Financial Performance - Subscription ARR grew 34% year-over-year to $1.35 billion as of October 31, 2025[5] - Total revenue increased 48% year-over-year to $350.2 million, with subscription revenue at $336.4 million, a 52% increase from $221.5 million in Q3 FY 2025[6] - Total revenue for the three months ended October 31, 2025, was $350,166,000, representing a 48.2% increase from $236,178,000 in the same period of 2024[29] - Subscription revenue for the nine months ended October 31, 2025, reached $899,008,000, up 53.6% from $585,021,000 in the prior year[29] - Gross profit for the three months ended October 31, 2025, was $282,029,000, compared to $180,032,000 for the same period in 2024, indicating a gross margin improvement[29] - Non-GAAP total gross profit for the nine months ended October 31, 2025, reached $766,853, compared to $485,949 in the same period of 2024, reflecting a 57.8% growth[35] - GAAP total gross margin improved to 81% in Q3 2025 from 76% in Q3 2024, while non-GAAP total gross margin increased to 83% from 79%[35] Cash Flow and Financial Position - Free cash flow reached over $76 million, compared to $15.6 million in Q3 FY 2025[6] - Cash and cash equivalents increased to $307,100,000 as of October 31, 2025, from $186,331,000 at the beginning of the year[31] - The company reported a net cash provided by operating activities of $189,863,000 for the nine months ended October 31, 2025, compared to a cash outflow of $35,369,000 in the prior year[33] - Proceeds from the issuance of convertible senior notes amounted to $1,129,875,000, contributing to the company's financing activities[33] - The company reported a net cash used in investing activities of $(109,760) for Q3 2025, compared to $(72,139) in Q3 2024[37] Customer Growth and Market Position - The number of customers with $100K or more in subscription ARR increased by 27% year-over-year to 2,638[6] - Deferred revenue increased to $968,167,000 as of October 31, 2025, compared to $777,135,000 at the beginning of the year, indicating strong future revenue potential[31] Guidance and Outlook - Fourth quarter revenue guidance is between $341 million and $343 million[11] - Full year 2026 revenue outlook is projected between $1,280 million and $1,282 million[11] - Non-GAAP net loss per share for Q4 FY 2026 is expected to be between $(0.12) and $(0.10)[11] Operational Efficiency - Operating expenses for the nine months ended October 31, 2025, totaled $1,009,365,000, down from $1,439,068,000 in the previous year, reflecting a reduction in costs[29] - Non-GAAP operating expenses for the nine months ended October 31, 2025, were $1,014,253, compared to $887,818 in 2024, reflecting a 14.3% increase[37] - Operating cash flow margin improved to 24% in Q3 2025 from 10% in Q3 2024, indicating enhanced operational efficiency[37] Loss and Margin Improvement - Net loss for the nine months ended October 31, 2025, was $261,862,000, a decrease from $1,039,931,000 in the same period of 2024[29] - Non-GAAP net income for Q3 2025 was $22,853, compared to a loss of $37,782 in Q3 2024, showing a positive turnaround[36] - GAAP net loss per share for Q3 2025 was $(0.32), an improvement from $(0.71) in Q3 2024[36] - GAAP gross margin improved to 80.5%, up from 76.2% in Q3 FY 2025[6] Product Development and Partnerships - Launched Rubrik Agent Cloud to enhance Enterprise AI Agent adoption and risk management[6] - Expanded partnership with CrowdStrike to improve identity security and resilience against cyber threats[11]

Financial Performance - Q2 net sales were $124.7 million, a decrease of $5.0 million, or 3.9%, from the comparable quarter last year[6] - Q2 gross margin was 24.3%, down from 26.6% in the comparable quarter last year[6] - Q2 net income was $1.9 million, or $0.04 per diluted share, compared to $4.5 million, or $0.10 per diluted share, for the comparable quarter last year[6] - Adjusted EBITDAS for Q2 was $15.1 million, or 12.1% of net sales, compared to $19.1 million, or 15.0% of net sales, for the comparable quarter last year[6] - GAAP net sales for the three months ended October 31, 2025, were $124,670,000, a decrease from $129,679,000 in the same period of 2024, representing a decline of approximately 1.0%[19] - Non-GAAP net sales for the six months ended October 31, 2025, were $209,748,000, compared to $213,800,000 in 2024, reflecting a decrease of about 1.5%[19] - The company reported a GAAP gross profit of $30,349,000 for the three months ended October 31, 2025, which is 24.3% of sales, down from 26.6% in the same period of 2024[19] - Non-GAAP adjusted EBITDAS for the six months ended October 31, 2025, was $23,184,000, down from $29,287,000 in the same period of 2024, indicating a margin of 11.1%[21] Cash Flow and Investments - Operating cash flow for Q2 was over $27 million, an increase of $34.7 million over the comparable quarter last year[6] - Operating cash flows for the six months ended October 31, 2025, provided $19,158,000, a significant improvement from cash used of $38,212,000 in the prior year[17] - Free cash flow for the six months ended October 31, 2025, was $3,877,000, compared