TABLE OF CONTENTS 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 September 30, 2025 OR ☐ 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 001-39253 Opendoor Technologies Inc. (Exact name of registrant as specified in its c ...

Financial Performance - GAAP revenue for Q3 2025 was $361.2 million, a 60.1% increase compared to $225.6 million in Q3 2024, driven by higher average AUM[22]. - Adjusted net income with tax benefit increased 6.5% to $141.3 million, or $1.63 per diluted share, compared to $132.8 million, or $1.57 per diluted share, in Q2 2025[21]. - Net income for Q3 2025 was $96.5 million, compared to $58.7 million in Q2 2025, representing a 64.4% increase[41]. - Earnings per share (EPS) for Q3 2025 was $1.12, compared to $0.69 in Q2 2025[41]. - Adjusted EBITDA for Q3 2025 was $190.5 million, reflecting a 57.1% increase from $121.3 million in Q3 2024[24]. - Adjusted EBITDA for the nine months ended September 30, 2025, reached $485,375 million, compared to $350,117 million for the same period in 2024, reflecting a growth of 38.6%[43]. - The company reported an adjusted net income of $130,850 million for the three months ended September 30, 2025, compared to $122,507 million in the previous quarter, marking a 2.7% increase[43]. Client Assets and Management - Total client assets reached $313 billion, with assets under management (AUM) of $310.6 billion, reflecting an increase of $12.1 billion from $298.6 billion at the end of Q2 2025[16]. - Total client assets at the end of September 30, 2025, were $313,370 million, up from $301,613 million at the end of June 30, 2025[49]. - Ending assets under management (AUM) for September 30, 2025, were $310,644 million, an increase from $298,563 million at June 30, 2025[50]. - Total assets under management (AUM) as of September 30, 2025, reached $310.6 billion, a significant increase from $176.1 billion in 2024, representing an increase of 76.3%[71]. - The U.S. market accounted for 83% of total AUM at $258.5 billion, while non-U.S. assets comprised 17% at $52.2 billion[71]. Cash Flows and Dividends - Long-term gross flows amounted to $17 billion, while long-term net outflows were $244 million for the quarter, marking an improvement in net flows for the fourth consecutive quarter[5]. - The company repurchased 1.8 million shares and returned approximately $163 million to shareholders through share buybacks and cash dividends[7]. - The board authorized a regular quarterly cash dividend of $0.49 per share, payable on December 23, 2025[29]. - The company declared a dividend of $0.49 per share for Q3 2025, consistent with Q2 2025[41]. - For the nine months ended September 30, 2025, gross client cash inflows totaled $42.513 million, a substantial increase from $19.375 million in the same period in 2024, marking a growth of 120%[59]. - The company reported gross client cash outflows of $(44.86) billion for the nine months ended September 30, 2025, up from $(24.88) billion in the previous year[80]. Operational Efficiency - GAAP operating margin expanded to 38.2%, up from 26.8% in the previous quarter, due to reduced personnel and acquisition-related costs[20]. - Total operating expenses decreased to $223.1 million in Q3 2025 from $257.0 million in Q2 2025[41]. - The company’s net debt to leverage ratio improved to 1.1x, enhancing its capacity for inorganic growth opportunities[7]. - The company is on track to achieve $110 million in net expense synergies from the integration of Pioneer Investments[4]. Market Conditions and Strategic Focus - Future business outlook remains cautious due to potential risks including market conditions and geopolitical factors[36]. - The company is focused on maintaining historical returns and exploring new investment strategies[36]. - The company’s strategic focus includes expanding its investment capabilities and enhancing client offerings through new product developments and market expansions[68]. Market Appreciation and Asset Transfers - The company experienced a market appreciation of $14,692 million in total client assets for the three months ended September 30, 2025[50]. - Market appreciation for the three months ended September 30, 2025, was $14.515 million, compared to $10.076 million in the same period of 2024, reflecting a 44% increase[54]. - The company experienced a significant impact from the closure of three Investment Franchises, resulting in approximately $1 billion of divested assets during the third quarter of 2025[55]. - The company experienced a net transfer of assets amounting to negative $2.1 billion, reflecting divestitures related to the closure of three investment franchises[74]. - The company experienced a net transfer of acquired assets amounting to $3 billion during the nine months ended September 30, 2025[80].

