Financial Performance - Net income for Q3 2025 was $6,201, an increase of $338 or 5.8% from $5,863 in Q3 2024, driven by higher operating revenues and lower income taxes [81]. - For the first nine months of 2025, net income was $14,891, a decrease of $292 or 1.9% from $15,183 in the same period of 2024, impacted by higher operating expenses and interest on debt [87]. Revenue Growth - Operating revenues for Q3 2025 increased by $646 or 3.3% to $20,361, primarily due to customer base growth and a $673 increase from the distribution system improvement charge (DSIC) approved by PPUC [82]. - Operating revenues for the first nine months of 2025 increased by $1,923 or 3.4% to $58,016, driven by customer base growth and $1,590 from the DSIC [89]. Customer Base Expansion - The average number of water customers served increased by 1,101 to 73,684 in 2025, while wastewater customers rose by 530 to 7,115, mainly due to acquisitions [82]. - The Company signed agreements to acquire wastewater and water assets, expected to add approximately 100 and 140 customers respectively, with closings anticipated in Q2 2026 [98][99]. Operating Expenses - Operating expenses for Q3 2025 rose by $787 or 6.7% to $12,447, attributed to higher distribution system maintenance, depreciation, and wages [83]. - Interest on debt for the first nine months of 2025 rose by $1,006 or 15.4% to $7,555, due to increased long-term debt and higher interest rates [91]. Debt and Capitalization - Interest on debt increased by $372 or 16.6% to $2,615 in Q3 2025, primarily due to an increase in long-term debt outstanding [84]. - Common stockholders' equity as a percentage of total capitalization decreased to 50.9% as of September 30, 2025, from 52.6% as of December 31, 2024 [109]. - The Company's total long-term debt as a percentage of total capitalization was 49.1% as of September 30, 2025, up from 47.4% at the end of 2024 [115]. - The Company has a committed line of credit of $50,000, with $37,430 borrowed as of September 30, 2025, and an interest rate of 5.45% [111]. Investments and Expenditures - The Company invested $37,102 in construction expenditures for main extensions and upgrades for the nine months ended September 30, 2025 [103]. - Anticipated construction expenditures for the remainder of 2025 are approximately $10,000, primarily funded through internally-generated funds [104]. - Internally-generated funds from operations increased to $21,432 during the first nine months of 2025, compared to $20,391 in the same period of 2024 [108]. Regulatory and Environmental Factors - Effective October 1, 2025, the Company's tariff included a DSIC on revenues of 4.89% [96]. - A drought watch was declared for 29 counties in Pennsylvania, which may impact future revenues and operating expenses [129]. - The Company maintains a substantial deferred income tax asset due to accelerated depreciation from the Tax Cuts and Jobs Act of 2017 [118]. Credit Rating - Standard & Poor's affirmed the Company's credit rating at A- with a stable outlook as of July 30, 2025 [121].

Financial Results Announcement - The York Water Company announced its third quarter and first nine months 2025 financial results on November 6, 2025[5] - The press release detailing the financial results is incorporated by reference in the Current Report on Form 8-K[5] Financial Metrics - The report does not include specific financial metrics or performance indicators in the provided content[5]

Business Segments - The company operates in three business segments: Capital Markets, Asset Management, and Principal Investing, with a focus on capital markets and asset management services [363]. - The Capital Markets segment includes unrealized and realized gains and losses on investments, with a notable focus on SPAC-related activities [367][376]. - The company has established SPAC Series Funds to invest in SPACs, which have become a significant part of the Principal Investing segment [378]. Revenue Generation - Revenue generation is primarily through fixed income sales, trading, advisory services, and asset management fees, with