Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ________________________________ FORM 10-Q ________________________________ x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 2, 2025. OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-13536 ________________________________ Macy's, Inc. (Ex ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents Oracle Corporation's unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents Oracle Corporation's unaudited condensed consolidated financial statements for the three months ended August 31, 2025 and 2024, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes covering accounting policies, fair value measurements, restructuring activities, deferred revenues, leases, stockholders' equity, income taxes, segment information, earnings per share, and legal proceedings [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of Oracle's financial position, detailing assets, liabilities, and equity as of August 31, 2025, and May 31, 2025 | Metric | Aug 31, 2025 (millions) | May 31, 2025 (millions) | Change (millions) | | :-------------------------------- | :---------------------- | :---------------------- | :---------------- | | Total Assets | $180,449 | $168,361 | $12,088 | | Property, plant and equipment, net | $53,194 | $43,522 | $9,672 | | Total Current Liabilities | $39,874 | $32,643 | $7,231 | | Notes payable and other borrowings, current | $9,079 | $7,271 | $1,808 | | Deferred revenues | $12,098 | $9,387 | $2,711 | | Total Stockholders' Equity | $24,666 | $20,969 | $3,697 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines Oracle's financial performance, presenting revenues, expenses, operating income, and net income for the three months ended August 31, 2025 and 2024 | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (%) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :------------- | | Total Revenues | $14,926 | $13,307 | 12% | | Cloud Revenues | $7,186 | $5,623 | 28% | | Software Revenues | $5,721 | $5,766 | -1% | | Total Operating Expenses | $10,649 | $9,316 | 14% | | Operating Income | $4,277 | $3,991 | 7% | | Net Income | $2,927 | $2,929 | 0% | | Diluted EPS | $1.01 | $1.03 | -2% | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section details Oracle's comprehensive income, including net income and other comprehensive income components, for the three months ended August 31, 2025 and 2024 | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | | Net Income | $2,927 | $2,929 | -$2 | | Net foreign currency translation gains | $28 | $220 | -$192 | | Total other comprehensive income, net | $5 | $104 | -$99 | | Comprehensive Income | $2,932 | $3,033 | -$101 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section presents changes in Oracle's stockholders' equity, including common stock, accumulated deficit, and total equity, for the three months ended August 31, 2025 and 2024 | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (millions) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | | Common stock and additional paid in capital (end of period) | $39,378 | $33,083 | $6,295 | | Accumulated deficit (end of period) | $(14,054) | $(20,939) | $6,885 | | Total Stockholders' Equity (end of period) | $24,666 | $11,269 | $13,397 | | Cash dividends declared per common share | $0.50 | $0.40 | $0.10 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes Oracle's cash inflows and outflows from operating, investing, and financing activities for the three months ended August 31, 2025 and 2024 | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (%) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :------------- | | Net cash provided by operating activities | $8,140 | $7,427 | 10% | | Net cash used for investing activities | $(8,718) | $(2,765) | 215% | | Capital expenditures | $(8,502) | $(2,303) | 269% | | Net cash provided by (used for) financing activities | $210 | $(4,585) | N/A (shift from outflow to inflow) | | Cash and cash equivalents at end of period | $10,445 | $10,616 | -2% | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, estimates, and specific financial items [1. BASIS OF PRESENTATION, RECENT ACCOUNTING PRONOUNCEMENTS AND OTHER](index=10&type=section&id=1.%20BASIS%20OF%20PRESENTATION%2C%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS%20AND%20OTHER) This note outlines the basis of financial statement presentation, discusses recent accounting pronouncements, and provides additional financial details including remaining performance obligations and investments - Remaining performance obligations were **$455.3 billion** as of August 31, 2025, with approximately **10%** expected to be recognized as revenues over the next twelve months[31](index=31&type=chunk) - Financing receivables sold to financial institutions were **$756 million** for the three months ended August 31, 2025, up from **$595 million** in the prior year[33](index=33&type=chunk) - Oracle's total carrying value of investments in Ampere Computing Holdings LLC was **$1.7 billion** as of August 31, 2025, with an ownership interest of approximately **29%**, and SoftBank Group Corp. has an agreement to acquire Ampere, ending Oracle's investment[34](index=34&type=chunk) Non-Operating Income, net (millions) | Non-Operating Income, net (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :----------------------------------- | :-------------------------- | :-------------------------- | | Interest income | $103 | $133 | | Foreign currency losses, net | $(31) | $(50) | | Losses from marketable and non-marketable investments, net | $(52) | $(69) | | Total non-operating income, net | $73 | $20 | [2. FAIR VALUE MEASUREMENTS](index=12&type=section&id=2.%20FAIR%20VALUE%20MEASUREMENTS) This note details the fair value measurements of Oracle's financial assets and liabilities, including marketable securities and long-term borrowings Fair Value Measurements (millions) | Fair Value Measurements (millions) | Aug 31, 2025 (Total) | May 31, 2025 (Total) | | :--------------------------------- | :------------------- | :------------------- | | Total Assets | $3,737 | $2,859 | | Money market funds | $2,965 | $2,220 | | Time deposits and other | $742 | $585 | - The estimated fair value of senior notes and other long-term borrowings was **$81.1 billion** as of August 31, 2025, compared to **$81.3 billion** as of May 31, 2025[46](index=46&type=chunk) [3. RESTRUCTURING ACTIVITIES](index=13&type=section&id=3.%20RESTRUCTURING%20ACTIVITIES) This note describes Oracle's restructuring plans, including estimated costs and expenses recorded in connection with the Fiscal 2026 Oracle Restructuring Plan - Oracle approved the Fiscal 2026 Oracle Restructuring Plan with total estimated costs up to **$1.6 billion**[47](index=47&type=chunk) - **$415 million** of restructuring expenses were recorded in Q1 FY26 in connection with the 2026 Restructuring Plan[47](index=47&type=chunk) 2026 Restructuring Plan Costs (millions) | 2026 Restructuring Plan Costs (millions) | Costs Recorded (3 Months Ended Aug 31, 2025) | Total Expected Program Costs | | :--------------------------------------- | :------------------------------------------- | :--------------------------- | | Cloud and software | $119 | $484 | | Hardware | $16 | $67 | | Services | $36 | $326 | | Other | $244 | $737 | | Total | $415 | $1,614 | [4. DEFERRED REVENUES](index=14&type=section&id=4.%20DEFERRED%20REVENUES) This note provides a breakdown of Oracle's deferred revenues by business segment, including cloud, software, hardware, and services Deferred Revenues (millions) | Deferred Revenues (millions) | Aug 31, 2025 | May 31, 2025 | Change (millions) | | :--------------------------- | :----------- | :----------- | :---------------- | | Cloud | $3,944 | $2,959 | $985 | | Software | $7,062 | $5,350 | $1,712 | | Hardware | $584 | $614 | $(30) | | Services | $508 | $464 | $44 | | Total deferred revenues | $13,362 | $10,733 | $2,629 | [5. LEASES](index=15&type=section&id=5.%20LEASES) This note details Oracle's lease expenses, right-of-use assets, lease liabilities, and significant future lease commitments, particularly for data centers Lease Expense (millions) | Lease Expense (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :----------------------- | :-------------------------- | :-------------------------- | | Operating lease cost | $575 | $362 | | Total finance lease cost | $107 | $0 | Lease Balance Sheet Info (millions) | Lease Balance Sheet Info (millions) | Aug 31, 2025 | May 31, 2025 | | :---------------------------------- | :----------- | :----------- | | Operating lease ROU assets | $15,979 | $13,145 | | Total operating lease liabilities | $16,290 | $13,450 | | Finance lease ROU assets | $3,937 | $2,874 | | Total finance lease liabilities | $4,017 | $2,934 | - Oracle had **$99.8 billion** of additional lease commitments, substantially for data centers, as of August 31, 2025, expected to commence between fiscal 2026 and 2028, with an additional **$6.6 billion** in lease commitments entered into subsequent to August 31, 2025[50](index=50&type=chunk)[51](index=51&type=chunk) [6. STOCKHOLDERS' EQUITY](index=16&type=section&id=6.%20STOCKHOLDERS%27%20EQUITY) This note provides information on Oracle's stock repurchase program, cash dividends, and stock-based compensation expenses affecting stockholders' equity - Approximately **$6.3 billion** remained available for stock repurchases as of August 31, 2025[52](index=52&type=chunk) Stock Repurchases | Stock Repurchases | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :---------------- | :-------------------------- | :-------------------------- | | Shares repurchased | 0.4 million | 1.1 million | | Value of repurchases | $93 million | $150 million | - A quarterly cash dividend of **$0.50 per share** was declared in September 2025, payable on October 23, 2025[54](index=54&type=chunk) Stock-based Compensation Expense (millions) | Stock-based Compensation Expense (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :---------------------------------------- | :-------------------------- | :-------------------------- | | Cloud and software | $156 | $141 | | Research and development | $647 | $569 | | Total stock-based compensation | $1,124 | $1,007 | [7. INCOME TAXES](index=17&type=section&id=7.%20INCOME%20TAXES) This note discusses Oracle's effective tax rate, the impact of tax legislation, and changes in net deferred tax assets Income Tax Metric | Income Tax Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | | :---------------- | :-------------------------- | :-------------------------- | | Effective tax rate | 14.6% | 7.6% | - A net tax expense of **$958 million** was recorded in Q1 FY26 due to the enactment of the U.S. One, Big, Beautiful Bill Act, primarily related to the remeasurement of a deferred tax liability[66](index=66&type=chunk)[153](index=153&type=chunk) - Net deferred tax assets were **$9.8 billion** as of August 31, 2025, down from **$10.2 billion** as of May 31, 2025[60](index=60&type=chunk) [8. SEGMENT INFORMATION](index=18&type=section&id=8.%20SEGMENT%20INFORMATION) This note presents Oracle's financial performance by operating segment (Cloud and Software, Hardware, Services) and by offering, highlighting revenue contributions - Oracle's three operating segments are Cloud and Software, Hardware, and Services[68](index=68&type=chunk) - Cloud and software business represented **86%** of total revenues on a trailing four-quarter basis[90](index=90&type=chunk) Segment Revenues (millions) | Segment Revenues (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (%) | | :-------------------------- | :-------------------------- | :-------------------------- | :------------- | | Cloud and software | $12,907 | $11,389 | 13% | | Hardware | $670 | $655 | 2% | | Services | $1,349 | $1,263 | 7% | | Total Revenues | $14,926 | $13,307 | 12% | Revenue by Offering (millions) | Revenue by Offering (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (%) | | :----------------------------- | :-------------------------- | :-------------------------- | :------------- | | Cloud applications | $3,839 | $3,469 | 11% | | Cloud infrastructure | $3,347 | $2,154 | 55% | | Software license | $766 | $870 | -12% | | Software support | $4,955 | $4,896 | 1% | [9. EARNINGS PER SHARE](index=21&type=section&id=9.%20EARNINGS%20PER%20SHARE) This note provides basic and diluted earnings per share calculations for Oracle for the three months ended August 31, 2025 and 2024 EPS Metric | EPS Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change | | :--------- | :-------------------------- | :-------------------------- | :--------- | | Basic EPS | $1.04 | $1.06 | -$0.02 | | Diluted EPS | $1.01 | $1.03 | -$0.02 | [10. LEGAL PROCEEDINGS](index=21&type=section&id=10.%20LEGAL%20PROCEEDINGS) This note details Oracle's ongoing legal proceedings, specifically the Netherlands Privacy Class Action, and management's assessment of its potential financial impact - Oracle is defending a Netherlands Privacy Class Action lawsuit alleging violations of GDPR and Dutch Telecommunications Act related to its Data Management Platform product[80](index=80&type=chunk) - The Dutch Court of Appeal overturned an earlier dismissal, allowing the case to proceed, and Oracle has filed an interim appeal to the Supreme Court[82](index=82&type=chunk)[83](index=83&type=chunk) - Oracle believes the final outcome will not have a material impact on its financial position or results of operations[84](index=84&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Oracle's businesses, critical accounting estimates, and a detailed analysis of its financial performance and condition for the three months ended August 31, 2025. It highlights revenue growth driven by cloud and software, increased operating expenses, and changes in liquidity and capital resources, including significant capital expenditures and a shift in financing activities [Business Overview](index=23&type=section&id=Business%20Overview) This section outlines Oracle's core business segments, the growing contribution of cloud revenues, and its strategy for acquisitions and investments - Oracle's three businesses are cloud and software, hardware, and services, addressing enterprise IT needs globally[89](index=89&type=chunk) - Cloud and software business represented **86%** of total revenues on a trailing four-quarter basis[90](index=90&type=chunk) - Cloud revenues represented **48%** of total revenues for Q1 FY26, up from **42%** in Q1 FY25, and this trend is expected to continue[92](index=92&type=chunk) - Oracle maintains an active acquisition program to further its corporate strategy and may fund future acquisitions through internal cash, operations, or additional borrowings[102](index=102&type=chunk)[103](index=103&type=chunk) - Oracle's investment in Ampere Computing Holdings LLC (**29%** ownership) had a carrying value of **$1.7 billion** as of August 31, 2025, and SoftBank Group Corp. has an agreement to acquire Ampere[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) [Critical Accounting Estimates](index=26&type=section&id=Critical%20Accounting%20Estimates) This section identifies Oracle's critical accounting estimates, primarily in income taxes and non-marketable investments, noting no significant changes in the current quarter - Critical accounting estimates are in the areas of income taxes and non-marketable investments[107](index=107&type=chunk) - No significant changes to critical accounting estimates occurred during the first quarter of fiscal 2026[108](index=108&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20Operations) This section analyzes Oracle's overall financial performance, including total revenues, operating expenses, and operating margin, for the three months ended August 31, 2025 Total Revenues and Operating Expenses | Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (%) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | :------------- | | Total Revenues | $14,926 | $13,307 | 12% | | Total Operating Expenses | $10,649 | $9,316 | 14% | | Total Operating Margin | $4,277 | $3,991 | 7% | | Total Operating Margin % | 29% | 30% | -1% | - Total revenues increased by **$1.6 billion (12%)** in