[Fiscal Year 2025 Financial Results Overview](index=1&type=section&id=Fiscal%20Year%202025%20Financial%20Results%20Overview) This section provides an overview of Astrotech's financial performance and key strategic developments for fiscal year 2025, including CEO statements and financial highlights [CEO Statement](index=1&type=section&id=CEO%20Statement) CEO Thomas B. Pickens, III, detailed Astrotech's mission to expand access to precise mass spectrometry and gas chromatography, highlighting global product presence and service expansion - Astrotech's mission is to make the benefits of precise mass spectrometry and gas chromatography accessible to organizations in focus markets[4](index=4&type=chunk) - Mass spectrometry products have a strong international presence, and gas chromatography products deliver meaningful advantages by meeting real-time, on-site industry demands[4](index=4&type=chunk) - Servicing has been expanded to Asia, Europe, and the United States, with confidence in the sales team to drive growth[4](index=4&type=chunk) [Financial Highlights and Key Developments](index=1&type=section&id=Financial%20Highlights%20and%20Key%20Developments) Astrotech reported decreased FY2025 revenue but stable gross margin, alongside global TRACER 1000 deployment, new subsidiary formation, and R&D contract wins Revenue and Gross Margin Performance | Metric | FY2025 | FY2024 | | :----- | :----- | :----- | | Revenue | $1.0 million | $1.664 million | | Gross Margin | 45.3% | 45.1% | - As of June 30, 2025, the TRACER 1000 has been deployed in approximately **34 locations in 16 countries** across the United States, Europe, and Asia[5](index=5&type=chunk) - The Company announced the formation of a new wholly owned subsidiary, **EN-SCAN, Inc.**, to manufacture and sell a new line of instruments for environmental testing applications[5](index=5&type=chunk) - 1st Detect Corporation launched its enhanced **TRACER 1000 Narcotics Trace Detector (NTD)** and was awarded a research and development contract with the Department of Homeland Security (DHS) for next-generation explosives trace detection[5](index=5&type=chunk) - 1st Detect Corporation made its first sale and deployment of its **TRACER 1000 Narcotics Trace Detector in Vietnam**, expanding its footprint across Southeast Asia[5](index=5&type=chunk) Cash and Liquid Investments | Metric | As of June 30, 2025 | | :----- | :------------------ | | Cash and cash equivalents and liquid investments | $18.2 million | [About Astrotech Corporation](index=2&type=section&id=About%20Astrotech%20Corporation) This section provides an overview of Astrotech Corporation, detailing its business model, key subsidiaries and their market focus, and important disclosures regarding forward-looking statements [Company Profile](index=2&type=section&id=Company%20Profile) Astrotech (Nasdaq: ASTC) is a mass spectrometry company that innovates and scales businesses through subsidiaries leveraging core technology for specialized markets - **Astrotech (Nasdaq: ASTC)** is a mass spectrometry company that creates, operates, and scales innovative businesses through its wholly owned subsidiaries[6](index=6&type=chunk) [Subsidiaries and Their Focus](index=2&type=section&id=Subsidiaries%20and%20Their%20Focus) Astrotech's wholly-owned subsidiaries, including 1st Detect, AgLAB, Pro-Control, BreathTech, and EN-SCAN, Inc., apply core technology to diverse specialized markets - **1st Detect:** Develops, manufactures, and markets trace detection systems for security and narcotics screening applications[7](index=7&type=chunk) - **AgLAB:** Designs process analyzers tailored to the agriculture industry[7](index=7&type=chunk) - **Pro-Control:** Produces solutions for in-situ chemical process control in industrial manufacturing[7](index=7&type=chunk) - **BreathTech:** Advancing a breath analysis platform to detect volatile organic compounds (VOCs) associated with infections and critical health conditions[7](index=7&type=chunk) - **EN-SCAN, Inc.:** Delivers portable, ruggedized environmental testing solutions that integrate gas chromatography and mass spectrometry for use in challenging field environments[7](index=7&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) Forward-looking statements are subject to risks including economic conditions, product development, market acceptance, and regulatory changes, with no obligation for the company to update them - Forward-looking statements are subject to risks, trends, and uncertainties that could cause actual results to be materially different from the forward-looking statement[6](index=6&type=chunk) - Key risk factors include inflationary pressures, global economic conditions, the Company's ability to successfully complete product development and obtain regulatory approvals, market acceptance, and potential impacts from evolving regulatory areas[6](index=6&type=chunk) - The Company assumes no obligation to correct or update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law[6](index=6&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents Astrotech's consolidated financial statements, including the statements of operations and comprehensive loss, and the balance sheets, for the fiscal year ended June 30, 2025 [Consolidated Statements of Operations and Comprehensive Loss](index=3&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Astrotech reported a larger net loss of **$13.850 million** in FY2025, with revenue decreasing by **37%** and operating expenses rising by **8.39%** due to increased R&D Key Operating Metrics | Metric (in thousands) | FY2025 | FY2024 | YoY Change | | :-------------------- | :----- | :----- | :--------- | | Revenue | $1,049 | $1,664 | -36.96% | | Cost of revenue | $574 | $913 | -37.13% | | Gross profit | $475 | $751 | -36.75% | | Selling, general and administrative | $7,067 | $7,241 | -2.39% | | Research and development | $8,142 | $6,790 | +19.91% | | Total operating expenses | $15,209 | $14,031 | +8.39% | | Loss from operations | $(14,734) | $(13,280) | +10.95% (larger loss) | | Net loss | $(13,850) | $(11,666) | +18.72% (larger loss) | | Net loss per common share (Basic and Diluted) | $(8.32) | $(7.12) | +16.85% (larger loss per share) | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Astrotech's total assets decreased by **28.31%** to **$26.989 million** as of June 30, 2025, driven by reduced cash and investments, while total liabilities increased by **72.50%** Key Balance Sheet Metrics | Metric (in thousands) | June 30, 2025 | June 30, 2024 | YoY Change | | :-------------------- | :------------ | :------------ | :--------- | | Cash and cash equivalents | $3,100 | $10,442 | -70.33% | | Short-term investments | $15,108 | $21,474 | -29.64% | | Total current assets | $21,975 | $34,728 | -36.71% | | Total assets | $26,989 | $37,640 | -28.31% | | Total current liabilities | $2,451 | $2,528 | -3.05% | | Total liabilities | $4,889 | $2,833 | +72.50% | | Total stockholders' equity | $22,100 | $34,807 | -36.50% |

Documents Incorporated by Reference Portions of the 2025 Annual Meeting of Stockholders proxy statement are incorporated by reference in Part III of this Annual Report on Form 10-K [Portions of Proxy Statement](index=2&type=section&id=Portions%20of%20Proxy%20Statement) Portions of the registrant's proxy statement for its 2025 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K - **Portions of the 2025 Annual Meeting of Stockholders proxy statement are incorporated by reference in Part III of this 10-K**[9](index=9&type=chunk) Part I This section details the company's business operations, competitive strengths, growth strategies, organizational structure, customer and supplier relationships, warehousing network, services, technology, employees, competition, governmental regulations, and associated risk factors [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Armlogi Holding Corp. is a rapidly expanding U.S.-based warehousing and logistics service provider offering comprehensive supply-chain solutions, primarily serving cross-border e-commerce merchants from China, operating ten warehouses across the U.S. with **3.9 million square feet**, and reported a **net loss** in FY2025, with **84% of revenue** derived from PRC-based customers - **Armlogi Holding Corp. is a fast-growing U.S.-based warehousing and logistics service provider offering comprehensive supply-chain solutions, including warehouse management and order fulfillment**[13](index=13&type=chunk) - The company operates **ten warehouses** across the U.S. with an aggregate gross floor area of approximately **3,905,020 square feet**, equipped for processing bulky items[15](index=15&type=chunk) - A significant portion of revenue is generated from PRC-based customers, accounting for approximately **84% in FY2025** and **96% in FY2024**[16](index=16&type=chunk) Key Financial Highlights (FY2025 vs FY2024) | Metric | FY2025 (US$ million) | FY2024 (US$ million) | Change (US$ million) | Change (%) | | :----- | :------------------- | :------------------- | :------------------- | :--------- | | Total Revenue | 190.4 | 167.0 | 23.4 | 14.0% | | Net Income (Loss) | (15.3) | 7.4 | (22.7) | -306.8% | [Overview](index=4&type=section&id=Overview) The company provides comprehensive warehousing and logistics services to cross-border e-commerce merchants and U.S.-based commercial customers - The company provides **one-stop warehousing and logistics services** to cross-border e-commerce merchants outside the U.S. who seek to sell in the U.S. market, as well as U.S.-based commercial customers[15](index=15&type=chunk) - Services include customs brokerage, transportation to U.S. warehouses, and warehouse management and order fulfillment (storage, packing, labeling, kitting, inventory management, third-party distribution, and value-added services)[15](index=15&type=chunk) Active Customer Base | Date | Active Customers | | :--------- | :--------------- | | June 30, 2025 | 505 | | June 30, 2024 | 105 | [Our Competitive Strengths](index=4&type=section&id=Our%20Competitive%20Strengths) The company leverages quality services, competitive pricing, proprietary technology, and an experienced management team for competitive advantage - The company offers **quality warehousing and logistics services** meeting ISO 9001 standards, with **high inventory accuracy (99.64% in FY2025)** and 24/7 customer support, particularly suitable for bulky e-commerce items[17](index=17&type=chunk)[18](index=18&type=chunk) - **Reasonable service and delivery fees** are achieved due to large processing volumes, enabling significant discounts from third-party logistics providers like FedEx and UPS[19](index=19&type=chunk) - **Efficient and low-error warehousing services** are provided by leveraging proprietary technology, including the Armlogi Order Management System (OMS), built on Amazon Web Services[20](index=20&type=chunk)[22](index=22&type=chunk) - An **experienced management team** with decades of supply chain, warehousing, and logistics industry expertise drives strategic planning and day-to-day operations[23](index=23&type=chunk) [Our Growth Strategies](index=7&type=section&id=Our%20Growth%20Strategies) The company plans to expand its customer base and geographic footprint, enhance supply chain efficiency, invest in technology, and pursue strategic acquisitions - Plans to expand and diversify the customer base beyond China into Southeast Asia (Vietnam, Thailand, Indonesia, Philippines) and Mexico, and to grow geographic footprint in key U.S. markets (California, Georgia, Tennessee, Florida, Illinois, Arizona) by leasing additional warehouse space[24](index=24&type=chunk) - Enhance supply chain efficiency by expanding solutions, including international ocean freight services launched in January 2023, aiming for a comprehensive factory-to-consumer doorstep solution[25](index=25&type=chunk) - Further invest in supply chain technologies like AI, data analytics, and optimization algorithms to improve efficiency, transparency, and sustainability, and to offer smart supply chain solutions[26](index=26&type=chunk) - Pursue additional strategic and financially attractive acquisitions to expand the warehousing and logistics business and achieve synergies[27](index=27&type=chunk) [Organizational Structure](index=8&type=section&id=Organizational%20Structure) Armlogi Holding Corp. was incorporated in Nevada in 2022, acquired Armstrong Logistic Inc., and completed its IPO in May 2024 - **Armlogi Holding Corp. was incorporated in Nevada on September 27, 2022**, and acquired Armstrong Logistic Inc. on October 7, 2022, as part of an IPO reorganization[29](index=29&type=chunk)[31](index=31&type=chunk) - Armstrong Logistic Inc. holds **100% equity interests** in several subsidiaries: Armlogi Truck Dispatching LLC, AndTech Trucking LLC, Amlogi Trucking LLC, Armlogi Group LLC, and AndTech Customs Broker LLC[28](index=28&type=chunk) - The company closed its IPO on **May 15, 2024**, issuing **1,600,000 shares of common stock** at **$5.00 per share**, trading on Nasdaq under 'BTOC'[29](index=29&type=chunk) [Our Business Model](index=8&type=section&id=Our%20Business%20Model) The company's business model focuses on providing integrated warehousing and logistics services to cross-border e-commerce and domestic customers - The business model involves providing a package of warehousing and logistics services to international cross-border e-commerce merchants (primarily from PRC) and domestic customers[30](index=30&type=chunk) - Revenue is recognized from three main sources: Transportation Services (reselling third-party carrier services), Warehousing Services (inventory management, storage), and Other Services (primarily customs brokerage)[30](index=30&type=chunk)[34](index=34&type=chunk) - Service fees vary based on factors like load type, weight, volume, storage time, and delivery distance, with transportation fees typically ranging from **$5 to $75** and warehousing fees from **$3 to $500**[30](index=30&type=chunk)[34](index=34&type=chunk) [Our Customers](index=9&type=section&id=Our%20Customers) The company primarily serves overseas cross-border e-commerce merchants from the PRC, with a growing U.S. domestic customer base - Primary customer types are overseas cross-border e-commerce merchants (mainly from PRC) selling in the U.S. market and U.S. domestic e-commerce merchants[32](index=32&type=chunk) Revenue Contribution by Customer Type | Customer Type | FY2025 Revenue (%) | FY2024 Revenue (%) | | :------------ | :----------------- | :----------------- | | Overseas (PRC) | 84% | 96% | | U.S. Domestic | 16% | 4% | Largest Customers by Revenue Contribution | Fiscal Year | Customer 1 (Revenue %) | Customer 2 (Revenue %) | Customer 3 (Revenue %) | Customer 4 (Revenue %) | | :---------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | FY2025 | Goldensee Ltd. (22.0%) | Kimberly Tenneco Inc (10.8%) | N/A | N/A | | FY2024 | Aukey International Ltd. (11.7%) | Western Post (HK) Ltd. (11.7%) | Goldensee Ltd. (10.9%) | Union Grand Imp. & Exp. Co., Ltd. (10.0%) | [Our Suppliers](index=10&type=section&id=Our%20Suppliers) Key suppliers include warehouse landlords and third-party logistics providers like FedEx and UPS - Key suppliers include warehouse landlords and third-party logistics service providers like FedEx and UPS for transportation and delivery[35](index=35&type=chunk) Supplier Concentration (Percentage of Total Purchases) | Supplier | FY2025 (%) | FY2024 (%) | | :------- | :--------- | :--------- | | FedEx | 9% | 50% | | UPS | 15.2% | N/A | | MEGA CORP LOGISTIC LLC | 10% | N/A | - Armstrong Logistic has a service agreement with FedEx since **April 10, 2020**, for various transportation services, with potential for earned discounts based on shipping activity[36](index=36&type=chunk) [Our Warehousing Network](index=10&type=section&id=Our%20Warehousing%20Network) The company operates ten strategically located leased warehouses across five U.S. states, equipped with automated systems and advanced security - The company operates **ten leased warehouses** in **five U.S. states** (California, Georgia, Texas, New Jersey, Illinois), strategically located near major ports[37](index=37&type=chunk) - Warehouses have an aggregate gross floor area of **3,905,020 square feet** and are equipped with automated sorting systems, forklifts, pallets, trays for bulky items, and advanced security/scanning systems[37](index=37&type=chunk) - Data analytics are utilized for optimal inventory distribution, SKU-level real-time monitoring, live