significant reliance on market conditions and trading volumes [367][374]. - The mortgage group's revenue is highly dependent on U.S. mortgage origination volumes, which are sensitive to interest rates and economic conditions [384]. - Rising interest rates have negatively impacted the fair value of fixed income securities and reduced mortgage activity, affecting overall profitability [386]. - Management fees are contingent on the performance of Investment Vehicles, with potential declines in demand affecting future fee income [374]. Market Conditions and Competition - Recent market conditions have led to margin pressures in the fixed income brokerage business, with expectations of continued competition impacting profitability [382]. - The company's trading activities are sensitive to market movements, with proprietary trading and riskless trades contributing to revenue generation [372]. Financial Performance - Total revenues increased by $111,767, or 183%, to $172,824 for the nine months ended September 30, 2025, compared to $61,057 for the same period in 2024 [420]. - Net trading revenue rose by $6,066 to $33,528 for the nine months ended September 30, 2025, compared to $27,462 for the same period in 2024, driven by significant gains in the gestation repo segment [421]. - New issue and advisory revenue surged by $245,311 to $298,658 for the nine months ended September 30, 2025, compared to $53,347 for the same period in 2024, primarily due to CCM's activities [433]. - Operating income increased to $29,362 for the nine months ended September 30, 2025, compared to a loss of ($2,520) for the same period in 2024, reflecting a significant turnaround [419]. - Net income attributable to Cohen & Company Inc. rose to $6,330 for the nine months ended September 30, 2025, compared to $1,824 for the same period in 2024, marking a 247% increase [419]. Operating Expenses - Total operating expenses increased by $79,885 to $143,462 for the nine months ended September 30, 2025, compared to $63,577 for the same period in 2024, primarily driven by increased compensation and benefits [419]. - Compensation and benefits rose by $76,220, or 175%, to $119,673 for the nine months ended September 30, 2025, compared to $43,453 in 2024 [453]. - Business development, occupancy, and equipment expenses increased by $1,259, or 27%, to $5,858 for the nine months ended September 30, 2025, compared to $4,599 in 2024 [456]. Cash Flow and Liquidity - Cash flow from operating activities for the nine months ended September 30, 2025, was $29,405, up from $5,042 in 2024, indicating improved operational efficiency [556]. - Cash and cash equivalents increased to $54,688 as of September 30, 2025, from $19,590 at the end of 2024, demonstrating enhanced liquidity [554]. - The company reported a net cash flow of $35,098 for the nine months ended September 30, 2025, compared to $3,640 in 2024, indicating strong cash generation [556]. SPAC Activities - Columbus Circle Capital Corp I completed the sale of 25,000,000 units in its IPO, with the company acting as the lead underwriter [387][388]. - The Columbus Circle SPAC entered a definitive business combination agreement with ProCap Financial, which will become publicly traded [401]. - Proceeds from the Business Combination are expected to be used by ProCap Financial to purchase bitcoin, aligning with its business strategy [402]. Tax and Income - Income tax expense increased by $1,208 million to $1,643 million for the nine months ended September 30, 2025, compared to $435 million in 2024 [469]. - The net income before tax for the Operating LLC was $15,998 million for the nine months ended September 30, 2025 [479]. - The net income after tax for the Operating LLC was $14,397 million for the nine months ended September 30, 2025 [479]. Future Financing Needs - The company may need to raise additional debt or equity financing to capitalize on attractive investment opportunities [557]. - Future merger or acquisition activities may require additional funding through equity or debt offerings if liquidity sources are insufficient [557].

