 90,427 | 84,884 | 93.9% | ||||
Operating expenses: | ||||||||
Selling, general and administrative expenses | 81,206 | 44,350 | 36,856 | 83.1% | ||||
Amortization of intangible assets | 31,136 | 23,800 | 7,336 | 30.8% | ||||
Related party expenses | 7,378 | 756 | 6,622 | n/m | ||||
Impairment on assets held for sale | 2,128 | — | 2,128 | n/m | ||||
Total operating expenses | 121,848 | 68,906 | 52,942 | 76.8% | ||||
Operating income | 53,463 | 21,521 | 31,942 | 148.4% | ||||
Non-operating income (expenses) | ||||||||
Interest income | 1,199 | 182 | 1,017 | n/m | ||||
Interest expense | (31,323) | (16,106) | (15,217) | 94.5% | ||||
Other income (expenses), net | 81 | (68) | 149 | n/m | ||||
Total non-operating expense, net | (30,043) | (15,992) | (14,051) | 87.9% | ||||
Income before income taxes | 23,420 | 5,529 | 17,891 | 323.6% | ||||
Provision for income taxes | 942 | 594 | 348 | 58.6% | ||||
Net income | 22,478 | 4,935 | 17,543 | n/m | ||||
Net income attributable to noncontrolling interest | 718 | — | 718 | n/m | ||||
Net income attributable to Accelevation LLC | $21,760 | $4,935 | $16,825 | n/m | ||||
Revenue
Nine Months Ended September 30, | Change | |||||||||||
(in thousands) | 2026 | % of Total | 2025 | % of Total | $ | % | ||||||
Over-time revenue | $543,163 | 84.9% | $234,875 | 83.7% | $308,288 | 131.3% | ||||||
Point-in-time revenue | 96,512 | 15.1% | 45,643 | 16.3% | 50,869 | 111.4% | ||||||
Total revenue | $639,675 | 100.0% | $280,518 | 100.0% | $359,157 | 128.0% | ||||||
For the nine months ended September 30, 2026, revenue increased $359.2 million, or 128.0%, when compared to the nine months
ended September 30, 2025. This increase was driven by (i) a $308.3 million, or 131.3%, increase in over-time revenue attributable
to customized infrastructure solutions recognized on an over-time basis and (ii) a $50.9 million, or 111.4%, increase in revenue
attributable to standard products recognized on a point-in-time basis.
The $308.3 million increase in revenue attributable to our customized infrastructure solutions for the nine months ended
September 30, 2026 was driven by both (i) an increase of 46.8% in the number of active customized infrastructure solutions
| September 30, 2026 Form 10-Q | 45 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
contracts for which revenue was recognized during the nine months ended September 30, 2026 and (ii) generally higher average
contract values. Aggregate contract value for contracts under which over-time revenue was recognized during the nine months
ended September 30, 2026 was $1.7 billion versus $611.8 million for the same prior-year period. The increase in the volume of
active customized infrastructure solutions contracts during the nine months ended September 30, 2026 reflects increased demand,
as evidenced by the order backlog. The increase in average customized infrastructure solutions contract values during the nine
months ended September 30, 2026 was due to an increase in the scale of customer projects, expanded offerings within our
solutions and additional manufacturing capacity.
The $50.9 million increase in our point-in-time revenue for the nine months ended September 30, 2026, as compared to the nine
months ended September 30, 2025, was substantially driven by an increase in revenue from our power and containment products
sold on a standalone basis. For the nine months ended September 30, 2026, contract values for these products were significantly
greater due to higher volumes within orders.
Cost of goods sold
Nine Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Material costs | $280,885 | $105,422 | $175,463 | 166.4% | ||||
Labor costs | 127,601 | 64,407 | 63,194 | 98.1% | ||||
Other costs of goods sold | 55,878 | 20,262 | 35,616 | 175.8% | ||||
Total cost of goods sold | $464,364 | $190,091 | $274,273 | 144.3% | ||||
For the nine months ended September 30, 2026, cost of goods sold increased $274.3 million, or 144.3%, as compared to the nine
months ended September 30, 2025. This increase was most significantly driven by the $359.2 million or 128.0% growth in revenue
for the same periods. Overall, cost of goods sold was also impacted by $23.9 million of negative margin on loss contracts during
the nine months ended September 30, 2026, driven by higher absorption of indirect costs as well as labor and travel inefficiencies
incurred in completing older projects. Material cost increases were further driven by a less favorable mix of product within our
contracts. In addition, other cost of goods sold increased as a result of (i) an increase in travel costs corresponding to the
significant increase in revenue generated from our customized infrastructure solution projects, which have required extensive travel
of field workers to the related job sites; (ii) an increase in equipment rental expense, attributable to the significant increase in
revenue generated from our customized infrastructure solution projects which, at times, have required rentals at the job sites; and
(iii) increases in facility and storage costs, which is primarily attributable to the commencement of the lease of a primary
manufacturing facility in March 2025 and a second space in May 2026, as well as the commencement of several other warehouse
and assembly leases later in the year ended December 31, 2025.
Gross profit and gross profit margin
Nine Months Ended September 30, | Change | |||||||
(dollars in thousands) | 2026 | 2025 | $ | % | ||||
Gross profit | $175,311 | $90,427 | $84,884 | 93.9% | ||||
Gross profit margin | 27.4% | 32.2% | ||||||
For the nine months ended September 30, 2026, gross profit increased $84.9 million, or 93.9%, as compared to the nine months
ended September 30, 2025, while gross profit margin declined 4.8% in the same period. The increase in gross profit was primarily
driven by the revenue growth previously discussed. Partially offsetting the increase in gross profit, and driving the decline in gross
profit margin, is $23.9 million of negative margin on loss contracts in the period compared to $3.3 million in the same year-ago
period.
| September 30, 2026 Form 10-Q | 46 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Selling, general and administrative expenses
Nine Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Wages and benefit costs | $51,975 | $28,316 | $23,659 | 83.6% | ||||
Professional services fees | 7,152 | 1,509 | 5,643 | 374.0% | ||||
Acquisition- and transaction-related costs | 7,187 | 7,636 | (449) | (5.9)% | ||||
Other | 14,893 | 6,889 | 8,004 | 116.2% | ||||
Total selling, general and administrative expenses | $81,207 | $44,350 | $36,857 | 83.1% | ||||
For the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, selling, general and
administrative costs increased largely as a result of:
•A $23.7 million increase in wages and benefits costs and an $8.0 million increase in other costs impacted by (i) an
increase in sales commission and performance bonuses expense related to revenue growth; (ii) a significant increase in
ordinary salaries, wages, and benefits expense due to a significant increase in headcount; and (iii) additional facility and
technology costs related to the expanded workforce;
•Additional professional service costs primarily driven by $5.6 million of third-party professional fees incurred in
connection with and in preparation for the IPO including higher accounting, audit and tax fees; and
•Acquisition-related cost incurred for the nine months ended September 30, 2025 that were substantially replaced by
IPO-related costs for the nine months ended September 30, 2026.
