Business Combination and Corporate Changes - Following the Business Combination on March 13, 2024, the company changed its name from "ESGEN Acquisition Corporation" to "Zeo Energy Corp."[361] - The Business Combination was accounted for as a reverse recapitalization, with Sunergy being treated as the accounting acquirer[367]. - The primary sellers retained 83.8% ownership of the company immediately following the Business Combination, ensuring no change in control[372]. Financial Performance - Revenue decreased by approximately $36.4 million, from $109.7 million in 2023 to $73.2 million in 2024, a decline of 33.2%[400]. - Gross profit decreased from $49.8 million in 2023 to $34.4 million in 2024, resulting in a gross margin increase from 45.4% to 47.0%[378]. - Adjusted EBITDA decreased from $6.98 million in 2023 to $1.96 million in 2024, with the adjusted EBITDA margin dropping from 6.4% to 2.7%[378]. - Contribution profit decreased from $19.7 million in 2023 to $14.6 million in 2024, with the contribution margin increasing from 18.0% to 19.9%[378]. - Cost of goods sold decreased by $21.4 million, from $59.4 million in 2023 to $38.0 million in 2024, maintaining a cost of goods sold percentage of 52.4%[401]. - General and administrative expenses increased by $8.7 million, from $12.9 million in 2023 to $21.6 million in 2024, primarily due to stock compensation expenses[404]. - Sales and marketing expenses decreased by $10.7 million, from $30.3 million in 2023 to $19.6 million in 2024, attributed to reduced commissions from lower revenue[403]. - Total revenue for 2024 was $73.2 million, down from $109.7 million in 2023, reflecting a decline in overall sales[419]. Cash Flow and Financial Position - As of December 31, 2024, cash and cash equivalents were approximately $5.6 million, down from $8.0 million in 2023[407]. - Net cash used in operating activities was approximately $8.7 million in 2024, a decrease of $20.7 million compared to a net cash provided of approximately $12.0 million in 2023[412]. - Net cash provided by financing activities was approximately $13.7 million in 2024, a significant increase of $18.9 million compared to a net cash used of $5.2 million in 2023[414]. - The company incurred approximately $7.4 million in net cash used in investing activities in 2024, compared to $1.0 million in 2023, primarily due to asset purchases[413]. - The company cannot assure that its cash and cash equivalents will be sufficient for its business needs over the next twelve months, indicating potential future financing requirements[410]. Sales and Market Strategy - The company has approximately 290 sales agents and 22 independent sales dealers as of December 31, 2024, focusing on a capital-light business strategy[358]. - The majority of sales in 2023 were generated in Florida, with a significant split between Florida and Ohio in 2024, indicating a focus on operational efficiency due to revenue decreases[359]. - The company aims to expand into new markets with favorable net metering policies and cost incentives, enhancing its customer base[359]. - The company plans to expand its residential sales into new markets, currently operating in eight states and servicing customers in 16 states[384]. - The company intends to expand its roofing business alongside solar installations to improve processing times and customer financing options[385]. - Revenues from lease arrangements accounted for 64% of sales in 2024, up from 21% in 2023, indicating a significant shift in customer financing preferences[412]. Operational Developments - The company has built a scalable regional operating platform to support rapid sales and installation growth through a multi-channel marketing approach[356]. - The company entered into a Promissory Note for $2.4 million in December 2024 to fund the creation of a year-round sales team[409]. - The company has approximately $3.6 million in trade-credit with solar equipment distributors and $2.4 million in a convertible promissory note with a related party[415].

