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)

[Q2 2025 Earnings Release Overview](index=1&type=section&id=Intellia%20Therapeutics%20Announces%20Second%20Quarter%202025%20Financial%20Results%20and%20Highlights%20Recent%20Company%20Progress) Intellia Therapeutics reported accelerated clinical trial progress for ATTR-CM and HAE, with $630.5 million cash on hand, extending its financial runway into H1 2027 [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Q2 2025 highlights include accelerated enrollment in Phase 3 trials for ATTR-CM and HAE, an expanded MAGNITUDE trial, and a strong cash position of $630.5 million - Enrollment for the Phase 3 MAGNITUDE trial (ATTR-CM) and Phase 3 HAELO study (HAE) is tracking ahead of schedule, leading to an accelerated timeline for the HAELO study and an expansion of the MAGNITUDE trial[3](index=3&type=chunk)[4](index=4&type=chunk) - The company plans to expand the MAGNITUDE study enrollment from 765 to approximately **1,200 patients** to provide a more robust dataset, with no expected impact on projected timelines or financial runway[4](index=4&type=chunk)[9](index=9&type=chunk) - Ended Q2 2025 with approximately **$630.5 million** in cash, cash equivalents, and marketable securities, which is expected to fund operations into H1 2027 and through the first anticipated commercial launch[4](index=4&type=chunk)[14](index=14&type=chunk) [Clinical Program Updates](index=2&type=section&id=Clinical%20Program%20Updates) The company provided updates on its HAE and ATTR amyloidosis programs, detailing accelerated trial progress and positive long-term efficacy data [Hereditary Angioedema (HAE) Program: Lonvoguran ziclumeran (lonvo-z)](index=2&type=section&id=Hereditary%20Angioedema%20%28HAE%29) The HAE program for lonvo-z shows accelerated Phase 3 trial progress, with long-term data demonstrating a 98% reduction in HAE attacks and a BLA submission targeted for H2 2026 - Randomization in the global Phase 3 HAELO study is expected to be completed in **Q3 2025**, earlier than originally planned[6](index=6&type=chunk) - Three-year follow-up data from the Phase 1/2 study showed a single dose of lonvo-z resulted in a **98% mean reduction** in monthly HAE attack rates, with all 10 patients attack-free and treatment-free for a median of nearly two years[6](index=6&type=chunk) - The company remains on track to submit a Biologics License Application (BLA) for lonvo-z in the **second half of 2026**[6](index=6&type=chunk) [Transthyretin (ATTR) Amyloidosis Program: Nexiguran ziclumeran (nex-z)](index=2&type=section&id=Transthyretin%20%28ATTR%29%20Amyloidosis) The nex-z program for ATTR amyloidosis is rapidly advancing, with accelerated enrollment in both ATTR-CM and ATTRv-PN Phase 3 trials and strong TTR reduction data - Nex-z is an investigational in vivo CRISPR-based therapy designed to inactivate the TTR gene, aiming for a lifelong reduction in TTR protein after a single dose to halt and reverse ATTR amyloidosis[6](index=6&type=chunk)[7](index=7&type=chunk) [ATTR Amyloidosis with Cardiomyopathy (ATTR-CM)](index=3&type=section&id=ATTR%20Amyloidosis%20with%20Cardiomyopathy%20%28ATTR-CM%29) Enrollment for the Phase 3 MAGNITUDE trial in ATTR-CM is ahead of schedule, leading to an expansion of the study size for a more robust dataset - Enrollment in the Phase 3 MAGNITUDE trial is ahead of projections, with plans to expand total enrollment from 765 to approximately **1,200 patients** to generate a more robust dataset[9](index=9&type=chunk) - Phase 1 data presented in May 2025 showed nex-z effectively reduced TTR production and showed promise for treating both wild-type (ATTRwt) and variant (ATTRv) forms of ATTR-CM with a favorable safety profile[9](index=9&type=chunk) [Hereditary ATTR Amyloidosis with Polyneuropathy (ATTRv-PN)](index=3&type=section&id=Hereditary%20ATTR%20Amyloidosis%20with%20Polyneuropathy%20%28ATTRv-PN%29) The Phase 3 MAGNITUDE-2 study for ATTRv-PN is enrolling ahead of schedule, with two-year follow-up data showing significant TTR reduction and neurological improvement - Enrollment in the global Phase 3 MAGNITUDE-2 study is ahead of schedule, with completion now expected in the **first half of 2026**[9](index=9&type=chunk) - Two-year follow-up data from Phase 1 showed a mean serum TTR reduction of **90% by Day 28**, which remained durable through 24 months, with 13 of 18 patients showing clinically meaningful neurological improvement (≥ 4 point improvement in mNIS+7)[9](index=9&type=chunk)[10](index=10&type=chunk) [Platform and Company Updates](index=4&type=section&id=Platform%20and%20Company%20Updates) Intellia is advancing its CRISPR platform with gene writing and extrahepatic delivery technologies while building commercial infrastructure for future product launches [Platform Technology and Commercial Readiness](index=4&type=section&id=Platform%20Technology%20and%20Commercial%20Readiness) Intellia is developing advanced CRISPR technologies and expanding its commercial and medical affairs teams to prepare for future product launches - The company is developing novel CRISPR technologies like gene writing and extrahepatic lipid nanoparticle (LNP) delivery to create differentiated in vivo and ex vivo product candidates[12](index=12&type=chunk) - Intellia has expanded its commercial and medical affairs teams, including key leadership hires in U.S. sales and commercial operations, to build a strong foundation for commercial readiness[12](index=12&type=chunk) [Upcoming Events](index=4&type=section&id=Upcoming%20Events) Intellia will participate in several key industry and medical conferences in Q3 2025, including events hosted by Citi, Wells Fargo, Bernstein, and the International ATTR Amyloidosis Meeting - The company will present at four conferences in September 2025: - Citi 2025 Biopharma Back to School Conference (Sept. 3) - Wells Fargo Health Care Conference (Sept. 4) - Bernstein Healthcare Forum (Sept. 23) - 5th International ATTR Amyloidosis Meeting (Sept. 25-26)[12](index=12&type=chunk) [Second Quarter 2025 Financial Results](index=5&type=section&id=Second%20Quarter%202025%20Financial%20Results) The company reported its Q2 2025 financial performance, detailing collaboration revenue, operating expenses, net loss, and cash position [Financial Summary](index=5&type=section&id=Financial%20Summary) Q2 2025 saw increased collaboration revenue, decreased operating expenses, a reduced net loss of $101.3 million, and a strong cash position of $630.5 million Q2 2025 Key Financial Metrics | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Collaboration Revenue | $14.2M | $6.9M | +$7.3M | | R&D Expenses | $97.0M | $114.2M | -$17.2M | | G&A Expenses | $27.2M | $31.8M | -$4.6M | | Net Loss | $101.3M | $147.0M | -$45.7M | | Cash Position (as of quarter end) | $630.5M | N/A | N/A | - The increase in collaboration revenue was mainly driven by cost reimbursements from the collaboration with Regeneron Pharmaceuticals, Inc[14](index=14&type=chunk) - The decrease in R&D and G&A expenses was primarily driven by lower employee-related costs and stock-based compensation, partially offset by increased spending on lead programs and commercial infrastructure[14](index=14&type=chunk) [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) The unaudited consolidated statements of operations detail the company's revenues, expenses, and net loss for the three and six months ended June 30, 2025, compared to the same periods in 2024 Consolidated Statements of Operations (Unaudited, in thousands, except per share data) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Collaboration revenue** | **$14,245** | **$6,957** | **$30,872** | **$35,892** | | **Operating expenses:** | | | | | | Research and development | 97,035 | 114,207 | 205,462 | 226,054 | | General and administrative | 27,206 | 31,793 | 56,213 | 62,884 | | Total operating expenses | 124,241 | 146,000 | 261,675 | 288,938 | | **Operating loss** | **(109,996)** | **(139,043)** | **(230,803)** | **(253,046)** | | **Net loss** | **$(101,255)** | **$(146,975)** | **$(215,584)** | **$(254,411)** | | **Net loss per share, basic and diluted** | **$(0.98)** | **$(1.52)** | **$(2.08)** | **$(2.64)** | [Consolidated Balance Sheet Data](index=8&type=section&id=Consolidated%20Balance%20Sheet%20Data) The unaudited consolidated balance sheet data provides a snapshot of the company's financial position as of June 30, 2025, compared to December 31, 2024, highlighting key assets, liabilities, and stockholders' equity Consolidated Balance Sheet Data (Unaudited, in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents and marketable securities | $630,506 | $861,730 | | Total assets | $898,894 | $1,191,015 | | Total liabilities | $183,639 | $319,059 | | Total stockholders' equity | $715,255 | $871,956 |

Exhibit 99.1 Cars.com Reports Second Quarter 2025 Results Grew to 19,412 Dealer Customers, Driven by Strong Sequential Increase in Marketplace Subscriptions Achieved Record First Half 27.8MM Monthly Average Unique Visitors and 332MM Visits Repurchased 2.1 Million Shares, Representing 3% of Shares Outstanding Raising FY 2025 Share Repurchase Target to $70 to $90 Million CHICAGO, August 7, 2025 -- Cars.com Inc. (NYSE: CARS) (d/b/a "Cars Commerce Inc." or the "Company"), an audience-driven technology company e ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) Priority Technology Holdings, Inc. presents its strong Q2 2025 financial results and updated full-year 2025 guidance [Second Quarter 2025 Consolidated Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Consolidated%20Financial%20Highlights) Priority Technology Holdings, Inc. reported strong second-quarter 2025 financial results, driven by performance across its Unified Commerce Platform - The company's strong Q2 2025 results are attributed to the continued success of its Connected Commerce platform, with over **9% revenue growth** and **13% adjusted gross profit growth**[2](index=2&type=chunk) - Adjusted gross profit from recurring revenue represents **62% of total**, indicating a stable and predictable revenue base[2](index=2&type=chunk) Q2 2025 Consolidated Financial Highlights | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :-------------------------- | :------------------ | :------------------ | :--------- | | Revenue | $239.8 | $219.9 | 9.1% | | Adjusted Gross Profit | $92.4 | $81.7 | 13.0% | | Adjusted Gross Profit Margin | 38.5% | 37.2% | +135 bps | | Operating Income | $37.4 | $33.2 | 12.6% | | Adjusted EBITDA | $56.0 | $51.6 | 8.7% | | Adjusted EPS | $0.26 | $0.11 | 136.4% | [Full Year 2025 Financial Guidance Update](index=2&type=section&id=Full%20Year%202025%20Financial%20Guidance%20Update) Priority Technology Holdings, Inc. updated its full-year 2025 financial guidance, narrowing ranges for revenue and adjusted EBITDA - The company expects an acceleration of organic growth in the second half of 2025 due to sales pipeline timing, year-over-year comparatives, and moderating headwinds[4](index=4&type=chunk) Full Year 2025 Financial Guidance | Metric | New FY 2025 Guidance (Millions) | Original FY 2025 Guidance (Millions) | Growth Rate (vs FY 2024) | | :-------------------- | :----------------------------- | :---------------------------------- | :----------------------- | | Revenue | $970 - $990 | $965 - $1,000 | 10.2% - 12.5% | | Adjusted Gross Profit | $365 - $380 | $360 - $385 | N/A | | Adjusted EBITDA | $222.5 - $227.5 | $220 - $230 | N/A | [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) Priority Technology Holdings, Inc. will host a conference call on August 7, 2025, to discuss its second-quarter financial results - A conference call