[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Backblaze reported strong Q2 2025 results with 16% total revenue growth, 29% B2 Cloud Storage growth, significantly improved profitability, and key operational achievements in AI and cybersecurity Q2 2025 Financial Highlights (YoY) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $36.3 million | $31.3 million | +16% | | B2 Cloud Storage Revenue | $19.8 million | $15.3 million | +29% | | Computer Backup Revenue | $16.5 million | $15.9 million | +4% | | **Gross Profit** | $23.0 million | $17.2 million | +33.7% | | Gross Margin | 63% | 55% | +8 p.p. | | **Net Loss** | $(7.1) million | $(10.3) million | N/A | | Net Loss Per Share | $(0.13) | $(0.25) | N/A | | **Adjusted EBITDA** | $6.6 million | $2.7 million | +144% | | Adjusted EBITDA Margin | 18% | 9% | +9 p.p. | | **Non-GAAP Net Income (Loss)** | $0.8 million | $(4.8) million | N/A | - B2 Cloud Storage revenue growth accelerated sequentially from **23%** in Q1 to **29%** in Q2, solidifying the company's path to be Adjusted Free Cash Flow positive in **Q4 2025**[2](index=2&type=chunk) - Key operational developments include: - **AI Momentum**: Signed the first six-figure B2 Overdrive customer for AI workloads just two months after launch - **Cybersecurity**: Launched a suite of enterprise security features, including AI-powered 'Anomaly Alerts' - **Up-Market Growth**: The number of customers contributing over $50,000 in ARR grew **53%** year-over-year[2](index=2&type=chunk)[7](index=7&type=chunk) Key Business Metrics (YoY) | Metric | Q2 2025 (USD) | Q2 2024 (USD) | | :--- | :--- | :--- | | Annual Recurring Revenue (ARR) | $145.9 million (+16%) | N/A | | B2 Cloud Storage ARR | $80.7 million (+29%) | N/A | | Computer Backup ARR | $65.2 million (+3%) | N/A | | Net Revenue Retention (NRR) | 109% | 114% | | B2 Cloud Storage NRR | 112% | 126% | [Financial Outlook](index=2&type=section&id=Financial%20Outlook) The company issued positive Q3 2025 guidance and raised its full-year revenue forecast, expecting continued strong B2 Cloud Storage growth accelerating to over 30% by Q4 2025 Q3 and Full-Year 2025 Guidance | Metric | Q3 2025 Outlook (USD) | Full-Year 2025 Outlook (USD) | Previous FY2025 Outlook (USD) | | :--- | :--- | :--- | :--- | | **Revenue** | $36.7 million - $37.1 million | $145.0 million - $147.0 million | $144.0 million - $146.0 million | | **Adjusted EBITDA Margin** | 17% - 19% | 17% - 19% | N/A | B2 Business YoY Growth Outlook for 2025 | Quarter | Q1 2025 (Actual) | Q2 2025 (Actual) | Q3 2025 (Outlook) | Q4 2025 (Outlook) | | :--- | :--- | :--- | :--- | :--- | | **YoY Growth** | 23% | 29% | 28-30% | 30%+ | [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail the company's financial position and performance, reflecting growth in assets and liabilities, increased revenue, improved gross margins, a smaller net loss, and positive cash from operations [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $186.0 million and total liabilities grew to $106.4 million, with cash and marketable securities totaling $50.5 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 (in thousands USD) | December 31, 2024 (in thousands USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $32,187 | $45,776 | | Marketable securities | $18,354 | $9,139 | | **Total Assets** | **$186,045** | **$168,558** | | Total current liabilities | $59,914 | $59,803 | | **Total Liabilities** | **$106,403** | **$90,936** | | **Total Stockholders' Equity** | **$79,642** | **$77,622** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, revenue grew 16% to $36.3 million, gross profit increased 33.7% to $23.0 million with margin expanding to 63%, and net loss significantly reduced to $7.1 million Statement of Operations Summary - Q2 (in thousands) | Account | Three Months Ended June 30, 2025 (in thousands USD) | Three Months Ended June 30, 2024 (in thousands USD) | | :--- | :--- | :--- | | **Revenue** | $36,298 | $31,285 | | **Gross Profit** | $23,041 | $17,229 | | Total operating expenses | $29,758 | $27,038 | | Loss from operations | $(6,717) | $(9,809) | | **Net Loss** | **$(7,097)** | **$(10,348)** | | Net loss per share | $(0.13) | $(0.25) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operations improved to $8.5 million, while investing and financing activities resulted in a net decrease in cash of $13.6 million Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 (in thousands USD) | Six Months Ended June 30, 2024 (in thousands USD) | | :--- | :--- | :--- | | 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) | $(3,376) | | **Net decrease in cash** | **$(13,589)** | **$(2,675)** | [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles key non-GAAP financial measures to GAAP, demonstrating significant improvement in underlying profitability with positive Non-GAAP net income, doubled Adjusted EBITDA, and nearly halved adjusted free cash flow burn [Adjusted Gross Profit](index=10&type=section&id=Adjusted%20Gross%20Profit) Adjusted gross profit for Q2 2025 was $28.8 million, with an adjusted gross margin of 79%, a slight improvement from 78% in Q2 2024 after excluding non-cash items Adjusted Gross Profit Reconciliation - Q2 (in thousands) | Metric | Q2 2025 (in thousands USD) | Q2 2024 (in thousands USD) | | :--- | :--- | :--- | | GAAP Gross Profit | $23,041 | $17,229 | | Stock-based compensation | $432 | $354 | | Depreciation and amortization | $5,384 | $6,879 | | **Adjusted Gross Profit** | **$28,844** | **$24,462** | | **Adjusted Gross Margin** | **79%** | **78%** | [Adjusted EBITDA](index=10&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 more than doubled to $6.6 million from $2.7 million, with the margin expanding significantly to 18% from 9%, reflecting strong operating profitability improvement Adjusted EBITDA Reconciliation - Q2 (in thousands) | Metric | Q2 2025 (in thousands USD) | Q2 2024 (in thousands USD) | | :--- | :--- | :--- | | Net Loss | $(7,097) | $(10,348) | | Depreciation and amortization | $5,474 | $7,025 | | Stock-based compensation | $7,304 | $5,528 | | Other adjustments | $929 | $538 | | **Adjusted EBITDA** | **$6,610** | **$2,743** | | **Adjusted EBITDA Margin** | **18%** | **9%** | [Non-GAAP Net Income (Loss)](index=12&type=section&id=Non-GAAP%20Net%20Income%20%28Loss%29) In Q2 2025, Backblaze achieved a Non-GAAP net income of $0.8 million ($0.01 per share), a significant turnaround from a $4.8 million loss in Q2 2024, primarily by excluding stock-based compensation Non-GAAP Net Income (Loss) Reconciliation - Q2 (in thousands) | Metric | Q2 2025 (in thousands USD) | Q2 2024 (in thousands USD) | | :--- | :--- | :--- | | Net Loss | $(7,097) | $(10,348) | | Stock-based compensation | $7,304 | $5,528 | | Other adjustments | $549 | $(1) | | **Non-GAAP Net Income (Loss)** | **$756** | **$(4,821)** | | **Non-GAAP Net Income (Loss) per share** | **$0.01** | **$(0.11)** | [Adjusted Free Cash Flow](index=12&type=section&id=Adjusted%20Free%20Cash%20Flow) For the first six months of 2025, adjusted free cash flow outflow significantly improved to $(6.0) million from $(11.6) million, with the margin improving to (8)% from (19)%, indicating progress towards cash flow positivity Adjusted Free Cash Flow Reconciliation (in thousands) | Metric | Six Months Ended June 30, 2025 (in thousands USD) | Six Months Ended June 30, 2024 (in thousands USD) | | :--- | :--- | :--- | | 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)** | [Definitions of Key Metrics & Non-GAAP Measures](index=4&type=section&id=Definitions%20of%20Key%20Metrics%20%26%20Non-GAAP%20Measures) This section defines key business metrics like ARR, NRR, and Gross Customer Retention Rate, alongside non-GAAP financial measures such as Adjusted Gross Profit, Adjusted EBITDA, and Adjusted Free Cash Flow, used to assess performance and provide a clearer view of core operations - **Annual Recurring Revenue (ARR)**: Defined as the annualized value of all B2 and Computer Backup arrangements as of the end of a period, calculated by multiplying the last month's revenue by 12[21](index=21&type=chunk) - **Net Revenue Retention Rate (NRR)**: Calculated as the average of the last four quarters' NRR. A quarterly NRR is the revenue from a cohort of customers in the current quarter divided by the revenue from the same cohort in the prior-year quarter[22](index=22&type=chunk) - **Gross Customer Retention Rate**: Measures the ability to retain customers, irrespective of revenue changes. It is the trailing four-quarter average of the quarterly retention rate[23](index=23&type=chunk) - **Non-GAAP Measures**: The company uses several non-GAAP metrics, including **Adjusted Gross Profit**, **Adjusted EBITDA**, **Non-GAAP Net Income**, and **Adjusted Free Cash Flow**, to supplement GAAP results. These typically exclude expenses such as stock-based compensation, depreciation & amortization, and other non-recurring charges to better reflect core operational performance[13](index=13&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) N-able achieved strong Q2 2025 results, surpassing $500 million ARR, exceeding guidance, and initiating a share repurchase program [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) N-able surpassed $500 million ARR, exceeded Q2 revenue and Adjusted EBITDA guidance, and began a share repurchase program - Surpassed **$500 million ARR** milestone[1](index=1&type=chunk)[2](index=2&type=chunk) - Exceeded second quarter revenue and **Adjusted EBITDA** guidance[1](index=1&type=chunk)[2](index=2&type=chunk) - Began executing on share repurchase program[2](index=2&type=chunk) - Cyber-resiliency platform designed to provide comprehensive protection against AI-turbocharged complexity and risk[2](index=2&type=chunk) [Recent Business Highlights](index=1&type=section&id=Recent%20Business%20Highlights) N-able announced a new CMO, launched UEM product certifications, expanded its Ecoverse, and hosted Empower 2025 customer event - Appointed Vikram Ramesh as Chief Marketing Officer to accelerate security transformation and growth[4](index=4&type=chunk) - N-able U launched product certifications to boost Unified Endpoint Management (UEM) operational efficiency and simplify IT and security management[4](index=4&type=chunk) - Expanded Ecoverse with key Technology Alliance Program integrations, including Xurrent, SeedPod Cyber, ScalePad Lifecycle Manager, Rewst, Derdack SIGNL4, and Webroot by OpenText DNS Protection[4](index=4&type=chunk) - Hosted Empower 2025 customer event in Berlin, bringing together global IT leaders to advance cyber resilience and partner collaboration[4](index=4&type=chunk)[5](index=5&type=chunk) [Financial Results](index=1&type=section&id=Financial%20Results) N-able reported strong Q2 2025 financial results, including revenue growth, increased ARR, and a positive outlook for Q3 and full-year 2025 [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) N-able reported Q2 2025 total revenue of **$131.2 million** (9.9% YoY growth), ARR of **$513.7 million**, and Adjusted EBITDA of **$41.6 million** Q2 2025 Key Financial Metrics (YoY Growth) | Metric | Value (Millions) | YoY Growth (Reported) | YoY Growth (Constant Currency) | | :----------------------- | :------------------- | :---------------------------- | :----------------------------- | | Total Revenue | $131.2 | 9.9% | 7.9% | | Subscription Revenue | $129.9 | 10.6% | 8.6% | | Total ARR | $513.7 | 14.5% | 12.0% | | GAAP Gross Margin | 78.1% | - | - | | Non-GAAP Gross Margin | 81.8% | - | - | | GAAP Net Loss | $(4.0) | - | - | | GAAP Diluted EPS | $(0.02) | - | - | | Non-GAAP Net Income | $20.4 | - | - | | Non-GAAP Diluted EPS | $0.11 | - | - | | Adjusted EBITDA | $41.6 | - | - | | Adjusted EBITDA Margin | 31.7% | - | - | [Balance Sheet Summary](index=2&type=section&id=Balance%20Sheet%20Summary) As of June 30, 2025, N-able reported **$93.9 million** in cash and **$332.1 million** in total net debt, with preliminary financial results Balance Sheet Snapshot (June 30, 2025) | Metric | Value (Millions) | | :-------------------------- | :--------------- | | Total