Financial Performance - Universal Corporation generated approximately $2,947.3 million in consolidated revenues and earned $232.8 million in total operating income for fiscal year 2025[19]. - Universal Corporation reported a 7% increase in revenues, amounting to $2,947.3 million for fiscal year 2025, compared to $2,748.6 million in fiscal year 2024[157]. - Operating income for fiscal year 2025 rose by 5%, reaching $232.8 million, up from $222.0 million in fiscal year 2024[157]. - The Tobacco Operations segment generated revenues of $2,608.7 million, a 7% increase from $2,438.8 million in the previous year, with operating income rising by 8% to $240.2 million[157]. - The Ingredients Operations segment saw revenues increase by 9% to $338.6 million, with operating income surging by 212% to $12.3 million[157]. - Adjusted diluted earnings per share decreased by 9% to $4.63 in fiscal year 2025, down from $5.08 in fiscal year 2024[157]. - The gross profit margin declined by 90 basis points to 18.6% in fiscal year 2025, compared to 19.5% in fiscal year 2024[157]. - Selling, general, and administrative expenses decreased by 2% to $305.3 million, primarily due to higher recoveries of farmer advances[159]. - A pension settlement charge of $14.1 million was recognized in fiscal year 2025 due to a pension de-risking transaction involving approximately $47 million in obligations[164]. - The consolidated effective tax rate increased to 26.6% in fiscal year 2025, up from 19% in fiscal year 2024[165]. - Net income attributable to Universal Corporation for fiscal year 2025 was $116.3 million, a decrease of 8.5% from $127.1 million in fiscal year 2024[168]. - Total debt as of March 31, 2025, was $1.1 billion, an increase of $38.4 million compared to the previous year[182]. - Net debt decreased by $179.6 million to $816.6 million during fiscal year 2025, reflecting lower working capital requirements[182]. - Cash flow from operations generated approximately $327.0 million in fiscal year 2025, a significant increase from $74.6 million used in fiscal year 2024[176]. - Working capital at March 31, 2025, was approximately $1.4 billion, an increase of $14.8 million from the previous year[177]. - Capital expenditures for fiscal year 2025 were $66.6 million, slightly up from $66.0 million in fiscal year 2024[181]. - The net debt to net capitalization ratio improved to 36% as of March 31, 2025, down from 41% the previous year[169]. Business Segments - The company operates through two segments: Tobacco Operations and Ingredients Operations, with a focus on maximizing sales volumes and market share in Tobacco Operations while growing the Ingredients Operations segment[17][18]. - Universal Corporation's Ingredients Operations include acquisitions of FruitSmart, Silva, and Universal Ingredients–Shank's, enhancing its portfolio of plant-based ingredients[36]. - FruitSmart, a subsidiary, produced significant products including not-from-concentrate apple juice and has initiated automation projects to increase efficiency in fiscal year 2025[37]. - Silva specializes in over 60 types of dehydrated vegetables and fruits, maintaining strong quality control and relationships with suppliers[38]. - Universal Ingredients–Shank's offers over 2,400 botanical extracts and completed a major expansion project in fiscal year 2025 to enhance extraction and packaging capabilities[39]. Customer Relationships - Sales to the top five customers accounted for more than 50% of consolidated revenues for each of the past three fiscal years, with Imperial Brands plc and Philip Morris International, Inc. each contributing 10% or more of revenues in fiscal year 2025[31]. - The company distinguishes itself in a fragmented market by offering high-quality, innovative, and customized product solutions with strong customer relationships[42]. - The company services a diverse food and beverage industry, including small regional brands and multinational companies, with a significant presence in the pet food market[41]. Sustainability and Social Responsibility - The company emphasizes sustainable practices and agronomic support for farmers, promoting good agricultural practices and environmental stewardship[23][34]. - The company aims to achieve net-zero greenhouse gas emissions across its value chain by 2050, with plans to reduce total scope 1 and 2 emissions in North America by 45% through renewable energy initiatives[50]. - The company is committed to protecting human rights and has implemented policies to support this effort, including a global compliance program overseen by its Board of Directors[57]. Workforce and Human Capital - As of March 31, 2025, the company employed over 28,500 employees, with approximately 60% being seasonal and 40% full-time[52]. - The company has 13 collective bargaining agreements in place, covering about 40% of its workforce[52]. - Employee training and development are integral to the company's human capital strategy, with programs focused on both technical and leadership skills[61]. - The company emphasizes health and safety management, with strict compliance to regulations and initiatives to ensure a safe working environment for employees[62]. - The company faces challenges in attracting and retaining qualified personnel, which could adversely affect business operations and profitability[94]. - The company relies on a seasonal workforce, which may impact operational needs if sufficient personnel cannot be hired[96]. Risks and Challenges - The company bears the risk of tobacco quality and quantity not meeting customer requirements, which could adversely affect profitability and operations[72]. - The leaf tobacco industry is competitive, with the company heavily reliant on a few large customers, making it vulnerable to significant decreases in demand from these customers[73]. - The company faces competition from smaller leaf tobacco suppliers that often have lower overhead costs, potentially reducing the volume of tobacco handled[74]. - Financial results are significantly affected by changes in the global supply and demand balance for leaf tobacco, influenced by various market factors[75]. - Weather conditions and climate change can impact tobacco growing seasons and crop sizes, affecting financial results and operational capabilities[78]. - Major shifts in customer requirements for tobacco supply could necessitate restructuring and capital investments in different regions[80]. - The company may struggle to pass on cost increases due to