Q1 FY26, with cloud and software revenues contributing **$1.5 billion** of this growth[116](index=116&type=chunk) - Total GAAP operating expenses increased by **$1.3 billion (14%)** in Q1 FY26, primarily due to a **$1.0 billion** increase in cloud and software expenses, a **$329 million** increase in restructuring expenses, and a **$185 million** increase in R&D expenses[118](index=118&type=chunk) [Cloud and Software Business](index=29&type=section&id=Cloud%20and%20Software%20Business_Results) This section analyzes the financial performance of Oracle's Cloud and Software business, detailing revenue and expense growth, and margin changes Cloud and Software Metrics | Cloud and Software Metrics | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (Actual %) | YoY Change (Constant %) | | :------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :---------------------- | | Total Revenues | $12,907 | $11,389 | 13% | 12% | | Total Expenses | $5,216 | $4,193 | 24% | 24% | | Total Margin | $7,691 | $7,196 | 7% | 5% | | Total Margin % | 60% | 63% | -3% | -3% | - Cloud applications and cloud infrastructure contributed **23%** and **77%**, respectively, to the growth in cloud revenues in Q1 FY26 (constant currency)[124](index=124&type=chunk) - Cloud and software expenses increased by **$1.0 billion (41% actual, 41% constant currency)** primarily due to a **$929 million** increase in infrastructure expenses and a **$41 million** increase in employee-related expenses to support cloud growth[125](index=125&type=chunk) [Hardware Business](index=31&type=section&id=Hardware%20Business_Results) This section reviews the financial performance of Oracle's Hardware business, focusing on revenue and expense trends, and margin stability Hardware Metrics | Hardware Metrics | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (Actual %) | YoY Change (Constant %) | | :--------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :---------------------- | | Total Revenues | $670 | $655 | 2% | 1% | | Total Expenses | $223 | $217 | 3% | 1% | | Total Margin | $447 | $438 | 2% | 1% | | Total Margin % | 67% | 67% | 0% | 0% | - Hardware revenue growth was primarily due to Oracle Exadata and other strategic hardware product offerings[129](index=129&type=chunk) - Hardware expenses increased due to a **$14 million** increase in hardware product and support costs, partially offset by a **$12 million** decrease in sales and marketing expenses[130](index=130&type=chunk) [Services Business](index=32&type=section&id=Services%20Business_Results) This section examines the financial performance of Oracle's Services business, highlighting revenue growth and expense reductions leading to improved margins Services Metrics | Services Metrics | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (Actual %) | YoY Change (Constant %) | | :--------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :---------------------- | | Total Revenues | $1,349 | $1,263 | 7% | 5% | | Total Expenses | $1,017 | $1,066 | -5% | -5% | | Total Margin | $332 | $197 | 67% | 64% | | Total Margin % | 25% | 16% | 9% | 9% | - Services revenue growth was due to increases across all primary services offerings[133](index=133&type=chunk) - Services expenses decreased primarily due to a **$55 million** decrease in bad debt expenses[134](index=134&type=chunk) [Research and Development Expenses](index=32&type=section&id=Research%20and%20Development%20Expenses) This section analyzes the trends in Oracle's research and development expenses, attributing increases primarily to employee-related and computer equipment costs R&D Expenses (millions) | R&D Expenses (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Total expenses | $2,491 | $2,306 | 8% | 8% | | % of Total Revenues | 17% | 17% | 0% | 0% | - Increase in R&D expenses was primarily due to a **$137 million** increase in employee-related expenses (including stock-based compensation) and a **$38 million** increase in computer equipment expenses[138](index=138&type=chunk) [General and Administrative Expenses](index=33&type=section&id=General%20and%20Administrative%20Expenses) This section reviews Oracle's general and administrative expenses, noting an increase primarily due to event sponsorship costs G&A Expenses (millions) | G&A Expenses (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Total expenses | $376 | $358 | 5% | 4% | | % of Total Revenues | 2% | 3% | -1% | -1% | - Increase in G&A expenses was primarily due to an increase in event sponsorship expenses[140](index=140&type=chunk) [Amortization of Intangible Assets](index=33&type=section&id=Amortization%20of%20Intangible%20Assets) This section discusses the decrease in Oracle's amortization of intangible assets, primarily due to certain assets becoming fully amortized Amortization (millions) | Amortization (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :---------------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Total amortization of intangible assets | $420 | $624 | -33% | -33% | - The decrease in amortization was due to a reduction in expenses associated with certain intangible assets that became fully amortized[142](index=142&type=chunk) [Acquisition Related and Other Expenses](index=34&type=section&id=Acquisition%20Related%20and%20Other%20Expenses) This section reports on Oracle's acquisition-related and other expenses, noting their consistent level year-over-year Acquisition Related Expenses (millions) | Acquisition Related Expenses (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | | :------------------------------------ | :-------------------------- | :-------------------------- | :-------------------- | | Total acquisition related and other expenses | $13 | $13 | 0% | [Restructuring Expenses](index=34&type=section&id=Restructuring%20Expenses_Results) This section details the significant increase in Oracle's restructuring expenses, primarily driven by the Fiscal 2026 Restructuring Plan aimed at improving cost structure Restructuring Expenses (millions) | Restructuring Expenses (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :------------------------------ | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Restructuring expenses | $402 | $73 | 448% | 439% | - Restructuring expenses in Q1 FY26 primarily related to the 2026 Restructuring Plan, aimed at improving cost structure and operations, particularly for cloud-based offerings[147](index=147&type=chunk)[148](index=148&type=chunk) [Interest Expense](index=34&type=section&id=Interest%20Expense) This section analyzes the increase in Oracle's interest expense, primarily due to higher average borrowings from recently issued senior notes Interest Expense (millions) | Interest Expense (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :------------------------ | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Interest expense | $923 | $842 | 10% | 10% | - Increase in interest expense was primarily due to higher average borrowings from **$14.0 billion** senior notes issued in fiscal 2025, partially offset by scheduled debt repayments[149](index=149&type=chunk) [Non-Operating Income, net](index=35&type=section&id=Non-Operating%20Income%2C%20net) This section reviews the increase in Oracle's net non-operating income, driven by gains from deferred compensation plans and reduced foreign currency losses Non-Operating Income, net (millions) | Non-Operating Income, net (millions) | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Total non-operating income, net | $73 | $20 | 250% | 286% | - The increase was primarily due to a **$43 million** increase in gains from the deferred compensation plan's investment portfolio, a **$19 million** decrease in foreign currency losses, and a **$17 million** decrease in losses from marketable and non-marketable investments, partially offset by a **$30 million** decrease in interest income[151](index=151&type=chunk) [Provision for Income Taxes](index=35&type=section&id=Provision%20for%20Income%20Taxes) This section discusses the significant increase in Oracle's provision for income taxes, influenced by new tax legislation and stock-based compensation benefits Income Tax Metric | Income Tax Metric | 3 Months Ended Aug 31, 2025 | 3 Months Ended Aug 31, 2024 | YoY Change (Actual %) | YoY Change (Constant %) | | :---------------- | :-------------------------- | :-------------------------- | :-------------------- | :---------------------- | | Provision for income taxes | $500 | $240 | 108% | 101% | | Effective tax rate | 14.6% | 7.6% | 7% | 7% | - The increase was primarily related to an unfavorable impact from the U.S. One, Big, Beautiful Bill Act (**$958 million** net tax expense) and the absence of **$99 million** in unrecognized tax benefits, partially offset by an **$853 million** increase in tax benefits related to stock-based compensation[153](index=153&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes Oracle's liquidity and capital resources, including changes in working capital, cash flows, free cash flow, and remaining performance obligations Liquidity Metric | Liquidity Metric | Aug 31, 2025 (millions) | May 31, 2025 (millions) | Change (millions) | | :--------------- | :---------------------- | :---------------------- | :---------------- | | Working capital | $(15,240) | $(8,064) | $(7,176) | | Cash, cash equivalents and marketable securities | $11,005 | $11,203 | $(198) | - Working capital decreased primarily due to **$8.5 billion** in capital expenditures, **$3.1 billion** of long-term borrowings reclassified to current liabilities, and **$1.4 billion** in dividend payments[155](index=155&type=chunk) Cash Flow Metric | Cash Flow Metric | 3 Months Ended Aug 31, 2025 (millions) | 3 Months Ended Aug 31, 2024 (millions) | YoY Change (%) | | :------------------------------- | :------------------------------------- | :------------------------------------- | :------------- | | Net cash provided by operating activities | $8,140 | $7,427 | 10% | | Net cash used for investing activities | $(8,718) | $(2,765) | 215% | | Net cash provided by (used for) financing activities | $210 | $(4,585) | N/A | - Net cash used for investing activities increased by **$6.0 billion**, primarily due to increased capital expenditures[160](index=160&type=chunk) Free Cash Flow (millions) | Free Cash Flow (millions) | Trailing Four-Quarters Ended Aug 31, 2025 | Trailing Four-Quarters Ended Aug 31, 2024 | Change (millions) | | :------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------- | | Net cash provided by operating activities | $21,534 | $19,126 | $2,408 | | Capital expenditures | $(27,414) | $(7,855) | $(19,559) | | Free cash flow | $(5,880) | $11,271 | $(17,151) | - Remaining performance obligations increased to **$455.3 billion** as of August 31, 2025, from **$99.1 billion** in the prior year, primarily due to significant cloud contracts[164](index=164&type=chunk) - The maximum potential dilution from all outstanding stock-based awards was **4.0%** as of August 31, 2025[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there were no significant changes to Oracle's quantitative and qualitative disclosures about market risk during the first quarter of fiscal 2026, referring readers to the Annual Report on Form 10-K for a more complete discussion - No significant changes to quantitative and qualitative disclosures about market risk occurred during Q1 FY26[170](index=170&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Oracle's management concluded that its disclosure controls and procedures were effective as of August 31, 2025, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely. No material changes in internal control over financial reporting were identified during the quarter - Disclosure controls and procedures were effective as of August 31, 2025, providing reasonable assurance for timely and accurate financial reporting[171](index=171&type=chunk) - No material changes in internal control over financial reporting were identified during the last fiscal quarter[172](index=172&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity security sales, other disclosures, and a list of exhibits [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the detailed information regarding legal proceedings and claims, including the Netherlands Privacy Class Action, from Note 7 and Note 10 of the Condensed Consolidated Financial Statements - Refers to Note 10 of the financial statements for details on legal proceedings, including the Netherlands Privacy Class Action[175](index=175&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the comprehensive discussion of risk factors in Oracle's Annual Report on Form 10-K for the fiscal year ended May 31, 2025, emphasizing that those risks, along with potential new or currently insignificant risks, could materially affect the company's business and financial results - Refers to Part I, Item 1A Risk Factors in the Annual Report on Form 10-K for a comprehensive discussion of market risks[176](index=176&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) As of August 31, 2025, Oracle had approximately $6.3 billion remaining under its stock repurchase program. During the three months ended August 31, 2025, the company repurchased 0.4 million shares for $93 million. The pace of future repurchases is flexible and dependent on various financial and market conditions - Approximately **$6.3 billion** remained available for stock repurchases as of August 31, 2025[177](index=177&type=chunk) Stock Repurchase Activity (millions, except per share amounts) | Period | Shares Purchased (millions) | Average Price Paid per Share | | :------------------------ | :-------------------------- | :--------------------------- | | June 1, 2025—June 30, 2025 | 0.2 | $193.51 | | July 1, 2025—July 31, 2025 | 0.2 | $236.48 | | August 1, 2025—August 31, 2025 | — | $— | | Total | 0.4 | $212.30 | [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) This section discloses Rule 10b5-1 trading plans. Stuart Levey, Oracle's Executive Vice President and Chief Legal Officer, adopted a new trading plan on July 10, 2025, to sell up to 13,615 vested shares and approximately 11,805 gross shares (net of taxes) of restricted stock units, with the plan scheduled to terminate by April 10, 2026 - Stuart Levey, EVP, Chief Legal Officer, adopted a Rule 10b5-1 trading plan on July 10, 2025, to sell up to **13,615 vested shares** and approximately **11,805 gross shares (net of taxes)** of restricted stock units by April 10, 2026[180](index=180&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including corporate governance documents, stock option agreements, certifications from the Principal Executive and Financial Officer, and Interactive Data Files (Inline XBRL) for the financial statements - Lists exhibits filed with the Form 10-Q, including corporate governance documents, stock option agreements, certifications, and Interactive Data Files (Inline XBRL)[184](index=184&type=chunk) [SIGNATURES](index=41&type=section&id=SIGNATURES) This section provides the official signatures of Oracle's principal executive and accounting officers, certifying the accuracy of the report - The report was signed by Safra A. Catz (CEO and Principal Executive and Financial Officer) and Maria Smith (EVP, Chief Accounting Officer and Principal Accounting Officer) on September 10, 2025[188](index=188&type=chunk)