Cash and Cash Equivalents | $93.9 | | Total Debt (net) | $332.1 | - Financial results are preliminary and pending final review by the company and its external auditors[6](index=6&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) N-able provided its Q3 and full-year 2025 financial outlook, considering FX rates and macroeconomic conditions, including non-GAAP measures - Financial outlook reflects expectations regarding changing foreign exchange rates and current macroeconomic dynamics[8](index=8&type=chunk) - Estimates of non-GAAP financial measures are not reconciled to GAAP due to uncertainty and potential variability of excluded items in future periods[7](index=7&type=chunk) [Third Quarter 2025 Outlook](index=2&type=section&id=Third%20Quarter%202025%20Outlook) N-able projects Q3 2025 total revenue between **$127 million** and **$128 million**, and Adjusted EBITDA from **$36 million** to **$37 million** Q3 2025 Financial Outlook | Metric | Range (Millions) | YoY Growth (Reported & Constant Currency) | % of Total Revenue | | :---------------- | :--------------- | :---------------------------------------- | :----------------- | | Total Revenue | $127 - $128 | 9% - 10% | - | | Adjusted EBITDA | $36 - $37 | - | 28% - 29% | [Full-Year 2025 Outlook](index=2&type=section&id=Full-Year%202025%20Outlook) N-able forecasts full-year 2025 total ARR between **$525 million** and **$530 million**, and total revenue from **$500 million** to **$503 million** Full-Year 2025 Financial Outlook | Metric | Range (Millions) | YoY Growth (Reported) | YoY Growth (Constant Currency) | % of Total Revenue | | :---------------- | :--------------- | :-------------------- | :----------------------------- | :----------------- | | Total ARR | $525 - $530 | 9% - 10% | 7% - 9% | - | | Total Revenue | $500 - $503 | 7% - 8% | 7% - 8% | - | | Adjusted EBITDA | $141 - $144 | - | - | 28% - 29% | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This section details N-able's non-GAAP financial measures, their rationale, limitations, and specific definitions for key metrics [Rationale and Limitations](index=4&type=section&id=Rationale%20and%20Limitations) N-able uses non-GAAP measures for operational insights and comparisons, acknowledging their limitations and non-GAAP nature - Non-GAAP measures clarify and enhance understanding of performance, aid period-to-period comparison, and are used for assessing operational performance, resource allocation, budgeting, and compensation[13](index=13&type=chunk) - These measures exclude the impact of certain amounts that management and the board do not consider part of core operating results[13](index=13&type=chunk) - Non-GAAP measures have limitations: they are not prepared in accordance with GAAP, do not reflect a comprehensive accounting system, and may not be completely comparable to other companies' measures[15](index=15&type=chunk) - Management compensates for limitations by using non-GAAP measures as supplements to GAAP and reviewing reconciliations[16](index=16&type=chunk) [Definitions of Non-GAAP and Other Metrics](index=5&type=section&id=Definitions%20of%20Non-GAAP%20and%20Other%20Metrics) This section defines N-able's key non-GAAP metrics: ARR, Gross Margin, Operating Income, Net Income, Adjusted EBITDA, and Unlevered Free Cash Flow - **Annual Recurring Revenue (ARR):** Annualized recurring revenue and related usage revenue from subscriptions, excluding credits and reserves, recognized on the last day of the reporting period[17](index=17&type=chunk) - **Non-GAAP Gross Margin, Operating Income, and Operating Margin:** Excludes stock-based compensation, amortization of acquired intangible assets, transaction-related costs, spin-off costs, and restructuring costs[18](index=18&type=chunk) - **Adjusted EBITDA and Adjusted EBITDA Margin:** Net income or loss, excluding amortization, depreciation, income tax expense, interest expense, unrealized foreign currency (gains) losses, transaction-related costs, spin-off costs, stock-based compensation, and restructuring costs[20](index=20&type=chunk) - **Non-GAAP Revenue on a Constant Currency Basis:** Current period revenue converted to U.S. Dollars using average exchange rates from the corresponding prior period to assess performance excluding foreign currency fluctuations[21](index=21&type=chunk) - **Unlevered Free Cash Flow:** Cash flow from operations, after deducting capital expenditures and prior to the impact of capital structure, transaction-related costs, restructuring costs, spin-off costs, employer-paid payroll taxes on stock awards, and certain one-time items[22](index=22&type=chunk) [Forward-Looking Statements and Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section outlines forward-looking statements and key risk factors that could materially impact N-able's financial results and operations [Forward-Looking Statements and Risk Factors](index=2&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section details forward-looking statements and key risk factors, including economic conditions, customer retention, cybersecurity, and spin-off risks - Statements regarding financial outlook for Q3 and full-year 2025 and macroeconomic conditions are forward-looking and subject to safe harbor provisions[11](index=11&type=chunk) - Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results to be materially and adversely different[12](index=12&type=chunk) - **Key Risk Factors:** * Impact of adverse economic conditions, including inflation, rising interest rates, war, and political unrest * Ability to sell subscriptions to new customers, sell additional solutions to existing customers, and maintain customer loyalty * Any decline in renewal or net retention rates * Risks that cyberattacks and other security incidents may compromise systems, lead to data theft, or interfere with operations * Ability to attract and retain qualified employees and key personnel * Risks related to the spin-off from SolarWinds, including potential tax liabilities and failure to achieve anticipated benefits[12](index=12&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of N-able's mission, technology, partner-first approach, and contact information for inquiries [About N-able](index=6&type=section&id=About%20N-able) N-able is a global software company providing a unified cyber-resiliency platform with AI-powered capabilities and a partner-first approach - Mission: Protect businesses against evolving cyberthreats with a unified cyber-resiliency platform to manage, secure, and recover[23](index=23&type=chunk) - Technology infrastructure includes AI-powered capabilities, market-leading third-party integrations, and flexibility to employ technologies of choice[23](index=23&type=chunk) - Partner-first approach combines products with experts, training, and peer-led events to empower customers[23](index=23&type=chunk) [Conference Call and Contacts](index=2&type=section&id=Conference%20Call%20and%20Contacts) N-able will host a conference call and webcast on August 7, 2025, to discuss financial results, with contact information provided - Conference call and webcast to discuss financial results and business outlook scheduled for August 7, 2025, at 8:30 a.m. ET[10](index=10&type=chunk) - Live webcast available on N-able Investor Relations website: http://investors.n-able.com[10](index=10&type=chunk) - Investor Contact: Griffin Gyr (gryr@n-able.com)[25](index=25&type=chunk) - Media Contact: Kim Cecchini (pr@n-able.com, Phone: 202.391.5205)[25](index=25&type=chunk) [Unaudited Consolidated Financial Statements](index=8&type=section&id=Unaudited%20Consolidated%20Financial%20Statements) This section presents N-able's unaudited consolidated balance sheets, statements of operations, and cash flows for recent periods [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets show N-able's financial position as of June 30, 2025, with total assets at **$1,386.0 million** and equity at **$809.4 million** Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------- | :-------------- | :---------------- | :----- | | Cash and cash equivalents | $93,874 | $85,196 | +$8,678 | | Total current assets | $186,656 | $183,923 | +$2,733 | | Goodwill | $1,023,226 | $977,013 | +$46,213 | | Total assets | $1,386,002 | $1,338,847 | +$47,155 | | Total current liabilities | $151,092 | $150,098 | +$994 | | Long-term debt, net | $328,639 | $329,606 | -$967 | | Total liabilities | $576,585 | $579,559 | -$2,974 | | Total stockholders' equity | $809,417 | $759,288 | +$50,129 | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations detail N-able's Q2 2025 performance, with **$131.2 million** revenue and a **$4.0 million** net loss Consolidated Statements of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Subscription and other revenue | $131,249 | $119,447 | $249,446 | $233,196 | | Total cost of revenue | $28,697 | $19,164 | $56,375 | $37,461 | | Gross profit | $102,552 | $100,283 | $193,071 | $195,735 | | Total operating expenses | $92,430 | $78,304 | $181,125 | $153,265 | | Operating income | $10,122 | $21,979 | $11,946 | $42,470 | | Net (loss) income | $(4,022) | $9,455 | $(11,184) | $16,911 | | Diluted (loss) income per share | $(0.02) | $0.05 | $(0.06) | $0.09 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated cash flows show Q2 2025 operating cash flow at **$24.2 million** and increased financing cash outflow due to stock repurchases Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------------- | :------ | :------ | :------ | :------ | | Net cash provided by operating activities | $24,187 | $27,278 | $43,864 | $31,462 | | Net cash used in investing activities | $(6,498) | $(5,145) | $(12,574) | $(10,272) | | Net cash used in financing activities | $(18,291) | $(4,965) | $(25,580) | $(16,881) | | Net (decrease) increase in cash and cash equivalents | $(216) | $18,282 | $8,678 | $4,461 | | Cash and cash equivalents, end of period | $93,874 | $157,509 | $93,874 | $157,509 | - Repurchase of common stock amounted to **$10,000 thousand** in Q2 2025 and for the six months ended June 30, 2025[31](index=31&type=chunk) [Reconciliation of GAAP to Non-GAAP Financial Measures](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations from GAAP to non-GAAP financial measures for various performance indicators [Non-GAAP Cost of Revenue and Gross Profit Reconciliation](index=12&type=section&id=Non-GAAP%20Cost%20of%20Revenue%20and%20Gross%20Profit%20Reconciliation) This section reconciles GAAP cost of revenue and gross profit to non-GAAP equivalents, showing Q2 2025 non-GAAP gross profit at **$107.4 million** Q2 2025 GAAP to Non-GAAP Cost of Revenue & Gross Profit (in thousands) | Metric | GAAP (Q2 2025) | Adjustments | Non-GAAP (Q2 2025) | | :------------------------------------------------ | :------------- | :---------- | :----------------- | | Cost of revenue | $28,697 | $(4,809) | $23,888 | | Gross profit | $102,552 | $4,809 | $107,361 | | *Adjustments include stock-based compensation expense and related employer-paid payroll taxes, amortization of acquired technologies, and transaction related costs.* | | | | [Non-GAAP Operating Expenses Reconciliation](index=12&type=section&id=Non-GAAP%20Operating%20Expenses%20Reconciliation) This section reconciles GAAP operating expenses to non-GAAP, adjusting for stock-based compensation, transaction, and restructuring costs Q2 2025 GAAP to Non-GAAP Operating Expenses (in thousands) | Metric | GAAP (Q2 2025) | Adjustments | Non-GAAP (Q2 2025) | | :-------------------------------- | :------------- | :---------- | :----------------- | | Sales and marketing expense | $42,362 | $(6,153) | $36,209 | | Research and development expense | $26,336 | $(3,290) | $23,046 | | General and administrative expense | $23,229 | $(9,095) | $14,134 | | *Adjustments primarily include stock-based compensation expense and related employer-paid payroll taxes, transaction related costs, and restructuring costs.