[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The unaudited consolidated financial statements for the six months ended June 30, 2025, show total revenues of **$40.26 billion**, a decrease from **$42.36 billion** in the prior year period. Net income attributable to partners was **$2.49 billion**, slightly down from **$2.55 billion** year-over-year. Total assets stood at **$125.02 billion**, with total liabilities at **$79.17 billion**. The statements reflect the ongoing operations, recent acquisitions, and financial position of the Partnership [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Energy Transfer's total assets were **$125.02 billion**, a slight decrease from **$125.38 billion** at year-end 2024. The change was primarily driven by a decrease in current assets, offset by an increase in net property, plant, and equipment. Total liabilities increased to **$79.17 billion** from **$78.63 billion**, mainly due to a rise in long-term debt Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $13,671 | $14,202 | | **Property, Plant and Equipment, Net** | $95,531 | $95,212 | | **Total Assets** | **$125,022** | **$125,380** | | **Total Current Liabilities** | $11,849 | $12,656 | | **Long-term Debt, less current maturities** | $60,749 | $59,752 | | **Total Liabilities** | $79,165 | $78,633 | | **Total Equity** | $45,534 | $46,017 | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, revenues were **$19.24 billion**, down from **$20.73 billion** in Q2 2024, primarily due to lower refined product and crude sales. Net income attributable to partners was **$1.16 billion**, compared to **$1.31 billion** in the prior-year quarter. For the six-month period, revenues decreased to **$40.26 billion** from **$42.36 billion**, while net income attributable to partners slightly decreased to **$2.49 billion** from **$2.55 billion** Key Operating Results (in millions, except per unit data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $19,242 | $20,729 | $40,262 | $42,358 | | **Operating Income** | $2,309 | $2,298 | $4,800 | $4,678 | | **Net Income** | $1,458 | $1,992 | $3,178 | $3,684 | | **Net Income Attributable to Partners** | $1,163 | $1,314 | $2,486 | $2,554 | | **Basic Net Income per Common Unit** | $0.32 | $0.35 | $0.68 | $0.67 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was **$5.68 billion**, a decrease from **$6.04 billion** in the prior year period. Net cash used in investing activities increased significantly to **$2.90 billion** from **$1.15 billion**, driven by higher capital expenditures. Net cash used in financing activities was **$2.85 billion**, primarily for distributions to partners and debt management Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $5,679 | $6,042 | | **Net Cash Used in Investing Activities** | $(2,899) | $(1,151) | | **Net Cash Used in Financing Activities** | $(2,850) | $(4,402) | | **Decrease in Cash and Cash Equivalents** | $(70) | $489 | [Notes to Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed information on the Partnership's accounting policies and financial activities. Key highlights include significant acquisition activity by subsidiary Sunoco LP, details on debt obligations and recent refinancing activities, equity transactions including preferred unit redemptions and common unit distributions, and extensive disclosures on regulatory matters, legal contingencies, and environmental liabilities. The notes also disaggregate revenue and provide segment-level financial data - Sunoco LP, a consolidated subsidiary, announced a definitive agreement to acquire Parkland Corporation for approximately **$9.1 billion** and entered an agreement to acquire TanQuid GmbH & Co. KG for approximately **€500 million**[31](index=31&type=chunk)[34](index=34&type=chunk) - The Partnership issued **$3.0 billion** in new senior notes in March 2025 to refinance existing debt and redeemed **$2.0 billion** of senior notes due in March and May 2025[50](index=50&type=chunk)[51](index=51&type=chunk) - Quarterly cash distributions on common units increased sequentially, reaching **$0.3300 per unit** for the quarter ended June 30, 2025[65](index=65&type=chunk) - As of June 30, 2025, the Partnership had accrued approximately **$305 million** for contingent obligations deemed probable and reasonably estimable, with a potential range of additional losses up to **$42 million** for matters considered reasonably possible[86](index=86&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=41&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management's discussion provides an analysis of the financial results for the three and six months ended June 30, 2025. Consolidated Adjusted EBITDA increased to **$3.87 billion** for the quarter and **$7.96 billion** for the six-month period, driven by strong performance in the Midstream and Investment in Sunoco LP segments. The discussion details segment-level performance, recent acquisitions by Sunoco LP, regulatory updates, liquidity position, capital expenditure plans for 2025, and cash distribution policies Consolidated Adjusted EBITDA (in millions) | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30** | $3,866 | $3,760 | $106 | | **Six Months Ended June 30** | $7,964 | $7,640 | $324 | - The increase in Adjusted EBITDA was primarily driven by higher segment margin in the Midstream segment and the Investment in Sunoco LP segment[204](index=204&type=chunk) - The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, permanently reinstates **100% bonus depreciation**, which is expected to defer a significant portion of U.S. federal income taxes for the Partnership's corporate subsidiaries in future periods[185](index=185&type=chunk) [Recent Developments](index=41&type=section&id=Recent%20Developments) Key recent developments include significant acquisition activities by subsidiary Sunoco LP, which agreed to acquire Parkland Corporation for ~**$9.1 billion** and TanQuid for ~**€500 million**. Energy Transfer also announced an increased quarterly cash distribution of **$0.33 per common unit**. Additionally, the report notes the enactment of the One Big Beautiful Bill Act (OBBBA), which reinstates **100% bonus depreciation** and is expected to defer future federal income tax payments - Sunoco LP announced a definitive agreement to acquire Parkland Corporation in a cash and equity transaction valued at approximately **$9.1 billion**, expected to close in Q4 2025[178](index=178&type=chunk) - Sunoco LP also agreed to acquire TanQuid GmbH & Co. KG, which operates fuel terminals in Germany and Poland, for approximately **€500 million**, including assumed debt[181](index=181&type=chunk) - Energy Transfer announced a quarterly distribution of **$0.33 per common unit** (**$1.32 annualized**) for the quarter ended June 30, 2025[184](index=184&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) For Q2 2025, consolidated Adjusted EBITDA increased by **$106 million** YoY to **$3.87 billion**. The Midstream segment's Adjusted EBITDA grew by **$75 million** due to acquired assets and higher Permian volumes. The Investment in Sunoco LP segment saw a **$134 million** increase, largely from the NuStar acquisition. These gains were partially offset by decreases in the Intrastate, NGL & Refined Products, and Crude Oil segments. For the six-month period, Adjusted EBITDA rose **$324 million** to **$7.96 billion**, with the Midstream and Sunoco LP segments again being the primary drivers of growth Segment Adjusted EBITDA - Q2 2025 vs Q2 2024 (in millions) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Intrastate transportation and storage | $284 | $328 | $(44) | | Interstate transportation and storage | $470 | $392 | $78 | | Midstream | $768 | $693 | $75 | | NGL and refined products transportation | $1,033 | $1,070 | $(37) | | Crude oil transportation and services | $732 | $801 | $(69) | | Investment in Sunoco LP | $454 | $320 | $134 | | Investment in USAC | $149 | $144 | $5 | | **Total Adjusted EBITDA** | **$3,866** | **$3,760** | **$106** | - The Midstream segment's performance was boosted by recently acquired assets and higher volumes in the Permian region, which increased segment margin by **$176 million** YoY[227](index=227&type=chunk) - The Investment in Sunoco LP segment benefited from the NuStar acquisition (acquired May 2024), contributing to a **$12 million** increase in segment margin and a **$48 million** increase in Adjusted EBITDA from unconsolidated affiliates (ET-S Permian)[235](index=235&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) The Partnership maintains a strong liquidity position, funding capital expenditures and distributions primarily with cash from operations. For 2025, total planned capital expenditures are approximately **$6.1 billion**, with **$5.0 billion** allocated to growth projects and **$1.1 billion** for maintenance. As of June 30, 2025, the Partnership had **$2.51 billion** available for future borrowings under its **$5.0 billion** Five-Year Credit Facility. Total consolidated debt stood at **$60.76 billion** 2025 Expected Capital Expenditures (in millions) | Category | Growth | Maintenance | Total | | :--- | :--- | :--- | :--- | | Intrastate transportation and storage | $1,400 | $85 | $1,485 | | Interstate transportation and storage | $170 | $205 | $375 | | Midstream | $1,525 | $375 | $1,900 | | NGL and refined products | $1,375 | $150 | $1,525 | | Crude oil transportation and services | $295 | $180 | $475 | | All other | $235 | $105 | $340 | | **Total** | **$5,000** | **$1,100** | **$6,100** | - As of June 30, 2025, the Partnership's Five-Year Credit Facility had **$2.47 billion** of outstanding borrowings and **$2.51 billion** available for future borrowings[265](index=265&type=chunk) - Total consolidated debt was **$60.76 billion** as of June 30, 2025, up from **$59.76 billion** at year-end 2024[258](index=258&type=chunk) [Cash Distributions](index=62&type=section&id=Cash%20Distributions) Energy Transfer follows a policy of distributing all available cash quarterly. For the quarter ended June 30, 2025, the distribution on common units was set at **$0.3300 per unit**. The report also details distributions for various series of