inflation, tariffs, and other pressures, which could adversely affect financial results[81]. - Legal and regulatory measures addressing climate change could lead to increased production costs and require additional capital investments[87]. - Disruptions in the supply chain for plant-based ingredients could negatively impact production and sales capabilities[89]. - The potential impact of epidemics or pandemics on the company's business and financial condition remains uncertain, with possible disruptions to supply chains and employee availability[97]. - Regulatory efforts to reduce tobacco consumption globally could significantly affect the company's customers and, in turn, its results of operations[99]. - The World Health Organization's Framework Convention on Tobacco Control may lead to restrictions that could materially affect the company's business[100]. - Government actions on the sourcing of leaf tobacco may create barriers that adversely affect the company's performance[102]. - Political and economic uncertainties in countries where the company operates could materially affect its business and results of operations[106]. Financial Management and Compliance - A material weakness in internal control over financial reporting has been identified, which could lead to misstatements in financial statements if not remediated[112]. - The company is currently ineligible to use a Form S-3 registration statement, potentially impairing its capital-raising activities until March 1, 2026[117]. - Fluctuations in foreign currency exchange rates could materially impact the company's results of operations, especially in international markets[119]. - The company maintains a proportion of its debt in both variable and fixed interest rates to manage exposure to interest rate changes, which could materially affect cash flows and financing costs[122]. - The company is in compliance with all financial covenants related to minimum tangible net worth and maximum levels of debt as of March 31, 2025[144]. Pension and Benefits - The projected benefit obligation (PBO) of the qualified U.S. pension plan was approximately $150 million, with plan assets around $160 million at the end of fiscal year 2025[124]. - The discount rate for pension benefits is based on investment yields from a hypothetical portfolio of long-term corporate bonds rated AA[208]. - Changes in actuarial assumptions significantly affect the company's pension and postretirement benefit obligations, impacting future expenses[209]. - The expected long-term return on plan assets is influenced by asset allocations and investment strategies, with a 1% increase in this return resulting in a decrease in annual expense by $1,850,000[210]. - The healthcare cost trend rate shows that a 1% increase would lead to an increase in postretirement medical plan obligations by $22,000, while a 1% decrease would decrease it by $19,000[210]. Cybersecurity - The company has adopted a comprehensive Information Security Program to manage cybersecurity risks, which includes regular training for employees[126]. - The company has a third-party security operations center that monitors logs and alerts from its systems to identify and respond to potential threats[134]. - The company has not experienced any cybersecurity incidents that have resulted in a material adverse effect on its financial condition or operations[130]. - The company uses currency hedging strategies to mitigate foreign currency exchange rate risks in certain markets[121].

Financial Performance - The net loss for Q1 2025 was $17.4 million, or $(1.19) per share, compared to a net loss of $3.3 million, or $(0.75) per share, for the same period in the prior year[10]. - Total operating loss for Q1 2025 was $3.5 million, slightly higher than the $3.3 million loss in the same period of 2024[10]. - Net loss for Q1 2025 was $17,401,000, compared to a net loss of $3,261,000 in Q1 2024, representing a significant increase in losses[20]. - Net cash used in operating activities for Q1 2025 was $6,172,000, up from $4,513,000 in Q1 2024[20]. - Cash paid for interest during Q1 2025 was $539,000, a significant increase from $23,000 in Q1 2024[20]. Cash Position - The cash balance increased to $9.9 million at March 31, 2025, compared to $0.1 million at December 31, 2024[10]. - Cash and cash equivalents at the end of Q1 2025 were $9,867,000, compared to $2,901,000 at the end of Q1 2024, indicating a substantial increase[20]. - The company experienced a net increase in cash and cash equivalents of $9,791,000 in Q1 2025, compared to a decrease of $5,653,000 in Q1 2024[20]. - Net cash provided by financing activities in Q1 2025 was $12,405,000, compared to a net cash used of $776,000 in Q1 2024[20]. - The company recorded a change in fair value of derivative instruments amounting to $9,143,000 in Q1 2025, with no comparable figure in Q1 2024[20]. Grants and Financing - The company raised gross proceeds of $15 million in a private placement financing and received a $2 million grant award advance from CPRIT to accelerate the development of REYOBIQ for the leptomeningeal metastases program[5]. - The company recognized $1.1 million in grant revenue in Q1 2025, a decrease from $1.7 million in Q1 2024[10]. Clinical Development - The company presented updated interim data on REYOBIQ at a conference, highlighting safety and clinical benefits in patients with leptomeningeal metastases[5]. - REYOBIQ has shown a median overall survival of 17 months for patients receiving a radiation dose greater than 100 Gy, more than double the standard of care for recurrent glioblastoma[5]. - The company completed the ReSPECT-LM Phase 1 trial and determined the maximum tolerated and recommended Phase 2 dose[5]. Management and Team - The company strengthened its management team with key appointments, including Dr. Michael Rosol as Chief Development Officer and Russell Bradley as President of CNSide Diagnostics[10]. - The company plans to commercialize the CNSide™ CSF assay platform in the U.S. in 2025[11]. Other Financial Activities - The company issued notes payable and warrants totaling $3,738,000 in Q1 2025, with no issuance reported in Q1 2024[20]. - The company reported a redemption of short-term investments amounting to $3,531,000 in Q1 2025, compared to a redemption of $324,000 in Q1 2024[20]. - The company had a supplemental disclosure of non-cash investing and financing activities, including an exchange of warrants for notes payable valued at $3,694,000 in Q1 2025[20].

