Financial Performance - Total revenue for fiscal year 2025 was $592.4 million, essentially flat compared to $592.8 million in fiscal 2024[3] - The company reported an operating loss of $16.2 million in fiscal 2025, an improvement from a loss of $43.5 million in the prior year[4] - Net loss for the fiscal year was $34.3 million, or $3.35 per diluted share, compared to a net loss of $26.5 million, or $2.60 per diluted share, in fiscal 2024[7] - Operating expenses decreased by $20.2 million from the prior year, largely due to a goodwill impairment charge in the previous year and reduced promotional spending[5] Gross Margin and Cash Position - Gross margin increased to 35.1% in fiscal 2025, up from 33.9% in fiscal 2024, primarily due to improved overhead absorption and reduced inventory reserves[4] - Cash and investments as of October 3, 2025, totaled $176.4 million, a $14.4 million increase from the prior year, with no debt on the balance sheet[10] Revenue by Segment - Fishing segment revenue increased by 2% in fiscal 2025, driven by the success of new product launches[9] - Diving sales also rose by 2% due to modest improvements in market conditions and favorable foreign currency translation[9] - Camping and Watercraft Recreation revenue decreased by 13% primarily due to the exit of the Eureka! brand[9] Future Growth Strategy - The company plans to continue investing in innovation, operational efficiencies, and e-commerce to drive future growth[3]

Financial Performance - Active subscriptions reached a record 1.1 million, up 54% year-over-year; subscription revenue grew 29% year-over-year [2] - Total revenue increased by 5.8% to $7.6 million; advertising revenue rose by 6.0% to $5.2 million [9] - GAAP net income was $0.8 million, compared to a net loss of $0.3 million in the previous year; GAAP EPS improved to $0.06 from a loss of $0.02 [10] - Revenues for the three months ended October 31, 2025, increased to $7,610,000, up 5.8% from $7,194,000 in the same period of 2024 [27] - Net income for the three months ended October 31, 2025, was $788,000, compared to a net loss of $339,000 for the same period in 2024 [27] - Total comprehensive income for the three months ended October 31, 2025, was $887,000, compared to a loss of $368,000 in the same period of 2024 [27] - Net Income for Q126 was $0.8 million, showing improvement from a loss of $0.6 million in Q425 [31] - Adjusted EBITDA for Q126 was $1.2 million, compared to $0.3 million in Q425, indicating a positive trend [31] - Non-GAAP Net Income for Q126 was $0.9 million, a significant increase from $0.1 million in Q425 [31] Cash Flow and Assets - Free cash flow decreased by 36.8% to $0.6 million, impacted by restructuring-related compensation tax payments and reinvestments in high-potential initiatives [6] - Cash and cash equivalents at the end of the period were $18,496,000, down from $18,609,000 at the beginning of the period [29] - The company reported a net cash provided by operating activities of $825,000 for the three months ended October 31, 2025, down from $1,170,000 in the same period of 2024 [29] - Total Cash Flow from Operations for FY24 reached $5.9 million, demonstrating strong operational performance [31] Market and Growth Outlook - The company is optimistic about future growth, entering the second quarter of fiscal 2026 with a leaner operating structure and a stronger business engine [7] - DataSeeds Production Cloud is experiencing increased demand, with a significant order size increase of roughly 25X from an existing customer in the AI space [5] - The company expects to achieve a Non-GAAP diluted EPS of $0.07 for FY25, signaling growth potential [31] Shareholder Actions and Equity - The company repurchased approximately 240,000 shares of Class B Common Stock during the quarter [10] - Stockholders' equity as of October 31, 2025, was $25,895,000, slightly down from $25,901,000 as of July 31, 2025 [24] - The weighted average shares used for Non-GAAP basic EPS calculation was 14.1 million for Q125, indicating a stable share count [31] Liabilities and Expenses - Total liabilities increased to $10,064,000 as of October 31, 2025, compared to $9,753,000 as of July 31, 2025 [24] - Deferred revenues increased to $3,735,000 for current liabilities as of October 31, 2025, compared to $3,425,000 as of July 31, 2025 [24] - The company incurred $12.0 million in asset impairments and restructuring charges for FY24, impacting overall profitability [31] - Stock-based compensation expenses totaled $2.1 million for FY24, reflecting ongoing employee incentive programs [31] Other Metrics - ARPMAU increased by 29.2% to $0.099, indicating improved monetization of the user base [11] - The Zedge Marketplace showed resilience, with a GAAP operating income of $0.9 million compared to an operating loss of $0.5 million in the prior year [10] - Zedge Premium's Gross Transaction Value (GTV) decreased by 3.7% to $0.66 million [11] - Capital Expenditures for FY24 are projected at $1.2 million, with a focus on strategic investments [31]