preferred units. Consolidated subsidiaries Sunoco LP and USAC also continued their regular quarterly distributions to their respective unitholders Energy Transfer Common Unit Distributions Declared in 2025 | Quarter Ended | Rate per Unit | | :--- | :--- | | December 31, 2024 | $0.3250 | | March 31, 2025 | $0.3275 | | June 30, 2025 | $0.3300 | [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The Partnership is exposed to market risks from commodity price volatility and interest rate changes. Commodity price risk is managed using various derivative instruments. A hypothetical **10%** change in commodity prices would have a varied impact on the fair value of its derivative portfolio. For interest rate risk, the company had **$4.05 billion** of floating-rate debt outstanding as of June 30, 2025, where a **100-basis-point** change would alter annual interest expense by approximately **$40 million**. There have been no material changes to market risk exposures since year-end 2024 - The company manages commodity price volatility through exchange-traded and OTC financial instruments, including futures, swaps, and options[281](index=281&type=chunk) - As of June 30, 2025, the Partnership had **$4.05 billion** of floating-rate debt. A **100-basis-point** change in interest rates would result in an estimated **$40 million** annual change in interest expense[283](index=283&type=chunk) [Controls and Procedures](index=66&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the Co-Chief Executive Officers and Chief Financial Officer, evaluated the Partnership's disclosure controls and procedures and concluded they were effective as of June 30, 2025. There were no material changes in the company's internal control over financial reporting during the second quarter of 2025 - Based on an evaluation, the Co-Principal Executive Officers and Principal Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025[286](index=286&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[287](index=287&type=chunk) [PART II – OTHER INFORMATION](index=67&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=67&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The Partnership is involved in various legal and environmental proceedings. Notable updates include an investigation by the Pennsylvania Attorney General's Office into a refined products release from an SPLP pipeline in January 2025. Additionally, a lawsuit by the State of New Mexico regarding PCB contamination is proceeding to trial, with the state seeking damages of **$50-$60 million** from Transwestern. A consent decree related to a 2014 crude oil release in Ohio was terminated after payments of approximately **$3 million** were made - A January 2025 refined products release from the Twin-Oaks to Newark Pipeline in Pennsylvania is under investigation by the Pennsylvania Attorney General's Office, Environmental Crimes Unit. Potential charges and penalties are unknown[292](index=292&type=chunk) - In a lawsuit concerning PCB contamination, the State of New Mexico is seeking damages of **$50 million** to **$60 million** from subsidiary Transwestern, with a trial tentatively set for October 2025[293](index=293&type=chunk) - A consent decree related to a 2014 crude oil release in Ohio was terminated in May 2025 after SPLP and Mid Valley made total payments of approximately **$3 million** for civil penalties and natural resource damages[294](index=294&type=chunk) [Risk Factors](index=68&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2024, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 - No material changes have been identified from the risk factors described in the 2024 Form 10-K and the Q1 2025 Form 10-Q[298](index=298&type=chunk) [Exhibits](index=69&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed or furnished as part of the quarterly report, including corporate governance documents, certifications by executive officers as required by the Sarbanes-Oxley Act, and interactive data files

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________________to___________________________ Commission file number 1-36785 SB FINANCIAL GROUP, INC. (Exact name of registrant as specified in its charter) Ohio 34-1395 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38098 APPIAN CORPORATION (Exact Name of Registrant as Specified in its Charter) (Address of principal executive offices) (Zip Code ...

PART I — FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20%E2%80%94%20Financial%20Statements%20%28Unaudited%29) The unaudited financial statements for Q2 2025 reflect a significant net loss driven by a **$539.3 million goodwill impairment**, decreasing total assets to **$12.55 billion** [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$12.55 billion** as of June 30, 2025, primarily due to the complete write-off of **$530.6 million** in goodwill Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Assets** | **$12,546,596** | **$13,032,007** | **($485,411)** | | Cash and cash equivalents | $40,487 | $36,950 | $3,537 | | Total property, plant and equipment, net | $10,810,484 | $10,686,169 | $124,315 | | Goodwill | $— | $530,616 | ($530,616) | | **Total Liabilities** | **$4,450,372** | **$4,329,745** | **$120,627** | | Long-term debt | $918,901 | $842,600 | $76,301 | | **Total Stockholders' Equity** | **$8,096,224** | **$8,702,262** | **($606,038)** | - Goodwill was reduced to **zero** as of June 30, 2025, from **$530.6 million** at the end of 2024, due to a non-cash impairment charge[23](index=23&type=chunk)[43](index=43&type=chunk) [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a Q2 2025 net loss of **$389.9 million**, primarily driven by a **$541.9 million impairment charge**, despite **$1.18 billion** in total revenues Key Operating Results (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,180,560 | $1,260,680 | $2,395,606 | $2,345,940 | | Operating Income (Loss) | ($403,215) | $289,021 | ($65,222) | $561,960 | | Impairment and Exploration | $541,940 | $1,485 | $543,923 | $7,639 | | **Net Income (Loss)** | **($389,905)** | **$213,361** | **($170,068)** | **$412,715** | | Diluted EPS | ($6.77) | $4.25 | ($2.93) | $8.87 | - A significant non-cash impairment charge of **$539.3 million** related to goodwill was recognized in the three and six months ended June 30, 2025, leading to a substantial **net loss**[27](index=27&type=chunk)[43](index=43&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased to **$1.08 billion** for the first half of 2025, with significant cash used in investing and financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,076,703 | $867,574 | | Net cash used in investing activities | ($677,782) | ($1,150,576) | | Net cash provided by (used in) financing activities | ($395,384) | $162,393 | | **Increase (decrease) in cash** | **$3,537** | **($120,609)** | - Major uses of cash in financing activities for the first six months of 2025 included **$274.0 million** for common stock repurchases and **$168.8 million** for dividend payments[33](index=33&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the Enerplus acquisition, a **$539.3 million** goodwill impairment, debt refinancing, and significant shareholder returns - The acquisition of Enerplus Corporation was completed on May 31, 2024, and accounted for under the acquisition method, with the purchase price allocation finalized as of June 30, 2025[40](index=40&type=chunk)[41](index=41&type=chunk) - A goodwill impairment test on June 30, 2025, triggered by a decrease in the company's stock price and commodity prices, resulted in a non-cash impairment charge of **$539.3 million**, reducing goodwill to **zero**[43](index=43&type=chunk)[60](index=60&type=chunk) - In March 2025, the company issued **$750.0 million** of 6.750% senior unsecured notes due 2033 and used the proceeds to redeem its **$400.0 million** of 6.375% senior notes due 2026[91](index=91&type=chunk)[94](index=94&type=chunk) - During the first six months of 2025, the company repurchased **2.6 million shares** for **$271.5 million** and declared total dividends of **$2.60 per share**[114](index=114&type=chunk)[117](index=117&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20%E2%80%94%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the Q2 2025 net loss to a **$539.3 million** goodwill impairment, despite increased production and strong **$1.83 billion** liquidity [Overview and Recent Developments](index=32&type=section&id=Overview%20and%20Recent%20Developments) Chord Energy experienced a **$539.3 million** goodwill impairment in Q2 2025 due to volatile commodity prices, while maintaining capital discipline - The company's revenue and profitability are substantially dependent on fluctuating crude oil, NGL, and natural gas prices, which are beyond its control[133](index=133&type=chunk) - Due to market volatility and a decrease in crude oil prices during Q2 2025, the company assessed goodwill for impairment and recognized a non-cash charge of **$539.3 million**[134](index=134&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q2 2025 revenues decreased due to lower commodity prices, despite higher production, with operating expenses dominated by a **$539.3 million** goodwill impairment Production and Realized Prices (Q2 2025 vs Q1 2025) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Avg. Daily Production (Boepd) | 281,858 | 270,855 | +4.1% | | Avg. Crude Oil Sales Price (/Bbl) | $61.62 | $69.11 | -10.8% | | Avg. NGL Sales Price (/Bbl) | $5.80 | $14.18 | -59.1% | | Avg. Natural Gas Sales Price (/Mcf) | $1.10 | $2.30 | -52.2% | - The decrease in Q2 2025 revenue compared to Q1 2025 was primarily driven by lower realized commodity prices, which offset the increase in production volumes[143](index=143&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - General and administrative expenses decreased in Q2 2025 compared to Q1 2025, mainly due to lower employee compensation and a reduction in merger-related costs from the Enerplus Arrangement[157](index=157&type=chunk) - Compared to the first six months of 2024, DD&A expense for the same period in 2025 increased by **$330.0 million**, primarily due to a higher depletion rate and increased