Financial Performance - As of September 30, 2025, Lipocine had $15.1 million in unrestricted cash, down from $21.6 million at December 31, 2024, representing a decrease of approximately 30.3%[7] - The net loss for the third quarter ended September 30, 2025, was $3.2 million, or ($0.59) per diluted share, compared to a net loss of $2.2 million, or ($0.44) per diluted share, for the same period in 2024, indicating an increase in loss of 45.5%[7] - For the nine months ended September 30, 2025, Lipocine reported a net loss of $7.3 million, or ($1.35) per diluted share, compared to a net loss of $1.8 million, or ($0.33) per diluted share, for the same period in 2024, representing an increase in loss of 305.6%[13] - Total revenues for the three months ended September 30, 2025, were $114,574, compared to $0 in the same period of 2024, indicating a significant increase[26] - Total revenue for the nine months ended September 30, 2025, was $831,000, a significant decrease from $7.7 million in the same period of 2024, primarily due to a drop in license revenue from $7.5 million to $500,000[14] - License revenue for the nine months ended September 30, 2025, was $500,000, down from $7,500,000 in the same period of 2024[26] - The net loss attributable to common shareholders for the three months ended September 30, 2025, was $3,186,832, compared to a loss of $2,218,818 in the same period of 2024[26] - Comprehensive loss for the three months ended September 30, 2025, was $(3,180,962), compared to $(2,199,157) in the same period of 2024[26] Expenses - Research and development expenses increased to $2.7 million for the third quarter of 2025 from $1.6 million in the same quarter of 2024, reflecting a rise of 68.8% primarily due to ongoing clinical trials[9] - Operating expenses for the three months ended September 30, 2025, totaled $3,475,614, an increase from $2,630,473 in the same period of 2024[26] - Research and development expenses for the three months ended September 30, 2025, were $2,707,777, up from $1,585,233 in the same period of 2024[26] - General and administrative expenses decreased to $0.8 million for the third quarter of 2025 from $1.1 million in the same quarter of 2024, a reduction of 27.3%[11] - General and administrative expenses for the three months ended September 30, 2025, were $767,837, down from $1,045,240 in the same period of 2024[26] Assets and Cash Position - Lipocine's total assets decreased to $16.1 million as of September 30, 2025, from $22.5 million at December 31, 2024, a decline of approximately 28.5%[24] Product Development - Lipocine is developing LPCN 1154 for postpartum depression, with top-line data expected in Q2 2026 and plans for a 505(b)(2) NDA submission in the U.S. in 2026[4] - The company is exploring partnerships for LPCN 1154 and LPCN 2401, which targets obesity management and is expected to enter a proof-of-concept Phase 2 study[10] Revenue Sources - Royalty revenue from TLANDO sales was $115,000 during the quarter ended September 30, 2025, with no royalty revenue recorded in the comparable period in 2024[8]

Regulatory Approvals and Product Launches - TLANDO received FDA approval on March 28, 2022, and was commercially launched on June 7, 2022[95][109]. - The FDA requires an efficacy and safety study of oral LPCN 1154 in the target population for 505(b)(2) NDA submission[120]. - FDA granted orphan drug designation to LPCN 1107, providing development incentives including tax credits and waiver of user fees[174]. Licensing Agreements and Financials - Verity Pharma paid an initial payment of $2.5 million upon signing the Verity License Agreement and an additional $5 million on February 1, 2024[111]. - The company is eligible to receive milestone payments of up to $259 million based on sales and development milestones under the Verity License Agreement[111]. - The company entered into multiple licensing agreements for TLANDO, including a $2.5 million initial payment from Verity Pharma and potential milestone payments of up to $259 million[208]. - Revenue generated from license fees, royalties, and milestone payments totaled $53.9 million since inception through September 30, 2025[177]. - Total revenue for the nine months ended September 30, 2025 was $831,287, a decrease of $6.9 million compared to $7.7 million in 2024[196]. Research and Development - LPCN 1154 is being developed as a fast-acting oral antidepressant for postpartum depression with a 48-hour treatment duration[103]. - The company aims to leverage its Lip'ral drug delivery technology platform to develop differentiated products for conditions with large unmet medical needs[102]. - LPCN 2101 is being evaluated for epilepsy, including drug-resistant epilepsy and women with epilepsy[103]. - LPCN 2401 demonstrated a 4.4% increase in lean mass and a 6.7% decrease in fat mass in a Phase 2 study, indicating its potential for improving body composition in patients using GLP-1 therapies[154]. - LPCN 1148 met its primary endpoint by increasing skeletal muscle index (L3-SMI) relative to placebo (P<.01) in male cirrhotic patients, showing its efficacy in managing sarcopenia[164]. Clinical Studies and Outcomes - Positive data from a qEEG study of oral brexanolone indicated robust CNS activity, suggesting effective oral delivery of endogenous GABAA receptor PAMs[118]. - As of the end of Q3 2025, one-third of planned participants have been randomized in the Phase 3 safety and efficacy study for LPCN 1154[120]. - The Phase 2 study of LPCN 1148 showed fewer occurrences of hepatic encephalopathy (OHE) events in treated patients, suggesting improved clinical outcomes[165]. Market Opportunities and Unmet Needs - Approximately 600,000 women are affected by postpartum depression (PPD) annually, with about 240,000 diagnosed