Financial Performance - Total revenue for Q3 2025 was $1,433.5 million, a 12.4% increase from $1,275.5 million in Q3 2024[143] - Gross profit for Q3 2025 was $260.5 million, up 28.3% from $202.9 million in Q3 2024[143] - The company’s net income attributable to Granite Construction for Q3 2025 was $102.9 million, compared to $79.0 million in Q3 2024[143] - Gross profit for the construction segment increased by $21.7 million (12.7%) for the three months ended September 30, 2025, and by $68.6 million (18.9%) for the nine months ended September 30, 2025, compared to 2024[155] - Materials gross profit surged by $35.9 million (111.4%) for the three months and by $53.0 million (89.7%) for the nine months ended September 30, 2025, compared to 2024, primarily due to higher volumes and sales prices[156] Revenue Breakdown - Materials revenue increased by $76.2 million (39.1%) in Q3 2025 compared to Q3 2024, driven by higher sales volumes and prices[147] - Construction revenue for Q3 2025 increased by $81.8 million (7.6%) compared to Q3 2024, primarily due to contributions from recently acquired businesses[145] Project and Funding Information - Committed and Awarded Projects (CAP) balance was $6.3 billion at the end of Q3 2025, supported by a positive public funding environment[136] - Significant additions to CAP included $350 million for a drainage improvement project in Illinois and $158 million for a federal project in Guam[150] - The Infrastructure Investment and Jobs Act (IIJA) has provided $550 billion in incremental funding over five years, boosting project lettings[133] - Public work projects account for approximately 85% of the company's portfolio, heavily reliant on federal, state, and local funding[133] Expenses and Costs - Selling, general and administrative (SG&A) expenses for the three months ended September 30, 2025, totaled $101.6 million, an increase of $10.0 million compared to the same period in 2024, mainly due to higher salaries and related expenses[157] - Other costs, net for the three months ended September 30, 2025, were $16.0 million, up from $8.5 million in 2024, primarily due to acquisition and integration costs[158] Tax and Income - The provision for income taxes for the three months ended September 30, 2025, was $38.1 million, with an effective tax rate of 25.8%[161] - The amount attributable to non-controlling interests for the three months ended September 30, 2025, was $(6.5) million, reflecting increased profitability on joint venture projects[163] Liquidity and Cash Flow - The company expects its primary sources of liquidity to be sufficient to meet working capital needs and capital expenditures for the next twelve months[167] - As of September 30, 2025, total cash, cash equivalents, and marketable securities amounted to $616.5 million, an increase from $585.6 million as of December 31, 2024[170] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $289.6 million, representing a $6.1 million increase compared to the same period in 2024[176] - Cash used in investing activities increased to $947.8 million for the nine months ended September 30, 2025, primarily due to a $569.6 million increase in cash used for acquisitions[177] - Cash provided by financing activities was $521.7 million for the nine months ended September 30, 2025, reflecting a $549.5 million increase compared to the same period in 2024[178] Debt and Financial Compliance - As of September 30, 2025, the company had $580.4 million of unused availability under its $600.0 million Revolver[169] - The principal amount of $373.8 million for the 3.25% Convertible Notes has been classified as a current liability as of September 30, 2025[169] - The company is in compliance with the financial covenants of its Credit Agreement as of September 30, 2025[183]

Arrangement Agreement Overview - The Arrangement Agreement aims to deliver additional benefits to BBU Unitholders and BBUC Shareholders by consolidating their investments through a newly formed corporation[8]. - The BBU Board unanimously recommends the Arrangement after considering the Fairness Opinion, determining it to be in the best interests of BBU[8]. - The BBUC Board also unanimously supports the Arrangement based on the Fairness Opinion and other considerations, affirming its benefits for BBUC[8]. - The Arrangement is structured under Section 288 of the BCBCA, with specific conditions and resolutions to be approved by BBU and BBUC[12]. - The Arrangement will be subject to approval at the BBU Unitholders' Meeting and the BBUC Shareholders' Meeting[34]. - The Arrangement is subject to the approval of BBU Unitholders and BBUC Shareholders at their respective meetings[88]. Financial Considerations - The Fairness Opinion indicates that the consideration for Public Holders of BBU Units and BBUC Shares is fair from a financial perspective[30]. - The Transaction Costs associated with the Arrangement will cover all fees, costs, and expenses incurred directly in connection with the process[39]. - Each Party will pay 50% of all Transaction Costs unless otherwise agreed[70]. - The Cash Consideration is defined as the value of one Class A Share[139]. Effective Date and Conditions - The Effective Date of the Arrangement will be determined once all conditions precedent are satisfied or waived, including the granting of the Final Order[28]. - The Effective Date will be determined by the Corporation, BBU, and BBUC upon satisfaction or waiver of conditions precedent[88]. - Each Party is obligated to complete the transactions subject to conditions that must be materially performed before the Effective Date[62]. - The