Competition and Market Position - The quick service restaurant (QSR) pizza category is highly competitive, with significant competition from national chains like Pizza Hut, Papa John's, and Little Caesars, as well as local establishments[93]. - The company’s ability to maintain its competitive position is crucial, as failure to do so could lead to reduced margins and loss of market share[96]. - The company faces risks related to franchisee operations, including potential defaults and the impact on royalty payments and brand goodwill[135]. Growth Strategy and Expansion - The company’s growth strategy includes opening new U.S. and international franchised stores to increase global retail sales and operating income, but challenges exist in finding suitable franchisees and locations[98]. - As of December 28, 2025, the company had 754 independent U.S. franchisees operating 6,924 U.S. franchise stores, with the largest franchisee owning 160 stores[116]. - The company achieved a net store growth of 776 stores in 2025, including 172 net store openings in the U.S. and 604 internationally[216]. Financial Performance - Total revenues increased by $233.6 million, or 5.0%, to $4,940.0 million in 2025, driven by higher supply chain revenues, U.S. franchise advertising revenues, and U.S. franchise royalties and fees[223]. - Income from operations increased by 8.5% in 2025, reflecting improved gross margin dollar performance within the supply chain[216]. - The total global retail sales for 2025 reached $20,126.8 million, compared to $19,124.2 million in 2024[213]. Costs and Expenses - Labor and food costs have seen significant increases, with labor costs representing approximately 55% to 65% of sales at a typical Company-owned store, which could adversely affect profitability[105]. - The company has experienced and anticipates further increases in payroll expenses due to government-mandated minimum wage increases, which may materially affect financial results[157]. - General and administrative expenses rose by $4.6 million, or 1.0%, in 2025, primarily due to severance expenses related to an organizational realignment[237]. Supply Chain and Operational Risks - The company faces risks from supply chain disruptions, which could adversely affect the availability and cost of ingredients and equipment[108]. - The company operates 22 regional dough manufacturing and supply chain centers in the U.S. and five in Canada, with plans to continue investing in supply chain productivity initiatives[112]. - The company relies on third-party service providers for critical operations, and failures in these systems could materially affect business[126]. Cybersecurity and Technology - Cyber incidents pose significant risks, including operational interruptions and potential data breaches, which could harm the company's brand and financial results[124]. - The company has implemented processes to mitigate cybersecurity risks, but these measures may not fully protect against potential incidents[125]. - Cybersecurity risks are actively managed by the company's Board of Directors and Audit Committee, with regular updates on the cybersecurity risk profile and strategy[169]. International Operations and Currency Risks - The company faces risks from international operations, including political, economic, and regulatory changes that could adversely affect profitability[113]. - International franchise royalties and fees accounted for approximately 6.9% of total revenues in 2025, 6.8% in 2024, and 6.9% in 2023, with a significant portion denominated in foreign currencies[164]. - A hypothetical 10% adverse change in foreign currency rates could have resulted in a negative impact on international royalty revenues of approximately $30.0 million in 2025[164]. Environmental and Regulatory Compliance - The company is committed to achieving net zero carbon emissions by 2050, with near-term targets approved by the Science Based Targets initiative (SBTi) for 2032[138]. - The company is subject to extensive laws and regulations, and non-compliance could lead to fines or sanctions that negatively impact business operations[152]. - Changes in regulatory environments, such as the National Labor Relations Board's rulings, could increase operational costs and liabilities for the company[154]. Financial Position and Debt - The company's consolidated total indebtedness was approximately $4.82 billion as of December 28, 2025[140]. - Rising interest rates could increase interest expenses, affecting cash flow and financial flexibility[142]. - The company is subject to restrictive covenants in its securitized debt agreements, which could limit operational flexibility and ability to pay dividends[145]. Shareholder Returns and Capital Management - The company has a remaining $459.7 million under its $1.0 billion share repurchase authorization approved on February 21, 2024[187]. - Domino's declared a quarterly dividend of $1.99 per common share, payable on March 30, 2026[185]. - Share repurchase programs utilized cash of $354.7 million in 2025, $327.0 million in 2024, and $269.0 million in 2023[268].

Exhibit 99.1 For Immediate Release Contact: Greg Lemenchick Vice President - Investor Relations investorrelations@dominos.com Domino's Pizza® Announces Fourth Quarter and Fiscal 2025 Financial Results Global retail sales growth (excluding foreign currency impact) of 4.9% for the fourth quarter; 5.4% growth for fiscal 2025 U.S. same store sales growth of 3.7% for the fourth quarter; 3.0% growth for fiscal 2025 International same store sales growth (excluding foreign currency impact) of 0.7% for the fourth qu ...