* | | | | [Non-GAAP Operating Income and Net Income Reconciliation](index=12&type=section&id=Non-GAAP%20Operating%20Income%20and%20Net%20Income%20Reconciliation) N-able reconciles GAAP operating income and net (loss) income to non-GAAP, showing Q2 2025 non-GAAP operating income of **$34.0 million** and net income of **$20.4 million** Q2 2025 GAAP to Non-GAAP Operating Income & Net Income (in thousands) | Metric | GAAP (Q2 2025) | Adjustments | Non-GAAP (Q2 2025) | | :------------------------------------------------ | :------------- | :---------- | :----------------- | | Operating income | $10,122 | $23,850 | $33,972 | | Operating margin | 7.7% | - | 25.9% | | Net (loss) income | $(4,022) | $24,417 | $20,395 | | Diluted (loss) income per share | $(0.02) | - | $0.11 | | *Adjustments include amortization of acquired technologies and intangibles, stock-based compensation, transaction related costs, restructuring costs, interest on deferred consideration, and tax benefits.* | | | | [Adjusted EBITDA Reconciliation](index=14&type=section&id=Adjusted%20EBITDA%20Reconciliation) This section reconciles GAAP net (loss) income to Adjusted EBITDA, reporting Q2 2025 Adjusted EBITDA at **$41.6 million** with a **31.7%** margin Q2 2025 GAAP Net (Loss) Income to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | | :------------------------------------------------ | :------ | :------ | | Net (loss) income | $(4,022) | $9,455 | | Amortization | $6,262 | $1,879 | | Depreciation | $4,602 | $4,025 | | Income tax expense | $5,200 | $6,060 | | Interest expense, net | $8,090 | $7,606 | | Unrealized foreign currency losses | $2,377 | $445 | | Transaction related costs | $5,577 | $4,919 | | Spin-off costs | — | — | | Stock-based compensation expense and related employer-paid payroll taxes | $13,150 | $12,164 | | Restructuring costs and other | $391 | $259 | | **Adjusted EBITDA** | **$41,627** | **$46,812** | | Adjusted EBITDA margin | 31.7% | 39.2% | [Non-GAAP Revenue on a Constant Currency Basis Reconciliation](index=15&type=section&id=Non-GAAP%20Revenue%20on%20a%20Constant%20Currency%20Basis%20Reconciliation) This section reconciles GAAP revenue to non-GAAP constant currency revenue, showing Q2 2025 growth of **7.9%** excluding FX impact Q2 2025 GAAP to Non-GAAP Revenue (Constant Currency, in thousands) | Metric | GAAP (Q2 2025) | Estimated FX Impact | Non-GAAP (Q2 2025) | Reported Growth | Constant Currency Growth | | :---------------------------------------- | :------------- | :------------------ | :----------------- | :-------------- | :----------------------- | | Subscription revenue | $129,874 | $(2,395) | $127,479 | 10.6% | 8.6% | | Other revenue | $1,375 | $(4) | $1,371 | (32.4)% | (32.6)% | | Total subscription and other revenue | $131,249 | $(2,399) | $128,850 | 9.9% | 7.9% | - Estimated foreign currency impact is calculated using average foreign currency exchange rates from the comparable prior year monthly periods[39](index=39&type=chunk) [Unlevered Free Cash Flow Reconciliation](index=16&type=section&id=Unlevered%20Free%20Cash%20Flow%20Reconciliation) This section reconciles operating cash flow to Unlevered Free Cash Flow, reporting Q2 2025 Unlevered Free Cash Flow at **$33.3 million** Q2 2025 Unlevered Free Cash Flow (in thousands) | Metric | Q2 2025 | Q2 2024 | | :---------------------------------------------------------------------------------------------------------------- | :------ | :------ | | Net cash provided by operating activities | $24,187 | $27,278 | | Purchases of property and equipment | $(3,788) | $(3,242) | | Purchases of intangible assets | $(3,009) | $(1,903) | | Free cash flow | $17,390 | $22,133 | | Cash paid for interest, net | $6,259 | $7,292 | | Cash paid for transaction related costs, restructuring costs, spin-off costs, employer-paid payroll taxes on stock awards and other one-time items | $9,628 | $6,029 | | **Unlevered free cash flow** | **$33,277** | **$35,454** |

[Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) Forward-looking statements are subject to risks including volatile economic climate, political/military conditions, customer dependency, profitability, evolving markets, technological competition, AI/GenAI, and data privacy concerns - Forward-looking statements are subject to risks including **volatile economic climate**, **political/military conditions in Israel/Ukraine**, **customer dependency**, inability to achieve profitability, evolving markets, technological competition, **AI/GenAI risks**, and **data privacy concerns**[12](index=12&type=chunk)[13](index=13&type=chunk)[18](index=18&type=chunk) [PART I FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements (unaudited)](index=7&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(unaudited)) Kaltura, Inc.'s unaudited condensed consolidated financial statements for Q2 and H1 2025 are presented, prepared under U.S. GAAP and SEC interim rules - The financial statements are unaudited and prepared under U.S. GAAP for interim reporting, with results for Q2 and H1 2025 not necessarily indicative of full-year performance[41](index=41&type=chunk)[43](index=43&type=chunk) - The Company operates in two main segments: **Enterprise, Education, and Technology (EE&T)** and **Media and Telecom (M&T)**, offering SaaS and PaaS video solutions[40](index=40&type=chunk)[89](index=89&type=chunk) - A cost-reduction and reorganization plan was approved on August 4, 2025, involving a **10% workforce reduction**, expected to incur **$687 thousand in pre-tax charges in Q3 2025** and result in **$8.5 million in annualized cost savings**[118](index=118&type=chunk)[255](index=255&type=chunk) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Total Assets | $169,447 | $181,305 | | Total Liabilities | $152,493 | $156,918 | | Total Stockholders' Equity | $16,954 | $24,387 | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenue | $44,462 | $44,032 | $91,446 | $88,813 | | Gross profit | $31,219 | $28,676 | $63,955 | $57,284 | | Operating loss | $(2,757) | $(8,550) | $(4,334) | $(15,840) | | Net loss | $(7,750) | $(10,004) | $(8,869) | $(21,100) | | Net loss per share, basic and diluted | $0.05 | $0.07 | $0.06 | $0.14 | [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Condensed Consolidated Statements of Comprehensive Loss (in thousands) | 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 loss | $(7,750) | $(10,004) | $(8,869) | $(21,100) | | Other comprehensive income (losses) | $3,859 | $(685) | $2,947 | $(1,430) | | Comprehensive loss | $(3,891) | $(10,689) | $(5,922) | $(22,530) | [Condensed Consolidated Statement of Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders'%20Equity) - Total stockholders' equity decreased from **$24,387 thousand** as of January 1, 2025, to **$16,954 thousand** as of June 30, 2025, primarily due to **net loss ($8,869 thousand)** and **common stock repurchases ($9,595 thousand)**, partially offset by **stock-based compensation ($8,447 thousand)** and **other comprehensive income ($2,947 thousand)**[33](index=33&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=13&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $1,610 | $(2,751) | | Net cash provided by investing activities | $11,625 | $1,763 | | Net cash used in financing activities | $(11,335) | $(1,296) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $2,387 | $(2,416) | | Cash, cash equivalents and restricted cash at end of period | $35,546 | $34,368 | [Notes to Condensed Consolidated Interim Financial Statements](index=15&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [NOTE 1: General](index=15&type=section&id=NOTE%201%3A%20General) - Kaltura, Inc. was incorporated in October 2006 and operates in two main segments: **Enterprise, Education, and Technology (EE&T)** and **Media and Telecom (M&T)**, providing a platform for video creation, management, and collaboration through SaaS and PaaS offerings[40](index=40&type=chunk) [NOTE 2: Basis of Presentation and Summary of Significant Accounting Policies](index=15&type=section&id=NOTE%202%3A%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) - The unaudited condensed consolidated financial statements are prepared in accordance with **U.S. GAAP** and **SEC interim reporting rules**, with certain disclosures condensed or omitted compared to annual reports[41](index=41&type=chunk)[42](index=42&type=chunk) - The Company, as an "emerging growth company," has elected to use the **extended transition period** for new accounting pronouncements[50](index=50&type=chunk) - New ASUs on income tax disclosures (**ASU 2023-09**, effective after Dec 15, 2024) and expense disaggregation (**ASU 2024-03**, effective after Dec 15, 2026) are being evaluated for impact[51](index=51&type=chunk)[52](index=52&type=chunk) [NOTE 3: Revenues from Contracts with Customers](index=17&type=section&id=NOTE%203%3A%20Revenues%20from%20Contracts%20with%20Customers) Disaggregated Revenue by Segment (in thousands) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | H1 2025 Revenue | H1 2024 Revenue | | :------ | :-------------- | :-------------- | :-------------- | :-------------- | | EE&T | $33,242 | $30,965 | $67,658 | $63,405 | | M&T | $11,220 | $13,067 | $23,788 | $25,408 | | Total | $44,462 | $44,032 | $91,446 | $88,813 | Disaggregated Revenue by Region (in thousands) | Region | Q2 2025 Revenue | Q2 2024 Revenue | H1 2025 Revenue | H1 2024 Revenue | | :----- | :-------------- | :-------------- | :-------------- | :-------------- | | US | $24,182 | $23,547 | $48,372 | $46,737 | | EMEA | $16,987 | $16,884 | $35,755 | $34,404 | | Other | $3,293 | $3,601 | $7,319 | $7,672 | | Total | $44,462 | $44,032 | $91,446 | $88,813 | - Remaining performance obligations totaled **$188.1 million** as of June 30, 2025, with **61% expected to be recognized as revenue over the next 12 months**[56](index=56&type=chunk) [NOTE 4: Marketable Securities](index=19&type=section&id=NOTE%204%3A%20Marketable%20Securities) Available-for-Sale Marketable Securities (in thousands) | Category | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :------- | :----------------------- | :--------------------------- | | Current | $35,756 | $48,275 | | Long-term | $4,132 | $3,379 | | Total | $39,888 | $51,654 | [NOTE 5: Fair Value Measurements](index=21&type=section&id=NOTE%205%3A%20Fair%20Value%20Measurements) - Cash equivalents and marketable securities are measured at fair value using the **market approach (Level 1 or Level 2 inputs)**, while foreign currency derivative contracts are classified as **Level 2**[64](index=64&type=chunk) Fair Value of Assets (in thousands) | Asset Category | June 30, 2025 | December 31, 2024 | | :------------- | :------------ | :---------------- | | Money market funds | $21,719 | $12,212 | | Short-term marketable securities | $35,091 | $48,275 | | Long-term marketable securities | $4,132 | $3,379 | | Restricted bank deposits (current) | $3,507 | $3,507 | | Options and forward contracts (hedging) | $3,884 | $960 | | Restricted bank deposit (noncurrent) | $1,103 | $1,020 | [NOTE 6: Derivatives and Hedging](index=22&type=section&id=NOTE%206%3A%20Derivatives%20and%20Hedging) - The Company uses forward contracts to hedge forecasted payroll costs denominated in NIS against USD exchange rate fluctuations, with outstanding notional amounts of **$38.5 million** as of June 30, 2025[67](index=67&type=chunk)[68](index=68&type=chunk) - Gains from hedging instruments reclassified from accumulated other comprehensive income were **$817 thousand for Q2 2025** and **$1,143 thousand for H1 2025**[68](index=68&type=chunk) [NOTE 7: Leases](index=23&type=section&id=NOTE%207%3A%20Leases) - The Company leases office facilities with agreements expiring through November 2027, with an estimated lease term extending to **November 2032** due to a probable extension option[71](index=71&type=chunk) Operating Lease Costs (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----- | :------ | :------ | :------ | :------ | | Total Operating Lease Cost | $754 | $721 | $1,716 | $1,439 | - As of June 30, 2025, total operating lease liabilities were **$17.8 million**, with a weighted-average remaining term of **6.90 years** and a weighted-average discount rate of **4.71%**[72](index=72&type=chunk)[73](index=73&type=chunk) [NOTE 