UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2025 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 001-41459 SILGAN HOLDINGS INC. (Exact name of Registrant as specified in its charter) Delaware ...

Financial Performance - Sempra reported third-quarter 2025 GAAP earnings of $77 million or $0.12 per diluted share, a significant decrease from $638 million or $1.00 per diluted share in the same quarter of 2024[3]. - Adjusted earnings for the first nine months of 2025 were $2.253 billion or $3.45 per diluted share, compared to $1.987 billion or $3.12 per diluted share in the first nine months of 2024, reflecting a 13.5% increase[4]. - Sempra's GAAP earnings for the first nine months of 2025 were $1.444 billion or $2.21 per diluted share, down from $2.152 billion or $3.38 per diluted share in the same period of 2024[4]. - Total revenues for Q3 2025 reached $3,151 million, a 13.5% increase from $2,776 million in Q3 2024[26]. - Net income for Q3 2025 was $150 million, a significant decrease of 80.2% compared to $759 million in Q3 2024[26]. - Adjusted EPS for Q3 2025 was $0.12, down from $1.00 in Q3 2024, reflecting a decline of 88%[30]. - The company reported a net income of $1,588 million for the nine months ended September 30, 2025, compared to $2,511 million for the same period in 2024[41]. - Sempra's GAAP EPS guidance range for full-year 2025 is projected to be between $3.05 and $3.45, while the adjusted EPS guidance range is between $4.30 and $4.70[34]. Capital Expenditures and Investments - Oncor Electric Delivery Company expects a more than 30% increase in its 2026-2030 base capital plan, building on a $36 billion 2025-2029 base capital plan[9]. - The company is advancing six major projects, including the development of Port Arthur LNG Phase 2, which is subscribed with long-term offtake agreements[14]. - Capital expenditures for property, plant, and equipment totaled $7,201 million for the nine months ended September 30, 2025, compared to $5,765 million for the same period in 2024[42]. - Sempra announced a strategic transaction to sell a 45% equity interest in Sempra Infrastructure Partners, expected to close in Q2-Q3 2026, to support its value creation initiatives[8]. Revenue and Sales Performance - The company reported a total of $1,363 million in natural gas revenues for Q3 2025, up 14.1% from $1,195 million in Q3 2024[26]. - Gas sales for Sempra California decreased to 56 Bcf in Q3 2025 from 54 Bcf in Q3 2024, while total deliveries fell to 197 Bcf from 211 Bcf[44]. - Electric sales in Sempra California dropped to 820 million kWh in Q3 2025 compared to 857 million kWh in Q3 2024, with total electric deliveries decreasing to 4,571 million kWh from 4,819 million kWh[44]. - Oncor Electric Delivery Company LLC reported total electric deliveries of 50,761 million kWh in Q3 2025, up from 46,208 million kWh in Q3 2024, indicating a growth of approximately 11%[44]. Operating Expenses and Financial Health - Operating expenses increased to $1,349 million in Q3 2025, compared to $1,326 million in Q3 2024, marking a rise of 1.7%[26]. - Interest expense increased to $403 million in Q3 2025, compared to $328 million in Q3 2024, reflecting a rise of 22.9%[26]. - Total current assets increased significantly to $31,726 million as of September 30, 2025, compared to $5,285 million as of December 31, 2024[37]. - Total liabilities increased to $68,633 million as of September 30, 2025, from $58,367 million as of December 31, 2024[39]. - Cash, cash equivalents, and restricted cash increased to $3,025 million as of September 30, 2025, from $690 million in the same period of 2024[41]. - Sempra's total assets reached $106,919 million as of September 30, 2025, compared to $96,155 million as of December 31, 2024[39]. Tax and Regulatory Matters - The company reported a $514 million net income tax expense due to the classification of Sempra Infrastructure Partners as held for sale[29]. - The company experienced a $(540) million net income tax expense due to the classification of SI Partners and Ecogas as held for sale[35]. - California's Senate Bill 254 established an up to $18 billion continuation account to enhance the wildfire fund's stability, benefiting San Diego Gas & Electric Company[12]. Customer Metrics and Energy Production - Total electric customer meters for Oncor increased to 4,100 thousand in Q3 2025 from 4,027 thousand in Q3 2024[44]. - Total electric customer meters for Sempra California rose to 1,545 thousand in Q3 2025 from 1,529 thousand in Q3 2024[44]. - Total gas customer meters for Sempra California increased to 7,126 thousand in Q3 2025 from 7,107 thousand in Q3 2024[44]. - Sempra Infrastructure's Termoeléctrica de Mexicali generated 1,001 million kWh in Q3 2025, a decrease from 1,081 million kWh in Q3 2024[44]. - Wind and solar energy production in Sempra Infrastructure was 643 million kWh in Q3 2025, down from 687 million kWh in Q3 2024[44].