Amortization of intangible assets
Nine Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Amortization of intangible assets | $31,136 | $23,800 | $7,336 | 30.8% | ||||
The $7.3 million, or 30.8%, increase in intangible asset amortization expense for the nine months ended September 30, 2026 over
2025, primarily relates to the previously discussed change in the useful lives of SteelPro intangible assets.
Related party expenses
Nine Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Related party expenses | $7,378 | $756 | $6,622 | n/m | ||||
The $6.6 million increase in related party expense for the nine months ended September 30, 2026, as compared to the nine
months ended September 30, 2025, primarily relates to consulting and professional services fees incurred with one of our affiliates
for assistance with activities commenced during the nine months ended September 30, 2026 related to the IPO.
| September 30, 2026 Form 10-Q | 47 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Impairment of assets held for sale
Nine Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Impairment of assets held for sale | $2,128 | $— | $2,128 | n/m | ||||
During the nine months ended September 30, 2026, we recorded a $2.1 million impairment charge to reduce the carry value of
Workplace Modular Systems, LLC (“WMS”) — our subsidiary that previously had been classified as held for sale to its estimated
fair value less cost to sell. The impairment charge was triggered by the continued negotiations for the sale of WMS to the eventual
buyer of the subsidiary. In April 2026, we completed the sale of WMS for $2.7 million. As a result of working capital changes after
the impairment in the first quarter of 2026, we recognized a loss of $0.7 million within Selling, General and Administrative Expenses
on the condensed consolidated income statements. Refer to Note 3 – Dispositions to our unaudited condensed consolidated
financial statements for the nine months ended September 30, 2026 for additional details regarding the classification of WMS as
held for sale.
Non-operating expense, net
Nine Months Ended September 30, | Change | |||||||
(in thousands) | 2026 | 2025 | $ | % | ||||
Interest income | $1,199 | $182 | $1,017 | n/m | ||||
Interest expense | (31,323) | (16,106) | (15,217) | 94.5% | ||||
Other income (expenses), net | 81 | (68) | 149 | n/m | ||||
Total non-operating expense, net | $(30,043) | $(15,992) | $(14,051) | 87.9% | ||||
The $15.2 million increase in interest expense for the nine months ended September 30, 2026, as compared to the nine months
ended September 30, 2025, primarily relates to a significant increase in our outstanding debt balance since September 30, 2025.
As of December 31, 2025, the majority of the variable-rate borrowings were fixed by $200 million of interest rate hedges. Additional
draws on the debt since that date have been subject to variable interest rates.
Tax provision
The effective tax rate for the nine months ended September 30, 2026 and 2025 was 4.0% and 10.7%, respectively, which is
significantly below the combined federal and state statutory tax rate because we are a pass-through entity for federal tax
purposes. Following the IPO, we expect future taxes incurred to differ from those reported in the past as a result of the changing
reporting entity structure.
Non-GAAP Financial Measures and Performance Metrics
Non-GAAP Measures
We report our financial results in accordance with GAAP; however, management believes evaluating Accelevation’s ongoing
operating results may be enhanced if investors have additional non-GAAP financial measures. Specifically, management reviews
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Net Income Margin, and Free Cash Flow, which are
non-GAAP financial measures, to manage our business, make planning decisions, evaluate our performance and allocate
resources and, for the reasons described below, considers them to be effective indicators, for both management and investors, of
our financial performance over time.
| September 30, 2026 Form 10-Q | 48 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
We believe these metrics help investors and analysts in comparing our results across reporting periods on a consistent basis.
These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a
substitute for, the analysis of other GAAP financial measures, including net income and cash flow from operating activities. Other
companies in our industry may calculate these metrics differently, limiting their usefulness as a comparative measure. Our
presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or non-
recurring items.
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA is defined as net income (loss) adjusted for interest income and expense, provision for income taxes,
depreciation and amortization expense, equity-based compensation expense, public company readiness costs, acquisition costs,
sponsor fees and expenses, change in fair value of acquisition earnout and asset impairment, as well as certain non-recurring
items, including payments to Olympus that ceased upon the IPO. Adjusted EBITDA Margin is Adjusted EBITDA as a percentage of
Revenue.
Among other limitations, Adjusted EBITDA and Adjusted EBITDA Margin do not reflect our cash expenditures, or future
requirements, for capital expenditures or contractual commitments, non-cash charges for depreciation and amortization, and do
not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations
such as interest expense. Adjusted EBITDA and Adjusted EBITDA Margin also do not reflect income tax expense or benefit.
We believe that Adjusted EBITDA and Adjusted EBITDA Margin are important metrics for management and investors as they (i)
adjust for the impact of items that we do not believe are indicative of our core operating results or the overall health of our
company and (ii) allow for consistent comparison of our operating results over time. In addition, we use Adjusted EBITDA and
Adjusted EBITDA Margin in evaluating management’s performance when determining incentive compensation and to evaluate the
effectiveness of our business strategies.