Business Combination and Corporate Changes - Following the Business Combination on March 13, 2024, the company changed its name from "ESGEN Acquisition Corporation" to "Zeo Energy Corp."[361] - The Business Combination was accounted for as a reverse recapitalization, with Sunergy being treated as the accounting acquirer[367]. - The company retains majority control post-Business Combination, with the Primary Sellers owning 83.8% of the equity[372]. Financial Performance - Revenue decreased by approximately $36.4 million, from $109.7 million in 2023 to $73.2 million in 2024, a decline of 33.2%[400]. - Gross profit fell to $34.4 million in 2024, down from $49.8 million in 2023, with a gross margin of 47.0% compared to 45.4% in the previous year[378]. - Adjusted EBITDA decreased to $1.96 million in 2024, with an adjusted EBITDA margin of 2.7%, down from $6.98 million and 6.4% in 2023[378]. - Net loss increased to $9.87 million in 2024, compared to a net income of $4.85 million in 2023, representing a significant decline[378]. - Contribution profit for 2024 was $14.6 million, a decrease from $19.7 million in 2023, with a contribution margin of 19.9% compared to 18.0% in 2023[419]. Expenses and Cost Management - General and administrative expenses rose by $8.7 million to $21.6 million in 2024, primarily due to $7.8 million in stock compensation expenses[404]. - Sales and marketing expenses decreased by $10.7 million to $19.6 million in 2024, attributed to reduced commissions from lower revenue[403]. - Cost of goods sold decreased by $21.4 million, from $59.4 million in 2023 to $38.0 million in 2024, maintaining a cost of goods sold percentage of 52.4%[401]. Cash Flow and Capital Management - As of December 31, 2024, cash and cash equivalents were approximately $5.6 million, down from $8.0 million in 2023[407]. - Net cash used in operating activities was approximately $8.7 million in 2024, a decrease of $20.7 million compared to a net cash provided of approximately $12.0 million in 2023[412]. - Net cash used in investing activities was approximately $7.4 million in 2024, significantly higher than $1.0 million in 2023, primarily due to a $4.0 million asset purchase[413]. - The company cannot assure that its cash and cash equivalents will be sufficient for its business needs over the next twelve months, indicating potential future capital requirements[410]. Sales and Market Strategy - The company has approximately 290 sales agents and 22 independent sales dealers as of December 31, 2024, focusing on a capital-light business strategy[358]. - The majority of sales in 2023 were generated in Florida, with a significant split between Florida and Ohio in 2024, indicating a focus on operational efficiency due to revenue decreases[359]. - The company aims to expand into new markets with favorable net metering policies and cost incentives, enhancing its customer base[359]. - The company plans to expand its residential sales into new markets, currently operating in eight states and servicing customers in 16 states[384]. - The company intends to grow its in-house sales force and introduce a year-round sales team in 2025 to enhance operational efficiency[386]. Financing Activities - The company raised approximately $13.7 million in net cash from financing activities in 2024, primarily from the issuance of convertible preferred stock[414]. - The company has approximately $3.6 million in trade-credit with solar equipment distributors and $2.4 million in a convertible promissory note with a related party[415]. - The company entered into a promissory note for $2.4 million in December 2024 to fund the creation of a year-round sales team[409]. Revenue Composition - Revenues associated with lease arrangements accounted for 64% of sales in 2024, up from 21% in 2023[412]. - Total revenue for 2024 was $73.2 million, down from $109.7 million in 2023, resulting in a gross profit of $34.4 million compared to $49.8 million in 2023[419].

Financial Performance - Net income increased by 27% to $156.8 million, or $1.12 per diluted share, in Q2 2025, compared to $123.1 million, or $0.88 per diluted share, in Q2 2024[1] - Net sales reached a record $1,097.8 million in Q2 2025, up 15% from $955.4 million in Q2 2024, with an operating income increase of 19% to $248.2 million[2] - EBITDA increased by 18% to $297.7 million in Q2 2025, up from $252.4 million in Q2 2024[5] - Operating income for the three months ended April 30, 2025, was $248,152, up 18.6% from $209,153 in the prior year[34] - Net income attributable to HEICO for the three months ended April 30, 2025, was $156,793, representing a 27.4% increase from $123,146 in 2024[34] Cash Flow and Debt Management - Cash flow from operating activities rose by 45% to $204.7 million in Q2 2025, compared to $141.1 million in Q2 2024[7] - The total debt to net income ratio improved to 3.79x as of April 30, 2025, down from 4.34x as of October 31, 2024[8] - The net debt to EBITDA ratio improved to 1.86 as of April 30, 2025, compared to 2.06 on October 31, 2024[43] Segment Performance - The Flight Support Group's net sales increased by 19% to $767.1 million in Q2 2025, driven by a 14% organic net sales growth[11] - The Electronic Technologies Group's net sales increased by 7% to $342.2 million in Q2 2025, reflecting organic growth of 4%[18] - The Flight Support Group's operating margin improved to 24.1% in Q2 2025, up from 23.0% in Q2 2024[15] - The Electronic Technologies Group's operating margin was 22.8% in Q2 2025, down from 23.6% in Q2 2024, primarily due to a lower gross profit margin[23] Overall Growth - For the six months ended April 30, 2025, net sales reached $2,128,042, a 14.9% increase compared to $1,851,758 in the same period of 2024[36] - The company's EBITDA for the six months ended April 30, 2025, was $571,614, up 19.9% from $476,838 in 2024[43] Assets and Cash Position - Cash and cash equivalents increased to $242,309 as of April 30, 2025, compared to $204,161 at the end of the same period in 2024[42] - Total assets as of April 30, 2025, were $8,092,176, an increase from $7,592,822 on October 31, 2024[41] Tax Benefits - The company recognized a $27.2 million discrete tax benefit from stock option exercises during the first quarter of fiscal 2025, increasing net income attributable to HEICO by $26.5 million[40] Sales Growth Strategy - The company aims to achieve net sales growth across both segments, driven by strong organic demand and recent acquisitions[9]

Financial Performance - Net income increased by 27% to $156.8 million, or $1.12 per diluted share, in Q2 2025, compared to $123.1 million, or $0.88 per diluted share, in Q2 2024[1] - Net sales reached a record $1,097.8 million in Q2 2025, up 15% from $955.4 million in Q2 2024[2] - Operating income rose 19% to a record $248.2 million in Q2 2025, compared to $209.2 million in Q2 2024[2] - Net sales for the three months ended April 30, 2025, increased to $1,097,820, a 14.9% rise from $955,395 in the same period of 2024[34] - Operating income for the three months ended April 30, 2025, was $248,152, up 18.6% from $209,153 in the prior year[34] - Net income attributable to HEICO for the three months ended April 30, 2025, was $156,793, representing a 27.4% increase compared to $123,146 in 2024[34] - For the six months ended April 30, 2025, net sales reached $2,128,042, a 14.9% increase from $1,851,758 in the same period of 2024[36] - The company's EBITDA for the six months ended April 30, 2025, was $571,614, up 19.9% from $476,838 in 2024[43] Cash Flow and Assets - Cash flow from operating activities increased by 45% to $204.7 million in Q2 2025, up from $141.1 million in Q2 2024[7] - Cash and cash equivalents increased to $242,309 as of April 30, 2025, compared to $162,103 at the end of October 2024[41] - Total assets grew to $8,092,176 as of April 30, 2025, from $7,592,822 at the end of October 2024[41] Debt and Ratios - The total debt to net income ratio improved to 3.79x as of April 30, 2025, down from 4.34x as of October 31, 2024[8] - The net debt to EBITDA ratio improved to 1.86 as of April 30, 2025, compared to 2.06 in the prior year[43] Segment Performance - The Flight Support Group's net sales increased 19% to a record $767.1 million in Q2 2025, up from $647.2 million in Q2 2024[11] - The Electronic Technologies Group's net sales increased 7% to $342.2 million in Q2 2025, up from $319.3 million in Q2 2024[18] - The Flight Support Group achieved 14% organic net sales growth in Q2 2025, reflecting increased demand across all product lines[10] - The Electronic Technologies Group's operating margin was 22.8% in Q2 2025, down from 23.6% in Q2 2024, primarily due to a lower gross profit margin[23] Tax Benefits - The company recognized a $27.2 million discrete tax benefit from stock option exercises during the first quarter of fiscal 2025, increasing net income attributable to HEICO by $26.5 million[40] Growth Strategy - The Company aims to achieve net sales growth across both segments, driven by strong organic demand and recent acquisitions[9]

