[Second Quarter 2025 Financial Results and Business Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results%20and%20Business%20Highlights) This section presents Aspen Aerogels' second quarter 2025 financial results and strategic business developments [Q2 2025 Financial Performance](index=1&type=section&id=Q2%202025%20Financial%20Performance) Aspen Aerogels reported a significant revenue decline and net loss in Q2 2025, yet achieved sequential improvements in gross margin and Adjusted EBITDA Q2 2025 vs. Q2 2024 Key Financial Metrics | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $78.0 | $117.8 | -33.8% | | Net Income (Loss) | ($9.1) | $16.8 | N/A | | Net (Loss) Income per Share | ($0.11) | $0.22 | N/A | | Adjusted EBITDA | $9.7 | $28.9 | -66.4% | Q2 2025 Quarter-over-Quarter (QoQ) Performance | Metric | Q2 2025 Value (in millions) | QoQ Change | | :--- | :--- | :--- | | Total Revenue | $78.0 | -1% | | - Thermal Barrier Revenue | $55.2 | +13% | | - Energy Industrial Revenue | $22.8 | -24% | | Gross Margin | 32% | +3 percentage points | | Adjusted EBITDA | $9.7 | +98% | - The company ended the second quarter with **$167.6 million** in cash and cash equivalents[7](index=7&type=chunk) [Business Developments and Strategy](index=1&type=section&id=Business%20Developments%20and%20Strategy) Management focused on organizational streamlining and cost structure improvements in H1 2025, alongside a planned CFO transition to ensure strategic continuity - Management's primary focus in H1 2025 was on streamlining the organization to improve the cost structure and profitability, creating a resilient business framework designed to operate with minimal capital expenditure requirements[5](index=5&type=chunk) - CFO Ricardo Rodriguez will step down at the end of Q3 2025, to be succeeded by Grant Thoele, the current Chief of Staff to the CEO and VP of Corporate Strategy and Finance, ensuring a smooth internal transition[6](index=6&type=chunk)[8](index=8&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) This section provides Aspen Aerogels' financial projections for the second half and full year 2025, including revenue and Adjusted EBITDA targets [Second Half of 2025 Financial Outlook](index=2&type=section&id=Second%20Half%20of%202025%20Financial%20Outlook) Aspen projects H2 2025 revenue between **$140 million** and **$160 million**, with full-year revenue of **$297 million** to **$317 million**, anticipating a maintained net cash position H2 2025 and Full Year 2025 Outlook | Metric (in millions) | H2 2025 Outlook | FY 2025 Outlook | | :--- | :--- | :--- | | Revenue | $140 - $160 | $297 - $317 | | Net Income (Loss) | ($7) - $3 | ($317) – ($307) | | Adjusted EBITDA | $20 - $30 | $35 – $45 | | CAPEX* | $10 | $25 | - The company expects to maintain its net cash position through the end of the year, driven by a leaner fixed cost structure and reductions in net working capital[10](index=10&type=chunk) - Planned asset sales in Georgia are expected to materially reduce the company's debt over the coming quarters[10](index=10&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section provides a detailed overview of Aspen Aerogels' condensed consolidated financial statements, including balance sheets, statements of operations, and cash flow analysis [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$525.1 million**, primarily due to reduced property, plant, and equipment, while total liabilities also declined Balance Sheet Summary (in thousands of US dollars) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $167,622 | $220,882 | | Total current assets | $310,467 | $409,448 | | Property, plant and equipment, net | $156,271 | $459,276 | | Total assets | $525,132 | $895,144 | | Total current liabilities | $78,046 | $110,112 | | Total liabilities | $216,364 | $280,439 | | Total stockholders' equity | $308,768 | $614,705 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported **$78.0 million** in Q2 2025 revenue and a **$9.1 million** net loss, with a significant **$310.3 million** net loss for the first six months due to impairment charges Q2 Statement of Operations Summary (in thousands of US dollars) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $78,024 | $117,770 | | Gross profit | $25,316 | $51,578 | | Income (loss) from operations | ($5,155) | $19,986 | | Net income (loss) | ($9,056) | $16,818 | Six-Month Statement of Operations Summary (in thousands of US dollars) | Account | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $156,747 | $212,271 | | Gross profit | $48,128 | $86,721 | | Income (loss) from operations | ($304,496) | $22,422 | | Net income (loss) | ($310,305) | $14,983 | [Analysis of Cash Flow](index=6&type=section&id=Analysis%20of%20Cash%20Flow) For the first six months of 2025, the company generated **$1.7 million** in cash from operating activities, resulting in a net decrease in cash of **$53.2 million** Six-Month Cash Flow Summary (in thousands of US dollars) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash from Operating activities | $1,702 | ($10,906) | | Net cash used in Investing activities | ($25,883) | ($50,690) | | Net cash from (used in) Financing activities | ($29,063) | $13,400 | | **Net decrease in cash** | **($53,244)** | **($48,196)** | [Reconciliation of Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides reconciliations of GAAP net income (loss) to non-GAAP Adjusted EBITDA and Adjusted Net Loss, including forward-looking guidance adjustments [Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted Net Loss](index=6&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20EBITDA%20and%20Adjusted%20Net%20Loss) The company reconciles GAAP net income (loss) to non-GAAP Adjusted EBITDA and Adjusted Net Loss by excluding specific non-core and non-cash charges Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands of US dollars) | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(9,056) | $16,818 | $(310,305) | $14,983 | | Adjustments | $18,801 | $12,125 | $325,077 | $26,888 | | **Adjusted EBITDA** | **$9,745** | **$28,943** | **$14,672** | **$41,871** | Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) (in thousands of US dollars) | | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $(9,056) | $16,818 | | Restructuring and demobilization costs | $4,938 | - | | Impairment of property, plant and equipment | $955 | - | | **Adjusted Net Income (Loss)** | **$(3,163)** | **$16,818** | [Reconciliation for Financial Outlook](index=8&type=section&id=Reconciliation%20for%20Financial%20Outlook) The company provides forward-looking reconciliations of projected GAAP net income (loss) to Adjusted EBITDA for both the second half and full year 2025 H2 2025 Outlook Reconciliation: Net Income (Loss) to Adjusted EBITDA (in thousands of US dollars) | | Low | High | | :--- | :--- | :--- | | Net income (loss) | $(6,500) | $3,500 | | Adjustments (Depreciation, Stock Comp, etc.) | $26,500 | $26,500 | | **Adjusted EBITDA** | **$20,000** | **$30,000** | FY 2025 Outlook Reconciliation: Net Loss to Adjusted EBITDA (in thousands of US dollars) | | Low | High | | :--- | :--- | :--- | | Net loss | $(316,805) | $(306,805) | | Adjustments (Depreciation, Impairment, etc.) | $351,477 | $351,477 | | **Adjusted EBITDA** | **$34,672** | **$44,672** |

Financial Performance Overview [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Aveanna Healthcare achieved significant Q2 2025 growth, with revenue increasing **16.8%** to **$589.6 million** and Adjusted EBITDA rising **93.6%** to **$88.4 million** Q2 2025 Financial Performance vs. Q2 2024 | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $589.6 | $505.0 | +$84.6 | +16.8% | | **Gross Margin** | $210.8 | $158.3 | +$52.5 | +33.2% | | **Net Income** | $27.0 | $13.9 | +$13.1 | +94.3% | | **Adjusted EBITDA** | $88.4 | $45.6 | +$42.7 | +93.6% | | **Net Income per Diluted Share** | $0.13 | $0.07 | +$0.06 | +85.7% | | **Adjusted Net Income per Diluted Share** | $0.18 | $0.01 | +$0.17 | +1700% | - The overall revenue increase was driven by growth across all segments: a **$78.2 million** increase in Private Duty Services (PDS), a **$5.5 million** increase in Home Health and Hospice (HHH), and a **$1.0 million** increase in Medical Solutions (MS)[4](index=4&type=chunk) [Six-Month 2025 Financial Highlights](index=3&type=section&id=Six-Month%202025%20Financial%20Highlights) For H1 2025, revenue grew **15.4%** to **$1,148.8 million**, with Adjusted EBITDA rising **93.4%** to **$155.7 million**, reflecting sustained positive momentum Six-Month 2025 Financial Performance vs. Six-Month 2024 | Metric | H1 2025 (in millions) | H1 2024 (in millions) | Change (in millions) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $1,148.8 | $995.6 | +$153.2 | +15.4% | | **Gross Margin** | $394.4 | $304.1 | +$90.2 | +29.7% | | **Net Income** | $32.2 | $2.7 | +$29.5 | +1088% | | **Adjusted EBITDA** | $155.7 | $80.5 | +$75.2 | +93.4% | | **Net Income per Diluted Share** | $0.16 | $0.01 | +$0.15 | +1500% | | **Adjusted Net Income per Diluted Share** | $0.28 | $(0.02) | +$0.30 | N/A | - Revenue growth for the six-month period was primarily driven by a **$143.2 million** increase in the PDS segment, complemented by increases of **$7.6 million** in HHH and **$2.4 million** in MS[10](index=10&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management attributed strong Q2 results to Strategic Transformation and operational excellence, with the Thrive acquisition expanding markets and leading to raised full-year guidance - CEO Jeff Shaner stated that the second quarter results reflect continued positive momentum in all three operating divisions as the company navigates the third year of its Strategic Transformation[3](index=3&type=chunk) - The acquisition of Thrive Skilled Pediatric Care is cited as an illustration of the company's commitment to investing in current markets and expanding into new ones to facilitate core service growth[3](index=3&type=chunk) - CFO Matt Buckhalter credited the improved results to the team's relentless focus on operational excellence, disciplined execution, and delivering strong clinical outcomes[15](index=15&type=chunk) Full Year 2025 Guidance [Revised Outlook](index=3&type=section&id=Revised%20Outlook) Reflecting strong performance and positive business momentum, Aveanna has raised its full-year 2025 guidance, now expecting revenue greater than **$2.3 billion** and Adjusted EBITDA exceeding **$270 million** Updated Full Year 2025 Guidance | Metric | New Guidance (FY 2025) | Previous Guidance (FY 2025) | | :--- | :--- | :--- | | **Revenue** | > $2.3 billion | > $2.15 billion | | **Adjusted EBITDA** | > $270 million | > $207 million | - The company is not providing guidance on net income due to the volatility of certain required inputs, such as future fair value adjustments for interest rate swaps and caps[16](index=16&type=chunk) Financial Condition [Liquidity and Capital Resources](index=3&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 28, 2025, Aveanna maintained a solid liquidity position with **$100.7 million** in cash and significant borrowing capacity, with total bank debt at approximately **$1.47 billion** and interest rate exposure substantially hedged Liquidity Position as of June 28, 2025 | Item | Amount (in millions) | | :--- | :--- | | Cash | $100.7 | | Securitization Facility Capacity | $106.3 | | Revolver Capacity | ~$147.0 | Total Indebtedness as of June 28, 2025 | Instrument | Amount (in millions) | | :--- | :--- | | 2021 Extended Term Loan | $886.0 | | Second Lien Term Loan | $415.0 | | Securitization Facility | $168.8 | | **Total Indebtedness** | **$1,469.7** | - The company's interest rate exposure is managed with **$520.0 million** in interest rate swaps and **$880.0 million** in interest rate caps[18](index=18&type=chunk) [Cash Flow Summary](index=3&type=section&id=Cash%20Flow%20Summary) For the first six months of 2025, the company generated **$42.9 million** in net cash from operating activities, a significant improvement from the **$10.2 million** used in the same period last year, with free cash flow positive at **$36.9 million** Cash Flow for the Six-Month Period Ended June 28, 2025 | Cash Flow Item | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $42,937 | $(10,163) | | Net cash used in investing activities | $(18,330) | $(2,577) | | Net cash (used in) provided by financing activities | $(8,157) | $16,459 | - Free cash flow for the first six months of 2025 was **$36.9 million**[18](index=18&type=chunk)[50](index=50&type=chunk) Detailed Financial Results and Reconciliations [Consolidated Results of Operations](index=10&type=section&id=Consolidated%20Results%20of%20Operations) The consolidated income statement for Q2 and H1 2025 shows strong top-line revenue growth, improved gross margins, and a significant increase in operating and net income, with Q2 2025 operating income more than doubling to **$80.0 million** Consolidated Income Statement Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $589,553 | $504,958 | $1,148,777 | $995,611 | | **Operating Income** | $80,034 | $37,126 | $131,835 | $59,992 | | **Income before taxes** | $44,138 | $3,979 | $54,286 | $5,469 | | **Net Income** | $27,025 | $13,906 | $32,218 | $2,734 | [Segment Performance](index=12&type=section&id=Segment%20Performance) All three business segments contributed to growth, with Private Duty Services (PDS) driving a **19.2%** revenue increase in Q2, Home Health & Hospice (HHH) growing **10.0%**, and Medical Solutions (MS) seeing a **2.2%** revenue increase [Private Duty Services (PDS) Segment](index=12&type=section&id=Private%20Duty%20Services%20(PDS)%20Segment) The PDS segment delivered strong Q2 2025 results, with revenue increasing **19.2%** to **$486.0 million**, driven by a **6.9%** increase in hours and a **12.3%** increase in revenue rate, expanding gross margin percentage to **32.5%** PDS Segment Performance - Q2 2025 vs Q2 2024 | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Revenue | $486.0 | $407.9 | +19.2% | | Gross Margin | $157.9 | $110.9 | +42.5% | | Gross Margin % | 32.5% | 27.2% | +5.3 pts | | Hours (thousands) | 11,053 | 10,336 | +6.9% | [Home Health & Hospice (HHH) Segment](index=12&type=section&id=Home%20Health%20%26%20Hospice%20(HHH)%20Segment) The HHH segment reported a **10.0%** increase in Q2 2025 revenue to **$60.1 million**, supported by a **4.3%** rise in total admissions and a **6.9%** increase in total episodes, with gross margin improving to **55.0%** HHH Segment Performance - Q2 2025 vs Q2 2024 | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Revenue | $60.1 | $54.6 | +10.0% | | Gross Margin | $33.1 | $29.4 | +12.5% | | Gross Margin % | 55.0% | 53.8% | +1.2 pts | | Home health total admissions (thousands) | 9.8 | 9.4 | +4.3% | [Medical Solutions (MS) Segment](index=12&type=section&id=Medical%20Solutions%20(MS)%20Segment) The MS segment's revenue grew by **2.2%** to **$43.4 million** in Q2 2025, achieving a **10.0%** increase in gross margin despite a **3.2%** decrease in unique patients served, with the margin percentage expanding to **45.6%** MS Segment Performance - Q2 2025 vs Q2 2024 | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | % Change | | :--- | :--- | :--- | :--- | | Revenue | $43.4 | $42.5 | +2.2% | | Gross Margin | $19.8 | $18.0 | +10.0% | | Gross Margin % | 45.6% | 42.4% | +3.2 pts | | Unique patients served (thousands) | 91 | 94 | -3.2% | [Non-GAAP Financial Measures and Reconciliations](index=3&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) The company utilizes several non-GAAP measures, including EBITDA, Adjusted EBITDA, Field Contribution, Adjusted Net Income, and Free Cash Flow, to evaluate financial performance, with detailed reconciliations provided to bridge these figures to comparable GAAP measures - The company uses non-GAAP measures like EBITDA, Adjusted EBITDA, Field contribution, Adjusted net income, and Free cash flow to supplement its GAAP results and highlight trends in core operating performance[17](index=17&type=chunk)[21](index=21&type=chunk)[25](index=25&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=14&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) For Q2 2025, Net Income of **$27.0 million** was reconciled to an Adjusted EBITDA of **$88.4 million**, while for the six-month period, Net Income of **$32.2 million** was reconciled to an Adjusted EBITDA of **$155.7 million**, with adjustments primarily including interest, taxes, depreciation, non-cash share-based compensation, and acquisition-related costs Net Income to Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $27,025 | $13,906 | $32,218 | $2,734 | | Interest expense, net | $35,874 | $39,518 | $72,077 | $79,063 | | Income tax expense (benefit) | $17,113 | $(9,927) | $22,068 | $2,735 | | Depreciation and amortization | $2,617 | $2,833 | $5,211 | $5,745 | | **EBITDA** | $82,629 | $46,330 | $131,574 | $90,277 | | Total Adjustments | $5,745 | $(683) | $24,153 | $(9,747) | | **Adjusted EBITDA** | **$88,374** | **$45,647** | **$155,727** | **$80,530** | [Reconciliation of Net Income to Adjusted Net Income (Loss)](index=15&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20(Loss)) Adjusted Net Income for Q2 2025 was **$37.4 million**, or **$0.18** per diluted share, compared to **$2.5 million**, or **$0.01** per share, in the prior year, with H1 Adjusted Net Income at **$58.8 million**, or **$0.28** per share, a significant improvement from an adjusted net loss of **$3.2 million**, or **$(0.02)** per share, in H1 2024 Net Income to Adjusted Net Income Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $27,025 | $13,906 | $32,218 | $2,734 | | Total Adjustments (pre-tax) | $22,858 | $(10,610) | $46,221 | $(7,012) | | Income tax expense on adjusted income | $(12,471) | $(824) | $(19,610) | $1,070 | | **Adjusted Net Income (Loss)** | **$37,412** | **$2,472** | **$58,829** | **$(3,208)** | [Reconciliation of Gross Margin to Field Contribution](index=14&type=section&id=Reconciliation%20of%20Gross%20Margin%20to%20Field%20Contribution) Field Contribution, a non-GAAP measure, increased by **71.7%** to **$120.7 million** in Q2 2025, with the Field Contribution Margin expanding significantly to **20.5%** from **13.9%** in the prior-year quarter Gross Margin to Field Contribution Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Gross Margin** | $210,800 | $158,267 | $394,358 | $304,121 | | Branch and regional admin expenses | $(90,069) | $(87,972) | $(181,456) | $(175,886) | | **Field Contribution** | **$120,731** | **$70,295** | **$212,902** | **$128,235** | | **Field Contribution Margin** | 20.5% | 13.9% | 18.5% | 12.9% | [Reconciliation of Operating Cash Flow to Free Cash Flow](index=17&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow%20to%20Free%20Cash%20Flow) For the six-month period ended June 28, 2025, net cash provided by operations of **$42.9 million** was reconciled to a Free Cash Flow of **$36.9 million** after accounting for capital expenditures and principal payments on debt Operating Cash Flow to Free Cash Flow (H1 2025, in thousands) | Item | Amount | | :--- | :--- | | Net cash provided by operations | $42,937 | | Purchases of property and equipment, and software | $(3,477) | | Principal payments of term loans | $(4,600) | | Principal payments of notes payable and financing lease obligations | $(4,086) | | Settlements with swap counterparties | $6,144 | | **Free cash flow** | **$36,918** | Other Information [Conference Call Information](index=7&type=section&id=Conference%20Call%20Information) Aveanna will host a conference call on Thursday, August 7, 2025, at 10:00 a.m. Eastern Time to discuss the second quarter financial results, with details provided for accessing the live call, webcast, and replay - A conference call to discuss Q2 results is scheduled for August 7, 2025, at 10:00 a.m. Eastern Time[31](index=31&type=chunk) [About Aveanna Healthcare](index=9&type=section&id=About%20Aveanna%20Healthcare) Headquartered in Atlanta, Georgia, Aveanna Healthcare operates in 38 states, providing a wide range of pediatric and adult healthcare services focused on high-quality, lower-cost alternatives to prolonged hospitalization - Aveanna Healthcare is a diversified home care platform with locations in 38 states, offering a broad range of pediatric and adult healthcare services[35](index=35&type=chunk)

345 E. Main St. Warsaw, IN 46580 www.zimmerbiomet.com Exhibit 99.1 Media Investors Zimmer Biomet Announces Second Quarter 2025 Financial Results (WARSAW, IN) August 7, 2025 — Zimmer Biomet Holdings, Inc. (NYSE and SIX: ZBH) today reported financial results for the quarter ended June 30, 2025. The Company reported second quarter net sales of $2.077 billion, an increase of 7.0% over the prior year period, an increase of 5.4% on a constant currency 1 basis and an increase of 2.8% on an organic constant currenc ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Elanco Animal Health's strong Q2 2025 performance, exceeding expectations with organic revenue growth and accelerated deleveraging, leads to an upward revision of full-year 2025 guidance [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) Elanco Animal Health achieved its eighth consecutive quarter of growth in Q2 2025, with revenue exceeding expectations, driven by 8% organic fixed currency growth and 11% in U.S. pet health - The company achieved its eighth consecutive quarter of growth, with performance exceeding expectations[3](index=3&type=chunk) - The innovative product portfolio drove accelerated organic fixed currency revenue growth of **8%**, with U.S. pet health growing **11%**[3](index=3&type=chunk) - The company deleveraged faster than anticipated, reaching a net leverage ratio of **4.0x** at quarter-end[3](index=3&type=chunk) Key Financial Data for Q2 2025 | Metric | Amount (Millions USD) | Change (%) | Organic Fixed Currency Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | $1,241 | 5% | 8% | | Reported Net Income | $11 | (122)% | | | Adjusted Net Income | $131 | | | | Adjusted EBITDA | $238 | (13)% | | | Reported EPS | $0.02 | NM | | | Adjusted EPS | $0.26 | (13)% | | | Net Leverage Ratio | 4.0x | | | [Full Year 2025 Outlook & Key Targets](index=1&type=section&id=Full%20Year%202025%20Outlook%20%26%20Key%20Targets) Elanco raised its full-year 2025 outlook, projecting revenue of $4.57 billion to $4.62 billion, with organic fixed currency revenue growth of 5% to 6% - The company raised its full-year 2025 outlook, with anticipated growth in both revenue and adjusted EBITDA[4](index=4&type=chunk) - The 2025 innovation revenue target was increased by **$60 million**, reaching **$720 million to $800 million**[4](index=4&type=chunk) - The year-end 2025 net leverage ratio target improved to **3.8x to 4.1x**, driven by year-to-date execution and disciplined working capital management[4](index=4&type=chunk) Full Year 2025 Guidance (Updated) | Metric | Updated Guidance (Millions USD) | Change | | :--- | :--- | :--- | | Revenue | $4,570 to $4,620 | Upward | | Reported Net Loss | $(38) to $(14) | | | Adjusted EBITDA | $850 to $890 | Upward | | Reported Loss Per Share | $(0.08) to $(0.03) | | | Adjusted Earnings Per Share | $0.85 to $0.91 | Upward | | Expected Total Debt Repayment | $500 to $550 | Increased | | Year-End Net Leverage Target | 3.8x to 4.1x | Improved | [Business & Financial Review](index=2&type=section&id=Business%20%26%20Financial%20Review) A comprehensive review of Elanco's Q2 2025 business and financial performance, highlighting revenue drivers, profitability, and balance sheet strength [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) Elanco achieved $1.241 billion in total revenue for Q2 2025, a 5% year-over-year increase and 8% organic fixed currency growth, driven by strong pet health performance Q2 2025 Financial Performance Overview | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (%) | Organic Fixed Currency Growth (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $1,241 | $1,184 | 5% | 8% | | Gross Profit | $713 | $689 | 3% | | | Reported Net Income (Loss) | $11 | $(50) | (122)% | | | Adjusted EBITDA | $238 | $275 | (13)% | | | Reported EPS | $0.02 | $(0.10) | NM | | | Adjusted EPS | $0.26 | $0.30 | (13)% | | - Total revenue reached **$1.241 billion**, a 5% year-over-year increase and 8% organic fixed currency growth, primarily benefiting from new products and favorable foreign exchange impacts[7](index=7&type=chunk) - Reported net income improved from a **$50 million loss** in Q2 2024 to a **$11 million profit**, while adjusted net income was **$131 million**, a 13.3% decrease year-over-year[15](index=15&type=chunk) [Revenue Performance by Segment](index=2&type=section&id=Revenue%20Performance%20by%20Segment) Pet Health revenue grew 11% to $643 million, driven by new products, while Farm Animal revenue saw 6% organic fixed currency growth to $583 million despite the aquaculture divestiture Q2 2025 Revenue by Segment | Segment | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (%) | Organic Fixed Currency Growth (%) | | :--- | :--- | :--- | :--- | :--- | | Pet Health | $643 | $579 | 11% | 10% | | Farm Animal | $583 | $594 | (2)% | 6% | | - Cattle | $268 | $257 | 4% | 4% | | - Poultry | $215 | $198 | 9% | 7% | | - Swine | $100 | $90 | 11% | 10% | | - Aquaculture | $— | $49 | (100)% | | | Contract Manufacturing & Other | $15 | $11 | 36% | | - Pet Health revenue grew **11%**, with price contributing 4% and volume growth of 6%, primarily driven by new products like Credelio Quattro, AdTab, and Zenrelia[8](index=8&type=chunk)[9](index=9&type=chunk) - Farm Animal organic fixed currency growth was **6%**, with price contributing 2% and volume growth of 4%, primarily due to increased U.S. cattle (driven by Experior) and international poultry and swine sales[9](index=9&type=chunk) - International farm animal product sales benefited from customer pull-forward, particularly in China, with an estimated **$10 million to $20 million** of future purchases accelerated into Q2[9](index=9&type=chunk) [Gross Profit and Operating Expenses](index=3&type=section&id=Gross%20Profit%20and%20Operating%20Expenses) Gross profit for Q2 2025 was $713 million, with a gross margin of 57.5%, a 75 basis point decrease year-over-year, primarily due to inflation and higher manufacturing costs - Gross profit was **$713 million**, with a gross margin of **57.5%**, a 75 basis point decrease year-over-year, primarily due to inflation and increased manufacturing costs at the Speke facility[10](index=10&type=chunk) - Total operating expenses were **$492 million**, an 11% increase, with marketing, selling, and administrative expenses up 13% to **$400 million**, and R&D expenses up 3% to **$92 million**[11](index=11&type=chunk) - Asset impairment, restructuring, and other special charges were **$1 million**, significantly lower than **$80 million** in Q2 2024, which was primarily related to pet health IPR&D asset impairment and the aquaculture divestiture[12](index=12&type=chunk) [Net Interest Expense and Tax Rate](index=3&type=section&id=Net%20Interest%20Expense%20and%20Tax%20Rate) Reported net interest expense decreased by $17 million to $48 million in Q2 2025, while