Revenue Performance - Total net revenues decreased by 4.7% compared to the same period last year[174] - Wholesale revenue decreased by 6.2%, while direct-to-consumer revenue decreased by 2.2%[174] - Apparel revenue decreased by 1.1%, footwear revenue decreased by 15.7%, and accessories revenue decreased by 2.8%[174] - Net revenues for the three months ended September 30, 2025, decreased by $65.6 million, or 4.7%, to $1.33 billion compared to $1.40 billion in the same period of 2024[180] - Net sales decreased by $63.1 million, or 4.6%, to $1.31 billion during the three months ended September 30, 2025, primarily due to lower average selling prices and unfavorable channel mix[181] - For the six months ended September 30, 2025, net revenues decreased by $115.2 million, or 4.5%, to $2.47 billion compared to $2.58 billion in the same period of 2024[180] - Net revenues in North America decreased by $71.8 million or 8.3% during the three months ended September 30, 2025[211] - Net revenues in EMEA increased by $34.5 million or 12.2% during the three months ended September 30, 2025[214] - Net revenues in Asia-Pacific decreased by $28.5 million or 13.7% during the three months ended September 30, 2025[216] - Net revenues in Latin America increased by $6.9 million or 14.6% during the three months ended September 30, 2025[218] - Corporate Other net revenues decreased by $6.7 million during the three months ended September 30, 2025, primarily due to foreign currency hedge losses[220] Profitability and Margins - Gross margin decreased by 250 basis points to 47.3%[174] - Gross profit decreased by $65.5 million to $630.6 million during the three months ended September 30, 2025, with a gross margin decline to 47.3% from 49.8%[187] - Gross profit for the six months ended September 30, 2025, decreased by $81.7 million to $1.18 billion, with a gross margin decline to 47.7% from 48.7%[188] - Estimated negative impact of approximately $100 million to cost of goods sold in Fiscal 2026 due to increased tariffs, affecting gross profit by approximately 200 basis points[176] Expenses and Charges - Selling, general and administrative expenses increased by 11.9%[174] - Selling, general and administrative expenses increased by $61.8 million, or 11.9%, to $581.6 million during the three months ended September 30, 2025, representing 43.6% of net revenues[192] - Restructuring and related charges totaled $36.4 million for the three months ended September 30, 2025[175] - Restructuring charges increased significantly by 893.3% to $31.9 million during the three months ended September 30, 2025, compared to $3.2 million in the same period of 2024[194] - Marketing and advertising costs increased by $28.4 million or 22.6%, rising to 11.5% of net revenues from 9.0%[195] - Other costs increased by $33.4 million or 8.5%, rising to 32.1% of net revenues from 28.2%[195] Operating Income - North America operating income decreased by $79.3 million, or 36.5%, for the three months ended September 30, 2025, primarily due to lower net revenues and higher product input costs[223] - EMEA operating income increased by $1.0 million, or 1.9%, for the three months ended September 30, 2025, driven by higher net revenues[225] - Latin America operating income decreased by $7.6 million, or 62.2%, for the three months ended September 30, 2025, primarily due to higher product input costs[229] - Total operating income for the three months ended September 30, 2025, was $17.0 million, a decrease of $156.0 million or 90.2% compared to the previous year[221] Cash Flow and Financing - Cash and cash equivalents as of September 30, 2025, were approximately $396 million[235] - Cash flows used in operating activities decreased by $147.4 million for the six months ended September 30, 2025, compared to the previous year[246] - Total capital expenditures during the six months ended September 30, 2025, were $55.9 million, representing a $35.7 million decrease from the previous year[247] - Cash flows from financing activities increased by $689.9 million, primarily due to the issuance of $400 million of Senior Notes due 2030 and $200 million of borrowings under the revolving credit facility[248] - The company repurchased $25 million of Class C Common Stock during the three months ended September 30, 2025, totaling 5.2 million shares[241] - The company repurchased $25 million of Class C Common Stock during the six months ended September 30, 2025, compared to $40 million repurchased in the same period of 2024[248] - As of September 30, 2025, there was a total of $200 million outstanding under the revolving credit facility, with no amounts outstanding as of March 31, 2025[251] - The amended credit agreement provides for an aggregate $1.1 billion of revolving credit commitments, expiring on June 16, 2030[250] - The company issued $400 million in aggregate