Financial Performance - For the three months ended April 30, 2025, CooperVision reported net sales of $669.6 million, a 5% increase compared to $635.9 million in the same period of 2024[92]. - For the six months ended April 30, 2025, total net sales reached $1,315.7 million, reflecting a 5% growth from $1,257.4 million in the same period of 2024[96]. - For the three months ended April 30, 2025, total net sales increased by 8% to $332.7 million compared to $306.7 million in the same period of 2024[103]. - Consolidated gross margin improved to 68% in the three months ended April 30, 2025, up from 67% in the same period of 2024, due to efficiency gains and a favorable product mix[110]. - Operating income for the company increased by 14% to $184.8 million in the three months ended April 30, 2025, compared to $161.7 million in the same period of 2024[121]. Sales by Product Type - Toric and multifocal lenses generated $328.4 million in sales, up 6% from $310.3 million in the prior year, while spherical and other lenses increased by 5% to $341.2 million from $325.6 million[92]. - CooperSurgical's net sales are supported by a diversified portfolio in the fertility and women's health care market, with significant contributions from products like MiSight and Biofinity[99]. - Office and surgical net sales rose by 13% to $205.8 million, driven by increased sales of Paragard contraceptive intrauterine devices and the acquisition of obp Surgical[107]. - Fertility net sales increased by 3% to $126.9 million, attributed to higher revenue from gamete services[107]. Regional Sales Performance - In the Americas region, net sales increased by 7% to $282.4 million for the three months and $553.3 million for the six months, compared to $264.4 million and $517.0 million, respectively, in 2024[98]. - EMEA region sales grew by 5% to $248.6 million for the three months and 4% to $495.1 million for the six months, compared to $237.0 million and $475.2 million in 2024[98]. - Asia Pacific region sales saw a 3% increase to $138.6 million for the three months and a 1% increase to $267.3 million for the six months, compared to $134.5 million and $265.2 million in 2024[98]. Expenses and Costs - Selling, General and Administrative (SGA) expenses for CooperVision increased by 5% to $236.9 million, while CooperSurgical's SGA expenses rose by 2% to $136.8 million[113]. - Research and Development (R&D) expenses increased by 17% to $45.5 million in the three months ended April 30, 2025, primarily due to myopia management programs[116]. Cash Flow and Capital Management - Operating cash flow for the first six months of fiscal 2025 increased to $286.8 million, up from $233.7 million in the same period of fiscal 2024, reflecting improved net income and changes in operating capital[133][134]. - Cash used in investing activities decreased to $(176.0) million in the first half of fiscal 2025, compared to $(398.9) million in the first half of fiscal 2024, primarily due to a $200 million payment for the Cook Medical acquisition in 2024[135]. - Cash used in financing activities was $(105.2) million in the first six months of fiscal 2025, mainly for repayments on revolving credit and the first installment related to the Cook Medical acquisition[136]. - Working capital increased to $1,113.2 million as of April 30, 2025, from $928.7 million as of October 31, 2024, mainly due to higher inventories and accounts receivable[132]. Debt and Compliance - As of April 30, 2025, the company had outstanding debt of $2.6 billion and may use interest rate swaps to manage interest rate risk[148][149]. - As of April 30, 2025, the company had total credit facilities of $3.8 billion, with $2.5 billion outstanding and $1.27 billion available[137]. - The company remains in compliance with all debt covenants and anticipates sufficient cash flow to meet its needs for at least the next 12 months[138]. Tax and Interest - Interest expense decreased by 16% to $24.2 million in the three months ended April 30, 2025, due to lower interest rates and average debt balances[126]. - The effective tax rate for the three months ended April 30, 2025, was 39.3%, up from 31.6% in the same period of 2024, primarily due to changes in valuation allowance[129]. Market Outlook - CooperVision is focused on expanding its market presence through new product introductions and acquisitions, particularly in the silicone hydrogel contact lens segment[81]. - The company anticipates continued growth in the contact lens market driven by technological advancements and improved product offerings[80]. Currency Impact - A hypothetical 10% change in foreign currency exchange rates could result in a $31.8 million impact on operating income for the fiscal quarter ended April 30, 2025[147]. - CooperVision's sales growth was partially offset by unfavorable foreign exchange rate fluctuations of approximately $7.7 million for the three months and $22.4 million for the six months ended April 30, 2025[96]. Share Repurchase - As of April 30, 2025, the company had $215.8 million remaining for share repurchase under the 2012 program, having repurchased 0.5 million shares for $40.6 million at an average price of $75.60 per share during the first half of fiscal 2025[141].

Customer Growth and Engagement - As of April 30, 2025, the company had 11,578 total customers, up from 11,127 customers as of January 31, 2025, indicating a growth of approximately 4.0%[148] - The net revenue retention rate was 124% as of April 30, 2025, and 126% as of January 31, 2025, reflecting strong customer engagement and expansion[147] - Approximately 41% of the company's revenue for the three months ended April 30, 2025, was contributed by 754 customers from the Forbes Global 2000 list[148] - The number of customers with trailing 12-month product revenue greater than $1 million increased to 606, up from 579 in the previous quarter[160] - The number of customers with product revenue exceeding $1 million rose to 606, up from 479, representing approximately 66% of product revenue for the trailing 12 months[197] Revenue and Financial Performance - Revenue for the three months ended April 30, 2025, was $1,042,074, an increase from $828,709 in the same period of 2024, representing a growth of approximately 25.7%[191] - Total revenue for the three months ended April 30, 2025, was $1,042,074,000, a 26% increase from $828,709,000 in the same period of 2024[196] - Product revenue for the three months ended April 30, 2025, was $996.8 million, representing a 5.5% increase from $943.3 million in the previous quarter[160] - Product revenue increased by $207.2 million, reaching $996,813,000, primarily due to a net revenue retention rate of 124%[196] - Total cost of revenue increased to $348,786,000, a 28% rise from $272,517,000, driven by higher third-party cloud infrastructure expenses[199] - Gross profit for the same period was $693,288, compared to $556,192 in 2024, maintaining a gross profit margin of 67%[191] - Gross profit for the three months ended April 30, 2025, was $693,288,000, a 25% increase from $556,192,000 in 2024[199] Operating Expenses and Losses - Operating loss for the three months ended April 30, 2025, was $(447,257), compared to $(348,572) in 2024, indicating an increase in operating loss[191] - Total operating expenses increased to $1,140,545 in 2025 from $904,764 in 2024, with sales and marketing expenses rising to $458,554 from $400,822[191] - Research and development expenses for the three months ended April 30, 2025, were $472,404, up from $410,794 in 2024, reflecting continued investment in platform development[191] - General and administrative expenses increased significantly to $209,587 in 2025 from $93,148 in 2024, partly due to asset impairment charges of $106.5 million[185] - Stock-based compensation for the three months ended April 30, 2025, totaled $379,460, compared to $331,936 in 2024, primarily due to additional equity awards granted[191] Cash Flow and Liquidity - Net cash provided by operating activities for the same period was $228.4 