the adjusted effective tax rate increased to 21.7% from 16.9% in Q2 2024 - Reported net interest expense was **$48 million**, a **$17 million** decrease year-over-year, primarily due to lower debt balances[13](index=13&type=chunk) - Adjusted net interest expense was **$38 million**, a **$27 million** decrease year-over-year[13](index=13&type=chunk) - The reported effective tax rate was **55.4%**, and the adjusted effective tax rate was **21.7%**, higher than 16.9% in the prior year period[14](index=14&type=chunk) [Net Income and Earnings Per Share](index=3&type=section&id=Net%20Income%20and%20EPS) Reported net income for Q2 2025 was $11 million ($0.02 EPS), a significant improvement from a $50 million net loss in Q2 2024, while adjusted net income decreased to $131 million ($0.26 EPS) Q2 2025 Net Income and EPS | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Reported Net Income (Millions USD) | $11 | $(50) | (122)% | | Reported EPS | $0.02 | $(0.10) | NM | | Adjusted Net Income (Millions USD) | $131 | $147 | (11)% | | Adjusted EPS | $0.26 | $0.30 | (13)% | - The decrease in adjusted net income was primarily due to increased sales and marketing expenses supporting global new product launches and the impact of the aquaculture divestiture last year[15](index=15&type=chunk) [Adjusted EBITDA](index=3&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was $238 million, a 13.5% year-over-year decrease, resulting in an adjusted EBITDA margin of 19.2%, down from 23.2% in Q2 2024 Q2 2025 Adjusted EBITDA | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | Change (%) | | :--- | :--- | :--- | :--- | | Adjusted EBITDA | $238 | $275 | (13.5)% | | Adjusted EBITDA Margin | 19.2% | 23.2% | (400) bps | - The decrease in adjusted EBITDA was primarily driven by increased sales and marketing expenses related to global launches and the impact of the aquaculture divestiture[16](index=16&type=chunk) [Select Business Highlights](index=2&type=section&id=Select%20Business%20Highlights) Elanco achieved significant business milestones in Q2, including strong market penetration for Credelio Quattro, EU approval for Zenrelia, and USDA approval for TruCan Ultra CIV vaccine - Credelio Quattro™ captured approximately **14%** market share in broad-spectrum sales within U.S. veterinary clinics[8](index=8&type=chunk) - Zenrelia™ received European Commission approval, with a planned launch in EU countries in Q3 2025[8](index=8&type=chunk) - Experior® sales grew over **80%** year-over-year in Q2, and AdTab™ sales grew over **60%** year-over-year in Q2[8](index=8&type=chunk) - TruCan™ Ultra CIV received USDA approval and launched in the U.S. in July, enhancing Elanco's vaccine portfolio[8](index=8&type=chunk) - **$295 million** was generated from the monetization of lotilaner U.S. royalties, used for debt repayment[8](index=8&type=chunk) - Elanco Ascend, a productivity and capability program, was initiated, expected to deliver additional value in 2026 and beyond[8](index=8&type=chunk) - Robert (Bob) VanHimbergen was appointed Executive Vice President and Chief Financial Officer[8](index=8&type=chunk) [Working Capital and Balance Sheet](index=3&type=section&id=Working%20Capital%20and%20Balance%20Sheet) Operating cash flow for Q2 2025 was $237 million, and the net leverage ratio improved to 4.0x adjusted EBITDA as of June 30, 2025, driven by strong cash generation and debt repayment - Operating cash flow was **$237 million**, higher than **$200 million** in the prior year period[17](index=17&type=chunk) - As of June 30, 2025, the net leverage ratio was **4.0x** adjusted EBITDA, a 0.3x reduction from December 31, 2024[18](index=18&type=chunk) - The company anticipates the year-end net leverage ratio to improve to **3.8x to 4.1x**[18](index=18&type=chunk) [Financial Guidance](index=4&type=section&id=Financial%20Guidance) Elanco provides updated financial guidance for full-year 2025 and Q3 2025, reflecting strong performance and strategic investments in innovation [Full Year 2025 Guidance Update](index=4&type=section&id=Full%20Year%202025%20Guidance%20Update) Elanco updated its full-year 2025 guidance, raising revenue to $4.57 billion-$4.62 billion and adjusted EBITDA to $850 million-$890 million, reflecting strong Q2 execution and favorable foreign exchange Full Year 2025 Guidance (Updated) | Metric | May Guidance (Millions USD) | August Guidance (Millions USD) | | :--- | :--- | :--- | | Revenue | $4,510 to $4,580 | $4,570 to $4,620 | | Reported Net Loss | $(35) to $(7) | $(38) to $(14) | | Adjusted EBITDA | $830 to $870 | $850 to $890 | | Reported Loss Per Share | $(0.07) to $(0.01) | $(0.08) to $(0.03) | | Adjusted Earnings Per Share | $0.80 to $0.86 | $0.85 to $0.91 | - Favorable foreign exchange is expected to provide an approximate **$35 million** tailwind to revenue[20](index=20&type=chunk) - Excluding the impact of foreign exchange, divested royalty revenue, and the aquaculture divestiture, the company expects revenue growth of **5% to 6%** (previously 4% to 6%)[20](index=20&type=chunk) - Adjusted gross margin is projected to be **54.5% to 55.0%**, an increase of 30 basis points from the previous range[21](index=21&type=chunk) - Operating expenses are expected to increase by approximately **7%** at constant currency (previously 6%), reflecting strategic investments in the global launch of the innovation portfolio[21](index=21&type=chunk) [Full Year 2025 EPS Guidance Reconciliation](index=12&type=section&id=Full%20Year%202025%20EPS%20Guidance%20Reconciliation) Full-year 2025 reported loss per share guidance of $(0.08) to $(0.03) is reconciled to adjusted EPS guidance of $0.85 to $0.91 by adjusting for non-GAAP items Full Year 2025 EPS Guidance Reconciliation | Item | Full Year 2025 Guidance | | :--- | :--- | | Reported Loss Per Share | $(0.08) to $(0.03) | | Amortization of Intangible Assets | Approx. $1.08 | | Asset Impairment, Restructuring & Other Special Charges | $0.02 to $0.04 | | Other Net Expense | $0.03 to $0.04 | | Royalty Monetization | Approx. $0.03 | | Total Adjustments | $0.93 to $0.94 | | Adjusted Earnings Per Share | $0.85 to $0.91 | [Full Year 2025 Adjusted EBITDA Guidance Reconciliation](index=12&type=section&id=Full%20Year%202025%20Adjusted%20EBITDA%20Guidance%20Reconciliation) Full-year 2025 reported net loss guidance of $(38) million to $(14) million is reconciled to adjusted EBITDA guidance of $850 million to $890 million by adjusting for non-GAAP items Full Year 2025 Adjusted EBITDA Guidance Reconciliation | Item | Full Year 2025 Guidance (Millions USD) | | :--- | :--- | | Reported Net Loss | $(38) to $(14) | | Net Interest Expense (including royalty monetization liability) | Approx. $220 | | Income Tax (Benefit) Expense | $(13) to $8 | | Depreciation and Amortization | Approx. $670 | | EBITDA | $836 to $886 | | Total Non-GAAP Adjustments | Approx. $10 | | Adjusted EBITDA | $850 to $890 | | Adjusted EBITDA Margin | 18.6% to 19.3% | [Third Quarter 2025 Guidance](index=4&type=section&id=Third%20Quarter%202025%20Guidance) Elanco projects Q3 2025 revenue between $1.08 billion and $1.11 billion, with organic fixed currency revenue growth of 4% to 6%, and adjusted EBITDA between $160 million and $180 million Third Quarter 2025 Guidance | Metric | Guidance (Millions USD) | | :--- | :--- | | Revenue | $1,080 to $1,110 | | Reported Net Loss | $(66) to $(45) | | Adjusted EBITDA | $160 to $180 | | Reported Loss Per Share | $(0.13) to $(0.09) | | Adjusted Earnings Per Share | $0.12 to $0.16 | - Favorable foreign exchange is expected to provide an approximate **$10 million** tailwind to revenue[22](index=22&type=chunk) - Growth is anticipated to be impacted by approximately **$15 million** in revenue and **$10 million** in adjusted EBITDA from pre-tariff customer pull-forward, primarily from China[22](index=22&type=chunk) - Operating expenses are expected to increase by approximately **8%** at constant currency, reflecting strategic investments in the global launch of the innovation portfolio[22](index=22&type=chunk) [Third Quarter 2025 EPS Guidance Reconciliation](index=13&type=section&id=Third%20Quarter%202025%20EPS%20Guidance%20Reconciliation) Q3 2025 reported loss per share guidance of $(0.13) to $(0.09) is reconciled to adjusted EPS guidance of $0.12 to $0.16 by adjusting for non-GAAP items Third Quarter 2025 EPS Guidance Reconciliation | Item | Third Quarter 2025 Guidance | | :--- | :--- | | Reported Loss Per Share | $(0.13) to $(0.09) | | Amortization of Intangible Assets | Approx. $0.27 | | Asset Impairment, Restructuring & Other Special Charges | $0.00 to $0.01 | | Other Net Expense | Approx. $0.01 | | Royalty Monetization | Approx. $0.01 | | Total Adjustments | Approx. $0.25 | | Adjusted Earnings Per Share | $0.12 to $0.16 | [Third Quarter 2025 Adjusted EBITDA Guidance Reconciliation](index=13&type=section&id=Third%20Quarter%202025%20Adjusted%20EBITDA%20Guidance%20Reconciliation) Q3 2025 reported net loss guidance of $(66) million to $(45) million is reconciled to adjusted EBITDA guidance of $160 million to $180 million by adjusting for non-GAAP items Third Quarter 2025 Adjusted EBITDA Guidance Reconciliation | Item | Third Quarter 2025 Guidance (Millions USD) | | :--- | :--- | | Reported Net Loss | $(66) to $(45) | | Net Interest Expense (including royalty monetization liability) | Approx. $50 | | Income Tax (Benefit) Expense | $(6) to $1 | | Depreciation and Amortization | Approx. $170 | | EBITDA | $158 to $182 | | Total Non-GAAP Adjustments | Approx. $2 | | Adjusted EBITDA | $160 to $180 | | Adjusted EBITDA Margin | 14.8% to 16.2% | [Non-GAAP Financial Measures & Reconciliations (Historical)](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations%20(Historical)) This section provides explanations and reconciliations for Elanco's non-GAAP financial measures, offering a clearer view of operational performance trends [Explanation of Non-GAAP Measures](index=6&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Elanco utilizes various non-GAAP financial measures, such as adjusted revenue growth, EBITDA, and adjusted EPS, to provide transparent insights into its operational performance and trends - The company uses non-GAAP financial measures to assess and analyze operating results and trends, providing greater transparency into operational performance[29](index=29&type=chunk)[31](index=31&type=chunk) - Non-GAAP metrics include revenue growth excluding divestitures and foreign exchange, EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS, adjusted gross profit, adjusted gross margin, net debt, and net debt leverage[29](index=29&type=chunk) - These non-GAAP measures should not be considered a substitute for GAAP reported metrics, and investors should primarily use GAAP measures to evaluate the company's performance[31](index=31&type=chunk) [Adjusted Gross Profit and Margin Reconciliation](index=9&type=section&id=Adjusted%20Gross%20Profit%20and%20Margin%20Reconciliation) Adjusted gross profit, defined as gross profit less divested royalty revenue and cost of sales adjustments, was $709 million in Q2 2025, with an adjusted gross margin of 57.3% Adjusted Gross Profit and Margin Reconciliation | Metric | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | | :--- | :--- | :--- | | GAAP Reported Gross Profit | $713 | $689 | | Divested Royalty Revenue | $(4) | $— | | Cost of Sales Adjustments | $— | $— | | Adjusted Gross Profit | $709 | $689 | | Adjusted Gross Margin | 57.3% | 58.2% | [Adjusted Net Income and EPS Reconciliation](index=9&type=section&id=Adjusted%20Net%20Income%20and%20EPS%20Reconciliation) Adjusted net income and EPS are reconciled by excluding non-GAAP items such as intangible asset amortization and special charges, with Q2 2025 adjusted net income at $131 million and adjusted EPS at $0.26 Q2 2025 Adjusted Net Income and EPS Reconciliation | Item | Q2 2025 (Millions USD) | Q2 2025 EPS | Q2 2024 (Millions USD) | Q2 2024 EPS | | :--- | :--- | :--- | :--- | :--- | | GAAP Reported Net Income (Loss) | $11 | $0.02 | $(50) | $(0.10) | | Amortization of Intangible Assets | $136 | $0.27 | $131 | $0.26 | | Asset Impairment, Restructuring & Other Special Charges | $1 | $0.00 | $80 | $0.16 | | Divested Royalty Revenue | $(4) | $(0.01) | $— | $— | | Interest Expense Adjustments | $10 | $0.02 | $— | $— | | Income Tax Expense | $(22) | $(0.04) | $(12) | $(0.02) | | Adjusted Net Income | $131 | $0.26 | $147 | $0.30 | H1 2025 Adjusted Net Income and EPS Reconciliation | Item | H1 2025 (Millions USD) | H1 2025 EPS | H1 2024 (Millions USD) | H1 2024 EPS | | :--- | :--- | :--- | :--- | :--- | | GAAP Reported Net Income (Loss) | $78 | $0.16 | $(18) | $(0.04) | | Cost of Sales Adjustments | $1 | $0.00 | $— | $— | | Amortization of Intangible Assets | $264 | $0.53 | $264 | $0.53 | | Asset Impairment, Restructuring & Other Special Charges | $10 | $0.02 | $126 | $0.25 | | Divested Royalty Revenue | $(4) | $(0.01) | $— | $— | | Interest Expense Adjustments | $10 | $0.02 | $— | $— | | Other Net Expense | $4 | $0.01 | $3 | $0.01 | | Income Tax Expense | $(48) | $(0.10) | $(61) | $(0.12) | | Adjusted Net Income | $315 | $0.63 | $314 | $0.63 | [Adjusted EBITDA and Margin Reconciliation](index=10&type=section&id=Adjusted%20EBITDA%20and%20Margin%20Reconciliation) Adjusted EBITDA for Q2 2025 was $238 million, with an adjusted EBITDA margin of 19.2%, calculated by adjusting net income for interest, taxes, depreciation, amortization, and other non-GAAP items Adjusted EBITDA and Margin Reconciliation | Item | Q2 2025 (Millions USD) | Q2 2024 (Millions USD) | | :--- | :--- | :--- | | GAAP Reported Net Income (Loss) | $11 | $(50) | | Net Interest Expense | $48 | $65 | | Income Tax Expense (Benefit) | $14 | $18 | | Depreciation and Amortization | $169 | $164 | | EBITDA | $242 | $197 | | Total Non-GAAP Adjustments | $(4) | $78 | | Adjusted EBITDA | $238 | $275 | | Adjusted EBITDA Margin | 19.2% | 23.2% | [Gross and Net Debt and Net Leverage Ratio](index=11&type=section&id=Gross%20and%20Net%20Debt%20and%20Net%20Leverage%20Ratio) As of June 30, 2025, Elanco's net debt was $3.436 billion, resulting in a net leverage ratio of 4.0x, calculated by adjusting total debt for cash and financing lease liabilities Net Debt Calculation as of June 30, 2025 | Item | Amount (Millions USD) | | :--- | :--- | | Long-term debt | $4,148 | | Current portion of long-term debt | $61 | | Less: Unamortized debt issuance costs | $(21) | | **Total Debt** | **$4,230** | | Less: Cash and cash equivalents | $(539) | | Less: Finance lease liabilities | $(255) | | **Net Debt** | **$3,436** | Net Leverage Ratio Calculation as of June 30, 2025 | Item | Amount (Millions USD) | | :--- | :--- | | Net Debt | $3,436 | | Adjusted EBITDA for the trailing twelve months | $855 | | **Net Leverage Ratio** | **4.0** | [Company Information & Legal Disclosures](index=5&type=section&id=Company%20Information%20%26%20Legal%20Disclosures) This section provides details on Elanco's corporate communications, company profile, forward-looking statements, and definitions of key financial terms [Webcast & Conference Call Details](index=5&type=section&id=Webcast%20%26%20Conference%20Call%20Details) Elanco hosted a webcast and conference call on August 7, 2025, at 8:00 AM ET to discuss Q2 results and provide updated financial guidance, with a replay available online - The company held a webcast and conference call on **August 7, 2025, at 8:00 AM ET**[24](index=24&type=chunk) - Investors, analysts, media members, and the public can access the live event and slides via the Elanco website, with a replay available within hours after the event[24](index=24&type=chunk) [About Elanco](index=5&type=section&id=About%20Elanco) Elanco Animal Health Incorporated (NYSE: ELAN) is a global leader in animal health, dedicated to innovating products and services for preventing and treating diseases in farm animals and pets - Elanco Animal Health Incorporated (NYSE: ELAN) is a global leader in animal health[25](index=25&type=chunk) - The company is dedicated to innovating and providing products and services to prevent and treat diseases in farm animals and pets[25](index=25&type=chunk) - The company's vision is "Food and Companionship Enriching Life," with a purpose to "make a difference" for animals, customers, society, and employees[25](index=25&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=5&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This press release contains forward-looking statements regarding product launches, revenue, 2025 guidance, and debt levels, subject to inherent uncertainties and risks that may cause actual results to differ materially - This press release contains forward-looking statements regarding product launches, revenue, 2025 guidance, debt levels, and industry and operational expectations[26](index=26&type=chunk) - Forward-looking statements are based on current expectations and assumptions but are subject to inherent uncertainties, risks, and changes in circumstances, where actual results may differ materially from those stated[27](index=27&type=chunk) - Key risk factors include a highly competitive industry, success of R&D and regulatory approvals, disruptive innovation, generic competition, restrictions on antibiotic use, animal disease outbreaks, customer and distributor consolidation, manufacturing issues, reliance on information technology systems, climate conditions, labor disputes, impact of significant debt, interest rate changes, and intellectual property challenges[27](index=27&type=chunk)[30](index=30&type=chunk) [Availability of Certain Information](index=7&type=section&id=Availability%20of%20Certain%20Information) Elanco discloses important corporate information, including investor overview presentations, to investors, customers, employees, and other stakeholders through its website - The company discloses important corporate information to investors, customers, employees, and relevant parties through its website[32](index=32&type=chunk) - Investors can access the investor overview presentation on the "Events & Presentations" page of the company's website[32](index=32&type=chunk) [Additional Information and Definitions](index=7&type=section&id=Additional%20Information%20and%20Definitions) This section defines "innovation revenue" as incremental revenue from new products and lifecycle management, and "organic fixed currency revenue growth" as revenue growth excluding divestitures and foreign exchange impacts - Innovation revenue is defined as incremental revenue from new products, lifecycle management, specific geographic expansion, and business development transactions, excluding cannibalization of the base portfolio[33](index=33&type=chunk) - Organic fixed currency revenue growth is defined as revenue growth excluding the aquaculture divestiture (July 9, 2024), divested royalty revenue (May 2025), and the impact of foreign exchange[34](index=34&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Commission File Number: 001-38205 FORM 10-Q ____________________ ____________________ (Mark One) ZAI LAB LIMITED x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHAN ACT OF 1934 (Exact Name of Registrant as Specified in its Charter) ____________________ For the quarterly period ended June 30, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHAN ACT OF 1934 For the transition period fr ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Q2 and H1 2025, showing significant growth in revenue and net income driven by higher metal prices and new acquisitions Consolidated Balance Sheet Highlights (as of June 30, 2025) | Account | June 30, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | **Total current assets** | 342,013 | 275,287 | | **Total assets** | 3,572,453 | 3,392,130 | | **Total current liabilities** | 76,101 | 85,151 | | **Total liabilities** | 253,494 | 260,924 | | **Total equity** | 3,318,959 | 3,131,206 | Consolidated Statement of Operations Highlights | Metric | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | Six Months 2025 ($ thousands) | Six Months 2024 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 209,643 | 174,096 | 403,080 | 322,999 | | **Operating income** | 141,840 | 102,083 | 264,952 | 177,609 | | **Net income attributable to Royal Gold** | 132,349 | 81,208 | 245,847 | 128,372 | | **Diluted EPS** | $2.01 | $1.23 | $3.73 | $1.95 | Consolidated Statement of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | 2025 ($ thousands) | 2024 ($ thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | 289,171 | 251,799 | | **Net cash used in investing activities** | (171,049) | (27,341) | | **Net cash used in financing activities** | (65,440) | (254,393) | | **Net increase (decrease) in cash** | 52,682 | (29,935) | Notes to Consolidated Financial Statements Notes detail accounting policies and financial line items, disclosing recent acquisitions and credit facility amendments - In Q2 2025, the company entered into a **$200 million** stream and royalty agreement for the Warintza Project, with **$100 million** paid at closing and the remainder conditional[20](index=20&type=chunk) - The company's revolving credit facility was amended on June 26, 2025, extending the maturity to 2030 and increasing the accordion feature to **$400 million**. As of June 30, 2025, no amount was outstanding[35](index=35&type=chunk)[37](index=37&type=chunk) - Subsequent to the quarter end, the company acquired a **$1.0 billion** gold stream on the Kansanshi mine, funded by cash and an **$825 million** draw on its credit facility. It also entered into agreements to acquire Sandstorm Gold and Horizon Copper[72](index=72&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) Revenue by Segment (Six Months Ended June 30, 2025) | Segment | Revenue ($ thousands) | | :--- | :--- | | Stream interests | 255,673 | | Royalty interests | 147,407 | | **Total** | **403,080** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q2 and H1 2025 financial results, highlighting revenue growth from higher metal prices, recent acquisitions, and liquidity - The company's business is divided into two segments: Acquisition and Management of Stream Interests (**63% of H1 2025 revenue**) and Acquisition and Management of Royalty Interests (**37% of H1 2025 revenue**)[87](index=87&type=chunk) - Recent strategic developments include the **$1.0 billion** Kansanshi gold stream acquisition, agreements to acquire Sandstorm Gold and Horizon Copper, and the **$200 million** Warintza project stream and royalty agreement[91](index=91&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk) Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change Driver | | :--- | :--- | :--- | :--- | | **Total Revenue** | $209.6M | $174.1M | Higher average gold and silver prices | | **Net Income** | $132.3M | $81.2M | Higher revenue and lower tax expense | | **Average Gold Price** | $3,280/oz | $2,338/oz | Market conditions | - As of June 30, 2025, the company had working capital of **$265.9 million** and total liquidity of approximately **$1.3 billion**. Subsequent to the quarter, the credit facility was increased to **$1.4 billion**, and **$825 million** was drawn for the Kansanshi acquisition[142](index=142&type=chunk)[143](index=143&type=chunk)[148](index=148&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section outlines the company's primary market risk from metal price volatility, providing a sensitivity analysis on revenue impact - The company's earnings and cash flows are significantly impacted by fluctuations in the market prices of gold, silver, and copper[158](index=158&type=chunk) Revenue Sensitivity to 10% Metal Price Change (H1 2025) | Metal | Percentage of Total Revenue | Impact on Revenue ($) | | :--- | :--- | :--- | | Gold | 77% | $31.4 million | | Silver | 12% | $4.7 million | | Copper | 8% | $3.6 million | [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal controls during the quarter - Based on an evaluation as of June 30, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[160](index=160&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[161](index=161&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings for the period - The company reported no legal proceedings[163](index=163&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, highlighting increased indebtedness, acquisition integration challenges, stock dilution, and joint venture risks - Increased indebtedness following the Kansanshi acquisition and planned draws for the Sandstorm and Horizon transactions could adversely affect financial condition and limit operational flexibility[165](index=165&type=chunk)[167](index=167&type=chunk) - The proposed acquisition of Sandstorm Gold will involve issuing a significant number of new shares, which could create a "market overhang" and depress the stock price. Current Royal Gold stockholders' ownership will be diluted to approximately **77%** of the combined company[169](index=169&type=chunk)[181](index=181&type=chunk) - The Sandstorm and Horizon transactions are subject to significant closing conditions and risks, including the potential inability to successfully integrate the businesses or realize anticipated synergies[171](index=171&type=chunk)[175](index=175&type=chunk) - The acquisition of Horizon includes a **30%** interest in the Hod Maden project, subjecting the company to joint venture risks where it is not the operator and has limited control over strategic decisions[178](index=178&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=35&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or related use of proceeds during the period - None reported[184](index=184&type=chunk) [Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon its senior securities - None reported[185](index=185&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Royal Gold's business model - Not applicable[186](index=186&type=chunk) [Other Information](index=35&type=section&id=Item%205.%20Other%20Information) This section discloses no Rule 10b5-1 trading plan changes and details post-quarter financing activities, including a **$825 million** borrowing and credit facility increase - On August 1, 2025, the company borrowed **$825 million** under its revolving credit facility to fund the Kansanshi stream acquisition[188](index=188&type=chunk) - On August 5, 2025, the company exercised a **$400 million** accordion feature, increasing its total committed revolving credit facility to **$1.4 billion**, with **$575 million** remaining available after the Kansanshi borrowing[188](index=188&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including acquisition agreements, credit facility amendments, and certifications - Key exhibits filed include the arrangement agreements for the Sandstorm and Horizon acquisitions, dated July 6, 2025[191](index=191&type=chunk) - The Sixth Amendment to the Revolving Facility Credit Agreement and the Incremental Joinder to the agreement are filed as exhibits[191](index=191&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 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 2 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 56 Item 3. Defaults Upon Senior Securities 56 Item 4. Mine Safety Disclosures 56 Item 5 ...