Financial Performance - Net income for Q3 2025 was $17.5 million, up from $13.8 million in Q3 2024, reflecting a 27% increase[204]. - Year-to-date net income for the first nine months of 2025 was $50.0 million, compared to $48.3 million in the same period of 2024, representing a 3.5% increase[205]. - Basic net income per common share for Q3 2025 was $0.85, compared to $0.66 in Q3 2024, a 28.8% increase[206]. - Non-interest income totaled $11.9 million in Q3 2025, up from $9.5 million in Q3 2024, while year-to-date non-interest income decreased to $33.7 million from $37.2 million[224]. - The company recorded a net loss of $0.36 million on the sale of securities AFS for the first nine months of 2025, compared to a loss of $0.41 million in 2024[233]. Interest Income and Margin - Net interest income for Q3 2025 totaled $45.4 million, an increase of $3.5 million or 8.4% from Q3 2024[208]. - For the first nine months of 2025, net interest income was $133.7 million, up $10.3 million or 8.3% from the same period in 2024[209]. - The net interest margin for Q3 2025 was 3.54%, compared to 3.37% in Q3 2024, indicating improved efficiency[214]. - The net interest margin (Non-GAAP FTE) for the nine months ended September 30, 2025, was 3.54%, compared to 3.35% in 2024[218]. Asset and Equity Growth - Total assets increased to $5,385,238 thousand in 2025 from $5,219,668 thousand in 2024, reflecting growth in the company's balance sheet[216]. - Shareholders' equity rose to $466,533 thousand in 2025, up from $418,688 thousand in 2024, indicating improved financial stability[216]. - Total shareholders' equity grew to $490.7 million at September 30, 2025, from $454.7 million at December 31, 2024, primarily due to earnings retention[293]. Loan and Credit Quality - Non-accrual loans averaged $10.8 million in Q3 2025, up from $4.5 million in Q3 2024[212]. - The provision for credit losses increased by $2.0 million in the first nine months of 2025 compared to the same period in 2024[205]. - The total loans increased to $4,198,283,000 as of September 30, 2025, compared to $4,038,825,000 at December 31, 2024, reflecting a growth of approximately 3.95%[265]. - Non-performing loans rose to $20,355,000, representing 0.48% of total portfolio loans, up from 0.15% at December 31, 2024[267]. - The allowance for credit losses (ACL) on loans increased to $62,459,000 at September 30, 2025, from $59,379,000 at December 31, 2024, equating to 1.49% of total portfolio loans[272]. Deposits and Funding - Deposits totaled $4.86 billion at September 30, 2025, an increase of $205.1 million from December 31, 2024[254]. - Core deposits increased to $4.86 billion as of September 30, 2025, from $4.65 billion at December 31, 2024, driven by growth in savings and interest-bearing checking accounts[275]. - Uninsured deposits rose to $1,139,186 thousand, representing 24.3% of total deposits as of September 30, 2025, compared to 23.3% at December 31, 2024[277]. Expenses and Cost Management - Total non-interest expense increased by $1.5 million to $34.1 million in Q3 2025 and by $4.0 million to $102.2 million for the first nine months of 2025 compared to the same periods in 2024[240]. - Compensation and employee benefits expenses increased by $1.1 million in Q3 2025 and by $0.6 million for the first nine months of 2025 compared to the same periods in 2024[242]. Securities and Investments - Securities available for sale had a fair value of $502.6 million as of September 30, 2025, down from $559.2 million at December 31, 2024[257]. - As of September 30, 2025, the carrying value of securities held to maturity is $321,450,000, with unrealized losses of $13,766,000[258]. - The company recorded net losses of $36,000 on sales of securities available for sale during the three months ended September 30, 2025[261]. Risk Management and Controls - The maximum estimated additional losses from litigation matters are considered insignificant, although outcomes remain uncertain[306]. - The company has not experienced material changes in its critical accounting policies since the last annual report[313]. - There were no changes in internal controls over financial reporting that materially affected the company's reporting during the quarter ended September 30, 2025[319]. - The company’s disclosure controls and procedures were evaluated as effective as of September 30, 2025[318].