Exhibit 99.1 MoonLake Announces Positive Topline Results from its Phase 2 Clinical Trial of Sonelokimab in Axial Spondyloarthritis and Reports 2025 Financial Results ZUG, Switzerland, February 22, 2026 – MoonLake Immunotherapeutics (NASDAQ:MLTX) ("MoonLake" or the "Company"), a clinical-stage biotechnology company focused on creating next-level therapies for inflammatory diseases, today announces topline results from the S-OLARIS Phase 2 trial of SLK in patients with radiographic and non-radiographic axSpA ...

Merger and Acquisition - Omnicom completed its merger with IPG on November 26, 2025, with legacy Omnicom shareholders owning approximately 60.6% and legacy IPG shareholders owning approximately 39.4% of the combined company[17]. - The merger was structured as a tax-free reorganization, and IPG's results will only be included in Omnicom's financial statements from the Closing Date onward[18]. - Omnicom exchanged approximately 94% of IPG's outstanding senior notes, totaling $2.76 billion, for new notes issued by Omnicom[19]. - The merger with IPG may result in significant costs exceeding initial expectations, impacting financial condition and cash flows[70]. - There is uncertainty regarding the retention of key management personnel post-merger, which could disrupt operations and client relationships[69]. - The integration of the two companies' operations may face challenges, including managing a larger, more complex business and achieving anticipated cost savings[71]. - The company may not fully realize the expected benefits of the merger, which could affect adjusted earnings per share and cash returns to shareholders[74]. Financial Performance - Revenue for the year ended December 31, 2025, was $17,271.9 million, an increase of $1,582.8 million (10.1%) compared to 2024[158]. - Operating income for 2025 was $444.7 million, a decrease of $1,829.9 million, or 80.4%, from 2024[129]. - Net income for Omnicom Group Inc. was a loss of $54.5 million in 2025, down from a profit of $1,480.6 million in 2024[129]. - Operating margin for 2025 was 2.6%, a significant drop from 14.5% in 2024, representing a decline of 11.9 percentage points[158]. - EBITA for 2025 was $560.5 million, down from $2,362.1 million in 2024, a decrease of $1,801.6 million[158]. - The year-over-year increase in worldwide revenue reflected constant currency growth of $1,458.2 million, or 9.3%[171]. - In 2025, operating expenses included $1,247.0 million related to severance and efficiency initiatives, reducing operating income by $2,141.4 million[159]. Client and Revenue Composition - Omnicom's client base is diverse, with no single industry representing more than 15% of revenue in 2025, and the largest client contributing 2.4% of revenue[34]. - In 2025, the largest client represented approximately 2.4% of total revenue, while the top 100 clients accounted for about 54% of revenue[55]. - The Pharmaceuticals and Healthcare sector accounted for 15% of total revenue in 2025, consistent with previous years[183]. - The Technology sector maintained an 8% share of total revenue across 2023 to 2025[183]. Operational Insights - The company employs approximately 120,000 people globally, with the largest employee base in the United States at around 37,700[38]. - Omnicom's revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns[28]. - The company focuses on revenue growth and variability of operating expenses as key performance indicators[29]. - Omnicom's business model emphasizes a client-centric approach, facilitating collaboration across multiple agencies to meet specific client needs[25]. Technology and Innovation - Omnicom's new Omni platform integrates AI and data capabilities to enhance marketing services and client performance[26]. - The company is committed to responsible AI practices while evaluating risks related to privacy and data security[27]. - The company has entered into strategic partnerships with leading AI technology firms in 2023 to enhance product and service capabilities using AI[62]. Economic and Market Risks - A period of sustained inflation could lead to increased operating costs, particularly in salary and service costs, affecting overall financial condition[45]. - The company relies on information technology systems and faces cybersecurity risks that could adversely affect business operations and financial results[56]. - Currency exchange rate fluctuations have historically impacted the company's financial condition and will continue to do so in the future[67]. - The company operates in high-growth markets and developing countries, which may lead to longer billing collection cycles and increased operational risks[68]. Compliance and Regulatory Risks - Legal and regulatory risks may limit service scope and affect client relationships, potentially leading to reduced spending on services[79]. - Compliance with evolving privacy and data protection laws requires significant resources, and any failure could adversely affect business operations[80]. - Changes in tax laws and regulations could increase tax complexity and adversely impact effective tax rates and cash flows[86]. Financial Position and Liquidity - The liquidity and long-term financing needs are significantly influenced by the operating cash flows of the company's agencies[65]. - The company may need to restructure debt or sell assets if operating cash flow significantly declines, impacting financial condition[65]. - The aggregate principal amount of long-term debt is $9.3 billion, with future interest payments totaling $2.1 billion[214]. - The company has a $3.5 billion unsecured multi-currency revolving credit facility, expiring on November 26, 2030, to support liquidity needs[208].