Part I [Business Overview](index=5&type=section&id=Item%201.%20Business) Alliance Entertainment is a leading global distributor and retailer of physical entertainment and collectibles, serving over 35,000 retail stores and 200 online stores in more than 70 countries through a multi-channel distribution model, with growth driven by strategic acquisitions and new divisions [Company Overview](index=5&type=section&id=Company%20Overview) Alliance Entertainment is a global leader in physical entertainment and collectibles distribution, connecting top content creators with leading retailers, and completed its business combination with Adara in February 2023 - Alliance Entertainment is a leading global distributor and retailer of physical entertainment and collectibles, including vinyl records, CDs, DVDs, Blu-rays, video games, electronics, and licensed fan merchandise[16](index=16&type=chunk) - The company connects top content creators (e.g., Universal Pictures, Warner Bros., Disney, Sony Music, Nintendo) with leading retailers (e.g., Walmart, Amazon, Best Buy, Target)[17](index=17&type=chunk) - The company completed its business combination with Adara on February 10, 2023, and was renamed Alliance Entertainment Holding Corporation[21](index=21&type=chunk) [Business Operations](index=6&type=section&id=Business%20Operations) Alliance's operations are built on service, selection, and technology, offering efficient omnichannel solutions, supported by various subsidiary brands and continuous warehouse automation improvements - Alliance's business is structured around service, selection, and technology, providing efficient omnichannel expansion solutions including e-commerce, DTC, and vendor-managed inventory (VMI)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - The company owns multiple subsidiary brands such as COKeM (video game distribution), AMPED Distribution (exclusive supplier for independent music labels), Distribution Solutions (aggregator for independent film labels), and DirectToU (proprietary retail brand)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) - The company continuously improves warehouse operations through investments in automated processing equipment (e.g., OPEX Sure Sort X® system and AutoStore system) to reduce labor costs, accelerate processing times, and enhance efficiency[34](index=34&type=chunk)[35](index=35&type=chunk) 2025财年和2024财年产品类别收入占比 | 产品类别 | 2025财年收入占比 | 2024财年收入占比 | | :--- | :--- | :--- | | 游戏产品 | 24% | 31% | | 黑胶唱片 | 32% | 30% | | DVD/蓝光/UltraHD | 26% | 19% | | 压缩光盘 (CDs) | 12% | 12% | | 收藏品和电子产品 | 4% | 4% | [Industry Background](index=8&type=section&id=Industry%20Background) The physical media distribution industry faces challenges from evolving consumer demand and retail environments, yet the collectibles market shows growth, favoring distributors with DTC and e-commerce fulfillment capabilities - Physical media distributors face challenges from changing consumer demand, evolving omnichannel retail environments, and supplier consolidation, but the physical media collectibles market (e.g., vinyl records, SteelBook® DVDs, CD box sets, and pop culture collectibles) continues to grow[38](index=38&type=chunk) - As major retail chains reduce physical media shelf space, distributors with direct-to-consumer (DTC) capabilities and retail e-commerce fulfillment services, like Alliance, gain an advantage[41](index=41&type=chunk) - Market competition is intense, requiring differentiation through exclusive content, curated products, enhanced customer service, and partnerships with artists and content creators for exclusive distribution rights[43](index=43&type=chunk)[44](index=44&type=chunk) [Market Opportunity](index=9&type=section&id=Market%20Opportunity) The company identifies market opportunities in content media through exclusive distribution agreements and new brand launches, and in fulfillment services via scalable 3PL and DTC solutions - The company identifies two market opportunities: content media and fulfillment services. In content media, it established Alliance Home Entertainment through an exclusive distribution agreement with Paramount Home Entertainment and expanded physical music and video products (e.g., vinyl records, SteelBooks™)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) - The company also launched the Alliance Authentic brand, focusing on licensed merchandise and collectibles to meet demand for branded, limited-edition pop culture products[49](index=49&type=chunk) - In fulfillment services, the company capitalizes on the strong growth in the global e-commerce fulfillment services market through scalable third-party logistics (3PL) and DTC fulfillment solutions[50](index=50&type=chunk)[51](index=51&type=chunk) [Competitive Strengths](index=9&type=section&id=Competitive%20Strengths) Alliance is a leading global distributor of physical media and collectibles, leveraging its infrastructure, market leadership, and strategic partnerships for competitive advantage - Alliance is one of the largest global distributors of physical media, entertainment, and collectibles, and a leader in fulfillment and e-commerce distribution solutions[52](index=52&type=chunk) - The company expands into premium collectibles and licensed merchandise through its Alliance Authentic division, utilizing its core distribution infrastructure and deep entertainment industry relationships[54](index=54&type=chunk) - The company possesses an experienced management team, significant barriers to market entry, market leadership (over **340,000 SKUs**), and strategic partnerships with major content providers (e.g., exclusive distribution agreement with Paramount)[56](index=56&type=chunk) [Strategy for Future Growth](index=10&type=section&id=Strategy%20for%20Future%20Growth) The company plans to drive future growth through organic expansion and acquisitions, leveraging its distribution network, strategic partnerships, and enhanced DTC capabilities - The company will continue to leverage its service, selection, and scalable distribution network technology to drive future growth through organic expansion and acquisitions[55](index=55&type=chunk) - Strategies include executing an acquisition strategy to increase market share, utilizing strategic studio partnerships (e.g., Paramount), enhancing DTC relationships and capabilities, expanding into new consumer product categories, and continuous technological advancements[56](index=56&type=chunk)[57](index=57&type=chunk)[64](index=64&type=chunk) [Suppliers](index=11&type=section&id=Suppliers) Alliance distributes over 400,000 products from more than 600 suppliers, with a significant portion of product receipts from its top suppliers, operating under non-exclusive, short-term agreements - Alliance distributes and sells over **400,000 products** from more than **600 top physical media entertainment product suppliers**, with approximately **340,000 unique items** in inventory[58](index=58&type=chunk) 2025财年和2024财年主要供应商产品接收价值占比 | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Top Five Suppliers' Product Receipt Value Share | 59% | - | | Top Eleven Suppliers' Product Receipt Value Share | 80% | - | | Single Largest Supplier's Product Receipt Value Share | 23% | 21% | - The company enters into non-exclusive distribution agreements with many suppliers, typically short-term and renewable annually, which may include termination without cause clauses[60](index=60&type=chunk)[61](index=61&type=chunk) [Customers](index=11&type=section&id=Customers) Alliance partners with leading entertainment product retailers globally, serving over 4,000 customers across 35,000 stores, with a significant portion of revenue concentrated among its top clients - Alliance partners with most leading global entertainment product and service retailers, serving over **4,000 customers** across more than **35,000 stores** and **2,500 independent music and video retailers**[62](index=62&type=chunk) - The company typically ships orders on the same day they are received and accepted, with backlogs usually not significant[63](index=63&type=chunk) 2025财年和2024财年主要客户收入贡献 | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | Top Three Customers' Revenue Share | 40% | 39% | | Largest Customer's Net Sales Share | 15% | 18% | [Seasonality](index=12&type=section&id=Seasonality) The company's business experiences seasonal fluctuations, with increased demand typically observed from October to December, driven by pre-holiday stocking in North American retail channels - The company's business experiences seasonal fluctuations, with demand typically increasing from October to December, primarily driven by pre-holiday stocking levels in North American retail channels[67](index=67&type=chunk) [Inventory Management](index=12&type=section&id=Inventory%20Management) Alliance manages inventory to optimize order fulfillment and mitigate risk through continuous monitoring, controlled purchasing, and supplier protection, with certain products handled as consignments or fully returnable - Alliance aims to maintain sufficient inventory for optimal order fulfillment rates, maximizing supplier protection and reducing inventory risk through continuous monitoring of inventory levels and controlled purchasing timing[68](index=68&type=chunk) - Music CDs and video movies are **100% returnable** to suppliers, while exclusive distribution products from AMPED and Distribution Solutions are treated as consignments[68](index=68&type=chunk) [Sales and Marketing](index=12&type=section&id=Sales%20and%20Marketing) Alliance's product management and marketing teams drive demand through advertising, market research, online marketing, and retail programs, utilizing performance marketing and CRM for DTC channels, and brand marketing for overall presence - Alliance's product management and marketing teams create demand for supplier products and services through advertising, market research, online marketing, retail programs, and sales promotions[70](index=70&type=chunk) - The company's DTC division employs performance marketing strategies across digital and offline channels, leveraging customer relationship management platforms for personalized campaigns and targeted advertising[71](index=71&type=chunk) - Marketing strategies also include brand marketing, performance marketing, and viral marketing, strengthening the brand through public relations activities (e.g., trade show participation) to reduce reliance on performance marketing[72](index=72&type=chunk) [Competition](index=13&type=section&id=Competition) Alliance faces intense competition from various entities in the entertainment and gaming sectors, including digital content providers, necessitating differentiation through unique products, exclusive content, and superior customer service - Alliance faces competition from suppliers, wholesale distributors, retailers, and internet companies, including large diversified entertainment and gaming companies and those focused on digital downloads and streaming products[73](index=73&type=chunk)[74](index=74&type=chunk) - The physical media market is increasingly competitive, requiring the company to differentiate through unique products, exclusive content, and superior customer service, while rapidly adapting to market trends and consumer preferences[76](index=76&type=chunk) [Intellectual Property](index=14&type=section&id=Intellectual%20Property) Alliance's intellectual property, including domains, trademarks, copyrights, and trade secrets, is crucial to its business, protected through various legal and contractual measures, though complete effectiveness is not guaranteed - Alliance's intellectual property is a vital component of its business, relying on domain names, trademarks, copyrights, proprietary technology, trade secrets, and contractual terms for protection[77](index=77&type=chunk) - As of June 30, 2025, the company holds **22 registered or pending U.S. trademarks**, **1 registered or pending trademark** in other jurisdictions, and **128 domain names**[78](index=78&type=chunk) - The company protects trade secrets and confidential information through confidentiality agreements and restrictions on unauthorized access to proprietary technology, but cannot guarantee these measures will be fully effective or provide a competitive advantage[79](index=79&type=chunk)[80](index=80&type=chunk) [Human Capital Resources](index=14&type=section&id=Human%20Capital%20Resources) Alliance manages its human capital through talent acquisition, internal promotions, and compensation reviews, maintaining a diverse workforce and an annualized employee turnover rate of approximately 11.4% for FY2025 员工和劳务派遣人员数量 | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Employees on Payroll | 697 | 657 | | Agency Workers | 168 | 226 | - As of June 30, 2025, approximately **49.5%** of the company's employees on payroll are female, and **50.5%** are male[82](index=82&type=chunk) - The company's annualized employee turnover rate for fiscal year 2025 was approximately **11.4%**, attracting and retaining talent through recruitment, internal promotions, and annual compensation reviews to ensure pay equity[83](index=83&type=chunk)[84](index=84&type=chunk) [Regulatory Compliance](index=15&type=section&id=Regulatory%20Compliance) The company's operations are subject to extensive U.S. and international laws and regulations, including privacy and data protection, employment, tax, and consumer protection laws, with ongoing efforts to ensure compliance and data security - The company's business is subject to extensive laws, regulations, and standards in U.S. and international jurisdictions, including privacy and data protection (e.g., GDPR, CCPA, PIPEDA), employment laws, tax laws, and consumer protection laws[86](index=86&type=chunk)[88](index=88&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - The company has implemented various technical and organizational security measures to protect data and continuously evaluates and takes additional measures to comply with relevant privacy regulations[89](index=89&type=chunk) [Periodic Reporting and Financial Information](index=15&type=section&id=Periodic%20Reporting%20and%20Financial%20Information) The company's Class A common stock and warrants are listed on Nasdaq, and as a smaller reporting company and emerging growth company, it benefits from simplified disclosure obligations and extended transition periods for new accounting standards - The company's Class A common stock and warrants are listed on Nasdaq, and as a smaller reporting company, it enjoys certain exemptions from simplified disclosure obligations, such as not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act[92](index=92&type=chunk)[96](index=96&type=chunk) - As an 'emerging growth company,' the company can utilize the extended transition period provided by the JOBS Act to comply with new or revised accounting standards[93](index=93&type=chunk)[94](index=94&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors.) The company faces diverse risks, including technological shifts, supply chain disruptions, economic pressures, management challenges from expansion, evolving consumer preferences, reliance on key partners, debt, talent retention, IP protection, cybersecurity, trade policy changes, litigation, and accounting complexities [Risk Factor Summary](index=16&type=section&id=Risk%20Factor%20Summary) Key risks include failure to adapt to industry technological advancements, operational inefficiencies, supply chain and cost increases, economic downturns, expansion pressures, shifting consumer interests, reliance on key partners, significant debt, talent loss, cybersecurity threats, trade policy changes, and acquisition risks - Key risks include: failure to adapt to technological developments in the entertainment industry, improper operation of the fulfillment network, supply chain disruptions and cost increases, inflation, economic downturns, pressures from business expansion, rapid changes in consumer interest, reliance on key suppliers and customers, significant debt, loss of key talent, cybersecurity threats, changes in international trade policies, and potential acquisition risks[98](index=98&type=chunk)[99](index=99&type=chunk) [Risks Related to Our Business and Industry](index=18&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Industry) The company faces risks from rapid technological advancements in the entertainment industry, potential inefficiencies in its fulfillment network, supply chain disruptions, and inflationary pressures, which could impact operations and profitability - The entertainment industry experiences rapid technological development, with consumers shifting to digital content; if the company fails to adapt its content and distribution capabilities in a timely manner, its business could be harmed[100](index=100&type=chunk)[101](index=101&type=chunk) - Failure to successfully optimize and operate the fulfillment network could lead to increased costs, lost sales, or