Financial Ratios and Coverage - As of September 30, 2025, the company's asset coverage ratio was 207.8%, exceeding the minimum requirement of 200% under the 1940 Act[133]. - The company's asset coverage ratio was 207.8% as of September 30, 2025, exceeding the minimum requirement of 200% under the 1940 Act[148]. - The company's asset coverage was 207.8% after giving effect to leverage, exceeding the minimum requirement of 200% under the 1940 Act[193]. Debt and Borrowing - The company has issued $57.5 million in aggregate principal amount of 5.25% unsecured notes due November 1, 2028, and has a revolving credit facility increased to $100 million[130][131]. - The company has a revolving credit facility that was amended to increase the principal amount available by $12.5 million to $62.5 million[130]. - As of September 30, 2025, the company had $149.2 million in outstanding borrowings with a weighted average interest rate of 6.5%[154]. - The terms of the Credit Facility impose restrictions on the company's ability to incur additional debt, which could affect liquidity and investment strategy[213]. Investment Risks - Rising interest rates may increase borrowing costs and reduce net investment income, potentially leading to defaults on loans from portfolio companies[117][118]. - Economic downturns could impair portfolio companies' ability to repay debt investments, increasing the risk of non-performing assets[120][121]. - The company is exposed to risks associated with leverage, which could increase the risk of credit and capital losses during economic recessions[129][130]. - The company may face challenges in paying required distributions if it recognizes income before receiving cash, potentially affecting its RIC tax treatment[146]. - The company may need to raise additional capital to finance growth, but such capital may not be available on favorable terms[151]. - The company may suffer losses on unitranche loans if borrowers are unable to make required payments[182]. - Covenant-Lite Loans may expose the company to different risks, including liquidity and credit risks[183]. - The company may face dilution of NAV per share if shares are sold below current NAV, impacting stockholder interests[210]. - The company faces risks from potential defaults or impairments in debt investments due to issuer financial condition deterioration[245]. Regulatory and Policy Risks - The company faces regulatory uncertainty due to potential changes in U.S. trade policy, which could adversely affect the profitability of portfolio companies reliant on imports[115][116]. - Changes in governmental policies, including tariffs, could have a material adverse impact on the company's investments and operations[116][122]. - Legislative changes regarding tax reform could adversely affect the company and its stockholders[197]. - The board of directors has the authority to change investment objectives and strategies without prior notice, which could impact the company's operations and stock value[152]. Investment Strategy and Diversification - The company is classified as a non-diversified investment company, allowing it to invest a significant portion of its assets in a limited number of issuers, which may lead to greater NAV fluctuations[137]. - The company has not adopted fixed guidelines for diversification, which could lead to concentrated investments in a few portfolio companies[137]. - The company may invest up to 30% of its portfolio in opportunistic investments to diversify and enhance returns[184]. - Significant investments in one or more economic sectors may expose the company to risks associated with economic, regulatory, political, or market events[191]. Insurance Business Risks - As of September 30, 2025, 15.3% of the company's total assets were invested in NSG, its insurance business, exposing the company to various associated risks[177]. - NSG's pricing accuracy relies on morbidity and mortality estimates, which may be based on insufficient or incorrect