Financial Performance - License and collaboration revenue for Q3 2025 was $1,000,000, a decrease of 66.7% compared to $2,997,000 in Q3 2024[20] - Net loss for Q3 2025 was $10,056,000, compared to a net loss of $16,675,000 in Q3 2024, indicating a 39.5% improvement[20] - The company reported a comprehensive loss of $10,054,000 for Q3 2025, compared to a comprehensive loss of $16,618,000 in Q3 2024, showing a 39.5% reduction[20] - For the nine months ended September 30, 2025, the net loss was $36.2 million, a decrease from a net loss of $56.7 million in the same period of 2024, representing a 36% improvement[26] - Net loss for the three months ended September 30, 2025, was $10.1 million, a decrease of $6.6 million or 39.7% compared to a net loss of $16.7 million for the same period in 2024[150] - For the nine months ended September 30, 2025, the net loss was $36.2 million compared to $56.7 million for the same period in 2024, indicating a reduction in losses[133] Revenue and Expenses - Research and development expenses for the nine months ended September 30, 2025, were $26,218,000, down 49.5% from $51,816,000 in the same period of 2024[20] - Research and development expenses for the three months ended September 30, 2025, totaled $7,618 million, a decrease of 53.3% from $16,313 million in the same period of 2024[119] - General and administrative expenses decreased by $0.5 million, or 11.0%, to $4.1 million for the three months ended September 30, 2025, from $4.6 million for the same period in 2024[153] - General and administrative expenses for the nine months ended September 30, 2025, decreased by $1.9 million, or 12.9%, to $12.9 million from $14.8 million for the same period in 2024[158] - For the nine months ended September 30, 2025, license and collaboration revenue decreased by $4.7 million, or 82.5%, to $1.0 million from $5.7 million for the same period in 2024[156] Assets and Liabilities - Total assets increased to $100,333,000 as of September 30, 2025, up from $91,049,000 at December 31, 2024, representing a 10.3% growth[18] - Total stockholders' equity increased to $93,240,000 as of September 30, 2025, up from $79,626,000 at December 31, 2024, reflecting a 17.1% increase[18] - The company’s total liabilities decreased to $7,093,000 as of September 30, 2025, down from $11,423,000 at December 31, 2024, a reduction of 38.1%[18] - Cash and cash equivalents decreased to $42,548,000 as of September 30, 2025, down from $57,387,000 at December 31, 2024, a decline of 25.8%[18] - The company reported cash and cash equivalents of $42.5 million as of September 30, 2025, down from $43.8 million at the end of 2024[26] - The company has an accumulated deficit of $417.9 million as of September 30, 2025, highlighting ongoing financial challenges[28] Cash Flow - Cash flows from operating activities resulted in a net cash used of $31.4 million for the nine months ended September 30, 2025, compared to $43.1 million in 2024, indicating a 27% reduction in cash outflow[26] - Net cash used in operating activities for the nine months ended September 30, 2025, was $31.4 million, reflecting a net loss of $36.2 million[168] - Net cash provided by financing activities for the nine months ended September 30, 2025, was $44.4 million, primarily from the sale of common stock and warrants[171] Stock and Equity - Weighted-average shares outstanding increased to 72,184,818 for Q3 2025, compared to 50,833,538 for Q3 2024, representing a 42.0% increase[20] - The Company issued 15,225,158 shares of common stock at a price of $0.8677 per share in August 2025[106] - The Company completed a public offering in December 2023, selling 4,651,163 shares of common stock at a price of $6.45 per share[105] - As of September 30, 2025, the company has 52,635,346 common stock warrants outstanding[108] - The Company recorded total stock-based compensation of $1.778 million for the three months ended September 30, 2025, a decrease of 30.5% from $2.556 million in the same period of 2024[112] Future Outlook - The company anticipates additional losses and negative cash flows until it can generate significant sales from its product candidates currently in development[28] - The company does not expect to generate significant product revenue until successful development and regulatory approval of its product candidates, which may take several years[134] - The company estimates that existing cash and cash