inventory impairment[102](index=102&type=chunk) - Supply chain disruptions (e.g., pandemics, geopolitical events, labor shortages) could result in higher product costs, delayed deliveries, and reputational damage[110](index=110&type=chunk)[111](index=111&type=chunk) - Inflation could cause product costs and operating expenses to grow faster than net sales, thereby reducing gross margins and net income[113](index=113&type=chunk) [Risks Related to Expansion of our Business](index=20&type=section&id=Risks%20Related%20to%20Expansion%20of%20our%20Business) Rapid business expansion poses risks to management, operations, and financial resources, while acquisitions may not yield expected benefits, and international operations face diverse economic, political, and regulatory challenges - Rapid expansion of the company's business places pressure on management, operational, financial, and other resources, potentially impacting reputation and operating results[117](index=117&type=chunk) - The anticipated benefits of acquisitions and investments may not be realized or may be delayed, and they could consume significant management attention and resources[118](index=118&type=chunk)[119](index=119&type=chunk) - Entering new market segments like collectibles may present new technological challenges and lower profitability[120](index=120&type=chunk) - International operations face risks from local economic and political conditions, government regulations, trade protection measures, restrictions on fund repatriation, limited infrastructure, and cultural differences[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) [Risks Related to Shifts in Consumer Demand](index=24&type=section&id=Risks%20Related%20to%20Shifts%20in%20Consumer%20Demand) Rapid shifts in consumer interests and product acceptance, influenced by external factors, can lead to short product lifecycles and potential revenue and profit declines if demand is not accurately predicted - Consumer interests change rapidly, and product and entertainment product acceptance is influenced by external factors, potentially leading to short product lifecycles and decreased revenue and profit if consumer interest is not correctly predicted[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - Failure to timely and cost-effectively develop, launch, and ship planned products, product lines, and new brands could harm the company's business[133](index=133&type=chunk)[134](index=134&type=chunk) [Risks Related to Our Supply Chain and Sales Channels](index=25&type=section&id=Risks%20Related%20to%20Our%20Supply%20Chain%20and%20Sales%20Channels) Supply chain disruptions, failure to adapt to e-commerce shifts, customer concentration, reliance on third-party suppliers, and significant inventory risks could impair the company's ability to meet demand and increase costs - Supply chain or logistics network disruptions or inefficiencies could impact the company's ability to meet customer demand and increase costs, despite mitigation strategies like diversifying suppliers and alternative transportation[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) - Failure to adapt to the ongoing shift towards e-commerce could harm the business, as e-commerce sales lead to reduced retailer inventory and higher demands for fast, low-cost delivery[138](index=138&type=chunk) - The company has a concentrated retail customer base, with the **top three customers accounting for 40% of FY2025 net sales** and the **largest customer accounting for 15%**, posing significant impact if major customers face difficulties or change purchasing policies[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk) - The company relies on third-party suppliers, labels, studios, and publishers; if their product quality is substandard, supply is untimely, or partnerships cease, the company's brand and operating results could be harmed[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - The company faces significant inventory risks due to seasonality, new product launches, rapid changes in product cycles and pricing, defective goods, and shifts in consumer demand, which could lead to excess or insufficient inventory[148](index=148&type=chunk) [Risks Related to Our Debt](index=29&type=section&id=Risks%20Related%20to%20Our%20Debt) The company's substantial debt, including a $120 million senior secured revolving credit facility, exposes it to interest rate fluctuations, restrictive covenants, and reduced cash availability for operations and strategic investments - As of June 30, 2025, the company had approximately **$57 million** in outstanding debt under its **$120 million** senior secured revolving credit facility, which matures on December 21, 2026[158](index=158&type=chunk) - Borrowing rates for the revolving credit facility are 30-day SOFR (minimum **2.00%**) plus a spread of **4.0% to 4.25%**, with effective interest rates of **9.25%** and **9.5%** for fiscal years 2025 and 2024, respectively[160](index=160&type=chunk)[161](index=161&type=chunk) - Breaching covenants in the credit agreement could lead to accelerated debt maturity and potentially prevent the company from obtaining further credit or repaying its debt[163](index=163&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - Government efforts to combat inflation may result in the company incurring higher interest rates and financing costs[169](index=169&type=chunk) - The company's debt may limit cash availability, forcing it to use cash for debt service, thereby reducing funds for working capital, capital expenditures, and strategic opportunities[165](index=165&type=chunk)[166](index=166&type=chunk)[170](index=170&type=chunk) [Risks Related to our Management](index=32&type=section&id=Risks%20Related%20to%20our%20Management) The company's success depends on its executive team and employees; failure to retain key talent could lead to knowledge loss and reduced productivity, while related-party transactions may present conflicts of interest - The company's success depends on the efforts and dedication of its executives and other employees; failure to recruit, hire, or retain key talent could lead to loss of knowledge and relationships, decreased productivity, and reduced profitability[175](index=175&type=chunk)[176](index=176&type=chunk) - The company engages in transactions with related parties, including major shareholders, which may present conflicts of interest and adversely affect the company's business and operating results[178](index=178&type=chunk)[179](index=179&type=chunk) [Risks Related to Our Technology and Intellectual Property](index=34&type=section&id=Risks%20Related%20to%20Our%20Technology%20and%20Intellectual%20Property) Failure to protect key intellectual property, information system failures, or cybersecurity breaches could severely harm the company's business, competitive position, operations, and reputation, leading to significant costs - Failure to protect key intellectual property, including trademarks, copyrights, patents, and trade secrets, could harm the company's business and competitive position[180](index=180&type=chunk) - Information system failures or the inability to effectively implement new technologies could disrupt business or reduce sales and profitability[181](index=181&type=chunk) - Electronic data breaches could severely damage the company's operations and reputation, leading to significant costs and liabilities[182](index=182&type=chunk) [Risks Related to Matters Outside our Control That May Impact Our Business](index=35&type=section&id=Risks%20Related%20to%20Matters%20Outside%20our%20Control%20That%20May%20Impact%20Our%20Business) Changes in international trade policies, adverse economic conditions, and seasonal business fluctuations requiring accurate demand forecasting are external factors that could significantly impact the company's costs, sales, and profitability - Changes in international trade policies, including new or increased tariffs, could significantly raise the cost of goods sold, particularly impacting game and collectibles categories[184](index=184&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - Adverse economic conditions (e.g., inflation, high interest rates, low employment) could lead to reduced consumer disposable income, thereby decreasing sales of the company's products and entertainment spending[189](index=189&type=chunk)[191](index=191&type=chunk) - The company's business experiences seasonal fluctuations, with retail sales increasing during the October to December holiday period, requiring accurate demand forecasting to avoid lost sales or excess inventory[194](index=194&type=chunk)[197](index=197&type=chunk) [Risks Related to Taxes and Government Related Matters](index=37&type=section&id=Risks%20Related%20to%20Taxes%20and%20Government%20Related%20Matters) Changes in economic conditions, tax laws, and government regulations could adversely affect the company's business and financial performance, potentially leading to increased tax liabilities, compliance costs, or product liability claims - Changes in U.S., global, or regional economic conditions could harm the company's business and financial performance, including levels of consumer disposable spending, inflation, and rising interest rates[191](index=191&type=chunk) - The company faces additional tax liabilities and collection obligations; changes in tax laws, regulations, or their interpretation could increase tax liabilities or compliance costs[199](index=199&type=chunk)[200](index=200&type=chunk) - The company is subject to various government regulations; violations could result in sanctions or harm to the business, and it may face product liability lawsuits or product recalls[201](index=201&type=chunk)[202](index=202&type=chunk) [Risks Related to Litigation](index=38&type=section&id=Risks%20Related%20to%20Litigation) The company faces increased costs related to sustainability goals and potential reputational damage, along with various litigation risks including claims for defamation, privacy infringement, intellectual property infringement, and significant lawsuits such as a trademark infringement claim exceeding $35 million and a $1.577 million VPPA class action settlement - The company may face increased costs in achieving sustainability goals, and failure to meet these goals could result in reputational damage[203](index=203&type=chunk)[204](index=204&type=chunk) - As a distributor of media content, the company may face liability claims for defamation, invasion of privacy, copyright, or trademark infringement[205](index=205&type=chunk) - The company is involved in multiple lawsuits, arbitrations, or regulatory matters, including a trademark infringement lawsuit against COKeM (claiming over **$35 million**), multiple Video Privacy Protection Act (VPPA) class action lawsuits (one settled for **$1.577 million**), and other commercial disputes[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) [Risks Related to Accounting Matters](index=40&type=section&id=Risks%20Related%20to%20Accounting%20Matters) While the company has remediated prior material weaknesses in internal controls, maintaining effectiveness is ongoing, and the quarterly fair value determination of warrant liabilities can cause significant non-cash fluctuations in financial results, potentially impacting investor appeal and stock price volatility due to its reporting status - The company has fully remediated previously identified material weaknesses in internal control over financial reporting, but maintaining effective internal controls is an ongoing process, and new material weaknesses may arise in the future[213](index=213&type=chunk)[214](index=214&type=chunk) - The company is required to determine the fair value of warrant liabilities quarterly, which can significantly impact its financial condition and operating results, leading to non-cash gains or losses[215](index=215&type=chunk)[216](index=216&type=chunk) - The company's status as an 'emerging growth company' and 'smaller reporting company' may make its securities less attractive to investors and increase stock price volatility[217](index=217&type=chunk)[219](index=219&type=chunk) [Risks Related to Our Securities](index=41&type=section&id=Risks%20Related%20to%20Our%20Securities) Risks related to the company's securities include exclusive forum provisions for warrant litigation, potential warrant redemption making them worthless, dilution from cashless exercise, concentrated ownership by insiders, lack of an active trading market, delisting risk, no planned cash dividends, anti-takeover provisions, and potential future stock issuances - The warrant agreement designates New York State courts or the U.S. District Court for the Southern District of New York as the sole and exclusive forum for certain litigation, potentially limiting warrant holders' ability to choose a favorable jurisdiction[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - The company may redeem unexpired warrants before their exercise, rendering them worthless[223](index=223&type=chunk) - If warrant holders exercise public warrants on a 'cashless basis,' they will receive fewer shares of Class A common stock than if exercised for cash[224](index=224&type=chunk)[225](index=225&type=chunk) - Cash proceeds from warrant exercise depend on the market price exceeding the **$11.50** exercise price and warrants being exercised for cash[226](index=226&type=chunk)[227](index=227&type=chunk) - Highly concentrated ownership by the company's executives, directors, and their affiliates may prevent new investors from influencing significant corporate decisions[228](index=228&type=chunk)[229](index=229&type=chunk) - An active trading market for the company's Class A common stock may not develop, and the stock price could fluctuate significantly due to various factors, including a limited number of publicly traded shares[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) - The company may not be able to maintain its listing on the Nasdaq Capital Market[233](index=233&type=chunk) - The company currently has no plans to pay cash dividends in the foreseeable future, and investors may not receive a return on investment through dividends[235](index=235&type=chunk) - Anti-takeover provisions in the company's charter and Delaware law may make it more difficult to acquire the company and could deter attempts by shareholders to replace or remove current management[236](index=236&type=chunk)[238](index=238&type=chunk)[240](index=240&type=chunk) - The company's charter requires certain derivative actions and other lawsuits to be brought exclusively in the Delaware Court of Chancery, which may deter lawsuits against directors, officers, other employees, or shareholders[239](index=239&type=chunk)[241](index=241&type=chunk) - A sudden significant increase in demand for Class A common stock exceeding supply could lead to a 'short squeeze,' causing extreme stock price volatility[242](index=242&type=chunk) - The company may issue additional Class A common stock or preferred stock under the 2023 Plan, which would dilute existing shareholders' equity[243](index=243&type=chunk)[244](index=244&type=chunk) [Unresolved Staff Comments](index=47&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) As of the reporting period end, the company has no unresolved staff comments [Cybersecurity](index=47&type=section&id=Item%201C.%20Cybersecurity) The company processes significant digital data, including customer and confidential information, and has implemented a program to assess, identify, and manage cybersecurity risks, overseen by the executive team and board, with external expert consultation - The company receives, processes, uses, and stores significant digital data, including customer data and confidential information, making the integrity and availability of information technology systems crucial[246](index=246&type=chunk) - The company has implemented a program designed to assess, identify, and manage risks of potential unauthorized incidents, which is managed by the executive team and consults external advisors and experts[246](index=246&type=chunk)[247](index=247&type=chunk) - The Board of Directors is responsible for overseeing cybersecurity and information technology matters and related risk exposures, receiving regular updates from management[248](index=248&type=chunk) [Properties](index=47&type=section&id=Item%202.