Financial Performance - Essential Utilities reported net income of $92.1 million or $0.33 per share for Q3 2025, compared to $69.4 million or $0.25 per share for Q3 2024, reflecting a 32.5% increase in net income [3][5]. - Revenues for Q3 2025 were $477.0 million, a 9.6% increase from $435.3 million in Q3 2024, primarily driven by rate increases [7]. - Operating revenues for the quarter ended September 30, 2025, were $476,971,000, an increase of 9.1% from $435,255,000 in the same quarter of 2024 [34]. - Net income for the quarter ended September 30, 2025, was $92,077,000, representing a 32.5% increase compared to $69,402,000 for the same quarter in 2024 [34]. - Basic and diluted net income per common share for the quarter ended September 30, 2025, was $0.33, up from $0.25 in the same quarter of 2024, reflecting a 32% increase [34]. - The company reported operating income of $169,771,000 for the quarter ended September 30, 2025, compared to $155,089,000 for the same quarter in 2024, marking a 9.8% increase [36]. Revenue Segments - The regulated water segment generated revenues of $364.1 million, an 8.8% increase from $334.5 million in Q3 2024, with water and wastewater rates being the largest contributor [8]. - The regulated natural gas segment reported revenues of $108.5 million, a 12.1% increase from $96.7 million in Q3 2024, also driven by increased rates [9]. Investment and Infrastructure - Essential invested $983 million in infrastructure in the first nine months of 2025, on track to invest $1.4 to $1.5 billion for the full year [6][15]. - The company plans to invest approximately $7.8 billion in regulated infrastructure from 2025 through 2029, focusing on improving water and natural gas systems [15][26]. - The company plans to invest $1.4 to $1.5 billion in infrastructure in 2025, contributing to anticipated rate base growth through 2029 [32]. - The company announced a $26 million investment in a major data center in Western Pennsylvania, expected to support both power generation and data center cooling needs [6][21]. Mergers and Acquisitions - Essential's merger with American Water Works Company, Inc. is expected to create a leading regulated U.S. water and wastewater utility with a pro forma market capitalization of approximately $40 billion [23][24]. - The expected closing date of the pending merger with American Water is anticipated by the end of the first quarter of 2027 [32]. - Essential has signed agreements for additional wastewater systems in Pennsylvania and Texas, expected to serve over 200,000 customers for a total purchase price of approximately $301 million [18]. Environmental Goals - The company aims to reduce Scope 1 and Scope 2 greenhouse gas emissions by 60% by 2035 from the 2019 baseline [32]. Customer Growth - The water utility customer base is expected to grow at an average annual long-term growth rate of 2-3% for acquisitions and organic customer growth [32]. Equity and Debt - Total equity increased to $6,816,299,000 as of September 30, 2025, compared to $6,198,809,000 at the end of 2024 [38]. - Long-term debt, excluding current portion, increased to $7,692,091,000 as of September 30, 2025, from $7,368,381,000 at the end of 2024 [38].

Revenue Performance - Total Annual Recurring Revenue (ARR) reached $1.490 billion, a 1% increase from $1.482 billion in Q3 2024, with a 1% positive impact from foreign currency fluctuations [84]. - Public Cloud ARR increased by 11% to $633 million compared to $570 million in Q3 2024, with no impact from foreign currency fluctuations [84]. - Total revenue for Q3 2025 was $416 million, a decrease of $24 million or 5% from Q3 2024, with recurring revenue down 2% [84]. - Total revenue decreased by $99 million, or 7%, to $1,242 million for the first nine months of 2025 compared to $1,341 million in 2024 [1]. - Recurring revenue decreased by 4%, while Public Cloud revenue increased due to expansions and migrations [1]. - Revenue from perpetual software licenses, hardware, and other decreased by 20% year over year [2]. - Consulting services revenue decreased by 23% due to lower order booking activity in the second half of 2024 [2]. Profitability Metrics - Gross margin improved to 60.8% in Q3 2025 from 60.5% in Q3 2024, driven by a greater mix of recurring revenue [84]. - Operating income for Q3 2025 was $61 million, up from $56 million in Q3 2024 [84]. - Net income increased to $40 million in Q3 2025, compared to $32 million in Q3 2024 [84]. - Total gross profit decreased to $731 million, or 58.9% of revenue, down from $815 million, or 60.8% of revenue in 2024 [3]. - Selling, general and administrative expenses decreased by 13% to $373 million, representing 30.0% of revenue [6]. Cash Flow and Financial Position - Cash provided by operating activities was $145 million, a decrease of $2 million compared to the prior year [12]. - Free cash flow increased to $134 million for the first nine months of 2025, compared to $129 million in 2024 [14]. - The company had no outstanding borrowings on its $400 million Revolving Facility as of September 30, 2025 [22]. Taxation - The effective tax rate for Q3 2025 was 25.9%, down from 31.9% in Q3 2024 [94]. - The effective tax rate decreased to 25.6% for the nine months ended September 30, 2025, down from 33.6% in 2024 [10]. Market and Risk Factors - Cloud Net Expansion Rate was 109% in Q3 2025, down from 120% in Q3 2024 [84]. - No material changes to market risk factors were reported compared to the previous disclosures in the 2024 Annual Report [128]. - New accounting pronouncements are discussed in Note 2 of the Condensed Consolidated Financial Statements [127].

