Alliance Laundry Holdings Inc. (ALH)

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

OVERVIEW

We are the world’s largest designer and manufacturer of commercial laundry systems, serving a diverse and resilient range of global end markets. We believe we engineer and produce the highest quality and one of the most reliable commercial laundry systems in the industry. We leverage our pure play focus on the commercial laundry industry and over 100 years of engineering excellence to drive innovation and design our equipment to deliver outstanding performance in the most demanding applications. We believe the need for clean laundry is universal and growing, and our premium machines meet this fundamental human need, all day, every day.

We produce a full line of commercial washers and dryers with load capacities up to 400 pounds as well as presses and finishing equipment under the well-known brand names of Speed Queen, UniMac, Huebsch, IPSO and Primus. Our products are sold to three core end markets, including:

(i) On-Premise laundries: Businesses or institutions that process large volumes of laundry in support of their core business, including healthcare facilities, fire stations and hotels;

(ii) Vended businesses: Laundromats and communal laundry operators, that operate commercial systems for end users who pay for use; and

(iii) Commercial In-Home: Residential consumers who pay a premium to have the reliability and effectiveness of commercial systems in their homes.

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RESULTS OF OPERATIONS

Three Months Ended June 30, 2026 as Compared to the Three Months Ended June 30, 2025

Consolidated Results of Operations

The following table sets forth our consolidated results of operations for the quarter ended June 30, 2026 (in thousands):

Net revenues

Net revenues for the three months ended June 30, 2026 increased $29.6 million, or 6.6%, to $476.8 million from $447.2 million for the three months ended June 30, 2025. The increase in net revenues reflects a combination of price increases and volume growth, with price contributing approximately half of the increase. Equipment revenue increased $28.8 million, or 7.6%, year over year, primarily driven by volume growth and price increases. Service parts revenue increased $0.3 million, or 0.7%, year over year primarily driven by price increases. Equipment financing revenue increased $0.1 million, or 1.0% year over year driven by an increase in interest income due to growth in the loan base, partially offset by a decrease in variable loan rates tied to the prime rate.

Gross profit

Gross profit for the three months ended June 30, 2026 increased $15.7 million, or 9.0%, to $189.9 million from $174.2 million for the three months ended June 30, 2025. Gross profit as a percentage of net revenues was 39.8% for the three months ended June 30, 2026, as compared to 39.0% for the three months ended June 30, 2025. The increase in gross profit as a percentage of revenue was primarily driven by favorable production volume cost absorption, cost reduction

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initiatives and $3.8 million of insurance proceeds and tariff refunds, which favorably impacted gross margin in the current period.

Selling, general, and administrative expenses

Selling, general, and administrative expenses for the three months ended June 30, 2026 increased $3.9 million to $84.2 million from $80.3 million for the three months ended June 30, 2025. Selling, general, and administrative expenses as a percentage of net revenues was 17.7% for the three months ended June 30, 2026 as compared to 18.0% for the three months ended June 30, 2025. Included within Selling, general, and administrative expenses is $9.8 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 June 30, 2026 and 2025, respectively. The increase in Selling, general and administrative expenses is primarily due to increased administrative costs related to public company support costs, partially offset by a favorable impact from foreign exchange movements.

Interest expense, net

Interest expense, net for the three months ended June 30, 2026 decreased $21.6 million to $17.8 million from $39.4 million for the three months ended June 30, 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 August 2025. Additionally, the decrease reflects a favorable change in the fair value of our interest rate swaps.

Other expenses, net

Other expenses, net for the three months ended June 30, 2026 was less than $0.1 million, compared to $13.8 million for the three months ended June 30, 2025. The expense in the prior year period was driven by $13.8 million of foreign exchange losses on intercompany loans where the lender or borrower’s functional currency differs from the loan denomination currency. In contrast, the current period included a de minimis foreign exchange loss on intercompany loans.

Provision for income taxes

The effective income tax rate was a 21.8% provision for the three months ended June 30, 2026 as compared to a 23.7% provision for the three months ended June 30, 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 in the prior year period.

Segment Results

Our business is organized into two reportable segments, North America and International. The Company uses Segment Net revenues, Segment Adjusted EBITDA and Segment Adjusted EBITDA Margin as its measures of performance. The Company allocates certain costs including manufacturing variances, customer support expenses and selling and general expenses which are incurred in our global operations to the reportable segments in determining Segment Adjusted EBITDA.

Segment Adjusted EBITDA is a performance metric utilized by the Company’s Chief Operating Decision Maker to allocate resources on a segment basis. We define Segment Adjusted

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EBITDA as, on a segment basis, net income excluding interest income/expense, income taxes, depreciation and amortization. Segment Adjusted EBITDA is also adjusted for the discrete items that management excluded in analyzing the segments’ operating performance, such as refinancing and debt related costs, share-based compensation, strategic transaction costs, foreign exchange on intercompany loans and other non-recurring items which management believes are not indicative of the Company’s ongoing operating performance. Segment Adjusted EBITDA is a measure of operating performance of our reportable segments and may not be comparable to similar measures reported by other companies. See Note 15 - Segment Information to our interim condensed consolidated financial statements included in this Quarterly Report.