principal amount of 7.25% Senior Notes due July 15, 2030, with interest payable semi-annually starting January 15, 2026[262] - The company satisfied and discharged the Senior Notes due 2026 by depositing sufficient funds for all remaining principal and interest payments[260] - The company is required to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0[256] - As of September 30, 2025, the company was in compliance with all applicable covenants under the amended credit agreement[256] - The company has $45.6 million of letters of credit outstanding as of September 30, 2025[253] - The Senior Notes due 2026 remain on the Condensed Consolidated Balance Sheets and will accrete to their par value until maturity in June 2026[261] Strategic Focus - The company is focused on enhancing digital strategy to improve consumer engagement and brand connectivity[172] - The 2025 restructuring plan is expected to incur up to $160 million in pre-tax charges, including $90 million in cash-related charges[173]

Revenue Performance - Total net revenues decreased by 4.7% compared to the same period last year[174] - Wholesale revenue decreased by 6.2%, while direct-to-consumer revenue decreased by 2.2%[174] - Apparel revenue decreased by 1.1%, footwear revenue decreased by 15.7%, and accessories revenue decreased by 2.8%[174] - Net revenues for the three months ended September 30, 2025, decreased by $65.6 million, or 4.7%, to $1.33 billion compared to $1.40 billion in the same period of 2024[180] - Net sales decreased by $63.1 million, or 4.6%, to $1.31 billion during the three months ended September 30, 2025, primarily due to lower average selling prices and unfavorable channel mix[181] - For the six months ended September 30, 2025, net revenues decreased by $115.2 million, or 4.5%, to $2.47 billion compared to $2.58 billion in the same period of 2024[180] - North America net revenue decreased by 8.3%, while EMEA increased by 12.2%[174] - North America net revenues decreased by $71.8 million or 8.3% during the three months ended September 30, 2025[211] - EMEA net revenues increased by $34.5 million or 12.2% during the three months ended September 30, 2025[214] - Asia-Pacific net revenues decreased by $28.5 million or 13.7% during the three months ended September 30, 2025[216] - Latin America net revenues increased by $6.9 million or 14.6% during the three months ended September 30, 2025[218] - Corporate Other net revenues decreased by $6.7 million during the three months ended September 30, 2025, primarily due to foreign currency hedge losses[220] Profitability and Expenses - Gross margin decreased by 250 basis points to 47.3%[174] - Gross profit decreased by $65.5 million to $630.6 million during the three months ended September 30, 2025, with a gross margin decline to 47.3% from 49.8%[187] - Gross profit for the six months ended September 30, 2025, decreased by $81.7 million to $1.18 billion, with a gross margin decline to 47.7% from 48.7%[188] - Selling, general and administrative expenses increased by 11.9%[174] - Selling, general and administrative expenses increased by $61.8 million, or 11.9%, to $581.6 million during the three months ended September 30, 2025, representing 43.6% of net revenues[192] - Selling, general and administrative expenses decreased by $245.2 million, or 18.1%, during the six months ended September 30, 2025, representing 45.1% of net revenues[192] - Restructuring charges increased significantly by 893.3% to $31.9 million during the three months ended September 30, 2025, compared to $3.2 million in the same period of 2024[194] - Marketing and advertising costs increased by $28.4 million or 22.6%, rising to 11.5% of net revenues from 9.0%[195] - Other costs increased by $33.4 million or 8.5%, rising to 32.1% of net revenues from 28.2%[195] Financial Position and Cash Flow - Cash and cash equivalents as of September 30, 2025, were approximately $396 million[235] - Net cash used in operating activities was $(20,978) million for the six months ended September 30, 2025, a decrease of $147.4 million compared to the previous year[245] - Total capital expenditures during the six months ended September 30, 2025, were $55.9 million, representing a $35.7 million decrease from the previous year[247] - The company repurchased $25 million of Class C Common Stock during the three months ended September 30, 2025, totaling 5.2 million shares[241] - Approximately $650 million of additional current and prior foreign earnings were repatriated, including a $250 million cash dividend in Fiscal 2026[238] - The company has a share repurchase program authorized for up to $500 million through May 31, 2027, with approximately $385 million remaining[243] - Cash flows from financing activities increased by $689.9 million, primarily due to the issuance of $400 million in Senior Notes