%20Properties) The company's main administrative office is in Plantation, Florida, and it leases several distribution centers, including two facilities in Shepherdsville, Kentucky, and one in Shakopee, Minnesota, while also maintaining marketing and sales offices with an anticipated future reduction in fixed office space needs - The company's main administrative office is located in Plantation, Florida, and it leases several distribution center facilities[249](index=249&type=chunk) 主要租赁设施 | Location | Area/Capacity | Lease Terms | | :--- | :--- | :--- | | Shepherdsville, Kentucky | 662,087 sq ft | Lease until January 31, 2031, with 3.25% annual rent increase and a five-year renewal option | | Shepherdsville, Kentucky (additional storage) | Up to 3,000 pallets | **$11 per pallet**, minimum **$14,000 per month**, no time limit | | Shakopee, Minnesota | 29,688 sq ft | Lease until September 30, 2025 | - The company also maintains marketing and sales offices in six U.S. cities and believes its existing facilities are sufficient for current business needs[249](index=249&type=chunk) [Legal Proceedings](index=47&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, including trademark infringement, VPPA class actions, and commercial disputes, with a trademark claim exceeding **$35 million** and a VPPA settlement of **$1.577 million**, actively defending cases and accruing related liabilities - The company is involved in legal proceedings, claims, and government investigations in the ordinary course of business, which could result in monetary damages, fines, or injunctive relief[250](index=250&type=chunk)[252](index=252&type=chunk) - COKeM International Ltd. faces a trademark infringement lawsuit filed by Office Create Corporation, with claims increasing to over **$35 million**; COKeM's **$330,000** settlement offer was rejected, and it has **$2.5 million** in insurance coverage[253](index=253&type=chunk) - The company faces multiple Video Privacy Protection Act (VPPA) class action lawsuits, alleging disclosure of users' personally identifiable information and video viewing history to third parties via Facebook Pixel. One lawsuit settled for **$1.577 million** on June 12, 2025, with COKeM's insurer, CNA, approving coverage for **$1.377 million**[254](index=254&type=chunk)[255](index=255&type=chunk) - The company is also involved in California Proposition 65 violation allegations (products containing lead), Algomus's breach of non-solicitation clause allegations, and Sparkle Pop's trade secret theft and contract interference lawsuit[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - The McConigle lawsuit settled for **$70,000** on August 8, 2025, an amount the company believes is not material to its consolidated financial statements[259](index=259&type=chunk) [Mine Safety Disclosure](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosure) Not applicable Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=50&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's Class A common stock and warrants are listed on Nasdaq, with 28 record holders for common stock and 34 for warrants as of June 30, 2025; no cash dividends have been paid or are planned, and no unregistered equity securities were sold or common stock repurchased during the reporting period - The company's Class A common stock and warrants are listed on Nasdaq under the symbol 'AENT'[263](index=263&type=chunk) 2025年6月30日证券持有人数量 | Security Type | Number of Record Holders | | :--- | :--- | | Class A Common Stock | 28 | | Warrants | 34 | - The company has not paid any cash dividends and currently has no plans to pay dividends in the foreseeable future; future dividend decisions will depend on operating results, financial condition, and contractual restrictions[264](index=264&type=chunk) - During the reporting period, the company did not sell any unregistered equity securities or repurchase any common stock[265](index=265&type=chunk)[266](index=266&type=chunk) [Selected Financial Data](index=50&type=section&id=Item%206.%20Selected%20Financial%20Data.) This item is reserved [Management's Discussion and Analysis Of Financial Condition and Results Of Operations](index=50&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20Of%20Financial%20Condition%20and%20Results%20Of%20Operations) This section discusses Alliance Entertainment's financial condition and operating results for fiscal year 2025, highlighting its role as a leading global entertainment product distributor connecting content creators with retailers through diverse brands and technology platforms, achieving gross margin growth and reduced operating expenses despite macroeconomic headwinds, and detailing revenue, expense changes, liquidity, and key accounting policies [Company Overview](index=50&type=section&id=Company%20Overview) Alliance is a leading global wholesaler, DTC distributor, and e-commerce provider, connecting international entertainment content manufacturers with top retail partners across over 70 countries, offering advanced warehousing, distribution technology, and a vast inventory of over 340,000 SKUs - Alliance is a leading global wholesaler, DTC distributor, and e-commerce provider, connecting international entertainment content manufacturers with top retail partners, selling products in over **70 countries** worldwide[269](index=269&type=chunk)[270](index=270&type=chunk)[271](index=271&type=chunk) - The company provides advanced warehousing and distribution technology, with an inventory of over **340,000 SKUs**, including vinyl records, video games, CDs, DVDs, Blu-rays, toys, electronics, and collectibles[272](index=272&type=chunk) [License Agreements](index=51&type=section&id=License%20Agreements) In January 2025, Alliance signed an exclusive home entertainment distribution agreement with Paramount Pictures, becoming the sole distributor of Paramount's physical media in the U.S. and Canada - In January 2025, Alliance signed an exclusive home entertainment distribution agreement with Paramount Pictures, becoming the sole distributor of Paramount's physical media (DVD, Blu-ray, 4K UHD) in the U.S. and Canada[273](index=273&type=chunk) [Merger and Business Acquisition](index=51&type=section&id=Merger%20and%20Business%20Acquisition) The company has a track record of successful acquisitions, including Handmade by Robots in December 2024 for $7.6 million, and completed a business combination with Adara in February 2023, resulting in non-cash losses from warrant fair value changes - The company has experience in successfully acquiring and integrating competitors and complementary businesses and will continue to evaluate acquisition opportunities[274](index=274&type=chunk) - On December 17, 2024, the company acquired Handmade by Robots for **$7.6 million**, adding a licensed vinyl figure collectibles line, expected to generate incremental revenue growth in the future[275](index=275&type=chunk)[276](index=276&type=chunk) - On February 10, 2023, the company completed its business combination with Adara Acquisition Corp., resulting in non-cash losses from warrant fair value changes of **$0.9 million** and **$0.04 million** for fiscal years 2025 and 2024, respectively[277](index=277&type=chunk) [Macroeconomic Uncertainties](index=52&type=section&id=Macroeconomic%20Uncertainties) Macroeconomic conditions, such as persistent inflation, continued to impact the company's operating environment in FY2025, leading to reduced warehouse costs and lower interest expenses on its credit facility, though potential tariff discussions could pressure future gross margins - In fiscal year 2025, macroeconomic conditions (e.g., persistent inflation) continued to affect the company's operating environment, with warehouse costs decreasing year-over-year and reduced interest expense under the credit facility[278](index=278&type=chunk) - Re-discussion of tariffs on imported physical media and electronics could lead to increased costs, putting pressure on future gross margins[278](index=278&type=chunk) [Key Performance Indicators](index=52&type=section&id=Key%20Performance%20Indicators) Management monitors key performance indicators including net revenue, cost of sales, gross and net margins, operating expenses (distribution, fulfillment, SG&A), and balance sheet metrics such as cash, inventory, accounts payable, and working capital - Key performance indicators monitored and analyzed by management include: net revenue, cost of sales (excluding depreciation and amortization), gross and net margins, operating expenses (distribution and fulfillment expenses, selling, general and administrative expenses), and balance sheet metrics (cash, product inventory, accounts payable, and working capital)[279](index=279&type=chunk)[280](index=280&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) [Results of Income Year Ended June 30, 2025, Compared to Year Ended June 30, 2024](index=53&type=section&id=Results%20of%20Income%20Year%20Ended%20June%2030,%202025,%20Compared%20to%20Year%20Ended%20June%2030,%202024) For FY2025, net revenue slightly decreased by 3% to **$1.063 billion**, while operating income significantly increased by 113.1% to **$30.1 million**, and net income grew by 229.1% to **$15.1 million**, driven by improved gross margins and reduced operating expenses 2025财年与2024财年合并损益表摘要（千美元） | Metric | June 30, 2025 | June 30, 2024 | Change Amount | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | **$1,063,457** | **$1,100,483** | (**$37,026**) | -3% | | Cost of Sales (excl. D&A) | **$930,605** | **$971,594** | (**$40,989**) | -4% | | Operating Expenses | **$102,716** | **$114,748** | (**$12,032**) | -10.5% | | Operating Income | **$30,136** | **$14,141** | **$15,995** | 113.1% | | Other Expenses | **$11,428** | **$12,288** | (**$860**) | -7% | | Income Before Income Taxes | **$18,708** | **$1,853** | **$16,855** | 910% | | Income Tax Expense (Benefit) | **$3,630** | (**$2,728**) | **$6,358** | -233% | | Net Income | **$15,078** | **$4,581** | **$10,497** | 229.1% | | Basic and Diluted Net Income Per Share | **$0.30** | **$0.09** | **$0.21** | 233.3% | - Fiscal year 2025 net revenue slightly decreased by **3%** year-over-year to **$1.063 billion**, primarily due to macroeconomic headwinds such as high interest rates, cautious consumer spending, and geopolitical uncertainties. DirectToU LLC contributed **37%** of total revenue, up from **36%** last year[284](index=284&type=chunk) 2025财年与2024财年产品类别销售额变化（千美元） | Product Category | FY2025 Sales | FY2024 Sales | Change Amount | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Vinyl Records | **$340,000** | **$329,000** | **$11,000** | 3% | | Music CDs | **$125,000** | **$130,000** | (**$5,000**) | -4% | | Physical Movies (DVD/Blu-ray/Ultra HD) | **$279,000** | **$204,000** | **$75,000** | 37% | | Games | **$255,000** | **$338,000** | (**$83,000**) | -25% | | Collectibles and Electronics | **$37,000** | **$43,000** | (**$6,000**) | -14% | | - Collectibles | **$22,000** | **$26,000** | (**$4,000**) | -15% | | - Electronics | **$15,000** | **$16,000** | (**$1,000**) | -6% | - Cost of sales (excluding depreciation and amortization) decreased by **4%** year-over-year to **$931 million**. Gross margin increased from **11.7% to 12.5%** (**+0.8 percentage points**), primarily due to higher average selling prices, exclusive content partnerships, and improved inventory management and vendor rebates[290](index=290&type=chunk) - Total operating expenses decreased by **10.3%** year-over-year, with the ratio to revenue falling from **10.4% to 9.7%** (**-0.7 percentage points**). Distribution and fulfillment expenses as a percentage of net revenue decreased from **4.4% to 3.8%** (**-0.6 percentage points**), mainly due to improved operational efficiency and the closure of the Shakopee warehouse[291](index=291&type=chunk)[292](index=292&type=chunk) - Selling, general, and administrative (SG&A) expenses decreased by **2.9%** year-over-year to **$56 million**, remaining at **5.3%** of net revenue[293](index=293&type=chunk) - Interest expense decreased by **13.1%** year-over-year to **$10.6 million**, primarily due to a reduction in the average effective interest rate from **9.5% to 9.2%** and a **25%** decrease in the average revolving credit balance to **$77.5 million**[294](index=294&type=chunk) - Income tax expense for fiscal year 2025 was **$3.6 million**, compared to an income tax benefit of **$2.7 million** in fiscal year 2024, with effective tax rates of **19%** and **147%**, respectively[295](index=295&type=chunk)[296](index=296&type=chunk) 2025财年与2024财年调整后EBITDA（千美元） | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net Income | **$15,078** | **$4,581** | | Adjusted EBITDA | **$36,543** | **$24,267** | | Year-over-Year Growth | - | **$12,276** | [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) The company relies on existing cash, operating cash flow, and its $120 million senior secured asset-backed revolving credit facility, which matures in December 2026, to meet liquidity needs, with no expected warrant exercises due to the current stock price - The company entered into a three-year, **$120 million** senior secured asset-backed revolving credit facility on December 21, 2023, and has implemented strategic initiatives to reduce expenses and focus on high-margin product sales[298](index=298&type=chunk)[299](index=299&type=chunk) 2025年和2024年6月30日循环信贷工具余额和可用性（百万美元） | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Revolving Credit Balance | **$57** | **$73** | | Availability | **$54** | **$44** | - The company primarily relies on existing cash, cash generated from operating activities, and borrowing capacity under its credit facility to meet liquidity needs. Due to the Class A common stock market price being below the **$11.50** warrant exercise price, the company currently does not anticipate warrants to be exercised[300](index=300&type=chunk)[301](index=301&type=chunk) 2025财年与2024财年现金流量摘要（千美元） | Cash Flow Type | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | **$26,809** | **$55,773** | | Net Cash from Investing Activities | (**$8,134**) | (**$117**) | | Net Cash from Financing Activities | (**$18,571**) | (**$55,390**) | - Cash generated from operating activities in fiscal year 2025 was **$26.8 million**, with net income of **$15.1 million**, a year-over-year decrease primarily due to increased accounts payable and changes in inventory[305](index=305&type=chunk) - Cash used in investing activities in fiscal year 2025 was **$8 million**, primarily including **$7.6 million** for a business acquisition that ultimately did not materialize, with the company pursuing recovery of funds[306](index=306&type=chunk) - Cash used in financing activities in fiscal year 2025 was **$19 million**, primarily reflecting net repayments of **$15.7 million** under the revolving credit facility, compared to net repayments of **$60.3 million** in the prior year[307](index=307&type=chunk) [Critical Accounting Policies and Estimates](index=57&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The company's financial statements, prepared under GAAP, require management to apply significant judgment in areas such as sales return provisions, customer rebates, inventory valuation, goodwill and intangible asset impairment, and the fair value of warrants, with specific assumptions used for warrant valuation - The company's financial statements are prepared in accordance with GAAP, requiring management to apply accounting policies, estimates, and assumptions, with areas involving higher judgment or complexity including: sales return reserves, customer rebates and discount reserves, inventory valuation, goodwill and intangible asset impairment, and the fair value of warrants[308](index=308&type=chunk)[309](index=309&type=chunk) - Inventory is measured at the lower of cost or net realizable value, with adjustments assessed based on historical sales, current inventory levels, and market conditions[309](index=309&type=chunk)[310](index=310&type=chunk) - The company performs annual impairment tests for goodwill, with no impairment recognized in fiscal years 2025 and 2024. Intangible assets are presented at cost less accumulated amortization, and indefinite-lived intangible assets are tested for impairment annually[311](index=311&type=chunk)[312](index=312&type=chunk) - Purchase price allocation for business combinations involves estimates and judgments regarding future cash flows and the fair value of identifiable tangible and intangible assets[314](index=314&type=chunk) 2025年和2024年6月30日认股权证估值关键假设 | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Stock Price | **$3.77** | **$3.00** | | Exercise Price Per Share | **$11.50** | **$11.50** | | Risk-Free Interest Rate | **3.63%** | **4.41%** | | Expected Term (Years) | **2.62** | **3.6** | | Expected Volatility | **47.1%** | **36.0%** | | Expected Dividend Yield | - | - | [Quantitative and Qualitative Disclosures about Market Risk](index=59&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Not applicable [Financial Statements and Supplementary Data](index=59&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This information is included after Item 15 of this annual report and incorporated herein by reference [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=59&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) None [Controls and Procedures](index=59&type=section&id=Item%209A.