Business and Basis of Presentation Financial Services, Insurance (Policies)

3 Months Ended

6 Months Ended

Mar. 31, 2026

Mar. 31, 2025

Consolidation

The consolidated financial statements include the accounts of OSG and all other entities in which OSG (directly or through its subsidiaries) has a controlling financial interest. All significant intercompany balances have been eliminated. The usual condition for a controlling financial interest is ownership of a majority of the voting interests of an entity.

Discontinued Operations

On September 29, 2025, the Company completed the sale of its Legacy Financial Guarantee business, inclusive of Ambac Assurance Corporation ("AAC") and its wholly owned subsidiary Ambac Assurance UK Limited. The results of discontinued operations for all periods to the date of sale are reported separately as Net income (loss) from discontinued operations within the Consolidated Statements of Income (Loss) for the prior periods. Assets and liabilities of AAC prior to the date of sale are presented as Assets of discontinued operations and Liabilities of discontinued operations. AAC's cash flows for all periods to the date of sale are reflected as Net cash provided by (used in) discontinued operations within the Consolidated Statements of Cash Flows.

Refer to Sale of Ambac Assurance Corporation in Note 3. Discontinued Operations for further information.

New Accounting Pronouncements, Policy [Policy Text Block]

Adopted Accounting Standards

Credit Losses for Accounts Receivable and Contract Assets

In July 2025, the FASB issued ASU 2025-05, Financial Instruments— Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in the ASU provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions under Topic 606. The practical expedient allows entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset.

Octave has adopted the practical expedient allowed under this ASU for the measurement of expected credit losses on current accounts receivable and current contract assets arising from transactions under Topic 606 for interim and annual reporting periods beginning January 1, 2026. The standard did not have a material impact on Octave's financial statements.

There have been no other new accounting standards adopted during the three months ended March 31, 2026.

Future Application of Accounting Standards and Required Disclosures

Goodwill and Other — Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles— Goodwill and Other— Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal Use Software. This standard is intended to increase the operability of the accounting guidance for internal-use software development costs considering the evolution of software development methods. Amendments remove references to prescriptive and sequential project stages, requiring entities to

start capitalizing costs when: (i) management has authorized and committed to funding the project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

The ASU is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted. Octave has not determined if it will early adopt this ASU and is evaluating the ASU's potential impact on Octave's financial statements.

Expense Disaggregation Disclosures

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The enhanced disclosures requirements include the following:

•Disclose the amounts of certain expense categories included in each relevant expense caption. Those categories applicable to Octave include employee compensation, depreciation, and intangible asset amortization. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed above.

•Include certain amounts that are already required to be disclosed under current GAAP in the same disclosure as the other disaggregation requirements.

•Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

•Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The ASU is effective for annual periods beginning after December 15, 2026 and for interim reporting periods after December 15, 2027 with early adoption permitted. Octave has not determined if it will early adopt this ASU and is evaluating the potential impact on Octave's financial statements.

Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block]

1. BACKGROUND AND BUSINESS DESCRIPTION

Business

The following description provides an update of Note 1. Background and Business Description and Note 2. Basis of Presentation and Significant Accounting Policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, and should be read in conjunction with the complete descriptions provided in the Form 10-K. Capitalized terms used, but not defined herein, and in the other footnotes to the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q shall have the meanings ascribed thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Octave Specialty Group, Inc. (“OSG”), headquartered in New York City, is a financial services holding company incorporated in the state of Delaware on April 29, 1991. References to “Octave,” "OSG", the “Company,” “we,” “our,” and “us” are to OSG and its subsidiaries, as the context requires. Octave operates two principal businesses:

•Insurance Distribution — Octave's specialty property and casualty ("P&C") insurance underwriting and distribution business, includes Managing General Agents and Underwriters (collectively "MGAs" or "MGA/Us"); an insurance broker; and other distribution, underwriting and related businesses. On October 31, 2025, the Company completed the acquisition of ArmadaCorp Capital, LLC and its subsidiaries (collectively, "ArmadaCorp"), a leading specialty accident and health MGA. Octave's insurance distribution platform operates in the following lines of business: property, niche specialty risk, accident & health, miscellaneous specialty, reinsurance, surety, marine & energy, specialty auto, Excess & Surplus ("E&S") commercial package, professional lines and Directors & Officers ("D&O") .

•Specialty Property & Casualty Insurance — Octave's Specialty Property & Casualty Insurance program insurer business currently includes five carriers (collectively, “Everspan”). Everspan carriers have an A.M. Best rating of 'A-' (Excellent), which was affirmed on July 17, 2025.

The Company reports these two business operations as segments; see Note 2. Segment Information for further information.