data, potentially leading to underpricing or overpricing risks[221]. - A material increase in the valuation of liabilities for future benefit payments could occur if actual policyholder behavior deviates from assumptions, impacting NSG's financial condition[219]. - NSG's liquidity may be adversely affected by unexpected policyholder withdrawals or surrenders, which could force the company to sell investments or seek third-party financing[223]. - The property and casualty insurance business is cyclical, with operating results subject to fluctuations based on market conditions and catastrophic events[231]. - Competition in the insurance industry is intense, with NSG facing challenges from larger competitors that may offer better pricing and broader product ranges[233]. - Changes in regulatory environments could limit NSG's operational flexibility and increase compliance costs, adversely affecting business objectives[237]. Cybersecurity and Technological Risks - The company does not maintain insurance coverage relating to cybersecurity risks, which may result in significant additional resource expenditures for protective measures and remediation[160]. - Cybersecurity failures or breaches from third-party service providers could disrupt business operations and lead to financial losses and regulatory penalties[159]. - The company is exposed to risks from technological innovations, including artificial intelligence and machine learning, which may disrupt market practices and increase competition[161]. Market and Economic Conditions - The competitive landscape has intensified, with larger entities potentially offering better terms, which may limit the company's investment opportunities[149]. - The market price of the company's common stock is subject to significant fluctuations due to various external factors, including regulatory changes and economic trends[205]. - Difficult conditions in capital markets and the economy could adversely affect demand for insurance products and overall business performance[250]. - Public health crises or extreme mortality events could significantly impact NSG's business and financial condition, affecting sales and claims[222]. Interest Rate Sensitivity - Interest rate fluctuations could negatively impact the company's investments and net interest income, particularly if new investments yield lower rates than current ones[138]. - The company utilizes SOFR-based loans for its Credit Facility, which may result in lower net interest margins compared to previous LIBOR-based rates[140]. - NSG's investment portfolio is significantly affected by interest rate changes, with 67.5% of its income-bearing investments linked to floating rates based on fair value[361]. - A rise in interest rates could lead to an increase in interest income from variable rate investments, while a decline may reduce gross investment income[362]. - As of September 30, 2025, the floating rate debt investments composition shows 44.1% of the portfolio has a SOFR floor between 1% to under 2%[363]. - Hypothetical interest rate changes indicate that a 300 basis points increase could result in a net increase of $1,300 thousand in net assets from operations[364].

Investment Income - Total investment income for Q4 2025 was $6.9 million, with $6.7 million from portfolio interest and dividend income [3]. - Net investment income for Q4 2025 was $1.4 million, while total net expenses were $5.5 million [4]. Asset Valuation - The net asset value (NAV) as of September 30, 2025, was $160.8 million, or $80.24 per share, an increase from $79.37 per share a year earlier [9]. - The fair value of the investment portfolio totaled $302.3 million, consisting of 36 portfolio companies [6]. - Total assets increased to $316.9 million as of September 30, 2025, compared to $302.8 million a year earlier [16]. Financial Performance - The weighted average yield on debt and other income-producing investments was 12.8% at the fiscal year end [9]. - The company recorded a net realized loss of $0.04 million and a net unrealized gain of $2.2 million during the quarter [5]. Cash and Debt Management - The company had $7.3 million in cash and cash equivalents and $90.0 million outstanding under the Credit Facility as of September 30, 2025 [8]. Shareholder Returns - A special dividend of $1.43 per share was paid in February 2025 as part of the share repurchase program [2]. - The company aims to continue delivering value to shareholders in 2026 and beyond, focusing on growth in NAV per share [2].