8: Commitments and Contingencies](index=24&type=section&id=NOTE%208%3A%20Commitments%20and%20Contingencies) Future Non-Cancelable Purchase Commitments (in thousands) | Year Ending December 31, | Amount | | :----------------------- | :----- | | 2025 (Remainder) | $16,056 | | 2026 | $29,177 | | Total | $45,233 | - The Company is occasionally involved in legal proceedings but does not believe any pending litigation will have a **material adverse effect** on its business[76](index=76&type=chunk) [NOTE 9: Condensed Consolidated Balance Sheet Components](index=24&type=section&id=NOTE%209%3A%20Condensed%20Consolidated%20Balance%20Sheet%20Components) Prepaid Expenses and Other Current Assets (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------- | :------------ | :---------------- | | Prepaid expenses | $3,984 | $4,085 | | Derivative instrument | $3,884 | $960 | | Restricted bank deposits | $3,507 | $3,507 | | Other current assets | $931 | $929 | | Total | $12,306 | $9,481 | Property and Equipment, Net (in thousands) | Component | June 30, 2025 | December 31, 2024 | | :-------- | :------------ | :---------------- | | Cost | $25,118 | $24,873 | | Accumulated depreciation | $(10,839) | $(8,683) | | Depreciated cost | $14,279 | $16,190 | - Depreciation expenses for H1 2025 were **$2,156 thousand**, down from **$2,343 thousand** in H1 2024[78](index=78&type=chunk) [NOTE 10: Goodwill and Intangible Assets](index=26&type=section&id=NOTE%2010%3A%20Goodwill%20and%20Intangible%20Assets) - Goodwill remained unchanged at **$11.1 million**[21](index=21&type=chunk)[81](index=81&type=chunk) Intangible Assets, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------- | :------------ | :---------------- | | Technology | $0 | $97 | | Customer relationship | $89 | $115 | | Total | $89 | $212 | - Estimated future amortization expense for intangible assets is **$27 thousand for the remainder of 2025**, **$50 thousand for 2026**, and **$12 thousand for 2027**[82](index=82&type=chunk) [NOTE 11: Income Taxes](index=27&type=section&id=NOTE%2011%3A%20Income%20Taxes) Income Tax Expense (in thousands) | Period | Income Tax Expense | Effective Tax Rate | | :----- | :----------------- | :----------------- | | Q2 2025 | $424 | (8)% | | Q2 2024 | $2,464 | (33)% | | H1 2025 | $1,769 | (36)% | | H1 2024 | $4,772 | (29)% | - The effective tax rates differ from the U.S. statutory rate primarily due to **U.S. losses with no benefit** and **tax rate differences in foreign countries**; the Company has a **full valuation allowance** on its net deferred tax assets[83](index=83&type=chunk)[84](index=84&type=chunk) [NOTE 12: Net Loss Per Share Attributable to Common Stockholders](index=27&type=section&id=NOTE%2012%3A%20Net%20Loss%20Per%20Share%20Attributable%20to%20Common%20Stockholders) Net Loss Per Share (Basic and Diluted) | Period | Net Loss Per Share | Weighted-Average Shares Outstanding | | :----- | :----------------- | :---------------------------------- | | Q2 2025 | $0.05 | 153,536,740 | | Q2 2024 | $0.07 | 147,607,504 | | H1 2025 | $0.06 | 153,771,875 | | H1 2024 | $0.14 | 145,939,847 | - As of June 30, 2025, **28,870,136 outstanding stock options and RSUs** were excluded from diluted EPS calculation as their inclusion would have been anti-dilutive[87](index=87&type=chunk) [NOTE 13: Reportable Segments and Geographical Information](index=28&type=section&id=NOTE%2013%3A%20Reportable%20Segments%20and%20Geographical%20Information) - The Company operates in two segments: **Enterprise, Education and Technology (EE&T)** and **Media and Telecom (M&T)**, with EE&T representing **75% of Q2 2025 revenue** and M&T **25%**[170](index=170&type=chunk) Segment Revenue and Gross Profit (Q2 2025, in thousands) | Segment | Revenue | Cost of Revenue | Gross Profit | | :------ | :------ | :-------------- | :----------- | | EE&T | $33,242 | $7,375 | $25,867 | | M&T | $11,220 | $5,868 | $5,352 | | Total | $44,462 | $13,243 | $31,219 | Segment Revenue and Gross Profit (H1 2025, in thousands) | Segment | Revenue | Cost of Revenue | Gross Profit | | :------ | :------ | :-------------- | :----------- | | EE&T | $67,658 | $15,223 | $52,435 | | M&T | $23,788 | $12,268 | $11,520 | | Total | $91,446 | $27,491 | $63,955 | [NOTE 14: Long-Term Loan](index=32&type=section&id=NOTE%2014%3A%20Long-Term%20Loan) - The Company has a Credit Agreement with a Term Loan Facility and a Revolving Credit Facility, which has been amended multiple times, most recently in **March 2025**, to increase permitted Restricted Payments[100](index=100&type=chunk)[102](index=102&type=chunk) - As of June 30, 2025, the Term Loan Facility had an outstanding balance of approximately **$31.0 million**, with an interest rate of **6.90% per annum**[103](index=103&type=chunk)[222](index=222&type=chunk) - The Company was in compliance with all loan covenants as of June 30, 2025[105](index=105&type=chunk) [NOTE 15: Stockholders' Equity and Equity Incentive Plans](index=34&type=section&id=NOTE%2015%3A%20Stockholders'%20Equity%20and%20Equity%20Incentive%20Plans) - The number of shares authorized under the **2021 Incentive Award Plan** increased by **7,602,857 shares** on January 1, 2025[107](index=107&type=chunk) - Total unrecognized stock-based compensation cost was **$28.1 million** as of June 30, 2025, expected to be recognized over approximately **two years**[110](index=110&type=chunk) - A new **$15.0 million stock repurchase program (2025 Repurchase Program)** was approved in March 2025, superseding the 2024 program; during Q2 2025, **3,468,731 shares** were repurchased for **$2.07 per share**, with **$6.9 million remaining authorization**[112](index=112&type=chunk)[113](index=113&type=chunk) [NOTE 16: Selected Statements of Operations Data](index=36&type=section&id=NOTE%2016%3A%20Selected%20Statements%20of%20Operations%20Data) Financial Expense (Income), Net (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----- | :------ | :------ | :------ | :------ | | Financial income | $737 | $1,858 | $1,632 | $1,608 | | Financial expenses | $5,306 | $848 | $4,398 | $2,096 | | Financial expense (income), net | $4,569 | $(1,010) | $2,766 | $488 | [NOTE 17: Accumulated Other Comprehensive Income](index=36&type=section&id=NOTE%2017%3A%20Accumulated%20Other%20Comprehensive%20Income) Changes in Accumulated Other Comprehensive Income (Loss) (H1 2025, in thousands) | Component | Balance Dec 31, 2024 | Other Comprehensive Income (Loss) before reclassifications | Net realized losses reclassified | Balance June 30, 2025 | | :-------- | :------------------- | :--------------------------------------------------------- | :------------------------------- | :-------------------- | | Net Unrealized Gains (Losses) on Available-for-Sale Securities | $23 | $(1) | $0 | $22 | | Net Unrealized Gains (Losses) on Derivatives Designated as Hedging Instruments | $936 | $4,091 | $(1,143) | $3,884 | | Total | $959 | $4,090 | $(1,143) | $3,906 | [NOTE 18: Subsequent Events](index=37&type=section&id=NOTE%2018%3A%20Subsequent%20Events) - On August 4, 2025, the Board approved a cost-reduction and reorganization plan, including a **10% workforce reduction**, expected to incur **$687 thousand in pre-tax charges in Q3 2025**[118](index=118&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis covers Kaltura's financial condition and operational results, focusing on performance drivers, financial metrics, and liquidity - Kaltura is a market-leading provider of **AI-infused video offerings** for enterprises, focusing on enhancing customer and employee engagement[121](index=121&type=chunk) - The Company's **2025 Reorganization Plan**, approved in August 2025, includes a **10% workforce reduction** to increase efficiency and productivity, with expected annualized cost savings of **$8.5 million** and pre-tax charges of **$0.7 million in Q3 2025**[124](index=124&type=chunk) [Overview](index=38&type=section&id=Overview) - Kaltura provides live, real-time, and on-demand video offerings, leveraging **AI to create hyper-personalized video experiences** for organizations[121](index=121&type=chunk) - The company's Video Experience Cloud includes platforms for **Enterprise Video Content Management System** and **TV Content Management System**, powering various AI-infused video products[121](index=121&type=chunk) - Revenue is primarily generated from **SaaS subscriptions**, platform usage licenses, and associated professional services, targeting medium to large enterprises, educational institutions, technology providers, and media/telecom companies[123](index=123&type=chunk) [Key Factors Affecting Our Performance](index=40&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) - Key performance drivers include expanding the platform with **Gen AI features**, acquiring new customers across verticals (direct sales, channel partnerships, self-serve for SMEs), and increasing revenue from existing customers through **cross-selling and upselling**[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk) - The company plans continued investment in growth, expecting cost of revenue and operating expenses to fluctuate[134](index=134&type=chunk) [Key Financial and Operating Metrics](index=40&type=section&id=Key%20Financial%20and%20Operating%20Metrics) Key Financial and Operating Metrics (in thousands, except percentages) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | | Annualized Recurring Revenue | $170,364 | $165,167 | | Net Dollar Retention Rate | 101% | 98% | | Remaining Performance Obligations | $188,124 | $177,751 | - Remaining Performance Obligations as of June 30, 2025, were **$188.1 million**, with **61% expected to be recognized as revenue over the next 12 months**[142](index=142&type=chunk)[143](index=143&type=chunk) [Non-GAAP Financial Measures](index=42&type=section&id=Non-GAAP%20Financial%20Measures) - EBITDA and Adjusted EBITDA are non-GAAP measures used to evaluate performance, excluding items like financial expenses, taxes, depreciation, amortization, stock-based compensation, war-related expenses, and strategic initiative costs[145](index=145&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (in thousands) | 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 loss | $(7,750) | $(10,004) | $(8,869) | $(21,100) | | EBITDA | $(1,663) | $(7,271) | $(2,055) | $(13,255) | | Adjusted EBITDA | $4,060 | $1,632 | $8,201 | $2,196 | [Components of Our Results of Operation](index=44&type=section&id=Components%20of%20Our%20Results%20of%20Operation) - Revenue is primarily from **SaaS and PaaS subscriptions**, recognized ratably, with professional services revenue recognized upon rendering or ratably if considered setup activities[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Gross margins improved year-over-year, with **Q2 2025 at 70%** (**77% for subscriptions**, (73)% for professional services) compared to **Q2 2024 at 65%** (**74% for subscriptions**, (49)% for professional services)[158](index=158&type=chunk) - M&T segment gross margins are lower than EE&T due to **higher implementation costs** and a greater proportion of **private cloud/on-premise deployments**[157](index=157&type=chunk) [Results of Operations](index=47&type=section&id=Results%20of%20Operations) Consolidated Results of Operations (in thousands, except percentages) | Metric | Q2 2025 | Q2 2024 | Q2 YoY Change (%) | H1 2025 | H1 2024 | H1 YoY Change (%) | | :-------------------------- | :------ | :------ | :---------------- | :------ | :------ | :---------------- | | Total Revenue | $44,462 | $44,032 | 1% | $91,446 | $88,813 | 3% | | Total Gross Profit | $31,219 | $28,676 | 9% | $63,955 | $57,284 | 12% | | Total Operating Expenses | $33,976 | $37,226 | -9% | $68,289 | $73,124 | -7% | | Operating Loss | $(2,757) | $(8,550) | -68% | $(4,334) | $(15,840) | -73% | | Financial expense (income), net | $4,569 | $(1,010) | -552% | $2,766 | $488 | 467% | | Net Loss | $(7,750) | $(10,004) | -23% | $(8,869) | $(21,100) | -58% | - EE&T revenue increased by **7% for both Q2 and H1 2025**, driven by new and existing customers, while M&T revenue