Revenue Performance - Cloud subscriptions revenue for the three months ended September 30, 2025, was $113,596, representing a 20.8% increase from $94,075 in the same period of 2024[128]. - For the nine months ended September 30, 2025, cloud subscriptions revenue reached $320,337, a 19.0% increase from $269,106 in the prior year[128]. - Subscriptions revenue for Q3 2025 reached $147.2 million, a 19.5% increase from $123.1 million in Q3 2024, driven by a $19.5 million increase in cloud subscriptions revenue[152]. - Total revenue for Q3 2025 was $187.0 million, up $33.0 million or 21% compared to $154.1 million in Q3 2024, with professional services revenue increasing by 28.7% to $39.8 million[152]. - Total revenue increased by $73.7 million, or 16.4%, to $524.1 million in the nine months ended September 30, 2025, driven by a $60.4 million increase in subscriptions revenue[161]. - Total revenue for the nine months ended September 30, 2025, was $49,138,000, compared to $38,973,000 for the same period in 2024, representing a year-over-year increase of approximately 26%[177]. Customer Retention and Acquisition - The cloud subscriptions revenue retention rate as of September 30, 2025, was 111%, down from 117% in 2024, indicating a decline in revenue retention from existing customers[129]. - The average cloud subscriptions gross renewal rate over the last three years was 98%, reflecting strong customer retention[121]. - Appian's investment in professional services aims to drive customer success and facilitate platform adoption, supported by strategic partnerships with firms like Accenture and Deloitte[115]. - The company targets organizations with over 2,000 employees and $2 billion in annual revenue, focusing on key industries such as financial services and government[118]. - Appian's business model emphasizes maximizing customer lifetime value through subscription renewals and additional purchases, with significant customer acquisition costs involved[120]. Operating Income and Expenses - Operating income for Q3 2025 was $13.1 million, compared to a loss of $7.2 million in Q3 2024, indicating a significant improvement in profitability[150]. - General and administrative expenses are expected to increase in absolute dollars in 2025 due to investments in the information technology team[147]. - Sales and marketing expenses for Q3 2025 were $51.9 million, reflecting a marginal increase in headcount and continued investment in customer acquisition[143][144]. - Research and development expenses are projected to rise as the company focuses on enhancing its software platform, with a new product development center opened in India[146]. - The company anticipates continued growth in operating expenses, albeit at a more measured rate than in previous years[142]. - Non-GAAP total operating expense for the three months ended September 30, 2025, was $113.572 million, down from $128.597 million in the previous quarter, reflecting a decrease of 11.7%[176]. - Adjusted EBITDA for the three months ended September 30, 2025, was $29.762 million, compared to an operating loss of $7.157 million in the same period of 2024[176]. - Operating income for the nine months ended September 30, 2025, was $49,681,000, significantly improved from an operating loss of $8,470,000 in the same period of 2024[177]. Net Income and Cash Flow - Net income for the nine months ended September 30, 2025, was $6.3 million, a recovery from a net loss of $78.6 million in the same period of 2024[150]. - Net income for the three months ended September 30, 2025, was $24.394 million, with diluted net income per share of $0.32, compared to a net loss of $2.100 million in the same period of 2024[176]. - For the nine months ended September 30, 2025, net cash provided by operating activities was $61.7 million, a significant increase from a net cash used of $7.0 million in the same period of 2024[194]. - Cash and cash equivalents increased by 26.3% to $125.2 million as of September 30, 2025, up from $99.2 million at the end of September 2024[193]. Expenses and Financial Metrics - Cost of revenue for subscriptions increased by 26.1% to $17.8 million in Q3 2025, while total cost of revenue rose by 22.1% to $45.3 million[154]. - Subscriptions gross margin for Q3 2025 was 87.9%, slightly down from 88.6% in Q3 2024, while professional services gross margin improved to 30.9% from 25.6%[154]. - Research and development expense rose by $1.7 million, or 4%, to $40.3 million in Q3 2025, driven by increased personnel and IT costs[156]. - General and administrative expense increased by $1.7 million, or 5%, to $36.4 million in Q3 2025, primarily due to higher personnel costs and rent expenses[157]. - Other income, net decreased by $11.1 million, or 88.9%, to a loss of $1.4 million in Q3 2025, mainly due to foreign exchange losses[158]. - Interest expense decreased by $0.9 million, or 13.9%, to $6.2 million in Q3 2025, attributed to lower effective interest rates[159]. Future Outlook and Capital Requirements - The company plans to continue investing in growth, including platform enhancements and strategic acquisitions, to capitalize on market opportunities[126]. - Future capital requirements will depend on growth rate, R&D spending, and market acceptance of new products[186]. - The company has a non-cancellable cloud hosting arrangement with AWS totaling $220,000,000 over five years, with minimum annual spending requirements of $44,000,000[190]. - A hypothetical increase of one percentage point in interest rates would increase the company's annual interest expense by approximately $2.4 million[202]. - A 10% change in foreign currency exchange rates could impact total revenue by approximately $18 million and operating loss by about $8 million for the nine months ended September 30, 2025[204].