Revenue Performance - Rafael Holdings reported a 100% increase in product revenue for the Healthcare segment, reaching approximately $0.2 million for the three months ended October 31, 2025, compared to $0 for the same period in 2024[268]. - The Infusion Technology segment reported a 100% decrease in revenue, falling to $0 for the three months ended October 31, 2025, compared to $51,000 in the same period in 2024[271]. - The Real Estate segment generated rental income of $56,000 from third parties, reflecting a 12% increase compared to $50,000 in the prior year[273]. - Revenue from tenants located in Israel represented 36% of consolidated revenues for the three months ended October 31, 2025, down from 60% in 2024[293]. Expenses - Research and development expenses surged by 545% to $7.5 million for the Healthcare segment in the three months ended October 31, 2025, primarily due to the consolidation of Cyclo's expenses[267]. - General and administrative expenses for the Healthcare segment increased by 20% to $2.8 million, largely due to the inclusion of Cyclo's expenses[269]. - General and administrative expenses in the Real Estate segment decreased by 53% to $57,000, primarily due to reduced real estate taxes[273]. - Consolidated net loss for the three months ended October 31, 2025, was $9.8 million, a 6% increase from the net loss of $9.2 million in the same period of 2024[274]. - Loss from operations increased by 164% to $10.1 million for the three months ended October 31, 2025, compared to a loss of $3.8 million in 2024[274]. - Interest income decreased by 30% to $0.4 million for the three months ended October 31, 2025, compared to $0.6 million in 2024[274]. Cash Flow and Working Capital - Cash and cash equivalents decreased by 14% to $45.5 million as of October 31, 2025, down from $52.8 million on July 31, 2025[282]. - Working capital decreased by 20% to $36.2 million as of October 31, 2025, compared to $45.1 million on July 31, 2025[282]. - Cash used in operating activities was $6.8 million for the three months ended October 31, 2025, a 124% increase from $3.0 million used in the same period of 2024[284]. - Cash flows from investing activities for the three months ended October 31, 2025, included a purchase of preferred shares for $0.5 million[286]. Assets and Holdings - Total assets decreased by 8% to $105.4 million as of October 31, 2025, from $114.1 million on July 31, 2025[282]. - Rafael Holdings holds a 95% interest in LipoMedix and a 67% interest in Cornerstone, with ongoing evaluations of these holdings to focus resources on core assets[260][262]. Strategic Developments - The FDA granted substantial equivalence determination for the VECTR System, which is designed for minimally invasive surgeries, marking a significant milestone for Rafael Medical Devices[263]. - The merger with Cyclo was completed on March 25, 2025, making Cyclo a wholly-owned subsidiary and enhancing the company's product pipeline[259]. - The company is strategically focusing on the development of Trappsol® Cyclo™ for Niemann-Pick Disease Type C1, with ongoing Phase 3 clinical trials[257].

Table of Contents U. S. Securities and Exchange Commission Washington, D. C. 20549 FORM 10-Q ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2025 ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission File No. 001-42591 TIANCI INTERNATIONAL, INC. (Exact Name of Registrant in its Charter) Nevada 45-5440446 (State or Other Jurisdiction of incorpo ...

