UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 1, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-18590 Good Times Restaurants Inc. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation or Organization) 651 CORPORATE ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 7, 2025 PureCycle Technologies, Inc. (State or other jurisdiction of incorporation) Delaware 001-40234 86-2293091 (Commission File Number) (IRS Employer Identification No.) 20 North Orange Avenue, Suite 106 Orlando, Florida 32801 (Address of principal executive offices) (Zip Code) Regist ...

CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 7, 2025 PureCycle Technologies, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K Delaware 001-40234 86-2293091 (Commission File Number) (IRS Employer Identification No.) 20 North Orange Avenue, Suite 106 Orlando, Florida 32801 (Ad ...

[Second Quarter 2025 Financial and Business Overview](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Business%20Overview) The company reported strong Q2 2025 results, driven by cell processing revenue growth and strategic acquisitions, despite a GAAP net loss impacted by a one-time IPR&D expense [Management Commentary and Business Highlights](index=1&type=section&id=Management%20Commentary%20and%20Business%20Highlights) Management reported strong Q2 performance, with cell processing revenue up 28% year-over-year, driven by the biopreservation media franchise and strategic acquisitions - Cell processing revenue increased by **28% year-over-year**, achieving its **seventh consecutive quarter** of sequential growth, primarily led by the biopreservation media (BPM) franchise[4](index=4&type=chunk) - The company's biopreservation media is utilized in **over 250** commercially sponsored clinical trials in the U.S., representing **over 70% market share**, and is embedded in **16 unique commercial cell and gene therapies**[6](index=6&type=chunk) - Strategic growth initiatives included the **acquisition of the remaining 90% of PanTHERA CryoSolutions** to enhance biopreservation capabilities and a **$2.0 million investment in Pluristyx, Inc.** to support iPSC-based product development[10](index=10&type=chunk) [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Q2 2025 saw Cell Processing revenue grow 28% to $23.0 million, with a GAAP net loss of $15.8 million largely due to a $15.5 million IPR&D expense Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Cell Processing Revenue | $23.0 million (+28% YoY) | | GAAP Gross Margin | 62% | | Non-GAAP Adj. Gross Margin | 65% | | GAAP Net Loss | $15.8 million | | Non-GAAP Adj. EBITDA | $6.1 million (24% of revenue) | - The GAAP net loss includes a significant one-time, non-cash charge of **$15.5 million** for in-process research and development (IPR&D) from the PanTHERA acquisition, impacting GAAP EPS by approximately **$0.32** for the quarter[1](index=1&type=chunk)[7](index=7&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) Q2 2025 financial results show significant revenue growth across platforms, improved adjusted profitability, and a solid cash position [Revenue](index=2&type=section&id=Revenue) Total revenue for Q2 2025 increased 29% year-over-year to $25.4 million, driven by strong growth in both Cell Processing and evo and Thaw platforms Revenue Performance (Q2 2025 vs Q2 2024) | Revenue Stream | Q2 2025 (Millions USD) | YoY Growth | | :--- | :--- | :--- | | Total Revenue | $25.4 | 29% | | Cell Processing Platform | $23.0 | 28% | | evo and Thaw Platform | $2.5 | 44% | Revenue Performance (Six Months Ended June 30, 2025 vs 2024) | Revenue Stream | H1 2025 (Millions USD) | YoY Growth | | :--- | :--- | :--- | | Total Revenue | $49.4 | 29% | | Cell Processing Platform | $44.6 | 30% | | evo and Thaw Platform | $4.8 | 22% | [Profitability and Margins](index=3&type=section&id=Profitability%20and%20Margins) Q2 2025 GAAP gross margin was 62%, with a GAAP operating loss of $16.6 million, while adjusted EBITDA improved to $6.1 million, or 24% of revenue Gross