Alliance Laundry Holdings Inc.

Previous wording

This management’s discussion and analysis (“MD&A”) should be read in conjunction with the information included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto for the year ended December 31, 2024 filed with the SEC in our IPO Prospectus. The discussions in this MD&A contain forward-looking statements that involve risks and uncertainties. This discussion includes disclosures that are shown in rounded amounts. The related percentage disclosures are calculated on unrounded amounts. As such, certain totals, subtotals, and percentages may not reconcile.

Current wording

This management’s discussion and analysis (“MD&A”) should be read in conjunction with the information included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. The discussions in this MD&A contain forward-looking statements that involve risks and uncertainties. This discussion includes disclosures that are shown in rounded amounts. The related percentage disclosures are calculated on unrounded amounts. As such, certain totals, subtotals, and percentages may not reconcile.

Previous wording

Net revenues for the three months ended September 30, 2025 increased $53.3 million, or 13.9%, to $437.6 million from $384.3 million for the three months ended September 30, 2024. Equipment revenue increased $49.3 million, or 15.4%, year over year, primarily driven by volume growth and modest price increases. Service parts revenue increased $3.5 million, or 8.6%, year over year primarily driven by volume growth. Other revenues increased $0.1 million, or 1.3%, primarily due to increased field service revenue. Equipment financing revenue increased $0.3 million, or 2.4% year over year driven by growth of in loan base, partially offset by a decrease in variable loan rates tied to the prime rate.

Current wording

Net revenues for the three months ended March 31, 2026 increased $37.3 million, or 9.6%, to $426.9 million from $389.6 million for the three months ended March 31, 2025. The increase in net revenues reflects a combination of volume growth, which contributed approximately one-third of the increase, price increases, and an approximately 1% favorable impact from foreign exchange. Equipment revenue increased $35.6 million, or 11.0%, year over year, primarily driven by volume growth and price increases. Service parts revenue increased $1.9 million, or 4.5%, year over year primarily driven by price increases. Equipment financing revenue increased $0.3 million, or 2.7% year over year driven by growth in loan base, partially offset by a decrease in variable loan rates tied to the prime rate.

Previous wording

Gross profit for the three months ended September 30, 2025 increased $19.0 million, or 13.3%, to $162.0 million from $143.0 million for the three months ended September 30, 2024. Gross profit as a percentage of net revenues was 37.0% for the three months ended September 30, 2025 as compared to 37.2% for the three months ended September 30, 2024. The decrease in gross profit as a percentage of revenue was primarily driven by customer and product mix and tariff costs, which were partially offset by absorption and efficiency gains achieved through higher production volumes.

Current wording

Gross profit for the three months ended March 31, 2026 increased $12.2 million, or 8.4%, to $157.2 million from $145.0 million for the three months ended March 31, 2025. Gross profit, as a percentage of net revenues, remained relatively flat at 36.8% for the three months ended March 31, 2026 as compared to 37.2% for the three months ended March 31, 2025. A year over year increase in tariffs of approximately $3.4 million negatively impacted gross margin for three months ended March 31, 2026. Tariffs were partially offset by price increases and cost reduction initiatives.

Previous wording

Selling, general, and administrative expenses for the three months ended September 30, 2025 increased $5.4 million to $76.5 million from $71.0 million for the three months ended September 30, 2024. Selling, general, and administrative expenses as a percentage of net revenues was 17.5% for the three months ended September 30, 2025 as compared to 18.5% for the three months ended September 30, 2024. Included within Selling, general, and administrative expenses is $11.0 million and $11.2 million of non-cash depreciation and amortization related to the fair value step-up of assets recorded under purchase accounting from a prior business combination for the three months ended September 30, 2025 and 2024, respectively. The increase in Selling, general and administrative expenses is primarily due to investment in physical and digital product development, increased Information Technology expense to support systems and security, acquisition of distributors, public company support costs and selling expenses and bonus accruals driven by higher sales volume and profitability.

