Financial Performance - Total net revenue for Q3 2025 was $69.0 million, a 13% increase from Q3 2024, driven by the introduction of Evolysse and growth in global Jeuveau revenue [5]. - Global Jeuveau net revenue reached $63.2 million for Q3 2025, up from $59.7 million in Q2 2025, reflecting sequential growth that outperformed typical seasonal trends [5]. - Evolysse generated $5.7 million in revenue for Q3 2025, marking the strongest hyaluronic acid filler debut in over a decade [5]. - Product revenue for Q3 2025 reached $68.967 million, a 14.7% increase from $60.164 million in Q3 2024 [23]. - Total net revenues for the nine months ended September 30, 2025, were $206.876 million, compared to $187.327 million for the same period in 2024, reflecting a growth of 10.5% [23]. Profitability and Loss - The company expects to achieve positive non-GAAP operating income of $5 million to $7 million in Q4 2025, remaining on track for sustainable annual profitability beginning in 2026 [5]. - GAAP loss from operations for Q3 2025 was $11.5 million, an improvement from $15.5 million in Q3 2024 [7]. - The net loss for Q3 2025 was $15.737 million, compared to a net loss of $19.170 million in Q3 2024, showing an improvement of 17.5% [23]. - Non-GAAP loss from operations for Q3 2025 was $3.079 million, an improvement from a loss of $6.738 million in Q3 2024 [33]. - The company reported a comprehensive loss of $15.275 million for Q3 2025, compared to a comprehensive loss of $19.258 million in Q3 2024 [23]. Guidance and Future Plans - The company reaffirms its 2025 net revenue guidance of $295 million to $305 million, representing 11% to 15% growth over 2024 results [8]. - Evolus plans to launch Evolysse Sculpt in the U.S. in 2026 and Evolysse Lips in 2027, with a target of $700 million in total net revenue by 2028 [8]. Customer and Market Growth - Total purchasing accounts increased by nearly 500 in Q3 2025, with over 17,000 customers having purchased from Evolus since launch [6]. - Evolus Rewards consumer loyalty program members grew by over 79,000 during the quarter, surpassing 1.3 million, representing a total increase of 34% compared to Q3 2024 [9]. Expenses and Margins - Gross profit margin for Q3 2025 was 66.5%, while adjusted gross profit margin was 67.6% [7]. - Gross profit margin for Q3 2025 was 66.5%, down from 68.9% in Q3 2024 [29]. - Operating expenses for Q3 2025 were $57.341 million, slightly down from $57.572 million in Q3 2024 [31]. - Research and development expenses for the nine months ended September 30, 2025, were $6.095 million, compared to $6.742 million for the same period in 2024 [23]. Cash and Liabilities - Cash and cash equivalents decreased to $43.523 million as of September 30, 2025, from $86.952 million at the end of 2024 [25]. - Total liabilities increased to $247.757 million as of September 30, 2025, compared to $227.047 million at the end of 2024 [25].

Financial Performance - Net sales for Q3 2025 reached $657.7 million, a 6.0% increase from $620.5 million in Q3 2024[20] - Gross profit for Q3 2025 was $319.1 million, compared to $304.2 million in Q3 2024, reflecting a gross margin improvement[20] - Net income attributable to Acushnet Holdings Corp. for Q3 2025 was $48.5 million, down from $56.2 million in Q3 2024, resulting in a diluted earnings per share of $0.81[20] - Comprehensive income attributable to Acushnet Holdings Corp. for Q3 2025 was $50,087,000, down from $71,163,000 in Q3 2024, reflecting a decline of 29.6%[23] - Net income for Q3 2025 was $48,031,000, a decrease of 12.5% compared to $55,275,000 in Q3 2024[23] - Cash flows provided by operating activities for the nine months ended September 30, 2025, were $194,708,000, compared to $246,228,000 for the same period in 2024, a decrease of 21%[26] - The company reported a net income of $222,135,000 for the nine months ended September 30, 2025, an increase of 5.4% from $209,998,000 in the same period of 2024[26] - Net income for the nine months ended September 30, 2025, was $223.3 million, compared to $215.4 million for the same period in 2024, reflecting a year-over-year increase of approximately 3.9%[31] Assets and Liabilities - Total assets increased to $2.35 billion as of September 30, 2025, up from $2.18 billion at the end of 2024[18] - Current liabilities decreased slightly to $461.0 million from $472.7 million at the end of 2024[18] - Long-term debt increased to $878.3 million as of September 30, 2025, compared to $753.1 million at the end of 2024, indicating potential leverage for growth initiatives[18] - The total shareholders' equity as of September 30, 2025, was $852,275,000, compared to $898,602,000 as of September 30, 2024[28] - As of September 30, 2025, total shareholders' equity was $852.3 million, a decrease from $898.6 million as of December 31, 2024[31] Expenses - Research and development expenses for the nine months ended September 30, 2025, were $56.4 