Margin Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP Gross Margin | 62% | 64% | | Non-GAAP Adj. Gross Margin | 65% | 67% | Profitability Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | | :--- | :--- | :--- | | GAAP Operating Loss | ($16.6) | ($1.3) | | GAAP Net Loss | ($15.8) | ($5.6) | | GAAP Loss Per Share | ($0.33) | ($0.12) | | Non-GAAP Adj. Net Income/(Loss) | $0.5 | ($1.0) | - Adjusted EBITDA for Q2 2025 increased to **$6.1 million** (**24% of revenue**) from **$3.9 million** (**20% of revenue**) in Q2 2024, with the six-month adjusted EBITDA at **$11.8 million** (**24% of revenue**), up from **$6.5 million** (**17% of revenue**) in the prior year[16](index=16&type=chunk)[19](index=19&type=chunk) [Financial Position](index=5&type=section&id=Financial%20Position) As of June 30, 2025, the company maintained a strong financial position with $100.2 million in cash, cash equivalents, and marketable securities - The company's cash, cash equivalents, and marketable securities totaled **$100.2 million** as of June 30, 2025[20](index=20&type=chunk) [2025 Financial Guidance](index=1&type=section&id=2025%20Financial%20Guidance) The company raised its full-year 2025 revenue guidance, reflecting strong performance and an optimistic outlook for gross and EBITDA margins [Updated Revenue and Margin Outlook](index=1&type=section&id=Updated%20Revenue%20and%20Margin%20Outlook) BioLife Solutions raised its full-year 2025 revenue guidance to $100.0 - $103.0 million, anticipating GAAP gross margin in the low 60% range Full-Year 2025 Revenue Guidance | Category | Revised Guidance (Millions USD) | Prior Guidance (Millions USD) | YoY Growth | | :--- | :--- | :--- | :--- | | Total Revenue | $100.0 - $103.0 | $95.5 - $99.0 | 22% - 25% | | Cell Processing Revenue | $91.0 - $93.0 | $86.5 - $89.0 | 24% - 26% | | evo and Thaw Revenue | $9.0 - $10.0 | Affirmed | 3% - 15% | - Management expects full-year 2025 GAAP gross margin to be in the **low 60% range** and adjusted gross margin (non-GAAP) in the **mid-60% range**, with continued expansion of adjusted EBITDA margin compared to 2024[20](index=20&type=chunk) [Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides the unaudited consolidated financial statements, including statements of operations, balance sheet, and cash flows for the periods presented [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited statements of operations for Q2 and H1 2025, detailing revenue, operating expenses, and net loss from continuing operations Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Total revenue** | **$25,421** | **$19,715** | **$49,362** | **$38,148** | | Total operating expenses | $42,064 | $21,021 | $67,222 | $42,749 | | *IPR&D expense* | *$15,521* | *$—* | *$15,521* | *$—* | | **Operating loss** | **($16,643)** | **($1,306)** | **($17,860)** | **($4,601)** | | **Net loss from continuing operations** | **($15,838)** | **($5,560)** | **($16,286)** | **($8,759)** | | **Loss per share from continuing ops** | **($0.33)** | **($0.12)** | **($0.34)** | **($0.19)** | [Condensed Consolidated Balance Sheet](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) This section provides a snapshot of the company's financial position, comparing assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheet Information (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents, and marketable securities | $100,237 | $109,212 | | Total assets | $387,240 | $399,487 | | Total liabilities | $40,085 | $50,578 | | Total shareholders' equity | $347,155 | $348,909 | [Condensed Consolidated Statement of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement details cash flows for the six months ended June 30, 2025, showing positive operating cash flow and a net decrease in cash Condensed Consolidated Statement of Cash Flows (in thousands, for six months ended June 30) | | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,095 | $1,984 | | Net cash used in investing activities | ($66,709) | ($13,656) | | Net cash used in financing activities | ($5,870) | ($1,656) | | **Net decrease in cash and cash equivalents** | **($63,484)** | **($13,393)** | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of GAAP financial measures to their non-GAAP adjusted counterparts, highlighting key adjustments [Reconciliation of Gross Profit and Gross Margin](index=12&type=section&id=Reconciliation%20of%20Gross%20Profit%20and%20Gross%20Margin) This section reconciles GAAP gross profit to non-GAAP adjusted gross profit, showing Q2 2025 GAAP gross margin at 62% and adjusted gross margin at 65% Reconciliation of Gross Profit (in thousands) | | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **GAAP GROSS PROFIT** | **$15,831 (62%)** | **$31,022 (63%)** | | Intangible asset amortization | $602 | $1,198 | | **ADJUSTED GROSS PROFIT** | **$16,433 (65%)** | **$32,208 (65%)** | [Reconciliation of Operating Loss/Income](index=16&type=section&id=Reconciliation%20of%20Operating%20Loss%2FIncome) This table reconciles GAAP operating loss to non-GAAP adjusted operating loss by excluding specific non-recurring and non-cash items Reconciliation of Operating Loss (in thousands) | | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **GAAP OPERATING LOSS** | **($16,643)** | **($17,860)** | | IPR&D expense | $15,521 | $15,521 | | Intangible asset amortization | $708 | $1,410 | | Other adjustments | ($59) | $1,347 | | **ADJUSTED OPERATING (LOSS)/INCOME** | **($473)** | **$418** | [Reconciliation of Net Loss/Income](index=18&type=section&id=Reconciliation%20of%20Net%20Loss%2FIncome) This section reconciles GAAP net loss to non-GAAP adjusted net income by removing the impact of non-recurring or non-cash items Reconciliation of Net Loss (in thousands) | | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **GAAP NET LOSS** | **($15,838)** | **($16,286)** | | IPR&D expense | $15,521 | $15,521 | | Intangible asset amortization | $708 | $1,410 | | Other adjustments | $67 | $1,487 | | **ADJUSTED NET INCOME** | **$458** | **$2,132** | [Reconciliation of Adjusted EBITDA](index=19&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) This table reconciles GAAP net loss to non-GAAP adjusted EBITDA, incorporating adjustments for non-cash and non-recurring expenses Reconciliation to Adjusted EBITDA (in thousands) | | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **GAAP NET LOSS** | **($15,838)** | **($16,286)** | | Interest, Taxes, Depreciation & Amortization | $823 | $1,541 | | **EBITDA** | **($15,215)** | **($15,050)** | | Share-based compensation | $5,849 | $10,002 | | IPR&D expense | $15,521 | $15,521 | | Other adjustments | ($59) | $1,347 | | **ADJUSTED EBITDA** | **$6,096 (24% of Revenue)** | **$11,820 (24% of Revenue)** |

Exhibit 99.1 In January 2025, we received notice that our remaining contracted sports betting operator in Colorado and Indiana was discontinuing its operations in those states, to be effective in June 2025 and December 2025, respectively. In July 2025, such operator reversed its decision related to our Indiana skin and fully prepaid its remaining term through December 2031 for a reduced fee totaling $1.5 million. - American Place Casino Continued Its Strong Growth, Achieving Record Net Revenue and Operating ...

Exhibit 99.1 OneStream Announces Second Quarter 2025 Financial Results BIRMINGHAM, Mich., Aug. 7, 2025 /PRNewswire/ -- OneStream, Inc. (Nasdaq: OS), the leading enterprise Finance management platform that modernizes the Office of the CFO by unifying core finance and operational functions -- including financial close, consolidation, reporting, planning and forecasting -- today announced financial results for its second quarter ended June 30, 2025. Second Quarter 2025 Financial Highlights "One year after goin ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 07, 2025 Registrant's Telephone Number, Including Area Code: 240 327-0630 Not Applicable (Former Name or Former Address, if Changed Since Last Report) Arcellx, Inc. (Exact name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorporation) Delaware 001-41259 47 ...

[Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended June 30, 2025, show a significant turnaround to profitability, with total assets growing to $1.40 billion and net income reaching $16.7 million for Q2 2025, a substantial improvement from a net loss in the prior year [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $1.40 billion from $1.29 billion at year-end 2024, primarily due to growth in investments in loans and securities, while total liabilities rose to $856.8 million and total shareholders' equity improved to $468.0 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$1,399,043** | **$1,291,072** | | Cash and cash equivalents | $182,986 | $187,921 | | Investments in loans and securities | $870,061 | $778,409 | | **Total Liabilities** | **$856,814** | **$775,276** | | Secured borrowing | $265,557 | $176,089 | | Long-term debt | $314,547 | $321,317 | | **Total Shareholders' Equity** | **$467,979** | **$441,546** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved a significant turnaround in profitability, reporting a net income attributable to Pagaya of $16.7 million for Q2 2025, compared to a net loss of $74.8 million in Q2 2024, driven by a 31% increase in revenue from fees to $317.7 million and a substantial rise in operating income to $56.5 million from $5.0 million year-over-year Q2 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue from fees | $317,714 | $242,594 | | Total Revenue and Other Income | $326,398 | $250,344 | | Operating Income | $56,469 | $5,027 | | Net Income (Loss) Attributable to Pagaya | $16,655 | $(74,785) | | Diluted EPS | $0.20 | $(1.04) | [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities significantly increased to $91.8 million from $27.0 million in the same period of 2024, while net cash used in investing activities decreased to $152.2 million and net cash provided by financing activities was $74.7 million Six-Month Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $91,777 | $27,004 | | Net cash used in investing activities | $(152,192) | $(342,330) | | Net cash provided by financing activities | $74,652 | $362,434 | [Notes to the Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide further information on financial statement items, highlighting strong growth in Network AI fees, the composition of debt, and a significant subsequent event involving the issuance of $500 million in Senior Notes to refinance existing debt - Revenue from fees is primarily composed of Network AI fees (**$285.9 million** in Q2 2025) and Contract fees (**$31.8 million** in Q2 2025)[42](index=42&type=chunk)[43](index=43&type=chunk) - As of June 30, 2025, total borrowings stood at approximately **$727.6 million**, comprising secured borrowings, long-term debt, and exchangeable notes[52](index=52&type=chunk) - Subsequent to the quarter's end, on July 28, 2025, the company issued **$500 million** in Senior Notes and used the proceeds to repay **$332.1 million** of its long-term debt, incurring a **$24 million** loss on extinguishment[137](index=137&type=chunk)[138](index=138&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=35&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the strong Q2 2025 performance to a 13.6% YoY growth in Network Volume to $2.6 billion and improved economics with partners, achieving a net income of $16.7 million and Adjusted EBITDA of $86.3 million, while strengthening its balance sheet by issuing $500 million in senior notes post-quarter [Key Operating Metric](index=38&type=section&id=Key%20Operating%20Metric) The company's key operating metric is Network Volume, defined as the gross dollar value of assets originated by partners using Pagaya's AI technology, serving as a primary indicator of scale and revenue generation capability Network Volume Growth (in millions) | Period | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $2,648 | $2,331 | 13.6% | | Six Months Ended June 30 | $5,048 | $4,750 | 6.3% | [Results of Operations](index=40&type=section&id=Results%20of%20Operations) For Q2 2025, total revenue increased 30% YoY to $326.4 million, driven by a 31% rise in fee revenue and a 13.6% increase in Network Volume, leading to a significant swing in profitability with operating income reaching $56.5 million and net income of $16.7 million - Q2 2025 revenue from fees increased by **$75.1 million (31%)** YoY, primarily due to a **$64.1 million** increase in Network AI fees driven by higher Network Volume and improved partner economics[191](index=191&type=chunk)[192](index=192&type=chunk) - General and administrative costs for Q2 2025 decreased by **$24.1 million (37%)** YoY, mainly due to lower losses from loan purchases and reduced compensation expenses[202](index=202&type=chunk) - Other expense, net, decreased by **$38.3 million** YoY, largely due to a **$38.0 million** reduction in credit-related impairment losses on investments[203](index=203&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=47&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) The company highlights non-GAAP metrics to