[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) PepsiCo reported Q3 2025 GAAP net revenue growth of 2.6% and diluted EPS of $1.90, with organic revenue at 1.3% and core constant currency EPS declining by 2%, alongside strategic priorities for growth and cost optimization [Third-Quarter 2025 Reported (GAAP) Results](index=1&type=section&id=Third-Quarter%202025%20Reported%20(GAAP)%20Results) PepsiCo reported a 2.6% net revenue performance for Q3 2025, with a foreign exchange impact of 0.5%. Diluted EPS for the quarter was $1.90, representing an 11% decrease year-over-year, with a 1% positive foreign exchange impact | Metric | Third-Quarter | Year-to-Date | | :--- | :--- | :--- | | Net revenue performance | 2.6% | 0.8% | | Foreign exchange impact on net revenue | 0.5% | (1)% | | Earnings per share (EPS) | $1.90 | $4.15 | | EPS change | (11)% | (29)% | | Foreign exchange impact on EPS | 1% | (2)% | [Third-Quarter 2025 Organic/Core (non-GAAP) Results](index=1&type=section&id=Third-Quarter%202025%20Organic%2FCore%20(non-GAAP)%20Results) For Q3 2025, PepsiCo achieved 1.3% organic revenue performance. Core EPS stood at $2.29, with core constant currency EPS declining by 2% compared to the prior year | Metric | Third-Quarter | Year-to-Date | | :--- | :--- | :--- | | Organic revenue performance | 1.3% | 1.5% | | Core EPS | $2.29 | $5.88 | | Core constant currency EPS change | (2)% | (3.5)% | [CEO Commentary & Strategic Priorities](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Priorities) Chairman and CEO Ramon Laguarta highlighted accelerated reported net revenue growth, driven by international business resilience, improved momentum in North America Beverages, and portfolio reshaping. Key priorities for the future include accelerating growth and aggressively optimizing the cost structure through innovation, sharpening price pack architecture, and right-sizing the cost base - Reported net revenue growth accelerated, reflecting resilience in international business, improved momentum in North America Beverages, and benefits from portfolio reshaping actions[5](index=5&type=chunk) - Top priorities are to accelerate growth and aggressively optimize the cost structure[6](index=6&type=chunk) - Strategies include introducing a strong pipeline of innovation, continuously sharpening price pack architecture, and right-sizing the entire cost base[6](index=6&type=chunk) [Segment Performance Summary](index=2&type=section&id=Segment%20Performance%20Summary) PepsiCo's Q3 and year-to-date 2025 segment performance shows varied revenue and operating profit changes across North America, EMEA, Latin America, and Asia Pacific regions [Third-Quarter 2025 Segment Performance](index=2&type=section&id=Third-Quarter%202025%20Segment%20Performance) In Q3 2025, PepsiCo's total reported net revenue increased by 3%, with organic revenue growth of 1%. EMEA showed strong organic revenue growth at 5.5%, while PFNA experienced a 3% organic revenue decline. Operating profit saw a GAAP reported decline of 8% overall, but core constant currency operating profit declined by 1.5% Q3 2025 Revenue Performance by Segment | Segment | GAAP Reported % Change | Foreign Exchange Translation | Acquisitions and Divestitures | Organic % Change | Convenient Foods Volume % Change | Beverages Volume % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | PepsiCo Foods North America (PFNA) | — | — | (2.5) | (3) | (4) | | | PepsiCo Beverages North America (PBNA) | 2 | — | — | 2 | | (3) | | International Beverages Franchise (IB Franchise) | — | (1) | — | (1) | | (1) | | Europe, Middle East and Africa (EMEA) | 9 | (4) | — | 5.5 | (1) | 1.5 | | Latin America Foods (LatAm Foods) | 2 | 2 | — | 4 | — | | | Asia Pacific Foods | 2 | — | (1) | 1 | 3 | | | **Total** | **3** | **(0.5)** | **(1)** | **1** | **(1)** | **(1)** | Q3 2025 Operating Profit and EPS by Segment | Segment | GAAP Reported % Change | Items Affecting Comparability | Foreign Exchange Translation | Core Constant Currency % Change | | :--- | :--- | :--- | :--- | :--- | | PFNA | (5) | 2 | — | (3.5) | | PBNA | (20) | 13 | — | (7) | | IB Franchise | (5) | 13 | (1) | 7 | | EMEA | 1 | 6 | (4) | 3 | | LatAm Foods | (12) | 18 | 2 | 9 | | Asia Pacific Foods | 16 | 3 | (1) | 18 | | Corporate unallocated expenses | (3.5) | 19 | — | 16 | | **Total** | **(8)** | **7** | **(1)** | **(1.5)** | | **EPS** | **(11)** | **10** | **(1)** | **(2)** | [Year-to-Date 2025 Segment Performance](index=3&type=section&id=Year-to-Date%202025%20Segment%20Performance) Year-to-date 2025, PepsiCo's total reported net revenue increased by 1%, with organic revenue growth of 1.5%. LatAm Foods showed significant foreign exchange impact on revenue (10%) and strong core constant currency operating profit growth (8%). Overall GAAP reported operating profit declined by 25%, while core constant currency operating profit declined by 2% YTD 2025 Revenue Performance by Segment | Segment | GAAP Reported % Change | Foreign Exchange Translation | Acquisitions and Divestitures | Organic % Change | Convenient Foods Volume % Change | Beverages Volume % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | PFNA | — | — | (2) | (2) | (2) | | | PBNA | 1 | — | — | 1 | | (3) | | IB Franchise | 2 | 1 | — | 3 | | 1 | | EMEA | 6 | — | — | 6 | (5) | — | | LatAm Foods | (5) | 10 | — | 4 | 1 | | | Asia Pacific Foods | — | 1 | (1) | — | 4 | | | **Total** | **1** | **1** | **(0.5)** | **1.5** | **(2)** | **—** | YTD 2025 Operating Profit and EPS by Segment | Segment | GAAP Reported % Change | Items Affecting Comparability | Foreign Exchange Translation | Core Constant Currency % Change | | :--- | :--- | :--- | :--- | :--- | | PFNA | (7) | (1) | — | (8) | | PBNA | (77) | 77 | — | — | | IB Franchise | 2 | 5 | 2 | 9 | | EMEA | (13) | 20 | (1) | 5.5 | | LatAm Foods | (9) | 6 | 12 | 8 | | Asia Pacific Foods | (21) | 21 | — | — | | Corporate unallocated expenses | 9 | 5 | — | 14 | | **Total** | **(25)** | **22** | **2** | **(2)** | | **EPS** | **(29)** | **24** | **2** | **(3.5)** | [Financial Guidance and Outlook](index=4&type=section&id=Financial%20Guidance%20and%20Outlook) PepsiCo reaffirms its 2025 guidance for low-single-digit organic revenue growth and stable core constant currency EPS, with an updated foreign exchange impact and details on the investor webcast [Full-Year 2025 Guidance](index=4&type=section&id=Full-Year%202025%20Guidance) PepsiCo reaffirms its 2025 guidance, expecting low-single-digit organic revenue growth and core constant currency EPS to be approximately even with the prior year. The company anticipates a core annual effective tax rate of approximately 20% and plans total cash returns to shareholders of approximately $8.6 billion, comprising $7.6 billion in dividends and $1.0 billion in share repurchases - Company continues to expect a **low-single-digit increase** in organic revenue for 2025[18](index=18&type=chunk) - Core constant currency EPS is expected to be approximately **even with the prior year**[18](index=18&type=chunk) - Anticipates a core annual effective tax rate of approximately **20%**[18](index=18&type=chunk) - Total cash returns to shareholders of approximately **$8.6 billion**, including **$7.6 billion in dividends** and **$1.0 billion in share repurchases**[18](index=18&type=chunk) [Foreign Exchange Impact Update](index=4&type=section&id=Foreign%20Exchange%20Impact%20Update) The company has updated its expectation for foreign exchange translation headwind, now anticipating approximately 0.5 percentage points negative impact on reported net revenue and core EPS growth, an improvement from the previously expected 1.5-percentage-point headwind. This implies a 0.5% decline in core EPS for 2025, an improvement from the prior 1.5% decline - Foreign exchange translation headwind is now expected to be approximately **0.5 percentage points**, negatively impacting reported net revenue and core EPS growth (previously 1.5 percentage points)[15](index=15&type=chunk) - This updated assumption implies a **0.5% decline in core EPS in 2025** (previously 1.5% decline) compared to 2024 core EPS of $8.16[16](index=16&type=chunk) [Investor Webcast Information](index=4&type=section&id=Investor%20Webcast%20Information) PepsiCo will post prepared management remarks for its Q3 2025 results and 2025 outlook on October 9, 2025, at 6:30 a.m. (Eastern time) on its investor relations website. A live question and answer session with investors and financial analysts will follow at 8:15 a.m. (Eastern time) on the same day - Prepared management remarks for Q3 2025 results and 2025 outlook will be posted at 6:30 a.m. (Eastern time) on October 9, 2025, at https://www.pepsico.com/investors[17](index=17&type=chunk) - A live question and answer session will be hosted at 8:15 a.m. (Eastern time) on October 9, 2025, accessible via the company's investor website[17](index=17&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) PepsiCo's condensed consolidated statements of income, cash flows, and balance sheet for Q3 and year-to-date 2025 detail key financial positions and performance [Condensed Consolidated Statement of Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Income) For the 12 weeks ended September 6, 2025, PepsiCo reported net revenue of $23,937 million, a gross profit of $12,824 million, and net income attributable to PepsiCo of $2,603 million, resulting in diluted EPS of $1.90. For the 36 weeks ended September 6, 2025, net revenue was $64,582 million, gross profit $35,239 million, and diluted EPS $4.15 Condensed Consolidated Statement of Income (Selected Data) | Metric | 12 Weeks Ended 9/6/2025 (in millions) | 12 Weeks Ended 9/7/2024 (in millions) | 36 Weeks Ended 9/6/2025 (in millions) | 36 Weeks Ended 9/7/2024 (in millions) | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | $23,937 | $23,319 | $64,582 | $64,070 | | Cost of sales | $11,113 | $10,396 | $29,343 | $28,563 | | Gross profit | $12,824 | $12,923 | $35,239 | $35,507 | | Operating Profit | $3,569 | $3,872 | $7,941 | $10,637 | | Net Income Attributable to PepsiCo | $2,603 | $2,930 | $5,700 | $8,055 | | Diluted Net income attributable to PepsiCo per common share | $1.90 | $2.13 | $4.15 | $5.84 | - For the 12 and 36 weeks ended September 6, 2025, charges were recognized primarily related to the impairment of the **Rockstar brand**[20](index=20&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the 36 weeks ended September 6, 2025, net cash provided by operating activities was $5,468 million, a decrease from $6,220 million in the prior year. Net cash used for investing activities significantly increased to $5,237 million, primarily due to higher acquisitions. Net cash used for financing activities decreased to $1,008 million, largely due to increased proceeds from long-term debt issuances Condensed Consolidated Statement of Cash Flows (Selected Data) | Activity | 36 Weeks Ended 9/6/2025 (in millions) | 36 Weeks Ended 9/7/2024 (in millions) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $5,468 | $6,220 | | Net Cash Used for Investing Activities | $(5,237) | $(2,965) | | Net Cash Used for Financing Activities | $(1,008) | $(5,282) | | Net Decrease in Cash and Cash Equivalents and Restricted Cash | $(382) | $(2,418) | | Cash and Cash Equivalents and Restricted Cash, End of Period | $8,171 | $7,343 | - Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets significantly increased to **$3,176 million in 2025** from $31 million in 2024[23](index=23&type=chunk) - Proceeds from issuances of long-term debt more than doubled to **$8,179 million in 2025** from $4,014 million in 2024[25](index=25&type=chunk) [Condensed Consolidated Balance Sheet](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of September 6, 2025, PepsiCo's total assets increased to $106,558 million from $99,467 million at December 28, 2024. This increase was driven by higher accounts and notes receivable, inventories, and goodwill. Total liabilities also increased to $87,015 million, primarily due to a rise in long-term debt obligations. Total equity grew to $19,543 million Condensed Consolidated Balance Sheet (Selected Data) | Metric | 9/6/2025 (in millions) | 12/28/2024 (in millions) | | :--- | :--- | :--- | | Total Current Assets | $28,722 | $25,826 | | Property, Plant and Equipment, net | $29,053 | $28,008 | | Goodwill | $18,845 | $17,534 | | Total Assets | $106,558 | $99,467 | | Total Current Liabilities | $31,499 | $31,536 | | Long-Term Debt Obligations | $44,113 | $37,224 | | Total Liabilities | $87,015 | $81,296 | | Total Equity | $19,543 | $18,171 | - Accounts and notes receivable, net, increased to **$12,634 million** from $10,333 million[28](index=28&type=chunk) - Inventories increased to **$6,093 million** from $5,306 million[28](index=28&type=chunk) [Non-GAAP Measures & Glossary](index=9&type=section&id=Non-GAAP%20Measures%20%26%20Glossary) This section explains PepsiCo's use of non-GAAP financial measures for internal decision-making and provides a comprehensive glossary of related terms [Explanation of Non-GAAP Measures](index=9&type=section&id=Explanation%20of%20Non-GAAP%20Measures) PepsiCo uses non-GAAP financial measures like organic revenue performance, core results, and core constant currency results internally for operational and strategic decisions, including annual operating plans and compensation. These measures provide additional information for comparing historical operating results and understanding underlying performance trends, adjusting for items not indicative of ongoing performance such as mark-to-market gains/losses, restructuring charges, and acquisition/divestiture impacts - Non-GAAP measures are used internally for operating and strategic decisions, annual operating plan preparation, business performance evaluation, and compensation determination[29](index=29&type=chunk) - These measures facilitate comparison of historical operating results and trends, providing transparency on how the business is evaluated[29](index=29&type=chunk) - Adjustments are made for items like mark-to-market gains/losses, restructuring charges, acquisition/divestiture charges, asset impairment, product recall impacts, and pension/retiree medical-related amounts[30](index=30&type=chunk) [Glossary of Non-GAAP Terms](index=9&type=section&id=Glossary%20of%20Non-GAAP%20Terms) The glossary defines key non-GAAP terms used by PepsiCo, including 'Acquisitions and divestitures' for structural changes, 'Bottler case sales (BCS)' and 'Concentrate shipments and equivalents (CSE)' for beverage volume, 'Constant currency' for results assuming stable foreign exchange rates, and 'Core' results which exclude specific items affecting comparability. It also details various excluded items such as mark-to-market net impact, restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges (e.g., Rockstar brand), indirect and income tax impact, product recall-related impact, and pension and retiree medical-related impact. 