Company Overview - Stella-Jones Inc. is a leading North American manufacturer focused on infrastructure products essential for electrical distribution, transmission, and railway transportation systems [4] - The company supplies treated wood and steel utility poles, steel lattice towers, and treated wood railway ties to major electrical utilities and railway operators across North America [4] - Stella-Jones also manufactures industrial products such as timbers for railway bridges, marine and foundation pilings, and coal tar-based products, alongside premium treated residential lumber for outdoor applications [4] Upcoming Events - A conference call is scheduled for August 7, 2025, at 10:00 AM Eastern Daylight Time, with a live webcast available [2] - The press release related to the conference call will be published before market opens on the same day [3] - A web recording of the meeting will be accessible from August 7, 2025, at 1:00 PM EDT until August 14, 2025, at 11:59 PM EDT [3]

[First Quarter 2025 Operating and Financial Summaries](index=1&type=section&id=First%20Quarter%202025%20Operating%20and%20Financial%20Summaries) This section provides an overview of Scienjoy's Q1 2025 financial performance, highlighting operational efficiency and strategic global expansion [Company Overview](index=1&type=section&id=Company%20Overview) Scienjoy Holding Corporation, a Nasdaq-listed interactive entertainment leader in the Chinese market, announced its financial results for the first quarter ended March 31, 2025 - Scienjoy Holding Corporation (**NASDAQ: SJ**) is an interactive entertainment leader in the Chinese market[2](index=2&type=chunk) [Executive Commentary and Key Financial Highlights](index=1&type=section&id=Executive%20Commentary%20and%20Key%20Financial%20Highlights) Despite a slight decline in total revenues, Scienjoy achieved a substantial increase in gross profit and gross margin, with income from operations up 33.3% year over year, reflecting a focus on operational efficiency and strategic cost management - Scienjoy's Q1 2025 results reflect continued focus on operational efficiency and strategic cost management, leading to a substantial increase in **gross profit** and **gross margin** despite a slight revenue decline[4](index=4&type=chunk) - The company is advancing global expansion through its Dubai hub, establishing a strong foundation for a dual AI model combining an AI-focused app with an offline presence for revenue generation and marketing[4](index=4&type=chunk) - Income from operations increased by **33.3%** year over year, demonstrating effective cost management and value extraction from a targeted paying user base[4](index=4&type=chunk) First Quarter 2025 Key Financial Highlights | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change (%) | | :------------------------------------- | :--------------------- | :--------------------- | :------------- | | Total revenues | 307.3 | 316.3 | -2.8% | | Gross profit | 59.5 | 53.1 | +12.1% | | Gross margin | 19.4% | 16.8% | +2.6 pp | | Income from operations | 13.7 | 10.3 | +33.3% | | Net loss | (13.0) | 2.8 (Net Income) | N/A | | Net loss attributable to shareholders | (9.1) | 6.6 (Net Income) | N/A | | Adjusted net loss attributable to shareholders | (5.5) | 9.0 (Net Income) | N/A | | Cash and cash equivalents (as of March 31, 2025) | 286.5 | 252.5 (as of Dec 31, 2024) | +13.5% | [First Quarter 2025 Financial Results](index=2&type=section&id=First%20Quarter%202025%20Financial%20Results) This section provides a detailed analysis of Scienjoy's Q1 2025 revenues, costs, operating expenses, and net income, including key user and financial metrics [Total Revenues and User Metrics](index=2&type=section&id=Total%20Revenues%20and%20User%20Metrics) Total revenues decreased by 2.8% year-over-year to RMB307.3 million, primarily due to a decline in paying users from 164,044 to 151,971, attributed to the competitive landscape of China's mobile live streaming market Total Revenues (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :----------- | :--------------------- | :--------------------- | :--------- | | Total revenues | 307.3 | 316.3 | -2.8% | - The decrease in total revenues was primarily caused by a decrease in paying users due to the competitive landscape of China's mobile live streaming market[6](index=6&type=chunk) Total Paying Users (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | YoY Change | | :------------- | :------ | :------ | :--------- | | Total paying users | 151,971 | 164,044 | -7.36% | [Cost of Revenues and Gross Profit](index=2&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Profit) Cost of revenues decreased by RMB15.4 million, mainly due to lower revenue sharing fees, partially offset by increased user acquisition costs, leading to a 12.1% increase in gross profit to RMB59.5 million and a rise in gross margin to 19.4% Cost of Revenues (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :------------- | :--------------------- | :--------------------- | :--------- | | Cost of revenues | 247.8 | 263.2 | -5.85% | - The decrease in cost of revenues was primarily attributable to a **RMB22.9 million** decrease in revenue sharing fees, offset by a **RMB7.0 million** increase in user acquisition costs[7](index=7&type=chunk) Gross Profit and Margin (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :---------- | :--------------------- | :--------------------- | :--------- | | Gross profit | 59.5 | 53.1 | +12.1% | | Gross margin | 19.4% | 16.8% | +2.6 pp | - The increase in gross margin was due to higher average live streaming revenue per paying user (ARPPU), indicating effective conversion of high-quality paying users[8](index=8&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses