Financial Performance - Liberty Broadband's operating income for the three months ended September 30, 2025, was a loss of $8 million, compared to a loss of $11 million in the same period of 2024[152]. - Liberty Broadband's share of earnings from its affiliate, Charter, was $295 million for the three months ended September 30, 2025, down from $346 million in the same period of 2024[152]. - The net earnings from continuing operations for Liberty Broadband for the nine months ended September 30, 2025, were $845 million, compared to $523 million for the same period in 2024[152]. - Revenue decreased by $123 million to $13,672 million for the three months ended September 30, 2025, while remaining relatively constant at $41,173 million for the nine months[164]. - Net income for the three months ended September 30, 2025, was $1,316 million, compared to $1,474 million in the prior year[164]. - Operating income decreased by $204 million and $82 million for the three and nine months ended September 30, 2025, respectively[167]. - Consolidated operating loss improved by $3 million for the three months ended September 30, 2025, but declined by $2 million for the nine months compared to the prior year[156]. Investments and Initiatives - Charter added 493,000 mobile lines during the third quarter of 2025, with video losses improving compared to the prior year period[148]. - Charter spent $582 million on its subsidized rural construction initiative in the third quarter of 2025, activating approximately 124,000 subsidized rural passings[150]. - Charter's pricing and packaging strategy launched in September 2024 aims to improve customer results and reduce churn[148]. - Charter's network evolution initiative aims to deliver symmetrical and multi-gigabit speeds across its footprint[150]. Corporate Actions and Changes - The GCI Divestiture was completed on July 14, 2025, resulting in GCI Liberty becoming an independent, publicly traded company[144]. - Liberty Broadband controls 25.01% of the aggregate voting power of Charter, with a merger agreement in place for Charter to acquire Liberty Broadband[134][135]. - The corporate level tax liability from the GCI Divestiture is estimated to be significantly less than $420 million[138]. Cash Flow and Financing Activities - Net cash provided by investing activities was $907 million for the nine months ended September 30, 2025, compared to $212 million in the prior year[180]. - During the nine months ended September 30, 2024, net cash flows used in financing activities included repurchases of approximately $300 million in 3.125% Debentures due 2053 and net repayments of approximately $670 million on the Margin Loan Facility[185]. - The issuance of $860 million in 3.125% Exchangeable Senior Debentures due 2054 partially offset the cash flows used in financing activities[185]. - Net cash flows used in financing activities also included repurchases of Liberty Broadband Series A and Series C common stock totaling $89 million[185]. - A distribution of $150 million received from a former subsidiary partially offset the net cash flows used in financing activities[185]. Debt and Interest Rate Management - As of September 30, 2025, the company has $840 million in variable rate debt with a weighted average interest rate of 5.9% and $965 million in fixed rate debt with a weighted average interest rate of 3.1%[189]. - Projected uses of cash for the remainder of 2025 include approximately $20 million for interest payments on outstanding debt and approximately $3 million for dividends on Liberty Broadband preferred stock[186]. - The company manages interest rate exposure by maintaining a mix of fixed and variable rate debt to protect against interest rate risk[188]. Market Risk and Liquidity - The company is exposed to market risk due to changes in stock prices and interest rates, which could affect fair values, cash flows, and future earnings[187]. - The investment in Charter, an equity method affiliate, is publicly traded and not reflected at fair value in the balance sheet, exposing the company to additional market risk[189]. - Corporate cash and other available sources of liquidity are expected to cover corporate expenses for the foreseeable future[186]. Expenses - Selling, general and administrative expenses increased by $9 million for the three and nine months ended September 30, 2025, compared to the prior year periods[154]. - Stock-based compensation expense decreased by $2 million and $7 million for the three and nine months ended September 30, 2025, respectively[155]. - Other expenses, net decreased by $58 million and $123 million for the three and nine months ended September 30, 2025, respectively[168]. Taxation - The effective income tax rate for the three and nine months ended September 30, 2025, was 0% compared to 21% in the prior year periods[173].