| September 30, 2026 Form 10-Q | 49 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following table reconciles Net Income to Adjusted EBITDA and Net Income Margin to Adjusted EBITDA Margin for the periods
indicated:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||
Net income | $3,153 | $13,646 | 22,478 | 4,935 | ||||
Interest expense | 16,046 | 5,673 | 31,323 | 16,106 | ||||
Interest income | (657) | (123) | (1,199) | (182) | ||||
(Benefit) provision for income taxes | (2) | 284 | 942 | 594 | ||||
Depreciation expense | 881 | 260 | 2,579 | 831 | ||||
Amortization of intangibles | 13,765 | 8,040 | 31,136 | 23,800 | ||||
Equity-based compensation | 751 | 124 | 1,941 | 278 | ||||
Acquisition costs | — | 67 | — | 6,104 | ||||
Sponsor fees and expenses(1) | 260 | 256 | 774 | 756 | ||||
Public company readiness costs(2) | 3,907 | — | 12,535 | — | ||||
Change in fair value of acquisition earnout | (560) | 577 | 537 | 1,532 | ||||
Asset impairment | — | — | 2,128 | — | ||||
Other(3) | 196 | 59 | 936 | 909 | ||||
Adjusted EBITDA | $37,740 | $28,863 | $106,110 | $55,663 | ||||
Revenue | $202,224 | $121,888 | $639,675 | $280,518 | ||||
Net Income Margin | 1.6% | 11.2% | 3.5% | 1.8% | ||||
Adjusted EBITDA Margin | 18.7% | 23.7% | 16.6% | 19.8% | ||||
(1)Represents fees and expense reimbursements paid to our sponsor, which will no longer be paid in future periods.
(2)Represents non-recurring professional service fees related to our IPO included as Related Party Expenses and Selling,
General and Administrative Expenses on our condensed consolidated income statements.
(3)Other for the year ended December 31, 2025 primarily includes disposals of fixed assets due to a one-time policy
change in our capitalization thresholds and abandonment of certain fixed assets. For the nine months ended
September 30, 2026, Other includes loss on the sale of WMS and disposals of certain fixed assets.
Adjusted Net Income and Adjusted Net Income Margin
Adjusted Net Income is calculated as net income (loss) plus or minus (i) amortization of intangibles, (ii) equity-based compensation,
(iii) sponsor fees and expenses, (iv) public company readiness costs, (v) acquisition-related costs, (vi) changes in the fair value of
contingent consideration liabilities, (vii) asset impairments, (viii) other non-recurring items, and (ix) tax impact of adjustments.
Adjusted Net Income Margin is Adjusted Net Income as a percentage of Revenue.
Among other limitations, Adjusted Net Income and Adjusted Net Income Margin do not reflect all our cash expenditures, future
requirements, for capital expenditures or contractual commitments, do not reflect certain recurring noncash charges, and do not
reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations.
We present Adjusted Net Income and Adjusted Net Income Margin because we believe they assist investors and analysts in
comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative
of our core operating performance. Adjusted Net Income and Adjusted Net Income Margin are used by management to evaluate
the effectiveness of our business strategies.
| September 30, 2026 Form 10-Q | 50 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following table reconciles Net Income and Net Income Margin to Adjusted Net Income and Adjusted Net Income Margin for the
periods indicated:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||
Net income | $3,153 | $13,646 | 22,478 | 4,935 | ||||
Amortization of intangibles | 13,765 | 8,040 | 31,136 | 23,800 | ||||
Equity-based compensation | 751 | 124 | 1,941 | 278 | ||||
Sponsor fees and expenses(1) | 260 | 256 | 774 | 756 | ||||
Public company readiness costs(2) | 3,907 | — | 12,535 | — | ||||
Acquisition costs | — | 67 | — | 6,104 | ||||
Change in fair value of acquisition earnout | (560) | 577 | 537 | 1,532 | ||||
Asset impairment | — | — | 2,128 | — | ||||
Other(3) | 196 | 59 | 936 | 909 | ||||
Tax impact of adjustments | (550) | (274) | (1,500) | (1,001) | ||||
Adjusted Net income | $20,922 | $22,495 | $70,965 | $37,313 | ||||
Revenue | $202,224 | $121,888 | $639,675 | $280,518 | ||||
Net Income Margin | 1.6% | 11.2% | 3.5% | 1.8% | ||||
Adjusted Net Income Margin | 10.3% | 18.5% | 11.1% | 13.3% | ||||
(1)Represents fees and expense reimbursements paid to our sponsor, which will no longer be paid in future periods.
(2)Represents non-recurring professional service fees related to our IPO included as Related Party Expenses and Selling,
General and Administrative Expenses on our condensed consolidated income statements.
(3)Other for the year ended December 31, 2025 primarily includes disposals of fixed assets due to a one-time policy
change in our capitalization thresholds and abandonment of certain fixed assets. For the three and nine months ended
September 30, 2026, Other includes loss on the sale of WMS and disposals of certain fixed assets.
Free Cash Flow
We define Free Cash Flow as Net Cash Provided by Operating Activities reduced by Purchases of Property and Equipment.
Management uses Free Cash Flow to provide insight into our liquidity, our cash-generating capability, as well as demonstrate our
ability to fund future growth. Free Cash Flow should be considered in addition to, rather than as a substitute for, Net Cash
Provided by Operating Activities as a measure of our liquidity. Additionally, our definition of Free Cash Flow is limited, in that it
does not represent residual cash flows available for discretionary expenditures, due to the fact that the measure does not deduct
the payments required for debt service and other contractual obligations or payments made for business acquisitions. Therefore,
management believes it is important to view Free Cash Flow as a measure that provides supplemental information to our
consolidated statements of cash flows.
| September 30, 2026 Form 10-Q | 51 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following table reconciles Net Cash Provided by Operating Activities to Free Cash Flow for the periods indicated:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||
(in thousands) | 2026 | 2025 | 2026 | 2025 | ||||
Net cash provided by (used in) operating activities | $62,506 | $(645) | $58,265 | $(5,576) | ||||
Purchase of property and equipment | (7,500) | (2,629) | (19,037) | (8,413) | ||||
Free Cash Flow | $55,006 | $(3,274) | $39,228 | $(13,989) | ||||
Performance Metrics
The Company utilizes certain performance metrics (defined below) to provide an indication of trends in operating results, including
future business, and to provide a useful indicator of the volume of our business over time. Measuring backlog, bookings, and
book-to-bill ratio involves the use of judgments, and there are no independent standards or requirements governing the calculation
of these metrics. These metrics may be impacted by, among other factors, the types of services and solutions sold, contract
duration, the pace of client spending, actual volumes of services delivered as compared to the volumes anticipated at the time of
sale, and contract modifications over the lifetime of a contract. Information regarding these performance metrics is not comparable
to, nor should it be substituted for, an analysis of reported revenues.