decreased by **14% in Q2** and **6% in H1 2025** due to existing customer decline[172](index=172&type=chunk)[178](index=178&type=chunk)[189](index=189&type=chunk)[195](index=195&type=chunk) - Operating expenses decreased across R&D, Sales & Marketing, and G&A for both Q2 and H1 2025, primarily due to **lower compensation costs** (including stock-based compensation) and **reduced subcontractor use**[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk)[202](index=202&type=chunk) - Financial expense (income), net shifted from income to expense, increasing by **$5.6 million in Q2 2025** and **$2.3 million in H1 2025**, primarily due to **exchange rate differences**[186](index=186&type=chunk)[203](index=203&type=chunk) [Liquidity and Capital Resources](index=55&type=section&id=Liquidity%20and%20Capital%20Resources) - The Company's liquidity is primarily from operating activities, **cash on hand ($35.5 million as of June 30, 2025)**, and a **$25.0 million Revolving Credit Facility with no outstanding balance**[205](index=205&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) - Net cash provided by operating activities improved significantly to **$1.6 million in H1 2025** from **$(2.8) million in H1 2024**[223](index=223&type=chunk)[224](index=224&type=chunk) - Net cash used in financing activities increased to **$(11.3) million in H1 2025**, primarily due to **$9.6 million in common stock repurchases** and **$3.1 million in cash settlement of equity awards**[223](index=223&type=chunk)[231](index=231&type=chunk) [Critical Accounting Policies and Estimates](index=60&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - The preparation of financial statements requires management to make estimates and judgments, which are believed to be reasonable, and there have been no significant changes to these policies during H1 2025[234](index=234&type=chunk)[235](index=235&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the Company's exposure to market risks, including foreign currency, interest rate, and inflation, and the strategies for their management - The Company is exposed to **foreign currency exchange risk**, primarily from NIS and Euro-denominated expenses and revenues, and uses hedging programs to mitigate this risk[237](index=237&type=chunk)[238](index=238&type=chunk) - A hypothetical **10% change in foreign currency exchange rates** would impact H1 2025 results by **$0.8 million due to NIS** (after hedges) and **$2.6 million due to Euros**[239](index=239&type=chunk) - With **$31.0 million in floating rate debt**, a hypothetical **10% change in interest rates** would impact H1 2025 interest expense by **$0.1 million**[240](index=240&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the Company's disclosure controls and procedures as of June 30, 2025, and concluded they were effective at a reasonable assurance level - Disclosure controls and procedures were evaluated and deemed **effective at the reasonable assurance level** as of June 30, 2025[244](index=244&type=chunk) - No material changes in internal control over financial reporting occurred during the period[245](index=245&type=chunk) [PART II OTHER INFORMATION](index=61&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The Company is involved in various legal proceedings, but none are expected to have a material adverse effect on its financial condition or operations - The Company is not currently a party to any legal proceedings expected to have a **material adverse effect** on its business, operating results, cash flows, or financial condition[247](index=247&type=chunk) [Item 1A. Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting new risks from the 2025 Reorganization Plan, such as unrealized cost savings, operational disruption, personnel attrition, and management distraction - New risk factors include the potential for the **2025 Reorganization Plan** to not fully achieve expected cost savings or benefits, incur higher-than-forecasted costs, lead to employee attrition or reduced morale, and divert management's focus[249](index=249&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the Company's common stock repurchases during Q2 2025 under the 2025 Repurchase Program, confirming no material change in IPO proceeds use Common Stock Repurchases (Q2 2025) | Period | Shares Purchased | Average Price Per Share | | :----- | :--------------- | :---------------------- | | April | 1,505,827 | $1.93 | | May | 1,135,743 | $2.20 | | June | 827,161 | $2.14 | | Total | 3,468,731 | $2.07 | - The **2025 Repurchase Program**, approved in March 2025, authorizes repurchases up to **$15.0 million**, with approximately **$6.9 million remaining** as of June 30, 2025[251](index=251&type=chunk) [Item 3. Defaults Upon Senior Securities](index=63&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there were no defaults upon senior securities during the reported period - No defaults upon senior securities were reported[253](index=253&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that mine safety disclosures are not applicable to the Company - Not applicable[254](index=254&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) The 2025 Reorganization Plan's approval, 10% workforce reduction, and financial impacts are reiterated, with no Rule 10b5-1 trading arrangements noted for directors or officers - The **2025 Reorganization Plan**, approved August 4, 2025, involves a **10% workforce reduction**, aiming for **$8.5 million in annualized cost savings** and incurring **$0.7 million in pre-tax charges in Q3 2025**[255](index=255&type=chunk) - No **Rule 10b5-1 trading arrangements** were adopted or terminated by directors or officers during Q2 2025[256](index=256&type=chunk) [Item 6. Exhibits](index=64&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, such as organizational documents, incentive plans, certifications, and XBRL documents - The report includes various exhibits such as the **Amended and Restated Certificate of Incorporation**, **Bylaws**, **Kaltura Severance Plan**, CEO/CFO certifications, and **Inline XBRL documents**[258](index=258&type=chunk)[259](index=259&type=chunk) [Signatures](index=66&type=section&id=Signatures) This section contains the signatures of Ron Yekutiel (Chairman, President, and CEO) and John Doherty (CFO), certifying the report's filing on August 7, 2025 - The report was signed by **Ron Yekutiel** (Chairman, President, and CEO) and **John Doherty** (CFO) on **August 7, 2025**[265](index=265&type=chunk)

[Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Kimbell Royalty Partners reported strong Q2 2025 results with **25,355 Boe/d** production, **$74.7 million** in revenues, **$63.8 million** Adjusted EBITDA, and a **$0.38** cash distribution per common unit, maintaining **88** active rigs | Metric | Value | | :--- | :--- | | **Run-Rate Daily Production** | 25,355 Boe/d (6:1) | | **Oil, Natural Gas & NGL Revenues** | $74.7 million | | **Net Income** | ~$26.7 million | | **Consolidated Adjusted EBITDA** | $63.8 million | | **Cash G&A per BOE** | $2.36 | | **Active Rigs on Acreage** | 88 (17% U.S. market share) | | **Q2 2025 Cash Distribution** | $0.38 per common unit | - The company announced a Q2 2025 cash distribution of **$0.38 per common unit**, representing a **75% payout ratio** and a **10.3% annualized yield**. The remaining **25%** of cash available for distribution will be used to repay outstanding borrowings[4](index=4&type=chunk) - As of June 30, 2025, Kimbell's major properties had **7.99 net DUCs** and permitted locations, exceeding the estimated **6.5 net wells** required to maintain flat production[4](index=4&type=chunk) [Management Commentary and Shareholder Distributions](index=2&type=section&id=Management%20Commentary%20and%20Shareholder%20Distributions) Management emphasized resilient operational performance, including increased U.S. land rig market share and a **$0.38** per common unit cash distribution, with remaining cash flow allocated to debt reduction - The CEO emphasized the company's strong operational position, with its market share of U.S. land rigs increasing to **17%** and net DUCs growing by **9%** quarter-over-quarter, indicating near-term production growth[5](index=5&type=chunk) - Cash G&A per BOE was below the low end of guidance, which management attributes to operational discipline and positive operating leverage[5](index=5&type=chunk) | Distribution Metric | Value | | :--- | :--- | | **Q2 2025 Distribution** | $0.38 per common unit | | **Payout Ratio** | 75% of cash available for distribution | | **Debt Paydown** | ~$13.6 million (remaining 25%) | | **Payment Date** | August 25, 2025 | | **Record Date** | August 18, 2025 | - Kimbell expects approximately **100%** of the Q2 2025 distribution to be considered a non-taxable return of capital for U.S. federal income tax purposes, which reduces the unitholder's cost basis[6](index=6&type=chunk)[7](index=7&type=chunk) [Financial and Operational Performance](index=2&type=section&id=Financial%20and%20Operational%20Performance) Kimbell achieved Q2 2025 revenues of **$86.5 million**, net income of **$26.7 million**, **25,355 Boe/d** production, maintained **7.99 net DUCs**, and managed debt at **$462.1 million** with a **1.6x** leverage ratio [Financial Highlights](index=2&type=section&id=Financial%20Highlights) Q2 2025 Realized Prices | Commodity | Average Realized Price | | :--- | :--- | | **Oil** | $63.48 / Bbl | | **Natural Gas** | $2.54 / Mcf | | **NGLs** | $24.10 / Bbl | | **Combined** | $33.04 / Boe | Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | **Total Revenues** | $86.5 million | | **Net Income** | ~$26.7 million | | **Net Income (to common units)** | ~$2.0 million ($0.02/unit) | | **Consolidated Adjusted EBITDA** | $63.8 million | - As of June 30, 2025, Kimbell had **$462.1 million** in debt outstanding, with a net debt to TTM consolidated Adjusted EBITDA ratio of approximately **1.6x**[11](index=11&type=chunk) - The company increased its borrowing base from **$550 million** to **$625 million** and redeemed **50%** of its Series A Preferred Units to simplify its capital structure[12](index=12&type=chunk) [Production](index=3&type=section&id=Production) Q2 2025 Production Breakdown | Metric | Value | | :--- | :--- | | **Average Daily Production** | 25,355 Boe/d (6:1) | | **Production Mix** | | |    Natural Gas | 47% | |    Liquids (Oil & NGLs) | 53% | |       Oil | 33% | |       NGLs | 20% | [Operational Update](index=3&type=section&id=Operational%20Update) - As of June 30, 2025, Kimbell had **88 rigs** actively drilling on its acreage, representing an approximate **16.5%** market share of all U.S. land rigs[15](index=15&type=chunk) DUCs and Permits by Basin (as of June 30, 2025) | Basin | Net DUCs | Net Permits | | :--- | :--- | :--- | | **Permian** | 3.27 | 2.15 | | **Eagle Ford** | 0.22 | 0.08 | | **Haynesville** | 0.35 | 0.13 | | **Mid-Continent** | 0.78 | 0.39 | | **Bakken** | 0.36 | 0.10 | | **Appalachia** | 0.02 | 0.02 | | **Rockies** | 0.10 | 0.02 | | **Total** | **5.10** | **2.89** | [Hedging Update](index=4&type=section&id=Hedging%20Update) Kimbell implemented fixed-price oil and natural gas swaps through Q2 2027 to stabilize cash flow by locking in future production prices Fixed Price Swaps as of June 30, 2025 | Period | Oil Volume (BBL) | Nat Gas Volume (MMBTU) | Wtd. Avg. Oil Price ($/BBL) | Wtd. Avg. Nat Gas Price ($/MMBTU) | | :--- | :--- | :--- | :--- | :--- | | **3Q 2025** | 136,068 | 1,261,964 | $74.20 | $3.74 | | **4Q 2025** | 146,372 | 1,291,680 | $68.26 | $3.68 | | **1Q 2026** | 146,880 | 1,296,000 | $70.38 | $4.07 | | **2Q 2026** | 148,512 | 1,310,400 | $70.78 | $3.33 | | **Full Year 2026** | 605,680 | 5,256,000 | ~$67.70 | ~$3.69 | | **Full Year 2027 (H1)** | 304,623 | 2,658,528 | ~$62.65 | ~$3.96 | [Financial Statements](index=7&type=section&id=Financial%20Statements) Q2 2025 unaudited financial statements report total assets of **$1.28 billion**, liabilities of **$483.5 million**, revenues of **$86.5 million**, and net income of **$26.7 million**, driven by derivative gains [Condensed Consolidated Balance Sheet](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) Balance Sheet Summary (as of June 30, 2025) | Account | Amount (in thousands) | | :--- | :--- | | **Total Current Assets** | $88,249 | | **Total Assets** | **$1,284,936** | | **Total Current Liabilities** | $16,185 | | **Long-Term Debt** | $462,096 | | **Total Liabilities** | **$483,533** | | **Total Unitholders' Equity** | **$643,008** | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statement of Operations Summary (Three Months Ended June 30) | Account (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total Revenues** | $86,548 | $76,573 | | **Operating Income** | $37,786 | $23,892 | | **Net Income** | $26,672 | $15,187 | | **Net Income Attributable to Common Units** | $2,007 | $8,410 | | **Diluted EPS** | $0.02 | $0.11 | [Supplemental Schedules (Non-GAAP Reconciliations)](index=9&type=section&id=Supplemental%20Schedules%20(Non-GAAP%20Reconciliations)) This section defines and reconciles non-GAAP measures, showing Q2 2025 Consolidated Adjusted EBITDA of **$63.8 million**, **$47.1 million** cash available for distribution, and a net debt to TTM Adjusted EBITDA ratio of **1.6x** [Definition of Non-GAAP Measures](index=9&type=section&id=Definition%20of%20Non-GAAP%20Measures) - Adjusted EBITDA is used by management to evaluate operating performance and cash flow available for distributions, excluding items like depreciation, interest, taxes, and unrealized derivative gains/losses[28](index=28&type=chunk) - Cash G&A and Cash G&A per Boe are used to measure cash costs relative to production, providing a metric for operational efficiency[29](index=29&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA and Cash Available for Distribution](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20and%20Cash%20Available%20for%20Distribution) Q2 2025 Reconciliation Summary (in thousands) | Metric | Value | | :--- | :--- | | **Net Income** | $26,672 | | **Consolidated Adjusted EBITDA** | $63,844 | | **Adjusted EBITDA (attributable to KRP)** | $55,268 | | **Cash Available for Distribution (on common units)** | $47,121 | | **Cash Available per Common Unit** | $0.50 | | **Declared Distribution per Common Unit** | $0.38 | - The difference between cash available for distribution (**$0.50/unit**) and the declared distribution (**$0.38/unit**) is due to the company allocating **25%** of cash to repay debt on its revolving credit facility[33](index=33&type=chunk) [Net Debt to Trailing Twelve Month Consolidated Adjusted EBITDA Calculation](index=13&type=section&id=Net%20Debt%20to%20Trailing%20Twelve%20Month%20Consolidated%20Adjusted%20EBITDA%20Calculation) Leverage Ratio Calculation (as of June 30, 2025) | Metric (in thousands) | Value | | :--- | :--- | | **Long-Term Debt** | $462,096 | | **Cash and Cash Equivalents (capped)** | ($25,000) | | **Net Debt** | $437,096 | | **Trailing Twelve Month Adj. EBITDA** | $279,816 | | **Net Debt / TTM Adj. EBITDA** | **1.6x** |

AMENDMENT NO. 14 TO THE CREDIT AGREEMENT AMENDMENT NO. 14 TO THE CREDIT AGREEMENT, dated as of August 6, 2025 (this "Amendment"), by and among Blizzard Midco, LLC, a Delaware limited liability company ("Holdings"), Norvax, LLC, a Delaware limited liability company (the "Borrower"), the Lenders party hereto (constituting the Required Lenders, all of the Revolving Lenders and all of the Term Lenders) and Blue Torch Finance, LLC, as the administrative agent and the collateral agent (in such capacities, the "Ad ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q þ 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: 001-37798 Cartesian Therapeutics, Inc. (Exact name of registrant as specified in its charter) Delaware 26-1622110 (State or oth ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q þ 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: 001-37798 Cartesian Therapeutics, Inc. (Exact name of registrant as specified in its charter) Delaware 26-1622110 (State or oth ...

[Q2 2025 Highlights and Updated 2025 Guidance](index=1&type=section&id=Second%20Quarter%20Highlights%20and%202025%20Guidance) Avadel reported strong Q2 2025 results with LUMRYZ™ net revenue of $68.1 million, a 64% year-over-year increase, leading to the first quarterly net income ($9.7 million) and positive cash flow since the product's launch. The number of patients on LUMRYZ grew 63% year-over-year to 3,100. Consequently, the company raised its full-year 2025 revenue guidance to $265-$275 million and provided Q3 2025 revenue guidance of $71-$75 million | Metric | Q2 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | | LUMRYZ™ Net Revenue | $68.1 million | +64% | | Patients on LUMRYZ | 3,100 | +63% | | Net Income | $9.7 million | N/A (Turned from loss) | | Earnings Per Share (EPS) | $0.10 | N/A (Turned from loss) | | Guidance | 2025 Full Year | Q3 2025 | | :--- | :--- | :--- | | Net Product Revenue | $265 - $275 million (Raised) | $71 - $75 million | | Cash Operating Expenses | Not specified for full year | $50 - $55 million | - The company achieved its **first quarterly net income and positive cash flow** since the launch of LUMRYZ in 2023, driven by strong uptake, growing patient numbers, and improved persistency[3](index=3&type=chunk)[4](index=4&type=chunk) [Second Quarter 2025 Financial Results](index=2&type=section&id=Overview%20of%20Second%20Quarter%20Financial%20Results) In Q2 2025, Avadel's net product revenue from LUMRYZ sales grew 64% to $68.1 million compared to Q2 2024. The company achieved a significant financial turnaround, reporting a net income of $9.7 million, or $0.10 per diluted share, compared to a net loss of $13.8 million in the prior-year period. Total operating expenses remained relatively stable at $52.9 million | Financial Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Product Revenue | $68.1M | $41.5M | | Total Operating Expenses | $52.9M | $51.5M | | R&D Expenses | $4.3M | $4.1M | | SG&A Expenses | $48.6M | $47.4M | | Net Income (Loss) | $9.7M | ($13.8M) | | Diluted EPS | $0.10 | ($0.14) | - The company generated positive cash flow, increasing its cash, cash equivalents, and marketable securities by $15.0 million during the quarter to a total of $81.5 million as of June 30, 2025[4](index=4&type=chunk)[11](index=11&type=chunk) - Q2 2025 marked the **first quarter the company has generated net income** since LUMRYZ was launched[10](index=10&type=chunk) [Corporate and Pipeline Updates](index=1&type=section&id=Corporate%20and%20Pipeline%20Updates) Avadel strengthened its leadership by appointing Susan Rodriguez as COO. The company received a favorable court ruling affirming LUMRYZ's FDA approval and clinical superiority. In pipeline developments, LUMRYZ was granted FDA Orphan Drug Designation for Idiopathic Hypersomnia (IH), with the pivotal Phase 3 REVITALYZ trial for this indication on track to complete enrollment by the end of 2025 - Appointed Susan Rodriguez, an experienced biopharma executive, as Chief Operating Officer to oversee commercial strategy and operations[13](index=13&type=chunk) - The U.S. Court of Appeals affirmed the FDA's approval of LUMRYZ and its finding that the once-at-bedtime dosing is clinically superior to other oxybates[13](index=13&type=chunk) - LUMRYZ was granted FDA Orphan Drug Designation for the treatment of Idiopathic Hypersomnia (IH)[3](index=3&type=chunk)[13](index=13&type=chunk) - The Phase 3 REVITALYZ study for LUMRYZ in IH is on track to complete enrollment by the end of 2025, with topline data expected in 2026[3](index=3&type=chunk)[13](index=13&type=chunk) [About LUMRYZ™](index=3&type=section&id=About%20LUMRYZ) LUMRYZ™ (sodium oxybate) is the first and only FDA-approved once-at-bedtime treatment for cataplexy or excessive daytime sleepiness (EDS) in narcolepsy patients aged seven and older. It has been granted seven years of Orphan Drug Exclusivity due to its clinical superiority over twice-nightly oxybate treatments. The drug carries a BOXED Warning for risks associated with CNS depressants and is available only through a restricted REMS program - LUMRYZ is an FDA-approved, once-at-bedtime treatment for cataplexy or EDS in adults and pediatric patients (7+) with narcolepsy[14](index=14&type=chunk) - The FDA granted LUMRYZ **seven years of Orphan Drug Exclusivity**, finding its once-nightly dosing a major contribution to patient care over twice-nightly products[16](index=16&type=chunk) - **BOXED WARNING**: Taking LUMRYZ with other CNS depressants (e.g., alcohol, sedatives) can cause serious medical problems, including respiratory depression and death[18](index=18&type=chunk) - Due to its active ingredient (GHB) and risk of abuse, LUMRYZ is a controlled substance available only through the restricted LUMRYZ REMS program[19](index=19&type=chunk)[20](index=20&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) The consolidated financial statements detail Avadel's performance. The income statement shows a shift to profitability in Q2 2025 with a net income of $9.7 million. The balance sheet indicates growth in total assets to $187.2 million and shareholders' equity to $90.7 million. The cash flow statement highlights a significant improvement, with $4.5 million in cash provided by operations for the first six months of 2025, compared to a $47.9 million use of cash in the prior-year period [Condensed Consolidated Statements of Income (Loss)](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME%20(LOSS)) For the three months ended June 30, 2025, Avadel reported net product revenue of $68.1 million and a net income of $9.7 million, a substantial improvement from a net loss of $13.8 million in Q2 2024. For the six-month period, net income was $4.7 million, compared to a net loss of $41.2 million in the first half of 2024 | (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 product revenue | $68,129 | $41,504 | $120,640 | $68,682 | | Gross profit | $61,763 | $38,716 | $108,697 | $64,372 | | Operating income (loss) | $8,884 | ($12,741) | $5,883 | ($38,776) | | Net income (loss) | $9,665 | ($13,822) | $4,745 | ($41,164) | | Net income (loss) per share - diluted | $0.10 | ($0.14) | $0.05 | ($0.44) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of June 30, 2025, Avadel's total assets were $187.2 million, with cash, cash equivalents, and marketable securities totaling $81.5 million. Total liabilities stood at $96.4 million, resulting in total shareholders' equity of $90.7 million, an increase from $73.8 million at year-end 2024 | (In thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $63,402 | $51,371 | | Marketable securities | $18,145 | $22,406 | | Total current assets | $159,105 | $134,208 | | Total assets | $187,157 | $164,236 | | Total current liabilities | $57,065 | $48,834 | | Total liabilities | $96,448 | $90,388 | | Total shareholders' equity | $90,709 | $73,848 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended June 30, 2025, net cash provided by operating activities was $4.5 million, a significant positive shift from the $47.9 million used in operations during the same period in 2024. The company's cash and cash equivalents increased by $12.0 million in the first half of 2025 to end at $63.4 million | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $4,465 | ($47,890) | | Net cash provided by investing activities | $4,063 | $31,937 | | Net cash provided by financing activities | $1,672 | $13,913 | | Net change in cash and cash equivalents | $12,031 | ($2,320) | | Cash and cash equivalents at end of period | $63,402 | $28,847 |