Financial Performance - Net sales for Q3 2025 were $441.9 million, a slight decrease of 0.3% compared to $443.4 million in Q3 2024[12] - Gross profit for Q3 2025 was $116.7 million, down 6.0% from $124.1 million in Q3 2024[12] - Operating income for Q3 2025 decreased significantly to $5.9 million, compared to $45.6 million in Q3 2024, reflecting a decline of 87.0%[12] - Net income for Q3 2025 was $12.9 million, a decrease of 61.4% from $33.4 million in Q3 2024[12] - Earnings per share (EPS) for Q3 2025 were $0.52, down from $1.34 in Q3 2024, representing a decline of 61.2%[12] - Comprehensive income for Q3 2025 was $11.3 million, down from $48.7 million in Q3 2024[14] - For the nine months ended September 30, 2025, net income decreased to $69.2 million from $106.0 million in the same period of 2024, representing a decline of approximately 34.7%[18] - Gross profit for the nine months ended September 30, 2025, was $365.0 million, down 10.2% from $406.7 million in 2024[12] - Operating income for the three months ended September 30, 2025, was $5.9 million, a significant decline of 87.0% compared to $45.6 million in 2024[12] - Basic earnings per share for the three months ended September 30, 2025, were $0.52, down 61.2% from $1.34 in 2024[12] Assets and Liabilities - Total assets increased to $1,799.4 million as of September 30, 2025, compared to $1,734.7 million at the end of 2024[17] - Total liabilities decreased to $496.5 million as of September 30, 2025, down from $518.6 million at the end of 2024[17] - Total equity increased to $1,302.9 million as of September 30, 2025, compared to $1,216.1 million at the end of 2024[17] - Cash and cash equivalents at the end of the period were $270.8 million, down from $303.8 million at the end of September 2024, a decrease of about 10.8%[18] - The company has a current portion of operating lease liabilities of $16.0 million as of September 30, 2025, compared to $13.9 million at the end of 2024[17] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025, was $76.9 million, down from $158.8 million in 2024, a decrease of about 51.5%[18] - Net cash used in investing activities rose to $55.9 million in 2025 compared to $41.4 million in 2024, an increase of about 35.1%[18] - Capital expenditures increased to $35.7 million in 2025 from $29.3 million in 2024, reflecting a rise of approximately 21.8%[18] - The company paid dividends of $20.8 million in 2025, up from $19.0 million in 2024, indicating an increase of approximately 9.5%[18] Impairments and Charges - The company reported an impairment of property, plant, and equipment amounting to $22.9 million for the nine months ended September 30, 2025[18] - The company impaired intangible assets totaling $19.1 million related to the acquisition of Química Geral S.A. due to insufficient expected cash flows[41] - The company impaired property, plant, and equipment assets totaling $22.9 million within its Oilfield Services segment[42] - The charge for plant closure provisions for the nine months ended September 30, 2025, was $5.0 million, compared to $2.6 million for the same period in 2024[56] Segment Information - The company operates through three reportable segments: Performance Chemicals, Fuel Specialties, and Oilfield Services[30] Foreign Currency and Contingent Considerations - The company reported a loss of $3.6 million from foreign currency forward exchange contracts for the nine months ended September 30, 2025, compared to a loss of $1.1 million for the same period in 2024[60] - The fair value of acquisition-related contingent consideration decreased by $18.5 million to $8.2 million as of September 30, 2025, primarily due to changes in expected financial targets[59] Research and Development - Research and development expenses for the nine months ended September 30, 2025, included $5.7 million that was reclassified from selling, general, and administrative expenses[27] Credit Facilities and Guarantees - As of September 30, 2025, the company has a $250.0 million multicurrency revolving credit facility available until May 30, 2028, with no borrowings drawn down during the first nine months of 2025[54] - Guarantees for certain obligations of affiliated companies amounted to $8.3 million as of September 30, 2025, up from $6.8 million at the end of 2024[64]

