Clinical Development - Reported positive interim Phase 1 results for SPY003, demonstrating an ~85-day half-life supporting quarterly or twice annual maintenance dosing[1] - Initiated Phase 2 SKYWAY basket study of SPY072 for rheumatoid arthritis, psoriatic arthritis, and axial spondyloarthritis[1] - On track for 6 proof-of-concept readouts in 2026 across the SKYLINE and SKYWAY Phase 2 trials[2] - The company anticipates 2026 will be transformational with six Phase 2 proof-of-concept readouts expected[2] Financial Performance - Net loss for Q3 2025 was $11.2 million, significantly improved from a net loss of $69.0 million in Q3 2024[14] - Cash used in operating activities was $37.1 million for Q3 2025[12] - Total operating expenses for the three months ended September 30, 2025, were $56.888 million, compared to $55.392 million in the same period of 2024, an increase of 2.7%[27] - Other income (expense), net for the three months ended September 30, 2025, was $40.326 million, a significant improvement compared to an expense of $18.802 million in the same period of 2024[27] Balance Sheet and Cash Position - Strengthened balance sheet with $316 million gross proceeds from a public offering, resulting in $783 million of pro forma cash as of September 30, 2025[1][12] - The company expects its cash runway to extend into the second half of 2028[19] - Total current assets decreased from $608.474 million as of December 31, 2024, to $504.604 million as of September 30, 2025, representing a decline of approximately 17.1%[25] - Total liabilities decreased from $90.680 million as of December 31, 2024, to $49.504 million as of September 30, 2025, a reduction of about 45.5%[25] Research and Development Expenses - R&D expenses totaled $45.2 million for Q3 2025, compared to $44.7 million for Q3 2024, reflecting higher clinical trial expenses[13] - Research and development expenses for the three months ended September 30, 2025, were $45.247 million, slightly increasing from $44.744 million in the same period of 2024, a rise of 1.1%[27] Stockholder Equity and Shares - The weighted-average common stock outstanding for the three months ended September 30, 2025, was 60,414,223 shares, up from 50,889,443 shares in the same period of 2024, an increase of about 18.5%[27] - The total stockholders' equity decreased from $517.804 million as of December 31, 2024, to $455.100 million as of September 30, 2025, a decline of approximately 12.0%[25] Accumulated Deficit and Interest Income - The accumulated deficit increased from $972.432 million as of December 31, 2024, to $1.065.105 million as of September 30, 2025, representing a rise of approximately 9.6%[25] - Interest income for the nine months ended September 30, 2025, increased to $17.746 million from $15.536 million in the same period of 2024, reflecting a growth of 14.2%[27]

Reported positive interim Phase 1 results for SPY003, a next-generation anti-IL-23 antibody, demonstrating the molecule was well-tolerated and exhibited an ~85-day half-life supporting quarterly or twice annual maintenance dosing Initiated Phase 2 SKYWAY basket study of SPY072 evaluating TL1A inhibition in rheumatoid arthritis ("RA"), psoriatic arthritis ("PsA"), and axial spondyloarthritis ("axSpA") Exhibit 99.1 Spyre Therapeutics Reports Third Quarter 2025 Financial Results and Provides Corporate Update O ...