Financial Performance - Net income attributable to the Company decreased to $0.7 million or $0.08 per diluted share for Q3 2025, down from $1.7 million or $0.20 per diluted share in Q3 2024[1][5] - Total revenues increased by $1.2 million to $12.8 million in Q3 2025, compared to $11.6 million in Q3 2024, driven by a $1.0 million increase from commercial properties[3] - Net operating loss decreased to $1.4 million in Q3 2025 from $1.7 million in Q3 2024, attributed to increased revenue offset by higher operating expenses[4] - Interest income decreased to $4.748 million in Q3 2025 from $5.917 million in Q3 2024[10] - General and administrative expenses increased to $1.594 million in Q3 2025 from $1.223 million in Q3 2024[10] - The company reported a total operating expense of $14.231 million in Q3 2025, up from $13.276 million in Q3 2024[10] - Earnings per share decreased to $0.08 in Q3 2025 from $0.20 in Q3 2024[10] Asset Management - The company sold Villas at Bon Secour, a 200-unit multifamily property, for $28 million, using proceeds to pay off an $18.767 million loan[7] - Gain on sale of assets was $755,000 in Q3 2025, contributing to overall financial performance[10] Occupancy Rates - Total occupancy was reported at 82% as of September 30, 2025, with multifamily properties at 94% and commercial properties at 58%[7]

Financial Performance - Net income attributable to common shares for Q3 2025 was $0.1 million, a significant improvement from a net loss of $17.5 million in Q3 2024[2] - Total revenue increased by $1.2 million, from $11.6 million in Q3 2024 to $12.8 million in Q3 2025, driven by a $0.3 million increase from multifamily properties and a $1.0 million increase from commercial properties[4] - Net operating loss decreased by $0.5 million, from $2.1 million in Q3 2024 to $1.6 million in Q3 2025, attributed to increased revenue offset by higher operating expenses[5] - Rental revenues for Q3 2025 were $11.9 million, compared to $11.1 million in Q3 2024, reflecting a year-over-year increase[11] - Gain on real estate transactions was $755,000 in Q3 2025, a recovery from a loss of $23.4 million in Q3 2024[11] - The company reported a basic and diluted earnings per share of $0.01 for Q3 2025, compared to a loss of $1.08 per share in Q3 2024[11] Operating Metrics - Total occupancy rate was 82% as of September 30, 2025, with multifamily properties at 94% and commercial properties at 58%[8] - Total operating expenses increased to $14.4 million in Q3 2025 from $13.7 million in Q3 2024, primarily due to higher property operating expenses and general administrative costs[11] Asset Management - The company sold Villas at Bon Secour, a 200-unit multifamily property, for $28,000, using proceeds to pay off an $18,767 loan and for general corporate purposes[8] Interest Income and Expense - Interest income decreased to $4.1 million in Q3 2025 from $5.5 million in Q3 2024, while interest expense decreased to $1.7 million from $2.1 million[11]