million, a decrease of 47.3% compared to $432.7 million in the prior quarter[167] - Free cash flow for the three months ended April 30, 2025, was $183.4 million, down 56.0% from $415.4 million in the previous quarter[167] - As of April 30, 2025, the company reported a total liquidity of $4.9 billion, consisting of cash, cash equivalents, and investments[214] - For the three months ended April 30, 2025, net cash provided by operating activities was $228.4 million, a decrease of $127.1 million compared to $355.5 million for the same period in 2024[225][227] - Net cash used in investing activities for the three months ended April 30, 2025, was $56.0 million, primarily for property and equipment purchases[228] Strategic Investments and Future Outlook - The company plans to continue investing significantly in research and development, particularly in data science and AI technology, to enhance its platform[157] - The company aims to expand its business both domestically and internationally, focusing on meeting the needs of regulated industries[157] - The company expects to see an increase in capacity contracts providing for quarterly upfront billings and monthly in arrears billings in future periods[170] - The company expects to continue generating positive net cash flows from operating activities for fiscal 2026[227] - The company plans to continue strategic investments as part of its corporate development program, anticipating additional volatility in financial results due to market price changes and impairments[243] Market Conditions and Risks - The company is monitoring macroeconomic conditions, including inflation and high interest rates, which may impact customer budgets and consumption patterns[150] - The company recognizes that customer consumption may fluctuate due to budget rationalization and macroeconomic uncertainty, affecting revenue recognition timing[154] - A hypothetical 100 basis point increase in interest rates would have resulted in a decrease of $18.2 million in the market value of the company's cash equivalents and investments as of April 30, 2025[235] - The company expects that a strengthening U.S. dollar may slow down consumption among international customers[240] Debt and Share Repurchase - The company issued $2.3 billion of convertible senior notes in September 2024, consisting of $1.15 billion due in 2027 and $1.15 billion due in 2029[217] - The company repurchased 3.2 million shares of common stock for $490.6 million at a weighted-average price of $152.63 per share during the three months ended April 30, 2025[221] - The company has $1.5 billion remaining available for future stock repurchases under its stock repurchase program as of April 30, 2025[221] Foreign Currency and Investments - The company utilizes foreign currency forward contracts to hedge a portion of its net outstanding monetary assets and liabilities, as well as forecasted operating expenses and capital expenditures[239] - Foreign currency forward contracts are not used for trading or speculative purposes, but to manage cash flow volatility[239] - The company assesses strategic investments for impairment based on qualitative and quantitative factors, including the investee's financial metrics and market acceptance[241]

Financial Performance - For the first quarter of 2025, the company reported operating revenues of $1,012.4 million, a decrease of $253.1 million or 20.0% compared to the prior year period [258]. - The company experienced a negative operating margin of 28.6% in Q1 2025, worsening from a negative margin of 16.4% in the same period of the previous year [255]. - Revenue passenger miles (RPMs) decreased by 20.9% to 8,604,963 thousand in Q1 2025, while available seat miles (ASMs) decreased by 19.8% to 10,824,829 thousand [254]. - The average daily aircraft utilization dropped by 22.1% to 8.1 hours in Q1 2025 compared to 10.4 hours in Q1 2024 [254]. - Total operating expenses for the first quarter of 2025 were $1.3 billion, a decrease of $171.3 million, or 11.6%, compared to the prior year [265]. - Adjusted CASM (cost per available seat mile) increased to 11.89 cents from 10.68 cents, reflecting a 11.3% rise [266]. - Total revenue per passenger flight segment decreased by 1.3% year over year, primarily due to a decrease in other revenue [259]. Cost Management - The company identified approximately $100 million of annualized cost reductions as part of its strategy to return to profitability through 2025 [292]. - Salaries, wages, and benefits decreased by $46.7 million, or 10.8%, driven by lower headcount and a decrease in operations [268]. - Aircraft rent expense increased by $35.9 million, or 31.1%, due to the acquisition of 22 new aircraft financed under operating leases [270]. - Maintenance, materials, and repairs expense increased by $3.8 million, or 6.9%, attributed to a higher volume of maintenance events [274]. - Distribution costs rose by $4.7 million, or 10.4%, primarily due to higher advertising expenses related to new travel options [275]. - Other operating expenses decreased by $8.1 million, or 4.1%, mainly due to reduced travel and lodging expenses [276]. Reorganization and Debt Management - Spirit emerged from Chapter 11 bankruptcy on March 12, 2025, following the confirmation of its reorganization plan [225]. - The company canceled $1.6 billion of liabilities subject to compromise during the Chapter 11 Cases and fully repaid the $300 million DIP Facility [287]. - The company reported interest income of $10.9 million for the combined Successor and Predecessor Periods for the three months ended March 31, 2025, compared to $13.6 million for the Predecessor three months ended March 31, 2024 [280]. - Long-term debt outstanding is $2,768 million, with $1,737 million due beyond 2029 [306]. - The company made $51.2 million in debt payments on outstanding aircraft debt obligations [293]. Liquidity and Financial Position - As of March 31, 2025, the company had $882.1 million in liquidity, which included unrestricted cash, cash equivalents, short-term investment securities, and funds available under the Exit Revolving Credit Facility [290]. - The fair market value of short-term investment securities is $119.6 million as of March 31, 2025 [338]. - The company has $6.0 million in a line of credit related to corporate credit cards, collateralized by $6.0 million in restricted cash [307]. - As of March 31, 2025, the company had $11.9 million in surety bonds and $49.1 million in standby letters of credit, representing off-balance sheet commitments [309]. Fleet and Operational Efficiency - Spirit's all-Airbus fleet is one of the youngest and most fuel-efficient in the United States, supporting its low-fare carrier model [222]. - The company had 213 Airbus A320-family aircraft in its fleet as of March 31, 2025, with 92 additional aircraft scheduled for delivery through 2031 [257]. - Aircraft fuel expense represents approximately 21.6% of operating expenses for the three months ended March 31, 2025 [337]. - A hypothetical 10.0% increase in the average price per gallon of aircraft fuel would increase into-plane aircraft fuel expense by approximately $135 million [337]. - The company has not engaged in fuel derivative activity since 2015, with no outstanding jet fuel derivatives as of March 31, 2025 [337]. Customer Experience and Loyalty - Updates to the Free Spirit® Loyalty Program aim to enhance guest experience and build loyalty [223]. - The company introduced over 40 extra-legroom seats with a 32-inch pitch across 7 rows, enhancing customer comfort [227]. - The company aims to drive higher unit revenues through strategic changes focused on premium leisure travel options and ancillary revenue [238]. Challenges and Risks - The impact of Pratt & Whitney GTF engine issues may lead to reduced operational reliability and financial performance through at least 2026 [241]. - The company recognized a loss on disposal of assets primarily consisting of $18.5 million in impairment charges related to early retirement of aircraft [276].

