Segment Reporting

12 Months Ended

Dec. 31, 2025

12.

Segment Reporting

ASC Subtopic 280-10, Segment Reporting, establishes standards for reporting information about operating segments, which are defined as components of an enterprise for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) to allocate resources and assess performance. The Company’s Chief Executive Officer serves as the CODM and reviews financial information at a consolidated level. The Company operates as a single operating segment, and the accounting policies of the segment are consistent with those described in the summary of significant accounting policies. The CODM evaluates performance and allocates resources based on consolidated net income, and segment assets are reported as total consolidated assets on the balance sheet.

The following table summarizes the Company’s revenues, net income and significant expenses:


	Year Ended December 31,
	2025			2024			2023
	(in thousands)
Revenue	$	471,500		$	345,251		$	280,705
Expenses and other items:
Cost of goods sold:
Labor		(115,060	)		(95,404	)		(80,684	)
Materials		(133,518	)		(91,808	)		(75,469	)
Overhead		(21,587	)		(17,100	)		(12,256	)
Depreciation and amortization		(11,309	)		(8,828	)		(6,747	)
Total cost of goods sold		(281,474	)		(213,140	)		(175,156	)
General and administrative expenses		(85,656	)		(44,421	)		(36,623	)
Depreciation and amortization not included in cost of goods sold		(31,428	)		(24,130	)		(20,432	)
Other income		4,147			1,502			563
Interest expense, net		(44,567	)		(50,733	)		(47,867	)
Income tax provision		(15,156	)		(1,628	)		3,169
Net income	$	17,366		$	12,701		$	4,359

General and administrative expenses include share-based compensation of $8.1 million, $1.0 million and $1.3 million and for the years ended December 31, 2025, 2024 and 2023, respectively.

Other income for the years ended December 31, 2025, 2024 and 2023, was $4.1 million, $1.5 million and $0.6 million, respectively. The increase was primarily attributable to the settlement of a shareholder loan in 2024 and the write-off of a contingent consideration liability in 2025.

Capital expenditures, which include purchases of property, plant, and equipment, are assessed and managed at the enterprise level. Refer to “Investing Activities” in the Consolidated Statement of Cash Flows for the amount of cash paid for capital expenditures.

Interest income during the periods presented is insignificant.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Karman Holdings Inc. 10-K