Part I [Business Overview](index=8&type=section&id=Item%201.%20Business) Legacy Education Inc. provides career-focused post-secondary education in healthcare across California through accredited institutions, focusing on workforce needs and strategic growth - Legacy Education Inc. operates four accredited academic institutions: High Desert Medical College (acquired July 2010), Central Coast College (acquired January 2019), Integrity College of Health (acquired September 2020), and Contra Costa Medical Career College (acquired December 2024)[24](index=24&type=chunk)[30](index=30&type=chunk) - The company's institutions primarily offer career-focused post-secondary education services in healthcare and related fields, with a strong presence in California[24](index=24&type=chunk)[34](index=34&type=chunk) - As of June 30, 2025, total student enrollment across all programs was **3,101**, a **42% increase** from **2,187 students** as of June 30, 2024[52](index=52&type=chunk) - The company reported an average program retention rate of **86%** and an average placement rate of **74.5%** as of June 30, 2025[54](index=54&type=chunk)[55](index=55&type=chunk) Student Enrollment and Starts (Quarterly) | | September 30, 2023 | December 31, 2023 | March 31, 2024 | June 30, 2024 | September 30, 2024 | December 31, 2024 | March 31, 2025 | June 30, 2025 | |:---|:---|:---|:---|:---|:---|:---|:---|:---| | **Consolidated Starts** | 760 | 415 | 719 | 623 | 849 | 397 | 1,227 | 721 | | **Ending Enrollment** | 2,024 | 1,912 | 2,166 | 2,187 | 2,539 | 2,768 | 3,245 | 3,101 | | **Starts YoY (%)** | 52% | 52% | 43% | 59% | 12% | -4% | 71% | 16% | | **Ending Enrollment YoY (%)** | 17% | 16% | 20% | 28% | 25% | 45% | 50% | 42% | [Overview](index=8&type=section&id=Overview) Legacy Education Inc. delivers career-focused post-secondary education through its accredited institutions, primarily in healthcare fields - Legacy Education Inc. provides career-focused, post-secondary education services to students through its accredited academic institutions: High Desert Medical College, Central Coast College, Integrity College of Health, and Contra Costa Medical Career College[24](index=24&type=chunk) [High Desert Medical College (HDMC)](index=8&type=section&id=High%20Desert%20Medical%20College%20%28%22HDMC%22%29) HDMC offers diverse healthcare programs across three California campuses, serving 1,956 students as of June 30, 2025 - HDMC, established in California in 2002, offers a wide range of programs including ultrasound tech, vocational nursing, and medical assisting across its Lancaster, Bakersfield, and Temecula campuses. As of June 30, 2025, HDMC had **1,956 students**[25](index=25&type=chunk) [Central Coast College (CCC)](index=8&type=section&id=Central%20Coast%20College%20%28%22CCC%22%29) CCC, located in Salinas, California, offers certificate and degree programs to 495 students as of June 30, 2025 - CCC, established in California in 1983 and located in Salinas, offers certificate and degree programs such as medical assisting, veterinary technology, and vocational nursing. As of June 30, 2025, CCC had **495 students**[26](index=26&type=chunk)[27](index=27&type=chunk) [Integrity College of Health (Integrity)](index=8&type=section&id=Integrity%20College%20of%20Health%20%28%22Integrity%22%29) Integrity, based in Pasadena, California, offers various healthcare programs and achieved initial RN-BSN accreditation in June 2025, serving 202 students - Integrity, established in California in 2007 with a campus in Pasadena, offers programs including vocational nursing, medical assisting, and Diagnostic Medical Sonography. It earned initial accreditation for its Bachelor of Science in Nursing RN-BSN Track in June 2025. As of June 30, 2025, Integrity had **202 students**[28](index=28&type=chunk) [Contra Costa Medical Career College (CCMCC)](index=9&type=section&id=Contra%20Costa%20Medical%20Career%20College%20%28%22CCMCC%22%29) CCMCC provides certificate and degree programs in healthcare, enrolling 448 students as of June 30, 2025 - CCMCC offers certificate and degree programs such as surgical technology, sterile processing technician, and vocational nursing. As of June 30, 2025, CCMCC had **448 students** enrolled[29](index=29&type=chunk) [Our History](index=9&type=section&id=Our%20History) The company's history involves strategic acquisitions and accreditations, expanding its educational offerings and institutional footprint - The company's history includes the founding of HDMC in 2002, its acquisition in 2010, and subsequent acquisitions of CCC in 2019, Integrity in 2020, and CCMCC in 2024. Key milestones include obtaining various accreditations and approvals, and launching new programs[30](index=30&type=chunk) - In June 2025, Integrity College of Health earned initial accreditation from the National League for Nursing Commission for Nursing Education Accreditation (NLN CNEA) for its Bachelor of Science in Nursing RN-BSN Track[30](index=30&type=chunk) [Industry Background](index=10&type=section&id=Industry%20Background) The U.S. post-secondary education market is competitive and growing, with increasing demand for skilled workers, especially in healthcare - The U.S. post-secondary education market is large, fragmented, and competitive, with proprietary colleges serving approximately **8.0%** of undergraduates in 2022-23. Total enrollments in higher education increased by **2.4%** and **3.2%** in Spring 2024 and 2025, respectively, with proprietary colleges seeing increases of **5.1%** and **3.7%**[31](index=31&type=chunk) - Demand for post-secondary education is expected to increase due to demographic, economic, and social trends, including a significant number of adults without college degrees and increasing demand for skilled workers, particularly in the healthcare sector[32](index=32&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) [Our Market Opportunity](index=10&type=section&id=Our%20Market%20Opportunity) California's unmet workforce needs, particularly in healthcare, present a significant opportunity for the company's career-focused programs - The company believes California's community college system is not meeting current educational and workforce needs, creating an opportunity for its focused, high-quality programs, especially in the healthcare sector[33](index=33&type=chunk)[34](index=34&type=chunk) - The target demographic is early to mid-20-year-olds seeking strong job opportunities, primarily within a **100-mile radius** of each campus, with a focus on quick entry into the workforce[35](index=35&type=chunk) - Employment in the healthcare and social assistance industry is projected to grow **8.4%** from 2024 to 2034, adding over **1.9 million new jobs**, driven by an aging population and chronic conditions[36](index=36&type=chunk) [Our Growth Strategies](index=11&type=section&id=Our%20Growth%20Strategies) Growth strategies include expanding existing programs, launching new offerings, opening new campuses, and pursuing acquisitions, while enhancing curriculum and student success - Growth strategies include moderate growth in existing programs, approval of registered nursing programs, adding Associate of Applied Sciences degrees, launching new program offerings (including online), and expanding through new branch campuses and acquisitions outside California (e.g., Nevada, Colorado, New Mexico)[38](index=38&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - Operational priorities focus on refining curriculum for learner success and employer needs, improving student retention and graduate success, expanding relationship-based marketing, and investing in innovation and diversification[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) [Competition](index=12&type=section&id=Competition) The post-secondary education industry is highly competitive, with various institutions vying for students based on program quality, reputation, and cost - The post-secondary education industry is highly competitive and fragmented, with competition from public and private institutions, other proprietary schools, and non-traditional programs. Key competitive factors include program quality, reputation, cost, graduate employment rates, and faculty quality[44](index=44&type=chunk)[45](index=45&type=chunk) - Public institutions often have greater financial resources and brand recognition due to government subsidies, posing a challenge for for-profit schools[46](index=46&type=chunk) [Marketing and Recruiting](index=12&type=section&id=Marketing%20and%20Recruiting) The company employs an integrated marketing approach, combining traditional and digital channels, with a significant portion of new enrollments from referrals - The company uses an integrated marketing approach, including traditional media (radio, billboards, direct mail) and digital marketing (paid search, SEO, online video, social media), which drives the majority of new student leads[48](index=48&type=chunk) - Referrals from current students, high school counselors, and satisfied graduates/employers historically account for approximately **25%** of new enrollments[

[Executive Summary](index=1&type=section&id=Executive%20Summary) This section provides a high-level overview of Legacy Education Inc.'s financial and operational performance for Q4 and the full fiscal year 2025, highlighting key growth metrics [Fourth Quarter 2025 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%202025%20Financial%20Highlights) Legacy Education Inc. reported strong financial performance for Q4 2025, with significant revenue and EBITDA growth compared to the prior year, indicating robust operational expansion | Metric | Q4 2025 | Q4 2024 | Change (%) | | :---------------- | :------ | :------ | :--------- | | Revenue | $17.9M | $12.8M | 40.8% | | EBITDA | $2.1M | $0.9M | 133% | [Fiscal Year Ended June 30, 2025 Financial and Operational Highlights](index=1&type=section&id=Fiscal%20Year%20Ended%20June%2030%2C%202025%20Financial%20and%20Operational%20Highlights) For the full fiscal year 2025, Legacy Education achieved substantial growth across key financial and operational metrics, including significant increases in revenue, student enrollment, and profitability | Metric | FY 2025 | FY 2024 | Change (%) | | :---------------------- | :---------- | :---------- | :--------- | | Revenue | $64.2M | $46.0M | 39.5% | | New student starts | | | 26.9% | | EBITDA | $10.4M | | | | Adjusted EBITDA | $11.0M | | | | Net income | $7.5M | | | | Diluted earnings per share | $0.56 | | | | Student population (end of year) | 3,101 | | 41.8% | [Strategic Developments](index=2&type=section&id=Strategic%20Developments) This section outlines Legacy Education's key strategic achievements and future growth positioning, including program expansion, accreditation, and governance enhancements [Strategic Developments](index=2&type=section&id=Strategic%20Developments) Legacy Education is well-positioned for continued growth in 2026, driven by record enrollment, expanded program offerings, and strong financial performance. The company also achieved significant milestones in program accreditation and governance - CEO LeeAnn Rohmann stated that Legacy Education is well-positioned for continued growth in 2026 due to record enrollment, expanded program offerings, and strong financial performance[7](index=7&type=chunk) - The company received approval for **3 new degree programs** and **2 certificate programs**[10](index=10&type=chunk) - Legacy Education earned NLN CNEA Initial Accreditation for its RN-BSN Track[10](index=10&type=chunk) - Two new Board Members were appointed, and an Advisory Board was established to support growth and expansion[10](index=10&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) This section provides an in-depth analysis of Legacy Education's income statement and balance sheet for the fourth quarter and full fiscal year 2025 [Income Statement Analysis (Q4 and Full Year)](index=2&type=section&id=Income%20Statement%20Analysis%20%28Q4%20and%20Full%20Year%29) Legacy Education's income statement for Q4 and the full fiscal year 2025 shows significant revenue growth, accompanied by increases in operating expenses, ultimately leading to higher operating and net income [Revenue](index=2&type=section&id=Revenue) | Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :----- | :----------- | :----------- | :----------- | :----------- | | Revenue | $17,950,235 | $12,752,420 | $64,168,025 | $46,000,316 | - Fiscal 2025 revenue increased by **$18.2 million (39.5%)** to **$64.2 million**, primarily due to increased student enrollment and program pricing[11](index=11&type=chunk) [Operating Expenses](index=2&type=section&id=Operating%20Expenses) | Expense Category | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :---------------------- | :----------- | :----------- | :----------- | :----------- | | Educational services | $9,446,177 | $8,548,697 | $34,246,953 | $26,351,326 | | General and administrative | $6,333,951 | $3,253,367 | $19,267,153 | $12,999,164 | | Depreciation and amortization | $124,672 | $75,865 | $441,718 | $265,036 | | Total costs and expenses | $15,959,975 | $11,919,929 | $54,181,699 | $39,783,526 | - Educational services increased by **$7.9 million (30.0%)** to **$34.2 million** in FY 2025, driven by increased instructional and staffing needs, rent, externship fees, and RN program investments, partially offset by a decrease in non-cash compensation[11](index=11&type=chunk) - General and administrative expense rose by **$6.3 million (48.2%)** to **$19.3 million** in FY 2025, primarily due to higher marketing expenses (**$4.7 million in FY25** vs **$4.1 million in FY24**), professional fees, and bad debt expense[11](index=11&type=chunk) [Net Income and EPS](index=2&type=section&id=Net%20Income%20and%20EPS) | Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :--------------------- | :----------- | :----------- | :----------- | :----------- | | Operating Income | $1,990,260 | $832,491 | $9,986,326 | $6,216,790 | | Income Before Income Taxes | $2,248,972 | $1,177,441 | $11,022,829 | $6,985,462 | | Net Income | $1,226,967 | $961,342 | $7,534,232 | $5,114,852 | | Basic Net Income Per Share | $0.10 | $0.10 | $0.65 | $0.55 | | Diluted Net Income Per Share | $0.09 | $0.10 | $0.59 | $0.53 | [Balance Sheet Data](index=3&type=section&id=Balance%20Sheet%20Data) As of June 30, 2025, Legacy Education reported a healthy cash position and increased total assets, reflecting its growth and operational stability | Balance Sheet Item | June 30, 2025 | | :---------------------- | :------------ | | Cash and cash equivalents | $20,316,357 | | Current assets | $37,753,027 | | Total assets | $69,205,138 | | Current liabilities | $13,780,773 | | Total stockholders' equity | $41,043,520 | [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the rationale behind using non-GAAP financial measures and provides a detailed reconciliation to GAAP net income [Explanation of Non-GAAP Measures](index=3&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Legacy Education provides non-GAAP financial measures like EBITDA and adjusted EBITDA to offer a clearer view of its core operating performance by excluding non-cash compensation and other non-recurring items, enhancing comparability with peers and future prospects - Non-GAAP measures (EBITDA and adjusted EBITDA) are used to supplement GAAP financial statements, adjusting for non-cash compensation to provide a more comparable measure of continuing business and primary operations[13](index=13&type=chunk) - Stock-based compensation is excluded from non-GAAP measures as it is generally not controllable in the short-term and can vary significantly, thus not reflecting ordinary earnings[14](index=14&type=chunk) [Reconciliation of EBITDA and Adjusted EBITDA](index=4&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) The reconciliation table details the adjustments made from net income to derive EBITDA and Adjusted EBITDA for both the fourth quarter and the full fiscal year 2025, primarily by adding back interest, taxes, depreciation, amortization, and non-cash compensation | Metric | Q4 2025 | Q4 2024 | FY 2025 | FY 2024 | | :---------------------- | :----------- | :----------- | :----------- | :----------- | | Net income | $1,226,967 | $961,342 | $7,534,232 | $5,114,852 | | Interest expense (income), net | $(258,712) | $(344,945) | $(1,036,503) | $(768,672) | | Provision for income taxes | $1,022,005 | $216,098 | $3,488,597 | $1,870,610 | | Depreciation and amortization | $124,672 | $75,864 | $441,718 | $265,036 | | **EBITDA** | **$2,114,932** | **$908,359** | **$10,428,044** | **$6,481,826** | | Non-cash compensation | $269,246 | $1,882,064 | $552,799 | $1,882,064 | | **Adjusted EBITDA** | **$2,384,178** | **$2,790,423** | **$10,980,843** | **$8,363,890** | [About Legacy Education Inc.](index=4&type=section&id=About%20Legacy%20Education%20Inc.) This section provides an overview of Legacy Education Inc., detailing its mission, educational offerings, and strategic growth initiatives [About Legacy Education Inc.](index=4&type=section&id=About%20Legacy%20Education%20Inc.) Legacy Education Inc. is an accredited, for-profit post-secondary education company specializing in career-focused healthcare programs. The company is committed to growth through organic enrollment, new program additions, and strategic acquisitions, aiming to provide high-quality, accessible, and affordable education - Legacy Education (NYSE: LGCY) is an award-winning, nationally accredited, for-profit post-secondary education company founded in 2009[16](index=16&type=chunk) - The company primarily provides career-focused education in the healthcare field, offering certificates and degrees for nursing, sonography, medical technicians, dental assisting, and business administrative programs[16](index=16&type=chunk) - Legacy Education's growth strategy focuses on organic enrollment growth, the addition of new programs, and accretive acquisitions, with a commitment to high-quality, accessible, and affordable education[16](index=16&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section serves as a disclaimer, indicating that statements about future expectations, plans, and prospects are forward-looking and subject to substantial risks and uncertainties. Actual results may differ materially, and the company does not undertake to update these statements [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section serves as a disclaimer, indicating that statements about future expectations, plans, and prospects are forward-looking and subject to substantial risks and uncertainties. Actual results may differ materially, and the company does not undertake to update these statements - Statements regarding future expectations, plans, and prospects, including operations, business strategy, and financial results, are considered 'forward-looking statements'[18](index=18&type=chunk) - These statements are based on management's current expectations and are subject to substantial risks, uncertainty, and changes in circumstances, as detailed in the Company's Form 10-K and other SEC filings[18](index=18&type=chunk) - Legacy Education does not guarantee future results and specifically declines any obligation to update or revise any forward-looking statements, except as required by applicable law[18](index=18&type=chunk) [Contact Information](index=5&type=section&id=Contact%20Information) This section provides essential contact details for investor relations inquiries regarding Legacy Education Inc [Contact Legacy Education Inc.](index=5&type=section&id=Contact%20Legacy%20Education%20Inc.) Contact details for investor relations are provided for inquiries regarding Legacy Education Inc - Investor Relations contact: ir@legacyed.com[19](index=19&type=chunk) - Amato and Partners, LLC serves as the Investors Relations Council, contactable at admin@amatoandpartners.com[19](index=19&type=chunk)