to discuss Q2 2025 financial results will be held on Thursday, August 7, 2025, at **10:00 a.m. EDT**[5](index=5&type=chunk) - Access to the live webcast and accompanying slide presentation is available via the company's investor relations website[6](index=6&type=chunk) - An audio replay of the call will be available until **August 21, 2025**[7](index=7&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles key non-GAAP financial measures used by the company to assess performance [Non-GAAP Measures Introduction](index=2&type=section&id=Non-GAAP%20Measures%20Introduction) The company uses non-GAAP financial measures like Adjusted Gross Profit and Adjusted EBITDA to evaluate business trends and performance - Non-GAAP measures are used to evaluate business and trends, measure performance, prepare financial projections, allocate resources, and make strategic decisions[8](index=8&type=chunk) - These non-GAAP measures are intended to complement GAAP measures and illustrate underlying financial and business trends, but are not superior to or a substitute for GAAP[8](index=8&type=chunk) [Adjusted Gross Profit and Adjusted Gross Profit Margin Reconciliation](index=3&type=section&id=Adjusted%20Gross%20Profit%20and%20Adjusted%20Gross%20Profit%20Margin%20Reconciliation) Adjusted gross profit, defined as revenues less cost of revenue (excluding D&A), is reconciled for Q2 and H1 2025 and 2024 - Adjusted gross profit excludes depreciation and amortization from cost of revenue to evaluate underlying profit trends[10](index=10&type=chunk) Adjusted Gross Profit and Margin Reconciliation | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $239,812 | $219,867 | $464,442 | $425,586 | | Cost of revenue (excluding depreciation and amortization) | (147,399) | (138,118) | (284,752) | (267,416) | | **Adjusted gross profit** | **$92,413** | **$81,749** | **$179,690** | **$158,170** | | **Adjusted gross profit margin** | **38.5%** | **37.2%** | **38.7%** | **37.2%** | | Depreciation and amortization of revenue generating assets | (4,911) | (3,941) | (9,597) | (7,842) | | Gross profit | $87,502 | $77,808 | $170,093 | $150,328 | | Gross profit margin | 36.5% | 35.4% | 36.6% | 35.3% | [EBITDA and Adjusted EBITDA Reconciliation](index=3&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) EBITDA and Adjusted EBITDA, which excludes non-cash and non-recurring items, are reconciled for Q2 and H1 2025 and 2024 - Adjusted EBITDA starts with EBITDA and excludes non-cash costs (e.g., stock-based compensation) and non-recurring expenses (e.g., acquisition integration, litigation settlements) to provide a clearer view of operational performance[11](index=11&type=chunk) EBITDA and Adjusted EBITDA Reconciliation | (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------------- | :--------------------------------- | :------------------------------- | :------------------------------- | | Net income | $10,879 | $994 | $19,147 | $6,187 | | Interest expense | 23,054 | 21,710 | 46,230 | 42,590 | | Income tax expense | 4,423 | 2,515 | 6,673 | 5,097 | | Depreciation and amortization | 14,093 | 15,244 | 27,870 | 30,497 | | **EBITDA** | **$52,449** | **$40,463** | **$99,920** | **$84,371** | | Debt modification and extinguishment expenses | — | 8,623 | 38 | 8,623 | | Selling, general and administrative (non-recurring) | 395 | 636 | 2,594 | 1,435 | | Non-cash stock-based compensation | 3,206 | 1,829 | 4,792 | 3,462 | | **Adjusted EBITDA** | **$56,050** | **$51,551** | **$107,344** | **$97,891** | [Adjusted Earnings Per Share (Adjusted EPS) Reconciliation](index=5&type=section&id=Adjusted%20Earnings%20Per%20Share%20%28Adjusted%20EPS%29%20Reconciliation) Adjusted EPS, a performance measure excluding non-recurring and non-cash items, is reconciled for Q2 and H1 2025 and 2024 - Adjusted EPS is calculated by adjusting net income for items such as accelerated accretion expense, debt extinguishment costs, stock-based compensation, other non-recurring expenses, and amortization of acquisition-related intangible assets, along with their tax impact[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) Adjusted Earnings Per Share Reconciliation | (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | :------------------------------- | :------------------------------- | | Net income (loss) attributable to common shareholders | $10,879 | $(17,629) | $19,147 | $(25,679) | | Accelerated accretion expense and excise tax attributable to redeemable senior preferred stockholders | — | 9,549 | — | 9,549 | | Debt extinguishment and modification costs | — | 8,623 | 38 | 8,623 | | Stock based compensation | 3,206 | 1,829 | 4,792 | 3,462 | | Other non-recurring expenses | 395 | 636 | 2,594 | 1,435 | | Amortization of acquisition related intangible assets | 9,417 | 11,425 | 18,731 | 23,117 | | Tax impact of adjustments | (3,244) | (5,855) | (6,800) | (9,526) | | **Adjusted net income attributable to common shareholders** | **$20,653** | **$8,578** | **$38,502** | **$10,981** | | Weighted average common shares outstanding (diluted) | 79,837 | 78,139 | 79,968 | 78,180 | | **Adjusted earnings per common share (Diluted)** | **$0.26** | **$0.11** | **$0.48** | **$0.14** | [Forward-Looking Non-GAAP Measures Disclosure](index=6&type=section&id=Forward-Looking%20Non-GAAP%20Measures%20Disclosure) The company does not reconcile forward-looking non-GAAP measures to GAAP due to the difficulty in estimating future reconciling items - Reconciliation of forward-looking non-GAAP measures to GAAP is not provided due to the unreasonable effort required to estimate future reconciling items like stock-based compensation expense[16](index=16&type=chunk) - The company primarily plans, forecasts, and analyzes future periods on a non-GAAP basis[16](index=16&type=chunk) [About the Company](index=7&type=section&id=About%20the%20Company) Priority Technology Holdings, Inc. provides a unified commerce engine offering payments and banking solutions for businesses - Priority provides a unified commerce engine that combines payables, merchant services, and banking and treasury solutions[19](index=19&type=chunk) - The platform helps businesses accelerate cash flow, optimize working capital, reduce costs, and unlock new revenue opportunities[19](index=19&type=chunk) [Forward-Looking Statements Disclaimer](index=7&type=section&id=Forward-Looking%20Statements%20Disclaimer) This press release contains forward-looking statements subject to risks and uncertainties, and actual results may differ materially - The press release includes forward-looking statements regarding future financial and operating results, plans, objectives, and intentions[21](index=21&type=chunk) - These statements are subject to significant business, economic, and competitive risks and uncertainties that could cause actual results to differ materially[21](index=21&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, and the company disclaims any obligation to publicly update or revise them[23](index=23&type=chunk) [Investor Relations Contact](index=7&type=section&id=Investor%20Relations%20Contact) Investor inquiries for Priority Technology Holdings, Inc. can be directed to the provided email address - Investor inquiries should be sent to **priorityIR@icrinc.com**[24](index=24&type=chunk) [Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited consolidated statements of operations, balance sheets, and cash flows for the reported periods [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=8&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) The unaudited consolidated statements of operations show increased net income for Q2 and H1 2025, driven by revenue growth Consolidated Statements of Operations and Comprehensive Income (Loss) | (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $239,812 | $219,867 | $464,442 | $425,586 | | Total operating expenses | 202,462 | 186,693 | 394,467 | 364,389 | | Operating income | 37,350 | 33,174 | 69,975 | 61,197 | | Income before income taxes | 15,302 | 3,509 | 25,820 | 11,284 | | Net income | 10,879 | 994 | 19,147 | 6,187 | | Net income (loss) attributable to common stockholders | 10,879 | (17,629) | 19,147 | (25,679) | | Basic EPS | $0.14 | $(0.23) | $0.24 | $(0.33) | | Diluted EPS | $0.14 | $(0.23) | $0.24 | $(0.33) | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheets show an increase in total assets and liabilities as of June 30, 2025, primarily due to settlement activities Consolidated Balance Sheets | (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :-------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $50,564 | $58,600 | | Settlement assets | 1,125,934 | 940,798 | | Total current assets | 1,305,885 | 1,105,085 | | Goodwill | 382,497 | 376,091 | | Intangible assets, net | 225,035 | 240,874 | | **Total assets** | **$2,027,420** | **$1,826,860** | | **Liabilities, Stockholders' Deficit and NCI** | | | | Settlement obligations | 1,127,266 | 940,213 | | Total current liabilities | 1,229,171 | 1,051,671 | | Long-term debt, net | 917,017 | 920,888 | | **Total liabilities** | **$2,171,554** | **$1,991,885** | | Total stockholders' deficit | (144,134) | (165,025) | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The consolidated statements of cash flows indicate decreased operating cash flow but increased financing cash flow in H1 2025 Consolidated Statements of Cash Flows | (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | | Net cash provided by operating activities | $27,080 | $42,007 | | Net cash used in investing activities | $(21,145) | $(20,598) | | Net cash provided by financing activities | $178,091 | $18,149 | | Net increase in cash and cash equivalents, and restricted cash | $184,026 | $39,558 | | Cash and cash equivalents and restricted cash at end of period | $1,177,890 | $835,781 | - The significant increase in net cash provided by financing activities in H1 2025 was largely driven by settlement obligations, which provided **$190,863 thousand**[30](index=30&type=chunk) [Reportable Segments' Results (Unaudited)](index=11&type=section&id=Reportable%20Segments%27%20Results%20%28Unaudited%29) This section details the unaudited financial performance of Priority's SMB, B2B, and Enterprise Payments segments [Segment Performance Overview (SMB, B2B, Enterprise)](index=11&type=section&id=Segment%20Performance%20Overview%20%28SMB%2C%20B2B%2C%20Enterprise%29) Priority's SMB, B2B, and Enterprise Payments segments show diversified performance in revenue and Adjusted EBITDA for Q2 and H1 2025 Segment Performance Overview **Three Months Ended June 30, 2025 vs 2024:** | Segment | Q2 2025 Revenue (Thousands) | Q2 2024 Revenue (Thousands) | Revenue Change (%) | Q2 2025 Adj. EBITDA (Thousands) | Q2 2024 Adj. EBITDA (Thousands) | Adj. EBITDA Change (%) | | :---------------- | :-------------------------- | :-------------------------- | :----------------- | :------------------------------ | :------------------------------ | :--------------------- | | SMB Payments | $163,230 | $155,101 | 5.2% | $27,749 | $28,597 | -3.0% | | B2B Payments | $25,033 | $21,881 | 14.4% | $3,770 | $1,530 | 146.4% | | Enterprise Payments | $52,658 | $43,670 | 20.6% | $45,558 | $37,244 | 22.3% | **Six Months Ended June 30, 2025 vs 2024:** | Segment | H1 2025 Revenue (Thousands) | H1 2024 Revenue (Thousands) | Revenue Change (%) | H1 2025 Adj. EBITDA (Thousands) | H1 2024 Adj. EBITDA (Thousands) | Adj. EBITDA Change (%) | | :---------------- | :-------------------------- | :-------------------------- | :----------------- | :------------------------------ | :------------------------------ | :--------------------- | | SMB Payments | $314,920 | $299,105 | 5.3% | $53,454 | $53,620 | -0.3% | | B2B Payments | $48,951 | $43,225 | 13.2% | $7,286 | $3,276 | 122.4% | | Enterprise Payments | $102,746 | $84,660 | 21.4% | $88,001 | $71,971 | 22.3% | - Enterprise Payments showed strong growth in average CFTPay billed clients (**992,279 in Q2 2025** vs **762,873 in Q2 2024**) and monthly new enrollments (**57,818 in Q2 2025** vs **55,416 in Q2 2024**)[32](index=32&type=chunk) - B2B issuing dollar volume decreased in both Q2 and H1 2025 compared to 2024, despite revenue and Adjusted EBITDA growth in the segment[32](index=32&type=chunk) [Reconciliation of Adjusted EBITDA to GAAP Measure by Segment](index=12&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20to%20GAAP%20Measure%20by%20Segment) Detailed reconciliations of Adjusted EBITDA to GAAP Income (loss) before taxes are provided for each reportable segment and corporate overhead - The reconciliation tables provide a detailed breakdown of adjustments from Adjusted EBITDA to Income (loss) before taxes for each segment and the corporate overhead[34](index=34&type=chunk)[36](index=36&type=chunk) - Corporate expenses, including interest, depreciation, non-recurring SG&A, and stock-based compensation, significantly impact the consolidated income before taxes[34](index=34&type=chunk)[36](index=36&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from_______________ to _______________ Commission File Number: 001-39103 CABALETTA BIO, INC. (Exact Name of Registrant as Specified in its Charter) | Delaware | 82-1685768 | | --- | --- | | (State or other jurisdiction of | (I.R.S. Employer | | incorporation or organization) | Identification No.) | | 29 ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides an overview of Cronos Group's strong Q2 2025 financial and operational performance, highlighting key achievements and strategic developments [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) Cronos Group reported strong Q2 2025 performance with **21% net revenue growth**, record international sales, and a robust balance sheet supporting global expansion - Net revenue increased by **21%** in Q2 2025[1](index=1&type=chunk) - PEACE NATURALS® maintained its **number one position** in Israel, achieving record international and Israeli market revenues[1](index=1&type=chunk)[2](index=2&type=chunk) - The balance sheet remained strong with **$834 million** in cash and short-term investments[1](index=1&type=chunk)[3](index=3&type=chunk) - In the Canadian market, Spinach® ranked **second overall** (4.7% market share) and **third in flower brands** (4.9% market share), with its gummies among the top ten edibles (19.9% market share) and vapes ranking **fourth** (6.5% market share), including the **second-ranked** 1.2g vape cartridge (8.4% market share)[10](index=10&type=chunk) - Lord Jones® Chocolate Fusions™ held a **10.2% market share**, making it the **third best-selling** chocolate cannabis edible brand in Canada, and ranked **first** in the hash-infused pre-roll segment with a **28.5% market share**[11](index=11&type=chunk) - The Cronos GrowCo expansion is complete, with sales expected to commence in **Fall 2025**, driving growth in both international and Canadian domestic markets[3](index=3&type=chunk)[14](index=14&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) This section details Cronos Group's Q2 2025 consolidated financial performance, including net revenue, gross profit, net loss, and adjusted EBITDA [Overview of Q2 2025 Financial Performance](index=2&type=section&id=Overview%20of%20Q2%202025%20Financial%20Performance) Cronos Group's Q2 2025 consolidated net revenue grew **21% to $33.5 million**, with gross profit surging **130% to $14.5 million**, despite a net loss increase to **$38.5 million** due to unrealized foreign exchange losses - The company obtained majority control of Cronos GrowCo and began consolidating its results effective **July 1, 2024**[4](index=4&type=chunk) Key Financial Data for Q2 2025 (Compared to Q2 2024) | Metric | Q2 2025 (Thousand Dollars) | Q2 2024 (Thousand Dollars) | Change ($) | Change (%) | | :-------------------------------- | :---------------------- | :---------------------- | :--------- | :--------- | | Net Revenue (Total) | 33,455 | 27,762 | 5,693 | 21 % | | Cronos GrowCo Net Revenue Contribution | 2,211 | — | 2,211 | N/A | | Cost of Sales | 18,865 | 21,070 | (2,205) | (10) % | | Inventory Write-downs | 86 | 395 | (309) | (78) % | | Gross Profit | 14,504 | 6,297 | 8,207 | 130 % | | Gross Margin | 43 % | 23 % | N/A | 20 pp | | Adjusted Gross Profit | 14,504 | 6,297 | 8,207 | 130 % | | Adjusted Gross Margin | 43 % | 23 % | N/A | 20 pp | | Net Loss | (38,482) | (8,759) | (29,723) | (339) % | | Adjusted EBITDA | 1,688 | (11,051) | 12,739 | N/M | | Cash and Cash Equivalents (End of Period) | 794,416 | 848,189 | (53,773) | (6) % | | Short-term Investments (End of Period) | 40,000 | — | 40,000 | N/A | | Capital Expenditures | 3,838 | 916 | 2,922 | 319 % | - Net revenue growth was primarily driven by increased cannabis flower sales in Israel and other international markets (excise tax-free), the consolidation of Cronos GrowCo (contributing **$2.2 million**), and higher cannabis extract sales in the Canadian market[9](index=9&type=chunk) - Gross profit growth was mainly attributed to the consolidation of Cronos GrowCo, higher average selling prices from a shift in sales mix towards Israel and other international markets, increased sales volume, and improved production efficiencies[9](index=9&type=chunk) - The increase in net loss was primarily due to unrealized foreign exchange losses on U.S. dollar-denominated cash and short-term investments held in Canada (impacted by a stronger Canadian dollar against the U.S. dollar), partially offset by higher gross profit and lower operating expenses[13](index=13&type=chunk) - Adjusted EBITDA improved mainly due to increased revenue, lower cost of sales (due to Cronos GrowCo consolidation), and reduced operating expenses (driven by lower general and administrative expenses)[13](index=13&type=chunk) [Business Updates](index=3&type=section&id=Business%20Updates) This section provides updates on Cronos Group's brand and product portfolio performance, as well as the progress of the Cronos GrowCo expansion [Brand and Product Portfolio](index=3&type=section&id=Brand%20and%20Product%20Portfolio) Cronos Group's brand portfolio performed strongly in Q2 2025, with Spinach® maintaining leadership in Canada, Lord Jones® excelling in premium segments, and PEACE NATURALS® achieving record international sales [Spinach®](index=3&type=section&id=Spinach) Spinach® maintained its strong position in the Canadian market in Q2 2025, ranking **second overall** (4.7% market share) and **third in flower brands** (4.9% market share) despite flower supply constraints Spinach® Brand Canadian Market Share and Ranking (Q2 2025) | Brand/Category | Market Share | Ranking | | :------------- | :----------- | :------ | | Spinach® (Overall) | 4.7% | 2 | | Spinach® (Flower) | 4.9% | 3 | | Spinach® Gummies (Edibles) | 19.9% | 5 products in top 10 | | Spinach® (Vape Category) | 6.5% | 4 | | Spinach® Vape Cartridges | 8.4% | 2 | | Spinach® Pink Lemonade 1.2g Vape Cartridge | N/A | Best-selling 1.2g vape cartridge | - The team is strategically allocating inventory and preparing to unlock significant additional capacity through the Cronos GrowCo expansion in **Fall 2025**[10](index=10&type=chunk) [Lord Jones®](index=3&type=section&id=Lord%20Jones) Lord Jones® Chocolate Fusions™ was the **third best-selling** chocolate cannabis edible brand in Canada in Q2 2025 with a **10.2% market share**, and the brand ranked **first** in the hash-infused pre-roll segment with a **28.5% market share** Lord Jones® Brand Canadian Market Share and Ranking (Q2 2025) | Brand/Category | Market Share | Ranking | | :-------------------------- | :----------- | :------ | | Lord Jones® Chocolate Fusions™ | 10.2% | 3 Best-selling Chocolate Edible Brand | | Lord Jones® (Hash-infused Pre-rolls) | 28.5% | 1 | - Launched Lord Jones® Live Resin Caviar, featuring prominent strains like Gorilla Grape and Orange Velvet, reinforcing its premium positioning in the extract category[11](index=11&type=chunk) [PEACE NATURALS®](index=3&type=section&id=PEACE%20NATURALS) PEACE NATURALS® continued its strong performance in Israel in Q2 2025, achieving record revenue and sales volume, and successfully expanded into new international medical cannabis markets - In Israel, PEACE NATURALS® was the best-performing brand, achieving record revenue and sales volume in Q2 2025[12](index=12&type=chunk) - The PEACE NATURALS® brand launched in the Australian and Maltese medical cannabis markets in Q2 2025, and entered the Swiss medical market subsequent to the quarter end[14](index=14&type=chunk) - The company's medical brands have expanded to **seven global markets**, including Canada, Israel, Germany, the U.K., Australia, Switzerland, and Malta[14](index=14&type=chunk) [Cronos GrowCo Expansion](index=4&type=section&id=Cronos%20GrowCo%20Expansion) Cronos GrowCo's expansion project is complete, with sales anticipated to commence in Fall 2025, providing additional supply for international and Canadian domestic market growth - The Cronos GrowCo expansion is complete[14](index=14&type=chunk) - Sales are expected to commence in **Fall 2025**, driving growth in both international and Canadian domestic markets[14](index=14&type=chunk) [Corporate Developments](index=4&type=section&id=Corporate%20Developments) This section outlines recent corporate developments, including updates on the Israeli anti-dumping duty proposal, strategic investments, and key appointments [Proposed Anti-Dumping Duty in Israel: Update](index=4&type=section&id=Proposed%20Anti-Dumping%20Duty%20in%20Israel%3A%20Update) Israel's Ministry of Justice confirmed the Finance Minister's rejection of a 165% anti-dumping duty proposal on Canadian medical cannabis imports, a decision welcomed by Cronos Group - Israel's Ministry of Justice announced on **July 3, 2025**, that the Finance Minister's rejection of the proposed **165% anti-dumping duty** on the company's medical cannabis imports was effective[15](index=15&type=chunk) - The company strongly refuted the allegations and expressed satisfaction with the decision to reject the anti-dumping duty proposal[15](index=15&type=chunk) [Investments](index=4&type=section&id=Investments) In July 2025, Cronos invested CAD **$25.2 million** (approximately USD **$18.5 million**) in High Tide Inc. via a five-year subordinated secured convertible loan to maintain market competitiveness - In **July 2025**, Cronos invested CAD **$25.2 million** (approximately USD **$18.5 million**) in High Tide Inc., operator of Canna Cabana, Canada's largest cannabis retailer[16](index=16&type=chunk) - The investment is structured as a five-year subordinated secured convertible loan with a face value of CAD **$30 million** (approximately USD **$22.1 million**), including a **16% original issue discount**, bearing an annual interest rate of **4%** (paid quarterly in cash), convertible into High Tide common shares (at a conversion price of CAD **$4.20 per share**, subject to mutual agreement)[16](index=16&type=chunk) - Concurrently, the company received a five-year common share purchase warrant exercisable for up to **3,836,317** High Tide common shares at an exercise price of CAD **$3.91 per share**[16](index=16&type=chunk) - This investment helps maintain competition in the cannabis market and ensures Cronos brands remain competitive in Canada[16](index=16&type=chunk) [Appointments](index=4&type=section&id=Appointments) Lloyd Wilson was