Financial Performance - For the three-month period ended September 30, 2025, net revenue increased to $120.63 million, up from $97.16 million in the same period of 2024, representing a growth of 24%[17] - The company reported a net loss attributable to common stockholders of $9.66 million for the three-month period ended September 30, 2025, compared to a net loss of $11.98 million in the same period of 2024, showing an improvement of 19%[18] - Basic and diluted earnings per share from continuing operations for the three-month period ended September 30, 2025, was $(0.11), compared to $(0.12) in the same period of 2024[17] - Net income attributable to common stockholders for the nine-month period ended September 30, 2025, was $(60,962) thousand, compared to $(92,550) thousand for the same period in 2024, indicating an improvement[21] - Total revenue for the three-month period ended September 30, 2025, was $120,630,000, a 24.2% increase from $97,156,000 in the same period of 2024[123] Revenue Breakdown - Digital advertising revenue for the three-month period ended September 30, 2025, was $85,200,000, compared to $45,871,000 in 2024, representing an increase of 85.5%[123] - Broadcast advertising revenue for the three-month period ended September 30, 2025, was $25,496,000, down from $39,998,000 in 2024, a decrease of 36.5%[123] - The Advertising Technology & Services segment saw a significant revenue increase of 104% to $76.13 million for the three-month period ended September 30, 2025, compared to $37.35 million in 2024[140] - The media segment reported a 26% decrease in revenue to $44.51 million for the three-month period ended September 30, 2025, compared to $59.80 million in 2024[140] Assets and Liabilities - The total current assets decreased to $184.49 million as of September 30, 2025, compared to $186.30 million at the end of 2024, a decline of approximately 1%[16] - Total liabilities decreased slightly to $336.44 million as of September 30, 2025, from $341.26 million at the end of 2024, a reduction of about 1%[16] - The company’s total stockholders' equity decreased to $78.17 million as of September 30, 2025, compared to $146.02 million at the end of 2024, a decline of about 47%[16] Cash Flow and Liquidity - Cash and cash equivalents decreased to $61.76 million as of September 30, 2025, down from $95.91 million at the end of 2024, a decline of approximately 36%[16] - Cash flows from operating activities provided $861 thousand for the nine-month period ended September 30, 2025, a significant decrease from $61,922 thousand in 2024[21] - The Company’s liquidity position is supported by existing cash and projected operating cash flows, which are deemed adequate to meet operating needs over the next twelve months[38] Impairment and Charges - The company incurred an impairment charge of $5.71 million during the three-month period ended September 30, 2025[17] - The Company recorded a goodwill impairment charge of $43.3 million for the media reporting unit due to lower than anticipated political advertising revenue and higher projected future costs[60] - The Company recorded impairment charges of $17.9 million for FCC licenses and $35.4 million for goodwill in the digital segment during the first quarter of 2024[64] - The Company recorded a loss on lease abandonment of $16.1 million related to the acceleration of amortization of the right-of-use asset and $9.1 million for leasehold improvements in the first quarter of 2025[67] Restructuring and Operational Changes - The Company implemented a restructuring plan resulting in a reduction of 39 employees, approximately 5% of the media segment workforce, incurring severance charges of approximately $0.7 million[69] - Total restructuring charges recorded during the third quarter of 2025 amounted to $3.2 million, with a remaining restructuring liability of $0.8 million as of September 30, 2025[71] - The Company discontinued a significant portion of its operations in 2024, primarily affecting its former digital segment, following a strategic review of its digital strategy[25] Debt and Financing - The Company entered into a Credit Facility consisting of a $200.0 million senior secured Term A Facility and a $75.0 million Revolving Credit Facility, with $11.5 million drawn on the 2023 Closing Date[75] - As of September 30, 2025, the interest rate on the Company's Term A Facility and the drawn portion of the Revolving Credit Facility was 7.26%[79] - The carrying amount of the Term Loan A Facility as of September 30, 2025, was $161.8 million, net of $0.7 million of unamortized debt issuance costs[89] Stock-Based Compensation - Stock-based compensation expense for the nine-month period ended September 30, 2025, was $8,102 thousand, compared to $12,422 thousand for the same period in 2024[21] - Stock-based compensation expense related to restricted stock units (RSUs) was $6.6 million for the nine-month period ended September 30, 2025, compared to $11.7 million for the same period in 2024, reflecting a decrease of approximately 43.5%[50] - The total unrecognized compensation expense related to PSUs as of September 30, 2025, was $2.4 million, expected to be recognized over a weighted-average period of 2.1 years[53] Discontinued Operations - The Company recorded a loss of $40.7 million from the sale of its EGP business, which was included in net income (loss) from discontinued operations[146] - The EGP business was classified as held for sale, with results presented as discontinued operations, reflecting a strategic shift impacting financial results[156] - For the nine-month period ended September 30, 2024, the net loss from discontinued operations was $77.9 million, with significant impairment charges of $49.4 million[157][162]

Debt: During the third quarter we closed the following loans: Executive Summary We have no loan maturities in 2025 and we are actively working to refinance our remaining 2026 loan maturities. See page 12 for more information regarding our loans. Balance Sheet & Dividends: At quarter end, we had cash and cash equivalents of $408.5 million. On October 15, 2025, we paid a quarterly cash dividend of $0.19 per common share, or $0.76 per common share on an annualized basis. Guidance: We now expect our 2025 Net In ...