Revenue Growth and Financial Performance - Revenue increased from $115.8 million in 2023 to $396.3 million in 2024, and further to $852.5 million in 2025, indicating significant growth[69] - Net income recorded was $219.1 million in 2025, with net losses of $83.4 million and $26.3 million in 2024 and 2023 respectively[72] - In 2025, one end customer represented over 70% of total revenue, while the top three customers accounted for approximately 86%[82] - The company anticipates continued dependence on a limited number of end customers for a significant portion of revenue, which may increase in the future[82] Costs and Investments - The company expects to incur increasing costs to support anticipated future growth, including significant investments in research and development[72] - Research and development expenses for the years ended December 31, 2025, and 2024, were $304.0 million and $200.8 million, respectively, highlighting the company's commitment to innovation[106] Market and Customer Dynamics - The adoption and commercialization of AI technology remain uncertain, which could adversely affect the company's business and financial condition[65] - The company may face challenges in accurately predicting future revenue due to rapid market changes and dependence on a limited customer base[74] - The introduction of new products is critical for maintaining revenue growth, and failure to meet customer demands could lead to significant revenue declines[75] - The company may pursue acquisitions and investments, which could disrupt operations and affect financial results[65] - The company aims to maximize return on investment by aligning with customers to address high-value problem sets, particularly in cloud and AI markets[107] Manufacturing and Supply Chain Risks - The company relies on a limited number of third-party manufacturing partners, and any disruptions could adversely affect product marketing and sales[65] - The company faces risks related to third-party manufacturing partners, particularly with TSMC as the sole supplier for integrated circuits, which could impact product availability and revenue[97] - Geopolitical uncertainties in regions where manufacturing partners are located, such as Taiwan and China, could disrupt operations and affect financial performance[99] - The company does not maintain long-term supply contracts with manufacturing partners, which could lead to supply disruptions and negatively impact financial results[120] - The company relies on third-party manufacturing partners for production, and any issues with yields or quality could harm its reputation and customer relationships[131] Product Development and Market Acceptance - The company relies heavily on design wins, which are critical for generating sales and recouping investments in product development[87] - A design win does not guarantee sales, and delays or cancellations from customers can adversely affect financial results due to significant expenses incurred during the design process[88] - The qualification process for products can take several months, and even after qualification, there is no assurance of volume sales, which may lead to excess or obsolete inventory[105] - The complexity of products may lead to unforeseen delays or defects, adversely affecting market acceptance and operational costs[125] - The company may incur significant design and development costs for products that do not achieve market acceptance, adversely affecting financial results[203] Regulatory and Compliance Challenges - Compliance with emerging regulations, such as the EU AI Act, may increase research and development costs and operational burdens[95] - The company is subject to enhanced reporting and compliance obligations as a large accelerated filer, which may increase legal and financial compliance costs[244] - The company faces risks related to cybersecurity and data privacy, with evolving regulations that could increase compliance costs and expose it to significant penalties[160] - Changes in laws and regulations could materially affect the company's business, financial condition, and results of operations, particularly regarding export controls and international sales[182] Financial Risks and Market Conditions - Gross margins may decline due to factors such as customer and product mix, revenue mix, and competitive pricing dynamics, which could negatively impact financial results[108][109] - The company may offer favorable pricing to attract or retain customers, which could decrease product prices and adversely affect gross margins[110] - The company anticipates fluctuations in demand for its products, which could lead to excess inventory or missed revenue opportunities[119] - Economic conditions, including inflation and geopolitical developments, may adversely affect demand for the company's products and its overall financial performance[172] - The semiconductor industry is highly cyclical, with fluctuations in supply and demand impacting operating results and customer inventory levels[134] Intellectual Property and Legal Risks - The company has issued 26 patents in the United States and one in foreign jurisdictions, with 35 patent applications pending in the U.S. and five pending abroad as of December 31, 2025[204] - The company may face claims of intellectual property infringement, which could be costly and time-consuming to defend, potentially harming customer relationships[215] - The company’s ability to protect its intellectual property rights may be compromised in foreign jurisdictions, affecting competitive positioning[211] - The company may need to initiate litigation to protect its intellectual property, which could divert resources and negatively impact business operations[206] - The company’s agreements with customers often include indemnification clauses, which could lead to substantial expenses in the event of litigation[218] Stock and Investment Considerations - The company’s common stock has been publicly traded since March 2024, and its market price may continue to be volatile, impacting investment value[221] - The company expects to issue additional capital stock in the future, which may result in dilution to existing stockholders[231] - The company recognizes that fluctuations in revenue and operating results could cause its share price to decline[226] Operational and Management Challenges - Attracting and retaining qualified personnel, especially in design and technical roles, is critical for executing the business strategy[146] - Cybersecurity risks, including data breaches and system vulnerabilities, pose significant threats to the company's operations and reputation[150] - The company is transitioning to a new enterprise resource planning (ERP) system, which may lead to delays and unexpected costs, potentially impacting financial reporting and operational efficiency[167] - The company incurred stock-based compensation expense of $160.0 million during the year ended December 31, 2025[234] Cash and Financial Position - As of December 31, 2025, the company had cash and cash equivalents of $167.6 million and marketable securities totaling $1,021.2 million[340] - A hypothetical 100 basis point change in interest rates would change the fair value of the company's investments in marketable securities by $11.0 million as of December 31, 2025[341] - The company is exposed to market risks primarily due to fluctuations in interest rates and foreign currency exchange rates[339] - The reporting currency and functional currency of the company’s wholly owned foreign subsidiaries is the U.S. dollar[342] - All sales and the majority of operating expenses are transacted in U.S. dollars, minimizing foreign currency risk[342] - Foreign exchange gains and losses were not material for the years ended December 31, 2025, 2024, and 2023[342]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________ FORM 10-K ___________________ ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to ____________ Commission File Number 001-32216 ADAMAS TRUST, INC. (Exact name of registrant as specified in its charter) (State ...