Financial Performance - Sales for Q3 2025 were $680.7 million, a 3% increase from $657.7 million in Q3 2024, driven by higher revenue in Aerospace & Defense (A&D) and Medical sectors [109]. - A&D revenue increased by 26%, Medical revenue increased by 18%, while Advanced Computing & Communication (AC&C) revenue decreased by 20% [113]. - Gross profit margin for Q3 2025 was 10.0%, down from 10.1% in Q3 2024, with cost of sales at 90.0% [115]. - Net income for Q3 2025 was 2.1%, down from 2.3% in Q3 2024, with income before income taxes at 3.0% [115]. - Total net sales for the three months ended September 30, 2025, increased by 3.5% to $680.7 million compared to $657.7 million for the same period in 2024 [1]. - Semiconductor Capital Equipment sales decreased by 1% to $185.2 million for the three months ended September 30, 2025, but increased by 9% to $570.6 million for the nine months ended September 30, 2025 [1]. - Aerospace and Defense sales increased by 26% to $128.7 million for the three months ended September 30, 2025, and by 19% to $376.8 million for the nine months ended September 30, 2025 [1]. - Medical sales increased by 18% to $126.3 million for the three months ended September 30, 2025, and by 2% to $339.5 million for the nine months ended September 30, 2025 [1]. - Advanced Computing and Communications sales decreased by 20% to $88.2 million for the three months ended September 30, 2025, and by 39% to $237.2 million for the nine months ended September 30, 2025 [1]. - Gross profit for the three months ended September 30, 2025, increased by 2% to $67.9 million, while gross profit margin decreased to 10.0% from 10.1% in the same period of 2024 [1]. - Income from operations for the three months ended September 30, 2025, decreased by 16% to $23.7 million compared to $28.1 million for the same period in 2024 [1]. - Net income for the three months ended September 30, 2025, was $14.3 million, or $0.39 per diluted share, a decrease from $15.4 million, or $0.42 per diluted share, for the same period in 2024 [142]. - For the nine months ended September 30, 2025, net income was $18.9 million, or $0.52 per diluted share, down from $44.9 million, or $1.23 per diluted share, for the same period in 2024 [142]. Expenses and Costs - Selling, general and administrative expenses increased to 6.1% of sales in Q3 2025 from 5.5% in Q3 2024 [115]. - Selling, General and Administrative expenses increased to $41.5 million for the three months ended September 30, 2025, from $36.6 million for the same period in 2024 [1]. - Interest expense decreased to $4.4 million for the three months ended September 30, 2025, from $6.6 million for the same period in 2024 [1]. - Income tax expense for the three months ended September 30, 2025, was $6.3 million, representing a 30.7% effective tax rate, compared to $5.0 million and a 24.6% effective tax rate for the same period in 2024 [1]. Cash Flow and Investments - Cash provided from operating activities was $65.3 million during the nine months ended September 30, 2025, primarily driven by $18.9 million of net income and $35.6 million of depreciation and amortization [145]. - Cash used in investing activities totaled $22.8 million during the nine months ended September 30, 2025, mainly for capital expenditures of $25.2 million [147]. - Cash used in financing activities was $92.9 million during the nine months ended September 30, 2025, including $26.0 million for share repurchases and $18.4 million for dividends [148]. - As of September 30, 2025, cash, cash equivalents, and restricted cash totaled $286.1 million, with $249.2 million held outside the United States [143]. - The company had $475.6 million available for borrowings under the Credit Agreement as of September 30, 2025 [151]. Future Outlook and Strategic Initiatives - The company expects restructuring activities at its Fremont, California site and Guadalajara, Mexico facility to be fully completed in 2025 [99]. - The company continues to monitor economic uncertainties, including inflation and geopolitical instability, which may impact customer demand [112]. - The company anticipates capital expenditures of approximately $60 million to $70 million over the next 12 months to increase production capacity [151]. - The company intends to continue paying quarterly dividends, with cash dividends paid totaling $18.4 million during the nine months ended September 30, 2025 [152][153]. - The company repurchased 0.7 million shares for an aggregate of $26.0 million at an average price of $38.06 per share during the nine months ended September 30, 2025 [155]. Operational Efficiency - The company utilizes enterprise resource planning (ERP) systems and lean/six sigma methodologies to enhance procurement and manufacturing efficiency [106]. - The company has experienced improved availability of electronic components, except for older technologies where capacity constraints remain [110].