Sales and Market Performance - For the fiscal year ended September 30, 2025, the Salt segment sales accounted for approximately 82% of total sales, compared to 81% in 2024 and 84% in 2023[30]. - Approximately 88% of Plant Nutrition segment sales in fiscal 2025 were made to U.S. customers, including retail fertilizer dealers and distributors[52]. - Highway deicing, including salt sold to chemical customers, constituted 63% of fiscal 2025 Salt segment sales[36]. - The company is the leading SOP producer and marketer in North America, with a significant market share due to its logistically favorable production site[56]. - Demand for products in the agricultural sector is influenced by crop prices, planted acreage, and weather conditions, which can significantly affect sales[136]. - The agricultural sector's supply and demand imbalances can impact product pricing and demand, particularly for potash fertilizers[138]. Financial Performance and Capital Expenditures - Capital expenditures decreased by 39.0%, or $44.5 million, during the fiscal year ended September 30, 2025, compared to the previous fiscal year[28]. - The Board of Directors does not expect to declare dividends for the foreseeable future to focus on accelerating cash flow generation and debt reduction[28]. - The company ceased paying cash dividends in fiscal 2024 to focus on accelerating cash flow generation and debt reduction[156]. - As of September 30, 2025, the company had $845.8 million in outstanding indebtedness, with significant interest payments based on variable rates[141]. - The consolidated first lien net leverage ratio was 0.01x as of September 30, 2025, with a default threshold of 2.75x[146]. - The company may incur additional indebtedness or refinance existing debt, increasing leverage risks and potentially impacting financial flexibility[142]. Environmental and Regulatory Compliance - Environmental-specific capital expenditures for fiscal 2025 were estimated at $0.9 million, with expectations of $2.2 million for fiscal 2026[75]. - The company recorded $2.8 million of accruals for environmental liabilities as of September 30, 2025[76]. - The company has a Voluntary Agreement with the Utah Division of Forestry, Fire and State Lands to cap brine withdrawals, reducing consumption to 50% of certificated water rights for 2026[83]. - The company is subject to complex and evolving environmental, health, and safety laws and regulations impacting its operations[88]. - Compliance costs with laws and regulations, including environmental improvements, are expected to remain significant and unpredictable[91]. - Compliance with evolving environmental, health, and safety (EHS) laws may lead to increased operational costs and require modifications to facilities[162]. - The company is subject to complex regulatory requirements, including import and export laws, which could increase the cost of doing business[168]. Workforce and Labor Relations - As of September 30, 2025, the company employed 1,849 employees, with 906 in the U.S., 761 in Canada, and 182 in the UK[65]. - The company has 12 collective bargaining agreements (CBAs) in effect, with six expiring in fiscal 2025 and four in fiscal 2026[68]. - The company provides over 500 learning modules through Compass Minerals University for employee training and development[70]. - A labor shortage or loss of key personnel may adversely affect the company's performance and operational efficiency[178]. - The company’s ability to attract and retain skilled personnel is critical, and a decline in its compensation package competitiveness could weaken its workforce[180]. Legal and Litigation Risks - The company is involved in ongoing litigation, including a securities class action lawsuit with a settlement of $48.0 million approved on July 30, 2025[161]. - Legal and regulatory challenges, including permit revocations and compliance costs, could materially affect operations and financial condition[157]. - Tax liabilities and disputes with tax authorities could adversely affect profitability and cash flow, with potential material impacts from unresolved assessments[149]. Operational Risks and Challenges - The company faces currency transaction risks due to a significant portion of cash flow generated in Canadian dollars and British pounds, impacting financial results when translated to U.S. dollars[134]. - The company invests in product innovation but faces risks that new products may not generate sufficient revenue or meet customer expectations[177]. - The company relies on computer systems for business operations, and disruptions could adversely impact financial transactions and operational efficiency[182]. - The company may incur significant costs related to product liability claims and recalls, which could harm its reputation and financial performance[171]. - Changes in tariffs or trade regulations could materially affect the company's sales and financial condition, particularly regarding salt imports[170]. - The company is susceptible to cyber-attacks and technological disruptions, with increasing sophistication of attackers due to AI tools[183]. - Unauthorized access attempts have been made, but none have resulted in material adverse impacts to the business[183]. - Climate change could negatively impact customer demand for products and increase operational costs due to changing weather patterns[185]. - Transition risks from climate change regulations may require capital expenditures and could increase operational costs[187]. - The company may face challenges in expanding through acquisitions and investments, limiting business growth opportunities[188]. - Acquisitions may not perform as expected, potentially leading to increased debt obligations and management distractions[189]. - Successful integration of acquired businesses is critical, with risks of losing key employees and higher-than-expected costs[190].