increased by 7.0% to RMB45.8 million in Q1 2025, driven by increases in sales and marketing and general and administrative expenses, partially offset by a decrease in research and development expenses Total Operating Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :------------------- | :--------------------- | :--------------------- | :--------- | | Total operating expenses | 45.8 | 42.8 | +7.0% | [Sales and Marketing Expenses](index=2&type=section&id=Sales%20and%20marketing%20expenses) Sales and marketing expenses increased slightly due to more marketing activities Sales and Marketing Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :----------------------- | :--------------------- | :--------------------- | :--------- | | Sales and marketing expenses | 2.1 | 2.0 | +6.3% | - The increase in sales and marketing expenses was primarily attributable to more marketing activities[15](index=15&type=chunk) [General and Administrative Expenses](index=2&type=section&id=General%20and%20administrative%20expenses) General and administrative expenses rose, primarily driven by increased professional consultant fees General and Administrative Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :----------------------------- | :--------------------- | :--------------------- | :--------- | | General and administrative expenses | 23.4 | 19.9 | +17.2% | - The increase in general and administrative expenses was primarily due to an increase of **RMB3.8 million** in professional consultant fees[15](index=15&type=chunk) [Research and Development Expenses](index=2&type=section&id=Research%20and%20development%20expenses) Research and development expenses decreased, mainly due to lower technical service fees Research and Development Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :--------------------------- | :--------------------- | :--------------------- | :--------- | | Research and development expenses | 19.6 | 21.5 | -8.8% | - The decrease in research and development expenses was due to a decrease of **RMB2.4 million** in technical service fees[15](index=15&type=chunk) [Provision for Credit Losses](index=2&type=section&id=Provision%20for%20credit%20losses) The company recorded a provision for credit losses, shifting from a prior recovery, due to slower collections Provision for Credit Losses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | Change | | :------------------------ | :--------------------- | :--------------------- | :----- | | Provision for credit losses | 0.8 | (0.6) (Recovery) | N/A | - The shift to a provision for credit losses from a recovery was due to slow collection[15](index=15&type=chunk) [Income from Operations](index=2&type=section&id=Income%20from%20operations) Income from operations significantly increased by 33.3% to RMB13.7 million in Q1 2025, reflecting improved operational efficiency and cost management Income from Operations (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :------------------- | :--------------------- | :--------------------- | :--------- | | Income from operations | 13.7 | 10.3 | +33.3% | [Other Income and Expenses](index=2&type=section&id=Other%20Income%20and%20Expenses) The company experienced a substantial increase in loss from the change in fair value of investment in marketable security, rising by 654.1% to RMB24.3 million, primarily due to fair value changes in publicly traded company investments Change in Fair Value of Investment in Marketable Security (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :------------------------------------------------ | :--------------------- | :--------------------- | :--------- | | Change in fair value of investment in marketable security | (24.3) (Loss) | (3.2) (Loss) | +654.1% | - The significant increase in loss from marketable security investment fair value changes was primarily attributable to fair value changes in investments in a publicly traded company[10](index=10&type=chunk) Investment Loss (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :--------------- | :--------------------- | :--------------------- | :--------- | | Investment loss | (0.4) | (2.2) | -81.8% | - The investment loss was primarily attributable to share of unrealized loss in long-term investments[11](index=11&type=chunk) [Net Income (Loss) and Earnings Per Share (EPS)](index=2&type=section&id=Net%20Income%20(Loss)%20and%20Earnings%20Per%20Share) Despite a strong increase in income from operations, Scienjoy reported a net loss of RMB13.0 million for Q1 2025, primarily driven by a significant unrealized loss from marketable security investments Net Income (Loss) (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | Change | | :----------- | :--------------------- | :--------------------- | :----- | | Net income (loss) | (13.0) (Loss) | 2.8 (Income) | N/A | - The net loss for Q1 2025 was primarily attributable to an unrealized loss of **RMB24.3 million** from the change in fair value of investment in marketable security, despite a **33.3%** increase in income from operations[12](index=12&type=chunk) Net Income (Loss) Attributable to Shareholders (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | Change | | :------------------------------------------ | :--------------------- | :--------------------- | :----- | | Net income (loss) attributable to shareholders | (9.1) (Loss) | 6.6 (Income) | N/A | Basic and Diluted Net Loss Per Ordinary Share (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB) | Q1 2024 (RMB) | Change | | :---------------------------------------------------- | :------------ | :------------ | :----- | | Basic and diluted net loss per ordinary share | (0.22) | 0.16 | N/A | Adjusted Net Income (Loss) Attributable to Shareholders (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | Change | | :---------------------------------------------------- | :--------------------- | :--------------------- | :----- | | Adjusted net income (loss) attributable to shareholders | (5.5) (Loss) | 9.0 (Income) | N/A | Adjusted Basic and Diluted Net Loss Per Ordinary Share (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB) | Q1 2024 (RMB) | Change | | :---------------------------------------------------------- | :------------ | :------------ | :----- | | Adjusted basic and diluted net loss per ordinary share | (0.13) | 0.22 | N/A | [Cash and Cash Equivalents](index=3&type=section&id=Cash%20and%20Cash%20Equivalents) As of March 31, 2025, the company's cash and cash equivalents increased by RMB33.9 million to RMB286.5 million from December 31, 2024 Cash and Cash Equivalents (As of March 31, 2025 vs Dec 31, 2024) | Metric | As of March 31, 2025 (RMB million) | As of Dec 31, 2024 (RMB million) | Change | | :------------------------ | :---------------------------------- | :---------------------------------- | :------- | | Cash and cash equivalents | 286.5 | 252.5 | +33.9 | [About Scienjoy Holding Corporation](index=3&type=section&id=About%20Scienjoy%20Holding%20Corporation) This section provides a concise description of Scienjoy as a Nasdaq-listed interactive entertainment leader leveraging AI for metaverse experiences [Company Description](index=3&type=section&id=Company%20Description) Scienjoy is a Nasdaq-listed interactive entertainment leader leveraging AI-powered technology to create immersive experiences and foster connections, with a vision to shape a metaverse lifestyle - Scienjoy is a pioneering Nasdaq-listed interactive entertainment leader driven by the vision of shaping a metaverse lifestyle[18](index=18&type=chunk) - The company leverages AI-powered technology to create immersive experiences that resonate with global audiences, fostering meaningful connections and redefining entertainment[18](index=18&type=chunk) [Use of Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section explains the definition and purpose of Scienjoy's non-GAAP financial measures, such as adjusted net income, for investor understanding [Definition and Purpose](index=3&type=section&id=Definition%20and%20Purpose%20of%20Non-GAAP%20Financial%20Measures) Scienjoy uses Adjusted net income and Adjusted basic/diluted net income per ordinary share as non-GAAP financial measures to provide investors with a better understanding of its financial performance - Adjusted net income is calculated as net income adjusted for change in fair value of contingent consideration, change in fair value of warrant liability, and share-based compensation[19](index=19&type=chunk) - Adjusted basic and diluted net income per ordinary share is non-GAAP net income (loss) attributable to ordinary shareholders divided by the weighted average number of ordinary shares[19](index=19&type=chunk) - These non-GAAP measures are presented to enhance investors' overall understanding of the Company's financial performance and should not be considered a substitute for, or superior to, GAAP financial information[19](index=19&type=chunk) [Exchange Rate Information](index=3&type=section&id=Exchange%20Rate%20Information) This section details the specific exchange rate used for RMB to US dollar conversions in the report and clarifies its representational limitations [Exchange Rate Details](index=3&type=section&id=Exchange%20Rate%20Details) The report uses an exchange rate of RMB7.2567 to US$1.00, the noon buying rate on March 31, 2025, for convenience, without representation of actual convertibility - Translations from RMB to U.S. dollars are made at a rate of **RMB7.2567 to US$1.00**, the noon buying rate in effect on March 31, 2025[21](index=21&type=chunk) - The Company makes no representation that RMB amounts could have been, or could be, converted, realized or settled in U.S. dollars at that rate[21](index=21&type=chunk) [Safe Harbor Statement](index=3&type=section&id=Safe%20Harbor%20Statement) This section presents a disclaimer regarding forward-looking statements, outlining inherent risks and uncertainties that may affect actual future results [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section includes a safe harbor statement regarding forward-looking statements, highlighting that such statements involve known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially - The release contains 'forward-looking statements' subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from those discussed[22](index=22&type=chunk) - Important factors include managing growth, future acquisitions, financing, economic conditions, litigation, regulatory changes, and pandemics[22](index=22&type=chunk) [Investor Relations Contacts](index=3&type=section&id=Investor%20Relations%20Contacts) This section provides essential contact information for investor and media inquiries regarding Scienjoy Holding Corporation [Contact Information](index=3&type=section&id=Contact%20Information) Contact information for investor and media inquiries is provided, including the Chief Financial Officer of Scienjoy and Ascent Investor Relations LLC - Investor and media inquiries can be directed to Denny Tang, Chief Financial Officer of Scienjoy Holding Corporation, or Tina Xiao of Ascent Investor Relations LLC[23](index=23&type=chunk)[24](index=24&type=chunk) [UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS](index=5&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section presents the company's unaudited financial position, including assets, liabilities, and equity, as of March 31, 2025 [Balance Sheet Data](index=5&type=section&id=Balance%20Sheet%20Data) The unaudited condensed consolidated