Financial Performance - Revenue for Q3 2025 was $463.3 million, a 23.9% increase from $374.2 million in Q3 2024[114] - Gross profit margin improved to 37.6% in Q3 2025, compared to 35.8% in Q3 2024[114] - Operating income from continuing operations was $49.2 million in Q3 2025, a significant recovery from a loss of $11.0 million in Q3 2024[114] - Income from continuing operations for the first nine months of 2025 was $96.8 million, up from $7.3 million in the same period of 2024[114] - Total revenue for the three months ended September 30, 2025, was $463.3 million, representing a 23.8% increase from $374.2 million in the same period of 2024[116] - Data Center Computing revenue surged to $171.6 million for the three months ended September 30, 2025, up 112.9% from $80.6 million in 2024[116] - Gross profit for the three months ended September 30, 2025, was $174.4 million, a 30.1% increase from $134.1 million in 2024, with a gross margin of 37.6%[119] - Non-GAAP gross profit for Q3 2025 was $181.2 million, up from $136.0 million in Q3 2024, representing a 33.2% increase[138] - Non-GAAP gross margin improved to 39.1% in Q3 2025, compared to 36.3% in Q3 2024[138] - Non-GAAP operating income for the nine months ended September 30, 2025, was $197.1 million, significantly higher than $94.4 million for the same period in 2024[138] Operating Expenses and Management - Operating expenses decreased to $125.2 million in Q3 2025 from $145.1 million in Q3 2024, reflecting cost management efforts[114] - Operating expenses for the three months ended September 30, 2025, totaled $125.2 million, down from $145.1 million in 2024, representing a decrease of 13.7%[120] - Total operating expenses for the nine months ended September 30, 2025, were $376.9 million, slightly up from $371.9 million in 2024, with a percentage of revenue increase to 28.9%[120] - Research and development expenses increased to $59.1 million for the three months ended September 30, 2025, accounting for 12.8% of revenue, compared to 14.3% in 2024[120] Cash Flow and Financial Position - Cash flow from continuing operations for the nine months ended September 30, 2025, was $154.6 million[142] - As of September 30, 2025, the company had cash and cash equivalents totaling $758.6 million and available funding under the Revolving Facility of $600.0 million[142] - Net cash from operating activities from continuing operations increased to $154.6 million for the nine months ended September 30, 2025, compared to $50.4 million in the same period of 2024, representing a $104.2 million increase[149] - Cash and cash equivalents at the end of the period increased to $758.6 million as of September 30, 2025, up from $657.4 million at the end of the same period in 2024[148] - Net cash used in investing activities was $71.9 million for the nine months ended September 30, 2025, primarily due to $69.9 million in purchases of property and equipment[150] - Net cash used in financing activities decreased significantly to $47.0 million for the nine months ended September 30, 2025, from $374.5 million in the same period of 2024[152] Market Trends and Expectations - Data center computing market revenue more than doubled in the first nine months of 2025, driven by increased investments in AI applications[108] - The Industrial and Medical market began to recover in Q2 2025, with expectations for continued improvement as customer inventories normalize[105] - The Semiconductor Equipment market is expected to see mixed trends, with potential demand acceleration in the second half of 2026[102] Shareholder Returns and Debt - The company paid quarterly cash dividends of $0.10 per share, totaling $11.6 million during the nine months ended September 30, 2025[146] - The company repurchased 282,232 shares of common stock for $23.7 million at an average price of $84.19 per share during the nine months ended September 30, 2025[147] - The only outstanding debt as of September 30, 2025, was $575.0 million in Convertible Notes with a 2.5% interest rate[144] Tax and Currency Impact - The effective tax rate for the three months ended September 30, 2025, was 11.3%, up from 2.8% in the same period of 2024[131] - The company experienced a $4.8 million increase in unrealized foreign exchange gains for the three months ended September 30, 2025, compared to the prior year[128] - The effect of currency translation on cash was minimal during the nine months ended September 30, 2025[154] - The company is exposed to interest rate risk from its investments and the Credit Agreement, but current debt carries a fixed interest rate of 2.5%[162] - The company may enter into foreign currency exchange rate contracts to hedge against changes in foreign currency exchange rates related to future transactions[161]

Table of Contents 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: 001-35403 Verastem, Inc. (Exact name of registrant as specified in its charter) Delaware (State or other juri ...