million, compared to $51.5 million for the same period in 2024, indicating a focus on innovation[20] - Advertising and promotion expenses increased to $61.4 million for the three months ended September 30, 2025, compared to $57.2 million in 2024, marking a 7.4% increase[105][106] - The net periodic benefit cost for pension benefits increased to $3,702,000 for the three months ended September 30, 2025, compared to $2,360,000 for the same period in 2024, representing an increase of approximately 56.8%[77] - The company reported restructuring costs of $2.8 million for the three months ended September 30, 2025, compared to $0.4 million in 2024[105][106] Cash and Investments - Cash, cash equivalents, and restricted cash at the end of Q3 2025 were $89,481,000, a decrease from $99,062,000 at the end of Q3 2024[26] - The company declared dividends totaling $43.3 million for the nine months ended September 30, 2025[31] - The Company had $264.7 million remaining under the current share repurchase authorization as of September 30, 2025[86] Market and Economic Conditions - The company anticipates continued challenges in consumer spending and macroeconomic factors affecting golf participation rates[11] - Acushnet Holdings Corp. is focused on expanding its presence in international markets while managing risks associated with global operations[15] - The company is exposed to commodity price risks for materials such as polybutadiene and titanium, which may impact operating results[204] - Inflation in raw materials and input costs has historically affected the company's financial performance and may continue to do so in the future[205] Share Repurchase and Stock Options - As of September 30, 2025, the company had authorized a share repurchase program of up to $1.25 billion since its establishment in 2018[82] - The Company repurchased a total of 2,842,719 shares of common stock with an aggregate value of $187.5 million[86] - The average repurchase price for shares repurchased from the open market was $65.96, while the average price for shares repurchased from Magnus was $66.17[86] - The Amended and Restated 2015 Omnibus Incentive Plan was approved, increasing the number of shares available for grant by 1,266,000 shares and extending the term through June 2, 2035[89] Foreign Exchange and Derivatives - The gross U.S. dollar equivalent notional amount of foreign exchange forward contracts was $218.1 million as of September 30, 2025, up from $192.2 million as of December 31, 2024[64] - The company expects to reclassify a net loss of $2.3 million related to foreign exchange derivative instruments from accumulated other comprehensive loss into cost of goods sold within the next 12 months[66] - The fair value of foreign exchange derivative instruments as of September 30, 2025, was $1,307,000, while liabilities for the same instruments were $2,842,000[70] Segment Performance - Segment operating income for Titleist Golf Equipment was $83.7 million for the three months ended September 30, 2025, compared to $81.1 million in 2024, reflecting a 3.2% increase[105][106] - Total net sales for the nine months ended September 30, 2025, were $2.08 billion, a 3.4% increase from $2.01 billion in 2024[107][109] - The United States market generated $397.0 million in sales for the three months ended September 30, 2025, compared to $374.2 million in 2024, reflecting a 6.0% growth[111]

Financial Performance - For the quarter ended September 30, 2025, the Company reported a GAAP net loss of $9.5 million, or $0.07 per share, and a Distributable Loss of $21.5 million, or $0.15 per share[2]. - The book value per share was reported at $12.24[6]. Loan Resolutions - The Company achieved loan resolutions totaling $716.0 million of UPB, including one full repayment of $167.6 million and a discounted payoff of $390.0 million[6]. - The Company resolved 18 loans totaling $2.2 billion of UPB, receiving $81 million in partial loan repayments[6]. - The Company has exceeded its full-year goal of $2 billion in resolutions, significantly improving liquidity and deleveraging its portfolio[7]. Liquidity and Debt Management - As of September 30, 2025, total liquidity was $353 million, with $340 million in cash, and the Company had a loan portfolio of $4.3 billion with a weighted average yield of 6.7%[6]. - The Company improved total liquidity by $283 million since the end of 2024, and the net debt/equity ratio was 1.9x as of September 30, 2025[13]. Reserves and Foreclosures - The provision for CECL reserves for the quarter was $24.2 million, with total CECL reserves of $307.7 million on loans receivable, representing approximately 6.8% of UPB[6]. - Four remaining watchlist multifamily loans with a total UPB of $640.3 million are expected to be resolved through foreclosure in upcoming quarters[13]. Asset Sales - The Company executed the sale of two floors of office space, resulting in gross proceeds of $13.8 million[6].