Real Estate Portfolio - As of December 31, 2025, the company owned 471 single-family rental properties, primarily located in Illinois and Maryland[35]. - The multi-family investment portfolio consists of credit-oriented investments, including preferred equity investments and cross-collateralized mezzanine lending investments[37]. - As of December 31, 2025, 100% of the company's Mezzanine Lending assets were structured as preferred equity investments[40]. - The company may invest in other multi-family investments and structured investments based on market conditions, while maintaining its qualification as a REIT[44]. - The average occupancy rate across multi-family properties was 92.9% as of December 31, 2025, with the highest occupancy in Little Rock, AR, at 97.3%[448]. Financial Performance - As of December 31, 2025, the company had approximately $12.6 billion in total assets, an increase from approximately $9.2 billion as of December 31, 2024[404]. - The investment securities portfolio included $8.8 billion in total investment securities as of December 31, 2025, compared to $5.7 billion as of December 31, 2024[405][407]. - The fair value of Agency RMBS increased to $6.6 billion as of December 31, 2025, from $3.1 billion as of December 31, 2024[406][407]. - The weighted average yield on investment securities was 5.82% as of December 31, 2025, compared to 5.94% as of December 31, 2024[406][407]. - The company generated net cash flows from operating activities totaling $134.0 million during the year ended December 31, 2025[468]. Leverage and Debt - The company's maximum leverage ratios are 15:1 for liquid Agency securities, between 1:1 and 4:1 for illiquid assets, and 8:1 for residential loans, with a target total debt leverage ratio not exceeding 6:1[45]. - The company’s recourse leverage ratio was approximately 5.0 to 1 as of December 31, 2025, and the portfolio recourse leverage ratio was approximately 4.7 to 1[46]. - The total outstanding under repurchase agreements was $6.2 billion as of December 31, 2025, compared to $3.33 billion in 2024, indicating an increase of approximately 86%[410]. - The company had total contractual obligations of approximately $7.34 billion as of December 31, 2025, including projected interest payments[497]. - The company had $100.0 million in 2026 Senior Notes outstanding, bearing interest at 5.75% per year, maturing on April 30, 2026[477]. Risk Management - The company employs derivative instruments, including interest rate swaps and TBAs, as part of its risk management strategy to manage exposure to interest rates and market values[52]. - The company utilizes model-based risk analysis to evaluate the sensitivity of its assets and liabilities to changes in interest rates and other market factors[58]. - The company monitors all at-risk or shorter-term financings to respond to market disruptions[483]. - The company may be required to enter into interest rate cap contracts related to variable-rate mortgages payable[486]. Compliance and Regulation - The company is required to distribute at least 90% of its ordinary taxable income each year to qualify as a REIT under the Internal Revenue Code[64]. - The company incurs significant ongoing costs to comply with various laws and regulations, although these have not had a material adverse effect on its business[62]. - The company’s operations are subject to supervision and regulation by governmental authorities, which impose various requirements and restrictions[61]. - The company believes it meets the requirements for qualification and taxation as a REIT under the Internal Revenue Code[63]. Employee and Corporate Governance - As of December 31, 2025, the company had 221 full-time employees, with 160 (72%) directly engaged in operations[60]. - The company has adopted a Code of Business Conduct and Ethics applicable to its executive officers and employees[74]. Investment Strategy - The company focuses on selecting servicers with appropriate expertise to mitigate losses and maximize returns on residential loans[33]. - The company may utilize debt securities offerings as a source of liquidity, in addition to equity offerings[487]. - The company had commitments to fund up to $149.4 million of additional advances on existing business purpose loans[494]. Stockholder Equity - The company's stockholders' equity increased to $1.43 billion as of December 31, 2025, from $1.39 billion in 2024, reflecting a growth of approximately 2.0%[461]. - The company repurchased 231,200 shares of its common stock for a total cost of approximately $1.5 million, representing an average repurchase price of $6.50 per common share[489].