equivalents, short-term investments, and potential future proceeds from the exercise of all outstanding common stock warrants will fund operating expenses into 2029[188] Regulatory and Compliance - The company is classified as an emerging growth company and a smaller reporting company, allowing it to take advantage of reduced reporting requirements and exemptions from certain accounting standards[179][181] - The company has identified risks related to potential disruptions at the FDA, which could negatively impact the review of regulatory submissions and overall business operations[190] - The company regained compliance with Nasdaq Listing Rule 5450(a)(1) after meeting the minimum bid price requirement of $1.00 per share[135] Miscellaneous - The global macroeconomic environment remains uncertain, potentially impacting the company's future operations due to inflation and other economic factors[29] - The One Big Beautiful Bill Act (OBBBA) was enacted, with provisions effective in 2025 and 2027, but the immediate impact is not material[79] - The company has not reported any legal proceedings or defaults upon senior securities during the reporting period[186][197] - Shattuck Labs, Inc. filed its Quarterly Report on Form 10-Q on November 6, 2025[204]

Financial Position - As of September 30, 2025, the company reported cash and cash equivalents and marketable securities totaling $37,097,000, with working capital of $36,856,000[95]. - Working capital decreased by $3,210,000 to $36,856,000 as of September 30, 2025, compared to $40,066,000 at December 31, 2024, primarily due to dividend payments and cash used in operating activities[128]. - The company does not have any long-term debt, capital lease obligations, purchase obligations, or other long-term liabilities[134]. - The company maintains cash in money market funds, government securities, certificates of deposit, and short-term fixed income securities, minimizing exposure to interest rate risk[132]. Revenue and Income - The company generated licensing revenue exceeding $188,000,000 from the Remote Power Patent from May 2007 through February 2025, but has ceased asserting this patent[97]. - Revenue for the nine months ended September 30, 2025, was $150,000, compared to $100,000 for the same period in 2024, all from litigation settlements involving the Remote Power Patent[119]. - The net loss for the nine months ended September 30, 2025, was $1,386,000 or $0.06 per share, an improvement from a net loss of $1,894,000 or $0.08 per share for the same period in 2024[126]. Expenses - Operating expenses for the nine months ended September 30, 2025, were $2,315,000, a decrease of $223,000 from $2,538,000 in the same period in 2024[120]. - The company recognized $1,095,000 of net losses related to its equity share of ILiAD for the nine months ended September 30, 2025, compared to $1,613,000 for the same period in 2024[125]. Cash Flow - Net cash used in operating activities decreased by $79,000 to $606,000 for the nine months ended September 30, 2025, from $685,000 for the same period in 2024[129]. - Net cash used in investing activities increased by $3,855,000 to $2,241,000 for the nine months ended September 30, 2025, primarily due to decreased sales of marketable securities of $3,390,000[130]. - Net cash used in financing activities decreased by $920,000 to $2,590,000 for the nine months ended September 30, 2025, primarily due to a decrease of $796,000 in repurchases of common stock[131]. Investments and Risks - The company has invested $7,000,000 in ILiAD, a clinical stage biotechnology company, which involves significant risk and uncertainty[96]. - The company is currently involved in multiple patent infringement litigations, including cases against Optiver and Samsung, which may impact future revenue[99][100]. Strategic Goals - The company aims to continue its licensing efforts and acquire additional intellectual property assets to enhance monetization opportunities[105]. Compliance and Controls - The company’s financial statements are prepared in accordance with GAAP, requiring management to make estimates that could materially affect financial condition or results of operations[135]. - There were no changes in internal control over financial reporting that materially affected the company during the fiscal quarter ended September 30, 2025[140]. - The company does not have any off-balance sheet arrangements[133].