Backlog consists of the remaining unrecognized revenue on executed contracts and purchase orders, as well as letters of intent
and notices to proceed with respect to purchase orders received in writing. The Company utilizes backlog to provide additional
insights regarding trends in future revenue and market penetration. Project cancellations, scope adjustments, deferrals or changes
in customer phasing may occur with respect to contracts reflected in our backlog, which could reduce the dollar amount of our
backlog and the revenue and profits that we actually earn.
Bookings is defined as the aggregate dollar value of executed customer contracts and purchase orders, as well as letters of intent
and notices to proceed with respect to purchase orders received in writing, during a given period. Contracts, purchase orders,
letters of intent and notices to proceed included in bookings may be cancelled, modified or delayed, and there can be no
assurance that our bookings will be realized as revenue or, if realized, will result in profits.
Book-to-bill ratio is defined as bookings divided by revenue for the applicable period.
Liquidity and Capital Resources
General
Our primary sources of cash are
•amounts generated through our operations;
•our borrowing capacity under our Credit Agreement; and
•available unrestricted cash.
Our primary cash requirements include:
•execution costs for customer contracts, including to fund inventory purchases, labor costs and facility costs;
•expansion of capacity and capital expenditures aligned to our growth, including for new lease commitments;
•internal sales, engineering and administrative functions;
•payments under our Tax Receivable Agreement; and
•maintenance of our debt facilities, including to service interest expense and principal payment obligations,
| September 30, 2026 Form 10-Q | 52 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Tax Receivable Agreement
In connection with the IPO, Pubco and Holdings LLC entered into a Tax Receivable Agreement (TRA) with LLC Unit holders. Under
the Tax Receivable Agreement, we will retain 15% of certain available tax savings, and will be required to pay the Members (as
defined in the Tax Receivable Agreement) the remaining 85% of such tax savings, if any, that are realized or deemed realized as a
result of tax attributes (i.e. DTA). Any payments made by us under the Tax Receivable Agreement will generally reduce the amount
of overall cash flow that might have otherwise been available to use.
The actual amount and timing of any payments under the Tax Receivable Agreement will vary depending upon a number of factors,
including the timing of exchanges by the LLC Unit holders, the amount of gain recognized by the LLC Unit holders, the amount and
timing of the taxable income we generate in the future and the federal tax rates then applicable. However, we expect that the
payments Accelevation Holdings Corp. will be required to make under the Tax Receivable Agreement will be substantial and could
materially affect our liquidity.
Debt
As of September 30, 2026, our total outstanding principal totaled $665.2 million. On June 25, 2026, we entered into the Fourth
Amendment of our 2025 Credit Agreement. The Fourth Amendment provided incremental term loans of an aggregate principal
amount of $346.0 million and an additional $10.0 million in delayed draw term loan commitments. The proceeds from this
amendment were primarily used to fund distributions and notes to certain members in the amount of $299.4 million, repay $20.0
million of debt on the Revolving Credit Facility, and provide funds for operating and capital needs. See additional discussion of the
distributions in Note 14 – Related-Party Transactions.
In October 2026 we entered into a new debt facility (the "2026 Credit Agreement") containing (i) a $250.0 million senior secured
term loan facility and (ii) a $400.0 million senior secured revolving credit facility (the "Revolver"), with a maturity in October 2031.
We used cash on hand, IPO proceeds of $170.6 million, and proceeds from the 2026 Credit Agreement to pay the 2025 Credit
Agreement in full.
Operational Factors that Impact Our Liquidity
Due to the nature of our operations, our liquidity is significantly impacted by (i) the timing of the collection of cash on our contracts
for which we recognized revenue over-time, including the timing of milestone payments and whether we are able to collect upfront
cash deposits and (ii) the timing upon which we are required to expend cash, including for labor and materials, when delivering
upon contracts for which we recognized revenue over-time. Going forward, we will support our liquidity position through the
maintenance of the Revolver.
We believe that our cash and cash equivalents, the cash generated from our operations, and the availability under the Revolver are
sufficient to fund our near-term and long-term liquidity needs.
Cash Flows
The following table summarizes our cash flows for the nine months ended September 30, 2026 and 2025, and the changes
between those periods:
Nine Months Ended September 30, | ||||||
(in thousands) | 2026 | 2025 | Change | |||
Net cash provided by (used in) operating activities | $58,265 | $(5,576) | $63,841 | |||
Net cash used in investing activities | (17,394) | (406,846) | 389,452 | |||
Net cash provided by financing activities | 51,374 | 427,660 | (376,286) | |||
| September 30, 2026 Form 10-Q | 53 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Operating Activities
The $63.8 million additional cash provided by operating activities for the nine months ended September 30, 2026, compared to the
same year-ago period was primarily driven by the increase in overall operational volume in both sales and expenses. Additionally,
we experienced favorable changes in working capital, largely a result of contractual customer deposits. This impact was slightly
offset by the net increase in accounts receivable and contract asset balances, which reflect portions of recognized revenue for
which cash has not been collected. Increases in our accounts receivable and contract asset balances are reflective of a
combination of our growth and milestone and longer billing and collection cycles associated with our larger projects that have been
driving a significant portion of our growth.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2026 was $17.4 million, as compared to $406.8
million for the nine months ended September 30, 2025. The reduction in cash used in investing activities for the periods primarily
reflects $398.4 million used for acquisitions during the first nine months of 2025 to pay for the acquisitions of Accelevation Holding
Company, LLC (the Change in Control Transaction), Aura, and Earnest Solutions, LLC. The decrease in cash used for acquisitions
was partially offset by a $10.6 million increase in capital expenditures. This increase in cash used for capital expenditures
corresponds with our growth and related expansion of capacity. Additionally, during the second quarter of 2026, we completed the
disposal of Workplace Modular Systems, LLC, which resulted in proceeds of $1.6 million.
Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2026 was $51.4 million, as compared to net
cash provided by financing activities of $427.7 million for the nine months ended September 30, 2025. The cash provided by
financing activities for the nine months ended September 30, 2025, primarily reflects proceeds received to fund the Change in
Control Transaction that occurred on January 2, 2025. In connection with the Change in Control Transaction, we received net
proceeds of $194.8 million from the issuance of long-term debt and $215.0 million from equity issuances. This total cash inflow of
$409.8 million was used to fund the acquisition of Accelevation Holding Company, LLC and certain related acquisition costs.