production volumes following the Enerplus acquisition[169](index=169&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Chord Energy maintained **$1.83 billion** in liquidity as of June 30, 2025, with cash used for capital expenditures, share repurchases, and debt refinancing - The company maintained a strong liquidity position with **$1,830.6 million** available as of June 30, 2025[178](index=178&type=chunk) - In August 2025, the Board of Directors authorized a new **$1.0 billion** share repurchase program, replacing the previous **$750.0 million** program[199](index=199&type=chunk)[119](index=119&type=chunk) Six Months 2025 Cash Flow Summary (in thousands) | Category | Amount | | :--- | :--- | | Net cash provided by operating activities | $1,076,703 | | Net cash used in investing activities | ($677,782) | | Net cash used in financing activities | ($395,384) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages commodity price, interest rate, and counterparty risks using derivatives and fixed-rate debt, with a **10%** crude oil price change impacting derivative fair value by **$55 million** - The company uses derivative instruments to partially reduce the risk of volatile commodity prices for crude oil, NGLs, and natural gas[205](index=205&type=chunk) - A **10%** increase in crude oil prices would reduce the fair value of the company's unrealized derivative asset position by approximately **$54.5 million**, while a **10%** decrease would increase it by **$56.4 million**[206](index=206&type=chunk) - Interest rate risk exists on the **$180.0 million** of borrowings under the variable-rate Credit Facility as of June 30, 2025, while **$750.0 million** of senior notes carry a fixed interest rate[208](index=208&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20%E2%80%94%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2025, while integrating Enerplus's internal controls post-acquisition - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the quarter, June 30, 2025[213](index=213&type=chunk) - Following the acquisition of Enerplus on May 31, 2024, the company is in the process of incorporating Enerplus's controls and procedures into its own system of internal control over financial reporting[214](index=214&type=chunk) PART II — OTHER INFORMATION [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20%E2%80%94%20Legal%20Proceedings) The company refers to Note 16 for material legal proceedings, with no new significant updates in this section - For discussion of material legal proceedings, the company refers to Note 16 in the financial statements[217](index=217&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20%E2%80%94%20Risk%20Factors) No material changes to risk factors were reported from the 2024 Annual Report on Form 10-K - There have been no material changes in risk factors from those described in the 2024 Annual Report[219](index=219&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20%E2%80%94%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Chord Energy repurchased **605,621 shares** for **$55.0 million** in Q2 2025 under its program, with no unregistered equity sales Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | April 2025 | 573,025 | $90.68 | 494,344 | | May 2025 | 116,455 | $89.91 | 111,277 | | June 2025 | — | — | — | | **Total** | **689,480** | **$90.55** | **605,621** | - In August 2025, the Board authorized a new **$1.0 billion** share repurchase program, which replaces the previous **$750 million** program[221](index=221&type=chunk)

[Filing Information](index=1&type=section&id=Filing%20Information) [Form 10-Q Details](index=1&type=section&id=Form%2010-Q%20Details) This section details the company's quarterly report filing on Form 10-Q for the period ended June 30, 2025, identifying Liquidity Services, Inc. as an accelerated filer and providing key stock information and shares outstanding - Filing as a **Quarterly Report on Form 10-Q** for the period ended **June 30, 2025**[2](index=2&type=chunk) - Registrant: **LIQUIDITY SERVICES, INC.**, incorporated in Delaware, with Commission file number **0-51813**[2](index=2&type=chunk) - Company is an **Accelerated Filer**[3](index=3&type=chunk) Common Stock Information | Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | |---|---|---| | Common Stock, $0.001 par value | LQDT | Nasdaq | **Shares Outstanding as of August 4, 2025:** **31,236,939 shares** [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining accounting policies, acquisitions, earnings per share, leases, goodwill, intangible assets, income taxes, debt, stockholders' equity, fair value measurements, pension plans, legal proceedings, and segment information [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (Dollars in Thousands) | Metric | June 30, 2025 | September 30, 2024 | |---|---|---| | **Assets** | | | | Cash and cash equivalents | $155,605 | $153,226 | | Short-term investments | $11,353 | $2,310 | | Accounts receivable, net | $20,158 | $11,467 | | Inventory, net | $16,853 | $17,099 | | Total current assets | $220,007 | $199,235 | | Property and equipment, net | $18,187 | $17,961 | | Intangible assets, net | $14,096 | $13,912 | | Goodwill | $103,007 | $97,792 | | Total assets | $372,435 | $346,888 | | **Liabilities** | | | | Accounts payable | $58,797 | $58,693 | | Accrued expenses and other current liabilities | $25,363 | $28,261 | | Payables to sellers | $59,265 | $58,226 | | Total current liabilities | $153,895 | $155,153 | | Total liabilities | $163,785 | $164,328 | | **Stockholders' Equity** | | | | Total stockholders' equity | $208,650 | $182,560 | | Total liabilities and stockholders' equity | $372,435 | $346,888 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (Dollars in Thousands, Except Per Share Data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Purchase revenues | $76,517 | $53,396 | $237,159 | $142,726 | | Consignment and other fee revenues | $43,358 | $40,217 | $121,422 | $113,665 | | **Total revenue** | **$119,875** | **$93,613** | **$358,581** | **$256,391** | | Cost of goods sold | $65,110 | $44,212 | $206,220 | $119,960 | | Total costs and expenses | $109,657 | $85,718 | $334,473 | $240,253 | | Income from operations | $10,218 | $7,895 | $24,108 | $16,138 | | Income before provision for income taxes | $11,295 | $8,702 | $27,191 | $18,687 | | Provision for income taxes | $3,885 | $2,702 | $6,920 | $5,071 | | **Net income** | **$7,410** | **$6,000** | **$20,271** | **$13,616** | | Basic income per common share | $0.24 | $0.20 | $0.66 | $0.45 | | Diluted income per common share | $0.23 | $0.19 | $0.63 | $0.43 | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Condensed Consolidated Statements of Comprehensive Income (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Net income | $7,410 | $6,000 | $20,271 | $13,616 | | Foreign currency translation | $1,669 | $(110) | $267 | $391 | | Other comprehensive income (loss), net of taxes | $1,669 | $(110) | $267 | $391 | | **Comprehensive income** | **$9,079** | **$5,890** | **$20,538** | **$14,007** | [Condensed Consolidated Statement of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders%27%20Equity) Condensed Consolidated Statement of Stockholders' Equity (Dollars In Thousands) | Metric | September 30, 2024 | June 30, 2025 | |---|---|---| | Total Stockholders' Equity | $182,560 | $208,650 | | Net Income (9 months) | $10,033 (Retained Earnings) | $30,304 (Retained Earnings) | | Additional Paid-in Capital | $275,771 | $281,370 | | Treasury Stock | $(93,854) | $(93,901) | | Accumulated Other Comprehensive Loss | $(9,427) | $(9,160) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (Dollars In Thousands) | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---| | Net cash provided by operating activities | $28,768 | $48,215 | | Net cash used in investing activities | $(20,881) | $(17,646) | | Net cash used in financing activities | $(5,068) | $(10,825) | | Effect of exchange rate differences on cash and cash equivalents | $(440) | $287 | | Net decrease in cash and cash equivalents | $2,379 | $20,031 | | Cash and cash equivalents at beginning of period | $153,226 | $110,281 | | Cash and cash equivalents at end of period | $155,605 | $130,312 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Organization](index=10&type=section&id=Note%201.%20Organization) - **Liquidity Services, Inc.** is a **global commerce company** providing **online marketplace platforms** that power the **circular economy** by connecting buyers and sellers of surplus assets[24](index=24&type=chunk) - The company operates through **three reportable segments**: **GovDeals**, **Retail Supply Chain Group (RSCG)**, and **Capital Assets Group (CAG)**, with **Machinio and Software Solutions** combined for reporting[27](index=27&type=chunk) - Operations are subject to **various risks**, including dependence on the Internet, economic trends, technological change, competition, and collectability of payments[28](index=28&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=10&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) - **Unaudited interim financial statements** are prepared in accordance with **U.S. GAAP** and **SEC rules**, including normal, recurring adjustments[29](index=29&type=chunk) - Management's estimates and assumptions are affected by **macroeconomic conditions** such as **international conflicts**, **tariffs**, and **market volatility**[32](index=32&type=chunk) Contract Assets and Liabilities (Dollars in Millions) | Metric | June 30, 2025 | September 30, 2024 | |---|---|---| | Contract assets | $1.5 | $1.5 | | Contract liabilities (Deferred revenue) | $5.2 | $4.8 | | Remaining performance obligation (Machinio & Software Solutions) | $5.2 | N/A | - **New accounting standards** (**ASU 2023-07**, **2023-09**, **2024-03**) will require enhanced disclosures for segment expenses, income tax reconciliation, and disaggregation of income statement expenses, with **no material change expected for ASU 2023-07**[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [Note 3. Acquisitions](index=14&type=section&id=Note%203.