Financial Performance - Net income for Q3 2025 was $4.0 million, a 71.9% increase from $2.4 million in Q3 2024, with diluted earnings per share rising to $0.64 from $0.35[158]. - Operating revenue for Q3 2025 reached $16.6 million, a 15.9% increase from $14.3 million in Q3 2024[160]. - Net income for the first nine months of 2025 was $10.1 million, an increase of $2.2 million, or 28.3% compared to $7.8 million in the same period of 2024[165]. - Total operating revenue for the first nine months of 2025 was $49.1 million, up $7.7 million, or 18.5% from $41.5 million in the prior year[167]. Income and Expenses - Total noninterest income for Q3 2025 was $4.2 million, slightly up from $4.1 million in Q3 2024, while mortgage loan sales increased by 8.4%[158][162]. - Total noninterest expense for Q3 2025 was $11.5 million, an increase of $0.5 million from $11.0 million in Q3 2024, driven by higher mortgage activity and one-time fees[164]. - Total noninterest income was $13.4 million for the first nine months of 2025, an increase of $0.9 million from $12.5 million in the prior year[169]. - Total noninterest expense for the first nine months of 2025 was $35.8 million, up $3.8 million from $32.0 million in the prior year, including over $0.7 million in merger-related expenses[171]. Interest Income and Loans - Net interest income for Q3 2025 was $12.3 million, up from $10.2 million in Q3 2024, with a net interest margin of 3.48% compared to 3.16% in the prior year[161]. - Net interest income (NII) for the first nine months of 2025 was $35.7 million, an increase of $6.7 million from $29.0 million in the prior year, with a net interest margin of 3.44% compared to 3.08%[168]. - Total loans were $1.11 billion as of September 30, 2025, up $63.8 million, or 6.1% from year-end 2024[173]. Credit Losses and Delinquency - The provision for credit losses in Q3 2025 was $124,000, down from $200,000 in Q3 2024, with net charge-offs of $2,000 compared to $27,000 in the previous year[159]. - Provision for credit losses for the first nine months of 2025 was $1.1 million, compared to $0.2 million in the prior year, with net charge-offs of $132,000[166]. - Total delinquent loans at the end of Q3 2025 were $5.0 million, representing 0.45% of total loans, while the allowance for credit losses was 1.44% of total loans[160]. - Non-performing assets as a percentage of total assets decreased to 0.32% in Q3 2025 from 0.40% in Q3 2024[160]. Assets and Deposits - Total assets as of September 30, 2025, were $1.50 billion, an increase of $116.7 million, or 8.5% since December 31, 2024[173]. - Total deposits increased to $1.26 billion, an increase of $109.9 million, or 9.5% since the end of 2024[173]. - The Company had $285.0 million in liquid assets as of September 30, 2025, compared to $235.9 million at December 31, 2024[177]. Interest Rate Risk Management - The Company evaluates its exposure to interest rate changes by assessing both management processes and quantitative levels of exposure[190]. - The Federal Reserve's Joint Agency Policy Statement on Interest Rate Risk emphasizes the need for active oversight and a comprehensive risk management process[191]. - Financial institutions face lower profit margins if they cannot adapt to changing market interest rates, particularly when assets are funded with short-term liabilities[192]. - Institutions can manage interest rate risk through matching repricing periods, selling assets, repaying liabilities, or using hedging strategies[193]. - The Company does not currently utilize derivative financial instruments for interest rate risk management but may consider them as market conditions warrant[193]. - There has been no material change in the Company's market risk from the information in the Annual Report for the year ended December 31, 2024[194].