The net cash inflows of $51.4 million for the nine months ended September 30, 2026 was largely driven by $382.2 million of net
proceeds received from the issuance and repayment of debt used to finance our operations and growth plans, offset primarily by
$296.3 million of distributions and $22.1 million of notes issued to members during the period ended September 30, 2026.
Off-Balance Sheet Arrangements
As of September 30, 2026, we had no material off-balance sheet arrangements that have or are reasonably likely to have a current
or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
Critical Accounting Policies and Estimates
Our consolidated financial statements have been prepared in accordance with U.S. GAAP. Preparation of the financial statements
requires our management to make judgments, estimates, and assumptions that impact the reported amount of revenue and
expenses, assets and liabilities, and the disclosure of contingent assets and liabilities. We consider an accounting judgment,
estimate or assumption to be critical when the estimate or assumption is complex in nature or requires a high degree of judgment,
and the use of different judgments, estimates, and assumptions could have a material impact on our consolidated financial
statements. We periodically review our estimates and make adjustments when facts and circumstances dictate. To the extent that
there are material differences between these estimates and actual results, our financial condition or results of operations will be
affected.
| September 30, 2026 Form 10-Q | 54 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Business Combinations
We had a change in control on January 2, 2025 (“Inception”) resulting in a new basis of accounting, and we completed three
additional acquisitions for an aggregate purchase price of $548.8 million from Inception to December 31, 2025. In accordance with
ASC 805 Business Combinations, total consideration was first allocated to the fair value of assets acquired and liabilities assumed,
with the excess being recorded as goodwill. Intangible assets have been determined to be separately identifiable and recognized
apart from goodwill whenever an acquired intangible asset arises from contractual or other legal rights, or whenever it is capable of
being separated or divided from the acquired entity.
We use our best estimates and assumptions to assign fair values to the tangible and intangible assets acquired and liabilities
assumed at the acquisition date. Determining these fair values and estimated lives required us to make significant estimates and
assumptions, particularly with respect to acquired intangible assets. The fair value of the identifiable intangible assets has been
estimated using the multi-period excess earnings method (customer relationships and order backlog) and relief from royalty
method (trade name and technology). Significant inputs used in valuing intangible assets we have acquired include but are not
limited to: (i) estimated revenue and expenses based on actuals and forecasts, (ii) royalty rates, (iii) discount rates and (iv) customer
attrition rates. The determination of fair value and estimated lives required considerable judgment and were sensitive to changes in
underlying assumptions, estimates and market factors.
As part of the acquisition of Aura in 2025, we agreed to pay contingent consideration to the sellers for a percentage of non-GAAP
revenue generated from the sale of specified products (“In-Scope Products”) during the five-year period after the acquisition
(“Earnout Period”). We are required to remeasure this contingent consideration at fair value as of each reporting period and record
changes in the fair value in earnings through the date that the contingent consideration is fully settled. The estimation of the fair
value of the contingent consideration requires the application of significant judgment and estimates regarding the future non-GAAP
revenues expected to be generated from In-Scope Products, for which there is no certainty. There is no defined limit regarding the
amount of Contingent Consideration that could potentially become payable to the sellers of Aura on an annual basis or over the
Earnout Period. The fair value of the Contingent consideration has been determined based upon non-GAAP revenue projections
and projections of our related payment obligations to Aura’s sellers, discounted to reflect the present value of the projected
payment obligations. We recognized $0.5 million of SG&A expense in our statement of operations for the nine months ended
September 30, 2026, related to the remeasurement of this contingent consideration. Future revisions to our estimates of non-
GAAP revenue expected to be generated from In-Scope Products could result in material changes to our estimates of our
contingent consideration liability, triggering adjustments required to be recognized in our statements of operations in future
periods.
Revenue Recognition
We recognize revenue upon satisfying the performance obligations identified in a contract, which is achieved as services are
rendered, upon completion of a service, or through the transfer of control of the promised good or service to the customer at either
a point in time or over time. Once we identify a contract’s performance obligations, we determine the transaction price, which
includes estimating the amount of variable consideration to be included in the transaction price, if any. Our contracts generally do
not contain penalties, credits, price concessions, or other types of potential variable consideration. Prices are fixed at contract
inception and are not contingent on performance or any other criteria.
A significant portion of our revenue is recognized over time, as the work performed under our customized integrated solution
contracts typically involves a continuous transfer of control to the customer. For these customer contracts, revenue is recognized
over time as they involve the delivery of products with no alternative use. While contracts may contain a customer termination for
convenience clause, there is an enforceable right to recover costs incurred plus a reasonable profit margin for work completed to
date.
For contracts for which revenue is recognized over time, we apply the cost-to-cost method to (1) estimate progress towards
contract completion and (2) measure the amount of revenue to be recognized. For these contracts to which we apply the cost-to-
| September 30, 2026 Form 10-Q | 55 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
cost method, the costs incurred to date, measured as a percentage of total estimated costs to complete a performance obligation
or the contract (“Estimated Costs at Completion”), has been deemed the best measure of progress toward satisfying a
performance obligation or a contract in its entirety.
Our estimates of the total costs to complete a performance obligation under a contract and/or the contract in its entirety are
subject to significant assumptions, judgments, and uncertainties, as well as certain factors that may be outside of our control. As
these estimates are subject to change over the life of a contract, we review our cost estimates on a periodic basis, as well as when
circumstances change and warrant a modification to a previous estimate. Cost estimates are largely based on negotiated or
estimated purchase contract terms, historical performance trends, and other economic projections. Examples of uncertainties,
judgments, and certain other factors outside of our control that subject our Estimated Costs at Completion to change include:
•the length of our contracts, which may subject Estimated Costs at Completion to changes in commodity prices and/or
labor costs;
•project delays, which may result in unanticipated costs;
•changes in our underlying indirect cost structure as we scale to match our growth; and
•the complexity and highly customized nature, size, components, designs and configurations of our integrated
infrastructure solutions, which may impact our ability to forecast total contract costs at contract inception.