%20Acquisitions) - On **January 31, 2025**, the Company acquired **Auction Software** for **$7.4 million** (**$6.5 million cash**, **$0.9 million stock**), allocating **$2.6 million to intangible assets** and **$5.1 million to goodwill** within the **Software Solutions segment**[45](index=45&type=chunk) - On **January 1, 2024**, the Company acquired **Sierra Auction Management, Inc.** for approximately **$13.7 million in cash**, allocating **$5.1 million to supplier relationships**, **$0.3 million to trade name assets**, and **$7.9 million to goodwill** within the **GovDeals segment**[47](index=47&type=chunk)[48](index=48&type=chunk) - Financial results from both acquisitions were **immaterial** to the condensed consolidated financial statements for the reported periods[46](index=46&type=chunk)[49](index=49&type=chunk) [Note 4. Earnings per Share](index=16&type=section&id=Note%204.%20Earnings%20per%20Share) - **Basic EPS** is calculated by dividing **net income** by **weighted-average common shares outstanding**, excluding **unvested restricted stock awards**[50](index=50&type=chunk) - **Diluted EPS** includes **potentially dilutive common shares** (stock options, RSUs, RSAs) using the **treasury stock method**, considering performance/market conditions[51](index=51&type=chunk)[52](index=52&type=chunk) Earnings Per Share (Dollars in Thousands, Except Per Share Data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Net income | $7,410 | $6,000 | $20,271 | $13,616 | | Basic weighted average shares outstanding | 31,157,183 | 30,388,675 | 30,935,882 | 30,497,820 | | Diluted weighted average shares outstanding | 32,497,238 | 31,464,461 | 32,404,183 | 31,617,578 | | Basic income per common share | $0.24 | $0.20 | $0.66 | $0.45 | | Diluted income per common share | $0.23 | $0.19 | $0.63 | $0.43 | [Note 5. Leases](index=16&type=section&id=Note%205.%20Leases) - The Company holds **operating leases** for corporate offices, warehouses, vehicles, and equipment, with remaining terms **up to 5.2 years**[54](index=54&type=chunk)[55](index=55&type=chunk) Total Net Lease Cost (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Operating lease cost | $1,563 | $1,418 | $4,494 | $4,046 | | Operating lease impairment expense | $459 | $— | $459 | $— | | Total net lease cost | $2,531 | $1,809 | $6,271 | $5,196 | - During the **three months ended June 30, 2025**, the Company incurred **$0.5 million in impairment expense** due to exiting an **RSCG warehouse** for consolidation[55](index=55&type=chunk) Maturities of Lease Liabilities as of June 30, 2025 (Dollars in Thousands) | Years ending September 30, | Operating Leases | Finance Leases | |---|---|---| | Remainder of 2025 | $1,466 | $32 | | 2026 | $5,548 | $123 | | 2027 | $3,167 | $73 | | 2028 | $2,783 | $51 | | 2029 and thereafter | $2,662 | $127 | | Total lease liabilities | $14,159 | $357 | - **Non-cash adjustments to lease assets and liabilities** **increased significantly** in the **nine months ended June 30, 2025**, primarily due to the **renewal of a warehouse lease in Brampton, Ontario**, for the **RSCG segment**[56](index=56&type=chunk) [Note 6. Goodwill](index=17&type=section&id=Note%206.%20Goodwill) Goodwill Carrying Value by Segment (Dollars in Thousands) | Segment | September 30, 2024 | June 30, 2025 | |---|---|---| | GovDeals | $61,683 | $61,683 | | CAG | $21,551 | $21,696 | | Machinio & Software Solutions | $14,558 | $19,628 | | Total Goodwill | $97,792 | $103,007 | - **Goodwill increased by approximately $5.1 million** in the **Software Solutions business** during the **nine months ended June 30, 2025**, due to the **Auction Software acquisition**[57](index=57&type=chunk) - **No indicators of impairment** were identified for **goodwill** during the **three and nine months ended June 30, 2025**[58](index=58&type=chunk) [Note 7. Intangible Assets](index=18&type=section&id=Note%207.%20Intangible%20Assets) Intangible Assets, Net (Dollars in Thousands) | Intangible Asset Type | June 30, 2025 (Net Carrying Amount) | September 30, 2024 (Net Carrying Amount) | |---|---|---| | Customer and supplier relationships | $12,776 | $13,295 | | Technology | $825 | $61 | | Trade names | $347 | $397 | | Other intangibles | $148 | $159 | | **Total intangible assets, net** | **$14,096** | **$13,912** | - **Gross carrying amount of total intangible assets increased by $2.6 million** during the **nine months ended June 30, 2025**, due to the **Auction Software acquisition**[59](index=59&type=chunk) Expected Future Amortization of Intangible Assets as of June 30, 2025 (Dollars in Thousands) | Years ending September 30, | Expected Future Amortization | |---|---| | Remainder of 2025 | $783 | | 2026 | $3,128 | | 2027 | $3,045 | | 2028 | $3,009 | | 2029 and thereafter | $4,131 | | **Total** | **$14,096** | - **No impairment charges** were recorded on **intangible assets** or **material long-lived assets** during the reported periods[61](index=61&type=chunk) [Note 8. Income Taxes](index=18&type=section&id=Note%208.%20Income%20Taxes) - The **effective income tax rate** for the **nine months ended June 30, 2025**, was **25.4%**, down from **27.1%** in the prior year, primarily due to **increased tax benefits from stock compensation vesting, state and foreign taxes, and permanent tax adjustments**[62](index=62&type=chunk) - The **'One Big Beautiful Bill Act'** signed on **July 4, 2025**, is being evaluated for its tax reform provisions, but is **not expected to have a material impact** on financial statements for the reported period[63](index=63&type=chunk) - The Company did not record any **unrecognized tax benefits** during the **nine months ended June 30, 2025**, and has **no open income tax examinations in the U.S. for years prior to 2021**[64](index=64&type=chunk) [Note 9. Debt](index=18&type=section&id=Note%209.%20Debt) - On **May 7, 2025**, the Company amended its **Credit Agreement**, extending the maturity date to **March 31, 2027**, increasing the maximum principal amount from **$25.0 million** to **$35.0 million**, and raising the sublimit for **standby letters of credit** from **$10.0 million** to **$35.0 million**[69](index=69&type=chunk) - The applicable interest rate is a **variable rate** (**Daily Simple SOFR + 1.25% to 1.75% margin**), with monthly interest payments and quarterly unused commitment fees[70](index=70&type=chunk) - As of **June 30, 2025**, the Company had **no outstanding borrowings** under the **Line of Credit**, **$9.0 million in standby letters of credit**, and **$26.0 million of remaining borrowing capacity**[73](index=73&type=chunk) - The Company was in **full compliance** with all **financial and non-financial restrictive covenants** of the **Credit Agreement** as of **June 30, 2025**[72](index=72&type=chunk) [Note 10. Stockholders' Equity](index=21&type=section&id=Note%2010.%20Stockholders%27%20Equity) - The Company maintains the **Third Amended and Restated 2006 Omnibus Long-Term Incentive Plan (LTIP)**, with **1,289,677 shares of common stock** remaining available for use as of **June 30, 2025**[77](index=77&type=chunk) Share-Based Compensation Expense (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Stock options | $563 | $550 | $1,595 | $1,574 | | RSUs & RSAs | $2,949 | $2,067 | $7,927 | $5,634 | | **Total Equity-classified awards** | **$3,512** | **$2,617** | **$9,522** | **$7,208** | - **Stock options** and **RSUs/RSAs** granted during the **nine months ended June 30, 2025**, include both **service-based (vesting over four years)** and **performance-based conditions** (vesting upon achievement of specified financial targets)[79](index=79&type=chunk) - On **December 9, 2024**, the Board authorized an **additional $10.0 million for share repurchases** through **December 31, 2026**, bringing the **total remaining authorization to $17.6 million** as of **June 30, 2025**[82](index=82&type=chunk)[83](index=83&type=chunk) [Note 11. Fair Value Measurement](index=25&type=section&id=Note%2011.%20Fair%20Value%20Measurement) - The Company classifies fair value measurements into a **three-level hierarchy**: **Level 1 (quoted prices in active markets)**, **Level 2 (observable inputs other than quoted prices)**, and **Level 3 (unobservable inputs)**[86](index=86&type=chunk) - **Money market funds** (**$77.5 million** at **June 30, 2025**) and **guaranteed investment certificates** (**$11.4 million** at **June 30, 2025**) are classified as **Level 1 assets**[87](index=87&type=chunk)[88](index=88&type=chunk) - The **carrying values** of **cash, short-term investments, accounts receivable, accounts payable, and payables to sellers** **approximate their fair values**[90](index=90&type=chunk) [Note 12. Defined Benefit Pension Plan](index=25&type=section&id=Note%2012.%20Defined%20Benefit%20Pension%20Plan) - Certain employees of **Liquidity Services UK Limited (GoIndustry)** are covered by the **Henry Butcher Pension Fund and Life Assurance Scheme**, a **qualified defined benefit pension plan**[92](index=92&type=chunk) - The Company **guarantees GoIndustry's obligations** to the Scheme up to **£10 million British pounds**[92](index=92&type=chunk) - **Net periodic pension cost** was **$0.1 million** for both the **three months ended June 30, 2025 and 2024**, and **$0.1 million** and **$0.3 million** for the **nine months ended June 30, 2025 and 2024**, respectively[93](index=93&type=chunk) [Note 13. Legal Proceedings and Other Contingencies](index=25&type=section&id=Note%2013.%20Legal%20Proceedings%20and%20Other%20Contingencies) - A former CMO filed a complaint alleging **wrongful termination based on race and age and retaliation**; the Company is asserting substantial defenses and **cannot estimate potential liability**[95](index=95&type=chunk) - A former VP of Human Resources settled a **wrongful termination lawsuit** for **$3.5 million** in **August 2024**, with **CNA funding $3.0 million** and the **Company recording a $0.5 million litigation settlement expense in Q3 2024**[96](index=96&type=chunk) [Note 14. Segment Information](index=26&type=section&id=Note%2014.