Financial Performance - Net income for the three months ended September 30, 2025, was $34,262 thousand, down 20.2% from $42,947 thousand in the same quarter of 2024[15]. - Basic earnings per share decreased to $0.69 for the three months ended September 30, 2025, compared to $1.01 in the same period of 2024, a decline of 31.7%[15]. - Total comprehensive income for the three months ended September 30, 2025, was $44,783 thousand, down from $79,970 thousand in the same quarter of 2024, a decrease of 43.9%[19]. - The net income for the nine months ended September 30, 2025, was reported at $129,787,000, compared to $142,047,000 for the same period in 2024, indicating a decrease of about 8.6%[24]. - Net income for the nine months ended September 30, 2025, was $129.8 million, a decrease from $142.0 million in the same period of 2024, representing a decline of approximately 8.8%[27]. Asset Growth - Total assets increased to $24,993,239 thousand as of September 30, 2025, up from $19,373,565 thousand at December 31, 2024, representing a growth of 29.0%[12]. - Total deposits grew to $20,295,869 thousand, reflecting a 32.5% increase from $15,305,978 thousand at the end of 2024[12]. - The total assets as of September 30, 2025, were reported at $3,546,887,000, compared to $2,993,120,000 at the end of 2024, indicating a significant increase of approximately 18.5%[24]. - As of September 30, 2025, the total common stock outstanding increased to 49,787,305 shares, up from 42,500,611 shares at the end of 2024, representing a growth of approximately 17.1%[24]. Loan and Credit Quality - Net loans rose to $18,261,967 thousand, a 27.5% increase from $14,338,394 thousand year-over-year[12]. - Provision for credit losses increased significantly to $60.7 million compared to $28.8 million in the prior year, indicating a rise of over 111%[27]. - The Company reported a significant increase in loans classified as "Substandard," rising to $28,411,000 from $4,195,000 in the previous year[77]. - The "Pass" category loans reached $1,993,000,000, showing growth compared to $1,830,000,000 in 2024[77]. - Total non-accrual loans amounted to $86.6 million as of September 30, 2025, compared to $101.5 million at December 31, 2024[84]. Income and Expenses - Net interest income for the three months ended September 30, 2025, was $203,344 thousand, up 43.5% from $141,703 thousand in the same period of 2024[15]. - Total non-interest expenses increased to $160,836 thousand for the three months ended September 30, 2025, compared to $100,443 thousand in the same period of 2024, reflecting a 60.0% increase[15]. - Non-interest income totaled $40,398 thousand for the three months ended September 30, 2025, a 20.8% increase from $33,549 thousand in the same quarter of 2024[15]. - The common dividend declared for the nine months ended September 30, 2025, was $1.77 per share, totaling $79,668,000, compared to $1.71 per share totaling $72,620,000 in 2024, reflecting an increase of approximately 10% in total dividends[24]. Securities and Investments - Total available for sale securities amounted to $1,998,347 thousand as of September 30, 2025, with gross unrealized losses of $64,604 thousand[55]. - The total amortized cost of held to maturity securities was $1,357,617,000, with gross unrealized losses of $97,170,000 as of September 30, 2025[60]. - The fair value of agency mortgage-backed securities was $707,265 thousand as of September 30, 2025[146]. - The Company reported a total of 214 holdings in available for sale securities, with 160 holdings in a similar position as of December 31, 2024, indicating a decrease in the number of holdings[57]. Risk Management and Credit Losses - The allowance for credit losses increased by $20.5 million to $190.5 million as of September 30, 2025, compared to $170.0 million at December 31, 2024[66]. - The charge-offs for the three months ended September 30, 2025, totaled $2.67 million, while recoveries amounted to $834,000[65]. - The Company continues to monitor borrowers in the "Special Mention" category closely, as trends could weaken asset quality if not addressed[76]. - The Company retains an independent loan review firm to evaluate the credit quality of the commercial loan portfolio, reporting results to the Audit Committee quarterly[74]. Derivative Instruments and Fair Value - The total fair value of the Company's derivative financial instruments at September 30, 2025 was $37,777,000 after netting adjustments[122]. - The Company reported derivative instruments liabilities totaling $123,755,000 as of December 31, 2024[147]. - The Company has classified its derivative valuations as Level 2 within the fair value hierarchy, indicating that the majority of inputs used are observable[141]. - The Company does not offset fair value amounts recognized for derivative instruments, but it does net the amount recognized for the right to reclaim cash collateral against the obligation to return cash collateral[120]. Corporate Governance and Operations - The Company operates as a community-oriented commercial bank with a single reportable segment focused on community banking, primarily generating revenue from loans to individuals and small-to-medium sized businesses[183]. - The Chief Executive Officer and Chief Financial Officer assess performance based on consolidated net income and diluted earnings per share, which are critical for resource allocation and performance benchmarking[184]. - The Company is involved in pending lawsuits, but management believes the outcomes will not materially affect its financial position or results of operations[182].

