[Executive Summary & Highlights](index=1&type=section&id=I.%20Executive%20Summary%20%26%20Highlights) Viatris reported strong Q2 2025 performance, exceeding expectations and making significant progress on 2025 strategic priorities, while reaffirming financial guidance and returning substantial capital to shareholders [CEO and CFO Commentary](index=1&type=section&id=1.1%20CEO%20and%20CFO%20Commentary) Viatris's CEO highlighted strong second-quarter performance, meaningful progress on 2025 strategic priorities, and the resilience of its diversified global business, with an advancing late-stage pipeline and significant capital return, while the CFO emphasized exceeding expectations, financial discipline, and reaffirming all key elements of the 2025 financial guidance - Viatris delivered a strong second quarter and continued to make meaningful progress against its key 2025 strategic priorities[3](index=3&type=chunk) - Second-quarter results exceeded expectations, demonstrating strong operational performance and financial discipline, with all key elements of 2025 financial guidance reaffirmed[3](index=3&type=chunk) - More than **$630 million** in capital has been returned to shareholders year-to-date[3](index=3&type=chunk) [Key Business and Financial Highlights](index=1&type=section&id=1.2%20Key%20Business%20and%20Financial%20Highlights) Viatris reported Q2 2025 total revenues above expectations, reflecting strong execution and business resilience, announced positive results from five Phase 3 data readouts, returned over $630 million in capital to shareholders, and reiterated its 2025 financial guidance, expecting to be in the top half of the range for Total Revenues and Adjusted EPS - Total Revenues were above expectations, reflecting strong execution and the resilience of the diversified global business[4](index=4&type=chunk) - Positive results from five Phase 3 data readouts this year reinforce the continued momentum of the late-stage pipeline[4](index=4&type=chunk) - Over **$630 million** of capital was returned to shareholders year-to-date, including **$350 million** in share buybacks[4](index=4&type=chunk) - The company reiterated its 2025 financial guidance ranges across all metrics and expects to be in the top half of the range for Total Revenues and Adjusted EPS[4](index=4&type=chunk) [Second Quarter and Year-to-Date Financial Performance](index=2&type=section&id=II.%20Second%20Quarter%20and%20Year-to-Date%20Financial%20Performance) This section details Viatris's Q2 and H1 2025 financial results, showing revenue declines, significant GAAP net losses due to goodwill impairment, and updates on product pipeline developments [Consolidated Financial Results (Q2 2025 vs Q2 2024)](index=2&type=section&id=2.1%20Consolidated%20Financial%20Results%20(Q2%202025%20vs%20Q2%202024)) In Q2 2025, Viatris reported a **6%** decrease in total revenues to **$3.58 billion** (**2%** divestiture-adjusted operational decrease), primarily due to the negative Indore Impact, while U.S. GAAP net loss significantly improved from **$(326.4) million** to **$(4.6) million**, and adjusted EBITDA and adjusted EPS saw declines of **11%** and **10%** respectively, with free cash flow decreasing by **48%** Q2 2025 vs Q2 2024 Key Financials | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Reported Change | Divestiture Adjusted Operational Change | | :-------------------------------- | :----------------- | :----------------- | :-------------- | :------------------------------------ | | Total Revenues | $3,582.1 | $3,796.6 | (6)% | (2)% | | U.S. GAAP Net Loss | $(4.6) | $(326.4) | NM | - | | U.S. GAAP Loss Per Share | $0.00 | $(0.27) | NM | - | | Adjusted Net Earnings | $726.0 | $826.5 | (12)% | - | | Adjusted EPS | $0.62 | $0.69 | (10)% | (4)% | | Adjusted EBITDA | $1,078.8 | $1,207.9 | (11)% | (4)% | | U.S. GAAP Net Cash from Ops | $219.7 | $379.1 | (42)% | - | | Free Cash Flow | $166.8 | $320.3 | (48)% | - | - Total revenues were **$3.6 billion**, down **6%** on a reported basis and down **2%** on a divestiture-adjusted operational basis compared to Q2 2024, primarily driven by the negative Indore Impact, though excluding the Indore Impact, divestiture-adjusted operational total revenues increased **3%**[9](index=9&type=chunk) - Brands net sales demonstrated strong performance in Greater China and Emerging Markets, in addition to growth in certain key brands in Developed Markets[9](index=9&type=chunk) [Consolidated Financial Results (H1 2025 vs H1 2024)](index=3&type=section&id=2.2%20Consolidated%20Financial%20Results%20(H1%202025%20vs%20H1%202024)) For the first six months of 2025, total revenues decreased by **8%** to **$6.84 billion** (**2%** divestiture-adjusted operational decrease), with the company reporting a significant U.S. GAAP net loss of **$(3,046.6) million**, primarily due to a **$2.9 billion** goodwill impairment charge, while Adjusted EBITDA and Adjusted EPS declined by **17%** and **18%** respectively, and free cash flow decreased by **25%** H1 2025 vs H1 2024 Key Financials | Metric | H1 2025 (Millions) | H1 2024 (Millions) | Reported Change | Divestiture Adjusted Operational Change | | :-------------------------------- | :----------------- | :----------------- | :-------------- | :------------------------------------ | | Total Revenues | $6,836.4 | $7,460.0 | (8)% | (2)% | | U.S. GAAP Net Loss | $(3,046.6) | $(212.5) | NM | - | | U.S. GAAP Loss Per Share | $(2.58) | $(0.18) | NM | - | | Adjusted Net Earnings | $1,326.3 | $1,639.2 | (19)% | - | | Adjusted EPS | $1.11 | $1.36 | (18)% | (9)% | | Adjusted EBITDA | $2,002.3 | $2,401.3 | (17)% | (8)% | | U.S. GAAP Net Cash from Ops | $755.2 | $993.7 | (24)% | - | | Free Cash Flow | $659.7 | $885.1 | (25)% | - | - The U.S. GAAP Net Loss for the six months ended June 30, 2025, includes a previously disclosed goodwill impairment charge of **$2.9 billion** as a result of an interim goodwill impairment test[7](index=7&type=chunk)[42](index=42&type=chunk) [Additional Business and Pipeline Highlights](index=4&type=section&id=2.3%20Additional%20Business%20and%20Pipeline%20Highlights) Generics net sales were impacted by the Indore event and competition but partially offset by growth in key products like Yupelri® and Breyna®, the company generated **$79 million** in new product revenues, reported positive Phase 3 results for Phentolamine Ophthalmic Solution (MR-142 and MR-141) for night driving impairment and presbyopia, while a Phase 3 study for Pimecrolimus Ophthalmic Ointment (MR-139) for blepharitis did not meet its primary endpoint, and Sotagliflozin received approval in UAE - Generics net sales reflect the expected negative Indore Impact and competition on Wixela®, partially offset by continued growth in Yupelri® and Breyna® in North America, strong performance across key European markets, and slight volume growth in JANZ[11](index=11&type=chunk) - The Company generated approximately **$79 million** in new product revenues in the quarter[11](index=11&type=chunk) - Positive top-line results were announced from pivotal Phase 3 trials for Phentolamine Ophthalmic Solution (MR-142) for night driving impairment and (MR-141) for presbyopia[11](index=11&type=chunk) - A Phase 3 study for Pimecrolimus Ophthalmic Ointment (MR-139) for blepharitis did not meet its primary endpoint, and the Company is evaluating next steps[11](index=11&type=chunk) - Sotagliflozin (INPEFA®) 200mg and 400mg film-coated tablets received approval in United Arab Emirates in June 2025[11](index=11&type=chunk) - Five abstracts from the Phase 3 program evaluating a novel fast-acting formulation of meloxicam (MR-107A-02) in moderate-to-severe acute surgical pain models will be presented at PAINWeek 2025, including positive results from two previously announced pivotal studies[11](index=11&type=chunk) [Capital Allocation and Business Development](index=5&type=section&id=III.%20Capital%20Allocation%20and%20Business%20Development) Viatris remains committed to returning capital to shareholders through repurchases and pursuing strategic regional licensing and partnership opportunities to enhance its core business [Capital Return to Shareholders](index=5&type=section&id=3.1%20Capital%20Return%20to%20Shareholders) Viatris reaffirmed its commitment to prioritizing returning capital to shareholders in 2025, having returned over **$630 million** year-to-date, including **$350 million** in share repurchases, and continues to expect total share repurchases for 2025 to be between **$500 million** and **$650 million** - The Company reaffirmed its commitment to prioritizing returning capital to shareholders in 2025[12](index=12&type=chunk) - Year-to-date, the Company returned more than **$630 million** of capital to shareholders, including **$350 million** in share repurchases[12](index=12&type=chunk) - The Company continues to expect **$500 million to $650 million** in total share repurchases in 2025[12](index=12&type=chunk) [Business Development Strategy](index=5&type=section&id=3.2%20Business%20Development%20Strategy) Viatris plans to continue pursuing regional licensing and partnership opportunities that offer immediate revenue contributions and leverage its unique commercial and R&D infrastructure and capabilities to enhance its core business - The Company expects to continue to pursue regional licensing and partnership opportunities with immediate revenue contribution[13](index=13&type=chunk) - These opportunities will leverage its unique commercial and R&D infrastructure and capabilities[13](index=13&type=chunk) - The strategy aims to enhance the core business[13](index=13&type=chunk) [2025 Financial Guidance](index=5&type=section&id=IV.%202025%20Financial%20Guidance) Viatris reaffirmed its 2025 financial guidance across all metrics, anticipating performance in the top half of the range for Total Revenues and Adjusted EPS [Reaffirmed Guidance](index=5&type=section&id=4.1%20Reaffirmed%20Guidance) Viatris reaffirmed its 2025 financial guidance across all metrics, expecting to be in the top half of the range for Total Revenues and Adjusted EPS, with U.S. GAAP net cash provided by operating activities estimated between **$2.2 billion** and **$2.5 billion**, excluding transaction-related costs and acquired IPR&D for unsigned deals 2025 Financial Guidance (Reaffirmed) | Metric | Estimated Ranges (Millions) | Midpoint (Millions) | | :------------------------------------------ | :------------------------ | :------------------ | | Total Revenues | $13,500 - $14,000 | $13,750 | | Adjusted EBITDA | $3,890 - $4,190 | $4,040 | | Adjusted EPS | $2.16 - $2.30 | $2.23 | | Free Cash Flow | $1,800 - $2,200 | $2,000 | | U.S. GAAP Net Cash provided by Operating Activities | $2,200 - $2,500 | $2,350 | - The Company expects to be in the top half of the range for Total Revenues and Adjusted EPS[4](index=4&type=chunk) - 2025 financial guidance excludes the impact of any acquisition and divestiture-related transaction costs, acquired IPR&D for unsigned deals, and any potential impact of future tariffs and trade restrictions[14](index=14&type=chunk)[15](index=15&type=chunk) [Company Information](index=6&type=section&id=V.%20Company%20Information) This section provides details on Viatris's Q2 2025 earnings conference call and an overview of the company's global healthcare mission and operations [Conference Call Details](index=6&type=section&id=5.1%20Conference%20Call%20Details) Viatris hosted a conference call and live webcast on August 7, 2025, at 8:30 a.m. ET to review its second quarter 2025 financial results, with investors and the public able to access the webcast and presentation materials on the company's investor relations website - Viatris hosted a conference call and live webcast on August 7, 2025, at 8:30 a.m. ET to review its second quarter 2025 financial results[16](index=16&type=chunk) - The 'Viatris Q2 2025 Earnings Presentation' and a replay of the webcast are available at investor.viatris.com[17](index=17&type=chunk) [About Viatris](index=6&type=section&id=5.2%20About%20Viatris) Viatris Inc. is a global healthcare company headquartered in the U.S., uniquely positioned to bridge generics and brands to holistically address healthcare needs worldwide, with a mission to empower people to live healthier, providing high-quality medicines to approximately **1 billion** patients annually through an extensive portfolio and global supply chain - Viatris Inc. (Nasdaq: VTRS) is a global healthcare company positioned to bridge the traditional divide between generics and brands[18](index=18&type=chunk) - Its mission is to empower people worldwide to live healthier at every stage of life, providing access to high-quality medicines to approximately **1 billion** patients annually[18](index=18&type=chunk) - Viatris is headquartered in the U.S., with global centers in Pittsburgh, Shanghai, and Hyderabad, India[18](index=18&type=chunk) [Non-GAAP Financial Measures & Key Terms](index=6&type=section&id=VI.%20Non-GAAP%20Financial%20Measures%20%26%20Key%20Terms) This section clarifies the definitions and rationale behind Viatris's non-GAAP financial measures and key operational terms used throughout the report [Non-GAAP Financial Measures Explanation](index=6&type=section&id=6.1%20Non-GAAP%20Financial%20Measures%20Explanation) This section explains the use of various non-GAAP financial measures, such as adjusted gross profit, adjusted net earnings, adjusted EPS, EBITDA, adjusted EBITDA, and free cash flow, which supplement U.S. GAAP reporting to provide a more complete understanding of the company's operational performance, especially given the impact of acquisitions, divestitures, and other significant events, and are used internally for forecasting, budgeting, and performance measurement - Non-GAAP financial measures, including adjusted gross profit, adjusted net earnings, adjusted EPS, EBITDA, adjusted EBITDA, and free cash flow, are presented to supplement investors' understanding of Viatris's financial performance[19](index=19&type=chunk) - Management uses these measures internally for forecasting, budgeting, measuring operating performance, and incentive-based awards[19](index=19&type=chunk) - Non-GAAP measures are considered useful supplemental information for investors, especially due to acquisitions, divestitures, and other significant events that may impact comparability of periodic operating results[19](index=19&type=chunk) - Free cash flow refers to U.S. GAAP net cash provided by operating activities less capital expenditures[19](index=19&type=chunk) - Constant currency (operational change) measures provide information on changes in total revenues, net sales, adjusted EBITDA, and adjusted EPS assuming foreign currency exchange rates had not changed, facilitating period-to-period comparison of operational activities[20](index=20&type=chunk) - Divestiture-adjusted operational change refers to operational change, further adjusted for the impact of divestitures that closed during 2024 by excluding proportionate net sales from those divested businesses[20](index=20&type=chunk) [Certain Key Terms and Presentation Matters](index=7&type=section&id=6.2%20Certain%20Key%20Terms%20and%20Presentation%20Matters) This section defines key terms used in the report to ensure clarity and consistent interpretation of financial results, including 'New product sales,' 'Operational change,' 'Divestiture-adjusted operational change,' 'Closed divestitures or divestitures closed in 2024,' 'Indore Impact,' and 'Transaction-related costs' - **New product sales:** Revenue from new products launched in 2025 and the carryover impact of new products, including business development, launched within the last 12 months[22](index=22&type=chunk) - **Operational change:** Constant currency percentage changes derived by translating current period amounts at prior year comparative period exchange rates[23](index=23&type=chunk) - **Divestiture-adjusted operational change:** Operational changes, further adjusted for the impact of proportionate results from divestitures that closed in 2024[24](index=24&type=chunk) - **Closed divestitures or divestitures closed in 2024:** Refers to the divestiture of rights to two women's healthcare products in the U.K., commercialization rights in most Upjohn Distributor markets, the women's healthcare business, the API business in India, and the OTC business[26](index=26&type=chunk) - **Indore Impact:** The estimated negative financial impact on 2025 total revenues and (loss) earnings from operations versus comparable 2024 periods, resulting from an FDA warning letter and import alert related to the oral finished dose manufacturing facility in Indore, India[27](index=27&type=chunk) - **Transaction-related costs:** The impact of any acquisition and divestiture-related transaction costs, including taxes[28](index=28&type=chunk) [Forward-Looking Statements](index=8&type=section&id=VII.