Financial Performance - The company reported a decrease in net income for the three months ended September 30, 2025, primarily due to a decrease in interest income from related party receivables [54]. - For the nine months ended September 30, 2025, net income also decreased, again attributed to a decline in interest income from related party receivables [55]. Cash Management - The principal sources of cash for the company are expected to continue being the collection of mortgage notes receivables and collections from related companies [56]. - As of September 30, 2025, the company anticipates that its cash and cash equivalents, along with cash generated from related party receivables over the next twelve months, will be sufficient to meet current cash requirements [57]. Related Party Transactions - The company engages in business transactions with related parties, which may not always be favorable and could include terms not beneficial to its interests [42]. - The company operates under an Advisory Agreement with Pillar, which manages its operations and is considered a related party due to common ownership [43]. - The company’s operating expenses primarily consist of general and administrative costs, including fees paid to related parties [52]. - The company has no employees; services are rendered by employees of Pillar under the Advisory Agreement [43]. Risk Factors - The company acknowledges various risks that could impact performance, including financing availability, economic downturns, and dependence on key personnel [44]. Fair Value Measurement - The company applies ASC Topic 820 for fair value measurements of real estate assets, prioritizing inputs based on their transparency [47].

Sales Performance - The average net realized sales price per ton of potash increased to $381 for Q3 2025, up from $356 in Q3 2024, while the nine-month average decreased to $345 from $387 year-over-year[110]. - Sales volume of potash increased by 15% and 28% in Q3 and the first nine months of 2025, respectively, compared to the same periods in 2024, due to improved production volumes[110]. - The average net realized sales price per ton of Trio rose to $402 and $362 for Q3 and the first nine months of 2025, respectively, compared to $312 and $305 in the same periods of 2024[113]. - Total sales for the three months ended September 30, 2025, decreased by $4.3 million, or 8%, compared to the same period in 2024, primarily due to a $7.6 million decrease in oilfield solutions segment sales[119]. - Potash segment sales increased by $4.1 million during the three months ended September 30, 2025, with a 15% increase in tons sold and a 7% increase in average net realized sales price per ton[119]. - Trio segment sales decreased by $0.8 million, or 4%, in the three months ended September 30, 2025, with a 20% reduction in tons sold, while the average net realized sales price per ton increased by 29%[120]. - Total sales for the nine months ended September 30, 2025, increased by $23.6 million, or 12%, compared to the same period in 2024, with Trio segment sales up by $19.2 million and potash segment sales up by $14.1 million[131]. - Potash sales increased by 28% in the nine months ended September 30, 2025, despite an 11% decrease in the average net realized sales price per ton[155]. Financial Performance - Gross margin for the three months ended September 30, 2025, was $10.6 million, compared to $7.7 million in the same period in 2024, due to increased average net realized sales prices[125]. - Net income for the three months ended September 30, 2025, was $3.7 million, compared to a net loss of $1.8 million in the same period in 2024[130]. - Gross margin increased to $39.5 million during the nine months ended September 30, 2025, from $21.8 million in the same period of 2024[139]. - Net income for the nine months ended September 30, 2025, was $11.6 million, a significant improvement from a net loss of $5.8 million in the same period of 2024[144]. - The average net realized sales price per ton decreased by approximately $70 compared to the beginning of 2024, impacting overall revenue[155]. - The effective tax rate for the nine months ended September 30, 2025, was 4.0%, significantly lower than the 15.8% effective tax rate for the same period in 2024[182]. Segment Performance - Oilfield solutions segment sales decreased by $7.6 million, or 74%, in the three months ended September 30, 2025, driven by a $7.4 million decrease in water sales[120]. - Cost of goods sold for the oilfield solutions segment decreased by 62% in Q3 2025, primarily due to not purchasing third-party water, which had cost $3.6 million in Q3 2024[171]. - Gross margin for the