'Organic revenue performance' is defined as revenue adjusted for foreign exchange, acquisitions, divestitures, and calendar week impacts - Acquisitions and divestitures: Mergers, acquisitions, divestitures, and structural changes[32](index=32&type=chunk) - Constant currency: Financial results assuming constant foreign currency exchange rates based on prior-year period rates[34](index=34&type=chunk) - Core: Non-GAAP financial measures excluding items affecting comparability, such as mark-to-market net impact, restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges (e.g., Rockstar brand), indirect and income tax impact, product recall-related impact, and pension and retiree medical-related impact[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) - Organic revenue performance: Revenue adjusted for foreign exchange translation, acquisitions and divestitures, and the impact of an additional week of results (every five or six years)[44](index=44&type=chunk) [Reconciliation of GAAP and Non-GAAP Information](index=11&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Information) This section provides detailed reconciliations of PepsiCo's GAAP reported results to non-GAAP measures for organic revenue, operating profit, and diluted EPS across various periods [Organic Revenue Performance Reconciliation (Q3 & YTD)](index=11&type=section&id=Organic%20Revenue%20Performance%20Reconciliation%20(Q3%20%26%20YTD)) The reconciliation details the adjustments from GAAP reported net revenue to non-GAAP organic revenue performance for both the 12 and 36 weeks ended September 6, 2025. For Q3 2025, total reported net revenue growth was 3%, which adjusted to 1% organic revenue growth after accounting for foreign exchange translation and acquisitions/divestitures. Year-to-date, reported net revenue growth was 1%, leading to 1.5% organic revenue growth Organic Revenue Performance Reconciliation (12 Weeks Ended 9/6/2025) | Segment | Reported Net Revenue % Change, GAAP | Impact of foreign exchange translation | Impact of acquisitions and divestitures | Organic Revenue % Change, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | — | — | (2.5) | (3) | | PBNA | 2 | — | — | 2 | | IB Franchise | — | (1) | — | (1) | | EMEA | 9 | (4) | — | 5.5 | | LatAm Foods | 2 | 2 | — | 4 | | Asia Pacific Foods | 2 | — | (1) | 1 | | **Total** | **3** | **(0.5)** | **(1)** | **1** | Organic Revenue Performance Reconciliation (36 Weeks Ended 9/6/2025) | Segment | Reported Net Revenue % Change, GAAP | Impact of foreign exchange translation | Impact of acquisitions and divestitures | Organic Revenue % Change, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | — | — | (2) | (2) | | PBNA | 1 | — | — | 1 | | IB Franchise | 2 | 1 | — | 3 | | EMEA | 6 | — | — | 6 | | LatAm Foods | (5) | 10 | — | 4 | | Asia Pacific Foods | — | 1 | (1) | — | | **Total** | **1** | **1** | **(0.5)** | **1.5** | [Certain Line Items by Segment Reconciliation (Q3 2025)](index=12&type=section&id=Certain%20Line%20Items%20by%20Segment%20Reconciliation%20(Q3%202025)) For the 12 weeks ended September 6, 2025, the reconciliation shows adjustments from GAAP to Core for various line items by segment. Total GAAP reported operating profit was $3,569 million (14.9% margin), which adjusted to $4,137 million (17.3% margin) on a non-GAAP Core basis, after adding back items affecting comparability such as restructuring and impairment charges ($142 million) and acquisition and divestiture-related charges ($221 million) Q3 2025 Operating Profit Reconciliation (Selected Data) | Metric | Reported Operating Profit, GAAP (in millions) | Items Affecting Comparability (in millions) | Core Operating Profit, non-GAAP (in millions) | Core Operating Profit Margin, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | $1,536 | $34 | $1,570 | 17.3% | | PBNA | $729 | $246 | $975 | | | IB Franchise | $436 | $75 | $511 | | | EMEA | $720 | $88 | $808 | | | LatAm Foods | $424 | $99 | $523 | | | Asia Pacific Foods | $151 | $5 | $156 | | | Corporate unallocated expenses | $(427) | $21 | $(406) | | | **Total** | **$3,569** | **$568** | **$4,137** | **17.3%** | - Items affecting comparability for Q3 2025 operating profit included **$142 million in restructuring and impairment charges**, **$221 million in acquisition and divestiture-related charges**, and **$100 million in impairment and other charges**[52](index=52&type=chunk) [Certain Line Items by Segment Reconciliation (Q3 2024)](index=13&type=section&id=Certain%20Line%20Items%20by%20Segment%20Reconciliation%20(Q3%202024)) For the 12 weeks ended September 7, 2024, GAAP reported operating profit was $3,872 million (16.6% margin). After adjusting for items affecting comparability, the non-GAAP Core operating profit was $4,176 million (17.9% margin). Key adjustments included $238 million for restructuring and impairment charges and $52 million for mark-to-market net impact Q3 2024 Operating Profit Reconciliation (Selected Data) | Metric | Reported Operating Profit, GAAP (in millions) | Items Affecting Comparability (in millions) | Core Operating Profit, non-GAAP (in millions) | Core Operating Profit Margin, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | $1,620 | $7 | $1,627 | 17.9% | | PBNA | $914 | $133 | $1,047 | | | IB Franchise | $458 | $15 | $473 | | | EMEA | $713 | $45 | $758 | | | LatAm Foods | $480 | $11 | $491 | | | Asia Pacific Foods | $129 | $2 | $131 | | | Corporate unallocated expenses | $(442) | $91 | $(351) | | | **Total** | **$3,872** | **$304** | **$4,176** | **17.9%** | - Items affecting comparability for Q3 2024 operating profit included **$238 million in restructuring and impairment charges** and **$52 million in mark-to-market net impact**[56](index=56&type=chunk) [Certain Line Items by Segment Reconciliation (YTD 2025)](index=14&type=section&id=Certain%20Line%20Items%20by%20Segment%20Reconciliation%20(YTD%202025)) For the 36 weeks ended September 6, 2025, GAAP reported operating profit was $7,941 million (12.3% margin). After adjustments, non-GAAP Core operating profit was $10,837 million (16.8% margin). Significant adjustments included $1,960 million for impairment and other charges, $554 million for restructuring and impairment charges, and $308 million for acquisition and divestiture-related charges YTD 2025 Operating Profit Reconciliation (Selected Data) | Metric | Reported Operating Profit, GAAP (in millions) | Items Affecting Comparability (in millions) | Core Operating Profit, non-GAAP (in millions) | Core Operating Profit Margin, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | $4,463 | $170 | $4,633 | 16.8% | | PBNA | $550 | $2,014 | $2,564 | | | IB Franchise | $1,248 | $73 | $1,328 | | | EMEA | $1,310 | $388 | $1,698 | | | LatAm Foods | $1,301 | $118 | $1,419 | | | Asia Pacific Foods | $321 | $89 | $410 | | | Corporate unallocated expenses | $(1,252) | $37 | $(1,215) | | | **Total** | **$7,941** | **$2,896** | **$10,837** | **16.8%** | - Items affecting comparability for YTD 2025 operating profit included **$1,960 million in impairment and other charges**, **$554 million in restructuring and impairment charges**, and **$308 million in acquisition and divestiture-related charges**[60](index=60&type=chunk) [Certain Line Items by Segment Reconciliation (YTD 2024)](index=15&type=section&id=Certain%20Line%20Items%20by%20Segment%20Reconciliation%20(YTD%202024)) For the 36 weeks ended September 7, 2024, GAAP reported operating profit was $10,637 million (16.6% margin). After adjustments, non-GAAP Core operating profit was $11,236 million (17.5% margin). Key adjustments included $393 million for restructuring and impairment charges and $181 million for product recall-related impact YTD 2024 Operating Profit Reconciliation (Selected Data) | Metric | Reported Operating Profit, GAAP (in millions) | Items Affecting Comparability (in millions) | Core Operating Profit, non-GAAP (in millions) | Core Operating Profit Margin, non-GAAP | | :--- | :--- | :--- | :--- | :--- | | PFNA | $4,802 | $228 | $5,030 | 17.5% | | PBNA | $2,411 | $150 | $2,561 | | | IB Franchise | $1,221 | $15 | $1,236 | | | EMEA | $1,509 | $85 | $1,594 | | | LatAm Foods | $1,436 | $32 | $1,468 | | | Asia Pacific Foods | $407 | $6 | $413 | | | Corporate unallocated expenses | $(1,149) | $83 | $(1,066) | | | **Total** | **$10,637** | **$599** | **$11,236** | **17.5%** | - Items affecting comparability for YTD 2024 operating profit included **$393 million in restructuring and impairment charges** and **$181 million in product recall-related impact**[64](index=64&type=chunk) [Certain Line Items Reconciliation (Q3 2025 & Q3 2024)](index=16&type=section&id=Certain%20Line%20Items%20Reconciliation%20(Q3%202025%20%26%20Q3%202024)) For Q3 2025, GAAP diluted EPS was $1.90, which adjusted to $2.29 on a non-GAAP Core basis. For Q3 2024, GAAP diluted EPS was $2.13, adjusting to $2.31 Core. The reconciliation highlights the impact of various items affecting comparability on net income and EPS, such as acquisition and divestiture-related charges and indirect and income tax impact Q3 Diluted EPS Reconciliation | Metric | 12 Weeks Ended 9/6/2025 (GAAP) | Items Affecting Comparability (9/6/2025) | 12 Weeks Ended 9/6/2025 (Core) | 12 Weeks Ended 9/7/2024 (GAAP) | Items Affecting Comparability (9/7/2024) | 12 Weeks Ended 9/7/2024 (Core) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net income attributable to PepsiCo per common share - diluted | $1.90 | $0.39 | $2.29 | $2.13 | $0.18 | $2.31 | | Effective tax rate | 21.4% | -2.0% | 19.4% | 20.3% | 0.0% | 20.3% | - For Q3 2025, items affecting comparability increased diluted EPS by **$0.39**, including **$0.12 from acquisition and divestiture-related charges** and **$0.09 from indirect and income tax impact**[68](index=68&type=chunk) - For Q3 2024, items affecting comparability increased diluted EPS by **$0.18**, primarily from **$0.14 in restructuring and impairment charges**[68](index=68&type=chunk) [Certain Line Items Reconciliation (YTD 2025 & YTD 2024)](index=17&type=section&id=Certain%20Line%20Items%20Reconciliation%20(YTD%202025%20%26%20YTD%202024)) For YTD 2025, GAAP diluted EPS was $4.15, which adjusted to $5.88 on a non-GAAP Core basis. For YTD 2024, GAAP diluted EPS was $5.84, adjusting to $6.20 Core. The reconciliation highlights significant adjustments for impairment and other charges, which added $1.12 to YTD 2025 Core EPS YTD Diluted EPS Reconciliation | Metric | 36 Weeks Ended 9/6/2025 (GAAP) | Items Affecting Comparability (9/6/2025) | 36 Weeks Ended 9/6/2025 (Core) | 36 Weeks Ended 9/7/2024 (GAAP) | Items Affecting Comparability (9/7/2024) | 36 Weeks Ended 9/7/2024 (Core) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net income attributable to PepsiCo per common share - diluted | $4.15 | $1.73 | $5.88 | $5.84 | $0.36 | $6.20 | | Effective tax rate | 20.8% | -0.6% | 20.2% | 20.2% | 0.1% | 20.3% | - For YTD 2025, items affecting comparability increased diluted EPS by **$1.73**, with impairment and other charges contributing **$1.12**[72](index=72&type=chunk) - For YTD 2024, items affecting comparability increased diluted EPS by **$0.36**, with restructuring and impairment charges contributing **$0.24** and product recall-related impact contributing **$0.10**[72](index=72&type=chunk) [Fiscal 2024 Diluted EPS Reconciliation](index=18&type=section&id=Fiscal%202024%20Diluted%20EPS%20Reconciliation) For the fiscal year 2024, PepsiCo's reported diluted EPS (GAAP) was $6.95. After adjusting for various items affecting comparability, the non-GAAP Core diluted EPS was $8.16. Significant adjustments included $0.41 for restructuring and impairment charges and $0.38 for impairment and other charges Fiscal 2024 Diluted EPS Reconciliation | Metric | Year Ended 12/28/2024 | | :--- | :--- | | Reported diluted EPS, GAAP measure | $6.95 | | Mark-to-market net impact | (0.01) | | Restructuring and impairment charges | 0.41 | | Acquisition and divestiture-related charges | 0.01 | | Impairment and other charges | 0.38 | | Indirect and income tax impact | 0.16 | | Product recall-related impact | 0.10 | | Pension and retiree medical-related impact | 0.16 | | **Core diluted EPS, non-GAAP measure** | **$8.16** | [Cautionary Statement](index=19&type=section&id=Cautionary%20Statement) This section outlines cautionary statements regarding PepsiCo's forward-looking statements and identifies key risks that could materially affect future results [Forward-Looking Statements and Risk Factors](index=19&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section contains cautionary statements regarding forward-looking statements, including 2025 guidance, which are based on current information and projections. These statements inherently involve risks and uncertainties that could cause actual results to differ materially. Key risks include future demand, brand image damage, competition, workforce management, water scarcity, retail landscape changes, supply chain disruptions, geopolitical conditions, economic changes, cyber incidents, and regulatory compliance. Investors are advised not to place undue reliance on these statements and to refer to SEC filings for additional risk factors - Forward-looking statements are based on currently available information, operating plans, and projections, and inherently involve risks and uncertainties[79](index=79&type=chunk) - Risks include future demand for products, damage to reputation, product recalls, competition, workforce management, water scarcity, changes in retail landscape, supply chain disruptions, political/social/geopolitical conditions, economic conditions, cyber incidents, and regulatory compliance[79](index=79&type=chunk) - Investors are cautioned not to place undue reliance on forward-looking statements and should refer to PepsiCo's SEC filings (Form 10-K, 10-Q, 8-K) for additional risk factors[80](index=80&type=chunk)

[Filing Information](index=1&type=section&id=Filing%20Information) This section details the registrant's identification, contact information, and registered securities with their trading symbols and exchanges [Registrant Details](index=1&type=section&id=Registrant%20Details) This section provides the basic identification details for SuRo Capital Corp. as filed with the SEC, including its address and contact information - Registrant: **SURO CAPITAL CORP.**, located at 640 Fifth Avenue, 12th Floor, New York, NY 10019. Telephone: (212) 931-6331[1](index=1&type=chunk) [Securities Information](index=1&type=section&id=Securities%20Information) Details the classes of securities registered by SuRo Capital Corp. and their trading information, confirming its status regarding emerging growth company regulations Registered Securities | Title of each class | Trading symbol | Name of each exchange on which registered | | :------------------ | :------------- | :-------------------------------------- | | Common Stock, par value $0.01 per share | SSSS | Nasdaq Global Select Market | | 6.00% Notes due 2026 | SSSSL | Nasdaq Global Select Market | - The registrant is **not an emerging growth company**[4](index=4&type=chunk) [Item 2.02. Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition) This section provides preliminary estimates for the third quarter ended September 30, 2025, and clarifies its furnishing status [Preliminary Q3 2025 Results Overview](index=2&type=section&id=Preliminary%20Q3%202025%20Results%20Overview) SuRo Capital Corp. issued a press release on October 8, 2025, providing preliminary Q3 2025 estimates, furnished under Section 18 of the Exchange Act - SuRo Capital Corp. issued a press release on **October 8, 2025**, containing preliminary estimates for the third quarter ended September 30, 2025[5](index=5&type=chunk) - The information disclosed is **'furnished'** and **not 'filed'** for purposes of Section 18 of the Securities Exchange Act of 1934, as amended[6](index=6&type=chunk) [Item 8.01. Other Events](index=2&type=section&id=Item%208.01.