appointed Chief Accounting Officer of Cronos Group on August 7, 2025, bringing over two decades of financial reporting and operational finance experience - Lloyd Wilson was appointed as the company's Chief Accounting Officer effective **August 7, 2025**[17](index=17&type=chunk) - Lloyd Wilson is a Chartered Professional Accountant with over **20 years** of experience in financial reporting, internal audit, plant control, and operational finance, with a strong background in the consumer packaged goods industry[17](index=17&type=chunk) [Conference Call](index=4&type=section&id=Conference%20Call) Cronos Group held a conference call and live webcast on August 7, 2025, to discuss its Q2 2025 business results, with an archived replay available on the company's website - The company held a conference call and live audio webcast on **August 7, 2025**, at **8:30 a.m. EDT**, to discuss its Q2 2025 business results[18](index=18&type=chunk) - An audio replay of the conference call has been archived on the company's website[18](index=18&type=chunk) [Company Overview](index=5&type=section&id=Company%20Overview) This section provides a brief overview of Cronos Group, highlighting its mission as an innovative global cannabinoid company focused on research, technology, and brand development [About Cronos Group](index=5&type=section&id=About%20Cronos%20Group) Cronos Group is an innovative global cannabinoid company focused on building disruptive intellectual property through cannabis research, technology, and product development - Cronos is an innovative global cannabinoid company dedicated to building disruptive intellectual property through advancing cannabis research, technology, and product development[20](index=20&type=chunk) - The company aims to responsibly elevate consumer experiences and is building an iconic brand portfolio[20](index=20&type=chunk) - Cronos' international brand portfolio includes Spinach®, PEACE NATURALS®, and Lord Jones®[20](index=20&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section outlines the nature and scope of forward-looking statements, which are based on current expectations and involve inherent risks and uncertainties that may cause actual results to differ materially [Nature and Scope of Forward-Looking Statements](index=5&type=section&id=Nature%20and%20Scope%20of%20Forward-Looking%20Statements) This section clarifies the nature of forward-looking statements, which are based on current internal expectations, estimates, forecasts, assumptions, and beliefs, and are not historical facts - Forward-looking statements are based on the company's current internal expectations, estimates, forecasts, assumptions, and beliefs, and are not historical facts[21](index=21&type=chunk) - Topics covered by forward-looking statements include: the impact of the Israeli anti-dumping investigation, the Middle East conflict's effect on Israeli operations, expectations for the PEACE NATURALS® brand in Germany, Australia, the U.K., Switzerland, and Malta, cost reduction initiatives (including the cessation of operations at the Winnipeg facility), future plans following the exit from the U.S. hemp-derived cannabinoid product business, the Cronos GrowCo transaction and facility expansion, and expectations for revenue, expenses, gross margin, and capital expenditures[22](index=22&type=chunk)[25](index=25&type=chunk) - Forward-looking statements are based on certain material assumptions management believes are reasonable, but there is no guarantee that these expectations will be achieved[24](index=24&type=chunk)[26](index=26&type=chunk) - Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those stated, with risk factors discussed in the company's reports filed with the SEC and other regulatory authorities[27](index=27&type=chunk)[28](index=28&type=chunk) - Readers should carefully consider these factors and not place undue reliance on forward-looking statements, as the company undertakes no obligation to update or revise any such statements[29](index=29&type=chunk) [Condensed Consolidated Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Cronos Group's condensed consolidated financial statements, including balance sheets, statements of net loss and comprehensive income (loss), and cash flow statements [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets slightly increased to **$1.175 billion**, total liabilities decreased to **$45 million**, and total shareholders' equity rose to **$1.130 billion** Condensed Consolidated Balance Sheet Highlights (Thousand Dollars) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------ | :----------------- | :--------- | :--------- | | Total Assets | 1,175,227 | 1,166,312 | 8,915 | 0.8 % | | Cash and Cash Equivalents | 794,416 | 858,805 | (64,389) | (7.5) % | | Short-term Investments | 40,000 | — | 40,000 | N/A | | Accounts Receivable, Net | 26,619 | 15,462 | 11,157 | 72.1 % | | Inventory, Net | 42,142 | 33,149 | 8,993 | 27.1 % | | Total Current Assets | 927,147 | 936,113 | (8,966) | (1.0) % | | Total Liabilities | 45,021 | 55,330 | (10,309) | (18.6) % | | Total Shareholders' Equity | 1,130,206 | 1,110,982 | 19,224 | 1.7 % | [Condensed Consolidated Statements of Net Loss and Comprehensive Income (Loss)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Net%20Loss%20and%20Comprehensive%20Income%20(Loss)) In Q2 2025, net revenue grew **21% to $33.5 million**, and gross profit surged **130% to $14.5 million**, despite a net loss of **$38.5 million** primarily due to significant foreign exchange losses Condensed Consolidated Statements of Net Loss and Comprehensive Income (Loss) Highlights (Thousand Dollars) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net Revenue | 33,455 | 27,762 | 5,693 | 21 % | | Cost of Sales | 18,865 | 21,070 | (2,205) | (10) % | | Gross Profit | 14,504 | 6,297 | 8,207 | 130 % | | Total Operating Expenses | 19,828 | 21,858 | (2,030) | (9) % | | Operating Loss | (5,324) | (15,561) | 10,237 | 65.8 % | | Foreign Currency Gain (Loss) | (39,538) | 6,543 | (46,081) | (704) % | | Net Loss | (38,482) | (8,759) | (29,723) | (339) % | | Basic Net Loss Attributable to Cronos Group | (0.10) | (0.02) | (0.08) | (400) % | [Condensed Consolidated Cash Flow Statements](index=11&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statements) For the six months ended June 30, 2025, net cash from operating activities improved to **$0.722 million**, with investing activities resulting in a **$56.3 million** net outflow and financing activities using **$10.6 million** Condensed Consolidated Cash Flow Statement Highlights (Six Months Ended June 30, 2025, Thousand Dollars) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----- | :----- | :--------- | :--------- | | Net Cash Provided by (Used in) Operating Activities | 722 | (460) | 1,182 | N/M | | Net Cash Provided by (Used in) Investing Activities | (56,339) | 180,999 | (237,338) | (131) % | | Net Cash Used in Financing Activities | (10,616) | (905) | (9,711) | (1073) % | | Net Change in Cash and Cash Equivalents | (64,389) | 178,898 | (243,287) | (136) % | | Cash and Cash Equivalents, End of Period | 794,416 | 848,189 | (53,773) | (6) % | - Major cash outflows from investing activities included the purchase of short-term investments (**$40 million**) and property, plant, and equipment (**$19.1 million**)[33](index=33&type=chunk) - Major cash outflows from financing activities included the repurchase of common shares (**$3.6 million**) and dividends paid to non-controlling interests (**$3.9 million**)[33](index=33&type=chunk) [Non-GAAP Financial Measures](index=12&type=section&id=Non-GAAP%20Financial%20Measures) This section explains Cronos Group's use of non-GAAP financial measures, such as Adjusted EBITDA and Adjusted Gross Profit, to provide additional insights into operational performance [Overview of Non-GAAP Measures](index=12&type=section&id=Overview%20of%20Non-GAAP%20Measures) Cronos Group utilizes non-GAAP measures like Adjusted EBITDA and Adjusted Gross Profit to provide additional insights into operational performance by excluding non-cash and non-recurring items - Non-GAAP measures are intended to supplement U.S. GAAP measures, providing management with additional information on operating results and a better understanding of underlying business trends and results[34](index=34&type=chunk)[36](index=36&type=chunk)[43](index=43&type=chunk) - All non-GAAP measures have been reconciled to their most directly comparable U.S. GAAP measures[34](index=34&type=chunk) [Adjusted EBITDA](index=12&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA significantly improved to **$1.7 million** in Q2 2025 and **$4.0 million** for the six months ended June 30, 2025, driven by increased revenue and reduced operating expenses - Adjusted EBITDA is defined as net income (loss) excluding interest, taxes (benefit), depreciation, and amortization, adjusted for non-cash items and items not reflective of management's assessment of ongoing business performance[35](index=35&type=chunk) Adjusted EBITDA Performance (Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 1,688 | (11,051) | 12,739 | N/M | | Six Months Ended June 30 | 3,977 | (21,720) | 25,697 | N/M | - The improvement in Adjusted EBITDA is primarily attributed to increased revenue, lower cost of sales (due to Cronos GrowCo consolidation), and reduced operating expenses (driven by lower general and administrative expenses)[13](index=13&type=chunk)[40](index=40&type=chunk) [Adjusted Gross Profit and Adjusted Gross Margin](index=16&type=section&id=Adjusted%20Gross%20Profit%20and%20Adjusted%20Gross%20Margin) Adjusted gross profit surged **130% to $14.5 million** in Q2 2025 and **167% to $28.8 million** for the six months ended June 30, 2025, primarily due to Cronos GrowCo consolidation, improved sales mix, and production efficiencies - Adjusted gross profit and adjusted gross margin are non-GAAP measures that exclude the impact of inventory-related purchase accounting adjustments resulting from the Cronos GrowCo transaction[42](index=42&type=chunk) Adjusted Gross Profit Performance (Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 14,504 | 6,297 | 8,207 | 130 % | | Six Months Ended June 30 | 28,755 | 10,780 | 17,975 | 167 % | Adjusted Gross Margin Performance | Period | 2025 | 2024 | Change (pp) | | :-------------------------------- | :----- | :----- | :---------- | | Three Months Ended June 30 | 43 % | 23 % | 20 pp | | Six Months Ended June 30 | 44 % | 20 % | 24 pp | - Growth is primarily attributed to the consolidation of Cronos GrowCo, higher average selling prices from a shift in sales mix towards Israel and other international markets, increased sales volume, and improved production efficiencies[9](index=9&type=chunk)[44](index=44&type=chunk) [Constant Currency Analysis](index=16&type=section&id=Constant%20Currency%20Analysis) This section provides an analysis of Cronos Group's financial performance on a constant currency basis, isolating the impact of foreign exchange fluctuations [Overview of Constant Currency Measures](index=16&type=section&id=Overview%20of%20Constant%20Currency%20Measures) Cronos Group provides constant currency adjusted financial metrics to eliminate the impact of foreign exchange fluctuations on performance, thereby assessing the company's underlying operational performance - Constant currency information is provided to offer a framework for assessing the company's underlying operating performance by excluding the impact of foreign exchange rate fluctuations[45](index=45&type=chunk) - Income statement results are translated using the average exchange rates from the comparative period (2024); balance sheet information is translated using the spot exchange rates at the end of the prior year[45](index=45&type=chunk) [Net Revenue (Constant Currency)](index=17&type=section&id=Net%20Revenue%20(Constant%20Currency)) On a constant currency basis, Q2 2025 net revenue grew **20% to $33.3 million**, and for the six months ended June 30, 2025, it increased **26% to $67.0 million**, primarily due to increased international cannabis flower sales and Cronos GrowCo consolidation Net Revenue (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 33,334 | 27,762 | 5,572 | 20 % | | Six Months Ended June 30 | 66,956 | 53,050 | 13,906 | 26 % | Net Revenue by Product Type (Constant Currency, Q2 2025 vs Q2 2024, Thousand Dollars) | Product Type | 2025 (Thousand Dollars) | 2024 (Thousand Dollars) | Change ($) | Change (%) | | :------------- | :------------------- | :------------------- | :--------- | :--------- | | Cannabis Flower | 24,820 | 20,661 | 4,159 | 20 % | | Cannabis Extracts | 8,446 | 7,064 | 1,382 | 20 % | Net Revenue by Geography (Constant Currency, Q2 2025 vs Q2 2024, Thousand Dollars) | Region | 2025 (Thousand Dollars) | 2024 (Thousand Dollars) | Change ($) | Change (%) | | :------------- | :------------------- | :------------------- | :--------- | :--------- | | Canada | 19,633 | 19,844 | (211) | (1) % | | Israel | 9,001 | 6,889 | 2,112 | 31 % | | Other International | 4,700 | 1,029 | 3,671 | 357 % | - Net revenue growth is primarily attributed to increased cannabis flower sales in Israel and other international markets, the consolidation of Cronos GrowCo (contributing **$2.2 million** in Q2 2025 and **$5.3 million** for the six months), and higher cannabis extract sales in the Canadian market[49](index=49&type=chunk) [Gross Profit (Constant Currency)](index=17&type=section&id=Gross%20Profit%20(Constant%20Currency)) On a constant currency basis, Q2 2025 gross profit increased **129% to $14.4 million**, and for the six months ended June 30, 2025, it rose **166% to $28.6 million**, driven by Cronos GrowCo consolidation and improved sales mix Gross Profit (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 14,421 | 6,297 | 8,124 | 129 % | | Six Months Ended June 30 | 28,645 | 10,780 | 17,865 | 166 % | - Gross profit growth is primarily attributed to the consolidation of Cronos GrowCo, higher average selling prices from a shift in sales mix towards Israel and other international markets, increased sales volume, and improved production efficiencies[50](index=50&type=chunk) [Operating Expenses (Constant Currency)](index=17&type=section&id=Operating%20Expenses%20(Constant%20Currency)) On a constant currency basis, Q2 2025 operating expenses decreased **9% to $19.8 million**, and for the six months ended June 30, 2025, they fell **9% to $38.3 million**, primarily due to reduced compensation and equity-based compensation Operating Expenses (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 19,843 | 21,858 | (2,015) | (9) % | | Six Months Ended June 30 | 38,319 | 42,289 | (3,970) | (9) % | - The decrease in operating expenses is primarily due to lower compensation and benefits, an increase in the prior period expected credit loss provision, and lower equity-based compensation expense[51](index=51&type=chunk) - This was partially offset by increased sales and marketing expenses, restructuring costs, and the consolidation of Cronos GrowCo (adding **$1.0 million** in Q2 2025 and **$1.9 million** for the six months)[51](index=51&type=chunk) [Net Loss (Constant Currency)](index=17&type=section&id=Net%20Loss%20(Constant%20Currency)) On a constant currency basis, Q2 2025 net loss increased to **$39.8 million**, and for the six months ended June 30, 2025, it rose to **$32.5 million**, mainly due to unrealized foreign exchange losses Net Loss (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | (39,798) | (8,759) | (31,039) | (354) % | | Six Months Ended June 30 | (32,477) | (11,243) | (21,234) | (189) % | - The increase in net loss is primarily due to unrealized foreign exchange losses on U.S. dollar-denominated cash and short-term investments held in Canada (impacted by a stronger Canadian dollar against the U.S. dollar), partially offset by higher gross profit and lower operating expenses[52](index=52&type=chunk) [Adjusted EBITDA (Constant Currency)](index=17&type=section&id=Adjusted%20EBITDA%20(Constant%20Currency)) On a constant currency basis, Q2 2025 Adjusted EBITDA improved to **$1.6 million**, and for the six months ended June 30, 2025, it improved to **$3.9 million**, driven by higher gross profit and lower operating expenses Adjusted EBITDA (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 1,587 | (11,051) | 12,638 | N/M | | Six Months Ended June 30 | 3,920 | (21,720) | 25,640 | N/M | - The improvement in Adjusted EBITDA is primarily attributed to higher gross profit and lower operating expenses (particularly reduced general and administrative expenses)[53](index=53&type=chunk) [Cash and Cash Equivalents & Short-term Investments (Constant Currency)](index=17&type=section&id=Cash%20and%20Cash%20Equivalents%20%26%20Short-term%20Investments%20(Constant%20Currency)) On a constant currency basis, total cash and short-term investments decreased **3% to $832.6 million** as of June 30, 2025, primarily due to capital expenditures, share repurchases, and dividend payments Total Cash and Cash Equivalents and Short-term Investments (Constant Currency, Thousand Dollars) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change ($) | Change (%) | | :------------------------------------------------ | :------------------ | :----------------- | :--------- | :--------- | | Total Cash and Cash Equivalents and Short-term Investments | 832,622 | 858,805 | (26,183) | (3) % | - The decrease is primarily due to purchases of property, plant, and equipment, repurchases of common shares, dividends paid to non-controlling interests, and tax withholdings related to equity-based compensation[54](index=54&type=chunk) [Foreign Currency Exchange Rates](index=19&type=section&id=Foreign%20Currency%20Exchange%20Rates) This section provides spot and average foreign currency exchange rates for USD against CAD and ILS, highlighting the strengthening of the Canadian dollar against the US dollar USD to CAD Exchange Rates (C$ per $) | Exchange Rate Type | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :-------- | :------------ | :------------ | :---------------- | | Spot Rate | 1.3608 | 1.3674 | 1.4351 | | Average Rate | 1.4094 | 1.3581 | N/A | USD to Israeli New Shekel Exchange Rates (ILS per $) | Exchange Rate Type | June 30, 2025 | June 30, 2024 | December 31, 2023 | | :-------- | :------------ | :------------ | :---------------- | | Spot Rate | 3.3683 | 3.7742 | 3.6526 | | Average Rate | 3.5954 | 3.6950 | N/A | [Investor Relations Contact](index=19&type=section&id=Investor%20Relations%20Contact) This section provides the contact information for Cronos Group's investor relations, including the contact person's name, email, and phone number [Contact Information](index=19&type=section&id=Contact%20Information) This section provides the contact information for Cronos Group's investor relations, including the contact person's name, phone, and email address - Investor Relations Contact: Harrison Aaron[56](index=56&type=chunk) - Email: investor.relations@thecronosgroup.com[56](index=56&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ____________. Commission file number 033-80623 Achieve Life Sciences, Inc. (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdi ...

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) [Q2 2025 Key Achievements](index=1&type=section&id=Q2%202025%20Key%20Achievements) Immunocore achieved KIMMTRAK net revenue of $98 million in Q2 2025, a 30% year-over-year increase, and reported robust cash reserves, making progress in several key clinical trials, including Phase 3 trials for TEBE-AM and PRISM-MEL-301, and planning to release Phase 1 HBV data Q2 2025 Key Financial and Business Highlights | Metric | Amount/Status | | :--- | :--- | | KIMMTRAK Net Revenue (Q2 2025) | $98.0 million | | KIMMTRAK Net Revenue YoY Growth (Q2 2025) | 30% | | Cash, Cash Equivalents, and Marketable Securities (as of June 30, 2025) | $883 million | | Phase 3 TEBE-AM Trial | Enrollment on track for H1 2026 | | PRISM-MEL-301 Phase 3 Trial | Dose selection expected H2 2025 | | Phase 1 HBV Data | To be presented at AASLD Liver Meeting 2025 | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Bahija Jallal highlighted strong revenue growth (32% YoY) in H1 2025, attributed to KIMMTRAK's global market expansion, and noted good progress in multiple Phase 3 and Phase 1/2 clinical trials, preparing for autoimmune CTA submissions, demonstrating platform depth and diversity - Revenue grew **32% year-over-year** in the first half of 2025, primarily driven by the continued rollout of KIMMTRAK in the US and global markets[3](index=3&type=chunk) - The Phase 3 TEBE-AM trial is on track for enrollment completion in the first half of 2026, with other Phase 3 trials like PRISM-MEL-301 and ATOM also progressing well[3](index=3&type=chunk) - The company is advancing Phase 1/2 trials in oncology and infectious diseases and preparing to submit clinical trial applications for autoimmune candidates, showcasing platform depth and diversity[3](index=3&type=chunk) [Product & Pipeline Update](index=1&type=section&id=Product%20%26%20Pipeline%20Update) [KIMMTRAK® (tebentafusp)](index=1&type=section&id=KIMMTRAK%C2%AE%20(tebentafusp)) KIMMTRAK is approved in 39 countries and launched in 28, establishing itself as the standard of care for HLA-A*02:01-positive metastatic uveal melanoma (mUM) patients, with plans for continued global mUM expansion and potential extension to 2L+ advanced cutaneous melanoma (CM) and adjuvant uveal melanoma - KIMMTRAK is approved in **39 countries** globally and launched in **28 countries** for HLA-A*02:01-positive metastatic uveal melanoma patients[4](index=4&type=chunk) - The company plans to achieve three key growth areas for KIMMTRAK through global mUM expansion, potential extension to 2L+ advanced CM, and adjuvant uveal melanoma[6](index=6&type=chunk) [Commercial Performance & Expansion](index=2&type=section&id=Commercial%20Performance%20%26%20Expansion) KIMMTRAK achieved net sales of $98 million in Q2 2025 and $191.8 million in H1 2025, representing 30% and 32% YoY growth respectively, driven by increased demand, new country launches, and completed price negotiations in France and Germany, with new distribution agreements signed for the Middle East and North Africa KIMMTRAK Net Product Sales (million USD) | Period | 2025 | 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | Three Months Ended June 30 | $98.0 | $75.3 | 30% | | Six Months Ended June 30 | $191.8 | $145.7 | 32% | Regional Quarterly Growth (YoY) | Region | Growth Rate | | :--- | :--- | | US | 15% | | Europe & International | 71% | - Growth in Europe and international markets was primarily driven by increased demand, new country launches, and completed price negotiations in France and Germany[10](index=10&type=chunk) - The company signed a distribution and commercialization agreement with Er-Kim Pharmaceuticals for KIMMTRAK in Turkey, the Middle East, North Africa, the Caucasus, and CIS regions[10](index=10&type=chunk) [KIMMTRAK Clinical Development](index=2&type=section&id=KIMMTRAK%20Clinical%20Development) The Phase 3 TEBE-AM trial for KIMMTRAK is recruiting patients, with enrollment expected to complete in H1 2026, addressing unmet needs in 2L+ advanced cutaneous melanoma, while the EORTC is expanding site coverage