oilfield solutions segment decreased by $3.1 million in Q3 2025, mainly due to reduced water sales[172]. - The potash segment gross margin increased by $0.7 million in the nine months ended September 30, 2025, compared to the same period in 2024[160]. - The potash sales mix for the nine months ended September 30, 2025, included 78% agricultural, 4% industrial, and 18% feed[161]. Costs and Expenses - Cost of goods sold for the potash segment increased by $10.7 million, or 16%, during the nine months ended September 30, 2025, due to the increased volume of sales[134]. - Oilfield solutions segment cost of goods sold decreased by $5.5 million, or 40%, during the nine months ended September 30, 2025, as total segment sales decreased[137]. - Selling and administrative expenses rose by $1.7 million, or 7%, during the nine months ended September 30, 2025, primarily due to increased professional services and stock compensation expenses[140]. Cash Flow and Investments - Cash paid for capital investments during the nine months ended September 30, 2025, totaled $20.2 million, with expectations to invest between $30 million to $34 million in 2025[185][186]. - As of September 30, 2025, cash and cash equivalents increased to $77.2 million from $41.3 million at December 31, 2024, primarily due to increased potash and Trio segment sales[187]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $46.9 million, a decrease of $18.1 million compared to the same period in 2024[189]. - The company expects to fund its 2025 operating plans and capital programs primarily from operating cash flows and existing cash[186]. Other Notable Information - The company is continuing to evaluate options for an injection well and pipeline to connect the AMAX mine to the HB injection system, with necessary permits expected to be completed in Q1 2026[115]. - The company is pursuing opportunities to supply or source water for additional fracs on or near Intrepid South, although the timing of these opportunities is uncertain[113]. - The company recorded no impairment expense for the Trio segment in Q3 2025, following previous impairments in 2023 and 2024[165]. - The percentage of Trio tons sold in the domestic market was 89% for Q3 2025, up from 84% in Q3 2024[168]. - The company had no borrowings outstanding under its $150 million revolving credit facility as of September 30, 2025[193]. - The share repurchase program approved in February 2022 has approximately $13 million remaining available, with no shares repurchased in the three and nine months ended September 30, 2025[195].

Financial Performance - For the three months ended September 30, 2025, net sales were $8.3 billion, a decrease from $8.5 billion in the same period of 2024[122] - Net income attributable to Cummins Inc. for the three months ended September 30, 2025, was $536 million, down from $809 million in the prior year[122] - Earnings per diluted share for the three months ended September 30, 2025, were $3.86, compared to $5.86 in the same period of 2024[122] - For the nine months ended September 30, 2025, net sales were $25.1 billion, a decrease from $25.7 billion in the same period of 2024[124] - Net income attributable to Cummins Inc. for the nine months ended September 30, 2025, was $2.3 billion, down from $3.5 billion in the prior year[124] - The decrease in net income for the nine months was attributed to the absence of a $1.3 billion gain from the divestiture of Atmus in 2024 and lower demand in on-highway commercial truck markets[124] - Total net sales decreased by 2% to $8.317 billion for the three months ended September 30, 2025, compared to $8.456 billion in the same period of 2024[125] - EBITDA for the three months ended September 30, 2025, was $1.166 billion, a decrease of 14% compared to $1.389 billion in 2024[129] Sales and Market Trends - Net sales in the U.S. and Canada declined by 4% to $4.972 billion, primarily due to lower demand in medium-duty and heavy-duty truck markets[125] - International sales increased by 2% to $3.345 billion, driven by higher sales in China and Europe, partially offset by lower sales in Latin America and Asia Pacific[125] - Components segment sales decreased by 15% primarily due to lower demand in North American heavy-duty and medium-duty truck markets and the divestiture of Atmus[142] - Engine segment sales decreased by 11% largely due to lower demand in North American medium-duty and heavy-duty truck markets[143] - Heavy-duty truck sales for the three months ended September 30, 2025, decreased by $249 million (24%) due to weaker demand, with shipments down 36% in North America[174] - Light-duty automotive sales increased by $188 million (48%) for the