Financial Performance - Total revenue for Q3 2025 was $22.6 million, a 31% increase from $17.2 million in Q3 2024[3] - Product revenue in Q3 2025 was $17.0 million, up 28% from $13.3 million in Q3 2024[3] - Subscription revenue for Q3 2025 reached $5.6 million, representing a 44% increase from $3.9 million in Q3 2024[3] - Gross profit for Q3 2025 was $19.9 million, with a gross margin of 88%, compared to 87% in Q3 2024[4] - Operating expenses in Q3 2025 were $34.6 million, a 39% increase from $24.9 million in Q3 2024[5] - Net loss for Q3 2025 was $13.5 million, or $0.37 per share, compared to a net loss of $10.4 million, or $1.85 per share, in Q3 2024[6] Cash and Guidance - Cash, cash equivalents, and marketable securities totaled $168.5 million as of September 30, 2025[6] - Ceribell raised its revenue guidance for the full year 2025 to a range of $87 million to $89 million, indicating growth of approximately 33% to 36% over the previous year[7] Market Position and Strategy - The company ended Q3 2025 with 615 total active accounts[8] - Ceribell aims to establish point-of-care EEG as a new standard of care for seizure management, targeting a $2 billion addressable market opportunity[2]

Financial Performance - Total revenue for Q3 2025 was $19.552 million, a decrease of 11% from $22.086 million in Q3 2024[16] - Product revenue decreased to $13.800 million in Q3 2025, down 12.5% from $15.779 million in Q3 2024[16] - Gross profit for Q3 2025 was $9.484 million, compared to $12.126 million in Q3 2024, reflecting a decline of 21.5%[16] - The net loss for Q3 2025 was $34.687 million, compared to a net loss of $26.938 million in Q3 2024, representing a 28.5% increase in losses[16] - For the nine months ended September 30, 2025, the net loss was $94,179, compared to a net loss of $104,813 for the same period in 2024, representing a 9% improvement[24] - The Company reported a net loss from continuing operations of $31,684,000 for the three months ended September 30, 2025, compared to a net loss of $21,919,000 for the same period in 2024[103] Operating Expenses - Total operating expenses increased to $42.422 million in Q3 2025, up 9.5% from $38.825 million in Q3 2024[16] - Research and development expenses were $6.356 million in Q3 2025, a decrease of 8.4% from $6.939 million in Q3 2024[16] - Selling, general and administrative expenses rose to $26.595 million in Q3 2025, an increase of 8.7% from $24.466 million in Q3 2024[16] - Stock-based compensation expense for the quarter ending June 30, 2025, amounted to $8.474 million, reflecting an increase from $6.387 million in the previous quarter[20] - Stock-based compensation expense for the three months ended September 30, 2025, totaled $7,536,000, an increase from $4,649,000 in the same period in 2024[97] - The company recognized restructuring charges of approximately $10.8 million for workforce reductions and incurred an additional $2.2 million in facility-related restructuring expenses during the nine months ended September 30, 2025[116] Cash and Assets - Cash and cash equivalents decreased to $129.418 million as of September 30, 2025, down from $166.728 million at the end of 2024[14] - Total current assets increased to $472.439 million as of September 30, 2025, compared to $375.883 million at the end of 2024[14] - The total assets held for sale as of September 30, 2025, amounted to $230.7 million, with total liabilities of $22.2 million[65] - Cash and cash equivalents at the end of the period totaled $132,006, down from $211,938 at the end of the same period in 2024[24] - The fair value of total assets measured at fair value as of September 30, 2025, was $186,544,000, with cash equivalents and short-term investments comprising a significant portion[91] Liabilities and Equity - Total liabilities decreased slightly to $139.977 million as of September 30, 2025, from $140.623 million at the end of 2024[14] - As of September 30, 2025, total stockholders' equity was $399.659 million, with an accumulated deficit of $1,279.83 million[20] - The balance of restructuring liabilities at September 30, 2025, was $6.311 million, reflecting ongoing adjustments from previous restructuring plans[117] Business Operations and Strategy - The company expects the acquisition of SomaLogic and Sengenics to close in the first half of 2026, which will enhance its capabilities in the proteomics sector[32] - The Company completed the merger with SomaLogic on January 5, 2024, with a fair value of consideration transferred amounting to $444.2 million and recognized a gain on bargain purchase of $25.2 million[52] - The Company acquired 100% of Sengenics on November 21, 2024, further expanding its business operations[54] - The divestiture of the SomaScan Business to Illumina is expected to close in the first half of 2026, with an aggregate cash consideration of up to $425 million, including an upfront payment of $350 million[58][60] - The company has classified the results of the SomaScan Business as discontinued operations, impacting its financial reporting[34] Future Outlook - The Company updated its forecast for future sales under the Collaboration Agreement, reducing the transaction price from $158.4 million to $155.5 million due to decreased forecasted royalties[57] - The company expects to recognize $3,964,000 in revenue from unfulfilled performance obligations in the remainder of 2025[70] - The company plans to consolidate its R&D capabilities from South San Francisco to Singapore, with the process expected to be completed by December 31, 2025[113] Market and Economic Conditions - The company does not believe inflation has materially affected its business in the last two years, but anticipates increases in labor and operating costs if global inflation trends continue[184] - The company has not hedged its foreign currency exposure, which could materially affect its financial condition and results of operations[183]