Financial Performance - Net income available to common shareholders increased to $98.9 million for the nine months ended September 30, 2025, compared to $88.4 million for the same period in 2024, representing a growth of 11.0%[118] - Earnings per common share (basic) rose to $6.76 for the nine months ended September 30, 2025, up from $5.96 in 2024, reflecting a 13.4% increase[118] - Non-interest income for the nine months ended September 30, 2025, was $58.1 million, a 2.5% increase from $56.7 million in 2024[156] - Non-interest income increased from $56.7 million for the nine months ended September 30, 2024, to $58.1 million for the nine months ended September 30, 2025, representing a growth of 2.5%[157] - Non-interest income for the quarter ended September 30, 2025, was $20.2 million, slightly down from $20.3 million in the same quarter of 2024[161] Interest Income and Margin - The Company's net interest income increased to $175.8 million for the nine months ended September 30, 2025, compared to $164.7 million in 2024, marking a growth of 6.7%[119] - Net interest income for the nine months ended September 30, 2025, was $176,416,000, an increase from $165,318,000 in 2024, representing a growth of approximately 6.7%[129] - The reported net interest margin increased slightly from 3.90% for the nine months ended September 30, 2024, to 3.95% for the same period in 2025[128] - For the third quarter of 2025, net interest income increased by $5.5 million, or 9.9%, from $55.6 million in Q3 2024 to $61.1 million in Q3 2025[133] - The reported net interest margin improved from 3.87% in Q3 2024 to 4.04% in Q3 2025, indicating enhanced profitability[134] Loans and Deposits - Gross loans increased by $138.0 million (3.2%) to $4.41 billion at September 30, 2025, with residential real estate loans rising by $86.2 million (4.7%) during the same period[125] - Total loans increased by $138.0 million from December 31, 2024, to September 30, 2025, reaching $4.41 billion[143] - Residential real estate loans increased by $86.2 million from December 31, 2024, to September 30, 2025, totaling $1.91 billion[147] - Total deposits rose by $113.4 million (2.2%) to $5.26 billion at September 30, 2025, with time deposits increasing by $53.5 million[126] Expenses and Allowance for Credit Losses - Non-interest expense for the nine months ended September 30, 2025, was $114.5 million, a 3.8% increase from $110.3 million in 2024[156] - Non-interest expenses increased by $4.2 million (3.8%), from $110.3 million in the first nine months of 2024 to $114.5 million in the first nine months of 2025, primarily due to higher salaries and employee benefits[159] - The allowance for credit losses was estimated using a 2-year unemployment forecast range of 4.3% to 4.7% for the September 30, 2025 estimate, reflecting a slight adjustment from the previous quarter[112] - The allowance for credit losses decreased from $21.9 million at December 31, 2024, to $19.7 million at September 30, 2025[155] - The company recorded a recovery of credit losses of $0.5 million in Q3 2025, compared to a provision for credit losses of $1.2 million in Q3 2024[150] Capital Adequacy - As of September 30, 2025, City Holding Company reported a Common Equity Tier I (CET I) Capital of $726,739, representing a ratio of 17.2%, exceeding the minimum required ratio of 7.0% under Basel III[181] - City National Bank's CET I Capital was $667,193, with a ratio of 15.8%, also above the minimum required ratio of 7.0%[181] - Total Capital for City Holding Company stood at $746,422, reflecting a ratio of 17.7%, surpassing the minimum required ratio of 10.5%[181] - City National Bank's Total Capital was $686,876, with a ratio of 16.3%, exceeding the minimum required ratio of 10.5%[181] - City Holding Company and City National Bank are considered "well capitalized" as of September 30, 2025, meeting all capital adequacy requirements[181] Shareholder Equity and Dividends - Shareholders' equity increased by $68.3 million for the nine months ended September 30, 2025, primarily due to net income of $98.9 million[178] - The dividend payout ratio decreased to 36.3% for the nine months ended September 30, 2025, down from 37.3% in 2024[118] Regulatory Compliance - The Company and its subsidiary bank do not currently plan to elect the community bank leverage ratio framework but may consider it in the future[183] - City Holding Company and City National Bank are subject to regulatory capital requirements from the Federal Reserve and the OCC/FDIC, respectively[181] - The management believes that both entities have met all capital adequacy requirements as of the reporting date[181] - The Company has a Tier I Leverage Ratio of 11.1% for City Holding Company and 10.2% for City National Bank, both exceeding the minimum required ratio of 4.0%[181] - The Company is classified as a qualifying community banking organization, eligible for the community bank leverage ratio framework if certain criteria are met[182]