Financial Performance - For the three months ended September 30, 2025, the company reported total revenue of $25 million, representing a 15% increase compared to the same period in 2024[7]. - The gross profit margin for Q3 2025 was 45%, up from 40% in Q3 2024, indicating improved operational efficiency[7]. - The company achieved a net income of $5 million for the nine months ended September 30, 2025, compared to a net loss of $2 million in the same period of 2024[7]. - Cash and cash equivalents as of September 30, 2025, were reported at $10 million, providing sufficient liquidity for ongoing operations and strategic investments[7]. - The company anticipates continued tax benefits related to U.S. federal foreign-derived intangible income, which will positively impact future earnings[7]. Customer Growth - User data showed a 20% increase in active customers year-over-year, reaching a total of 50,000 active users by the end of Q3 2025[7]. Future Outlook - The company expects revenue growth of 10-15% for the next quarter, driven by new product launches and market expansion efforts[7]. - The company plans to expand its market presence in Europe, targeting a 30% increase in sales from this region by the end of 2026[7]. Research and Development - Research and development expenses increased by 25% to $3 million in Q3 2025, reflecting the company's commitment to innovation and new technology development[7]. Strategic Initiatives - The company is exploring potential acquisition opportunities to enhance its technology portfolio and market reach[7].

Financial Performance - Total revenues for the third quarter of 2025 were $0.2 million, a significant decrease from $2.4 million for the same period in 2024[7] - Total revenues for the three months ended September 30, 2025, were $240,000, a decrease of 89.9% compared to $2,380,000 for the same period in 2024[27] - Net loss for the third quarter of 2025 was $163.1 million, or $1.17 per share, compared to a net loss of $213.7 million, or $1.56 per share, for the same period in 2024[14] - The net loss for the three months ended September 30, 2025, was $163,141,000, compared to a net loss of $213,717,000 in 2024, representing a 23.6% improvement[27] - The company reported a loss from operations of $173,443,000 for the three months ended September 30, 2025, compared to a loss of $231,304,000 in 2024, indicating a 25.0% improvement[27] - The company reported interest income of $9,363,000 for the three months ended September 30, 2025, down 46.6% from $17,527,000 in 2024[27] Cash and Investments - As of September 30, 2025, the company had $810.7 million in cash and investments, representing a decrease of approximately $81.4 million during the third quarter of 2025[7] - The company expects its cash, cash equivalents, and investments to fund operations into mid-2027[15] - Cash and cash equivalents decreased to $170,084,000 as of September 30, 2025, from $222,947,000 as of December 31, 2024, a decline of 23.6%[25] Research and Development - R&D expenses for the third quarter of 2025 were $151.5 million, down from $195.2 million in the same period in 2024, primarily due to lower license expenses and cost savings[10] - Research and development expenses for the same period were $151,463,000, down 22.4% from $195,178,000 in 2024[27] - The company plans to provide a comprehensive data update for VIR-5500 in the first quarter of 2026, which is currently in Phase 1 study[1] - The first patient has been dosed in the Phase 1 study of VIR-5500 in combination with ARPIs for first-line metastatic castration-resistant prostate cancer[1] Trials and Studies - ECLIPSE 1 enrollment completed approximately two months ahead of schedule, with topline data for ECLIPSE 1, 2, and 3 expected in the first quarter of 2027[1] - The ECLIPSE 2 and ECLIPSE 3 trials are progressing well, with topline data expected in the first quarter of 2027[3] Expenses - SG&A expenses for the third quarter of 2025 were $22.2 million, a decrease from $25.7 million in the same period in 2024, due to efficiencies from restructuring initiatives[12] Assets and Liabilities - Total current assets decreased to $545,684,000 as of September 30, 2025, from $1,042,458,000 as of December 31, 2024, a decline of 47.7%[25] - Total liabilities decreased to $223,355,000 as of September 30, 2025, from $248,428,000 as of December 31, 2024, a reduction of 10.1%[25] - Total stockholders' equity decreased to $796,098,000 as of September 30, 2025, from $1,150,385,000 as of December 31, 2024, a decline of 30.8%[25] - The weighted-average shares outstanding for the basic and diluted net loss per share increased to 138,930,173 in 2025 from 136,653,753 in 2024[27]