three months ended September 30, 2025, driven by higher pick-up demand and non-tariff pricing[174] - Distribution segment external sales for Q3 2025 increased by $228 million (8%) compared to Q3 2024, totaling $3,170 million[179] - Power generation sales in the Power Systems segment rose by $225 million (21%) in Q3 2025, driven by higher demand in North America, India, and China[184] Expenses and Charges - The Accelera segment experienced a goodwill impairment charge and inventory write-down, impacting overall performance[122] - The company recorded $240 million in non-cash charges in its electrolyzer business for the Accelera segment in September 2025[132] - Other operating expense, net increased significantly to $(247) million for the three months and $(321) million for the nine months ended September 30, 2025, primarily due to goodwill impairment[157] - Interest expense remained flat at $83 million for the three months but decreased by $34 million (12%) to $247 million for the nine months ended September 30, 2025[158] - Selling, general and administrative expenses decreased by $18 million (2%) for the three months and $135 million (5%) for the nine months ended September 30, 2025[149][150] - Research, development and engineering expenses decreased by $14 million (4%) for the three months and $61 million (6%) for the nine months ended September 30, 2025[151][153] Cash Flow and Capital Management - Cash generated from operations for the nine months ended September 30, 2025, was $2.1 billion, a significant increase from $65 million in the same period of 2024[130] - The company's working capital as of September 30, 2025, was $7,266 million, significantly up from $3,518 million at December 31, 2024[194] - Net cash provided by operating activities for the nine months ended September 30, 2025, increased by $2,022 million compared to the same period in 2024, primarily due to lower working capital requirements[195] - The company had $353 million of commercial paper outstanding as of September 30, 2025, which reduced the available capacity under revolving credit facilities to $3.6 billion[206] - Capital expenditures for the nine months ended September 30, 2025, were $691 million, an increase from $668 million in the same period in 2024, with plans to spend $1.2 billion to $1.3 billion in 2025[211] Dividends and Shareholder Returns - The company authorized a 10% increase in its quarterly dividend from $1.82 to $2.00 per share in July 2025[133] - The company paid dividends of $778 million during the nine months ended September 30, 2025, with a quarterly dividend increase of approximately 10% from $1.82 to $2.00 per share authorized in July 2025[210] Debt and Liquidity - The debt to capital ratio improved to 36.8% as of September 30, 2025, down from 38.4% at December 31, 2024[131] - The company entered into a new 3-year credit agreement allowing it to borrow up to $2.0 billion of unsecured funds prior to June 2, 2028[136] - The company maintains strong credit ratings, with a long-term rating of A from Standard and Poor's and A2 from Moody's, both with a stable outlook[217] - The company assesses its liquidity as strong, with adequate cash flow to fund operating, investing, and financing activities through 2025 and beyond[218] Segment Performance - Engine segment external sales for the three months ended September 30, 2025, decreased by $293 million (13%) to $1,922 million, while total sales decreased by $308 million (11%) to $2,605 million[171] - Engine segment EBITDA for the three months ended September 30, 2025, decreased by $166 million (39%) to $261 million, primarily due to lower volumes and higher material costs[171] - The nine months ended September 30, 2025, saw a decrease in Engine segment sales by $717 million (8%) compared to the same period in 2024[173] - Components segment external sales for Q3 2025 decreased by $301 million (13%) compared to Q3 2024, totaling $1,986 million[175] - Total sales for the Components segment for the nine months ended September 30, 2025, decreased by $1.3 billion (15%) compared to the same period in 2024, totaling $7,704 million[176] - Distribution segment EBITDA for Q3 2025 increased by $122 million (33%) compared to Q3 2024, totaling $492 million[181] - Distribution segment EBITDA for the nine months ended September 30, 2025, increased by $335 million (34%) compared to the same period in 2024, totaling $1,313 million[182] - Power Systems segment external sales for Q3 2025 increased by $214 million (23%) to $1,126 million compared to Q3 2024[183] - Accelera segment total sales for Q3 2025 increased by $11 million (10%) to $121 million, mainly due to higher sales for electrified