Financial Performance - Consolidated net sales for the third quarter of 2025 increased by $43.4 million, or 8%, compared to the same period in 2024, driven by higher average selling prices and increased sales volume in Polymers and Specialty Products[94]. - Net income for the third quarter of 2025 was $10.8 million, or $0.47 per diluted share, down from $23.6 million, or $1.03 per diluted share, in the third quarter of 2024[93]. - EBITDA for the third quarter of 2025 was $56.1 million, reflecting a 6% increase from $53.0 million in the same quarter of 2024[93]. - Total net sales for Q3 2025 were $590.3 million, an increase of $43.4 million or 8% compared to Q3 2024[101]. - Operating income for the total company decreased by $2.2 million, or 9%, to $21.8 million in Q3 2025[101]. - Adjusted net income for the nine months ended September 30, 2025, was $42.2 million, compared to $47.7 million for the same period in 2024[172]. - Net income for the first nine months of 2025 was $41.9 million, or $1.83 per diluted share, compared to $47.0 million, or $2.05 per diluted share, in the same period of 2024[121]. Segment Performance - Surfactants accounted for 72% of consolidated net sales for the first nine months of 2025, while Polymers and Specialty Products accounted for 25% and 3%, respectively[87][88][89]. - Surfactants segment net sales increased by $39.6 million, or 10%, driven by higher average selling prices, which contributed $41.4 million[102]. - Polymers segment net sales decreased by $5.9 million, or 4%, primarily due to lower average selling prices impacting sales by $21.3 million[110]. - Specialty Products segment net sales increased by $9.7 million, or 68%, compared to the prior year[101]. - Specialty Products net sales increased by $15.0 million, or 32 percent, due to higher average selling prices and a 14 percent increase in sales volume[148]. - Surfactant net sales for the first nine months of 2025 increased by $110.8 million, or 10%, with higher average selling prices contributing $129.4 million to this increase[131]. Operating Income and Expenses - Operating income for the third quarter of 2025 decreased by $2.1 million, or 9%, compared to the third quarter of 2024, with declines in Surfactant and Polymer operating incomes[95]. - Surfactants operating income fell by $10.6 million, or 40%, with gross profit decreasing by $9.5 million, or 19%[106]. - Polymer operating income in Q3 2025 decreased by $1.1 million, or 8%, compared to Q3 2024, with gross profit down by $0.9 million, or 4%[114]. - Research and development expenses increased by $0.7 million, or 5%, year-over-year[98]. - Corporate expenses decreased by $3.7 million, or 17%, year-over-year, primarily due to the non-recurrence of prior year charges related to an external fraud event[95]. Tax and Interest - The effective tax rate rose to 34.4% in Q3 2025 from a negative 10.7% in Q3 2024, primarily due to an unfavorable provision-to-return adjustment[98]. - Net interest expense for the third quarter of 2025 increased by $3.2 million compared to the third quarter of 2024, primarily due to lower capitalized interest income[96]. Cash Flow and Capital Expenditures - Cash and cash equivalents increased by $18.9 million compared to December 31, 2024, totaling $118.5 million as of September 30, 2025[152]. - Cash used for capital expenditures was $87.9 million in the first nine months of 2025, with total capital expenditures estimated to be between $118.0 million and $123.0 million for the year[156]. - Operating activities generated a cash source of $87.9 million for the first nine months of 2025, compared to $93.8 million for the same period in 2024[151]. Debt and Financial Position - Consolidated balance sheet debt increased by $30.1 million, from $625.4 million on December 31, 2024, to $655.5 million on September 30, 2025, primarily due to the issuance of $75.0 million of senior unsecured notes[159]. - Net debt was $537.0 million on September 30, 2025, compared to $525.7 million at December 31, 2024, with a net debt to net debt plus shareholders' equity ratio of 30.1%[160]. - The Company maintains a credit agreement providing for credit facilities in an initial aggregate principal amount of $450.0 million, maturing on June 24, 2027[161]. - The Company's net debt to net debt plus equity ratio improved to 30% as of September 30, 2025, compared to 31% at the end of 2024[176]. Environmental and Legal Matters - Environmental expenditures for capital projects were $7.2 million for the first nine months of 2025, compared to $7.0 million for the same period in 2024[166]. - The Company accrued an additional $1.8 million for remediation expenses in the second quarter of 2025 due to a change in the scope of planned remediation activities[167]. - The Company's environmental and legal accruals totaled $19.4 million at September 30, 2025, compared to $20.0 million at December 31, 2024[167]. Market Risks - There have been no material changes to the market risks as described in the Company's 2024 Annual Report on Form 10-K[177].