Current wording

Selling, general, and administrative expenses for the three months ended March 31, 2026 increased $2.8 million to $73.4 million from $70.5 million for the three months ended March 31, 2025. Selling, general, and administrative expenses as a percentage of net revenues was 17.2% for the three months ended March 31, 2026 as compared to 18.1% for the three months ended March 31, 2025. Included within Selling, general, and administrative expenses is $9.7 million and $11.1 million of non-cash depreciation and amortization related to the fair value step-up of assets recorded under purchase accounting from a prior business combination for the three months ended March 31, 2026 and 2025, respectively. The increase in Selling, general and administrative expenses is primarily due to higher selling and promotional expenses driven by higher sales volume and increased administrative costs related to public company support costs, partially offset by a favorable impact from foreign exchange movements.

Previous wording

Interest expense, net for the three months ended September 30, 2025 decreased $5.4 million to $37.0 million from $42.3 million for the three months ended September 30, 2024. The decrease in interest expense was primarily attributable to a lower interest rate on the Term Loan following refinancing activities in February 2025 and August 2025, as discussed in Note 12 - Debt.

Current wording

Interest expense, net for the three months ended March 31, 2026 decreased $27.0 million to $17.9 million from $44.9 million for the three months ended March 31, 2025. The decrease in interest expense was primarily attributable to a lower debt balance resulting from Term Loan voluntary prepayments, as discussed in Note 11 - Debt, and a lower interest rate on the Term Loan following refinancing activities in February 2025 and August 2025.

Previous wording

Other expenses, net for the three months ended September 30, 2025 was $5.6 million compared to income of $37.3 million for the three months ended September 30, 2024. Other expenses, net for the three months ended September 30, 2025 included $3.2 million foreign exchange losses on intercompany loans, net where the lender or borrower’s functional currency differs from the loan denomination currency and $2.4 million of debt issuance costs. Other expenses, net for the three months ended September 30, 2024 included $33.0 million of debt issuance costs and $4.4 million foreign exchange gains on intercompany loans, net.

Current wording

Other (income)/expenses, net for the three months ended March 31, 2026 was $6.5 million of income compared to $7.1 million of expenses for the three months ended March 31, 2025. Other income for the three months ended March 31, 2026 included $6.5 million of foreign exchange gains on intercompany loans where the lender or borrower’s functional currency differs from the loan denomination currency. Other expenses for the three months ended March 31, 2025 included $1.1 million of debt issuance costs and $6.1 million foreign exchange losses on intercompany loans, net.

Previous wording

The effective income tax rate was a 23.4% provision for the three months ended September 30, 2025 as compared to a 18.3% benefit for the three months ended September 30, 2024. The increase is primarily due to the limitation of the deductibility of officer compensation under IRC Section 162(m) in 2025.

Current wording

The effective income tax rate was a 21.4% provision for the three months ended March 31, 2026 as compared to a 23.3% provision for the three months ended March 31, 2025. The decrease is primarily due to the benefit of deductibility for exercises of stock options, partially offset by limitations of deductibility of officer compensation subsequent to the IPO.

Previous wording

Revenue in North America increased $41.5 million or 14.3% to $330.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Equipment revenue increased $38.5 million, or 16.2%, mainly driven by strong demand across all end markets, with particularly strong performance in the Vended (an increase of 18.7%) and Commercial In-Home (an increase of 16.0%) end markets. Service parts revenue increased $2.7 million, or 8.7%, primarily driven by volume growth and modest price increases. Other revenues and Equipment financing revenue remained relatively flat year over year.

Current wording

Revenue in North America increased $27.5 million or 9.4% to $319.8 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Equipment revenue increased $27.2 million, or 11.3%, mainly driven by strong demand across all end markets, with particularly strong performance in the Commercial In-Home end market (an increase of 23%). Service parts revenue increased $0.2 million, or 0.5%, primarily driven by price increases. Other revenues and Equipment financing revenue remained relatively flat year over year.