conditions set forth in Sections 5.1 and 5.2 will be deemed satisfied or waived on the Effective Date[63]. Shareholder Rights and Dissenting Unitholders - The Arrangement includes provisions for Dissent Rights for registered BBU Unitholders and BBUC Shareholders[27]. - Dissent Rights will be exercised by no more than 5% of the outstanding BBU Units and BBUC Shares in aggregate[60]. - Dissenting Unitholders will receive a debt-claim for the fair value of their BBU Units[104]. - A dissenting Unitholder is entitled to be paid the fair value of the Units held, determined as of the close of business on the day before the Resolutions were adopted[149]. - The Partnership must send a written offer to dissenting Unitholders within seven days after the action approved by the Resolutions is effective[150]. - The final order of a court in proceedings for dissenting Unitholders shall be rendered against the Partnership for the amount of the Units as fixed by the court[153]. Corporate Structure and Share Issuance - The authorized capital of the Corporation includes an unlimited number of Corporation Class A Shares and B Shares, among others[53]. - The Corporation Class A Shares will be conditionally approved for trading on the NYSE and TSX, subject to standard listing conditions[60]. - The Corporation will acquire all issued and outstanding Units and class A exchangeable subordinate voting shares in exchange for Class A Shares[136]. - Holders of Units will receive one Class A Share for each Unit held as Class A Consideration[136]. - The Corporation will deliver DRS statements representing the Corporation Shares to REU Holders and Specified Purchasers as soon as practicable following the Effective Time[124]. Amendments and Governance - The Agreement outlines the responsibilities and covenants of the involved parties, ensuring compliance with applicable laws[10]. - The Agreement may be amended by written agreement of the Parties before the Effective Time without further notice to stakeholders[65]. - The directors of the General Partner are authorized to amend the Arrangement Agreement or the Plan of Arrangement without notice to Unitholders[160]. - The Agreement is governed by the laws of the Province of British Columbia and Canada[78]. Legal and Compliance - The Corporation intends to rely on the exemption from registration under Section 3(a)(10) of the U.S. Securities Act for the issuance of Corporation Class A Shares[48]. - The Agreement will remain effective until the earlier of the Effective Time or termination as per its terms[66]. - No Party will have personal liability under this Agreement for any special or consequential damages[79]. - The provisions of Section 9.5 shall apply mutatis mutandis to any payment to a Unitholder under Section 7.6[184].

Financial Performance - Reported GAAP net income attributable to controlling interest of $55.9 million, or $0.33 per diluted share, for Q3 2025[5] - Total revenues for the three months ended September 30, 2025, increased to $572,937, up 9.4% from $523,814 in the same period of 2024[34] - Net income attributable to controlling interest for the three months ended September 30, 2025, was $55,927, compared to a loss of $4,126 in the same period of 2024[34] - Basic net income per share for the three months ended September 30, 2025, was $0.33, compared to a loss of $0.03 in the same period of 2024[34] - Net income attributable to common stockholders is projected to be between $78.00 million and $83.00 million for 2025, compared to $53.70 million to $60.50 million in the prior year[53] - The company anticipates a diluted net income per common share of $0.47 to $0.50, compared to $0.33 to $0.37 in the prior year[53] Operational Metrics - Achieved Same-Store Net Operating Income (NOI) growth of 16.4% for Q3 2025 compared to Q3 2024, with SHOP and ISHC segments growing by 25.3% and 21.7%, respectively[5][7] - Net operating income (NOI) for the three months ended September 30, 2025, was $105,815, an increase of 13.1% from $93,536 in the same period of 2024[40] - Total Portfolio NOI for Q3 2025 was $105,815,000, an increase of 13.2% from $93,536,000 in Q3 2024[45] - Same-Store NOI for Q3 2025 was $101,407,000, representing a 16.4% increase compared to $87,111,000 in Q3 2024[45] - Cash NOI for the three months ended September 30, 2025, reached $111,895, compared to $100,535 in the same period of 2024, reflecting a 11.5% increase[40] - Cash NOI for the nine months ended September 30, 2025, reached $322,144,000, up 12.4% from $286,490,000 in the same period of 2024[45] Guidance and Projections - Increased total portfolio Same-Store NOI growth guidance for FY 2025 to a range of 13.0% to 15.0%, up from 11.0% to 14.0%[5][16] - Increased NFFO guidance for FY 2025 to a range of $1.69 to $1.72 per diluted share, reflecting a $0.045 increase at the midpoint[5][16] - NAREIT FFO attributable to common stockholders is expected to range from $283.50 million to $288.50 million, up from $259.40 million to $266.20 million previously[53] - Total Portfolio Same-Store NOI growth is forecasted to be between 13.0% and 15.0%, compared to 11.0% to 14.0% in the prior year[53] - ISHC segment is anticipated to achieve Same-Store NOI growth of 17.0% to 20.0%, an increase from 15.0% to 19.0% previously[53] - SHOP segment is expected to see Same-Store NOI growth of 24.0% to 26.0%, compared to 20.0% to 24.0% in the prior year[53] Acquisitions and Investments - Closed approximately $210.8 million in acquisitions during Q3 2025, totaling over $575 million year-to-date[5] - Initiated ten new development and expansion projects with an expected total