Product Development and Clinical Trials - Plus Therapeutics reported that its lead radiotherapeutic candidate, REYOBIQ™, is designed for CNS cancers, specifically targeting recurrent glioblastoma, with a potential radiation dose delivery up to 20 times greater than traditional external beam radiation therapy (EBRT) [138]. - The ReSPECT-GBM trial has enrolled 42 patients, with 19 treated at the recommended Phase 2 dose of 22.3 mCi, showing an average absorbed radiation dose to the tumor of 300 Gy [145]. - REYOBIQ™ has received both orphan drug designation and Fast Track designations from the FDA for the treatment of recurrent glioblastoma [141]. - REYOBIQ™ is under clinical investigation in a Phase 1/2 trial, with Phase 2 expected to enroll up to 34 patients and targeted for full enrollment by the end of 2025 [143]. - The ReSPECT-LM Phase 1 trial achieved full enrollment by the end of 2024, with trial closeout procedures currently underway [149]. - The ReSPECT-LM Phase 1 trial determined a recommended Phase 2 dose of 44.1 mCi with no dose-limiting toxicities observed, and one patient achieved a complete response [153]. - The company plans to begin enrollment for a ReSPECT-PBC clinical trial for pediatric brain cancer in 2025, supported by a $3.0 million DoD Award over three years [158][172]. Financial Performance and Funding - The company incurred net losses of $17.4 million for the three months ended March 31, 2025, with an accumulated deficit of $510.9 million [181]. - Cash and cash equivalents increased significantly to $9.867 million as of March 31, 2025, compared to $76,000 as of December 31, 2024 [181]. - The company raised approximately $15.0 million in gross proceeds from the March 2025 Private Placement, which closed on March 7, 2025 [187][192]. - The company recognized $1.1 million in grant revenue from the CPRIT Grant during the quarter ended March 31, 2025, part of a total grant of $17.6 million [196]. - The company has an ongoing need to raise additional cash through equity offerings, debt financings, and potential collaborations to fund future clinical development programs [209]. Research and Development - Research and development expenses decreased by approximately $1.0 million to $1.756 million for the three months ended March 31, 2025, compared to $2.763 million in the same period in 2024 [174]. - The company expects aggregate research and development expenses to remain consistent during the remainder of 2025 compared to the same period in 2024 [175]. Regulatory and Compliance - The FDA has agreed with the proposed application of cGMP guidance for REYOBIQ™, supporting ongoing and future clinical trials [135]. - Nasdaq compliance was regained on March 7, 2025, due to the March 2025 Private Placement, after previously failing to meet the Minimum Stockholders' Equity Requirement [199]. - The company received notice on May 16, 2025, for falling below the minimum bid price requirement of $1.00 per share for 30 consecutive business days [201]. - The company has until November 12, 2025, to regain compliance with the Minimum Bid Requirement, requiring a closing bid price of at least $1.00 per share for 10 consecutive business days [202]. - The company is monitoring its stock price and may consider implementing options to regain compliance with the Minimum Bid Requirement [204]. - The company has until July 21, 2025, to submit an update to its plan to regain compliance with Nasdaq Listing Rule 5250(c)(1) due to a delay in filing its Quarterly Report [206]. Technology and Innovations - The company acquired the CNSide® Platform from Biocept, which is being utilized in the ReSPECT-LM clinical trial, and plans to reintroduce the CNSide®Test to the U.S. market in Q2 2025 [129]. - The CNSide® Test demonstrated an 80% sensitivity in detecting tumor cells compared to 29% for CSF cytology, influencing treatment decisions in over 90% of cases evaluated [170]. - The company licensed Biodegradable Alginate Microsphere technology to enhance tumor targeting capabilities and plans to develop a novel radioembolization technology using Rhenium-188 [159]. Operational Metrics - General and administrative expenses increased by $0.6 million to $2.839 million for the three months ended March 31, 2025, compared to $2.213 million in 2024 [176]. - Total share-based compensation remained consistent at $148,000 for the three months ended March 31, 2025, compared to $146,000 in 2024 [178]. - Interest income decreased to $1,000 for the three months ended March 31, 2025, down from $72,000 in 2024, primarily due to lower average cash and investment balances [179][180]. - The company reported a net cash used in operating activities of $6.2 million for the three months ended March 31, 2025, compared to $4.5 million in the same period of 2024 [215]. - Net cash provided by investing activities for the three months ended March 31, 2025, was $3.6 million, primarily from maturities of short-term investments [216]. - Financing activities generated net cash of $12.4 million for the three months ended March 31, 2025, mainly from the issuance of common stock and warrants [217]. - The company has no long-term contractual obligations other than lease obligations as of March 31, 2025 [214].