Previous wording

Revenue increased $11.8 million or 12.4% to $106.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Equipment revenue increased $10.8 million, or 13.1%, primarily due to strong performance in Europe (an increase of 19.5%) and in Asia Pacific (an increase of 11.7%) where the expanding Vended end markets are driving growth. Service parts revenue increased $0.9 million, or 8.2%, primarily driven by volume growth.

Current wording

Revenue increased $9.8 million or 10.1% to $107.1 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Equipment revenue increased $8.4 million, or 9.9%, primarily due to strong performance in Europe (an increase of 21%) and in Middle East and Africa (an increase of 10%) where the expanding Vended end markets are driving growth. Service parts revenue increased $1.8 million, or 16.1%, primarily driven by volume growth.

Previous wording

Adjusted EBITDA increased $11.6 million or 14.5% to $91.3 million for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 and Adjusted EBITDA Margin increased to 28.3% for the nine months ended September 30, 2025 from 27.1% for the nine months ended September 30, 2024. This increase was primarily driven by gross margin expansion due to higher volumes and cost reduction initiatives in addition to operating expense cost controls.

Current wording

Adjusted EBITDA increased $3.8 million or 13.0% to $32.6 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025 and Adjusted EBITDA Margin increased to 30.4% for the three months ended March 31, 2026 from 29.6% for the three months ended March 31, 2025. This increase was primarily driven by customer and product mix and favorable foreign exchange.

Previous wording

Our principal sources of liquidity are cash on hand, cash flows generated from operations, and potential borrowings under our revolving credit facilities. We believe that our sources of liquidity will be adequate to meet our anticipated requirements for ongoing operations, capital expenditures, working capital, interest payments, scheduled principal payments, and other debt repayments over the next twelve months while remaining in compliance with the covenants of our debt agreements. We expect that capital expenditures in 2025 will be approximately $48.0 million. We have invested $29.8 million of cash into capital expenditures during the nine months ended September 30, 2025.

Current wording

Our principal sources of liquidity are cash on hand, cash flows generated from operations, and potential borrowings under our revolving credit facilities. We believe that our sources of liquidity will be adequate to meet our anticipated requirements for ongoing operations, capital expenditures, working capital, interest payments, scheduled principal payments, and other debt repayments over the next twelve months while remaining in compliance with the covenants of our debt agreements. We expect that capital expenditures in 2026 will be approximately $60.0 million. We have invested $5.2 million of cash into capital expenditures during the three months ended March 31, 2026.

Previous wording

Cash provided by operating activities for the nine months ended September 30, 2025 of$116.8 million was primarily derived from net income adjusted for non-cash provisions, partially offset by a$73.8 million increase in working capital. The primary contributors to the change in working capital were a$56.2 million increase in accounts andequipment financing receivables held for securitization investors, an increase of $15.1 million in inventories, adecrease of $5.9 million in other liabilities, an increase of$3.8 million in accounts and equipment financing receivables, partially offset byan decrease of$10.0 million in accounts payable.

Current wording

Cash provided by operating activities for the three months ended March 31, 2026 of$79.9 million was primarily derived from net income adjusted for non-cash provisions and a$7.6 million decrease in working capital. The primary contributors to the change in working capital were a$27.4 million increase in accounts payable, a$7.7 million decrease in other assetsand a $4.0 million increase in other liabilities, partially offset by an$18.8 million increase in accounts andequipment financing receivables heldfor securitization investors anda $14.0 million increase in inventories.

Previous wording

Cash provided by operating activities for the nine months ended September 30, 2024 of$67.3 millionwas primarily derived from net income adjusted for non-cash provisions and a$74.9 million increase in working capital. The primary contributors to the change in working capital were a$35.4 million increase in accounts andequipment financing receivables held for securitization investors, a $31.5 million decrease in other liabilities, a $16.3 million increase in inventories, and a $2.5 million increase in Other assets , partially offset by a $6.1 million increase in accounts payable, a $4.8 million decrease in accounts and equipment financing receivables.