```markdown [PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents BlackBerry Limited's unaudited consolidated financial statements, including balance sheets, statements of shareholders' equity, operations, comprehensive income (loss), and cash flows, supported by detailed explanatory notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show a decrease in total assets from **$1,295.6 million** as of February 28, 2025, to **$1,184.1 million** as of August 31, 2025, primarily driven by a reduction in current assets Consolidated Balance Sheet Data (in millions) | Category | August 31, 2025 (in millions) | February 28, 2025 (in millions) | Change (in millions) | | :------- | :---------------------------- | :------------------------------ | :------------------- | | Total Assets | $1,184.1 | $1,295.6 | $(111.5) | | Total Liabilities | $459.0 | $575.7 | $(116.7) | | Shareholders' Equity | $725.1 | $719.9 | $5.2 | [Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity increased from **$719.9 million** at February 28, 2025, to **$725.1 million** at August 31, 2025, primarily due to net income and stock-based compensation, partially offset by share repurchases Shareholders' Equity Changes (in millions) | Item | Six Months Ended August 31, 2025 (in millions) | Six Months Ended August 31, 2024 (in millions) | | :-------------------------- | :----------------------------------- | :----------------------------------- | | Balance as at Feb 28/29 | $2,976.4 | $2,947.7 | | Net income (loss) | $15.2 | $(61.1) | | Other comprehensive income | $7.2 | $1.8 | | Stock-based compensation | $11.6 | $14.8 | | Share repurchase | $(37.9) | — | | Employee share purchase plan | $1.2 | $1.5 | | Balance as at Aug 31 | $2,951.3 | $2,964.0 | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended August 31, 2025, BlackBerry reported net income of **$13.3 million**, a significant improvement from a net loss of **$19.7 million** in the prior-year period, with revenue increasing slightly to **$129.6 million** and gross margin improving to **$96.6 million** Statements of Operations Summary (in millions, except EPS) | Metric | Three Months Ended Aug 31, 2025 (in millions) | Three Months Ended Aug 31, 2024 (in millions) | Six Months Ended Aug 31, 2025 (in millions) | Six Months Ended Aug 31, 2024 (in millions) | | :---------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Revenue | $129.6 | $126.2 | $251.3 | $249.6 | | Gross margin | $96.6 | $88.6 | $186.9 | $178.6 | | Operating income (loss) | $11.5 | $2.2 | $13.5 | $(10.7) | | Net income (loss) | $13.3 | $(19.7) | $15.2 | $(61.1) | | Basic EPS | $0.02 | $(0.03) | $0.03 | $(0.10) | | Diluted EPS | $0.02 | $(0.03) | $0.03 | $(0.10) | [Consolidated Statements of Comprehensive Income (Loss)](index=9&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income for the three months ended August 31, 2025, was **$14.1 million**, a significant improvement from a comprehensive loss of **$17.6 million** in the prior-year period, driven by net income and positive foreign currency translation adjustments Comprehensive Income (Loss) Summary (in millions) | Metric | Three Months Ended Aug 31, 2025 (in millions) | Three Months Ended Aug 31, 2024 (in millions) | Six Months Ended Aug 31, 2025 (in millions) | Six Months Ended Aug 31, 2024 (in millions) | | :---------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net income (loss) | $13.3 | $(19.7) | $15.2 | $(61.1) | | Other comprehensive income | $0.8 | $2.1 | $7.2 | $1.8 | | Comprehensive income (loss) | $14.1 | $(17.6) | $22.4 | $(59.3) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended August 31, 2025, net cash used in operating activities decreased to **$14.1 million** from **$31.1 million** in the prior-year period, with net cash provided by investing activities significantly increasing to **$52.8 million** Cash Flow Summary (in millions) | Cash Flow Activity | Six Months Ended Aug 31, 2025 (in millions) | Six Months Ended Aug 31, 2024 (in millions) | | :---------------------------------- | :------------------------------------ | :------------------------------------ | | Net cash used in operating activities | $(14.1) | $(31.1) | | Net cash provided by investing activities | $52.8 | $16.6 | | Net cash provided by (used in) financing activities | $(28.8) | $1.5 | | Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | $10.3 | $(12.8) | | End of period cash, cash equivalents, restricted cash, and restricted cash equivalents | $290.6 | $187.7 | [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and breakdowns of the figures presented in the consolidated financial statements, covering accounting policies, discontinued operations, fair value measurements, specific balance sheet accounts, income taxes, long-term debt, capital stock, earnings per share, comprehensive loss, commitments, contingencies, segment reporting, and cash flow information [1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES](index=11&type=section&id=1.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES%20AND%20CRITICAL%20ACCOUNTING%20ESTIMATES) The financial statements are prepared in accordance with U.S. GAAP, with no material changes to accounting policies or critical accounting estimates from the annual statements, and new accounting pronouncements are being evaluated for future adoption - The Company reclassified all expenses associated with its facilities to General and administrative expenses in the third quarter of fiscal **2025**, impacting prior period comparatives[33](index=33&type=chunk) - No material changes to the Company's accounting policies or critical accounting estimates have occurred during fiscal **2026**[35](index=35&type=chunk) - The Company is evaluating new FASB ASUs on income tax disclosures (ASU **2023-09**, effective FY**26**) and expense disaggregation (ASU **2024-03**, effective FY**28**), and does not expect ASU **2025-05** on credit losses (effective FY**28**) to have a material impact[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) [2. DISCONTINUED OPERATIONS](index=12&type=section&id=2.%20DISCONTINUED%20OPERATIONS) The Cylance business, acquired in **2019**, was classified as held for sale in Q3 fiscal **2025** and subsequently sold to Arctic Wolf Networks, Inc. on February 3, **2025**, with its financial results now presented as 'loss from discontinued operations, net of tax' - The Cylance business was sold to Arctic Wolf Networks, Inc. on February 3, **2025**, resulting in a gain on disposal of **$10.4 million** in Q4 fiscal **2025**[42](index=42&type=chunk) Discontinued Operations Financials (in millions) | Metric | Three Months Ended Aug 31, 2024 (in millions) | Six Months Ended Aug 31, 2024 (in millions) | | :---------------------------------- | :------------------------------------ | :------------------------------------ | | Revenue | $20.3 | $41.2 | | Gross margin | $8.2 | $16.2 | | Operating loss | $(23.2) | $(48.1) | | Loss from discontinued operations, net of tax | $(23.2) | $(48.1) | | Basic loss per share from discontinued operations | $(0.04) | $(0.08) | [3. FAIR VALUE MEASUREMENTS, CASH, CASH EQUIVALENTS AND INVESTMENTS](index=13&type=section&id=3.%20FAIR%20VALUE%20MEASUREMENTS,%20CASH,%20CASH%20EQUIVALENTS%20AND%20INVESTMENTS) The Company uses a three-level fair value hierarchy for its investments, with cash, cash equivalents, and short-term investments totaling **$276.4 million** and **$14.1 million** respectively as of August 31, 2025, and recorded impairment charges for long-lived assets - During the three and six months ended August 31, 2025, the Company recorded a pre-tax impairment charge of **$0.5 million** and **$0.6 million**, respectively, for operating lease ROU assets and property, plant and equipment[53](index=53&type=chunk) Cash, Investments, and Fair Value Summary (in millions) | Category | August 31, 2025 (in millions) | February 28, 2025 (in millions) | | :---------------------------------------------------------------- | :---------------------------- | :------------------------------ | | Cash and cash equivalents | $276.4 | $266.7 | | Short-term investments | $14.1 | $71.1 | | Long-term investments (including equity investments in private companies) | $58.8 | $58.9 | | Restricted cash and cash equivalents | $14.2 | $13.6 | | **Total Cash, Cash Equivalents and Investments** | **$363.5** | **$410.3** | - As of August 31, 2025, the Company had non-marketable equity investments without readily determinable fair value of **$58.8 million**, including common shares of Arctic Wolf[59](index=59&type=chunk) [4. CONSOLIDATED BALANCE SHEET DETAILS](index=17&type=section&id=4.%20CONSOLIDATED%20BALANCE%20SHEET%20DETAILS) Accounts receivable, net of allowance, decreased to **$125.0 million** as of August 31, 2025, with a CECL of **$5.4 million**, while intangible assets, net, decreased to **$42.0 million** due to amortization, and goodwill increased to **$478.5 million** due to foreign exchange effects Balance Sheet Details (in millions) | Item | August 31, 2025 (in millions) | February 28, 2025 (in millions) | | :-------------------------------- | :---------------------------- | :------------------------------ | | Accounts receivable, net | $125.0 | $173.7 | | Allowance for credit losses (CECL) | $5.4 | $6.6 | | Other receivables | $48.7 | $48.4 | | Intangible assets, net | $42.0 | $47.3 | | Goodwill | $478.5 | $472.4 | | Accrued liabilities | $83.9 | $126.2 | | Restructuring program liabilities | $5.2 | $10.4 | - Other receivables include a **$38.1 million** delayed cash payment from Arctic Wolf related to the Cylance sale[69](index=69&type=chunk) - Amortization expense for intangible assets was **$7.6 million** for the six months ended August 31, 2025, down from **$22.0 million** in the prior year[74](index=74&type=chunk) [5. INCOME TAXES](index=21&type=section&id=5.%20INCOME%20TAXES) The Company's net effective income tax expense rate remained approximately **17%** for both the six months ended August 31, 2025, and 2024, reflecting changes in unrecognized income tax benefits and a significant valuation allowance against deferred income tax assets - The net effective income tax expense rate was approximately **17%** for the six months ended August 31, 2025 and 2024[84](index=84&type=chunk) - Total unrecognized income tax benefits were **$19.6 million** as of August 31, 2025, with **$19.2 million** netted against deferred income tax assets[85](index=85&type=chunk) [6. LONG-TERM NOTES](index=21&type=section&id=6.%20LONG-TERM%20NOTES) The Company has **$200.0 million** aggregate principal amount of **3.00%** senior convertible unsecured notes due February 15, 2029, with a carrying amount of **$195.9 million** and an estimated fair value of **$249.0 million** as of August 31, 2025 - The Company issued **$200.0 million** aggregate principal amount of **3.00%** senior convertible unsecured notes due February 15, 2029[87](index=87&type=chunk)[88](index=88&type=chunk) Long-Term Notes Summary (in millions) | Metric | August 31, 2025 (in millions) | February 28, 2025 (in millions) | | :-------------------------------- | :---------------------------- | :------------------------------ | | Carrying amount of Notes | $195.9 | $195.3 | | Fair value of Notes | $249.0 | $289.5 | | Interest expense (3 months) | $1.5 | $1.5 | | Interest expense (6 months) | $3.0 | $3.0 | [7. CAPITAL STOCK](index=22&type=section&id=7.%20CAPITAL%20STOCK) As of August 31, 2025, the Company had **590,361,084** common shares issued and outstanding, having repurchased **7.6 million** common shares at a cost of **$30.0 million** under its Normal Course Issuer Bid (NCIB) share buyback program Capital Stock Activity (000s, in millions) | Item | August 31, 2025 (000s) | February 28, 2025 (000s) | | :-------------------------------- | :--------------------- | :--------------------- | | Common shares outstanding | 590,361 | 596,231 | | Common shares repurchased (6 months) | (7,595) | — | | Cost of share repurchase (6 months) | $(30.0) | — | - The NCIB share buyback program, commenced on May 12, 2025, authorizes the repurchase of up to **27.9 million** common shares[93](index=93&type=chunk) [8. EARNINGS (LOSS) PER SHARE](index=23&type=section&id=8.%20EARNINGS%20(LOSS)%20PER%20SHARE) Basic and diluted earnings per share from continuing operations for the three months ended August 31, 2025, were **$0.02**, an increase from **$0.01** in the prior-year period, with the dilutive effect of convertible notes excluded as it was anti-dilutive Earnings Per Share Data (in millions, except EPS) | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | | :------------------------------------------------ | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | Net income (loss) from continuing operations | $13.3 | $3.5 | $15.2 | $(13.0) | | Basic EPS from continuing operations | $0.02 | $0.01 | $0.03 | $(0.02) | | Diluted EPS from continuing operations | $0.02 | $0.01 | $0.03 | $(0.02) | | Total basic EPS | $0.02 | $(0.03) | $0.03 | $(0.10) | | Total diluted EPS | $0.02 | $(0.03) | $0.03 | $(0.10) | | Weighted average shares outstanding (basic, 000s) | 592,938 | 590,549 | 594,624 | 590,188 | | Weighted average shares outstanding (diluted, 000s) | 597,369 | 591,610 | 598,697 | 590,188 | [9. ACCUMULATED OTHER COMPREHENSIVE LOSS](index=24&type=section&id=9.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20LOSS) Accumulated Other Comprehensive Loss (AOCL) decreased from **$(19.2) million** at February 28, 2025, to **$(12.0) million** at August 31, 2025, primarily driven by positive foreign currency translation adjustments and net changes in fair value of cash flow hedges Accumulated Other Comprehensive Loss Breakdown (in millions) | Component | Three Months Ended Aug 31, 2025 (in millions) | Three Months Ended Aug 31, 2024 (in millions) | Six Months Ended Aug 31, 2025 (in millions) | Six Months Ended Aug 31, 2024 (in millions) | | :---------------------------------------------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Cash Flow Hedges (net unrealized gains) | $0.3 | $0.9 | $0.3 | $0.9 | | Foreign Currency Cumulative Translation Adjustment | $(11.7) | $(12.8) | $(11.7) | $(12.8) | | Other Post-Employment Benefit Obligations (actuarial losses) | $(0.6) | $(0.6) | $(0.6) | $(0.6) | | **Accumulated Other Comprehensive Loss, End of Period** | **$(12.0)** | **$(12.5)** | **$(12.0)** | **$(12.5)** | [10. COMMITMENTS AND CONTINGENCIES](index=24&type=section&id=10.%20COMMITMENTS%20AND%20CONTINGENCIES) The Company has **$14.1 million** in collateralized outstanding letters of credit and is involved in various litigations, including a Canadian employment class action that settled for **$2.8 million** (CAD **$4.0 million**) in February 2025, with other claims ongoing - The Company had **$14.1 million** in collateralized outstanding letters of credit as of August 31, 2025[100](index=100&type=chunk) - A Canadian employment class action settled for **$2.8 million** (CAD **$4.0 million**) in February 2025, with Court approval in July 2025[110](index=110&type=chunk) - The Company recognized **$29.0 million** in funds from QNX's Strategic Innovation Fund (SIF) claims, which may be repayable if certain terms are not met[108](index=108&type=chunk) [11. REVENUE AND SEGMENT DISCLOSURES](index=26&type=section&id=11.%20REVENUE%20AND%20SEGMENT%20DISCLOSURES) BlackBerry operates through three reportable segments: QNX, Secure Communications, and Licensing, with total revenue of **$129.6 million** for the three months ended August 31, 2025, and North America remaining the largest geographic region - The Company is organized into three operating segments: QNX, Secure Communications, and Licensing, following the sale of the Cylance business[116](index=116&type=chunk) Segment Revenue Breakdown (in millions) | Segment | Three Months Ended Aug 31, 2025 (in millions) | Three Months Ended Aug 31, 2024 (in millions) | Six Months Ended Aug 31, 2025 (in millions) | Six Months Ended Aug 31, 2024 (in millions) | | :-------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | QNX Revenue | $63.1 | $54.7 | $120.6 | $107.9 | | Secure Communications Revenue | $59.9 | $66.5 | $119.4 | $130.7 | | Licensing Revenue | $6.6 | $5.0 | $11.3 | $11.0 | | **Total Segment Revenue** | **$129.6** | **$126.2** | **$251.3** | **$249.6** | Revenue by Geographic Region (%) | Region | Three Months Ended Aug 31, 2025 (%) | Three Months Ended Aug 31, 2024 (%) | Six Months Ended Aug 31, 2025 (%) | Six Months Ended Aug 31, 2024 (%) | | :---------------------------- | :---------------------------------- | :---------------------------------- | :-------------------------------- | :-------------------------------- | | North America | 48.1% | 46.1% | 46.6% | 45.8% | | Europe, Middle East and Africa | 30.8% | 34.5% | 32.8% | 35.0% | | Other regions | 21.1% | 19.4% | 20.6% | 19.2% | | **Total** | **100.0%** | **100.0%** | **100.0%** | **100.0%** | Remaining Performance Obligations (in millions) | Time Frame | Remaining Performance Obligations (as at Aug 31, 2025, in millions) | | :-------------------- | :------------------------------------------------ | | Less than 12 Months | $128.5 | | 12 to 24 Months | $3.1 | | Thereafter | $3.6 | | **Total** | **$135.2** | [12. CASH FLOW AND ADDITIONAL INFORMATION](index=30&type=section&id=12.