Financial Performance - Q3 2025 revenue was $53.7 million, with a Non-GAAP gross margin of 49.6%[2] - The company reported a GAAP operating loss of $38.3 million in Q3 2025, an improvement from a loss of $49.9 million a year ago[2] - Non-GAAP operating loss for Q3 2025 was $11.3 million, compared to $16.8 million in the same period last year[2] - The net loss attributable to indie Semiconductor, Inc. for Q3 2025 was $38.3 million, or $0.19 per share[15] - GAAP revenue for the three months ended September 30, 2025, was $53,676 million, slightly down from $53,965 million in the same period of 2024, a decrease of about 0.5%[20] - Non-GAAP gross margin for the three months ended September 30, 2025, was 49.6%, compared to 50.4% for the same period in 2024, indicating a decline of 0.8 percentage points[20] - GAAP loss from operations for the three months ended September 30, 2025, was $(38,342) million, an improvement from $(49,903) million in the same period of 2024[21] - Non-GAAP net loss for the three months ended September 30, 2025, was $(13,259) million, compared to $(17,739) million in the same period of 2024, reflecting a reduction of approximately 25.5%[21] - Adjusted EBITDA for the three months ended September 30, 2025, was $(9,111) million, an improvement from $(14,814) million in the same period of 2024[21] - Non-GAAP net loss per share attributable to indie Semiconductor, Inc. for the three months ended September 30, 2025, was $(0.07)[21] Guidance and Forecast - Q4 2025 revenue guidance is between $54 million and $60 million, with a midpoint estimate of $57 million[5] - The supply shortage of package substrates is expected to negatively impact Q4 revenue by approximately $5 million[5] Strategic Developments - The strategic backlog increased to $7.4 billion, driven by design wins in ADAS and industrial markets[3] - The Gen8 radar product, incorporating indie's radar chipset, was launched by a Tier 1 partner[6] - The company commenced supply to market leaders in humanoid robotics in both the U.S. and China[7] - The first connectivity ICs were shipped to a leading North American EV manufacturer for production in the first half of 2026[7] Asset and Liability Management - Total assets decreased from $941,386 million on December 31, 2024, to $855,065 million on September 30, 2025, representing a decline of approximately 9.2%[17] - Total current liabilities decreased from $84,880 million on December 31, 2024, to $79,159 million on September 30, 2025, a reduction of approximately 6.4%[17] - Cash and cash equivalents decreased from $274,248 million on December 31, 2024, to $160,873 million on September 30, 2025, a decline of about 41.1%[17] - Stockholders' equity decreased from $445,395 million on December 31, 2024, to $392,914 million on September 30, 2025, a decline of approximately 11.8%[17] Non-GAAP Financial Measures - The company does not report GAAP gross profit or gross margin due to certain costs related to contract revenues being expensed as incurred, impacting the calculation of non-GAAP gross profit[25] - Non-GAAP operating loss excludes acquisition-related and other non-recurring professional expenses, totaling significant amounts that do not reflect ongoing operations[25] - Adjusted EBITDA is calculated by excluding various non-recurring items, including acquisition-related expenses and share-based compensation, to provide a clearer view of operational performance[35] - Non-GAAP net loss per share is derived by dividing non-GAAP net loss by a non-GAAP share count that includes weighted average Class A and Class V common stock[26] - The company emphasizes that non-GAAP financial measures should not be considered in isolation and may have limited value for comparisons between companies due to different calculation methods[34] - Restructuring costs related to workforce reduction and other one-time expenses are excluded from non-GAAP measures as they do not reflect ongoing performance[31] - The company acknowledges that forward-looking estimates of non-GAAP financial measures may differ materially from actual results due to uncertainties and unanticipated events[36] - Non-cash interest expenses related to the amortization of debt discounts are excluded from non-GAAP calculations as they do not influence operational decision-making[32] - The impact of inventory cost realignments introduced during COVID is deemed non-recurring and excluded from ongoing performance evaluations[29] - Management believes that including certain categories in non-GAAP presentations provides investors with a more transparent view of the company's capital structure[26]