balance sheets provide a snapshot of Scienjoy's assets, liabilities, and equity as of March 31, 2025, and December 31, 2024, showing total assets of RMB1,411.5 million at the end of Q1 2025 Unaudited Condensed Consolidated Balance Sheets (Selected Data) | Metric (RMB thousand) | As of Dec 31, 2024 | As of Mar 31, 2025 | | :--------------------- | :----------------- | :----------------- | | Cash and cash equivalents | 252,540 | 286,482 | | Total current assets | 544,644 | 538,543 | | Total non-current assets | 860,541 | 872,987 | | TOTAL ASSETS | 1,405,185 | 1,411,530 | | Total current liabilities | 160,769 | 164,504 | | Total non-current liabilities | 59,100 | 70,770 | | TOTAL LIABILITIES | 219,869 | 235,274 | | Total equity | 1,185,316 | 1,176,256 | | TOTAL LIABILITIES AND EQUITY | 1,405,185 | 1,411,530 | [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)](index=7&type=section&id=UNAUDITED%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)) This section details the company's unaudited financial performance, including revenues, expenses, and net loss, for Q1 2025 [Income Statement and Comprehensive Income Data](index=7&type=section&id=Income%20Statement%20and%20Comprehensive%20Income%20Data) The unaudited condensed consolidated statements of operations and comprehensive income (loss) detail the company's revenues, expenses, and net loss for the three months ended March 31, 2025, compared to the same period in 2024, showing a net loss of RMB12.96 million Unaudited Condensed Consolidated Statements of Operations (Selected Data) | Metric (RMB thousand) | For three months ended Mar 31, 2024 | For three months ended Mar 31, 2025 | | :------------------------------------------ | :---------------------------------- | :---------------------------------- | | Total revenue | 316,299 | 307,335 | | Cost of revenues | (263,212) | (247,842) | | Gross profit | 53,087 | 59,493 | | Sales and marketing expenses | (1,988) | (2,113) | | General and administrative expenses | (19,930) | (23,352) | | Research and development expenses | (21,527) | (19,562) | | Recovery of (provision for) credit losses | 643 | (754) | | Income from operations | 10,285 | 13,712 | | Change in fair value of investment in marketable security | (3,227) | (24,334) | | Net income (loss) | 2,806 | (12,958) | | Net income (loss) attributable to the Company's shareholders | 6,580 | (9,090) | | Basic earnings (loss) per share | 0.16 | (0.22) | | Diluted earnings (loss) per share | 0.16 | (0.22) | [Reconciliations of Non-GAAP Results](index=8&type=section&id=Reconciliations%20of%20Non-GAAP%20Results) This section provides a clear reconciliation of GAAP to non-GAAP financial measures, specifically for net income and earnings per share [Non-GAAP Reconciliation Table](index=8&type=section&id=Non-GAAP%20Reconciliation%20Table) This section provides a reconciliation of GAAP net income (loss) attributable to the Company's shareholders to adjusted net income (loss) attributable to the Company's shareholders, showing the impact of share-based compensation Reconciliations of Non-GAAP Results (Q1 2025 vs Q1 2024) | Metric (RMB thousand) | For three months ended Mar 31, 2024 | For three months ended Mar 31, 2025 | | :---------------------------------------------------- | :---------------------------------- | :---------------------------------- | | Net income (loss) attributable to the Company's shareholders | 6,580 | (9,090) | | Less: Share based compensation | (2,435) | (3,575) | | Adjusted net income (loss) attributable to the Company's shareholders | 9,015 | (5,515) | | Adjusted net income (loss) per ordinary share - Basic | 0.22 | (0.13) | | Adjusted net income (loss) per ordinary share - Diluted | 0.22 | (0.13) |

Core Viewpoint - Scienjoy Holding Corporation reported mixed financial results for the first quarter of 2025, with a significant increase in income from operations and gross profit, despite a decline in total revenues and a net loss attributed to unrealized investment losses [1][3][12]. Financial Performance - Total revenues decreased to RMB307.3 million (US$42.4 million) in Q1 2025 from RMB316.3 million in Q1 2024, primarily due to a reduction in paying users [5][6]. - Gross profit increased by 12.1% to RMB59.5 million (US$8.2 million) in Q1 2025 from RMB53.1 million in Q1 2024, with gross margin rising to 19.4% from 16.8% [5][8]. - Income from operations rose by 33.3% to RMB13.7 million (US$1.9 million) in Q1 2025 compared to RMB10.3 million in Q1 2024 [5][10]. - The company reported a net loss of RMB13.0 million (US$1.8 million) in Q1 2025, down from a net income of RMB2.8 million in Q1 2024, largely due to an unrealized loss of RMB24.3 million from marketable securities [12][13]. - Cash and cash equivalents increased to RMB286.5 million (US$39.5 million) as of March 31, 2025, up from RMB252.5 million at the end of 2024 [16]. Operational Insights - The decline in total revenues was attributed to a decrease in paying users, which fell to 151,971 in Q1 2025 from 164,044 in Q1 2024, reflecting the competitive landscape of China's mobile live streaming market [6]. - Cost of revenues decreased to RMB247.8 million (US$34.2 million) in Q1 2025 from RMB263.2 million in Q1 2024, mainly due to reduced revenue sharing fees [7]. - Total operating expenses increased by 7.0% to RMB45.8 million (US$6.3 million) in Q1 2025 from RMB42.8 million in Q1 2024 [9]. Strategic Focus - The company emphasized its commitment to operational efficiency and strategic cost management, aiming for global expansion, particularly through its Dubai hub [3][4]. - The management expressed confidence in the company's ability to drive operational excellence and pursue high-quality growth despite the current challenges [3][4].