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 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 Delaware 85-3087759 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 1220 N. Price Road, Suite 2 Olivette, Missouri 63132 (314) 200 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 September 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 1-5231 McDONALD'S CORPORATION (Exact Name of Registrant as Specified in Its Charter) (State or Other Jurisdiction of Incorp ...

Financial Performance - Software revenue for Q2 2024 was $5,022,000, an increase of 13.8% from $4,413,000 in Q2 2023[239] - Total revenue for Q2 2024 reached $12,938,000, reflecting a 27.1% increase from $10,178,000 in Q2 2023[239] - The net loss for Q2 2024 was $16,937,000, a significant improvement of 45.1% compared to a net loss of $30,876,000 in Q2 2023[239] - Adjusted EBITDA for Q2 2024 was $(9,908,000), showing a 50.7% improvement from $(20,112,000) in Q2 2023[239] - For the first half of 2024, software revenue totaled $10,059,000, up 19.9% from $8,386,000 in the first half of 2023[239] - Total revenue for the first half of 2024 was $24,973,000, an increase of 17.1% from $21,328,000 in the first half of 2023[239] - The net loss for the first half of 2024 was $30,574,000, a 52.1% improvement from $63,800,000 in the first half of 2023[239] - Total revenue for the three months ended June 30, 2024, increased by $2.8 million (27.1%) to $12.9 million compared to the same period in 2023, driven by increases in hardware, software, and professional services revenue[265] - For the six months ended June 30, 2024, total revenue increased by $3.6 million (17.1%) to $25.0 million, with software revenue increasing by $1.7 million (19.9%) and professional services revenue increasing by $1.4 million (40.6%) compared to the same period in 2023[275] Expenses and Cost Management - Total operating expenses decreased by $11.5 million (32.7%) to $23.7 million for the three months ended June 30, 2024, primarily due to reductions in research and development, sales and marketing, and general and administrative expenses[265] - Research and development expenses decreased by $5.7 million (66.1%) to $2.9 million, attributed to a $4.8 million decrease in personnel-related expenses[270] - Sales and marketing expenses decreased by $2.1 million (48.6%) to $2.3 million, mainly due to a reduction in personnel-related expenses and professional fees[271] - General and administrative expenses decreased by $3.8 million (18.5%) to $16.7 million, primarily due to a decrease related to the Investigation and Restatement[272] - Research and development expenses decreased by $10.6 million for the six months ended June 30, 2024, mainly from an $8.6 million reduction in personnel-related expenses[279] - Sales and marketing expenses decreased by $4.2 million for the six months ended June 30, 2024, driven by a $2.4 million decrease in personnel-related expenses[280] - General and administrative expenses decreased by $7.1 million for the six months ended June 30, 2024, largely due to a $6.3 million decrease in investigation and restatement costs[281] - Cost of revenue decreased by $7.3 million for the six months ended June 30, 2024, primarily due to an $8.6 million decrease in hardware costs[278] Cash Flow and Financial Position - As of June 30, 2024, the company's unrestricted cash and cash equivalents were approximately $110.0 million[286] - Net cash used in operating activities for the six months ended June 30, 2024 was $44.5 million, a decrease of $0.8 million compared to the same period in 2023[296] - Net cash provided by investing activities increased by $3.9 million for the six months ended June 30, 2024, primarily due to a decrease in purchases of available-for-sale securities[297] - The company repaid $22.0 million in promissory notes in April 2024, which were issued in connection with the HDW Acquisition[290] - The company expects to use its current cash and cash equivalents and available-for-sale securities to fund operational cash requirements for at least 12 months from the date of the report[292] Strategic Initiatives - The company completed the merger with HelloTech on July 1, 2024, enhancing its service offerings in the multifamily building sector[236] - The ongoing expansion of the DOOR Platform aims to integrate broader smart home solutions, including sensors and thermostats, to create more connected buildings[231] - The company is focused on improving its financial reporting and internal controls following an investigation into its key performance indicators and revenue recognition practices[235] Shareholder Information - The weighted average shares outstanding for basic and diluted calculations increased to 156,386,470 from 144,609,513 year-over-year[265] - Total other income, net increased by $0.4 million (81.7%) to $0.9 million, driven by a favorable change in the fair value of warrant liability[274] - Total other income, net increased by $0.5 million for the six months ended June 30, 2024, primarily from a $0.3 million favorable change in the fair value of private placement warrants[283]