Financial Performance - Total revenues for Q3 2025 decreased by approximately 9% to $458.1 million from $502.1 million in Q3 2024, primarily due to lower pulp and manufactured products sales realizations, partially offset by higher lumber sales realizations [115]. - Net loss for Q3 2025 was $80.8 million, compared to a net loss of $17.6 million in Q3 2024, resulting in a net loss per common share of $1.21 [111]. - Total revenues for the nine months ended September 30, 2025, decreased by approximately 9% to $1,418.6 million from $1,555.0 million in the same period of 2024 [153]. - Net loss for the nine months ended September 30, 2025 was $189.2 million, or $2.83 per share, compared to a net loss of $101.8 million, or $1.53 per share in the same period of 2024 [162]. - Operating loss in Q3 2025 was $67.6 million, a significant decline from operating income of $8.8 million in Q3 2024, primarily due to lower sales realizations and higher costs [119]. Revenue Breakdown - Pulp segment revenues for Q3 2025 were $339.0 million, down from $373.3 million in Q3 2024, while solid wood segment revenues decreased to $117.2 million from $125.1 million in the same period [111]. - Lumber revenues increased by approximately 24% to $61.0 million in Q3 2025 from $49.1 million in Q3 2024, primarily due to higher sales realizations [143]. - Pulp revenues decreased by approximately 10% to $318.6 million in Q3 2025 from $354.2 million in Q3 2024, driven by lower sales realizations [126]. - Lumber revenues increased by approximately 21% to $192.7 million in the nine months ended September 30, 2025, up from $158.9 million in the same period of 2024, driven by higher sales realizations and volumes [181]. Costs and Expenses - Costs and expenses in Q3 2025 increased by approximately 7% to $525.7 million from $493.3 million in Q3 2024, primarily due to higher per unit fiber costs and negative foreign exchange impacts [116]. - Costs and expenses in Q3 2025 increased by approximately 9% to $378.6 million from $348.6 million in Q3 2024, influenced by higher fiber costs and inventory impairment [136]. - Total costs and expenses decreased to $1,108.3 million in the nine months ended September 30, 2025, from $1,129.1 million in the same period of 2024, despite higher fiber costs and inventory impairment [176]. Production and Sales - Lumber production in Q3 2025 was 115.4 million board feet, down from 122.5 million board feet in Q3 2024, with sales slightly increasing to 110.2 million board feet from 108.8 million board feet [113]. - Pulp production for Q3 2025 was 366.7 thousand ADMTs for NBSK and 92.0 thousand ADMTs for NBHK, compared to 374.4 thousand ADMTs and 41.4 thousand ADMTs, respectively, in Q3 2024 [113]. Price Trends - Average NBSK pulp prices in Europe were $1,497 per ADMT, down from $1,573 in Q3 2024, while prices in North America decreased to $1,700 from $1,762 [113]. - Average sales realizations for NBSK pulp were $728 per ADMT in Q3 2025, down from $814 in Q3 2024, while NBHK pulp realizations decreased to $528 from $632 [113]. - Average lumber sales realizations increased by approximately 16% to $533 per Mfbm in the nine months ended September 30, 2025, compared to $458 per Mfbm in the same period of 2024 [186]. Impairments and Charges - The company recorded a non-cash impairment of $20.4 million in Q3 2025 primarily against pulp inventory due to lower prices [116]. - The company recorded inventory impairment charges of $29.9 million in the nine months ended September 30, 2025, primarily due to low pulp prices [175]. Debt and Interest - Interest expense increased by approximately 8% to $28.5 million in Q3 2025 from $26.4 million in Q3 2024, primarily due to debt refinancing activities [120]. - Interest expense increased by approximately 5% to $85.1 million in the nine months ended September 30, 2025, from $80.8 million in the same period of 2024, driven by debt refinancing activities [158]. Market Conditions and Risks - The company faces intense competition in the forest products industry, which could adversely affect its financial condition and results of operations [224]. - The pulp and lumber markets are highly cyclical, with prices sensitive to global economic conditions and industry capacity [229]. - The company’s level of indebtedness could negatively impact its financial condition, results of operations, and liquidity [228]. - Political uncertainty and trade protectionism could adversely affect global macroeconomic activities and the company’s financial condition [228]. Capital Expenditures and Liquidity - Total capital expenditures for the nine months ended September 30, 2025, were $74.4 million, primarily for various upgrades and strategic projects [193]. - As of September 30, 2025, cash and cash equivalents were $98.1 million, with approximately $278.0 million available under revolving credit facilities, totaling aggregate liquidity of about $376.1 million [202]. - The company expects capital expenditures for fiscal 2025 to be between $90.0 million to $100.0 million [202]. Currency and Foreign Exchange - The dollar was approximately 3% weaker against the Canadian dollar and 13% weaker against the euro since December 31, 2024, which could adversely affect operating margins [213]. - The company’s operations in Germany, Canada, and the U.S. expose it to currency exchange rate fluctuations, impacting operating margins and cash flow [238].

