3. Revenue

The Company recognizes revenue for each separately identifiable performance obligation in a contract representing a promise to transfer a distinct good to a customer. In most cases, goods provided under the Company’s contracts are accounted for as a single performance obligation due to the complex and integrated nature of its products. These contracts generally require significant integration of a group of goods to deliver a combined output. Warranties are provided on certain contracts, but do not typically provide for services beyond standard assurances and are therefore not considered to be a separate performance obligation. Assets recognized from costs to obtain or fulfill a contract are not material. Payment terms are typically forty-five days, but may vary.

The Company generates revenue under a range of contract types including fixed-price, time and material and cost-plus-fixed-fee contracts. Substantially all revenue is recognized over time as control is transferred to the customer, measured with the input method based on costs incurred compared to estimated total costs at completion. In general, the Company’s contracts contain termination clauses that entitle the Company to payment for work performed to-date for goods that do not have an alternative use. Amounts recoverable in the event of terminations include reasonable profit margins. Control is effectively transferred as the Company performs its contractual obligations.

Remaining Performance Obligations

As of September 30, 2026, the Company elected to change its method of disclosing remaining performance obligations (“RPO”) to provide a more comprehensive view of its total contracted backlog and future revenue visibility. Historically, the Company utilized the practical expedient available under ASC 606-10-50-14, which allowed for the exclusion of contracts with an original expected duration of one year or less. The RPO as of December 31, 2025 would have been $667.6 million under the new disclosure methodology. This change impacted disclosure only and had no effect on the Company’s condensed consolidated balance sheets, statement of operations and comprehensive income, or cash flows.

As of September 30, 2026, the Company had $1.5 billion of RPO. The Company expects to recognize approximately 15% of the remaining performance obligations as revenue in the fourth quarter of 2026, 36% in 2027, and 49% thereafter.

Contract Estimates

The Company generally recognizes revenue over time using the input method, measured by the percentage of total costs incurred to-date relative to estimated total anticipated costs for each contract. This method is used because the Company considers total costs to be the best available measure of progress toward satisfaction of its performance obligations. Use of the input method requires the Company to make reasonable estimates regarding the costs associated with the design, manufacture, and delivery of its products.

The Company estimates profit on these contracts as the difference between total estimated revenue and total estimated costs at completion (“EAC”) and recognizes profit as costs are incurred. Significant judgment is used to estimate total costs at completion. Cost

estimates are largely based on negotiated or estimated purchase contract terms, historical performance and trends, and other economic conditions. Unforeseen events and circumstances can alter the estimate of the costs and potential benefits associated with a particular contract.

The nature of the Company’s business can give rise to significant contract modifications, which can impact performance obligations and transaction price. A contract modification exists when the parties to a contract agree to a change in the scope and/or price of a contract. Contracts are often modified for changes in contract specifications or requirements. Most of the Company’s contract modifications are for goods that are not distinct in the context of the contract and are therefore accounted for as part of the original performance obligation through a cumulative catch-up adjustment in the period they are identified.

Changes in contract estimates, including those arising from contract modifications, may result in the recognition of revenue in the current period for performance obligations satisfied or partially satisfied in prior periods or the reversal of previously recognized revenue. If at any time the estimate of contract profitability indicates an anticipated loss on the contract, the Company recognizes the total loss in the condensed consolidated statement of operations and comprehensive income in the period in which it is identified.

Contract Assets and Liabilities

The timing of Company billings is generally dependent upon agreed-upon contractual terms, milestone billings based on the completion of certain phases of the work, or when products are provided. Billing can occur prior to revenue recognition, resulting in deferred revenue, or subsequent to revenue recognition, resulting in unbilled revenue. “Contract assets” represent revenue recognized in excess of amounts billed. These contract assets are not considered a significant financing component of the Company’s contracts, as the payment terms are intended to protect the customer in the event the Company does not fulfill its obligations under the contract. “Contract liabilities” represent amounts billed in excess of revenue recognized. Contract liabilities are not a significant financing component, as they are generally utilized to pay for contract costs within a one-year period or are used to ensure the customer meets contractual requirements.

Disaggregation of Revenue