Real Estate Portfolio - As of December 31, 2025, the company owned 471 single-family rental properties, primarily located in Illinois and Maryland[35]. - The company targets middle-market multi-family apartment communities located in secondary and tertiary markets for its investments[37]. - The multi-family investment portfolio consists of credit-oriented investments, including preferred equity investments and cross-collateralized mezzanine lending investments[37]. - As of December 31, 2025, 100% of the company's Mezzanine Lending assets were structured as preferred equity investments[40]. - The company has consolidated its cross-collateralized mezzanine lending investment, owning approximately 27% common equity interest and $144.1 million of preferred equity interests in the entity[41]. Financial Performance - As of December 31, 2025, the company had approximately $12.6 billion in total assets, an increase from approximately $9.2 billion as of December 31, 2024[404]. - The investment securities portfolio included $8.8 billion in total investment securities as of December 31, 2025, compared to $5.7 billion as of December 31, 2024[405][407]. - The fair value of Agency RMBS increased to $6.6 billion as of December 31, 2025, from $3.1 billion as of December 31, 2024[406][407]. - The weighted average yield on investment securities was 5.82% as of December 31, 2025, compared to 5.94% as of December 31, 2024[406][407]. - The company reported a cumulative deficit of $1.41 billion as of December 31, 2025, an improvement from a deficit of $1.43 billion in 2024[461]. Leverage and Debt - The company's maximum leverage ratios are 15:1 for liquid Agency securities, between 1:1 and 4:1 for illiquid assets, and 8:1 for residential loans, with a target total debt leverage ratio not exceeding 6:1[45]. - The company’s recourse leverage ratio was approximately 5.0 to 1 as of December 31, 2025, and the portfolio recourse leverage ratio was approximately 4.7 to 1[46]. - The company had total contractual obligations of approximately $7.34 billion as of December 31, 2025, including projected interest payments[497]. - The company had $100.0 million in 2026 Senior Notes outstanding, bearing interest at 5.75% per year, maturing on April 30, 2026[477]. - The company had $60.0 million in 2029 Senior Notes outstanding, bearing interest at 9.125% per year, maturing on July 1, 2029[478]. Risk Management - The company employs derivative instruments, including interest rate swaps and TBAs, as part of its risk management strategy to manage exposure to interest rates and market conditions[52]. - The company primarily uses interest rate swaps to hedge variable cash flows associated with its variable-rate borrowings[54]. - The company utilizes model-based risk analysis to evaluate the sensitivity of its assets and liabilities to changes in interest rates and other market factors[58]. - The company may be required to enter into interest rate cap contracts related to variable-rate mortgages, impacting its liquidity[486]. Employee and Operations - As of December 31, 2025, the company had 221 full-time employees, with 160 (72%) directly engaged in operations[60]. - The company has adopted a Code of Business Conduct and Ethics applicable to its executive officers and employees[74]. - The company incurs significant ongoing costs to comply with various laws and regulations, although these have not had a material adverse effect on its business[62]. - The company’s operations are subject to supervision and regulation by governmental authorities, impacting lending activities and consumer protections[61]. Investment Strategy - The company may invest in other multi-family investments and structured investments based on market conditions while maintaining its REIT qualification[44]. - The company relies on exemptions from registration as an investment company under the Investment Company Act, requiring at least 55% of its assets to be qualifying real estate assets[67]. - The company has a preferred equity investment in a Consolidated VIE valued at $17,344 as of December 31, 2025, with a weighted average preferred return rate of 13.86%[440]. - The business purpose rental loan strategy accounted for $1.57 billion in fair value with a weighted average coupon of 7.05% as of December 31, 2025[418]. Cash Flow and Financing Activities - The company generated net cash flows from operating activities totaling $134.0 million during the year ended December 31, 2025[468]. - Net cash flows used in investing activities were $2.9 billion, primarily due to purchases of investment securities and residential loans[469]. - Net cash flows provided by financing activities were $2.8 billion, mainly from proceeds received from repurchase agreements and warehouse facilities[472]. - The company may utilize debt securities offerings as a source of liquidity, in addition to equity offerings[487]. Stockholder Equity and Repurchase Programs - The company's stockholders' equity increased to $1.43 billion as of December 31, 2025, compared to $1.39 billion in 2024, marking an increase of approximately 2.0%[461]. - The preferred stock repurchase program approved in March 2023 allows for repurchases of up to $100.0 million, with $97.6 million remaining available as of December 31, 2025[488]. - The common stock repurchase program was increased to $246.0 million in March 2023, with $188.2 million remaining available as of December 31, 2025[489]. - The company repurchased 231,200 shares of its common stock for a total cost of approximately $1.5 million, representing an average repurchase price of $6.50 per common share[489].