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) Zai Lab's leadership emphasized innovation, strong execution, and financial discipline, marked by Q2 2025 revenue growth and pipeline progress [CEO & COO Commentary](index=1&type=section&id=CEO%20%26%20COO%20Commentary) Dr. Samantha Du and Josh Smiley highlighted Zai Lab's pivotal period of innovation, scale, and strong execution, emphasizing patient impact, global innovation, and financial discipline - CEO emphasizes Zai Lab's pivotal period, marked by **innovation, scale, and strong execution**, with progress in patient impact, global innovation, and financial discipline[3](index=3&type=chunk) - COO highlights **VYVGART's record patient utilization** and strengthened role in MG treatment due to updated national guidelines, expecting momentum to accelerate in H2 2025[3](index=3&type=chunk) - COO projects **profitability by Q4 2025**, supported by a **28% YoY reduction in operating loss** (**37% adjusted**)[3](index=3&type=chunk) [Second Quarter 2025 Key Highlights](index=1&type=section&id=Second%20Quarter%202025%20Key%20Highlights) Zai Lab reported a 9% YoY total revenue growth to $110.0 million for Q2 2025, reaffirming full-year guidance, with VYVGART achieving record patient utilization and operating loss improving by 28% YoY Key Financial Highlights | Metric | Q2 2025 | YoY Growth | Full-Year 2025 Guidance | | :----- | :------ | :--------- | :---------------------- | | Total Revenues | $110.0 million | 9% | $560M - $590M | | Operating Loss | $54.9 million | (28)% | On track for profitability in Q4 2025 | | Adjusted Operating Loss | $34.2 million | (37)% | | - **VYVGART** reached **record patient utilization** in Q2 2025; updated national guidelines elevate its role as a treatment for both acute and maintenance gMG[4](index=4&type=chunk) - **ZL-1310 (DLL3 ADC)** data presented at ASCO 2025 showed a **67% ORR across all doses** (n=33) and **79% at 1.6mg/kg** (n=14) in 2L ES-SCLC, with a differentiated safety profile; registrational study to be initiated in H2 2025[4](index=4&type=chunk) - The global Phase 3 FORTITUDE-101 study of **bemarituzumab** met its primary endpoint of **overall survival** in first-line gastric cancer, with China regulatory submission expected in H2 2025[4](index=4&type=chunk) [Second Quarter 2025 Financial Performance](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Zai Lab's Q2 2025 revenues grew 9% to $110.0 million, significantly reducing operating and net losses, supported by product sales and expense efficiencies [Financial Results Overview](index=2&type=section&id=Financial%20Results%20Overview) Zai Lab's total revenues for Q2 2025 reached $109.977 million, a 9% increase from Q2 2024, primarily driven by product revenue, significantly reducing its loss from operations and net loss Consolidated Financial Summary | Metric | Q2 2025 (USD thousands) | Q2 2024 (USD thousands) | YoY Change (%) | | :---------------------- | :---------------------- | :---------------------- | :------------- | | Total Revenues | 109,977 | 100,504 | 9% | | Product Revenue, net | 109,085 | 100,106 | 9% (10% at CER) | | Collaboration Revenue | 892 | 398 | 124% | | Loss from Operations | (54,895) | (76,064) | (28)% | | Net Loss | (40,727) | (80,277) | (49.3%) | | Loss per share (basic & diluted) | (0.04) | (0.08) | (50%) | [Product Revenue Analysis](index=2&type=section&id=Product%20Revenue%20Analysis) Product revenue, net, grew 9% YoY to $109.1 million in Q2 2025, primarily driven by strong sales of VYVGART, XACDURO, and NUZYRA, while ZEJULA sales softened due to competitive dynamics Product Sales Performance | Product | Q2 2025 Sales (USD millions) | Q1 2025 Sales (USD millions) | Q2 2024 Sales (USD millions) | QoQ Growth (%) | YoY Growth (%) | | :------ | :--------------------------- | :--------------------------- | :--------------------------- | :------------- | :------------- | | VYVGART & Hytrulo | $26.5 | $18.1 | N/A | 46% | N/A | | ZEJULA | $41.0 | N/A | $45.0 | N/A | (8.9)% | | XACDURO | $4.6 | N/A | N/A | N/A | N/A | | NUZYRA | $14.3 | N/A | $12.3 | N/A | 16.3% | - **VYVGART sales growth** was driven by extension of duration of therapy and increasing market penetration[7](index=7&type=chunk) - **ZEJULA sales were softer** due to evolving competitive dynamics within the PARPi class[7](index=7&type=chunk) [Operating Expenses and Profitability](index=2&type=section&id=Operating%20Expenses%20and%20Profitability) Operating expenses saw significant reductions in Q2 2025, with R&D decreasing by 17.9% YoY to $50.6 million and SG&A falling by 10.9% YoY to $71.0 million, leading to a 28% YoY improvement in GAAP loss from operations Operating Expenses Summary | Expense Category | Q2 2025 (USD thousands) | Q2 2024 (USD thousands) | YoY Change (%) | | :--------------- | :---------------------- | :---------------------- | :------------- | | R&D Expenses | (50,614) | (61,625) | (17.9)% | | SG&A Expenses | (71,038) | (79,710) | (10.9)% | | Loss from Operations (GAAP) | (54,895) | (76,064) | (28)% | | Adjusted Loss from Operations (Non-GAAP) | (34,187) | (54,485) | (37.2)% | - Decreases in R&D and SG&A expenses reflect reduced personnel and clinical trial costs, driven by ongoing resource prioritization and efficiency efforts[7](index=7&type=chunk) [Net Loss and Cash Position](index=2&type=section&id=Net%20Loss%20and%20Cash%20Position) Zai Lab's net loss for Q2 2025 significantly narrowed to $40.7 million, down from $80.3 million in Q2 2024, primarily due to product revenue growth outpacing net operating expenses, while maintaining a strong cash position Net Loss Performance | Metric | Q2 2025 (USD) | Q2 2024 (USD) | YoY Change | | :----- | :------ | :------ | :--------- | | Net Loss | $(40.7) million | $(80.3) million | (49.3)% | | Loss per Ordinary Share | $(0.04) | $(0.08) | (50)% | | Loss per ADS | $(0.37) | $(0.82) | (54.9)% | Cash Position | Cash Position (USD millions) | June 30, 2025 | March 31, 2025 | | :--------------------------- | :------------ | :------------- | | Cash & Cash Equivalents, Short-term Investments, Current Restricted Cash | $832.3 | $857.3 | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) Zai Lab provides non-GAAP financial measures, including growth rates adjusted for constant exchange rates (CER) and adjusted loss from operations, to offer additional perspective on operational trends and greater transparency - Non-GAAP financial measures are used to provide an additional perspective on operational trends and greater transparency into historical and projected operating performance[26](index=26&type=chunk) Product Revenue and Loss from Operations (Non-GAAP) | Metric | Q2 2025 (USD thousands) | Q2 2024 (USD thousands) | As reported YoY Growth | At CER YoY Growth | | :---------------------- | :------ | :------ | :--------------------- | :---------------- | | Product revenue, net | $109,085 | $100,106 | 9% | 10% | | Loss from operations | $(54,895) | $(76,064) | (28)% | (28)% | Reconciliation of GAAP to Non-GAAP Loss from Operations | Metric | Q2 2025 (USD thousands) | Q2 2024 (USD thousands) | | :---------------------------------- | :---------------------- | :---------------------- | | GAAP loss from operations | (54,895) | (76,064) | | Plus: Depreciation and amortization expenses | 3,735 | 2,941 | | Plus: Share-based compensation | 16,973 | 18,638 | | Adjusted loss from operations (Non-GAAP) | (34,187) | (54,485) | [Condensed Consolidated Financial Statements](index=8&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Zai Lab Limited, including the Balance Sheets, Statements of Operations, and Statements of Comprehensive Loss for the specified periods - The unaudited condensed consolidated balance sheets provide a snapshot of assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024[32](index=32&type=chunk) - The unaudited condensed consolidated statements of operations detail revenues, expenses, and net loss for the three and six months ended June 30, 2025, and 2024[33](index=33&type=chunk) - The unaudited condensed consolidated statements of comprehensive loss present the net loss and other comprehensive income/loss, primarily foreign currency translation adjustments, for the three and six months ended June 30, 2025, and 2024[34](index=34&type=chunk) [Unaudited Condensed Consolidated Balance Sheets](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This section presents Zai Lab's unaudited balance sheets, detailing assets, liabilities, and equity for June 30, 2025, and December 31, 2024 Balance Sheet Highlights | Metric (USD thousands) | June 30, 2025 | December 31, 2024 | Change | | :--------------------- | :------------ | :---------------- | :----- | | Total Assets | 1,164,101 | 1,185,753 | (21,652) | | Total Liabilities | 372,366 | 344,855 | 27,511 | | Total Shareholders' Equity | 791,735 | 840,898 | (49,163) | | Cash and cash equivalents | 732,159 | 449,667 | 282,492 | | Short-term investments | — | 330,000 | (330,000) | | Short-term debt | 174,509 | 131,711 | 42,798 | [Unaudited Condensed Consolidated Statements of Operations](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines Zai Lab's unaudited statements of operations, detailing revenues, expenses, and net loss for the three and six months ended June 30, 2025 and 2024 Statements of Operations Summary | Metric (USD thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------- | :------ | :------ | :------ | :------ | | Total Revenues | 109,977 | 100,504 | 216,464 | 187,653 | | Loss from operations | (54,895) | (76,064) | (111,206) | (146,373) | | Net loss | (40,727) | (80,277) | (89,165) | (133,748) | | Loss per share - basic and diluted | (0.04) | (0.08) | (0.08) | (0.14) | [Unaudited Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This section details Zai Lab's unaudited statements of comprehensive loss, presenting net loss and other comprehensive income/loss, including foreign currency adjustments, for the specified periods Statements of Comprehensive Loss Summary | Metric (USD thousands) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--------------------- | :------ | :------ | :------ | :------ | | Net loss | (40,727) | (80,277) | (89,165) | (133,748) | | Foreign currency translation adjustments | (2,955) | 3,605 | (4,167) | 5,147 | | Comprehensive loss | (43,682) | (76,672) | (93,332) | (128,601) | [Recent Pipeline Updates](index=2&type=section&id=Recent%20Pipeline%20Updates) Zai Lab reported significant advancements across its oncology, immunology, and neuroscience pipelines, with positive clinical data and new registrational study plans [Oncology Pipeline](index=2&type=section&id=Oncology%20Pipeline) Zai Lab reported significant advancements in its oncology pipeline, with ZL-1310 showing strong efficacy in SCLC, bemarituzumab meeting its primary OS endpoint in gastric cancer, and TTFields demonstrating OS benefit in pancreatic cancer [ZL-1310 (DLL3 ADC)](index=2&type=section&id=ZL-1310%20%28DLL3%20ADC%29) ZL-1310 (DLL3 ADC) showed strong efficacy (67% ORR) and a well-tolerated safety profile in 2L ES-SCLC, receiving U.S. FDA Fast Track designation - **ZL-1310** demonstrated an objective response rate (**ORR**) of **67% across all dose levels** (n=33) and **79% at 1.6 mg/kg** (n=14) in second-line extensive-stage small cell lung cancer (ES-SCLC)[8](index=8&type=chunk) - **ZL-1310** exhibited a **well-tolerated safety profile** with **6% Grade ≥3 treatment-related adverse events (TRAEs)** and no drug discontinuations[8](index=8&type=chunk) - The U.S. FDA granted **Fast Track designation** to ZL-1310 for treatment of ES-SCLC in May 2025[8](index=8&type=chunk) [Bemarituzumab (FGFR2b)](index=3&type=section&id=Bemarituzumab%20%28FGFR2b%29) Bemarituzumab (FGFR2b) plus chemotherapy met its primary OS endpoint in Phase 3 FORTITUDE-101 for first-line gastric cancer, with China submission planned for H2 2025 - The Phase 3 FORTITUDE-101 clinical trial evaluating first-line **bemarituzumab plus chemotherapy** met its primary endpoint of **overall survival (OS)** at a pre-specified interim analysis[11](index=11&type=chunk) - **Bemarituzumab plus chemotherapy significantly improved OS** in patients with FGFR2b overexpression compared to chemotherapy alone[11](index=11&type=chunk) - Zai