%20Other%20Events) This section covers preliminary financial estimates, investment portfolio activities, at-the-market offering updates, and dividend declarations [Preliminary Estimates and Investment Portfolio Update](index=2&type=section&id=Preliminary%20Estimates%20and%20Investment%20Portfolio%20Update) This section provides preliminary Q3 2025 financial estimates, including NAV per share, and details investment activities, ATM offering status, and dividend declarations [Preliminary Financial Estimates](index=2&type=section&id=Preliminary%20Financial%20Estimates) This subsection presents the estimated Net Asset Value per share for Q3 2025 and the total outstanding common stock shares Net Asset Value (NAV) Per Share | Date | NAV Per Share | | :---------------- | :------------ | | June 30, 2025 | ~$9.18 | | September 30, 2024 | ~$6.73 | | September 30, 2025 (estimated) | $9.00 - $9.50 | - As of September 30, 2025, there were **25,119,091 shares** of the Company's common stock outstanding[9](index=9&type=chunk) [Investment Portfolio Activity](index=2&type=section&id=Investment%20Portfolio%20Activity) This subsection details the company's investment holdings, new investments, and sales activities during the third quarter of 2025 - As of September 30, 2025, the Company held positions in **37 portfolio companies** (**33 privately held** and **4 publicly held**)[10](index=10&type=chunk) New Investments During Q3 2025 | Portfolio Company | Investment Type | Transaction Date | Amount ($) | | :---------------------------------- | :---------------- | :--------------- | :----- | | Supplying Demand, Inc. (d/b/a Liquid Death) | Convertible Note | 7/29/2025 | 0.3 million | | HL Digital Assets Inc. | Preferred Shares | 9/18/2025 | 5.0 million | - HL Digital Assets Inc.'s primary purpose is to invest and manage its investment in **HYPE**, the digital token of Hyperliquid[12](index=12&type=chunk) Investment Sales/Proceeds During Q3 2025 | Portfolio Company | Transaction Date | Quantity | Average Net Share Price ($) | Net Proceeds ($) | Realized Gain ($) | | :------------------------------------ | :--------------- | :------- | :---------------------- | :----------- | :------------ | | CW Opportunity 2 LP | Various | -- | -- | 7.2 million | 3.7 million | | GrabAGun Digital Holdings Inc. – Public Warrants | Various | 395,512 | 1.67 | 0.7 million | 0.5 million | - SuRo Capital retains approximately **83.4%** of its investment in CW Opportunity 2, LP as of September 30, 2025. The realized gain includes a discount related to estimated fees[20](index=20&type=chunk) - As of September 30, 2025, SuRo Capital held **1,204,488** remaining GrabAGun Digital Holdings Inc. public warrants[20](index=20&type=chunk) [At-The-Market Offering](index=3&type=section&id=At-The-Market%20Offering) This subsection details the shares sold and remaining value under the company's at-the-market offering during Q3 2025 - During Q3 2025, SuRo Capital sold **1,230,984 shares** under its at-the-market (ATM) offering for gross aggregate proceeds of approximately **$10.8 million**[14](index=14&type=chunk) - The remaining aggregate dollar value of shares that may yet be sold under the ATM Offering is approximately **$88.0 million**[14](index=14&type=chunk) [Dividend Declaration](index=3&type=section&id=Dividend%20Declaration) This subsection reports the cash dividend declared and paid in July 2025 to common stockholders - On **July 3, 2025**, a cash dividend of **$0.25 per share** was declared, paid on **July 31, 2025**, to common stockholders of record as of **July 21, 2025**[15](index=15&type=chunk) [Preliminary Estimates and Guidance](index=3&type=section&id=Preliminary%20Estimates%20and%20Guidance) This section clarifies that the preliminary financial estimates are unaudited and subject to change, with the full Q3 2025 results expected in November 2025 - The preliminary financial estimates are **unaudited** and prepared by management; actual results may differ materially[16](index=16&type=chunk) - The Company expects to announce its third quarter ended September 30, 2025 results in **November 2025**[17](index=17&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This standard disclosure warns that forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are **not guarantees of future performance** and involve risks and uncertainties that could cause actual results to differ materially from projections[18](index=18&type=chunk) - The Company undertakes **no obligation** to update any forward-looking statement[18](index=18&type=chunk) [Item 9.01. Financial Statements and Exhibits](index=3&type=section&id=Item%209.01.%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K filing, including the press release and interactive data file [Exhibits List](index=3&type=section&id=Exhibits%20List) This section lists the exhibits accompanying the Form 8-K filing, including the press release and interactive data file Exhibits Filed | Exhibit No. | Description | | :------------ | :---------------------------------------------------- | | Exhibit 99.1 | Press Release dated October 8, 2025* | | Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | - Exhibit 99.1 (Press Release) is **'furnished'** and **not 'filed'**, as described in Item 2.02[19](index=19&type=chunk) [Signature](index=4&type=section&id=Signature) This section provides the signatory details for the report, including the officer's name, title, and signing date - The report was signed on **October 8, 2025**, by **Allison Green**, **Chief Financial Officer, Chief Compliance Officer, Treasurer, and Corporate Secretary** of SuRo Capital Corp[23](index=23&type=chunk)

[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) This section details the registrant's identity and stock exchange listing [Registrant Details](index=1&type=section&id=Registrant%20Details) FS KKR Capital Corp. is identified as the registrant, a Maryland corporation, with common stock traded on the New York Stock Exchange under FSK - Registrant: **FS KKR Capital Corp.**[1](index=1&type=chunk) - State of Incorporation: **Maryland**[1](index=1&type=chunk) | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common stock | FSK | New York Stock Exchange | [Item 2.02. Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02.%20Results%20of%20Operations%20and%20Financial%20Condition) This item announces the upcoming conference call for third quarter 2025 financial results [Third Quarter 2025 Earnings Call Announcement](index=3&type=section&id=Third%20Quarter%202025%20Earnings%20Call%20Announcement) FS KKR Capital Corp. announced it will host a conference call to discuss its third quarter 2025 results on Thursday, November 6, 2025 - Conference Call Date: **Thursday, November 6, 2025**[4](index=4&type=chunk) - Conference Call Time: **9:00 a.m. (Eastern Time)**[4](index=4&type=chunk) - Purpose: Discuss third quarter 2025 results[4](index=4&type=chunk) [Item 7.01. Regulation FD Disclosure](index=3&type=section&id=Item%207.01.%20Regulation%20FD%20Disclosure) This item discloses the declared cash distribution and the availability of an investor presentation [Cash Distribution Declaration](index=3&type=section&id=Cash%20Distribution%20Declaration) The Company announced a cash distribution of $0.70 per share, payable in December 2025 to stockholders of record in early December 2025 | Metric | Value | | :-------------------------- | :--------------------- | | Cash Distribution per Share | $0.70 | | Payment Date | On or about Dec 17, 2025 | | Record Date | Dec 3, 2025 | [Investor Presentation Availability](index=3&type=section&id=Investor%20Presentation%20Availability) A presentation containing financial and operating information will be made available on the Company's website prior to the November 6, 2025 conference call - A presentation with financial and operating information will be available on the Company's website (www.fskkradvisor.com/fsk) under 'Events & Presentations' before the November 6, 2025 conference call[7](index=7&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section provides a disclaimer regarding forward-looking statements and outlines potential risk factors [Disclaimer and Risk Factors](index=3&type=section&id=Disclaimer%20and%20Risk%20Factors) This section includes standard forward-looking statements, identified by terms like 'believes' and 'expects,' which are subject to inherent uncertainties - The report contains forward-looking statements, identified by words such as 'believes,' 'expects,' and 'projects,' which are subject to inherent uncertainties[8](index=8&type=chunk) - Actual results could differ materially due to factors including changes in the economy, risks from terrorism, natural disasters or pandemics, future changes in laws or regulations, and stock price fluctuations[8](index=8&type=chunk) - The Company undertakes no obligation to update or revise any forward-looking statements[8](index=8&type=chunk) [Item 9.01. Financial Statements and Exhibits](index=3&type=section&id=Item%209.01.%20Financial%20Statements%20and%20Exhibits) This item lists the exhibits filed with the report, specifically a press release [Exhibits List](index=3&type=section&id=Exhibits%20List) This item lists Exhibit 99.1, which is a Press Release dated October 8, 2025, incorporated by reference | Exhibit Number | Description | | :------------- | :-------------------------- | | 99.1 | Press Release, dated Oct 8, 2025 | [SIGNATURE](index=4&type=section&id=SIGNATURE) This section confirms the official authorization and signing of the report by the company's General Counsel [Report Authorization](index=4&type=section&id=Report%20Authorization) The report was duly signed on behalf of FS KKR Capital Corp. by Stephen Sypherd, General Counsel, on October 8, 2025, pursuant to the Securities Exchange Act of 1934 - The report was signed by Stephen Sypherd, General Counsel of FS KKR Capital Corp., on **October 8, 2025**[11](index=11&type=chunk)[12](index=12&type=chunk) [EXHIBIT INDEX](index=5&type=section&id=EXHIBIT%20INDEX) This section provides a comprehensive listing of all exhibits accompanying the filing [Detailed Exhibit Listing](index=5&type=section&id=Detailed%20Exhibit%20Listing) This section provides a detailed index of the exhibits filed with the report, specifically Exhibit 99.1, the Press Release dated October 8, 2025 | Exhibit Number | Description | | :------------- | :-------------------------- | | 99.1 | Press Release, dated Oct 8, 2025 |

PART I—FINANCIAL INFORMATION [ITEM 1. Consolidated Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Resources Connection, Inc. for the three months ended August 30, 2025, and August 24, 2024, including balance sheets, statements of operations, comprehensive loss, stockholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, acquisitions, segment information, and other financial disclosures [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific points in time, detailing assets, liabilities, and stockholders' equity Consolidated Balance Sheet Metrics (in thousands) | Metric (in thousands) | August 30, 2025 | May 31, 2025 | Change | % Change | | :-------------------- | :-------------- | :----------- | :----- | :------- | | Cash and cash equivalents | $77,518 | $86,147 | $(8,629) | -10.0% | | Trade accounts receivable, net | $93,555 | $99,210 | $(5,655) | -5.7% | | Total current assets | $188,248 | $203,686 | $(15,438) | -7.6% | | Total assets | $287,211 | $304,688 | $(17,477) | -5.7% | | Accrued salaries and related obligations | $32,207 | $47,931 | $(15,724) | -32.8% | | Total current liabilities | $58,614 | $75,402 | $(16,788) | -22.3% | | Total liabilities | $80,852 | $97,607 | $(16,755) | -17.2% | | Total stockholders' equity | $206,359 | $207,081 | $(722) | -0.3% | [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific periods, providing insight into operational performance Consolidated Statements of Operations Metrics (in thousands, except per share) | Metric (in thousands, except per share) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | Change | % Change | | :------------------------------------ | :--------------------------------- | :--------------------------------- | :----- | :------- | | Revenue | $120,229 | $136,935 | $(16,706) | -12.2% | | Cost of services | $72,760 | $86,948 | $(14,188) | -16.3% | | Gross profit | $47,469 | $49,987 | $(2,518) | -5.0% | | Gross profit margin | 39.5% | 36.5% | +3.0 pp | | | Selling, general and administrative expenses | $47,916 | $48,910 | $(994) | -2.0% | | Goodwill impairment | $0 | $3,855 | $(3,855) | -100.0% | | Loss from operations | $(1,988) | $(4,803) | $2,815 | -58.6% | | Net loss | $(2,405) | $(5,707) | $3,302 | -57.9% | | Basic net loss per common share | $(0.07) | $(0.17) | $0.10 | -58.8% | | Diluted net loss per common share | $(0.07) | $(0.17) | $0.10 | -58.8% | | Cash dividends declared per common share | $0.07 | $0.14 | $(0.07) | -50.0% | [Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss) This section presents the total comprehensive loss, including net loss and other comprehensive income or loss items, for the specified periods Consolidated Statements of Comprehensive Loss Metrics (in thousands) | Metric (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | Change | % Change | | :-------------------- | :--------------------------------- | :--------------------------------- | :----- | :------- | | Net loss | $(2,405) | $(5,707) | $3,302 | -57.9% | | Foreign currency translation adjustment gain, net of tax | $767 | $831 | $(64) | -7.7% | | Total comprehensive loss | $(1,638) | $(4,876) | $3,238 | -66.4% | [Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Stockholders'%20Equity) This section outlines changes in the company's equity accounts, including common stock, additional paid-in capital, accumulated deficit, and treasury stock Consolidated Statements of Stockholders' Equity Metrics (in thousands) | Metric (in thousands) | Balances at May 31, 2025 | Balances at August 30, 2025 | Change | | :-------------------- | :----------------------- | :-------------------------- | :----- | | Common Stock (Amount) | $370 | $373 | $3 | | Additional Paid-in Capital | $400,180 | $403,673 | $3,493 | | Accumulated Other Comprehensive Loss | $(17,863) | $(17,096) | $767 | | Accumulated Deficit | $(121,575) | $(126,881) | $(5,306) | | Treasury Stock (Amount) | $(54,031) | $(53,710) | $321 | | Total Stockholders' Equity | $207,081 | $206,359 | $(722) | - Key changes in stockholders' equity for the three months ended August 30, 2025, include a **$2.3 million increase** from stock-based compensation expense, **$1.1 million** from ESPP share issuance, a **$2.3 million decrease** from cash dividends, and a **$2.4 million net loss**[18](index=18&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section presents the cash inflows and outflows from operating, investing, and financing activities, reflecting the company's liquidity and solvency Consolidated Statements of Cash Flows Metrics (in thousands) | Metric (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | Change | | :-------------------- | :--------------------------------- | :--------------------------------- | :----- | | Net cash used in operating activities | $(7,832) | $(309) | $(7,523) | | Net cash used in investing activities | $(121) | $(10,924) | $10,803 | | Net cash used in financing activities | $(1,554) | $(7,685) | $6,131 | | Net decrease in cash and cash equivalents | $(8,629) | $(19,267) | $10,638 | | Cash and cash equivalents at end of period | $77,518 | $89,625 | $(12,107) | - The significant increase in cash used in operating activities for Q1 FY2026 was primarily due to a **$15.8 million decrease** in accrued salaries and related obligations, driven by the timing of the pay cycle and annual incentive compensation payout[184](index=184&type=chunk) - The substantial reduction in cash used in investing activities in Q1 FY2026 was mainly because the prior year period included a **$23.0 million net cash outflow** for the Reference Point acquisition, partially offset by **$12.3 million** from the sale of the Irvine office building, with no comparable large transactions in the current period[187](index=187&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information regarding the figures presented in the consolidated financial statements [Note 1. Description of the Company and its Business](index=8&type=section&id=Note%201.