due 2030 and $200 million in borrowings under the revolving credit facility[248] - The company repurchased $25 million of Class C Common Stock during the six months ended September 30, 2025, compared to $40 million repurchased in the same period of 2024[248] - As of September 30, 2025, there was a total of $200 million outstanding under the revolving credit facility, with no amounts outstanding as of March 31, 2025[251] Debt and Financing - The company issued $400 million in Senior Notes due 2030, bearing interest at a fixed rate of 7.25% per annum, payable semi-annually starting January 15, 2026[262] - The company satisfied and discharged the Senior Notes due 2026 using net proceeds from the Senior Notes due 2030, along with borrowings and cash on hand[260] - The company is required to maintain a consolidated EBITDA to consolidated interest expense ratio of not less than 3.50 to 1.0[256] - As of September 30, 2025, the company was in compliance with all applicable covenants under the amended credit agreement[256] - The amended credit agreement provides for $1.1 billion in revolving credit commitments, expiring on June 16, 2030, with a springing maturity of 91 days prior if Senior Notes due 2030 are not refinanced[250] - The amended credit agreement contains negative covenants that limit the company's ability to incur additional indebtedness and engage in certain transactions[255] - The company has $45.6 million of letters of credit outstanding as of September 30, 2025[253] Strategic Initiatives - The 2025 restructuring plan is expected to incur up to $160 million in pre-tax charges, including $90 million in cash-related charges[173] - Estimated negative impact of approximately $100 million to cost of goods sold in Fiscal 2026 due to increased tariffs, affecting gross profit by approximately 200 basis points[176] - The company plans to enhance consumer engagement through a digital strategy aimed at long-term growth[172] - The company is actively monitoring macroeconomic factors, including inflation and foreign currency fluctuations, that may impact financial results[177] Income and Tax - Interest expense, net increased by $6.9 million to $8.6 million during the three months ended September 30, 2025, primarily due to the issuance of Senior Notes due 2030[200] - Income tax expense increased by $28.1 million to $25.9 million during the three months ended September 30, 2025, with an effective tax rate of 345.9%[205]

Market Focus and Product Development - Organogenesis reported a significant focus on advanced wound care and surgical markets, addressing chronic and acute wounds with a comprehensive product portfolio[100] - The company plans to transition Dermagraft manufacturing to a new facility in Smithfield, Rhode Island, expected to begin in 2027, which will lead to substantial long-term cost savings[104] - A Phase 3 clinical trial for ReNu showed a statistically significant reduction in knee pain (p=0.0177) and maintenance of function (p<0.0001) at six months[107] - The second Phase 3 trial of ReNu did not achieve statistical significance for its primary endpoint, despite showing a numerical improvement in pain reduction[108] Financial Performance - Net product revenue increased by $35.3 million, or 31%, to $150.5 million for the three months ended September 30, 2025, compared to $115.2 million for the same period in 2024[131] - Advanced Wound Care net product revenue increased by $33.5 million, or 31%, to $141.5 million in Q3 2025, while it decreased by $21.0 million, or 6%, to $314.1 million for the nine months ended September 30, 2025[138] - Surgical & Sports Medicine net product revenue increased by $1.8 million, or 25%, to $9.0 million in Q3 2025, and by $3.6 million, or 17%, to $23.9 million for the nine months ended September 30, 2025[139] - Gross profit increased by $25.9 million, or 29%, to $114.2 million in Q3 2025, but decreased by $20.3 million, or 8%, to $250.4 million for the nine months ended September 30, 2025[141] - Adjusted EBITDA for Q3 2025 was $30.1 million, compared to $13.4 million in Q3 2024, reflecting a significant improvement in operational performance[134] - The company recorded a net income of $21.6 million for Q3 2025, compared to a net income of $12.3 million for the same period in 2024[131] - The total revenue for the nine months ended September 30, 2025, was $338.6 million, compared to $355.4 million for the same period in 2024, indicating a slight decline[131] Expenses and Investments - Selling, general and administrative expenses are expected to increase due to investments in market development and geographic expansion[123] - Research and development expenses include costs for clinical trials and enhancements to existing products, which are expensed as incurred[124] - Research and development expenses increased by $2.9 million, or 28%, to $13.2 million in Q3 2025 from $10.3 million in Q3 2024[143] - Selling, general and administrative expenses rose by $7.9 million, or 11%, to $79.7 million in Q3 2025 from $71.8 million in Q3 2024, primarily due to increased commissions and headcount-related expenses[144] - For the nine months ended September 30, 2025, selling, general and administrative expenses increased by $5.4 million, or 2%, to $226.1 million from $220.7 million in the same period of 2024[145] Cash Flow and Working Capital - As of September 30, 2025, the company had working capital of $205.1 million, including $63.7 million in cash and cash equivalents[150] - Net cash used in operating activities was $49.7 million for the nine months ended September 30, 2025, compared to net cash provided of $3.3 million in the same period of 2024[153] - During the nine months ended September 30, 2025, net cash used in investing activities was $9.5 million, up from $6.7 million in the same period of 2024[156] Tax and Compliance - Income tax benefit decreased by $6.1 million, or 94%, to $0.4 million in Q3 2025 from $6.5 million in Q3 2024, mainly due to changes in estimated effective tax rates[148] - Income tax benefit increased by $3.5 million, or 57%, to $9.8 million for the nine months ended September 30, 2025, compared to $6.2 million in the same period of 2024[149] - As of September 30, 2025, the company did not require a valuation allowance for its net U.S. deferred tax assets[128] - As of September 30, 2025, the company was in compliance with the covenants under the 2021 Credit Agreement, with no outstanding borrowings under the Term Loan Facility or the Revolving Facility[163] Market Risks and Accounting Standards - Medicare's proposed local coverage determinations could classify over 200 products as "non-covered," potentially impacting revenue from products like PuraPly and Novachor[111] - For calendar year 2026, CMS will pay approximately $127.28 per square centimeter for certain skin substitute products, which may affect product utilization and revenue[112] - There were no material changes to market risk disclosures for the nine months ended September 30, 2025[167] - Recently issued accounting standards were reviewed as disclosed in the financial statements[166] - No off-balance sheet arrangements were reported during the periods presented[165]

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 (Exact name of registrant as specified in its charter) | Delaware | 001-40773 | 86-2171101 | | --- | --- | --- | | (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer | | incorporation or organization) | | Identification Number) | | 477 Madison A ...

Financial Performance - Allogene Therapeutics reported a net loss of $41.4 million for Q3 2025, or $0.19 per share, compared to a net loss of $66.3 million in Q3 2024[15] - Total operating expenses for Q3 2025 were $44.9 million, a decrease from $71.8 million in Q3 2024[19] - The company expects a decrease in cash, cash equivalents, and investments of approximately $150 million for 2025[11] - GAAP operating expenses for 2025 are projected to be approximately $230 million, including an estimated non-cash stock-based compensation expense of $45 million[11] Research and Development - Research and development expenses for Q3 2025 were $31.2 million, down from $44.7 million in Q3 2024[19] - The pivotal Phase 2 ALPHA3 trial with cema-cel is expected to conduct a futility analysis in the first half of 2026, focusing on minimal residual disease (MRD) conversion rates[6] - The Phase 1 RESOLUTION trial with ALLO-329 is exploring treatment regimens that may reduce or eliminate lymphodepletion, with proof-of-concept data anticipated in the first half of 2026[9] - Allogene's ALLO-316 trial in renal cell carcinoma has shown early signs of efficacy and tolerability, with plans for the next phase ongoing[10] Cash Position - The company ended Q3 2025 with $277.1 million in cash, cash equivalents, and investments, projecting a cash runway into the second half of 2027[11] - The company has over 50 active clinical sites in the U.S. and Canada for the ALPHA3 trial, with additional sites in Australia and South Korea expected to open in early 2026[5]