%20Segment%20Information) - The Company operates through **three reportable segments**: **GovDeals**, **Retail Supply Chain Group (RSCG)**, **Capital Assets Group (CAG)**, and a combined **Machinio & Software Solutions segment**[97](index=97&type=chunk) - **Segment direct profit** (**total revenue less cost of goods sold**) is used by the **CEO** to **assess segment performance**[99](index=99&type=chunk) Segment Revenue and Direct Profit (Three Months Ended June 30, 2025 vs. 2024, Dollars in Thousands) | Segment | Total Revenue 2025 | Total Revenue 2024 | Change (%) | Segment Direct Profit 2025 | Segment Direct Profit 2024 | Change (%) | |---|---|---|---|---|---|---| | GovDeals | $23,966 | $22,109 | 8.4% | $22,160 | $20,716 | 7.0% | | RSCG | $81,544 | $58,764 | 38.8% | $19,371 | $17,365 | 11.6% | | CAG | $9,161 | $8,650 | 5.9% | $8,460 | $7,430 | 13.9% | | Machinio & Software Solutions | $5,221 | $4,106 | 27.1% | $4,790 | $3,906 | 22.6% | | Consolidated Total | $119,875 | $93,613 | 28.1% | $54,764 | $49,401 | 10.9% | Segment Revenue and Direct Profit (Nine Months Ended June 30, 2025 vs. 2024, Dollars in Thousands) | Segment | Total Revenue 2025 | Total Revenue 2024 | Change (%) | Segment Direct Profit 2025 | Segment Direct Profit 2024 | Change (%) | |---|---|---|---|---|---|---| | GovDeals | $63,725 | $56,384 | 13.0% | $58,688 | $52,982 | 10.8% | | RSCG | $251,917 | $159,299 | 58.1% | $54,434 | $48,478 | 12.3% | | CAG | $28,604 | $28,764 | -0.6% | $25,909 | $23,611 | 9.7% | | Machinio & Software Solutions | $14,386 | $11,994 | 19.9% | $13,380 | $11,409 | 17.3% | | Consolidated Total | $358,581 | $256,391 | 39.9% | $152,360 | $136,431 | 11.7% | - Revenue from transactions outside the U.S. was **8.6% (Q3 2025)** and **9.0% (YTD 2025)** of **total revenues**, **down from 9.1% and 11.6%** in the prior year periods, respectively[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, including an overview of the business, macroeconomic conditions, industry trends, key business metrics, revenue recognition models, and a detailed analysis of consolidated and segment-level financial performance for the three and nine months ended June 30, 2025, compared to the prior year. It also discusses non-GAAP financial measures, liquidity, capital resources, and cash flow changes [Overview](index=29&type=section&id=Overview) - **Liquidity Services** is a **global commerce company** providing **online marketplace platforms** that power the **circular economy** by connecting millions of buyers and thousands of sellers of surplus assets[107](index=107&type=chunk) - The business model focuses on creating a **self-reinforcing cycle of value creation** through **online platforms**, attracting more participants and enhancing **network effects**[108](index=108&type=chunk) - The Company operates through **GovDeals**, **Retail Supply Chain Group (RSCG)**, **Capital Assets Group (CAG)**, and **Machinio & Software Solutions segments**[109](index=109&type=chunk)[110](index=110&type=chunk) [Macroeconomic Conditions](index=31&type=section&id=Macroeconomic%20Conditions) - **Tariffs and trade barriers** may impact buyers, sellers, and asset availability, with ongoing developments remaining **fluid and unpredictable**[111](index=111&type=chunk) - **Supply chain challenges** and **volatile used vehicle market prices**, along with **turbulent consumer behavior**, can **affect financial performance**[112](index=112&type=chunk) - **Inflation and heightened interest rates** have **increased prices for energy, shipping, and labor**, and **impacted borrowing costs, buyer qualification, and transaction timelines**[113](index=113&type=chunk) - **Ongoing international armed and geopolitical conflicts** (e.g., Russia-Ukraine, Israel) have heightened **global supply chain disruptions** and impacted **international trade markets**, though direct revenues from these regions were **not material**[115](index=115&type=chunk) [Industry Trends](index=31&type=section&id=Industry%20Trends) - **Positive long-term growth drivers** include **increased volume of returned merchandise**, **growing demand for sustainability solutions**, and **outsourcing of surplus disposition** by corporations and governments[116](index=116&type=chunk) - **Increased buyer demand for surplus merchandise** due to **environmental consciousness and value-seeking**, and a **preference for online solutions ensuring fair market value**, are also contributing factors[116](index=116&type=chunk) - **Innovation in the retail supply chain** is expected to **accelerate product obsolescence**, **increasing the supply of surplus assets**[116](index=116&type=chunk) [Our Marketplace Transactions](index=32&type=section&id=Our%20Marketplace%20Transactions) - The Company's marketplaces benefit from **greater scale and user adoption**, creating a **continuous flow of goods**[117](index=117&type=chunk) - As of **June 30, 2025**, the Company had **5.9 million registered buyers**, an **approximate 9% increase** from **5.4 million a year prior**[117](index=117&type=chunk)[128](index=128&type=chunk) [Revenues](index=32&type=section&id=Revenues) - **Revenue is primarily earned through** **Purchase model (resale of purchased inventory)** and **Consignment model (commission fees on seller-owned goods)** transactions, plus **other fee revenues**[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) Revenue Mix by Transaction Model | Metric | Three Months Ended June 30, 2025 | Nine Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Consignment model GMV % | 82.5% | 80.9% | 86.5% | 86.0% | | Consignment revenues % of total | 30.0% | 28.1% | 35.9% | 36.5% | | Purchase model GMV % | 17.5% | 19.1% | 13.5% | 14.0% | | Purchase revenues % of total | 63.8% | 66.1% | 57.0% | 55.7% | | Other fee revenues % of total | 6.2% | 5.8% | 7.1% | 7.8% | - The Company was **not dependent on any single buyer in a material manner** for the reported periods[123](index=123&type=chunk) [Key Business Metrics](index=34&type=section&id=Key%20Business%20Metrics) Key Business Metrics (Dollars in Millions, except for counts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Gross Merchandise Volume (GMV) | $413.0 | $380.4 | $1,166.4 | $1,005.7 | | GMV Change (YoY) | +8.6% | N/A | +16.0% | N/A | | Total registered buyers (as of period end) | 5.9 million | 5.4 million | 5.9 million | 5.4 million | | Total auction participants | 1,098,000 | 1,016,000 | 3,040,000 | 3,003,000 | | Completed transactions | 286,000 | 263,000 | 797,000 | 802,000 | [Components of Revenue and Expenses](index=34&type=section&id=Components%20of%20Revenue%20and%20Expenses) - **Technology expenses** primarily consist of costs for **technical staff, third-party services, licenses, and infrastructure** for marketplace platforms and operational systems, net of **capitalized software development costs**[134](index=134&type=chunk) - **Operations expenses** cover **warehouse operations, shipping logistics, inventory management, refurbishment, customer support, and field support**[136](index=136&type=chunk) - **Sales and marketing expenses** include **personnel costs, lead generation, marketing campaigns (online/offline), and trade shows**[137](index=137&type=chunk) - **General and administrative expenses** are **corporate and administrative functions**, generally more **fixed in nature**[138](index=138&type=chunk) - **Other operating expenses, net**, include **acquisition-related costs, impairment, lease terminations, and business realignment expenses**[139](index=139&type=chunk) - **Interest and other income, net**, includes **interest income, credit agreement fees, pension costs, and foreign currency fluctuations**[140](index=140&type=chunk) - **Income taxes** include **current and deferred income tax expense** for **U.S. federal, state, and foreign jurisdictions**, estimated using an **annual effective tax rate**[141](index=141&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Consolidated Operating Results (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | |---|---|---|---|---| | Total revenue | $119,875 | $93,613 | $26,262 | 28.1% | | Cost of goods sold | $65,110 | $44,212 | $20,898 | 47.3% | | Total costs and expenses | $109,657 | $85,718 | $23,939 | 27.9% | | Income from operations | $10,218 | $7,895 | $2,323 | 29.4% | | Net income | $7,410 | $6,000 | $1,410 | 23.5% | | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | Change ($) | Change (%) | |---|---|---|---|---| | Total revenue | $358,581 | $256,391 | $102,190 | 39.9% | | Cost of goods sold | $206,220 | $119,960 | $86,260 | 71.9% | | Total costs and expenses | $334,473 | $240,253 | $94,220 | 39.2% | | Income from operations | $24,108 | $16,138 | $7,970 | 49.4% | | Net income | $20,271 | $13,616 | $6,655 | 48.9% | - **GovDeals revenue increased 8.4% (Q3) and 13.0% (YTD)** due to **new seller acquisition and service expansion**, despite **lower vehicle market prices**[144](index=144&type=chunk)[154](index=154&type=chunk) - **RSCG revenue increased 38.8% (Q3) and 58.1% (YTD)** driven by **increased GMV from existing and new retail client programs** and **higher volumes from client purchase model programs**[146](index=146&type=chunk)[155](index=155&type=chunk) - **CAG revenue increased 5.9% (Q3) but decreased 0.6% (YTD)**, with **Q3 growth from heavy equipment consignment sales**, while YTD was impacted by **fewer large international spot purchase transactions**[147](index=147&type=chunk)[156](index=156&type=chunk) - **Machinio & Software Solutions revenue increased 27.1% (Q3) and 19.9% (YTD)** due to **Machinio price increases, subscriber growth, and the Auction Software acquisition**[148](index=148&type=chunk)[157](index=157&type=chunk) - **Cost of goods sold increased significantly (47.3% Q3, 71.9% YTD)** primarily due to **increased purchase transaction volumes in the RSCG segment**[149](index=149&type=chunk)[158](index=158&type=chunk) - **General and administrative expenses decreased 4.4% (Q3) and 1.0% (YTD)**, mainly due to a **$0.5 million litigation settlement expense in Q3 2024 not recurring**, and **ongoing cost management**[152](index=152&type=chunk)[161](index=161&type=chunk) - **Depreciation and amortization decreased (16.9% Q3, 16.7% YTD)** as **historically acquired intangible assets reached the end of their useful lives**[152](index=152&type=chunk)[162](index=162&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) - **Non-GAAP EBITDA** is **Net