[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Haemonetics reported a decrease in Q1 FY26 total revenue but achieved positive organic growth and increased adjusted diluted EPS and cash flow [First Quarter Fiscal 2026 Performance Highlights](index=1&type=section&id=First%20Quarter%20Fiscal%202026%20Performance%20Highlights) Haemonetics reported a decrease in total revenue for Q1 FY26 but achieved positive organic revenue growth and significant organic ex-CSL revenue growth, alongside an increase in adjusted diluted EPS and positive cash flow from operations and free cash flow | Metric | Q1 FY26 | | :----------------------------- | :-------- | | Revenue, decrease | $321 million, (4)% | | Organic revenue increase | 0.5% | | Organic ex-CSL revenue increase | 12.9% | | Earnings diluted share | $0.70 per | | Adjusted earnings diluted share | $1.10 per | | Cash flow from operating activities | $17 million | | Free cash flow | $2 million | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Chris Simon highlighted the company's continued margin expansion, sustained profitable growth, market share gains in Plasma, advancements in Hemostasis Management, and efforts to strengthen Vascular Closure, affirming the company's position to achieve long-range plan goals - CEO Chris Simon emphasized driving meaningful margin expansion, sustaining profitable growth, gaining share in Plasma, advancing Hemostasis Management, and strengthening commercial execution in Vascular Closure, positioning the company for its long-range plan goals[2](index=2&type=chunk) [GAAP Financial Results](index=1&type=section&id=GAAP%20Financial%20Results) This section details Haemonetics' first quarter fiscal 2026 GAAP financial performance, including revenue, profitability, and earnings per share [Revenue Performance (GAAP)](index=1&type=section&id=Revenue%20Performance%20(GAAP)) First quarter fiscal 2026 GAAP revenue decreased by 4.4% year-over-year to $321.4 million, primarily driven by significant declines in Blood Center and Plasma, partially offset by growth in Hospital [Consolidated Revenue](index=1&type=section&id=Consolidated%20Revenue%20(GAAP)) Consolidated GAAP net revenues for Q1 FY26 decreased by 4.4% year-over-year to $321.4 million | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :------------- | :-------- | :-------- | :--------- | | Net revenues | $321.4M | $336.2M | (4.4)% | [Revenue by Business Unit](index=1&type=section&id=Revenue%20by%20Business%20Unit%20(GAAP)) This section details GAAP revenue performance across Plasma, Blood Center, and Hospital business units for Q1 FY26 | Business Unit | Q1 FY26 Revenue (Millions) | YoY Growth | | :------------ | :-------------- | :--------- | | Plasma | $129.9M | (4.4)% | | Blood Center | $51.8M | (21.7)% | | Hospital | $139.7M | 4.2% | | Total net revenue | $321.4M | (4.4)% | [Profitability (GAAP)](index=1&type=section&id=Profitability%20(GAAP)) GAAP gross margin significantly improved to 59.8% in Q1 FY26, driven by pricing benefits, product mix, and decreased restructuring costs. Operating income increased substantially, despite higher R&D investments, while net income and diluted EPS saw a slight decrease due to a higher income tax rate [Gross Margin](index=2&type=section&id=Gross%20Margin%20(GAAP)) GAAP gross margin significantly improved to 59.8% in Q1 FY26, driven by pricing benefits and product mix | Metric | Q1 FY26 | Q1 FY25 | YoY Change | | :--------- | :-------- | :-------- | :--------- | | Gross margin | 59.8% | 52.0% | +7.8 pp | - Primary drivers for gross margin increase were pricing benefits across all business units, product mix, decreased restructuring costs from portfolio rationalization, and decreased amortization of fair value inventory step-up[5](index=5&type=chunk) [Operating Expenses & Income](index=2&type=section&id=Operating%20Expenses%20%26%20Income%20(GAAP)) GAAP operating income increased by 35.5% to $53.9 million in Q1 FY26, despite higher R&D investments | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :---------------- | :-------- | :-------- | :--------- | | Operating expenses | $138.4M | $135.2M | +2.4% | | Operating income | $53.9M | $39.8M | +35.5% | | Operating margin | 16.8% | 11.8% | +5.0 pp | - Increase in operating expenses was driven by increased investments in research and development[5](index=5&type=chunk) [Net Income & EPS](index=2&type=section&id=Net%20Income%20%26%20EPS%20(GAAP)) GAAP net income and diluted EPS decreased in Q1 FY26, primarily due to a higher income tax rate | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :-------------------- | :-------- | :-------- | :--------- | | Income tax rate | 25% | 18% | +7 pp | | Net income | $34.0M | $38.4M | (11.3)% | | Diluted EPS | $0.70 | $0.74 | (5.4)% | - The income tax rate increased primarily due to lower benefits from performance share vestings[5](index=5&type=chunk) [Adjusted Financial Results](index=2&type=section&id=Adjusted%20Financial%20Results) This section presents Haemonetics' first quarter fiscal 2026 financial results on an adjusted (non-GAAP) basis, focusing on organic growth and profitability [Organic Revenue Growth](index=2&type=section&id=Organic%20Revenue%20Growth) Haemonetics achieved 0.5% total organic revenue growth and a strong 12.9% organic ex-CSL revenue growth in Q1 FY26. Plasma's organic ex-CSL growth was particularly robust at 29.3%, while Blood Center and Hospital also showed positive organic growth [Total Organic Revenue](index=2&type=section&id=Total%20Organic%20Revenue) Haemonetics achieved 0.5% total organic revenue growth and 12.9% organic ex-CSL revenue growth in Q1 FY26 | Metric | Q1 FY26 | | :---------------------- | :-------- | | Organic revenue increase | 0.5% | | Organic ex-CSL revenue increase | 12.9% | [Organic Revenue by Business Unit](index=2&type=section&id=Organic%20Revenue%20by%20Business%20Unit) This section details organic revenue growth for Plasma, Blood Center, and Hospital business units in Q1 FY26 | Business Unit | Organic Growth | Organic ex-CSL Growth | | :------------ | :------------- | :-------------------- | | Plasma | (4.3)% | 29.3% | | Blood Center | 4.4% | 4.4% | | Hospital | 3.8% | 3.8% | | Total net revenue | 0.5% | 12.9% | [Adjusted Profitability](index=2&type=section&id=Adjusted%20Profitability) Adjusted gross margin expanded by 550 basis points to 60.8% in Q1 FY26, driven by pricing and product mix. Adjusted operating income increased by 9.2%, leading to a 300 basis point improvement in adjusted operating margin. Adjusted net income and diluted EPS also grew, despite a higher adjusted income tax rate [Adjusted Gross Margin](index=2&type=section&id=Adjusted%20Gross%20Margin) Adjusted gross margin expanded by 550 basis points to 60.8% in Q1 FY26, driven by pricing and product mix | Metric | Q1 FY26 | Q1 FY25 | YoY Change | | :---------------- | :-------- | :-------- | :--------- | | Adjusted gross margin | 60.8% | 55.3% | +5.5 pp | - Primary drivers for the increase in adjusted gross margin percentage were pricing benefits across all business units and product mix[6](index=6&type=chunk) [Adjusted Operating Expenses & Income](index=2&type=section&id=Adjusted%20Operating%20Expenses%20%26%20Income) Adjusted operating income increased by 9.2% to $77.6 million in Q1 FY26, with a 300 basis point improvement in operating margin | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :---------------------- | :-------- | :-------- | :--------- | | Adjusted operating expenses | $117.8M | $114.9M | +2.4% | | Adjusted operating income | $77.6M | $71.0M | +9.2% | | Adjusted operating margin | 24.1% | 21.1% | +3.0 pp | - Increase in adjusted operating expenses was driven by increased investments in research and development[7](index=7&type=chunk) [Adjusted Net Income & EPS](index=2&type=section&id=Adjusted%20Net%20Income%20%26%20EPS) Adjusted net income and diluted EPS grew in Q1 FY26, despite an increase in the adjusted income tax rate | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :---------------------- | :-------- | :-------- | :--------- | | Adjusted income tax rate | 25% | 19.9% | +5.1 pp | | Adjusted net income | $53.2M | $52.4M | +1.7% | | Adjusted diluted EPS | $1.10 | $1.02 | +7.8% | - The adjusted income tax rate increased due to lower benefits from performance share vestings[7](index=7&type=chunk) [Balance Sheet and Cash Flow](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) This section provides an overview of Haemonetics' balance sheet and cash flow performance for the first quarter of fiscal 2026 [Balance Sheet Overview](index=2&type=section&id=Balance%20Sheet%20Overview) As of June 28, 2025, cash on hand decreased by $13.9 million since the end of fiscal 2025, primarily due to strategic investment outflows. Total assets slightly increased, while total current liabilities decreased | Metric | June 28, 2025 (Millions) | March 29, 2025 (Millions) | Change (Millions) | | :-------------------- | :-------------- | :--------------- | :------- | | Cash and cash equivalents | $292.9M | $306.8M | ($13.9M) | | Total assets | $2,462.1M | $2,450.9M | +$11.2M | | Total current liabilities | $531.4M | $578.1M | ($46.7M) | - The decrease in cash on hand was primarily driven by cash outflows for strategic investments[9](index=9&type=chunk) [Cash Flow Analysis](index=2&type=section&id=Cash%20Flow%20Analysis) Haemonetics generated $17.4 million in cash from operating activities and $2.5 million in free cash flow in Q1 FY26, a significant improvement year-over-year, mainly due to decreased cash outflows in working capital from lower inventory purchasing, and lower capital expenditures [Operating Activities Cash Flow](index=2&type=section&id=Operating%20Activities%20Cash%20Flow) Cash flow from operating activities significantly improved to $17.4 million in Q1 FY26, driven by decreased working capital outflows | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (Millions) | | :-------------------------------- | :-------- | :-------- | :------- | | Cash flows from operating activities | $17.4M | ($27.4M) | +$44.8M | - The primary driver of increased cash provided by operating activities was decreased cash outflows in working capital, driven by lower inventory purchasing[10](index=10&type=chunk) [Free Cash Flow](index=2&type=section&id=Free%20Cash%20Flow) Free cash flow improved to $2.5 million in Q1 FY26, positively impacted by lower capital expenditures | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | Change (Millions) | | :------------- | :-------- | :-------- | :------- | | Free cash flow | $2.5M | ($16.9M) | +$19.4M | - Free cash flow was positively impacted by lower capital expenditures and additions to Haemonetics equipment[10](index=10&type=chunk) [Fiscal 2026 Guidance](index=4&type=section&id=Fiscal%202026%20Guidance) This section outlines Haemonetics' financial guidance for fiscal year 2026, covering revenue, profitability, and cash flow [Revenue Guidance](index=4&type=section&id=Revenue%20Guidance) Haemonetics reaffirmed its fiscal 2026 guidance for total GAAP revenue growth of (3)% to (6)% and organic revenue growth of (2)% to 1%. Organic ex-CSL revenue growth is projected to be 6% to 9% | Metric | FY26 Guidance Range | | :-------------------- | :------------------ | | Reported Total Revenue | (3)% – (6)% | | Organic Total Revenue | (2)% – 1% | | Organic, ex-CSL Total Revenue | 6% – 9% | | Business Unit | Reported Growth | Organic Growth | Organic, ex-CSL Growth | | :------------ | :-------------- | :------------- | :--------------------- | | Plasma | (7)% – (10)% | (7)% – (10)% | 11% – 14% | | Blood Center | (23)% – (26)% | (4)% – (6)% | (4)% – (6)% | | Hospital | 8% – 11% | 8% – 11% | 8% – 11% | [Profitability & Cash Flow Guidance](index=4&type=section&id=Profitability%20%26%20Cash%20Flow%20Guidance) The company reaffirmed its fiscal 2026 guidance for adjusted operating margin between 26% and 27%, adjusted diluted EPS between $4.70 and $5.00, and free cash flow between $160 million and $200 million | Metric | FY26 Guidance Range | | :-------------------------- | :------------------ | | Adjusted operating margin | 26% – 27% | | Adjusted earnings per diluted share | $4.70 – $5.00 | | Free cash flow | $160M – $200M | [Company Information & Disclosures](index=4&type=section&id=Company%20Information%20%26%20Disclosures) This section provides essential company information, including its mission, forward-looking statements, and the use of non-GAAP financial measures [About Haemonetics](index=4&type=section&id=ABOUT%20HAEMONETICS) Haemonetics is a global medical technology company focused on improving healthcare quality, effectiveness, and efficiency through innovative solutions in hospital technologies, plasma collection, and blood component collection for blood centers - Haemonetics is a global medical technology company dedicated to improving healthcare quality, effectiveness, and efficiency[13](index=13&type=chunk) - Their innovative solutions address critical medical needs, including hospital technologies, end-to-end plasma collection technologies, and products for blood component collection[13](index=13&type=chunk) [Forward-Looking Statements](index=5&type=section&id=FORWARD-LOOKING%20STATEMENTS) This section clarifies that statements not describing historical facts are forward-looking, subject to risks and uncertainties, and not guarantees of future results. It lists various factors that could cause actual results to differ materially, including market demand, product development, competition, regulatory changes, and economic conditions - Forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and are based on current projections, plans, objectives, beliefs, expectations, estimates and assumptions, subject to risks and uncertainties[16](index=16&type=chunk) - Factors that may influence or contribute to the inaccuracy of forward-looking statements include availability and demand for products, ability to develop and market new products, competitive products and pricing, cybersecurity events, and regulatory uncertainties[16](index=16&type=chunk) [Management's Use of Non-GAAP Measures](index=5&type=section&id=MANAGEMENT%27S%20USE%20OF%20NON-GAAP%20MEASURES) Management uses non-GAAP financial measures to monitor performance, make business decisions, and set targets, considering them supplemental to GAAP results. The section defines specific non-GAAP adjustments, such as organic revenue growth and adjusted profitability metrics, and explains why forward-looking GAAP reconciliations are not provided - Management uses non-GAAP measures to monitor financial performance, make informed business decisions, establish budgets, and forecast future results, considering them supplemental to GAAP results[17](index=17&type=chunk) - Organic revenue growth excludes the impact of currency fluctuation, acquisitions, and divestitures. Organic ex-CSL revenue growth further excludes the impact of fiscal 2025 disposable sales to CSL Plasma[18](index=18&type=chunk) - Adjusted gross profit, operating expenses, operating income, net income, and EPS exclude restructuring costs, amortization of acquired intangible assets, acquisition/divestiture related costs, and other specific non-recurring items[18](index=18&type=chunk) [Unaudited Financial Statements & Reconciliations](index=7&type=section&id=Unaudited%20Financial%20Statements%20%26%20Reconciliations) This section presents the unaudited GAAP financial statements and reconciliations of non-GAAP measures for the first quarter of fiscal 2026 [Condensed Consolidated Statements of Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) This section presents the detailed unaudited GAAP income statement for the three months ended June 28, 2025, and June 29, 2024, showing net revenues, cost of goods sold, gross profit, operating expenses, operating income, interest, income before taxes, provision for income taxes, net income, and earnings per diluted share, along with corresponding profit margins | Metric | Three Months Ended 6/28/2025 (Thousands) | Three Months Ended 6/29/2024 (Thousands) | Inc/(Dec) % | | :---------------------------------- | :--------------------------- | :--------------------------- | :---------- | | Net revenues | $321,394 | $336,172 | (4.4)% | | Cost of goods sold | $129,150 | $161,248 | (19.9)% | | Gross profit | $192,244 | $174,924 | 9.9% | | Research and development | $16,261 | $14,449 | 12.5% | | Selling, general and administrative | $110,719 | $108,248 | 2.3% | | Amortization of acquired intangible assets | $11,392 | $12,471 | (8.7)% | | Total Operating expenses | $138,372 | $135,168 | 2.4% | | Operating income | $53,872 | $39,756 | 35.5% | | Interest and other (expense) income, net | ($8,703) | $6,957 | (225.1)% | | Income before provision for income taxes | $45,169 | $46,713 | (3.3)% | | Provision for income taxes | $11,138 | $8,340 | 33.5% | | Net income | $34,031 | $38,373 | (11.3)% | | Net income per common share assuming dilution | $0.70 | $0.74 | (5.4)% | | Gross profit margin | 59.8 % | 52.0 % | 7.8% | | Operating income margin | 16.8 % | 11.8 % | 5.0% | | Net income margin | 10.6 % | 11.4 % | (0.8)% | [Revenue Analysis by Business Unit](index=8&type=section&id=Revenue%20Analysis%20by%20Business%20Unit%20(Unaudited)) This table provides a detailed breakdown of revenue by business unit for Q1 FY26 and Q1 FY25, including reported growth, currency impact, acquisitions & divestitures impact, organic growth, and organic growth excluding CSL 2025 US disposable revenue, highlighting the significant impact of the CSL agreement on Plasma's reported and organic growth | Business Unit | 6/28/2025 Revenue (Thousands) | Reported growth | Currency impact | Acquisitions & Divestitures | Organic growth | 2025 CSL US Disposable Revenue | Organic growth, ex CSL | | :------------ | :---------------- | :-------------- | :-------------- | :-------------------------- | :------------- | :----------------------------- | :--------------------- | | Plasma | $129,897 | (4.4)% | 0.3% | (0.4)% | (4.3)% | (33.6)% | 29.3% | | Apheresis | $51,822 | 5.6% | 1.2% | —% | 4.4% | —% | 4.4% | | Whole Blood | $17 | (99.9)% | —% | (99.9)% | —% | —% | —% | | Blood Center | $51,839 | (21.7)% | 1.1% | (27.2)% | 4.4% | —% | 4.4% | | Hospital | $139,658 | 4.2% | 0.4% | —% | 3.8% | —% | 3.8% | | Total net revenues | $321,394 | (4.4)% | 0.5% | (5.4)% | 0.5% | (12.4)% | 12.9% | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This section provides the unaudited condensed consolidated balance sheets as of June 28, 2025, and March 29, 2025, detailing assets (cash, receivables, inventories, property, intangibles, goodwill) and liabilities & stockholders' equity (debt, other liabilities, equity) | Asset/Liability | June 28, 2025 (Thousands) | March 29, 2025 (Thousands) | | :-------------------------- | :-------------- | :--------------- | | Cash and cash equivalents | $292,898 | $306,763 | | Total current assets | $913,160 | $934,975 | | Property, plant & equipment, net | $286,865 | $284,052 | | Intangible assets, net | $450,634 | $455,743 | | Goodwill | $607,299 | $604,269 | | Total assets | $2,462,094 | $2,450,948 | | Total current liabilities | $531,407 | $578,113 | | Long-term debt | $920,833 | $921,230 | | Stockholders' equity | $882,300 | $820,836 | | Total liabilities & stockholders' equity | $2,462,094 | $2,450,948 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents the unaudited condensed consolidated statements of cash flows for the three months ended June 28, 2025, and June 29, 2024, detailing cash flows from operating, investing, and financing activities, along with a reconciliation of free cash flow | Cash Flow Activity | Three Months Ended 6/28/2025 (Thousands) | Three Months Ended 6/29/2024 (Thousands) | | :-------------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by (used in) operating activities | $17,395 | ($27,421) | | Net cash used in investing activities | ($33,000) | ($139,197) | | Net cash (used in) provided by financing activities | ($2,442) | $333,692 | | Net Change in Cash and Cash Equivalents | ($13,865) | $165,629 | | Cash and Cash Equivalents at End of Period | $292,898 | $344,429 | | Free cash flow | $2,478 | ($16,926) | [Reconciliation of Adjusted Measures](index=11&type=section&id=Reconciliation%20of%20Adjusted%20Measures%20for%20First%20Quarter%20of%20FY26%20and%20FY25%20(Unaudited)) This section provides a detailed reconciliation of GAAP financial measures to their corresponding adjusted (non-GAAP) measures for the first quarter of fiscal 2026 and 2025, covering gross profit, operating expenses, operating income, interest, income taxes, net income, and diluted EPS, outlining specific adjustments made for each period | Metric (Q1 FY26) | Reported (Thousands) | Adjustments (Thousands) | Adjusted (Thousands) | | :-------------------------- | :--------- | :---------- | :--------- | | Gross profit | $192,244 | $3,078 | $195,312 | | Operating expenses | $138,372 | ($20,612) | $117,760 | | Operating income | $53,872 | $23,680 | $77,552 | | Net income | $34,031 | $19,202 | $53,233 | | Earnings per diluted share | $0.70 | $0.40 | $1.10 | | Adjusted gross profit margin | | | 60.8% | | Adjusted operating margin | | | 24.1% | | Adjusted net income margin | | | 16.6% | | Metric (Q1 FY25) | Reported (Thousands) | Adjustments (Thousands) | Adjusted (Thousands) | | :-------------------------- | :--------- | :---------- | :--------- | | Gross profit | $174,924 | $11,045 | $185,969 | | Operating expenses | $135,168 | ($20,220) | $114,948 | | Operating income | $39,756 | $31,265 | $71,021 | | Net income | $38,373 | $13,993 | $52,366 | | Earnings per diluted share | $0.74 | $0.28 | $1.02 | | Adjusted gross profit margin | | | 55.3% | | Adjusted operating margin | | | 21.1% | | Adjusted net income margin | | | 15.6% |