cost of approximately $176.9 million[10] - Maintained over $450 million in awarded deals within its investments pipeline, expected to close by year-end or early 2026[9] Balance Sheet and Financial Position - Total consolidated indebtedness as of September 30, 2025, was $1.54 billion, with a Net-Debt-to-Annualized Adjusted EBITDA of 3.5x[11] - Total assets increased to $4,770,289 thousand as of September 30, 2025, up from $4,488,057 thousand at December 31, 2024, representing a growth of approximately 6.3%[31] - Real estate investments net value rose to $3,598,607 thousand, compared to $3,366,648 thousand at the end of 2024, indicating an increase of about 6.9%[31] - Cash and cash equivalents significantly increased to $147,364 thousand from $76,702 thousand, reflecting an increase of approximately 92.2%[31] - Total liabilities decreased to $2,050,359 thousand from $2,183,895 thousand, a reduction of about 6.1%[31] - Stockholders' equity grew to $2,678,177 thousand as of September 30, 2025, compared to $2,261,231 thousand at the end of 2024, marking an increase of approximately 18.5%[31] - The accumulated deficit increased to $(1,523,335) thousand from $(1,458,089) thousand, indicating a rise in losses of about 4.5%[31] - Common stock shares issued and outstanding increased to 171,031,062 as of September 30, 2025, from 157,446,697 at December 31, 2024, representing an increase of approximately 8.6%[31] Corporate Responsibility and Future Initiatives - Published its inaugural Corporate Responsibility Report outlining future initiatives[5] - The company reported a significant focus on expanding its portfolio in clinical healthcare real estate, particularly in senior housing and skilled nursing facilities across the U.S. and U.K.[29] - Management emphasizes the importance of non-GAAP financial measures such as EBITDA and NFFO for evaluating operational performance and making investment decisions[24][25] - The company plans to continue leveraging its diversified portfolio to enhance revenue growth and operational efficiency in the upcoming quarters[29] Expenses and Impairments - The company reported a depreciation and amortization expense of $49,181 for the three months ended September 30, 2025, compared to $44,246 in the same period of 2024[34] - Interest expense for the three months ended September 30, 2025, decreased to $20,392 from $30,395 in the same period of 2024, a reduction of 32.9%[40] - The company recognized an impairment of real estate investments of $3,768 for the three months ended September 30, 2025, compared to no impairment in the same period of 2024[36] - Depreciation and amortization for 2025 is expected to remain steady at $182.00 million, up from $168.30 million in the prior year[53] - Non-cash impact of changes to equity plan is projected at $12.80 million, slightly up from $12.50 million previously[53]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) Delaware 81-4063248 (State or other jurisdiction of incorporation or organization) 3601 Walnut Street, Suite 400 Denver, Colorado 80205 ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-40575 EverCommerce Inc. (Exact Name of Registrant as Specified in its Charter) For the quarterly period ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SEC ...

Financial Performance - Revenue for Q3 2025 was $392.2 million, a 12% increase year-over-year from $350.1 million in Q3 2024 and a 7% increase sequentially from $366.2 million in Q2 2025[4] - GAAP net income for Q3 2025 was $14.3 million, or $0.31 per diluted share, compared to $13.7 million, or $0.30 per diluted share in Q3 2024 and $46.1 million, or $0.99 per diluted share in Q2 2025[9] - Non-GAAP adjusted net income was $17.2 million, or $0.37 per diluted share, down from $20.1 million, or $0.43 per diluted share in Q3 2024[10] - Net income attributable to common stockholders for Q3 2025 was $14.28 million, a 3.9% increase from $13.75 million in Q3 2024[25] - Net income for Q3 2025 was $14.28 million, up from $13.75 million in Q3 2024, representing a year-over-year increase of approximately 3.9%[46] Profitability Metrics - GAAP gross profit was $120.5 million, representing a gross profit margin of 30.7%, down from 33.7% in Q3 2024 and 31.5% in Q2 2025[4] - EBITDA for Q3 2025 was $46.6 million, or 11.9% of revenue, compared to $46.9 million, or 13.4% of revenue in Q3 2024[12] - Gross profit for Q3 2025 was $120.49 million, compared to $118.01 million in Q3 2024, reflecting a gross margin of 30.7%[25] - EBITDA for Q3 2025 was $46.56 million, compared to $46.94 million in Q3 2024, showing a slight decrease[46] Cash Flow and Liquidity - Cash flow from operations was $79.1 million, with free cash flow of $62.8 million, including $16.3 million in capital expenditures[13] - Free cash flow (FCF) for Q3 2025 was $62.8 million, indicating the cash generated after capital expenditures[43] - As of September 30, 2025, the company had approximately $392 million in cash and cash equivalents, with total debt of approximately $58 million[14] - Cash and cash equivalents increased to $376.59 million as of September 30, 2025, compared to $308.67 million at the end of 2024, reflecting a growth of 22%[48] Expenses and Investments - Research and development expenses increased to $41.86 million in Q3 2025, up from $33.69 million in Q3 2024, indicating a focus on innovation[25] - The company reported a total operating expense of $108.92 million in Q3 2025, up from $96.13 million in Q3 2024, driven by increased R&D and SG&A expenses[25] - The company excluded costs related to the retirement of two executives from its financial measures, which