for the Phase 3 ATOM adjuvant uveal melanoma trial, targeting 1,200 high-risk patients in the US and Europe - The TEBE-AM registrational Phase 3 trial is recruiting patients, with enrollment expected to complete in the first half of 2026, addressing a significant unmet need in 2L+ advanced cutaneous melanoma[10](index=10&type=chunk) - The European Organisation for Research and Treatment of Cancer (EORTC) is expanding site coverage for the Phase 3 ATOM adjuvant uveal melanoma trial[10](index=10&type=chunk) - The company estimates the HLA-A*02:01 high-risk adjuvant uveal melanoma patient population could be as many as **1,200 individuals** in the US and Europe[10](index=10&type=chunk) [PRAME Portfolio (Brenetafusp)](index=2&type=section&id=PRAME%20Portfolio%20(Brenetafusp)) Brenetafusp, the company's leading PRAME-A02 ImmTAC bispecific candidate, is being evaluated in multiple clinical trials, including the Phase 3 registrational trial PRISM-MEL-301 for first-line advanced cutaneous melanoma, and Phase 1/2 trials as monotherapy and in combination across various tumor types like ovarian cancer and non-small cell lung cancer - Brenetafusp, the company's leading PRAME-A02 ImmTAC bispecific candidate, is undergoing a Phase 3 registrational trial (PRISM-MEL-301) in combination with nivolumab for first-line advanced cutaneous melanoma patients[9](index=9&type=chunk) - Brenetafusp is also being evaluated in Phase 1/2 clinical trials as monotherapy and in combination across various tumor types, including ovarian cancer and non-small cell lung cancer[9](index=9&type=chunk) [PRISM-MEL-301 Phase 3 Trial](index=3&type=section&id=PRISM-MEL-301%20Phase%203%20Trial) PRISM-MEL-301, a Phase 3 registrational trial for brenetafusp combined with nivolumab in first-line advanced cutaneous melanoma, has activated over 150 global sites, with the IDMC recommending continuation after reviewing safety data from the first 30 patients, and final dose selection expected in H2 2025, addressing an unmet need for approximately 10,000 HLA-A*02:01-positive patients - The PRISM-MEL-301 trial has activated over **150 clinical sites** globally and is recruiting HLA-A*02:01-positive, first-line, advanced or metastatic cutaneous melanoma patients[15](index=15&type=chunk) - The IDMC reviewed safety data from the first **30 patients** and recommended continuation of the study, with final brenetafusp dose selection expected in the second half of 2025[15](index=15&type=chunk) - The company estimates approximately **10,000 HLA-A*02:01-positive patients** in the US and Europe have an unmet need for improved progression-free and overall survival[15](index=15&type=chunk) [Brenetafusp Phase 1/2 in Multiple Solid Tumors](index=3&type=section&id=Brenetafusp%20Phase%201%2F2%20in%20Multiple%20Solid%20Tumors) Brenetafusp is being evaluated in Phase 1/2 trials in combination with non-platinum chemotherapy for platinum-resistant ovarian cancer, and with bevacizumab or platinum chemotherapy for early platinum-sensitive ovarian cancer, while also undergoing signal detection in non-small cell lung cancer cohorts, including combinations with docetaxel and osimertinib, with an estimated 150,000 eligible HLA-A*02:01-positive solid tumor patients globally annually - The company continues to evaluate brenetafusp in Phase 1/2 trials in combination with non-platinum chemotherapy for platinum-resistant ovarian cancer, and with bevacizumab or platinum chemotherapy for early platinum-sensitive ovarian cancer[15](index=15&type=chunk) - In the same trial, the company continues signal detection in metastatic non-small cell lung cancer cohorts, including brenetafusp in combination with docetaxel and osimertinib[15](index=15&type=chunk) - The company estimates that as many as **150,000 HLA-A*02:01-positive patients** are eligible for testing across all solid tumors globally each year[15](index=15&type=chunk) [Other PRAME Candidates](index=3&type=section&id=Other%20PRAME%20Candidates) The company is conducting a Phase 1 dose-escalation trial for IMC-P115C (PRAME-A02 half-life extended) in multiple solid tumors - The company is recruiting patients for a Phase 1 dose-escalation trial of IMC-P115C (PRAME-A02 half-life extended) in multiple solid tumors[12](index=12&type=chunk) [Other Oncology Programs (IMC-R117C)](index=3&type=section&id=Other%20Oncology%20Programs%20(IMC-R117C)) The company is conducting a Phase 1/2 dose-escalation trial for IMC-R117C (PIWIL1) in HLA-A*02:01-positive advanced solid tumors, including colorectal cancer, as monotherapy and in combination with standard of care - The company is recruiting patients for a Phase 1/2 dose-escalation trial of IMC-R117C (PIWIL1) in HLA-A*02:01-positive advanced solid tumors, including colorectal cancer, as monotherapy and in combination with standard of care[13](index=13&type=chunk) [Infectious Disease Programs (ImmTAV)](index=3&type=section&id=Infectious%20Disease%20Programs%20(ImmTAV)) The ImmTAV platform aims for a 'functional cure' of chronic infections through bispecific TCR technology, with two candidates in Phase 1 or Phase 1/2 trials targeting HIV and chronic Hepatitis B virus (HBV) infection - The ImmTAV platform aims to provide a new approach for certain chronic infections, targeting a 'functional cure' where patients eliminate evidence of the virus from their bodies after stopping treatment[14](index=14&type=chunk) [HIV Program (IMC-M113V)](index=4&type=section&id=HIV%20Program%20(IMC-M113V)) The Phase 1/2 multi-dose escalation trial for IMC-M113V (Gag-A02) continues to recruit patients to determine a safe and tolerable dose - The Phase 1/2 multi-dose escalation clinical trial for IMC-M113V (Gag-A02) continues to recruit patients at higher doses to determine a safe and tolerable dose[16](index=16&type=chunk) [HBV Program (IMC-I109V)](index=4&type=section&id=HBV%20Program%20(IMC-I109V)) Phase 1 single-dose escalation trial data for IMC-I109V (Envelope-A02) will be presented at the AASLD Liver Meeting in November 2025 - The company will present single-dose escalation data from the Phase 1 trial of IMC-I109V (Envelope-A02) at the AASLD Liver Meeting in November 2025[17](index=17&type=chunk) [Autoimmune Disease Programs (ImmTAAI)](index=4&type=section&id=Autoimmune%20Disease%20Programs%20(ImmTAAI)) The ImmTAAI platform aims to tissue-specifically downregulate the immune system by inhibiting pathogenic T cells via PD1 receptor agonism, with two candidates in development: IMC-S118AI (PPI-A02) for Type 1 Diabetes, with CTA/IND submission expected in H2 2025, and IMC-U120AI (CD1a) for Atopic Dermatitis, with CTA/IND submission expected in 2026 - The ImmTAAI platform achieves tissue-specific downregulation of the immune system by inhibiting pathogenic T cells via PD1 receptor agonism when binding to target tissues[18](index=18&type=chunk) [Type 1 Diabetes (IMC-S118AI)](index=4&type=section&id=Type%201%20Diabetes%20(IMC-S118AI)) IMC-S118AI (PPI-A02) for Type 1 Diabetes is expected to have its Clinical Trial Application (CTA) or Investigational New Drug (IND) application submitted in the second half of 2025 - The company is on track to submit a CTA or IND application for IMC-S118AI (PPI x PD1) for Type 1 Diabetes in the second half of 2025[19](index=19&type=chunk) [Atopic Dermatitis (IMC-U120AI)](index=4&type=section&id=Atopic%20Dermatitis%20(IMC-U120AI)) IMC-U120AI (CD1a) for Atopic Dermatitis is expected to have its CTA/IND submission in 2026 - The company plans to submit a CTA/IND application for IMC-U120AI (CD1a x PD1) for Atopic Dermatitis in 2026[20](index=20&type=chunk) [Corporate Update](index=4&type=section&id=Corporate%20Update) [Director Resignation](index=4&type=section&id=Director%20Resignation) Rob Perez resigned from the company's Board of Directors on August 5, 2025, effective September 16, 2025, with the company expressing gratitude for his six years of contributions to Immunocore - Rob Perez resigned from the company's Board of Directors on August 5, 2025, effective September 16, 2025[21](index=21&type=chunk) [Financial Results](index=4&type=section&id=Financial%20Results) [Q2 2025 Financial Performance Overview](index=4&type=section&id=Q2%202025%20Financial%20Performance%20Overview) Immunocore achieved net product sales of $98 million in Q2 2025, a 30% YoY increase, with R&D expenses rising to $69 million due to autoimmune programs and Phase 3 trials, and SG&A expenses increasing to $42.8 million to support pipeline and global commercial expansion, resulting in a narrowed net loss of $10.3 million, or $0.20 per share Q2 2025 Key Financial Data (million USD) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Net Product Sales | $98.0 | $75.3 | 30% increase | | R&D Expenses | $69.0 | $51.1 | increase of $17.9 | | SG&A Expenses | $42.8 | $38.6 | increase of $4.2 | | Net Loss | ($10.3) | ($11.6) | loss narrowed by $1.3 | | Basic and Diluted Loss Per Share | ($0.20) | ($0.23) | loss narrowed by $0.03 | - R&D expenses increased primarily due to the advancement of autoimmune programs and Phase 3 trials (TEBE-AM and PRISM-MEL-301)[23](index=23&type=chunk) - SG&A expenses increased mainly due to business support function costs for the company's growing pipeline and global commercial expansion[24](index=24&type=chunk) [Balance Sheet & Cash Position](index=5&type=section&id=Balance%20Sheet%20%26%20Cash%20Position) As of June 30, 2025, the company's cash, cash equivalents, and marketable securities totaled $882.8 million, an increase from $820.4 million at the end of 2024, with an estimated $65 million in sales-related rebate accruals expected to be paid in H2 2025 Cash, Cash Equivalents, and Marketable Securities (million USD) | Date | Amount | | :--- | :--- | | June 30, 2025 | $882.8 | | December 31, 2024 | $820.4 | | Change | increase of $62.4 | - The company expects to pay approximately **$65 million** in sales-related rebate accruals in the second half of 2025[27](index=27&type=chunk) [About Immunocore & Technologies](index=5&type=section&id=About%20Immunocore%20%26%20Technologies) [About ImmTAC® molecules for cancer](index=5&type=section&id=About%20ImmTAC%C2%AE%20molecules%20for%20cancer) ImmTAC molecules are novel bispecific biologics generated by Immunocore's proprietary T-cell receptor (TCR) technology, designed to redirect the immune system to recognize and kill cancer cells, functioning as soluble TCRs with ultra-high affinity for intracellular cancer antigens and selective killing via anti-CD3 immune activating effector function, holding promise for various hematological and solid tumors - ImmTAC molecules are novel bispecific biologics generated by Immunocore's proprietary T-cell receptor (TCR) technology, designed to redirect the immune system to recognize and kill cancer cells[28](index=28&type=chunk) - ImmTAC molecules selectively kill cancer cells by recognizing intracellular cancer antigens with ultra-high affinity and employing anti-CD3 immune activating effector function, holding promise for both hematological and solid tumors[28](index=28&type=chunk) [About ImmTAV infectious disease molecules](index=5&type=section&id=About%20ImmTAV%20molecules%20and%20infectious%20diseases) ImmTAV molecules are novel bispecific drugs designed to enable the immune system to recognize and eliminate virally infected cells, with Immunocore advancing clinical candidates to achieve a 'functional cure' for HIV and HBV patients, meaning sustained viral control after stopping medication - ImmTAV molecules are novel bispecific drugs designed to enable the immune system to recognize and eliminate virally infected cells[29](index=29&type=chunk) - Immunocore is advancing clinical candidates to