[Financial Highlights and Management Commentary](index=1&type=section&id=Financial%20Highlights%20and%20Management%20Commentary) Acushnet Holdings Corp. achieved strong Q2 and year-to-date 2025 financial results, driven by growth in Titleist golf equipment and Golf gear [Overall Performance Summary](index=1&type=section&id=Overall%20Performance%20Summary) Acushnet Holdings Corp. reported strong Q2 and year-to-date 2025 net sales and income growth, primarily from Titleist golf equipment and Golf gear | Metric | Q2 2025 | Q2 YoY Change | YTD 2025 | YTD YoY Change | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $720.5M | +5.4% | $1,423.8M | +2.3% | | Net Sales (Constant Currency) | - | +4.7% | - | +2.9% | | Net Income | $75.6M | +5.9% | $174.9M | +9.9% | | Adjusted EBITDA | $143.1M | +9.2% | $282.0M | -0.9% | - Year-to-date constant currency net sales increased by **3%**, driven by growth in Titleist golf equipment and Golf gear. The company noted a positive response to new Pro V1 models and continued growth in Titleist GT drivers and fairways[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO David Maher highlighted the company's strong performance despite a dynamic environment and poor spring weather, with positive golf industry fundamentals - The U.S. golfer base continued its growth for the **seventh straight year in 2024**, and global participation is described as healthy and resilient[5](index=5&type=chunk) - Upcoming product launches for the second half of 2025 include new Titleist T-series irons, Scotty Cameron putters, and extensions to the FJ Hyperflex and Quantum golf shoe lines[5](index=5&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) This section details Acushnet's financial performance for Q2 and the first six months of 2025, analyzing results by segment and geography [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) In Q2 2025, consolidated net sales grew 5.4% to $720.5 million, driven by Titleist golf equipment and Golf gear, with net income increasing 5.9% to $75.6 million [Q2 Performance Overview](index=2&type=section&id=Q2%20Performance%20Overview) A summary of Acushnet's key financial metrics for the second quarter of 2025, including net sales, net income, and Adjusted EBITDA | Financial Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $720.5M | $683.9M | +5.4% | | Net Income | $75.6M | $71.4M | +5.9% | | Adjusted EBITDA | $143.1M | $131.0M | +9.2% | - The increase in net sales was primarily driven by higher average selling prices in golf clubs and higher sales volumes in golf balls within the Titleist segment, along with growth in Golf gear[7](index=7&type=chunk) - Adjusted EBITDA margin improved to **19.9%** from 19.2% in the prior year period[13](index=13&type=chunk) [Q2 Performance by Segment](index=2&type=section&id=Q2%20Performance%20by%20Segment) An overview of Acushnet's second-quarter 2025 net sales performance across its Titleist, FootJoy, and Golf gear segments | Segment | Net Sales Change (YoY) | Constant Currency Change (YoY) | Key Drivers | | :--- | :--- | :--- | :--- | | Titleist golf equipment | +6.8% | +6.1% | Higher ASP in clubs, higher volume in 2025 Pro V1 balls | | FootJoy golf wear | -1.3% | -2.0% | Lower sales volumes in footwear | | Golf gear | +7.9% | +7.2% | Higher sales volumes in bags and gloves, higher ASP | [Q2 Performance by Geography](index=2&type=section&id=Q2%20Performance%20by%20Geography) A geographical breakdown of Acushnet's second-quarter 2025 net sales, highlighting performance in the U.S. and international markets - Net sales in the United States grew, driven by Titleist golf equipment (+$20.7M) and Golf gear (+$4.8M), partially offset by a decrease in FootJoy golf wear (-$1.6M)[8](index=8&type=chunk) - Net sales in regions outside the U.S. increased by **3.8%** (**2.3% constant currency**), with growth in EMEA and Rest of World, offset by declines in Korea and Japan[9](index=9&type=chunk) [Year-to-Date (First Six Months) 2025 Financial Results](index=4&type=section&id=Year-to-Date%20(First%20Six%20Months)%202025%20Financial%20Results) For the first six months of 2025, net sales increased 2.3% to $1,423.8 million, with net income growing 9.9% to $174.9 million due to a one-time gain [YTD Performance Overview](index=4&type=section&id=YTD%20Performance%20Overview) A summary of Acushnet's key financial metrics for the first six months of 2025, including net sales, net income, and Adjusted EBITDA | Financial Metric | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,423.8M | $1,391.4M | +2.3% | | Net Income | $174.9M | $159.2M | +9.9% | | Adjusted EBITDA | $282.0M | $284.7M | -0.9% | - The **9.9% increase in net income** was primarily due to a non-cash pre-tax gain of **$20.9 million** related to the deconsolidation of the FootJoy golf shoe joint venture and lower income tax expense[19](index=19&type=chunk) - Adjusted EBITDA margin for the first six months was **19.8%**, compared to 20.5% in the prior year period[20](index=20&type=chunk) [YTD Performance by Segment](index=4&type=section&id=YTD%20Performance%20by%20Segment) An overview of Acushnet's year-to-date 2025 net sales performance across its Titleist, FootJoy, and Golf gear segments | Segment | Net Sales Change (YoY) | Constant Currency Change (YoY) | Key Drivers | | :--- | :--- | :--- | :--- | | Titleist golf equipment | +4.5% | +4.9% | Higher volume in 2025 Pro V1 balls, higher ASP in clubs | | FootJoy golf wear | -4.2% | -3.6% | Lower sales volumes in footwear and apparel | | Golf gear | +5.0% | +5.5% | Higher ASP and higher volumes in gloves and bags | [YTD Performance by Geography](index=4&type=section&id=YTD%20Performance%20by%20Geography) A geographical breakdown of Acushnet's year-to-date 2025 net sales, highlighting performance in the U.S. and international markets - Net sales in the United States grew, driven by Titleist golf equipment (+$31.0M) and Golf gear (+$5.4M), partially offset by a decrease in FootJoy golf wear (-$7.3M)[15](index=15&type=chunk) - Net sales in regions outside the U.S. increased by **0.1%** (**1.5% constant currency**), with growth in EMEA and Rest of World offset by declines in Korea and Japan[16](index=16&type=chunk) [Shareholder Returns and Outlook](index=6&type=section&id=Shareholder%20Returns%20and%20Outlook) This section outlines Acushnet's capital allocation strategies, including dividends and share repurchases, and provides an update on the 2025 financial outlook [Cash Dividend and Share Repurchase](index=6&type=section&id=Cash%20Dividend%20and%20Share%20Repurchase) The company demonstrated its commitment to shareholder returns by declaring a quarterly cash dividend of $0.235 per share and repurchasing 1.35 million shares for $88.4 million during the second quarter - The Board of Directors declared a quarterly cash dividend of **$0.235 per share**, payable on September 19, 2025[21](index=21&type=chunk) - During Q2, the Company repurchased **1,348,369 shares** of common stock for an aggregate of **$88.4 million**, including repurchases from Magnus Holdings Co., Ltd[22](index=22&type=chunk) [2025 Outlook](index=6&type=section&id=2025%20Outlook) Acushnet will provide its financial outlook for the second half of 2025 during its upcoming second-quarter earnings conference call - Information regarding the outlook for the second half of 2025 will be shared during the upcoming Q2 2025 earnings conference call and webcast[23](index=23&type=chunk) [Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) This section presents Acushnet's unaudited condensed consolidated financial statements, including statements of operations, balance sheets, and cash flows [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The income statement shows year-over-year growth in net sales and gross profit for both the second quarter and first six months of 2025, with diluted EPS of $1.25 and $2.87 respectively | (in thousands) | Three months ended June 30, 2025 | Six months ended June 30, 2025 | | :--- | :--- | :--- | | Net sales | $720,476 | $1,423,848 | | Gross profit | $354,316 | $691,478 | | Income from operations | $109,868 | $224,415 | | Net income attributable to Acushnet | $75,563 | $174,935 | | Diluted EPS | $1.25 | $2.87 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $2.40 billion, driven by higher accounts receivable, while total liabilities rose to $1.58 billion due to increased long-term debt | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,157,838 | $973,873 | | Total assets | $2,395,571 | $2,180,206 | | Total current liabilities | $515,262 | $472,707 | | Long-term debt | $911,001 | $753,081 | | Total liabilities | $1,582,210 | $1,383,042 | | Total shareholders' equity | $808,519 | $793,136 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, cash provided by operating activities decreased to $31.6 million, resulting in a net increase in cash of $7.0 million for the period | (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Cash flows provided by operating activities | $31,608 | $102,117 | | Cash flows used in investing activities | ($25,792) | ($22,110) | | Cash flows used in financing activities | ($2,132) | ($63,019) | | Net increase in cash | $6,996 | $14,851 | [Supplemental and Non-GAAP Information](index=12&type=section&id=Supplemental%20and%20Non-GAAP%20Information) This section provides additional details on net sales by segment and geography, along with a reconciliation of GAAP to non-GAAP financial measures [Supplemental Net Sales Information](index=12&type=section&id=Supplemental%20Net%20Sales%20Information) This section provides a detailed breakdown of net sales by product segment and geographic region for Q2 and the first six months of 2025, showing Titleist golf equipment and the United States as largest contributors Q2 2025 Net Sales by Segment (in millions) | Segment | Q2 2025 Net Sales | % Change (YoY) | | :--- | :--- | :--- | | Titleist golf equipment | $453.8 | +6.8% | | FootJoy golf wear | $153.0 | -1.3% | | Golf gear | $76.7 | +7.9% | YTD 2025 Net Sales by Segment (in millions) | Segment | YTD 2025 Net Sales | % Change (YoY) | | :--- | :--- | :--- | | Titleist golf equipment | $874.9 | +4.5% | | FootJoy golf wear | $331.4 | -4.2% | | Golf gear | $147.6 | +5.0% | Q2 2025 Net Sales by Region (in millions) | Region | Q2 2025 Net Sales | % Change (YoY) | | :--- | :--- | :--- | | United States | $434.5 | +6.4% | | EMEA | $98.6 | +13.7% | | Japan | $30.2 | +1.3% | | Korea | $80.1 | -4.4% | | Rest of World | $77.1 | +2.7% | [Reconciliation of GAAP to Non-GAAP Measures](index=13&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) The company provides a reconciliation from GAAP Net Income to Adjusted EBITDA, adjusting for items not indicative of ongoing operating performance - The company uses non-GAAP measures such as net sales on a constant currency basis and Adjusted EBITDA to evaluate business performance, as management believes they exclude items not indicative of ongoing operating performance[40](index=40&type=chunk)[43](index=43&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to Acushnet | $75,563 | $71,428 | $174,935 | $159,190 | | Adjustments (Interest, Taxes, D&A, etc.) | $67,582 | $59,585 | $107,066 | $125,514 | | **Adjusted EBITDA** | **$143,145** | **$131,013** | **$282,001** | **$284,704** | | **Adjusted EBITDA margin** | **19.9%** | **19.2%** | **19.8%** | **20.5%** |

all all DIGITALBRIDGE EARNINGS PRESENTATION 2Q 2025 August 7, 2025 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may contain forward-lobing statements within the nearing of the feelal securities laws, induding statements relating to (i) our strately, outbok and gover financial tages and (ii) general economic trends and trends in our inclusion and markets. Forward-foolings statements relate to expections, fitnute share and strated events trends and similar expressions conserming ...