Housing Market Trends - Single-family housing starts decreased by approximately 4% and 5% for the three and nine months ended September 30, 2025, compared to the same periods in 2024, while multi-family housing starts increased by approximately 24% and 20% respectively [82]. - Total housing starts for the three months ended September 30, 2025, were 365,000, compared to 353,000 for the same period in 2024, indicating an increase of approximately 3.4% [95]. Financial Performance - Adjusted EBITDA for the three months ended September 30, 2025, was $82 million, compared to $153 million for the same period in 2024, reflecting a decrease of approximately 46.4% [91]. - Adjusted Diluted EPS for the three months ended September 30, 2025, was $0.36, down from $1.22 in the same period of 2024, representing a decline of approximately 70.5% [91]. - The Siding segment's Adjusted EBITDA for the three months ended September 30, 2025, was $117 million, slightly down from $123 million in the same period of 2024 [91]. - The OSB segment reported an Adjusted EBITDA of $(27) million for the three months ended September 30, 2025, compared to $33 million in the same period of 2024, indicating a significant decline [91]. - For the three months ended September 30, 2025, total sales volume increased to 496 MMSF from 470 MMSF in the same period of 2024, reflecting a growth of 5.5% [96]. - The Siding segment net sales for the three months ended September 30, 2025, were $443 million, a 5% increase from $420 million in 2024, while Adjusted EBITDA decreased by 4% to $117 million [100]. - OSB segment net sales for the three months ended September 30, 2025, were $253 million, a decrease of 29% from $179 million in 2024, with Adjusted EBITDA dropping by 182% to $(27) million [101]. - LPSA segment net sales for the three months ended September 30, 2025, were $47 million, down 17% from $39 million in 2024, with Adjusted EBITDA decreasing by 50% to $5 million [105]. Cost and Expense Management - In the nine months ended September 30, 2025, the cost of sales in the Siding segment was negatively impacted by $7 million due to new or increased tariffs, with potential incremental costs estimated at approximately $8 million for 2025 [84]. - Selling, general, and administrative expenses increased to $95 million for the three months ended September 30, 2025, compared to $75 million in 2024, primarily due to higher employee compensation [108]. - The company has experienced increases in material prices and supply disruptions, which are being addressed to meet market demands [83]. - The company is actively exploring opportunities to mitigate increased costs from tariffs and trade policy changes, but the effectiveness of these strategies remains uncertain [84]. Cash Flow and Investments - Cash provided by operations for the nine months ended September 30, 2025, was $315 million, down from $500 million in 2024, attributed to lower net income and changes in working capital [114]. - Cash used in investing activities increased to $216 million for the nine months ended September 30, 2025, compared to $122 million in 2024, mainly due to higher spending on growth and maintenance projects [115]. - Capital expenditures in 2025 are expected to be approximately $315 million, funded through cash on hand, cash generated from operations, and available borrowing [116]. - Cash used in financing activities for the nine months ended September 30, 2025, was $124 million, including $61 million for share repurchases and $58 million in cash dividends [117]. - For the nine months ended September 30, 2024, cash used in financing activities was $252 million, with $188 million allocated for share repurchases and $56 million for dividends [118]. Credit and Borrowing - The Amended Credit Agreement increased the credit facility from $550 million to $750 million and extended the maturity date to March 26, 2032 [119]. - As of September 30, 2025, there were no outstanding borrowings under the Amended Credit Facility, and the company was in compliance with all financial covenants [120]. - As of September 30, 2025, the company had no outstanding borrowings under its Amended Credit Facility and no derivative or hedging arrangements for interest rate changes [131]. Impairment Charges - The company recorded $13 million in non-cash, pre-tax impairment charges during Q3 2025 related to equipment not utilized in future operations [125]. - In Q2 2025, the company recorded $17 million in non-cash, pre-tax impairment charges, including $11 million for acquired equipment not utilized [126]. Foreign Currency Exposure - The company is exposed to fluctuations in foreign currency exchange rates, particularly with the Canadian dollar, Brazilian real, Chilean peso, and Argentine peso [129]. Production and Efficiency - The overall equipment efficiency (OEE) for the Siding segment remained stable at 77% for both 2025 and 2024, while OSB improved to 80% from 78% in 2024 [97]. - The most significant commodity product sold is OSB, with no material changes to production capacity and price sensitivity disclosed [130].