provide a clearer view of core performance, with Fee Revenue Less Production Cost (FRLPC) growing to $126.2 million, Adjusted Net Income to $50.6 million, and Adjusted EBITDA rising to $86.3 million in Q2 2025 Non-GAAP Financial Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Fee Revenue Less Production Cost (FRLPC) | $126,249 | $96,992 | | Adjusted Net Income | $50,624 | $7,188 | | Adjusted EBITDA | $86,283 | $50,305 | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company had $242.0 million in cash and equivalents, and subsequently issued $500 million in Senior Unsecured Notes in July 2025 to repay existing debt, optimizing its capital structure and ensuring sufficient liquidity for the next twelve months - Principal sources of liquidity as of June 30, 2025, were cash, cash equivalents, and restricted cash totaling **$242.0 million**[231](index=231&type=chunk) - In July 2025, the company issued **$500 million** in Senior Notes at **8.875%** to repay existing debt, including a term loan with an **11.95%** interest rate, thereby optimizing its debt profile[253](index=253&type=chunk)[257](index=257&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are credit risk on its $870 million investments in loans and securities, interest rate risk affecting floating-rate borrowings and loan performance, and immaterial foreign exchange risk related to Israeli Shekel expenses - The company is exposed to credit risk on its **$870 million** portfolio of investments in loans and securities as of June 30, 2025[285](index=285&type=chunk) - Interest rate risk exists due to floating-rate debt facilities and the potential for higher rates to negatively impact borrower performance and securitization economics[287](index=287&type=chunk)[288](index=288&type=chunk) [Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on an evaluation as of June 30, 2025, the company's disclosure controls and procedures were deemed effective at a reasonable assurance level, with no material changes in internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[292](index=292&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended June 30, 2025[293](index=293&type=chunk) [Part II - Other Information](index=57&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that would be expected to have a material adverse effect on its business, financial condition, or results of operations - As of the filing date, Pagaya is not involved in any material legal proceedings[297](index=297&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes from the risk factors previously disclosed in the Annual Report on Form 10-K have been reported[300](index=300&type=chunk) [Other Information](index=58&type=section&id=Item%205.%20Other%20Information) During the second quarter of 2025, Tami Rosen, a director and the company's Chief Development Officer, established a new Rule 10b5-1 trading plan to sell a maximum of 149,610 shares, with the plan ending on March 31, 2026 - On May 29, 2025, director and Chief Development Officer Tami Rosen entered into a new 10b5-1 plan to sell up to **149,610 shares**[304](index=304&type=chunk)

"We delivered significant progress in the second quarter with $375 million in net sales, representing growth across all three segments, both sequentially and year-over-year, along with continued adjusted EBITDA margin improvement," commented Mike Dennison, FOX's Chief Executive Officer. "Our focus on world class product innovation continues to drive growth even in these highly uncertain times. While our premium products are bolstering the top line, our operational improvement and strategic cost management i ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company's financial position strengthened, with total assets increasing to $2.59 billion from $1.95 billion, largely due to a significant rise in cash and cash equivalents from a recent equity offering. However, net income for the quarter and six-month period decreased compared to the prior year, driven by lower gross margins despite higher revenues. Cash flow from operations was negative, reflecting increased working capital needs for inventory and other assets Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $783.6 | $329.3 | | **Total current assets** | $1,428.9 | $872.1 | | **Total assets** | $2,585.7 | $1,950.9 | | **Total current liabilities** | $322.4 | $296.7 | | **Total liabilities** | $625.7 | $597.7 | | **Total stockholders' equity** | $1,960.0 | $1,353.2 | Condensed Consolidated Statements of Operations Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $351.5 | $300.1 | $654.1 | $577.3 | | **Gross profit** | $73.8 | $77.2 | $147.4 | $148.2 | | **Operating income** | $3.7 | $12.5 | $10.3 | $19.5 | | **Net income** | $2.9 | $7.9 | $7.4 | $9.2 | | **Diluted EPS** | $0.02 | $0.05 | $0.05 | $0.06 | Condensed Consolidated Statements of Cash Flows Highlights (in millions) | Activity | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(40.9) | $(2.0) | | **Net cash used in investing activities** | $(43.1) | $(40.8) | | **Net cash provided by financing activities** | $536.3 | $279.0 | [Note 2. Acquisitions](index=11&type=section&id=Note%202.