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The company achieved significant Q2 and H1 2025 financial growth, driven by the Alani Nu acquisition and expanded U.S. market share [Second Quarter 2025 Financial and Market Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Market%20Highlights) Q2 2025 saw record revenue of **$739.3 million** (up **84%**) driven by the Alani Nu acquisition, with Adjusted EBITDA more than doubling to **$210.3 million** Q2 2025 Financial Summary | Summary Financials | 2Q 2025 | 2Q 2024 | Change | | :--- | :--- | :--- | :--- | | **(Millions except for percentages and EPS)** | | | | | Revenue | $739.3 | $402.0 | 84% | | N. America | $714.5 | $382.4 | 87% | | International | $24.8 | $19.6 | 27% | | Gross Margin | 51.5% | 52.0% | -50 BPS | | Net Income | $99.9 | $79.8 | 25% | | Diluted EPS | $0.33 | $0.28 | 18% | | Adjusted Diluted EPS* | $0.47 | $0.28 | 68% | | Adjusted EBITDA* | $210.3 | $100.4 | 109% | - Revenue growth was primarily driven by **$301.2 million** from the newly acquired Alani Nu brand, while the legacy CELSIUS brand revenue grew **9%** in the quarter[5](index=5&type=chunk) - Gross margin decreased slightly from **52.0%** to **51.5%**, as improvements from lower material costs and favorable mix were offset by the impact of Alani Nu's margin profile, which included a **$21.7 million** inventory step-up adjustment[7](index=7&type=chunk) - Selling, general and administrative (SG&A) expenses increased **107%** to **$237.9 million**, mainly due to the addition of Alani Nu, acquisition-related costs, and increased marketing investment[8](index=8&type=chunk) - International revenue grew **27%** to **$24.8 million**, driven by momentum in expansion markets like the UK, Ireland, France, Australia, New Zealand, and the Netherlands[6](index=6&type=chunk) [First Half 2025 Financial and Market Highlights](index=2&type=section&id=First%20Half%202025%20Financial%20and%20Market%20Highlights) H1 2025 revenue grew **41%** to **$1.07 billion**, primarily from the Alani Nu acquisition, with gross margin improving to **51.8%** and Adjusted Diluted EPS rising **18%** 1H 2025 Financial Summary | Summary Financials | 1H 2025 | 1H 2024 | Change | | :--- | :--- | :--- | :--- | | **(Millions except for percentages and EPS)** | | | | | Revenue | $1,068.5 | $757.7 | 41% | | N. America | $1,021.0 | $721.9 | 41% | | International | $47.5 | $35.8 | 33% | | Gross Margin | 51.8% | 51.6% | +20 BPS | | Net Income | $144.3 | $157.6 | (8)% | | Diluted EPS | $0.48 | $0.55 | (13)% | | Adjusted Diluted EPS* | $0.65 | $0.55 | 18% | | Adjusted EBITDA* | $280.0 | $188.4 | 49% | - The **41%** revenue increase for the first half was primarily driven by the **$301.2 million** contribution from the Alani Nu brand in the second quarter[12](index=12&type=chunk) - Gross margin for the six-month period increased by **20 basis points** to **51.8%**, driven by lower material costs and favorable mix, partially offset by the Alani Nu inventory step-up adjustment[15](index=15&type=chunk) - International revenue for the first half increased **33%** to **$47.5 million**, reflecting continued momentum in expansion markets and growth in Nordic markets[14](index=14&type=chunk) [Retail Performance](index=2&type=section&id=Retail%20Performance) Celsius Holdings increased its U.S. RTD energy dollar share to **17.3%**, driven by a **129%** surge in Alani Nu retail sales, while the CELSIUS brand grew **3%** - Celsius Holdings' total portfolio retail sales in U.S. tracked channels increased **29%** year-over-year, capturing a **17.3%** dollar share of the RTD energy category[11](index=11&type=chunk) - The Alani Nu brand was a key growth driver, with retail sales increasing **129%** year-over-year and **39%** sequentially, and its dollar share grew by **3.1 points** to **6.3%**[11](index=11&type=chunk) - The CELSIUS brand's retail sales grew **3%** year-over-year and **17.6%** sequentially, with its dollar share at **11%**, a **1.3 point** decline from the prior year but a slight sequential increase[11](index=11&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The balance sheet significantly expanded in Q2 2025 due to the Alani Nu acquisition, while the statement of operations reflects increased revenue but a first-half GAAP net income decline [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets significantly increased to **$3.8 billion** by June 30, 2025, primarily due to the Alani Nu acquisition adding over **$1 billion** in brands and **$730 million** in goodwill, partly financed by **$863 million** in new long-term debt Condensed Consolidated Balance Sheets (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $ 1,391,212 | $ 1,324,580 | | Brands-net | $ 1,104,389 | $ 907 | | Goodwill | $ 802,234 | $ 71,582 | | **Total Assets** | **$ 3,795,143** | **$ 1,766,881** | | **Total current liabilities** | $ 659,775 | $ 365,535 | | Long-term debt | $ 862,917 | $ — | | **Total Liabilities** | **$ 1,703,829** | **$ 542,464** | | **Total Stockholders' Equity** | **$ 1,266,826** | **$ 399,929** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Q2 2025 revenue reached **$739.3 million** with net income of **$99.9 million**, while H1 2025 revenue was **$1.07 billion**, though net income decreased to **$144.3 million** due to increased interest and operating costs Consolidated Statements of Operations (in thousands) | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | Revenue | $ 739,259 | $ 401,977 | $ 1,068,535 | $ 757,685 | | Gross profit | $ 380,851 | $ 209,098 | $ 553,224 | $ 391,305 | | Income from operations | $ 142,965 | $ 94,248 | $ 194,996 | $ 177,438 | | Net income | $ 99,855 | $ 79,783 | $ 144,274 | $ 157,594 | | Diluted EPS | $ 0.33 | $ 0.28 | $ 0.48 | $ 0.55 | [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) The company reconciles GAAP to non-GAAP measures like Adjusted EBITDA and Adjusted Diluted EPS, used by management for operational assessment, with noted limitations [Reconciliation of Non-GAAP Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) Q2 2025 GAAP Net Income of **$99.9 million** was reconciled to non-GAAP Adjusted EBITDA of **$210.3 million**, with adjustments for acquisition costs and inventory step-up, similarly adjusting Diluted EPS from **$0.33** to **$0.47** Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA (in thousands) | | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Net income (GAAP measure) | $ 99,855 | $ 79,783 | | Adjustments: | | | | Net interest (expense) income | $ 14,042 | $ (10,647) | | Provision for income taxes | $ 29,610 | $ 24,848 | | Depreciation and amortization | $ 9,119 | $ 1,418 | | Acquisition Costs | $ 29,855 | $ — | | Inventory step-up adjustment | $ 21,692 | $ — | | Other adjustments | $ 6,076 | $ 5,010 | | **Non-GAAP Adjusted EBITDA** | **$ 210,289** | **$ 100,412** | Reconciliation of GAAP Diluted EPS to Non-GAAP Adjusted Diluted EPS | | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--- | :--- | :--- | | Diluted earnings per share (GAAP) | $ 0.33 | $ 0.28 | | Acquisition Costs | $ 0.08 | $ — | | Inventory step-up adjustment | $ 0.06 | $ — | | **Non-GAAP diluted earnings per share** | **$ 0.47** | **$ 0.28** | [Use and Definition of Non-GAAP Measures](index=8&type=section&id=Use%20and%20Definition%20of%20Non-GAAP%20Measures) Management uses non-GAAP measures like Adjusted EBITDA and Adjusted Diluted EPS for internal decision-making, believing they offer a clearer view of operating performance, while acknowledging their limitations and non-comparability - Adjusted EBITDA is defined as net income excluding net interest, taxes, depreciation, amortization, and further adjusted for items like stock-based compensation, acquisition costs, and inventory step-up[34](index=34&type=chunk) - Management uses these non-GAAP measures for internal decision-making, budgeting, and assessing operating performance, believing they provide useful information to investors[35](index=35&type=chunk) - The company cautions that non-GAAP measures have limitations, should not be considered in isolation, and may not be comparable to similarly titled measures from other companies[36](index=36&type=chunk)[37](index=37&type=chunk)

[Executive Summary](index=1&type=section&id=executive-summary) Summarizes Talen Energy's Q2 2025 performance, strategic initiatives, and reaffirmed 2025 guidance [Second Quarter 2025 Performance Overview](index=1&type=section&id=second-quarter-2025-performance-overview) Talen Energy reported Q2 2025 results, with **$90 million** Adjusted EBITDA and **$(78) million** Adjusted Free Cash Flow, reaffirming 2025 guidance | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | GAAP Net Income (Loss) Attributable to Stockholders | $72 million | $454 million | $(63) million | $748 million | | Adjusted EBITDA | $90 million | $87 million | $290 million | $376 million | | Adjusted Free Cash Flow | $(78) million | $(29) million | $9 million | $165 million | | Total Generation (TWh) | **7.3** | **8.2** | **17.0** | **16.3** | | Carbon-Free Generation | **41%** | **49%** | **44%** | **53%** | | OSHA TRIR | **0.7** | **0.2** | **0.6** | **0.3** | | Fleet EFOF | **2.3%** | **2.2%** | **1.8%** | **2.0%** | - Second quarter GAAP Net Income Attributable to Stockholders was **$72 million**[7](index=7&type=chunk) - Second quarter Adjusted EBITDA was **$90 million** and Adjusted Free Cash Flow use was **$(78) million**[7](index=7&type=chunk) [Strategic Highlights](index=1&type=section&id=strategic-highlights) Talen Energy expanded its Amazon partnership, acquired Freedom and Guernsey plants, and cleared significant PJM capacity, enhancing data center service - Expanded existing relationship with Amazon to provide additional energy to Amazon Web Services ("AWS"), offering flexibility to support power delivery to other Pennsylvania sites[7](index=7&type=chunk) - Signed definitive agreements to acquire Caithness Energy's Freedom Energy Center in Pennsylvania and Guernsey Power Station in Ohio, both baseload combined-cycle gas-fired plants located within the PJM power market[7](index=7&type=chunk) - Cleared **6,702 megawatts** ("MWs") in the 2026/2027 PJM Base Residual Auction ("BRA") at **$329.17 per megawatt-day** ("MWd") for the MAAC, PPL, and PSEG locational deliverability areas[7](index=7&type=chunk) [2025 Guidance Reaffirmation](index=1&type=section&id=2025-guidance-reaffirmation) Talen Energy reaffirmed its 2025 guidance