income** adjusted for **Interest and other income** (excluding non-service pension costs), **Provision for income taxes**, and **Depreciation and amortization**[164](index=164&type=chunk) - **Non-GAAP Adjusted EBITDA** further adjusts **Non-GAAP EBITDA** for **stock-based compensation, acquisition costs, business realignment expense, deferred revenue purchase accounting adjustments, and impairment charges**[164](index=164&type=chunk) - These **non-GAAP measures** are used by management for **evaluating performance, planning, resource allocation, and assessing operational strategies**, and are considered **useful for investors to compare performance consistently**[165](index=165&type=chunk)[167](index=167&type=chunk)[170](index=170&type=chunk) Reconciliation of Net Income to Non-GAAP EBITDA and Non-GAAP Adjusted EBITDA (Dollars in Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | |---|---|---|---|---| | Net income | $7,410 | $6,000 | $20,271 | $13,616 | | EBITDA | $12,825 | $11,010 | $31,701 | $25,181 | | Stock compensation expense | $3,512 | $2,617 | $9,522 | $7,208 | | Acquisition-related costs and litigation settlement expense | $50 | $1,080 | $286 | $1,657 | | Business realignment expenses | $618 | $— | $777 | $— | | **Non-GAAP Adjusted EBITDA** | **$17,005** | **$14,707** | **$42,286** | **$34,046** | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) - **Operational cash needs** are funded by **existing cash balances and cash generated from operations**, with **no historical or foreseeable dividend payments**[174](index=174&type=chunk) - As of **June 30, 2025**, the Company had **$155.6 million in Cash and cash equivalents** and **$11.4 million in Short-term investments**, deemed **sufficient for anticipated cash needs for at least one year**[174](index=174&type=chunk) - The Company intends to **indefinitely reinvest foreign subsidiary earnings** (**$9.1 million undistributed** as of **June 30, 2025**) outside the U.S. to **avoid adverse tax consequences upon repatriation**[176](index=176&type=chunk) - **Capital expenditures** for the **nine months ended June 30, 2025**, were **$5.8 million**, a **decrease from $6.1 million** in the prior year, primarily due to **timing of platform enhancements**[177](index=177&type=chunk) - The **Credit Agreement** was amended on **May 7, 2025**, extending maturity to **March 31, 2027**, and increasing the **maximum principal amount to $35.0 million** and **standby letter of credit sublimit to $35.0 million**[181](index=181&type=chunk) - As of **June 30, 2025**, the Company had **$26.0 million of remaining borrowing capacity** under the **Credit Agreement**, with **no outstanding borrowings**[182](index=182&type=chunk) - **Net cash provided by operating activities decreased by $19.4 million to $28.8 million** for the **nine months ended June 30, 2025**, primarily due to **changes in accounts receivable and payables to sellers**[189](index=189&type=chunk) - **Net cash used in investing activities increased by $3.3 million to $20.9 million**, driven by a **$14.0 million increase in short-term investment purchases**, partially offset by **decreased business acquisition cash payments**[191](index=191&type=chunk) - **Net cash used in financing activities decreased by $5.7 million to $5.1 million**, mainly due to a **$9.4 million decrease in share repurchases**, partially offset by **increased taxes paid for stock compensation**[192](index=192&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, specifically interest rate sensitivity and exchange rate sensitivity, and the potential impact of these risks on its financial performance - A **hypothetical 100 basis point decline in interest rates** would impact **pre-tax earnings by less than $1.0 million annually**[194](index=194&type=chunk) - The Company has **no debt as of June 30, 2025**, but future draws on the **Line of Credit** would incur **variable interest based on SOFR**[195](index=195&type=chunk) - **Primary foreign exchange exposures** include **British Pounds, Canadian Dollars, Chinese Yuan, Euros, and Hong Kong Dollars**[197](index=197&type=chunk) - A **hypothetical 10% decrease in foreign exchange rates** would **reduce total expected revenues by approximately 1%**, with a **smaller impact on pre-tax earnings**[197](index=197&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting - As of **June 30, 2025**, management, including the **CEO and CFO**, concluded that **disclosure controls and procedures were effective** in providing **reasonable assurance for timely and accurate reporting**[199](index=199&type=chunk) - **No material changes** occurred in **internal control over financial reporting** during the **three months ended June 30, 2025**[200](index=200&type=chunk) [PART II. OTHER INFORMATION](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 13 of the financial statements for information on legal proceedings, indicating that no new material litigation has arisen - Information regarding **legal proceedings** is detailed in **Note 13** to the **condensed consolidated financial statements**[202](index=202&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024 - **No material changes** from the **risk factors** disclosed in the **Annual Report on Form 10-K** for the fiscal year ended **September 30, 2024**[203](index=203&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities and provides details on the Company's share repurchase program - **No unregistered sales of equity securities** occurred during the period[204](index=204&type=chunk) - The Company made **no repurchases** under its **share repurchase program** during the **three months ended June 30, 2025**[207](index=207&type=chunk) - As of **June 30, 2025**, the Company had **$17.6 million of remaining authorization** to **repurchase shares through December 31, 2026**[210](index=210&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report under this item - **No other information to report**[211](index=211&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate documents, certifications, and XBRL data - Includes **Fourth Amended and Restated Certificate of Incorporation**, **Amended and Restated Bylaws**, and **various certifications (CEO, CFO)** as **exhibits**[212](index=212&type=chunk) - **XBRL formatted financial statements** (**Balance Sheets, Statements of Operations, Comprehensive Income, Stockholders' Equity, Cash Flows, and Notes**) are included as **Exhibit 101**[212](index=212&type=chunk) [SIGNATURES](index=51&type=section&id=SIGNATURES) This section contains the required signatures from the registrant's authorized officers, including the Chairman of the Board and Chief Executive Officer, and the Chief Financial Officer - Report signed by **William P. Angrick, III** (**Chairman of the Board of Directors and Chief Executive Officer**) and **Jorge A. Celaya** (**Chief Financial Officer**) on **August 7, 2025**[214](index=214&type=chunk)

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements detail the company's financial position, performance, and cash flows for the period [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Financial statements show total assets of $14.43 billion, with a significant decrease in net income year-over-year Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $2,482 | $2,465 | | **Total Assets** | $14,428 | $14,375 | | **Total Current Liabilities** | $1,630 | $1,947 | | **Long-term Debt, net** | $7,803 | $7,484 | | **Total Liabilities** | $10,331 | $10,307 | | **Total Equity** | $4,097 | $4,068 | Consolidated Statement of Operations Highlights (in millions, except per unit data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total Revenues** | $10,569 | $11,673 | | **Operating Income** | $499 | $447 | | **Net Income** | $293 | $731 | | **Net Income per Common Unit (Basic)** | $1.55 | $6.43 | Consolidated Statement of Cash Flows Highlights (in millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $399 | $216 | | **Net cash (used in) provided by investing activities** | ($350) | $727 | | **Net cash used in financing activities** | ($27) | ($746) | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail major acquisitions like Parkland and TanQuid, debt structure, and segment performance - Announced a definitive agreement to acquire Parkland Corporation in a cash and equity transaction valued at approximately **$9.1 billion**, expected to close in Q4 2025[30](index=30&type=chunk) - Entered into an agreement to acquire TanQuid, which owns 16 fuel terminals in Europe, for approximately **€500 million**, with the transaction expected to close in the second half of 2025[35](index=35&type=chunk) - In March 2025, the Partnership issued **$1.0 billion of 6.250% senior notes** due 2033 and used the proceeds to repay $600 million of notes due 2025 and borrowings under its Credit Facility[49](index=49&type=chunk) Segment Adjusted EBITDA (in millions) | Segment | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Fuel Distribution | $426 | $463 | | Pipeline Systems | $349 | $53 | | Terminals | $137 | $46 | | **Total** | **$912** | **$562** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial results, focusing on major acquisitions and segment performance drivers [Recent Developments](index=25&type=section&id=Recent%20Developments) This section details significant strategic acquisitions and the impact of new tax legislation - Announced a definitive agreement to acquire Parkland Corporation in a cash and equity transaction valued at approximately **$9.1 billion**, expected to close in Q4 2025[97](index=97&type=chunk) - Entered an agreement to acquire TanQuid for approximately **€500 million**, which includes 15 fuel terminals in Germany and one in Poland, with the deal expected to close in H2 2025[103](index=103&type=chunk) - The "One Big Beautiful Bill Act" was signed into law on July 4, 2025, permanently reinstating **100% bonus depreciation**, which is anticipated to defer a significant portion of the Partnership's corporate subsidiaries' U.S. federal income taxes[106](index=106&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Consolidated Adjusted EBITDA grew significantly, driven by acquisitions, despite a drop in