to a negative free cash flow of $46,216,000 in the same period of 2024[22] - The company’s net cash used in investing activities for the six months ended October 31, 2025, was $19,859,000, compared to $7,879,000 in the prior year[17] - The company’s net cash provided by financing activities for the six months ended October 31, 2025, was a net outflow of $2,099,000, contrasting with a net inflow of $24,345,000 in the same period of 2024[17] Product and Sales Strategy - New products accounted for 38.7% of sales in the quarter, highlighting the success of the innovation strategy[4] - Distributor inventory declined by over 5% from the end of the prior quarter and by 15% compared to the end of October 2024, indicating positive sell-through at retail[4] - The company expects Q3 sales to be 8-10% higher than Q3 fiscal 2025 sales, with no significant impact from channel inventory[4] Dividends and Assets - A quarterly dividend of $0.13 per share has been authorized, to be paid on January 2, 2026[4] - Total assets as of October 31, 2025, were $548.6 million, a decrease from $559.6 million as of April 30, 2025[13] Losses and Expenses - For the six months ended October 31, 2025, the company reported a net loss of $1,494,000 compared to a net income of $2,691,000 for the same period in 2024[17] - The company incurred stock-based compensation expenses of $3,990,000 for the six months ended October 31, 2025, compared to $3,722,000 in the same period of 2024[17]

Financial Performance - Gross transaction volume (GTV) for Q3 2026 reached $21.7 billion, a year-over-year growth of 22% compared to $17.8 billion in Q3 2025[3] - Total revenue for Q3 2026 was $249.2 million, reflecting a 25% increase from $199.3 million in Q3 2025[3] - Non-GAAP income from operations for Q3 2026 was $21.5 million, significantly up from $1.6 million in Q3 2025, resulting in a non-GAAP operating margin of 8.6%[3] - The platform revenue for Q3 2026 was $239.6 million, a 25% increase from $191.2 million in Q3 2025[3] - The company expects total revenue for Q4 2026 to be between $244 million and $246 million, and for the full fiscal year 2026, total revenue is projected to be between $951 million and $953 million[4] - Non-GAAP income from operations for Q4 2026 is anticipated to be between $16 million and $17 million, with full fiscal year 2026 expected to be between $83 million and $84 million[4] Cash Flow and Assets - Net cash provided by operating activities for Q3 2026 was $43.8 million, compared to $15.5 million in Q3 2025[3] - Total current assets increased to $644,012 thousand as of October 31, 2025, up from $572,766 thousand as of January 31, 2025, representing a growth of 12.4%[16] - Net cash provided by operating activities for the three months ended October 31, 2025, was $43,780 thousand, compared to $15,534 thousand for the same period in 2024, indicating a significant increase of 182.5%[18] - Cash and cash equivalents rose to $493,238 thousand as of October 31, 2025, compared to $441,802 thousand as of January 31, 2025, marking an increase of 11.6%[16] - The company reported a net change in cash, cash equivalents, and restricted cash of $21,753 thousand for the three months ended October 31, 2025, compared to $5,710 thousand for the same period in 2024, showing an increase of 281.5%[18] Profitability Metrics - GAAP gross profit for the three months ended October 31, 2025, was $185,055,000, compared to $138,986,000 for the same period in 2024, representing a year-over-year increase of 33.2%[26] - Non-GAAP gross profit for the three months ended October 31, 2025, was $192,119,000, up from $147,342,000 in 2024, indicating a growth of 30.4%[26] - GAAP gross margin improved to 77.2% in Q3 2025 from 72.7% in Q3 2024, while non-GAAP gross margin increased to 80.2% from 77.1% in the same period[26] - Non-GAAP net income for the three months ended October 31, 2025, was $23,814,000, compared to a loss of $1,148,000 for the same period in 2024[33] - Non-GAAP net income for the nine months ended October 31, 2025, was $74,556,000, significantly up from $9,081,000 in 2024[33] Expenses - GAAP sales and marketing expense for the three months ended October 31, 2025, was $78,270,000, an increase from $67,795,000 in 2024[29] - Non-GAAP research and development expense for the three months ended October 31, 2025, was $63,647,000, compared to $54,016,000 in 2024, showing a rise of 17.5%[30] - Non-GAAP general and administrative expense for the three months ended October 31, 2025, was $33,960,000, up from $28,189,000 in 2024, indicating a 20.0% increase[31] - Stock-based compensation expense for the three months ended October 31, 2025, was $49,660 thousand, up from $25,426 thousand in the same period of 2024, representing a substantial increase of 95.2%[18] Losses and Liabilities - The company reported a GAAP loss from operations of $42.2 million in Q3 2026, an improvement from a loss of $44.0 million in Q3 2025[3] - Net loss for the three months ended October 31, 2025, was $39,527 thousand, an improvement from a net loss of $46,460 thousand for the same period in 2024, reflecting a decrease of 14.3%[18] - Total liabilities decreased slightly to $311,651 thousand as of October 31, 2025, from $314,064 thousand as of January 31, 2025, a reduction of 0.8%[16] - The company incurred $19,781 thousand in cash outflows for business acquisitions during the three months ended October 31, 2025[18] Operational Focus - ServiceTitan continues to focus on leveraging competitive advantages to enhance automation in the trades industry[2]