and 144,000 treated with prescription medication[126]. - LPCN 1154 aims to provide rapid relief with a 48-hour duration through a convenient oral therapy, addressing the unmet need for fast-acting treatments for PPD[128]. - Drug-resistant epilepsy (DRE) affects 30-40% of epilepsy patients in the U.S., contributing to $24.5 billion in annual healthcare costs[131]. - Approximately 74% of U.S. adults aged 20 and older are either obese or overweight, highlighting a significant market opportunity for obesity management solutions[157]. Financial Performance and Expenses - Research and development expenses amounted to approximately $160.5 million since inception through September 30, 2025[178]. - Research and development expenses for the three months ended September 30, 2025 increased by $1.35 million primarily due to LPCN 1154 Phase 3 clinical trial costs[190]. - General and administrative expenses for the three months ended September 30, 2025 decreased by $277,403 compared to the same period in 2024[191]. - As of September 30, 2025, the company had $15.1 million in unrestricted cash, down from $21.6 million as of December 31, 2024[203]. Cash Flow and Liquidity - For the nine months ended September 30, 2025, net cash used in operating activities was $6.8 million, compared to $2.9 million for the same period in 2024[217]. - The company expects to continue incurring operating losses as it advances the clinical development of multiple product candidates, including LPCN 1154 and LPCN 2401[202]. - The company has sufficient liquidity to meet projected operating requirements through at least November 6, 2026, but may need to raise additional capital[214]. Market Risks and Accounting Policies - The company is exposed to various market risks, including potential losses from adverse changes in interest rates, but does not engage in derivatives for trading or speculative purposes[227]. - There have been no material changes to the company's market risk during the first nine months of 2025, as noted in the 2024 Form 10-K[228].

Revenue Growth - Total revenue for the three months ended September 30, 2025, was $131.7 million, an increase of $15.3 million or 13.1% compared to $116.4 million for the same period in 2024[128][146]. - Annual recurring revenue (ARR) as of September 30, 2025, was $528.1 million, representing a 14.2% increase from $462.4 million as of September 30, 2024[130]. - Subscription revenue for the three months ended September 30, 2025, was $130.5 million, a 13.5% increase from $115.0 million in the same period in 2024[146][147]. - Total revenue increased by $31.5 million, or 9.0%, for the nine months ended September 30, 2025, compared to the same period in 2024[162]. - Subscription revenue increased by $33.3 million, or 9.7%, for the nine months ended September 30, 2025, representing 99.0% of total revenue[163]. Customer Metrics - The number of customers with ARR over $50,000 increased by 14.8% to 2,611 as of September 30, 2025, up from 2,275 as of September 30, 2024[131]. - The annual dollar-based net revenue retention rate for subscription products was approximately 102% for the trailing twelve-month period ended September 30, 2025, down from 105% for the same period in 2024[148][164]. Operating Income and Expenses - Operating income for the three months ended September 30, 2025, was $11.6 million, down from $23.9 million for the same period in 2024[133]. - Operating expenses rose by $17.8 million, or 24.5%, for the three months ended September 30, 2025, compared to the same period in 2024, driven by increases in sales and marketing, research and development, and general and administrative expenses[152]. - Total operating expenses for the nine months ended September 30, 2025, increased by $45.7 million, or 20.2%, to $271.6 million, representing 71.3% of revenue compared to 64.6% in 2024[167]. Net Income and Tax - Net income for the three months ended September 30, 2025, was $1.4 million, a decrease from $10.8 million for the same period in 2024, primarily due to increased expenses[133]. - The effective tax rate increased to 82.2% for the three months ended September 30, 2025, primarily due to an increase in unbenefited losses in the United States[159]. - Income tax expense decreased by $4.8 million, with an effective tax rate of 293.0% for the nine months ended September 30, 2025, primarily due to an increase in unbenefited losses in the U.S.[174]. Cash Flow and Investments - Cash flows from operations for the three months ended September 30, 2025, were $24.0 million, compared to $22.0 million for the same period in 2024[134]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $67.9 million, an increase from $53.5 million in 2024[195]. - Net cash used in investing activities increased to $22.0 million for the nine months ended September 30, 2025, compared to $15.6 million in 2024, primarily due to increased capitalized research and development costs[199]. - The company repurchased $10.0 million of common stock during the three months ended September 30, 2025, and $20.0 million during the nine months ended September 30, 2025, under its share repurchase program[192]. Acquisitions and Future Plans - The company completed the acquisition of Adlumin on November 20, 2024, contributing to revenue growth and customer expansion[130]. - The company expects to continue growing its sales and marketing organization to drive new customer additions and retain existing customers[139]. - Research and development expenses are anticipated to increase as the company brings new product offerings to market and enhances security features[140]. - The company has not entered into any material definitive agreements regarding potential investments or acquisitions but may consider such arrangements in the future[193].