%20Description%20of%20the%20Company%20and%20its%20Business) This note describes Resources Connection, Inc.'s global professional services offerings and its primary markets of operation - Resources Connection, Inc. (RGP) is a global professional services firm offering On-Demand Talent, Consulting, and Outsourced Services, primarily serving CFOs and C-suite leaders[22](index=22&type=chunk) - The Company's principal markets of operations are North America, Europe & Asia Pacific[22](index=22&type=chunk) - The Company's fiscal year consists of 52 or 53 weeks, ending on the Saturday in May closest to May 31; fiscal 2026 will consist of **52 weeks**[23](index=23&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=8&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the financial statements, including revenue recognition and segment reporting - The unaudited financial statements are prepared in conformity with GAAP for interim financial information and include all necessary normal recurring adjustments[24](index=24&type=chunk) - The Company's reportable segments are On-Demand Talent, Consulting, Europe & Asia Pacific, and Outsourced Services, with Sitrick disclosed under 'All Other'[29](index=29&type=chunk) - Revenue is primarily recognized over time based on hours worked, net of variable consideration, with fixed-price contracts using the input method[31](index=31&type=chunk)[32](index=32&type=chunk) - The Company does not expect ASU 2025-06 (Intangibles — Goodwill and Other — Internal-Use Software) to have a material impact and is evaluating ASU 2025-05 (Financial Instruments – Credit Losses)[57](index=57&type=chunk)[58](index=58&type=chunk) [Note 3. Revenues](index=14&type=section&id=Note%203.%20Revenues) This note provides details on contract assets and liabilities, and revenue recognized from deferred revenue Contract Assets and Liabilities (in thousands) | Metric (in thousands) | August 30, 2025 | May 31, 2025 | | :-------------------- | :-------------- | :----------- | | Contract assets | $25,100 | $30,700 | | Contract liabilities | $4,500 | $4,300 | Revenue Recognized from Deferred Revenue (in thousands) | Revenue Recognized from Deferred Revenue (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :---------------------------------------------------- | :--------------------------------- | :--------------------------------- | | Revenue recognized from deferred revenue | $1,800 | $600 | [Note 4. Acquisitions](index=14&type=section&id=Note%204.%20Acquisitions) This note details the acquisition of Reference Point LLC, including the cash consideration, recognized intangible assets, and goodwill - On July 1, 2024, the Company acquired Reference Point LLC, a strategy, management, and technology consulting firm for the financial services sector, for cash consideration of **$23.2 million** (net of cash acquired)[64](index=64&type=chunk) - The acquisition resulted in the recognition of **$15.7 million** in identifiable intangible assets (customer relationships, non-compete, trade name) and **$6.9 million** in goodwill, primarily attributable to expected synergies and the assembled workforce[66](index=66&type=chunk)[68](index=68&type=chunk) Acquisition Costs (in thousands) | Acquisition Costs (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :------------------------------- | :--------------------------------- | :--------------------------------- | | Acquisition costs | $400 | $1,300 | [Note 5. Goodwill and Intangible Assets](index=15&type=section&id=Note%205.%20Goodwill%20and%20Intangible%20Assets) This note provides information on goodwill impairment, allocation, and the net carrying amount and amortization of intangible assets - No goodwill impairment was recorded for the three months ended August 30, 2025. In the first quarter of fiscal 2025, a non-cash goodwill impairment charge of **$3.9 million** was recorded for the Europe & Asia Pacific segment due to a business segment reorganization[70](index=70&type=chunk)[71](index=71&type=chunk) - As of August 30, 2025, all goodwill on the Consolidated Balance Sheet is allocated to the Outsourced Services segment[73](index=73&type=chunk) Intangible Assets (in thousands) | Intangible Assets (in thousands) | August 30, 2025 (Net Carrying Amount) | May 31, 2025 (Net Carrying Amount) | | :------------------------------- | :------------------------------------ | :--------------------------------- | | Customer contracts and relationships | $17,233 | $18,340 | | Trade names | $0 | $50 | | Non-Compete Agreements | $552 | $588 | | Total Intangible Assets, net | $17,785 | $18,978 | Amortization Expense (in thousands) | Amortization Expense (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :---------------------------------- | :--------------------------------- | :--------------------------------- | | Amortization expense | $1,200 | $1,500 | [Note 6. Leases](index=16&type=section&id=Note%206.%20Leases) This note details the components of lease cost, weighted-average lease terms, discount rates, and future operating lease liabilities Lease Cost Components (in thousands) | Lease Cost Components (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :----------------------------------- | :--------------------------------- | :--------------------------------- | | Operating lease cost | $1,774 | $1,727 | | Short-term lease cost | $56 | $79 | | Variable lease cost | $368 | $381 | | Sublease income | $(128) | $(179) | | Total lease cost | $2,070 | $2,008 | - As of August 30, 2025, the weighted-average remaining lease term for operating leases was **6.1 years**, and the weighted-average discount rate was **5.15%**[76](index=76&type=chunk) Future Operating Lease Liabilities (in thousands) | Future Operating Lease Liabilities (in thousands) | Amount | | :------------------------------------------------ | :----- | | 2026 (remaining nine months) | $4,891 | | 2027 | $5,149 | | 2028 | $4,727 | | 2029 | $3,879 | | 2030 | $3,148 | | Thereafter | $8,014 | | Total future lease payments | $29,808 | | Less: interest | $(4,455) | | Present value of operating lease liabilities | $25,353 | [Note 7. Long-Term Debt](index=17&type=section&id=Note%207.%20Long-Term%20Debt) This note describes the Company's new $50.0 million secured revolving credit facility, its maturity, and interest rate terms - On July 2, 2025, the Company entered into a new **$50.0 million** secured revolving credit facility (the '2025 Credit Facility') maturing on November 30, 2029, concurrently terminating the previous 2021 Credit Facility[77](index=77&type=chunk) - As of August 30, 2025, the Company had no debt outstanding under the 2025 Credit Facility and **$49.3 million** of potential remaining capacity, subject to terms and financial covenants[83](index=83&type=chunk) - The 2025 Credit Facility bears interest at Term SOFR plus a margin ranging from **1.25% to 2.50%** or Base Rate plus a margin of **0.25% to 1.50%**, depending on Consolidated EBITDA[79](index=79&type=chunk) [Note 8. Income Taxes](index=18&type=section&id=Note%208.%20Income%20Taxes) This note provides details on income tax expense, effective tax rates, and unrecognized tax benefits Income Tax Metrics | Income Tax Metric | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :---------------- | :--------------------------------- | :--------------------------------- | | Income tax expense | $0.5 million | $1.1 million | | Effective tax rate | 24.7% | 22.7% | - The effective tax rate was negative in both quarters due to income tax expense measured against consolidated pretax losses, primarily driven by an increase in domestic and foreign valuation allowance in Q1 FY2026 and non-deductible tax adjustment on goodwill impairment in Q1 FY2025[85](index=85&type=chunk) - The Company's total liability for unrecognized gross tax benefits, including accrued interest and penalties, was **$1.1 million** as of August 30, 2025, with no anticipated cash payments within the next 12 months[87](index=87&type=chunk) [Note 9. Stockholders' Equity](index=18&type=section&id=Note%209.%20Stockholders'%20Equity) This note details the remaining availability for stock repurchases and the declared quarterly cash dividends - As of August 30, 2025, approximately **$79.2 million** remained available for future repurchases under the Company's Stock Repurchase Programs, with no shares purchased in Q1 FY2026[89](index=89&type=chunk) - The Board of Directors approved a regular quarterly dividend of **$0.07 per share** for Q1 FY2026, a **50% reduction** from the **$0.14 per share** declared in Q1 FY2025[13](index=13&type=chunk)[90](index=90&type=chunk) [Note 10. Stock-Based Compensation Plans](index=19&type=section&id=Note%2010.%20Stock-Based%20Compensation%20Plans) This note outlines stock-based compensation expense, shares issued under the ESPP, and unrecognized compensation costs for various equity awards Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :---------------------------------------------- | :--------------------------------- | :--------------------------------- | | Stock-based compensation expense | $2,300 | $1,600 | - The Company issued **240,674 shares** under the Employee Stock Purchase Plan (ESPP) in Q1 FY2026, compared to **229,341 shares** in Q1 FY2025, with **589,714 shares** remaining available for issuance[98](index=98&type=chunk) Unrecognized Compensation Costs (in thousands) | Unrecognized Compensation Costs (in thousands) | Amount | Weighted-Average Recognition Period | | :--------------------------------------------- | :----- | :---------------------------------- | | Restricted Stock Awards (RSAs) | $1,900 | 1.53 years | | Equity-classified Restricted Stock Units (RSUs) | $8,100 | 2.07 years | | Liability-classified Restricted Stock Units (RSUs) | $500 | 1.70 years | | Performance Stock Units (PSUs) | $1,200 | 1.75 years | [Note 11. Commitments and Contingencies](index=22&type=section&id=Note%2011.%20Commitments%20and%20Contingencies) This note addresses the company's legal matters and management's assessment of their potential financial impact - Management believes that all legal matters, if disposed of unfavorably, would not have a material adverse effect on the Company's financial position, cash flows, or results of operations[106](index=106&type=chunk) [Note 12. Segment Information and Enterprise Reporting](index=22&type=section&id=Note%2012.%20Segment%20Information%20and%20Enterprise%20Reporting) This note provides a breakdown of the company's reportable segments, including revenue and Adjusted EBITDA by segment and geographic revenue - The Company's reportable segments are On-Demand Talent, Consulting, Europe & Asia Pacific, and Outsourced Services, with Sitrick reported as 'All Other'[109](index=109&type=chunk) Segment Revenue (in thousands) | Segment Revenue (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | Change | % Change | | :----------------------------- | :--------------------------------- | :--------------------------------- | :----- | :------- | | On-Demand Talent | $44,442 | $52,473 | $(8,031) | -15.3% | | Consulting | $43,641 | $55,025 | $(11,384) | -20.7% | | Europe & Asia Pacific | $19,888 | $17,983 | $1,905 | 10.6% | | Outsourced Services | $9,994 | $9,491 | $503 | 5.3% | | All Other | $2,264 | $1,963 | $301 | 15.3% | | Total consolidated revenue | $120,229 | $136,935 | $(16,706) | -12.2% | Segment Adjusted EBITDA (in thousands) | Segment Adjusted EBITDA (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | Change | % Change | | :------------------------------------- | :--------------------------------- | :--------------------------------- | :----- | :------- | | On-Demand Talent | $4,422 | $2,559 | $1,863 | 72.8% | | Consulting | $5,045 | $7,753 | $(2,708) | -34.9% | | Europe & Asia Pacific | $837 | $227 | $610 | 268.7% | | Outsourced Services | $2,330 | $1,394 | $936 | 67.1% | | All Other | $183 | $(467) | $650 | 139.2% | Geographic Revenue (in thousands) | Geographic Revenue (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :-------------------------------- | :--------------------------------- | :--------------------------------- | | United States | $95,556 | $112,452 | | International | $24,673 | $24,483 | | Total | $120,229 | $136,935 | [Note 13. Subsequent Events](index=26&type=section&id=Note%2013.%20Subsequent%20Events) This note discloses a global workforce reduction initiated after the reporting period and its expected financial charges - On September 30, 2025, the Company initiated a global reduction in its management and administrative workforce, expecting estimated charges of approximately **$2.1 million** in Q2 FY2026, primarily for one-time employee termination benefits[116](index=116&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of the Company's financial condition, results of operations, and liquidity and capital resources for the three months ended August 30, 2025, compared to the prior year period. It covers strategic focus areas, market trends, critical accounting policies, non-GAAP financial measures, and a breakdown of operating results by segment and cash flow activities [Forward-Looking Statements](index=27&type=section&id=Forward-Looking%20Statements) This section highlights that the report contains forward-looking statements subject to various risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements regarding expectations for operating segments, macroeconomic environment, costs, liabilities, business strategies, growth, and future performance, identified by words like 'anticipates,' 'expects,' 'will,' or similar terms[119](index=119&type=chunk) - These statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially, including economic downturns, market competition, talent retention, and compliance risks[120](index=120&type=chunk) [Overview](index=28&type=section&id=Overview) This section provides a general description of RGP as a global professional services firm and outlines its strategic reorganization and focus areas - RGP is a global professional services firm delivering flexible solutions through on-demand resourcing, strategic and execution consulting, and fully outsourced services, with core capabilities spanning Enterprise Strategy & Operational Performance; Finance & Accounting; Digital, Technology & Data; and Governance, Risk & Compliance[122](index=122&type=chunk) - In Q1 FY2025, the Company reorganized into distinct business units: On-Demand Talent, Consulting, Europe & Asia Pacific, Outsourced Services, and Sitrick (All Other), focusing on CFO Advisory and Digital, Data and Cloud, and completed technology modernization in North America[123](index=123&type=chunk) [Fiscal 2026 Strategic Focus Areas](index=28&type=section&id=Fiscal%202026%20Strategic%20Focus%20Areas) This section outlines the company's key strategic priorities for fiscal year 2026, including expanding cross-sell opportunities and optimizing high-growth solutions - The Company's fiscal 2026 strategic focus areas include expanding cross-sell opportunities across its diversified services platform (On-Demand Talent, Consulting, Outsourced Services)[124](index=124&type=chunk)[126](index=126&type=chunk) - Other key focus areas are optimizing high-growth solutions (e.g., ERP/cloud finance modernization, AI adoption) and evolving talent strategy, further leveraging value-based pricing, and driving improvement in cost structure[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) [Market Trends and Uncertainties](index=29&type=section&id=Market%20Trends%20and%20Uncertainties) This section discusses the impact of uncertain macroeconomic conditions on the company's financial results and professional services spending - Uncertain macroeconomic conditions, including ambiguity around interest rates, softening labor markets, currency fluctuations, and policy changes, have created significant uncertainty in the global economy and adversely impacted financial results[130](index=130&type=chunk) - The Company observes caution in professional services spending, and persistent adverse conditions could lead to further declines in billable hours and bill rates[130](index=130&type=chunk) [Critical Accounting Policies and Estimates](index=29&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section confirms that there have been no material changes to the company's critical accounting policies or estimates since the last annual report - There have been no material changes in the Company's critical accounting policies or underlying estimates and assumptions from those described in its Fiscal Year 2025 Form 10-K[132](index=132&type=chunk) [Non-GAAP Financial Measures](index=29&type=section&id=Non-GAAP%20Financial%20Measures) This section explains the company's use of non-GAAP financial measures such as Same-day constant currency revenue, EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to evaluate performance - The Company uses non-GAAP financial