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 quarter ended September 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-42913 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securi ...

Financial Performance - Net sales for the three months ended November 1, 2025, were $239.1 million, an increase of $16.6 million or 7.5% compared to the same period in 2024, driven by a 7.6% increase in comparable sales[81] - Gross profit for the three months ended November 1, 2025, was $89.8 million, an increase of $11.5 million or 14.7%, with gross profit as a percentage of net sales rising to 37.6%[83] - Selling, general and administrative expenses for the three months ended November 1, 2025, were $78.0 million, an increase of $2.1 million or 2.7%, with SG&A as a percentage of net sales decreasing to 32.7%[84] - Net income for the three months ended November 1, 2025, was $9.2 million, or $0.55 earnings per diluted share, compared to $1.2 million, or $0.06 earnings per diluted share, for the same period in 2024[85] - For the nine months ended November 1, 2025, net sales were $637.7 million, an increase of $27.7 million or 4.5% compared to the same period in 2024, driven by a 5.3% increase in comparable sales[86] - Gross profit for the nine months ended November 1, 2025, was $221.1 million, an increase of $19.1 million or 9.5%, with gross profit as a percentage of net sales increasing to 34.7%[88] - Selling, general and administrative expenses for the nine months ended November 1, 2025, were $229.1 million, an increase of $8.9 million or 4.1%, with SG&A as a percentage of net sales decreasing to 36.0%[89] - Net loss for the nine months ended November 1, 2025, was $6.2 million, or $0.36 loss per diluted share, compared to a net loss of $16.5 million, or $0.86 loss per diluted share for the same period in 2024[90] Tax and Cash Flow - The effective income tax rate for the three months ended November 1, 2025, was 26.1%, a decrease from 63.4% for the same period in 2024, primarily due to improved operating results[85] - The effective income tax rate for the nine months ended November 1, 2025, was -149.6%, a decrease from -3.7% for the nine months ended November 2, 2024, primarily due to improved operating results and one-time discrete tax items[90] - Net cash used in operating activities decreased by $29.8 million to $4.2 million for the nine months ended November 1, 2025, from $34.0 million for the same period in 2024[95] - Net cash provided by investing activities was $5.1 million for the nine months ended November 1, 2025, compared to $22.1 million for the same period in 2024[96] - Net cash used in financing activities for the nine months ended November 1, 2025, was $37.7 million, compared to $24.6 million for the same period in 2024[97] Capital Expenditures and Store Openings - The company expects to spend approximately $10.0 million to $12.0 million on capital expenditures in fiscal 2025, primarily for new store openings and remodels[94] - The company plans to open approximately 6 new stores in fiscal 2025, although actual openings may differ from this plan[94] Risks and Challenges - The company experienced increased costs during 2024 and 2025, impacting sales and consumer confidence[79] - The company faces potential margin erosion due to tariffs and trade restrictions, which could significantly raise merchandise costs[114] - North America growth strategy relies on optimizing customer engagement and opening new stores, which may strain resources and require additional financing[115] - International expansion plans include risks related to different competitive conditions and consumer preferences, potentially impacting operational success[116] - Seasonal fluctuations in sales and inventory levels lead to volatility in quarterly results, with higher sales expected in the third and fourth fiscal quarters[119] - Increased labor costs, including minimum wage and healthcare, could adversely impact operating profit[128] - The company is exposed to foreign currency exchange rate risks, which could materially affect financial condition and results of operations[127] - Integration challenges from acquisitions, such as Blue Tomato and Fast Times, may divert management attention and increase operational inefficiencies[118] - The company relies on vendor relationships for product supply, and deterioration in these relationships could adversely affect business performance[132] - Unseasonable weather conditions could negatively impact inventory compatibility and overall business results[135] - Cybersecurity risks are increasing, and failure to maintain data security could lead to significant expenses and reputational