Financial Performance - Net sales increased by 7.0% to $122.5 million in Q3 2025 compared to $114.6 million in Q3 2024, with growth across all reportable segments: Wholesale, Retail, and Contract Manufacturing [74]. - Year-to-date net sales for 2025 reached $342.3 million, a 5.1% increase from $325.7 million in 2024, primarily driven by growth in the Retail segment [80]. - Total net sales for the nine months ended September 30, 2025 were $342.3 million, a 5.1% increase from $325.7 million in the prior year, driven by increased demand in wholesale and retail segments [95]. - Retail net sales rose by 15.1% to $95.9 million for the nine months ended September 30, 2025, attributed to growth in the Lehigh CustomFit business and enhanced e-commerce sales [96]. - Wholesale segment net sales increased by 6.1% to $89.1 million in Q3 2025, attributed to higher demand and tariff-related price increases [84]. - Operating income for the nine months ended September 30, 2025, was $27.6 million, or 8.1% of net sales, compared to $22.6 million, or 6.9% of net sales, in the prior year [83]. Margins and Expenses - Gross margin improved by 210 basis points to 40.2% in Q3 2025, driven by favorable shifts in product mix and price increases, particularly in rubber-boot brands [74][77]. - Operating expenses increased to $37.5 million, or 30.6% of net sales, in Q3 2025, up from $33.6 million, or 29.3% of net sales, in Q3 2024, due to higher logistics and selling costs [78][91]. - Total operating expenses for the nine months ended September 30, 2025 were $112.0 million, representing 32.7% of net sales, an increase from 31.7% in the prior year [102]. - Wholesale gross margin increased to $94.8 million, or 40.0% of net sales, compared to $86.0 million, or 37.0% of net sales, for the same period last year, reflecting a favorable product mix [99]. Cash Flow and Debt - Net cash used in operating activities for the nine months ended September 30, 2025 was $1.3 million, a significant decrease from $28.4 million provided in the same period last year [111]. - An increase in inventory resulted in a cash use of $26.9 million for the nine months ended September 30, 2025, compared to $2.6 million in the prior year, driven by tariffs and anticipated demand [112]. - As of September 30, 2025, the company maintained cash and cash equivalents of $3.3 million and had $40.1 million available under its ABL Facility [106]. - Total debt decreased by 7.5% to $139.0 million as of September 30, 2025, reflecting continued debt repayments [74]. - Interest expense for the three months ended September 30, 2025 decreased to $2.5 million from $3.2 million in the prior year, a reduction of 21.6% due to lower debt levels and interest rates [92]. Tax and Legal Matters - Income tax expense increased by 25.9% to $2.0 million for the three months ended September 30, 2025, compared to $1.6 million in the same period last year [93]. - The effective tax rate decreased to 22.1% for the nine months ended September 30, 2025, down from 23.4% in the previous year, primarily due to the earnings mix between the U.S. and international subsidiaries [105]. - The Company is contingently liable for lawsuits, taxes, and other matters arising in the normal course of business, with no off-balance sheet arrangements or related party transactions affecting financial results [117]. Strategic Initiatives - The company is implementing sourcing shifts to leverage manufacturing facilities in the Dominican Republic and Puerto Rico to mitigate tariff impacts [68]. - A share repurchase program was announced on February 25, 2025, allowing for the repurchase of up to $7.5 million of the Company's outstanding common stock [116]. Accounting and Market Risk - The Company has identified critical accounting policies that impact estimates and assumptions in financial reporting, with historical results not materially differing from estimates [118]. - There have been no material changes to market risk as disclosed in the Annual Report for the year ended December 31, 2024 [121].