Revenue Performance - Total revenue for Michael Kors decreased to $725 million in Q3 2025 from $738 million in Q3 2024, representing a decline of 1.8%[156] - Total revenue for Jimmy Choo decreased to $131 million in Q3 2025 from $140 million in Q3 2024, representing a decline of 6.4%[156] - Total revenue for the company decreased to $856 million in Q3 2025 from $878 million in Q3 2024, representing a decline of 2.5%[156] - Total revenue decreased by $22 million, or 2.5%, to $856 million for the three months ended September 27, 2025, compared to $878 million for the same period in 2024[162] - Michael Kors revenue decreased by $13 million, or 1.8%, to $725 million, while Jimmy Choo revenue decreased by $9 million, or 6.4%[163] - Total revenue decreased by $73 million, or 4.2%, to $1.653 billion for the six months ended September 27, 2025, compared to $1.726 billion for the same period in 2024[182] - Michael Kors revenue decreased by $53 million, or 3.8%, to $1.360 billion for the six months ended September 27, 2025, while Jimmy Choo revenue decreased by $20 million, or 6.4%, to $293 million[186] Operating Performance - The company reported a loss from operations of $12 million in Q3 2025 compared to a loss of $6 million in Q3 2024[156] - The company experienced a significant loss from operations of $12 million for the three months ended September 27, 2025, compared to a loss of $6 million in the prior year[161] - Loss from operations was $12 million for the three months ended September 27, 2025, compared to a loss of $6 million for the same period in 2024, representing a 100% increase in loss[172] - Michael Kors recorded income from operations of $136 million for the six months ended September 27, 2025, down from $162 million in the prior year, with an operating margin decrease from 11.5% to 10.0%[197] Expenses - Cost of goods sold for Michael Kors increased to $295 million in Q3 2025 from $287 million in Q3 2024, an increase of 2.8%[156] - Selling, general and administrative expenses for Michael Kors decreased to $339 million in Q3 2025 from $344 million in Q3 2024, a decrease of 1.5%[156] - Total operating expenses decreased by $19 million, or 3.4%, to $534 million, representing 62.4% of total revenue[165] - Selling, general and administrative expenses decreased by $16 million, or 3.2%, to $481 million, accounting for 56.2% of total revenue[167] - Total operating expenses decreased by $57 million, or 5.3%, to $1.020 billion for the six months ended September 27, 2025, with a decrease in operating expenses as a percentage of total revenue from 62.4% to 61.7%[184] - Selling, general and administrative expenses decreased by $52 million, or 5.3%, to $936 million for the six months ended September 27, 2025, compared to $988 million for the same period in 2024[188] Profitability - Gross profit decreased by $25 million, or 4.6%, to $522 million, with a gross profit margin of 61.0% for the three months ended September 27, 2025[164] - Gross profit decreased by $58 million, or 5.4%, to $1.024 billion for the six months ended September 27, 2025, with gross profit margin at 61.9% compared to 62.7% in the prior year[183] - Michael Kors operating margin decreased from 11.8% to 10.1% for the three months ended September 27, 2025, while Jimmy Choo's operating margin worsened from a loss of 3.6% to 6.9%[176] Asset Impairment - Impairment of assets during the three months ended September 27, 2025, was $21 million, compared to $20 million in the same period last year[156] - Asset impairment charges recognized were $21 million for the three months ended September 27, 2025, compared to $20 million for the same period in 2024[169] - The company recognized asset impairment charges of $21 million for the six months ended September 27, 2025, compared to $20 million for the same period in 2024[190] Macroeconomic Factors - The company is facing macroeconomic conditions and inflationary pressures that are likely to impact consumer spending on luxury items[148] - The U.S. Government announced tariffs on imports from select countries, which could materially impact revenue and profitability[149] - The company anticipates continued challenges in demand for certain categories of fashion luxury goods, particularly in EMEA and Asia[163] Store Operations - The total number of retail stores decreased from 981 in 2024 to 907 in 2025, with a notable reduction in full-price retail stores[157] - The Americas region had 264 Michael Kors stores and 41 Jimmy Choo stores as of