measures like Same-day constant currency revenue, EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to assess financial and operating performance and evaluate revenue trends on a comparable basis[133](index=133&type=chunk)[135](index=135&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk) Non-GAAP Financial Metrics (in thousands, except %) | Non-GAAP Metric (in thousands, except %) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | Change | % Change | | :--------------------------------------- | :--------------------------------- | :--------------------------------- | :----- | :------- | | Same-day constant currency revenue | $117,969 | $136,935 | $(18,966) | -13.9% | | Adjusted EBITDA | $3,065 | $2,320 | $745 | 32.1% | | Adjusted EBITDA Margin | 2.5% | 1.7% | +0.8 pp | | [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section analyzes the consolidated operating results, including revenue, cost of services, gross profit, and selling, general and administrative expenses Consolidated Operating Results (in thousands, except %) | Consolidated Operating Results (in thousands, except %) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | Change | % Change | | :---------------------------------------------------- | :--------------------------------- | :--------------------------------- | :----- | :------- | | Revenue | $120,229 | $136,935 | $(16,706) | -12.2% | | Cost of services | $72,760 | $86,948 | $(14,188) | -16.3% | | Gross profit | $47,469 | $49,987 | $(2,518) | -5.0% | | Selling, general and administrative expenses | $47,916 | $48,910 | $(994) | -2.0% | | Loss from operations | $(1,988) | $(4,803) | $2,815 | -58.6% | | Net loss | $(2,405) | $(5,707) | $3,302 | -57.9% | - Revenue decreased by **12.2%** year-over-year, or **13.9%** on a same-day constant currency basis, primarily due to a **14.3% decline** in billable hours amidst a choppy demand environment, partially offset by a **2.2% increase** in average bill rates[145](index=145&type=chunk) - Cost of services as a percentage of revenue improved to **60.5%** from **63.5%** year-over-year, driven by an improved pay/bill ratio and lower consultant costs[147](index=147&type=chunk) - Selling, general and administrative expenses decreased by **$1.0 million**, primarily due to reduced employee compensation, technology transformation costs, and business support costs, partially offset by the absence of a gain on sale of assets recorded in the prior year[150](index=150&type=chunk) [Operating Results of Segments](index=34&type=section&id=Operating%20Results%20of%20Segments) This section analyzes the revenue and Adjusted EBITDA performance of the On-Demand Talent, Consulting, Europe & Asia Pacific, and Outsourced Services segments - On-Demand Talent revenue declined by **15.3%** due to lower demand and a softer labor market, while Adjusted EBITDA increased by **72.8%** due to decreased segment expenses[162](index=162&type=chunk)[167](index=167&type=chunk) - Consulting revenue decreased by **20.7%** due to a **28.4% decrease** in billable hours, despite an **11.1% increase** in average bill rates from value-based pricing, leading to a **34.9% decrease** in Adjusted EBITDA[163](index=163&type=chunk)[168](index=168&type=chunk) - Europe & Asia Pacific revenue increased by **10.6%** (**5.4%** on a same-day constant currency basis), driven by a **9.6% increase** in average bill rates and growing client demand in Europe, resulting in a **268.7% increase** in Adjusted EBITDA[164](index=164&type=chunk)[169](index=169&type=chunk) - Outsourced Services revenue grew by **5.3%** (**3.7%** on a same-day constant currency basis) due to increased billable hours, and Adjusted EBITDA increased by **67.1%** primarily from higher gross profit[165](index=165&type=chunk)[170](index=170&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's sources of liquidity, cash position, new credit facility, purchase obligations, and future funding outlook - Primary liquidity sources include cash from operating activities and the senior secured revolving credit facility. As of August 30, 2025, the Company had **$77.5 million** in cash and cash equivalents, with **$41.3 million** held in international operations[172](index=172&type=chunk) - The Company entered into a new 2025 Credit Facility on July 2, 2025, providing a secured revolving loan up to **$50.0 million**, maturing on November 30, 2029, with no debt outstanding as of August 30, 2025[174](index=174&type=chunk)[176](index=176&type=chunk) - Non-cancellable purchase obligations total **$8.5 million**, primarily for licensing arrangements, with **$4.0 million** due in fiscal 2026[178](index=178&type=chunk)[179](index=179&type=chunk) - The Company believes current cash, ongoing cash flows from operations, and the 2025 Credit Facility will provide sufficient funds for working capital and capital expenditure needs for at least the next 12 months, despite macroeconomic uncertainties[181](index=181&type=chunk) [Operating Activities](index=38&type=section&id=Operating%20Activities) This section analyzes the net cash used in operating activities and the primary drivers of changes between periods Cash Flow from Operating Activities (in thousands) | Cash Flow from Operating Activities (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :----------------------------------------------- | :--------------------------------- | :--------------------------------- | | Net cash used in operating activities | $(7,832) | $(309) | - The increase in cash used in operating activities was primarily driven by a **$15.8 million decrease** in accrued salaries and related obligations due to the timing of the pay cycle and annual incentive compensation payout[184](index=184&type=chunk) [Investing Activities](index=39&type=section&id=Investing%20Activities) This section details the net cash used in investing activities, highlighting the impact of acquisitions and asset sales Cash Flow from Investing Activities (in thousands) | Cash Flow from Investing Activities (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | | Net cash used in investing activities | $(121) | $(10,924) | - Net cash used in investing activities significantly decreased from **$10.9 million** in Q1 FY2025 to **$0.1 million** in Q1 FY2026. The prior period included a **$23.0 million net cash outflow** for the Reference Point acquisition and **$12.3 million net proceeds** from the sale of the Irvine office building[187](index=187&type=chunk) [Financing Activities](index=39&type=section&id=Financing%20Activities) This section analyzes the net cash used in financing activities, focusing on changes related to dividends and stock repurchases Cash Flow from Financing Activities (in thousands) | Cash Flow from Financing Activities (in thousands) | Three Months Ended August 30, 2025 | Three Months Ended August 24, 2024 | | :------------------------------------------------ | :--------------------------------- | :--------------------------------- | | Net cash used in financing activities | $(1,554) | $(7,685) | - Net cash used in financing activities decreased significantly, primarily due to lower cash dividend payments (**$2.3 million** vs **$4.7 million**) and the absence of common stock repurchases (**$0** vs **$5.0 million**) compared to the prior year[188](index=188&type=chunk)[189](index=189&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the Company's exposure to market risks, primarily from fluctuations in interest rates and foreign currency exchange rates, and discusses how these risks are managed [Interest Rate Risk](index=39&type=section&id=Interest%20Rate%20Risk) This section discusses the company's exposure to interest rate fluctuations on its cash and borrowings, and the expected impact of rate changes - The Company is exposed to market risks from fluctuations in interest rates affecting its cash and cash equivalents and borrowings under the 2025 Credit Facility[190](index=190&type=chunk) - As of August 30, 2025, the Company had **$77.5 million** in cash and cash equivalents and no outstanding borrowings under its 2025 Credit Facility, with a **10% decline** in interest rates not expected to materially impact financial position or results[191](index=191&type=chunk)[192](index=192&type=chunk) [Foreign Currency Exchange Rate Risk](index=39&type=section&id=Foreign%20Currency%20Exchange%20Rate%20Risk) This section details the company's exposure to foreign currency exchange rate fluctuations due to international operations and cash holdings - Approximately **20.5%** of the Company's revenues for Q1 FY2026 were generated outside the U.S., making operating results subject to foreign currency exchange rate fluctuations[193](index=193&type=chunk) - As of August 30, 2025, **53.3%** of cash and cash equivalents were denominated in foreign currencies (Euros, Mexican Pesos, Canadian Dollar, Chinese Yuan, Indian Rupee, Japanese Yen, and British Pound Sterling)[194](index=194&type=chunk) - The Company does not currently use financial hedges to mitigate foreign currency fluctuation risks, believing its economic exposure has not been material[195](index=195&type=chunk) [ITEM 4. Controls and Procedures](index=41&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as evaluated by its principal officers - As of August 30, 2025, the Company's Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective[197](index=197&type=chunk) [Changes in Internal Control Over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports on any material changes in the company's internal control over financial reporting during the fiscal quarter - There has been no material change in the Company's internal control over financial reporting during the fiscal quarter ended August 30, 2025[198](index=198&type=chunk) PART II—OTHER INFORMATION [ITEM 1A. Risk Factors](index=42&type=section&id=ITEM%201A.%20Risk%20Factors) This section states that there have been no material changes to the Company's risk factors since its last annual report - There have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A of its Fiscal Year 2025 Form 10-K[200](index=200&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities and use of proceeds during the reporting period[201](index=201&type=chunk) [ITEM 5. Other Information](index=42&type=section&id=ITEM%205.%20Other%20Information) This section confirms that there are no other material information or insider trading arrangements to report - There were no insider trading arrangements to report[202](index=202&type=chunk) [ITEM 6. Exhibits](index=43&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with or incorporated by reference in this Quarterly Report on Form 10-Q, including certifications and financial statements in Inline XBRL format - The report includes certifications from the CEO and CFO (Exhibits 31.1, 31.2, 32.1, 32.2) and unaudited interim consolidated financial statements formatted in Inline XBRL (Exhibit 101)[204](index=204&type=chunk) [Signatures](index=44&type=section&id=Signatures) This section contains the duly authorized signatures of the Company's President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, affirming the filing of the report - The report is signed by Kate W. Duchene, President and Chief Executive Officer, and Jennifer Ryu, Executive Vice President and Chief Financial Officer, on October 8, 2025[208](index=208&type=chunk)

[Filing Information](index=1&type=section&id=Filing%20Information) This section details the registrant's general filing information, securities status, and contact details [General Filing Details](index=1&type=section&id=General%20Filing%20Details) This section provides the foundational details of the Form 8-K filing, including the registrant's legal name, jurisdiction of incorporation, principal executive offices address, and telephone number - Registrant Name: **APA CORPORATION**[2](index=2&type=chunk) - Date of Report (earliest event reported): **October 8, 2025**[2](index=2&type=chunk) - Jurisdiction of Incorporation: **Delaware**[2](index=2&type=chunk) - Principal Executive Offices: **2000 W Sam Houston Pkwy S, Suite 200, Houston, Texas 77042-3643**[2](index=2&type=chunk) - Registrant's Telephone Number: **(713) 296-6000**[2](index=2&type=chunk) [Securities and Registrant Status](index=1&type=section&id=Securities%20and%20Registrant%20Status) This section outlines the securities registered under Section 12(b) of the Act and confirms the registrant's status regarding emerging growth company provisions | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :------------------ | :---------------- | :---------------------------------------- | | Common Stock, $0.625 par value | APA | Nasdaq Global Select Market | - Emerging growth company status: **Not an emerging growth company**[4](index=4&type=chunk) [Report Items](index=2&type=section&id=Report%20Items) This section details the company's financial and operating results and lists accompanying exhibits [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) APA Corporation announced supplemental financial and operating results for the fiscal quarter ended September 30, 2025, through a press release issued on October 8, 2025 - Date of press release: **October 8, 2025**[6](index=6&type=chunk) - Information announced: **Supplemental information regarding certain financial and operating results**[6](index=6&type=chunk) - Period covered: **Fiscal quarter ended September 30, 2025**[6](index=6&type=chunk) - Exhibit reference: **Full text of the press release is furnished as Exhibit 99.1**[6](index=6&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K filing, which include the press release detailing financial and operating results and the interactive data file | Exhibit No. | Description | | :---------- | :---------- | | 99.1 | Press Release of APA Corporation dated October 8, 2025 | | 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | [Signatures](index=3&type=section&id=Signatures) This section provides the authorization and signatory details for the Form 8-K filing [Authorization and Signatory](index=3&type=section&id=Authorization%20and%20Signatory) The report is duly signed on behalf of APA Corporation by Rebecca A. Hoyt, Senior Vice President, Chief Accounting Officer, and Controller, on October 8, 2025 - Signatory: **Rebecca A. Hoyt**[11](index=11&type=chunk) - Title: **Senior Vice President, Chief Accounting Officer, and Controller (Principal Accounting Officer)**[11](index=11&type=chunk) - Date of Signature: **October 8, 2025**[11](index=11&type=chunk)

[Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) Richardson Electronics achieved its fifth consecutive quarter of YoY net sales growth, driven by semiconductor wafer fab sales, alongside positive operating income and cash flow, and declared a dividend [Q1 FY26 Performance Highlights](index=1&type=section&id=1.1.%20Q1%20FY26%20Performance%20Highlights) The company achieved its fifth consecutive quarter of YoY net sales growth, driven by semiconductor wafer fab sales, and maintained positive operating income and cash flow - Net sales increased YoY for the **5th consecutive quarter**, led by a **52.2% YoY increase** in semi-conductor wafer fab net sales[1](index=1&type=chunk) - Generated **$1.0 million** of operating income and ended Q1 FY26 with positive operating cash flow for the **6th consecutive quarter**[1](index=1&type=chunk) - The Board of Directors declared a **$0.06 per share** quarterly cash dividend[1](index=1&type=chunk) [CEO Commentary](index=1&type=section&id=1.2.%20CEO%20Commentary) The CEO expressed satisfaction with Q1 FY26 results, highlighting significant operating income improvement from a profitable sales mix and cost control, and projected improved fiscal year performance - Excluding Healthcare (majority of assets sold in January 2025), net sales grew by **6.8% year-over-year**[2](index=2&type=chunk) - Operating income more than tripled from the prior year's first quarter due to a more profitable sales mix and continued focus on controlling fixed costs[2](index=2&type=chunk) - Management is confident in the ability to deliver improved results for the year, supported by a solid balance sheet and a highly capable team[3](index=3&type=chunk) [First Quarter Fiscal 2026 Financial Review](index=2&type=section&id=2.%20First%20Quarter%20Fiscal%202026%20Financial%20Review) This section provides a detailed financial review of Richardson Electronics' performance for the first quarter of fiscal year 2026 [Net Sales](index=2&type=section&id=2.1.%20Net%20Sales) Q1 FY26 net sales grew by **1.6%** YoY to **$54.6 million**, or **6.8%** excluding Healthcare, driven by PMT and Canvys, with a slight increase in backlog | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :----- | :----------------- | :----------------- | :--------- | | Net Sales | $54.6 | $53.7 | +1.6% | | Net Sales (Excl. Healthcare) | N/A | N/A | +6.8% | - PMT sales increased by **$1.1 million (+2.8%)**, or **+10.5%** excluding Healthcare, driven by higher demand from semiconductor wafer fab customers and distributed electron tube products[5](index=5&type=chunk) - Canvys sales increased by **$0.6 million (+8.3%)** reflecting improved market conditions in Europe[5](index=5&type=chunk) - GES sales declined by **$0.8 million**, mainly due to the non-recurrence of a large EV Locomotive order[5](index=5&type=chunk) Net Sales by Strategic Business Unit (in thousands) | Segment | Q1 FY26 (Aug 30, 2025, in thousands) | Q1 FY25 (Aug 31, 2024, in thousands) | % Change | | :------ | :--------------------- | :--------------------- | :------- | | PMT | $39,069 | $38,001 | +2.8% | | GES | $7,263 | $8,086 | -10.2% | | Canvys | $8,275 | $7,638 | +8.3% | | Total | $54,607 | $53,725 | +1.6% | - Backlog totaled **$134.7 million** at the end of Q1 FY26, versus **$134.2 million** at the end of fiscal 2025, primarily driven by increases in PMT and Canvys[6](index=6&type=chunk) [Gross Margin](index=2&type=section&id=2.2.%20Gross%20Margin) Overall gross margin improved to **31.0%** in Q1 FY26, with PMT and GES margins increasing due to product mix, while Canvys' margin decreased | Metric | Q1 FY26 | Q1 FY25 | Change | | :----- | :------- | :------- | :----- | | Gross Margin | 31.0% | 30.6% | +0.4 pp | - PMT gross margin increased to **31.3%** (from **30.1%**) due to a favorable product mix and improved manufacturing absorption[7](index=7&type=chunk) - GES gross margin increased to **29.6%** (from **29.4%**) due to product mix[7](index=7&type=chunk) - Canvys gross margin decreased to **30.9%** (from **34.3%**) primarily due to product mix and higher freight costs[7](index=7&type=chunk) Gross Profit by Strategic Business Unit (in thousands) | Segment | Q1 FY26 Gross Profit (in thousands) | Q1 FY26 % of Net Sales | Q1 FY25 Gross Profit (in thousands) | Q1 FY25 % of Net Sales | | :------ | :------------------ | :-------------------- | :------------------ | :-------------------- | | PMT | $12,226 | 31.3% | $11,431 | 30.1% | | GES | $2,150 | 29.6% | $2,374 | 29.4% | | Canvys | $2,553 | 30.9% | $2,621 | 34.3% | | Total | $16,929 | 31.0% | $16,426 | 30.6% | [Operating Expenses and Income](index=2&type=section&id=2.3.%20Operating%20Expenses%20and%20Income) Operating expenses slightly decreased in Q1 FY26, resulting in operating income more than tripling compared to the prior year | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :----- | :----------------- | :----------------- | :--------- | | Operating Expenses | $16.0 | $16.1 | -0.6% | | Operating Expenses (% of Net Sales) | 29.2% | 30.0% | -0.8 pp | | Operating Income | $1.0 | $0.3 | +233.3% | - The decrease in operating expenses resulted from lower travel expenses[8](index=8&type=chunk) [Other Income, Taxes, and Net Income](index=2&type=section&id=2.4.%20Other%20Income,%20Taxes,%20and%20Net%20Income) Other income significantly increased due to a non-recurring gain, driving substantial growth in income before taxes and net income, despite a higher effective tax rate | Metric | Q1 FY26 (Millions) | Q1 FY25 (Millions) | YoY Change | | :----- | :----------------- | :----------------- | :--------- | | Other Income | $1.4 | $0.3 | +366.7% | | Income Before Income Taxes | $2.3 | $0.6 | +283.3% | | Income Tax Provision | $0.4 | < $0.1 | Significant Increase | | Effective Tax Rate | 18.1% | 9.0% | +9.1 pp | | Net Income | $1.9 | $0.6 | +216.7% | - The increase in other income was mainly due to a non-recurring gain of **$0.9 million**[9](index=9&type=chunk) [Earnings Per Share (EPS) and EBITDA](index=2&type=section&id=2.5.%20Earnings%20Per%20Share%20(EPS)%20and%20EBITDA) Diluted EPS more than tripled and EBITDA more than doubled in Q1 FY26, reflecting strong net income growth | Metric | Q1 FY26 | Q1 FY25 | YoY Change | | :----- | :------- | :------- | :--------- | | Diluted EPS | $0.13 | $0.04 | +225.0% | | EBITDA (Millions) | $3.3 | $1.7 | +94.1% | [Financial Position and Capital Management](index=2&type=section&id=3.%20Financial%20Position%20and%20Capital%20Management) This section reviews Richardson Electronics' financial position, cash management, debt, and capital allocation strategies for the quarter [Cash and Capital Expenditures](index=2&type=section&id=3.1.%20Cash%20and%20Capital%20Expenditures) The company maintained **$35.7 million** in cash and cash equivalents, primarily using cash for dividends, while capital expenditures slightly increased YoY | Metric | August 30, 2025 (Millions) | May 31, 2025 (Millions) | QoQ Change | | :----- | :------------------------- | :---------------------- | :--------- | | Cash and Cash Equivalents | $35.7 | $35.9 | -0.6% | - Cash used during the first quarter of fiscal 2026 primarily related to the payment of dividends[12](index=12&type=chunk) - The Company invested **$1.0 million** in capital expenditures during the quarter, primarily for its manufacturing business, facilities improvements, and IT systems, versus **$0.9 million** in the prior year's first quarter[12](index=12&type=chunk) [Debt and Credit Facilities](index=3&type=section&id=3.2.%20Debt%20and%20Credit%20Facilities) Richardson Electronics has no outstanding debt on its revolving credit line and extended its **$20 million** Credit Agreement with PNC Bank through October 2028 - As of the end of Q1 FY26, the Company had no outstanding debt on its revolving line of credit with PNC Bank[13](index=13&type=chunk) - The Credit Agreement has been extended through October 6, 2028, with similar terms and a **$20 million** borrowing limit[13](index=13&type=chunk) [Quarterly Cash Dividend](index=3&type=section&id=3.3.%20Quarterly%20Cash%20Dividend) The Board declared a quarterly cash dividend of **$0.06** per common share and **$0.054** per Class B common share, payable November 26, 2025 - A **$0.06** quarterly cash dividend per share was declared for holders of common stock[14](index=14&type=chunk) - A **$0.054** cash dividend per share was declared for holders of Class B common stock[14](index=14&type=chunk) - The dividend will be payable on November 26, 2025, to common stockholders of record as of November 7, 2025[14](index=14&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=4.%20Non-GAAP%20Financial%20Measures) This section defines and explains the company's use of non-GAAP financial measures, specifically EBITDA, and its reconciliation [Non-GAAP Measure Definition and Use](index=3&type=section&id=4.1.%20Non-GAAP%20Measure%20Definition%20and%20Use) The company defines EBITDA as a non-GAAP measure, used by management to assess ongoing financial performance by excluding non-core items for evaluation and planning - EBITDA is presented as a non-GAAP financial measure, reflecting earnings before interest, income tax, depreciation, and amortization expenses[15](index=15&type=chunk) - Management believes EBITDA provides useful information to investors by assessing financial performance excluding items not indicative of ongoing results, and uses it for evaluating performance, planning, forecasting, and analyzing future periods[16](index=16&type=chunk) - Non-GAAP financial measures are not intended as a substitute for GAAP measurements and may not be comparable to similarly titled measures reported by other companies[16](index=16&type=chunk) [Corporate Information](index=3&type=section&id=5.%20Corporate%20Information) This section provides an overview of Richardson Electronics, its forward-looking statements, and details for its upcoming conference call [About Richardson Electronics, Ltd.](index=4&type=section&id=5.1.%20About%20Richardson%20Electronics,%20Ltd.) Richardson Electronics is a global manufacturer specializing in engineered solutions, green energy products, and various electronic components, providing technical expertise and value-added services - Richardson Electronics is a leading global manufacturer of engineered solutions, green energy products, power grid and microwave tubes, power conversion and RF and microwave components, tubes for diagnostic imaging equipment, and customized display solutions[20](index=20&type=chunk) - The company serves customers in alternative energy, healthcare, aviation, broadcast, communications, industrial, marine, medical, military, scientific, and semiconductor markets[21](index=21&type=chunk) - The Company's strategy is to provide specialized technical expertise and "engineered solutions" through design-in support, systems integration, prototype design and manufacturing, testing, logistics, and aftermarket technical service and repair[21](index=21&type=chunk) [Forward-Looking Statements](index=3&type=section&id=5.2.%20Forward-Looking%20Statements) This release contains forward-looking statements subject to risks and uncertainties, with readers advised to consult SEC filings and the company disclaiming update responsibility - This release includes certain "forward-looking" statements as defined by the Securities and Exchange Commission, which involve risks and uncertainties[19](index=19&type=chunk) - For a discussion of such risks and uncertainties, readers should refer to Item 1A, "Risk Factors" in the Company's Annual Report on Form 10-K and other reports filed with the SEC[19](index=19&type=chunk) - The Company assumes no responsibility to update the "forward-looking" statements in this release[19](index=19&type=chunk) [Conference Call Details](index=3&type=section&id=5.3.%20Conference%20Call%20Details) Richardson Electronics will host a conference call on October 9, 2025, at 9:00 a.m. Central Time to discuss Q1 FY26 results, with a replay available - The Company will host a conference call and question-and-answer session on Thursday, October 9, 2025, at 9:00 a.m. Central Time, to discuss its first quarter fiscal 2026 results[17](index=17&type=chunk) - Participants may register for the call, and a replay will be available beginning at 1:00 p.m. Central Time on October 10, 2025, for seven days[18](index=18&type=chunk) - A webcast link is also available[18](index=18&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=6.%20Consolidated%20Financial%20Statements) This section presents the consolidated financial statements, including balance sheets, income statements, cash flows, and segment-level performance data [Consolidated Balance Sheets](index=5&type=section&id=6.1.%20Consolidated%20Balance%20Sheets) The balance sheet shows slight increases in total assets and stockholders' equity, driven by accounts receivable and inventories, with a corresponding rise in current liabilities | Metric (in thousands) | August 30, 2025 (in thousands) | May 31, 2025 (in thousands) | Change | | :-------------------- | :-------------- | :----------- | :----- | | Total Assets | $200,067 | $195,835 | +$4,232 | | Total Liabilities | $40,699 | $39,176 | +$1,523 | | Total Stockholders' Equity | $159,368 | $156,659 | +$2,709 | | Cash and cash equivalents | $35,654 | $35,901 | -$247 | | Accounts receivable, net | $27,039 | $24,117 | +$2,922 | | Inventories, net | $104,635 | $102,799 | +$1,836 | | Total current assets | $170,276 | $165,887 | +$4,389 | | Total current liabilities | $38,699 | $36,786 | +$1,913 | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=6.2.%20Consolidated%20Statements%20of%20Comprehensive%20Income) The statement highlights significant YoY growth in net sales, gross profit, operating income, and net income for Q1 FY26, with comprehensive income more than doubling | Metric (in thousands) | Q1 FY26 (Aug 30, 2025, in thousands) | Q1 FY25 (Aug 31, 2024, in thousands) | YoY Change | | :-------------------- | :--------------------- | :--------------------- | :--------- | | Net sales | $54,607 | $53,725 | +1.6% | | Gross profit | $16,929 | $16,426 | +3.1% | | Operating income | $968 | $316 | +206.3% | | Income before income taxes | $2,330 | $648 | +259.6% | | Net income | $1,909 | $590 | +223.6% | | Comprehensive income | $2,963 | $1,226 | +141.7% | | Diluted EPS (Common Stock) | $0.13 | $0.04 | +225.0% | [Consolidated Statements of Cash Flows](index=7&type=section&id=6.3.%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities significantly increased in Q1 FY26, with cash primarily used for investing and financing, leading to a slight quarterly decrease in cash equivalents | Metric (in thousands) | Q1 FY26 (Aug 30, 2025, in thousands) | Q1 FY25 (Aug 31, 2024, in thousands) | YoY Change | | :-------------------- | :--------------------- | :--------------------- | :--------- | | Net cash provided by operating activities | $1,367 | $412 | +231.8% | | Net cash used in investing activities | $(1,025) | $(919) | +11.5% | | Net cash used in financing activities | $(895) | $(868) | +3.1% | | Decrease in cash and cash equivalents | $(247) | $(1,228) | -79.9% | | Cash and cash equivalents at end of period | $35,654 | $23,035 | +54.8% | [Net Sales and Gross Profit by Strategic Business Unit](index=8&type=section&id=6.4.%20Net%20Sales%20and%20Gross%20Profit%20by%20Strategic%20Business%20Unit) This section details net sales and gross profit by strategic business unit, showing sales growth in PMT and Canvys, a decline in GES, and varied gross margin performance Net Sales by Strategic Business Unit (in thousands) | Segment | Q1 FY26 (Aug 30, 2025, in thousands) | Q1 FY25 (Aug 31, 2024, in thousands) | % Change | | :------ | :--------------------- | :--------------------- | :------- | | PMT | $39,069 | $38,001 | +2.8% | | GES | $7,263 | $8,086 | -10.2% | | Canvys | $8,275 | $7,638 | +8.3% | | Total | $54,607 | $53,725 | +1.6% | Gross Profit by Strategic Business Unit (in thousands) | Segment | Q1 FY26 Gross Profit (in thousands) | Q1 FY26 % of Net Sales | Q1 FY25 Gross Profit (in thousands) | Q1 FY25 % of Net Sales | | :------ | :------------------ | :-------------------- | :------------------ | :-------------------- | | PMT | $12,226 | 31.3% | $11,431 | 30.1% | | GES | $2,150 | 29.6% | $2,374 | 29.4% | | Canvys | $2,553 | 30.9% | $2,621 | 34.3% | | Total | $16,929 | 31.0% | $16,426 | 30.6% | [Reconciliation of Non-GAAP Financial Measures (EBITDA)](index=9&type=section&id=6.5.%20Reconciliation%20of%20Non-GAAP%20Financial%20Measures%20(EBITDA)) This section reconciles net income to EBITDA, demonstrating a significant increase in Q1 FY26 EBITDA, reflecting improved operational profitability before non-cash and financing items EBITDA Reconciliation (in thousands) | Metric | Q1 FY26 (Aug 30, 2025, in thousands) | Q1 FY25 (Aug 31, 2024, in thousands) | | :----- | :--------------------- | :--------------------- | | Net income | $1,909 | $590 | | Income tax expense | $421 | $58 | | Depreciation & amortization | $971 | $1,044 | | **EBITDA** | **$3,301** | **$1,692** |

Resources Connection Reports Financial Results for First Quarter Fiscal 2026 Management Commentary "First quarter results exceeded our outlook ranges on all fronts and we continue to make progress to transform our business to be more integrated, diversified and resilient," said Kate W. Duchene, Chief Executive Officer. "We are engaging with clients on more consulting opportunities which have higher bill rates, larger deal size and often create more extension and cross selling. We are increasingly becoming a ...