Product Performance - Jazz Pharmaceuticals reported approximately 15,675 patients taking Xywav by the end of Q3 2025, including about 10,725 with narcolepsy and 4,950 with idiopathic hypersomnia (IH) [147]. - The company achieved benefit coverage for Xywav in both narcolepsy and IH for approximately 90% of commercial lives in the U.S. [146]. - Xywav, approved for the treatment of IH in adults, remains the first and only FDA-approved therapy for this condition, with an estimated 37,000 diagnosed patients in the U.S. [145]. - Xywav has demonstrated efficacy for treating cataplexy and excessive daytime sleepiness in narcolepsy, with a focus on educating patients and physicians on its benefits [143]. - Xywav revenues significantly contributed to the business, with a 92% lower sodium content compared to high-sodium oxybates, maintaining its position as the 1 branded oxybate treatment for narcolepsy [174]. - The FDA recognized seven years of ODE for Xywav in narcolepsy, extending to January 21, 2028, due to its clinical superiority over Xyrem [174]. - Xywav and Xyrem face competition from Avadel's Lumryz, launched in June 2023, and multiple AG versions of high-sodium oxybate, negatively impacting sales [176]. - Amneal's AG version of high-sodium oxybate launched in July 2023, with rights to sell a low-single-digit percentage of historical Xyrem sales over each 6-month period [179]. - The company expects continued competition from generic versions of Xyrem and Xywav, with Lupin receiving tentative approval for a generic version on October 13, 2023 [180]. - Epidiolex/Epidyolex product sales increased by 20% in the three months and 11% in the nine months ended September 30, 2025, due to increased demand and lower gross to net deductions [196]. - Xywav product sales increased by 11% in both the three and nine months ended September 30, 2025, driven by a 14% increase in sales volumes [196]. - Xyrem product sales decreased by 39% in the three months and 41% in the nine months ended September 30, 2025, primarily due to competition from high-sodium oxybate and adoption of Xywav [196]. Financial Performance - Product sales for the three months ended September 30, 2025, were $1,064,412, an increase of 8% compared to $989,707 for the same period in 2024 [193]. - Total revenues for the three months ended September 30, 2025, were $1,126,107, a 7% increase from $1,054,969 in the same period in 2024 [195]. - Selling, general and administrative expenses rose by 63% to $530,647 for the three months ended September 30, 2025, compared to $325,772 for the same period in 2024 [193]. - Research and development expenses decreased by 1% to $198,203 for the three months ended September 30, 2025, compared to $199,919 for the same period in 2024 [193]. - The company anticipates that margins could be adversely affected by potential tariffs beginning as early as fiscal 2026 [191]. - The company reported a significant increase in inventory levels in anticipation of potential tariffs on imported products [191]. - The company is subject to increasing pricing pressure and restrictions on reimbursement imposed by payors, which could adversely affect future revenues [190]. - Total revenues are expected to increase in 2025 over 2024, primarily due to growth across the commercial portfolio, offset by decreased sales of Xyrem [200]. - Cost of product sales increased by $5.3 million in Q3 2025 compared to Q3 2024, with a gross margin of 87.9% for both periods [201]. - Selling, general and administrative expenses rose by $90.0 million in Q3 2025, primarily due to litigation settlements and increased compensation-related expenses [202]. - Research and development expenses decreased by $1.7 million in Q3 2025 compared to Q3 2024, driven by lower costs related to clinical studies [205]. - Income tax benefit was $242.4 million in Q3 2025, significantly higher than $14.5 million in Q3 2024, primarily due to the reversal of a valuation allowance [210]. Strategic Initiatives - The company’s strategy includes expanding its pipeline to achieve a valuable portfolio of durable, highly differentiated products [138]. - Jazz Pharmaceuticals focuses on patient populations with high unmet needs, aiming to develop differentiated therapies supported by efficient commercialization models [137]. - The company plans to continue R&D activities in neuroscience and oncology therapeutic areas in 2025 [139]. - The ongoing trials for various oncology products, including Zanidatamab and Vyxeos, are in different phases, indicating a robust pipeline [172][173]. - The company is focused on expanding its R&D activities and acquiring differentiated products with significant commercial potential [186]. - The licensing agreement with Zymeworks for zanidatamab included an upfront payment of $50 million and potential total payments of $1.76 billion, with ongoing clinical trials for various HER2-expressing cancers [159]. - The global license agreement with Saniona for SAN2355 included an upfront payment of $42.5 million and potential milestone payments of up to $800 million, expanding the neuroscience pipeline [171]. - The licensing agreement with Werewolf for JZP898 included an upfront payment of $15 million and potential milestone payments of up to $1.26 billion, with a Phase 1 trial initiated in late 2023 [165]. Acquisitions and Divestitures - The company divested Sativex to CNX Therapeutics in October 2025, transitioning all commercialization responsibilities for the product [149]. - The acquisition of Chimerix in April 2025 for $944.2 million added Modeyso, which received FDA accelerated approval in August 2025 for treating H3 K27M-mutant diffuse midline glioma [155][166]. - The company incurred an outflow of $858.1 million related to the Chimerix Acquisition during the nine months ended September 30, 2025 [226]. - Future milestone payments and royalty obligations from the Chimerix Acquisition total $312.0 million, while those related to the Saniona license agreement total $992.5 million [223]. Shareholder Returns - The New Repurchase Program authorized by the board allows for the repurchase of ordinary shares up to $500.0 million, replacing the previous program of $1.5 billion [217]. - During the nine months ended September 30, 2025, the company repurchased 1.1 million shares for a total of $125.0 million at an average price of $109.52 per share [217]. - As of September 30, 2025, the remaining amount authorized for repurchases under the New Repurchase Program was $225.0 million [217]. Cash Flow and Debt Management - As of September 30, 2025, the company had cash and investments of $2.0 billion and a long-term debt principal balance of $5.4 billion [211]. - The company expects to continue generating positive cash flows from operations, enabling it to operate and de-lever its balance sheet over time [211]. - The company has made voluntary repayments of $1.1 billion on its Tranche B-2 Dollar Term Loans since the acquisition of GW in May 2021 [212]. - The company made a voluntary repayment of $750.0 million on the Tranche B-2 Dollar Term Loans in January 2025 [221]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $993.3 million, slightly down from $997.3 million in 2024 [218]. - Net cash used in investing activities increased by $822.8 million to $(1,137.8) million in the nine months ended September 30, 2025, compared to $(314.9) million in 2024 [221]. - Net cash provided by (used in) financing activities decreased by $977.6 million, resulting in $(948.8) million for the nine months ended September 30, 2025 [221].