damage[125] - The company relies heavily on key executives for its financial performance, and losing them could hinder growth objectives[136] - Staffing challenges could adversely affect the company's growth strategy and operational results, particularly in the retail sector where turnover is high[137] - Inability to hire qualified store managers and associates may impair new store openings and affect existing store performance[138] - A decline in cash flows from operations could significantly impact the company's ability to fund operations and growth strategies[139] - The company operates a single distribution center in California, and disruptions could materially affect operations and financial condition[140] - Risks from terrorism and violence in shopping malls could lead to decreased consumer traffic and sales[141] - The company faces potential litigation risks that could result in significant costs and impact financial results[143] - Changes in tax laws and obligations could materially affect the company's financial condition and cash flows[148] - Failure to meet analyst expectations could lead to a decline in stock price[149] - Increased scrutiny regarding ESG practices may result in additional costs and risks for the company[152]

Financial Performance - BMO Financial Group reported total assets of $1.5 trillion, making it the seventh largest bank in North America[10]. - The bank achieved a return on equity (ROE) of 11.3% for the full year, reflecting a year-over-year improvement of 150 basis points[36]. - BMO's pre-provision pre-tax earnings growth was significant, supported by disciplined expense management, contributing to positive operating leverage for six out of the last seven years[36]. - BMO achieved a reported earnings per share (EPS) growth of 20.2% for 2025, exceeding the medium-term objective of 7% to 10%[55]. - Reported earnings per share (EPS) increased by 20% to $11.44 in fiscal 2025, while adjusted EPS rose by 26% to $12.16[128]. - Return on equity (ROE) improved to 10.6% on a reported basis and 11.3% on an adjusted basis, compared to 9.7% and 9.8% in fiscal 2024[131]. - The efficiency ratio improved to 58.2% in fiscal 2025 from 59.5% in fiscal 2024, while the adjusted efficiency ratio decreased to 56.3% from 58.6%[137]. - Net income for the year ended October 31, 2025, was CAD 8,725 million, an increase of 19.1% from CAD 7,327 million in 2024[148]. - Total revenue rose to CAD 36,274 million in 2025, up 10.1% from CAD 32,795 million in 2024[148]. - Basic earnings per share increased to CAD 11.46 in 2025, compared to CAD 9.52 in 2024, reflecting a growth of 20.4%[148]. - Total annual shareholder return (TSR) for 2025 was 43.3%, outperforming the Canadian peer group average of 35.8%[143]. Strategic Initiatives - The company aims to reach a medium-term ROE target of 15%[22]. - BMO has made strategic acquisitions, including Burgundy Asset Management, to bolster its presence and capabilities[38]. - The bank is focused on delivering a digital-first, AI-powered business model to enhance client experiences and operational efficiency[44]. - BMO's strategic priorities include superior risk management and a high-performing culture to drive growth and shareholder value[15]. - BMO's Digital-First strategy has led to over 80% of employees actively using AI tools, with more than 3.7 million prompts utilized[78]. - BMO completed the acquisition of Burgundy Asset Management Ltd. on November 1, 2025, enhancing its Wealth Management segment[113]. - The bank announced the sale of 138 branches to First-Citizens Bank, involving approximately US$5.7 billion in deposits and US$1.1 billion in loans[115]. Community Engagement - The bank has committed to investing $1 billion in community initiatives, addressing critical issues and supporting economic growth[40]. - The annual Employee Giving Campaign raised $31 million for charities across Canada and the U.S., with 90% employee participation[83]. - BMO's commitment to community support has resulted in nearly $250 million raised for community organizations over the past decade[50]. - BMO was recognized as one of the World's Most Ethical Companies for the eighth consecutive year, highlighting its commitment to ethical business practices[82]. Risk Management and Compliance - The company reported a CET1 Ratio of 13.3%, exceeding regulatory requirements[55]. - The Enhanced Disclosure Task Force (EDTF) recommendations have been adopted by BMO to enhance risk disclosures, with specific sections detailing risk-related information and governance frameworks[91]. - BMO's risk management framework addresses various risks, including credit, market, operational, and environmental risks, which could materially impact financial position and results[99]. - The company is focused on strategic planning and capital management to navigate potential challenges in the economic environment, including inflationary pressures and changes in regulatory requirements[102]. - The report outlines BMO's plans to meet new key regulatory ratios once applicable rules are finalized, indicating proactive compliance measures[92]. Economic