%20Acquisitions) On February 4, 2025, the company acquired certain assets of Norden Millimeter, Inc. for a total consideration of $37.0 million, primarily paid in Kratos common stock. This acquisition added $29.9 million in goodwill and is included in the KGS segment, contributing $5.9 million in revenue for the quarter - The company acquired certain assets of Norden Millimeter, Inc. on February 4, 2025, for a total consideration of **$37.0 million**, primarily consisting of **$32.2 million** in common stock and a **$6.0 million** holdback[38](index=38&type=chunk)[44](index=44&type=chunk) Preliminary Purchase Price Allocation for Norden (in millions) | Account | Value | | :--- | :--- | | Total identifiable net assets acquired | $21.6 | | Total identifiable net liabilities assumed | $(14.5) | | **Goodwill** | **$29.9** | | **Net assets acquired** | **$37.0** | - The acquired Norden assets contributed **$5.9 million** in revenue and **$0.4 million** in operating income for the three months ended June 29, 2025[43](index=43&type=chunk) [Note 3. Revenue Recognition](index=13&type=section&id=Note%203.%20Revenue%20Recognition) The company's revenue is primarily recognized over time using the cost-to-cost method. As of June 29, 2025, remaining performance obligations (a proxy for backlog) stood at approximately $1.41 billion. Revenue is disaggregated by segment, contract type, and customer, with the U.S. Government being the largest customer - Remaining performance obligations totaled **$1,413.6 million** as of June 29, 2025. The company expects to recognize approximately **36%** of this amount as revenue in fiscal year 2025[50](index=50&type=chunk) Revenue by Segment and Contract Type - Q2 2025 (in millions) | Segment | Fixed price | Cost plus fee | Time and materials | Total | | :--- | :--- | :--- | :--- | :--- | | **Kratos Government Solutions** | $170.3 | $94.8 | $13.2 | $278.3 | | **Unmanned Systems** | $59.2 | $13.1 | $0.9 | $73.2 | | **Total Revenues** | **$229.5** | **$107.9** | **$14.1** | **$351.5** | Revenue by Customer - Q2 2025 (in millions) | Segment | U.S. Government | International | U.S. Commercial & Other | Total | | :--- | :--- | :--- | :--- | :--- | | **Kratos Government Solutions** | $186.7 | $52.2 | $39.4 | $278.3 | | **Unmanned Systems** | $62.0 | $9.0 | $2.2 | $73.2 | | **Total Revenues** | **$248.7** | **$61.2** | **$41.6** | **$351.5** | [Note 9. Debt](index=21&type=section&id=Note%209.%20Debt) As of June 29, 2025, the company had $180.0 million outstanding on its Term Loan A. Subsequent to the quarter's end, on July 2, 2025, the company fully extinguished this debt using proceeds from a recent equity offering. The $200 million revolving credit facility remains undrawn and available - As of quarter-end, total debt was **$180.0 million** under the Term Loan A, with no borrowings on the **$200 million** revolving credit facility[88](index=88&type=chunk) - On July 2, 2025, subsequent to the quarter end, the company extinguished the entire outstanding Term Loan A balance of **$177.5 million** using proceeds from its June 2025 equity offering[88](index=88&type=chunk)[105](index=105&type=chunk) - In anticipation of the debt extinguishment, the company terminated its interest rate swap contract on June 30, 2025, receiving a payment of approximately **$0.3 million**[87](index=87&type=chunk)[114](index=114&type=chunk) [Note 10. Segment Information](index=22&type=section&id=Note%2010.%20Segment%20Information) The Kratos Government Solutions (KGS) segment reported a 29.9% revenue increase to $278.3 million in Q2 2025, with operating income of $12.6 million. The Unmanned Systems (US) segment saw a 14.7% revenue decrease to $73.2 million, resulting in an operating loss of $0.3 million Segment Performance Comparison (in millions) | Metric (Q2 2025) | KGS | US | Total | | :--- | :--- | :--- | :--- | | **Total revenues** | $278.3 | $73.2 | $351.5 | | **Total segment operating income (loss)** | $12.6 | $(0.3) | $12.3 | | **Metric (Q2 2024)** | | | | | **Total revenues** | $214.3 | $85.8 | $300.1 | | **Total segment operating income** | $15.5 | $3.6 | $19.1 | - For the six months ended June 29, 2025, KGS revenues grew to **$517.8 million** from **$432.1 million** year-over-year, while US revenues decreased to **$136.3 million** from **$145.2 million**[94](index=94&type=chunk)[96](index=96&type=chunk) - Corporate assets increased significantly to **$782.7 million** as of June 29, 2025, from **$314.8 million** at year-end 2024, primarily due to the increase in cash and cash equivalents from the equity offering[98](index=98&type=chunk) [Note 12. Stockholders Equity - Common Stock](index=26&type=section&id=Note%2012.