September 27, 2025[157] Cash Flow and Financing - Cash used in operating activities was $13 million for the six months ended September 27, 2025, compared to cash provided of $138 million for the same period in 2024[204] - Net cash provided by financing activities was $187 million during the six months ended September 27, 2025, compared to net cash used of $67 million in the prior year[206] - The company had cash and cash equivalents of $120 million as of September 27, 2025, up from $107 million as of March 29, 2025[203] Debt and Commitments - As of September 27, 2025, the company has $1.024 billion in borrowings outstanding under its 2022 Credit Facility and $724 million under its 2025 Term Loans[221] - The company has multiple fixed to fixed cross-currency swap agreements with an aggregate notional amount of $3.5 billion to hedge its net investment in CHF denominated subsidiaries[218] - The company recorded off-balance sheet commitments of $30 million related to outstanding letters of credit as of September 27, 2025[213] - The company has $30 million in off-balance sheet commitments related to letters of credit, with $29 million issued outside of the 2025 Credit Facilities[213] - The company is exposed to interest rate risk related to borrowings under its various credit facilities, with interest rates tied to different benchmarks[220] - The company has 17 financial institutions participating in its 2025 Credit Facilities, with no institution maintaining a maximum commitment percentage in excess of 10%[208]

Financial Performance - Third quarter net income increased by $302 million, from $215 million to $517 million, primarily due to higher income tax benefits and margins from new projects in the Renewables SBU [217]. - Adjusted EBITDA rose by $132 million, from $698 million to $830 million, driven by contributions from new projects in the Renewables SBU and increased rider revenues in the Utilities SBU [218]. - For the nine months ended September 30, 2025, net income decreased by $352 million, from $646 million to $294 million, mainly due to lower earnings from the Energy Infrastructure SBU and the sale of AES Brasil [222]. - Total revenue for the third quarter of 2025 was $3,351 million, a 2% increase from $3,289 million in 2024 [237]. - The Utilities SBU revenue increased by 15% in Q3 2025, reaching $1,105 million compared to $961 million in Q3 2024 [237]. - Adjusted EPS for the nine months ended September 30, 2025, decreased by $0.07, from $1.60 to $1.53, primarily due to lower realized tax attributes at the Renewables SBU [226]. - The Renewables SBU operating margin increased by 13% in Q3 2025, reaching $213 million compared to $189 million in Q3 2024 [237]. - Net cash provided by operating activities increased by 32% in Q3 2025, totaling $1,297 million compared to $985 million in Q3 2024 [237]. - Consolidated revenue increased by $62 million, or 2%, for the three months ended September 30, 2025, compared to the same period in 2024, driven by higher transmission and distribution revenues [244]. - Operating margin increased by $13 million, or 2%, for the three months ended September 30, 2025, compared to the same period in 2024, despite a decrease in the Energy Infrastructure segment [246]. - For the nine months ended September 30, 2025, consolidated revenue decreased by $184 million, or 2%, primarily due to lower revenues from the Energy Infrastructure segment [249]. - The operating margin decreased by $265 million, or 14%, for the nine months ended September 30, 2025, compared to the same period in 2024, largely due to lower generation and prior year revenues from the AES Andes portfolio [253]. Expenses and Income - General and administrative expenses decreased by $11 million, or 19%, to $46 million for the three months ended September 30, 2025, reflecting cost reductions from the company's restructuring program [257]. - Interest expense decreased by $31 million, or 8%, to $348 million for the three months ended September 30, 2025, primarily due to the sale of AES Brasil [259]. - Other income decreased by $45 million, or 70%, to $19 million for the three months ended September 30, 2025, mainly due to a decrease in gains on remeasurement of contingent consideration [265]. - The gain on disposal and sale of business interests increased by $27 million, or 63%, to $70 million for the nine months ended September 30, 2025, primarily due to a gain on the selldown of Dominican Republic Renewables [271]. - Asset impairment expense decreased by $43 million, or 58%, to $31 million for the three months ended September 30, 2025, compared to the same period in 2024, due to prior year impairments [273]. - Asset impairment expense decreased by $232 million to a $74 million asset impairment reversal for the nine months ended September 30, 2025, compared to a $158 million expense for the same period in 2024 [274]. - The company recognized net foreign currency transaction losses of $57 million for the nine months ended September 30, 2025, primarily due to unrealized losses from the depreciation of the Argentine peso [277]. - Income tax benefit was $226 million for the three months ended September 30, 2025, compared to an income tax expense of $103 million