for Adjusted EBITDA and Adjusted Free Cash Flow, demonstrating confidence in its financial projections - Reaffirming 2025 guidance[5](index=5&type=chunk)[7](index=7&type=chunk) [Financial and Operational Performance](index=1&type=section&id=financial-and-operational-performance) Provides a comprehensive overview and detailed analysis of Talen Energy's financial and operational results for Q2 and H1 2025 [Summary of Financial and Operating Results](index=1&type=section&id=summary-of-financial-and-operating-results) This section provides a high-level overview of Talen Energy's financial and operational performance for Q2 and H1 2025, highlighting key metrics | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | GAAP Net Income (Loss) Attributable to Stockholders | $72 million | $454 million | $(63) million | $748 million | | Adjusted EBITDA | $90 million | $87 million | $290 million | $376 million | | Adjusted Free Cash Flow | $(78) million | $(29) million | $9 million | $165 million | | Total Generation (TWh) | **7.3** | **8.2** | **17.0** | **16.3** | | Carbon-Free Generation | **41%** | **49%** | **44%** | **53%** | | OSHA TRIR | **0.7** | **0.2** | **0.6** | **0.3** | | Fleet EFOF | **2.3%** | **2.2%** | **1.8%** | **2.0%** | [Detailed Financial Performance Analysis](index=2&type=section&id=detailed-financial-performance-analysis) GAAP Net Income decreased significantly due to a prior-year asset sale gain absence; Adjusted EBITDA increased modestly, while Adjusted Free Cash Flow declined - GAAP Net Income (Loss) Attributable to Stockholders decreased **$(382) million** primarily due to the absence of the gain and associated tax expense from the sale of the ERCOT portfolio. This was partially offset by an increase in capacity revenues, but also impacted by higher operation and maintenance expenses due to the extended Susquehanna refueling outage[17](index=17&type=chunk) - Adjusted EBITDA increased **$3 million**, mainly due to an increase in capacity revenues, partially offset by higher operation and maintenance expenses from the extended Susquehanna refueling outage[17](index=17&type=chunk) - Adjusted Free Cash Flow decreased **$(49) million**, primarily attributable to higher cash income tax payments and capital expenditures associated with the extended Susquehanna refueling outage[17](index=17&type=chunk) - The generation fleet maintained reliability and safety with a Fleet EFOF of **2.3%** and an OSHA TRIR of **0.7**. Total generation was **7.3 terawatt-hours** ("TWh"), with **41%** from carbon-free nuclear generation[9](index=9&type=chunk) [Strategic Initiatives and Business Development](index=2&type=section&id=strategic-initiatives-and-business-development) Details Talen Energy's key strategic moves, including an expanded AWS PPA, significant acquisitions, and PJM capacity auction results [Data Center Power Purchase Agreement with AWS](index=2&type=section&id=data-center-power-purchase-agreement-with-aws) Talen expanded its PPA with AWS to supply up to **1,920 MWs** of power through 2042, reducing market risk and exploring new nuclear options - New PPA with AWS, entered in June 2025, will supply electricity for AWS' data center campus adjacent to Susquehanna, with flexibility to deliver to other Pennsylvania sites[11](index=11&type=chunk) - Talen and AWS will explore building new small modular reactors within Talen's Pennsylvania footprint and pursue expanding the nuclear plant's energy output through uprates, with the intent to add net-new energy to the PJM grid[11](index=11&type=chunk) - Under the expanded PPA, Talen expects to provide AWS with up to **1,920 MWs** of power through 2042, with options to extend. This long-term transaction will significantly decrease Talen's market risk and minimize its reliance on the Federal nuclear production tax credit[12](index=12&type=chunk) [Freedom and Guernsey Acquisitions](index=2&type=section&id=freedom-and-guernsey-acquisitions) Talen agreed to acquire Freedom and Guernsey power plants for **$3.5 billion**, expected to be immediately accretive to free cash flow per share and close in **Q4 2025** - On July 17, 2025, Talen entered into definitive agreements to acquire Freedom Energy Center (Pennsylvania) and Guernsey Power Station (Ohio), both baseload combined-cycle gas-fired plants located within the PJM power market[13](index=13&type=chunk) - The net acquisition price is **$3.5 billion** (after estimated tax benefits), or approximately **$3.8 billion** gross, reflecting an attractive acquisition multiple of **6.7x 2026 EV/EBITDA**[14](index=14&type=chunk) - The transaction is expected to be immediately accretive to free cash flow per share by **over 40%** in 2026, and **over 50%** from 2027 through 2029. Talen expects to issue approximately **$3.8 billion** in new debt to fund the acquisitions and refinance target debt[14](index=14&type=chunk)[15](index=15&type=chunk) - Both acquisitions are expected to close in the **fourth quarter 2025**, subject to customary closing conditions and regulatory approvals[16](index=16&type=chunk) [PJM Capacity Auction Results](index=3&type=section&id=pjm-capacity-auction-results) Talen cleared **6,702 MWs** in the 2026/2027 PJM auction at **$329.17/MWd**, projected to generate approximately **$805 million** in capacity revenues - Talen cleared **6,702 MWs** in the 2026/2027 PJM BRA at a price of **$329.17/MWd**[18](index=18&type=chunk) - This equates to approximately **$805 million** in capacity revenues for the 2026/2027 PJM Capacity Year (excluding potential impacts from Freedom and Guernsey transactions)[18](index=18&type=chunk) - The 2027/2028 PJM BRA is scheduled for December 2025[18](index=18&type=chunk) [Index Inclusion](index=3&type=section&id=index-inclusion) Talen was added to various Russell indices in Q2 2025 and other major indices since September 2024, potentially increasing stock demand - During the second quarter 2025, Talen was added to various Russell indices[19](index=19&type=chunk) - Since September 2024, Talen has been added to the S&P Total Market Index, S&P Completion Index, CRSP Total Market Index, CRSP Small Cap Index and MSCI USA Small Cap Index[19](index=19&type=chunk) [Financial Position and Outlook](index=2&type=section&id=financial-position-and-outlook) Presents Talen Energy's current liquidity, leverage targets, hedging strategy, and reaffirmed financial guidance for 2025 [Balance Sheet and Liquidity](index=3&type=section&id=balance-sheet-and-liquidity) As of August 4, 2025, Talen reported **$861 million** liquidity, committed to **below 3.5x** net leverage by year-end 2026, with a projected ratio of **2.7x** - As of August 4, 2025, Talen had ample total available liquidity of approximately **$861 million**, comprised of **$161 million** of unrestricted cash and **$700 million** of available capacity under the revolving credit facility[20](index=20&type=chunk) - The company is committed to net leverage targets **below 3.5x** net debt-to-Adjusted EBITDA following the post-acquisition deleveraging period and intends to be **below 3.5x** net leverage by year-end 2026[20](index=20&type=chunk) - The projected net leverage ratio, utilizing the 2025E Adjusted EBITDA midpoint and net debt balance as of August 4, 2025, is approximately **2.7x**[20](index=20&type=chunk) [Hedging Activities](index=3&type=section&id=hedging-activities) Talen's hedging program secured **100%** of 2025, **66%** of 2026, and **33%** of 2027 expected generation volumes, aiming for cash flow stability | Year | Expected Generation Volumes Hedged (as of June 30, 2025, including Nuclear PTC) | | :--- | :--------------------------------------------------------------------------------- | | 2025 | **~100%** | | 2026 | **66%** | | 2027 | **33%** | - The Company's hedging program is a key component of our comprehensive risk policy and supports the objective of increasing cash flow stability while maintaining upside optionality[21](index=21&type=chunk) [2025 Guidance](index=2&type=section&id=2025-guidance) Talen Energy reaffirmed its 2025 guidance, providing expected ranges for Adjusted EBITDA and Adjusted Free Cash Flow | (Millions of Dollars) | 2025E Low | 2025E High | | :-------------------- | :-------- | :--------- | | Adjusted EBITDA | $975 | $1,125 | | Adjusted Free Cash Flow | $450 | $540 | [Company Information](index=3&type=section&id=company-information) Offers an overview of Talen Energy's business, contact details for investor relations, and a standard disclosure on forward-looking statements [About Talen Energy](index=3&type=section&id=about-talen-energy) Talen Energy is a leading independent power producer operating approximately **10.5 gigawatts** of power infrastructure, positioned to serve AI data centers - Talen Energy (NASDAQ: TLN) is a leading independent power producer and energy infrastructure company dedicated to powering the future[23](index=23&type=chunk) - We own and operate approximately **10.5 gigawatts** of power infrastructure in the United States, including **2.2 gigawatts** of nuclear power and a significant dispatchable fossil fleet[23](index=23&type=chunk) - Talen is well-positioned to serve the growing digital infrastructure revolution, as artificial intelligence data centers increasingly demand more reliable, clean power[23](index=23&type=chunk) [Investor Relations & Media Contacts](index=3&type=section&id=investor-relations-media-contacts) This section provides contact details for investor relations and media inquiries - Investor Relations contact: Sergio Castro, Vice President & Treasurer, InvestorRelations@talenenergy.com[24](index=24&type=chunk) - Media contact: Taryne Williams, Director, Corporate Communications, Taryne.Williams@talenenergy.com[24](index=24&type=chunk) [Forward-Looking Statements](index=4&type=section&id=forward-looking-statements) This standard disclosure highlights that the communication contains forward-looking statements subject to substantial risks and uncertainties - This communication contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties[25](index=25&type=chunk) - Forward-looking statements address future events and conditions concerning, among other things, proposed acquisitions, financing, capital expenditures, earnings, litigation, regulatory matters, hedging, liquidity, and capital resources[25](index=25&type=chunk) - All forward-looking statements include assumptions that may cause actual results to differ materially