%20Stockholders%20Equity%20-%20Common%20Stock) The company conducted two major public equity offerings. In February 2024, it raised approximately $331.2 million in net proceeds. In June 2025, it raised an additional $555.9 million in net proceeds to fund investments, capital expenditures, and debt repayment - On June 27, 2025, the company sold **14.9 million** shares of common stock in an underwritten offering, receiving approximately **$555.9 million** in net proceeds[105](index=105&type=chunk) - Proceeds from the June 2025 offering were used to pay off the **$177.5 million** Term Loan A debt and are intended for investments, capex, potential acquisitions, and general corporate purposes[105](index=105&type=chunk) - An earlier offering in February 2024 raised net proceeds of approximately **$331.2 million**, which was used to strengthen the balance sheet and pay down the revolving credit facility[104](index=104&type=chunk) [Note 13. Significant Customers](index=26&type=section&id=Note%2013.%20Significant%20Customers) The U.S. Government remains the company's most significant customer, accounting for 71% of total revenue in Q2 2025, up from 65% in the prior-year quarter - Sales to the U.S. Government represented **71%** (**$248.7M**) of total revenue for the three months ended June 29, 2025, and **69%** (**$454.2M**) for the first six months of 2025[106](index=106&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights the company's position as a disruptive technology provider amidst a global recapitalization of weapon systems. While revenue grew 17.1% in Q2 2025, driven by the KGS segment, profitability was challenged by lower gross margins due to product mix and cost pressures from inflation and labor shortages. The company maintains a strong liquidity position following a significant equity raise and has a record backlog of $1.41 billion, signaling future growth potential despite macroeconomic headwinds [Overview](index=29&type=section&id=Overview) Kratos positions itself as an innovative and disruptive technology company focused on rapidly developing affordable solutions for defense and national security. Key business areas include unmanned systems, hypersonics, satellite ground systems, and microwave electronics. The company is making significant capital investments to expand manufacturing capacity for programs like Valkyrie, hypersonic systems, and jet engines to meet record backlog and pipeline opportunities - Kratos' strategy is to be a disruptive change agent, focusing on affordability and rapid development of mission-critical solutions for defense, national security, and commercial markets[118](index=118&type=chunk) - The company is making significant internally funded investments to expand production capacity for key strategic areas, including unmanned jet aircraft (Valkyrie), hypersonic systems (Zeus, Erinyes), jet engines, and microwave electronics[119](index=119&type=chunk) [Industry Update](index=30&type=section&id=Industry%20Update) Management notes the current political environment, including the FY2026 defense budget request of approximately $962 billion, an 11.8% increase. However, the company faces macroeconomic headwinds, including supply chain disruptions, inflation, and a significant industry-wide shortage of qualified labor, which are adversely impacting costs and margins - The fiscal year 2026 DoD budget request of approximately **$962 billion** represents an **11.8%** increase over FY2025 levels, indicating a favorable spending environment for defense priorities[121](index=121&type=chunk) - The company continues to be affected by unfavorable macroeconomic conditions, including supply chain disruptions, inflation, and increased costs for materials and parts, which adversely impact operations and profit margins[126](index=126&type=chunk) - A significant industry-wide shortage of qualified labor, particularly in STEM fields and for personnel requiring security clearances, is a major operational challenge impacting execution and margins on fixed-price contracts[127](index=127&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) For Q2 2025, revenues increased 17.1% year-over-year to $351.5 million, driven by a 29.9% growth in the KGS segment, while the US segment declined 14.7%. Overall gross margin fell from 25.7% to 21.0%, primarily due to a less favorable product mix and increased labor and material costs on fixed-price contracts. For the six-month period, revenues grew 13.3% to $654.1 million Q2 Revenue Comparison by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **KGS** | $278.3 | $214.3 | $64.0 | 29.9% | | **US** | $73.2 | $85.8 | $(12.6) | (14.7)% | | **Total** | **$351.5** | **$300.1** | **$51.4** | **17.1%** | - Q2 2025 gross margin decreased to **21.0%** from **25.7%** in Q2 2024. This was primarily due to a less favorable mix of products in the US segment and the impact of increased labor and material costs on multi-year fixed-price contracts[135](index=135&type=chunk) - For the six months ended June 29, 2025, total revenues increased **13.3%** to **$654.1 million** from **$577.3 million** in the prior year period[141](index=141&type=chunk) [Backlog](index=34&type=section&id=Backlog) As of June 29, 2025, total backlog increased to $1.41 billion from $1.30 billion a year prior. The funded portion of the