Revenue Performance - Total operating revenue decreased by 5% to $934 million in Q3 2025 from $987 million in Q3 2024[81] - Total operating revenue decreased by 7% to $2.76 billion in 2025 from $2.97 billion in 2024[97] - Intermodal and Transportation Solutions (ITS) revenue increased slightly to $561 million, while Logistics revenue decreased by 13% to $402 million[82][83] - Intermodal and Transportation Solutions revenue decreased by 3% to $1.62 billion, while operating income increased by 10% to $44 million[99] - Logistics revenue decreased by 13% to $1.22 billion, with operating income remaining consistent at $67 million[100] Operating Income and Expenses - ITS operating income rose by 17% to $16 million, representing 3% of revenue, compared to 2% of revenue in the prior year[82] - Logistics operating income increased by 27% to $24 million, or 6% of revenue, due to cost controls and exiting unprofitable business[84] - Purchased transportation and warehousing costs decreased by 8% to $684 million in 2025 from $740 million in 2024[86] - Purchased transportation and warehousing costs decreased by 10% to $2.00 billion in 2025 from $2.21 billion in 2024[102] - Salaries and benefits remained consistent at $143 million, but as a percentage of revenue, it increased to 15.3% in 2025 from 14.5% in 2024[88] - Salaries and benefits increased to $436 million in 2025 from $429 million in 2024, representing 15.8% of revenue[103] - Depreciation and amortization expense decreased to $96 million in 2025 from $108 million in 2024, accounting for 3.5% of revenue[105] Net Income and Taxation - Net income for Q3 2025 was $28.9 million, or 3.1% of revenue, compared to $23.6 million, or 2.5% of revenue, in Q3 2024[85] - Net income increased to $81 million in 2025 from $79 million in 2024, representing 3.0% of total revenue[101] - The provision for income taxes increased to $10 million in 2025 from $7 million in 2024, with an effective tax rate of 24.9%[95] Cash Flow and Financial Position - Cash provided by operating activities was $160 million in 2025, a decrease of $34 million compared to 2024[114] - Net cash used in investing activities was $87 million, including capital expenditures of $39 million and container asset purchases of $53 million[115] - As of September 30, 2025, the company had $120 million in cash and cash equivalents, with no borrowings under the Credit Agreement[112][121] Customer Concentration - Hub's top 50 customers accounted for approximately 68% of revenue for the nine months ended September 30, 2025[78] Headcount - Headcount increased to 6,604 as of September 30, 2025, primarily due to the acquisition of EASO[89]

Financial Performance - Net revenue for the three months ended September 30, 2025, increased by 2.3% to $778.2 million, driven by an 11.7% increase in commercial end market same branch sales growth and contributions from recent acquisitions [120][130]. - Gross profit for the same period rose by 2.9% to $264.2 million, with a gross profit margin of 34.0%, reflecting improvements in selling price and product mix [120][130]. - Consolidated sales growth for the nine months ended September 30, 2025, was 1.5%, compared to 6.5% in the same period of 2024 [125]. - Same branch sales growth in the residential market declined by 2.8% for the three months ended September 30, 2025, primarily due to a 4.8% decline in sales volume [130]. - Commercial sales growth for the same period increased by 12.2%, with same branch sales growth of 11.7% [125][130]. Shareholder Returns - Cash and cash equivalents as of September 30, 2025, totaled $333.3 million, allowing the company to increase its quarterly dividend by 6% to $0.37 per share, totaling $10.1 