Core Points - Stella-Jones Inc. announced the results of its director election following the Annual Meeting of Shareholders held on May 7, 2025 [1] - All nominees proposed as directors were elected by a majority of votes cast by shareholders [2] - The advisory vote on executive compensation received 88.98% approval [2] Election Results - Michelle Banik received 44,324,929 votes for (99.85%) and 66,759 votes against (0.15%) [2] - Robert Coallier received 44,196,728 votes for (99.56%) and 194,961 votes against (0.44%) [2] - Anne E. Giardini received 44,214,196 votes for (99.60%) and 177,451 votes against (0.40%) [2] - Karen Laflamme received 44,192,661 votes for (99.55%) and 199,027 votes against (0.45%) [2] - Katherine A. Lehman received 44,225,747 votes for (99.63%) and 165,942 votes against (0.37%) [2] - Douglas Muzyka received 44,328,595 votes for (99.86%) and 63,093 votes against (0.14%) [2] - Simon Pelletier received 43,768,177 votes for (98.60%) and 623,512 votes against (1.40%) [2] - Éric Vachon received 44,376,962 votes for (99.97%) and 14,727 votes against (0.03%) [2] Company Overview - Stella-Jones Inc. is a leading North American manufacturer focused on infrastructure products essential for electrical distribution and railway transportation [4] - The company supplies treated wood utility poles to major electrical utilities and treated wood railway ties to North America's Class 1, short line, and commercial railroad operators [4] - Stella-Jones also manufactures industrial products such as timbers for railway bridges and marine pilings, as well as premium treated residential lumber for outdoor applications [4]

Financial Performance - Stella-Jones reported sales of CAD 773 million for Q1 2025, a slight decrease from CAD 775 million in Q1 2024, with pressure-treated wood sales down by CAD 36 million or 5% due to lower volumes across most product categories [4][6] - Gross profit for the quarter was CAD 168 million, resulting in a gross profit margin of 21.7%, down from 22.2% in the previous year [3][7] - Operating income increased to CAD 143 million, up from CAD 124 million in Q1 2024, aided by an insurance settlement of CAD 38 million [8][9] - EBITDA rose to CAD 179 million, with an EBITDA margin of 23.2%, compared to CAD 156 million and a margin of 20.1% in the same period last year [8][9] Acquisition Strategy - The company announced a definitive agreement to acquire Locweld Inc. for CAD 58 million, enhancing its infrastructure offerings in the steel transmission structure industry [2][14] - The acquisition is expected to unlock investment opportunities and create more value for customers and shareholders [2][14] Liquidity and Capital Resources - Stella-Jones maintained robust liquidity of CAD 691 million at the end of the quarter and a net debt-to-EBITDA ratio of 2.6x [10][32] - The company utilized its liquidity to support seasonal working capital needs, repurchase CAD 15 million of shares, and declared a dividend of CAD 17 million [10][13] Segment Performance - Utility poles sales increased to CAD 419 million, while railway ties sales decreased to CAD 208 million, reflecting a 14% decline in volumes [12] - Residential lumber sales remained stable at CAD 88 million, and industrial product sales increased to CAD 39 million [12]

Company Overview - Stella-Jones Inc. has announced the acquisition of Locweld Inc., a designer and manufacturer of lattice transmission towers and steel poles, with the deal expected to close today [1][3]. - Locweld, based in Candiac, Quebec, has over 75 years of experience and employs approximately 220 people [2]. Strategic Implications - The acquisition allows Stella-Jones to enter the approximately $5 billion steel transmission structure market, enhancing its current utility poles business and creating new growth opportunities [3]. - The CEO of Stella-Jones emphasized that this strategic move will leverage the company's extensive sales and distribution network to better serve customers and expand its market reach [3]. Financial Details - The acquisition price is set at $58 million on a cash-free, debt-free basis, with potential additional performance-based payments of up to $7 million contingent on achieving specific milestones [5]. - Stella-Jones plans to invest approximately $15 million in capital expenditures to increase Locweld's output and optimize operational efficiencies [5]. - Locweld reported sales of approximately $55 million for the year ending September 30, 2024 [5]. Management Transition - Following the acquisition, Michael Cyr, the CEO of Locweld, will step down, while key management members will remain to support the business [5].