Debt and Financial Obligations - The Term Loan Agreement matures on July 1, 2029, with additional agreements maturing on April 1, 2030, and October 1, 2029, indicating a structured debt repayment schedule [189]. - The company expects to continue utilizing debt for operations, which may increase vulnerability to economic downturns and affect operational flexibility [190]. - The company’s credit facilities are concentrated with JPMorgan, following the acquisition of First Republic, which could pose risks if financial institutions face instability [191]. - There is a concentration of credit risk due to account balances exceeding FDIC insurance coverage of $250,000 per depositor, potentially impacting liquidity [192]. - The company may face challenges in complying with financial covenants in Loan Agreements, which could limit operational flexibility and lead to defaults [196]. - The company’s obligations under Loan Agreements are secured by substantially all assets, which could lead to significant consequences in the event of a default [196]. - The company’s ability to access funding sources may be impaired by factors affecting the financial institutions it relies on, impacting overall business operations [194]. - The company has approximately 12.7 million shares of Class A common stock issuable upon exchange of Class B and Class C units, which will be eligible for resale subject to certain restrictions [327]. - As of March 31, 2025, the company had $193.1 million in borrowings outstanding under Loan Agreements, with an annual interest rate of 6.25% on the Term Loan Agreement and 6.00% on the Revolving Loan Agreement [506]. - A 100 basis point increase in interest rates is estimated to result in an increased interest expense of approximately $0.9 million over the next 12 months [507]. Investment Performance and Risks - The performance of investments in specialized funds and customized accounts directly affects management revenue, with poor performance leading to decreased earnings and capital raising difficulties [206]. - Defaults by clients or investors in specialized funds could adversely affect fund operations and performance, particularly during economic uncertainty [201]. - The risk of clawback obligations exists if previously distributed carried interest exceeds amounts ultimately entitled, which could affect financial stability [206]. - The company's cash flow may fluctuate significantly due to sporadic and unpredictable distributions of carried interest, impacting steady earnings growth [207]. - Carried interest distributions may decrease in volatile economic environments, making it difficult to predict timing and amounts, leading to increased stock price volatility [208]. - Redemption or repurchase rights in evergreen funds may adversely affect revenues, especially during declining market conditions [209]. - Sustained redemption requests could exhaust liquidity sources, forcing the company to dispose of investments sooner than anticipated, potentially reducing carried interest [211]. - Valuation methodologies for specialized funds can be highly subjective, leading to significant losses if fair values are not realized [213]. - Investments in high-risk, illiquid assets may result in losses or failure to realize profits for extended periods [217]. - Portfolio companies may experience financial difficulties during market downturns, adversely affecting investment returns [220]. - The company may pursue complex investment opportunities that involve regulatory and legal risks, potentially impacting returns [221]. - Lack of diversification in specialized funds could lead to significant adverse impacts on investment performance [223]. Regulatory and Compliance Risks - The company is subject to extensive government regulation, and changes in laws or regulations could impose additional expenses or limit fundraising activities [282]. - The SEC has increased scrutiny on the asset management and private equity industries, focusing on fees, expense allocations, and disclosures, which may affect the company's operations [289]. - The company is subject to various international regulations, including the AIFMD in the EU, which may impose additional compliance burdens and affect its ability to operate [298]. - Compliance with MiFID II has resulted in increased complexity and higher operational costs for the company [299]. - New prudential regulations in the EU and U.K. could hinder the company's capital deployment and recruitment efforts [300]. - Regulatory requirements aimed at enhancing retail investor protection may impose additional operational costs and limit access to capital from retail investors [301]. - Non-compliance with existing or new laws and regulations could have a material adverse effect on the company's financial condition and operations [302]. - The company faces increasing scrutiny and demands regarding ESG matters from investors and regulators, which may impact return potential and fundraising capabilities [303]. - Certain investors are focusing on ESG integration, potentially hampering return potential and leading to operational complexities and costs [303]. - Regulatory penalties related to insufficient compliance with ESG laws could adversely affect profitability and reputation [304]. - Climate change risks, including compliance costs and regulatory actions, may negatively impact returns for the company and its portfolio companies [305]. - Enhanced disclosure obligations due to climate-related regulations could increase compliance costs and administrative burdens [306]. - The company relies on third-party data for ESG-related reporting, and inaccuracies in this data could harm its reputation and lead to enforcement actions [264]. - Legal liabilities related to investment management activities are increasing, with potential for significant damages from claims of misleading statements or negligent conduct [254][255]. Operational and Cybersecurity Risks - The company faces significant challenges in maintaining adequate financial and operational controls, which may lead to increased expenses and resource commitments [228]. - Operational risks, including technology failures and cybersecurity threats, could disrupt business and result in financial losses [236]. - The company relies on secure processing and storage of sensitive information, with potential cybersecurity threats posing significant risks [237]. - Unauthorized access and data breaches could lead to material financial losses and reputational damage for the company [240]. - The company faces increased compliance costs and potential regulatory liabilities due to rapidly evolving data security and privacy laws, including GDPR and CPRA, which could lead to significant penalties [241][245]. - Compliance obligations are expanding, requiring adherence to various international data protection laws, which may increase operational complexities and costs [243][244]. - There is a heightened risk of data theft or compromise, particularly in jurisdictions with weaker protections for intellectual property and sensitive information [256][258]. - The company may face challenges in managing international operations, including compliance with diverse regulatory environments and potential currency fluctuations [256][259]. Market and Economic Risks - A pandemic or global health crisis could materially impact the company's business, financial condition, and results of operations, exacerbating existing risks [265]. - The company may experience reduced revenue and cash flow during economic downturns or tightening global credit markets, leading to potential write-downs of investment valuations [277]. - Market volatility and geopolitical conflicts, such as the ongoing war between Russia and Ukraine, contribute to uncertainty and could negatively impact investment valuations [273]. - The company may face challenges in fundraising efforts due to negative international reactions to U.S. trade policies, potentially affecting client relationships [274]. - Operational risks from another pandemic include employee illness and compliance challenges, which could reduce productivity and increase costs [267]. Tax and Financial Management - HLA, the company's primary asset, is required to make substantial tax distributions to members, which may exceed actual tax liabilities [320]. - Tax distributions from HLA are based on an assumed tax rate, likely leading to distributions that significantly exceed actual tax obligations [321]. - Payments under the tax receivable agreement could be substantial and may negatively impact liquidity if they exceed actual cash savings [316]. - The company may not be reimbursed for payments made under the tax receivable agreement if the IRS challenges the tax basis increases [319]. - The company's effective tax rate and liabilities are subject to complex interpretations of current tax laws, which could lead to increased tax liabilities if challenged by authorities [285]. - Changes in U.S. tax laws could impact the company's tax liabilities and increase regulatory compliance costs, with uncertain timing and details [284]. Corporate Governance and Shareholder Relations - The company expects to continue paying dividends to stockholders, but this is subject to the discretion of the board of directors and various legal limitations [329]. - The company’s ability to declare and pay dividends is subject to Delaware law, which may limit the amount of funds available for dividends [329]. - Anti-takeover provisions in the company’s charter documents may make it more difficult for stockholders to replace current management, potentially affecting the market price of Class A common stock [330]. - The disparity in voting rights between Class A and Class B common stock may adversely affect the price of Class A common stock, as Class B stockholders have superior voting rights [324]. - The company’s management fees are generally based on commitments or net invested capital, which are not significantly impacted by changes in investment values [504]. - Management fees from specialized funds and customized separate accounts are based on the amount of capital committed or invested, not significantly affected by changes in fair value [508]. - Incentive fees from specialized funds are based on realized gains and performance criteria, not materially affected by unrealized investment fair value changes [508]. - The company limits counterparties in financial transactions to reputable financial institutions to minimize credit risk exposure [509]. - There have been no material changes in market risk exposures since March 31, 2024 [510].