%20Forward-Looking%20Statements) This section provides a standard legal disclaimer regarding forward-looking statements, highlighting inherent risks and uncertainties that may cause actual results to differ materially [Disclaimer](index=8&type=section&id=7.1%20Disclaimer) This section provides a standard legal disclaimer regarding forward-looking statements, emphasizing that actual future results may differ materially from those expressed or implied due to various risks and uncertainties, including regulatory actions, changes in laws, economic conditions, competition, and the ability to achieve strategic goals, and encourages investors to review detailed risk factors outlined in the company's SEC filings - This press release contains 'forward-looking statements' made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995[29](index=29&type=chunk) - Because forward-looking statements inherently involve risks and uncertainties, actual future results may differ materially from those expressed or implied[29](index=29&type=chunk) - Factors that could cause differences include actions and decisions of healthcare regulators, changes in laws, ability to attract and retain key personnel, liquidity, product market acceptance, manufacturing difficulties, legal proceedings, data security breaches, global operations risks, intellectual property protection, competition, economic conditions, and inflation rates[30](index=30&type=chunk)[31](index=31&type=chunk) - Investors are encouraged to review the risks described in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and other SEC filings[31](index=31&type=chunk) [Contacts](index=10&type=section&id=VIII.%20Contacts) This section provides essential contact information for Viatris's Media and Investor Relations teams [Media and Investor Relations](index=10&type=section&id=8.1%20Media%20and%20Investor%20Relations) This section provides contact information for Viatris's Media and Investor Relations teams, including names, email addresses, and phone numbers for inquiries - Media Contacts: Jennifer Mauer and Matt Klein, Communications@viatris.com, +1.724.514.1968[32](index=32&type=chunk) - Investors Contact: Bill Szablewski, InvestorRelations@viatris.com, +1.724.514.1813[32](index=32&type=chunk) [Condensed Consolidated Financial Statements](index=11&type=section&id=IX.%20Condensed%20Consolidated%20Financial%20Statements) This section presents Viatris's condensed consolidated financial statements, including statements of operations, balance sheets, and detailed key product net sales for Q2 and H1 2025 [Statements of Operations](index=11&type=section&id=9.1%20Statements%20of%20Operations) The condensed consolidated statements of operations show a significant improvement in U.S. GAAP net loss for Q2 2025 to **$(4.6) million** from **$(326.4) million** in Q2 2024, however, for the six months ended June 30, 2025, a net loss of **$(3,046.6) million** was reported, primarily due to a goodwill impairment charge, compared to **$(212.5) million** in the prior year, with total revenues decreasing for both periods Condensed Consolidated Statements of Operations (Selected Items) | Metric (Millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Total revenues | $3,582.1 | $3,796.6 | $6,836.4 | $7,460.0 | | Gross profit | $1,332.9 | $1,445.4 | $2,494.1 | $2,949.4 | | Earnings (loss) from operations | $233.0 | $(239.9) | $(2,649.2) | $(36.0) | | Net loss | $(4.6) | $(326.4) | $(3,046.6) | $(212.5) | | Loss per share (Diluted) | $0.00 | $(0.27) | $(2.58) | $(0.18) | - The six-month net loss for 2025 includes a **$2.9 billion** goodwill impairment charge, which significantly impacted the U.S. GAAP results[7](index=7&type=chunk)[42](index=42&type=chunk) [Balance Sheets](index=12&type=section&id=9.2%20Balance%20Sheets) As of June 30, 2025, Viatris reported total assets of **$38.41 billion**, a decrease from **$41.50 billion** at December 31, 2024, primarily driven by a reduction in goodwill and intangible assets, and a decrease in cash and cash equivalents, while the current portion of long-term debt significantly increased Condensed Consolidated Balance Sheets (Selected Items) | Metric (Millions) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total assets | $38,411.5 | $41,500.9 | | Cash and cash equivalents | $566.4 | $734.8 | | Goodwill | $6,748.3 | $9,133.3 | | Intangible assets, net | $16,323.8 | $17,070.9 | | Total liabilities | $22,841.0 | $22,865.4 | | Current portion of long-term debt | $1,680.7 | $8.3 | | Long-term debt | $12,791.6 | $14,038.9 | | Shareholders' equity | $15,570.5 | $18,635.5 | - Goodwill decreased significantly from **$9,133.3 million** at December 31, 2024, to **$6,748.3 million** at June 30, 2025[37](index=37&type=chunk) - The current portion of long-term debt increased substantially from **$8.3 million** at December 31, 2024, to **$1,680.7 million** at June 30, 2025[37](index=37&type=chunk) [Key Product Net Sales](index=13&type=section&id=9.3%20Key%20Product%20Net%20Sales) Several key global products showed mixed performance in Q2 and H1 2025, with Lipitor®, Norvasc®, EpiPen®, Lyrica®, Creon®, Effexor®, and Zoloft® generally seeing increases in net sales for both periods, while Viagra®, Celebrex®, and Xalabrands experienced declines, and among key segment products, Yupelri® and Amitiza® grew, while Dymista® and Xanax® declined Key Product Net Sales (Selected Global Products) | Product | Q2 2025 (Millions) | Q2 2024 (Millions) | H1 2025 (Millions) | H1 2024 (Millions) | | :------------------ | :----------------- | :----------------- | :----------------- | :----------------- | | Lipitor ® | $387.9 | $348.4 | $775.9 | $737.3 | | Norvasc ® | $182.7 | $161.9 | $355.0 | $338.2 | | EpiPen® Auto-Injectors | $136.8 | $115.5 | $233.5 | $195.7 | | Lyrica ® | $128.1 | $124.3 | $240.7 | $238.5 | | Viagra ® | $100.3 | $106.1 | $198.8 | $206.8 | | Creon ® | $91.4 | $78.2 | $173.8 | $153.2 | | Celebrex ® | $70.0 | $72.2 | $133.4 | $144.4 | | Effexor ® | $63.1 | $62.7 | $122.4 | $122.1 | | Zoloft ® | $61.1 | $58.9 | $121.3 | $116.9 | | Xalabrands | $40.7 | $45.6 | $77.8 | $88.1 | Key Product Net Sales (Selected Segment Products) | Product | Q2 2025 (Millions) | Q2 2024 (Millions) | H1 2025 (Millions) | H1 2024 (Millions) | | :------------------ | :----------------- | :----------------- | :----------------- | :----------------- | | Yupelri ® | $66.6 | $54.5 | $124.9 | $109.7 | | Dymista ® | $48.4 | $55.0 | $91.2 | $103.2 | | Amitiza ® | $41.6 | $36.9 | $74.9 | $69.9 | | Xanax ® | $33.9 | $35.4 | $66.2 | $69.9 | [Reconciliation of Non-GAAP Financial Measures](index=14&type=section&id=X.%20Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of U.S. GAAP financial measures to their non-GAAP counterparts, including adjusted net earnings, EBITDA, segment revenues, and free cash flow [U.S. GAAP Net Loss to Adjusted Net Earnings and EPS](index=14&type=section&id=10.1%20U.S.%20GAAP%20Net%20Loss%20to%20Adjusted%20Net%20Earnings%20and%20EPS) The reconciliation shows significant adjustments from U.S. GAAP net loss to adjusted net earnings, primarily due to purchase accounting amortization, goodwill impairment, litigation settlements, and other special items, with Q2 2025 adjusted net earnings at **$726.0 million** (Adjusted EPS **$0.62**) compared to a U.S. GAAP net loss of **$(4.6) million**, and H1 2025 adjusted net earnings at **$1,326.3 million** (Adjusted EPS **$1.11**) contrasting with a U.S. GAAP net loss of **$(3,046.6) million** Reconciliation of U.S. GAAP Net Loss to Adjusted Net Earnings and EPS (Selected Items) | Metric (Millions, except EPS) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | U.S. GAAP net loss | $(4.6) | $(326.4) | $(3,046.6) | $(212.5) | | Purchase accounting amortization | $597.8 | $709.9 | $1,181.3 | $1,321.6 | | Impairment of goodwill | $0.0 | $321.0 | $2,936.8 | $321.0 | | Litigation settlements and other contingencies, net | $(47.6) | $131.0 | $(121.1) | $207.8 | | Loss on divestitures of businesses | $43.8 | $258.8 | $80.7 | $188.4 | | Acquisition and divestiture-related costs | $53.7 | $105.1 | $94.4 | $192.6 | | Restructuring costs | $26.6 | $21.1 | $119.5 | $40.7 | | Share-based compensation expense | $37.1 | $34.7 | $92.3 | $81.4 | | Other special items | $395.2 | $(202.7) | $556.5 | $(203.5) | | Tax effect of above items | $(366.5) | $(222.8) | $(548.8) | $(286.9) | | **Adjusted net earnings** | **$726.0** | **$826.5** | **$1,326.3** | **$1,639.2** | | **Adjusted EPS** | **$0.62** | **$0.69** | **$1.11** | **$1.36** | - The goodwill impairment charge of **$2.9 billion** for the six months ended June 30, 2025, was a primary driver of the difference between U.S. GAAP net loss and adjusted net earnings[42](index=42&type=chunk) [U.S. GAAP Net Loss to EBITDA and Adjusted EBITDA](index=15&type=section&id=10.2%20U.S.%20GAAP%20Net%20Loss%20to%20EBITDA%20and%20Adjusted%20EBITDA) The reconciliation from U.S. GAAP net loss to EBITDA and Adjusted EBITDA highlights the impact of non-operating and non-cash items, with Q2 2025 EBITDA at **$577.8 million** and Adjusted EBITDA at **$1,078.8 million**, while H1 2025 EBITDA was **$(1,739.0) million**, primarily due to the goodwill impairment, and Adjusted EBITDA was **$2,002.3 million** Reconciliation of U.S. GAAP Net Loss to EBITDA and Adjusted EBITDA (Selected Items) | Metric (Millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | U.S. GAAP net loss | $(4.6) | $(326.4) | $(3,046.6) | $(212.5) | | Income tax (benefit) provision | $(212.5) | $(65.4) | $(267.5) | $25.3 | | Interest expense | $116.6 | $145.8 | $232.1 | $284.2 | | Depreciation and amortization | $678.3 | $786.3 | $1,343.0 | $1,477.3 | | **EBITDA** | **$577.8** | **$540.3** | **$(1,739.0)** | **$1,574.3** | | Share-based compensation expense | $37.1 | $34.7 | $92.3 | $81.4 | | Litigation settlements and other contingencies, net | $(47.6) | $131.0 | $(121.1) | $207.8 | | Loss on divestitures of businesses | $43.8 | $258.8 | $80.7 | $188.4 | | Impairment of goodwill | $0.0 | $321.0 | $2,936.8 | $321.0 | | Restructuring, acquisition and divestiture-related and other special items | $467.7 | $(77.9) | $752.6 | $28.4 | | **Adjusted EBITDA** | **$1,078.8** | **$1,207.9** | **$2,002.3** | **$2,401.3** | - EBITDA for the six months ended June 30, 2025, was significantly negative at **$(1,739.0) million**, primarily due to the **$2.9 billion** goodwill impairment charge[43](index=43&type=chunk) [Summary of Total Revenues by Segment](index=16&type=section&id=10.3%20Summary%20of%20Total%20Revenues%20by%20Segment) The segment revenue breakdown for Q2 2025 shows Developed Markets net sales decreased by **9%** (**4%** divestiture-adjusted operational), JANZ decreased by **13%** (**11%** divestiture-adjusted operational), and Emerging Markets decreased by **4%** (**1%** divestiture-adjusted operational increase), while Greater China was a strong performer, with net sales increasing by **9%** (**9%** divestiture-adjusted operational), and similar trends were observed for H1 2025 Total Net Sales by Segment (Q2 2025 vs Q2 2024) | Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | Reported Change | Divestiture Adjusted Operational Change | | :---------------- | :----------------- | :----------------- | :-------------- | :------------------------------------ | | Developed Markets | $2,119.3 | $2,319.2 | (9)% | (4)% | | Greater China | $588.9 | $539.0 | 9% | 9% | | JANZ | $305.7 | $349.6 | (13)% | (11)% | | Emerging Markets | $555.1 | $578.1 | (4)% | 1% | | **Total net sales** | **$3,569.0** | **$3,785.9** | **(6)%** | **(2)%** | Total Net Sales by Segment (H1 2025 vs H1 2024) | Segment | H1 2025 (Millions) | H1 2024 (Millions) | Reported Change | Divestiture Adjusted Operational Change | | :---------------- | :----------------- | :----------------- | :-------------- | :------------------------------------ | | Developed Markets | $4,011.0 | $4,484.6 | (11)% | (4)% | | Greater China | $1,144.4 | $1,082.9 | 6% | 7% | | JANZ | $581.8 | $667.4 | (13)% | (9)% | | Emerging Markets | $1,075.0 | $1,204.5 | (11)% | (2)% | | **Total net sales** | **$6,812.2** | **$7,439.4** | **(8)%** | **(2)%** | - The estimated negative Indore Impact on total revenues was approximately **$160 million** for Q2 2025 and **$300 million** for H1 2025[27](index=27&type=chunk) [Reconciliation of Statements of Operations Line Items](index=17&type=section&id=10.4%20Reconciliation%20of%20Statements%20of%20Operations%20Line%20Items) This section provides detailed reconciliations of various U.S. GAAP operating expense lines to their adjusted non-GAAP counterparts, with key adjustments including purchase accounting amortization, acquisition and divestiture-related costs, restructuring costs, and share-based compensation, which significantly impact adjusted gross profit, R&D, SG&A, and earnings from operations Reconciliation of U.S. GAAP to Adjusted Operating Expenses (Selected Items) | Metric (Millions) | Q2 2025 (GAAP) | Q2 2025 (Adjusted) | H1 2025 (GAAP) | H1 2025 (Adjusted) | | :------------------------------------------ | :------------- | :----------------- | :------------- | :----------------- | | Cost of sales | $2,249.2 | $1,553.7 | $4,342.3 | $2,988.4 | | Gross profit | $1,332.9 | $2,028.4 | $2,494.1 | $3,848.0 | | Gross margin | 37% | 57% | 36.5% | 56.3% | | Research and development | $218.8 | $211.2 | $440.8 | $428.7 | | Selling, general and administrative | $928.7 | $826.0 | $1,876.8 | $1,604.7 | | Total operating expenses | $1,099.9 | $1,037.2 | $5,143.3 | $2,043.4 | | Earnings from operations | $233.0 | $991.2 | $(2,649.2) | $1,804.6 | | Interest expense | $116.6 | $126.1 | $232.1 | $250.8 | | Other expense (income), net | $333.5 | $(14.8) | $432.8 | $(53.8) | | Loss before income taxes | $(217.1) | $880.0 | $(3,314.1) | $1,607.7 | | Income tax (benefit) provision | $(212.5) | $154.0 | $(267.5) | $281.3 | | Adjusted effective tax rate | - | 17.5% | - | 17.5% | - Adjusted gross margin for Q2 2025 was **57%**, significantly higher than the U.S. GAAP gross margin of **37.2%**[6](index=6&type=chunk)[48](index=48&type=chunk) - Adjusted earnings from operations for H1 2025 were **$1,804.6 million**, contrasting sharply with the U.S. GAAP loss from operations of **$(2,649.2) million**, primarily due to the goodwill impairment adjustment[34](index=34&type=chunk)[49](index=49&type=chunk) [Reconciliation of Estimated 2025 U.S. GAAP Net Cash Provided by Operating Activities to Free Cash Flow](index=19&type=section&id=10.5%20Reconciliation%20of%20Estimated%202025%20U.S.%20GAAP%20Net%20Cash%20Provided%20by%20Operating%20Activities%20to%20Free%20Cash%20Flow) This section provides the reconciliation of the estimated 2025 U.S. GAAP Net Cash provided by Operating Activities to Free Cash Flow, projecting an estimated Free Cash Flow between **$1.8 billion** and **$2.2 billion** after deducting estimated capital expenditures of **$300 million** to **$400 million** from the estimated U.S. GAAP Net Cash provided by Operating Activities (**$2.2 billion** to **$2.5 billion**) Reconciliation of Estimated 2025 U.S. GAAP Net Cash Provided by Operating Activities to Free Cash Flow | (In millions) | Estimated Ranges | | :------------------------------------------ | :--------------- | | Estimated U.S. GAAP Net Cash provided by Operating Activities | $2,200 - $2,500 | | Less: Capital Expenditures | $(300) - $(400) | | Free Cash Flow | $1,800 - $2,200 | - The reconciliation excludes the impact of any transaction-related costs[50](index=50&type=chunk)[51](index=51&type=chunk)

FOR IMMEDIATE RELEASE CONTACT: James Francis, VP - IR Jessica Batt, VP - IR Date: August 7, 2025 IR@maximus.com Maximus Reports Fiscal Year 2025 Third Quarter Results Third Consecutive Raise to FY25 Guidance Caswell added, "Over the 50 years that Maximus has served as a trusted and impartial delivery partner for government, we've consistently demonstrated adaptability as legislation and regulatory changes lead to new program imperatives and advanced technologies like AI reshape citizen services." Third Quar ...

