In 2025, we launched a corporate transformation initiative focused on modernization and growth. This includes streamlining our processes through technology and shifting our geographic footprint with a stronger corporate presence in offshore locations and relocation of our principal executive office from California to Texas. The initiative is intended to transform our corporate functions, improving efficiency and productivity.

Corporate transformation costs of approximately $6.9 million and $1.8 million were incurred for the six months ended June 30, 2026 and 2025, respectively.

Corporate transformation costs consisting of Employee Related and Real Estate Related expenses are a component of general and administrative expense in the Consolidated Statements of Income. Employee Related costs primarily consist of termination benefits provided to employees who have been involuntarily terminated, duplicate payroll costs and retention bonuses incurred during transition periods. Real Estate Related and Other costs primarily consist of accelerated depreciation and consulting fees. The following table presents changes in accrued corporate transformation costs and cumulative costs incurred during the six months ended June 30, 2026:



	Six Months Ended June 30, 2026
			Employee Related		Real Estate Related and Other		Total

		(Amounts in thousands)

Balances at December 31, 2025			$	954	$	—	$	954
Costs			2,313		4,619		6,932
Cash payments and other adjustments			(1,929)		(4,619)		(6,548)
Balances at June 30, 2026			$	1,338	$	—	$	1,338