Sales Performance - Total sales for Q3 2025 reached $69,347,000, a 3.3% increase from $67,115,000 in Q3 2024[14] - Domestic sales increased to $28,261,000, up 16.5% from $24,365,000 year-over-year[14] - International sales decreased to $41,086,000, down 3.9% from $42,750,000 year-over-year[14] - Total sales for the nine months ended September 30, 2025, were $185,027, a decrease of 4% compared to $192,910 for the same period in 2024[116] - Domestic sales for the Outdoor segment were $63,455, while Adventure segment domestic sales were $14,339, contributing to total domestic sales of $77,794[116] - International sales reached $107,233, with $66,217 from the Outdoor segment and $41,016 from the Adventure segment[116] Profit and Loss - Gross profit for Q3 2025 was $24,366,000, compared to $23,497,000 in Q3 2024, reflecting a 3.7% increase[14] - Net loss for the nine months ended September 30, 2025, was $15,295,000, compared to a net income of $13,234,000 in 2024[16] - Comprehensive loss for the nine months ended September 30, 2025, was $8,934,000, compared to comprehensive income of $14,588,000 in 2024[16] - Gross profit decreased by $3,914, or 5.7%, to $64,840, with a gross margin of 35.0% for the nine months ended September 30, 2025, compared to 35.6% in the prior year[170] Cash and Assets - Cash and cash equivalents at the end of Q3 2025 were $29,508,000, down from $45,359,000 at the end of 2024[12] - Total assets decreased to $283,070,000 as of September 30, 2025, from $294,094,000 at the end of 2024[12] - Stockholders' equity decreased to $225,805,000 from $233,093,000 over the same period[12] - The company reported a depreciation expense of $894 for the three months ended September 30, 2025, compared to $980 for the same period in 2024[45] Expenses and Liabilities - Operating loss for the nine months ended September 30, 2025, was $20,689,000, slightly higher than the loss of $20,269,000 for the same period in 2024[16] - Selling, general, and administrative expenses decreased by $1,725, or 6.2%, to $26,155, primarily due to lower employee-related costs and expenses from the sale of PIEPS[152] - Legal expenses incurred during the three months ended September 30, 2025, amounted to $322,000, up from $194,000 in the same period of 2024, indicating a year-over-year increase of approximately 66%[99] - Restructuring charges were $155 during the three months ended September 30, 2025, down from $478 in the same period of 2024[154] Acquisitions and Sales - The acquisition of RockyMounts was completed on December 5, 2024, for a total purchase consideration of up to $8,000, which includes $4,000 in cash at closing and additional contingent consideration of up to $2,000 based on future net sales thresholds[32][34] - The company completed the acquisition of TRED Outdoors Pty Ltd on October 9, 2023, enhancing its market presence in the outdoor equipment sector[130] - The company received net proceeds of approximately $37,871 from the sale of its Precision Sport segment, which has been reported as discontinued operations[132] Legal and Regulatory Matters - The Company recorded a liability of $2,500,000 related to potential penalties from the CPSC, reflecting the low end of the estimated exposure range[98] - The U.S. Consumer Product Safety Commission approved a voluntary product recall for certain avalanche beacon transceivers to improve safety[209] - The Company is currently unable to predict the duration or outcome of ongoing investigations, which may materially affect its liquidity and financial condition[99] Stock and Compensation - Stock-based compensation expense for the quarter ended September 30, 2025, was $1,544[22] - The company issued stock option awards for an aggregate of 630 shares during the nine months ended September 30, 2025, with varying vesting schedules[78] - As of September 30, 2025, there were 1,053 unvested stock options with an unrecognized compensation cost of $1,180, and 1,050 unvested restricted stock unit awards with an unrecognized compensation cost of $1,639[82] Tax and Deferred Assets - The estimated effective tax rate benefit for the three months ended September 30, 2025, was 58.1%, significantly higher than the U.S. federal statutory tax rate of 21%[106] - The Company has recorded a gross deferred tax asset of $35,658,000 as of December 31, 2024, with a valuation allowance of $23,344,000, resulting in a net deferred tax asset of $12,314,000[108]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 OR ☐ 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: 001-13695 (Exact name of registrant as specified in its charter) | Delaware | 16-1213679 | | --- | --- | | (State or oth ...