Financial Performance - Total revenues for the three months ended September 30, 2025, were $430,000, a decrease of 48.7% compared to $838,000 for the same period in 2024[14]. - The company reported a net income of $14,184,000 for the three months ended September 30, 2025, compared to a net loss of $1,087,000 for the same period in 2024[14]. - For the nine months ended September 30, 2025, the company reported a net income of $10.6 million compared to a net loss of $4.9 million for the same period in 2024[22]. - The company reported revenues from discontinued operations of $226,000 for the three months ended September 30, 2025, compared to $85,000 for the same period in 2024, representing a 165% increase[48]. - The company reported a net income from discontinued operations of $250,000 for the three months ended September 30, 2025, compared to a loss of $44,000 for the same period in 2024[48]. Revenue Breakdown - License fees accounted for $406,000, representing 94.4% of total revenue, down from $731,000 or 87.2% in the prior year[73]. - Net revenues from IT & Industrial in North America for the nine months ended September 30, 2025, were $329,000, down from $589,000 in 2024[36]. - In the Asia Pacific region, net revenues from Automotive for the nine months ended September 30, 2025, were $313,000, a decrease from $597,000 in 2024[36]. - Japan contributed $277,000 in revenue, accounting for 64.4% of total revenue for the three months ended September 30, 2025[62]. Expenses and Margins - Gross margin for the nine months ended September 30, 2025, was $1,518,000, down from $2,389,000 for the same period in 2024[14]. - Gross margin for the three months ended September 30, 2025, was $421,000, a decline of 48.3% from $815,000 in the same period last year[73]. - Research and development expenses for the three months ended September 30, 2025, were $794,000, slightly down from $822,000 in the same period of 2024[14]. - Research and development expenses increased by 5.6% to $2.8 million for the nine months ended September 30, 2025, compared to $2.7 million in 2024[81]. - Total costs and expenses for the three months ended September 30, 2025, were $2,127,000, compared to $2,054,000 for the same period in 2024, an increase of 3.5%[60]. Assets and Liabilities - The total current assets increased to $32,193,000 as of September 30, 2025, compared to $17,685,000 as of December 31, 2024[12]. - The company’s total liabilities were $6,016,000 as of September 30, 2025, compared to $1,939,000 as of December 31, 2024[12]. - Cash and cash equivalents decreased to $11,585,000 as of September 30, 2025, from $16,427,000 as of December 31, 2024[12]. - The accumulated deficit improved to $(213,497,000) as of September 30, 2025, from $(224,080,000) as of December 31, 2024[12]. - The company has an accumulated deficit of approximately $213.5 million as of September 30, 2025, down from $224.1 million at the end of 2024[31]. Gains and Other Income - The company recognized a gain from patent assignment of $19,389,000 for the three months ended September 30, 2025[14]. - The company recognized a gain of approximately $19.4 million from a patent assignment during the third quarter of 2025[39]. - Gain from patent assignment was $19.4 million for the nine months ended September 30, 2025[86]. Shareholder and Market Activities - The company has entered into an At The Market Offering Agreement with Ladenburg Thalmann & Co. Inc. to issue and sell up to approximately $10 million of shares of common stock[51]. - The company has an At-the-Market Offering Program allowing it to issue and sell up to $10 million of common stock, with a commission of 3.0% on gross sales price per share sold[107][108]. - No shares were sold under the Ladenburg ATM Facility during the three and nine months ended September 30, 2025, while 1,423,441 shares were sold in the same periods of 2024, generating net proceeds of $5.8 million[110]. Legal and Compliance - The company has identified material weaknesses in internal controls over financial reporting, particularly in the design and operation of controls related to income tax calculations and management override risks[119][120]. - The company is involved in ongoing legal proceedings related to patent infringement against Apple and Samsung, with a settlement reached with Samsung in August 2025[115]. Operational Considerations - The ongoing war in Ukraine may exacerbate supply chain disruptions, impacting the company's operations and financial conditions[72]. - The company has sufficient cash to meet its obligations for at least one year from the date of the financial statements, despite operating losses and negative cash flows from operations[97]. - The company may need additional capital sources beyond cash on hand and its ATM Facility if operations do not become cash flow positive, potentially leading to equity investments or debt arrangements[98].