Lab plans to move rapidly toward **regulatory submission in China in the second half of 2025** for bemarituzumab[11](index=11&type=chunk) [Tumor Treating Fields (TTFields)](index=3&type=section&id=Tumor%20Treating%20Fields%20%28TTFields%29) Tumor Treating Fields (TTFields) therapy showed OS benefit and improved quality of life in pancreatic cancer, with China regulatory filing planned for H2 2025 - Phase 3 PANOVA-3 trial data demonstrated that **TTFields therapy**, when added to standard of care, achieved an **OS benefit** supported by significantly improved quality of life and extended pain-free survival in pancreatic cancer[11](index=11&type=chunk) - Zai Lab plans to file for **regulatory approval in China in the second half of 2025** for TTFields in first-line pancreatic cancer[11](index=11&type=chunk) [ZL-6201 (LRRC15 ADC)](index=4&type=section&id=ZL-6201%20%28LRRC15%20ADC%29) ZL-6201 (LRRC15 ADC) is advancing into global Phase 1 development, targeting sarcoma and other LRRC15-positive solid tumors - Zai Lab is advancing **ZL-6201 (LRRC15 ADC)** into **global Phase 1 development**[13](index=13&type=chunk) - **ZL-6201** targets patients with sarcoma and potentially other LRRC15-positive solid tumors, such as breast cancer and other malignancies[13](index=13&type=chunk) [Immunology Pipeline](index=3&type=section&id=Immunology%20Pipeline) The immunology pipeline saw updates for Efgartigimod, with new China MG guidelines emphasizing its role, ZL-1503 showing promising preclinical data, and Povetacicept and VRDN-003 advancing to pivotal/registrational studies [Efgartigimod (FcRn)](index=3&type=section&id=Efgartigimod%20%28FcRn%29) China MG guidelines (2025) recommend VYVGART (efgartigimod) for early and sustained long-term treatment in myasthenia gravis, targeting Minimal Symptom Expression - The China Guidelines for the Diagnosis and Treatment of Myasthenia Gravis (MG) (2025) were published in July 2025, emphasizing **Minimal Symptom Expression (MSE)** as the primary treatment goal[11](index=11&type=chunk) - **VYVGART (efgartigimod)** is now recommended for **early use in mild-to-moderate and highly active MG patients** and for sustained long-term treatment[11](index=11&type=chunk) [ZL-1503 (IL-13/IL-31R)](index=3&type=section&id=ZL-1503%20%28IL-13%2FIL-31R%29) ZL-1503 showed promising preclinical data for moderate-to-severe atopic dermatitis, supporting global Phase 1 advancement in H2 2025 with favorable safety - New preclinical data for **ZL-1503** highlights its potential as a promising treatment for **moderate-to-severe atopic dermatitis** and other IL-13 and IL-31-driven diseases[11](index=11&type=chunk) - **ZL-1503's favorable preclinical safety profile**, prolonged half-life, and durable suppression of inflammatory and pruritogenic pathways support its continued advancement[11](index=11&type=chunk) - Zai Lab plans to advance **ZL-1503 into a global Phase 1 study** in moderate-to-severe atopic dermatitis in the second half of 2025[12](index=12&type=chunk) [Povetacicept (APRIL/BAFF)](index=4&type=section&id=Povetacicept%20%28APRIL%2FBAFF%29) Zai Lab will partner with Vertex to initiate a global pivotal Phase 2/3 study of povetacicept in pMN in Greater China in H2 2025 - Zai Lab plans to partner with Vertex to execute the **global pivotal Phase 2/3 study of povetacicept in Primary Membranous Nephropathy (pMN)** in Greater China[17](index=17&type=chunk) - The **povetacicept study in pMN** is expected to start in the second half of 2025[17](index=17&type=chunk) [VRDN-003 (IGF-1R, subcutaneous)](index=5&type=section&id=VRDN-003%20%28IGF-1R%2C%20subcutaneous%29) Zai Lab will initiate a registrational study for VRDN-003 in thyroid eye disease in Greater China in H2 2025, with global results expected in H1 2026 - Zai Lab will initiate a **registrational study for VRDN-003 in thyroid eye disease** in Greater China in the second half of 2025[21](index=21&type=chunk) - Partner Viridian is expected to provide **topline results from the global registrational REVEAL-1 and REVEAL-2 studies in the first half of 2026**[21](index=21&type=chunk) [Neuroscience Pipeline](index=4&type=section&id=Neuroscience%20Pipeline) In the neuroscience pipeline, Zai Lab's partner Bristol Myers Squibb is expected to provide data readout from the Phase 3 ADEPT-2 study of Xanomeline-Trospium (KarXT) in Alzheimer's Disease Psychosis in H2 2025 [Xanomeline-Trospium (KarXT)](index=4&type=section&id=Xanomeline-Trospium%20%28KarXT%29) Zai Lab's partner Bristol Myers Squibb expects data readout from the Phase 3 ADEPT-2 study of KarXT in Alzheimer's Disease Psychosis in H2 2025 - Zai Lab partner Bristol Myers Squibb to provide **data readout from the Phase 3 ADEPT-2 study of KarXT in Alzheimer's Disease Psychosis** in the second half of 2025[15](index=15&type=chunk) [Anticipated Major Milestones (2025 & H1 2026)](index=3&type=section&id=Anticipated%20Major%20Milestones%20%282025%20%26%20H1%202026%29) Zai Lab anticipates multiple NMPA submissions and approvals, alongside key clinical developments and data readouts across its pipelines through H1 2026 [Upcoming Potential NMPA Submissions](index=3&type=section&id=Upcoming%20Potential%20NMPA%20Submissions) Zai Lab plans to submit for NMPA approval in H2 2025 for bemarituzumab in first-line gastric cancer, Tumor Treating Fields in first-line pancreatic cancer, and efgartigimod (prefilled syringe) for gMG and CIDP - **NMPA submission for Bemarituzumab (FGFR2b)** in first-line gastric cancer in H2 2025[11](index=11&type=chunk) - **NMPA submission for Tumor Treating Fields (TTFields)** in first-line pancreatic cancer in H2 2025[11](index=11&type=chunk) - **NMPA submission for Efgartigimod (FcRn)** for prefilled syringe in gMG and CIDP in H2 2025[11](index=11&type=chunk) [Upcoming Potential NMPA Approvals](index=3&type=section&id=Upcoming%20Potential%20NMPA%20Approvals) Zai Lab expects potential NMPA approvals for Xanomeline-Trospium (KarXT) in schizophrenia, Tisotumab Vedotin (Tissue Factor ADC) in recurrent or metastatic cervical cancer, and Repotrectinib (ROS1/TRK) in NTRK+ solid tumors - Potential **NMPA approval for Xanomeline-Trospium (KarXT)** in schizophrenia[11](index=11&type=chunk) - Potential **NMPA approval for Tisotumab Vedotin (Tissue Factor ADC)** in recurrent or metastatic cervical cancer following progression on or after chemotherapy[11](index=11&type=chunk) - Potential **NMPA approval for Repotrectinib (ROS1/TRK)** in NTRK+ solid tumors[11](index=11&type=chunk) [Expected Clinical Developments and Data Readouts](index=4&type=section&id=Expected%20Clinical%20Developments%20and%20Data%20Readouts) Key clinical developments include initiating a global registrational study for ZL-1310 in 2L ES-SCLC and a global Phase 1 study for ZL-1503 in atopic dermatitis in H2 2025, with various data readouts expected across the pipeline - **ZL-1310**: Global registrational study of monotherapy in 2L ES-SCLC to be initiated in H2 2025; data readout for dose escalation of doublet in combination with atezolizumab in 1L ES-SCLC[18](index=18&type=chunk) - **ZL-1503**: Global Phase 1 study in moderate-to-severe atopic dermatitis to advance in H2 2025[12](index=12&type=chunk) - **Bemarituzumab**: Detailed results from Phase 3 FORTITUDE-101 study and potential data readout from Phase 1b/3 FORTITUDE-102 study in first-line gastric cancer[19](index=19&type=chunk) - **Efgartigimod**: Topline results from Phase 2 study in Lupus Nephritis (Q4 2025), Phase 3 ADAPT-SERON study in seronegative gMG (H2 2025), and Phase 3 ADAPT-OCULUS study in ocular myasthenia gravis (H1 2026)[19](index=19&type=chunk) - **Povetacicept**: Global pivotal Phase 2/3 study in Primary Membranous Nephropathy (pMN) in Greater China expected to start in H2 2025[17](index=17&type=chunk) - **VRDN-003**: Registrational study in thyroid eye disease in Greater China to be initiated in H2 2025; topline results from global registrational REVEAL-1 and REVEAL-2 studies in H1 2026[21](index=21&type=chunk) - **KarXT**: Data readout from Phase 3 ADEPT-2 study in Alzheimer's Disease Psychosis in H2 2025[15](index=15&type=chunk) - **IgA Nephropathy (IgAN)**: Interim analysis of global Phase 3 RAINIER study following 36 weeks of treatment with potential for U.S. accelerated approval filing in H1 2026[20](index=20&type=chunk) [Additional Company Information](index=6&type=section&id=Additional%20Company%20Information) This section provides details on Zai Lab's conference call, company overview, non-GAAP measures, forward-looking statements, and investor/media contacts [Conference Call and Webcast](index=6&type=section&id=Conference%20Call%20and%20Webcast) Zai Lab hosted a live conference call and webcast on August 7, 2025, to discuss financial results and corporate updates, with a replay available on the company's website - Conference call and webcast held on **August 7, 2025, at 8:00 a.m. ET (8:00 p.m. HKT)**[2](index=2&type=chunk) - Access to live webcast via http://ir.zailaboratory.com; registration required for dial-in[22](index=22&type=chunk)[28](index=28&type=chunk) [About Zai Lab](index=6&type=section&id=About%20Zai%20Lab) Zai Lab Limited is an innovative, research-based, commercial-stage biopharmaceutical company operating in China and the United States, focused on developing and commercializing innovative products for unmet medical needs - Zai Lab is an **innovative, research-based, commercial-stage biopharmaceutical company** based in China and the United States[24](index=24&type=chunk) - Focus areas include **oncology, immunology, neuroscience, and infectious disease**, addressing significant unmet medical needs[24](index=24&type=chunk) [Non-GAAP Measures Definition](index=6&type=section&id=Non-GAAP%20Measures%20Definition) Zai Lab uses non-GAAP financial measures, such as constant exchange rate (CER) adjusted growth rates and adjusted loss from operations, to provide a clearer understanding of business performance and operational trends - Non-GAAP measures include **growth rates adjusted for constant exchange rates (CER)** and **adjusted loss from operations**[26](index=26&type=chunk) - **Adjusted loss from operations excludes depreciation, amortization, and share-based compensation**[26](index=26&type=chunk) - These measures provide additional perspective on operational trends and greater transparency but should not be considered an exclusive alternative to GAAP[26](index=26&type=chunk) [Forward-Looking Statements & Disclaimers](index=6&type=section&id=Forward-Looking%20Statements%20%26%20Disclaimers) The press release contains forward-looking statements regarding Zai Lab's strategy, pipeline potential, commercialization, financial guidance, and future results, which are subject to inherent uncertainties and risks - The press release contains **forward-looking statements** relating to Zai Lab's strategy, plans, potential of its business, commercial products, and pipeline programs, including revenue growth and profitability[27](index=27&type=chunk) - Forward-looking statements are subject to **inherent uncertainties, risks, and changes in circumstances** that may differ materially from those contemplated[27](index=27&type=chunk)[29](index=29&type=chunk) - Investors should not place undue reliance on these statements, and the company undertakes no obligation to update or revise them, except as may be required by law[29](index=29&type=chunk) [Investor & Media Contacts](index=7&type=section&id=Investor%20%26%20Media%20Contacts) Contact information for Zai Lab's Investor Relations and Media teams is provided for further inquiries - Investor Relations contacts: Christine Chiou / Lina Zhang[31](index=31&type=chunk) - Media contacts: Shaun Maccoun / Xiaoyu Chen[31](index=31&type=chunk)

Exhibit 99.1 811 Louisiana, Suite 2100 Houston, TX 77002 713.584.1000 Targa Resources Corp. Reports Second Quarter 2025 Financial Results HOUSTON – August 7, 2025 - Targa Resources Corp. (NYSE: TRGP) ("TRGP," the "Company" or "Targa") today reported second quarter 2025 results. Second quarter 2025 net income attributable to Targa Resources Corp. was $629.1 million compared to $298.5 million for the second quarter of 2024. The Company reported adjusted earnings before interest, income taxes, depreciation and ...