million [121]. - The company repurchased $51.5 million of its common stock during the three months ended September 30, 2025, resulting in a total capital return to shareholders of $61.6 million [121]. Operating Expenses - Operating expenses for the three months ended September 30, 2025, included selling expenses of $36.2 million and administrative expenses of $111.1 million, representing 4.7% and 14.3% of total net revenue, respectively [133]. Interest and Taxation - Interest expense, net, decreased by 10.4% to $6.9 million for the three months ended September 30, 2025, due to lower interest expenses from prior year term loan repricing [137]. - Income tax provision for the three months ended September 30, 2025, was $25.9 million, with an effective tax rate of 25.8% [138]. Cash Flow and Liquidity - Net cash provided by operating activities increased to $306.5 million for the nine months ended September 30, 2025, from $265.2 million in 2024 [155]. - Working capital, including cash and cash equivalents, decreased to $663.0 million as of September 30, 2025, from $695.9 million at the end of 2024 [154]. - The company had total liquidity of $579.8 million as of September 30, 2025, consisting of $333.3 million in cash and cash equivalents and $250.0 million available under a credit facility [147]. - The company expects to meet its short-term liquidity requirements primarily through net cash flows from operations and available borrowing capacity [149]. Debt and Financing - As of September 30, 2025, the outstanding balance on the Term Loan was $489.2 million, net of unamortized debt issuance costs [166]. - The ABL Credit Agreement was amended to increase the commitment under the asset-based lending credit facility to $250.0 million, with the potential to increase to $300.0 million [168]. - The ABL Revolver had remaining availability of $246.5 million as of September 30, 2025 [168]. - Total outstanding loan balances related to Master Loan and Equipment Agreements were $92.0 million as of September 30, 2025, up from $82.3 million as of December 31, 2024 [174]. - The company had $226.8 million in total bonds and letters of credit as of September 30, 2025 [176]. - The company was in compliance with all applicable covenants under the Term Loan Agreement, ABL Credit Agreement, and Senior Notes as of September 30, 2025 [171]. Risk Management - The company had three active interest rate swaps hedging $400.0 million of variable cash flows on the Term Loan through December 14, 2028 [172]. - A hypothetical one percentage point increase in interest rates on variable rate debt would increase annual interest expense by approximately $0.9 million [181]. - The company has not entered into derivatives for trading or speculative purposes [182]. - The Senior Notes accrue interest at a fixed rate of 5.75% [181]. Strategic Outlook - The company’s strategy includes enhancing procurement efforts through vertical integration in select product and end markets, contributing to a 29.8% increase in sales within its Distribution and Manufacturing businesses [130]. - The company anticipates continued pressures from elevated mortgage rates impacting housing demand through 2025 and into 2026 [141]. - The company expects to spend cash for acquisitions of companies with at least $100.0 million in aggregate net revenue each fiscal year [148]. Other Comprehensive Income - Other comprehensive loss for the three months ended September 30, 2025, was $(2.2) million, compared to $(10.6) million in 2024 [139]. - The company recorded unrealized losses of $2.3 million on cash flow hedges for the three months ended September 30, 2025, due to market expectations for lower interest rates [139].