%20CASH%20FLOW%20AND%20ADDITIONAL%20INFORMATION) Interest paid for the six months ended August 31, 2025, was **$3.0 million**, while income taxes paid were **$18.1 million**, and the Company is exposed to foreign exchange, interest rate, and credit risks, including a **$38.1 million** deferred cash payment from Arctic Wolf Cash Flow Details (in millions) | Item | Six Months Ended Aug 31, 2025 (in millions) | Six Months Ended Aug 31, 2024 (in millions) | | :-------------------------------- | :------------------------------------ | :------------------------------------ | | Interest paid | $3.0 | $3.0 | | Income taxes paid | $18.1 | $9.8 | | Income tax refunds received | $0.2 | — | - The Company is exposed to foreign exchange risk, with approximately **10%** of cash and cash equivalents, **25%** of accounts receivable, and **71%** of accounts payable denominated in foreign currencies as of August 31, 2025[134](index=134&type=chunk) - The Company is owed a **$38.1 million** delayed cash payment from Arctic Wolf, exposing it to credit risk related to potential non-payment[137](index=137&type=chunk) - Equity investments in private companies, including Arctic Wolf shares (**$24.6 million**), are illiquid securities, posing liquidity risk[140](index=140&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on BlackBerry's financial condition and results of operations for the three and six months ended August 31, 2025, covering business overview, summary results, and an assessment of liquidity and capital resources [Business Overview](index=33&type=section&id=Business%20Overview) BlackBerry Limited is a leading provider of intelligent software and services, with two core divisions: QNX for embedded software and Secure Communications for highly secure solutions, complemented by a Licensing division - BlackBerry's QNX division is a leader in embedded software, serving top automotive OEMs, Tier 1 suppliers, EV OEMs, and medical OEMs, with a focus on safety-critical foundational software[150](index=150&type=chunk) - The Secure Communications division provides operational resiliency with secure solutions for mobile fortification, mission-critical communications, and critical event management, targeting government and strategic industries[151](index=151&type=chunk) - Recent product innovations include the launch of QNX OS for Safety **8** and BlackBerry UEM achieving BSI certification[168](index=168&type=chunk) [Second Quarter Fiscal 2026 Summary Results of Operations](index=35&type=section&id=Second%20Quarter%20Fiscal%202026%20Summary%20Results%20of%20Operations) For the second quarter of fiscal 2026, BlackBerry reported revenue of **$129.6 million** and net income of **$13.3 million** (**$0.02** basic and diluted EPS), a significant improvement from a net loss of **$19.7 million** in the prior-year period Q2 FY26 Summary Results (in millions, except EPS) | Metric | Q2 FY26 (in millions, except EPS) | Q2 FY25 (in millions, except EPS) | Change (in millions) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Revenue | $129.6 | $126.2 | $3.4 | | Gross margin | $96.6 | $88.6 | $8.0 | | Operating expenses | $85.1 | $86.4 | $(1.3) | | Net income (loss) | $13.3 | $(19.7) | $33.0 | | Basic EPS | $0.02 | $(0.03) | | | Diluted EPS | $0.02 | $(0.03) | | | Adjusted Net Income (Loss) | $24.2 | $(2.6) | | | Adjusted EPS | $0.04 | $0.00 | | - The significant improvement in net income is primarily due to the absence of loss from discontinued operations (Cylance) in Q2 FY**26**, which was **$(23.2) million** in Q2 FY**25**[169](index=169&type=chunk)[259](index=259&type=chunk) [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) BlackBerry uses non-GAAP financial measures such as adjusted gross margin, adjusted operating expense, adjusted net income (loss), adjusted EPS, and adjusted EBITDA to provide a consistent basis for comparison and to help understand underlying operational trends - Non-GAAP measures exclude restructuring charges, stock compensation expenses, amortization of acquired intangible assets, and long-lived asset impairment charges[187](index=187&type=chunk) Non-GAAP Financial Metrics (in millions) | Metric | Q2 FY26 (in millions) | Q2 FY25 (in millions) | H1 FY26 (in millions) | H1 FY25 (in millions) | | :-------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Adjusted Gross Margin | $97.2 | $89.2 | $188.0 | $179.9 | | Adjusted Operating Expense | $74.8 | $78.5 | $153.2 | $163.3 | | Adjusted EBITDA | $25.9 | $15.1 | $42.3 | $25.6 | | Adjusted Net Income (Loss) | $24.2 | $(2.6) | $36.5 | $(16.9) | | Adjusted Basic EPS | $0.04 | $0.00 | $0.06 | $(0.03) | [Key Metrics](index=44&type=section&id=Key%20Metrics) Secure Communications Annual Recurring Revenue (ARR) increased to **$213 million** as of August 31, 2025, up from **$209 million** in the prior year, with the Dollar-Based Net Retention Rate (DBNRR) remaining consistent at **93%** Key Operational Metrics (in millions) | Metric | August 31, 2025 (in millions) | August 31, 2024 (in millions) | Change | | :------------------------------------ | :---------------------------- | :---------------------------- | :----- | | Secure Communications ARR | $213 | $209 | $4 | | Secure Communications DBNRR | 93% | 93% | —% | [Results of Operations - Three months ended August 31, 2025 compared to the three months ended August 31, 2024](index=45&type=section&id=Results%20of%20Operations%20-%20Three%20months%20ended%20August%2031,%202025%20compared%20to%20the%20three%20months%20ended%20August%2031,%202024) This section details the financial performance for the second quarter of fiscal 2026, highlighting revenue growth in QNX and Licensing, improved consolidated gross margin and operating income, and updated guidance reflecting stronger-than-expected performance [Revenue](index=45&type=section&id=Revenue) Total revenue for Q2 FY26 was **$129.6 million**, exceeding expectations, with QNX revenue increasing by **$8.4 million** to **$63.1 million**, while Secure Communications revenue decreased by **$6.6 million** to **$59.9 million** Q2 Revenue by Segment (in millions) | Segment | Q2 FY26 Revenue (in millions) | Q2 FY25 Revenue (in millions) | Change (in millions) | | :-------------------- | :---------------------------- | :---------------------------- | :------------------- | | QNX | $63.1 | $54.7 | $8.4 | | Secure Communications | $59.9 | $66.5 | $(6.6) | | Licensing | $6.6 | $5.0 | $1.6 | | **Total Revenue** | **$129.6** | **$126.2** | **$3.4** | - QNX revenue of **$63.1 million** exceeded expectations due to better-than-expected royalty revenue[209](index=209&type=chunk) - The Company now expects QNX revenue to be in the range of **$256 million** to **$270 million** for fiscal 2026, up from **$250 million** to **$270 million**[210](index=210&type=chunk) - Total BlackBerry revenue is now expected to be in the range of **$519 million** to **$541 million** for fiscal 2026, up from **$508 million** to **$538 million**[217](index=217&type=chunk) [Gross Margin](index=47&type=section&id=Gross%20Margin) Consolidated gross margin increased by **$8.0 million** to **$96.6 million** in Q2 FY26, with the gross margin percentage rising to **74.5%** from **70.2%**, primarily due to a higher contribution from Secusmart and QNX - Consolidated gross margin increased by **$8.0 million** to **$96.6 million** in Q2 FY**26**, with gross margin percentage increasing by **4.3%** to **74.5%**[222](index=222&type=chunk)[223](index=223&type=chunk) Q2 Adjusted Gross Margin and EBITDA by Segment (in millions) | Segment | Q2 FY26 Adjusted Gross Margin (in millions) | Q2 FY25 Adjusted Gross Margin (in millions) | Change (in millions) | | :-------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | QNX | $52.4 | $45.4 | $7.0 | | Secure Communications | $39.7 | $40.4 | $(0.7) | | Licensing | $5.1 | $3.4 | $1.7 | | **Total Adjusted Gross Margin** | **$97.2** | **$89.2** | **$8.0** | | Segment | Q2 FY26 Adjusted EBITDA (in millions) | Q2 FY25 Adjusted EBITDA (in millions) | Change (in millions) | | :-------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | QNX | $20.5 | $13.1 | $7.4 | | Secure Communications | $9.7 | $7.9 | $1.8 | | Licensing | $5.6 | $4.0 | $1.6 | | **Total Adjusted EBITDA** | **$35.8** | **$25.0** | **$10.8** | - QNX adjusted EBITDA of **$20.5 million** exceeded the expected range of **$10 million** to **$13 million** due to strong revenue and SIF claims[228](index=228&type=chunk) - Secure Communications adjusted EBITDA of **$9.7 million** exceeded the expected range of **$3 million** to **$6 million** due to revenue performance and increased gross margin percentage[232](index=232&type=chunk) [Operating Expenses](index=49&type=section&id=Operating%20Expenses) Total U.S. GAAP operating expenses decreased by **$1.3 million** year-over-year to **$85.1 million** in Q2 FY26, primarily due to SIF claims benefits, lower infrastructure costs, and reduced amortization, partially offset by increased restructuring costs and salaries Q2 Operating Expenses Breakdown (in millions) | Operating Expense Category | Q2 FY26 (in millions) | Q2 FY25 (in millions) | Change (in millions) | | :-------------------------------- | :-------------------- | :-------------------- | :------------------- | | Research and development | $25.6 | $27.1 | $(1.5) | | Sales and marketing | $24.4 | $21.3 | $3.1 | | General and administrative | $31.5 | $32.8 | $(1.3) | | Amortization | $3.1 | $4.6 | $(1.5) | | Impairment of long-lived assets | $0.5 | $0.6 | $(0.1) | | **Total Operating Expenses** | **$85.1** | **$86.4** | **$(1.3)** | - Operating expenses decreased year-over-year by **$1.3 million**, primarily due to **$3.8 million** in SIF claims benefits, **$1.6 million** in lower infrastructure costs, and **$1.5 million** in reduced amortization[239](index=239&type=chunk) - Investment income, net, decreased by **$0.8 million** to **$1.9 million** in Q2 FY26, mainly due to a non-recurring interest income in the prior year, partially offset by higher returns on cash and investments[257](index=257&type=chunk) - The Company now expects adjusted EBITDA for fiscal 2026 to be in the range of **$82 million** to **$101 million** (previously **$72 million** to **$87 million**) and non-GAAP EPS to be **$0.11** to **$0.15** (previously **$0.08** to **$0.10**)[264](index=264&type=chunk)[265](index=265&type=chunk) [Results of Operations - Six months ended August 31, 2025 compared to the six months ended August 31, 2024](index=53&type=section&id=Results%20of%20Operations%20-%20Six%20months%20ended%20August%2031,%202025%20compared%20to%20the%20six%20months%20ended%20August%2031,%202024) This section reviews the financial performance for the first six months of fiscal 2026, showing a slight increase in total revenue and a significant improvement in net income from a loss to a positive figure, driven by QNX segment growth and reduced operating expenses [Consolidated Financial Performance](index=53&type=section&id=Consolidated%20Financial%20Performance) For the six months ended August 31, 2025, BlackBerry reported revenue of **$251.3 million** and net income of **$15.2 million** (**$0.03** basic and diluted EPS), a substantial improvement from a net loss of **$61.1 million** in the prior-year period H1 FY26 Consolidated Financial Performance (in millions, except EPS) | Metric | H1 FY26 (in millions, except EPS) | H1 FY25 (in millions, except EPS) | Change (in millions) | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Revenue | $251.3 | $249.6 | $1.7 | | Gross margin | $186.9 | $178.6 | $8.3 | | Operating income (loss) | $13.5 | $(10.7) | $24.2 | | Net income (loss) | $15.2 | $(61.1) | $76.3 | | Basic EPS | $0.03 | $(0.10) | $0.13 | | Diluted EPS | $0.03 | $(0.10) | $0.13 | - The **$76.3 million** increase in net income is primarily due to the absence of a **$48.1 million** loss from discontinued operations in H1 FY**25**[270](index=270&type=chunk)[309](index=309&type=chunk) [Revenue](index=53&type=section&id=Revenue) Total revenue for the six months ended August 31, 2025, increased slightly to **$251.3 million**, with QNX revenue growing by **$12.7 million** to **$120.6 million**, while Secure Communications revenue decreased by **$11.3 million** to **$119.4 million** H1 Revenue by Segment (in millions) | Segment | H1 FY26 Revenue (in millions) | H1 FY25 Revenue (in millions) | Change (in millions) | | :-------------------- | :---------------------------- | :---------------------------- | :------------------- | | QNX | $120.6 | $107.9 | $12.7 | | Secure Communications | $119.4 | $130.7 | $(11.3) | | Licensing | $11.3 | $11.0 | $0.3 | | **Total Revenue** | **$251.3** | **$249.6** | **$1.7** | H1 Revenue by Segment and Region (in millions) | Region | H1 FY26 Revenue (in millions) | H1 FY25 Revenue (in millions) | Change (in millions) | | :---------------------------- | :---------------------------- | :---------------------------- | :------------------- | | North America | $117.1 | $114.4 | $2.7 | | Europe, Middle East and Africa | $82.4 | $87.3 | $(4.9) | | Other regions | $51.8 | $47.9 | $3.9 | | **Total** | **$251.3** | **$249.6** | **$1.7** | [Gross Margin](index=55&type=section&id=Gross%20Margin) Consolidated gross margin increased by **$8.3 million** to **$186.9 million** for the first six months of fiscal 2026, with the gross margin percentage rising to **74.4%** from **71.6%**, primarily due to increased revenue from QNX and a favorable mix - Consolidated gross margin increased by **$8.3 million** to **$186.9 million** in H1 FY**26**, with gross margin percentage increasing by **2.8%** to **74.4%**[281](index=281&type=chunk)[282](index=282&type=chunk) H1 Adjusted Gross Margin and EBITDA by Segment (in millions) | Segment | H1 FY26 Adjusted Gross Margin (in millions) | H1 FY25 Adjusted Gross Margin (in millions) | Change (in millions) | | :-------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | QNX | $98.7 | $89.1 | $9.6 | | Secure Communications | $81.1 | $82.8 | $(1.7) | | Licensing | $8.2 | $8.0 | $0.2 | | **Total Adjusted Gross Margin** | **$188.0** | **$179.9** | **$8.1** | | Segment | H1 FY26 Adjusted EBITDA (in millions) | H1 FY25 Adjusted EBITDA (in millions) | Change (in millions) | | :-------------------- | :------------------------------------ | :------------------------------------ | :------------------- | | QNX | $33.2 | $22.0 | $11.2 | | Secure Communications | $19.3 | $17.2 | $2.1 | | Licensing | $9.4 | $8.7 | $0.7 | | **Total Adjusted EBITDA** | **$61.9** | **$47.9** | **$14.0** | - QNX adjusted EBITDA increased by **$11.2 million**, primarily due to revenue growth and benefits from SIF claims[286](index=286&type=chunk) [Operating Expenses](index=56&type=section&id=Operating%20Expenses) Total U.S. GAAP operating expenses decreased by **$15.9 million** to **$173.4 million** for the first six months of fiscal 2026, driven by SIF claims benefits, lower impairment charges, reduced amortization, and decreased infrastructure and restructuring costs H1 Operating Expenses Breakdown (in millions) | Operating Expense Category | H1 FY26 (in millions) | H1 FY25 (in millions) | Change (in millions) | | :-------------------------------- | :-------------------- | :-------------------- | :------------------- | | Research and development | $50.6 | $57.7 | $(7.1) | | Sales and marketing | $53.1 | $45.1 | $8.0 | | General and administrative | $62.0 | $73.1 | $(11.1) | | Amortization | $7.1 | $9.3 | $(2.2) | | Impairment of long-lived assets | $0.6 | $4.1 | $(3.5) | | **Total Operating Expenses** | **$173.4** | **$189.3** | **$(15.9)** | - Operating expenses decreased by **$15.9 million**, primarily due to **$8.3 million** in SIF claims benefits, **$3.5 million** lower impairment charges, and **$2.2 million** reduced amortization[292](index=292&type=chunk) - Investment income, net, decreased by **$1.9 million** to **$4.8 million**, mainly due to non-recurring unrealized gains and interest income in the prior year, partially offset by higher returns on cash and investments[307](index=307&type=chunk) [Financial Condition](index=59&type=section&id=Financial%20Condition) This section details BlackBerry's liquidity and capital resources, showing a decrease in cash, cash equivalents, and investments to **$363.5 million** as of August 31, 2025, with working capital increasing to **$277.0 million** [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) Cash, cash equivalents, and investments decreased by **$46.8 million** to **$363.5 million** as of August 31, 2025, primarily due to changes in working capital, while net cash used in operating activities decreased by **$17.0 million** Liquidity and Capital Resources Summary (in millions) | Item | August 31, 2025 (in millions) | February 28, 2025 (in millions) | Change (in millions) | | :------------------------------------ | :---------------------------- | :------------------------------ | :------------------- | | Cash, cash equivalents, and investments | $363.5 | $410.3 | $(46.8) | | Current assets | $507.2 | $591.5 | $(84.3) | | Current liabilities | $230.2 | $344.3 | $(114.1) | | Working capital | $277.0 | $247.2 | $29.8 | Cash Flow Activities (in millions) | Cash Flow Activity | H1 FY26 (in millions) | H1 FY25 (in millions) | Change (in millions) | | :------------------------------------ | :-------------------- | :-------------------- | :------------------- | | Net cash used in operating activities | $(14.1) | $(31.1) | $17.0 | | Net cash provided by investing activities | $52.8 | $16.6 | $36.2 | | Net cash used in financing activities | $(28.8) | $1.5 | $(30.3) | - The increase in cash flows used in financing activities was primarily due to **$30.0 million** in common share repurchases under the NCIB share buyback program[326](index=326&type=chunk) Contractual Obligations (in millions) | Obligation Type | Total (in millions) | Short-term (next 12 months, in millions) | Long-term (>12 months, in millions) | | :-------------------------- | :------------------ | :--------------------------------------- | :---------------------------------- | | Operating lease obligations | $39.3 | $12.6 | $26.7 | | Purchase obligations and commitments | $53.0 | $53.0 | — | | Debt interest and principal payments | $221.0 | $6.0 | $215.0 | | **Total** | **$313.3** | **$71.6** | **$241.7** | [Accounting Policies and Critical Accounting Estimates](index=61&type=section&id=Accounting%20Policies%20and%20Critical%20Accounting%20Estimates) There have been no changes to the Company's accounting policies or critical accounting estimates from those described in the Annual MD&A - No changes to the Company's accounting policies or critical accounting estimates have occurred[333](index=333&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) BlackBerry is exposed to foreign exchange risk, interest rate risk, and credit and customer concentration risk, which are managed through hedging activities and monitored for potential impacts - The Company is exposed to foreign exchange risk, with significant portions of cash, accounts receivable, and accounts payable denominated in foreign currencies (Canadian dollar, euro, British pound)[334](index=334&type=chunk) - Interest rate risk stems from investments with varying maturities and fixed-rate convertible notes[337](index=337&type=chunk) - Credit risk includes an allowance for credit losses of **$5.4 million** and exposure to a **$38.1 million** deferred cash payment from Arctic Wolf[338](index=338&type=chunk) [Item 4. Controls and Procedures](index=62&type=section&id=Item%204.