Q2 2025 Earnings Overview [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Q2 2025 revenue grew 4.2% to **$1.1 billion** (organic decline 3.3%), with operating earnings up significantly and adjusted EBITDA margin contracting - The company's strategy in Q2 focused on driving growth in resilient markets like K-12 staffing (Education), telecom/engineering (SET), and payroll outsourcing (ETM), while managing resources in areas with slower hiring[3](index=3&type=chunk) Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $1.1 billion | $1.06 billion | +4.2% | | Organic Revenue | - | - | -3.3% | | **Operating Earnings** | $22.2 million | $12.2 million | +82.0% | | Adjusted Operating Earnings | $24.6 million | $28.1 million | -12.4% | | **Adjusted EBITDA** | $37.0 million | $40.5 million | -8.7% | | Adjusted EBITDA Margin | 3.4% | 3.8% | -40 bps | | **Diluted EPS** | $0.52 | $0.12 | +333.3% | | Adjusted Diluted EPS | $0.54 | $0.71 | -23.9% | H1 2025 Key Financial Metrics (vs. H1 2024) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $2.3 billion | $2.1 billion | +7.8% | | Organic Revenue | - | - | -1.6% | | **Operating Earnings** | $33.0 million | $39.0 million | -15.4% | | Adjusted Operating Earnings | $46.7 million | $51.2 million | -8.8% | | **Adjusted EBITDA** | $71.9 million | $73.8 million | -2.6% | | Adjusted EBITDA Margin | 3.2% | 3.5% | -30 bps | | **Diluted EPS** | $0.67 | $0.83 | -19.3% | | Adjusted Diluted EPS | $0.93 | $1.26 | -26.2% | - The company expects a year-over-year revenue decline of **5% to 7%** in Q3, driven by reduced demand from U.S. federal contractors and certain large customers, but anticipates an adjusted EBITDA margin expansion of **80 to 90 bps** in Q3[7](index=7&type=chunk) [Corporate Developments](index=2&type=section&id=Corporate%20Developments) The company declared a quarterly cash dividend of **$0.075 per share** and appointed Nick Zuhlke as the new VP, Controller, and Chief Accounting Officer - The Board of Directors declared a quarterly dividend of **$0.075 per share**, payable on September 3, 2025, to stockholders of record as of August 20, 2025[9](index=9&type=chunk) - Effective August 11, 2025, Nick Zuhlke is appointed as the new Vice President, Controller, and Chief Accounting Officer, succeeding the retiring Laura Lockhart[11](index=11&type=chunk) Consolidated Financial Statements [Consolidated Statements of Earnings](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings) Q2 2025 revenue increased 4.2% to **$1.1 billion**, with net earnings surging to **$19.0 million**, while H1 net earnings decreased 18.3% to **$24.8 million** Q2 Statement of Earnings Highlights (in millions) | Account | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue from services | $1,101.8 | $1,057.5 | 4.2% | | Gross profit | $225.5 | $213.7 | 5.5% | | Earnings from operations | $22.2 | $12.2 | 81.0% | | Net earnings | $19.0 | $4.6 | 314.7% | | Diluted EPS | $0.52 | $0.12 | 333.3% | H1 Statement of Earnings Highlights (in millions) | Account | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue from services | $2,266.7 | $2,102.6 | 7.8% | | Gross profit | $462.0 | $419.4 | 10.2% | | Earnings from operations | $33.0 | $39.0 | -15.5% | | Net earnings | $24.8 | $30.4 | -18.3% | | Diluted EPS | $0.67 | $0.83 | -19.3% | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$2.51 billion**, while long-term debt was significantly reduced to **$74.3 million**, improving the debt-to-capital ratio to **5.5%** Balance Sheet Summary (in millions) | Account | June 29, 2025 | Dec 29, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Cash and equivalents | $18.0 | $39.0 | $38.2 | | Total current assets | $1,253.1 | $1,365.5 | $1,310.8 | | **Total Assets** | **$2,511.9** | **$2,632.3** | **$2,628.2** | | Total current liabilities | $826.7 | $826.5 | $812.3 | | Long-term debt | $74.3 | $239.4 | $210.4 | | **Total Liabilities** | **$1,245.8** | **$1,397.7** | **$1,348.3** | | **Total stockholders' equity** | **$1,266.1** | **$1,234.6** | **$1,279.9** | | Working Capital | $426.4 | $539.0 | $498.5 | | Debt-to-capital % | 5.5% | 16.2% | 14.1% | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 net cash from operating activities significantly improved to **$119.3 million**, while financing activities used **$172.7 million** primarily for debt repayment H1 2025 Cash Flow Summary (in millions) | Cash Flow Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $119.3 | $32.2 | | Net cash from (used in) investing activities | $24.7 | $(353.1) | | Net cash used in (from) financing activities | $(172.7) | $201.6 | | **Net change in cash** | **$(21.1)** | **$(122.0)** | | Cash at end of period | $24.5 | $45.6 | - Year-to-date free cash flow was **$114.8 million**, a substantial increase from **$25.5 million** in the same period of 2024, driven by stronger operating cash flow[28](index=28&type=chunk)[42](index=42&type=chunk) Segment and Revenue Analysis [Segment Performance](index=6&type=section&id=Segment%20Performance) Q2 2025 saw strong revenue growth in SET (**19.4%**) and Education (**5.6%**), driven by acquisitions, while ETM revenue declined by **3.9%** [Enterprise Talent Management (ETM)](index=6&type=section&id=Enterprise%20Talent%20Management%20(ETM)) ETM revenue decreased by **3.9%** in Q2 and **1.0%** in H1 2025, with adjusted business unit profit falling **22.6%** in Q2 due to margin pressure ETM Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $520.2 | $541.2 | -3.9% | $1,054.2 | $1,065.3 | -1.0% | | Adjusted Business Unit Profit | $12.2 | $15.8 | -22.6% | $21.7 | $24.6 | -11.4% | [Science, Engineering & Technology (SET)](index=6&type=section&id=Science%2C%20Engineering%20%26%20Technology%20(SET)) SET revenue grew significantly by **19.4%** in Q2 and **28.6%** in H1 2025, primarily due to the MRP acquisition, with adjusted profit also increasing SET Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $317.3 | $265.7 | 19.4% | $639.7 | $497.3 | 28.6% | | Adjusted Business Unit Profit | $20.2 | $19.2 | 4.9% | $34.7 | $33.4 | 3.6% | [Education](index=6&type=section&id=Education) The Education segment continued steady growth, with revenue up **5.6%** in Q2 and **6.1%** in H1 2025, and adjusted business unit profit also increasing Education Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $265.3 | $251.1 | 5.6% | $574.3 | $541.0 | 6.1% | | Adjusted Business Unit Profit | $13.7 | $12.7 | 7.9% | $33.0 | $30.8 | 7.1% | [Revenue from Services by Service Type](index=11&type=section&id=Revenue%20from%20Services%20by%20Service%20Type) Q2 2025 Staffing Services remained the largest revenue source at **$733.0 million**, while Permanent Placement revenue showed strong growth of **38.3%** Q2 Revenue by Service Type (in millions) | Service Type | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Staffing Services | $733.0 | $705.4 | +3.9% | | Outcome-based Services | $228.1 | $224.0 | +1.8% | | Talent Solutions | $126.9 | $117.9 | +7.6% | | Permanent Placement | $14.8 | $10.7 | +38.3% | H1 Revenue by Service Type (in millions) | Service Type | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Staffing Services | $1,526.5 | $1,420.1 | +7.5% | | Outcome-based Services | $470.7 | $442.2 | +6.4% | | Talent Solutions | $244.7 | $222.6 | +9.9% | | Permanent Placement | $26.3 | $18.7 | +40.6% | Reconciliation of Non-GAAP Measures [Reconciliation of Earnings and EPS](index=13&type=section&id=Reconciliation%20of%20Earnings%20and%20EPS) GAAP net earnings for Q2 2025 of **$19.0 million** were adjusted to **$19.8 million**, with adjusted diluted EPS at **$0.54**, reflecting exclusions for non-core items Q2 Reconciliation of Earnings from Operations (in millions) | Description | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **As reported (GAAP)** | **$22.2** | **$12.2** | | Integration and realignment costs | $6.1 | - | | Transaction costs | $0.1 | $1.6 | | (Gain) loss on sale of EMEA staffing | $(4.0) | $10.0 | | Other adjustments | $0.2 | $15.3 | | **Adjusted earnings from operations** | **$24.6** | **$28.1** | Q2 Reconciliation of Diluted EPS | Description | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **As reported (GAAP)** | **$0.52** | **$0.12** | | Adjustments (net of tax) | $0.02 | $0.59 | | **Adjusted net earnings per share** | **$0.54** | **$0.71** | [Reconciliation of Adjusted EBITDA](index=15&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Q2 2025 Adjusted EBITDA decreased to **$37.0 million** (margin **3.4%**), and H1 Adjusted EBITDA was **$71.9 million**, with reconciliation starting from GAAP net earnings Reconciliation to Adjusted EBITDA (in millions) | Description | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings (GAAP) | $19.0 | $4.6 | $24.8 | $30.4 | | Adjustments (Taxes, D&A, etc.) | $15.7 | $12.2 | $33.4 | $24.6 | | EBITDA | $34.7 | $16.8 | $58.2 | $55.0 | | Other specific adjustments | $2.3 | $23.7 | $13.7 | $18.8 | | **Adjusted EBITDA** | **$37.0** | **$40.5** | **$71.9** | **$73.8** | | **Adjusted EBITDA Margin** | **3.4%** | **3.8%** | **3.2%** | **3.5%** | [Explanation of Non-GAAP Adjustments](index=17&type=section&id=Explanation%20of%20Non-GAAP%20Adjustments) Non-GAAP adjustments enhance comparability by excluding non-core items, including 2025 integration and executive transition costs, and 2024 restructuring and asset impairment charges - **Integration and Realignment Costs (2025):** Totaled **$16.8 million** year-to-date, related to integrating MRP and other acquisitions, including IT charges, severance, and other fees[47](index=47&type=chunk) - **Transaction Costs (2024/2025):** Costs related to the sale of EMEA staffing operations and, in 2024, **$7.9 million** related to the MRP acquisition[47](index=47&type=chunk) - **Executive Transition Costs (2025):** Non-recurring expenses associated with the CEO transition[48](index=48&type=chunk) - **Restructuring Charges (2024):** Costs from a transformation initiative started in 2023 to streamline the operating model, including severance and execution costs[51](index=51&type=chunk) - **Asset Impairment Charge (2024):** A charge for right-of-use assets related to the leased headquarters facility due to changes in building utilization[52](index=52&type=chunk)

Q2 2025 Earnings Overview [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Q2 2025 revenue grew 4.2% to **$1.1 billion** (organic decline 3.3%), with operating earnings up significantly and adjusted EBITDA margin contracting - The company's strategy in Q2 focused on driving growth in resilient markets like K-12 staffing (Education), telecom/engineering (SET), and payroll outsourcing (ETM), while managing resources in areas with slower hiring[3](index=3&type=chunk) Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $1.1 billion | $1.06 billion | +4.2% | | Organic Revenue | - | - | -3.3% | | **Operating Earnings** | $22.2 million | $12.2 million | +82.0% | | Adjusted Operating Earnings | $24.6 million | $28.1 million | -12.4% | | **Adjusted EBITDA** | $37.0 million | $40.5 million | -8.7% | | Adjusted EBITDA Margin | 3.4% | 3.8% | -40 bps | | **Diluted EPS** | $0.52 | $0.12 | +333.3% | | Adjusted Diluted EPS | $0.54 | $0.71 | -23.9% | H1 2025 Key Financial Metrics (vs. H1 2024) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Revenue** | $2.3 billion | $2.1 billion | +7.8% | | Organic Revenue | - | - | -1.6% | | **Operating Earnings** | $33.0 million | $39.0 million | -15.4% | | Adjusted Operating Earnings | $46.7 million | $51.2 million | -8.8% | | **Adjusted EBITDA** | $71.9 million | $73.8 million | -2.6% | | Adjusted EBITDA Margin | 3.2% | 3.5% | -30 bps | | **Diluted EPS** | $0.67 | $0.83 | -19.3% | | Adjusted Diluted EPS | $0.93 | $1.26 | -26.2% | - The company expects a year-over-year revenue decline of **5% to 7%** in Q3, driven by reduced demand from U.S. federal contractors and certain large customers, but anticipates an adjusted EBITDA margin expansion of **80 to 90 bps** in Q3[7](index=7&type=chunk) [Corporate Developments](index=2&type=section&id=Corporate%20Developments) The company declared a quarterly cash dividend of **$0.075 per share** and appointed Nick Zuhlke as the new VP, Controller, and Chief Accounting Officer - The Board of Directors declared a quarterly dividend of **$0.075 per share**, payable on September 3, 2025, to stockholders of record as of August 20, 2025[9](index=9&type=chunk) - Effective August 11, 2025, Nick Zuhlke is appointed as the new Vice President, Controller, and Chief Accounting Officer, succeeding the retiring Laura Lockhart[11](index=11&type=chunk) Consolidated Financial Statements [Consolidated Statements of Earnings](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings) Q2 2025 revenue increased 4.2% to **$1.1 billion**, with net earnings surging to **$19.0 million**, while H1 net earnings decreased 18.3% to **$24.8 million** Q2 Statement of Earnings Highlights (in millions) | Account | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue from services | $1,101.8 | $1,057.5 | 4.2% | | Gross profit | $225.5 | $213.7 | 5.5% | | Earnings from operations | $22.2 | $12.2 | 81.0% | | Net earnings | $19.0 | $4.6 | 314.7% | | Diluted EPS | $0.52 | $0.12 | 333.3% | H1 Statement of Earnings Highlights (in millions) | Account | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue from services | $2,266.7 | $2,102.6 | 7.8% | | Gross profit | $462.0 | $419.4 | 10.2% | | Earnings from operations | $33.0 | $39.0 | -15.5% | | Net earnings | $24.8 | $30.4 | -18.3% | | Diluted EPS | $0.67 | $0.83 | -19.3% | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$2.51 billion**, while long-term debt was significantly reduced to **$74.3 million**, improving the debt-to-capital ratio to **5.5%** Balance Sheet Summary (in millions) | Account | June 29, 2025 | Dec 29, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | Cash and equivalents | $18.0 | $39.0 | $38.2 | | Total current assets | $1,253.1 | $1,365.5 | $1,310.8 | | **Total Assets** | **$2,511.9** | **$2,632.3** | **$2,628.2** | | Total current liabilities | $826.7 | $826.5 | $812.3 | | Long-term debt | $74.3 | $239.4 | $210.4 | | **Total Liabilities** | **$1,245.8** | **$1,397.7** | **$1,348.3** | | **Total stockholders' equity** | **$1,266.1** | **$1,234.6** | **$1,279.9** | | Working Capital | $426.4 | $539.0 | $498.5 | | Debt-to-capital % | 5.5% | 16.2% | 14.1% | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) H1 2025 net cash from operating activities significantly improved to **$119.3 million**, while financing activities used **$172.7 million** primarily for debt repayment H1 2025 Cash Flow Summary (in millions) | Cash Flow Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $119.3 | $32.2 | | Net cash from (used in) investing activities | $24.7 | $(353.1) | | Net cash used in (from) financing activities | $(172.7) | $201.6 | | **Net change in cash** | **$(21.1)** | **$(122.0)** | | Cash at end of period | $24.5 | $45.6 | - Year-to-date free cash flow was **$114.8 million**, a substantial increase from **$25.5 million** in the same period of 2024, driven by stronger operating cash flow[28](index=28&type=chunk)[42](index=42&type=chunk) Segment and Revenue Analysis [Segment Performance](index=6&type=section&id=Segment%20Performance) Q2 2025 saw strong revenue growth in SET (**19.4%**) and Education (**5.6%**), driven by acquisitions, while ETM revenue declined by **3.9%** [Enterprise Talent Management (ETM)](index=6&type=section&id=Enterprise%20Talent%20Management%20(ETM)) ETM revenue decreased by **3.9%** in Q2 and **1.0%** in H1 2025, with adjusted business unit profit falling **22.6%** in Q2 due to margin pressure ETM Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $520.2 | $541.2 | -3.9% | $1,054.2 | $1,065.3 | -1.0% | | Adjusted Business Unit Profit | $12.2 | $15.8 | -22.6% | $21.7 | $24.6 | -11.4% | [Science, Engineering & Technology (SET)](index=6&type=section&id=Science%2C%20Engineering%20%26%20Technology%20(SET)) SET revenue grew significantly by **19.4%** in Q2 and **28.6%** in H1 2025, primarily due to the MRP acquisition, with adjusted profit also increasing SET Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $317.3 | $265.7 | 19.4% | $639.7 | $497.3 | 28.6% | | Adjusted Business Unit Profit | $20.2 | $19.2 | 4.9% | $34.7 | $33.4 | 3.6% | [Education](index=6&type=section&id=Education) The Education segment continued steady growth, with revenue up **5.6%** in Q2 and **6.1%** in H1 2025, and adjusted business unit profit also increasing Education Segment Performance (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $265.3 | $251.1 | 5.6% | $574.3 | $541.0 | 6.1% | | Adjusted Business Unit Profit | $13.7 | $12.7 | 7.9% | $33.0 | $30.8 | 7.1% | [Revenue from Services by Service Type](index=11&type=section&id=Revenue%20from%20Services%20by%20Service%20Type) Q2 