Business Operations and Strategy - The Company sold its industrial motors and generators businesses for $444.0 million on April 30, 2024, which represented the substantial majority of the Industrial Systems operating segment[24]. - The total purchase price for the acquisition of Altra was $5.1 billion, completed on March 27, 2023, which is expected to generate significant revenue and cost synergies[26]. - The Company operates in three segments: Automation & Motion Control, Industrial Powertrain Solutions, and Power Efficiency Solutions, each serving diverse markets[17]. - The Company plans to leverage its strong free cash flows to enhance growth and raise shareholder returns, maintaining a long track record of strong free cash flow generation[30]. - The Company aims to double its new product vitality in the medium term, focusing on serving secular growth markets and enhancing energy efficiency[23]. - The Company is focused on improving business durability by increasing the consistency of sales performance and targeting markets with secular growth tailwinds[23]. - The Company emphasizes innovation through research and development, targeting energy efficiency and smart product solutions to gain market share[34]. - The company is expanding into new markets, which requires significant investment and carries risks related to demand fluctuations and supply chain disruptions[99]. - The company plans to continue making acquisitions as part of its growth strategy, but successful integration and realization of anticipated benefits are uncertain[110]. Financial Performance - The company reported annual net sales of $5.9 billion for the year ended December 31, 2025, compared to $6.0 billion for the year ended December 31, 2024, reflecting a slight decrease[174]. - Net sales for 2025 were $5,934.5 million, a decrease of $99.3 million, or 1.6%, compared to 2024, primarily due to divestitures impacting sales by 2.8%[195]. - Gross profit for 2025 increased by $26.8 million, or 1.2%, driven by a $41.9 million increase in Industrial Powertrain Solutions and a $26.8 million increase in Power Efficiency Solutions[195]. - Operating expenses for 2025 totaled $1,537.0 million, a decrease of $24.0 million, or 1.5%, primarily due to the impact of divestitures[195]. - Cash flow provided by operating activities was $990.8 million in 2025, an increase of $381.4 million from 2024, driven by cash proceeds from the sale of receivables[203]. - Cash flow used in investing activities was $71.0 million in 2025, compared to cash flow provided by investing activities of $275.4 million in 2024, mainly due to proceeds from the sale of the industrial motors and generators businesses in 2024[205]. - Cash flow used in financing activities decreased to $814.1 million in 2025 from $1,095.8 million in 2024, with net debt repayments of $709.4 million in 2025, down by $228.9 million compared to 2024[207]. - The effective tax rate for 2025 was 20.3%, consistent with the effective tax rate for 2024 of 20.0%[199]. Workforce and Training - As of December 31, 2025, the company employed approximately 29,200 associates worldwide, with about 28,700 being full-time[42]. - In 2025, 99.6% of global employees completed training on the company's Code of Business Conduct and Ethics[46]. - The company has a structured annual goal-setting process for associates, linking performance to pay through evaluations and coaching[45]. - The company conducted a global associate engagement survey in 2025 and executed a robust action plan in response[47]. Environmental and Social Responsibility - The company aims to achieve carbon neutrality across its absolute Scope 1 and 2 emissions by 2032[49]. - The company is focused on innovation and product design to increase overall energy efficiency and reduce Scope 3 emissions associated with product use[49]. - The company allocated $1.1 million to charitable organizations across the US, Mexico, and Canada in 2025[48]. - The company has committed to achieving absolute Scope 1 and Scope 2 carbon emission neutrality by 2032 and aims for net zero across all scopes in the long term[80]. Risks and Challenges - The company is dependent on a limited number of suppliers for key materials, which may affect its business and results of operations[57]. - The volatility in prices and availability of raw materials such as steel, copper, and rare earth magnets may adversely affect gross margins[58]. - A significant portion of revenue is dependent on several key OEM customers and distributors, and any loss or reduction in purchases could materially affect the business[62]. - The company faces demand uncertainty as many orders are placed through purchase orders rather than long-term contracts, leading to unpredictable