Financial Performance - The Company reported a net income of $7,675 for 2024, a significant increase from $795 in 2023, reflecting a growth of 867%[81] - Total revenue for 2024 was $78,508, up $18,928 or 32% from $59,580 in 2023, driven by increased sales in barrier rentals, shipping, installation, and utility products[86] - Operating income surged to $9,899 in 2024, an increase of $8,781 or 785% compared to $1,118 in 2023, primarily due to higher revenues and lower cost of sales[102] - The Company reported a net income of $7,675 for the year ended December 31, 2024, compared to $795 for 2023, with earnings per share increasing from $0.15 to $1.45[104] Sales and Revenue Growth - Soundwall sales increased by 54% in 2024 compared to 2023, attributed to higher production volumes across all plants[88] - Architectural sales saw a remarkable increase of 272% in 2024, linked to the production of two major projects initiated in early 2024[89] - Utility product sales surged by 171% in 2024, driven by the growing market for dry utility vaults supporting data center expansion[94] - Barrier rentals increased by 90% in 2024, with core rental fleet revenue rising by 52%, reflecting a strategic shift from barrier sales to rentals[96] Cost Management and Margins - Cost of sales as a percentage of revenue decreased to 78% in 2024 from 86% in 2023, indicating improved margins[82] - General and administrative expenses rose by 9% to $6,554 in 2024, influenced by higher salary rates and increased credit loss allowances[100] Cash Flow and Capital Expenditures - Cash provided by operations was $5,584, while cash disbursements from investing activities totaled $6,576, leading to a decrease in cash from $9,175 in 2023 to $7,548 in 2024[111] - Capital expenditures increased from $5,010 in 2023 to $6,629 in 2024, primarily for the expansion of the North Carolina production facility and new manufacturing equipment[112] - The Company anticipates capital spending for 2025 to be approximately $5,000, focusing on increased production capacity and miscellaneous manufacturing equipment[112] Accounts Receivable and Inventory - The Company's accounts receivable balance increased to $19,420 in 2024 from $17,209 in 2023, attributed to increased revenue, with days sales outstanding (DSO) improving from 113 days in 2023 to 88 days in 2024[116] - Inventory rose to $6,677 in 2024 from $5,150 in 2023, with annual inventory turns decreasing from 15.0 to 10.0[117] Sales Backlog - The Company's sales backlog as of March 3, 2025, was approximately $59.5 million, slightly down from $60.8 million the previous year, with expectations for increased sales volumes in 2025[85] - The Company had a sales backlog of approximately $59.5 million as of March 3, 2025, compared to $60.8 million in 2024, indicating stable demand for its products[123] Strategic Initiatives - The Company is continuing its strategy of innovation and new product development to mitigate risks associated with recessionary economic conditions[124] - The Company is implementing lean business practices to improve production quality, reduce defects, and increase sales volume[125] - The Company has a $5,000 line of credit with no balance outstanding as of December 31, 2024, which is collateralized by accounts receivable and inventory[110]

Financial Performance - Champion Homes reported net sales of approximately $2.5 billion for fiscal 2025, maintaining a market share of about 2.5% in the total U.S. housing market[16]. - For fiscal 2025, net sales increased by $458.6 million, or 22.7%, to $2.5 billion compared to fiscal 2024[162]. - U.S. manufacturing and retail net sales rose by $472.4 million, or 25.1%, driven by strong demand and the acquisition of Regional Homes[163]. - The number of U.S. homes sold increased by 20.6% to 25,273 units, with an average home selling price of $93.3 thousand, up 3.7%[162][163]. - The backlog of customer orders at the end of fiscal 2025 was $343.4 million, an increase from $315.8 million in fiscal 2024[157]. - The company's gross profit margin improved to 26.7% in fiscal 2025, up from 24.0% in fiscal 2024[160]. - Total gross profit for fiscal 2025 was $664.0 million, an increase of $178.2 million or 36.7% compared to $485.8 million in fiscal 2024[167]. - Adjusted EBITDA for fiscal 2025 was $285.1 million, representing 11.5% of net sales, compared to 12.1% in fiscal 2024[160]. - Interest (income), net was $(17.0) million in fiscal 2025, a decrease of $11.3 million or 39.9% compared to $(28.3) million in fiscal 2024[175]. - Income tax expense for fiscal 2025 was $53.7 million, representing an effective tax rate of 20.9%, compared to $47.1 million and 23.5% in fiscal 2024[177]. Operations and Manufacturing - The company operates 48 manufacturing facilities across 20 states in the U.S. and three provinces in Canada, employing around 9,000 individuals[16][36]. - The company is expanding its retail presence with 72 active sales centers across the U.S. as of the end of fiscal 2025[18]. - The company maintains a one to three-week supply of raw materials at manufacturing facilities to mitigate supply chain challenges[45]. - The company began production in previously idled facilities