%20Controls%20and%20Procedures) As of June 30, 2025, the company's management assessed and determined its disclosure controls and procedures to be effective, having fully remediated previously identified material weaknesses in internal control over financial reporting through strengthened governance, new IT general controls, and improved financial closing processes, demonstrating a commitment to continuous monitoring and enhancement of its internal control environment [Disclosure Controls and Procedures](index=59&type=section&id=Disclosure%20Controls%20and%20Procedures) As of June 30, 2025, the company's management, under the guidance of the CEO and CFO, assessed and determined its disclosure controls and procedures to be effective - As of June 30, 2025, the company's management, under the guidance and participation of the Chief Executive Officer and Chief Financial Officer, assessed and determined its disclosure controls and procedures to be effective[319](index=319&type=chunk) [Remediation of Previously Identified Material Weaknesses in Internal Control Over Financial Reporting](index=59&type=section&id=Remediation%20of%20Previously%20Identified%20Material%20Weaknesses%20in%20Internal%20Control%20Over%20Financial%20Reporting) Previously identified material weaknesses in internal control over financial reporting, stemming from insufficient qualified personnel and inadequate control design, have been fully remediated as of June 30, 2025, through enhanced governance, new IT controls, and improved financial processes - Previously disclosed material weaknesses involved the control environment, entity-level controls, information technology general controls, and financial closing and reporting processes, primarily due to insufficient qualified personnel, ineffective segregation of duties, and inadequate control activity design[321](index=321&type=chunk) - As of June 30, 2025, management has completed the remediation of all previously identified material weaknesses, including strengthening governance and oversight, implementing new user access controls and segregation of duties, and establishing formal accounting policies and improved management review controls[323](index=323&type=chunk) - Management tested the design and operating effectiveness of the remediated controls and concluded that these controls were operating effectively as of June 30, 2025[323](index=323&type=chunk) [Management's Report on Internal Controls Over Financial Reporting](index=61&type=section&id=Management's%20Report%20on%20Internal%20Controls%20Over%20Financial%20Reporting) Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding financial reporting reliability, acknowledging inherent limitations, and noting that this annual report does not include an independent registered public accounting firm's attestation report due to the company's status - Management is responsible for establishing and maintaining adequate internal control over financial reporting, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements[326](index=326&type=chunk) - Internal controls have inherent limitations and may not prevent or detect misstatements in a timely manner. This annual report does not include an attestation report of the independent registered public accounting firm, as the company is an emerging growth company and a non-accelerated filer[327](index=327&type=chunk)[328](index=328&type=chunk) [Changes in Internal Control over Financial Reporting](index=61&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) During fiscal year 2025, the company completed the implementation and testing of certain controls as part of its remediation efforts for previously identified material weaknesses in internal control, with no significant impact on financial reporting internal controls - In fiscal year 2025, the company completed the implementation and testing of certain controls as part of its remediation efforts for previously identified material weaknesses in internal control, and these changes did not materially affect internal control over financial reporting[329](index=329&type=chunk)[330](index=330&type=chunk) [Other Information](index=61&type=section&id=Item%209B%20Other%20Information.) For the three months ended June 30, 2025, no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements, and on June 30, 2025, the company amended its credit facility with White Oak to reduce the applicable interest rate spread, anticipating lower future interest expenses - For the three months ended June 30, 2025, no directors or officers adopted or terminated 'Rule 10b5-1 trading arrangements' or 'non-Rule 10b5-1 trading arrangements'[331](index=331&type=chunk) - On June 30, 2025, the company amended its credit facility with White Oak, reducing the applicable interest rate spread from **4.5%-4.75% to 4.0%-4.25%**, which is expected to lower future interest expenses[332](index=332&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=61&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections.) Not applicable Part III [Directors, Executive Officers and Corporate Governance](index=62&type=section&id=Item%2010%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance.) This section introduces Alliance Entertainment's board of directors and executive officers, including Executive Chairman Bruce Ogilvie and CEO Jeffrey Walker, highlighting the board's independent composition and its audit, compensation, and nominating committees, which ensure independent and effective corporate governance, further supported by adopted codes of ethics and insider trading policies to promote integrity and compliance with securities laws [Directors and Executive Officers](index=62&type=section&id=Directors%20and%20Executive%20Officers) This section lists Alliance Entertainment's directors and executive officers, including Executive Chairman Bruce Ogilvie, CEO Jeffrey Walker, COO Warwick Goldby, CFO Amanda Gnecco, and CCO Robert Black, along with independent directors 董事和高管 | Name | Age | Position | | :--- | :--- | :--- | | Bruce Ogilvie | 67 | Executive Chairman and AEC Director | | Jeffrey Walker | 57 | Chief Executive Officer and AEC Director | | Warwick Goldby | 49 | Chief Operating Officer | | Amanda Gnecco | 46 | Chief Financial Officer | | Robert Black | 65 | Chief Compliance Officer | | W. Tom Donaldson III | 48 | Independent Director | | Terilea J. Wielenga | 66 | Independent Director | | Chris Nagelson | 57 | Independent Director | - Bruce Ogilvie has served as Executive Chairman since 2023, Jeffrey Walker as Chief Executive Officer since February 2023, and Amanda Gnecco as Chief Financial Officer since July 21, 2025[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk)[340](index=340&type=chunk) [Director Independence](index=64&type=section&id=Director%20Independence) The Board of Directors has determined that W. Tom Donaldson III, Chris Nagelson, and Terilea J. Wielenga are independent directors, meeting Nasdaq listing standards and applicable SEC rules - The Board of Directors has determined that W. Tom Donaldson III, Chris Nagelson, and Terilea J. Wielenga are independent directors, meeting Nasdaq listing standards and applicable SEC rules[350](index=350&type=chunk) [Committees of the Board of Directors](index=64&type=section&id=Committees%20of%20the%20Board%20of%20Directors) The Board of Directors maintains Audit, Compensation, and Nominating Committees to ensure independent and effective corporate governance, with specific members designated for financial expertise and oversight responsibilities - The Board of Directors has an Audit Committee, a Compensation Committee, and a Nominating Committee to ensure independent and effective corporate governance[351](index=351&type=chunk) - The Audit Committee consists of Ms. Wielenga (Chair) and Mr. Nagelson, with Ms. Wielenga possessing financial literacy and Mr. Nagelson designated as an 'audit committee financial expert'[352](index=352&type=chunk)[353](index=353&type=chunk) - The Compensation Committee comprises Messrs. Donaldson (Chair), Nagelson, and Ms. Wielenga, responsible for reviewing and approving compensation for the CEO and other executive officers, and administering equity incentive plans[354](index=354&type=chunk)[355](index=355&type=chunk)[358](index=358&type=chunk) - The Nominating Committee consists of Mr. Donaldson and Ms. Wielenga, with Mr. Nagelson serving as Chair, responsible for identifying, screening, and recommending director candidates, and overseeing the implementation of corporate governance guidelines[357](index=357&type=chunk)[359](index=359&type=chunk) [Section 16(a) Beneficial Ownership Reporting Compliance](index=67&type=section&id=Section%2016(a)%20Beneficial%20Ownership%20Reporting%20Compliance) Based on a review of forms, the company believes there were no late filers for the fiscal year ended June 30, 2025, regarding Section 16(a) beneficial ownership reporting compliance - Based on a review of the forms, the company believes there were no late filers for the fiscal year ended June 30, 2025[362](index=362&type=chunk) [Code of Ethics](index=67&type=section&id=Code%20of%20Ethics) The company adopted a Code of Ethics, effective March 15, 2023, applicable to directors, officers, and employees, promoting integrity, full disclosure, and compliance with laws, with no waivers granted in FY2025 - The company adopted a Code of Ethics, applicable to directors, officers, and employees, designed to promote honest and ethical conduct, full disclosure, and compliance with laws and regulations, effective March 15, 2023[363](index=363&type=chunk) - No waivers were granted in fiscal year 2025[365](index=365&type=chunk) [Insider Trading Policy](index=67&type=section&id=Insider%20Trading%20Policy) The company adopted an Insider Trading Policy to ensure compliance with federal securities laws and Nasdaq rules, prohibiting trading in company securities while in possession of material non-public information - The company adopted an Insider Trading Policy designed to promote compliance with federal securities laws and Nasdaq Stock Market rules, prohibiting trading in company securities while in possession of material non-public information[366](index=366&type=chunk) [Executive Compensation](index=67&type=section&id=Item%2011%20Executive%20Compensation.) This section outlines Alliance Entertainment's executive compensation program, detailing compensation for Executive Chairman Bruce Ogilvie and CEO Jeffrey Walker, which includes base salaries, bonuses, and equity incentives, alongside termination and severance benefits, the 2023 Omnibus Equity Incentive Plan, a cash bonus incentive plan, and a clawback policy for accounting restatements [Overview](index=67&type=section&id=Overview) This section provides an overview of Alliance's executive compensation program, including a description of compensation information for named executive officers - This section provides an overview of Alliance's executive compensation program, including a description of compensation information for named executive officers[367](index=367&type=chunk) [2025 and 2024 Summary Compensation Table](index=68&type=section&id=2025%20and%202024%20Summary%20Compensation%20Table) The summary compensation table details the salaries, bonuses, and other compensation for named executive officers, including Bruce Ogilvie and Jeffrey Walker, for fiscal years 2025 and 2024, with other compensation covering allowances and benefits 2025财年和2024财年高管薪酬摘要（美元） | Name and Position | Fiscal Year | Salary | Bonus | Stock Awards | All Other Co

ATLANTA, September 10, 2025 (GLOBE NEWSWIRE) -- Oxford Industries, Inc. (NYSE:OXM) today announced financial results for its second quarter of fiscal 2025 ended August 2, 2025. Consolidated net sales in the second quarter of fiscal 2025 were $403 million compared to $420 million in the second quarter of fiscal 2024. EPS on a GAAP basis was $1.12 compared to $2.57 in the second quarter of fiscal 2024. On an adjusted basis, EPS was $1.26 compared to $2.77 in the second quarter of fiscal 2024. Tom Chubb, Chair ...

Exhibit 99.1 Lesaka Announces Preliminary FY2025 Results, Delivers on FY2025 Profitability Guidance, Reaffirms FY2026 Profitability Outlook, and Sets FY2026 Profitability per Share Guidance, reflecting more than 100% Year-on-Year Growth JOHANNESBURG, September 10, 2025 - Lesaka Technologies, Inc. (Nasdaq: LSAK; JSE: LSK) today released preliminary unaudited results for the fourth quarter ("Q4 2025") and full year of fiscal 2025 ("FY2025"). FY2025 performance: All growth rates are year-on-year between FY2025 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 2, 2025 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___ to ___. Commission File Number: 001-38747 Daktronics, Inc. (Exact Name of Registrant as Specified in its Charter) Delaware 46-0306862 (State or Other Juri ...

Exhibit 99.1 VINCE HOLDING CORP. REPORTS SECOND QUARTER 2025 RESULTS Net Sales of $73.2 Million Net Income of $12.1 Million; Adjusted Net Income of $4.9 Million Adjusted EBITDA of $6.7 Million, an increase of $4.0 Million vs. Q2 FY2024 NEW YORK, New York – September 10, 2025 – Vince Holding Corp. (NYSE: VNCE) ("VNCE" or the "Company"), a global contemporary retailer, today reported its financial results for the second quarter ended August 2, 2025. Brendan Hoffman, Chief Executive Officer of VNCE said, "We a ...