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The company's unaudited financials show a net loss of $118.6 million for H1 2025 and reduced total assets [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $520.3 million as of June 30, 2025, driven by lower cash and investments Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $72,820 | $83,005 | | Total current assets | $275,911 | $414,668 | | Total assets | $520,329 | $621,824 | | **Liabilities & Equity** | | | | Total current liabilities | $28,058 | $30,647 | | Total liabilities | $28,183 | $31,496 | | Total stockholders' equity | $492,146 | $590,328 | | Total liabilities and stockholders' equity | $520,329 | $621,824 | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Net loss for H1 2025 increased to $118.6 million from $79.4 million in H1 2024 due to higher R&D expenses Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $61,030 | $36,259 | $102,489 | $66,905 | | General and administrative | $14,768 | $13,768 | $28,305 | $26,111 | | Loss from operations | $(75,798) | $(50,027) | $(130,794) | $(93,016) | | Net loss attributable to Cullinan | $(70,055) | $(42,028) | $(118,556) | $(79,176) | | Basic and diluted net loss per share (Common) | $(1.07) | $(0.68) | $(1.81) | $(1.43) | [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity declined to $492.1 million by June 30, 2025, primarily due to the net loss - The primary driver for the decrease in stockholders' equity in the first half of 2025 was the **net loss of $118.6 million**[24](index=24&type=chunk) - In the first half of 2024, the company raised **net proceeds of $262.7 million** from the issuance of common stock and pre-funded warrants[26](index=26&type=chunk)[54](index=54&type=chunk) [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $100.8 million for H1 2025, contributing to a $10.2 million decrease in cash Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(100,764) | $(74,538) | | Net cash provided by (used in) investing activities | $90,206 | $(172,156) | | Net cash provided by financing activities | $373 | $263,281 | | **Net (decrease) increase in cash** | **$(10,185)** | **$16,587** | [Notes to the Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The company has sufficient cash for the next twelve months and expensed a $20.0 million upfront license fee - The company believes its cash, cash equivalents, and investments totaling **$510.9 million** as of June 30, 2025, will fund operations and capital expenditures for at least the next twelve months[34](index=34&type=chunk) - In June 2025, Cullinan entered into a license agreement with Genrix for velinotamig, paying a **$20.0 million upfront fee** which was recorded as R&D expense[44](index=44&type=chunk)[45](index=45&type=chunk)[47](index=47&type=chunk) - Under the Taiho co-development agreement for zipalertinib, Cullinan recorded its share of R&D costs from Taiho totaling **$7.8 million** and **$13.4 million** for the three and six months ended June 30, 2025, respectively[50](index=50&type=chunk) - In April 2024, Cullinan raised **net proceeds of $262.7 million** through a private placement of common stock and pre-funded warrants[54](index=54&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) R&D expenses rose due to a $20.0 million license fee, while cash reserves are deemed sufficient for operations [Overview](index=21&type=section&id=Overview) The company is a clinical-stage biopharmaceutical firm focused on immunology and oncology programs - **Immunology Pipeline:** - **CLN-978 (CD19xCD3):** Phase 1 trials ongoing in SLE, RA, and SjD, with initial SLE data expected in Q4 2025 - **Velinotamig (BCMAxCD3):** Licensed from Genrix; a Phase 1 trial in autoimmune diseases is planned by Genrix in China by year-end 2025[78](index=78&type=chunk)[80](index=80&type=chunk) - **Oncology Pipeline:** - **Zipalertinib (EGFR inhibitor):** Co-developed with Taiho, Phase 2b met its primary endpoint in NSCLC, with an NDA submission planned by year-end 2025 - **CLN-049 (FLT3xCD3):** Phase 1 trial ongoing in AML, with data expected in Q4 2025 - **CLN-619 (MICA/B antibody):** Phase 1 continues in NSCLC and multiple myeloma - **CLN-617 (IL-2/IL-12 fusion protein):** Phase 1 ongoing in advanced solid tumors[79](index=79&type=chunk)[80](index=80&type=chunk)[88](index=88&type=chunk) - The company recently **discontinued development of CLN-619** in gynecological cancers and **terminated the license for CLN-418** to focus resources[82](index=82&type=chunk)[83](index=83&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Operating expenses increased significantly, driven by a one-time $20.0 million R&D in-licensing fee - The **$24.8 million increase in Q2 2025 R&D expenses** was primarily driven by a **$20.0 million upfront license fee** for velinotamig, along with higher clinical and personnel costs[99](index=99&type=chunk) - The **$35.6 million increase in H1 2025 R&D expenses** was also mainly due to the **$20.0 million velinotamig fee**, plus increases in clinical costs ($9.7 million) and personnel costs ($5.6 million)[100](index=100&type=chunk) Research and Development Expenses by Category (in thousands) | Category | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Clinical-stage product candidates | $25,022 | $23,689 | $51,661 | $43,326 | | Early-stage programs | $1,986 | $1,455 | $3,008 | $2,816 | | R&D personnel and operations | $9,741 | $7,236 | $19,572 | $13,724 | | License agreement obligations | $20,115 | $25 | $20,153 | $50 | | Equity-based compensation | $4,166 | $3,854 | $8,095 | $6,989 | | **Total R&D Expenses** | **$61,030** | **$36,259** | **$102,489** | **$66,905** | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company holds $510.9 million in cash and investments, sufficient for at least the next twelve months - As of June 30, 2025, the company had **$510.9 million in cash, cash equivalents, and investments**[105](index=105&type=chunk) - The company expects its current capital to fund operations through **at least the next twelve months** from the financial statement issuance date[106](index=106&type=chunk) - The company has an at-the-market (ATM) equity offering program with **$85.6 million remaining available** for sale as of June 30, 2025[109](index=109&type=chunk) Cash Flow Summary (in thousands) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(100,764) | $(74,538) | | Net cash provided by (used in) investing activities | $90,206 | $(172,156) | | Net cash provided by financing activities | $373 | $263,281 | [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company qualifies as a smaller reporting company - As a smaller reporting company, Cullinan is **not required to provide the information** for this item[126](index=126&type=chunk) [Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective with no material changes to internal controls - The Principal Executive Officer and Principal Financial Officer concluded that **disclosure controls and procedures were effective** as of June 30, 2025[127](index=127&type=chunk) - **No changes occurred** during the fiscal quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[129](index=129&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - Cullinan is not currently party to any litigation or legal proceedings that management believes are probable to have a **material adverse effect** on the business[131](index=131&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor was added related to reduced reporting requirements as a smaller reporting company - A new risk factor has been added: due to its qualification as a smaller reporting company, the company will be subject to reduced reporting requirements, which could make its **common stock less attractive** to investors[133](index=133&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period [Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement - No directors or officers adopted, modified, or terminated a **Rule 10b5-1 trading plan** during the fiscal quarter[136](index=136&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed, including a new license agreement and officer certifications

[Corporate Profile](index=3&type=section&id=Corporate%20Profile) Americold is a global leader in temperature-controlled logistics real estate, operating 237 warehouses with approximately 1.5 billion refrigerated cubic feet of storage globally [Company Overview](index=3&type=section&id=Company%20Overview) Americold is a global leader in temperature-controlled logistics real estate, owning and operating 237 warehouses with 1.5 billion refrigerated cubic feet of storage - Americold operates **237** temperature-controlled warehouses globally, with a total storage capacity of approximately **1.5 billion** refrigerated cubic feet[5](index=5&type=chunk) [Management, Board, and Investor Relations](index=3&type=section&id=Management%2C%20Board%2C%20and%20Investor%20Relations) The report lists the company's senior management team, led by CEO George F. Chappelle, Jr., and the Board of Directors - Key leadership includes **George F. Chappelle, Jr.** as Chief Executive Officer and **Mark R. Patterson** as Chairman of the Board[6](index=6&type=chunk)[7](index=7&type=chunk) [Analyst Coverage, Stock Info, and Credit Ratings](index=4&type=section&id=Analyst%20Coverage%2C%20Stock%20Info%2C%20and%20Credit%20Ratings) The company is covered by numerous financial firms, its stock trades on the NYSE under "COLD", and it holds investment-grade credit ratings - The company's common stock is listed on the New York Stock Exchange under the ticker symbol **"COLD"**[9](index=9&type=chunk) Credit Ratings | Rating Agency | Rating | Outlook/Trend | | :--- | :--- | :--- | | DBRS Morningstar | BBB | Positive Trend | | Fitch | BBB | Stable Outlook | | Moody's | Baa3 | Stable Outlook | [Earnings Release](index=5&type=section&id=Earnings%20Release) Americold reported Q2 2025 Adjusted FFO of $0.36 per share, launched new development projects, and updated its full-year 2025 outlook [Second Quarter 2025 Highlights & CEO Commentary](index=5&type=section&id=Second%20Quarter%202025%20Highlights%20%26%20CEO%20Commentary) Americold reported Q2 2025 Adjusted FFO of $0.36 per share, launched new development projects, and updated its full-year outlook Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $650.7M | $661.0M | -1.5% | | Net Income | $1.6M | N/A (Net Loss) | N/A | | Net Income per Share | $0.01 | ($0.23) | N/A | | Adjusted FFO per Share | $0.36 | $0.38 | -5.6% | | Core EBITDA | $159.1M | $165.5M | -3.9% | - The company launched three significant development projects: a partnership with CPKC in Kansas City, an expansion in Allentown, and a new facility with DP World in Dubai[13](index=13&type=chunk) - CEO commentary indicates that occupancy and throughput levels are expected to remain below typical seasonal trends in the second half of the year due to a challenging demand environment[13](index=13&type=chunk) [2025 Full-Year Outlook](index=6&type=section&id=2025%20Full-Year%20Outlook) The company updated its full-year 2025 guidance, lowering its outlook for same-store revenue growth and adjusting its Adjusted FFO per share range Updated 2025 Full-Year Guidance | Metric | New Guidance (Aug 7, 2025) | Old Guidance (May 8, 2025) | | :--- | :--- | :--- | | Same Store Revenue Growth (CC) | (4.0)% - 0.0% | 0.0% - 2.0% | | Total Maintenance CapEx | $60M - $70M | $80M - $85M | | Adjusted FFO per Share | $1.39 - $1.45 | $1.42 - $1.52 | [Second Quarter 2025 Total Company Financial Results](index=6&type=section&id=Second%20Quarter%202025%20Total%20Company%20Financial%20Results) Q2 2025 total revenues decreased by 1.5% to $650.7 million, with net income improving to $1.6 million from a prior-year net loss Q2 2025 vs Q2 2024 Financial Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $650.7M | $661.0M | | Total NOI | $211.7M | N/A | | Net Income (Loss) | $1.6M | ($64.4M) | | Core EBITDA | $159.1M | $165.5M | | Core FFO per Share | $0.27 | $0.33 | | Adjusted FFO per Share | $0.36 | $0.38 | - The significant year-over-year improvement in net income was primarily driven by the absence of a **$110.7 million loss on debt extinguishment** that occurred in Q2 2024[23](index=23&type=chunk) [Global Warehouse Segment Results](index=8&type=section&id=Global%20Warehouse%20Segment%20Results) The Global Warehouse segment saw a 1.1% revenue decrease to $594.1 million and a 1.7% NOI decrease to $201.0 million in Q2 2025, driven by lower volumes [Total Warehouse Segment Performance (Q2 & YTD)](index=8&type=section&id=Total%20Warehouse%20Segment%20Performance%20%28Q2%20%26%20YTD%29) Q2 2025 Total Warehouse