Revenue Performance - Revenue for Q3 2025 was $533 million, a decrease of $22 million or 4.0% compared to $555 million in Q3 2024, driven by lower Net Commercial Activity and project revenue[182][193]. - Revenue for the nine months ended September 30, 2025, was $1,609 million, a decrease of $43 million or 2.6% compared to $1,652 million in the prior year period[207]. - Total Employer Solutions Revenue for Q3 2025 was $533 million, a decrease of $22 million from $555 million in Q3 2024, primarily due to declines in project revenue[230]. Recurring Revenues - Recurring revenues decreased by $15 million or 3.0%, from $504 million in Q3 2024 to $489 million in Q3 2025, primarily due to lower Net Commercial Activity[194]. - Recurring revenues decreased by $17 million or 1.1%, from $1,518 million in the prior year period to $1,501 million, primarily due to lower Net Commercial Activity[208]. Expenses and Costs - Cost of services, exclusive of depreciation and amortization, decreased by $31 million or 8.7% in Q3 2025 compared to the prior year, attributed to lower compensation expenses and productivity initiatives[195]. - Selling, general and administrative expenses decreased by $55 million or 38.7% in Q3 2025, driven by lower professional fees and a reduction in compensation expenses[197]. - Cost of services, excluding depreciation and amortization, decreased by $56 million or 5.3% for the nine months ended September 30, 2025, driven by productivity initiatives and lower revenues[209]. - Selling, general and administrative expenses decreased by $113 million or 26.0% for the nine months ended September 30, 2025, primarily due to lower compensation expenses and professional fees[211]. Goodwill Impairment - A non-cash goodwill impairment charge of $1,338 million was recorded in Q3 2025, with no impairment recognized in Q3 2024[199]. - The company recorded a non-cash goodwill impairment charge of $2,321 million for the nine months ended September 30, 2025, with no impairment recognized in the prior year[213]. - The company reported a Goodwill impairment charge of $1,338 million for Q3 2025, contributing to a net loss from continuing operations of $(1,054) million[226]. Loss from Operations - Loss from continuing operations before taxes was $1,253 million in Q3 2025, compared to a loss of $53 million in Q3 2024, primarily due to the goodwill impairment charge[204]. - Loss from continuing operations before taxes was $2,349 million for the nine months ended September 30, 2025, compared to a loss of $203 million in the prior year[219]. Tax and Interest - Income tax benefit was $204 million for the nine months ended September 30, 2025, with an effective tax rate of 9%, lower than the 21% U.S. statutory corporate income tax rate[220]. - The One Big Beautiful Bill Act (OBBBA) resulted in a deferred tax benefit of approximately $12 million for the three months ended September 30, 2025[221]. - Interest expense decreased by $15 million for the nine months ended September 30, 2025, primarily due to partial debt repayment and loan repricing[217]. Cash Flow and Liquidity - Free Cash Flow for the nine months ended September 30, 2025, was $151 million, a significant improvement from $(20) million in the same period of 2024[237]. - Cash provided by operating activities for the nine months ended September 30, 2025, was $236 million, compared to $75 million in the prior year, driven by lower separation costs[236]. - Cash provided by operating activities was $236 million for the nine months ended September 30, 2025, compared to $75 million for the same period in 2024[252]. - Cash used in investing activities was $98 million for the nine months ended September 30, 2025, compared to cash provided of $877 million in the prior year[253]. - Cash used in financing activities was $288 million for the nine months ended September 30, 2025, down from $1,028 million in the same period in 2024[254]. - The company anticipates that its liquidity position will remain strong, supported by cash flows from operations and availability under its revolving credit facility[239]. Share Repurchase and Dividends - As of September 30, 2025, the company repurchased 6,580,136 shares for $25 million and 13,881,417 shares for $65 million during the nine months[245]. - The company authorized a total of $281 million for share