%20Controls%20and%20Procedures) As of August 31, 2025, the Company's Chief Executive Officer and Chief Financial Officer concluded that its disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The Company's disclosure controls and procedures were effective as of August 31, 2025[340](index=340&type=chunk) - No material changes were made to the Company's internal control over financial reporting during the three months ended August 31, 2025[341](index=341&type=chunk) [PART II - OTHER INFORMATION](index=63&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings in which the Company is involved can be found in Note **10** to the Consolidated Financial Statements - Refer to Note **10** for details on legal proceedings[343](index=343&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company initiated a Normal Course Issuer Bid (NCIB) share buyback program on May 12, 2025, to repurchase up to **27,855,153** common shares, with **5,024,926** shares repurchased during July and August 2025 - The NCIB share buyback program commenced on May 12, 2025, authorizing the repurchase of up to **27,855,153** common shares[344](index=344&type=chunk)[345](index=345&type=chunk) Share Repurchase Program Activity | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :----------------------- | :----------------------------- | :--------------------------- | | July 1, 2025 - July 31, 2025 | 2,387,128 | $4.19 | | Aug 1, 2025 - Aug 31, 2025 | 2,637,798 | $3.77 | | **Total (July-Aug 2025)** | **5,024,926** | **$3.97 (approx)** | | Maximum Shares Remaining | 20,260,268 | | [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) During the three months ended August 31, 2025, no officers or directors of the Company adopted or terminated Rule **10b5-1** or non-Rule **10b5-1** trading arrangements for the purchase or sale of the Company's common shares - No officers or directors adopted or terminated Rule **10b5-1** trading arrangements during the three months ended August 31, 2025[348](index=348&type=chunk) [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form **10-Q**, including certifications from the Chief Executive Officer and Chief Financial Officer, as well as XBRL-related documents - Exhibits include CEO and CFO certifications (**31.1**, **31.2**, **32.1**, **32.2**) and various XBRL documents (**101**, **104**)[349](index=349&type=chunk)[350](index=350&type=chunk) [Signatures](index=65&type=section&id=Signatures) The report is duly signed on behalf of BlackBerry Limited by John Giamatteo, Chief Executive Officer, and Tim Foote, Chief Financial Officer, on September 25, 2025 - The report was signed by John Giamatteo (CEO) and Tim Foote (CFO) on September 25, 2025[354](index=354&type=chunk) ```

[Operating Results Overview](index=1&type=section&id=Operating%20Results%20Overview) This section presents Costco's financial and operational performance for Q4 and FY2025, including sales, income, and global footprint [Financial Highlights (Q4 and FY2025)](index=1&type=section&id=Financial%20Highlights%20%28Q4%20and%20FY2025%29) Costco reported strong financial performance for both the fourth quarter and the full fiscal year 2025, with significant increases in net sales, comparable sales across all regions and e-commerce, and net income per diluted share [Net Sales Performance](index=1&type=section&id=Net%20Sales%20Performance) This section details Costco's net sales figures and year-over-year growth for the recent quarter and full fiscal year | Metric | 16 Weeks Ended Aug 31, 2025 | 16 Weeks Ended Sep 1, 2024 | 52 Weeks Ended Aug 31, 2025 | 52 Weeks Ended Sep 1, 2024 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Sales | $84.4 billion | $78.2 billion | $269.9 billion | $249.6 billion | | YoY Growth | 8.0% | - | 8.1% | - | [Comparable Sales Performance](index=1&type=section&id=Comparable%20Sales%20Performance) This section analyzes Costco's comparable sales growth across various regions and e-commerce, both reported and adjusted | Region | 16 Weeks | 16 Weeks Adjusted* | 52 Weeks | 52 Weeks Adjusted* | | :---------------- | :------- | :----------------- | :------- | :----------------- | | U.S. | 5.1% | 6.0% | 6.2% | 7.3% | | Canada | 6.3% | 8.3% | 5.0% | 8.3% | | Other International | 8.6% | 7.2% | 4.8% | 8.2% | | Total Company | 5.7% | 6.4% | 5.9% | 7.6% | | E-commerce | 13.6% | 13.5% | 15.6% | 16.1% | *Excluding the impacts from changes in gasoline prices and foreign exchange. [Net Income and Earnings Per Share](index=1&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) This section presents Costco's net income and diluted earnings per share for the recent quarter and full fiscal year | Metric | 16 Weeks Ended Aug 31, 2025 | 16 Weeks Ended Sep 1, 2024 | 52 Weeks Ended Aug 31, 2025 | 52 Weeks Ended Sep 1, 2024 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net Income | $2.610 billion | $2.354 billion | $8.099 billion | $7.367 billion | | Diluted EPS | $5.87 | $5.29 | $18.21 | $16.56 | - Last year's Q4 results included a net non-recurring tax benefit of **$63 million**, or **$0.14 per diluted share**, related to a transfer pricing settlement and true-ups of tax reserves[3](index=3&type=chunk) [Operational Footprint](index=1&type=section&id=Operational%20Footprint) As of August 31, 2025, Costco operates 914 warehouses globally, with a significant presence in the United States and Canada, alongside a growing international and e-commerce footprint - Costco currently operates **914 warehouses globally**, including **629 in the United States and Puerto Rico**, **110 in Canada**, 42 in Mexico, 37 in Japan, 29 in the United Kingdom, 20 in Korea, 15 in Australia, 14 in Taiwan, seven in China, five in Spain, two in France, two in Sweden, and one each in Iceland and New Zealand[4](index=4&type=chunk) - The Company also operates e-commerce sites in the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan, and Australia[4](index=4&type=chunk) [Conference Call Information](index=1&type=section&id=Conference%20Call%20Information) A conference call was scheduled for September 25, 2025, to discuss the operating results, with webcast access available for investors - A conference call to discuss these results was scheduled for **2:00 p.m. (PT) on September 25, 2025**, and was available via a webcast on investor.costco.com[5](index=5&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) This section provides a comprehensive overview of Costco's financial health through its consolidated income statements, balance sheets, and cash flow statements [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) The Consolidated Statements of Income detail Costco's revenue, operating expenses, and net income figures for the 16-week and 52-week periods ending August 31, 2025, and September 1, 2024, showing year-over-year growth in key profitability metrics | Metric (in millions) | 16 Weeks Ended Aug 31, 2025 | 16 Weeks Ended Sep 1, 2024 | 52 Weeks Ended Aug 31, 2025 | 52 Weeks Ended Sep 1, 2024 | | :------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $84,432 | $78,185 | $269,912 | $249,625 | | Membership fees | $1,724 | $1,512 | $5,323 | $4,828 | | Total revenue | $86,156 | $79,697 | $275,235 | $254,453 | | Operating income | $3,341 | $3,042 | $10,383 | $9,285 | | Net income | $2,610 | $2,354 | $8,099 | $7,367 | | Diluted EPS | $5.87 | $5.29 | $18.21 | $16.56 | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets provide a snapshot of Costco's financial position as of August 31, 2025, and September 1, 2024, highlighting increases in total assets and equity, reflecting business expansion and retained earnings | Metric (in millions) | August 31, 2025 | September 1, 2024 | | :------------------- | :---------------- | :---------------- | | Cash and cash equivalents | $14,161 | $9,906 | | Total current assets | $38,380 | $34,246 | | Property and equipment, net | $31,909 | $29,032 | | TOTAL ASSETS | $77,099 | $69,831 | | Total current liabilities | $37,108 | $35,464 | | TOTAL LIABILITIES | $47,935 | $46,209 | | Retained earnings | $22,650 | $17,619 | | TOTAL EQUITY | $29,164 | $23,622 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The Condensed Consolidated Statements of Cash Flows illustrate the movement of cash for the 52-week periods ending August 31, 2025, and September 1, 2024, indicating strong cash generation from operating activities and significant investments in property and equipment | Metric (in millions) | 52 Weeks Ended Aug 31, 2025 | 52 Weeks Ended Sep 1, 2024 | | :------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $13,335 | $11,339 | | Net cash used in investing activities | $(5,311) | $(4,409) | | Net cash used in financing activities | $(3,775) | $(10,764) | | Net change in cash and cash equivalents | $4,255 | $(3,794) | | CASH AND CASH EQUIVALENTS END OF YEAR | $14,161 | $9,906 | [Additional Information](index=2&type=section&id=Additional%20Information) This section includes important disclosures regarding forward-looking statements and investor contact details [Forward-Looking Statements Disclaimer](index=2&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section outlines the nature of forward-looking statements within the document, emphasizing the inherent risks and uncertainties that could cause actual results to differ materially from projections - The document contains forward-looking statements regarding future activities, events, conditions, or developments, which are subject to risks and uncertainties that may cause actual results to differ materially[6](index=6&type=chunk) - These risks include economic conditions, competition, financial market uncertainties, consumer spending, security breaches, real estate conditions, rising costs, geopolitical conditions, and regulatory impacts[6](index=6&type=chunk) - The Company does not undertake to update these statements, except as required by law[6](index=6&type=chunk) [Company Contacts](index=2&type=section&id=Company%20Contacts) Contact information for Costco Wholesale Corporation investor relations is provided for further inquiries - For investor inquiries, contacts are **Josh Dahmen at 425/313-8254** and **Andrew Yoon at 425/313-6305**[7](index=7&type=chunk)

[PART I](index=5&type=section&id=Part%20I) [ITEM 1. BUSINESS.](index=5&type=section&id=ITEM%201.%20BUSINESS.) Stitch Fix offers personalized online styling through AI and expert stylists, providing curated shipments and direct purchases - Stitch Fix operates as an online personal styling service, integrating expert Stylists with AI and recommendation algorithms to offer personalized clothing and accessories[14](index=14&type=chunk)[17](index=17&type=chunk) - Clients engage through two main models: **'Fixes'** (curated shipments) and **'Freestyle'** (direct purchases from personalized online assortments)[18](index=18&type=chunk)[23](index=23&type=chunk)[29](index=29&type=chunk) - The company's business is powered by **AI and data science**, utilizing a large, growing client-provided data set to enhance personalization and operational efficiency[19](index=19&type=chunk)[30](index=30&type=chunk)[34](index=34&type=chunk) Active Clients | Metric | As of August 2, 2025 | As of August 3, 2024 | | :----- | :------------------- | :------------------- | | Active Clients | 2,309,000 | 2,508,000 | - Stitch Fix expanded its assortment to include Men's, Kids, Petite, Maternity, and Plus apparel, along with shoes and accessories, from brand partners and private labels[20](index=20&type=chunk) - The company ceased its **UK business operations in fiscal 2024**, now operating solely in the United States[59](index=59&type=chunk)[305](index=305&type=chunk) [ITEM 1A. RISK FACTORS](index=10&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company faces significant risks in client retention, consumer spending, competition, operations, cybersecurity, and legal and financial areas - The company faces significant risks in client retention and acquisition, with **active clients decreasing year-over-year**[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - Operational risks include ineffective inventory management, constraints at **three U.S. fulfillment centers**, and shipping disruptions[87](index=87&type=chunk)[92](index=92&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) - Revenue growth has declined in recent fiscal years (**5.3% in FY2025**, **16.0% in FY2024**, **21.1% in FY2023**), with uncertain future profitability despite restructuring[97](index=97&type=chunk)[98](index=98&type=chunk) - The business is highly susceptible to macroeconomic conditions like inflation, recessionary concerns, and trade policies, impacting consumer spending and merchandise costs[77](index=77&type=chunk)[78](index=78&type=chunk)[118](index=118&type=chunk)[120](index=120&type=chunk) - Cybersecurity threats, evolving privacy laws (e.g., CCPA/CPRA), and e-commerce regulations pose significant legal and operational risks, potentially causing expenses, liability, and reputational harm[129](index=129&type=chunk)[140](index=140&type=chunk)[145](index=145&type=chunk) - The **Class A common stock market price is volatile**, influenced by operating results, analyst expectations, and broader market trends, with potential decline from future share sales or dual-class structure[158](index=158&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) [ITEM 1B. UNRESOLVED STAFF COMMENTS.](index=34&type=section&id=ITEM%201B.%20UNRESOLVED%20STAFF%20COMMENTS.) The company reported no unresolved staff comments from the SEC - No unresolved staff comments were reported[185](index=185&type=chunk) [ITEM 1C. CYBERSECURITY.](index=34&type=section&id=ITEM%201C.%20CYBERSECURITY.) Stitch Fix employs a comprehensive cybersecurity strategy, overseen by the CISO and Audit Committee, covering risk management, training, and incident response - Stitch Fix employs a multi-pronged cybersecurity strategy focused on prevention, detection, and response to manage risks to its Information Systems and Data[188](index=188&type=chunk) - The cybersecurity program includes regular risk assessments, third-party risk management, and mandatory employee awareness and training[189](index=189&type=chunk)[190](index=190&type=chunk) - Cybersecurity governance is led by the **CISO**, reporting to the CPTO and chairing the Cybersecurity Governance Committee, with Audit Committee oversight and regular updates[193](index=193&type=chunk)[194](index=194&type=chunk)[196](index=196&type=chunk) - Despite no material cybersecurity breach, the company acknowledges the ongoing risk of future threats or incidents[197](index=197&type=chunk) [ITEM 2. PROPERTIES.](index=36&type=section&id=ITEM%202.%20PROPERTIES.) Stitch Fix leases its San Francisco headquarters and operates three US fulfillment centers, while subleasing a former Salt Lake City facility - Stitch Fix leases approximately **134,000 square feet** for its San Francisco headquarters, with **38,000 square feet utilized** and **58,000 square feet marketed for sublease**[199](index=199&type=chunk) - The company operates **three fulfillment centers** in Arizona, Indiana, and Georgia, totaling approximately **2,514,000 square feet**[200](index=200&type=chunk) - Stitch Fix subleases approximately **1,012,000 square feet** at its former Salt Lake City, Utah fulfillment center[200](index=200&type=chunk) [ITEM 3. LEGAL PROCEEDINGS.](index=36&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS.) Stitch Fix is involved in a Securities Class Action lawsuit regarding its Freestyle offering, with motions to dismiss filed and no material financial impact expected - Stitch Fix is a defendant in a **Securities Class Action lawsuit** and related derivative actions concerning its Freestyle offering between June 2020 and June 2022[159](index=159&type=chunk)[364](index=364&type=chunk)[366](index=366&type=chunk)[367](index=367&type=chunk) - Motions to dismiss have been filed by the company, with some granted in part, and the lawsuits remain pending[364](index=364&type=chunk)[365](index=365&type=chunk)[367](index=367&type=chunk) - The company records loss contingencies when probable and estimable, but does not anticipate a material impact on operating results, financial position, or cash flows from current legal actions[363](index=363&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES.](index=36&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES.) This item is not applicable to Stitch Fix, Inc - Not applicable[203](index=203&type=chunk) [PART II](index=37&type=section&id=Part%20II) [ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.](index=37&type=section&id=ITEM%205.%20MARKET%20FOR%20REGISTRANT%27S%20COMMON%20EQUITY,%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES.) Stitch Fix Class A common stock trades on Nasdaq; the company does not pay dividends and has an authorized $150.0 million share repurchase program with $120.0 million remaining - **Class A common stock (SFIX)** is listed on Nasdaq Global Select Market; Class B common stock is not publicly traded[206](index=206&type=chunk) - As of September 19, 2025, there were **37 record holders for Class A common stock** and **10 for Class B common stock**[207](index=207&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so, intending to retain earnings for business operations and expansion[208](index=208&type=chunk)[165](index=165&type=chunk) - A **$150.0 million share repurchase program** was authorized in January 2022, with **$120.0 million remaining available** as of August 2, 2025, and no repurchases in fiscal 2024 or 2025[213](index=213&type=chunk)[259](index=259&type=chunk)[401](index=401&type=chunk)[402](index=402&type=chunk) [ITEM 6. [RESERVED]](index=38&type=section&id=ITEM%206.