Basis of Presentation

The Company has disclosed its significant accounting policies in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The accompanying unaudited consolidated financial statements have been prepared on the basis of U.S. generally accepted accounting principles ("GAAP") for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the

information and disclosures required by GAAP for annual periods. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2025. The accompanying consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with the standards of the Public Company Accounting Oversight Board (U.S.), but in the opinion of management such financial statements include all adjustments necessary for the fair presentation of the Company’s consolidated financial position and results of operations. The results of operations for the three months ended March 31, 2026, may not be indicative of the results that may be expected for the year ending December 31, 2026 due to seasonality within the Insurance Distribution segment and other factors. The December 31, 2025, consolidated balance sheet was derived from audited financial statements.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Such estimates and assumptions could change in the future as more information becomes available or actual amounts become determinable, which could affect the amounts reported and disclosed herein, at which point the recorded estimates are revised and reflected in operating results. Actual results could differ from those estimates.

Consolidation

Discontinued Operations

Refer to Sale of Ambac Assurance Corporation in Note 3. Discontinued Operations for further information.

Foreign Currency

The impact of non-functional currency transactions and the remeasurement of non-functional currency assets and liabilities into the respective subsidiaries' functional currency (collectively "foreign currency transactions gains/(losses)") are $1,189 and $(1,582) for the three months ended March 31, 2026 and 2025, respectively. Foreign currency transaction gains/(losses) are primarily the result of Octave Ventures transactions in currencies (primarily the U.S. dollar) other than its functional currency (the British Pound Sterling).

Noncontrolling Interests ("NCI")

Nonredeemable NCI

The total Nonredeemable NCI as of March 31, 2026, and December 31, 2025, was $120,956 and $117,395, respectively, for the NCI share in certain Octave Ventures' operating units that are minority owned by the units' respective management teams that do not have associated put options. At the beginning of 2025, there were no put options associated with any of these minority interests, and as such, the aggregate amount was classified as nonredeemable NCI on the balance sheet. During the three months ended March 31, 2025, certain NCI shares were reclassified from nonredeemable to redeemable NCI as further described under "Redeemable NCI" below. When redeemable NCI shares are no longer redeemable, such as when put options expire unused, the NCI shares are reclassified to nonredeemable NCI with no change in carrying value.

Redeemable NCI

During the three months ended March 31, 2026, the minority owners of Octave Ventures exercised put options and certain Option Shares were also exercised. In addition, Octave purchased certain redeemable NCI shares from a minority interest owner of CMC.


	Ownership Percentage
Company	March 31, 2026	December 31, 2025


Capacity Marine	87%	80%

Octave Ventures (1)	70%	60%

(1)Octave Ventures' majority interests in its underlying MGAs ranges from 51% to 100% at March 31, 2026, and 60% to 100% at December 31, 2025, together with Octave's direct ownership in some underlying MGAs, resulting in Octave's interest ranging from 36% to 70% at March 31, 2026 and 36% to 60% at December 31, 2025, respectively, in each underlying MGA/U.

Under the terms of applicable agreements, Octave has call options to purchase the remaining NCI from the minority owners and the minority owners have put options to sell their interests to Octave. Because the exercise of the put options is outside of Octave's control, in accordance with the Distinguishing Liabilities from Equity Topic of the ASC, Octave reports redeemable NCI in the mezzanine section of its consolidated balance sheet. In addition, during the three months ended March 31, 2025, Octave entered into put options with certain minority owners of the MGA/U operating entities that are majority owned by Octave Ventures. These put options are embedded in the associated NCI shares ("Option Shares"), resulting in remeasurement of the shares at fair value inclusive of the put options, and reclassification of the

Option Shares from nonredeemable NCI to redeemable NCI. The change in carrying value resulting from revaluation of $10,276 was recorded as an offset to retained earnings, with a corresponding impact on earnings per share for the three months ended March 31, 2025. During the three months ended March 31, 2026 and 2025, put options on certain Option Shares expired, resulting in reclassification of the associated redeemable NCI balances of $3,841 and $1,877, respectively, to nonredeemable NCI.

During the three months ended March 31, 2026, Octave acquired redeemable NCI with a carrying value of $49,214 as a result of the exercise of put options by the minority owners of Octave Ventures and of certain Option Shares. The aggregate consideration payable for these shares of $43,644 is included in Other liabilities on the Consolidated Balance Sheets as of March 31, 2026, and was subsequently settled in cash in April 2026. The difference between the consideration paid and carrying value of the redeemable NCI is recorded as an adjustment to additional paid-in capital. Additionally, during the three months ended March 31, 2026, Octave paid $383 to purchase certain redeemable NCI shares from a minority interest owner of CMC, resulting in a $494 decrease to redeemable NCI. During the three months ended March 31, 2025, there was no activity related the exercise of the put options on the Option Shares.

The acquisition date valuation method used to determine the fair value of redeemable NCI and related put and call options was a Monte Carlo Simulation. The significant fair value assumptions used in the simulation include the exercise thresholds, EBITDA forecasts, discount rate and long-term growth rates. The redeemable NCI is remeasured each period as the greater of:

i.the carrying value under ASC 810, which attributes a portion of consolidated net income (loss) to the redeemable NCI, and

ii.the redemption value of the put option under ASC 480.