Financial Performance - Annual Recurring Revenue (ARR) increased to $496.0 million as of April 30, 2025, up from $463.4 million in 2024, representing a growth of 7.8%[119] - Revenue for the three months ended April 30, 2025, was $119.8 million, an increase of $8.6 million or 7.8% from $111.2 million in the same period of 2024[126] - Gross profit for the same period was $100.6 million, resulting in a gross margin of 84.0%, up from 82.6% in 2024[123] - Non-GAAP gross profit increased from $96.036 million in 2024 to $103.029 million in 2025, with a non-GAAP gross margin of 86.0%[155] - Non-GAAP operating income increased from $15.329 million in 2024 to $24.359 million in 2025, resulting in a non-GAAP operating margin of 20.3%[157] - Non-GAAP net income attributable to PagerDuty, Inc. common stockholders for the three months ended April 30, 2025, was $22,679,000, compared to $16,005,000 for the same period in 2024, representing a 41.5% increase[159] Customer Metrics - The total number of customers reached 15,247 as of April 30, 2025, compared to 15,120 in 2024, with customers generating over $100,000 in ARR increasing to 848 from 811[120] - The dollar-based net retention rate was 104% for the last 12 months ended April 30, 2025, down from 106% in 2024, indicating a slight decline in customer retention[122] Operating Expenses - Operating expenses totaled $110.9 million for the three months ended April 30, 2025, down from $113.6 million in 2024, with a notable decrease in research and development expenses[123] - Research and development expenses decreased by $3.475 million, or 9.3%, from $37.523 million in 2024 to $34.048 million in 2025[131] - Sales and marketing expenses increased by $1.546 million, or 3.2%, from $48.499 million in 2024 to $50.045 million in 2025[134] - General and administrative expenses decreased by $0.685 million, or 2.5%, from $27.540 million in 2024 to $26.855 million in 2025[135] - Total operating expenses decreased by $2.614 million, or 2.3%, from $113.562 million in 2024 to $110.948 million in 2025[130] Cash Flow and Liquidity - Free cash flow for the three months ended April 30, 2025, was $28,986,000, up from $27,098,000 in 2024, reflecting a 7.0% increase[161] - As of April 30, 2025, the company had cash and cash equivalents totaling $597.1 million, which is expected to support working capital and capital expenditure requirements for at least the next 12 months[162] - Net cash provided by operating activities increased by $2,023,000, from $28,647,000 in 2024 to $30,670,000 in 2025, driven by a 7.8% increase in revenue[168] - Net cash used in investing activities decreased by $1,139,000, from $2,821,000 in 2024 to $1,682,000 in 2025[168] Debt and Share Repurchase - The company’s total debt obligations as of April 30, 2025, amounted to $451.4 million, with $57.5 million classified as short-term[167] - The company announced a share repurchase program in March 2025, authorizing up to $150.0 million for repurchases, with no shares repurchased as of April 30, 2025[165] - The company repurchased 5,223,071 shares under the 2024 Share Repurchase Program at an average price of $19.15, totaling $100.0 million[166] Other Financial Metrics - The net loss attributable to PagerDuty, Inc. was $7.2 million for the three months ended April 30, 2025, compared to a net loss of $17.1 million in the same period of 2024[123] - Cost of revenue decreased to $19.2 million in 2025 from $19.3 million in 2024, contributing to improved gross margin[129] - Interest income decreased by $0.969 million, or 13.9%, from $6.980 million in 2024 to $6.011 million in 2025[137] - Interest expense increased by $0.216 million, or 10.1%, from $2.148 million in 2024 to $2.364 million in 2025[139] - The provision for income taxes increased by $0.620 million, or 321.2%, from $0.193 million in 2024 to $0.813 million in 2025[137] - The company expects research and development expenses to generally increase in dollar value as the business grows[130] Operational Capabilities - The company continues to focus on expanding its enterprise customer base, which constitutes the majority of its revenue[112] - PagerDuty's platform integrates with over 700 systems, enhancing its operational capabilities and customer service offerings[111] - Foreign exchange positively impacted cash by $335,000 in the three months ended April 30, 2025, compared to a negative impact of $115,000 in the same period in 2024[174]

Financial Performance - Net revenue for the first quarter of fiscal 2026 was $1.9 billion, a 63% increase compared to $1.16 billion in the first quarter of fiscal 2025[88][106]. - Operating income for the three months ended May 3, 2025, was 14.3%, compared to a loss of 13.1% in the same period of the previous year[104]. - Cost of goods sold increased to $942.9 million for the three months ended May 3, 2025, up 48.9% from $633.1 million in the same period of 2024, with gross profit rising to $952.4 million, an 80.4% increase[107]. - Research and development expenses rose to $507.7 million, a 6.6% increase from $476.1 million, representing 26.8% of net revenue compared to 41.0% in the prior year[108]. - Selling, general and administrative expenses decreased to $186.4 million, down 6.8% from $199.9 million, accounting for 9.8% of net revenue compared to 17.2% in the previous year[109]. - A net restructuring gain of $12.3 million was recognized, compared to a gain of $4.1 million in the prior year, reflecting efforts to enhance operational efficiency[110]. Market Performance - Sales from the data center end market increased by 76%, while the carrier infrastructure end market saw a 93% increase, enterprise networking increased by 16%, and consumer end market increased by 50%[88][106]. - The automotive/industrial end market experienced a 2% decrease in sales[88][106]. - Sales to customers with operations in Asia represented approximately 74% of net revenue for the three months ended May 3, 2025[100]. Cash Flow and Investments - Cash provided by operating activities was $332.9 million for the three months ended May 3, 2025, compared to $324.5 million in the same period of 2024[125][126]. - Net cash used in investing activities was $94.1 million, primarily for property and equipment purchases totaling $118.8 million[127]. - Net cash used in financing activities amounted to $301.2 million, mainly due to $340.0 million in common stock repurchases and $51.8 million in quarterly dividend payments[128]. - The company repurchased 5.6 million shares for $340 million during the three months ended May 3, 2025, with $2.2 billion remaining for future repurchases[96]. - Cash and cash equivalents were $885.9 million as of May 3, 2025, a decrease of $62.4 million from $948.3 million on February 1, 2025[97]. Taxation and Compliance - The company continues to benefit from lower income tax rates in certain jurisdictions, although changes in international taxation could reduce these benefits[92]. - Provision for income taxes was $38.0 million, a 113.5% increase from $17.8 million, influenced by various tax rate factors and adjustments[112]. - The company incurred $74.1 million for tax withholding payments on behalf of employees for net share settlements[129]. Debt and Financing - Total borrowings outstanding as of May 3, 2025, were $4.3 billion, with $1.3 billion due within twelve months[117]. - The company repaid $21.9 million in debt principal[129]. - For the three months ended May 4, 2024, net cash used in financing activities was $325.7 million, including $150.0 million for common stock repurchases and $51.8 million for quarterly dividends[129]. Risk Management - A hypothetical 1 percentage point increase in interest rates could result in an increase in annual interest expense by approximately $6.2 million[131]. - If the U.S. dollar weakened by 10%, operating expenses could increase by approximately 2%[135]. - The company maintains an investment policy that limits long-term interest rate risk by requiring effective maturities of generally less than five years[132]. - The majority of sales and expenses are denominated in U.S. dollars, but a portion of international operational expenses is in foreign currencies, exposing the company to exchange rate volatility[133]. - The company may enter into foreign currency forward and option contracts to mitigate foreign exchange risks associated with certain transactions[134].