2025 Staffing Services remained the largest revenue source at **$733.0 million**, while Permanent Placement revenue showed strong growth of **38.3%** Q2 Revenue by Service Type (in millions) | Service Type | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Staffing Services | $733.0 | $705.4 | +3.9% | | Outcome-based Services | $228.1 | $224.0 | +1.8% | | Talent Solutions | $126.9 | $117.9 | +7.6% | | Permanent Placement | $14.8 | $10.7 | +38.3% | H1 Revenue by Service Type (in millions) | Service Type | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Staffing Services | $1,526.5 | $1,420.1 | +7.5% | | Outcome-based Services | $470.7 | $442.2 | +6.4% | | Talent Solutions | $244.7 | $222.6 | +9.9% | | Permanent Placement | $26.3 | $18.7 | +40.6% | Reconciliation of Non-GAAP Measures [Reconciliation of Earnings and EPS](index=13&type=section&id=Reconciliation%20of%20Earnings%20and%20EPS) GAAP net earnings for Q2 2025 of **$19.0 million** were adjusted to **$19.8 million**, with adjusted diluted EPS at **$0.54**, reflecting exclusions for non-core items Q2 Reconciliation of Earnings from Operations (in millions) | Description | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **As reported (GAAP)** | **$22.2** | **$12.2** | | Integration and realignment costs | $6.1 | - | | Transaction costs | $0.1 | $1.6 | | (Gain) loss on sale of EMEA staffing | $(4.0) | $10.0 | | Other adjustments | $0.2 | $15.3 | | **Adjusted earnings from operations** | **$24.6** | **$28.1** | Q2 Reconciliation of Diluted EPS | Description | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **As reported (GAAP)** | **$0.52** | **$0.12** | | Adjustments (net of tax) | $0.02 | $0.59 | | **Adjusted net earnings per share** | **$0.54** | **$0.71** | [Reconciliation of Adjusted EBITDA](index=15&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Q2 2025 Adjusted EBITDA decreased to **$37.0 million** (margin **3.4%**), and H1 Adjusted EBITDA was **$71.9 million**, with reconciliation starting from GAAP net earnings Reconciliation to Adjusted EBITDA (in millions) | Description | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net earnings (GAAP) | $19.0 | $4.6 | $24.8 | $30.4 | | Adjustments (Taxes, D&A, etc.) | $15.7 | $12.2 | $33.4 | $24.6 | | EBITDA | $34.7 | $16.8 | $58.2 | $55.0 | | Other specific adjustments | $2.3 | $23.7 | $13.7 | $18.8 | | **Adjusted EBITDA** | **$37.0** | **$40.5** | **$71.9** | **$73.8** | | **Adjusted EBITDA Margin** | **3.4%** | **3.8%** | **3.2%** | **3.5%** | [Explanation of Non-GAAP Adjustments](index=17&type=section&id=Explanation%20of%20Non-GAAP%20Adjustments) Non-GAAP adjustments enhance comparability by excluding non-core items, including 2025 integration and executive transition costs, and 2024 restructuring and asset impairment charges - **Integration and Realignment Costs (2025):** Totaled **$16.8 million** year-to-date, related to integrating MRP and other acquisitions, including IT charges, severance, and other fees[47](index=47&type=chunk) - **Transaction Costs (2024/2025):** Costs related to the sale of EMEA staffing operations and, in 2024, **$7.9 million** related to the MRP acquisition[47](index=47&type=chunk) - **Executive Transition Costs (2025):** Non-recurring expenses associated with the CEO transition[48](index=48&type=chunk) - **Restructuring Charges (2024):** Costs from a transformation initiative started in 2023 to streamline the operating model, including severance and execution costs[51](index=51&type=chunk) - **Asset Impairment Charge (2024):** A charge for right-of-use assets related to the leased headquarters facility due to changes in building utilization[52](index=52&type=chunk)

Table of Contents | UNITED STATES | | | | | | --- | --- | --- | --- | --- | | SECURITIES AND EXCHANGE COMMISSION | | | | | | Washington, D.C. 20549 _______________________________________________________________________________ | | | | | | 10-Q | | FORM | | | | | (Mark One) | | | | | 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 ...

[Amendment No. 4 to Credit Agreement](index=1&type=section&id=Amendment%20No.%204%20to%20Credit%20Agreement) [Introduction and Effectiveness](index=1&type=section&id=Introduction%20and%20Effectiveness) This fourth amendment to the July 24, 2023 Credit Agreement is enacted at the Borrower's request and is effective upon meeting specific conditions - This is the **fourth amendment** to the Credit Agreement dated July 24, 2023, entered into by iRobot Corporation as the Borrower and TCG Senior Funding L.L.C. as the Agent[2](index=2&type=chunk)[4](index=4&type=chunk) - The effectiveness of this amendment is contingent upon due execution by all parties, the **absence of any Default or Event of Default**, and the payment of all outstanding fees and expenses[9](index=9&type=chunk) [Representations, Warranties, and General Provisions](index=2&type=section&id=Representations%2C%20Warranties%2C%20and%20General%20Provisions) Loan Parties confirm their authority, reaffirm obligations, release claims against Lenders, and establish New York law as the governing jurisdiction - Each Loan Party represents and warrants that the execution and performance of this amendment are **within its corporate powers** and have been duly authorized[10](index=10&type=chunk) - Except for the specific changes outlined, the original Credit Agreement and other Loan Documents **remain unmodified and in full force and effect**[12](index=12&type=chunk) - The Loan Parties provide a **general release**, discharging the Agent and Lenders from any claims existing before the amendment's effective date, except those arising from gross negligence or willful misconduct[16](index=16&type=chunk) - The amendment and any related disputes shall be **governed by and construed in accordance with the laws of the State of New York**[19](index=19&type=chunk) [Signatories](index=6&type=section&id=Signatories) The amendment is executed by authorized representatives of the Borrower, Guarantors, the Administrative Agent, and all Lenders - The amendment is signed by **Gary Cohen, Chief Executive Officer of iRobot Corporation**[25](index=25&type=chunk) - Guarantors include iRobot US Holdings, LLC, iRobot UK Ltd, iRobot France, iRobot Iberia SLU, and iRobot Japan G.K[26](index=26&type=chunk)[27](index=27&type=chunk) - TCG Senior Funding L.L.C. signs as the Administrative Agent, and various Carlyle-affiliated funds and other entities sign as Lenders[28](index=28&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk) [Amended Credit Agreement](index=14&type=section&id=Amended%20Credit%20Agreement) [ARTICLE I: DEFINITIONS AND ACCOUNTING TERMS](index=20&type=section&id=ARTICLE%20I%20DEFINITIONS%20AND%20ACCOUNTING%20TERMS) This article defines key terms, financial metrics, and roles, and establishes U.S. GAAP as the accounting standard for the agreement - The agreement provides a comprehensive set of definitions for terms used throughout the document, including financial, legal, and operational terminology[58](index=58&type=chunk) - A **"Change of Control"** is defined to occur if any person or group acquires beneficial ownership of **more than 35%** of the Borrower's voting stock[151](index=151&type=chunk) - The **"Maturity Date"** for the loan is the third anniversary of the Closing Date, which was July 24, 2023[290](index=290&type=chunk) - All accounting terms are to be construed in conformity with **U.S. Generally Accepted Accounting Principles (GAAP)**, and financial calculations must be prepared accordingly[464](index=464&type=chunk) [ARTICLE II: THE COMMITMENTS AND CREDIT EXTENSIONS](index=93&type=section&id=ARTICLE%20II%20THE%20COMMITMENTS%20AND%20CREDIT%20EXTENSIONS) This article details the $200 million senior secured term loan, including borrowing procedures, interest, repayments, and fee structures Credit Facility Details | Term | Detail | | :--- | :--- | | **Facility Type** | Senior Secured Term Loan | | **Total Commitment** | $200,000,000 | | **Funding Date** | July 25, 2023 | | **Repayment** | Full principal due on the Maturity Date (3rd anniversary of Closing Date) | Interest and Fees | Item | Rate/Amount | | :--- | :--- | | **Applicable Rate (SOFR Loans)** | 9.00% per annum | | **Applicable Rate (Base Rate Loans)** | 8.00% per annum | | **PIK Interest Rate** | 2.50% per annum (paid in-kind, added to principal) | | **Cash Interest Rate** | Applicable Rate minus PIK Interest Rate | | **MOIC Premium** | Varies from 1.30x to 1.75x of principal, depending on timing and Amazon acquisition status | - Mandatory prepayments are required from **100% of net cash proceeds** from asset sales exceeding **$1.5 million** and from the issuance of other indebtedness[496](index=496&type=chunk)[497](index=497&type=chunk) - Specific rules govern the application of the "Amazon Break Fee" if received, starting with a **mandatory $35 million prepayment** of the loans[498](index=498&type=chunk) [ARTICLE III: TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY](index=117&type=section&id=ARTICLE%20III%20TAXES%2C%20INCREASED%20COSTS%20PROTECTION%20AND%20ILLEGALITY) This article protects Lenders from financial burdens by addressing tax withholdings, increased costs, and benchmark rate unavailability - The Borrower must make all payments without deduction for Taxes or **pay additional amounts** to ensure the Lender receives the full sum[573](index=573&type=chunk) - If changes in law increase a Lender's cost to maintain its loan, the Borrower must **compensate for such increased costs**[595](index=595&type=chunk)[596](index=596&type=chunk) - The agreement includes provisions to replace the benchmark interest rate (Term SOFR) with a **"Benchmark Replacement"** if a "Benchmark Transition Event" occurs[587](index=587&type=chunk) - The Borrower has the right to **replace any Lender** that requests compensation, becomes a Defaulting Lender, or is a "Non-Consenting Lender"[608](index=608&type=chunk) [ARTICLE IV: CONDITIONS PRECEDENT TO CREDIT EXTENSIONS](index=127&type=section&id=ARTICLE%20IV%20CONDITIONS%20PRECEDENT%20TO%20CREDIT%20EXTENSIONS) This article specifies conditions for the agreement's effectiveness, including executed documents, perfected security interests, and key third-party consents - Conditions for effectiveness included the delivery of executed Loan Documents, legal opinions, a solvency certificate, and **perfection of security interests** via UCC-1 filings[614](index=614&type=chunk)[615](index=615&type=chunk)[618](index=618&type=chunk) - A critical condition was the **termination of the Existing Credit Agreement** and the release of all associated liens[623](index=623&type=chunk) - The Borrower was required to obtain and deliver a **consent from Amazon**, in relation to the Amazon Acquisition Agreement, permitting the new financing[625](index=625&type=chunk) [ARTICLE V: REPRESENTATIONS AND WARRANTIES](index=131&type=section&id=ARTICLE%20V%20REPRESENTATIONS%20AND%20WARRANTIES) This article contains statements of fact from the Loan Parties regarding their legal status, financial accuracy, and compliance with laws - The Loan Parties represent they are duly organized and have the power to execute the Loan Documents without contravening laws or organizational documents[631](index=631&type=chunk)[632](index=632&type=chunk) - The Borrower represents that its financial statements **fairly present its financial condition** and that no Material Adverse Effect has occurred[636](index=636&type=chunk)[639](index=639&type=chunk) - The company represents compliance with key regulations, including **Sanctions Laws, OFAC, and Anti-Corruption Laws**[653](index=653&type=chunk)[661](index=661&type=chunk)[665](index=665&type=chunk) - On the Closing Date, the Borrower and its subsidiaries, on a consolidated basis, are represented to be **Solvent**[659](index=659&type=chunk) [ARTICLE VI: AFFIRMATIVE COVENANTS](index=139&type=section&id=ARTICLE%20VI%20AFFIRMATIVE%20COVENANTS) This article outlines the Borrower's ongoing obligations, including financial reporting, notice of defaults, and maintenance of corporate status and assets - The Borrower must deliver **audited annual, unaudited quarterly, and monthly financial reports** and a Compliance Certificate[673](index=673&type=chunk)[675](index=675&type=chunk)[681](index=681&type=chunk) - The Borrower is required to **promptly notify the Administrative Agent** upon the occurrence of any Default or Event of Default[689](index=689&type=chunk) - The company must maintain its legal existence, properties, and **adequate insurance coverage**[693](index=693&type=chunk)[695](index=695&type=chunk)[696](index=696&type=chunk) - New subsidiaries in an Applicable Jurisdiction must **become a Guarantor** and provide collateral within a specified timeframe[704](index=704&type=chunk) [ARTICLE VII: NEGATIVE COVENANTS](index=153&type=section&id=ARTICLE%20VII%20NEGATIVE%20COVENANTS) This article restricts the Borrower's ability to incur debt, grant liens, sell assets, or make restricted payments to protect Lender interests - The Borrower is prohibited from incurring additional Indebtedness or creating Liens on its assets, except as specifically permitted[717](index=717&type=chunk)[728](index=728&type=chunk) - The company cannot make any Asset Sale unless it receives at least **75% cash consideration** at fair market value and the aggregate value does not exceed **$1,000,000**[735](index=735&type=chunk) - **Restricted Payments**, including dividends and stock repurchases, are generally prohibited subject to specific exceptions[738](index=738&type=chunk) - The Borrower must maintain **Consolidated Core Assets of at least $250,000,000**, tested monthly, with this threshold subject to reduction based on certain prepayments[753](index=753&type=chunk) [ARTICLE VIII: EVENTS OF DEFAULT AND REMEDIES](index=172&type=section&id=ARTICLE%20VIII%20EVENTS%20OF%20DEFAULT%20AND%20REMEDIES) This article defines Events of Default and specifies the Lenders' right to accelerate the loan and demand immediate repayment - Events of Default include **non-payment**, failure to comply with covenants (notably the **Minimum Core Assets Test**), misrepresentations, and bankruptcy[771](index=771&type=chunk) - A cross-default is triggered by payment failure on other indebtedness with an aggregate principal amount of **$1.5 million or more**[773](index=773&type=chunk) - A **Change of Control** is also an Event of Default[776](index=776&type=chunk) - Upon an Event of Default, the Agent may declare the entire unpaid principal, accrued interest, and all other amounts **immediately due and payable**[778](index=778&type=chunk) [ARTICLE IX: ADMINISTRATIVE AGENT AND OTHER AGENTS](index=178&type=section&id=ARTICLE%20IX%20ADMINISTRATIVE%20AGENT%20AND%20OTHER%20AGENTS) This article outlines the authority and duties of the Administrative Agent, protecting it from liability except in cases of gross negligence - Each Lender irrevocably **appoints TCG to act as the Administrative Agent and Collateral Agent**, authorizing it to take actions on their behalf[785](index=785&type=chunk)[786](index=786&type=chunk) - The Agent is **exculpated from liability** for any action taken or omitted, except for its own gross negligence, bad faith, or willful misconduct[789](index=789&type=chunk) - The Agent is authorized to **release collateral or guarantors** in connection with transactions permitted by the agreement[807](index=807&type=chunk) - A detailed **"Erroneous Payments" clause** requires any recipient to immediately return any funds mistakenly sent by the Administrative Agent[821](index=821&type=chunk) [ARTICLE X: MISCELLANEOUS](index=194&type=section&id=ARTICLE%20X%20MISCELLANEOUS) This final article contains standard legal clauses covering amendments, notices, governing law, and assignment of loans - Amendments generally require the written consent of the **Required Lenders (holding more than 50% of the loans)** and the Borrower[833](index=833&type=chunk) - The agreement is **governed by the laws of the State of New York**, and all parties submit to the exclusive jurisdiction of New York courts[891](index=891&type=chunk)[892](index=892&type=chunk) - All parties to the agreement irrevocably **waive their right to a trial by jury** for any claim arising from the Loan Documents[896](index=896&type=chunk) - Lenders may assign their rights to Eligible Assignees but require the **Borrower's consent** unless a Specified Event of Default has occurred[857](index=857&type=chunk)[858](index=858&type=chunk)[859](index=859&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 28, 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 001-41755 WK Kellogg Co (Exact name of registrant as specified in its charter) Delaware 92-1243173 (State or other ...