do not reflect ongoing operating expenses[41] Market Position and Future Outlook - The company expects Q4 2025 revenue to be approximately $380 million, representing a 12% year-over-year growth at the mid-point[16] - GAAP gross margin for Q4 2025 is expected to be 31.0%, with non-GAAP operating expenses projected at approximately 27.0% of revenue[16] - The company is gaining market share in the automotive sector with new programs launching early next year, alongside increased content in industrial applications[6] Balance Sheet Highlights - Total assets as of September 30, 2025, were $2.47 billion, an increase from $2.39 billion as of December 31, 2024[48] - Total stockholders' equity rose to $1.89 billion as of September 30, 2025, up from $1.80 billion at the end of 2024[48] - Current liabilities totaled $383.80 million as of September 30, 2025, slightly up from $375.60 million at the end of 2024[48] - The company reported a decrease in inventories to $470.91 million as of September 30, 2025, from $474.95 million at the end of 2024[48] Other Financial Metrics - Interest income for Q3 2025 was $8.49 million, significantly higher than $4.53 million in Q3 2024, indicating improved cash management[25] - The company recorded a foreign currency loss of $3.33 million in Q3 2025, compared to a loss of $4.42 million in Q3 2024, showing some improvement in currency exposure[25] - For the nine months ended September 30, 2025, net income was $55.94 million, a significant increase from $35.78 million in the same period of 2024[28][29]

Financial Performance - The net loss for the three months ended September 30, 2025, was $123.9 million, an improvement of $357.6 million compared to a net loss of $481.4 million in 2024[204]. - Adjusted EBITDA for the three months ended September 30, 2025, was $349.3 million, up 22.2% from $285.9 million in 2024[204]. - The net loss for the nine months ended September 30, 2025, was $302.2 million, a decrease of $289.4 million compared to a net loss of $12.8 million in 2024[205]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $690.1 million, a slight increase from $685.0 million in 2024[205]. - Total revenue for the three months ended September 30, 2025, was $1.6 billion, compared to $646.9 million in 2024[213]. - Adjusted revenue for the three months ended September 30, 2025, was $1.78 billion, an increase from $1.32 billion in 2024[213]. - Total revenue for the nine months ended September 30, 2025, was $4.0 billion, an increase of 20% compared to $3.3 billion in 2024[237]. - Other income for the nine months ended September 30, 2025, was $1.2 billion, an increase of $389.7 million, or 48%, compared to $814.3 million in the same period of 2024[258]. Loan Origination and Mortgage Activity - The company originated $32.4 billion in residential mortgage loans for the three months ended September 30, 2025, a 14% increase from $28.5 billion in 2024[204]. - For the nine months ended September 30, 2025, the company originated $83.1 billion in residential mortgage loans, a 13% increase from $73.4 billion in 2024[205]. - Closed loan origination volume for the three months ended September 30, 2025, was $32,412,828 thousand, an increase from $28,495,976 thousand in 2024[219]. - Total loans closed by Rocket Loans for the three months ended September 30, 2025, was 22.9 thousand, compared to 10.2 thousand in 2024[221]. Acquisition and Integration - The company completed the all-stock acquisition of Mr. Cooper on October 1, 2025, and Redfin on July 1, 2025, with integration efforts proceeding as expected[203]. - Goodwill was recorded based on the preliminary fair value of net assets acquired from the Redfin acquisition, with adjustments possible within one year[298]. Expenses and Profitability - Total expenses for the three months ended September 30, 2025, were $1.8 billion, an increase of 56% compared to $1.1 billion in 2024[237]. - Salaries, commissions, and team member benefits for Q3 2025 were $874.8 million, an increase of $267.2 million, or 44%, compared to $607.5 million in Q3 2024[261]. - Directly attributable expenses for Direct to Consumer were $683.8 million, an increase of $132.5 million, or 24%, compared to $551.2 million in 2024, primarily driven by higher variable compensation and performance marketing[268]. Market Conditions - The 30-year fixed mortgage rate decreased to approximately 6.3% by the end of the quarter, contributing to increased refinance activity[202]. - The weighted average loan rate increased to 4.52% in Q3 2025 from 4.18% in Q3 2024, while the weighted average LTV rose to 72.04% from 71.77%[247]. Liquidity and Capital Structure - Total liquidity as of September 30, 2025, was $9.3 billion, including $5.8 billion in cash and cash equivalents[287]. - The company completed the restructuring of approximately $5.0 billion of legacy unsecured debt, enhancing its liquidity position[287]. - As of September 30, 2025, cash and cash equivalents increased to $5.9 billion, up $4.6 billion from $1.2 billion as of September 30, 2024, primarily due to a $4.0 billion senior notes offering[290]. - Equity rose to $8.9 billion as of September 30, 2025, an increase of $0.5 billion or 6% compared to $8.4 billion as of September 30, 2024, driven by a $1.5 billion increase from the Redfin acquisition[291]. Tax and Compliance - The company paid tax distributions totaling $113.8 million during the nine months ended September 30, 2025, compared to no material distributions in the same period of 2024[292]. - The company was in compliance with all financial covenants as of September 30, 2025, and December 31, 2024[289].