%20%5BRESERVED%5D) This item is reserved and not applicable - Not applicable[214](index=214&type=chunk) [ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=39&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Fiscal 2025 revenue decreased 5.3% due to client declines, but net loss from continuing operations significantly reduced by 75.7% to $28.8 million due to restructuring Fiscal Year 2025 Financial Highlights (Continuing Operations) | Metric | FY2025 (in thousands) | FY2024 (in thousands) | YoY Change | | :----------------------------------- | :-------------------- | :-------------------- | :--------- | | Revenue, net | $1,267,171 | $1,337,468 | (5.3)% | | Net loss from continuing operations | $(28,844) | $(118,885) | (75.7)% | | Active Clients | 2,309 | 2,508 | (7.9)% | | Net Revenue per Active Client | $549 | $533 | 3.0% | | Selling, general, and administrative expenses | $601,844 | $725,465 | (17.0)% | - The decline in revenue was primarily due to a **7.9% decrease in active clients**, partially offset by higher average order values and more items kept per Fix[249](index=249&type=chunk) - Gross margin for fiscal 2025 increased by **10 basis points**, driven by higher average order values and transportation leverage, despite lower product margins[250](index=250&type=chunk) - SG&A expenses decreased significantly by **$123.6 million (17.0%)**, primarily due to lower compensation, benefits, facilities, and depreciation costs from restructuring[251](index=251&type=chunk)[252](index=252&type=chunk) - The company recorded **$1.2 million in additional restructuring charges** in fiscal 2025, with no further cash charges expected from the 2022 Restructuring Plan[224](index=224&type=chunk)[407](index=407&type=chunk) Non-GAAP Financial Measures (Continuing Operations) | Metric | FY2025 (in thousands) | FY2024 (in thousands) | | :------------- | :-------------------- | :-------------------- | | Adjusted EBITDA | $49,139 | $29,281 | | Free Cash Flow | $9,282 | $14,242 | - Cash and cash equivalents stood at **$114.0 million**, with **$128.8 million in investments** as of August 2, 2025, and a **$50.0 million revolving credit facility** with **$31.3 million excess availability**[255](index=255&type=chunk)[256](index=256&type=chunk) [ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=49&type=section&id=ITEM%207A.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company faces market risks from interest rate fluctuations on investments and inflation impacting costs and consumer spending - The company's cash equivalents and investments are exposed to interest rate risk, but the short-term nature of the portfolio limits material impact from immediate rate changes[279](index=279&type=chunk) - Stitch Fix is subject to inflation risk, impacting merchandise, shipping, and labor costs, and adversely affecting consumer discretionary spending and net revenue[280](index=280&type=chunk) [ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=50&type=section&id=ITEM%208.%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents audited consolidated financial statements for fiscal years 2023-2025, prepared under GAAP, with detailed notes on accounting policies and financial items - The consolidated financial statements for fiscal years ended August 2, 2025, August 3, 2024, and July 29, 2023, are presented in accordance with **GAAP**[284](index=284&type=chunk)[285](index=285&type=chunk)[306](index=306&type=chunk) - The report includes the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations and Comprehensive Loss, Stockholders' Equity, and Cash Flow[283](index=283&type=chunk) - Key financial notes cover significant accounting policies, fair value measurements, leases, property and equipment, accrued liabilities, credit facility, commitments and contingencies, stock-based compensation, income taxes, net loss per share, segment reporting, restructuring, and discontinued operations[283](index=283&type=chunk) - The independent auditor, **Deloitte & Touche LLP**, issued an **unqualified opinion** on the financial statements and internal control over financial reporting as of August 2, 2025[285](index=285&type=chunk) - A critical audit matter identified was the estimated **inventory reserve for excess and slow-moving inventory**, due to estimation uncertainty influenced by subjective factors like customer merchandise preference and economic conditions[293](index=293&type=chunk)[294](index=294&type=chunk) [ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.](index=79&type=section&id=ITEM%209.%20CHANGES%20IN%20AND%20DISAGREEMENTS%20WITH%20ACCOUNTANTS%20ON%20ACCOUNTING%20AND%20FINANCIAL%20DISCLOSURE.) The company reported no changes in or disagreements with accountants on accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure were reported[412](index=412&type=chunk) [ITEM 9A. CONTROLS AND PROCEDURES.](index=79&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES.) Stitch Fix's management concluded that disclosure controls and internal control over financial reporting were effective as of August 2, 2025, with no material changes - Disclosure controls and procedures were deemed effective as of **August 2, 2025**[414](index=414&type=chunk) - Management concluded that internal control over financial reporting was effective as of **August 2, 2025**, based on **COSO criteria**[416](index=416&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended August 2, 2025[419](index=419&type=chunk) - The company acknowledges that internal control systems have inherent limitations and cannot prevent or detect all errors or fraud[420](index=420&type=chunk) [ITEM 9B. OTHER INFORMATION](index=80&type=section&id=ITEM%209B.%20OTHER%20INFORMATION) No Rule 10b5-1 trading arrangements were adopted or terminated by directors and officers during the fiscal quarter ended August 2, 2025 - No Rule 10b5-1 trading arrangements were adopted or terminated by directors and officers during the fiscal quarter ended August 2, 2025[421](index=421&type=chunk) [ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.](index=80&type=section&id=ITEM%209C.%20DISCLOSURE%20REGARDING%20FOREIGN%20JURISDICTIONS%20THAT%20PREVENT%20INSPECTIONS.) This item is not applicable to Stitch Fix, Inc - Not applicable[422](index=422&type=chunk) [PART III](index=81&type=section&id=Part%20III) [ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.](index=81&type=section&id=ITEM%2010.%20DIRECTORS,%20EXECUTIVE%20OFFICERS%20AND%20CORPORATE%20GOVERNANCE.) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 Proxy Statement, including the Code of Conduct - Information on directors, executive officers, and corporate governance is incorporated by reference from the **2025 Proxy Statement**[425](index=425&type=chunk) - Stitch Fix maintains a written **Code of Conduct** for all employees, officers, and directors, accessible on its investor relations website[426](index=426&type=chunk) [ITEM 11. EXECUTIVE COMPENSATION.](index=81&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION.) Executive compensation information is incorporated by reference from the 2025 Proxy Statement - Executive compensation details are incorporated by reference from the **2025 Proxy Statement**[427](index=427&type=chunk) [ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.](index=81&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS.) Security ownership information for beneficial owners and management, along with equity compensation plan details, is incorporated by reference from the 2025 Proxy Statement - Security ownership information for beneficial owners and management, along with equity compensation plan details, is incorporated by reference from the **2025 Proxy Statement**[428](index=428&type=chunk) [ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.](index=81&type=section&id=ITEM%2013.%20CERTAIN%20RELATIONSHIPS%20AND%20RELATED%20TRANSACTIONS,%20AND%20DIRECTOR%20INDEPENDENCE.) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2025 Proxy Statement - Details on certain relationships, related transactions, and director independence are incorporated by reference from the **2025 Proxy Statement**[429](index=429&type=chunk) [ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.](index=81&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES.) Principal accounting fees and services information is incorporated by reference from the 2025 Proxy Statement - Information on principal accounting fees and services is incorporated by reference from the **2025 Proxy Statement**[430](index=430&type=chunk) [PART IV](index=82&type=section&id=Part%20IV) [ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.](index=82&type=section&id=ITEM%2015.%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES.) This section lists all exhibits filed with the Annual Report, including corporate documents and agreements, with financial statements under Item 8 - The section provides an index of exhibits filed with the Annual Report, including corporate documents, equity plans, and agreements[433](index=433&type=chunk) - Financial statements are included under Item 8, and financial statement schedules are omitted[434](index=434&type=chunk) [ITEM 16. FORM 10-K SUMMARY.](index=84&type=section&id=ITEM%2016.%20FORM%2010-K%20SUMMARY.) This item is not applicable to Stitch Fix, Inc - Not applicable[438](index=438&type=chunk) [SIGNATURES](index=85&type=section&id=SIGNATURES) The Annual Report on Form 10-K was signed by the Chief Financial Officer and other authorized persons on September 25, 2025 - The Annual Report on Form 10-K was signed by the **Chief Financial Officer, David Aufderhaar**, on **September 25, 2025**[442](index=442&type=chunk) - Additional signatures include the **Chief Executive Officer, Matt Baer**, and various Directors, all dated **September 25, 2025**[445](index=445&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2025 Tamboran Resources Corporation (Exact name of Registrant as specified in its Charter) Delaware 93-4111196 (State or other jurisdiction of incorporation or organization) Suite 01, Level 39, Tower One, International Towers, Sydney 100 Barangaroo Avenue, Barangaroo, New South Wales, Australia (Address of ...

[Third Quarter Fiscal 2025 Results Overview](index=1&type=section&id=Third%20Quarter%20Fiscal%202025%20Results%20Overview) Concentrix reported strong Q3 FY25 results, with revenue exceeding guidance and a significant increase in GAAP net income and EPS, despite a slight decline in non-GAAP operating income and adjusted EBITDA. The company also raised its full-year growth outlook [Key Financial Highlights](index=1&type=section&id=Key%20Financial%20Highlights) Concentrix reported strong Q3 FY25 results, with revenue exceeding guidance and a significant increase in GAAP net income and EPS, despite a slight decline in non-GAAP operating income and adjusted EBITDA. The company also raised its full-year growth outlook Key Financial Metrics | Metric | August 31, 2025 ($M) | August 31, 2024 ($M) | Change (%) | Change (bps) | | :--------------------------------- | :-------------------- | :-------------------- | :--------- | :----------- | | Revenue | 2,483.3 | 2,387.4 | 4.0 % | | | Operating income | 147.0 | 153.2 | (4.0)% | | | Non-GAAP operating income | 305.1 | 331.0 | (7.8)% | | | Operating margin | 5.9 % | 6.4 % | | -50 bps | | Non-GAAP operating margin | 12.3 % | 13.9 % | | -160 bps | | Net income | 88.1 | 16.6 | 430.7 % | | | Non-GAAP net income | 183.2 | 192.2 | (4.7)% | | | Adjusted EBITDA | 359.2 | 388.1 | (7.4)% | | | Adjusted EBITDA margin | 14.5 % | 16.3 % | | -180 bps | | Diluted EPS | 1.34 | 0.25 | 436.0 % | | | Non-GAAP diluted EPS | 2.78 | 2.87 | (3.1)% | | - Delivers revenue above guidance for Q3 and raises full year growth outlook[5](index=5&type=chunk) - Sees strong demand environment for integrated solutions[5](index=5&type=chunk) - Cash flow provided by operations was **$224.8 million** in the quarter. Adjusted free cash flow was **$178.8 million** in the quarter[6](index=6&type=chunk) [CEO Commentary](index=2&type=section&id=CEO%20Commentary) The CEO highlighted Concentrix's strong growth momentum, attributing it to its position as a trusted provider of business transformation solutions combining CX expertise, AI, and IT services. The strategy is aligned with client needs, driving market share gains and long-term value - Concentrix's ongoing growth momentum demonstrates its strong position as a trusted provider of business transformation solutions that combine CX expertise, AI and IT services globally[7](index=7&type=chunk) - The company's strategy is aligned with client needs, helping them drive positive business outcomes, gain market share, and expand offerings to drive long-term value for clients and shareholders[7](index=7&type=chunk) [Capital Allocation](index=2&type=section&id=Capital%20Allocation) Concentrix outlines its capital allocation strategy, including increased quarterly dividends and continued share repurchases, demonstrating a commitment to shareholder returns [Quarterly Dividend](index=2&type=section&id=Quarterly%20Dividend) Concentrix increased its quarterly dividend, demonstrating a commitment to returning value to shareholders - The Company paid a **$0.33275 per share** quarterly dividend on August 5, 2025[12](index=12&type=chunk) - The Board of Directors declared a quarterly dividend of **$0.36 per share** payable on November 4, 2025[12](index=12&type=chunk) [Share Repurchase Program](index=2&type=section&id=Share%20Repurchase%20Program) The company continued its share repurchase program in Q3, reducing outstanding shares and indicating further authorization for future repurchases - The Company repurchased approximately **800,000 common shares** in the third quarter at a cost of **$42.2 million**, at an average cost of **$53.07 per share**[12](index=12&type=chunk) - As of August 31, 2025, the Company's remaining share repurchase authorization was **$495.1 million**[12](index=12&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) Concentrix provides financial guidance for Q4 and full-year FY25, including revenue, EPS, and adjusted free cash flow expectations, while noting limitations in non-GAAP reconciliations [Fourth Quarter Fiscal 2025 Expectations](index=2&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Expectations) Concentrix provided guidance for Q4 FY25, projecting reported revenue between $2.525 billion and $2.550 billion, with constant currency revenue growth of 1.5% to 2.5%. Non-GAAP EPS is expected to be $2.85 to $2.96 Q4 FY25 Expectations | Metric | Low ($M) | High ($M) | | :--------------------------------- | :------- | :-------- | | Reported Revenue | 2,525 | 2,550 | | Constant Currency Revenue Growth | 1.5 % | 2.5 % | | Operating Income | 163 | 173 | | Non-GAAP Operating Income | 320 | 330 | | Non-GAAP EPS | 2.85 | 2.96 | | Effective Tax Rate | ~25% | ~25% | [Full Year Fiscal 2025 Expectations](index=2&type=section&id=Full%20Year%20Fiscal%202025%20Expectations) For the full fiscal year 2025, the company anticipates reported revenue of $9.798 billion to $9.823 billion, implying constant currency revenue growth of 1.75% to 2.0%. Non-GAAP EPS is projected to be $11.11 to $11.23 Full Year FY25 Expectations | Metric | Low ($M) | High ($M) | | :--------------------------------- | :------- | :-------- | | Reported Revenue | 9,798 | 9,823 | | Constant Currency Revenue Growth | 1.75 % | 2.0 % | | Operating Income | 627 | 637 | | Non-GAAP Operating Income | 1,250 | 1,260 | | Non-GAAP EPS | 11.11 | 11.23 | | Effective Tax Rate | ~24% | ~24% | [Adjusted Free Cash Flow and Shareholder Returns Outlook](index=2&type=section&id=Adjusted%20Free%20Cash%20Flow%20and%20Shareholder%20Returns%20Outlook) Concentrix expects to generate significant adjusted free cash flow and return a substantial amount to shareholders in fiscal year 2025 - The Company expects to generate approximately **$585 million to $610 million** of adjusted free cash flow in fiscal year 2025[11](index=11&type=chunk) - The Company also expects to return approximately **$240 million** to shareholders in fiscal 2025 through share repurchases and dividends[11](index=11&type=chunk) [Non-GAAP Outlook Reconciliation Disclaimer](index=2&type=section&id=Non-GAAP%20Outlook%20Reconciliation%20Disclaimer) The company notes that a quantitative reconciliation of non-GAAP EPS and adjusted free cash flow outlook to GAAP measures cannot be provided without unreasonable efforts due to the inability to forecast certain volatile items - A quantitative reconciliation of non-GAAP EPS outlook to GAAP cannot be provided without unreasonable efforts due to the inability to forecast future changes in acquisition contingent consideration and foreign currency losses (gains), net[12](index=12&type=chunk)[14](index=14&type=chunk) - A quantitative reconciliation of adjusted free cash flow outlook to GAAP cannot be provided without unreasonable efforts due to uncertainty related to future changes in the Company's factoring program[15](index=15&type=chunk) [Company Information](index=3&type=section&id=Company%20Information) This section provides details on the company's Q3 FY25 conference call and an overview of Concentrix Corporation as a global technology and services leader [Conference Call and Webcast](index=3&type=section&id=Conference%20Call%20and%20Webcast) Concentrix hosted a conference call and webcast for investors to discuss its Q3 FY25 results, with a replay available online - The Company hosted a conference call for investors to review its third quarter fiscal 2025 results on September 25, 2025[16](index=16&type=chunk) - A live webcast and replay are available in the Investor Relations section of the Company's website[16](index=16&type=chunk) [About Concentrix](index=3&type=section&id=About%20Concentrix) Concentrix Corporation is a Fortune 500 global technology and services leader, providing human-centered, tech-powered, and intelligence-fueled end-to-end solutions to over 2,000 clients across 70+ markets, focusing on business transformation and client experience - Concentrix Corporation (NASDAQ: CNXC) is a **Fortune 500®** global technology and services leader[17](index=17&type=chunk) - The company designs, builds, and runs fully integrated, end-to-end solutions for over **2,000 clients** across **70+ markets**[17](index=17&type=chunk) - Concentrix focuses on transforming how companies connect, interact, and grow, delivering outcomes across every major vertical[17](index=17&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) Concentrix defines and explains