At each reporting period, the redeemable NCI balance increases or decreases due to activity related to net income and distributions. Management calculates the redemption value of the put options under ASC 480 on an annual basis using prior-year EBITDA and related adjustments as prescribed by the terms of the relevant redemption provisions, or when otherwise required based on the terms of the redemption provisions. Management evaluates the redemption value and would record adjustments other than annually upon a change in contractual terms.

Any increase or (decrease) in the carrying value of the redeemable NCI as a result of adjusting to the redemption value of the put option is recorded as an offset to retained earnings. The impact of such differences on earnings per share are presented in Note 12. Net Income Per Share.

Following is a rollforward of redeemable NCI interest for the three months ended March 31, 2026 and 2025:



Three Months Ended March 31,	2026		2025
Beginning balance	$	252,981	$	199,402
Net income attributable to redeemable NCI (ASC 810)	1,980		258
Gain (loss) on foreign currency translation attributable to redeemable NCI	(4,193)		5,658

Reclassification from nonredeemable NCI, including remeasurement at fair value	—		42,180
Reclassification to nonredeemable NCI	(3,841)		(1,877)
Put / call option exercise	(49,708)		—
Distributions	(443)		(708)
Adjustment to redemption value (ASC 480 )	(807)		548
Ending balance	$	195,969	$	245,461

Immaterial Correction of Prior Period Error

The Company previously identified an immaterial prior period error for the three months ended March 31, 2025, related to the redeemable NCI redemption value adjustment recorded under ASC 810-10. In accordance with the U.S. Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” and ASC 250, Accounting Changes and Error Corrections, the Company assessed the impact of this error correction on its previously issued consolidated financial statements and concluded that the error is not material to any prior period. The immaterial error impacts the Consolidated Balance Sheet, Consolidated Statement of Comprehensive Income (Loss), Consolidated Statement of Stockholders' Equity and Earnings (Loss) Per Share.

The error was identified subsequent to the filing of the Company's Quarterly Reports on Form 10-Q for the three months ended March 31, 2025, June 30, 2025 and September 30, 2025, and prior to the filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2025. The impact of the correction for the three months ended March 31, 2025 is shown below.

Corrected Consolidated Statement of Comprehensive Income (Loss):


	Three Months Ended March 31, 2025
	As Reported		Immaterial Correction		As Corrected
Gain on foreign currency translation, net of income tax provision	$	36,220	$	8,500	$	44,720
(Gain) loss on foreign currency translation attributable to noncontrolling interest	$	(4,252)	$	(6,109)	$	(10,361)
Total comprehensive income (loss) attributable to shareholders	$	4,625	$	2,391	$	7,016

Corrected Consolidated Statement of Stockholders’ Equity:


	Three Months Ended March 31, 2025
	As Reported		Immaterial Correction		As Corrected
Balance at December 31, 2024	$	1,054,661	$	(58,542)	$	996,119
Total net income (loss)	—		(44,995)		(44,995)
Total other comprehensive income (loss)	—		58,110		58,110
Total comprehensive income (loss)	8,877		(8,877)		—
Stock-based compensation	2,349		—		2,349
Cost of shares repurchased	(3,122)		—		(3,122)
Cost of shares (acquired) issued under equity plan	(1,605)		—		(1,605)
Changes to noncontrolling interest	(35,112)		(5,740)		(40,852)
Balance at March 31, 2025	$	1,026,048	$	(60,044)	$	966,004

Corrected Earnings (Loss) Per Share:


	Three Months Ended March 31, 2025
	As Reported		Immaterial Correction		As Corrected
Net income (loss) from continuing operations per share attributable to stockholders
Basic	$	(0.58)	$	0.01	$	(0.57)
Diluted	$	(0.58)	$	0.01	$	(0.57)
Net income (loss) per share attributable to shareholders
Basic	$	(1.22)	$	0.01	$	(1.21)
Diluted	$	(1.22)	$	0.01	$	(1.21)

Corrected rollforward of redeemable NCI:


	Three Months Ended March 31, 2025
	As Reported		Immaterial Correction		As Corrected
Beginning balance	$	140,860	$	58,542	$	199,402

Reclassification from nonredeemable NCI, including remeasurement at fair value	42,180		—		42,180
Reclassification to nonredeemable NCI	(1,877)		—		(1,877)
Net income attributable to redeemable NCI (ASC 810)	258		—		258
Distributions	(708)		—		(708)
Adjustment to redemption value (ASC 480)	907		(359)		548
Gain (loss) on foreign currency translation attributable to redeemable NCI	3,797		1,861		5,658
Ending balance	$	185,417	$	60,044	$	245,461

Reclassifications and Rounding

Reclassifications may have been made to prior years' amounts to conform to the current year's presentation. Certain amounts and tables in the consolidated financial statements and associated notes may not add due to rounding.