powertrains[187] - Accelera segment sales for the nine months ended September 30, 2025, increased by $15 million (5%) to $329 million, primarily due to improved sales of electrified powertrains[188] Taxation - Income tax expense increased by $36 million in the third quarter of 2025 due to changes in U.S. federal income tax rules[160] - The effective tax rate for 2025 is expected to be approximately 26.5%, a 2% increase from prior estimates due to The Act and non-deductible goodwill impairment[161] - For the three months ended September 30, 2025, the effective tax rate was 32.7%, compared to 19.2% for the same period in 2024[162] Foreign Currency and Other Adjustments - The foreign currency translation adjustment resulted in a net loss of $67 million for the three months ended September 30, 2025, compared to a net gain of $165 million for the same period in 2024[168]

Revenue Performance - Revenues declined 4% due to a significant drop in ocean services, with ocean freight and other services decreasing by 27%[61] - Customs brokerage and other services revenues increased by 13%, while airfreight services revenues grew by 3%[61] - Airfreight services revenues increased by 3% to $1,020,258, while expenses rose by 4% to $766,783 for the three months ended September 30, 2025, compared to the same period in 2024[72] - Ocean freight services revenues decreased by 27% to $746,120, and expenses decreased by 31% to $542,304 for the three months ended September 30, 2025, compared to the same period in 2024[77] - Customs brokerage and other services revenues increased by 13% to $1,128,373, with expenses rising by 11% to $630,570 for the three months ended September 30, 2025, compared to the same period in 2024[84] - Ocean freight consolidation revenues decreased by 35% for the three months ended September 30, 2025, primarily due to a 33% decrease in average sell rates[78] - North Asia ocean freight revenues decreased by 43% for the three months ended September 30, 2025, driven by lower volumes and average rates[79] Operating Income and Earnings - Operating income decreased by 4% and net earnings to shareholders decreased by 3% compared to Q3 2024[61] - Operating income for the three months ended September 30, 2025, was $288,042, a decrease of 4% compared to $301,524 in the same period in 2024[72] - Net earnings attributable to shareholders decreased by 3% to $222,256 for the three months ended September 30, 2025, compared to $229,574 in the same period in 2024[72] - Earnings per share increased by 1% to $1.64, with cash from operating activities rising to $201 million from $90 million in Q3 2024[61] Costs and Expenses - Salaries and related costs increased by 9% to $490,437 for the three months ended September 30, 2025, primarily due to a 7% increase in headcount[88] - Other overhead expenses increased by 14% to $176,615 for the three months ended September 30, 2025, driven by technology-related expenses and higher rental costs[92] Cash Flow and Capital Expenditures - Net cash provided by operating activities for Q3 2025 was $201 million, up from $90 million in Q3 2024, and for the nine months ended September 30, 2025, it was $723 million compared to $474 million in the same period in 2024, reflecting an increase of $111 million and $249 million respectively due to changes in working capital[99] - Cash used in investing activities for Q3 2025 was $10 million, compared to $13 million in Q3 2024, and for the nine months ended September 30, 2025, it was $39 million versus $30 million in the same period in 2024, primarily for capital expenditures[103] - Cash used in financing activities during Q3 2025 was $150 million, compared to $76 million in Q3 2024, and for the nine months ended September 30, 2025, it was $655 million versus $659 million in the same period in 2024[104] - Total anticipated capital expenditures for 2025 are estimated to be approximately $60 million, including routine capital expenditures, leasehold and building improvements, and investments in technology[103] Tax and Currency Impact - The effective income tax rate decreased to 25.2% for the three months ended September 30, 2025, compared to 26.4% in the same period in 2024[94] - An average 10% weakening of the U.S. dollar would have raised operating income by approximately $46 million for the nine months ended September 30, 2025[113] - Net foreign currency transactional losses for Q3 2025 were approximately $3 million, a decrease from $11 million in Q3 2024, while for the nine months ended September 30, 2025, losses were approximately $20 million compared to gains of less than $1 million in the same period in 2024[114] Trade Environment and Regulatory Changes - The