[Executive Summary & Q1 FY26 Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Q1%20FY26%20Highlights) BARK achieved positive adjusted EBITDA and advanced diversification in Q1 FY26, exceeding revenue guidance and improving DTC gross margin [CEO Commentary](index=1&type=section&id=CEO%20Commentary) BARK's Co-Founder and CEO, Matt Meeker, reported solid progress in Q1 FY26, successfully maintaining positive adjusted EBITDA and advancing diversification efforts beyond subscription boxes - BARK's two clear priorities for fiscal 2026 are to maintain positive adjusted EBITDA and accelerate diversification beyond subscription boxes[3](index=3&type=chunk) - Revenue came in ahead of guidance, and the company achieved its strongest DTC gross margin quarter to date, driven by a shift toward higher-value Super Chewer customers[3](index=3&type=chunk) - The Commerce segment grew **50% year-over-year**, and BARK Air surpassed **$2 million in revenue**[3](index=3&type=chunk) [Fiscal First Quarter 2026 Key Financial Highlights](index=1&type=section&id=Fiscal%20First%20Quarter%202026%20Key%20Financial%20Highlights) BARK reported Q1 FY26 total revenue of $102.9 million, exceeding guidance despite an 11.5% year-over-year decline, with Commerce revenue surging and Adjusted EBITDA turning positive Q1 FY26 Key Financial Highlights | Metric | Q1 FY26 (Millions) | YoY Change | | :---------------------- | :----------------- | :--------- | | Total Revenue | $102.9 | -11.5% | | Commerce Revenue | $13.7 | +49.5% | | Direct-to-consumer gross margin | 67.0% | +250 bps | | Net Loss | $(7.0) | +$3.0M (improvement) | | Adjusted EBITDA | $0.1 | +$1.9M (improvement) | [Q1 FY26 Detailed Financial Performance](index=1&type=section&id=Q1%20FY26%20Detailed%20Financial%20Performance) This section details BARK's Q1 FY26 financial results, including revenue declines in DTC, strong Commerce growth, improved DTC gross margin, and reduced operating expenses leading to positive Adjusted EBITDA [Revenue Analysis](index=1&type=section&id=Revenue%20Analysis) Total revenue for Q1 FY26 was $102.9 million, an 11.5% decrease year-over-year, primarily due to fewer total orders and a strategic management of marketing spend Q1 FY26 Revenue Breakdown | Revenue Segment | Q1 FY26 (Millions) | YoY Change | Primary Driver/Reason |\ | :-------------------- | :----------------- | :--------- | :-------------------- |\ | Total Revenue | $102.9 | -11.5% | Fewer total orders, focus on profitability |\ | Direct to Consumer | $89.2 | -16.7% | Fewer total orders, marketing spend management |\ | Commerce | $13.7 | +49.5% | Strong growth at Costco, Amazon, Chewy, TJX | [Gross Profit and Margin](index=1&type=section&id=Gross%20Profit%20and%20Margin) Gross profit for Q1 FY26 decreased by 12.5% year-over-year to $64.1 million, primarily influenced by the decline in total revenue, while Direct-to-Consumer gross margin improved by 250 basis points Q1 FY26 Gross Profit and Margin | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :---------------------- | :----------------- | :----------------- | :--------- | | Gross Profit | $64.1 | $73.3 | -12.5% | | Consolidated Gross Margin | 62.3% | 63.0% | -0.7% | | DTC Gross Margin | 67.0% | 64.5% | +250 bps | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Operating expenses saw reductions in Q1 FY26, with advertising and marketing expenses decreasing to $15.2 million and general and administrative expenses also declining year-over-year Q1 FY26 Operating Expenses | Expense Category | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :------------------------ | :----------------- | :----------------- | :--------- | | Advertising and marketing | $15.2 | $20.4 | -25.5% |\ | General and administrative| $57.3 | $63.4 | -9.6% | [Net Loss and Adjusted EBITDA](index=1&type=section&id=Net%20Loss%20and%20Adjusted%20EBITDA) BARK demonstrated significant improvement in profitability for Q1 FY26, with net loss decreasing by $3.0 million and Adjusted EBITDA turning positive at $0.1 million Q1 FY26 Net Loss and Adjusted EBITDA | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :-------------- | :----------------- | :----------------- | :--------- | | Net Loss | $(7.0) | $(10.0) | +$3.0M (improvement) | | Adjusted EBITDA | $0.1 | $(1.8) | +$1.9M (improvement) | [Balance Sheet Highlights](index=2&type=section&id=Balance%20Sheet%20Highlights) BARK's balance sheet as of June 30, 2025, shows cash and equivalents at $84.7 million, increased inventory, stable total assets, and a rise in total liabilities [Key Balances as of June 30, 2025](index=2&type=section&id=Key%20Balances%20as%20of%20June%2030%2C%202025) As of June 30, 2025, BARK's cash and cash equivalents stood at $84.7 million, with inventory increasing to $98.1 million, while total liabilities rose to $166.0 million Balance Sheet Key Figures (June 30, 2025 vs. March 31, 2025) | Metric | June 30, 2025 (Thousands) | March 31, 2025 (Thousands) | Change (QoQ) | | :-------------------------- | :------------------------ | :------------------------- | :----------- | | Cash and cash equivalents | $84,665 | $94,022 | $(9,357) | | Inventory | $98,124 | $88,126 | +$9,998 | | Total Current Assets | $201,687 | $201,637 | +$50 | | Total Assets | $259,951 | $260,635 | $(684) | | Total Current Liabilities | $130,491 | $124,040 | +$6,451 | | Total Liabilities | $165,982 | $161,109 | +$4,873 | | Total Stockholders' Equity | $93,969 | $99,526 | $(5,557) | [Cash Flow Highlights](index=2&type=section&id=Cash%20Flow%20Highlights) BARK's Q1 FY26 cash flow saw net cash used in operating activities, primarily due to increased inventory, resulting in negative free cash flow [Q1 FY26 Cash Flow Summary](index=2&type=section&id=Q1%20FY26%20Cash%20Flow%20Summary) In Q1 FY26, BARK reported net cash used in operating activities of $(5.4) million, a shift from cash provided in the prior year, primarily driven by a $10.0 million net increase in inventory Q1 FY26 Cash Flow Summary | Cash Flow Activity | Q1 FY26 (Millions) | Q1 FY25 (Millions) | | :---------------------------------- | :----------------- | :----------------- | | Net cash (used in) provided by operating activities | $(5.4) | $1.8 | | Capital expenditures | $(0.7) | $(2.0) | | Free Cash Flow | $(6.1) | $(0.3) | | Net cash used in financing activities | $(2.1) | $(4.3) | | Net decrease in cash | $(8.3) | $(4.5) | - The **$10.0 million net increase in inventory** and **$1.8 million of share repurchases** contributed to the cash usage in the quarter[10](index=10&type=chunk) [Q2 FY26 Financial Outlook](index=2&type=section&id=Q2%20FY26%20Financial%20Outlook) BARK projects Q2 FY26 total revenue between $102.0 million and $105.0 million and Adjusted EBITDA between $(2.0) million and $2.0 million, withholding full-year guidance due to tariff uncertainties [Guidance for Fiscal Second Quarter 2026](index=2&type=section&id=Guidance%20for%20Fiscal%20Second%20Quarter%202026) BARK provided its financial outlook for Q2 FY26, projecting total revenue between $102.0 million and $105.0 million, and Adjusted EBITDA in the range of $(2.0) million to $2.0 million Q2 FY26 Financial Guidance | Metric | Q2 FY26 Guidance Range (Millions) | | :-------------- | :------------------------------- | | Total Revenue | $102.0 - $105.0 | | Adjusted EBITDA | $(2.0) - $2.0 | - BARK will not be providing full-year guidance at this time due to ongoing uncertainty surrounding tariffs and their impact on overall demand and operating costs[8](index=8&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Details for BARK's Q1 FY26 earnings conference call, held on August 7, 2025, including dial-in numbers and webcast access [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) A conference call to discuss BARK's first quarter fiscal year 2026 results was scheduled for August 7, 2025, at 8:30 a.m. ET, accessible via dial-in or live audio webcast - A conference call to discuss Q1 FY26 results was held on **August 7, 2025, at 8:30 a.m. ET**[12](index=12&type=chunk) - Access details include a U.S. dial-in number (**1-888-596-4144**), international number (**1-646-968-2525**), passcode (**5515653**), and a live audio webcast at **https://investors.bark.co/**[13](index=13&type=chunk) [About BARK](index=3&type=section&id=About%20BARK) BARK, founded in 2011, is a leading omnichannel dog brand dedicated to dog happiness through innovative products, services, and content, including subscriptions and specialized food [Company Overview](index=3&type=section&id=Company%20Overview) BARK, founded in 2011, is a leading global omnichannel dog brand committed to enhancing dog happiness through innovative products, services, and content - BARK is the world's most dog-centric company, devoted to making dogs happy with the best products, services, and content[14](index=14&type=chunk) - Founded in **2011**, BARK offers themed toys and treats subscriptions (BarkBox and BARK Super Chewer), custom product collections through retail partners (Target and Amazon), high-quality nutritious meals (BARK Food), and dental care products (BARK Bright®)[14](index=14&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section cautions that the press release contains forward-looking statements subject to risks and uncertainties, advising investors to consult the Company's Form 10-Q for detailed risk factors [Disclaimer and Risk Factors](index=3&type=section&id=Disclaimer%20and%20Risk%20Factors) This section highlights that the press release contains forward-looking statements based on current expectations, which are subject to various risks and uncertainties - This press release contains forward-looking statements based on current expectations, forecasts, and assumptions, which involve risks and uncertainties[15](index=15&type=chunk) - Actual results could differ materially due to factors including the uncertainty of projected financial information, risks related to pet spending, customer conversion, product line expansion, competition, and macroeconomic events[15](index=15&type=chunk) - Undue reliance should not be placed on these statements, and investors should refer to the 'Risk Factors' and 'Management's Discussion and Analysis of Financial Condition and Results of Operations' in the Company's Form 10-Q for more information[16](index=16&type=chunk) [Key Performance Indicators](index=4&type=section&id=Key%20Performance%20Indicators) This section defines and presents key performance indicators for Q1 FY26, including Total Orders and Average Order Value, alongside Direct to Consumer Gross Profit and Margin [Definitions of Key Performance Indicators](index=4&type=section&id=Definitions%20of%20Key%20Performance%20Indicators) BARK defines 'Total Orders' as the aggregate number of Direct-to-Consumer (DTC) orders shipped, and 'Average Order Value' (AOV) as DTC revenue divided by Total Orders - **Total Orders** are defined as the total number of DTC orders shipped in a given period, including all orders across all product categories, regardless of subscription, auto-ship, or one-off basis[17](index=17&type=chunk) - **Average Order Value (AOV)** is calculated by dividing Direct to Consumer revenue for the period by Total Orders for the same period[18](index=18&type=chunk) [Key Performance Indicator Data](index=5&type=section&id=Key%20Performance%20Indicator%20Data) For the three months ended June 30, 2025, Total Orders decreased to 2,819 thousand, Average Order Value slightly declined, and Direct to Consumer Gross Margin increased to 69.3% Key Performance Indicators (Three Months Ended June 30) | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------ | :------------ | :------------ | | Total Orders (in thousands) | 2,819 | 3,442 | | Average Order Value | $30.80 | $30.94 | | Direct to Consumer Gross Profit (in thousands) | $60,183 | $69,270 | | Direct to Consumer Gross Margin | 69.3% | 65.1% | [Condensed Consolidated Statement of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations%20and%20Comprehensive%20Loss) BARK's Q1 FY26 consolidated statement of operations shows a net loss of $(7.0) million, an improvement from the prior year, driven by reduced operating expenses despite lower total revenue [Q1 FY26 Consolidated Statement of Operations](index=5&type=section&id=Q1%20FY26%20Consolidated%20Statement%20of%20Operations) For Q1 FY26, BARK reported a net loss of $(7.0) million, an improvement from $(10.0) million in the prior year, with total revenue at $102.9 million and reduced operating expenses Condensed Consolidated Statement of Operations (Three Months Ended June 30) | Metric | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | | :-------------------------- | :------------------------ | :------------------------ | | REVENUE | $102,861 | $116,212 | | COST OF REVENUE | $38,784 | $42,946 | | Gross profit | $64,077 | $73,266 | | General and administrative | $57,252 | $63,426 | | Advertising and marketing | $15,178 | $20,432 | | Total operating expenses | $72,430 | $83,858 | | LOSS FROM OPERATIONS | $(8,353) | $(10,592) | | NET LOSS AND COMPREHENSIVE LOSS | $(7,030) | $(10,039) | [Disaggregated Revenue](index=6&type=section&id=Disaggregated%20Revenue) This section details BARK's Q1 FY26 revenue, showing a decline in Direct to Consumer revenue, particularly in Toys & Accessories, offset by significant growth in Commerce revenue and BARK Air contributions [Q1 FY26 Revenue by Segment and Category](index=6&type=section&id=Q1%20FY26%20Revenue%20by%20Segment%20and%20Category) In Q1 FY26, Direct to Consumer (DTC) revenue decreased to $89.2 million, while Commerce revenue significantly increased by 49.5% to $13.7 million, with BARK Air contributing $2.3 million Disaggregated Revenue (Three Months Ended June 30) | Revenue Category | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | | :------------------------ | :------------------------ | :------------------------ | | Direct to Consumer: | | | | Toys & Accessories | $51,800 | $70,569 | | Consumables | $35,030 | $35,904 | | Other (BARK Air) | $2,346 | $586 | | Total Direct to Consumer | $89,176 | $107,059 | | Commerce | $13,685 | $9,153 | | Total Revenue | $102,861 | $116,212 | [Gross Profit by Segment](index=6&type=section&id=Gross%20Profit%20by%20Segment) BARK's Q1 FY26 gross profit by segment shows a decrease in Direct to Consumer gross profit, while Commerce segment gross profit increased despite higher cost of revenue [Q1 FY26 Gross Profit by Segment](index=6&type=section&id=Q1%20FY26%20Gross%20Profit%20by%20Segment) For Q1 FY26, the Direct to Consumer (DTC) segment generated a gross profit of $59.7 million, a decrease from the prior year, while the Commerce segment's gross profit increased to $4.3 million Gross Profit by Segment (Three Months Ended June 30) | Segment | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | | :------------------------ | :------------------------ | :------------------------ | | Direct to Consumer: | | | | Revenue | $89,176 | $107,059 | | Cost of revenue | $29,431 | $38,051 | | Gross profit | $59,745 | $69,008 | | Commerce: | | | | Revenue | $13,685 | $9,153 | | Cost of revenue | $9,353 | $4,895 | | Gross profit | $4,332 | $4,258 | | Consolidated Gross profit | $64,077 | $73,266 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) This section presents BARK's consolidated balance sheets, highlighting total assets, liabilities, and stockholders' equity as of June 30, 2025, compared to the prior quarter [Balance Sheet Overview as of June 30, 2025](index=7&type=section&id=Balance%20Sheet%20Overview%20as%20of%20June%2030%2C%202025) As of June 30, 2025, BARK's total assets were $259.9 million, with cash and cash equivalents at $84.7 million and inventory at $98.1 million, while total liabilities increased to $166.0 million Consolidated Balance Sheets (June 30, 2025 vs. March 31, 2025) | Asset/Liability/Equity | June 30, 2025 (Thousands) | March 31, 2025 (Thousands) | | :------------------------------ | :------------------------ | :------------------------- | | Cash and cash equivalents | $84,665 | $94,022 | | Inventory | $98,124 | $88,126 | | Total current assets | $201,687 | $201,637 | | TOTAL ASSETS | $259,951 | $260,635 | | Total current liabilities | $130,491 | $124,040 | | Total liabilities | $165,982 | $161,109 | | Total stockholders' equity | $93,969 | $99,526 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) BARK's Q1 FY26 consolidated cash flow statements show net cash used in operating activities, primarily due to inventory increases, alongside investing and financing activities [Q1 FY26 Cash Flow Activities](index=8&type=section&id=Q1%20FY26%20Cash%20Flow%20Activities) For Q1 FY26, BARK reported net cash used in operating activities of $(5.4) million, largely due to a $10.3 million increase in inventory, alongside reduced investing and financing cash usage Consolidated Statements of Cash Flows (Three Months Ended June 30) | Cash Flow Activity | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | | :---------------------------------- | :------------------------ | :------------------------ | | Net loss | $(7,030) | $(10,039) | | Inventory change | $(10,283) | $2,521 | | Net cash (used in) provided by operating activities | $(5,440) | $1,792 | | Capital expenditures | $(708) | $(2,043) | | Net cash used in investing activities | $(708) | $(2,043) | | Payments to repurchase common stock | $(1,770) | $(4,286) | | Net cash used in financing activities | $(2,130) | $(4,300) | | NET DECREASE IN CASH | $(8,328) | $(4,530) | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) This section defines BARK's non-GAAP financial measures, including Adjusted Net Loss, Adjusted EBITDA, and Free Cash Flow, used to provide a clearer view of underlying business performance [Definitions of Non-GAAP Measures](index=9&type=section&id=Definitions%20of%20Non-GAAP%20Measures) BARK utilizes several non-GAAP financial measures, including Adjusted Net Loss, Adjusted EBITDA, and Free Cash Flow, to offer investors supplementary information on its operating performance - Non-GAAP measures include **Adjusted Net Loss**, **Adjusted Net Loss Margin**, **Adjusted Net Loss Per Common Share**, **Adjusted EBITDA**, **Adjusted EBITDA Margin**, and **Free Cash Flow**[31](index=31&type=chunk) - Adjusted Net Loss excludes stock-based compensation, change in fair value of warrants and derivatives, sales and use tax income, restructuring charges, litigation expenses, warehouse restructuring costs, impairment of assets, technology modernization costs, and other items[32](index=32&type=chunk) - Adjusted EBITDA further excludes interest income/expense, depreciation and amortization, and capitalized cloud computing amortization from Net Loss, in addition to items excluded from Adjusted Net Loss[34](index=34&type=chunk) - **Free Cash Flow** is defined as net cash provided by (used in) operating activities less capital expenditures[36](index=36&type=chunk) [Adjusted Net Loss Reconciliation](index=10&type=section&id=Adjusted%20Net%20Loss%20Reconciliation) For Q1 FY26, BARK's Adjusted Net Loss was $(2.8) million, an improvement from $(4.0) million in Q1 FY25, after adjusting for non-cash and non-recurring items Adjusted Net Loss Reconciliation (Three Months Ended June 30) | Metric | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | | :------------------------------ | :------------------------ | :------------------------ | | Net Loss | $(7,030) | $(10,039) | | Stock compensation expense | $3,594 | $2,941 | | Change in fair value of warrants and derivatives | $(782) | $391 | | Sales and use tax income | $(240) | $(1,303) | | Restructuring | $423 | $773 | | Litigation expenses | $176 | $387 | | Warehouse restructuring costs | $726 | $539 | | Impairment of assets | — | $799 | | Technology modernization | $323 | $707 | | Other items | $57 | $820 | | Adjusted net loss | $(2,753) | $(3,985) | | Adjusted net loss margin | (2.68)% | (3.43)% | | Adjusted net loss per common share | $(0.02) | $(0.02) | [Adjusted EBITDA Reconciliation](index=11&type=section&id=Adjusted%20EBITDA%20Reconciliation) BARK achieved a positive Adjusted EBITDA of $0.1 million in Q1 FY26, a significant improvement from $(1.8) million in Q1 FY25, after various adjustments to net loss Adjusted EBITDA Reconciliation (Three Months Ended June 30) | Metric | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | | :------------------------------ | :------------------------ | :------------------------ | | Net Loss | $(7,030) | $(10,039) | | Interest income | $(809) | $(1,479) | | Interest expense | $709 | $711 | | Depreciation and amortization expense | $2,520 | $2,879 | | Stock compensation expense | $3,594 | $2,941 | | Change in fair value of warrants and derivatives | $(782) | $391 | | Cloud computing amortization | $421 | $78 | | Sales and use tax income | $(240) | $(1,303) | | Restructuring | $423 | $773 | | Litigation expenses | $176 | $387 | | Warehouse restructuring costs | $726 | $539 | | Impairment of assets | — | $799 | | Technology modernization | $323 | $707 | | Other items | $57 | $820 | | Adjusted EBITDA | $88 | $(1,796) | | Adjusted EBITDA margin | 0.09% | (1.55)% | [Free Cash Flow Reconciliation](index=12&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free Cash Flow for Q1 FY26 was $(6.1) million, a decrease from $(0.3) million in Q1 FY25, derived from net cash used in operating activities less capital expenditures Free Cash Flow Reconciliation (Three Months Ended June 30) | Metric | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | | :-------------------------------------- | :------------------------ | :------------------------ | | Net cash (used in) provided by operating activities | $(5,440) | $1,792 | | Capital expenditures | $(708) | $(2,043) | | Free cash flow | $(6,148) | $(251) | [Contacts](index=12&type=section&id=Contacts) This section provides contact information for BARK's investor relations and media inquiries [Investor and Media Relations](index=12&type=section&id=Investor%20and%20Media%20Relations) This section provides the contact information for BARK's investor relations and media inquiries - Investor relations contact: **Michael Mougias** at **investors@barkbox.com**[46](index=46&type=chunk) - Media contact: **Garland Harwood** at **press@barkbox.com**[46](index=46&type=chunk)

Part I [Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements present Backblaze's financial position, operations, and cash flows, highlighting a 16% revenue increase, improved gross margin, and narrowed net loss [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$186.0 million** as of June 30, 2025, driven by property and equipment, while total liabilities and stockholders' equity also rose Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $32,187 | $45,776 | | Total current assets | $64,453 | $65,748 | | Property and equipment, net | $49,938 | $42,949 | | Total assets | $186,045 | $168,558 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $59,914 | $59,803 | | Total liabilities | $106,403 | $90,936 | | Total stockholders' equity | $79,642 | $77,622 | | Total liabilities and stockholders' equity | $186,045 | $168,558 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q2 2025 revenue grew **16%** to **$36.3 million**, with gross profit up **34%** and gross margin expanding to **63%**, significantly narrowing the net loss Statement of Operations Highlights (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $36,298 | $31,285 | $70,911 | $61,253 | | Gross Profit | $23,041 | $17,229 | $42,297 | $33,040 | | Loss from operations | $(6,717) | $(9,809) | $(15,637) | $(20,319) | | Net loss | $(7,097) | $(10,348) | $(16,421) | $(21,401) | | Net loss per share | $(0.13) | $(0.25) | $(0.30) | $(0.52) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Total stockholders' equity increased to **$79.6 million** by June 30, 2025, driven by stock-based compensation and option exercises, partially offset by net loss - The accumulated deficit grew to **$(212.4) million** as of June 30, 2025, from **$(196.0) million** at the end of 2024, reflecting the net loss for the period[20](index=20&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities improved to **$8.5 million** for the first six months of 2025, though overall cash and equivalents decreased by **$13.6 million** due to investing and financing activities Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,488 | $5,643 | | Net cash used in investing activities | $(14,689) | $(4,942) | | Net cash used in financing activities | $(7,388) | $(3,376) | | **Net decrease in cash and cash equivalents** | **$(13,589)** | **$(2,675)** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Notes detail accounting policies, including a change in equipment useful life, strong B2 Cloud Storage revenue growth, a new **$20 million** credit facility, and a **$10 million** share repurchase program - Effective April 1, 2025, the company extended the estimated useful lives of its data center equipment to a uniform **6 years**, reducing depreciation expense by approximately **$2.4 million** for the three and six months ended June 30, 2025[32](index=32&type=chunk)[33](index=33&type=chunk) Revenue by Product (in thousands) | Product | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | B2 Cloud Storage | $19,841 | $15,415 | 28.7% | | Computer Backup | $16,457 | $15,870 | 3.7% | | **Total revenue** | **$36,298** | **$31,285** | **16.0%** | - In June 2025, the company entered into a new **$20.0 million** senior secured revolving credit facility with Citizens Bank, N.A., maturing in June 2027[74](index=74&type=chunk) - In August 2025, the company announced a share repurchase program to purchase up to **$10.0 million** of its common stock through August 1, 2026, intended to be cash neutral by using proceeds from employee stock option exercises and ESPP purchases[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the strategic shift to up-market, **16%** revenue growth driven by B2 Cloud Storage, improved gross margin and non-GAAP metrics, and solid liquidity with a new **$20 million** credit facility [Overview](index=29&type=section&id=MD%26A%20Overview) Backblaze is transforming its go-to-market strategy to target up-market enterprise and AI customers with new product launches, serving over **500,000** customers globally - The company is actively moving up-market, evidenced by signing multiple deals with total contract values over **$1.0 million** each[117](index=117&type=chunk) - Recent product launches include B2 Overdrive, a premium high-throughput storage solution for AI/ML workloads, and a suite of enterprise cybersecurity features to expand the addressable market[118](index=118&type=chunk) [Key Business Metrics](index=31&type=section&id=Key%20Business%20Metrics) Total Annual Recurring Revenue (ARR) reached **$145.9 million** as of June 30, 2025, driven by **29%** growth in B2 Cloud Storage ARR, with overall NRR at **109%** Key Business Metrics as of June 30 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Total Company** | | | | Net revenue retention rate | 109% | 114% | | Gross customer retention rate | 90% | 90% | | Annual recurring revenue (in millions) | $145.9 | $126.3 | | **B2 Cloud Storage** | | | | Net revenue retention rate | 112% | 126% | | Annual recurring revenue (in millions) | $80.7 | $62.8 | | **Computer Backup** | | | | Net revenue retention rate | 106% | 105% | | Annual recurring revenue (in millions) | $65.2 | $63.5 | - The decrease in the NRR for B2 Cloud Storage is largely attributed to lapping the impact of the October 2023 price increase[129](index=129&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q2 2025 revenue grew **16%** to **$36.3 million**, with gross margin expanding to **63%** due to extended asset life, leading to a reduced operating loss - The **16%** YoY revenue growth in Q2 2025 was primarily driven by a **$4.4 million (29%)** increase in B2 Cloud Storage revenue, stemming from higher usage by existing customers and sales to new customers[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Gross margin improved to **63%** in Q2 2025 from **55%** in Q2 2024, with the extension of infrastructure equipment's useful life contributing **7 percentage points** to the margin improvement for the quarter[159](index=159&type=chunk) - Sales and Marketing expenses decreased by **$0.8 million (7%)** in Q2 2025 compared to Q2 2024, due to reduced headcount and more efficient, targeted marketing efforts[161](index=161&type=chunk)[163](index=163&type=chunk) [Non-GAAP Financial Measures](index=39&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP financial performance improved significantly, with Adjusted Gross Margin at **79%** and Adjusted EBITDA more than doubling to **$6.6 million (18% margin)** in Q2 2025 Reconciliation to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net loss and comprehensive loss | $(7,097) | $(10,348) | | Adjustments (Depreciation, Stock-Comp, etc.) | $13,703 | $13,091 | | **Adjusted EBITDA** | **$6,610** | **$2,743** | | **Adjusted EBITDA Margin** | **18%** | **9%** | Reconciliation to Adjusted Free Cash Flow (in thousands) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $8,488 | $5,643 | | Capital expenditures | $(5,471) | $(7,522) | | Principal payments on finance leases | $(9,277) | $(9,711) | | Other adjustments | $242 | $0 | | **Adjusted Free Cash Flow** | **$(6,018)** | **$(11,590)** | | **Adjusted Free Cash Flow Margin** | **(8)%** | **(19)%** | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity as of June 30, 2025, totaled **$50.5 million** in cash and marketable securities, supplemented by a new **$20.0 million** revolving credit facility, deemed sufficient for the next 12 months - Principal sources of liquidity as of June 30, 2025, were cash, cash equivalents, and marketable securities totaling **$50.5 million**[181](index=181&type=chunk) - On June 4, 2025, the company entered into a new **$20.0 million** senior secured revolving credit facility with Citizens Bank, N.A., which was undrawn as of June 30, 2025[184](index=184&type=chunk)[187](index=187&type=chunk) - In August 2025, the company announced a new share repurchase program of up to **$10 million**, intended to be funded by proceeds from employee stock exercises to be cash neutral[196](index=196&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposures are primarily interest rates and foreign currency, both considered minimal due to short-term investments and U.S. dollar-denominated sales - Interest rate risk primarily relates to future finance lease arrangements, with a **100 basis point** change not expected to materially affect financial position due to the short-term nature of investments[212](index=212&type=chunk) - Foreign currency risk is considered minimal as most sales are denominated in U.S. dollars, despite some expenses in foreign currencies[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - 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 (June 30, 2025)[216](index=216&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, these controls[217](index=217&type=chunk) Part II [Part II - Other Information](index=48&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - From time to time, the company may be involved in legal proceedings in the ordinary course of business, but it is not presently a party to any that are considered material[220](index=220&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) This section details numerous risks, including cumulative losses, intense competition, service disruptions, cybersecurity threats, and reliance on third-party vendors for critical infrastructure - The company has a history of cumulative losses (**$212.4 million** accumulated deficit as of June 30, 2025) and does not expect to be profitable for the foreseeable future due to continued investments in scaling the business[223](index=223&type=chunk) - The markets for cloud services are intensely competitive, with major competitors like AWS, Google Cloud, and Microsoft Azure having significantly greater resources, brand recognition, and broader service offerings[224](index=224&type=chunk) - The business relies on third-party vendors for critical components and services, including data centers and hard drives from limited sources, exposing it to potential supply chain and service disruptions[272](index=272&type=chunk) - Cybersecurity attacks, data breaches, or other system disruptions could damage the company's reputation, harm the business, and lead to significant costs and liabilities[225](index=225&type=chunk)[229](index=229&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities, no use of proceeds from registered securities, and no purchases of its equity securities during the period - There were no unregistered sales of equity securities during the reporting period[324](index=324&type=chunk) [Item 5. Other Information](index=73&type=section&id=Item%205.%20Other%20Information) CEO Gleb Budman terminated a Rule 10b5-1 trading plan on May 5, 2025 - CEO Gleb Budman terminated a previously adopted Rule 10b5-1 trading plan on May 5, 2025[327](index=327&type=chunk) [Item 6. Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Quarterly Report on Form 10-Q, including officer certifications and Interactive Data Files (XBRL) - The report includes certifications from the Principal Executive Officer and Principal Financial Officer as required by Sections 302 and 906 of the Sarbanes-Oxley Act[329](index=329&type=chunk) Signatures - The report was duly signed on August 7, 2025, by Gleb Budman, Chief Executive Officer, and Marc Suidan, Chief Financial Officer[333](index=333&type=chunk)