Financial Performance - Revenue for Q3 2025 reached $285.8 million, a 8.5% increase from $264.2 million in Q3 2024[18] - Gross profit for Q3 2025 was $157.3 million, compared to $142.2 million in Q3 2024, reflecting a gross margin improvement[18] - Net income for Q3 2025 was $18.0 million, compared to a net loss of $4.5 million in Q3 2024, marking a significant turnaround[18] - Total revenue for the nine months ended September 30, 2025, was $848,806,000, up from $763,278,000 in the same period of 2024, marking a growth of 11.2%[109] - Net income for the three and nine months ended September 30, 2025, was $18.0 million and $19.7 million, compared to net losses of $4.5 million and $24.4 million for the same periods in 2024[139] - Adjusted EBITDA for the three and nine months ended September 30, 2025, was $71.7 million and $192.4 million, compared to $52.4 million and $131.7 million for the same periods in 2024[147] Assets and Liabilities - Total assets decreased to $1.77 billion as of September 30, 2025, down from $2.05 billion at the end of 2024[15] - Total liabilities decreased to $993.1 million as of September 30, 2025, compared to $1.43 billion at the end of 2024[15] - Total stockholders' equity increased to $775.3 million as of September 30, 2025, up from $622.2 million at the end of 2024[15] - Cash and cash equivalents decreased to $193.4 million from $362.5 million at the end of 2024[15] - Total cash, cash equivalents, and restricted cash decreased to $195.4 million at the end of the period from $292.9 million at the end of the previous year[30] Expenses - Research and development expenses for Q3 2025 were $35.2 million, down from $42.5 million in Q3 2024[18] - Sales and marketing expenses for Q3 2025 were $71.7 million, a decrease from $78.6 million in Q3 2024[18] - General and administrative expenses for the three months ended September 30, 2025, decreased by $2.2 million (6%) compared to the same period in 2024, primarily due to a $1.1 million decrease in office and facilities costs[170] - For the nine months ended September 30, 2025, general and administrative expenses increased by $4.8 million (5%) compared to the same period in 2024, driven by a $2.9 million increase in personnel-related costs[171] Cash Flow - Net cash provided by operating activities increased to $142.6 million, compared to $93.4 million for the nine months ended September 30, 2024, reflecting a 52.8% increase[30] - Net cash provided by investing activities was $119.2 million for the nine months ended September 30, 2025, primarily from cash proceeds of $736.4 million from sales and maturities of marketable investments[183] - Net cash used in financing activities was $(430.5) million for the nine months ended September 30, 2025, mainly due to $434.4 million paid for the maturity of the 2025 convertible senior notes[185] Stock and Equity - The company issued $747.5 million in convertible senior notes in March 2024, with an estimated fair value of $662.1 million as of September 30, 2025[54] - The net carrying amount of the 2029 convertible senior notes was $734.6 million as of September 30, 2025, slightly up from $731.9 million at the end of 2024[75] - The Company repurchased approximately $313.1 million of 2025 convertible senior notes for about $304.9 million in cash, resulting in an extinguishment gain of approximately $6.6 million[65][67] - As of September 30, 2025, the Company had 78,214,059 shares of common stock issued and outstanding, an increase from 75,807,505 shares as of December 31, 2024[81] Customer and Revenue Composition - Subscription and related usage fees accounted for 93% of total revenue for the three and nine months ended September 30, 2025, compared to 92% for the same periods in 2024[134] - The company has over 3,000 customers across multiple industries, with no single customer accounting for more than 10% of total revenue[139] Future Outlook and Challenges - The company expects to recognize revenue on approximately 75% of the remaining performance obligations over the next 24 months[47] - Macroeconomic challenges, including global tariff increases and geopolitical conflicts, are expected to continue impacting revenue in future periods[135] - The company anticipates continued investment in professional services and cloud operations to maintain service quality, which may lead to long-term declines in cost of revenue as a percentage of revenue[153] Acquisitions and Restructuring - The company acquired Acqueon for approximately $173.8 million on August 27, 2024, to enhance its AI-powered customer experience platform[120] - The company implemented a reduction in force plan in 2024, resulting in a 6% decrease in global full-time employees, incurring $9.6 million in restructuring costs[126] - A further reduction of approximately 4% in global full-time employees was executed under the 2025 Plan, with restructuring costs totaling $7.9 million during the nine months ended September 30, 2025[138]

Exhibit 99.1 Revelation Biosciences, Inc. Announces Financial Results for the three and nine months ended September 30, 2025 San Diego, CA – November 6, 2025 – Revelation Biosciences, Inc. (NASDAQ: REVB) (the "Company" or "Revelation"), a clinical- stage life sciences company that is focused on rebalancing inflammation to optimize health, today reported its financial results for the three and nine months ended September 30, 2025. Corporate Highlights "The outstanding PRIME data and subsequent financing vali ...