Outlook - Economic uncertainties due to U.S. trade policies are expected to impact growth in both Canada and the U.S., with ongoing trade negotiations shaping future outcomes[164]. - The company anticipates that recent U.S. trade agreements may stabilize the global economic environment moving into 2026[164]. - U.S. real GDP growth moderated to an annual rate of 1.9% in 2025, down from 2.8% in 2024, influenced by slower consumer spending and housing market activity[166]. - Consumer price inflation in the U.S. rose to 3.0% year-over-year in September 2025, up from 2.3% in April 2025, partially due to tariffs[166]. - The unemployment rate in Canada rose to 6.9% in October 2025 and is expected to reach 7.2% before declining as economic growth improves in 2026[165]. - The Canadian dollar weakened against the U.S. dollar in 2025 but is projected to strengthen moderately in 2026, assuming trade tensions ease[165].

Store Operations - As of November 1, 2025, the company operated 1,907 stores across 44 states[93] - The company expects a significant percentage of net sales to continue coming from new stores not included in comparable sales[103] - The company plans to invest approximately $200 million in cash capital expenditures for fiscal 2025, primarily for the construction and opening of about 150 net new stores[131] - The company entered into 102 new retail leases with average terms of approximately 10 years, resulting in future minimum lease payments of approximately $193.5 million[145] Financial Performance - Net sales increased to $1,038.3 million for the thirteen weeks ended November 1, 2025, up 23.1% from $843.7 million for the same period in 2024, driven by a comparable sales increase of $113.8 million and a non-comparable sales increase of $80.8 million[114] - Comparable sales rose by 14.3%, attributed to a 7.2% increase in the number of transactions and a 6.7% increase in the average dollar value of transactions[115] - Gross profit for the thirteen weeks ended November 1, 2025, was $351.4 million, reflecting a 36.2% increase from $258.0 million, with gross margin improving to 33.8% from 30.6%[117] - Selling, general and administrative expenses rose to $308.1 million, a 19.1% increase from $258.6 million, while as a percentage of net sales, these expenses decreased to 29.7% from 30.7%[118] - Net income surged to $36.5 million for the thirteen weeks ended November 1, 2025, compared to $1.7 million in the prior year, marking an increase of $34.8 million[121] - For the thirty-nine weeks ended November 1, 2025, net sales reached $3,035.7 million, up 22.1% from $2,485.6 million, driven by a non-comparable sales increase of $282.6 million and a comparable sales increase of $267.5 million[122] - Net income for the thirty-nine weeks ended November 1, 2025, increased to $120.4 million, an 82.0% rise from $66.2 million in the same period of 2024[129] Costs and Expenses - Cost of goods sold increased to $686.9 million, a 17.3% rise from $585.7 million, primarily due to higher merchandise costs and store occupancy costs from new store openings[116] - SG&A expenses are expected to increase in future periods due to ongoing store growth[109] Cash Flow and Financing - Net cash provided by operating activities for the thirty-nine weeks ended November 1, 2025, was $145.5 million, an increase of $78.4 million compared to the same period in 2024[138] - Net cash used in investing activities for the thirty-nine weeks ended November 1, 2025, was $121.7 million, an increase of $91.0 million compared to the same period in 2024[139] - Net cash used in financing activities for the thirty-nine weeks ended November 1, 2025, was $4.6 million, a decrease of $41.9 million compared to the same period in 2024[140] - As of November 1, 2025, the company had approximately $220 million available under its Revolving Credit Facility, with no direct borrowings outstanding[133] - The company had approximately $220 million available on its line of credit, net of $5 million in outstanding letters of credit[152] - The interest rate on borrowings under the Revolving Credit Facility ranges from a base rate plus an applicable margin of 0.125% to 0.50% or SOFR plus a margin of 1.12% to 1.50%[152] - The company does not expect an immediate 100 basis point change in interest rates to materially affect its cash flows or operating results due to the short-term nature of its investment portfolio[150] Risks and Challenges - The company faces risks such as inflation, supply chain disruptions, and increased competition from other retailers[91] - The company’s business is affected by various factors including consumer preferences, competition, and economic trends[106] - The company seeks to minimize the impact of inflation on its operations by sourcing from different vendors and changing its product mix[153] Operational Efficiency - Operating income is used as an indicator of business productivity and ability to manage SG&A expenses[110] - The increase in operating cash flows was primarily due to improved store performance, offset by higher income taxes paid and changes in working capital[138] - Gross profit is calculated as net sales minus cost of goods sold, with gross margin being gross profit as a percentage of net sales[104]