Production and Revenue - Berry Corporation reported production of 23.9 MBoe/d, consistent with the previous quarter but down 3.6% from 24.8 MBoe/d in Q3 2024[4] - Oil, natural gas, and NGL revenues for Q3 2025 were $128 million, a 1.6% increase from $126 million in Q2 2025 but a 16.9% decrease from $154 million in Q3 2024[4] - Total revenues for the three months ended September 30, 2025, were $151,142, a decrease of 42.4% compared to $261,708 for the same period in 2024[24] - The company reported a net loss of $26 million, or $0.34 per diluted share, compared to a net income of $34 million, or $0.43 per diluted share in Q2 2025[4] - Net loss for the three months ended September 30, 2025, was $26,017, compared to a net income of $69,863 for the same period in 2024[24] Financial Performance - Adjusted EBITDA for Q3 2025 was $49 million, down 7.5% from $53 million in Q2 2025 and down 26.9% from $67 million in Q3 2024[4] - Adjusted EBITDA for the three months ended September 30, 2025, was $49,404, down from $67,121 in the same period last year, representing a decline of 26.4%[25] - The leverage ratio as of September 30, 2025, was 1.60x, with net debt of $402,886,000 and trailing twelve-month Adjusted EBITDA of $252,549,000[57] - Adjusted Net Loss Income for Q3 2025 was $(5,867,000), translating to a diluted EPS of $(0.08), compared to $(364,000) and $0.00 in Q2 2025 and $10,839,000 and $0.14 in Q3 2024[59] Cash Flow and Debt Management - Berry generated operating cash flow of $55 million and free cash flow of $38 million during the quarter[5] - The company paid down approximately $11 million of total debt in Q3 2025, contributing to a year-to-date total debt reduction of approximately $34 million[5] - Free Cash Flow for Q3 2025 was $38,390,000, compared to a negative $25,611,000 in Q2 2025 and $44,821,000 in Q3 2024[55] Capital Expenditures and Assets - Capital expenditures for the three months ended September 30, 2025, totaled $17,021, compared to $25,874 for the same period in 2024, reflecting a decrease of 34.1%[27] - Total current assets as of September 30, 2025, were $143,780, a decrease from $149,643 as of December 31, 2024[25] - Long-term debt as of September 30, 2025, was $354,469, down from $384,633 as of December 31, 2024[25] Operational Metrics - The company reported a total of 77,602 weighted-average shares of common stock outstanding for the three months ended September 30, 2025[25] - The company has hedged 18.2 MBbls/d of oil production for the remainder of 2025 at an average price of $74.15/Bbl of Brent[10] - The average price of Brent oil for the three months ended September 30, 2025, was $68.17 per bbl, while Henry Hub natural gas averaged $3.03 per mmbtu[38] Expenses - General and administrative expenses for Q3 2025 were $20,242,000, slightly up from $20,270,000 in Q2 2025 and $19,111,000 in Q3 2024[62] - Lease operating expenses (LOE) for Q3 2025 were $58,137,000, an increase from $53,193,000 in Q2 2025 and $54,900,000 in Q3 2024[66] - Energy LOE - unhedged for Q3 2025 was $26,119,000, compared to $22,476,000 in Q2 2025 and $24,548,000 in Q3 2024[66] Mergers and Agreements - Berry signed an agreement to merge with California Resources Corporation, with a special shareholder meeting scheduled for December 15, 2025, to approve the merger[5] Hedging Activities - The company hedged 3,680,000 mmbtu of natural gas purchases at a weighted-average price of $4.15 per mmbtu for FY 2026[34] - The company reported realized losses on natural gas purchase derivatives of $6,200,000 for Q3 2025[35] - Total realized gains on derivatives for the three months ended September 30, 2025, amounted to $4,082,000, while total unrealized losses were $24,797,000[35]