Financial Performance - Total revenue for the three months ended September 30, 2025, was $8,955,000, representing a 37.5% increase from $6,507,000 in the same period of 2024[13] - Research fees increased to $8,817,000 in Q3 2025, up from $6,289,000 in Q3 2024, marking a 40.2% growth[13] - Net loss for the three months ended September 30, 2025, was $57,119,000, compared to a net loss of $51,107,000 in the same period of 2024, indicating a 11.8% increase in losses[13] - Revenue for the three months ended September 30, 2025, increased by $2.4 million (38%) compared to the same period in 2024, reaching $8.955 million[88] - Revenue for the nine months ended September 30, 2025, increased by $6.5 million (27%) compared to the same period in 2024, totaling $30.275 million[88] - Basic and diluted net loss per share for the nine months ended September 30, 2024, was $0.44, which increased to $0.46 in 2025, representing a rise of approximately 5%[24] Cash and Liquidity - Total cash, cash equivalents, and marketable securities decreased to $495,672,000 as of September 30, 2025, down from $625,614,000 as of December 31, 2024, a decline of 20.8%[12] - Cash flows from operating activities resulted in a net cash used of $100.556 million for the nine months ended September 30, 2024, compared to $96.552 million for the same period in 2025, indicating a slight increase in cash outflow[17] - The company’s net cash provided by investing activities was $85.706 million for the nine months ended September 30, 2024, compared to $12.612 million in 2025, indicating a significant decline in cash inflow from investments[17] - As of September 30, 2025, the company had $495.7 million in cash, cash equivalents, and marketable securities, a decrease of $129.9 million since December 31, 2024[102] - The company does not anticipate the need for additional external funding over at least the next 36 months, based on current liquidity and cash flow projections[128] Expenses and Liabilities - Operating expenses for the three months ended September 30, 2025, were $85,233,000, down from $100,170,000 in Q3 2024, a reduction of 14.9%[13] - Total liabilities increased to $391,954,000 as of September 30, 2025, from $304,469,000 as of December 31, 2024, an increase of 28.7%[12] - Shareholders' equity decreased to $964,038,000 as of September 30, 2025, down from $1,056,084,000 as of December 31, 2024, a decline of 8.7%[12] - Stock-based compensation expenses for the three months ended September 30, 2025, totaled $13.9 million, down from $17.2 million in the same period of 2024, a decrease of 19.8%[37] - General and administrative expenses increased by $2.9 million, or 15%, for the three months ended September 30, 2025, compared to the same period in 2024[92] Research and Development - Research and development expenses for the nine months ended September 30, 2025, were $136,736,000, up from $121,183,000 in the same period of 2024, an increase of 12.8%[13] - The company plans to continue significant investments in research and development to enhance antibody discovery and development capabilities[74] - The company plans to invest significantly in preclinical and clinical development of internal programs, focusing on areas with substantial unmet medical needs[78] - Research and development expenses increased by $14.1 million, or 34%, for the three months ended September 30, 2025, compared to the same period in 2024[89] - Total compensation expense for research and development was $21.2 million for the three months ended September 30, 2025, compared to $20.3 million for the same period in 2024[89] Clinical Trials and Regulatory Matters - The Phase 1 clinical trial for ABCL635 is expected to present data in mid-2026, focusing on safety and pharmacokinetics[71] - The company achieved a regulatory milestone with the submission of Clinical Trial Applications for therapies ABCL635 and ABCL575 in Q2 2025[70] - The company may experience delays in filing applications for clinical trials, which could hinder timely commercialization of its products[151] - Regulatory approval for product candidates depends on various factors, including successful clinical trials and compliance with health authority requirements[161] - The successful development of product candidates is uncertain, with a high failure rate in clinical studies[183] Market and Competitive Risks - The company’s financial performance is highly reliant on the successful development and commercialization of antibodies by its partners, which will impact future milestone payments and royalties[82] - The company continues to face risks related to market fluctuations and the need for additional capital to support operations and growth initiatives[132] - Unstable market conditions may adversely affect the company's business, financial condition, and share price, with potential impacts from military conflicts and sanctions[133] - Market acceptance of approved products depends on various factors, including safety, efficacy, and competition[188] - The ability to generate significant revenue from product sales is contingent on timely market introduction and competitive positioning[193] Government Support and Funding - The company has recorded CAD $112.1 million ($81.6 million) in