in Decatur, Indiana, and Bartow, Florida, to enhance manufacturing capacity[153]. - The company owns or leases six idle manufacturing facilities that could be utilized for additional production capacity, requiring capital investments[132]. Market Trends and Challenges - The housing industry experiences seasonal fluctuations, with demand for single-family new home products typically peaking in spring and summer, leading to decreased traffic during holidays and winter months[69]. - Raw material shortages and price increases, particularly for lumber and steel, could materially impact construction costs and cash flows, especially during high demand periods[72]. - In fiscal 2025, the U.S. imposed increased tariffs on foreign imports, which may lead to higher costs of goods and potential supply chain disruptions, adversely affecting financial results[73]. - Labor shortages and turnover in the homebuilding industry can increase production costs and delays, adversely affecting net sales and operational results[89]. - Increased costs of transportation due to a lack of qualified drivers may impact the cost of goods sold and the ability to meet customer demand timely[90]. - Changes in consumer preferences and the introduction of new product features are critical for maintaining competitiveness in the factory-built housing market[80]. - Regulatory changes related to environmental standards and zoning ordinances could adversely affect the production and sale of factory-built homes, impacting sales and cash flows[85][86]. - Public health issues, such as pandemics, could disrupt operations and have a material adverse effect on business results[84]. Strategic Initiatives - Champion Homes began lending activities through Champion Financing, providing tailored financing products to enhance home ownership accessibility[19]. - The company is focused on enhancing operational excellence and leveraging digital technologies to improve customer engagement and streamline processes[21][24]. - The company is pursuing strategic acquisitions to expand its capabilities efficiently, including retail locations and manufacturing facilities[24]. - The company acquired Regional Homes in October 2023, expanding its manufacturing and retail presence in the Southeast U.S.[152]. Financial Position and Cash Flow - The company had cash, cash equivalents, and restricted cash of $610.3 million at the end of fiscal 2025, up from $495.1 million at the end of fiscal 2024[184]. - The company has a $200.0 million revolving credit facility with no borrowings as of March 29, 2025, and total available borrowings under the credit agreement were $168.5 million as of March 30, 2024[189]. - The company anticipates compliance with its debt covenants and projects cash availability to exceed operational needs for the next year[184]. - Cash used in investing activities significantly decreased to $46.2 million in fiscal 2025 from $485.7 million in fiscal 2024, primarily due to the absence of major acquisitions[187]. - Cash used in financing activities was $73.0 million in fiscal 2025, compared to $10.9 million provided in fiscal 2024, largely due to $80.0 million in common stock repurchases[188]. Risks and Liabilities - The company faces risks from product liability claims and warranty claims, which can be costly and impact financial results[95]. - Increased interest rates and inflation have limited the purchasing power of potential customers, adversely affecting sales and financial results[107][110]. - The availability of wholesale financing for retailers is limited, which could negatively impact inventory levels and sales[111]. - Contingent repurchase obligations related to wholesale financing may incur additional expenses and reduce cash flows[112]. - The company has contingent liabilities totaling $17.5 million in surety bonds and $31.5 million in letters of credit as of March 29, 2025[194]. - The company recorded charges of $34.5 million for a remediation plan related to water intrusion product liability claims during the fourth quarter of fiscal 2024[197]. Corporate Governance and Compliance - The company is subject to extensive regulations affecting the production and sale of factory-built housing, with non-compliance potentially leading to sanctions[87]. - A material weakness in internal control over financial reporting was identified due to ineffective controls in the Regional Homes retail operations acquired in October 2023[117]. - The company has established a comprehensive cybersecurity program overseen by the Audit Committee, focusing on risk management and incident response[122][123]. - The company does not expect any material adverse effects from cybersecurity threats on its business strategy or financial condition[129].