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%20%E2%80%94%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial information for the reported periods [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Acadian Asset Management Inc.'s unaudited condensed consolidated financial statements and detailed notes for the periods ended June 30, 2025 and 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (in millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $90.2 | $94.8 | | Investment advisory fees receivable | $124.2 | $164.7 | | Investments | $55.2 | $67.9 | | Total assets | $672.3 | $703.2 | | **Liabilities** | | | | Accrued incentive compensation | $66.0 | $119.6 | | Revolving credit facility | $20.0 | — | | Total liabilities | $585.4 | $616.1 | | **Equity** | | | | Retained earnings | $11.3 | $24.4 | | Total equity and redeemable non-controlling interests | $86.9 | $87.1 | - **Total assets** decreased by **$30.9 million** (**4.4%**) from **$703.2 million** at December 31, 2024, to **$672.3 million** at June 30, 2025, primarily due to decreases in investment advisory fees receivable and investments[8](index=8&type=chunk) - **Total liabilities** decreased by **$30.7 million** (**5.0%**) from **$616.1 million** at December 31, 2024, to **$585.4 million** at June 30, 2025, largely driven by a significant decrease in accrued incentive compensation[8](index=8&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net income Condensed Consolidated Statements of Operations (in millions, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------------------------- | :--------------------------- | :--------------------------- | :-------------- | :--------------------------- | :--------------------------- | :-------------- | | Total revenue | $127.4 | $109.0 | +16.9% | $247.3 | $214.7 | +15.2% | | Total operating expenses | $111.2 | $88.4 | +25.8% | $199.2 | $171.2 | +16.3% | | Operating income | $16.2 | $20.6 | -21.3% | $48.1 | $43.5 | +10.6% | | Income before income taxes | $23.6 | $17.1 | +38.0% | $55.7 | $38.9 | +43.2% | | Net income attributable to controlling interests | $10.1 | $11.0 | -8.2% | $30.2 | $25.6 | +18.0% | | Basic EPS attributable to controlling interests | $0.28 | $0.29 | -3.4% | $0.82 | $0.67 | +22.4% | | Diluted EPS attributable to controlling interests | $0.28 | $0.29 | -3.4% | $0.82 | $0.66 | +24.2% | - **Net consolidated Funds' investment gains** significantly increased to **$12.1 million** for the three months ended June 30, 2025, from **$0.8 million** in the prior year, and to **$15.7 million** for the six months ended June 30, 2025, from **$2.5 million** in the prior year[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section presents the company's net income and other comprehensive income components, reflecting changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Income (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $19.1 | $11.5 | $42.9 | $27.2 | | Total other comprehensive income | $1.1 | $0.8 | $2.3 | $1.3 | | Total comprehensive income attributable to controlling interests | $11.2 | $11.8 | $32.5 | $26.9 | - **Total other comprehensive income** increased for both the three-month period (from **$0.8 million** to **$1.1 million**) and the six-month period (from **$1.3 million** to **$2.3 million**) ended June 30, 2025, primarily due to amortization related to derivative securities and foreign currency translation adjustments[12](index=12&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section details the changes in the company's equity accounts, including net income, stock repurchases, and dividends Key Changes in Stockholders' Equity (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $10.1 | $11.0 | $30.2 | $25.6 | | Repurchase of common stock | $(23.8) | $(20.7) | $(43.4) | $(95.7) | | Dividends paid | $(0.4) | $(0.4) | $(0.8) | $(0.8) | | Total equity and redeemable non-controlling interests (End of Period) | $86.9 | $(18.8) | $86.9 | $(18.8) | - The company repurchased **0.9 million** shares for **$23.8 million** in Q2 2025, compared to **0.9 million** shares for **$20.7 million** in Q2 2024. For the six months, repurchases were **1.7 million** shares for **$43.4 million** in 2025, down from **4.4 million** shares for **$95.7 million** in 2024[13](index=13&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company across operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :----------------------------------- | :--------------------------- | :--------------------------- | | Net cash flows from operating activities | $12.8 | $5.3 | | Net cash flows from investing activities | $9.1 | $(18.8) | | Net cash flows from financing activities | $(26.9) | $(60.6) | | Net decrease in cash and cash equivalents | $(4.6) | $(74.2) | | Cash and cash equivalents at end of period | $93.9 | $73.4 | - **Net cash from operating activities** (including consolidated Funds) increased by **$7.5 million**, from **$5.3 million** in 2024 to **$12.8 million** in 2025[16](index=16&type=chunk) - **Net cash from investing activities** significantly improved, moving from an outflow of **$(18.8) million** in 2024 to an inflow of **$9.1 million** in 2025, primarily due to higher net sales of investment securities[16](index=16&type=chunk) - **Net cash used in financing activities** decreased by **$33.7 million**, from **$(60.6) million** in 2024 to **$(26.9) million** in 2025, mainly due to lower **common stock repurchases**[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1) Organization and Description of the Business](index=10&type=section&id=1)%20Organization%20and%20Description%20of%20the%20Business) This note describes Acadian Asset Management Inc.'s business operations and organizational structure - **Acadian Asset Management Inc.** operates a systematic investment management business through its majority-owned subsidiary, Acadian Asset Management LLC ('Acadian LLC'), offering diversified systematic investment strategies to institutional investors globally[21](index=21&type=chunk) - The company's **Quant & Solutions segment** utilizes advanced technology to identify mispriced assets and generate risk-adjusted returns, covering global, emerging market, non-U.S., small cap, enhanced equities, credit, and alternative strategies[21](index=21&type=chunk) Common Stock Repurchases (in millions) | Period | Shares Repurchased | Total Value (including commissions) | | :-------------------------------- | :----------------- | :---------------------------------- | | 6 Months Ended June 30, 2025 | 1,696,553 | $43.0 | | 6 Months Ended June 30, 2024 | 4,445,534 | $94.9 | [2) Basis of Presentation and Significant Accounting Policies](index=11&type=section&id=2)%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) This note outlines the accounting principles and policies used in preparing the financial statements - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, with all normal and recurring adjustments included[26](index=26&type=chunk) - Management makes estimates and assumptions that affect reported amounts, and actual results may differ materially[28](index=28&type=chunk) - The company adopted ASU 2024-01 (Compensation - Stock Compensation) in March 2024 with no material impact and is evaluating ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) for future periods, not expecting a material impact from ASU 2023-09[29](index=29&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk) [3) Investments](index=12&type=section&id=3)%20Investments) This note details the composition and valuation of the company's investment portfolio Investments Breakdown (in millions) | Investment Type | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Investments of consolidated Funds | $170.5 | $154.0 | | Other investments | $19.3 | $19.4 | | Investments related to long-term incentive compensation plans | $35.9 | $48.5 | | Total investments | $225.7 | $221.9 | - Unrealized gains for investments of consolidated Funds were **$12.3 million** for the three months ended June 30, 2025 (vs. **$(0.2) million** in 2024) and **$15.5 million** for the six months ended June 30, 2025 (vs. **$0.6 million** in 2024)[35](index=35&type=chunk) [4) Fair Value Measurements](index=13&type=section&id=4)%20Fair%20Value%20Measurements) This note explains the methodologies and hierarchy used to measure the fair value of assets and liabilities Fair Value Assets (in millions) as of June 30, 2025 | Asset Type | Level I | Level II | Level III | Uncategorized | Total | | :------------------------------------------ | :------ | :------- | :-------- | :------------ | :---- | | Common and preferred stock | $107.1 | — | — | — | $107.1 | | Corporate bonds | — | $62.6 | — | — | $62.6 | | Derivatives | $0.1 | $0.7 | — | — | $0.8 | | Investments related to long-term incentive compensation plans | $35.9 | — | — | — | $35.9 | | Investments in unconsolidated Funds | — | — | — | $19.3 | $19.3 | | **Total fair value assets** | **$143.1** | **$63.3** | **—** | **$19.3** | **$225.7** | Fair Value Liabilities (in millions) as of June 30, 2025 | Liability Type | Level I | Level II | Level III | Uncategorized | Total | | :-------------------- | :------ | :------- | :-------- | :------------ | :---- | | Securities sold short | $(25.7) | — | — | — | $(25.7) | | Derivatives | — | $(0.3) | — | — | $(0.3) | | **Total fair value liabilities** | **$(25.7)** | **$(0.3)** | **—** | **—** | **$(26.0)** | - Level I assets primarily include actively traded common and preferred stock and investments related to long-term incentive compensation plans. Level II assets include corporate bonds and derivatives valued using observable inputs[37](index=37&type=chunk)[41](index=41&type=chunk)[47](index=47&type=chunk) - Investments in unconsolidated Funds, primarily real estate investment funds, are valued using NAV as a practical expedient and are uncategorized within the fair value hierarchy[47](index=47&type=chunk) [5) Variable Interest Entities](index=16&type=section&id=5)%20Variable%20Interest%20Entities) This note discusses the company's involvement with and consolidation of Variable Interest Entities - The Company sponsors various Variable Interest Entities (VIEs), primarily Funds managed by Acadian LLC, and consolidates those where it is the primary beneficiary, typically when its ownership interest is substantial[49](index=49&type=chunk)[50](index=50&type=chunk) Consolidated VIEs Assets and Liabilities (in millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Investments | $170.5 | $154.0 | | Other assets | $10.3 | $5.3 | | Total Assets | $180.8 | $159.3 | | Liabilities | $27.1 | $21.2 | | Total Liabilities | $27.1 | $21.2 | - The Company's maximum exposure to loss from unconsolidated VIEs was **$19.3 million** at June 30, 2025, representing the carrying value of its investments in these entities[55](index=55&type=chunk) [6) Leases](index=17&type=section&id=6)%20Leases) This note provides information on the company's operating lease arrangements and related expenses Operating Lease Expenses (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total operating lease expense | $2.3 | $2.2 | $4.5 | $4.4 | | Operating cash flows from operating leases | $2.5 | $2.1 | $4.9 | $4.5 | - The weighted average remaining lease term was **8.0 years** at June 30, 2025, with a weighted average discount rate of **3.54%**[56](index=56&type=chunk) Maturities of Operating Lease Liabilities (in millions) | Year Ending December 31, | Amount | | :----------------------- | :----- | | 2025 (excluding 6 months ended June 30, 2025) | $4.7 | | 2026 | $9.5 | | 2027 | $9.1 | | 2028 | $8.7 | | 2029 | $8.0 | | Thereafter | $33.2 | | Total lease payments | $73.2 | | Less imputed interest | $(9.4) | | Total | $63.8 | [7) Borrowings and Debt](index=18&type=section&id=7)%20Borrowings%20and%20Debt) This note details the company's outstanding borrowings and long-term debt obligations Borrowings and Long-Term Debt (in millions) | Item | June 30, 2025 (Carrying Value) | December 31, 2024 (Carrying Value) | | :------------------------------------ | :----------------------------- | :------------------------------- | | Revolving credit facility | $20.0 | — | | $275 million 4.80% Senior Notes Due 2026 | $274.5 | $274.3 | | Total | $294.5 | $274.3 | - Acadian LLC's **$125 million** revolving credit facility was replaced with a new **$140 million** facility on August 29, 2024, maturing on August 29, 2027[61](index=61&type=chunk)[63](index=63&type=chunk) - The new revolving credit facility bears variable interest rates based on prime rate, federal funds effective rate, or Adjusted Term SOFR, plus additional amounts based on Acadian LLC's Leverage Ratio[64](index=64&type=chunk) [8) Commitments and Contingencies](index=19&type=section&id=8)%20Commitments%20and%20Contingencies) This note outlines the company's various commitments and potential contingent liabilities - The Company's subsidiaries are required to maintain minimum financial or capital requirements, with no known violations during the reported periods[66](index=66&type=chunk) - A guaranty for an office space security deposit of **$2.5 million** expires in 2033, with no related liabilities recorded[67](index=67&type=chunk) - Management does not believe any outstanding litigation or foreign tax contingencies will have a material adverse effect on the Company[68](index=68&type=chunk)[71](index=71&type=chunk) [9) Earnings Per Share](index=21&type=section&id=9)%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share for controlling interests Earnings Per Share (in millions, except per share data) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to controlling interests | $10.1 | $11.0 | $30.2 | $25.6 | | Weighted-average shares outstanding—basic | 35,912,023 | 37,547,741 | 36,633,243 | 38,305,631 | | Weighted-average shares outstanding—diluted | 35,929,662 | 38,238,620 | 36,651,092 | 38,985,030 | | Basic EPS attributable to controlling interests | $0.28 | $0.29 | $0.82 | $0.67 | | Diluted EPS attributable to controlling interests | $0.28 | $0.29 | $0.82 | $0.66 | - Basic and diluted EPS for the three months ended June 30, 2025, decreased slightly to **$0.28** from **$0.29** in the prior year, while for the six months, they increased to **$0.82** from **$0.67** and **$0.66**, respectively[76](index=76&type=chunk) [10) Revenue](index=21&type=section&id=10)%20Revenue) This note disaggregates the company's revenue streams, including management and performance fees Revenue Breakdown (in millions) | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3M) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6M) | | :-------------------- | :--------------------------- | :--------------------------- | :-------------- | :--------------------------- | :--------------------------- | :-------------- | | Management fees | $122.3 | $105.5 | +15.9% | $235.2 | $207.7 | +13.2% | | Performance fees | $2.6 | $2.8 | -7.1% | $7.9 | $5.9 | +33.9% | | Consolidated Funds' revenue | $2.5 | $0.7 | +257.1% | $4.2 | $1.1 | +281.8% | | Total revenue | $127.4 | $109.0 | +16.9% | $247.3 | $214.7 | +15.2% | Management Fee Revenue by Client Domicile (in millions) | Client Location | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | U.S. | $92.9 | $79.5 | $178.8 | $156.8 | | Non-U.S. | $29.4 | $26.0 | $56.4 | $50.9 | | Total | $122.3 | $105.5 | $235.2 | $207.7 | - **Performance fees** decreased by **$(0.2) million** (**7.1%**) for the three months ended June 30, 2025, but increased by **$2.0 million** (**33.9%**) for the six months ended June 30, 2025, reflecting varied performance relative to benchmarks[10](index=10&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) [11) Accumulated Other Comprehensive Income (Loss)](index=22&type=section&id=11)%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details the components of accumulated other comprehensive income or loss Accumulated Other Comprehensive Income (Loss) (in millions) | Item | Balance as of March 31, 2025 | Other Comprehensive Income (3M) | Balance as of June 30, 2025 | | :------------------------------------------ | :--------------------------- | :------------------------------ | :-------------------------- | | Foreign currency translation adjustment | $3.2 | $0.4 | $3.6 | | Amortization of derivative securities | $(6.4) | $0.7 | $(5.7) | | Total | $(3.2) | $1.1 | $(2.1) | | Item | Balance as of December 31, 2024 | Other Comprehensive Income (6M) | Balance as of June 30, 2025 | | :------------------------------------------ | :---------------------------- | :------------------------------ | :-------------------------- | | Foreign currency translation adjustment | $2.7 | $0.9 | $3.6 | | Amortization of derivative securities | $(7.1) | $1.4 | $(5.7) | | Total | $(4.4) | $2.3 | $(2.1) | - **Accumulated other comprehensive loss** improved from **$(4.4) million** at December 31, 2024, to **$(2.1) million** at June 30, 2025, driven by positive foreign currency translation adjustments and amortization related to derivative securities[83](index=83&type=chunk) [12) Derivatives and Hedging](index=23&type=section&id=12)%20Derivatives%20and%20Hedging) This note describes the company's derivative instruments and hedging activities - The Company previously entered into **$300.0 million** notional Treasury rate lock contracts, designated as cash flow hedges, which were settled in July 2016[84](index=84&type=chunk) - As of June 30, 2025, a balance of **$(5.7) million** (net of tax) related to these hedges is recorded in **accumulated other comprehensive income (loss)** and is expected to be reclassified to interest expense over the life of the issued debt[85](index=85&type=chunk) - The Company reclassified **$0.9 million** and **$0.8 million** to earnings for the three months ended June 30, 2025 and 2024, respectively, and expects to reclassify approximately **$4.1 million** to interest expense in the next twelve months[85](index=85&type=chunk) [13) Segment Information](index=24&type=section&id=13)%20Segment%20Information) This note provides financial information for the company's reportable operating segment, Quant & Solutions - The Company operates through one reportable segment, '**Quant & Solutions**,' which focuses on systematic investment strategies using advanced technology to identify mispriced assets[87](index=87&type=chunk) - **Economic Net Income (ENI)** is the primary measure used by the Chief Operating Decision