PART I. FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and related notes for the quarter [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Prestige Consumer Healthcare Inc., including statements of income and comprehensive income, balance sheets, statements of changes in stockholders' equity, and cash flows for the three months ended June 30, 2025 and 2024, along with detailed notes explaining the company's business, accounting policies, and specific financial line items [Condensed Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) This statement details the company's financial performance, including revenues, expenses, and net income, for the reporting period | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :-------------- | | Net sales | $249,278 | $266,835 | $(17,557) | -6.6% | | Total revenues | $249,530 | $267,142 | $(17,612) | -6.6% | | Gross profit | $140,331 | $146,022 | $(5,691) | -3.9% | | Operating income | $71,756 | $72,046 | $(290) | -0.4% | | Net income | $47,466 | $49,068 | $(1,602) | -3.3% | | Basic EPS | $0.96 | $0.98 | $(0.02) | -2.0% | | Diluted EPS | $0.95 | $0.98 | $(0.03) | -3.1% | | Comprehensive income | $52,870 | $52,228 | $642 | 1.2% | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's financial position, including assets, liabilities, and equity, at specific points in time | Metric (in thousands) | June 30, 2025 | March 31, 2025 | Change (QoQ) | % Change (QoQ) | | :-------------------- | :------------ | :------------- | :----------- | :------------- | | Cash and cash equivalents | $139,502 | $97,884 | $41,618 | 42.5% | | Total current assets | $480,518 | $448,328 | $32,190 | 7.2% | | Total Assets | $3,431,625 | $3,402,218 | $29,407 | 0.9% | | Total current liabilities | $109,668 | $106,623 | $3,045 | 2.9% | | Total Liabilities | $1,576,143 | $1,567,321 | $8,822 | 0.6% | | Total Stockholders' Equity | $1,855,482 | $1,834,897 | $20,585 | 1.1% | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines changes in the company's equity accounts, including net income, stock-based compensation, and share repurchases | Item (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | | Stock-based compensation | $3,682 | $3,425 | | Exercise of stock options | $3,155 | $1,975 | | Treasury share repurchases | $(39,122) | $(31,945) | | Net income | $47,466 | $49,068 | | Comprehensive income | $5,404 | $3,160 | | Total Stockholders' Equity (End of Period) | $1,855,482 | $1,680,767 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities for the period | Cash Flow Activity (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (YoY) | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------- | | Net cash provided by operating activities | $79,013 | $54,776 | $24,237 | | Net cash (used in) investing activities | $(1,938) | $(2,130) | $192 | | Net cash (used in) financing activities | $(36,282) | $(65,522) | $29,240 | | Effects of exchange rate changes on cash and cash equivalents | $825 | $663 | $162 | | Increase (Decrease) in cash and cash equivalents | $41,618 | $(12,213) | $53,831 | | Cash and cash equivalents - end of period | $139,502 | $34,256 | $105,246 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Business and Basis of Presentation](index=10&type=section&id=Note%201.%20Business%20and%20Basis%20of%20Presentation) This note describes the company's business, its accounting policies, and the basis for preparing the financial statements - Prestige Consumer Healthcare Inc. develops, manufactures, markets, sells, and distributes over-the-counter (OTC) health and personal care products in North America, Australia, and other international markets[20](index=20&type=chunk) - The company faces economic uncertainty due to evolving fiscal policy, global supply chain constraints, interest rate changes, high inflation, geopolitical events, and tariffs, which could impact product demand, supply, and costs[21](index=21&type=chunk)[22](index=22&type=chunk) - The unaudited Condensed Consolidated Financial Statements are prepared in accordance with GAAP for interim financial reporting and include normal recurring adjustments[23](index=23&type=chunk) - Management's significant estimates include valuation of intangible assets, stock-based compensation, fair value of debt, sales returns, trade promotional allowances, inventory obsolescence, and income taxes[24](index=24&type=chunk) - The company is evaluating the impact of new FASB ASUs 2024-03 (Expense Disaggregation Disclosures) and 2023-09 (Improvements to Income Tax Disclosures) on its financial statements, effective for annual periods beginning after December 15, 2026, and December 15, 2024, respectively[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) [Note 2. Inventories](index=11&type=section&id=Note%202.%20Inventories) This note details the composition and valuation methods for the company's inventory assets | Components of Inventories (in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------------------------- | :------------ | :------------- | | Packaging and raw materials | $19,158 | $26,562 | | Work in process | $2,382 | $2,880 | | Finished goods | $131,586 | $118,267 | | **Total Inventories** | **$153,126** | **$147,709** | - Inventories are carried at the lower of cost or net realizable value, with a reduction for obsolete and slow-moving inventory of **$5.6 million** at June 30, 2025, up from **$4.0 million** at March 31, 2025[28](index=28&type=chunk) [Note 3. Goodwill](index=11&type=section&id=Note%203.%20Goodwill) This note provides information on the company's goodwill balance and any impairment assessments | Goodwill (in thousands) | North American OTC Healthcare | International OTC Healthcare | Consolidated | | :---------------------- | :---------------------------- | :--------------------------- | :----------- | | Balance - March 31, 2025 | $498,936 | $28,489 | $527,425 | | Effects of foreign currency exchange rates | — | $889 | $889 | | Balance - June 30, 2025 | $498,936 | $29,378 | $528,314 | - No goodwill impairment charge was taken as of February 28, 2025, and no events indicating potential impairment were identified as of June 30, 2025[29](index=29&type=chunk)[30](index=30&type=chunk) [Note 4. Intangible Assets, net](index=12&type=section&id=Note%204.%20Intangible%20Assets%2C%20net) This note details the company's intangible assets, including trademarks, and their amortization | Intangible Assets (in thousands) | Indefinite-Lived Trademarks | Finite-Lived Trademarks and Customer Relationships | Totals | | :------------------------------- | :-------------------------- | :----------------------------------------------- | :----- | | Balance — March 31, 2025 | $2,136,986 | $158,364 | $2,295,350 | | Effects of foreign currency exchange rates | $3,197 | $752 | $3,949 | | Amortization | — | $(4,470) | $(4,470) | | Balance — June 30, 2025 | $2,140,183 | $154,646 | $2,294,829 | - Amortization expense was **$4.5 million** for the three months ended June 30, 2025, down from **$5.0 million** in the prior year[31](index=31&type=chunk) - No impairment charge was taken for intangible assets as of February 28, 2025, and no events indicating potential impairment were identified as of June 30, 2025[32](index=32&type=chunk) [Note 5. Leases](index=12&type=section&id=Note%205.%20Leases) This note outlines the company's lease arrangements, including lease costs and liabilities | Lease Cost (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | | Finance lease cost | $1,180 | $674 | | Operating lease cost | $1,938 | $1,704 | | Short term lease cost | $34 | $32 | | Variable lease cost | $4,826 | $16,423 | | **Total net lease cost** | **$7,978** | **$18,833** | | Lease Liabilities (in thousands) | Operating Leases | Finance Leases | Total | | :------------------------------- | :--------------- | :------------- | :---- | | Total present value of lease payments | $27,469 | $22,506 | $49,975 | - Weighted average remaining lease terms are **4.55 years** for operating leases and **7.87 years** for finance leases, with weighted average discount rates of **6.57%** and **6.32%**, respectively, as of June 30, 2025[34](index=34&type=chunk) [Note 6. Other Accrued Liabilities](index=13&type=section&id=Note%206.%20Other%20Accrued%20Liabilities) This note provides a breakdown of the company's various accrued liabilities | Other Accrued Liabilities (in thousands) | June 30, 2025 | March 31, 2025 | | :--------------------------------------- | :------------ | :------------- | | Accrued marketing costs | $32,731 | $26,324 | | Accrued compensation costs | $5,798 | $14,205 | | Income taxes payable | $5,452 | $830 | | **Total Other Accrued Liabilities** | **$63,782** | **$63,458** | [Note 7. Long-Term Debt](index=14&type=section&id=Note%207.%20Long-Term%20Debt) This note details the company's long-term debt obligations, including senior notes and credit facilities | Long-Term Debt (in thousands) | June 30, 2025 | March 31, 2025 | | :---------------------------- | :------------ | :------------- | | 2021 Senior Notes (3.750%, due April 1, 2031) | $600,000 | $600,000 | | 2019 Senior Notes (5.125%, due January 15, 2028) | $400,000 | $400,000 | | **Long-term debt, net** | **$992,749** | **$992,357** | - As of June 30, 2025, the company had no outstanding balance on its **$173.2 million** asset-based revolving credit facility[36](index=36&type=chunk) | Year Ending March 31, | Amount (in thousands) | | :-------------------- | :-------------------- | | 2028 | $400,000 | | Thereafter | $600,000 | | **Total** | **$1,000,000** | [Note 8. Fair Value Measurements](index=14&type=section&id=Note%208.%20Fair%20Value%20Measurements) This note describes the fair value measurements of the company's financial instruments - The fair values of cash, accounts receivable, accounts payable, and other current liabilities approximate their carrying amounts due to short maturities[38](index=38&type=chunk) - The 2021 Senior Notes and 2019 Senior Notes are measured in Level 2 of the fair value hierarchy, based on market values for similar instruments[40](index=40&type=chunk)[41](index=41&type=chunk) | Debt Instrument (in thousands) | June 30, 2025 Carrying Value | June 30, 2025 Fair Value | March 31, 2025 Carrying Value | March 31, 2025 Fair Value | | :----------------------------- | :----------------------------- | :----------------------- | :---------------------------- | :------------------------ | | 2019 Senior Notes | $400,000 | $397,500 | $400,000 | $392,000 | | 2021 Senior Notes | $600,000 | $553,500 | $600,000 | $537,750 | [Note 9. Stockholders' Equity](index=15&type=section&id=Note%209.%20Stockholders'%20Equity) This note provides details on the company's common stock, share repurchase programs, and equity changes - The company is authorized to issue **250.0 million** shares of common stock and **5.0 million** shares of preferred stock[43](index=43&type=chunk) - No dividends have been declared or paid on common stock through June 30, 2025[44](index=44&type=chunk) - The Board authorized a **$300.0 million** share repurchase program on May 6, 2024, with **$213.7 million** remaining as of June 30, 2025[45](index=45&type=chunk) | Share Repurchases | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :---------------- | :------------------------------- | :------------------------------- | | Employee restricted stock awards (shares) | 48,680 | 82,673 | | Employee restricted stock awards (amount) | $4.1 million | $5.8 million | | Share repurchase program (shares) | 410,446 | 401,111 | | Share repurchase program (amount) | $34.8 million | $26.0 million | [Note 10. Accumulated Other Comprehensive Loss](index=16&type=section&id=Note%2010.%20Accumulated%20Other%20Comprehensive%20Loss) This note details the components of the company's accumulated other comprehensive loss | Components of Accumulated Other Comprehensive Loss (in thousands) | June 30, 2025 | March 31, 2025 | | :-------------------------------------------------------------- | :------------ | :------------- | | Cumulative translation adjustment | $(32,899) | $(38,303) | | Unrecognized net gain on pension plans, net of tax | $644 | $644 | | **Accumulated other comprehensive loss, net of tax** | **$(32,255)** | **$(37,659)** | - No amounts were reclassified from accumulated other comprehensive loss into earnings during the periods presented[47](index=47&type=chunk) [Note 11. Earnings Per Share](index=16&type=section&id=Note%2011.%20Earnings%20Per%20Share) This note presents the calculation of basic and diluted earnings per share | EPS Metric (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :----------------------------------------------- | :------------------------------- | :------------------------------- | | Net income | $47,466 | $49,068 | | Denominator for basic EPS (weighted average shares) | 49,475 | 49,886 | | Basic earnings per share | $0.96 | $0.98 | | Diluted earnings per share | $0.95 | $0.98 | - Approximately **0.1 million** and **0.3 million** shares were excluded from diluted EPS calculation for the three months ended June 30, 2025 and 2024, respectively, due to their anti-dilutive effect[48](index=48&type=chunk) [Note 12. Stock-Based Compensation](index=16&type=section&id=Note%2012.%20Stock-Based%20Compensation) This note describes the company's stock-based compensation plans and related expenses - The company operates under the 2005 Long-Term Equity Incentive Plan and the 2020 Long-Term Incentive Plan, with **1.4 million** shares available for issuance under the 2020 Plan as of June 30, 2025[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) | Stock-Based Compensation (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | | Pre-tax stock-based compensation costs | $3,682 | $3,425 | | Income tax benefit recognized | $465 | $438 | | Total fair value of options and RSUs vested | $9,036 | $11,150 | | Cash received from exercise of stock options | $3,155 | $1,975 | - Unrecognized compensation costs for unvested stock options were **$4.6 million** and for unvested RSUs/PSUs were **$18.0 million** as of June 30, 2025, both expected to be recognized over a weighted average period of **2.4 years**[52](index=52&type=chunk) | RSU Activity (in thousands) | Unvested at March 31, 2025 | Granted | Vested | Forfeited | Unvested at June 30, 2025 | | :-------------------------- | :------------------------- | :------ | :----- | :-------- | :------------------------ | | Shares | 402.2 | 114.9 | (109.2) | (21.2) | 386.7 | | Weighted Average Grant-Date Fair Value | $63.20 | $82.98 | $56.85 | $61.03 | $70.99 | | Option Activity (in thousands) | Outstanding at March 31, 2025 | Granted | Exercised | Forfeited | Outstanding at June 30, 2025 | | :----------------------------- | :---------------------------- | :------ | :-------- | :-------- | :--------------------------- | | Shares | 518.7 | 104.7 | (52.7) | (5.1) | 565.6 | | Weighted Average Exercise Price | $52.22 | $82.98 | $59.84 | $74.48 | $57.00 | [Note 13. Income Taxes](index=18&type=section&id=Note%2013.%20Income%20Taxes) This note details the company's income tax provision and effective tax rate - The effective tax rate increased to **23.2%** for the three months ended June 30, 2025, from **16.0%** in the prior year, primarily due to a discrete item in the prior year related to the release of a reserve for uncertain tax positions[56](index=56&type=chunk) - The global minimum tax proposed by the OECD is not expected to have a material impact on the company's Consolidated Financial Statements[55](index=55&type=chunk) [Note 14. Commitments and Contingencies](index=19&type=section&id=Note%2014.%20Commitments%20and%20Contingencies) This note outlines the company's legal commitments and potential contingent liabilities - The company is involved in routine legal matters and claims incidental to its business, with assessments re-evaluated each reporting period[57](index=57&type=chunk) - Management believes the resolution of these matters, considering reserves, will not be material to the financial condition or results of operations[57](index=57&type=chunk) [Note 15. Concentrations of Risk](index=19&type=section&id=Note%2015.%20Concentrations%20of%20Risk) This note identifies significant concentrations of risk related to customers, brands, and suppliers - Revenues are concentrated in OTC Healthcare, with approximately **40%** derived from the top five selling brands for the three months ended June 30, 2025 and 2024[58](index=58&type=chunk) | Customer | % of Gross Revenues (Q2 2025) | % of Gross Revenues (Q2 2024) | | :------- | :---------------------------- | :---------------------------- | | Walmart | 22% | 20% | | Amazon | 12% | 13% | - The company relies on a single primary distribution center in Clayton, Indiana, and a third-party manufacturer for approximately **23%** of gross revenues, posing supply chain and operational risks[59](index=59&type=chunk)[60](index=60&type=chunk) [Note 16. Business Segments](index=20&type=section&id=Note%2016.%20Business%20Segments) This note provides financial information for the company's reportable business segments - The company operates in two reportable segments: North American OTC Healthcare and International OTC Healthcare, with contribution margin as the primary performance measure[61](index=61&type=chunk) | Segment Performance (in thousands) | Q2 2025 Revenues | Q2 2025 Gross Profit | Q2 2025 Contribution Margin | Q2 2024 Revenues | Q2 2024 Gross Profit | Q2 2024 Contribution Margin | | :--------------------------------- | :--------------- | :------------------- | :-------------------------- | :--------------- | :------------------- | :-------------------------- | | North American OTC Healthcare | $212,578 | $120,400 | $91,446 | $232,316 | $126,757 | $93,004 | | International OTC Healthcare | $36,952 | $19,931 | $13,948 | $34,826 | $19,265 | $13,653 | | **Consolidated** | **$249,530** | **$140,331** | **$105,394** | **$267,142** | **$146,022** | **$106,657** | | Product Group Revenues (in thousands) | Q2 2025 Consolidated | Q2 2024 Consolidated | | :------------------------------------ | :------------------- | :------------------- | | Analgesics | $28,932 | $28,293 | | Cough & Cold | $19,007 | $20,697 | | Women's Health | $56,758 | $54,578 | | Gastrointestinal | $57,784 | $58,015 | | Eye & Ear Care | $32,308 | $48,130 | | Dermatologicals | $30,109 | $33,355 | | Oral Care | $21,702 | $20,774 | | Other OTC | $2,930 | $3,300 | | **Total segment revenues** | **$249,530** | **$267,142** | [Note 17. Subsequent Events](index=21&type=section&id=Note%2017.