Financial Performance - Revenue increased by $2.8 million, or 11%, to $27.4 million for the three months ended September 30, 2025, compared to $24.6 million for the same period in 2024 [188]. - Revenue decreased by $0.6 million, or 1%, to $74.5 million for the nine months ended September 30, 2025, from $75.1 million in the same period in 2024 [198]. - Net loss for the three months ended September 30, 2025, was $17.4 million, a decrease of $3.7 million or 17% compared to the net loss of $21.1 million for the same period in 2024 [188]. User Acquisition and Marketing - User acquisition (UA) marketing spend for the nine months ended September 30, 2025, was approximately $12.4 million, down from approximately $14.1 million in the same period of 2024, indicating a reduction of about 12.1% [174]. - Sales and marketing expenses decreased by $1.9 million, or 10%, to $17.4 million for the three months ended September 30, 2025, primarily due to lower marketing expenses [191]. - Sales and marketing costs decreased by $9.3 million, or 15%, to $51.8 million for the nine months ended September 30, 2025, driven by lower marketing expenses [201]. Legal and Settlement Matters - The company received a total of $50 million from AviaGames as part of a settlement agreement, with Skillz receiving $48 million of that amount [182]. - The company recorded a gain of $46 million from the AviaGames litigation settlement, netting the gross payment of $48 million less $2 million for the Loan and Security Agreement [182]. - The company filed suit against Tether on September 1, 2025, seeking injunctive and declaratory relief regarding Tether's breach of agreements, which could materially affect business operations [177]. Cash Flow and Financial Obligations - Net cash used in operating activities was $56.2 million for the nine months ended September 30, 2025, compared to net cash provided of $12.4 million in the same period in 2024 [212]. - Net cash used in operating activities was $56.2 million for the nine months ended September 30, 2025, primarily due to a net loss of $52.5 million and non-cash expenses of $14.2 million related to stock-based compensation [214]. - Net cash used in investing activities amounted to $4.7 million, driven by software development costs of $2.6 million and property and equipment purchases of $2.1 million [215]. - Net cash used in financing activities was $8.2 million, mainly from the repurchase of common stock [216]. - The company has lease payment obligations of $1.3 million as of September 30, 2025, with $0.4 million payable within 12 months [219]. - The total principal amount of long-term debt is $129.7 million, due on December 15, 2026 [220]. Operational Insights - The company worked diligently to file its Annual Report on Form 10-K for the year ended December 31, 2024, on November 6, 2025, to regain compliance with NYSE listing requirements [179]. - The NYSE granted an extension for continued listing through December 17, 2025, contingent upon the company becoming current with SEC filings [180]. - The company’s operating segments include Skillz and Aarki, with Aarki focusing on AI-driven advertising solutions for mobile app developers [183]. - The company’s SDK allows developers to monitor and update their games seamlessly, enhancing data-driven algorithms and LiveOps systems [171]. Research and Development - Research and development costs rose by $0.7 million, or 15%, to $5.4 million for the three months ended September 30, 2025, driven by a $1.0 million increase in employee-related costs [190]. - Research and development costs increased by $1.5 million, or 11%, to $15.1 million for the nine months ended September 30, 2025, primarily due to higher employee-related costs [200]. Engagement Marketing - Engagement marketing expenses may be impacted by end-user incentives, which include Bonus Cash for entering paid contests [173].