for the same period in 2024, resulting in effective tax rates of (69)% and 31% respectively [282]. - Net income attributable to The AES Corporation increased by $135 million, or 27%, to $639 million for the three months ended September 30, 2025, compared to $504 million for the same period in 2024 [292]. - Net loss attributable to noncontrolling interests and redeemable stock of subsidiaries decreased by $270 million, or 48%, to $296 million for the nine months ended September 30, 2025, compared to $566 million for the same period in 2024 [291]. - Net equity in losses of affiliates increased by $34 million to $55 million for the nine months ended September 30, 2025, compared to $21 million for the same period in 2024, primarily driven by lower earnings from sPower [287]. - Other non-operating expense was $42 million for the nine months ended September 30, 2025, due to a $32 million impact from Uplight and a $10 million other-than-temporary impairment of convertible notes for 5B [281]. - Net loss from disposal of discontinued businesses was $37 million for the nine months ended September 30, 2025, compared to $7 million for the same period in 2024 [288]. - The company reported lower contributions from renewables projects placed in service in the current year of $155 million, impacting overall net income [293]. - Higher margins from the Renewables SBU increased by $74 million, excluding one-time restructuring costs, primarily due to increased revenue from new projects [293]. Earnings and Adjusted Metrics - For the three months ended September 30, 2025, the company reported a net income of $517 million, compared to $215 million for the same period in 2024, representing a 141% increase [304]. - Adjusted EBITDA for the three months ended September 30, 2025, was $830 million, up from $698 million in 2024, reflecting an increase of 19% [304]. - Adjusted EBITDA with Tax Attributes for the three months ended September 30, 2025, reached $1,256 million, compared to $1,174 million in 2024, indicating a growth of 7% [304]. - The company reported diluted earnings per share (EPS) of $0.94 for the three months ended September 30, 2025, compared to $0.86 for the same period in 2024, marking a 9% increase [318]. - For the nine months ended September 30, 2025, net income was $294 million, a decrease from $646 million in 2024, reflecting a decline of 54% [304]. - Adjusted PTC for the three months ended September 30, 2025, was $475 million, down from $582 million in 2024, representing a decrease of 18% [311]. - The company incurred impairment losses of $61 million for the three months ended September 30, 2025, compared to $37 million in 2024, indicating an increase of 65% [311]. - Interest expense for the three months ended September 30, 2025, was $348 million, slightly down from $379 million in 2024, a decrease of 8% [304]. - The company recognized tax attributes of $426 million for the three months ended September 30, 2025, compared to $476 million in 2024, reflecting a decrease of 10% [304]. - The company’s Adjusted EBITDA for the nine months ended September 30, 2025, was $2,102 million, compared to $1,996 million in 2024, showing an increase of 5% [304]. - For the three months ended September 30, 2025, the company reported a Non-GAAP diluted earnings per share of $0.95, compared to $0.72 for the same period in 2024, representing a 32% increase [319]. - Adjusted EBITDA for the three months ended September 30, 2025 increased by $82 million, reaching $296 million, a 38% increase from $214 million in the same period of 2024 [322]. - Operating Margin for the nine months ended September 30, 2025 increased by $19 million, primarily driven by a $147 million positive impact from new businesses and a $42 million impact from AES Andes moving to Renewables [324]. - Adjusted EBITDA with Tax Attributes for the nine months ended September 30, 2025 increased by $255 million, totaling $1,612 million, compared to $1,357 million in 2024, a 19% increase [326]. - The company realized $421 million from tax attributes earned by its U.S. renewables business during the three months ended September 30, 2025, down from $475 million in the same period of 2024 [323]. - Adjusted PTC for the three months ended September 30, 2025 increased by $25 million to $98 million, a 34% increase compared to the same period in 2024 [330]. - Operating Margin for the three months ended September 30, 2025 increased by $32 million, mainly due to higher transmission and rider revenues [328]. - The company reported a $66 million negative impact from the sale of AES Brasil in 2024, affecting the overall performance in the Renewables SBU [321]. - The company experienced a $150 million negative impact related to the sale of AES Brasil during the nine months ended September 30, 2025 [324]. - The company reported a $47 million increase in Adjusted EBITDA for the nine months ended September 30, 2025, totaling $659 million, compared to $619 million in 2024, a 6% increase [327]. - Adjusted EBITDA for the nine months ended September 30, 2025 increased by $40 million, primarily due to various operational drivers, adjusted for NCI, depreciation, and restructuring costs [332]. - Adjusted EBITDA with Tax Attributes