[Fiscal 2025 Fourth Quarter and Twelve Months Financial Results Overview](index=1&type=section&id=Fiscal%202025%20Fourth%20Quarter%20and%20Twelve%20Months%20Financial%20Results%20Overview) This section provides an overview of Aviat Networks' financial performance for the fourth quarter and full fiscal year 2025, highlighting key revenue, income, and EBITDA figures [Fourth Quarter Highlights](index=1&type=section&id=Fourth%20Quarter%20Highlights) Aviat Networks reported a strong fiscal 2025 fourth quarter, achieving significant GAAP net income growth and a third consecutive record for quarterly Adjusted EBITDA, despite a slight decrease in total revenue - Grew quarterly GAAP Net Income to **$5.2 million**, an increase of **$3.6 million** or **236%** versus the same period a year ago[9](index=9&type=chunk) - Achieved the third consecutive record for quarterly Adjusted EBITDA with **$15.1 million** at **13.0%** margin[9](index=9&type=chunk) Fiscal 2025 Fourth Quarter Key Financials (in millions) | Metric | GAAP Result | Non-GAAP Result | | :-------------------------- | :---------- | :-------------- | | Total Revenues | $115.3 million | N/A | | Gross Margin | 34.2% | 34.7% | | Operating Expenses | $30.6 million | $27.1 million | | Operating Income | $8.9 million | $12.9 million | | Net Income | $5.2 million | $10.7 million | | Net Income per diluted share | $0.40 | $0.83 | | Adjusted EBITDA | N/A | $15.1 million | | Cash and Cash Equivalents | $59.7 million | N/A | | Net Debt | $27.9 million | N/A | [Full Year Financial Highlights](index=1&type=section&id=Full%20Year%20Financial%20Highlights) For the full fiscal year 2025, Aviat Networks completed its fifth consecutive year of revenue growth, reaching $434.6 million, although GAAP net income and Adjusted EBITDA saw declines compared to the prior year - Completed fifth consecutive fiscal year of revenue growth[9](index=9&type=chunk) Fiscal 2025 Full Year Key Financials (in millions) | Metric | GAAP Result | Non-GAAP Result | | :-------------------------- | :---------- | :-------------- | | Total Revenues | $434.6 million | N/A | | Gross Margin | 32.1% | 32.8% | | Operating Expenses | $128.9 million | $113.5 million | | Operating Income | $10.6 million | $29.0 million | | Net Income | $1.3 million | $21.4 million | | Net Income per diluted share | $0.10 | $1.67 | | Adjusted EBITDA | N/A | $37.1 million | [Detailed Financial Performance](index=1&type=section&id=Detailed%20Financial%20Performance) This section provides an in-depth analysis of Aviat Networks' revenues, gross margins, operating expenses, operating income, income taxes, net income, and Adjusted EBITDA for both the fourth quarter and full fiscal year 2025 [Revenues](index=1&type=section&id=Revenues) Total revenues for Q4 FY25 slightly decreased by 1.1% year-over-year, primarily due to a decline in international revenue, offset by growth in North America's private network business. For the full fiscal year 2025, total revenue increased by 6.5%, driven by strong international growth [Fourth Quarter Revenues](index=1&type=section&id=Fourth%20Quarter%20Revenues) Fourth quarter revenues saw a slight overall decrease, with North America showing growth in private networks while international revenues declined due to project timing Fourth Quarter Revenues (in millions) | Metric | FY25 Q4 | FY24 Q4 | Change (Millions) | Change (%) | | :---------------- | :------ | :------ | :---------------- | :--------- | | Total Revenues | $115.3 | $116.7 | $(1.3) | (1.1)% | | North America | $58.0 | $56.2 | $1.8 | 3.2% | | International | $57.3 | $60.5 | $(3.1) | (5.2)% | - North America revenue growth was due to growth in private network business[4](index=4&type=chunk) - International revenue decrease was due to timing of certain mobile network projects[4](index=4&type=chunk) [Twelve Months Revenues](index=1&type=section&id=Twelve%20Months%20Revenues) Full year revenues increased by 6.5%, primarily driven by strong international growth, with North America also contributing to the overall increase Twelve Months Revenues (in millions) | Metric | FY25 | FY24 | Change (Millions) | Change (%) | | :---------------- | :----- | :----- | :---------------- | :--------- | | Total Revenues | $434.6 | $408.1 | $26.5 | 6.5% | | North America | $207.6 | $206.1 | $1.5 | 0.7% | | International | $227.0 | $202.0 | $25.0 | 12.4% | [Gross Margins](index=1&type=section&id=Gross%20Margins) Both GAAP and non-GAAP gross margins decreased in Q4 FY25 and for the full fiscal year 2025 compared to the prior year, primarily due to fluctuations in project and regional customer mix [Fourth Quarter Gross Margins](index=1&type=section&id=Fourth%20Quarter%20Gross%20Margins) Fourth quarter GAAP and non-GAAP gross margins both declined, influenced by changes in project and regional customer mix Fourth Quarter Gross Margins | Metric | FY25 Q4 | FY24 Q4 | Change (bps) | | :---------------- | :------ | :------ | :----------- | | GAAP Gross Margin | 34.2% | 35.3% | (110) | | Non-GAAP Gross Margin | 34.7% | 35.9% | (120) | - Gross margin fluctuations were driven by project and regional customer mix[6](index=6&type=chunk) [Twelve Months Gross Margins](index=1&type=section&id=Twelve%20Months%20Gross%20Margins) Full year GAAP and non-GAAP gross margins both decreased compared to the prior fiscal year Twelve Months Gross Margins | Metric | FY25 | FY24 | | :---------------- | :----- | :----- | | GAAP Gross Margin | 32.1% | 35.5% | | Non-GAAP Gross Margin | 32.8% | 36.4% | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total GAAP and non-GAAP operating expenses decreased significantly in Q4 FY25, reflecting a 14.3% and 13.2% reduction respectively. However, for the full fiscal year 2025, both GAAP and non-GAAP operating expenses increased by 2.8% and 7.7% respectively [Fourth Quarter Operating Expenses](index=2&type=section&id=Fourth%20Quarter%20Operating%20Expenses) Fourth quarter GAAP and non-GAAP operating expenses both saw significant year-over-year decreases Fourth Quarter Operating Expenses (in millions) | Metric | FY25 Q4 | FY24 Q4 | Change (Millions) | Change (%) | | :----------------------- | :------ | :------ | :---------------- | :--------- | | GAAP Operating Expenses | $30.6 | $35.7 | $(5.1) | (14.3)% | | Non-GAAP Operating Expenses | $27.1 | $31.3 | $(4.1) | (13.2)% | [Twelve Months Operating Expenses](index=2&type=section&id=Twelve%20Months%20Operating%20Expenses) Full year GAAP and non-GAAP operating expenses increased compared to the prior fiscal year Twelve Months Operating Expenses (in millions) | Metric | FY25 | FY24 | Change (Millions) | Change (%) | | :----------------------- | :----- | :----- | :---------------- | :--------- | | GAAP Operating Expenses | $128.9 | $125.3 | $3.5 | 2.8% | | Non-GAAP Operating Expenses | $113.5 | $105.4 | $8.1 | 7.7% | [Operating Income](index=2&type=section&id=Operating%20Income) Aviat Networks saw a substantial increase in operating income for Q4 FY25, with GAAP operating income up 62.8% and non-GAAP up 21.9%. Conversely, for the full fiscal year 2025, operating income decreased significantly, primarily due to merger and acquisition related expenses [Fourth Quarter Operating Income](index=2&type=section&id=Fourth%20Quarter%20Operating%20Income) Fourth quarter GAAP and non-GAAP operating income both increased significantly year-over-year Fourth Quarter Operating Income (in millions) | Metric | FY25 Q4 | FY24 Q4 | Change (Millions) | Change (%) | | :------------------- | :------ | :------ | :---------------- | :--------- | | GAAP Operating Income | $8.9 | $5.5 | $3.4 | 62.8% | | Non-GAAP Operating Income | $12.9 | $10.6 | $2.3 | 21.9% | [Twelve Months Operating Income](index=2&type=section&id=Twelve%20Months%20Operating%20Income) Full year GAAP and non-GAAP operating income decreased substantially, primarily due to merger and acquisition related expenses Twelve Months Operating Income (in millions) | Metric | FY25 | FY24 | Change (Millions) | Change (%) | | :------------------- | :----- | :----- | :---------------- | :--------- | | GAAP Operating Income | $10.6 | $19.4 | $(8.8) | (45.5)% | | Non-GAAP Operating Income | $29.0 | $43.1 | $(14.1) | (32.7)% | - Operating income decreased primarily due to merger and acquisition related expenses[13](index=13&type=chunk) [Income Taxes](index=2&type=section&id=Income%20Taxes) GAAP income tax expense increased in Q4 FY25 compared to the prior year, while for the full fiscal year 2025, it decreased significantly [Fourth Quarter Income Taxes](index=2&type=section&id=Fourth%20Quarter%20Income%20Taxes) Fourth quarter GAAP income tax expense increased year-over-year Fourth Quarter Income Tax Expense (in millions) | Metric | FY25 Q4 | FY24 Q4 | | :------------------- | :------ | :------ | | GAAP Income Tax Expense | $5.0 | $3.1 | [Twelve Months Income Taxes](index=2&type=section&id=Twelve%20Months%20Income%20Taxes) Full year GAAP income tax expense decreased significantly compared to the prior fiscal year Twelve Months Income Tax Expense (in millions) | Metric | FY25 | FY24 | | :------------------- | :----- | :----- | | GAAP Income Tax Expense | $2.2 | $6.1 | [Net Income / Net Income Per Share](index=2&type=section&id=Net%20Income%20%2F%20Net%20Income%20Per%20Share) Aviat Networks reported a substantial increase in GAAP net income and EPS for Q4 FY25, alongside growth in non-GAAP net income and EPS. However, for the full fiscal year 2025, both GAAP and non-GAAP net income and EPS saw significant declines compared to the prior year [Fourth Quarter Net Income / Net Income Per Share](index=2&type=section&id=Fourth%20Quarter%20Net%20Income%20%2F%20Net%20Income%20Per%20Share) Fourth quarter GAAP and non-GAAP net income and diluted EPS all increased significantly year-over-year Fourth Quarter Net Income / EPS | Metric | FY25 Q4 | FY24 Q4 | | :----------------------- | :------ | :------ | | GAAP Net Income (Millions) | $5.2 | $1.5 | | GAAP Diluted EPS | $0.40 | $0.12 | | Non-GAAP Net Income (Millions) | $10.7 | $9.2 | | Non-GAAP Diluted EPS | $0.83 | $0.72 | [Twelve Months Net Income / Net Income Per Share](index=2&type=section&id=Twelve%20Months%20Net%20Income%20%2F%20Net%20Income%20Per%20Share) Full year GAAP and non-GAAP net income and diluted EPS decreased substantially compared to the prior fiscal year Twelve Months Net Income / EPS | Metric | FY25 | FY24 | | :----------------------- | :----- | :----- | | GAAP Net Income (Millions) | $1.3 | $10.8 | | GAAP Diluted EPS | $0.10 | $0.86 | | Non-GAAP Net Income (Millions) | $21.4 | $39.2 | | Non-GAAP Diluted EPS | $1.67 | $3.15 | [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA increased significantly in Q4 FY25, reaching a record high, but decreased for the full fiscal year 2025 compared to the prior year [Fourth Quarter Adjusted EBITDA](index=2&type=section&id=Fourth%20Quarter%20Adjusted%20EBITDA) Fourth quarter Adjusted EBITDA increased significantly year-over-year, setting a new quarterly record Fourth Quarter Adjusted EBITDA (in millions) | Metric | FY25 Q4 | FY24 Q4 | | :-------------- | :------ | :------ | | Adjusted EBITDA | $15.1 | $11.9 | [Twelve Months Adjusted EBITDA](index=2&type=section&id=Twelve%20Months%20Adjusted%20EBITDA) Full year Adjusted EBITDA decreased compared to the prior fiscal year Twelve Months Adjusted EBITDA (in millions) | Metric | FY25 | FY24 | | :-------------- | :----- | :----- | | Adjusted EBITDA | $37.1 | $48.1 | [Balance Sheet Highlights](index=2&type=section&id=Balance%20Sheet%20Highlights) This section summarizes key balance sheet figures, including cash and cash equivalents and total debt, as of the end of fiscal year 2025 [Balance Sheet Summary](index=2&type=section&id=Balance%20Sheet%20Summary) As of June 27, 2025, Aviat Networks reported an increase in cash and cash equivalents compared to the previous quarter, with total debt standing at $87.6 million Balance Sheet Highlights (in millions) | Metric | As of June 27, 2025 | As of March 28, 2025 | | :---------------------- | :------------------ | :------------------- | | Cash and Cash Equivalents | $59.7 | $49.4 | | Total Debt | $87.6 | N/A | [Fiscal 2026 Full Year Guidance](index=2&type=section&id=Fiscal%202026%20Full%20Year%20Guidance) This section provides Aviat Networks' financial outlook and projections for the full fiscal year 2026 [FY26 Guidance Overview](index=2&type=section&id=FY26%20Guidance%20Overview) Aviat Networks provided its full-year guidance for fiscal 2026, projecting revenue between $440 million and $460 million, and Adjusted EBITDA between $45.0 million and $55.0 million Fiscal 2026 Full Year Guidance (in millions) | Metric | Guidance Range | | :---------------- | :------------- | | Full year Revenue | $440 - $460 | | Full year Adjusted EBITDA | $45.0 - $55.0 | [Corporate Information & Events](index=2&type=section&id=Corporate%20Information%20%26%20Events) This section details corporate communications, upcoming investor engagements, company background, and investor relations contact information [Conference Call Details](index=2&type=section&id=Conference%20Call%20Details) Aviat Networks hosted a conference call to discuss its financial results, with key executives participating and providing access details for investors - Aviat Networks hosted a conference call on September 10, 2025, at 4:15 p.m. ET to discuss its fiscal 2025 fourth quarter financial results[19](index=19&type=chunk) - Participating on the call were Peter Smith (President and CEO), Michael Connaway (Sr. Vice President and CFO), and Andrew Fredrickson (Vice President, Corporate Finance and Interim CFO)[19](index=19&type=chunk) - Interested parties could access the call live via webcast through Aviat Network's Investor Relations website or participate via telephone by registering online[20](index=20&type=chunk) [Upcoming Events](index=2&type=section&id=Upcoming%20Events) Aviat Networks announced its participation in an upcoming investor conference - Aviat will participate in the 9th Annual Lake Street Capital Markets Best Ideas Growth Conference on September 11, 2025, in New York, NY[21](index=21&type=chunk) [About Aviat Networks](index=3&type=section&id=About%20Aviat%20Networks) Aviat Networks is a leading global provider of wireless transport and access solutions, serving a diverse customer base with over 70 years of innovation and comprehensive support services - Aviat Networks, Inc. is the leading expert in wireless transport and access solutions[23](index=23&type=chunk) - The company has sold over **one million** systems into **170 countries** worldwide, serving communications service providers and private network operators (state/local government, utility, federal government, and defense organizations)[23](index=23&type=chunk) - Aviat provides a comprehensive suite of localized professional and support services and is headquartered in Austin, Texas[23](index=23&type=chunk) [Investor Relations Contact](index=3&type=section&id=Investor%20Relations%20Contact) Contact information for investor relations inquiries is provided - Investor Relations contact: Andrew Fredrickson, Email: investorinfo@aviatnet.com[27](index=27&type=chunk) [Forward-Looking Statements and Risk Factors](index=3&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section provides a disclaimer regarding forward-looking statements and outlines key risk factors that could materially impact future financial results [Forward-Looking Statements Disclaimer](index=3&type=section&id=Forward-Looking%20Statements%20Disclaimer) This section outlines the nature of forward-looking statements within the report, emphasizing that actual results may differ materially due to various important factors and risks, including those detailed in the company's Form 10-K - The report includes forward-looking statements regarding Aviat's outlook, business conditions, new product solutions, future orders, profitability, acquisitions, and financial projections[24](index=24&type=chunk) - Forward-looking statements are based on current beliefs, expectations, and assumptions of senior management, but involve risks and uncertainties that could cause actual results to differ materially[24](index=24&type=chunk) - Important factors include disruptions from acquisitions (4RF and NEC), integration challenges, geopolitical conflicts, price and margin erosion, supply chain constraints, inflation, and global economic weakness. Investors should refer to the 'Risk Factors' section in Aviat's Form 10-K for more information[25](index=25&type=chunk)[26](index=26&type=chunk) [Condensed Consolidated Financial Statements (GAAP)](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements%20(GAAP)) This section presents the unaudited GAAP condensed consolidated statements of operations and balance sheets for the specified periods [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited GAAP condensed consolidated statements of operations for the three and twelve months ended June 27, 2025, and June 28, 2024 Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | Product sales | $67,405 | $78,795 | $287,657 | $274,205 | | Services | $47,935 | $37,865 | $146,949 | $133,878 | | **Total revenues** | **$115,340** | **$116,660** | **$434,606** | **$408,083** | | Total cost of revenues | $75,874 | $75,521 | $295,170 | $263,351 | | **Gross margin** | **$39,466** | **$41,139** | **$139,436** | **$144,732** | | Total operating expenses | $30,587 | $35,684 | $128,861 | $125,331 | | **Operating income** | **$8,879** | **$5,455** | **$10,575** | **$19,401** | | Income before income taxes | $10,179 | $4,609 | $3,576 | $16,906 | | Provision