Financial Performance - Net sales for Q1 2026 were $251.1 million, representing a 22% year-over-year growth[4] - GAAP gross margin increased to 52.3%, up from 48.3% a year ago, while Non-GAAP adjusted gross margin rose to 53.5% from 49.8%[4] - GAAP diluted earnings per share improved to $0.22 compared to a loss of $0.36 a year ago, and Non-GAAP adjusted diluted earnings per share increased to $0.38 from $0.06[4] - Adjusted EBITDA margin for Q1 2026 was 22.1%, up from 16.1% a year ago[4] - Operating income for Q1'26 was $36.0 million, up from $21.2 million in Q4'25 and $3.1 million in Q1'25, indicating a strong operational performance[25] - Net income for Q1'26 was $19.3 million, compared to $39.1 million in Q4'25 and a loss of $23.2 million in Q1'25, reflecting improved profitability[25] - Free cash flow for Q1'26 was $26.2 million, down from $30.9 million in Q4'25 but a significant improvement from a negative $1.4 million in Q1'25[29] - The adjusted net income (Non-GAAP) for Q1'26 was $33.9 million, slightly down from $34.5 million in Q4'25[37] Debt and Liquidity - The company made a $10 million term loan principal prepayment in Q1 and an additional $15 million in Q2 2026 to prioritize debt reduction[3] - Interest expense decreased to $6.2 million in Q1 2026 from $22.7 million a year ago[5] - Current liabilities decreased to $236.0 million from $283.0 million in the previous quarter, indicating improved liquidity[27] Outlook and Projections - The outlook for Q2 2026 includes projected net sales of $256.0 million, with an adjusted diluted earnings per share estimate of $0.40[6] - The company expects a normalized tax rate of 15% for fiscal year 2026, applied to each quarter[15] Operational Efficiency - Adjusted operating margin for Q1 2026 was 19.0%, compared to 12.2% a year ago[5] - The company reported a basic earnings per share of $0.22 for Q1'26, down from $0.48 in Q4'25 but an improvement from a loss of $0.36 in Q1'25[25] - The segment gross margin for Signal Integrity was 65.5% in Q1'26, while Analog Mixed Signal and Wireless had a gross margin of 62.3%[31] - The operating margin (GAAP) improved to 14.3% in Q1'26, up from 8.5% in Q4'25 and 1.5% in Q1'25[34] - Selling, general and administrative expenses (GAAP) decreased to $46.4 million in Q1'26 from $54.5 million in Q4'25[34] - The adjusted operating expenses (Non-GAAP) were $86.6 million in Q1'26, compared to $83.7 million in Q4'25[34] Strategic Focus - The company continues to invest strategically in innovation and operational scale to support long-term growth[3] - The company continues to focus on high-performance semiconductor and IoT systems, aiming to enhance its market position and expand its product offerings[22]

Revenue and Growth - Total revenue for fiscal year 2025 was $278.4 million, an increase of $18.9 million or 7.3% compared to $259.5 million in fiscal year 2024[182]. - Service revenue reached $181.4 million in fiscal year 2025, up $11.9 million or 7.0%, accounting for 65.2% of total revenue[183]. - Distribution segment sales increased by 7.8% to $97.0 million in fiscal year 2025, representing 34.8% of total revenue[184]. - Service revenue increased by $11.9 million, or 7.0%, in fiscal year 2025, with $10.4 million attributed to acquisitions[209]. - Distribution sales rose by $7.0 million, or 7.8%, in fiscal year 2025, primarily due to $7.2 million from acquisitions[213]. - Service organic growth was in the high single-digit range for both the fourth quarter and full fiscal year 2025, driven by consistent demand in the Calibration business[246]. - The company expects a return to high single-digit organic Service revenue growth once the macroeconomic environment normalizes[248]. Profitability - Total gross profit was $89.5 million in fiscal year 2025, a 6.7% increase from $83.8 million in fiscal year 2024[185]. - Service gross profit was $60.7 million, reflecting a 5.9% increase from fiscal year 2024[216]. - Net income for fiscal year 2025 was $14.5 million, an increase of $0.9 million from $13.6 million in fiscal year 2024[187]. - Net income for fiscal year 2025 was 5.2% of total revenue, slightly down from 5.3% in fiscal year 2024[207]. - Adjusted EBITDA for FY 2025 was $39.7 million, a 2.9% increase from $38.6 million in FY 2024[226]. - Adjusted diluted earnings per share for FY 2025 was $2.29, down from $2.36 in FY 2024[230]. Expenses and Margins - Operating expenses were $71.6 million, or 25.7% of total revenue, compared to $64.0 million, or 24.7% of total revenue, in fiscal year 2024[186]. - Total operating expenses increased by $7.6 million, or 11.8%, to $71.6 million in FY 2025 compared to FY 2024[220]. - The Service segment gross margin decreased by 40 basis points to 33.4% in fiscal year 2025, while the Distribution segment gross margin increased by 20 basis points to 29.7%[185]. - Service gross margin for FY 2025 was 36.2% in Q4, up from 35.7% in Q4 FY 2024[217]. - Distribution gross margin for FY 2025 was 28.2% in Q4, an increase of 20 basis points compared to FY 2024[219]. Cash Flow and Financial Position - Cash provided by operating activities was $39.0 million in FY 2025, up from $32.6 million in FY 2024[238]. - Net cash provided by operating activities increased to $39.0 million in fiscal year 2025 from $32.6 million in fiscal year 2024, primarily due to increases in depreciation and amortization[240]. - Accounts receivable rose by $8.2 million in fiscal year 2025, including $7.7 million from acquisitions, compared to a $3.1 million increase in fiscal year 2024[240]. - The inventory balance decreased by $2.9 million in fiscal year 2025, following a $0.5 million increase in fiscal year 2024[240]. - The company has access to a revolving credit facility of $80.0 million through June 2026[232]. - The interest rate for the revolving credit facility ranged from 5.1% to 6.2% during fiscal year 2025, with a fixed rate of 3.90% on the 2018 Term Loan[251]. - As of March 29, 2025, the leverage ratio was 0.78, compared to 0.10 at March 30, 2024[235]. Acquisitions and Strategic Initiatives - Acquired revenue from recent acquisitions, including Martin and Becnel, contributed $10.4 million to the Service segment's growth[175]. - Business acquisitions totaled $87.4 million in fiscal year 2025, significantly higher than $12.9 million in fiscal year 2024[242]. - Management is implementing a diversification strategy in the Distribution segment to mitigate impacts from specific industries and enhance competitive differentiation[179]. Tax and Currency - The company expects an effective tax rate of 27.0% to 29.0% for FY 2026[222]. - The anticipated income tax rate for fiscal year 2026 is projected to range between 27.0% and 29.0%[249]. - Approximately 90% of total revenues for fiscal years 2025 and 2024 were denominated in U.S. dollars, with a 10% change in the value of the Canadian dollar or Euro impacting revenue by approximately 1%[253]. - A foreign exchange contract with a notional amount of $1.1 million was outstanding as of March 29, 2025, to mitigate currency risk[254]. Product Shipments and Backorders - Total pending product shipments decreased by $1.8 million, or 34.7%, at the end of fiscal year 2025 compared to fiscal year 2024[214]. - Backorders at the end of fiscal year 2025 were $2.7 million, down from $4.5 million at the end of fiscal year 2024[214].

Financial Performance - Q1 revenue was $688 million, a 12% year-over-year increase, with subscription revenue also growing 12% to $673 million[6]. - GAAP operating income was $39 million, representing 6% of total revenue, compared to a loss of $47 million in Q1 FY25[6]. - Non-GAAP operating income increased to $184 million, or 27% of total revenue, up from $133 million, or 22% of total revenue, in Q1 FY25[6]. - GAAP net income was $62 million, compared to a net loss of $40 million in Q1 FY25, with diluted net income per share at $0.35[6]. - Non-GAAP net income rose to $158 million, with diluted net income per share at $0.86, compared to $117 million and $0.65 in Q1 FY25[6]. - Operating cash flow was $241 million, or 35% of total revenue, while free cash flow was $238 million, also 35% of total revenue[6]. - Total revenue for the three months ended April 30, 2025, was $688 million, a 11.5% increase from $617 million in the same period of 2024[27]. - Subscription revenue increased to $673 million, up 11.6% from $603 million year-over-year[27]. - Net income for the three months ended April 30, 2025, was $62 million, compared to a net loss of $40 million in the same period of 2024[27]. - Non-GAAP net income for the same period was $158 million, up from $117 million year-over-year, resulting in a non-GAAP net margin of 23%[40]. - Free cash flow for the three months ended April 30, 2025, was $238 million, compared to $214 million in the same period of 2024, maintaining a free cash flow margin of 35%[43]. - Operating income for the three months ended April 30, 2025, was $39 million, a significant improvement from an operating loss of $47 million in the same period of 2024[37]. - Total operating expenses decreased to $494 million from $516 million year-over-year, reflecting a reduction in research and development costs[27]. - The company reported a gross profit of $533 million for the three months ended April 30, 2025, resulting in a gross margin of 77%[35]. Future Projections - For Q2 FY26, the company expects total revenue between $710 million and $712 million, reflecting a growth rate of 10% year-over-year[10]. - For the full year FY26, total revenue is projected to be between $2.850 billion and $2.860 billion, indicating a growth rate of 9% to 10% year-over-year[10]. Strategic Focus - The company is focusing on profitable growth and innovation in identity security solutions for large organizations[3]. Performance Obligations - Remaining performance obligations (RPO) reached $4.084 billion, up 21% year-over-year, while current remaining performance obligations (cRPO) grew 14% to $2.227 billion[6]. Cash Position - Cash and cash equivalents increased to $494 million as of April 30, 2025, compared to $409 million at the end of January 2025[30]. - Total assets decreased slightly to $9,365 million from $9,437 million at the end of January 2025[30].