Group 1 - Stella-Jones Inc. will hold a conference call on May 7, 2025, at 8:00 AM Eastern Daylight Time to discuss its first quarter results [1] - The annual meeting of shareholders will also take place on May 7, 2025, at 11:00 AM Eastern Daylight Time, both in-person and virtually [2] - Registered shareholders and duly appointed proxyholders will have the opportunity to participate, ask questions, and vote during the meeting [4] Group 2 - Stella-Jones Inc. is a leading North American manufacturer focused on infrastructure products essential for electrical distribution and railway transportation systems [6] - The company supplies treated wood utility poles to major electrical utilities and treated wood railway ties to Class 1, short line, and commercial railroad operators [6] - Stella-Jones also manufactures and distributes premium treated residential lumber and accessories for outdoor applications [7]

[Fiscal Year 2024 Operating and Financial Summaries](index=1&type=section&id=Fiscal%20Year%202024%20Operating%20and%20Financial%20Summaries) This section provides an overview of Scienjoy's strong financial performance in fiscal year 2024, highlighting significant profitability growth and strategic global expansion initiatives [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted strong 2024 performance with significant profit growth, strategic global expansion in MENA, and future focus on AIGC technologies - The company achieved significant growth in profitability, with gross profit rising by **27.4%** and income from operations by **78.5%** year-over-year, demonstrating effective conversion of paying users into profit[4](index=4&type=chunk) - Scienjoy is actively pursuing a global expansion strategy, using Dubai as a strategic hub to launch promotional initiatives in the high-potential Middle East and North Africa (MENA) region[4](index=4&type=chunk)[13](index=13&type=chunk) - Future strategic priorities include expanding the company's global presence and increasing investment in cutting-edge Artificial Intelligence Generated Content (AIGC) technologies across its product ecosystem[5](index=5&type=chunk) - The company reported a significant financial turnaround, achieving a net income of **RMB 26.7 million** in 2024, an improvement of approximately **RMB 60 million** from the net loss in 2023[5](index=5&type=chunk) [Key Financial & Operating Metrics Summary](index=1&type=section&id=Key%20Financial%20%26%20Operating%20Metrics%20Summary) Scienjoy's 2024 financial summary shows decreased revenues but substantial profitability improvements, including a shift to net income and strengthened cash position Fiscal Year 2024 Key Financial Highlights (vs. 2023) | Metric | FY 2024 (RMB million) | FY 2023 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Revenues | 1,363.4 | 1,464.9 | -6.9% | | Gross Profit | 245.4 | 192.7 | +27.4% | | Income from Operations | 40.7 | 22.8 | +78.5% | | Net (Loss) Income | 26.7 | (35.0) | +RMB 61.7M | | Net (Loss) Income Attributable to Shareholders | 39.7 | (30.8) | +RMB 70.5M | | Adjusted Net (Loss) Income Attributable to Shareholders | 50.3 | (11.7) | +RMB 62.0M | - As of December 31, 2024, cash and cash equivalents increased to **RMB 252.5 million (US$34.6 million)**, up **RMB 47.1 million** from **RMB 205.5 million** at the end of 2023[6](index=6&type=chunk) [Fiscal Year 2024 Financial Results](index=2&type=section&id=Fiscal%20Year%202024%20Financial%20Results) This section details Scienjoy's 2024 financial performance, covering revenue, cost of revenues, operating expenses, and net income drivers [Revenues](index=2&type=section&id=Revenues) Total revenues for fiscal year 2024 decreased to **RMB 1,363.4 million**, primarily due to a decline in paying users amidst a competitive market Revenue and Paying User Comparison (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenues (RMB million) | 1,363.4 | 1,464.9 | -6.9% | | Total Paying Users | 494,652 | 557,692 | -11.3% | [Cost of Revenues and Gross Profit](index=2&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Profit) Reduced cost of revenues, driven by lower sharing fees and user acquisition costs, significantly increased gross profit by **27.4%** and gross margin to **18.0%** - Cost of revenues decreased to **RMB 1,117.9 million** from **RMB 1,272.1 million** in 2023, mainly due to a **RMB 123.7 million** decrease in revenue sharing fees and a **RMB 26.5 million** decrease in user acquisition costs[8](index=8&type=chunk) Gross Profit and Margin (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Gross Profit (RMB million) | 245.4 | 192.7 | +27.4% | | Gross Margin | 18.0% | 13.2% | +4.8 p.p. | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses increased by **20.5%** to **RMB 204.7 million**, driven by a significant surge in sales and marketing for global expansion, and higher R&D and credit loss provisions Operating Expenses Breakdown (FY 2024 vs. FY 2023) | Expense Category (RMB million) | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Sales and Marketing | 7.0 | 1.4 | +420.2% | | General and Administrative | 76.6 | 75.6 | +1.4% | | Research and Development | 90.5 | 75.1 | +20.4% | | Provision for Credit Losses | 30.6 | 17.9 | +71.2% | | **Total Operating Expenses** | **204.7** | **169.9** | **+20.5%** | - The significant increase in sales and marketing expenses was primarily due to activities related to new subsidiaries in Dubai as part of the company's global expansion initiative[13](index=13&type=chunk) [Income from Operations and Other Items](index=2&type=section&id=Income%20from%20Operations%20and%20Other%20Items) Income from operations increased by **78.5%** to **RMB 40.7 million**, bolstered by a **RMB 6.1 million** gain on marketable securities and significantly reduced investment losses - Income from operations grew to **RMB 40.7 million (US$5.6 million)**, an increase of **78.5%** from **RMB 22.8 million** in 2023[11](index=11&type=chunk) - The company recorded a gain of **RMB 6.1 million** on marketable securities, a reversal from a **RMB 9.0 million** loss in the prior