Financial Performance - Revenue decreased by $0.1 million, or less than 0.1%, to $25.2 million for the three months ended June 30, 2025, compared to $25.3 million for the same period in 2024 [188]. - Revenue decreased by $3.4 million, or 7%, to $47.1 million for the six months ended June 30, 2025, from $50.5 million in 2024 [199]. - Net loss for the three months ended June 30, 2025, was $17.9 million, compared to a net income of $26.0 million in the same period in 2024, representing a decrease of $43.9 million [197]. - Total costs and expenses increased by $26.8 million, or 52%, to $78.6 million for the six months ended June 30, 2025, compared to $51.8 million in 2024 [198]. - Net cash used in operating activities was $31.7 million for the six months ended June 30, 2025, primarily reflecting a net loss of $35.1 million [213]. User Acquisition and Marketing - User acquisition (UA) marketing spend for the six months ending June 30, 2025, was approximately $8.1 million, down from approximately $9.8 million for the same period in 2024, indicating a reduction in marketing expenses that is expected to continue impacting revenue negatively [173]. - Engagement marketing expenses may be impacted by end-user incentives, including Bonus Cash, which could affect user engagement on the platform [172]. - Sales and marketing costs decreased by $4.4 million, or 21%, to $16.4 million for the three months ended June 30, 2025, compared to $20.8 million in 2024 [191]. Legal and Compliance - The company filed suit against Tether for breach of agreements, seeking injunctive and declaratory relief, with potential implications for its business if the litigation is unsuccessful [176]. - The company is involved in ongoing litigation related to its De-SPAC process, with an insurance recovery of $9.75 million recorded as an offset to general and administrative expenses [182]. - The company presented a compliance plan to the NYSE in September 2025, requesting an extension to continue listing its shares, which was granted through December 17, 2025 [179]. Revenue Sources and Dependencies - Tether accounted for 45% of the company's revenue for the year ended December 31, 2024, and the termination of agreements with Tether could have a material adverse effect on business operations if suitable replacements are not identified [175]. - The company received a total of $50 million from AviaGames as part of a settlement agreement, with Skillz receiving $48 million, which included a $2 million repayment under a Loan and Security Agreement [182]. - The company recorded a gain of $46 million from a litigation settlement with AviaGames, netting the gross payment received [182]. Costs and Expenses - General and administrative costs decreased by $0.5 million, or 3%, to $16.7 million for the three months ended June 30, 2025, from $17.2 million in 2024 [192]. - Research and development costs increased by $0.6 million, or 13%, to $4.8 million for the three months ended June 30, 2025, from $4.3 million in the same period in 2024 [190]. Financial Position - As of June 30, 2025, the company had cash, cash equivalents, and restricted cash totaling $238.7 million [208]. - As of June 30, 2025, the company has lease payment obligations totaling $0.3 million, all of which is due within 12 months [217]. - The company's long-term debt consists of the 2021 Senior Secured Notes, with a total principal amount of $129.7 million due on December 15, 2026 [218]. - There are currently no off-balance sheet financing arrangements or relationships with unconsolidated entities [219]. - There have been no material changes to the critical accounting policies and estimates as noted in the Annual Report [220]. - Recent accounting pronouncements and their potential impact on financial condition and results of operations are detailed in the condensed consolidated financial statements [221]. Business Segments and Technology - The company’s operating segments include Skillz and Aarki, with Aarki focusing on AI-driven advertising solutions for mobile app developers [183]. - The company’s technological capabilities include a software development kit (SDK) that allows developers to monitor and update their games seamlessly, enhancing data-driven algorithms [170].