Acquisition and Growth - QXO completed the acquisition of Beacon Roofing Supply, valuing the transaction at $10.6 billion, with a purchase price of $124.35 per share[153]. - Net sales for the three months ended September 30, 2025, reached $2.73 billion, a significant increase from $13.1 million in the same period of 2024, primarily due to the Beacon Acquisition[157]. - For the nine months ended September 30, 2025, net sales totaled $4.65 billion, up from $42.1 million in the prior year, driven by the inclusion of Beacon's sales[158]. - The company aims to achieve $50 billion in annual revenues within the next decade through strategic acquisitions and organic growth in the building products distribution industry[154]. - QXO has transitioned to the largest publicly-traded distributor of roofing and complementary building products in North America following the Beacon Acquisition[154]. Financial Performance - The company reported a net loss of $139.4 million for the three months ended September 30, 2025, compared to a net income of $17.2 million in the same period of 2024[156]. - Adjusted Gross Profit for Q3 2025 was $687.2 million, up from $5.5 million in Q3 2024, with an Adjusted Gross Margin of 25.2% compared to 42.0% in Q3 2024[178]. - Adjusted Net Income for the nine months ended September 30, 2025, was $310.6 million, with Adjusted Diluted EPS of $0.32, compared to a net loss of $189.2 million for the same period[179]. - Adjusted EBITDA for Q3 2025 was $301.9 million, resulting in an Adjusted EBITDA Margin of 11.1%, while the net loss for the same quarter was $139.4 million[181]. Expenses and Costs - Cost of products sold for the three months ended September 30, 2025, increased to $2.09 billion from $7.6 million in 2024, reflecting higher sales and inventory fair value adjustments[159]. - SG&A expenses for the three months ended September 30, 2025, rose to $452.5 million, up from $39.0 million in 2024, due to ongoing operational costs post-acquisition and transformation efforts[161]. - Interest expense for the three months ended September 30, 2025, was $(37.7) million, compared to $57.0 million in 2024, primarily due to additional debt from the Beacon Acquisition[167]. Tax and Liquidity - The effective tax rate for the nine months ended September 30, 2025, was 14.1%, down from 25.9% in the same period of 2024, influenced by pre-tax losses and acquisition-related costs[170]. - The company continually evaluates its liquidity requirements, with primary sources being cash on the balance sheet, cash generated by operations, and borrowings under the ABL Facility[183]. - The company has a quarterly dividend policy for its Convertible Preferred Stock, which is considered in evaluating overall liquidity needs[185]. Cash Flow and Financing Activities - Net cash provided by operating activities was $74.8 million for the nine months ended September 30, 2025, an increase of $43.9 million compared to $30.9 million for the same period in 2024[218]. - Net cash used in investing activities was $10.6 billion for the nine months ended September 30, 2025, a significant increase from $0.1 million for the same period in 2024, primarily due to the Beacon Acquisition[219]. - Net cash provided by financing activities was $7.77 billion for the nine months ended September 30, 2025, an increase of $2.77 billion compared to $5.0 billion for the same period in 2024[220]. Debt and Capital Structure - The Company raised $823.8 million in net proceeds from a private placement of common stock to partially fund the Beacon Acquisition, completed on April 29, 2025[188]. - The Company raised $487.9 million in net proceeds from a public offering of 37.7 million shares at $13.25 per share in April 2025[197]. - In May 2025, the Company raised $892.5 million in net proceeds from a public offering of 48.5 million shares at $16.50 per share[198]. - The Company raised $1.96 billion in net proceeds from a public offering of 89.9 million shares at $22.25 per share in June 2025[199]. - The Company issued $2.25 billion in aggregate principal amount of 6.75% Senior Secured Notes due 2032 to partially fund the Beacon Acquisition[200]. - The Term Loan Facility has an aggregate principal amount of $2.25 billion and matures on April 30, 2032[204]. - As of September 30, 2025, the outstanding balance on the Term Loan Facility was $824.0 million, net of unamortized costs[210]. - The ABL Facility provides for an aggregate borrowing availability of $2.0 billion, with a borrowing capacity of $1.93 billion as of September 30, 2025[211]. - The Company recognized a loss on debt extinguishment of $45.7 million due to a voluntary principal prepayment of $1.40 billion under the Term Loan Facility[209]. - The Company capitalized debt issuance costs of $22.2 million related to the Senior Secured Notes, amortized over the term of the financing arrangement[203]. - The Company capitalized debt issuance costs of $18.8 million related to the ABL Facility, with $17.2 million of unamortized costs remaining as of September 30, 2025[216]. Market and Operational Insights - The demand for exterior building materials is expected to peak in the quarters ending June 30, September 30, and December 31, with lower sales anticipated in the March quarter due to seasonal weather impacts[182]. - The Company is in compliance with the covenants of the ABL Credit Agreement as of September 30, 2025[214]. - The Company has minimal foreign currency exposure, primarily operating within the U.S.[221]. - A 10% increase or decrease in interest rates would not have a material effect on the Company's interest income or expense[222].