Revenue and Financial Performance - Revenue for the three and nine months ended October 31, 2025, was $108.5 million and $289.8 million, representing increases of 31.2% and 44.3% compared to the same periods in the prior fiscal year[85]. - Revenue for the three months ended October 31, 2025, was $108,452,000, representing a 31.2% increase from $82,653,000 in the same period of 2024[104]. - The increase in revenue was primarily driven by higher product unit shipments and a greater percentage of sales from AI inference processors[104]. - Operating losses for the three and nine months ended October 31, 2025, were $16.2 million and $64.1 million, improved from losses of $25.5 million and $101.2 million in the same periods of 2024[85]. - The net loss for the three months ended October 31, 2025, was $15,107,000, compared to a net loss of $24,071,000 in the same period of 2024[94]. - Gross profit for the three months ended October 31, 2025, was $64,586,000, with a gross margin of 59.6%, down from 60.6% in the prior year[105]. Cash Flow and Investments - Cash flows from operating activities increased to $54.6 million for the nine months ended October 31, 2025, compared to $8.4 million for the same period in 2024[85]. - Net cash provided by operating activities increased to $54,621 thousand for the nine months ended October 31, 2025, compared to $8,406 thousand in the same period of the prior fiscal year[113]. - Net cash used in investing activities decreased to $26,103 thousand for the nine months ended October 31, 2025, from $30,060 thousand in the prior year, primarily due to $9.4 million additional net cash received from debt security investments[115]. - Net cash provided by financing activities decreased slightly to $1,352 thousand for the nine months ended October 31, 2025, compared to $3,862 thousand in the prior year[116]. - As of October 31, 2025, the company had cash, cash equivalents, and marketable debt securities totaling approximately $295.3 million[112]. - The company believes its existing cash balances will be sufficient to meet anticipated cash requirements for at least the next 12 months[118]. Research and Development - The company anticipates increased research and development expenditures to support the development of innovative video and image processing solutions with AI capabilities[79]. - Research and development expenses increased to $61,451,000 for the three months ended October 31, 2025, a rise of 5.2% compared to $58,389,000 in 2024[106]. - The company anticipates continued growth in research and development expenses as it enhances product features and expands its workforce for new SoC development[100]. Market and Product Insights - The company expects AI and computer vision functionalities to become increasingly important in markets such as IoT, automotive, and industrial sectors[86]. - The average selling price of products is expected to vary by market and application, influenced by supply and demand dynamics and product mix[88]. - The company has historically concentrated revenue in a limited number of end markets, primarily IoT and automotive, which generated the majority of revenue since fiscal year 2018[90]. - Design wins are critical for revenue growth, particularly in computer vision-centric applications, but may not always translate into revenue[86]. - The company’s SoC designs integrate AI functionality and high-definition video processing, allowing for differentiation in various markets including security cameras and automotive applications[78]. Expenses and Tax Provisions - Selling, general and administrative expenses rose to $19,383,000 for the three months ended October 31, 2025, marking a 12.9% increase from $17,169,000 in the same period of 2024[107]. - The provision for income taxes for the three months ended October 31, 2025, was $933,000, an increase of 43.1% from $652,000 in the same period of 2024[109]. - The company expects fluctuations in gross margin due to changes in customer mix and average selling prices, particularly with the introduction of new products[99]. Operational Challenges - The semiconductor industry has faced global supply chain challenges, which may impact the company's operations depending on macroeconomic conditions[93]. - The company has purchase obligations with independent contract manufacturers amounting to $106.2 million as of October 31, 2025[119]. - Total cash payments for a noncancelable on-premise internal-use software license agreement for product design are approximately $5.3 million, with $3.5 million due within 12 months[120]. - There were no material changes in contractual obligations, commitments, and contingencies from those disclosed in the Annual Report for the fiscal year ended January 31, 2025[121]. - As of October 31, 2025, the company did not engage in any off-balance sheet arrangements[122]. Share Repurchase Program - The existing share repurchase program was extended for an additional twelve months through June 30, 2026[117].