year[15](index=15&type=chunk) - Investment loss decreased substantially to **RMB 5.7 million** in 2024 from **RMB 31.3 million** in 2023[16](index=16&type=chunk) [Net Income and Earnings Per Share](index=3&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) Scienjoy achieved a significant turnaround with a net income of **RMB 26.7 million** in 2024, resulting in a basic EPS of **RMB 0.96** and adjusted basic EPS of **RMB 1.22** Net Income and EPS (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net (Loss) Income (RMB million) | 26.7 | (35.0) | | Net (Loss) Income Attributable to Shareholders (RMB million) | 39.7 | (30.8) | | Basic (Loss) Earnings Per Share (RMB) | 0.96 | (0.76) | | Adjusted Basic (Loss) Earnings Per Share (RMB) | 1.22 | (0.29) | - Adjusted net income attributable to the Company's shareholders was **RMB 50.3 million**, an increase of **RMB 62.0 million** from an adjusted net loss of **RMB 11.7 million** in 2023[18](index=18&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents Scienjoy's consolidated financial statements, including balance sheets and statements of operations, detailing the company's financial position and performance [Consolidated Balance Sheets](index=5&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2024, Scienjoy's balance sheet shows total assets of **RMB 1,405.2 million**, increased cash, reduced liabilities, and total shareholders' equity of **RMB 1,199.1 million** Selected Balance Sheet Items (As of Dec 31, 2024 vs. 2023) | Item (RMB thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | 252,540 | 205,465 | | Total current assets | 544,644 | 576,977 | | **Total Assets** | **1,405,185** | **1,448,464** | | Total current liabilities | 160,769 | 234,121 | | **Total Liabilities** | **219,869** | **298,737** | | **Total Shareholders' Equity** | **1,199,094** | **1,150,564** | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20%28LOSS%29%20INCOME) The consolidated statement of operations for 2024 confirms **RMB 1,363.4 million** in revenue, **RMB 245.4 million** gross profit, and a net income of **RMB 26.7 million** Consolidated Statement of Operations Highlights (FY 2024 vs. FY 2023) | Item (RMB thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Total revenue | 1,363,384 | 1,464,871 | | Gross profit | 245,442 | 192,726 | | Income from operations | 40,719 | 22,808 | | Net (loss) income | 26,683 | (34,976) | | Net (loss) income attributable to the Company's shareholders | 39,685 | (30,788) | [Non-GAAP Financial Measures and Reconciliations](index=4&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section explains the company's use of non-GAAP financial measures and provides detailed reconciliations to their U.S. GAAP equivalents [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures, such as adjusted net income, to supplement U.S. GAAP results, providing enhanced insight into core financial performance by excluding specific items - Adjusted net income is defined as net income adjusted for change in fair value of contingent consideration, change in fair value of warrant liability, and share-based compensation[22](index=22&type=chunk) - The company presents non-GAAP measures to enhance understanding of its financial performance, but they should not be considered superior to or a substitute for financial information prepared in accordance with U.S. GAAP[22](index=22&type=chunk) [Reconciliations of Non-GAAP Results](index=8&type=section&id=Reconciliations%20of%20Non-GAAP%20Results) This section provides a reconciliation from GAAP net income to non-GAAP adjusted net income, showing a **RMB 39.7 million** GAAP net income adjusted to **RMB 50.3 million** non-GAAP net income for 2024 Reconciliation of GAAP to Non-GAAP Net Income (RMB thousands) | Description | 2024 | 2023 | | :--- | :--- | :--- | | **Net (loss) income attributable to the Company's shareholders (GAAP)** | **39,685** | **(30,788)** | | Change in fair value of contingent consideration | - | (5,624) | | Change in fair value of warrants liability | - | 170 | | Share based compensation | (10,579) | (13,637) | | **Adjusted net (loss) income attributable to the Company's shareholders (Non-GAAP)** | **50,264** | **(11,697)** |

Revenue Generation and User Engagement - The company relies heavily on a single monetization model, primarily generating revenue from virtual gifts purchased by users, which poses a risk if this model fails to diversify [46]. - Revenue growth is dependent on maintaining and increasing the paying user base and revenue per paying user; any decline could materially affect financial results [44]. - The user base's growth and engagement are critical, as a smaller or less active user base could lead to reduced spending on virtual gifts [44]. - The company relies on revenue from virtual gift sales, and its ability to monetize services depends on user engagement and broadcaster retention [59]. - The company has experienced a decline in revenue due to competitive pressures in China's mobile live streaming market, highlighting the challenges of converting non-paying users to paying users [60]. - The company must continuously innovate and diversify its content offerings to prevent decreasing viewership and user engagement [47]. - The company has adjusted its revenue sharing fee policy to increase the sharing percentage for broadcasters after a previous decrease led to significant departures [54]. Risks and Challenges - The company faces significant risks in retaining top broadcasters, whose content is crucial for user engagement and revenue generation [50]. - There is a potential for legal disputes with competing platforms that could impact the retention of top broadcasters and user engagement [52]. - The company must continue to attract and retain top broadcasters to maintain its user base, which may lead to increased costs if competitors offer higher compensation [97]. - The company faces high entry barriers in the entertainment live streaming industry, competing against established platforms for user traffic and quality broadcasters [63]. - The company