Acquisition and Financial Impact - QXO completed the acquisition of Beacon Roofing Supply, valuing the transaction at $10.6 billion, with a purchase price of $124.35 per share[153]. - Net sales for the three months ended September 30, 2025, reached $2.73 billion, a significant increase from $13.1 million in the same period of 2024, primarily due to the Beacon Acquisition[157]. - For the nine months ended September 30, 2025, net sales totaled $4.65 billion, up from $42.1 million in the prior year, driven by the inclusion of Beacon's sales[158]. - Cost of products sold for the three months ended September 30, 2025, increased to $2.09 billion from $7.6 million in 2024, reflecting higher sales and inventory fair value adjustments[159]. - SG&A expenses for the three months ended September 30, 2025, rose to $452.5 million, up from $39.0 million in 2024, largely due to costs associated with the Beacon Acquisition[161]. - The company reported a net loss of $139.4 million for the three months ended September 30, 2025, compared to a net income of $17.2 million in the same period of 2024[156]. - Interest expense for the three months ended September 30, 2025, was $(37.7) million, compared to $57.0 million in 2024, primarily due to additional debt from the Beacon Acquisition[167]. Profitability and Adjusted Metrics - Adjusted Gross Profit for Q3 2025 was $687.2 million, up from $5.5 million in Q3 2024, with an Adjusted Gross Margin of 25.2% compared to 42.0% in Q3 2024[178]. - Adjusted Net Income for the nine months ended September 30, 2025, was $310.6 million, with Adjusted Diluted EPS of $0.32, compared to a net loss of $189.2 million for the same period[179]. - Adjusted EBITDA for Q3 2025 was $301.9 million, with an Adjusted EBITDA Margin of 11.1%, while the net loss for the same quarter was $139.4 million[181]. Cash Flow and Liquidity - The company's cash balance as of September 30, 2025, was $2.31 billion, primarily consisting of cash deposits and money market fund investments[183]. - The company paid $22.5 million in dividends to holders of Convertible Preferred Stock during Q3 2025, totaling $67.5 million for the nine months ended September 30, 2025[185]. - The company continually evaluates its liquidity requirements in light of operating needs, growth initiatives, and capital resources following the Beacon Acquisition[183]. - The Company paid $6.9 million in dividends to holders of Mandatory Convertible Preferred Stock during the three and nine months ended September 30, 2025[190]. - Net cash provided by operating activities increased to $74.8 million for the nine months ended September 30, 2025, up from $30.9 million in the same period of 2024, reflecting a $43.9 million increase[218]. - Net cash used in investing activities surged to $10.6 billion for the nine months ended September 30, 2025, compared to $0.1 million in 2024, primarily due to the Beacon Acquisition and increased capital expenditures[219]. - Net cash provided by financing activities rose to $7.77 billion for the nine months ended September 30, 2025, compared to $5.0 billion in 2024, driven by the issuance of Notes and net borrowings under the Term Loan and ABL Facilities[220]. Debt and Financing Activities - The Company raised $823.8 million in net proceeds from a private placement of common stock to partially fund the Beacon Acquisition, completed on April 29, 2025[188]. - The Company raised $487.9 million in net proceeds from a public offering of 37.7 million shares at $13.25 per share in April 2025[197]. - In May 2025, the Company raised $892.5 million in net proceeds from a public offering of 48.5 million shares at $16.50 per share[198]. - The Company raised $1.96 billion in net proceeds from a public offering of 89.9 million shares at $22.25 per share in June 2025[199]. - The Company issued $2.25 billion in aggregate principal amount of 6.75% Senior Secured Notes due 2032 on April 29, 2025[200]. - The outstanding balance on the Notes as of September 30, 2025, was $2.23 billion, net of $21.1 million of unamortized debt issuance costs[203]. - The Company made a voluntary principal prepayment of $1.40 billion under the Term Loan Facility on May 29, 2025, resulting in a loss on debt extinguishment of $45.7 million[209]. - The outstanding balance on the Term Loan Facility as of September 30, 2025, was $824.0 million, net of $8.0 million of unamortized OID and $18.0 million of unamortized debt issuance costs[210]. - The ABL Facility has a borrowing capacity of $1.93 billion based on the borrowing base as of September 30, 2025[211]. - As of September 30, 2025, the outstanding balance on the ABL Facility was $43.0 million, with standby letters of credit amounting to $21.2 million[217]. - The Company capitalized debt issuance costs of $18.8 million related to the ABL Facility, with $17.2 million remaining unamortized as of September 30, 2025[216]. - The weighted-average effective interest rate on debt instruments with variable rates was 7.09% as of September 30, 2025, with a potential 10% change in interest rates having no material effect on interest income or expense[222]. - The ABL Facility requires maintaining a minimum fixed charge coverage ratio of 1.0 to 1.0 when availability is below $120 million or 10% of the borrowing base[215]. - The Company is in compliance with all covenants of the ABL Credit Agreement as of September 30, 2025[214]. - The ABL Facility is secured by a second-priority lien on equity interests and guaranteed by each subsidiary guarantor[213]. - The Company incurred a commitment fee of 0.20% per annum on unutilized commitments under the ABL Facility[216]. Future Outlook and Strategy - The company aims to achieve $50 billion in annual revenues within the next decade through organic growth and strategic acquisitions in the $800 billion building products distribution industry[154]. - The company plans to leverage technology to become a leader in the building products distribution sector following the transition from a technology solutions provider[154]. - The demand for exterior building materials is expected to peak in the quarters ending June 30, September 30, and December 31, with lower sales anticipated in the March quarter due to seasonal weather impacts[182]. - The company has a quarterly dividend policy for its Convertible Preferred Stock, which is considered in evaluating overall liquidity needs[185]. - The company expects inventory fair value adjustments to be fully recognized during the year ended December 31, 2025, impacting both gross profit and net income[178].