Financial Performance - In Q3 2025, Mercer International Inc. reported Operating EBITDA of negative $28.1 million, a decrease from positive $50.5 million in Q3 2024[2] - The net loss for Q3 2025 was $80.8 million ($1.21 per share), compared to a net loss of $17.6 million ($0.26 per share) in Q3 2024[2] - Total revenues for Q3 2025 decreased by approximately 9% to $458.1 million from $502.1 million in Q3 2024, primarily due to lower pulp and manufactured products sales realizations[14] - Operating loss for Q3 2025 was $67.6 million compared to an operating income of $8.8 million in Q3 2024[50] - The company reported a net loss of $80.8 million in Q3 2025, compared to a net loss of $17.6 million in Q3 2024[45] - Total revenues for the nine months ended September 30, 2025 decreased by approximately 9% to $1,418.6 million from $1,555.0 million in the same period of 2024[36] - Operating EBITDA for the nine months ended September 30, 2025 decreased to negative $1.9 million from positive $144.5 million in the same period of 2024[38] Revenue Breakdown - The pulp segment's revenues decreased by approximately 10% to $318.6 million in Q3 2025 from $354.2 million in Q3 2024, driven by lower sales realizations[19] - Solid wood segment revenues in Q3 2025 decreased by approximately 6% to $117.2 million from $125.1 million in Q3 2024, primarily due to lower manufactured products revenues[30] - Lumber revenues increased by approximately 24% to $61.0 million in Q3 2025 from $49.1 million in Q3 2024, driven by higher sales realizations[31] - Manufactured products revenues decreased by approximately 66% to $12.2 million in Q3 2025 from $35.8 million in Q3 2024, impacted by lower sales realizations and volumes[33] Production and Sales Realizations - Average NBSK pulp sales realizations decreased by approximately 11% to $728 per ADMT in Q3 2025 from $814 per ADMT in Q3 2024[20] - Pulp production for NBSK decreased to 366.7 thousand ADMTs in Q3 2025 from 374.4 thousand ADMTs in Q3 2024, a decline of 2.0%[47] - Lumber production in Q3 2025 was 115.4 million fbm, slightly down from 122.5 million fbm in Q3 2024, a decrease of 5.8%[47] - Average sales realizations for manufactured products were $1,615 per cubic meter in Q3 2025, compared to $3,463 per cubic meter in Q3 2024, a significant drop of 53.4%[47] - Average lumber sales realizations rose by approximately 23% to $553 per Mfbm in Q3 2025 from $451 per Mfbm in Q3 2024 due to lower supply and improved demand[31] Cost and Expenses - Per unit fiber costs increased by approximately 14% in Q3 2025 compared to Q3 2024, with expectations for further increases in Q4 2025 due to supply constraints[26] - The company incurred interest expenses of $28,506 thousand in Q3 2025, compared to $26,429 thousand in Q3 2024[59] - Total depreciation and amortization for the nine months ended September 30, 2025, was $117,390 thousand, slightly down from $121,959 thousand in the same period of 2024[54] - Inventory impairment increased to $31,400 thousand for the nine months ended September 30, 2025, compared to $4,000 thousand in the same period of 2024[54] Liquidity and Assets - As of September 30, 2025, the company had cash and cash equivalents of $98.1 million and total liquidity of approximately $376.1 million[40] - Total current assets decreased to $867.8 million as of September 30, 2025, from $910.0 million at the end of 2024[52] - Long-term debt increased to $1.55 billion as of September 30, 2025, compared to $1.47 billion at the end of 2024[52] - Cash and cash equivalents decreased to $98.1 million as of September 30, 2025, down from $184.9 million at the end of 2024[52] - Cash used in operating activities for the nine months ended September 30, 2025, was $(37,569) thousand, compared to a cash inflow of $19,046 thousand for the same period in 2024[54] Future Outlook - The company expects to realize approximately $30 million in cost savings and reliability improvements by the end of 2025 as part of its "One Goal One Hundred" program[5] - The company is advancing a carbon capture and sequestration project at the Peace River mill, expected to enhance long-term economic viability and sustainability[6] - The company will host a conference call on November 7, 2025, to discuss the earnings release and future outlook[41]

Financial Performance - For the three months ended September 30, 2025, the company reported a net loss of $308.9 million, or $4.33 per diluted share, compared to a net loss of $61.9 million, or $0.89 per diluted share for the same period in 2024, primarily due to a U.S. pension plan settlement loss of $227.7 million [124][144]. - Revenue for the three months ended September 30, 2025 was $460.2 million, a decrease of 7.4% from $497.0 million in the same period of 2024, driven by the timing of software license renewals [127]. - License and Support (L&S) revenue decreased by 20.6% to $83.0 million for the three months ended September 30, 2025, compared to $104.5 million for the same period in 2024, also due to the timing of software license renewals [128]. - Excluding License and Support (Ex-L&S) revenue for the three months ended September 30, 2025 was $377.2 million, down 3.9% from $392.5 million in the same period of 2024, primarily due to lower volume with clients in the DWS and CA&I segments [129]. - Gross profit for the three months ended September 30, 2025 was $117.2 million, with a gross profit margin of 25.5%, compared to $145.0 million and 29.2% for the same period in 2024 [133]. - For the nine months ended September 30, 2025, revenue was $1,375.6 million, a decrease of 6.0% from $1,463.0 