from expectations and are subject to numerous factors that present considerable risks and uncertainties[25](index=25&type=chunk) [Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=condensed-consolidated-financial-statements-unaudited) Contains the unaudited condensed consolidated statements of operations, balance sheets, and cash flows for specified periods [Statements of Operations](index=5&type=section&id=statements-of-operations) This section presents the unaudited condensed consolidated statements of operations, detailing revenues, expenses, and net income (loss) | (Millions of Dollars, except share data) | 2025 (3 Months) | 2024 (3 Months) | 2025 (6 Months) | 2024 (6 Months) | | :--------------------------------------- | :-------------- | :-------------- | :-------------- | :-------------- | | Capacity revenues | $88 | $46 | $137 | $91 | | Energy and other revenues | $366 | $367 | $948 | $939 | | Unrealized gain (loss) on derivative instruments | $176 | $76 | $(65) | $(32) | | **Operating Revenues** | **$630** | **$489** | **$1,020** | **$998** | | Fuel and energy purchases | $(150) | $(163) | $(418) | $(313) | | Nuclear fuel amortization | $(18) | $(28) | $(44) | $(63) | | Unrealized gain (loss) on derivative instruments | $(84) | $15 | $(25) | $(12) | | **Energy Expenses** | **$(252)** | **$(176)** | **$(487)** | **$(388)** | | Operation, maintenance and development | $(192) | $(164) | $(338) | $(318) | | General and administrative | $(41) | $(40) | $(75) | $(83) | | Depreciation, amortization and accretion | $(70) | $(75) | $(144) | $(150) | | Other operating income (expense), net | $(9) | $(7) | $(16) | $(7) | | **Operating Income (Loss)** | **$66** | **$27** | **$(40)** | **$52** | | Nuclear decommissioning trust funds gain (loss), net | $80 | $27 | $68 | $102 | | Interest expense and other finance charges | $(62) | $(62) | $(136) | $(121) | | Gain (loss) on sale of assets, net | $9 | $561 | $11 | $885 | | Other non-operating income (expense), net | $4 | $17 | $7 | $40 | | **Income (Loss) Before Income Taxes** | **$97** | **$570** | **$(90)** | **$958** | | Income tax benefit (expense) | $(25) | $(112) | $27 | $(181) | | **Net Income (Loss)** | **$72** | **$458** | **$(63)** | **$777** | | Less: Net income (loss) attributable to noncontrolling interest | — | $4 | — | $29 | | **Net Income (Loss) Attributable to Stockholders** | **$72** | **$454** | **$(63)** | **$748** | | Net Income (Loss) Attributable to Stockholders - Basic | $1.58 | $7.90 | $(1.38) | $12.87 | | Net Income (Loss) Attributable to Stockholders - Diluted | $1.50 | $7.60 | $(1.38) | $12.41 | | Weighted-Average Number of Common Shares Outstanding - Basic (in thousands) | 45,554 | 57,434 | 45,699 | 58,119 | | Weighted-Average Number of Common Shares Outstanding - Diluted (in thousands) | 47,905 | 59,775 | 45,699 | 60,269 | [Balance Sheets](index=6&type=section&id=balance-sheets) This section presents the unaudited condensed consolidated balance sheets, providing a snapshot of assets, liabilities, and equity | (Millions of Dollars, except share data) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | **Assets** | | | | Cash and cash equivalents | $122 | $328 | | Restricted cash and cash equivalents | $13 | $37 | | Accounts receivable | $226 | $123 | | Inventory, net | $224 | $302 | | Derivative instruments | $80 | $66 | | Other current assets | $165 | $184 | | **Total current assets** | **$830** | **$1,040** | | Property, plant and equipment, net | $3,089 | $3,154 | | Nuclear decommissioning trust funds | $1,790 | $1,724 | | Derivative instruments | — | $5 | | Other noncurrent assets | $118 | $183 | | **Total Assets** | **$5,827** | **$6,106** | | **Liabilities and Equity** | | | | Revolving credit facilities | $70 | — | | Long-term debt, due within one year | $17 | $17 | | Accrued interest | $30 | $18 | | Accounts payable and other accrued liabilities | $226 | $266 | | Derivative instruments | $32 | — | | Other current liabilities | $77 | $154 | | **Total current liabilities** | **$452** | **$455** | | Long-term debt | $2,972 | $2,987 | | Derivative instruments | $62 | $7 | | Postretirement benefit obligations | $282 | $305 | | Asset retirement obligations and accrued environmental costs | $478 | $468 | | Deferred income taxes | $297 | $362 | | Other noncurrent liabilities | $38 | $135 | | **Total Liabilities** | **$4,581** | **$4,719** | | **Stockholders' Equity** | | | | Common stock | — | — | | Additional paid-in capital | $1,711 | $1,725 | | Accumulated retained earnings (deficit) | $(456) | $(326) | | Accumulated other comprehensive income (loss) | $(9) | $(12) | | **Total Stockholders' Equity** | **$1,246** | **$1,387** | | **Total Liabilities and Stockholders' Equity** | **$5,827** | **$6,106** | [Statements of Cash Flows](index=7&type=section&id=statements-of-cash-flows) This section provides the unaudited condensed consolidated statements of cash flows, detailing cash from operating, investing, and financing activities | (Millions of Dollars) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :----------------------------- | :----------------------------- | | **Operating Activities** | | | | Net Income (Loss) | $(63) | $777 | | Non-cash reconciliation adjustments: | | | | Depreciation, amortization and accretion | $141 | $144 | | Unrealized (gains) losses on derivative instruments | $103 | $36 | | Deferred income taxes | $(66) | $94 | | Nuclear fuel amortization | $44 | $63 | | Nuclear decommissioning trust funds (gain) loss, net (excluding interest and fees) | $(44) | $(80) | | (Gain) loss on AWS Data Campus Sale and ERCOT Sale | — | $(886) | | Other | $34 | $(58) | | Changes in assets and liabilities: | | | | Accounts receivable | $(103) | $(14) | | Inventory, net | $78 | $90 | | Other assets | $15 | $34 | | Accounts payable and accrued liabilities | $(57) | $(114) | | Accrued interest | $12 | $(1) | | Collateral received (posted), net | $(58) | $35 | | Other liabilities | $(101) | $30 | | **Net cash provided by (used in) operating activities** | **$(65)** | **$150** | | **Investing Activities** | | | | Nuclear decommissioning trust funds investment purchases | $(1,201) | $(1,110) | | Nuclear decommissioning trust funds investment sale proceeds | $1,186 | $1,095 | | Nuclear fuel expenditures | $(50) | $(44) | | Property, plant and equipment expenditures | $(51) | $(45) | | Proceeds from AWS Data Campus Sale and ERCOT Sale | — | $1,089 | | Other | $2 | $(6) | | **Net cash provided by (used in) investing activities** | **$(114)** | **$979** | | **Financing Activities** | | | | Share repurchases | $(103) | $(654) | | Revolving credit facility borrowings | $75 | — | | Revolving credit facility repayments | $(5) | — | | Debt repayments | $(9) | — | | Deferred financing costs | $(9) | — | | Cumulus Digital TLF repayment | — | $(182) | | Repurchase of noncontrolling interest | — | $(39) | | Cash settlement of restricted stock units | — | $(28) | | Other | — | $(12) | | **Net cash provided by (used in) financing activities** | **$(51)** | **$(915)** | | Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents | $(230) | $214 | | Beginning of period cash and cash equivalents and restricted cash and cash equivalents | $365 | $901 | | End of period cash and cash equivalents and restricted cash and cash equivalents | $135 | $1,115 | [Non-GAAP Financial Measures](index=8&type=section&id=non-gaap-financial-measures) Explains and reconciles non-GAAP financial measures, including Adjusted EBITDA and Adjusted Free Cash Flow, for historical periods and 2025 guidance [Explanation of Non-GAAP Measures](index=8&type=section&id=explanation-of-non-gaap-measures) This section defines and explains Adjusted EBITDA and Adjusted Free Cash Flow, outlining their purpose, computation, and limitations - Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures used to compare operating performance, plan forecasts, evaluate results, and communicate financial performance to stakeholders[34](index=34&type=chunk)[35](index=35&type=chunk)[38](index=38&type=chunk) - Adjusted EBITDA is computed as net income (loss) adjusted for nonrecurring charges/gains, non-cash items, unusual market events, depreciation, amortization, mark-to-market gains/losses, NDT gains/losses, asset sales, impairments, interest expense, income taxes, legal settlements, development expenses, noncontrolling interests, and other adjustments[36](index=36&type=chunk) - Adjusted Free Cash Flow is computed as Adjusted EBITDA reduced by capital expenditures (excluding development, growth, and conversion capex), cash payments for interest and finance charges, cash payments for income taxes (with specific exclusions), and pension contributions[38](index=38&type=chunk) [Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation (Historical)](index=9&type=section&id=adjusted-ebitda-adjusted-free-cash-flow-reconciliation-historical) This section provides a detailed reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA and Adjusted Free Cash Flow for historical periods | (Millions of Dollars) | 2025 (3 Months) | 2024 (3 Months) | 2025 (6 Months) | 2024 (6 Months) | | :------------------------------------------ | :-------------- | :-------------- | :-------------- | :-------------- | | Net Income (Loss) | $72 | $458 | $(63) | $777 | | Adjustments: | | | | | | Interest expense and other finance charges | $62 | $62 | $136 | $121 | | Income tax (benefit) expense | $25 | $112 | $(27) | $181 | | Depreciation, amortization and accretion | $70 | $75 | $144 | $150 | | Nuclear fuel amortization | $18 | $28 | $44 | $63 | | Unrealized (gain) loss on commodity derivative contracts | $(92) | $(91) | $90 | $44 | | Nuclear decommissioning trust funds (gain) loss, net | $(80) | $(27) | $(68) | $(102) | | Stock-based and other long-term incentive compensation expense | $18 | $14 | $31 | $32 | | (Gain) loss on asset sales, net | $(9) | $(561) | $(11) | $(885) | | Operational and other restructuring activities | — | $19 | $9 | $21 | | Noncontrolling interest | — | $(7) | — | $(18) | | Other | $6 | $5 | $5 | $(8) | | **Total Adjusted EBITDA** | **$90** | **$87** | **$290** | **$376** | | Capital expenditures, net | $(35) | $(21) | $(99) | $(80) | | Interest and finance charge payments | $(84) | $(91) | $(107) | $(125) | | Income taxes | $(42) | $(2) | $(51) | $(2) | | Pension contributions | $(7) | $(2) | $(24) | $(4) | | **Total Adjusted Free Cash Flow** | **$(78)** | **$(29)** | **$9** | **$165** | [Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation (2025 Guidance)](index=10&type=section&id=adjusted-ebitda-adjusted-free-cash-flow-reconciliation-2025-guidance) This section provides a reconciliation of 2025 guidance for Net Income (Loss) to projected Adjusted EBITDA and Adjusted Free Cash Flow ranges | (Millions of Dollars) | 2025E Low | 2025E High | | :------------------------------------------ | :-------- | :--------- | | Net Income (Loss) | $205 | $325 | | Adjustments: | | | | Interest expense and other finance charges | $235 | $245 | | Income tax (benefit) expense | $60 | $80 | | Depreciation, amortization and accretion | $295 | $295 | | Nuclear fuel amortization | $105 | $105 | | Unrealized (gain) loss on commodity derivative contracts | $75 | $75 | | **Adjusted EBITDA** | **$975** | **$1,125** | | Capital expenditures, net | $(195) | $(205) | | Interest and finance charge payments | $(220) | $(230) | | Income taxes | $(40) | $(60) | | Pension contributions | $(70) | $(90) | | **Adjusted Free Cash Flow** | **$450** | **$540** |