Financial Performance - Total revenue for the three months ended September 30, 2025, was $933,337,000, representing a 34% increase from $698,479,000 in the same period of 2024[218] - Operating income improved to $63,661,000 compared to a loss of $132,623,000 in the prior year, marking a 148% increase[218] - Net income for the quarter was $80,694,000, a significant recovery from a net loss of $100,222,000 in the same quarter of 2024, reflecting an 181% improvement[218] - For the three months ended September 30, 2025, GMV was $10.8 billion, representing a 42% increase compared to $7.6 billion in the same period in 2024[241] - Merchant network revenue increased by $66.8 million, or 36%, for the three months ended September 30, 2025, compared to the same period in 2024[254] - Interest income rose by $77.1 million, or 20%, for the three months ended September 30, 2025, compared to the same period in 2024, driven by a 19% increase in the average balance of loans held for investment[258] - Gain on sales of loans increased by $55.4 million, or 87%, for the three months ended September 30, 2025, compared to the same period in 2024, with loan sales volume rising to $4.9 billion[259] - Servicing income increased by $13.7 million, or 53%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to a 57% increase in the average unpaid principal balance of off-balance sheet loans[262] - Loss on loan purchase commitment increased by $17.3 million, or 32%, for the three months ended September 30, 2025, compared to the same period in 2024, due to a 36% increase in total volume of loans purchased[264] Consumer Metrics - Active consumers reached approximately 24.1 million as of September 30, 2025, up 24% from approximately 19.5 million as of September 30, 2024[246] - Transactions per active consumer increased to 6.1 for the three months ended September 30, 2025, up 20% from 5.1 for the same period in 2024[250] Loan and Funding Information - Approximately $1.9 billion in loans were directly originated by the company, representing 18% of total GMV for the quarter[225] - For the three months ended September 30, 2025, Pay-in-X represented 15% of total GMV, while 0% APR installment loans accounted for 13%[220] - GMV from 0% APR monthly installment loans was $1.4 billion, representing a 74% increase from $826 million for the same period in 2024[244] - The company has drawn an aggregate of $1.2 billion on its warehouse credit facilities as of September 30, 2025, with a total borrowing capacity of $5.2 billion[286] - The company intends to add necessary funding capacity to support growth objectives as it expands into new geographies[288] - The company has a revolving credit facility with an aggregate commitment amount of $330.0 million, maturing on June 26, 2027, with no borrowings outstanding as of September 30, 2025[293] - The convertible senior notes have an aggregate principal balance of $1.1 billion, with the 2026 Notes maturing on November 15, 2026, and the 2029 Notes maturing on December 15, 2029[294] Cash Flow and Investments - Net cash provided by operating activities was $374.6 million for the three months ended September 30, 2025, compared to $196.9 million for the same period in 2024, reflecting a significant increase[296][298] - Net cash used in investing activities was $139.6 million for the three months ended September 30, 2025, with cash outflows primarily driven by purchases and origination of loans held for investment totaling $9.8 billion[300] - Net cash provided by financing activities was $110.1 million for the three months ended September 30, 2025, driven by $9.1 billion in proceeds from the issuance of secured debt[302] Risk Management - The company continues to monitor macroeconomic conditions, including elevated interest rates and consumer demand fluctuations, which may impact future performance[233] - The company maintains an interest rate risk management program, estimating that a hypothetical 100 basis point upward shock to interest rates would have a less than $70.0 million adverse impact on cash flows over the next 12 months[319] - The company is exposed to credit risk on $7.2 billion of loans held within its balance sheet as of September 30, 2025, with approximately 11% of loan receivables related to customers in California[322] - The company is exposed to credit risk due to nonperformance by financial institutions holding cash and cash equivalents[324] - The company manages credit risk by diversifying counterparties and adhering to guidelines regarding credit ratings and investment maturities[324] - A failure of multiple financing sources to fulfill funding obligations could materially adversely affect the company's financial condition and cash flows[324] Regulatory and Compliance - Regulatory oversight from the Consumer Financial Protection Bureau (CFPB) remains a factor, with ongoing requests for reports concerning the company's business conduct and activities[237] Expenses - Processing and servicing expenses increased by $38.7 million, or 41%, for the three months ended September 30, 2025, driven by a $2.9 billion, or 41%, increase in payment volume[269][270] - Technology and data analytics expenses increased by $33.8 million, or 25%, for the three months ended September 30, 2025, with a 43% rise in amortization of internally-developed software[273] - Sales and marketing expenses decreased by $66.7 million, or 46%, primarily due to a $66.3 million, or 62%, decrease in Amazon warrant expense[275] - General and administrative expenses increased by $6.5 million, or 5%, due to higher professional services costs, including consulting and legal fees[277] - Other income, net, decreased by $14.9 million, or 44%, primarily due to an $18.1 million, or 92%, reduction in gains from early extinguishment of convertible debt[280]