The following table presents the Company’s segment results for the three months ended June 30, 2026:

North America

Revenue in North America increased $30.2 million or 9.2% to $359.3 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Equipment revenue increased $28.0 million, or 10.2%, mainly driven by strong demand across all end markets, with particularly strong performance in the Commercial In-Home end market (an increase of 19%). Service parts revenue increased $1.2 million, or 3.7%, primarily driven by price increases offsetting inflationary increases. Other revenues and Equipment financing revenue remained relatively flat year over year.

Adjusted EBITDA increased $16.8 million or 17.4% to $113.6 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and Adjusted EBITDA Margin increased to 31.6% for the three months ended June 30, 2026 compared to 29.4% for the three months ended June 30, 2025. The increase in adjusted EBITDA margin is driven by broad-based growth across all end markets, supported by demand mix shift toward larger-capacity machines in the Vended market. Additionally, the adjusted EBITDA margin was impacted by $3.8 million of insurance proceeds and tariff refunds, which favorably impacted EBITDA margin in the current period.

International

Revenue decreased $0.6 million or 0.5% to $117.5 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Equipment revenue increased $0.7 million, or 0.7%, primarily due to strong performance in Asia (an increase of 9%), partially offset by a decrease in Middle East and Africa (a decrease of 35%), which was adversely impacted by heightened geopolitical tensions. Service parts revenue decreased $0.9 million, or 7.0%.

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Adjusted EBITDA decreased $2.9 million or 8.0% to $33.9 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025 and Adjusted EBITDA Margin de

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is

a discussion of our financial condition and results of operations and should be read in conjunction with our audited

historical consolidated financial statements and the accompanying notes elsewhere in this Annual Report. In addition to

historical financial information, the following discussion contains forward-looking statements that reflect our plans,

estimates, and beliefs. Our actual results may differ materially from those discussed in the forward-looking statements as a

result of various factors. You should review the information set forth in “Cautionary Note Regarding Forward-Looking

Statements” and “Part I. Item 1A. Risk Factors.” For purposes of this section, references to the “Company,” “we,” “us,”

and “our” refer to Alliance Laundry Holdings Inc. and its subsidiaries. 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.

The following discussion and analysis of our financial condition and results of operations includes discussion of

certain non-GAAP financial measures. For a description and reconciliation of the non-GAAP measures discussed in this

section, see “—Non-GAAP Financial Measures and Key Operating Metrics” below.

The following is a discussion and analysis of, and a comparison between, our results of operations for the years ended

December 31, 2025 and 2024. A discussion and analysis of, and a comparison between, our results of operations for the

years ended December 31, 2024 and 2023 can be found in the section entitled, “Management’s Discussion and Analysis of

Financial Condition and Results of Operations” in our final prospectus on Form 424(b)(4) filed with the SEC on October 9,

2025.

Our Business

We are the world’s largest designer and manufacturer of commercial laundry systems, serving a diverse and resilient

range of global end markets. We believe we engineer and produce the highest quality and one of the most reliable

commercial laundry systems in the industry. We leverage our pure play focus on the commercial laundry industry and over

100 years of engineering excellence to drive innovation and design our equipment to deliver outstanding performance in

the most demanding applications. We believe the need for clean laundry is universal and growing, and our premium

machines meet this fundamental human need, all day, every day.

Key Factors Affecting Our Performance

Our results of operations and financial condition have been, and will continue to be, affected by several factors that

present significant opportunities for us but can also pose risks and challenges, including but not limited to those discussed

below and in "Part I. Item 1A. Risk Factors."

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Incumbent Replacement Cycle

Despite the high reliability and durability of our equipment it does have a finite life, and the mission-critical nature of

our estimated eight million unit installed base of equipment, which we calculate assuming a ten-year average useful life of

our products, means our growth and performance has been driven by a consistent and predictable demand for replacement

equipment. The incumbency advantage offered by this significant installed base and our investment in maintaining

industry-leading physical and digital product offerings make us, we believe, well placed to capitalize on global demand and

continue to grow our market share and develop new markets for our products. This global demand is driven by the

commercial demand of our continually improved products, our customers repeatedly choosing our products and the

attractiveness of laundromats as an investment, and changes in customer habits or changes to the economic model,

including changes to operating, real estate and construction costs, the operating environment, or delays in laundromat

construction or increased regulatory or permitting obligations for laundromats, could impact this demand in the future.

Investment Trends in Diversified End-Markets

In addition to replacement demand, our performance is also driven by investment trends in both our developed and

developing end markets. The investment and macro trends impacting the On-Premise, Vended and Commercial In-Home

end-markets rarely move in tandem, and our ability to access all these markets by providing systems to satisfy the many

differences between them has been a key driver to our historical performance and we believe will continue to drive our

performance going forward.

Myriad applications required by the On-Premise end market create investment trends that rarely move in sync.