Maker (CODM) to evaluate performance, allocate resources, and determine compensation, as it reflects underlying economic earnings by excluding non-cash or non-recurring items[88](index=88&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) Quant & Solutions Segment Economic Net Income (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Segment ENI revenue | $124.9 | $108.3 | $243.1 | $213.6 | | Segment ENI expenses | $85.6 | $76.6 | $168.9 | $150.5 | | Segment economic net income | $39.3 | $31.7 | $74.2 | $63.1 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition, operational results, liquidity, and future outlook, including U.S. GAAP and non-GAAP performance measures [Overview](index=28&type=section&id=Overview) This section provides a general description of Acadian's business model, profitability drivers, and key performance metrics - **Acadian** operates a systematic investment management business through Acadian LLC, focusing on **Quant & Solutions** strategies for institutional investors globally[102](index=102&type=chunk) - Profitability is driven by **AUM** levels, fee rates, and expense structure, with **management fees** based on average **AUM** and **performance fees** earned when investment performance exceeds benchmarks[104](index=104&type=chunk) - The company uses a profit-sharing model with key employees, aligning economic interests through variable compensation and equity/profit interest distributions, which are key components of **compensation and benefits expense**[106](index=106&type=chunk)[107](index=107&type=chunk) - **Economic Net Income (ENI)**, a non-GAAP measure, is used by management to evaluate financial performance, make operational decisions, and manage capital, as it excludes non-cash or non-recurring items and reclassifies certain income statement items[110](index=110&type=chunk)[111](index=111&type=chunk) [Summary Results of Operations](index=30&type=section&id=Summary%20Results%20of%20Operations) This section presents a high-level summary of the company's financial performance, including key U.S. GAAP and non-GAAP metrics Summary Results of Operations (in millions, unless otherwise noted) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | U.S. GAAP Revenue | $127.4 | $109.0 | $247.3 | $214.7 | | U.S. GAAP Net income attributable to controlling interests | $10.1 | $11.0 | $30.2 | $25.6 | | U.S. GAAP Operating margin | 12.7% | 18.9% | 19.5% | 20.3% | | ENI revenue | $124.9 | $108.3 | $243.1 | $213.6 | | Economic net income | $22.9 | $17.2 | $43.2 | $34.6 | | Adjusted EBITDA | $39.1 | $32.0 | $74.3 | $63.9 | | ENI operating margin | 30.7% | 27.1% | 29.6% | 27.4% | | AUM at period end (in billions) | $151.1 | $112.6 | $151.1 | $112.6 | | Net client cash flows (in billions) | $13.8 | $0.0 | $17.6 | $0.4 | - **AUM** increased by **$38.5 billion** (**34.2%**) to **$151.1 billion** at June 30, 2025, compared to **$112.6 billion** at June 30, 2024, driven by market appreciation and positive **net client cash flows**[116](index=116&type=chunk)[118](index=118&type=chunk)[126](index=126&type=chunk) - **Net client cash flows** were **$13.8 billion** for the three months ended June 30, 2025, a significant increase from **$0.0 billion** in the prior year, and **$17.6 billion** for the six months, up from **$0.4 billion**[116](index=116&type=chunk)[128](index=128&type=chunk) [Assets Under Management](index=31&type=section&id=Assets%20Under%20Management) This section details the company's Assets Under Management (AUM) by strategy, client type, and geographic location, along with AUM flows Assets Under Management by Strategy (in billions) | Strategy | June 30, 2025 (AUM) | % of Total | December 31, 2024 (AUM) | % of Total | | :-------------------- | :------------------ | :--------- | :-------------------- | :--------- | | Non-U.S. Equity | $32.4 | 21.4% | $26.6 | 22.7% | | Small Cap Equity | $29.4 | 19.5% | $25.0 | 21.3% | | Enhanced Equity | $27.5 | 18.2% | $10.8 | 9.2% | | Global Equity | $22.2 | 14.7% | $19.0 | 16.2% | | Emerging Markets Equity | $21.7 | 14.4% | $18.1 | 15.4% | | Other | $17.9 | 11.8% | $17.8 | 15.2% | | **Total AUM** | **$151.1** | | **$117.3** | | Assets Under Management by Client Type (in billions) | Client Type | June 30, 2025 (AUM) | % of Total | December 31, 2024 (AUM) | % of Total | | :------------ | :------------------ | :--------- | :-------------------- | :--------- | | Institutional | $121.9 | 80.7% | $93.0 | 79.3% | | Sub-Advisory | $16.0 | 10.6% | $13.1 | 11.2% | | Wealth/Other | $13.2 | 8.7% | $11.2 | 9.5% | | **Total AUM** | **$151.1** | | **$117.3** | | Assets Under Management by Client Location (in billions) | Client Location | June 30, 2025 (AUM) | % of Total | December 31, 2024 (AUM) | % of Total | | :-------------- | :------------------ | :--------- | :-------------------- | :--------- | | U.S. | $86.9 | 57.5% | $74.7 | 63.7% | | EMEA | $32.8 | 21.7% | $16.9 | 14.4% | | Asia Pacific | $23.9 | 15.8% | $18.8 | 16.0% | | Other | $7.5 | 5.0% | $6.9 | 5.9% | | **Total AUM** | **$151.1** | | **$117.3** | | AUM Flows (in billions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Beginning balance | $121.9 | $110.4 | $117.3 | $103.7 | | Gross inflows | $18.7 | $8.3 | $27.5 | $12.6 | | Gross outflows | $(5.7) | $(9.1) | $(11.5) | $(13.8) | | Net flows | $13.8 | $0.0 | $17.6 | $0.4 | | Market appreciation | $15.4 | $2.2 | $16.2 | $8.5 | | Ending balance | $151.1 | $112.6 | $151.1 | $112.6 | [U.S. GAAP Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024](index=35&type=section&id=U.S.%20GAAP%20Results%20of%20Operations%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section provides a detailed analysis of the company's financial performance based on U.S. GAAP for the specified periods U.S. GAAP Statement of Operations (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------------------------- | :--------------------------- | :--------------------------- | :----- | :--------------------------- | :--------------------------- | :----- | | Management fees | $122.3 | $105.5 | +$16.8 | $235.2 | $207.7 | +$27.5 | | Performance fees | $2.6 | $2.8 | -$(0.2) | $7.9 | $5.9 | +$2.0 | | Total revenue | $127.4 | $109.0 | +$18.4 | $247.3 | $214.7 | +$32.6 | | Compensation and benefits | $83.8 | $62.2 | +$21.6 | $144.6 | $120.3 | +$24.3 | | General and administrative expense | $21.8 | $21.1 | +$0.7 | $44.1 | $41.1 | +$3.0 | | Total operating expenses | $111.2 | $88.4 | +$22.8 | $199.2 | $171.2 | +$28.0 | | Operating income | $16.2 | $20.6 | -$(4.4) | $48.1 | $43.5 | +$4.6 | | Net consolidated Funds' investment gains | $12.1 | $0.8 | +$11.3 | $15.7 | $2.5 | +$13.2 | | Income before taxes | $23.6 | $17.1 | +$6.5 | $55.7 | $38.9 | +$16.8 | | Net income attributable to controlling interests | $10.1 | $11.0 | -$(0.9) | $30.2 | $25.6 | +$4.6 | - Average basis points earned on **AUM** decreased to **37.0 bps** for Q2 2025 (from **38.5 bps** in Q2 2024) and **37.3 bps** for H1 2025 (from **38.3 bps** in H1 2024), due to changes in the mix of **AUM**[133](index=133&type=chunk) - **Compensation and benefits expense** increased by **$21.6 million** (**34.7%**) for Q2 2025 and **$24.3 million** (**20.2%**) for H1 2025, driven by higher variable compensation, sales-based compensation, and Acadian LLC key employee distributions, as well as revaluations of key employee equity[147](index=147&type=chunk)[148](index=148&type=chunk) Key U.S. GAAP Operating Metrics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | U.S. GAAP operating margin | 12.7% | 18.9% | 19.5% | 20.3% | | U.S. GAAP operating expense / management fee revenue | 89.8% | 83.7% | 83.8% | 82.3% | | U.S. GAAP variable compensation ratio | 62.3% | 55.8% | 53.8% | 53.7% | | U.S. GAAP Acadian LLC key employee distributions ratio | 20.9% | 9.5% | 13.4% | 9.2% | [Non-GAAP Supplemental Performance Measure — Economic Net Income and Segment Analysis](index=43&type=section&id=Non-GAAP%20Supplemental%20Performance%20Measure%20%E2%80%94%20Economic%20Net%20Income%20and%20Segment%20Analysis) This section reconciles U.S. GAAP net income to Economic Net Income (ENI) and analyzes segment performance using this non-GAAP measure - **ENI** is a non-GAAP measure used by management to evaluate financial performance, make operational decisions, and manage capital, differing from U.S. GAAP by reclassifying and excluding certain non-cash or non-recurring items[172](index=172&type=chunk) Reconciliation of U.S. GAAP Net Income to Economic Net Income (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | U.S. GAAP net income attributable to controlling interests | $10.1 | $11.0 | $30.2 | $25.6 | | Non-cash key employee-owned equity and profit interest revaluations | $19.7 | $5.9 | $19.4 | $10.3 | | Seed/Co-investment (gains) losses and financings | $(2.6) | $(0.2) | $(2.6) | $(1.4) | | Economic net income | $22.9 | $17.2 | $43.2 | $34.6 | Key Non-GAAP Operating Metrics | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | ENI operating margin | 30.7% | 27.1% | 29.6% | 27.4% | | ENI operating expense ratio | 44.6% | 48.8% | 46.3% | 48.6% | | ENI variable compensation ratio | 45.4% | 48.2% | 46.4% | 48.0% | | ENI Acadian LLC key employee distributions ratio | 10.4% | 7.1% | 9.9% | 7.3% | - The **Quant & Solutions segment's ENI** revenue increased by **15.3%** to **$124.9 million** for Q2 2025 and **13.8%** to **$243.1 million** for H1 2025, driven by higher **management fees** from increased **AUM**[200](index=200&type=chunk)[201](index=201&type=chunk) - Segment **ENI** expenses increased by **11.7%** to **$85.6 million** for Q2 2025 and **12.2%** to **$168.9 million** for H1 2025, primarily due to higher variable compensation and general and administrative expenses[203](index=203&type=chunk)[204](index=204&type=chunk) [Capital Resources and Liquidity](index=56&type=section&id=Capital%20Resources%20and%20Liquidity) This section discusses the company's financial resources, cash flows, and ability to meet its short-term and long-term obligations Cash Flows (excluding consolidated Funds, in millions) | Activity | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | | Operating activities | $10.7 | $5.4 | | Investing activities | $9.1 | $(18.8) | | Financing activities | $(24.8) | $(61.7) | - **Net cash from operating activities** (excluding consolidated Funds) increased by **$5.3 million** to **$10.7 million** for H1 2025[208](index=208&type=chunk) Adjusted EBITDA Reconciliation (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income attributable to controlling interests | $10.1 | $11.0 | $30.2 | $25.6 | | EBITDA | $23.3 | $26.0 | $59.6 | $55.0 | | Adjusted EBITDA | $39.1 | $32.0 | $74.3 | $63.9 | - The Company believes its available cash, cash equivalents, and future operations, supplemented by financing, will be sufficient to fund operations and capital requirements for at least the next twelve months[213](index=213&type=chunk) Other Compensation Liabilities (in millions) | Liability Type | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Share-based payments liability | $30.2 | $25.4 | | Profit interests liability | $33.9 | $18.7 | | Voluntary deferral plan liability | $35.6 | $48.4 | | Total | $99.7 | $92.5 | Accrued Incentive Compensation (in millions) | Period | Amount | | :-------------------------- | :----- | | June 30, 2025 | $66.0 | | December 31, 2024 | $119.6 | [Critical Accounting Policies and Estimates](index=59&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the accounting policies and estimates that require significant judgment and can materially impact financial results - There have been no significant changes to the critical accounting policies and estimates disclosed in the Company's most recent Form 10-K for the year ended December 31, 2024[223](index=223&type=chunk) [Forward Looking Statements](index=60&type=section&id=Forward%20Looking%20Statements) This section provides cautionary statements regarding the inherent uncertainties and risks associated with forward-looking information - The report contains forward-looking statements regarding anticipated revenues, margins, cash flows, future performance, and market conditions, which are subject to known and unknown risks and uncertainties[225](index=225&type=chunk) - Actual results may differ materially from these statements due to various factors, and readers are cautioned not to place undue reliance on them[226](index=226&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, including AUM, equity markets, and foreign currency, and analyzes their potential impact on revenues and profitability - The Company's revenue is directly tied to **AUM** and investment performance, making it susceptible to market depreciation and client withdrawals[228](index=228&type=chunk) - Approximately **39%** of the Company's **Economic Net Income (ENI)** cost structure is variable, linking variable compensation and Acadian LLC key employee distributions to profitability, thereby sharing market risk with employees[230](index=230&type=chunk) Market Risk Sensitivity Analysis (as of June 30, 2025, in millions) | Scenario | Impact on Annualized Gross Management Fee Revenue | Impact on Annual Post-Tax ENI | | :---------------------------------------------------- | :------------------------------------------ | :---------------------------- | | 10% increase/decrease in total AUM ($151.1B) | ±$56 | ±$24 | | 10% increase/decrease in equity markets-based AUM ($151B) | ±$55 | ±$22 (plus ±$2 from performance fees) | | 10% increase/decrease in foreign currency denominated AUM ($108B) | ±$45 | ±$18 (plus ±$2 from performance fees) | - The Company does not hedge market risks at the corporate level or within individual strategies, and changes in **AUM** composition could negatively impact overall weighted average fee rates[233](index=233&type=chunk)[234](index=234&type=chunk) - Interest rate risk exposure is primarily from variable-rate borrowings under the revolving credit facility; a hypothetical **10%** change in interest rates would have an immaterial impact on interest expense[235](index=235&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of disclosure controls and procedures and reports no material changes in internal control over financial reporting - Management, including the principal executive and financial officers, concluded that **disclosure controls and procedures** were effective as of June 30, 2025[237](index=237&type=chunk) - There have been no material changes in **internal control over financial reporting** during the quarter ended June 30, 2025[238](index=238&type=chunk) [PART II — OTHER INFORMATION](index=64&type=section&id=Part%20II%20%E2%80%94%20Other%20Information) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity sales [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses the company's involvement in legal proceedings and assesses their potential financial impact - The Company is involved in ordinary course legal proceedings but does not believe they will result in material liabilities to its consolidated financial condition, future results of operations, or cash flow[240](index=240&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) This section confirms no material changes to the risk factors previously disclosed in the company's latest annual report - No material changes have occurred in the risk factors described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[241](index=241&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=64&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's common stock repurchase activities and the remaining authorization under its programs Equity Securities Purchases (3 Months Ended June 30, 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Total Shares Purchased as Part of Publicly Announced Plans | Approximate Dollar Value Remaining Under Plans (in millions) | | :---------------- | :--------------------- | :--------------------------- | :------------------------------------------------------- | :--------------------------------------------------------- | | April 1-30, 2025 | 925,741 | $25.48 | 925,741 | $37.0 | | May 1-31, 2025 | — | — | — | $37.0 | | June 1-30, 2025 | — | — | — | $37.0 | | **Total** | **925,741** | **$25.48** | **925,741** | | - The Board of Directors authorized the repurchase of up to **$80 million** of common stock on February 6, 2025, with no expiration. **$23.6 million** was used to repurchase **0.9 million** shares during the three months ended June 30, 2025[242](index=242&type=chunk) [Item 5. Other Information](index=64&type=section&id=Item%205.%20Other%20Information) This section confirms no changes in Rule 10b5-1 or non-Rule 10b5-1 trading arrangements by directors or officers - No directors or officers changed their **Rule 10b5-1 trading arrangements** or **non-Rule 10b5-1 trading arrangements** during the quarter ended June 30, 2025[243](index=243&type=chunk) [Item 6. Exhibits](index=65&type=section&id=Item%206.%20Exhibits) This section lists all exhibits accompanying the Form 10-Q filing, including corporate governance documents and certifications - The exhibits include corporate governance documents (Amended and Restated Certificate of Incorporation, Bylaws), certifications from the CEO and CFO (Sarbanes-Oxley Act Sections 302 and 906), and interactive data files (XBRL) for the financial statements[244](index=244&type=chunk)