Revenue and Sales Performance - Total revenue for Q2 FY'26 was $350.2 million, an increase of 0.8% year-over-year, with adjusted revenue growth of 4.8% excluding a one-time benefit from the prior year[17]. - Sales volumes decreased by 1.1% to 13,637 units compared to 13,784 units in the prior year, attributed to capital constraints[18]. - Total revenues for the six months ended October 31, 2025, were $691,282 thousand, a decrease of 0.5% compared to $695,032 thousand for the same period in 2024[53]. - Adjusted total revenue for the three months ended October 31, 2025, was $350,192 thousand, reflecting a 4.8% increase from $334,088 thousand for the same period in 2024[64]. - Retail units sold decreased by 1.1% to 13,637 in Q3 2025 compared to 13,784 in Q3 2024[37]. - Same store revenue growth showed a decline of 0.2% in Q3 2025 compared to a decline of 8.4% in Q3 2024[37]. Financial Position and Cash Flow - Total cash, including restricted cash, increased to $251.0 million from $124.5 million at the start of the fiscal year[7]. - Cash and cash equivalents increased significantly to $122,362 thousand as of October 31, 2025, compared to $9,808 thousand as of April 30, 2025[55]. - Total assets increased to $1,717,920 thousand as of October 31, 2025, up from $1,606,474 thousand as of April 30, 2025[56]. Expenses and Cost Management - SG&A expenses totaled $57.2 million, with a target to reduce SG&A as a percentage of sales to approximately 16.5%[20]. - Adjusted selling, general and administrative expenses as a percentage of sales were 18.8% for the three months ended October 31, 2025, compared to 16.6% for the same period in 2024[65]. - The Company closed five underperforming stores, projected to save $1 million in fiscal 2026 and $2 million annually[21]. Credit and Charge-offs - The allowance for credit losses as a percentage of finance receivables was 24.19%, compared to 24.72% on October 31, 2024[26]. - Net charge-offs totaled $106.3 million, with net charge-offs as a percentage of average finance receivables increasing to 7.0% from 6.6% in the prior year[23]. - Provision for credit losses increased by 19.6% to $119,074,000 in Q3 2025 from $99,522,000 in Q3 2024[51]. - The provision for credit losses increased by 13.9% to $222,109 thousand for the six months ended October 31, 2025, compared to $194,945 thousand for the same period in 2024[53]. Profitability and Earnings - Net income loss for Q3 2025 was $22,473,000, a significant decline from a net income of $5,099,000 in Q3 2024[51]. - Net loss attributable to common shareholders for the six months ended October 31, 2025, was $(28,228) thousand, compared to a net income of $4,115 thousand for the same period in 2024[53]. - Management expects actions taken during the quarter to drive meaningful improvement in operating leverage and position the Company for a return to positive GAAP earnings[35]. Customer Metrics - Active customer count rose by 0.5% to 103,819 in Q2 2025 compared to 103,336 in Q2 2024[40]. - Average total collected per active customer per month increased by 3.6% to $580 in Q3 2025 from $560 in Q3 2024[40]. Underwriting and Originations - The new LOS V2 underwriting platform is enhancing the quality of new originations, with contracts originated under this system tracking better than those from the legacy system[9].

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 October 25, 2025 New Jersey 22-1576170 (State or other jurisdiction of incorporation or organization) (I. R. S. Employer Identification No.) 733 Mountain Avenue, Springfield, New Jersey, 07081 (Address of principal executive offices) (Zip Code) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15 ...