segment revenues declined 1.1% to $594.1 million, with NOI falling 1.7% and economic occupancy dropping 430 basis points Q2 2025 Total Warehouse Segment Performance (vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $594.1M | $600.4M | -1.1% | | Contribution (NOI) | $201.0M | $204.5M | -1.7% | | Economic Occupancy | 73.8% | 78.1% | -430 bps | | Physical Occupancy | 62.8% | 67.8% | -500 bps | YTD 2025 Total Warehouse Segment Performance (vs YTD 2024) | Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,169.4M | $1,198.1M | -2.4% | | Contribution (NOI) | $397.6M | $401.7M | -1.0% | | Economic Occupancy | 74.3% | 78.8% | -450 bps | | Physical Occupancy | 63.1% | 68.3% | -520 bps | [Same Store Warehouse Performance (Q2 & YTD)](index=9&type=section&id=Same%20Store%20Warehouse%20Performance%20%28Q2%20%26%20YTD%29) Same-store portfolio in Q2 2025 saw a 1.5% revenue decline and a 4.2% NOI decline, with economic occupancy falling 410 basis points to 75.5% Q2 2025 Same Store Performance (vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $573.1M | $581.9M | -1.5% | | Contribution (NOI) | $199.2M | $208.0M | -4.2% | | Economic Occupancy | 75.5% | 79.6% | -410 bps | | Services Margin | 13.3% | 12.4% | +90 bps | YTD 2025 Same Store Performance (vs YTD 2024) | Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $1,133.1M | $1,155.1M | -1.9% | | Contribution (NOI) | $391.9M | $409.2M | -4.2% | | Economic Occupancy | 76.0% | 80.2% | -420 bps | [Segment Analysis and Key Metrics](index=14&type=section&id=Segment%20Analysis%20and%20Key%20Metrics) Warehouse segment revenue and NOI declined due to lower volumes, with 59.7% of rent and storage revenues from fixed commitment contracts - The decrease in Global Warehouse segment revenue was principally driven by lower volumes and throughput due to a competitive environment, changes in consumer buying habits, and lapping a counter-cyclical inventory build from the prior year[57](index=57&type=chunk) - Annualized rent and storage revenues from fixed commitment contracts stood at **$617.4 million** as of June 30, 2025, representing **59.7%** of total rent and storage revenues[59](index=59&type=chunk) - Economic occupancy for the total warehouse segment was **73.8%**, a **1,100 basis point spread** above the physical occupancy, demonstrating the value of fixed commitment contracts[60](index=60&type=chunk) [Balance Sheet, Liquidity, and Dividends](index=14&type=section&id=Balance%20Sheet%2C%20Liquidity%2C%20and%20Dividends) As of June 30, 2025, Americold had $937.0 million in liquidity, net debt of $3.9 billion, and declared a $0.23 per share dividend - Total liquidity was approximately **$937.0 million**, including cash and available capacity on its revolving credit facility[62](index=62&type=chunk) - Net debt to pro forma Core EBITDA was approximately **6.3x** at the end of the quarter[62](index=62&type=chunk) - The company's debt structure is predominantly **fixed-rate (92.7%)** and **unsecured (95.2%)**, with a weighted average term of **4.9 years**[62](index=62&type=chunk) - A dividend of **$0.23 per share** was declared for Q2 2025, representing a **5% increase** compared to the prior year[63](index=63&type=chunk) [Financial Information](index=17&type=section&id=Financial%20Information) This section presents the company's condensed consolidated balance sheets, statements of operations, and reconciliations of non-GAAP financial measures [Condensed Consolidated Balance Sheets](index=17&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of June 30, 2025, shows total assets of $8.09 billion and total liabilities of $4.94 billion Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $8,089,619 | $7,735,954 | | Total Liabilities | $4,944,299 | $4,428,949 | | Total Equity | $3,145,320 | $3,307,005 | [Condensed Consolidated Statements of Operations](index=18&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 total revenues were $650.7 million, with a net income of $1.6 million ($0.01 per share), a significant improvement from a prior-year net loss Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $650,748 | $660,955 | | Operating Income | $37,595 | $63,368 | | Net Income (Loss) | $1,550 | ($64,409) | | Net Income (Loss) per Share | $0.01 | ($0.23) | [Reconciliation of Net Income (Loss) to NAREIT FFO, Core FFO and Adjusted FFO](index=19&type=section&id=Reconciliation%20of%20Net%20Income%20%28Loss%29%20to%20NAREIT%20FFO%2C%20Core%20FFO%20and%20Adjusted%20FFO) This section reconciles GAAP Net Income to NAREIT FFO, Core FFO, and Adjusted FFO for Q2 2025 Q2 FFO Reconciliation Summary (in thousands, except per share) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (Loss) | $1,550 | ($64,409) | | NAREIT FFO | $49,100 | ($7,528) | | Core FFO | $75,827 | $95,023 | | Adjusted FFO | $103,587 | $109,397 | | Adjusted FFO per Diluted Share | $0.36 | $0.38 | [Reconciliation of Net Income (Loss) to NAREIT EBITDAre and Core EBITDA](index=21&type=section&id=Reconciliation%20of%20Net%20Income%20%28Loss%29%20to%20NAREIT%20EBITDAre%20and%20Core%20EBITDA) For Q2 2025, Core EBITDA was $159.1 million, a decrease from $165.5 million in Q2 2024, with the Core EBITDA margin contracting to 24.4% Q2 EBITDA Reconciliation Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income (Loss) | $1,550 | ($64,409) | | NAREIT EBITDAre | $122,713 | $57,444 | | Core EBITDA | $159,105 | $165,482 | | Core EBITDA Margin | 24.4% | 25.0% | [Debt Detail and Maturities](index=22&type=section&id=Debt%20Detail%20and%20Maturities) As of June 30, 2025, Americold had $4.05 billion in total debt, with a 4.14% weighted average interest rate and 6.3x Net Debt to Pro Forma Core EBITDA Debt Profile as of June 30, 2025 | Metric | Value | | :--- | :--- | | Total Debt Outstanding | $4.05B | | Net Debt | $3.95B | | Weighted Avg. Interest Rate | 4.14% | | Weighted Avg. Maturity | 4.9 years | | % Fixed Rate (incl. hedges) | 92.7% | | % Unsecured | 95.2% | | Net Debt to Pro Forma Core EBITDA | 6.3x | [Operations Overview](index=23&type=section&id=Operations%20Overview) This section details the company's fixed commitment and lease maturity schedules, capital expenditures, and external growth activities [Fixed Commitment and Lease Maturity Schedules](index=24&type=section&id=Fixed%20Commitment%20and%20Lease%20Maturity%20Schedules) As of June 30, 2025, the company had 604 fixed commitment and lease contracts, generating $617.4 million in annualized rent and storage revenues, with 19.3% expiring in 2026 Fixed Commitment Contract Expiration Schedule (Annualized Rent & Storage Revenues in thousands) | Expiration Year | Annualized Revenues (in thousands) | % of Total | | :--- | :--- | :--- | | Month-to-Month | $100,095 | 9.7% | | 2025 | $59,918 | 5.8% | | 2026 | $199,812 | 19.3% | | 2027 | $61,296 | 5.9% | | 2028 | $47,483 | 4.6% | | 2029+ | $148,775 | 14.4% | | **Total** | **$617,379** | **59.7%** | [Capital Expenditures and Repair and Maintenance Expenses](index=26&type=section&id=Capital%20Expenditures%20and%20Repair%20and%20Maintenance%20Expenses) Total capital expenditures for Q2 2025 surged to $199.8 million, primarily due to expansion and development spending, with YTD capex reaching $421.8 million Capital Expenditures Summary (in thousands) | Category | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Maintenance | $17,283 | $22,832 | $32,082 | $40,765 | | External growth & integration | $0 | $0 | $108,448 | $0 | | Expansion, development & organic | $177,211 | $32,881 | $271,469 | $62,833 | | Technological upgrades | $5,324 | $2,759 | $9,835 | $3,739 | | **Total Capital Expenditures** | **$199,818** | **$58,472** | **$421,834** | **$107,337** | - Total repair and maintenance expenses, which are expensed rather than capitalized, were **$30.6 million** for Q2 2025, slightly up from **$29.3 million** in Q2 2024[109](index=109&type=chunk) [External Growth and Capital Deployment](index=28&type=section&id=External%20Growth%20and%20Capital%20Deployment) The company completed projects in Allentown and Kansas City, has four major expansion projects underway, and acquired a Houston facility for $127 million - Recently completed development projects include an expansion in Allentown, PA and a new facility in Kansas City, MO, both expected to stabilize in 2026[120](index=120&type=chunk) - Four major projects are in process, including a large-scale automated expansion in Dallas Ft. Worth, TX, with a total estimated cost of **$145-$155 million**[121](index=121&type=chunk) - The company acquired a facility in Houston, TX on March 17, 2025, for an acquisition price of **$127 million**, which includes **$16 million** for upgrades, with stabilization expected in Q1 2027 and a **10-12% NOI ROIC**[123](index=123&type=chunk) [Other Supplemental Information](index=29&type=section&id=Other%20Supplemental%20Information) This section provides historical performance trends for same-store operations and details on the company's unconsolidated joint ventures [Same Store Historical Performance Trend](index=29&type=section&id=Same%20Store%20Historical%20Performance%20Trend) Same-store NOI peaked in Q2 2024 at $208.0 million and has since declined to $199.2 million in Q2 2025, with economic occupancy also trending downwards Quarterly Same Store Performance Trend | Metric | Q2 25 | Q1 25 | Q4 24 | Q3 24 | Q2 24 | Q1 24 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenues ($M) | $573.1 | $560.0 | $592.6 | $595.8 | $581.9 | $573.3 | | Contribution (NOI) ($M) | $199.2 | $192.7 | $206.4 | $201.1 | $208.0 | $201.2 | | Economic Occupancy % | 75.5% | 76.6% | 79.3% | 78.3% | 79.6% | 80.8% | [Unconsolidated Joint Ventures](index=30&type=section&id=Unconsolidated%20Joint%20Ventures) The company sold its 14.99% equity interest in the SuperFrio joint venture in April 2025 and retains a 49% share in the Dubai-based RSA joint venture - The company finalized the sale of its **14.99% equity interest** in the SuperFrio joint venture in April 2025[130](index=130&type=chunk) - Americold owns a **49% equity share** in the RSA joint venture in Dubai, with its pro rata share of the JV's debt at **$18.7 million** as of June 30, 2025[131](index=131&type=chunk)[132](index=132&type=chunk) [Reconciliations, Notes, and Definitions](index=32&type=section&id=Reconciliations%2C%20Notes%2C%20and%20Definitions) This section provides detailed segment revenues and contribution, along with definitions for key non-GAAP financial measures used in the report [Revenues and Contribution (NOI) by Segment](index=32&type=section&id=Revenues%20and%20Contribution%20%28NOI%29%20by%20Segment) For Q2 2025, the Warehouse segment was the largest contributor to both revenue ($594.1 million) and NOI ($201.0 million) among the three business segments Q2 2025 Revenue and Contribution (NOI) by Segment (in thousands) | Segment | Revenues | Contribution (NOI) | | :--- | :--- | :--- | | Warehouse | $594,070 | $201,005 | | Transportation | $48,097 | $8,742 | | Third-party managed | $8,581 | $1,909 | | **Total** | **$650,748** | **$211,656** | [Notes and Definitions](index=33&type=section&id=Notes%20and%20Definitions) This section defines non-GAAP financial measures such as NAREIT FFO, Core FFO, Adjusted FFO, NAREIT EBITDAre, Core EBITDA, and NOI, used to assess operating performance - **NAREIT FFO** is calculated per NAREIT standards, starting with net income and excluding items like real estate depreciation and gains/losses on property sales[139](index=139&type=chunk) - **Core FFO** adjusts NAREIT FFO for items like acquisition costs, debt extinguishment losses, and foreign currency impacts to better reflect core business operations[140](index=140&type=chunk) - **Adjusted FFO (AFFO)** adjusts Core FFO for non-real estate depreciation, stock-based compensation, and maintenance capital expenditures to measure the ability to fund distributions and incremental investments[142](index=142&type=chunk) - **Core EBITDA** starts with NAREIT EBITDAre and adjusts for non-core items similar to Core FFO, providing a measure of operations excluding items not indicative of core performance[145](index=145&type=chunk)