its use of non-GAAP financial measures to provide a clearer view of core operating performance by excluding certain non-operational items [Definition and Rationale](index=3&type=section&id=Definition%20and%20Rationale) Concentrix uses various non-GAAP financial measures, such as constant currency revenue growth, non-GAAP operating income, adjusted EBITDA, non-GAAP net income, free cash flow, and non-GAAP diluted EPS, to provide a clearer view of its core operating performance by excluding certain non-recurring or non-operational items - Concentrix discloses non-GAAP financial information, including constant currency revenue growth, non-GAAP operating income, non-GAAP operating margin, adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, free cash flow, adjusted free cash flow, and non-GAAP diluted EPS[18](index=18&type=chunk)[19](index=19&type=chunk)[22](index=22&type=chunk) - These non-GAAP measures are used to better assess and understand base operating performance, facilitate period-to-period comparisons, and for management's operational goals and compensation purposes[20](index=20&type=chunk) - Non-GAAP measures exclude items like acquisition-related expenses, amortization of intangibles, and share-based compensation, which do not directly relate to ordinary business operations or reflect underlying business performance[18](index=18&type=chunk)[20](index=20&type=chunk) [Safe Harbor Statement](index=4&type=section&id=Safe%20Harbor%20Statement) The Safe Harbor Statement clarifies that the news release contains forward-looking statements subject to inherent uncertainties and substantial risks, which could cause actual results to differ materially from expectations. It lists various risk factors, including economic conditions, cybersecurity, new technologies, and regulatory changes - The news release includes forward-looking statements under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934[21](index=21&type=chunk) - These statements are inherently uncertain and involve substantial risks and uncertainties that could cause actual results to differ materially from those expressed or implied[23](index=23&type=chunk) - Risks include general economic and geopolitical conditions, cyberattacks, uncertainty from new and emerging technologies (including generative AI), inability to protect information, and changes in law or regulations[23](index=23&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents Concentrix's consolidated balance sheets and statements of operations, detailing assets, liabilities, equity, revenue, and net income for the reported periods [Consolidated Balance Sheets](index=6&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of August 31, 2025, Concentrix reported total assets of $12.41 billion, an increase from November 30, 2024. Key changes include higher cash and cash equivalents, accounts receivable, and goodwill, alongside an increase in total liabilities and stockholders' equity Consolidated Balance Sheet Data | Metric | August 31, 2025 ($M) | November 30, 2024 ($M) | | :-------------------------- | :-------------------- | :-------------------- | | Total assets | 12,410,099 | 11,991,438 | | Cash and cash equivalents | 350,259 | 240,571 | | Accounts receivable, net | 2,051,920 | 1,926,737 | | Goodwill | 5,191,565 | 4,986,967 | | Intangible assets, net | 2,079,278 | 2,286,940 | | Total liabilities | 8,065,970 | 7,951,714 | | Total stockholders' equity | 4,344,129 | 4,039,724 | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended August 31, 2025, Concentrix reported a 4% increase in total revenue to $2.48 billion, with significant growth in Banking, Financial Services & Insurance (9%) and Communications & Media (8%). Net income surged by 430% to $88.1 million, and diluted EPS increased from $0.25 to $1.34 year-over-year Consolidated Statements of Operations Data | Metric | Three Months Ended Aug 31, 2025 ($M) | Three Months Ended Aug 31, 2024 ($M) | % Change | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :------- | | Total Revenue | 2,483,253 | 2,387,412 | 4 % | | Cost of revenue | 1,628,246 | 1,523,220 | 7 % | | Gross profit | 855,007 | 864,192 | (1)% | | Operating income | 146,984 | 153,242 | (4)% | | Net income | 88,110 | 16,631 | 430 % | | Diluted EPS | 1.34 | 0.25 | 436 % | | Weighted-average common shares outstanding (Diluted) | 62,702 | 64,749 | | Revenue by Segment | Revenue Segment | Three Months Ended Aug 31, 2025 ($M) | Three Months Ended Aug 31, 2024 ($M) | % Change | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :------- | | Technology and consumer electronics | 670,573 | 664,829 | 1 % | | Retail, travel and e-commerce | 622,822 | 593,736 | 5 % | | Communications and media | 411,229 | 380,508 | 8 % | | Banking, financial services and insurance | 384,449 | 352,471 | 9 % | | Healthcare | 174,106 | 172,400 | 1 % | | Other | 220,074 | 223,468 | (2)% | [GAAP to Non-GAAP Reconciliations](index=8&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations from GAAP to non-GAAP financial measures, including revenue growth, operating income, EBITDA, net income, EPS, and free cash flow, along with explanatory notes [Revenue Growth Reconciliation](index=8&type=section&id=Revenue%20Growth%20Reconciliation) For Q3 FY25, reported revenue growth was 4.0%, which translates to 2.6% on a constant currency basis after accounting for a 1.4% negative foreign exchange impact Revenue Growth Reconciliation | Metric | Three Months Ended Aug 31, 2025 | | :--------------------------------- | :------------------------------ | | Revenue growth, as reported under U.S. GAAP | 4.0 % | | Foreign exchange impact | (1.4)% | | Constant currency revenue growth | 2.6 % | [Operating Income Reconciliation](index=8&type=section&id=Operating%20Income%20Reconciliation) Non-GAAP operating income for Q3 FY25 was $305.1 million, adjusted from GAAP operating income of $147.0 million by excluding acquisition-related and integration expenses, step-up depreciation, amortization of intangibles, and share-based compensation Operating Income Reconciliation | Metric | Three Months Ended Aug 31, 2025 ($M) | Three Months Ended Aug 31, 2024 ($M) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | | Operating income | 146,984 | 153,242 | | Acquisition-related and integration expenses | 18,619 | 36,055 | | Step-up depreciation | 2,704 | 2,449 | | Amortization of intangibles | 111,779 | 116,556 | | Share-based compensation | 25,042 | 22,663 | | Non-GAAP operating income | 305,128 | 330,965 | [Adjusted EBITDA Reconciliation](index=8&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA for Q3 FY25 was $359.2 million, a decrease of 7.4% from the prior year, after adding back interest, taxes, depreciation, and non-GAAP adjustments to net income Adjusted EBITDA Reconciliation | Metric | Three Months Ended Aug 31, 2025 ($M) | Three Months Ended Aug 31, 2024 ($M) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | | Net income | 88,110 | 16,631 | | Interest expense and finance charges, net | 72,014 | 80,815 | | Provision for income taxes | 23,334 | 9,785 | | Other expense (income), net | (36,474) | 46,011 | | Acquisition-related and integration expenses | 18,619 | 36,055 | | Step-up depreciation | 2,704 | 2,449 | | Amortization of intangibles | 111,779 | 116,556 | | Share-based compensation | 25,042 | 22,663 | | Depreciation (exclusive of step-up depreciation) | 54,074 | 57,115 | | Adjusted EBITDA | 359,202 | 388,080 | [Operating and EBITDA Margins](index=8&type=section&id=Operating%20and%20EBITDA%20Margins) In Q3 FY25, GAAP operating margin was 5.9% (down 50 bps YoY), non-GAAP operating margin was 12.3% (down 160 bps YoY), and Adjusted EBITDA margin was 14.5% (down 180 bps YoY) Operating and EBITDA Margins | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | | :--------------------------------- | :------------------------------ | :------------------------------ | | Operating margin | 5.9 % | 6.4 % | | Non-GAAP operating margin | 12.3 % | 13.9 % | | Adjusted EBITDA margin | 14.5 % | 16.3 % | [Net Income Reconciliation](index=9&type=section&id=Net%20Income%20Reconciliation) Non-GAAP net income for Q3 FY25 was $183.2 million, a 4.7% decrease year-over-year, after adjusting GAAP net income for various non-recurring items and their tax effects Net Income Reconciliation | Metric | Three Months Ended Aug 31, 2025 ($M) | Three Months Ended Aug 31, 2024 ($M) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | | Net income | 88,110 | 16,631 | | Acquisition-related and integration expenses | 18,619 | 36,055 | | Imputed interest related to sellers' note | 4,739 | 4,259 | | Foreign currency losses (gains), net | (35,531) | 33,435 | | Amortization of intangibles | 111,779 | 116,556 | | Share-based compensation | 25,042 | 22,663 | | Income taxes related to the above | (30,535) | (55,753) | | Non-GAAP net income | 183,231 | 192,158 | [Non-GAAP Net Income Attributable to Common Stockholders](index=10&type=section&id=Non-GAAP%20Net%20Income%20Attributable%20to%20Common%20Stockholders) Non-GAAP net income attributable to common stockholders for Q3 FY25 was $174.5 million, a decrease from $185.7 million in the prior year, reflecting adjustments and allocation to common stockholders Non-GAAP Net Income Attributable to Common Stockholders | Metric | Three Months Ended Aug 31, 2025 ($M) | Three Months Ended Aug 31, 2024 ($M) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | | Net income attributable to common stockholders | 83,896 | 16,073 | | Acquisition-related and integration expenses allocated to common stockholders | 17,729 | 34,845 | | Amortization of intangibles allocated to common stockholders | 106,433 | 112,645 | | Share-based compensation allocated to common stockholders | 23,844 | 21,903 | | Income taxes related to the above allocated to common stockholders | (29,075) | (53,882) | | Non-GAAP net income attributable to common stockholders | 174,468 | 185,711 | [Diluted EPS Reconciliation](index=11&type=section&id=Diluted%20EPS%20Reconciliation) Non-GAAP diluted EPS for Q3 FY25 was $2.78, a slight decrease from $2.87 in the prior year, after adjusting GAAP diluted EPS for various non-GAAP items Diluted EPS Reconciliation | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | | :--------------------------------- | :------------------------------ | :------------------------------ | | Diluted earnings per common share ("EPS") | 1.34 | 0.25 | | Acquisition-related and integration expenses | 0.28 | 0.54 | | Amortization of intangibles | 1.70 | 1.74 | | Share-based compensation | 0.38 | 0.34 | | Income taxes related to the above | (0.46) | (0.84) | | Non-GAAP diluted EPS | 2.78 | 2.87 | [Free Cash Flow Reconciliation](index=11&type=section&id=Free%20Cash%20Flow%20Reconciliation) Adjusted free cash flow for Q3 FY25 was $178.8 million, an increase from $135.3 million in the prior year, driven by higher cash flow from operations and changes in factoring balances Free Cash Flow Reconciliation | Metric | Three Months Ended Aug 31, 2025 ($M) | Three Months Ended Aug 31, 2024 ($M) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | | Net cash provided by operating activities | 224,803 | 191,622 | | Purchases of property and equipment | (65,054) | (62,746) | | Free cash flow | 159,749 | 128,876 | | Change in outstanding factoring balances | 19,056 | 6,374 | | Adjusted free cash flow | 178,805 | 135,250 | [Forecasted Non-GAAP Reconciliations](index=11&type=section&id=Forecasted%20Non-GAAP%20Reconciliations) The company provided forecasted non-GAAP reconciliations for Q4 and full-year FY25, detailing expected adjustments for operating income, including amortization of intangibles, share-based compensation, and acquisition-related expenses Forecasted Non-GAAP Reconciliations | Metric | Q4 FY25 Low ($M) | Q4 FY25 High ($M) | Full Year FY25 Low ($M) | Full Year FY25 High ($M) | | :--------------------------------- | :--------------- | :---------------- | :---------------------- | :----------------------- | | Operating income | 162,500 | 172,500 | 626,696 | 636,696 | | Amortization of intangibles | 105,000 | 105,000 | 431,556 | 431,556 | | Share-based compensation | 35,000 | 35,000 | 113,504 | 113,504 | | Acquisition-related and integration expenses | 15,000 | 15,000 | 68,451 | 68,451 | | Step-up depreciation | 2,500 | 2,500 | 10,116 | 10,116 | | Non-GAAP operating income | 320,000 | 330,000 | 1,250,323 | 1,260,323 | [Notes to Reconciliations](index=12&type=section&id=Notes%20to%20Reconciliations) This section provides detailed explanations for the various adjustments made in the GAAP to non-GAAP reconciliations, including acquisition-related and integration expenses, debt costs, legal settlement costs, foreign currency impacts, and the calculation of tax effects and diluted EPS - Acquisition-related and integration expenses primarily include costs associated with the Company's combination with Webhelp, such as severance, facilities consolidation, and IT system consolidation[36](index=36&type=chunk) - Foreign currency losses (gains), net, included in other expense (income), net, consist of gains and losses from revaluation and settlement of foreign currency transactions and derivative contracts not qualifying for hedge accounting[36](index=36&type=chunk) - Diluted EPS is calculated using the two-class method, allocating earnings proportionally among common stock and participating securities, with restricted stock awards and units considered participating securities[36](index=36&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) LightPath Technologies reported significant revenue growth in Q4 and full year fiscal 2025, driven by robust demand for Germanium-free optics, despite increased net losses and adjusted EBITDA losses due to higher operating expenses and non-cash charges [Financial Highlights (Q4 & FY2025)](index=1&type=section&id=Financial%20Highlights%20(Q4%20%26%20FY2025)) LightPath Technologies reported significant revenue growth in Q4 and full year fiscal 2025, driven by robust demand for Germanium-free optics, despite increased net losses and adjusted EBITDA losses due to higher operating expenses and non-cash charges Q4 & FY2025 Financial Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change (QoQ) | Year Ended June 30, 2025 | Year Ended June 30, 2024 | % Change (YoY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $12.2 million | $8.6 million | 41.4% | $37.6 million | $31.7 million | 17.3% | | Gross Profit | $2.7 million | $2.5 million | 6.6% | $10.1 million | $8.6 million | 17.4% | | Operating Expenses | $7.2 million | $4.7 million | 52.0% | $22.0 million | $16.5 million | 33.4% | | Net Income (Loss) | $(7.1) million | $(2.4) million | -199.8% | $(14.9) million | $(8.0) million | -85.7% | | Adjusted EBITDA* (non-GAAP) | $(2.0) million | $(1.1) million | -77.1% | $(5.1) million | $(2.8) million | -83.8% | [Operational & Strategic Highlights](index=1&type=section&id=Operational%20%26%20Strategic%20Highlights) The company secured significant IR camera orders, a strategic investment, and commenced production of Germanium-free IR camera products, validating its strategy to shift towards BlackDiamond™ glass and higher-value systems - Announced an initial **$18.2 million purchase order** for IR cameras, with a follow-on **$22.1 million purchase order**, expected to be delivered in CY 2026 and CY 2027 respectively[7](index=7&type=chunk) - Secured an **$8.0 million strategic investment** from Ondas Holdings and Unusual Machines to support growth in the drone/UAV sector[7](index=7&type=chunk) - Commenced production of two high-end cooled IR camera products, redesigned from G5 Infrared's original design to utilize LightPath's proprietary BlackDiamond™ Glass in place of Germanium[7](index=7&type=chunk) - Awarded an initial **$2.2 million engineering development model order** for IR cameras by L3Harris Technologies for the Navy's SPEIR Program[7](index=7&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management commentary highlights the validation of strategic shifts towards Germanium-free optics and IR camera systems, driven by accelerating market demand and key orders [Strategic Focus and Market Demand](index=1&type=section&id=Strategic%20Focus%20and%20Market%20Demand) LightPath's CEO highlighted the validation of their strategy to move away from Germanium optics, scale BlackDiamond™ glass into defense verticals, and expand into complete IR camera systems. Geopolitical uncertainty and Chinese export restrictions are accelerating customer demand for Germanium alternatives, favoring LightPath's solutions - Strategy validated by moving away from Germanium optics, scaling BlackDiamond™ glass into defense, and pushing into complete IR camera systems[5](index=5&type=chunk) - Supply chain risk and Chinese critical mineral export restrictions are accelerating customer demand for Germanium alternatives, driving adoption of BlackDiamond™ solution[5](index=5&type=chunk) - Focus on converting market's Germanium supply chain angst into BlackDiamond™-based camera sales to build sustainable, long-term value[9](index=9&type=chunk) [Key Orders and Strategic Investments](index=1&type=section&id=Key%20Orders%20and%20Strategic%20Investments) The company secured substantial orders for IR cameras from a global technology customer and defense contracts, alongside a strategic investment to bolster its position in the drone/UAV sector - Booked an initial **$18.2 million IR camera order** and a follow-on **$22.1 million purchase order** from a leading global technology customer[6](index=6&type=chunk) - Secured a **$2.2 million engineering development model order** from L3Harris for the Navy's SPEIR program[6](index=6&type=chunk) - Added **$9.7 million in cooled-camera orders** for counter UAS applications with an existing defense customer[6](index=6&type=chunk) - Secured an **$8.0 million strategic investment** from Ondas Holdings and Unusual Machines to support growth in the drone/UAV sector[7](index=7&type=chunk) [Product Innovation and Germanium-Free Transition](index=1&type=section&id=Product%20Innovation%20and%20Germanium-Free%20Transition) LightPath launched new industrial-grade MWIR OGI cameras and is actively redesigning G5's product line to replace Germanium with its proprietary BlackDiamond™ material, driven by customer demand for secure supply chains - Launched first industrial-grade MWIR OGI camera and validated its performance in line with EPA processes[7](index=7&type=chunk) - Actively redesigning G5's product line to implement proprietary BlackDiamond™ material in place of Germanium due to intense customer demand for secure supply chains[7](index=7&type=chunk)[8](index=8&type=chunk) - Germanium-free redesigns reduce supply chain risk and shorten time-to-field, expanding reachable market in defense and industrial sectors[9](index=9&type=chunk) [Fourth Quarter Fiscal 2025 Financial Results](index=2&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Financial%20Results) The fourth quarter of fiscal 2025 saw significant revenue growth, but also increased operating expenses, leading to a wider net loss and adjusted EBITDA loss [Revenue Analysis (Q4 FY2025)](index=2&type=section&id=Revenue%20Analysis%20(Q4%20FY2025)) Total revenue for Q4 FY2025 increased significantly by 41.4% year-over-year, primarily driven by strong growth in Assemblies & Modules and Infrared Components Q4 FY2025 Revenue by Product Group | Product Group | Q4 FY2025 Revenue ($ in millions) | Q4 FY2024 Revenue ($ in millions) | % Change | | :--- | :--- | :--- | :--- | | Infrared Components | $4.9 | $3.0 | 63% | | Visible Components | $2.8 | $3.2 | -11% | | Assemblies & Modules | $4.2 | $1.4 | 203% | | Engineering Services | $0.3 | $1.0 | -75% | | **Total Revenue** | **$12.2** | **$8.6** | **41.4%** | [Gross Profit (Q4 FY2025)](index=2&type=section&id=Gross%20Profit%20(Q4%20FY2025)) Gross profit increased by 6.6% in Q4 FY2025, but gross margin as a percentage of revenue decreased due to a significant increase in inventory reserve charges, mainly for visible components Q4 FY2025 Gross Profit | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Gross Profit | $2.7 million | $2.5 million | 6.6% | | Gross Margin % | 22.0% | 29.2% | -7.2 percentage points | - Gross margin percentage decreased primarily due to an approximately **$0.5 million increase in inventory reserve charges**, mainly attributable to visible components[10](index=10&type=chunk) [Operating Expenses (Q4 FY2025)](index=2&type=section&id=Operating%20Expenses%20(Q4%20FY2025)) Operating expenses rose by 52.0% in Q4 FY2025, driven by the integration of G5, increased sales and marketing, higher materials spend for new product development, and an increase in the fair value of acquisition liabilities Q4 FY2025 Operating Expenses | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Expenses | $7.2 million | $4.7 million | 52.0% | - Increase primarily due to: (i) G5 acquisition integration and increased sales/marketing; (ii) higher materials spend for internally-funded new product development; and (iii) a **$1.4 million increase in fair value of acquisition liabilities**[11](index=11&type=chunk) [Net Loss and EPS (Q4 FY2025)](index=2&type=section&id=Net%20Loss%20and%20EPS%20(Q4%20FY2025)) Net loss significantly widened in Q4 FY2025, primarily due to increased non-cash, non-operating expenses related to the G5 acquisition and its financing Q4 FY2025 Net Loss and EPS | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Net Loss | $(7.1) million | $(2.4) million | -199.8% | | Loss per Share (Basic & Diluted) | $(0.16) | $(0.06) | -166.7% | - Change in net loss primarily driven by an increase in certain non-cash, non-operating expenses associated with the G5 acquisition and related financing[12](index=12&type=chunk) [Adjusted EBITDA (Q4 FY2025)](index=2&type=section&id=Adjusted%20EBITDA%20(Q4%20FY2025)) Adjusted EBITDA loss increased substantially in Q4 FY2025 compared to the prior year, reflecting the overall increase in expenses and losses Q4 FY2025 Adjusted EBITDA Loss | Metric | Q4 FY2025 | Q4 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA Loss | $(2.0) million | $(1.1) million | -77.1% | [Full Year Fiscal 2025 Financial Results](index=2&type=section&id=Full%20Year%20Fiscal%202025%20Financial%20Results) Full year fiscal 2025 saw revenue growth across most product groups, but also a significant increase in operating expenses and net loss, leading to a wider adjusted EBITDA loss [Revenue Analysis (FY2025)](index=2&type=section&id=Revenue%20Analysis%20(FY2025)) Full year fiscal 2025 revenue increased by 17.4%, primarily driven by strong growth in Assemblies & Modules and Engineering Services FY2025 Revenue by Product Group | Product Group | FY2025 Revenue ($ in millions) | FY2024 Revenue ($ in millions) | % Change | | :--- | :--- | :--- | :--- | | Infrared Components | $14.3 | $14.1 | 2% | | Visible Components | $11.7 | $11.2 | 4% | | Assemblies & Modules | $8.0 | $4.5 | 79% | | Engineering Services | $3.2 | $2.0 | 63% | | **Total Revenue** | **$37.2** | **$31.7** | **17.4%** | [Gross Profit (FY2025)](index=2&type=section&id=Gross%20Profit%20(FY2025)) Gross profit for fiscal 2025 increased by 17.4%, maintaining a consistent gross margin percentage. This was favorably impacted by product mix but unfavorably by increased inventory reserve charges FY2025 Gross Profit | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Gross Profit | $10.1 million | $8.6 million | 17.4% | | Gross Margin % | 27.2% | 27.2% | 0.0 percentage points | - Gross margin percentage was favorably impacted by product mix (more revenue from higher-margin assemblies and modules, and engineering services) and unfavorably by an approximately **$0.5 million increase in inventory reserve charges**, primarily related to visible components[14](index=14&type=chunk)[15](index=15&type=chunk) [Operating Expenses (FY2025)](index=3&type=section&id=Operating%20Expenses%20(FY2025)) Operating expenses for fiscal 2025 increased by 33.4%, primarily due to higher legal and consulting fees, increased sales and marketing, higher materials spend for new product development, and an increase in the fair value of acquisition liabilities FY2025 Operating Expenses | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Operating Expenses | $22.0 million | $16.5 million | 33.4% | - Increase due to: (i) higher legal and consulting fees related to business development and strategic initiatives (including G5 acquisition expenses) and increased sales/marketing; (ii) higher materials spend for internally funded new product development; and (iii) a **$1.4 million increase in fair value of acquisition liabilities**[16](index=16&type=chunk) [Net Loss and EPS (FY2025)](index=3&type=section&id=Net%20Loss%20and%20EPS%20(FY2025)) Net loss for fiscal 2025 significantly increased, driven by higher non-cash, non-operating expenses related to the G5 acquisition and its financing FY2025 Net Loss and EPS | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Net Loss | $(14.9) million | $(8.0) million | -85.7% | | Loss per Share (Basic & Diluted) | $(0.36) | $(0.21) | -71.4% | - Change in net loss driven by an increase in certain non-cash, non-operating expenses associated with the G5 acquisition and the related financing[17](index=17&type=chunk) [Adjusted EBITDA (FY2025)](index=3&type=section&id=Adjusted%20EBITDA%20(FY2025)) Adjusted EBITDA loss for fiscal 2025 more than doubled compared to the prior fiscal year, reflecting the increased operational and non-operating losses FY2025 Adjusted EBITDA Loss | Metric | FY2025 | FY2024 | % Change | | :--- | :--- | :--- | :--- | | Adjusted EBITDA Loss | $(5.1) million | $(2.8) million | -83.8% | [Company Information & Investor Relations](index=3&type=section&id=Company%20Information%20%26%20Investor%20Relations) This section provides an overview of LightPath Technologies' business, its vertically integrated solutions, global manufacturing presence, and details for the investor conference call [About LightPath Technologies](index=3&type=section&id=About%20LightPath%20Technologies) LightPath Technologies is a leading provider of next-generation optics and imaging systems for defense and commercial applications, offering vertically integrated solutions from proprietary BlackDiamond™ glass to complete IR optical systems, with manufacturing facilities globally - LightPath Technologies is a leading provider of next-generation optics and imaging systems for defense and commercial applications[21](index=21&type=chunk) - Offers vertically integrated solutions, including proprietary BlackDiamond™ chalcogenide-based glass materials and complete IR optical systems[21](index=21&type=chunk) - Primary manufacturing in Orlando, Florida, with additional facilities in Texas, New Hampshire, Latvia, and China[21](index=21&type=chunk) [Earnings Call Details](index=3&type=section&id=Earnings%20Call%20Details) Management hosted an investor conference call on September 25, 2025, to discuss Q4 and full year fiscal 2025 financial results, provide a corporate update, and conduct a Q&A session. A replay was available until October 9, 2025 - Management hosted an investor conference call on **September 25, 2025**, at 5:00 p.m. Eastern time[19](index=19&type=chunk) - The call discussed Q4 and full year fiscal 2025 financial results and provided a corporate update[19](index=19&type=chunk) - A playback of the call was available through **Thursday, October 9, 2025**, via dial-in and webcast replay[20](index=20&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section defines non-GAAP financial measures like EBITDA and Adjusted EBITDA, explaining their rationale for providing additional insights into operating results, and includes a detailed reconciliation table [Definition and Rationale](index=3&type=section&id=Definition%20and%20Rationale) The company uses non-GAAP financial measures like EBITDA and Adjusted EBITDA to provide investors with additional insights into operating results, excluding items that may disproportionately impact results. Management believes these measures enhance the ability to analyze underlying business operations and are used for forecasting and planning - EBITDA is calculated by adjusting net income to exclude net interest expense, income tax expense or benefit, depreciation, and amortization[22](index=22&type=chunk) - Adjusted EBITDA further excludes: (1) non-cash income/expense from mark-to-market adjustments related to warrants; and (2) loss on extinguishment of debt[22](index=22&type=chunk) - Management believes these non-GAAP measures provide useful information for understanding period-over-period operating results, analyzing underlying business operations, and are used as guides in forecasting, budgeting, and planning[23](index=23&type=chunk)[24](index=24&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=4&type=section&id=Reconciliation%20Table) A reconciliation table is provided to bridge GAAP net loss to non-GAAP EBITDA and Adjusted EBITDA for both the fourth quarter and full fiscal year 2025 and 2024, detailing the adjustments made Reconciliation of Non-GAAP Financial Measures | Metric | Three Months Ended June 30, 2025 ($) | Three Months Ended June 30, 2024 ($) | Year Ended June 30, 2025 ($) | Year Ended June 30, 2024 ($) | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(7,055,980) | $(2,353,773) | $(14,873,182) | $(8,007,346) | | Depreciation and amortization | 792,488 | 1,062,559 | 4,149,240 | 4,048,409 | | Income tax provision | (122,402) | (53,912) | 37,790 | 67,490 | | Interest expense | 312,967 | 42,814 | 1,118,213 | 191,862 | | **EBITDA** | **$(6,072,927)** | **$(1,302,312)** | **$(9,567,939)** | **$(3,699,585)** | | Stock-based compensation | 298,309 | 216,765 | 1,043,464 | 1,019,023 | | Loss on extinguishment of debt | — | — | 418,502 | — | | Change in fair value of warrant liability | 2,224,270 | — | 1,353,716 | — | | Change in fair value of acquisition liabilities | 1,430,000 | — | 1,560,445 | — | | Foreign exchange (gain) loss | 141,583 | (31,876) | 129,882 | (72,741) | | **Adjusted EBITDA** | **$(1,978,765)** | **$(1,117,423)** | **$(5,061,930)** | **$(2,753,303)** | | % of revenue | -16% | -13% | -14% | -9% | [Forward-Looking Statements and Contact](index=4&type=section&id=Forward-Looking%20Statements%20and%20Contact) This section includes a disclaimer regarding forward-looking statements, outlining inherent risks and uncertainties, and provides contact information for investor relations inquiries [Forward-Looking Statements Disclaimer](index=4&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section contains forward-looking statements regarding future events, financial performance, strategic initiatives, and market conditions. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations, and readers are cautioned not to place undue reliance on them - Statements include expectations regarding purchase orders, program awards, financial performance, impact of G5 acquisition, product portfolio performance, demand for Germanium-free products, sustainable revenue growth, government/military projects, and supply chain risk management[28](index=28&type=chunk) - Subject to risks and uncertainties such as need for additional capital, varying product demand, reliance on key customers, raw material availability, international tariffs, political risks, economic uncertainty, geopolitical tensions, and inability to sustain profitable sales growth[28](index=28&type=chunk) - Readers are cautioned not to place undue reliance on these statements, which speak only as of the date they are made, and the company has no obligation to update them[28](index=28&type=chunk)[29](index=29&type=chunk) [Investor Contact Information](index=5&type=section&id=Investor%20Contact%20Information) Investor inquiries can be directed to Lucas A. Zimmerman of MZ Group – MZ North America - Contact: Lucas A. Zimmerman, MZ Group – MZ North America[30](index=30&type=chunk) - Email: LPTH@mzgroup.us, Phone: 949-259-4987[30](index=30&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of comprehensive income (loss), statements of changes in stockholders' equity, and statements of cash flows for fiscal years 2024 and 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows an increase in total assets from $48.1 million in FY2024 to $81.5 million in FY2025, primarily driven by increases in current assets, intangible assets, and goodwill. Total liabilities also increased significantly from $17.9 million to $31.6 million Key Balance Sheet Figures | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--- | :--- | :--- | | Total Assets | $81,505,766 | $48,086,964 | | Total Liabilities | $31,628,488 | $17,887,299 | | Total Stockholders' Equity | $15,644,768 | $30,199,665 | - Significant increases in current assets (cash, receivables, inventories), intangible assets, and goodwill, largely due to acquisitions[32](index=32&type=chunk) - Increase in liabilities driven by accounts payable, accrued liabilities, and loans payable[32](index=32&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The statement of comprehensive income shows a net loss of $(14.9) million for FY2025, significantly wider than $(8.0) million in FY2024, primarily due to increased operating expenses and other non-operating expenses Key Comprehensive Income (Loss) Figures | Metric | Year Ended June 30, 2025 ($) | Year Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Revenue, net | $37,202,630 | $31,726,192 | | Gross profit | $10,130,114 | $8,631,246 | | Total operating expenses | $21,952,995 | $16,457,910 | | Operating loss | $(11,822,881) | $(7,826,664) | | Net loss | $(14,873,182) | $(8,007,346) | | Comprehensive loss | $(14,404,432) | $(8,103,946) | | Loss per common share (basic & diluted) | $(0.36) | $(0.21) | - Operating loss widened from **$(7.8) million in FY2024 to $(11.8) million in FY2025**[35](index=35&type=chunk) - Other income (expense), net, significantly contributed to the loss, moving from **$(113,192) in FY2024 to $(3,012,511) in FY2025**, largely due to interest expense, loss on extinguishment of debt, and change in fair value of warrant liability[35](index=35&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity decreased from $30.2 million in FY2024 to $15.6 million in FY2025. This was primarily influenced by the net loss, preferred cumulative dividends, and reclassification of warrant liability, despite new issuances of common and preferred stock Key Stockholders' Equity Changes | Metric | June 30, 2025 ($) | June 30, 2024 ($) | | :--- | :--- | :--- | | Total Stockholders' Equity | $15,644,768 | $30,199,665 | | Accumulated Deficit | $(230,716,757) | $(215,843,575) | | Series G Convertible Preferred Stock | $34,232,510 | — | | Additional Paid-in Capital | $244,953,346 | $245,140,758 | - Issuance of preferred stock under private equity placement contributed **$19.48 million**[38](index=38&type=chunk) - Issuance of common stock for acquisition of G5 contributed **$4.87 million**[38](index=38&type=chunk) - Net loss of **$(14.87) million** and preferred cumulative dividends plus accretion of **$(14.75) million** significantly reduced equity[39](index=39&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows from operating activities resulted in a net outflow of $(8.3) million in FY2025, a significant change from a net inflow of $0.5 million in FY2024. Investing activities saw a substantial increase in cash used, primarily due to the G5 acquisition, while financing activities provided a large net inflow from new stock and debt issuances Key Cash Flow Figures | Metric | Year Ended June 30, 2025 ($) | Year Ended June 30, 2024 ($) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(8,331,390) | $521,037 | | Net cash used in investing activities | $(19,738,323) | $(2,665,236) | | Net cash provided by (used in) financing activities | $29,296,277 | $(1,466,440) | | Change in cash, cash equivalents and restricted cash | $1,396,768 | $(3,664,222) | | Cash, cash equivalents and restricted cash, end of period | $4,877,036 | $3,480,268 | - Operating cash flow shifted from positive to negative, largely influenced by the increased net loss and changes in working capital[41](index=41&type=chunk) - Investing cash outflow significantly increased due to the **$18.49 million acquisition of G5**[41](index=41&type=chunk) - Financing cash flow turned strongly positive due to proceeds from preferred stock (**$18.68 million**), warrants (**$4.62 million**), and loans payable (**$6.66 million**)[42](index=42&type=chunk)