faces potential liabilities for user-generated content that may violate PRC laws, which could result in fines or other disciplinary actions [89][91]. - The company faces risks related to litigation, which could be costly and time-consuming, potentially affecting business operations [114]. - Negative publicity regarding the company or its services could harm its brand and reputation, impacting growth prospects [117]. Regulatory Environment - The company is subject to various risks related to doing business in China, including regulatory uncertainties and potential penalties [41]. - The company must navigate regulatory challenges in China, including the need to maintain various licenses and approvals to operate legally [74]. - The evolving regulatory environment in China poses uncertainties that could materially affect the company's operations and financial condition [96][99]. - The company is subject to regulatory compliance regarding personal data protection, and any perceived failures could lead to legal actions and reputational damage [104]. - The company may face regulatory actions or sanctions from PRC governmental authorities due to uncertainties in the interpretation of M&A Rules for overseas offerings [195]. - The Data Security Law and Personal Information Protection Law impose strict obligations on data handling, with potential fines up to RMB 10 million for violations [198][199]. Financial Performance and Projections - In the fiscal year ended December 31, 2023, total revenues decreased by 25% compared to the fiscal year ended December 31, 2022, and further decreased by 7% in the fiscal year ended December 31, 2024, primarily due to a decrease in the number of paying users [60]. - The company expects costs and expenses to continue to increase as it implements new operational and financial systems, requiring substantial management efforts and significant additional expenditures [57]. - The company acknowledges that its past growth may not be indicative of future performance due to the rapidly evolving market and limited operating history [60]. Operational Dependencies - The company relies on independent third-party distributors for selling virtual currency, with four distributors accounting for 34.2%, 14.9%, 13.9%, and 10.0% of accounts receivable as of December 31, 2022 [94]. - As of December 31, 2023, three independent third-party distributors accounted for 30.3%, 24.8%, and 12.1% of the company's accounts receivable, indicating a reliance on a few key distributors for revenue [94]. - The company relies on third-party online payment platforms like China UnionPay, WeChat Pay, and Alipay for a significant portion of its revenue, and any disruptions in these services could adversely affect payment collection and revenue [122]. - The company relies on dividends from PRC subsidiaries for cash flow, and any restrictions on these dividends could hinder business operations [163]. Corporate Structure and Compliance - The company operates through Variable Interest Entities (VIEs) due to PRC laws restricting foreign ownership, which introduces uncertainties regarding compliance and operational control [144]. - The PRC Foreign Investment Law, effective January 1, 2020, defines foreign investment but leaves uncertainties regarding the treatment of VIEs [151]. - The latest "negative list" prohibits foreign investment in certain internet-related services, impacting the company's operations through VIEs [152]. - The company relies on contractual arrangements with VIEs for operational control, which may not be as effective as direct ownership [154]. - Potential conflicts of interest with VIE shareholders may disrupt operations and affect financial conditions [156]. Technology and Security - The company relies heavily on the performance of its IT systems, and any disruptions could materially affect user satisfaction and retention [100]. - The company has developed a robust content monitoring system, but it cannot detect every incident of inappropriate content due to the vast amount of user-generated content [91]. - The company is dependent on third-party services for data storage and encryption, and disruptions in these services could adversely impact operations [107]. - As of the date of the annual report, the company has not experienced any material incidents of security breaches, but vulnerabilities remain a concern [102]. Market and Competitive Landscape - The company monitors key performance metrics such as registered users, active users, and paying users, but these metrics may overstate the actual number of unique users due to potential duplicate accounts and fraudulent registrations [120]. - The company experiences seasonal fluctuations in user engagement, with active users typically peaking in the last quarter of the year and declining during the Chinese New Year [128]. - The company may need to invest significantly in research and development to keep pace with rapid technological changes in the Internet industry, which could impact its financial performance [98].

Group 1 - Stella-Jones Inc. announced the appointment of Wesley Bourland as Senior Vice-President and Chief Operating Officer, effective April 14, 2025 [1] - Mr. Bourland has extensive experience in operations, having served as COO for a leading hardwood lumber supplier and held various leadership roles in a steel structures manufacturer [3][4] - He is a trained Mechanical Engineer with a Bachelor of Science from the University of Texas at Austin, and will focus on manufacturing, strategic planning, and process optimization [5] Group 2 - Eric Vachon, President and CEO of Stella-Jones, expressed enthusiasm for Mr. Bourland's appointment, highlighting his results-driven leadership and ability to drive operational excellence [6][7] - Stella-Jones is a leading North American manufacturer of products essential for electrical distribution, transmission, and railway transportation systems [8] - The company supplies treated wood utility poles and railway ties to major electrical utilities and railroad operators across North America [8]