[Filing Information](index=1&type=section&id=Filing%20Information) This section provides essential filing details for the Form 8-K, including registrant information and report status [Registrant Details](index=1&type=section&id=Registrant%20Details) Provides official registrant details for Brookdale Senior Living Inc., including incorporation state, commission file number, address, and contact information Registrant Information | Detail | Information | | :--- | :--- | | **Registrant Name** | Brookdale Senior Living Inc. | | **State of Incorporation** | Delaware | | **Commission File Number** | 001-32641 | | **IRS Employer Identification No.** | 20-3068069 | | **Principal Executive Offices Address** | 105 Westwood Place, Suite 400, Brentwood, Tennessee 37027 | | **Telephone Number** | (615) 221-2250 | [Report Date and Filing Status](index=1&type=section&id=Report%20Date%20and%20Filing%20Status) This section specifies the date of the report and confirms that Brookdale Senior Living Inc. is not an emerging growth company - The date of the earliest event reported is **October 8, 2025**[3](index=3&type=chunk) - The registrant is not an emerging growth company[7](index=7&type=chunk) [Section 2 - Financial Information](index=2&type=section&id=Section%202%20-%20Financial%20Information) This section details the company's financial disclosures, specifically regarding results of operations and financial condition [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Brookdale Senior Living Inc. announced September 2025 occupancy and Q3 2025 financial results via a press release (Exhibit 99.1), noting its 'furnished' not 'filed' status - Brookdale Senior Living Inc. issued a press release on **October 8, 2025**, announcing consolidated occupancy for September 2025 and other information for the quarter ended September 30, 2025[8](index=8&type=chunk) - A copy of the press release is furnished as **Exhibit 99.1**[8](index=8&type=chunk) - The information in this report (including the exhibit) is not considered 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934, nor incorporated by reference into other filings, unless expressly set forth[9](index=9&type=chunk) [Section 7 - Regulation FD](index=2&type=section&id=Section%207%20-%20Regulation%20FD) This section addresses compliance with Regulation FD regarding the fair disclosure of material nonpublic information [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) Incorporates financial information from Item 2.02 by reference, ensuring Regulation FD compliance for fair disclosure of material nonpublic information - The information set forth in **Item 2.02** of this report is incorporated herein by reference[10](index=10&type=chunk) [Section 9 - Financial Statements and Exhibits](index=2&type=section&id=Section%209%20-%20Financial%20Statements%20and%20Exhibits) This section lists all financial statements and exhibits included as part of the Form 8-K filing [Item 9.01 Financial Statements and Exhibits](index=2&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section lists the exhibits accompanying the Form 8-K, including the press release detailing financial results and the interactive data file for the cover page Exhibits List | Exhibit No. | Description | | :--- | :--- | | 99.1 | Press Release dated October 8, 2025 | | 104 | Cover Page interactive Data File (embedded within the Inline XBRL document) | [Signature](index=3&type=section&id=Signature) This section provides the official authorization and signatory details for the Form 8-K filing [Authorization and Signatory](index=3&type=section&id=Authorization%20and%20Signatory) This section confirms the official authorization and signing of the Form 8-K report by an authorized officer of Brookdale Senior Living Inc. Signatory Details | Detail | Information | | :--- | :--- | | **Date** | October 8, 2025 | | **Signatory Name** | Dawn L. Kussow | | **Title** | Executive Vice President and Chief Financial Officer |

[Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) [Headline and Introduction](index=1&type=section&id=Headline%20and%20Introduction) AZZ Inc. reported strong Q2 FY2026 results, showing growth in sales, EPS, and cash flow, with unchanged FY2026 guidance - AZZ Inc. reported Q2 FY2026 results with growth in **sales, EPS, and cash flow**[1](index=1&type=chunk)[2](index=2&type=chunk) - Fiscal Year 2026 Guidance remains unchanged[1](index=1&type=chunk) [Fiscal Year 2026 Second Quarter Highlights](index=1&type=section&id=Fiscal%20Year%202026%20Second%20Quarter%20Highlights) Q2 FY2026 sales increased 2.0% to $417.3 million, net income surged 152.3% to $89.3 million, and adjusted EPS grew 13.1% to $1.55 Q2 FY2026 Key Financial Highlights | Metric | Q2 FY2026 (Millions) | Change YoY | | :----------------------- | :------------------- | :--------- | | Total Sales | $417.3 | +2.0% | | Metal Coatings Sales | $190.0 | +10.8% | | Precoat Metals Sales | $227.3 | -4.3% | | Net Income | $89.3 | +152.3% | | Adjusted Net Income | $46.9 | +13.8% | | GAAP Diluted EPS | $2.95 | +150.0% | | Adjusted Diluted EPS | $1.55 | +13.1% | | Consolidated Adjusted EBITDA | $88.7 | -3.5% (from $91.9M) | | Cash from Operating Activities | $58.4 | +23% | - Completed the acquisition of a galvanizing facility in Canton, Ohio for **$30.1 million**[6](index=6&type=chunk) - Paid a cash dividend of **$0.20 per share** to common shareholders during the quarter[6](index=6&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Tom Ferguson highlighted Q2 sales growth, strong Metal Coatings, weaker Precoat Metals, and balance sheet strengthening, affirming FY2026 guidance - Metal Coatings delivered strong, **double-digit sales gains** on volume increases, driven by infrastructure-driven project spending in construction, industrial, and electrical transmission and distribution end-markets[4](index=4&type=chunk) - Precoat Metals experienced weaker demand in building construction, HVAC, and appliance end-markets[4](index=4&type=chunk) - Strengthened balance sheet by introducing an Accounts Receivable securitization program, repricing Term Loan B (**75-basis point reduction**), and achieving modest debt paydown, maintaining a net debt leverage of **1.7x**[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Metal Coatings Segment](index=2&type=section&id=Metal%20Coatings%20Segment) The Metal Coatings segment reported sales of $190.0 million, a 10.8% increase, driven by higher volumes from infrastructure-related project spending Metal Coatings Segment Performance (Q2 FY2026 vs Q2 FY2025) | Metric | Q2 FY2026 | Q2 FY2025 | Change YoY | | :------------------- | :---------- | :---------- | :--------- | | Sales | $190.0 million | $171.5 million | +10.8% | | Adjusted EBITDA | $58.5 million | $54.4 million | +7.5% | | Adjusted EBITDA Margin | 30.8% | 31.7% | -90 bps | - Sales increase driven by **increased volume** supported by infrastructure-related project spending in construction, industrial, and electrical transmission and distribution end markets[7](index=7&type=chunk) [Precoat Metals Segment](index=2&type=section&id=Precoat%20Metals%20Segment) The Precoat Metals segment's sales decreased by 4.3% to $227.3 million due to weaker demand in building construction, HVAC, and appliance end markets Precoat Metals Segment Performance (Q2 FY2026 vs Q2 FY2025) | Metric | Q2 FY2026 | Q2 FY2025 | Change YoY | | :------------------- | :---------- | :---------- | :--------- | | Sales | $227.3 million | $237.5 million | -4.3% | | Adjusted EBITDA | $45.9 million | $50.2 million | -8.4% | | Adjusted EBITDA Margin | 20.2% | 21.1% | -90 bps | - Sales decrease primarily due to **weaker end markets**, including building construction, HVAC, and appliance[8](index=8&type=chunk) [Financial Position and Capital Allocation](index=2&type=section&id=Balance%20Sheet%2C%20Liquidity%20and%20Capital%20Allocation) [Balance Sheet, Liquidity and Capital Allocation Summary](index=2&type=section&id=Balance%20Sheet%2C%20Liquidity%20and%20Capital%20Allocation%20Summary) For H1 FY2026, AZZ generated $373.2M in operating cash, reduced debt by $290.4M, and maintained a net leverage of 1.7x Key Financial Position and Capital Allocation Metrics (Six Months Ended Aug 31) | Metric | Six Months Ended Aug 31, 2025 | Six Months Ended Aug 31, 2024 | Change YoY | | :-------------------------------- | :---------------------------- | :---------------------------- | :--------- | | Operating Cash Flow | $373.2 million | $119.4 million | +212.5% | | Debt Paid Down | $290.4 million | N/A | N/A | | Cash Dividends to Shareholders | $11.1 million | N/A | N/A | | Capital Expenditures | $40.2 million | N/A | N/A | - Net leverage ratio was **1.7x** trailing twelve months Adjusted EBITDA at the end of Q2 FY2026[9](index=9&type=chunk) - Operating cash flow for the first six months includes a **$273.2 million distribution** from the AVAIL JV following the sale of its Electrical Products Group[9](index=9&type=chunk) - Full fiscal year capital expenditures are expected to be approximately **$60 - $80 million**[9](index=9&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook%20%E2%80%94%20Fiscal%20Year%202026%20Guidance%20Remains%20Unchanged) [FY2026 Guidance](index=2&type=section&id=FY2026%20Guidance) AZZ Inc. maintains its FY2026 guidance, anticipating sales between $1.625 billion and $1.725 billion, Adjusted EBITDA of $360 million to $400 million, and Adjusted Diluted EPS of $5.75 to $6.25 FY2026 Financial Guidance | Metric | FY2026 Guidance | | :---------------- | :-------------------- | | Sales | $1.625 - $1.725 billion | | Adjusted EBITDA | $360 - $400 million | | Adjusted Diluted EPS | $5.75 - $6.25 | - Guidance assumes an annualized effective tax rate of **24%** and excludes future acquisitions, future equity in earnings from AVAIL joint venture, and certain non-GAAP adjustments[10](index=10&type=chunk)[12](index=12&type=chunk) - Assumes EBITDA margin range of **27-32%** for the Metal Coatings segment and **17-22%** for the Precoat Metals segment[12](index=12&type=chunk) [Additional Information](index=2&type=section&id=Additional%20Information) [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) AZZ Inc. will host a live conference call on Thursday, October 9, 2025, at 11:00 A.M. ET to discuss Q2 FY2026 financial results - Live conference call on **Thursday, October 9, 2025, at 11:00 A.M. ET**[11](index=11&type=chunk) - Webcast of the call will be available on the Company's Investor Relations page at http://www.azz.com/investor-relations, with a replay available for **12 months**[11](index=11&type=chunk)[13](index=13&type=chunk) [About AZZ Inc.](index=3&type=section&id=About%20AZZ%20Inc.) AZZ Inc. is a leading independent provider of hot-dip galvanizing and coil coating solutions in North America, enhancing essential infrastructure and products - Leading independent provider of hot-dip galvanizing and coil coating solutions to a broad range of end-markets in North America[14](index=14&type=chunk) - Business segments provide sustainable, unmatched metal coating solutions that enhance the longevity and appearance of buildings, products, and infrastructure[14](index=14&type=chunk) [Safe Harbor Statement](index=3&type=section&id=Safe%20Harbor%20Statement) The report contains forward-looking statements subject to various risks, including changes in demand, cost increases, supply-chain delays, and economic volatility - Forward-looking statements are subject to risks such as changes in **customer demand** for manufactured solutions (construction, industrial, metal coatings markets)[15](index=15&type=chunk) - Risks include increases in **labor costs**, components and **raw materials** (zinc, natural gas, paint), **supply-chain vendor delays**, customer requested delays, and delays in additional acquisition opportunities[15](index=15&type=chunk) - Other risks include an increase in **debt leverage** and/or **interest rates**, availability of experienced management and employees, downturns in market conditions, **economic volatility**, tariffs, acts of war or terrorism[15](index=15&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) Contact details are provided for AZZ Inc.'s Chief Marketing,

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Aehr Test Systems [Item 1. Financial Statements (Unaudited)](index=2&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Aehr Test Systems, including balance sheets, statements of operations, comprehensive income (loss), shareholders' equity, and cash flows, along with accompanying notes [Condensed Consolidated Balance Sheets](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and shareholders' equity at specific points in time Assets Measured at Fair Value (August 29, 2025) | (In thousands) | August 29, 2025 | May 30, 2025 | | :--- | :--- | :--- | | Total assets | $144,092 | $148,508 | | Total current assets | $84,052 | $88,778 | | Cash and cash equivalents | $22,708 | $24,529 | | Total liabilities | $21,698 | $25,637 | | Total shareholders' equity | $122,394 | $122,871 | - Total assets decreased by **$4.4 million**, and total shareholders' equity decreased by **$0.5 million** from May 30, 2025, to August 29, 2025[9](index=9&type=chunk)[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This statement presents the company's revenues, expenses, and net income or loss over a specific period, reflecting operational performance Condensed Consolidated Statements of Operations | (In thousands, except per share data) | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | Revenue | $10,969 | $13,119 | | Gross profit | $3,719 | $7,078 | | Income (loss) from operations | $(4,066) | $159 | | Net income (loss) | $(2,084) | $660 | | Basic Net income (loss) per share | $(0.07) | $0.02 | | Diluted Net income (loss) per share | $(0.07) | $0.02 | - Revenue decreased by **16%** and gross profit decreased by **47%** year-over-year. The company reported a **net loss of $2.1 million** for the three months ended August 29, 2025, compared to a net income of $0.7 million in the prior year period[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME%20(LOSS)) This statement reports net income or loss and other comprehensive income or loss, providing a complete view of changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Income (Loss) | (In thousands) | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | Net income (loss) | $(2,084) | $660 | | Net change in cumulative translation adjustment | $31 | $24 | | Comprehensive income (loss) | $(2,053) | $684 | - Comprehensive income shifted from a gain of **$0.7 million** in the prior year to a **loss of $2.1 million** for the three months ended August 29, 2025[13](index=13&type=chunk)[15](index=15&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20SHAREHOLDERS'%20EQUITY) This statement details changes in shareholders' equity, including net income, stock-based compensation, and stock transactions, over a period Condensed Consolidated Statements of Shareholders' Equity | (In thousands) | Balances, May 30, 2025 | Balances, August 29, 2025 | | :--- | :--- | :--- | | Total Shareholders' Equity | $122,871 | $122,394 | | Net loss | - | $(2,084) | | Stock-based compensation | - | $1,734 | | Issuance of common stock under employee plans | - | $170 | | Shares repurchased for tax withholdings | - | $(328) | - Total shareholders' equity decreased from **$122.9 million** to **$122.4 million** during the quarter, primarily due to the **net loss of $2.1 million**, partially offset by stock-based compensation and common stock issuance[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement categorizes cash inflows and outflows from operating, investing, and financing activities, showing liquidity changes Condensed Consolidated Statements of Cash Flows | (In thousands) | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(282) | $2,380 | | Net cash used in investing activities | $(1,391) | $(10,812) | | Net cash used in financing activities | $(158) | $(106) | | Net decrease in cash, cash equivalents and restricted cash | $(1,822) | $(8,529) | | Cash, cash equivalents and restricted cash, end of period | $24,658 | $40,780 | - Operating activities shifted from providing **$2.4 million** in cash to using **$0.3 million**. Investing activities used significantly less cash (**$1.4 million** vs. **$10.8 million**) due to the absence of a business acquisition in the current period[18](index=18&type=chunk)[19](index=19&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=5&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide additional details and explanations for the figures presented in the financial statements, enhancing transparency [1. Organization and Significant Accounting Policies](index=5&type=section&id=1.%20ORGANIZATION%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes Aehr Test Systems' organization, its primary business of developing and manufacturing semiconductor test and burn-in equipment, and the basis of presentation for the unaudited condensed consolidated financial statements - The Company develops and manufactures test and burn-in equipment for the semiconductor industry, including FOX-XP, FOX-NP, FOX-CP wafer contact and singulated die/module systems, and packaged parts burn-in products like Sonoma, Tahoe, and Echo[21](index=21&type=chunk) - No significant changes to critical accounting policies were made during the three months ended August 29, 2025[24](index=24&type=chunk) Revenue Concentration by Customer | Customer | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | Customer A | 42.6% | * | | Customer B | 21.8% | * | | Customer C | 11.6% | 90.8% | Accounts Receivable Concentration by Customer | Customer | August 29, 2025 | May 30, 2025 | | :--- | :--- | :--- | | Customer A | 22.1% | * | | Customer B | 18.2% | * | | Customer D | 20.8% | 26.2% | | Customer E | 17.8% | 17.2% | [2. Fair Value of Financial Instruments](index=7&type=section&id=2.%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note details the Company's financial instruments measured at fair value, primarily money market funds, which are classified as Level 1 in the fair value hierarchy Assets Measured at Fair Value (August 29, 2025) | (In thousands) | Balance as of August 29, 2025 | Level 1 | | :--- | :--- | :--- | | Money market funds | $20,863 | $20,863 | | Total | $20,863 | $20,863 | Assets Measured at Fair Value (May 30, 2025) | (In thousands) | Balance as of May 30, 2025 | Level 1 | | :--- | :--- | :--- | | Money market funds | $21,461 | $21,461 | | Total | $21,461 | $21,461 | - All money market funds are classified as **Level 1 fair value measurements**, indicating observable inputs from active markets[30](index=30&type=chunk)[33](index=33&type=chunk) [3. Balance Sheet Information](index=7&type=section&id=3.