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-40284 SOLID POWER, INC. (Exact name of registrant as specified in its charter) Delaware 86-1888095 (State ...

RXO Second-Quarter 2025 Financial Results [Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) RXO achieved 1% brokerage volume growth, a 45% LTL volume surge, and 17% Last Mile stop growth in Q2 2025, improving cash sequentially - Brokerage business outperformed the market, with volume growing **1% year-over-year**[2](index=2&type=chunk) - Less-than-truckload (LTL) volume was a key driver, growing **45% year-over-year**[2](index=2&type=chunk)[6](index=6&type=chunk) - Last Mile segment achieved **17% year-over-year stop growth**, its fourth consecutive quarter of double-digit growth[2](index=2&type=chunk)[6](index=6&type=chunk) - The company is realizing early benefits from its newly combined carrier and coverage operations, achieving a Brokerage gross margin of **14.4%**[2](index=2&type=chunk)[6](index=6&type=chunk) - Cash performance was strong, with the cash balance increasing sequentially from Q1 2025[2](index=2&type=chunk)[6](index=6&type=chunk) [Companywide Financial Performance](index=1&type=section&id=Companywide%20Financial%20Performance) RXO's Q2 2025 revenue grew significantly, reporting a GAAP net loss, but achieving increased adjusted net income and adjusted EBITDA Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenue ($) | $1.4 billion | $930 million | | Gross Margin | 17.8% | 19.0% | | GAAP Net Loss ($) | $(9) million | $(7) million | | Adjusted Net Income ($) | $7 million | $4 million | | Adjusted EBITDA ($) | $38 million | $28 million | | Adjusted EBITDA Margin | 2.7% | 3.0% | | GAAP Diluted Loss Per Share ($) | $(0.05) | $(0.06) | | Adjusted Diluted EPS ($) | $0.04 | $0.03 | - The Q2 2025 GAAP net loss included **$10 million** in transaction, integration, restructuring, and other costs[4](index=4&type=chunk) - Adjustments for transaction, integration, restructuring costs, and amortization of intangibles impacted GAAP earnings per share by **$0.09**, net of tax[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) RXO's Q2 2025 segment performance was mixed, with Brokerage volume up 1% due to LTL, and Complementary Services achieving 17% Last Mile stop growth [Brokerage](index=2&type=section&id=Brokerage) The Brokerage segment's volume grew year-over-year, fueled by LTL volume offsetting a full truckload decline, achieving a solid gross margin Brokerage Segment Performance (Q2 2025 vs Q2 2024) | Metric | Change | | :--- | :--- | | Overall Volume | +1% YoY | | Less-than-truckload Volume | +45% YoY | | Full Truckload Volume | -12% YoY | - Brokerage gross margin was **14.4%** in the second quarter[7](index=7&type=chunk) [Complementary Services](index=2&type=section&id=Complementary%20Services) Complementary Services saw Last Mile stops grow significantly, with Managed Transportation providing synergy loads to Brokerage, and achieving a strong gross margin - Last Mile stops grew by **17% year-over-year**[8](index=8&type=chunk) - Managed Transportation continued to increase synergy loads provided to the Brokerage segment[8](index=8&type=chunk) - Complementary services gross margin was **22.8%** for the quarter[8](index=8&type=chunk) [Third-Quarter Outlook](index=2&type=section&id=Third-Quarter%20Outlook) RXO anticipates Q3 2025 adjusted EBITDA between $33 million and $43 million, with flat brokerage volume growth and a projected gross margin - Q3 2025 adjusted EBITDA is expected to be between **$33 million** and **$43 million**[9](index=9&type=chunk) - In Brokerage, Q3 2025 overall volume growth is expected to be approximately **flat year-over-year**[9](index=9&type=chunk) - Brokerage gross margin for Q3 2025 is projected to be between **13.5%** and **15.0%**[9](index=9&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements detail RXO's Q2 2025 net loss, total assets, and net cash provided by operating activities for the first six months [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, RXO generated $1.419 billion in revenue, but increased costs led to a net loss of $9 million Q2 Statement of Operations Highlights (in millions) | Account | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | Revenue | $1,419 | $930 | | Cost of transportation and services | $1,118 | $700 | | Sales, general and administrative expense | $214 | $154 | | Operating income (loss) | $0 | $0 | | Net loss | $(9) | $(7) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, RXO's balance sheet shows decreased total assets, with significant accounts receivable and goodwill, alongside total liabilities and equity Balance Sheet Summary (in millions) | Account | June 30, 2025 ($) | Dec 31, 2024 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | $18 | $35 | | Total current assets | $1,184 | $1,339 | | Total assets | $3,201 | $3,414 | | Total current liabilities | $880 | $1,065 | | Total liabilities | $1,613 | $1,802 | | Total equity | $1,588 | $1,612 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, net cash from operating activities improved, while investing activities used cash and financing activities provided a net cash inflow Six Months Ended June 30 Cash Flow Summary (in millions) | Activity | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Net cash provided by operating activities | $21 | $2 | | Net cash used in investing activities | $(43) | $(22) | | Net cash provided by financing activities | $4 | $22 | | Net (decrease) in cash | $(16) | $2 | [Supplemental Financial Information](index=8&type=section&id=Supplemental%20Financial%20Information) This section provides detailed breakdowns of revenue by service, GAAP to non-GAAP reconciliations, and gross margin analysis by segment, offering deeper operational insights [Revenue by Service Offering](index=8&type=section&id=Revenue%20by%20Service%20Offering) In Q2 2025, Truck Brokerage was the largest revenue contributor, with Last Mile revenue growing and Managed Transportation revenue seeing a slight decline Q2 Revenue by Service (in millions) | Service | Q2 2025 ($) | Q2 2024 ($) | | :--- | :--- | :--- | | Truck brokerage | $1,025 | $543 | | Last mile | $315 | $265 | | Managed transportation | $142 | $156 | | **Total (after eliminations)** | **$1,419** | **$930** | [Reconciliation of Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company reconciles its GAAP net loss to non-GAAP measures, adjusting Q2 2025's GAAP net loss to Adjusted EBITDA and Adjusted Net Income Q2 2025 Reconciliation of Net Loss to Adjusted EBITDA (in millions) | Line Item | Amount ($) | | :--- | :--- | | Net loss | $(9) | | Interest expense, net | $8 | | Income tax benefit | $(1) | | Depreciation and amortization expense | $30 | | Transaction and integration costs | $7 | | Restructuring and other costs | $3 | | **Adjusted EBITDA** | **$38** | Q2 2025 Reconciliation of Net Loss to Adjusted Net Income (in millions) | Line Item | Amount ($) | | :--- | :--- | | Net loss | $(9) | | Amortization of intangible assets | $11 | | Transaction and integration costs | $7 | | Restructuring and other costs | $3 | | Income tax associated with adjustments | $(5) | | **Adjusted net income** | **$7** | [Gross Margin Analysis](index=11&type=section&id=Gross%20Margin%20Analysis) RXO's overall gross margin decreased in Q2 2025, with Truck Brokerage at 14.4% and Complementary Services achieving a higher 22.8% gross margin Q2 Gross Margin as a Percentage of Revenue | Segment | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Truck brokerage | 14.4% | 14.7% | | Complementary services | 22.8% | 23.0% | | **Total Company** | **17.8%** | **19.0%** | [Important Disclosures](index=3&type=section&id=Important%20Disclosures) This section provides legal and financial disclosures, explaining non-GAAP measures and including a forward-looking statements disclaimer outlining risks [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) RXO explains its use of non-GAAP financial measures like Adjusted EBITDA and Adjusted EPS to analyze ongoing business operations by excluding non-core items - The company uses non-GAAP measures like adjusted EBITDA and adjusted EPS to facilitate analysis of ongoing business operations and assist with comparisons to prior periods[15](index=15&type=chunk) - Adjustments include transaction and integration costs, restructuring costs, and amortization of acquisition-related intangible assets[16](index=16&type=chunk)[17](index=17&type=chunk) - A reconciliation of the forward-looking Q3 2025 adjusted EBITDA to the corresponding GAAP measure is not available without unreasonable effort due to the variability of reconciling items[18](index=18&type=chunk) [Forward-looking Statements](index=3&type=section&id=Forward-looking%20Statements) This section serves as a legal safe harbor, cautioning that non-historical statements are forward-looking and subject to numerous risk factors - The release contains forward-looking statements regarding outlook, integration with Coyote Logistics, and cash synergies, which are based on current assumptions and are not guarantees of future performance[19](index=19&type=chunk) - Key risks that could affect future results include competition, pricing pressures, economic conditions, fuel price fluctuations, and the ability to successfully integrate the Coyote Logistics acquisition[20](index=20&type=chunk)