Home Sales Performance - Home sales revenue decreased by 5.3% to $650.3 million for the three months ended April 30, 2025, compared to $686.9 million for the same period in 2024[118]. - The average price per home decreased by 5.5% to $506,081 for the three months ended April 30, 2025, down from $535,408 in the same period of 2024[126]. - Net contracts decreased by 7.5% for the three months ended April 30, 2025, primarily due to macroeconomic uncertainty affecting consumer confidence[122]. - Contract backlog decreased to 1,711 homes as of April 30, 2025, down from 2,018 homes a year earlier, representing a 12.5% decrease in dollar value to $988.2 million[124]. - The number of homes delivered increased by 0.2% to 1,285 for the three months ended April 30, 2025, compared to 1,283 in the same period of 2024[127]. - Sale of homes for the three months ended April 30, 2025, was $650.3 million, a decrease from $686.9 million in the same period of 2024[133]. Financial Performance - Income before income taxes decreased to $26.5 million for the three months ended April 30, 2025, compared to $69.4 million for the same period in 2024[121]. - Gross margin percentage decreased to 13.8% for the three months ended April 30, 2025, down from 19.5% in the same period of 2024[119]. - Selling, general and administrative expenses increased by $4.6 million to $51.1 million for the three months ended April 30, 2025[137]. - Income before income taxes in the Northeast for the three months ended April 30, 2025 was $31.4 million, a decrease of $0.3 million compared to the prior year[145]. - Income before income taxes in the Southeast decreased by $26.7 million to $0.4 million for the three months ended April 30, 2025[149]. - Income before income taxes in the West decreased by $16.7 million to $18.9 million for the three months ended April 30, 2025[153]. - Financial services income before income taxes increased to $8.4 million for the three months ended April 30, 2025, compared to $5.1 million in the prior year[157]. Inventory and Costs - Total inventory increased by $42.4 million to $1.5 billion at April 30, 2025, driven by new land purchases and development[181]. - Cost of sales, excluding interest expense and land charges, was $537.6 million for the three months ended April 30, 2025, compared to $531.4 million in 2024[133]. - The total cost of sales, excluding interest expense and land charges, was 82.7% for the three months ended April 30, 2025, compared to 77.4% in 2024[134]. - Construction costs represented approximately 50.2% of the homebuilding cost of sales for the six months ended April 30, 2025[191]. Market Conditions and Risks - The company continues to utilize quick move-in homes to address affordability challenges in the current market environment[114]. - The company continues to face risks related to rising construction costs and potential impacts on gross margins due to inflation and economic conditions[190]. - The annual inflation rate in the U.S. was 2.3% in April 2025, significantly lower than its peak of 9.1% in June 2022, which may impact home sale prices[190]. Liquidity and Financing - The company spent $467.4 million on land purchases and development during the six months ended April 30, 2025, while maintaining total liquidity of $202.4 million[117]. - Total liquidity at April 30, 2025 was $202.4 million, including $74.0 million in cash and $125.0 million of borrowing capacity[162]. - The company’s long-term debt as of April 30, 2025, totals $854.968 million, with a weighted average interest rate of 10.21%[198]. - Nonrecourse mortgage loans totaled $78.1 million at April 30, 2025, with a weighted-average interest rate of 8.2%[174]. - Senior notes and credit facilities net of discounts were $864.3 million as of April 30, 2025[168]. Joint Ventures and Share Repurchases - The company has 27 unconsolidated joint ventures with a total of 5,002 homes, indicating ongoing collaboration in homebuilding[184]. - The company repurchased 257,908 shares for a market value of $30.1 million at an average price of $116.70 per share during the six months ended April 30, 2025[178]. - The company had $30.6 million authorized for stock repurchases as of April 11, 2025[177]. Community and Sales Dynamics - As of April 30, 2025, the company has a total of 42,447 homes across 125 active selling communities, with 12,627 homes actively selling and 29,820 homes proposed[184]. - The number of active selling communities decreased from 130 on October 31, 2024, to 125 on April 30, 2025, reflecting a slight contraction in market presence[187]. - The total number of unsold homes increased from 1,106 on October 31, 2024, to 1,132 on April 30, 2025, indicating a decrease in sales pace during the second quarter of fiscal 2025[187]. Financial Services Performance - Financial services revenue increased by 24.2% to $21.3 million for the three months ended April 30, 2025, compared to $17.2 million for the same period in 2024[125]. - Financial services assets decreased by $42.0 million to $161.6 million as of April 30, 2025, primarily due to a reduction in the volume of loans originated[188]. - Financial services liabilities also decreased by $42.6 million to $140.6 million at April 30, 2025, correlating with the decrease in mortgage loans held for sale[189]. Impairments and Cancellations - Inventory impairments totaled $3.1 million for the three months ended April 30, 2025, compared to $0.2 million in the same period of 2024[136]. - Contract cancellation rate for the first quarter of 2025 was 16%, up from 14% in 2024[139].