%20Subsequent%20Events) This note discloses significant events that occurred after the reporting period - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, making permanent key elements of the Tax Cuts and Jobs Act; the company is evaluating its impact on financial statements[67](index=67&type=chunk) - Independent directors received grants of **2,094 RSUs** on August 5, 2025, vesting one year after receipt[68](index=68&type=chunk) - The company entered into a definitive agreement to acquire Pillar5 Pharma Inc., a sterile ophthalmic manufacturer and current Clear Eyes supplier, for approximately **$100.0 million**, expected to close in Q3 fiscal 2026[69](index=69&type=chunk)[70](index=70&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance and condition for the three months ended June 30, 2025, compared to the prior year. It covers overall business strategy, the impact of the economic environment, detailed analysis of revenues, gross profit, contribution margin by segment, operating expenses, interest, income taxes, and a review of liquidity and capital resources [General](index=23&type=section&id=General) This section outlines the company's business model and strategic growth initiatives - Prestige Consumer Healthcare Inc. develops, manufactures, markets, sells, and distributes well-recognized, brand name, over-the-counter (OTC) health and personal care products in North America and international markets[73](index=73&type=chunk) - The company's growth strategy involves organic development through new product lines, brand extensions, and advertising, as well as acquisitions of non-core consumer health and personal care brands to reinvigorate their performance[74](index=74&type=chunk) [Economic Environment](index=23&type=section&id=Economic%20Environment) This section discusses the impact of current economic conditions on the company's operations and financial performance - Economic uncertainty, including fiscal policy, supply chain constraints, interest rates, inflation, and geopolitical events, continues to create volatility, impacting prices, supply, and demand for products[75](index=75&type=chunk) - The volatile environment has led to labor and raw material shortages, shipping delays, and increased input costs, particularly affecting eye care products, which negatively impacted results of operations[76](index=76&type=chunk) [Global Minimum Tax](index=23&type=section&id=Global%20Minimum%20Tax) This section addresses the potential implications of the OECD's global minimum tax on the company's financial statements - The global minimum tax rate of **15%** proposed by the OECD is not expected to have a material impact on the company's Consolidated Financial Statements, but potential tax increases are being monitored as legislation becomes effective in more countries[78](index=78&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenues, gross profit, and operating expenses [Total Segment Revenues](index=25&type=section&id=Total%20Segment%20Revenues) This section provides an overview of the company's total revenue performance across all segments - Total revenues for the three months ended June 30, 2025, decreased by **$17.6 million**, or **6.6%**, to **$249.5 million** compared to the same period in 2024[80](index=80&type=chunk) [North American OTC Healthcare Segment (Revenue)](index=25&type=section&id=North%20American%20OTC%20Healthcare%20Segment%20(Revenue)) This section details revenue performance for the North American OTC Healthcare segment - North American OTC Healthcare segment revenues decreased by **$19.7 million**, or **8.5%**, primarily due to reduced sales in Eye & Ear Care (down **35.9%** due to supply limitations for Clear Eyes) and Dermatologicals (down **11.9%**)[81](index=81&type=chunk)[80](index=80&type=chunk) [International OTC Healthcare Segment (Revenue)](index=25&type=section&id=International%20OTC%20Healthcare%20Segment%20(Revenue)) This section details revenue performance for the International OTC Healthcare segment - International OTC Healthcare segment revenues increased by **$2.1 million**, or **6.1%**, driven by higher sales in Women's Health (up **25.2%**) and Dermatologicals (up **28.8%**)[82](index=82&type=chunk)[80](index=80&type=chunk) [Gross Profit](index=26&type=section&id=Gross%20Profit) This section analyzes the company's consolidated gross profit and margin changes - Consolidated gross profit decreased by **$5.7 million**, or **3.9%**, but increased as a percentage of total revenues to **56.2%** (from **54.7%** in Q2 2024) due to favorable product mix and lower air freight costs[84](index=84&type=chunk) [North American OTC Healthcare Segment (Gross Profit)](index=26&type=section&id=North%20American%20OTC%20Healthcare%20Segment%20(Gross%20Profit)) This section details gross profit performance for the North American OTC Healthcare segment - North American OTC Healthcare gross profit decreased by **$6.4 million**, or **5.0%**, but its gross profit margin increased to **56.6%** (from **54.6%** in Q2 2024) primarily due to lower air freight expenses[85](index=85&type=chunk) [International OTC Healthcare Segment (Gross Profit)](index=26&type=section&id=International%20OTC%20Healthcare%20Segment%20(Gross%20Profit)) This section details gross profit performance for the International OTC Healthcare segment - International OTC Healthcare gross profit increased by **$0.7 million**, or **3.5%**, but its gross profit margin decreased to **53.9%** (from **55.3%** in Q2 2024) mainly due to increased inflation costs[86](index=86&type=chunk) [Contribution Margin](index=26&type=section&id=Contribution%20Margin) This section analyzes the company's consolidated contribution margin and its percentage of total revenues - Consolidated contribution margin decreased by **$1.3 million**, or **1.2%**, but increased as a percentage of total revenues to **42.2%** (from **39.9%** in Q2 2024)[88](index=88&type=chunk) [North American OTC Healthcare Segment (Contribution Margin)](index=26&type=section&id=North%20American%20OTC%20Healthcare%20Segment%20(Contribution%20Margin)) This section details contribution margin performance for the North American OTC Healthcare segment - North American OTC Healthcare contribution margin decreased by **$1.6 million**, or **1.7%**, but its margin percentage increased to **43.0%** (from **40.0%** in Q2 2024) due to higher gross profit margin and decreased advertising and marketing spend[89](index=89&type=chunk) [International OTC Healthcare Segment (Contribution Margin)](index=26&type=section&id=International%20OTC%20Healthcare%20Segment%20(Contribution%20Margin)) This section details contribution margin performance for the International OTC Healthcare segment - International OTC Healthcare contribution margin increased by **$0.3 million**, or **2.2%**, but its margin percentage decreased to **37.7%** (from **39.2%** in Q2 2024) due to a decrease in gross profit margin[90](index=90&type=chunk) [General and Administrative](index=27&type=section&id=General%20and%20Administrative) This section analyzes changes in general and administrative expenses - General and administrative expenses decreased by **$0.4 million** to **$28.5 million**, driven by lower legal expenses partially offset by increased compensation costs[91](index=91&type=chunk) [Depreciation and Amortization](index=27&type=section&id=Depreciation%20and%20Amortization) This section details the company's depreciation and amortization expenses - Depreciation and amortization expenses decreased to **$5.2 million** (from **$5.7 million** in Q2 2024) due to impairment charges on finite-lived brands and certain intangible assets becoming fully amortized in fiscal 2025[92](index=92&type=chunk) [Interest Expense, Net](index=27&type=section&id=Interest%20Expense%2C%20Net) This section analyzes the company's net interest expense and its drivers - Net interest expense decreased to **$10.2 million** (from **$13.1 million** in Q2 2024), reflecting a decrease in average indebtedness to **$1.0 billion** (from **$1.1 billion**) and a lower average cost of borrowing of **4.5%** (from **4.8%**)[93](index=93&type=chunk) [Income Taxes](index=27&type=section&id=Income%20Taxes) This section details the company's income tax provision and effective tax rate - The provision for income taxes increased to **$14.3 million** (from **$9.3 million** in Q2 2024), with the effective tax rate rising to **23.2%** (from **16.0%**) primarily due to a prior-year discrete item related to the release of a reserve for uncertain tax positions[94](index=94&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flow, debt, and ability to meet financial obligations - The company's primary cash source is operations, supplemented by debt facilities for acquisitions, and expects to finance operations with cash flow and existing credit facilities for the foreseeable future[95](index=95&type=chunk) - Cash and cash equivalents increased by **$41.6 million** to **$139.5 million** as of June 30, 2025, from **$97.9 million** at March 31, 2025[96](index=96&type=chunk) [Operating Activities](index=27&type=section&id=Operating%20Activities) This section details cash flows generated from the company's primary business operations - Net cash provided by operating activities increased by **$24.2 million** to **$79.0 million**, driven by timing of working capital and increased net income before non-cash items[97](index=97&type=chunk) [Investing Activities](index=27&type=section&id=Investing%20Activities) This section details cash flows related to the company's investment activities - Net cash used in investing activities slightly decreased to **$1.9 million** (from **$2.1 million** in Q2 2024)[98](index=98&type=chunk) [Financing Activities](index=28&type=section&id=Financing%20Activities) This section details cash flows related to the company's debt and equity financing activities - Net cash used in financing activities decreased by **$29.2 million** to **$36.3 million**, primarily due to a **$35.0 million** decrease in debt repayments, partially offset by an **$8.8 million** increase in common stock repurchases[100](index=100&type=chunk) [Capital Resources](index=28&type=section&id=Capital%20Resources) This section outlines the company's available capital, including debt facilities - As of June 30, 2025, total outstanding indebtedness was **$1.0 billion**, consisting of **$400.0 million** in 2019 Senior Notes (5.125%, due 2028) and **$600.0 million** in 2021 Senior Notes (3.750%, due 2031)[101](index=101&type=chunk)[106](index=106&type=chunk) - The company had a borrowing capacity of **$173.2 million** on its 2012 ABL Revolver with no outstanding balance as of June 30, 2025[101](index=101&type=chunk) [Covenants](index=28&type=section&id=Covenants) This section confirms the company's compliance with debt covenants - The company was in compliance with all applicable financial and restrictive covenants under its debt facilities as of June 30, 2025, including maintaining a fixed charge ratio greater than **1.0 to 1.0**[103](index=103&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section addresses the company's key accounting policies and significant management estimates - There were no material changes to the company's critical accounting policies during the three months ended June 30, 2025[104](index=104&type=chunk) [Recent Accounting Pronouncements](index=28&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the impact of newly issued accounting standards on the company - A description of recently issued accounting pronouncements is included in Note 1 to the unaudited Condensed Consolidated Financial Statements[107](index=107&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, specifically interest rate risk and foreign currency exchange rate risk, and provides a sensitivity analysis for the latter [Interest Rate Risk](index=32&type=section&id=Interest%20Rate%20Risk) This section assesses the company's exposure to fluctuations in interest rates - As of June 30, 2025, none of the company's debt carried a variable rate of interest, as the 2012 ABL Revolver had a zero balance[113](index=113&type=chunk) [Foreign Currency Exchange Rate Risk](index=32&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) This section assesses the company's exposure to fluctuations in foreign currency exchange rates - Approximately **14.5%** of gross revenues for the three months ended June 30, 2025, were denominated in non-U.S. Dollar currencies, primarily Canadian and Australian Dollars[114](index=114&type=chunk) - A hypothetical **10.0%** adverse change in foreign currency exchange rates would result in a less than **5.0%** impact on pre-tax income, approximately **$0.8 million**, for the three months ended June 30, 2025[115](index=115&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter [Disclosure Controls and Procedures](index=32&type=section&id=Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[116](index=116&type=chunk) [Changes in Internal Control over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[117](index=117&type=chunk) PART II. OTHER INFORMATION This section covers risk factors, equity sales, stockholder meeting results, and exhibits for the reporting period [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the risk factors discussed in the company's Annual Report on Form 10-K, noting no material changes in the period covered by this quarterly report, but emphasizing potential quarterly fluctuations and the impact of unforeseen risks - No material changes to the risk factors discussed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2025, were identified in this quarterly report[118](index=118&type=chunk) - Quarterly operating results and revenues may fluctuate, and future results may fall below expectations, potentially impacting the market price of securities[119](index=119&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities during the quarter, including repurchases under its publicly announced program and those related to employee restricted stock awards | Period | Total Number of Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs | | :---------------------- | :------------------------------- | :--------------------------- | :--------------------------------------------------------------- | :--------------------------------------------------------------------------------------- | | April 1 to April 30, 2025 | 89,875 | $81.19 | 89,875 | $241,194 | | May 1 to May 31, 2025 | 246,844 | $85.44 | 198,220 | $224,152 | | June 1 to June 30, 2025 | 122,407 | $85.30 | 122,351 | $213,716 | | **Total** | **459,126** | | **410,446** | | - Of the total shares repurchased, **410,446 shares** were under the **$300.0 million** share repurchase program, and **48,680 shares** were for tax withholding related to employee restricted stock awards[120](index=120&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section reports the results of the 2025 Annual Meeting of Stockholders, including the election of directors, approval of executive compensation, and ratification of the independent registered public accounting firm - At the 2025 Annual Meeting of Stockholders on August 5, 2025, seven directors were elected, executive compensation was approved in a non-binding resolution, and PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, certifications, and XBRL-related files - Exhibits include amendments to the Certificate of Incorporation and Bylaws, certifications from the Principal Executive and Financial Officers (31.1, 31.2, 32.1, 32.2), and Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[125](index=125&type=chunk) [CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS](index=30&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This statement highlights risks and uncertainties that could cause actual results to differ materially from forward-looking projections - This section contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially, and the company does not intend to update them[108](index=108&type=chunk)[109](index=109&type=chunk) - Key risks include disruptions in supply, dependence on third-party manufacturers, rising input costs, regulatory actions, competition, limited success of new products, customer dependence, acquisition challenges, and general economic conditions[110](index=110&type=chunk) - Additional risks cover financial factors (interest rates, currency), distribution disruptions, changes in trade laws, product liability, intellectual property, IT system threats, dependence on key personnel, litigation costs, indebtedness, and tax law changes[110](index=110&type=chunk)[112](index=112&type=chunk) [SIGNATURES](index=35&type=section&id=SIGNATURES) This section formally attests to the accuracy and completeness of the report by the company's authorized financial officer - The report was signed on August 7, 2025, by Christine Sacco, Chief Financial Officer & Chief Operating Officer, on behalf of Prestige Consumer Healthcare Inc[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)