Financial Performance Overview [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) First Advantage reported significant revenue growth in Q2 2025, primarily driven by the acquisition of Sterling Check Corp, with revenues more than doubling to $390.6 million, while GAAP Net Income was minimal at $0.3 million due to substantial acquisition-related expenses, Adjusted EBITDA and Adjusted Diluted EPS showed strong year-over-year growth, reaching $113.9 million and $0.27, respectively Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $390.6 M | $184.5 M | +111.7% | | Net Income | $0.3 M | $1.9 M | -84.2% | | Adjusted EBITDA | $113.9 M | $55.8 M | +104.1% | | Adjusted Diluted EPS | $0.27 | $0.21 | +28.6% | - GAAP Net Income was significantly impacted by **$7.3 million** in expenses and **$41.3 million** in depreciation and amortization related to the Sterling acquisition and integration[5](index=5&type=chunk) - The company generated **$37.3 million** in Cash Flows from Operations, or **$47.7 million** on an adjusted basis after excluding cash costs associated with the Sterling acquisition[5](index=5&type=chunk) [Full Year 2025 Guidance](index=1&type=section&id=Full%20Year%202025%20Guidance) The company reaffirmed its full-year 2025 guidance, signaling confidence in its business outlook and the expected benefits from realized synergies following the Sterling acquisition, with management expecting revenues to be between $1.5 billion and $1.6 billion for the full year Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenues | $1.5 billion – $1.6 billion | | Adjusted EBITDA | $410 million – $450 million | | Adjusted Net Income | $152 million – $182 million | | Adjusted Diluted EPS | $0.86 – $1.03 | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management expressed satisfaction with the solid Q2 financial performance, achieved despite macroeconomic uncertainties, highlighting the seamless integration of the Sterling acquisition, advancement of the FA 5.0 strategy, and strong momentum in international markets and Digital Identity solutions, alongside improvements to capital structure through credit facility repricing and voluntary debt repayments - CEO Scott Staples highlighted the company's resilient business model, consistent go-to-market execution, and progress on the FA 5.0 strategic priorities, including the Sterling integration[6](index=6&type=chunk) - The company is experiencing strong customer interest in its Digital Identity solutions and continued momentum in international markets[6](index=6&type=chunk) - At its recent Investor Day, the company introduced a long-term projected Adjusted Diluted EPS compound annual growth rate (CAGR) of **19% to 25%**[7](index=7&type=chunk) - CFO Steven Marks noted that the company repriced its credit facility in July, reducing the borrowing rate by **50 basis points**, and has made over **$45 million** in voluntary principal debt repayments year-to-date[8](index=8&type=chunk) Condensed Financial Statements [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, the company's balance sheet showed total assets of $3.87 billion, a slight decrease from year-end 2024, with Goodwill and Intangible Assets remaining significant components at $2.14 billion and $0.93 billion, respectively, while total liabilities stood at $2.57 billion, with long-term debt being the largest component Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $502,846 | $475,993 | | Goodwill & Intangibles, net | $3,068,686 | $3,112,476 | | **Total Assets** | **$3,871,212** | **$3,922,893** | | Total Current Liabilities | $253,391 | $250,688 | | Long-term Debt, net | $2,104,285 | $2,121,289 | | **Total Liabilities** | **$2,572,049** | **$2,615,854** | | **Total Equity** | **$1,299,163** | **$1,307,039** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, revenues more than doubled to $390.6 million from $184.5 million in the prior-year period, offset by a corresponding increase in operating expenses, particularly Cost of Services and Depreciation & Amortization, with higher interest expense contributing to a near break-even Net Income of $0.3 million, compared to $1.9 million in Q2 2024 Q2 Statement of Operations Summary (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Revenues** | **$390,633** | **$184,546** | | Total Operating Expenses | $352,896 | $174,643 | | **Income from Operations** | **$37,737** | **$9,903** | | Interest Expense, net | $44,785 | $7,353 | | **Net Income** | **$308** | **$1,861** | | **Diluted Net Income Per Share** | **$0.00** | **$0.01** | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, the company generated $56.8 million in net cash from operating activities, a decrease from $70.4 million in the same period of 2024, while net cash used in investing activities increased to $23.8 million, primarily for capitalized software, and financing activities used $21.1 million, driven by debt repayments Six Months Ended June 30 Cash Flow Summary (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $56,816 | $70,372 | | Net Cash used in Investing Activities | ($23,816) | ($13,812) | | Net Cash (used in) provided by Financing Activities | ($21,107) | $213 | | **Increase in Cash** | **$14,862** | **$55,737** | Reconciliation of Non-GAAP Financial Measures [Reconciliation of Net Income to Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA) The company reconciled its Q2 2025 GAAP Net Income of $0.3 million to a non-GAAP Adjusted EBITDA of $113.9 million, with major adjustments including adding back $61.9 million in depreciation and amortization, $44.8 million in net interest expense, $5.7 million in share-based compensation, and a combined $8.6 million in transaction, integration, and restructuring charges Q2 2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | Amount | | :--- | :--- | | Net Income | $308 | | Interest expense, net | $44,785 | | (Benefit) for income taxes | ($7,610) | | Depreciation and amortization | $61,906 | | Share-based compensation | $5,742 | | Transaction & integration charges | $8,561 | | Other adjustments | $254 | | **Adjusted EBITDA** | **$113,946** | - Transaction and integration charges for Q2 2025 included approximately **$2.3 million** and **$3.7 million**, respectively, related to the Sterling acquisition[34](index=34&type=chunk)[35](index=35&type=chunk) [Reconciliation of Net Income to Adjusted Net Income and EPS](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20and%20EPS) To arrive at non-GAAP Adjusted Net Income of $47.0 million for Q2 2025, the company adjusted its pre-tax loss by excluding items such as $50.9 million in acquisition-related D&A, share-based compensation, and other charges, then applied an effective tax rate of 25.6%, resulting in an Adjusted Diluted EPS of $0.27, compared to a GAAP Diluted EPS of $0.00 Q2 2025 Reconciliation of GAAP EPS to Adjusted Diluted EPS | Description | Per Share Amount | | :--- | :--- | | **Diluted net income per share (GAAP)** | **$0.00** | | Adjustments (net of tax) | $0.27 | | **Adjusted Diluted Earnings Per Share (Non-GAAP)** | **$0.27** | - The most significant adjustment was for acquisition-related depreciation and amortization, which added **$50.9 million** to pre-tax income, or **$0.29** per share before tax effects[36](index=36&type=chunk)[37](index=37&type=chunk) [Reconciliation of Operating Cash Flow](index=10&type=section&id=Reconciliation%20of%20Operating%20Cash%20Flow) The company presented an Adjusted Operating Cash Flow metric to provide insight into liquidity from core operations, where for Q2 2025, GAAP cash flow from operating activities of $37.3 million was adjusted by adding back $10.3 million in cash costs related to the Sterling acquisition and integration, resulting in an Adjusted Operating Cash Flow of $47.7 million Q2 2025 Reconciliation of Operating Cash Flow (in thousands) | Description | Amount | | :--- | :--- | | Cash flows from operating activities (GAAP) | $37,345 | | Add: Cost paid related to Sterling acquisition | $10,345 | | **Adjusted Operating Cash Flow** | **$47,690** | Other Information [Conference Call and Webcast Information](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Information) First Advantage scheduled a conference call and webcast for 8:30 a.m. ET on August 7, 2025, to discuss the second quarter 2025 financial results with investors and analysts - The company will host a conference call to review its Q2 2025 results on August 7, 2025, at **8:30 a.m. ET**[11](index=11&type=chunk)[12](index=12&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) The press release includes forward-looking statements concerning the company's operations and financial performance, cautioning that these statements are subject to numerous risks and uncertainties, including macroeconomic conditions, regulatory changes, data security breaches, and the ability to successfully integrate the Sterling acquisition and realize its expected benefits - The report contains forward-looking statements that are not historical facts and are subject to various risks and uncertainties[14](index=14&type=chunk)[15](index=15&type=chunk) - Key identified risks include negative macroeconomic changes, operating in a highly regulated industry, potential data security breaches, and failure to realize the expected benefits of the Sterling acquisition[15](index=15&type=chunk)[20](index=20&type=chunk) [About First Advantage](index=5&type=section&id=About%20First%20Advantage) First Advantage is a leading global provider of HR technology software and data, with platforms powered by proprietary technology and AI, offering comprehensive employment background screening, digital identity solutions, and verification services to 80,000 organizations in over 200 countries and territories - First Advantage is a leading provider of global software and data in the HR technology industry, serving **80,000 organizations**[25](index=25&type=chunk) - Core services include employment background screening, digital identity solutions, and verification services, enabled by proprietary technology and AI[25](index=25&type=chunk)

Table of Contents ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . Commission File Number: 001-39144 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) DISH Network Corporation (Exact name of registrant as specified in its charter) Nevada 88-0336997 (St ...

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