Retail Operations - As of November 1, 2025, the company operated a total of 74 retail locations globally, including 68 in North America and 6 in Europe[139]. - The company plans to incorporate hospitality experiences into new Design Galleries, enhancing the retail experience and driving incremental sales[148]. - The company has invested significant capital in developing new Design Galleries, with adjusted capital expenditures of $223 million for the nine months ended November 1, 2025[230]. Financial Performance - Net revenues for the three months ended November 1, 2025, were $883,810,000, representing a 8.9% increase from $811,732,000 for the same period in 2024[152]. - Gross profit for the three months ended November 1, 2025, was $389,736,000, with a gross margin of 44.1%, compared to $361,340,000 and 44.5% in the prior year[152]. - Operating income for the three months ended November 1, 2025, was $105,930,000, or 12.0% of net revenues, compared to $101,468,000, or 12.5% in the same period last year[152]. - Net income for the three months ended November 1, 2025, was $36,265,000, a 6.3% increase from $33,168,000 in the prior year[158]. - Adjusted operating income for the three months ended November 1, 2025, was $102,555,000, compared to $121,874,000 for the same period in 2024[158]. - EBITDA for the three months ended November 1, 2025, was $143,418,000, compared to $133,012,000 in the same period last year[166]. - Adjusted EBITDA for the three months ended November 1, 2025, was $155,810,000, down from $168,547,000 in the prior year[166]. - Consolidated net revenues increased by $72 million, or 8.9%, to $884 million for the three months ended November 1, 2025, compared to $812 million for the same period in 2024[176]. - RH Segment net revenues rose by $68 million, or 8.8%, to $836 million for the three months ended November 1, 2025, compared to $768 million in the prior year[177]. - Consolidated net revenues increased by $229 million, or 9.7%, to $2,597 million for the nine months ended November 1, 2025, compared to $2,368 million for the same period in 2024[199]. - RH Segment net revenues rose by $221 million, or 9.9%, to $2,448 million for the nine months ended November 1, 2025, driven by higher core business revenue and increased hospitality revenue from new Gallery openings[200][201]. - Consolidated gross profit grew by $102 million, or 9.7%, to $1,154 million for the nine months ended November 1, 2025, with a gross margin of 44.5%[203]. - RH Segment gross profit increased by $97 million, or 9.9%, to $1,074 million, maintaining a gross margin of 43.9%[204]. Expenses and Taxation - Selling, general and administrative expenses rose by $24 million, or 9.2%, to $284 million for the three months ended November 1, 2025, compared to $260 million in the same period in 2024[185]. - Selling, general and administrative expenses rose by $64 million, or 8.0%, to $864 million for the nine months ended November 1, 2025[207]. - Income tax expense for the three months ended November 1, 2025, was $11,625,000, compared to $9,256,000 in the prior year[158]. - Income tax expense increased to $33.8 million with an effective tax rate of 26.0% for the nine months ended November 1, 2025, compared to 15.7% in the previous year[217]. - The effective tax rate increased to 24.3% for the three months ended November 1, 2025, compared to 21.8% for the same period in 2024[193]. Capital Expenditures and Financing - Adjusted capital expenditures for the nine months ended November 1, 2025, were $223,078 thousand, compared to $212,929 thousand for the same period in 2024[169]. - The company anticipates adjusted capital expenditures of $275 million to $325 million in fiscal 2025, mainly for growth and expansion initiatives[230]. - The company has a total authorized share repurchase program of $2,450 million, with $201 million remaining available for future repurchases as of November 1, 2025[246]. - The company entered into a $2,000 million term debt financing in October 2021, with a maturity date of October 20, 2028, requiring quarterly principal payments of $5 million[227]. - For the nine months ended November 1, 2025, net cash used in financing activities was $163 million, primarily due to net repayments under the asset-based credit facility of $135 million[238]. - The company amended the ABL Credit Agreement in July 2025, providing an asset-based credit facility with an initial availability of up to $600 million, expandable to $900 million under certain conditions[226]. Market Conditions and Strategic Initiatives - The company is facing challenges due to macroeconomic conditions, including high interest rates and inflation, which have negatively impacted the luxury home market[140]. - The company is adapting its supply chain to mitigate risks related to tariffs and trade policies, which may affect product costs[141]. - The company is focused on digital reimagination, enhancing its online presence through The World of RH portal and plans to upgrade its website throughout 2025[151]. - The company is committed to elevating its brand by conceptualizing and selling spaces, creating an ecosystem of products and experiences[149]. - The company is exploring new real estate models, including transitioning from leasing to development, which may require different levels of capital investment[231]. - The company expects to continue taking an opportunistic approach regarding capital allocation and may pursue additional debt financing for investments[224]. - The company is implementing significant business initiatives that may lead to variability in financial performance and results of operations[145].