Whether our products are used to sterilize large volumes of linens in healthcare, wash highly specialized firefighting gear,

launder hotel linens or are applied in any of the many other end-use cases, our ability to provide specific solutions for all of

these applications gives us end market diversification globally. We believe our incumbency in many of these applications

provides a strong platform for future growth in both developed and developing markets, as these markets upgrade their

laundry systems to align to more developed market standards.

The growth of the Vended market, whether in laundromats or communal laundry facilities, is being driven by a

combination of changes to the investment model in mature markets, including the U.S. and Western Europe, and

demographic changes in less mature markets where we are helping create the demand and drive adoption of Vended

laundry applications.

The U.S. and Western European laundromat markets are seeing an acceleration of investment, driven by a shift to

more commercially focused investors who are willing to invest in the latest machines and technology to deliver an

improved customer experience, and which also allows them to more easily operate their multi-site businesses. This is

driving demand for equipment for new laundromat locations, but also accelerating the replacement cycle in existing stores

as owners refurbish them to keep pace with the market trends. We believe our industry leading products and digital

technologies, alongside our in-house financing capability in the U.S., makes our products the most attractive choice for

these investors which has driven and will continue to drive our performance.

There remains significant untapped opportunity for Vended laundry systems across many under-penetrated developing

markets where there is a nascent or non-existent Vended laundry culture. We have a successful track record of expanding

our business in these high-potential geographies, such as in Thailand where we have grown revenue at a compound annual

growth rate of approximately 42% since we began operations there in 2017. We believe Vended laundry market

opportunities are driven by a number of key indicators such as GDP growth, population growth, rising personal incomes,

increasing urbanization, and expanding family sizes—all resulting in evolving lifestyles that demand Vended laundry

solutions. We believe there are many other potential markets that could replicate the success we have already seen in

markets like Thailand, though there are inevitable risks associated with growth in these new markets. For example, we face

risks associated with unforeseen government actions, changing political conditions, fluctuations in currency exchange rates,

increases in inflation, and other risks. See “Part I. Item 1A. Risk Factors.” In these developing markets, our team takes a

“feet on the street” approach to foster the development of the local commercial laundry industry. We believe accessing

these under-penetrated markets will continue to drive our performance alongside our local partners.

Within the Commercial In-Home market, we have benefited from users who are becoming increasingly frustrated with

lower quality residential machines and are looking for a more reliable and durable commercial-grade solution. We have

capitalized on this demand by focusing on our go-to-market strategy of selling through independent retailers and not “Big

Box” stores; we believe this strategy is unique in the industry and delivers the most profitable laundry sale for a retailer.

We also continue to launch product extensions. Together, these efforts have expanded our reach and product range to in-

home customers and we believe there remains continued growth opportunities in this market as these trends continue.

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Manufacturing and Procurement Excellence and Related Costs

To ensure that the reliability, durability and quality of our machines meet our customers’ expectations, we seek to

achieve manufacturing and procurement excellence, which in turn means our systems may have higher labor and material

costs than our primary competitors. Those high-quality product characteristics require us to run our manufacturing facilities

efficiently, design products, supporting technologies and any new technologies to appropriately balance cost and

performance, and procure materials and components at optimal prices. These activities have been key to our historical

margin expansion and will continue to be drivers of our margins in the future.

While we continue to focus on cost-down initiatives through engineering, manufacturing and procurement

workstreams, we remain exposed to market prices for these costs. We manage the potential risk in these input costs

through, when we deem appropriate, hedging and fixed price or term contracts. This focus on balancing cost with

performance and quality extends to our suppliers where we focus on long-term, mutually beneficial relationships, rather

than short-term cost minimization transactions, resulting in partnerships that help us to navigate any market volatility. For

example, these relationships were particularly valuable as we navigated the COVID-19 pandemic and supply chain issues

that followed, where we saw no significant disruption to our supply of components and materials.

Non-GAAP Financial Measures and Key Operating Metrics

We regularly review non-GAAP measures to evaluate our business, measure our performance and manage our

operations, including identifying trends affecting our business, formulating business plans and making strategic decisions.

We believe that non-GAAP measures provide an additional way of viewing aspects of our operations that, when viewed

together with our GAAP results, provide a more complete understanding of our results of operations and the factors and

trends affecting our business. These non-GAAP financial measures are also used by our management to evaluate financial

results and to plan and forecast future periods. Non-GAAP financial measures should be considered a supplement to, and

not a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP.

Adjusted EBITDA and Adjusted EBITDA Margin

This Annual Report contains certain financial measures, including Adjusted EBITDA and Adjusted EBITDA Margin,

that are not required by, or prepared in accordance with, GAAP. We refer to these measures as “non-GAAP” financial

measures. The use of non-GAAP financial measures should not be construed as an alternative to, or more meaningful than,

the comparable GAAP financial measure. You should not consider Adjusted EBITDA or Adjusted EBITDA Margin either

in isolation or as substitutes for analyzing our results as reported under GAAP. Adjusted EBITDA and Adjusted EBITDA

Margin are presented for supplemental informational purposes only and have limitations as an analytical tool. For example,

Adjusted EBITDA and Adjusted EBITDA Margin exclude certain tax payments that may reduce c

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