Revenue Performance - Net revenues for the three months ended September 30, 2025 decreased by $78.9 million or 7.8% compared to the same period in 2024, with a 3.2% increase when excluding the impact of the Jack Wolfskin sale[153]. - For the nine months ended September 30, 2025, net revenues decreased by $178.1 million or 5.4%, with a 1.1% decrease when excluding the Jack Wolfskin sale[154]. - Total net revenues for the three months ended September 30, 2025, were $934.0 million, a decrease of $78.9 million (7.8%) compared to $1,012.9 million in the same period of 2024[156]. - Topgolf net revenues increased by $19.0 million (4.2%) for the three months ended September 30, 2025, primarily due to new venue openings and improved traffic trends[157]. - Golf Equipment net revenues rose by $11.8 million (4.0%) for the three months ended September 30, 2025, driven by a 3.5% increase in golf club sales and a 5.6% increase in golf ball sales[159]. - Active Lifestyle segment saw a revenue decline of $109.7 million (41.2%) for the three months ended September 30, 2025, largely due to the sale of the Jack Wolfskin business[161]. - The ongoing business net revenues for the nine months ended September 30, 2025, were $3,041.2 million, a decrease of $33.2 million (1.1%) compared to $3,074.4 million in 2024[156]. Segment Performance - Segment operating income decreased by $6.5 million or 8.7%, primarily due to a decline in the Active Lifestyle segment following the Jack Wolfskin sale[153]. - The Golf Equipment segment saw an increase in net revenues, while Topgolf and Active Lifestyle segments experienced declines[154]. - Segment operating income for Topgolf increased by $2.8 million (9.9%) for the three months ended September 30, 2025, despite rising operating expenses[158]. - Golf Equipment segment operating income decreased by $3.6 million for the three months ended September 30, 2025, primarily due to $8.0 million in incremental tariffs[160]. Geographic Revenue Trends - Revenue from the United States for the three months ended September 30, 2025, was $749.9 million, an increase of $25.3 million (3.5%) compared to $724.6 million in 2024[163]. - Net revenues in the United States increased by $25.3 million (3.5%) for the three months ended September 30, 2025, compared to the same period in 2024, driven by new Topgolf venues and increased Golf Equipment sales[165]. - For the nine months ended September 30, 2025, net revenues in the United States decreased by $42.4 million (1.7%) due to declines in same venue sales and Golf Equipment sales, partially offset by new Topgolf venues[166]. - In Europe, net revenues decreased by $68.9 million (50.4%) and $89.0 million (22.7%) for the three and nine months ended September 30, 2025, respectively, primarily due to the sale of the Jack Wolfskin business[167]. - In Asia, net revenues decreased by $36.4 million (28.7%) and $44.5 million (12.2%) for the three and nine months ended September 30, 2025, respectively, due to the sale of Jack Wolfskin and soft market conditions[168]. Cost and Expense Management - Total costs and expenses decreased by $73.5 million (7.5%) for the three months ended September 30, 2025, and by $175.1 million (5.6%) for the nine months ended September 30, 2025[171]. - Cost of products decreased by $49.4 million (15.0%) and $97.5 million (8.7%) for the three and nine months ended September 30, 2025, respectively, primarily due to lower sales in the Active Lifestyle segment[172]. - Selling, general and administrative expenses decreased by $40.0 million (16.0%) for the three months ended September 30, 2025, and by $72.8 million (9.3%) for the nine months ended September 30, 2025, mainly due to the sale of Jack Wolfskin and cost reduction efforts[175][177]. - Research and development expenses decreased by $1.9 million (8.6%) and $11.0 million (15.2%) for the three and nine months ended September 30, 2025, respectively, due to reduced employee costs from business sales and restructuring[178]. Financial Position and Liquidity - Cash and cash equivalents increased by $415.6 million to $865.9 million as of September 30, 2025, primarily due to cash provided by operating activities of $270.1 million[191]. - Consolidated net accounts receivable rose to $218.5 million as of September 30, 2025, up from $175.7 million at December 31, 2024, reflecting seasonality in Golf Equipment sales[192]. - Inventory decreased by $188.6 million to $568.7 million as of September 30, 2025, compared to December 31, 2024, largely due to the sale of the Jack Wolfskin business[193]. - As of September 30, 2025, the company had $1,254.2 million in combined cash and availability under credit facilities, an increase of $391.2 million compared to September 30, 2024[196]. - Approximately 15% of the company's cash was held outside the United States as of September 30, 2025, maintaining an indefinite reinvestment assertion in most jurisdictions[197]. - The company plans to utilize its liquidity and cash flows from operations to fund significant cash obligations as of September 30, 2025[198]. Debt and Obligations - Total debt amounts to $1,529.4 million, with $1,157.9 million due thereafter[199]. - Interest payments related to total debt are projected at $431.9 million, with $186.6 million due in 2026-2027[199]. - Operating leases total $2,205.8 million, with $1,556.2 million due thereafter[199]. - Total estimated capital expenditures for the year ending December 31, 2025, are expected to be approximately $160.0 million, including $120.0 million for the Topgolf business[205]. - Future minimum lease payments for leases not yet commenced total $610.9 million[201]. - DLF obligations related to Topgolf venue construction amount to $5,116.2 million, with $4,676.9 million due thereafter[199]. - Unconditional purchase obligations total $116.6 million, with $70.8 million due in 2026-2027[199]. Economic and Market Conditions - Macroeconomic factors, including sustained inflation and high interest rates, are impacting consumer discretionary spending[149]. - The company is actively monitoring the effects of tariffs and inflation on its costs and pricing strategies[150][152]. - Inflation has contributed to increased costs, potentially affecting gross margins and operating expenses[213]. - A 10% increase in interest rates would result in an incremental expense of $3.5 million over the next 12 months[212]. - The estimated loss from foreign currency forward contracts is $12.4 million, based on a sensitivity analysis model[210]. Tax and Net Income - The provision for income tax increased by $11.8 million to a benefit of $7.6 million for the three months ended September 30, 2025, with an effective tax rate of 34.2% compared to 84.3% in the prior year[185]. - For the three months ended September 30, 2025, the GAAP net loss increased to $14.7 million, compared to a net loss of $3.6 million for the same period in 2024, representing an increase of $11.1 million[4]. - Non-GAAP net loss for the three months ended September 30, 2025 was $9.2 million, compared to a net income of $4.3 million for the same period in 2024, indicating a decrease of $13.5 million[188]. - For the nine months ended September 30, 2025, GAAP net income decreased to $7.7 million from $65.0 million in 2024, a decline of $57.3 million[189]. - Non-GAAP net income for the nine months ended September 30, 2025 was $56.7 million, down from $101.8 million in 2024, reflecting a decrease of $45.1 million[190].