respect of Government Contribution 2 funding from the Government of Canada as of September 30, 2025[53] - The Government of Canada and the Government of British Columbia committed up to $166.7 million and $55.6 million, respectively, to develop and deliver antibody medicines through Phase 1 clinical trials[105] - The company incurred maximum expenditures under Government Contribution 1, totaling CAD $175.6 million ($125.6 million), to support R&D efforts related to COVID-19[50] Legal and Compliance Issues - The company is involved in ongoing legal proceedings regarding intellectual property, with a jury trial scheduled for January 2026[117] - The FDA strictly regulates promotional claims, and improper promotion of off-label uses can lead to significant liabilities for the company[208] - Product liability claims may result in substantial liabilities, potentially limiting the commercialization of product candidates[209]

Revenue and Financial Performance - For the three months ended September 30, 2025, revenue was $35.1 million, a decrease of $0.3 million or 1% compared to $35.4 million in the same period of 2024[132]. - Revenue increased by $4.7 million, or 5%, to $106.9 million for the nine months ended September 30, 2025, compared to $102.2 million in 2024[141]. - The net loss for the three months ended September 30, 2025, was $2.3 million, compared to a net loss of $2.2 million in the same period of 2024[131]. - For the nine months ended September 30, 2025, the company reported a net loss of $14,272,000, compared to a net loss of $8,743,000 in 2024, with a net loss margin of 13% versus 9%[180]. Expenses and Cost Management - Total operating expenses for the three months ended September 30, 2025, were $19.7 million, an increase from $18.0 million in the same period of 2024[131]. - Cost of revenue, net increased by $0.5 million, or 3%, to $17.7 million for the three months ended September 30, 2025, compared to $17.1 million in 2024[133]. - General and administrative expenses increased by $0.7 million, or 8%, to $9.8 million for the three months ended September 30, 2025, compared to $9.1 million in 2024[136]. - Research and development expenses for the three months ended September 30, 2025, were $4.9 million, a decrease from $5.6 million in the same period of 2024[131]. - Sales and marketing expenses increased to $4.9 million for the three months ended September 30, 2025, compared to $3.3 million in the same period of 2024[131]. Profitability Metrics - Adjusted EBITDA for the three months ended September 30, 2025, was $6.5 million, with an adjusted EBITDA margin of 19%, compared to $9.7 million and 27% in 2024[174]. - Non-GAAP net income for the three months ended September 30, 2025, was $4.3 million, representing a margin of 12%, down from $5.4 million and 15% in 2024[176]. - Free cash flow for the three months ended September 30, 2025, was $1.2 million, with a free cash flow margin of 4%, compared to $6.7 million and 19% in 2024[177]. - Non-GAAP net income for the nine months ended September 30, 2025, was $7,308,000, down from $14,792,000 in 2024, resulting in a non-GAAP net income margin of 7% compared to 14% in the prior year[180]. Membership and Transaction Metrics - The number of paid members averaged 642,000 across 38,800 companies as of September 30, 2025[114]. - As of September 30, 2025, the average number of paid members was 642, a decrease from 684 in the same period of 2024[171]. - Expensify has processed and automated 1.8 billion expense transactions on its platform as of September 30, 2025[114]. Cash and Financing - Net cash provided by operating activities was $17.9 million for the nine months ended September 30, 2025, compared to $16.5 million in 2024[153]. - As of September 30, 2025, the company had $61.5 million in cash and cash equivalents, with no outstanding indebtedness[150]. - The company had $44.0 million remaining under the 2025 Share Repurchase Program as of September 30, 2025[159]. - The company repaid the outstanding balance of $7.6 million on the amortizing term mortgage in August 2024[160]. - The 2024 Amended Loan and Security Agreement provided for a $25.0 million revolving credit facility, which was terminated on July 1, 2025, with no borrowings outstanding at that time[161][166]. - The company entered into a new Letter of Credit Facility and Security Agreement on October 9, 2025, maintaining a Letter of Credit of $7.5 million[167]. Risk and Compliance - The company is subject to customary covenants under the LOC Security Agreement, restricting certain financial activities[168]. - The company has not reported any material changes in contractual obligations and commitments as of September 30, 2025[182]. - There are no off-balance sheet financing arrangements or relationships with unconsolidated entities as of the reporting date[185]. - The company has not experienced any material changes in market risk compared to the previous year[189]. - There have been no material changes to critical accounting policies and estimates compared to the previous annual report[187].

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 1-5467 VALHI, INC. (Exact name of Registrant as specified in its charter) Delaware 87-0110150 (State or other jurisdictio ...