Current wording

Cash provided by operating activities for the three months ended March 31, 2025 of$45.4 millionwas primarily derived from net income adjusted for non-cash provisions, partially offset by a$5.1 million increase in working capital. The primary contributors to the change in working capital were a$26.9 million increase in accounts andequipment financing receivables held for securitization investors and a $12.3 million increase in inventories, partially offset by a $21.3 million increase in accounts payable, a $6.8 million increase in other liabilities and a $5.3 million decrease in accounts and equipment financing receivables.

Previous wording

Cash used in investing activities of$54.3 million for the nine months ended September 30, 2025 wasprimarily the result of $29.8 million of capital expenditures, $13.6 million related to the acquisition of a distributor in the United States and $11.3 millionnet outflow related tooriginations of new equipment financing receivables exceeding collections.

Current wording

Cash used in investing activities of$6.4 million for the three months ended March 31, 2026 wasprimarily the result of $5.2 million of capital expenditures, $3.2 million related to the acquisitions of distributors in the United States, partially offset by a $1.9 millionnet inflow related tocollections of new equipment financing receivables exceeding originations.

Previous wording

Cash used in investing activities of$55.6 millionfor the nine months ended September 30, 2024 was primarily the result of $23.6 million related to capital expenditures, $22.2 million related to acquisitions of distributors in the United States and$9.9 millionnet outflow related tooriginations of new equipment financing receivables exceeding collections.

Current wording

Cash used in investing activities of$11.3 millionfor the three months ended March 31, 2025 was primarily the result of $8.5 million related to capital expenditures, $2.0 million related to acquisitions of distributors in the United States and a$1.0 millionnet outflow related tooriginations of new equipment financing receivables exceeding collections.

Previous wording

Cash used in financing activities of$91.6 million for the nine months ended September 30, 2025 was primarily comprised of$135.0 million in voluntary prepayments on the Term loan partially offset by a$47.2 million net increase in asset backed borrowings owed to securitization investors.

Current wording

Cash used in financing activities of$70.8 million for the three months ended March 31, 2026 was primarily comprised of$65.0 million in voluntary prepayments on the Term Loan, $7.6 million for taxes paid related to net share settlement of stock options, partially offset by a$1.7 million net increase in asset backed borrowings owed to securitization investors.

Previous wording

As of September 30, 2025, there was $1,940.0 million outstanding under the Term Loan and $250.0 million of unused capacity on the revolving facility. The Term Loan bears interest of SOFR plus a margin of 2.25%. As of September 30, 2025, the interest rate for the Term Loan is 6.39%.

Current wording

As of March 31, 2026, there was $1,300.0 million outstanding under the Term Loan and $250.0 million of unused capacity on the revolving facility. The Term Loan bears interest of SOFR plus a margin of 2.25%. As of March 31, 2026, the interest rate for the Term Loan is 5.92%.

Previous wording

The net proceeds from our initial public offering along with cash on-hand were used to repay $525.0 million of our indebtedness outstanding under the Term Loan on October 17, 2025. The repayment was first applied to and eliminated the future required quarterly installment principal repayments. As such, the remaining balance of the Term Loan is due at maturity on August 19, 2031, with exception for any Excess Cash Flow payment required under the Credit Agreement.

Current wording

During the three months ended March 31, 2026, the Company made $65.0 million of voluntary prepayments on the Term Loan. Previously, during 2025, the Company made total voluntary prepayments on the Term Loan of $710.0 million, consisting of a $525.0 million prepayment on October 17, 2025, funded with net proceeds from the Company's initial public offering and cash on hand, and $185.0 million of other voluntary prepayments made during the year. The repayments were first applied to and eliminated the future required quarterly installment principal repayments. As such, the remaining balance of the Term Loan is due at maturity on August 19, 2031, with exception for any Excess Cash Flow payment required under the Credit Agreement.