achieve a 'functional cure' for HIV and HBV patients, meaning sustained control of HIV after stopping antiretroviral therapy (ART), and sustained clearance of circulating viral antigens and replication markers for HBV after stopping medication[29](index=29&type=chunk) [About ImmTAAI autoimmune disease molecules](index=5&type=section&id=About%20ImmTAAI%20molecules%20and%20autoimmune%20diseases) ImmTAAI molecules are novel bispecific drugs designed for tissue-specific downregulation of the immune system, inhibiting pathogenic T cells via PD1 receptor agonism when binding to target tissues, currently in development for Type 1 Diabetes and inflammatory skin diseases - ImmTAAI molecules are novel bispecific drugs designed to achieve tissue-specific downregulation of the immune system[30](index=30&type=chunk) - When binding to target tissues, ImmTAAI candidates inhibit pathogenic T cells via PD1 receptor agonism[30](index=30&type=chunk) - The company is currently advancing two autoimmune disease candidates, including for Type 1 Diabetes and inflammatory skin diseases[30](index=30&type=chunk) [Detailed Clinical Trial Information](index=6&type=section&id=Detailed%20Clinical%20Trial%20Information) This section provides detailed information on Immunocore's key clinical trials, including the design, patient populations, randomization, and primary endpoints for PRISM-MEL301, IMC-F106C-101, TEBE-AM, and ATOM trials [PRISM-MEL301 (NCT06112314)](index=6&type=section&id=PRISM-MEL301%20(NCT06112314)) PRISM-MEL301 is a Phase 3 registrational trial for untreated HLA-A*02:01-positive advanced melanoma patients, randomized to brenetafusp + nivolumab or control, with an initial three-arm randomization and a primary endpoint of blinded independent central review of progression-free survival (PFS) - PRISM-MEL301 is a Phase 3 registrational trial for HLA-A*02:01-positive, untreated advanced melanoma patients[32](index=32&type=chunk) - Patients are randomized to brenetafusp + nivolumab or a control arm (nivolumab or nivolumab + relatlimab)[32](index=32&type=chunk) - The primary endpoint is blinded independent central review of progression-free survival (PFS), with secondary endpoints including overall survival (OS) and overall response rate (ORR)[32](index=32&type=chunk) [IMC-F106C-101 Phase 1/2 trial](index=6&type=section&id=IMC-F106C-101%20Phase%201%2F2%20trial) IMC-F106C-101 is a first-in-human Phase 1/2 dose-escalation trial for various solid tumor patients, aiming to determine the maximum tolerated dose and evaluate the safety, preliminary anti-tumor activity, and pharmacokinetics of IMC-F106C (brenetafusp), with a current focus on recruiting patients for combination with standard of care - IMC-F106C-101 is a first-in-human Phase 1/2 dose-escalation trial for various solid tumor patients, including non-small cell lung cancer and ovarian cancer[33](index=33&type=chunk) - The trial aims to determine the maximum tolerated dose (MTD) and evaluate the safety, preliminary anti-tumor activity, and pharmacokinetics of IMC-F106C (brenetafusp)[33](index=33&type=chunk) - The company's current focus is on recruiting patients for combination with standard of care[33](index=33&type=chunk) [TEBE-AM Phase 2/3 trial](index=6&type=section&id=TEBE-AM%20Phase%202%2F3%20trial) The TEBE-AM trial targets 2L+ advanced cutaneous melanoma patients who progressed after anti-PD1 therapy and received ipilimumab, randomizing them to tebentafusp monotherapy, tebentafusp plus anti-PD1, or a control arm, with overall survival as the primary endpoint - The TEBE-AM trial targets 2L+ advanced cutaneous melanoma patients who progressed after anti-PD1 therapy and received ipilimumab[34](index=34&type=chunk) - Patients are randomized to tebentafusp monotherapy, tebentafusp plus anti-PD1, or a control arm[34](index=34&type=chunk) - The primary endpoint is overall survival (OS)[34](index=34&type=chunk) [ATOM Phase 3 trial](index=6&type=section&id=ATOM%20Phase%203%20trial) The EORTC-sponsored Phase 3 ATOM clinical trial will establish sites in 10 EU countries and the US, recruiting HLA-A*02:01-positive, high-risk primary uveal melanoma patients randomized 1:1 to tebentafusp monotherapy or observation, with recurrence-free survival (RFS) as the primary endpoint - The EORTC-sponsored Phase 3 ATOM clinical trial will establish sites in **10 EU countries** and the US[35](index=35&type=chunk) - The trial will recruit HLA-A*02:01-positive, high-risk primary uveal melanoma patients, randomized to tebentafusp monotherapy or observation[35](index=35&type=chunk) - The primary endpoint is recurrence-free survival (RFS), with secondary objectives including overall survival and the safety and tolerability of tebentafusp[35](index=35&type=chunk) [Disease Background](index=7&type=section&id=Disease%20Background) This section describes the characteristics, prognosis, and unmet treatment needs of uveal melanoma and cutaneous melanoma, highlighting KIMMTRAK's significance in uveal melanoma treatment [Uveal Melanoma](index=7&type=section&id=Uveal%20Melanoma) Uveal melanoma is a rare, aggressive ocular melanoma and the most common primary intraocular malignancy in adults, with up to 50% of patients developing metastatic disease, often leading to poor prognosis, and no approved treatments existed before KIMMTRAK - Uveal melanoma is a rare and aggressive ocular melanoma, representing the most common primary intraocular malignancy in adults[37](index=37&type=chunk) - Up to **50%** of uveal melanoma patients eventually develop metastatic disease, often with a poor prognosis, and no approved treatment options existed prior to KIMMTRAK's approval[37](index=37&type=chunk) [Cutaneous Melanoma](index=7&type=section&id=Cutaneous%20Melanoma) Cutaneous melanoma is the most common and aggressive form of melanoma, responsible for the vast majority of skin cancer-related deaths, and despite advances in advanced melanoma treatment, unmet needs persist in improving first-line response rates, extending response duration, and treating patients resistant to first-line therapies - Cutaneous melanoma is the most common form of melanoma and the most aggressive skin cancer, associated with the vast majority of skin cancer-related deaths[38](index=38&type=chunk) - Despite advances in advanced melanoma treatment, unmet needs persist in improving first-line response rates, extending response duration, and treating patients resistant to first-line therapies[38](index=38&type=chunk) [About KIMMTRAK®](index=7&type=section&id=About%20KIMMTRAK%C2%AE) KIMMTRAK is a novel bispecific protein, a soluble T-cell receptor fused to an anti-CD3 immune-effector function, specifically targeting the gp100 antigen, and is the first molecule developed from Immunocore's ImmTAC technology platform, designed to redirect and activate T cells to recognize and kill tumor cells, approved for HLA-A*02:01-positive, unresectable or metastatic uveal melanoma in adults - KIMMTRAK is a novel bispecific protein, a soluble T-cell receptor fused to an anti-CD3 immune-effector function, specifically targeting the gp100 antigen[39](index=39&type=chunk) - KIMMTRAK is the first molecule developed from Immunocore's ImmTAC technology platform, designed to redirect and activate T cells to recognize and kill tumor cells[39](index=39&type=chunk) - KIMMTRAK is approved for the treatment of HLA-A*02:01-positive, unresectable or metastatic uveal melanoma in adults, with approvals in the US, EU, Canada, Australia, and the UK[39](index=39&type=chunk) [Important Safety Information](index=7&type=section&id=Important%20Safety%20Information) KIMMTRAK treatment may cause serious cytokine release syndrome (CRS), skin reactions, elevated liver enzymes, and embryo-fetal toxicity, requiring close monitoring for CRS symptoms and treatment or discontinuation based on severity, with common side effects including CRS, rash, fever, pruritus, fatigue, and laboratory abnormalities like decreased lymphocyte count, elevated creatinine, and liver enzymes - KIMMTRAK treatment may cause serious cytokine release syndrome (CRS), occurring in **89%** of patients, with **0.8%** being Grade 3 or 4[40](index=40&type=chunk) - Skin reactions (including rash, pruritus, skin edema) occurred in **91%** of patients, and elevated liver enzymes in **65%**[41](index=41&type=chunk)[43](index=43&type=chunk) - KIMMTRAK may cause fetal harm, and patients of reproductive potential are advised to use effective contraception during treatment and for **1 week** after the last dose[44](index=44&type=chunk) - The most common adverse reactions (≥**30%**) include cytokine release syndrome, rash, pyrexia, pruritus, fatigue, nausea, chills, abdominal pain, edema, hypotension, dry skin, headache, and vomiting[45](index=45&type=chunk) [KIMMTRAKConnect](index=8&type=section&id=KIMMTRAKConnect) The KIMMTRAKConnect program provides personalized support services, including educational resources, financial assistance, and care site coordination, delivered by dedicated nurse case managers, to help patients access KIMMTRAK - The KIMMTRAKConnect program offers personalized support, including educational resources, financial assistance, and care site coordination, to help patients access KIMMTRAK[47](index=47&type=chunk) [About Immunocore](index=8&type=section&id=About%20Immunocore) Immunocore is a commercial-stage biotechnology company developing novel TCR bispecific immunotherapies, ImmTAX, for cancer, autoimmune diseases, and infectious diseases, leveraging its proprietary ImmTAX platform to build a deep pipeline across multiple therapeutic areas, including KIMMTRAK, approved for HLA-A*02:01-positive, unresectable or metastatic uveal melanoma in adults - Immunocore is a commercial-stage biotechnology company dedicated to developing novel TCR bispecific immunotherapies, ImmTAX, for cancer, autoimmune diseases, and infectious diseases[48](index=48&type=chunk) - The company leverages its proprietary, flexible, and off-the-shelf ImmTAX platform to develop a deep pipeline across oncology, infectious diseases, and autoimmune diseases[48](index=48&type=chunk) - The company's most advanced oncology TCR therapeutic, KIMMTRAK, is approved for the treatment of HLA-A*02:01-positive, unresectable or metastatic uveal melanoma in adults[48](index=48&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) [Nature and Risks of Forward-Looking Statements](index=9&type=section&id=Nature%20and%20Risks%20of%20Forward-Looking%20Statements) This press release contains forward-looking statements regarding the company's clinical pipeline progress, KIMMTRAK's commercial performance and potential expansion, TCR technology platform potential, patient population size, clinical trial design and results, regulatory approvals, funding needs, and intellectual property protection, which are based on management's current expectations and subject to various risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements cover the company's clinical pipeline progress, KIMMTRAK's commercial performance and expansion, TCR technology platform potential, patient population size, clinical trial design and results, regulatory approvals, funding needs, and intellectual property protection[50](index=50&type=chunk) - These statements are based on management's current expectations but are subject to various risks and uncertainties, including macroeconomic conditions, clinical trial delays, regulatory actions, ability to obtain funding, and intellectual property protection, which could cause actual results to differ materially from expectations[50](index=50&type=chunk) [Contact Information](index=10&type=section&id=Contact%20Information) [Company