backlog was $1.13 billion. The company expects to recognize 36% of the total backlog as revenue in the remainder of fiscal 2025 Backlog Comparison (in millions) | Date | Total Backlog | Funded Backlog | | :--- | :--- | :--- | | **June 29, 2025** | $1,413.6 | $1,125.0 | | **June 30, 2024** | $1,302.7 | $1,070.6 | - The company expects to recognize approximately **36%** of its total backlog as revenue in fiscal year 2025, an additional **37%** in fiscal year 2026, and the balance thereafter[149](index=149&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity position is strong, with cash and cash equivalents at $783.6 million as of June 29, 2025, significantly boosted by a $555.9 million net proceed from a June 2025 equity offering. Cash used in operations was $40.9 million for the first six months, driven by working capital needs, including advance inventory purchases. Subsequent to the quarter, the company used offering proceeds to pay off its $177.5 million Term Loan A Summary of Cash Flows (in millions) | Activity | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(40.9) | $(2.0) | | Net cash used in investing activities | $(43.1) | $(40.8) | | Net cash provided by financing activities | $536.3 | $279.0 | - Cash and cash equivalents increased to **$783.6 million** at quarter-end, largely due to the **$555.9 million** in net proceeds from the June 2025 public equity offering[156](index=156&type=chunk)[162](index=162&type=chunk) - On July 2, 2025, the company extinguished all outstanding Term Loan A debt (**$177.5 million** principal) using proceeds from the June 2025 equity offering. The **$200 million** revolving credit facility remains undrawn[158](index=158&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its quantitative or qualitative market risk profile since its Annual Report on Form 10-K for the fiscal year ended December 29, 2024 - There have been no material changes in the quantitative or qualitative aspects of the company's market risk profile since December 29, 2024[174](index=174&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 29, 2025. No material changes to internal control over financial reporting occurred during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 29, 2025[177](index=177&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[178](index=178&type=chunk) [PART II. OTHER INFORMATION](index=39&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various claims and legal actions in the ordinary course of business, including audits by the Defense Contract Audit Agency (DCAA). Management does not currently believe the outcome of these matters will have a material adverse impact on its financial condition or results of operations - The company is subject to routine litigation and other matters arising from the ordinary course of business, the aggregate accruals for which are not material[110](index=110&type=chunk) - Contracts with the DoD are subject to audit by the DCAA, which from time to time raises claims about disallowed or disputed costs. The company cannot reasonably estimate the range of loss, if any, from unaudited periods[109](index=109&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as disclosed in its Annual Report on Form 10-K for the fiscal year ended December 29, 2024 - During the period covered by this Quarterly Report, there have been no material changes in the company's risk factors as previously disclosed in its Annual Report on Form 10-K[181](index=181&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On February 4, 2025, the company issued 1,095,674 shares of common stock, valued at $32.2 million, to Norden Millimeter, Inc. as part of the consideration for an asset acquisition. The issuance was exempt from registration under Section 4(a)(2) of the Securities Act - On February 4, 2025, the Company issued **1,095,674 shares** of its common stock, with a deemed value of **$32.2 million**, to Norden Millimeter, Inc. as part of the consideration for an asset acquisition[182](index=182&type=chunk) - The shares were issued in a private placement, relying on the exemption from registration provided by Section 4(a)(2) of the Securities Act[182](index=182&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) During the quarter ended June 29, 2025, several company officers and directors, including the President of Unmanned Systems and the CFO, adopted Rule 10b5-1 trading plans for the future sale of company stock Adoption of Rule 10b5-1 Trading Plans by Officers | Name | Title | Action | Adoption Date | | :--- | :--- | :--- | :--- | | Steven Fendley | President, Unmanned Systems | Adopted | 5/12/2025 | | Deanna Lund | EVP, Chief Financial Officer | Adopted | 5/20/2025 | | Thomas Mills | President, C5ISR Systems | Adopted | 6/03/2025 | | David Carter | President, Defense and Rocket Support Services | Adopted | 6/13/2025 | | Stacy Rock | President, Kratos Turbine Technologies | Adopted | 6/16/2025 | [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO as required by the Sarbanes-Oxley Act and the Inline XBRL documents