As our customized integrated infrastructure projects for which revenue is recognized over time are generally fixed price contracts,
changes in the estimated total costs at completion of a contract or in estimated total transaction price will impact the amount of
contract revenue recognized in a reporting period, the timing of revenue recognition over the course of a contract, as well as
contract gross margins. As these impacts are recognized on a cumulative basis for the contract life-to-date, significant changes in
Estimated Costs at Completion can result in the reversal of previously recognized revenue, the acceleration of revenue recognition,
or the determination that a loss provision is required to be recognized related to a contract. Accordingly, changes in Estimated
Costs at Completion could materially impact our revenue or gross margin reported in future periods.
For the nine months ended September 30, 2026, we recognized contract loss provisions totaling $22.4 million representing the
amounts by which Estimated Costs at Completion for certain contracts expected to exceed the transaction price. Of that amount,
$14.4 million is related to projects not yet completed. Any incremental increases to the estimated costs to complete the contracts
for which we have already recognized a loss would further increase the losses realized on these contracts. A 10% increase in the
forecasted remaining costs at September 30, 2026 for contracts not yet completed on which we have already recorded a loss
provision could result in the realization of incremental losses of up to $0.9 million on these contracts.
We believe that our active contracts with current forecasted gross margins below 20% are most susceptible to becoming a loss
contract in a future period if they were to experience material changes to their respective Estimated Costs at Completion. As of
September 30, 2026, we had seven contracts for which revenue is recognized over time that met this criterion. If each of these
contracts experienced a 25% increase in forecasted remaining costs to complete, without a corresponding change in contract
value, we could be required to recognize an incremental loss provision totaling approximately $10.2 million.
In addition, for certain contracts, changes in Estimated Costs at Completion may impact our financial results without triggering the
recognition of a contract loss provision. For the nine months ended September 30, 2026, changes in estimates of progress toward
completion on performance obligations recognized over time due to aggregate unfavorable adjustments to Estimated Costs at
Completion across programs resulted in an unfavorable cumulative catch-up adjustment to revenue of $11.6 million and were
immaterial for the nine months ended September 30, 2025. As of September 30, 2026, we have significant contracts for which a
substantial portion of their Estimated Costs at Completion have not yet been incurred and, accordingly, for which a substantial
portion of the associated revenue has not been recognized. Due to the size of these contracts, as well as our remaining
performance obligations to complete these contracts, it is reasonably possible that the Estimated Costs at Completion could
change over the course of these contracts, and such changes could have a material impact on our future results of operations.
| September 30, 2026 Form 10-Q | 56 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Goodwill and Intangible Assets
Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. We test goodwill for
impairment annually during the fourth quarter of our fiscal year or when events or circumstances change in a manner that indicates
goodwill might be impaired.
For the impairment test, we first assess qualitative factors, macroeconomic conditions, industry and market considerations,
triggering events, cost factors and overall financial performance, to determine whether it is necessary to perform a quantitative
goodwill impairment test. Alternatively, we may bypass the qualitative assessment and apply the quantitative impairment test. If
determined to be necessary, the quantitative impairment test shall be used to identify goodwill impairment and measure the
amount of a goodwill impairment loss to be recognized (if any). For the quantitative impairment test, we estimate fair value using an
income approach, market approach or combination thereof. These valuation approaches consider a number of factors that include,
but are not limited to, prospective financial information, growth rates, terminal value, discount rates and comparable multiples from
publicly traded companies in our industry and require us to make certain assumptions and estimates regarding industry economic
factors and future profitability of our business. Based upon the annual qualitative goodwill impairment testing performed during the
fourth quarter of 2025, we determined that there was no impairment of our goodwill during the year ended December 31, 2025. We
did not note any impairment indicators for goodwill in the nine months ended September 30, 2026.
Acquired intangible assets include customer relationships, technology and trade names. Finite-lived intangible assets are
amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the economic
benefits of such assets are consumed. We assess amortized intangible assets for impairment when events or circumstances
suggest that the carrying values may not be recoverable. This assessment involves comparing the carrying value of the assets or
asset groups to their undiscounted expected future cash flows. If the total undiscounted future cash flows are less than the
carrying amount, we recognize an impairment loss equal to the difference between the carrying amount and the fair value of the
assets or asset groups. Determining fair value requires management to make estimates and judgments based on various factors,
including projected revenues and associated earnings. We did not recognize any intangible assets impairment losses in the year
ended December 31, 2025 or the nine months ended September 30, 2026.
Share Based Compensation - Series P Units
Certain of our employees hold profit interests in Accelevation Topco LLC (“Topco”), a parent entity to Accelevation LLC. These
profit interests (the "Series P Units") represent a right to share in the future appreciation of the equity value of Topco. We recognize
equity-based compensation expense related to these Series P Units in Topco based on the grant date fair value of the profit
interests. The determination of the fair value of Series P Units awards issued to our employees is based upon the estimated
enterprise value of Topco and the use of an option pricing model to allocate that enterprise value (after allocation of a portion to
outstanding debt) among Topco’s underlying classes of equity.
With the assistance of a third-party valuation provider, management has determined the enterprise value of Topco and applied the
option pricing model to determine the fair value of granted Series P Units on a quarterly basis since the change of control of the
Company on January 2, 2025. The grant date fair value of Series P Units recognized in our financial statements is based upon the
most recently completed quarterly valuation of Topco.
Given the absence of a public trading market for Topco’s common units, and in accordance with the American Institute of Certified
Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, we exercised
reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the enterprise
value of Topco. These factors included:
•actual operating and financial results of Topco, consisting primarily of our results;
•the likelihood of various potential liquidity events, including an initial public offering and prevailing market conditions;
•the lack of marketability of Topco’s equity;
| September 30, 2026 Form 10-Q | 57 |
Part I
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
•average historical stock price volatility of comparable publicly traded companies in Topco's industry peer group; and
•the U.S and global economic and capital market conditions and outlook.