Contacts](index=10&type=section&id=Company%20Contacts) Provides contact information for Immunocore's corporate communications and investor relations, including names, phone numbers, and email addresses, for media and investor inquiries - Immunocore's corporate communications contact is Sébastien Desprez, and investor relations contacts are Clayton Robertson / Morgan Warenius[52](index=52&type=chunk) [Financial Statements](index=11&type=section&id=Financial%20Statements) [Condensed Consolidated Statement of Operations](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) In Q2 2025, the company reported total revenue of $97.964 million, a net loss of $10.3 million, and basic and diluted loss per share of $0.20, showing increased revenue and narrowed loss compared to Q2 2024, with H1 total revenue of $191.8 million and a net loss of $5.277 million, or $0.11 per share Immunocore Holdings plc Condensed Consolidated Statement of Operations (Unaudited, in thousands of USD, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net product sales | $97,964 | $75,347 | $191,845 | $145,689 | | Collaboration revenue | — | $53 | — | $213 | | **Total revenue** | **$97,964** | **$75,400** | **$191,845** | **$145,902** | | Cost of product sales | ($1,040) | ($1,707) | ($1,871) | ($1,953) | | Research and development expenses | ($69,008) | ($51,072) | ($125,476) | ($108,531) | | Selling, general and administrative expenses | ($42,791) | ($38,638) | ($82,989) | ($77,925) | | **Operating loss** | **($14,875)** | **($16,017)** | **($18,491)** | **($42,507)** | | Interest income | $4,271 | $6,239 | $8,447 | $14,485 | | Interest expense | ($3,045) | ($4,277) | ($6,070) | ($7,516) | | Foreign currency (loss) gain | ($738) | ($508) | $2,342 | ($2,914) | | Other income, net | $4,693 | $4,433 | $10,162 | $4,243 | | Net income (loss) before income taxes | ($9,694) | ($10,130) | ($3,610) | ($34,209) | | Income tax expense | ($606) | ($1,486) | ($1,667) | ($1,843) | | **Net income (loss)** | **($10,300)** | **($11,616)** | **($5,277)** | **($36,052)** | | Net loss per share, basic and diluted | ($0.20) | ($0.23) | ($0.11) | ($0.72) | | Weighted-average shares outstanding, basic and diluted | 50,294,205 | 50,014,086 | 50,191,018 | 49,944,767 | [Condensed Consolidated Balance Sheets](index=12&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company reported total assets of $1.0824 billion, total liabilities of $693.9 million, and total shareholders' equity of $388.5 million, with cash and cash equivalents at $487.9 million and marketable securities at $394.9 million, totaling $882.8 million Immunocore Holdings plc Condensed Consolidated Balance Sheets (Unaudited, in thousands of USD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $487,933 | $455,731 | | Marketable securities | $394,878 | $364,645 | | Accounts receivable, net | $69,761 | $63,009 | | Prepaid expenses and other current assets | $44,270 | $41,033 | | Inventories, net | $5,456 | $5,446 | | **Total current assets** | **$1,002,298** | **$929,864** | | Property and equipment, net | $9,548 | $10,092 | | Operating lease right-of-use assets, net | $39,428 | $37,643 | | Deferred tax assets, net | $14,077 | $14,790 | | Other non-current assets | $17,036 | $17,117 | | **Total assets** | **$1,082,387** | **$1,009,506** | | **Liabilities and Shareholders’ Equity** | | | | Accounts payable | $23,856 | $25,100 | | Accrued expenses and other current liabilities | $143,785 | $185,534 | | Deferred revenue, current | $0 | $0 | | Operating lease liabilities, current | $1,843 | $1,547 | | **Total current liabilities** | **$170,078** | **$212,181** | | Accrued expenses, non-current | $83,960 | $0 | | Deferred revenue, non-current | $5,247 | $5,434 | | Operating lease liabilities, non-current | $42,561 | $40,162 | | Interest-bearing loans and borrowings | $392,060 | $391,013 | | **Total liabilities** | **$693,906** | **$648,790** | | Ordinary shares | $135 | $135 | | Deferred shares | $1 | $1 | | Additional paid-in capital | $1,215,997 | $1,190,104 | | Accumulated deficit | ($801,038) | ($795,761) | | Accumulated other comprehensive loss | ($26,614) | ($33,763) | | **Total shareholders’ equity** | **$388,481** | **$360,716** | | **Total liabilities and shareholders’ equity** | **$1,082,387** | **$1,009,506** | [Summary Condensed Consolidated Statements of Cash Flows](index=13&type=section&id=Summary%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $26.4 million, net cash used in investing activities was $20.712 million, and net cash provided by financing activities was $6.221 million, with cash and cash equivalents totaling $487.9 million at period end Immunocore Holdings plc Summary Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands of USD) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents at beginning of period | $455,731 | $442,626 | | Net cash provided by operating activities | $26,399 | $18,885 | | Net cash used in investing activities | ($20,712) | ($350,761) | | Net cash provided by financing activities | $6,221 | $395,194 | | Net effect of exchange rate changes on cash | $20,294 | ($959) | | **Cash and cash equivalents at end of period** | **$487,933** | **$504,985** |

[Third Quarter Fiscal 2025 Financial Highlights](index=1&type=section&id=Third%20Quarter%20Fiscal%202025%20Financial%20Highlights) Construction Partners, Inc. achieved significant year-over-year growth in Q3 FY2025, with revenue up 51% to $779.3 million and Adjusted EBITDA increasing 80% to $131.7 million, reaching a record 16.9% margin Q3 FY2025 Key Financial Metrics (vs. Q3 FY2024) | Metric | Q3 FY2025 | Q3 FY2024 | % Change | | :--- | :--- | :--- | :--- | | Revenues | $779.3M | $517.8M | +51% | | Gross Profit | $131.8M | $83.5M | +58% | | Net Income | $44.0M | $30.9M | +42% | | Diluted EPS | $0.79 | $0.59 | +34% | | Adjusted EBITDA | $131.7M | $73.2M | +80% | | Adjusted EBITDA Margin | 16.9% | 14.1% | +280 bps | - The **$261.5 million revenue increase** was composed of **$235.7 million from acquisitions** and **$25.8 million from organic growth** in existing markets[2](index=2&type=chunk) - General and administrative expenses as a percentage of total revenues **decreased by 70 basis points to 6.6%** compared to 7.3% in the prior year's quarter[3](index=3&type=chunk) [Operational Highlights and Strategic Developments](index=1&type=section&id=Operational%20Highlights%20and%20Strategic%20Developments) The company achieved a record $2.94 billion project backlog and expanded its Texas footprint through the acquisition of Durwood Greene Construction Co., despite weather-related project delays - Project backlog reached a **record $2.94 billion** at June 30, 2025, a **significant increase from $1.86 billion** at June 30, 2024[1](index=1&type=chunk)[6](index=6&type=chunk) - The company successfully managed **persistent weather-related delays**, including **record or near-record rainfall** across many Sunbelt markets, which impacted project timelines and fixed asset cost recoveries[2](index=2&type=chunk) - Announced the **acquisition of Durwood Greene Construction Co.** in the Houston metropolitan area, adding **nearly 200 employees**, **three hot-mix asphalt plants**, and a rail-served aggregates terminal[2](index=2&type=chunk) [Fiscal 2025 Full-Year Outlook](index=2&type=section&id=Fiscal%202025%20Full-Year%20Outlook) The company maintained its full-year fiscal 2025 outlook, incorporating the Durwood Greene acquisition and accounting for Q3 weather impacts, anticipating strong demand Fiscal 2025 Full-Year Guidance | Metric | Low Range | High Range | | :--- | :--- | :--- | | Revenue | $2.77 billion | $2.83 billion | | Net Income | $106.0 million | $117.0 million | | Adjusted Net Income | $124.0 million | $135.0 million | | Adjusted EBITDA | $410.0 million | $430.0 million | | Adjusted EBITDA Margin | 14.8% | 15.2% | - The company is **well-positioned** to capitalize on **long-term infrastructure investment** and **population migration** into the Sunbelt region[8](index=8&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) Consolidated financial statements show significant growth from acquisitions, with Q3 revenue up 51%, total assets nearly doubling to $2.9 billion, and strong operating cash flow of $179.3 million for the nine-month period [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Q3 2025 revenues grew 51% to $779.3 million and net income increased 42% to $44.0 million, with nine-month revenues reaching $1.91 billion and operating income nearly doubling Income Statement Highlights (in thousands) | Metric | Q3 2025 | Q3 2024 | Nine Months 2025 | Nine Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $779,277 | $517,794 | $1,912,507 | $1,285,726 | | Gross Profit | $131,810 | $83,492 | $279,731 | $174,173 | | Operating Income | $82,943 | $45,657 | $124,040 | $65,472 | | Net Income | $44,047 | $30,908 | $45,211 | $39,627 | | Diluted EPS | $0.79 | $0.59 | $0.82 | $0.75 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets reached $2.93 billion, a significant increase from $1.54 billion, primarily driven by acquisitions and funded by a rise in long-term debt to $1.39 billion Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Sept 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **$809,443** | **$585,006** | | Property, plant and equipment, net | $1,147,613 | $629,924 | | Goodwill | $775,756 | $231,656 | | **Total Assets** | **$2,925,841** | **$1,542,135** | | **Total Current Liabilities** | **$552,198** | **$380,454** | | Long-term debt, net | $1,392,639 | $486,961 | | **Total Liabilities** | **$2,072,513** | **$968,395** | | **Total Stockholders' Equity** | **$853,328** | **$573,740** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2025, operating cash flow was $179.3 million, with $1.03 billion used in investing activities, primarily for acquisitions, funded by $893.4 million from financing activities Cash Flow Summary (Nine Months Ended June 30, in thousands) | Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $179,318 | $113,181 | | Net cash used in investing activities | ($1,033,130) | ($199,098) | | Net cash provided by financing activities | $893,433 | $95,280 | | **Net change in cash** | **$39,621** | **$9,363** | [Reconciliation of Non-GAAP Financial Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) The company reconciles GAAP Net Income to non-GAAP Adjusted EBITDA and Adjusted Net Income, showing Q3 2025 Adjusted EBITDA of $131.7 million and providing similar adjustments for the full-year 2025 outlook Q3 Net Income to Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q3 2025 | Q3 2024 | | :--- | :--- | :--- | | Net income | $44,047 | $30,908 | | Interest expense, net | $25,239 | $4,673 | | Provision for income taxes | $13,903 | $10,108 | | Depreciation, depletion, etc. | $39,294 | $23,507 | | Share-based compensation | $8,564 | $4,039 | | Transformative acquisition expenses | $663 | $— | | **Adjusted EBITDA** | **$131,710** | **$73,235** | FY2025 Outlook Net Income to Adjusted EBITDA Reconciliation (in thousands) | Line Item | Low | High | | :--- | :--- | :--- | | Net income | $106,000 | $117,000 | | Interest expense, net | $86,000 | $86,000 | | Provision for income taxes | $32,000 | $36,000 | | Depreciation, depletion, etc. | $143,000 | $145,000 | | Share-based compensation | $23,250 | $26,250 | | Transformative acquisition expenses | $19,750 | $19,750 | | **Adjusted EBITDA** | **$410,000** | **$430,000** | - **Adjusted Net Income for Q3 2025 was $45.2 million**, after adding back transformative acquisition expenses and related financing fees to the **GAAP Net Income of $44.0 million**[26](index=26&type=chunk)