repurchases as of February 13, 2025[244]. - The quarterly dividend of $0.04 per share was approved for payment on December 15, 2025[248]. Adjusted Metrics - Adjusted Net Income from Continuing Operations for Q3 2025 was $62 million, compared to $48 million in Q3 2024, reflecting a 29.2% increase[226]. - Adjusted EBITDA from Continuing Operations for Q3 2025 was $138 million, up from $118 million in Q3 2024, resulting in an Adjusted EBITDA Margin of 25.9% compared to 21.3% in the prior year[228]. - Gross Profit for Q3 2025 increased to $178 million from $174 million in Q3 2024, with an Adjusted Gross Profit of $206 million, up from $200 million[233]. - Adjusted Gross Profit Margin for Q3 2025 was 38.6%, an increase from 36.0% in Q3 2024, indicating improved operational efficiency[233]. Other Financial Information - The change in fair value of the Tax Receivable Agreement resulted in a gain of $66 million in Q3 2025, an increase of $93 million compared to a loss of $27 million in Q3 2024[201]. - The change in fair value of the tax receivable agreement resulted in a gain of $34 million for the nine months ended September 30, 2025, an increase of $85 million compared to a loss of $51 million in the prior year[216]. - Depreciation and amortization expenses increased by $5 million or 21.7% in Q3 2025, primarily driven by capitalized software[196]. - Total operating expenses for Q3 2025 were $1,500 million, significantly higher than $216 million in Q3 2024, largely due to the goodwill impairment charge[182]. - The company has a remaining cash outflow of $49 million for 2025 related to its strategic partnership with Wipro[263]. - The company expects to make payments of approximately $164 million under the Tax Receivable Agreement in 2026[261].

Financial Performance - Revenues from continuing operations for Q3 2025 were $0.4 million, a decrease of 48.7% compared to Q3 2024[5] - Total revenues for the three months ended September 30, 2025, were $430 million, a decrease of 48% compared to $838 million for the same period in 2024[20] - Net income for the three months ended September 30, 2025, was $14.184 million, compared to a net loss of $1.087 million for the same period in 2024[23] - Operating income for the three months ended September 30, 2025, was $13.810 million, compared to an operating loss of $1.225 million for the same period in 2024[20] - Basic and diluted net income per share for the three months ended September 30, 2025, was $0.85, compared to a loss of $0.07 for the same period in 2024[20] Operating Expenses - Operating expenses from continuing operations for Q3 2025 were $2.1 million, an increase of 4.0% compared to Q3 2024[10] - Total operating expenses for the three months ended September 30, 2025, were $2.122 million, compared to $2.040 million for the same period in 2024[20] Cash and Assets - Cash and accounts receivable totaled $12.2 million as of September 30, 2025, down from $17.2 million as of December 31, 2024[12] - Cash and cash equivalents at the end of the period were $11.585 million, down from $17.599 million at the end of September 30, 2024[28] - Total current assets increased to $32.2 million as of September 30, 2025, compared to $17.7 million as of December 31, 2024[18] Research and Development - Research and development expenses for the nine months ended September 30, 2025, were $2.843 million, an increase of 5.6% from $2.692 million for the same period in 2024[20] Gains and Losses - The gain from patent assignment to Aequitas was $15.5 million, which was paid in October 2025[5] - The company recognized a gain from patent assignment of $19.389 million for the three months ended September 30, 2025[20] - The company experienced a foreign currency translation adjustment loss of $33,000 for the three months ended September 30, 2025[23] Strategic Focus - The company is focusing on expanding its MultiSensing AI computer vision platform for the automotive sector[7] - The legacy business is experiencing a faster decline in revenues than anticipated, prompting a shift towards securing new partnerships in the automotive market[8] Non-Recurring Revenues - Revenues from non-recurring engineering for Q3 2025 were $24,000, a decrease of 77.6% compared to Q3 2024[9] - Cash used by operations in Q3 2025 was $1.5 million, compared to $1.3 million for Q3 2024[11]