Since Topco is privately held, in order to estimate the value of the enterprise and determine the fair value of the underlying equity,
we have historically used either the market approach, the income approach, or a combination thereof. During the year ended
December 31, 2025, the enterprise value of Topco was based entirely on the market approach. For the market approach, we
utilized the Guideline Company Method by selecting certain companies that we considered to be the most comparable to Topco in
terms of size, growth, profitability, risk and return on investment, amongst other factors. We then used these guideline companies
to develop relevant Adjusted EBITDA multiples, which were then adjusted to account for differences in growth prospects and risk
profiles. The market multiples and ratios were applied to Topco’s trailing twelve month Adjusted EBITDA based on assumptions at
the time of the valuation in order to estimate our total enterprise value. The estimated enterprise value at each grant date was then
allocated to each class of equity comprising Topco’s capital structure, with a discount for lack of marketability, ranging from 15%
to 30% applied to the estimate fair value of the Series P Units due to the lack of an active market for Topco’s equity.
The use of the Option Pricing Method requires us to estimate the strike price of the award based on whether certain market
conditions and internal rates of return are expected to be met. We utilize the estimated time to a liquidity event to estimate the
expected term of the awards. Expected volatility is based on the average of historical and implied volatilities of a set of comparable
companies over the expected term of the award, adjusted for size and leverage. The risk-free rates are based on the yields of U.S.
Treasury instruments over a comparable term of the award. The following table details the assumptions utilized for the awards
granted during the year ended December 31, 2025:
Expected Term | 2.0 – 2.9 Years |
Volatility | 37.5% – 45% |
Risk Free Rate | 3.47% – 4.27% |
In addition, our enterprise valuation performed as of December 31, 2025, which is the basis for determining the fair value of Series
P Units granted between December 31, 2025 and September 30, 2026, began to incorporate an assumption for the occurrence of
a potential future IPO. Prior to this valuation, an assumption of an IPO was not reflected in the determination of enterprise value as
discussions had not commenced and the business had recently been acquired as of January 2, 2025. The incorporation of the
assumption of a potential future IPO resulted in a 25% increase in the estimated enterprise value of Topco due to the application of
higher EBITDA multiples that would be applicable to a potential IPO transaction.
In connection with the IPO, effective October 1, 2026, we modified the Series P Units. Under these modified terms, which took
effect upon consummation of the IPO, the revised performance conditions are linked to certain selling stockholder sell-downs of
their ownership interests in the Company. Upon the triggering of the performance conditions, Series P Unit holders are entitled to
the partial settlement of their right to distributions under the Series P Unit awards in cash, shares, or a combination of cash and
shares. These changes to the timing and manner in which the Series P Units are settled superseded many of the original terms of
the awards and the 2025 Plan and, accordingly, the superseded terms are no longer deemed to remain in effect following the IPO.
Management concluded that the settlement obligation under the Series P Units’ modified performance conditions were not
applicable until the October effective date of the IPO and the modified agreement. Future obligations will not be triggered or
recognized until it is deemed probable that the performance condition will be achieved, which occurs with certain selling
stockholders’ future sell-downs.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our market risk exposures or in our risk management policies as disclosed in the
Prospectus.
| September 30, 2026 Form 10-Q | 58 |
Part I
Item 4. Controls and Procedures
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of
our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 as
of September 30, 2026. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of
September 30, 2026, our disclosure controls and procedures were not effective due to the material weaknesses in our internal
control over financial reporting described below.
Material Weaknesses in Internal Control Over Financial Reporting
In conjunction with the preparation of our consolidated financial statements as of and for the years ended December 31, 2025 and
2024, we identified the following material weaknesses in our internal control over financial reporting, which still exist as of
September 30, 2026:
•We identified a material weakness in our entity-level controls related to governance, financial reporting oversight and risk
assessment. Specifically, governance controls, including the formalization of oversight structures and responsibilities,
are not sufficiently established or documented. In addition, we do not maintain a sufficient complement of personnel with
accounting knowledge, experience and training to appropriately analyze, record and disclose certain accounting matters
to provide reasonable assurance of preventing material misstatements. Additionally, management has not implemented
a formal risk assessment that addresses risks relevant to financial reporting objectives, including fraud risks. Additionally,
we have not designed, documented and maintained formal accounting policies, procedures and controls over significant
accounts and disclosures to achieve complete, accurate and timely financial accounting, reporting and disclosures.
Specifically, the deficiencies were identified related to: (i) preparation, review and approval of account reconciliations,
journal entries and period-end close procedures, including appropriate segregation of duties; and (ii) significant
accounting estimates and accruals.
•We have also not designed and maintained effective controls over information technology general controls ("ITGCs") for
information systems that are relevant to the preparation of our consolidated financial statements. Specifically,
deficiencies were identified related to: (i) user access controls, including inappropriate access provisioning and
segregation of duties conflicts; (ii) change management controls over system implementations and modifications; and (iii)
IT operations controls, including the monitoring and oversight of system activities.
Each of the material weaknesses described above could result in misstatements of our account balances and disclosures that
would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or
detected.
Remediation Plan and Status
Our remediation efforts are ongoing and we continue our initiatives to implement and document policies, procedures, and internal
controls. Remediation of the identified material weaknesses and strengthening our internal control environment will require
substantial effort throughout 2026 and beyond. Management intends to work internally and with various third-parties to design and
implement the proper controls. While we believe the steps taken to date and those planned for implementation will improve our
internal controls over financial reporting, we have not completed all remediation efforts.
The following remedial actions have been completed, initiated or are in process as of September 30, 2026:
•We have hired key financial, accounting, and IT leadership, including individuals who have significant experience with
SOX compliance, public company financial reporting, and remediating material weaknesses in internal controls, which is
intended to strengthen the Company's financial reporting and internal control capabilities and address the personnel and
expertise gaps previously identified.
| September 30, 2026 Form 10-Q | 59 |
Part I
Item 4. Controls and Procedures
•We have engaged a third-party accounting firm to assist with designing and implementing an effective control
environment, including a formal risk assessment process.
•We have initiated the design and implementation of formal accounting policies, procedures and controls over significant
accounts and disclosures. As part of these efforts, we have implemented a structured reconciliation preparation, review
and approval process for certain significant accounts and have begun implementing additional controls intended to
strengthen preparation, review and segregation of duties over period-end close activities. We continue to formalize these
policies and procedures, train control owners and evaluate the operating effectiveness of the controls implemented to
date
•We have begun implementing a formal review and approval process for financial reporting and disclosures, including
oversight procedures intended to enhance the completeness, accuracy and timeliness of our financial reporting. Certain
components of this process have been implemented, while additional procedures, documentation and testing remain in
progress.