Revenue Growth - Total revenues increased from $363.0 million for the three months ended September 30, 2024 to $408.2 million for the same period in 2025, representing a 12% year-over-year increase[91]. - Recurring and other revenue accounted for 92% and 93% of total revenues for the three months ended September 30, 2024 and 2025, respectively[99]. - Recurring and other revenue increased by $45.8 million, or 14%, to $378.9 million for the three months ended September 30, 2025, compared to $333.1 million for the same period in 2024[117]. Profitability and Efficiency - Adjusted Gross Profit rose from $268.7 million in Q3 2024 to $306.7 million in Q3 2025, reflecting a significant increase in operational efficiency[95]. - Adjusted EBITDA increased from $129.0 million for the three months ended September 30, 2024 to $146.4 million for the same period in 2025[96]. - Operating income improved from $64.1 million in Q3 2024 to $74.2 million in Q3 2025, demonstrating enhanced profitability[113]. - Gross margin improved from 68% in 2024 to 69% in 2025[119]. Expenses - Sales and marketing expenses grew from $88.4 million in Q3 2024 to $96.4 million in Q3 2025, indicating a continued investment in client acquisition[113]. - Research and development expenses increased from $47.3 million in Q3 2024 to $55.6 million in Q3 2025, highlighting a focus on technological advancement[113]. - General and administrative expenses grew by $5.4 million, or 11%, to $53.6 million for the three months ended September 30, 2025[122]. - Sales and marketing expenses rose by $7.9 million, or 9%, to $96.4 million for the three months ended September 30, 2025[120]. - Research and development expenses increased by $8.3 million, or 18%, to $55.6 million for the three months ended September 30, 2025[121]. Cash Flow and Financial Position - The company had $165.2 million in cash and cash equivalents as of September 30, 2025, and a $550.0 million revolving credit facility[130]. - Net cash provided by operating activities was $91.5 million for the three months ended September 30, 2024, compared to $86.5 million for the same period in 2025, reflecting changes in operating assets and liabilities[139]. - Net cash used in investing activities increased from $13.3 million in 2024 to $17.7 million in 2025, primarily due to a $10.3 million increase in purchases of available-for-sale securities[140][141]. - Net cash used in financing activities decreased from $318.3 million in 2024 to $229.7 million in 2025, with a significant increase in client fund obligations by $692.0 million[142]. - Capital expenditures were $2.3 million in 2024 and $3.8 million in 2025, excluding capitalized internal-use software costs of $15.2 million and $15.5 million, respectively[144]. - As of September 30, 2025, the company had cash and cash equivalents of $165.2 million and funds held for clients totaling $2,775.6 million[148]. Future Outlook and Strategic Initiatives - The company plans to expand spend management capabilities through the acquisition of Airbase Inc. in October 2024, enhancing its platform offerings[84]. - The number of clients is expected to grow as the company continues to invest in its sales and marketing organization across new and existing territories[86]. - The company anticipates improved gross and operating margins over the long term as it scales its operations and gains economies of scale[88]. - The company expects to continue investing in capital spending to enhance operating facilities and technical infrastructure, depending on sales growth[144]. Market and Economic Factors - Interest income on funds held for clients decreased by $0.5 million, or 2%, to $29.3 million for the three months ended September 30, 2025, from $29.9 million in 2024[118]. - Cost of revenues increased by $13.4 million, or 12%, to $128.4 million for the three months ended September 30, 2025, compared to $115.0 million in 2024[119]. - An immediate 100-basis point increase in interest rates would decrease the market value of available-for-sale securities by $12.0 million, while a decrease would increase it by $11.6 million[150]. - The company maintains a revolving credit facility of $550.0 million, which can be increased to $825.0 million, with $81.3 million borrowed as of September 30, 2025[151]. - The company has $81.3 million in borrowings on its revolving credit facility, which is not due in the next twelve months, along with $63.2 million in operating lease obligations[143]. - Inflation has not materially affected the company's financial condition, but significant inflationary pressures could impact costs and pricing strategies[152]. Income Metrics - Net income decreased to 12% in 2025 from 14% in 2024, with income before income taxes at 18% for both years[116].