Revenue and Customer Metrics - Revenue from Higher Spend Customers accounted for 89% of total revenue for the three months ended September 30, 2025, up from approximately 88% in the same period of 2024[131]. - The number of Higher Spend Customers increased to approximately 177,000 as of September 30, 2025, compared to approximately 163,000 as of September 30, 2024[131]. - Average Revenue Per User (ARPU) rose to $116.20 for the three months ended September 30, 2025, up from $102.51 in the same period of 2024[132]. - Revenue for the three months ended September 30, 2025, was $229.6 million, a 16% increase from $198.5 million in the same period of 2024, driven by a 13% increase in ARPU to $116.20[167]. - Revenue for the nine months ended September 30, 2025, increased by $83.3 million, or 14%, to $659.0 million compared to $575.7 million in 2024, driven by a 13% increase in ARPU to $112.18 from $99.02[177]. Financial Performance - Net income attributable to common stockholders for the three months ended September 30, 2025, was $158.4 million, compared to $32.9 million in the same period of 2024[162]. - GAAP net income attributable to common stockholders for Q3 2025 was $158,371,000, compared to $32,949,000 in Q3 2024, representing a significant increase of 379%[208]. - For the nine months ended September 30, 2025, GAAP net income attributable to common stockholders was $233,602,000, compared to $66,226,000 for the same period in 2024, marking a 253% increase[212]. - Non-GAAP net income for Q3 2025 was $55,990,000, up from $51,674,000 in Q3 2024, reflecting a growth of 6.4%[212]. - Non-GAAP diluted net income per share for Q3 2025 was $0.54, compared to $0.52 in Q3 2024, indicating a 3.8% increase[212]. - The company reported a net income margin of 35% for the nine months ended September 30, 2025, compared to 12% for the same period in 2024[208]. Expenses and Cost Management - Cost of revenue increased by $10.8 million, or 13%, to $92.7 million for the three months ended September 30, 2025, primarily due to $8.3 million in co-location costs from data center expansion[169]. - Cost of revenue rose by $25.9 million, or 11%, to $261.7 million for the nine months ended September 30, 2025, primarily due to $22.6 million in co-location costs from data center expansion[178]. - Gross profit margin improved to 60% for the three months ended September 30, 2025, compared to 59% in the same period of 2024[169]. - Gross profit margin improved to 60% for the nine months ended September 30, 2025, up from 59% in the same period of 2024, mainly due to higher revenue[178]. - Sales and marketing expenses were approximately 9% of revenue for the three months ended September 30, 2025, compared to 8% in the same period of 2024[134]. - Sales and marketing expenses increased by $6.0 million, or 39%, to $21.2 million, driven by higher headcount and advertising expenses[171]. - Research and development expenses rose by $1.8 million, or 5%, to $38.1 million, mainly due to increased personnel costs[170]. - General and administrative expenses decreased by $7.8 million, or 19%, to $32.7 million, primarily due to lower personnel costs and share-based compensation[172]. Other Income and Tax Benefits - Other income, net, surged by $40.3 million, or 801%, to $45.4 million, mainly due to a $48.4 million gain on partial extinguishment of 2026 Convertible Notes[173]. - Other income, net, surged by $45.7 million, or 447%, to $10.2 million, primarily due to a $48.1 million net gain on the partial extinguishment of 2026 Convertible Notes[183]. - Income tax benefit increased by $64.7 million, or 1,957%, to $68.1 million, primarily due to the release of a $69.9 million valuation allowance related to U.S. deferred tax assets[175]. - Income tax benefit increased by $61.9 million, or 2,499%, to $59.5 million, largely due to a $69.9 million release of the valuation allowance related to U.S. deferred tax assets[185]. Cash Flow and Financial Position - Net cash provided by operating activities was $252.3 million for the nine months ended September 30, 2025, compared to $211.4 million in 2024, driven by higher revenues[198]. - Net cash used in investing activities increased to $138.8 million from $47.7 million, primarily due to a $91.7 million reallocation of marketable securities to cash equivalents[199]. - Net cash used in financing activities was $307.2 million, significantly higher than $41.0 million in 2024, mainly due to $1,131.5 million in repurchases of 2026 Convertible Notes[200]. - As of September 30, 2025, the company had $236.6 million in cash and cash equivalents, with $420.0 million of borrowing capacity available under its 2025 Credit Facility[194][190]. Strategic Initiatives - DigitalOcean continues to invest in its platform and product offerings to meet the needs of Higher Spend Customers and expand its IaaS, PaaS, and AI/ML services[138]. - The company completed acquisitions of Paperspace and Cloudways to enhance its AI/ML and Managed Hosting offerings, respectively[141]. - DigitalOcean aims to drive adoption through community engagement and educational initiatives, fostering brand loyalty and expanding its customer base[140]. Market and Risk Assessment - There have been no material changes in market risk from the previous annual report for the fiscal year ended December 31, 2024[216].