•We have completed an IT risk assessment to identify and evaluate relevant technology risks and have developed an
ITGC framework identifying the controls necessary to address those risks. We have initiated the design and
documentation of the identified controls related to user access, change management and IT operations. These efforts
remain ongoing, and the applicable controls have not yet operated for a sufficient period of time for management to
evaluate their operating effectiveness.
Remediation efforts remain ongoing and include completing the design and implementation of the identified controls with the
appropriate level of precision and supporting evidence, formalizing supporting policies and procedures, training control owners,
and evaluating the operating effectiveness of the controls. Although certain controls have been implemented, implementation alone
is not sufficient to conclude that the material weaknesses have been remediated. The material weaknesses will not be considered
remediated until the applicable controls have been fully implemented, operated for a sufficient period of time, and management
has concluded through testing that they are operating effectively.
Changes in Internal Control Over Financial Reporting
Except for the changes related to our remediation efforts described above, there was no change in our internal control over
financial reporting that occurred during the third quarter of 2026 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
| September 30, 2026 Form 10-Q | 60 |
Part II
Item 1. Legal Proceedings
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we have been and may be involved in litigation that covers a wide range of matters, including, among others,
contract and employment claims, personal injury claims, product liability claims and warranty claims and intellectual property
matters. Currently, there are no claims or proceedings against us that we believe will have a material adverse effect on our
business, financial condition, results of operations or cash flows. However, the results of any current or future litigation cannot be
predicted with certainty and, regardless of the outcome, we may incur significant costs and experience a diversion of management
resources as a result of litigation.
Item 1A. Risk Factors
Information regarding our risk factors is disclosed under the section entitled “Risk Factors” in the Prospectus, with such risk
factors incorporated herein by reference. Please refer to that section for disclosures regarding the risks and uncertainties related to
our business.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sale of Equity Securities
The information required by this Item 2 regarding the unregistered sale of equity securities was previously reported in the
Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 1, 2026, under Item 3.02,
and is incorporated herein by reference.
Use of Proceeds from IPO of Common Stock
On October 1, 2026, we closed our initial public offering (the "IPO"). In the IPO, Accelevation Holdings Corp. sold 10,000,000
shares of Class A common stock, and certain selling stockholders sold 20,000,000 shares of Class A common stock, in each case,
at a public offering price of $18.00 per share.
There has been no material change in the use of proceeds as described in the Prospectus.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
| September 30, 2026 Form 10-Q | 61 |
Part II
Item 5. Other Information
Item 5. Other Information
(c) Rule 10b5-1 Trading Plans and Non-Rule 10b5-1 Trading Arrangements
During the quarter ended September 30, 2026, no directors or officers (as defined in Rule 16a-1(f) under the Exchange Act)
in Item 408 of Regulation S-K.
Item 6. Exhibits
(i)Exhibits
Exhibit Number | Description | Reference | ||
3.1 | Form 8-K filed October 1, 2026, Exhibit 3.1 | |||
3.2 | Form 8-K filed October 1, 2026, Exhibit 3.2 | |||
4.1 | Form 8-K filed October 1, 2026, Exhibit 4.1 | |||
10.1 | Form 8-K filed October 1, 2026, Exhibit 10.1 | |||
10.2 | Form 8-K filed October 1, 2026, Exhibit 10.2 | |||
10.3 | Form 8-K filed October 1, 2026, Exhibit 10.3 | |||
10.4 | Form 8-K filed October 1, 2026, Exhibit 10.4 | |||
10.5 | Form S-1 filed September 11, 2026 Exhibit 10.12 | |||
10.6 | Form 8-K filed October 1, 2026, Exhibit 10.6 | |||
10.7 | Form 8-K filed October 13, 2026, Exhibit 10.1 | |||
31.1* | ||||
31.2* | ||||
32.1** |
| September 30, 2026 Form 10-Q | 62 |
Part II
Item 5. Other Information
Exhibit Number | Description | Reference | ||
32.2** | ||||
101.INS* | Inline XBRL Instance Document. | |||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||
104* | Inline XBRL Cover Page Interactive Data File (included in Exhibit 101). |
* Filed herewith.
** Exhibit is furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the
liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act, or the Exchange
Act, except as shall be expressly set forth by specific reference in such filing
(ii)Financial statement schedules. No financial statement schedules are provided because the information called for is not
applicable or is shown in the financial statements or notes.
| September 30, 2026 Form 10-Q | 63 |
Signatures
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized .
Accelevation Holdings Corp. | |
November 13, 2026 | By: /s/ Michael Rubiera |
Name: Michael Rubiera | |
Title: Chief Executive Officer | |
(Principal Executive Officer) | |
November 13, 2026 | By: /s/ Kenneth Krause |
Name: Kenneth Krause | |
Title: Chief Financial Officer | |
(Principal Financial and Accounting Officer) |
Exhibit 31.1
Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Michael Rubiera, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 of Accelevation Holdings Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)[Omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)];
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 13, 2026 | /s/ Michael Rubiera | ||||
| Name: Michael Rubiera | |||||
| Title: Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
Exhibit 31.2
Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Kenneth Krause, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 of Accelevation Holdings Corp.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)[Omitted pursuant to Exchange Act Rules 13a-14(a) and 15d-15(a)];
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 13, 2026 | /s/ Kenneth Krause | ||||
| Name: Kenneth Krause | |||||
| Title: Chief Financial Officer | |||||
| (Principal Financial and Accounting Officer) | |||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 of Accelevation Holdings Corp. (the "Company"), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael Rubiera, Chief Executive Officer of the Company, certify:
1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 13, 2026 | /s/ Michael Rubiera | ||||
| Name: Michael Rubiera | |||||
| Title: Chief Executive Officer | |||||
| (Principal Executive Officer) | |||||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 of Accelevation Holdings Corp. (the "Company"), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth Krause, Chief Financial Officer of the Company, certify:
1.The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 13, 2026 | /s/ Kenneth Krause | ||||
| Name: Kenneth Krause | |||||
| Title: Chief Financial Officer | |||||
| (Principal Financial and Accounting Officer) | |||||