Financial Performance - Software revenue for Q1 2024 was $5,037,000, an increase of 26.8% from $3,973,000 in Q1 2023[232] - Total revenue for Q1 2024 reached $12,035,000, up 7.9% from $11,150,000 in Q1 2023[232] - The net loss for Q1 2024 was $13,637,000, a significant improvement of 58.6% compared to a net loss of $32,924,000 in Q1 2023[232] - Adjusted EBITDA for Q1 2024 was $(7,395,000), a 69.7% improvement from $(24,444,000) in Q1 2023[232] - Total revenue for Q1 2024 was $12,035 million, a 7.9% increase from $11,150 million in Q1 2023, driven by a $1,064 million increase in software revenue and a $523 million increase in professional services revenue[257][258] - Hardware revenue decreased by $702 million, or 13.1%, to $4,643 million in Q1 2024 compared to Q1 2023[257][258] - Total cost of revenue decreased by $8,060 million, or 59.1%, to $5,581 million in Q1 2024, primarily due to an $8,564 million decrease in hardware-related costs[257][261] - Operating expenses decreased by $10,191 million, or 33.3%, to $20,445 million in Q1 2024, with significant reductions in research and development, sales and marketing, and general and administrative expenses[257][262][263][264] Cash Flow and Financial Position - The company had approximately $147.3 million in unrestricted cash and cash equivalents as of March 31, 2024[268] - The company repaid $22.0 million in unsecured promissory notes related to the HDW Acquisition on April 26, 2024[272][276] - Future capital requirements will depend on business plans, revenue levels, and market acceptance of products[273] - The company expects to fund operational cash requirements for at least 12 months using current cash and available-for-sale securities[274] - Net cash used in operating activities increased by $5.4 million to $(31,100) thousand for the three months ended March 31, 2024, compared to $(25,731) thousand in 2023[277] - Net cash provided by investing activities increased by $12.6 million to $45,162 thousand for the three months ended March 31, 2024, compared to $32,597 thousand in 2023[278] - The increase in cash from investing activities was primarily due to a $7.5 million increase in proceeds from sales and maturities of available-for-sale and trading securities[278] Business Developments - The company launched its property management division, Door Property Management, LLC, following the acquisition of The Broadway Company's property management business[230] - The company is expanding its DOOR Platform to include broader smart home solutions, integrating devices such as sensors, thermostats, and lighting[225] - Professional services revenue is generated through project-based hardware installation and property management services[240] Accounting and Compliance - There were no off-balance sheet arrangements as of March 31, 2024, that would materially affect the company's financial condition[279] - No material changes were reported in critical accounting estimates since the 2023 Annual Report[280] - The company did not disclose any recent accounting pronouncements that would impact financial reporting[281] - As a smaller reporting company, the company is not required to provide detailed market risk disclosures[282] Interest Income - Interest income increased to $2,002 million in Q1 2024 from $1,506 million in Q1 2023, resulting in a net interest income of $446 million, up 65.8% year-over-year[253][257][266]

Financial Performance - Sales for the three months ended September 30, 2025, were $497.974 million, an increase of 3.1% compared to $481.948 million in the same period of 2024[14]. - Gross profit for the same period was $154.550 million, up from $151.009 million, reflecting a gross margin of approximately 31.0%[14]. - Net income attributable to Kennametal for the three months ended September 30, 2025, was $23.298 million, representing a 5.3% increase from $22.123 million in 2024[14]. - Basic earnings per share increased to $0.31 for the three months ended September 30, 2025, compared to $0.28 in the prior year[14]. - The company reported a total comprehensive income of $24.202 million for the three months ended September 30, 2025, compared to $57.807 million in 2024[15]. - Operating income for the total segments was $38.203 million, an increase from $36.556 million in the previous year, with Metal Cutting contributing $21.564 million and Infrastructure $16.639 million[63]. - The company reported a net income before income taxes of $33.695 million for the three months ended September 30, 2025, compared to $31.372 million in the same period of 2024, reflecting a growth of 7.4%[63]. - The company recorded a net income of $24.6 million for the three months ended September 30, 2025[56]. - Basic earnings per share for the three months ended September 30, 2025, was calculated using a weighted average of 76,128 