Revenue and Financial Performance - Revenue of $276 million, up 4% year-over-year, and up 5% in constant currency[2] - Box reported revenue of $276,272,000 for the three months ended April 30, 2025, an increase of 4% compared to $264,658,000 for the same period in 2024[41] - GAAP revenue for the three months ended April 30, 2025, was $276,272, representing a 4.8% increase from $264,658 in 2024[49] - Full year FY26 revenue guidance expected to be in the range of $1.165 billion to $1.170 billion, up 7% year-over-year[17] - Q2 FY26 revenue guidance expected to be in the range of $290 million to $291 million, up 8% year-over-year[12] Profitability Metrics - GAAP operating margin of 2.3% and non-GAAP operating margin of 25.3%[2] - Non-GAAP diluted EPS of $0.30, compared to $0.39 in the prior year[7] - GAAP diluted earnings per share (EPS) of $0.02, compared to $0.08 in the prior year[7] - Non-GAAP net income attributable to common stockholders for the three months ended April 30, 2025, was $45,243, down 22.5% from $58,400 in 2024[46] - Net income attributable to common stockholders was $3,515,000, a decrease of 69% from $11,513,000 in the prior year[41] - Net income for the three months ended April 30, 2025, was $8,194, a decrease of 52.5% compared to $17,222 in the same period of 2024[44] Cash Flow and Liquidity - Box's cash and cash equivalents increased to $689,628,000 as of April 30, 2025, compared to $624,575,000 at the end of January 2025[38] - Cash, cash equivalents, and restricted cash at the end of the period increased to $691,279, up from $450,385 at the end of the same period in 2024[44] - Non-GAAP free cash flow for the three months ended April 30, 2025, was $118,337, compared to $123,244 in 2024, reflecting a decrease of 4.8%[46] - Non-GAAP free cash flow was not explicitly stated but is calculated as cash flows from operating activities less net capital expenditures, indicating liquidity and profitability[34] Expenses and Cost Management - Total operating expenses increased to $209,261,000, up from $188,399,000, primarily driven by higher research and development and sales and marketing expenses[41] - Stock-based compensation expense totaled $54,894,000 for the three months ended April 30, 2025, compared to $51,162,000 in the same period last year[41] Market Position and Innovations - Box continues to focus on expanding its market presence and enhancing its platform capabilities through enterprise AI and content management solutions[35] - New AI innovations introduced, including AI Agents for enhanced decision-making and productivity[3] Performance Obligations and Billings - Remaining performance obligations (RPO) of $1.469 billion, up 21% year-over-year, or 17% on a constant currency basis[7] - Remaining performance obligations (RPO) represent contracted revenue not yet recognized, which is a key indicator of future revenue growth[33] - Billings of $242.3 million, up 27%, or 17% on a constant currency basis[7] - Billings, which include sales to new customers and subscription renewals, are considered a significant performance measure for understanding sales activity[31] Deferred Revenue - Deferred revenue at the end of the period was $574,119, an increase from $513,572 in the previous year[49] Share Repurchase - Box repurchased approximately 1.6 million shares for approximately $50 million in Q1 FY26[9] - The company repurchased $49,659 of common stock during the three months ended April 30, 2025, compared to $32,134 in 2024[44] Future Guidance - The company provided guidance for GAAP net income per share attributable to common stockholders for the fiscal year ending January 31, 2026, to be between $0.16 and $0.20[51] - Non-GAAP operating margin for the fiscal year ending January 31, 2026, is projected to be 28.0%[53]