%20BALANCE%20SHEET%20INFORMATION) This note provides detailed breakdowns of inventories, property and equipment, and changes in product warranty liabilities and deferred revenue Inventories Breakdown | (In thousands) | August 29, 2025 | May 30, 2025 | | :--- | :--- | :--- | | Raw materials and sub-assemblies | $32,609 | $30,644 | | Work in process | $8,674 | $9,263 | | Finished goods | $559 | $2,090 | | Total | $41,842 | $41,997 | Property and Equipment, Net | (In thousands) | August 29, 2025 | May 30, 2025 | | :--- | :--- | :--- | | Total Property and equipment, gross | $14,835 | $14,436 | | Less: accumulated depreciation | $(5,834) | $(5,467) | | Property and equipment, net | $9,001 | $8,969 | Product Warranty Liability Changes | (In thousands) | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | Balance at the beginning of the period | $428 | $234 | | Accruals for warranties issued | $169 | $178 | | Adjustments to previously existing accruals | $204 | - | | Consumption of reserves | $(291) | $(193) | | Balance at the end of the period | $510 | $219 | - Deferred revenue, short-term, decreased from **$1.98 million** to **$1.12 million**, primarily due to a reduction in customer deposits[41](index=41&type=chunk) [4. Goodwill and Purchased Intangible Assets](index=8&type=section&id=4.%20GOODWILL%20AND%20PURCHASED%20INTANGIBLE%20ASSETS) This note provides details on goodwill and purchased intangible assets. There were no impairments to goodwill or purchased intangible assets during the reported periods. The net value of purchased intangible assets decreased slightly due to amortization - No impairments to goodwill were recorded during the three months ended August 29, 2025, or August 30, 2024[43](index=43&type=chunk) Purchased Intangible Assets, Net | (In thousands) | August 29, 2025 Net | May 30, 2025 Net | | :--- | :--- | :--- | | Developed technology | $8,306 | $8,496 | | Trade names | $936 | $962 | | Customer relationships | $730 | $749 | | Non-compete agreements and others | $467 | $574 | | Total | $10,439 | $10,781 | - Amortization expense for purchased intangible assets was **$0.3 million** for the three months ended August 29, 2025, an increase from $0.1 million in the prior year period[44](index=44&type=chunk) [5. Income Taxes](index=9&type=section&id=5.%20INCOME%20TAXES) This note details the Company's income tax expense (benefit) and effective tax rate. The Company recognized an income tax benefit for the current quarter due to year-to-date losses in the U.S., a significant change from the prior year's tax expense Income Taxes Details | (In thousands) | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | Income (loss) before income tax expense (benefit) | $(2,836) | $814 | | Income tax expense (benefit) | $(752) | $154 | | Effective tax rate | 26.5% | 18.9% | - The Company recognized a **tax benefit of $0.8 million** for the three months ended August 29, 2025, primarily due to year-to-date losses in the United States, contrasting with a tax expense of $0.2 million in the prior year[46](index=46&type=chunk)[47](index=47&type=chunk) [6. Commitments and Contingencies](index=10&type=section&id=6.%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the Company's purchase obligations and various contingencies, including legal proceedings. It reports the voluntary dismissal of a shareholder class action lawsuit and the dismissal of consolidated derivative actions. It also details ongoing intellectual property litigation in China - A putative shareholder class action lawsuit and consolidated shareholder derivative complaints were voluntarily dismissed or dismissed without prejudice, with no related proceedings currently pending[52](index=52&type=chunk) - The Company is actively pursuing intellectual property rights in China against Suzhou Semight Instruments Co., Ltd. for patent infringement, with infringement proceedings having resumed after patents were upheld[53](index=53&type=chunk) - The Company indemnifies other parties, including customers, for certain matters, but payments made to date have not had a material impact on financial results[54](index=54&type=chunk)[56](index=56&type=chunk) [7. Shareholders' Equity](index=11&type=section&id=7.%20SHAREHOLDERS'%20EQUITY) This note discusses activities related to shareholders' equity, specifically the authorization of a $100 million shelf registration and a $40 million ATM offering program. No proceeds were raised from the ATM offering during fiscal 2025 - The Board of Directors authorized a **$100 million shelf registration** and a **$40 million ATM offering program**, with $40 million remaining as of August 29, 2025[57](index=57&type=chunk) - No proceeds were raised from the ATM offering during fiscal 2025[57](index=57&type=chunk) [8. Revenue](index=11&type=section&id=8.%20REVENUE) This note details the Company's revenue recognition policies and disaggregates revenue by geographic area and product category. It highlights a significant shift in revenue contribution from Asia to the United States and Europe/Middle East, and from contactors to systems - Revenue is recognized when promised goods or services are transferred to customers, typically at a point in time for systems and spares, and over time for services[58](index=58&type=chunk)[60](index=60&type=chunk) Revenue Disaggregation by Geography | (In thousands) | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | United States | $4,812 | $523 | | Europe and Middle East | $3,681 | $18 | | Asia | $2,476 | $12,578 | | Total | $10,969 | $13,119 | Revenue Disaggregation by Product Category | (In thousands) | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | Systems | $6,764 | $60 | | Contactors | $2,613 | $12,094 | | Services | $1,592 | $965 | | Total | $10,969 | $13,119 | - Unbilled receivables decreased from **$3.6 million** to **$1.5 million**, and contract liabilities decreased from **$2.0 million** to **$1.2 million**[64](index=64&type=chunk)[65](index=65&type=chunk) [9. Stock-Based Compensation](index=12&type=section&id=9.%20STOCK-BASED%20COMPENSATION) This note outlines the Company's stock-based compensation plans and the expense recognized. Stock-based compensation expense significantly increased year-over-year, and the number of unvested awards grew Stock-Based Compensation Expense | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Cost of sales | $159 | $93 | | Research and development | $365 | $208 | | Selling, general and administrative | $1,147 | $569 | | Total | $1,671 | $870 | - Total stock-based compensation expense increased by **92%** to **$1.7 million** for the three months ended August 29, 2025, compared to $0.9 million in the prior year[71](index=71&type=chunk) Nonvested RSU, PRSU and Restricted Shares Activity | | Shares (in thousands) | Weighted Average Grant Date Fair Value Per Share | | :--- | :--- | :--- | | Unvested, May 30, 2025 | 664 | $16.89 | | Granted | 529 | $15.13 | | Vested | (61) | $14.81 | | Forfeited | (4) | $17.54 | | Unvested, August 29, 2025 | 1,128 | $16.18 | [10. Restructuring Charges](index=13&type=section&id=10.%20RESTRUCTURING%20CHARGES) This note details restructuring charges incurred during the period. The Company recorded $0.2 million in restructuring charges related to a workforce reduction, in addition to a previously initiated plan to consolidate facilities - The Company recorded **$0.2 million** in restructuring charges for the three months ended August 29, 2025, primarily due to employee termination benefits from a workforce reduction[75](index=75&type=chunk) - No additional charges were incurred related to the previously initiated facility consolidation plan, and the related liability remained at **$0.2 million**[74](index=74&type=chunk) - There were no restructuring charges during the three months ended August 30, 2024[76](index=76&type=chunk) [11. Employee Retention Credit](index=13&type=section&id=11.%20EMPLOYEE%20RETENTION%20CREDIT) This note explains the Employee Retention Credit (ERC) refund received by the Company. The Company received a $1.3 million ERC refund, which was recognized as other income, net of a $0.3 million service fee - The Company received an Employee Retention Credit (ERC) refund of approximately **$1.3 million** during the three months ended August 29, 2025[77](index=77&type=chunk) - A **$0.3 million service fee** was incurred in connection with filing the ERC claims, resulting in a net positive impact on other income[78](index=78&type=chunk) [12. Net Income (Loss) Per Share](index=14&type=section&id=12.%20NET%20INCOME%20(LOSS)%20PER%20SHARE) This note provides the computation of basic and diluted net income (loss) per share. Both basic and diluted EPS shifted to a loss of $0.07 per share for the current period, compared to a gain of $0.02 per share in the prior year Net Income (Loss) Per Share Computation | (In thousands, except per share data) | Three Months Ended August 29, 2025 | Three Months Ended August 30, 2024 | | :--- | :--- | :--- | | Net income (loss) | $(2,084) | $660 | | Basic weighted average shares outstanding | 29,923 | 29,107 | | Diluted weighted average shares outstanding | 29,923 | 29,632 | | Net income (loss) per share - Basic | $(0.07) | $0.02 | | Net income (loss) per share - Diluted | $(0.07) | $0.02 | - Antidilutive employee share-based awards excluded from diluted EPS calculation increased from **640,000** to **1,924,000 shares**[80](index=80&type=chunk) [13. Segment and Concentration Information](index=14&type=section&id=13.%20SEGMENT%20AND%20CONCENTRATION%20INFORMATION) This note clarifies that the Company operates in one operating segment, as the chief operating decision maker reviews financial information on a consolidated basis. It also provides a breakdown of property and equipment by geographic area - The Company considers itself to be in **one operating segment**, as the chief executive officer reviews discrete financial information on a consolidated basis[82](index=82&type=chunk) Property and Equipment, Net by Geographic Area | (In thousands) | August 29, 2025 | May 30, 2025 | | :--- | :--- | :--- | | United States | $8,939 | $8,892 | | International | $62 | $77 | | Total property and equipment, net | $9,001 | $8,969 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key business trends, financial performance, and liquidity [Overview](index=15&type=section&id=Overview) This overview introduces Aehr Test Systems as a leading provider of semiconductor test solutions, driven by generative AI and vehicle electrification demand - Aehr Test Systems is a leading provider of test solutions for semiconductor devices, addressing the growing demand driven by generative AI and the electrification of transportation and global infrastructure[86](index=86&type=chunk) - The Company's product portfolio includes FOX-P systems (FOX-XP, FOX-NP, FOX-CP), WaferPak contactors, DiePak carriers, and packaged parts burn-in solutions (Sonoma, Tahoe, Echo series) acquired through Incal Technology, Inc[87](index=87&type=chunk)[88](index=88&type=chunk) - The Sonoma line is designed for ultra-high-power burn-in testing of AI accelerators, GPUs, and HPC processors, while Tahoe and Echo target medium- and low-power logic and SoC devices[88](index=88&type=chunk) [Critical Accounting Estimates](index=15&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to the Company's critical accounting policies and estimates during the reported period - There have been no material changes to the Company's critical accounting policies and estimates during the three months ended August 29, 2025[92](index=92&type=chunk) [Results of Operations](index=16&type=section&id=Results%20of%20Operations) This section analyzes the Company's financial performance, detailing changes in revenue, gross profit, operating expenses, and net income year-over-year Revenue Performance (YoY) | (Dollars in thousands) | August 29, 2025 | August 30, 2024 | Percent Change | | :--- | :--- | :--- | :--- | | Revenues | $10,969 | $13,119 | (16%) | - Revenue decreased by **$2.2 million (16%)** year-over-year, primarily due to lower contactor shipments (**$9.5 million decrease**) partially offset by increased systems revenue (**$6.7 million increase**) and service revenue (**$0.6 million increase**)[93](index=93&type=chunk) Gross Margin Performance (YoY) | (Dollars in thousands) | August 29, 2025 | August 30, 2024 | Percent Change | | :--- | :--- | :--- | :--- | | Gross profit | $3,719 | $7,078 | (47%) | | Gross margin | 33.9% | 54.0% | (20.1 percentage points) | - Gross margin decreased by **20.1 percentage points** due to changes in product mix, higher assembly and warranty costs, increased tariffs, and amortization of acquired intangible assets[96](index=96&type=chunk) Operating Expenses (YoY) | (Dollars in thousands) | August 29, 2025 | August 30, 2024 | Percent Change | | :--- | :--- | :--- | :--- | | Research and development | $2,849 | $2,361 | 21% | | Selling, general and administrative | $4,717 | $4,558 | 3% | | Restructuring Charges | $219 | - | N.M. | - R&D expenses increased by **$0.5 million (21%)** due to higher employment-related costs and headcount[98](index=98&type=chunk)[99](index=99&type=chunk) - SG&A expenses remained consistent, with higher stock-based compensation offset by lower legal fees[99](index=99&type=chunk) Interest and Other Income (Expense), Net (YoY) | (Dollars in thousands) | August 29, 2025 | August 30, 2024 | Percent Change | | :--- | :--- | :--- | :--- | | Interest income, net | $179 | $681 | (74%) | | Other Income (expense), net | $1,051 | $(26) | N.M. | | Interest and other income (expense), net | $1,230 | $655 | 88% | - Other income (expense), net, increased by **$1.1 million**, primarily due to a **$1.3 million Employee Retention Credit (ERC) refund**, net of a $0.3 million service fee[104](index=104&type=chunk) Income Tax Expense (Benefit) (YoY) | (Dollars in thousands) | August 29, 2025 | August 30, 2024 | Percent Change | | :--- | :--- | :--- | :--- | | Income tax expense (benefit) | $(752) | $154 | (588%) | - The Company recognized an **income tax benefit of $0.8 million**, driven by year-to-date losses in the United States, a significant change from the prior year's tax expense[106](index=106&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the Company's ability to meet its financial obligations, reviewing cash flows, cash position, and future capital requirements - Cash, cash equivalents, and restricted cash decreased to **$24.7 million** as of August 29, 2025, from $40.8 million in the prior year[107](index=107&type=chunk) - Management believes existing cash resources and anticipated funds from operations will satisfy cash requirements for the next twelve months[107](index=107&type=chunk) Cash Flow Summary (YoY) | (In thousands) | August 29, 2025 | August 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Operating activities | $(282) | $2,380 | $(2,662) | | Investing activities | $(1,391) | $(10,812) | $9,421 | | Financing activities | $(158) | $(106) | $(52) | | Net increase (decrease) in cash | $(1,822) | $(8,529) | $6,707 | - The **$2.7 million decrease** in cash from operating activities was driven by lower income, decreased deferred revenue, increased accounts payable payments, and lower accounts receivable collection, partially offset by reduced inventory purchases[109](index=109&type=chunk) - Net cash used in investing activities decreased by **$9.4 million**, primarily due to the absence of the **$10.6 million Incal acquisition payment** made in the prior year, partially offset by increased spending on property and equipment[110](index=110&type=chunk) [Off-Balance Sheet Agreements](index=18&type=section&id=Off-Balance%20Sheet%20Agreements) This section confirms the absence of any off-balance sheet arrangements, special purpose entities, or undisclosed borrowings or debt - The Company does not have any off-balance sheet arrangements, investments in special purpose entities, or undisclosed borrowings or debt[112](index=112&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=18&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Aehr Test Systems is not required to provide quantitative and qualitative disclosures about market risk - The Company is not required to provide disclosures about market risk as it is a smaller reporting company[113](index=113&type=chunk) [Item 4. Controls and Procedures](index=19&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of August 29, 2025[115](index=115&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the three months ended August 29, 2025[116](index=116&type=chunk) [PART II OTHER INFORMATION](index=19&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and other disclosures [Item 1. Legal Proceedings](index=19&type=section&id=Item%201.%20Legal%20Proceedings) This item refers to Note 6 for details on legal proceedings, which include the voluntary dismissal of a shareholder class action and derivative lawsuits, and ongoing intellectual property litigation in China - Information regarding legal proceedings is provided in Note 6 – Commitments and Contingencies[117](index=117&type=chunk) [Item 1A. Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) This item states that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended May 30, 2025 - No material changes to risk factors have occurred since the Annual Report on Form 10-K for the year ended May 30, 2025[118](index=118&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=19&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item reports that there were no unregistered sales of equity securities or use of proceeds during the period - None[119](index=119&type=chunk) [Item 3. Defaults Upon Senior Securities](index=19&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item indicates that there were no defaults upon senior securities during the period - None[120](index=120&type=chunk) [Item 4. Mine Safety Disclosures](index=19&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not Applicable[121](index=121&type=chunk) [Item 5. Other Information](index=19&type=section&id=Item%205.%20Other%20Information) This item discloses that the President and CEO, Gayn Erickson, terminated his Rule 10b5-1 trading arrangement, and no directors or officers have such arrangements in place as of August 29, 2025 - President and CEO Gayn Erickson terminated his Rule 10b5-1 trading arrangement on August 8, 2025[122](index=122&type=chunk) - As of August 29, 2025, none of the Company's directors or officers have a Rule 10b5-1 trading arrangement[122](index=122&type=chunk) [Item 6. Exhibits](index=19&type=section&id=Item%206.%20Exhibits) This item lists the exhibits filed with the Form 10-Q, including certifications, XBRL documents, and documents incorporated by reference Key Exhibits Filed | Exhibit Number | Description | | :--- | :--- | | 31.1 | Certification of the principal executive officer | | 31.2 | Certification of the principal financial and accounting officer | | 32.1 | Certification pursuant to 18 U.S.C. Section 1350 | | 32.2 | Certification pursuant to 18 U.S.C. Section 1350 | | 101.INS | XBRL Instance Document | [SIGNATURES](index=20&type=section&id=SIGNATURES) This section contains the official signatures of the Company's principal executive and financial officers, certifying the report's accuracy - The report was signed on October 8, 2025, by Gayn Erickson, President and Chief Executive Officer, and Chris P. Siu, Executive Vice President of Finance and Chief Financial Officer[128](index=128&type=chunk)[129](index=129&type=chunk)