revenue patterns[63]. - The company relies on estimated demand forecasts, and inaccuracies in these forecasts could adversely affect revenue and financial condition[69]. - The introduction of evolving technologies, particularly in AI and machine learning, poses risks related to compliance, security, and competitive disadvantage[61]. - Climate change and related regulations could disrupt operations and increase costs, impacting the overall business strategy[76]. - The company is subject to various financial covenants that could limit its ability to borrow additional funds or take advantage of business opportunities[75]. - The company’s performance is vulnerable to general economic conditions, which could affect its ability to service debt and fund liquidity needs[72]. - The company is exposed to risks from commodity, currency, and interest rate fluctuations, which may adversely impact financial performance[117]. - Foreign currency fluctuations could affect revenues and operating costs, as net assets and earnings from foreign subsidiaries are translated into US Dollars[118]. - The company is subject to various tax laws and regulations, and claims from taxing authorities could adversely impact operating results and financial position[119]. - Required cash contributions to pension plans may increase, impacting cash available for other obligations and overall financial condition[120]. - The company faces significant pressure from customers to reduce costs, which could adversely affect gross margins if cost savings are not generated[100]. - Unfavorable changes in political and regulatory climates in countries where the company operates could materially affect its financial condition and cash flows[102]. - The company faces risks related to labor disputes, which could disrupt operations and increase labor costs if unionized workers engage in strikes or work stoppages[106]. - Integration costs and challenges from past and future acquisitions, such as the Altra Transaction, could adversely affect future results and the market price of the company's common stock[107][108]. Cybersecurity and Compliance - Operations are highly dependent on IT infrastructure, and any failures or breaches could significantly impact business operations and revenue[82]. - Cybersecurity threats are increasing, and the company may face unauthorized disclosures of information, leading to financial liability and reputational damage[83]. - The company has established a comprehensive cybersecurity program to manage risks and protect information systems[142][150]. - Cybersecurity threats have not materially affected the company to date, but the threat environment is increasingly challenging[153]. - The company is subject to various domestic and foreign laws regarding improper payments and data privacy, which could lead to civil or criminal penalties[132][133]. - Compliance with evolving data privacy laws, including GDPR, may increase operational costs and expose the company to significant fines for non-compliance[134]. - The company is subject to environmental laws that could impose significant costs and liabilities for non-compliance[136][138]. Corporate Governance and Financial Management - The company maintains a flexible global manufacturing presence, which aids in navigating geopolitical and supply chain disruptions[23]. - The company has approximately $4.8 billion in aggregate debt outstanding as of December 31, 2025, which includes debt from the Altra Transaction[73]. - The company has a share repurchase program authorized for up to $500 million, with $145 million remaining available as of December 31, 2025[164]. - The company did not repurchase any shares during 2025, but purchased 332,439 shares for $50 million in 2024[164]. - The company maintained a current ratio of 2.1:1 as of December 31, 2025, down from 2.3:1 in 2024, indicating a decrease in short-term liquidity[208]. - The company repatriated approximately $457.4 million of foreign cash in 2025 to support debt repayment, with $429.7 million of cash held by foreign subsidiaries available for domestic operations if needed[208]. - The company had no borrowings under the 2025 Term Facility as of December 31, 2025, but borrowed $850.0 million on February 12, 2026, to refinance the 2026 Senior Notes[210]. - The company had $1,500.0 million of available borrowing capacity under the 2025 Revolving Facility as of December 31, 2025, with a non-use fee applicable on the unused amount[211]. - The company plans to use cash generated from operations to fund interest obligations and reduce debt principal over time[213]. - The company had $1,100.0 million of 2026 Senior Notes maturing on February 16, 2026, which were refinanced through the 2025 Term Facility[212].