net income due to a prior-year gain Consolidated Adjusted EBITDA (in millions) | Period | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Three Months Ended June 30** | $454 | $320 | $134 | | **Six Months Ended June 30** | $912 | $562 | $350 | - The decrease in net income for H1 2025 to **$293 million** from $731 million in H1 2024 was primarily due to the absence of the **$598 million gain** on the West Texas Sale that occurred in April 2024[114](index=114&type=chunk) - Pipeline Systems segment Adjusted EBITDA increased by **$296 million** for H1 2025, driven by the NuStar acquisition and a **$95 million increase** in Adjusted EBITDA from the ET-S Permian joint venture[114](index=114&type=chunk)[132](index=132&type=chunk) - Terminals segment Adjusted EBITDA increased by **$91 million** for H1 2025, primarily due to contributions from the NuStar and Zenith European terminals acquisitions[114](index=114&type=chunk)[134](index=134&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through cash from operations and its credit facility to fund capital expenditures - As of June 30, 2025, the company had **$116 million in cash** and cash equivalents and **$1.24 billion of available borrowing capacity** on its Credit Facility[136](index=136&type=chunk) - Net cash provided by operating activities increased to **$399 million** for the six months ended June 30, 2025, compared to $216 million for the same period in 2024[140](index=140&type=chunk) - The company projects approximately **$150 million in maintenance capital expenditures** and at least **$400 million in growth capital** for the full year 2025[149](index=149&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to interest rate risk on variable-rate debt and commodity price risk on fuel inventories - The company is subject to interest rate risk on its **$206 million** of outstanding borrowings under the Credit Facility as of June 30, 2025[160](index=160&type=chunk) - The company faces commodity price risk on its approximately **$1.15 billion of fuel inventory** and uses derivative instruments to hedge this risk, holding a position of **3.2 million barrels** with an aggregate unrealized gain of **$4 million** at June 30, 2025[161](index=161&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal controls over financial reporting were effective - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by this report[164](index=164&type=chunk) - There have been **no changes** in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[165](index=165&type=chunk) [PART II - OTHER INFORMATION](index=41&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not party to any litigation expected to have a material adverse impact on its business - The company does not believe it is party to any litigation that will have a **material adverse impact** on its financial condition or operations[167](index=167&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in prior SEC filings - There have been **no material changes** from the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2024, and the Q1 2025 Form 10-Q[169](index=169&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued common units as partial consideration for an acquisition via a private placement - On May 29, 2025, the Partnership issued **251,646 common units** valued at approximately **$13 million** as partial consideration for an acquisition[171](index=171&type=chunk) - The issuance was **exempt from registration** under Section 4(a)(2) of the Securities Act of 1933, as it did not involve a public offering[171](index=171&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists key agreements and certifications filed as exhibits with the Form 10-Q - Lists key agreements filed as exhibits, including the Arrangement Agreement for the **Parkland Corporation acquisition** and amendments to the Third Amended and Restated Credit Agreement[173](index=173&type=chunk)[175](index=175&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2025 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ____ to ____ Commission File No. 1-13653 AMERICAN FINANCIAL GROUP, INC. Incorporated under the Laws of Ohio IRS Employer I.D. No. 31-1544320 301 East Fourth Street, Cinci ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly period ended June 30, 2025 Or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ☐ Commission File No. 001-35741 CHEMUNG FINANCIAL CORPORATION (Exact name of registrant as specified in its charter) | New York | 16-1237038 | | --- | --- | | (State or other jurisdiction of incorporation or ...

Table of Contents Washington, D.C. 20549 FORM 10-Q (Mark One) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-36473 UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or Trinseo PLC (Exact name of registrant as specified in its charter) Ireland N/A (State or other jurisdict ...

PART I FINANCIAL INFORMATION [Financial Statements](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited consolidated financial statements for Constellation Energy Corporation (CEG Parent) and Constellation Energy Generation, LLC for the quarterly period ended June 30, 2025, including statements of operations, cash flows, balance sheets, and changes in equity, along with combined notes detailing accounting policies and disclosures [Constellation Energy Corporation Financial Statements](index=8&type=section&id=Constellation%20Energy%20Corporation%20Financial%20Statements) For the six months ended June 30, 2025, Constellation Energy Corporation reported operating revenues of $12,889 million and net income attributable to common shareholders of $957 million, or $3.05 per diluted share, with total assets at $53,038 million and net cash from operating activities as a source of $1,584 million Constellation Energy Corporation - Consolidated Statement of Operations Highlights | Metric | Three Months Ended June 30, 2025 (Millions USD) | Three Months Ended June 30, 2024 (Millions USD) | Six Months Ended June 30, 2025 (Millions USD) | Six Months Ended June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenues** | $6,101 Millions | $5,475 Millions | $12,889 Millions | $11,637 Millions | | **Operating Income** | $951 Millions | $1,100 Millions | $1,402 Millions | $1,913 Millions | | **Net Income Attributable to Common Shareholders** | $839 Millions | $814 Millions | $957 Millions | $1,697 Millions | | **Diluted EPS** | $2.67 (USD) | $2.58 (USD) | $3.05 (USD) | $5.35 (USD) | Constellation Energy Corporation - Consolidated Cash Flow Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $1,584 Millions | ($1,336 Millions) | | **Net Cash from Investing Activities** | ($1,758 Millions) | $2,650 Millions | | **Net Cash from Financing Activities** | ($893 Millions) | ($1,385 Millions) | | **Increase (Decrease) in Cash** | ($1,067 Millions) | ($71 Millions) | Constellation Energy Corporation - Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (Millions USD) | December 31, 2024 (Millions USD) | | :--- | :--- | :--- | | **Total Current Assets** | $9,233 Millions | $10,776 Millions | | **Total Assets** | $53,038 Millions | $52,926 Millions | | **Total Current Liabilities** | $6,256 Millions | $6,846 Millions | | **Total Liabilities** | $39,235 Millions | $39,387 Millions | | **Total Shareholders' Equity** | $13,446 Millions | $13,166 Millions | [Constellation Energy Generation, LLC Financial Statements](index=13&type=section&id=Constellation%20Energy%20Generation%2C%20LLC%20Financial%20Statements) Constellation Energy Generation, LLC's operating financial results mirror its parent company, reporting $12,889 million in operating revenues and $962 million in net income for the six months ended June 30, 2025, with total assets of $52,994 million, while financing activities and equity structure reflect its subsidiary status Constellation Energy Generation, LLC - Consolidated Statement of Operations Highlights | Metric | Three Months Ended June 30, 2025 (Millions USD) | Three Months Ended June 30, 2024 (Millions USD) | Six Months Ended June 30, 2025 (Millions USD) | Six Months Ended June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenues** | $6,101 Millions | $5,475 Millions | $12,889 Millions | $11,637 Millions | | **Operating Income** | $951 Millions | $1,100 Millions | $1,402 Millions | $1,913 Millions | | **Net Income Attributable to Membership Interest** | $839 Millions | $814 Millions | $957 Millions | $1,697 Millions | Constellation Energy Generation, LLC - Consolidated Cash Flow Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $1,502 Millions | ($1,350 Millions) | | **Net Cash from Investing Activities** | ($1,758 Millions) | $2,650 Millions | | **Net Cash from Financing Activities** | ($819 Millions) | ($1,368 Millions) | | **Distributions to member** | ($793 Millions) | ($1,220 Millions) | [Combined Notes to Consolidated Financial Statements](index=18&type=section&id=Combined%20Notes%20to%20Consolidated%20Financial%20Statements) These notes detail accounting policies and financial figures, covering the proposed Calpine acquisition, revenue recognition, segment performance, nuclear Production Tax Credit (PTC) impact, changes to the accounts receivable financing facility, derivative usage, debt, credit facilities, and the share repurchase program - The company entered into an agreement to acquire Calpine Corporation in a cash and stock transaction, which includes assuming **approximately $12.7 billion** of Calpine's debt. Regulatory approvals from PUCT, NYPSC, and FERC were received in June and July 2025[47](index=47&type=chunk)[48](index=48&type=chunk) - For the June 2025 through May 2026 planning year, the company recognized **$201 million** of revenue for Zero Emission Credits (ZECs) delivered in prior years, with payment expected in Q3 2026[57](index=57&type=chunk) - The company's nuclear units are eligible for a Production Tax Credit (PTC) through 2032. For the six months ended June 30, 2025, the company recognized an estimated nuclear PTC benefit of **approximately $45 million** in Operating revenues, down from **$712 million** in the same period of 2024[71](index=71&type=chunk)[72](index=72&type=chunk) - In December 2024, the company amended its accounts