million in the same period of 2024, mainly due to the timing of software license renewals [145]. - L&S revenue for the nine months ended September 30, 2025 was $241.7 million, down 13.6% from $279.8 million in the same period of 2024 [146]. - Gross profit for the nine months ended September 30, 2025 was $354.7 million, with a gross profit margin of 25.8%, compared to $410.9 million and 28.1% for the same period in 2024 [151]. - For the nine months ended September 30, 2025, the company reported a net loss of $358.5 million, or $5.06 per diluted share, compared to a net loss of $223.4 million, or $3.23 per diluted share for the same period in 2024 [159][160]. - Total revenue for the nine months ended September 30, 2025 was $1,375.6 million, a decrease of 6.0% from $1,463.0 million in the prior year [161]. - The company's gross profit for the nine months ended September 30, 2025 was $354.7 million, representing a gross profit margin of 25.8%, down from 28.1% in the prior year [161]. Expenses and Costs - The company recognized net cost-reduction charges of $1.0 million related to workforce reductions during the three months ended September 30, 2025 [131]. - Interest expense increased to $18.2 million for the three months ended September 30, 2025, compared to $7.9 million for the same period in 2024, primarily due to increased long-term debt and higher interest rates [137]. - Research and development expenses for the nine months ended September 30, 2025 were $16.5 million, slightly down from $17.5 million in the prior year [153]. - The operating profit for the nine months ended September 30, 2025 was $1.9 million, significantly lower than the $48.8 million reported in the prior year, impacted by goodwill impairment charges [154]. - Interest expense increased to $34.6 million for the nine months ended September 30, 2025, compared to $23.7 million in the prior year, primarily due to higher long-term debt and interest rates [155]. - The company experienced a loss before income taxes of $312.9 million for the nine months ended September 30, 2025, compared to a loss of $134.6 million in the prior year [157]. Revenue Breakdown - Digital Workplace Solutions (DWS) revenue decreased by 3.4% to $382.0 million for the nine months ended September 30, 2025, compared to $395.3 million in the prior year [167]. - Cloud, Applications & Infrastructure Solutions (CA&I) revenue decreased by 5.2% to $542.2 million for the nine months ended September 30, 2025, compared to $571.7 million in the prior year [168]. - Enterprise Computing Solutions (ECS) revenue decreased by 7.5% to $392.1 million for the nine months ended September 30, 2025, compared to $424.0 million in the prior year [169]. Cash Flow and Debt - Cash and cash equivalents at September 30, 2025, were $321.9 million, down from $376.5 million at December 31, 2024 [177]. - Cash used for operations during the nine months ended September 30, 2025, was $244.9 million, compared to cash provided by operations of $58.5 million in the same period of 2024 [180]. - Total debt increased to $734.9 million as of September 30, 2025, from $493.2 million at December 31, 2024, primarily due to the issuance of the 2031 Notes [183]. - The company completed a private placement offering of $700 million aggregate principal amount of the 2031 Notes in June 2025 [184]. - Cash provided by financing activities during the nine months ended September 30, 2025, was $188.1 million, compared to cash used for financing activities of $13.7 million in the prior year [182]. - The company had no borrowings under its Amended and Restated ABL Credit Facility as of September 30, 2025, with $90.6 million available under the facility [196]. - The company expects to meet all covenants and conditions under its various lending and funding agreements for at least the next 12 months [201]. - The company incurred a loss on debt extinguishment of $7.0 million related to the satisfaction and discharge of the 2027 Notes [194]. Pension and Contributions - In September 2025, the company purchased a group annuity contract for approximately $316 million, resulting in a pre-tax settlement loss of $227.7 million for the three and nine months ended September 30, 2025 [202]. - For the nine months ended September 30, 2025, the company made cash contributions totaling $317.2 million, including a discretionary contribution of $250 million to its U.S. defined benefit pension plans [204]. - The company expects to make cash contributions of approximately $24 million for the remainder of 2025, leading to total expected contributions of approximately $342 million for the year [205]. - Future total cash contributions to global defined benefit pension plans are estimated at approximately $78 million in 2026 [206]. - The company made cash contributions of $17.6 million primarily to international defined benefit pension plans for the nine months ended September 30, 2024 [207]. - The company may need additional funding if it cannot generate sufficient cash flows from operations to meet pension contributions [208]. - The company will evaluate opportunities for further reduction of its global defined benefit pension obligations depending on market conditions [209]. - The company may explore additional debt and equity sources to fund its liquidity and capital needs [210]. Accounting and Risk Assessment - There have been no significant changes to the company's critical accounting policies and estimates since the last annual report [211]. - There has been no material change in the company's assessment of its sensitivity to market risk since the last annual report [212].