for the nine months ended September 30, 2025 increased by $96 million, driven by a $56 million increase in realized tax attributes related to the Pike County BESS project [332]. - Operating Margin for the nine months ended September 30, 2025 decreased by $344 million, influenced by prior year revenues from the monetization of the Warrior Run coal plant PPA and lower generation due to dispatch [336]. - Adjusted EBITDA for the three months ended September 30, 2025 increased by $11 million, mainly due to increased ownership of Cochrane and equity earnings from Gatun starting commercial operations [335]. - Adjusted EBITDA for the nine months ended September 30, 2025 decreased by $140 million, primarily due to various operational challenges, adjusted for NCI and restructuring costs [337]. - Adjusted EBITDA for the nine months ended September 30, 2025 decreased by $7 million, mainly due to higher net losses at Fluence, partially offset by reduced general and administrative expenses [341]. Regulatory and Market Environment - The U.S. maintains a global safeguard tariff of 14% on solar cells and modules, which is expected to expire in February 2026 [345]. - The U.S. has imposed Section 301 tariffs on certain Chinese-made lithium-ion batteries, currently set at 7.5% and increasing to 25% effective January 1, 2026 [347]. - AES has contracted and imported all necessary solar panels for U.S. solar projects scheduled to become operational in 2025, with most panels manufactured in the U.S. [356]. - AES has contracted all battery needs for U.S. energy storage projects scheduled for completion in 2025, with almost all batteries sourced from U.S. or Korean suppliers [359]. - In 2024, the company realized $1,313 million in earnings from Tax Attributes, with $1,293 million from the Renewables SBU and $20 million from the Utilities SBU [377]. - For the nine months ended September 30, 2025, the company recognized $988 million in Tax Attributes, expecting an increase in earnings from Tax Attributes in 2025 aligned with growth in the U.S. renewables business [377]. - The 2025 Act significantly revised U.S. renewable energy tax credits, allowing wind and solar projects starting construction within 12 months of enactment to qualify for 100% of the credit without a 2027 deadline [370]. - The company anticipates that the majority of its renewables project backlog will continue to qualify for the Investment Tax Credit (ITC) and Production Tax Credit (PTC) despite potential additional burdens from the 2025 Act [374]. - The 2025 Act amended the Global Intangible Low Taxed Income (GILTI) provision, which may subject a portion of the company's foreign earnings to current U.S. taxation starting January 1, 2026 [380]. - The company expects to exit the substantial majority of its coal facilities owned in 2022 by year-end 2025, continuing efforts to reduce carbon intensity through long-term contracted renewables [398]. - The enactment of the 2025 Act requires substantial guidance from the U.S. Department of Treasury, which may materially impact the company's results of operations [378]. Strategic Initiatives and Operations - The company is actively managing a hedging program to mitigate the impact of rising interest rates on future debt refinancings and new projects under development [386]. - The Central Bank of Argentina initiated a new economic program supported by a $20 billion agreement with the International Monetary Fund, with $15 billion available in 2025 [390]. - The company believes the carrying amount of its long-lived assets in Puerto Rico, valued at $920 million, is recoverable as of September 30, 2025 [397]. - AES Ohio's distribution rate case includes an increase in annual distribution revenue requirement of $168 million, based on a capital structure of 53.87% equity and 46.13% long-term debt [407][408]. - AES Indiana's settlement agreement proposes an increase in revenue of $90.7 million, with a return on common equity of 9.75% and a cost of long-term debt of 5.34% on a rate base of approximately $5.5 billion [411]. - As of September 30, 2025, the carrying value of AES Maritza's long-lived assets is $336 million, with potential risks related to the PPA discussions and compliance with EU State Aid rules [405]. - AES Ohio withdrew its Smart Grid Phase 2 Application on May 23, 2025, due to financial uncertainty from new legislation, allowing flexibility in timing and scope of future investments [406]. - The Ohio legislature passed H.B. 15, allowing electric utilities to file three-year forecasted base distribution rate cases, which could materially impact AES Ohio's financial results [409]. - AES Ohio recorded a net deferral of $8.4 million for previously recognized costs related to the recovery of expenditures during Q3 2025 [408]. - AES Indiana expects to receive an order from the IURC during Q2 2026 regarding its rate case filing [411]. - AES Maritza's PPA remains in place, but there is uncertainty regarding its future due to ongoing reviews and potential discussions with DG Comp [404][405]. - Regulatory changes and decarbonization initiatives may require material capital expenditures and impact the estimated useful life of coal facilities [401][402].