Financial Indebtedness and Liquidity - As of December 31, 2025, the company had an aggregate of $2,067.3 million in outstanding long-term indebtedness, which includes $1.8 billion of term loans incurred in 2022 [121]. - The company has a revolving credit facility with a maximum borrowing limit of $300.0 million, with no borrowings outstanding as of December 31, 2025 [123]. - Increased trading activities have resulted in significantly increased margin requirements, necessitating measures to enhance short-term liquidity [120]. - The company maintains borrowing facilities that are subject to stringent capital and liquidity requirements under Basel III, which could affect financing availability and terms [163]. - The company may need to invest significantly in additional hardware and software to accommodate growth, and failure to do so could limit business prospects [142]. - The company’s Credit Agreement restricts its subsidiaries from making distributions, potentially affecting the ability to make payments under tax receivable agreements [203]. Operational and Technological Risks - The company is subject to significant operational, financial, and liquidity risks due to self-clearing a substantial portion of its domestic equity trades, which may expand internationally [118]. - The company relies heavily on technology, and any failure to remain technologically competitive could negatively impact its operating results [133]. - Disruptions or corruption of the company's computer systems could lead to material financial and reputational harm [139]. - The company is susceptible to significant cyber-attacks that could impair internal systems and result in monetary damages, despite investing significant resources in cybersecurity measures [140]. - Business operations are heavily dependent on the integrity of computer and communication systems, with potential disruptions from human error, software bugs, and external events [141]. - The company may leverage artificial intelligence and machine learning, which present potential risks and liabilities that could adversely affect its business [138]. Regulatory and Legal Risks - Legal and regulatory standards around cryptocurrency are evolving, which could increase costs and risks for the company [137]. - Regulatory and legal uncertainties, particularly in the heavily regulated securities and derivatives markets, could adversely affect the company's operations and financial condition [159]. - Changes in the regulatory environment, especially regarding cryptocurrencies and digital assets, may significantly impact the company's business practices and expose it to potential liabilities [161]. - The implementation of MiFID II and ongoing regulatory changes in the EU may impose additional compliance costs and affect the company's ability to conduct business internationally [162]. - Non-compliance with applicable laws and regulations could lead to sanctions, negatively impacting the company's reputation and financial performance [167]. - The company is subject to regulatory capital rules that require maintaining minimum capital levels, with failure to comply potentially resulting in severe penalties [169]. - The evolving regulatory landscape, including scrutiny of market structure and trading practices, may impose additional operational costs and affect the company's market-making activities [166]. Market and Competitive Risks - The company faces intense competition for qualified personnel, which could hinder its ability to meet operational requirements and achieve historical performance levels [157]. - The company faces substantial litigation risks under federal and state securities laws, which could result in significant legal expenses and negatively affect market perception and stock price [172]. - Proposed financial transaction taxes in the EU and the U.S. could materially impact the company's business and financial results, increasing operational costs and potentially reducing trading volumes [173][176]. - The company is exposed to risks associated with international operations, including compliance with varying regulations, which may increase costs and limit growth opportunities [177][178]. - Brexit has introduced risks that could negatively affect the global economy and the company's operations, particularly regarding access to EU markets and potential regulatory divergence [179][180]. Corporate Governance and Ownership Structure - The company is a holding entity with a 57.2% equity interest in Virtu Financial, relying on distributions from it to cover expenses and dividends, which may be restricted under certain agreements [182]. - The Founder Post-IPO Member controls approximately 87.1% of the voting power, which may impact corporate governance and the ability to execute transactions beneficial to minority shareholders [186][187]. - The Founder Post-IPO Member holds significant economic interests that may conflict with Class A Common Stock holders, potentially affecting asset disposal and indebtedness decisions [188]. - The company is exempt from certain corporate governance requirements as a "controlled company," with the Founder Post-IPO Member controlling over 50% of voting power [193]. - Non-employee directors are not subject to restrictions on engaging in competitive activities, which may lead to differing interests compared to other stockholders [190]. Financial Performance and Market Risks - The fair value of the company's long positions in financial instruments was $10.6 billion as of December 31, 2025, compared to $7.8 billion as of December 31, 2024 [405]. - The company incurs significant costs as a public company due to compliance with Sarbanes-Oxley and SEC regulations, which may require hiring additional qualified personnel [215]. - The company is exposed to various market risks, including changes in market prices, interest rates, and currency rates, which could impact financial performance [400]. - The company utilizes proprietary risk management tools to monitor market risks continuously, including locking down trading strategies that exceed preset limits [403]. - The company maintains inventories of exchange-listed and other equity securities, with short positions valued at $9.1 billion as of December 31, 2025, compared to $6.4 billion as of December 31, 2024 [405]. - The company’s stock price may be volatile, influenced by operating results and broader market conditions, which could materially affect investment value [214]. Foreign Exchange and Hedging - Approximately 19.1% and 17.9% of total revenues for the years ended December 31, 2025 and 2024, respectively, were denominated in non-U.S. dollar currencies [413]. - A hypothetical 10% adverse change in the value of the U.S. dollar relative to foreign denominated earnings would have resulted in decreases in total revenues of $69.2 million and $51.4 million for the years ended December 31, 2025 and 2024, respectively [413]. - The company employs daily hedging practices to mitigate the impact of foreign exchange fluctuations on revenues [412]. - The effectiveness of hedging instruments is assessed based on changes in the fair value of interest rate swaps or forward contracts [409]. - Financial instruments with off-balance sheet risk include futures, forward contracts, swaps, and exchange-traded options, which are used to manage market risks [415]. - Futures contracts require the company to pledge cash or other assets equal to a certain percentage of the contract amount [410]. - The credit risk for forward contracts, options, and swaps is limited to unrealized market valuation gains recorded in the financial statements [416]. - Currency translation adjustments are recorded as foreign exchange translation adjustments in the Consolidated Statements of Comprehensive Income [414]. - The primary currency translation exposures relate to net investments in subsidiaries with functional currencies in the Euro, Pound Sterling, and Canadian dollar [414]. - The company recognizes gains or losses equal to the daily variation margin from futures contracts [410].