U.S. government has imposed significantly higher tariffs on imports, affecting trade dynamics and creating an unpredictable environment[62] - The termination of the "de minimis" exemption for goods made in China and Hong Kong has added complexity to customs declarations[62] - High demand for customs brokerage services has resulted in increased revenues from customs declaration fees due to a dynamic trade environment[61] - The global economic environment remains uncertain, with inflation, high interest rates, and geopolitical conflicts impacting trade[65] - Seasonal demand trends indicate that the first quarter is typically the weakest, while the third and fourth quarters are the strongest[66] Financial Position - As of September 30, 2025, working capital was $1,627 million, including cash and cash equivalents of $1,190 million, with no long-term obligations or debt other than recorded lease liabilities[99] - At September 30, 2025, borrowings under international unsecured bank lines of credit were $36 million, with contingent liabilities of $80 million from standby letters of credit and guarantees[107] - The company had approximately $132 million of net unsettled intercompany transactions as of September 30, 2025, with the majority resolved within 30 days[114] - The company had fixed lease payment obligations of $724 million as of September 30, 2025, with $143 million payable within 12 months[108]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) November 6, 2025 Income Opportunity Realty Investors, Inc. (Exact name of registrant as specified in its charter) Nevada 001-14784 75-2615944 (State or other jurisdiction of Incorporation or organization) (Commission File Number) (IRS Employer Identification Number) 1603 LBJ Freeway, Suite 800 D ...

Financial Performance - The company reported net sales of $69,002,000 for the three months ended September 28, 2025, an increase of $3,643,000 or 5.6% compared to the same period in 2024[68] - Gross profit increased to $15,396,000, reflecting a 30.5% increase year-over-year, driven by higher prices, increased unit volumes, and effective cost controls[68] - Operating income surged to $3,778,000, a significant increase of 276.3% compared to the prior year[68] - The MasterCraft segment achieved net sales of $58,145,000, up 4.7% from $55,533,000 in the previous year, with operating income rising by 48.1% to $5,468,000[70] - The Pontoon segment's net sales increased by 10.5% to $10,857,000, with a reduction in operating loss by 37.2% to $1,690,000[72] - Consolidated gross margin improved by 420 basis points to 22.3% compared to 18.1% in the prior year[69] - Income from continuing operations for the three months ended September 28, 2025, was $3.656 million, representing a margin of 5.3%, compared to $1.016 million and 1.6% for the same period in 2024[80] - Adjusted EBITDA for the three months ended September 28, 2025, was $6.705 million, or 9.7% of net sales, up from $3.842 million and 5.9% in the prior year[80] - Adjusted Net Income for the three months ended September 28, 2025, was $4.532 million, compared to $1.938 million in the same period of 2024[81] Cash Flow and Financial Position - Free cash flow for the three months ended September 28, 2025, was $(10.127) million, a decrease from $(2.707) million in the prior year[81] - Cash and cash equivalents increased to $31.8 million as of September 28, 2025, up by $2.9 million from $28.9 million as of June 30, 2025[84] - Net cash used in operating activities for the three months ended September 28, 2025, was $(7.047) million, primarily due to working capital usage[87] - Net cash provided by investing activities was $12.012 million for the three months ended September 28, 2025, including $15.1 million from available-for-sale securities[88] - The company had no long-term debt outstanding as of September 28, 2025, with $100.0 million available under the Revolving Credit Facility[84] Shareholder Actions - The company repurchased 116,370 shares of common stock for $2.3 million during the three months ended September 28, 2025, as part of a $50 million share repurchase program[85] Taxation - The income tax expense for fiscal 2026 was at a rate of 23.0%, compared to 20.0% for fiscal 2025[82] Operational Insights - Unit sales volume for MasterCraft was 377, a slight increase of 0.8%, while Pontoon unit sales rose by 6.2% to 188[70][72] - Operating expenses increased by $824,000, primarily due to senior leadership transition costs and timing of commercial activities[69] - The company emphasized the importance of non-GAAP financial measures to provide a clearer view of ongoing business performance, excluding certain non-cash charges[65][77]