thousand shares outstanding[55]. Assets and Liabilities - Total assets as of September 30, 2025, were $2.519 billion, a decrease from $2.545 billion as of June 30, 2025[16]. - The company had $1.284 billion in total equity attributable to Kennametal shareholders as of September 30, 2025, slightly up from $1.284 billion at the end of the previous quarter[16]. - Total equity as of September 30, 2025, was $1,325.6 million, a slight decrease from $1,324.6 million as of June 30, 2025[56]. - As of September 30, 2025, total debt was $598.4 million, with no borrowings outstanding under the $700.0 million revolving credit facility[100]. - The company’s obligations under the supplier finance program increased to $25.0 million as of September 30, 2025, from $17.3 million as of June 30, 2025[21]. - Environmental liabilities accrued as of September 30, 2025, totaled $11.0 million, with $1.4 million classified as current[49]. Cash Flow and Investments - Cash and cash equivalents decreased to $103.497 million from $140.540 million at the end of the previous quarter[17]. - Net cash flow provided by operating activities was $17.487 million, down from $45.746 million in the same period of 2024[17]. - Cash flow used in investing activities was $22.7 million for the three months ended September 30, 2025, compared to $20.0 million in the prior year period, primarily due to capital expenditures of $23.0 million[106]. - Cash flow used in financing activities was $31.1 million for the three months ended September 30, 2025, which included $15.1 million in dividends paid and $10.0 million in common shares repurchased[108]. - The company returned $25.1 million to shareholders through share repurchases and dividends during the three months ended September 30, 2025[75]. Segment Performance - The Metal Cutting segment generated sales of $310.625 million, up from $296.900 million in the prior year, while the Infrastructure segment saw sales increase to $187.349 million from $185.048 million[62]. - Metal Cutting segment sales were $310.6 million, a 5% increase from the prior year, while Infrastructure segment sales were $187.3 million, a 1% increase[86]. - Operating margin for the Metal Cutting segment was 6.9%, down from 8.0% in the prior year, while the Infrastructure segment's operating margin improved to 8.9% from 6.9%[87][91]. - The General Engineering end market represented 44% of total sales, followed by Transportation at 16%, Aerospace & Defense at 13%, and Energy at 13%[64]. Market and Regional Performance - The Americas accounted for 50% of total sales, while Europe, the Middle East, and Africa (EMEA) contributed 31%, and Asia Pacific made up 19%[63]. - Constant currency end market sales growth for the Aerospace & Defense sector was 16% for the three months ended September 30, 2025[120]. - Americas region reported a constant currency sales growth of 6% for the three months ended September 30, 2025[121]. - EMEA region experienced a constant currency sales growth of 1%, while Asia Pacific saw a decline of 1%[121]. - Total regional sales growth was reported at 4%, with a decline of 6% in the Americas and a growth of 5% in EMEA[121]. - Infrastructure segment showed a constant currency sales growth of 7%, with a decline of 3% in EMEA[121]. Legal and Compliance - The company is currently involved in litigation with MachiningCloud, Inc., which is seeking over $330 million in damages, although the outcome remains uncertain[60]. - The company is involved in ongoing legal proceedings, but believes the ultimate liability will not materially affect its financial position[127]. - The company's disclosure controls and procedures were evaluated as effective as of September 30, 2025[123]. - No changes in internal control over financial reporting occurred during the most recent fiscal quarter[124]. - The company expects no material impact from the One Big Beautiful Bill Act (OBBBA) on its consolidated financial statements for the current fiscal year[53]. Other Financial Metrics - The effective income tax rate for the three months ended September 30, 2025, was 26.9%, compared to 25.2% for the same period in 2024[52]. - The company recorded total restructuring and related charges of $15.6 million through September 30, 2025, compared to a target of approximately $25 million[33]. - For the three months ended September 30, 2025, the net periodic pension expense was $1.75 million, an increase from $1.01 million in the same period of 2024[40]. - The fair value of derivatives designated as hedging instruments was $11,000 as of September 30, 2025, compared to a liability of $(9,000) as of June 30, 2025[27]. - The company recorded a net loss of $3,000 related to currency forward contracts for the three months ended September 30, 2025, compared to a gain of $14,000 in the same period of 2024[28].