Financial Performance - For the three months ended September 30, 2025, same-property occupancy increased to 79.9% from 78.0% in 2024, while same-property RevPAR decreased to $231.84 from $239.34[137] - For the nine months ended September 30, 2025, FFO available to common share and unit holders was $138.8 million, down from $188.2 million in 2024[143] - Adjusted FFO available to common share and unit holders for the three months ended September 30, 2025, was $60.2 million, compared to $71.7 million in 2024[143] - The company reported a net loss of $32.4 million for the three months ended September 30, 2025, compared to a net income of $45.1 million in 2024[143] - Same-property total RevPAR for the three months ended September 30, 2025, was $362.12, compared to $367.47 in 2024[137] - Same-property ADR for the three months ended September 30, 2025, was $290.25, down from $306.78 in 2024[137] Revenue and Expenses - For the three months ended September 30, 2025, total revenues decreased by $5.8 million primarily due to demand decreases at several properties, partially offset by increases at 1 Hotel San Francisco and Newport Harbor Island Resort[147] - For the nine months ended September 30, 2025, total revenues increased by $10.8 million, driven by increases at Newport Harbor Island Resort and LaPlaya Beach Resort & Club, with demand increases at 1 Hotel San Francisco and The Westin Copley Place, Boston[152] - Total hotel operating expenses for the nine months ended September 30, 2025, increased by $19.3 million, primarily due to increased operations at several properties and higher wages and benefits[153] - An impairment loss of $46.5 million was recognized in 2025 related to three hotels, compared to an impairment loss of $1.9 million in 2024 due to hurricane damage[148][155] Debt and Financing - The company issued $400.0 million of 1.625% Convertible Senior Notes due January 2030 and repurchased $400.0 million of 1.75% Convertible Senior Notes due December 2026 at a discount, resulting in a gain on debt extinguishment of $7.4 million[139] - Interest expense decreased by $7.7 million in 2025, primarily due to the repurchase of $400.0 million of 1.75% Convertible Senior Notes, resulting in a gain on debt extinguishment of $7.4 million[150][157] - As of September 30, 2025, total debt at face value was $2.3 billion, with $916.7 million in unsecured term loans and $750.0 million in convertible senior notes[165] - Future fixed minimum payments associated with long-term operating and finance leases total $1.8 billion as of September 30, 2025, with $23.3 million payable on or before September 30, 2026[170] Cash Flow and Investments - Net cash provided by operating activities was $218.5 million for the nine months ended September 30, 2025, compared to $205.8 million for the same period in 2024[174] - Net cash used in investing activities was $66.0 million for the nine months ended September 30, 2025, down from $79.9 million in the same period of 2024, primarily due to capital improvements[175] - Net cash used in financing activities was $138.0 million for the nine months ended September 30, 2025, compared to $175.3 million for the same period in 2024, reflecting changes in debt and equity securities[176] - Total capital investments amounted to $70.7 million for the nine months ended September 30, 2025, with $56.6 million excluding specific repairs, compared to $100.9 million in the same period of 2024[178][180] - The company plans to invest between $65.0 million and $75.0 million in capital investments in 2025, focusing on hotel refurbishments and repositioning projects[181] Share Repurchase and Dividends - The company repurchased 5,623,656 common shares for an aggregate purchase price of $64.3 million, averaging $11.44 per share[139] - During the nine months ended September 30, 2025, the company repurchased 5,623,656 common shares for $64.3 million, averaging approximately $11.44 per share, with $66.6 million remaining for future repurchases[183] - The company repurchased 57,843 preferred shares for an aggregate price of $1.1 million during the same period, with $83.1 million remaining available for repurchase[187] - The company expects to pay approximately $47.1 million in aggregate annual dividends and distributions on preferred shares and units on or before September 30, 2026[172] Insurance and Economic Outlook - The company remains cautious about the broader economic backdrop and expects temporary softness in travel demand due to the recent federal government shutdown[134] - The company continues to work on its Hurricane Milton insurance claim while finalizing a settlement for Hurricane Helene[139] - The company received $5.3 million in property insurance proceeds during the nine months ended September 30, 2025, down from $21.7 million in the same period of 2024[178] - The company expects to maintain all hotels in good repair and condition, with capital investments administered by hotel management companies but subject to company approval[177] Interest Rate Exposure - As of September 30, 2025, the company had interest rate swap agreements with a notional amount of $955.0 million to hedge variable interest rates on loans[192] - 4.5% of the company's aggregate indebtedness, or $101.7 million, was subject to variable interest rates as of September 30, 2025, indicating exposure to interest rate fluctuations[193]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 ☐ 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 001-42167 DT Cloud Star Acquisition Corporation (Exact name of registrant as specified in its charter) Cayman Isl ...