receivable financing facility, increasing its size to **$1.5 billion** and extending the maturity to December 2027. The structure changed from selling receivables to a secured revolving loan facility[143](index=143&type=chunk) - The company's Board of Directors has authorized a **$3 billion** share repurchase program. As of June 30, 2025, **approximately $540 million** of authority remained. In June 2025, the company initiated a **$404 million** Accelerated Share Repurchase (ASR) agreement[180](index=180&type=chunk)[183](index=183&type=chunk) - In July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, which preserves key federal tax credits from the IRA, including the 45U nuclear PTC through 2032 and 45Y for new nuclear projects through 2035, reinforcing the long-term economic viability of the company's nuclear assets[216](index=216&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=48&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This MD&A provides management's perspective on financial condition and operations, highlighting legislative support for nuclear energy, a 20-year PPA with Meta, and the strategic Calpine acquisition, while detailing performance drivers, liquidity, capital resources, and credit matters [Executive Overview, Significant Transactions and Developments, and Other Key Business Drivers](index=48&type=section&id=Executive%20Overview%2C%20Significant%20Transactions%20and%20Developments%2C%20and%20Other%20Key%20Business%20Drivers) This section outlines the company's role as the largest U.S. carbon-free energy producer, highlighting the One Big Beautiful Bill Act (OBBBA) supporting nuclear energy, a **20-year** PPA with Meta for the Clinton Clean Energy Center, and the strategic acquisition of Calpine to expand generation capacity and retail supply, while monitoring tariffs, nuclear fuel supply risks from the Russia-Ukraine conflict, and environmental regulations - The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, preserves and enhances federal tax credits from the IRA, reinforcing the long-term economic viability of the company's nuclear generation assets[219](index=219&type=chunk) - A **20-year** PPA was signed with Meta Platforms, Inc. for the output of the Clinton Clean Energy Center, supporting its relicensing and continued operations. The deal includes a **30 MW** plant uprate expected to be complete in 2029[220](index=220&type=chunk) - The proposed acquisition of Calpine will add over **27 GW** of generation capacity (natural gas, geothermal, battery storage, solar) and a retail platform serving **60 TWhs** of load annually, creating the nation's leading competitive retail electric supplier[221](index=221&type=chunk)[222](index=222&type=chunk) - The company is actively managing risks from the Russia-Ukraine conflict related to nuclear fuel supply by working with a diverse set of suppliers and increasing fuel inventory, in light of the **U.S. ban on Russian uranium imports effective August 2024**[225](index=225&type=chunk) [Financial Results of Operations](index=50&type=section&id=Financial%20Results%20of%20Operations) For Q2 2025, GAAP Net Income slightly increased to **$839 million**, while the six-month GAAP Net Income decreased to **$957 million** from **$1,697 million** year-over-year, primarily due to lower Nuclear PTC revenues and unfavorable unrealized hedging results, partially offset by favorable ZEC revenues and improved market conditions, with Adjusted (non-GAAP) Operating Earnings for Q2 2025 rising to **$599 million** (**$1.91/share**) from **$531 million** (**$1.68/share**) GAAP vs. Adjusted (non-GAAP) Operating Earnings | Metric (in millions) | Three Months Ended June 30, 2025 (Millions USD) | Three Months Ended June 30, 2024 (Millions USD) | Six Months Ended June 30, 2025 (Millions USD) | Six Months Ended June 30, 2024 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | **GAAP Net Income Attributable to Common Shareholders** | $839 Millions | $814 Millions | $957 Millions | $1,697 Millions | | **Adjusted (non-GAAP) Operating Earnings** | $599 Millions | $531 Millions | $1,272 Millions | $1,110 Millions | - The primary drivers for the **$740 million** decrease in year-to-date GAAP Net Income were unfavorable net unrealized losses on economic hedges, lower Nuclear PTC revenues (**$45M** in YTD 2025 vs. **$712M** in YTD 2024), and higher net unrealized losses on equity investments[241](index=241&type=chunk)[244](index=244&type=chunk)[261](index=261&type=chunk) - Offsetting factors included favorable ZEC revenues (due to recognition of prior period deliveries), higher capacity revenues, and better margins on load contracts[240](index=240&type=chunk)[244](index=244&type=chunk) Nuclear Fleet Capacity Factor | Period | 2025 (%) | 2024 (%) | | :--- | :--- | :--- | | **Three Months Ended June 30** | 94.8% | 95.4% | | **Six Months Ended June 30** | 94.5% | 94.4% | [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position, with **$9.5 billion** in aggregate bank commitments and **$7.2 billion** of available capacity as of June 30, 2025, and net cash from operating activities significantly improved to **$1,584 million** for the first six months of 2025, sufficient to meet all requirements, though a credit downgrade could trigger **approximately $2.4 billion** in incremental collateral Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2025 (Millions USD) | 2024 (Millions USD) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $1,584 Millions | ($1,336 Millions) | | **Net Cash from Investing Activities** | ($1,758 Millions) | $2,650 Millions | | **Net Cash from Financing Activities** | ($893 Millions) | ($1,385 Millions) | - As of June 30, 2025, the company had access to **$9.5 billion** in aggregate bank commitments with **$7.2 billion** of available capacity[280](index=280&type=chunk) - A loss of investment grade credit rating (requiring a three-notch downgrade) would trigger an estimated incremental collateral requirement of **approximately $2.4 billion**[282](index=282&type=chunk)[283](index=283&type=chunk) - The company declared quarterly dividends of **$0.3878 per share** for the first three quarters of 2025[279](index=279&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the company's market risk exposures, including commodity prices, counterparty credit, interest rates, and equity prices, managed through hedging, the nuclear PTC, long-term nuclear fuel contracts, master netting agreements, and collateral requirements, with disclosures on variable-rate debt and Nuclear Decommissioning Trust (NDT) funds - The company's commodity price risk is significantly mitigated by the nuclear PTC, which provides increasing support as unit revenues decline. A hypothetical **$5/MWh** reduction in energy prices would not have a **material impact** on earnings for 2025 and 2026[298](index=298&type=chunk)[299](index=299&type=chunk) - The company manages nuclear fuel supply risk through long-term contracts. For the period 2025-2030, **approximately 35%** of uranium concentrate requirements are supplied by **three suppliers**. The company is diversifying its supply chain to mitigate geopolitical risks, such as the Russia-Ukraine conflict[300](index=300&type=chunk)[301](index=301&type=chunk) - A hypothetical **25 basis point** increase in interest rates and a **10%** decrease in equity prices would result in a **$981 million** reduction in the fair value of the company's Nuclear Decommissioning Trust (NDT) assets as of June 30, 2025[316](index=316&type=chunk) [Controls and Procedures](index=70&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The company's principal executive and financial officers concluded that disclosure controls and procedures were **effective** as of June 30, 2025, with **no material changes** to internal control over financial reporting during the second quarter of 2025 - As of June 30, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures **were effective**[319](index=319&type=chunk) - **No material changes** to internal control over financial reporting occurred during the second quarter of 2025[320](index=320&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=71&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company is involved in various lawsuits and regulatory proceedings in the ordinary course of business, with further details on material legal matters provided in Note 13 of the financial statements - The company is involved in various legal and regulatory proceedings in the ordinary course of business. For details on material cases, refer to Note 13 — Commitments and Contingencies[322](index=322&type=chunk) [Risk Factors](index=71&type=section&id=ITEM%201A.%20RISK%20FACTORS) As of June 30, 2025, the company's risk factors have not materially changed from those described in its 2024 Annual Report on Form 10-K - As of June 30, 2025, there were **no material changes** to the risk factors previously disclosed in the company's 2024 Form 10-K[323](index=323&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's share repurchase activities, including a **$3 billion** authorized program, a **$404 million** Accelerated Share Repurchase (ASR) agreement initiated in June 2025 resulting in an initial delivery of **1,099,580 shares**, and **approximately $540 million** remaining for repurchase as of June 30, 2025 - In June 2025, the company initiated a **$404 million** Accelerated Share Repurchase (ASR) agreement, receiving an initial delivery of **1,099,580 shares**[326](index=326&type=chunk)[330](index=330&type=chunk) - As of June 30, 2025, the approximate dollar value of shares that may yet be purchased under the authorized program is **$540 million**[330](index=330&type=chunk) - There were no open market share repurchases during the six months ended June 30, 2025[325](index=325&type=chunk) [Other Information](index=72&type=section&id=ITEM%205.%20OTHER%20INFORMATION) During the second quarter of 2025, no directors or executive officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements for the purchase or sale of the company's securities - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the three months ended June 30, 2025[332](index=332&type=chunk)