for income taxes | $4,982 | $3,060 | $2,235 | $6,146 | | **Net income** | **$5,197** | **$1,549** | **$1,341** | **$10,760** | | Diluted Net income per share | $0.40 | $0.12 | $0.10 | $0.86 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the unaudited GAAP condensed consolidated balance sheets as of June 27, 2025, and June 28, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | As of June 27, 2025 | As of June 28, 2024 | | :-------------------------- | :------------------ | :------------------ | | Cash and cash equivalents | $59,690 | $64,622 | | Accounts receivable, net | $180,321 | $158,013 | | Inventories | $83,979 | $62,267 | | **Total current assets** | **$463,575** | **$405,223** | | Goodwill | $19,655 | $8,217 | | **Total assets** | **$633,296** | **$535,223** | | Accounts payable | $148,093 | $92,854 | | Current portion of long-term debt | $18,624 | $2,396 | | **Total current liabilities** | **$282,196** | **$218,857** | | Long-term debt | $68,966 | $45,954 | | **Total liabilities** | **$370,113** | **$279,338** | | **Total stockholders' equity** | **$263,183** | **$255,885** | | **Total liabilities and stockholders' equity** | **$633,296** | **$535,223** | [Reconciliation of Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of non-GAAP financial measures to their most comparable GAAP equivalents, offering additional insights into operational performance [Non-GAAP Measures Overview](index=6&type=section&id=Non-GAAP%20Measures%20Overview) This section provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures, including gross margin, operating expenses, operating income, net income, and Adjusted EBITDA. These non-GAAP measures are presented to offer investors additional insights into period-over-period operating results, excluding certain non-recurring or non-cash items - Non-GAAP financial measures are provided to supplement GAAP consolidated financial statements, offering information useful to investors in understanding period-over-period operating results separate from items with disproportionate impacts[33](index=33&type=chunk) - Adjustments typically exclude share-based compensation, merger and acquisition related expenses, and restructuring charges[33](index=33&type=chunk)[37](index=37&type=chunk) - Reconciliations of forward-looking Adjusted EBITDA guidance are not provided due to the high variability and difficulty in making accurate forecasts for items like merger and acquisition costs and share-based compensation[34](index=34&type=chunk) [Non-GAAP Gross Margin Reconciliation](index=6&type=section&id=Non-GAAP%20Gross%20Margin%20Reconciliation) Reconciliation of GAAP gross margin to non-GAAP gross margin, adjusting for share-based compensation and merger and acquisition related expenses Non-GAAP Gross Margin Reconciliation (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP gross margin | $39,466 (34.2%) | $41,139 (35.3%) | $139,436 (32.1%) | $144,732 (35.5%) | | Share-based compensation | $19 | $96 | $233 | $406 | | Merger and acquisition related expense | $595 | $650 | $2,890 | $3,409 | | **Non-GAAP gross margin** | **$40,080 (34.7%)** | **$41,885 (35.9%)** | **$142,559 (32.8%)** | **$148,547 (36.4%)** | [Non-GAAP Operating Expenses Reconciliation](index=6&type=section&id=Non-GAAP%20Operating%20Expenses%20Reconciliation) Reconciliation of GAAP operating expenses to non-GAAP operating expenses, adjusting for share-based compensation, merger and acquisition related expenses, and restructuring charges Non-GAAP Operating Expenses Reconciliation (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP operating expense | $30,587 (26.5%) | $35,684 (30.6%) | $128,861 (29.7%) | $125,331 (30.7%) | | Share-based compensation | $(1,422) | $(1,700) | $(6,834) | $(6,935) | | Merger and acquisition and other expenses | $(6) | $(1,070) | $(4,896) | $(9,121) | | Restructuring (charges) recovery | $(2,019) | $(1,640) | $(3,611) | $(3,867) | | **Non-GAAP operating expense** | **$27,140 (23.5%)** | **$31,274 (26.8%)** | **$113,520 (26.1%)** | **$105,408 (25.8%)** | [Non-GAAP Operating Income Reconciliation](index=7&type=section&id=Non-GAAP%20Operating%20Income%20Reconciliation) Reconciliation of GAAP operating income to non-GAAP operating income, adjusting for share-based compensation, merger and acquisition related expenses, and restructuring charges Non-GAAP Operating Income Reconciliation (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP operating income | $8,879 (7.7%) | $5,455 (4.7%) | $10,575 (2.4%) | $19,401 (4.8%) | | Share-based compensation | $1,441 | $1,796 | $7,067 | $7,341 | | Merger and acquisition related expense | $601 | $1,720 | $7,786 | $12,530 | | Restructuring charges | $2,019 | $1,640 | $3,611 | $3,867 | | **Non-GAAP operating income** | **$12,940 (11.2%)** | **$10,611 (9.1%)** | **$29,039 (6.7%)** | **$43,139 (10.6%)** | [Non-GAAP Net Income Reconciliation](index=7&type=section&id=Non-GAAP%20Net%20Income%20Reconciliation) Reconciliation of GAAP net income and diluted EPS to non-GAAP net income and diluted EPS, adjusting for various non-recurring items and pro forma tax rates Non-GAAP Net Income Reconciliation (in thousands, except per share amounts) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP net income | $5,197 (4.5%) | $1,549 (1.3%) | $1,341 (0.3%) | $10,760 (2.6%) | | Share-based compensation | $1,441 | $1,796 | $7,067 | $7,341 | | Merger and acquisition related expense | $601 | $1,720 | $7,786 | $12,530 | | Restructuring charges | $2,019 | $1,640 | $3,611 | $3,867 | | Other (income) expense, net | $(3,106) | $(70) | $941 | $158 | | Adjustment to reflect pro forma tax rate | $4,582 | $2,560 | $635 | $4,546 | | **Non-GAAP net income** | **$10,734 (9.3%)** | **$9,195 (7.9%)** | **$21,381 (4.9%)** | **$39,202 (9.6%)** | | GAAP Diluted EPS | $0.40 | $0.12 | $0.10 | $0.86 | | **Non-GAAP Diluted EPS** | **$0.83** | **$0.72** | **$1.67** | **$3.15** | [Adjusted EBITDA Reconciliation](index=7&type=section&id=Adjusted%20EBITDA%20Reconciliation) Reconciliation of GAAP net income to Adjusted EBITDA, by adding back depreciation, amortization, interest, taxes, and non-GAAP pre-tax adjustments Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | GAAP net income | $5,197 (4.5%) | $1,549 (1.3%) | $1,341 (0.3%) | $10,760 (2.6%) | | Depreciation and amortization | $2,110 | $1,265 | $8,045 | $4,993 | | Interest expense, net | $1,806 | $916 | $6,058 | $2,337 | | Other (income) expense, net | $(3,106) | $(70) | $941 | $158 | | Share-based compensation | $1,441 | $1,796 | $7,067 | $7,341 | | Merger and acquisition related expense | $601 | $1,720 | $7,786 | $12,530 | | Restructuring charges | $2,019 | $1,640 | $3,611 | $3,867 | | Provision for income taxes | $4,982 | $3,060 | $2,235 | $6,146 | | **Adjusted EBITDA** | **$15,050 (13.0%)** | **$11,876 (10.2%)** | **$37,084 (8.5%)** | **$48,132 (11.8%)** | [Supplemental Schedule of Revenue by Geographical Area](index=8&type=section&id=Supplemental%20Schedule%20of%20Revenue%20by%20Geographical%20Area) This section provides a detailed breakdown of Aviat Networks' revenues segmented by geographical region for both quarterly and annual periods [Revenue by Geographical Area](index=8&type=section&id=Revenue%20by%20Geographical%20Area) This chapter provides a breakdown of Aviat Networks' revenues by geographical area for both the three and twelve months ended June 27, 2025, and June 28, 2024, showing contributions from North America and various international regions Supplemental Schedule of Revenue by Geographical Area (in thousands) | Region | Three Months Ended June 27, 2025 | Three Months Ended June 28, 2024 | Twelve Months Ended June 27, 2025 | Twelve Months Ended June 28, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :-------------------------------- | :-------------------------------- | | North America | $58,017 | $56,194 | $207,606 | $206,073 | | Africa and the Middle East | $11,218 | $13,063 | $49,428 | $48,884 | | Europe | $8,337 | $7,231 | $31,713 | $24,608 | | Latin America and Asia Pacific | $37,768 | $40,172 | $145,859 | $128,518 | | **Total international** | **$57,323** | **$60,466** | **$227,000** | **$202,010** | | **Total revenue** | **$115,340** | **$116,660** | **$434,606** | **$408,083** |

PART I — FINANCIAL INFORMATION This section presents Broadcom's unaudited condensed consolidated financial statements and management's discussion and analysis for the reported periods [Item 1. Condensed Consolidated Financial Statements — Unaudited](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%E2%80%94%20Unaudited) This section presents Broadcom Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), cash flows, and stockholders' equity, along with detailed notes explaining accounting policies, revenue recognition, acquisitions, debt, equity, income taxes, segment information, commitments, and restructuring charges for the periods ended August 3, 2025, and August 4, 2024 [Condensed Consolidated Balance Sheets — Unaudited](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%E2%80%94%20Unaudited) Provides a snapshot of Broadcom's financial position, detailing assets, liabilities, and equity at specific fiscal year-end dates | Metric | August 3, 2025 (In millions) | November 3, 2024 (In millions) | | :----------------------------- | :----------------------------- | :----------------------------- | | Cash and cash equivalents | $10,718 | $9,348 | | Total current assets | $24,998 | $19,595 | | Total assets | $165,621 | $165,645 | | Total current liabilities | $16,704 | $16,697 | | Total liabilities | $92,344 | $97,967 | | Total stockholders' equity | $73,277 | $67,678 | [Condensed Consolidated Statements of Operations — Unaudited](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%E2%80%94%20Unaudited) Presents Broadcom's financial performance over specific fiscal periods, including net revenue, gross margin, operating income, and net income | Metric (In millions, except per share data) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net revenue | $15,952 | $13,072 | $45,872 | $37,520 | | Gross margin | $10,703 | $8,356 | $31,045 | $23,507 | | Operating income | $5,887 | $3,788 | $17,976 | $8,836 | | Net income (loss) | $4,140 | $(1,875) | $14,608 | $1,571 | | Diluted net income (loss) per share | $0.85 | $(0.40) | $3.02 | $0.33 | [Condensed Consolidated Statements of Comprehensive Income (Loss) — Unaudited](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20%E2%80%94%20Unaudited) Details Broadcom's net income or loss and other comprehensive income components for the reported fiscal periods | Metric (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net income (loss) | $4,140 | $(1,875) | $14,608 | $1,571 | | Other comprehensive income, net of tax | $15 | $1 | $14 | $1 | | Comprehensive income (loss) | $4,155 | $(1,874) | $14,622 | $1,572 | [Condensed Consolidated Statements of Cash Flows — Unaudited](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%94%20Unaudited) Summarizes Broadcom's cash inflows and outflows from operating, investing, and financing activities for the reported fiscal periods | Metric (In millions) | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------------------------ | :-------------------------------------- | :-------------------------------------- | | Net cash provided by operating activities | $19,834 | $14,358 | | Net cash used in investing activities | $(213) | $(22,938) |\ | Net cash provided by (used in) financing activities | $(18,251) | $4,343 | | Net change in cash and cash equivalents | $1,370 | $(4,237) | [Condensed Consolidated Statements of Stockholders' Equity — Unaudited](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20%E2%80%94%20Unaudited) Outlines changes in Broadcom's stockholders' equity, including net income, dividends, and stock-based compensation, over specific fiscal periods | Metric (In millions) | Balance as of Nov 3, 2024 | Balance as of Aug 3, 2025 | | :------------------- | :------------------------ | :------------------------ | | Total Stockholders' Equity | $67,678 | $73,277 | | Net income | $14,608 | - | | Dividends to common stockholders | $(8,345) | - | | Stock-based compensation | $5,375 | - | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, revenue, acquisitions, and other financial items [1. Overview, Basis of Presentation and Significant Accounting Policies](index=10&type=section&id=1.%20Overview,%20Basis%20of%20Presentation%20and%20Significant%20Accounting%20Policies) Describes Broadcom's business, its operational segments, and the foundational accounting principles applied in the financial statements - Broadcom Inc. is a global technology leader in semiconductor and infrastructure software solutions, operating with two reportable segments: semiconductor solutions and infrastructure software[22](index=22&type=chunk) [2. Revenue from Contracts with Customers](index=10&type=section&id=2.%20Revenue%20from%20Contracts%20with%20Customers) Details Broadcom's revenue recognition policies, disaggregating revenue by type and presenting contract balances | Revenue Type (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Products | $9,257 | $7,439 | $25,934 | $22,043 | | Subscriptions and services | $6,695 | $5,633 | $19,938 | $15,477 | | Total | $15,952 | $13,072 | $45,872 | $37,520 | | Contract Balances (In millions) | August 3, 2025 | November 3, 2024 | | :------------------------------ | :------------- | :--------------- | | Contract Assets | $7,575 | $4,402 | | Contract Liabilities | $14,336 | $14,495 | - Remaining performance obligations under firmly committed multi-year contracts were approximately **$27.5 billion** as of August 3, 2025, with about **34%** expected to be recognized as revenue over the next 12 months[33](index=33&type=chunk) [3. Acquisitions](index=12&type=section&id=3.%20Acquisitions) Provides information on Broadcom's recent acquisition activities, including the financial impact and pro forma data - Broadcom completed the acquisition of VMware, Inc. on November 22, 2023, for approximately **$30,788 million** in cash and **544 million** shares of common stock (fair value **$53,398 million**) to enhance infrastructure software capabilities[34](index=34&type=chunk) | Pro Forma Information (In millions) | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 4, 2024 | | :---------------------------------- | :------------------------------- | :-------------------------------------- | | Pro forma net revenue | $13,088 | $38,118 | | Pro forma net income (loss) | $(1,819) | $2,057 | [4. Supplemental Financial Information](index=13&type=section&id=4.%20Supplemental%20Financial%20Information) Presents additional financial details, including inventory, other current assets and liabilities, and discontinued operations - Trade accounts receivable sold under factoring arrangements totaled **$1,700 million** for the fiscal quarter and **$5,651 million** for the three fiscal quarters ended August 3, 2025[38](index=38&type=chunk) | Inventory (In millions) | August 3, 2025 | November 3, 2024 | | :---------------------- | :------------- | :--------------- | | Finished goods | $477 | $504 | | Work-in-process | $1,349 | $970 | | Raw materials | $354 | $286 | | Total inventory | $2,180 | $1,760 | | Other Current Assets (In millions) | August 3, 2025 | November 3, 2024 | | :--------------------------------- | :------------- | :--------------- | | Current portion of contract assets | $4,157 | $1,916 | | Prepaid expenses | $793 | $1,391 | | Other | $656 | $764 | | Total other current assets | $5,606 | $4,071 | | Other Current Liabilities (In millions) | August 3, 2025 | November 3, 2024 | | :------------------------------------ | :------------- | :--------------- | | Contract liabilities | $10,305 | $9,395 | | Interest payable | $644 | $535 | | Tax liabilities | $410 | $720 | | Other | $795 | $1,143 | | Total other current liabilities | $12,154 | $11,793 | | Other Long-Term Liabilities (In millions) | August 3, 2025 | November 3, 2024 | | :---------------------------------------- | :------------- | :--------------- | | Contract liabilities | $4,031 | $5,100 | | Unrecognized tax benefits | $3,817 | $3,669 | | Deferred tax liabilities | $3,552 | $4,703 | | Other | $1,410 | $1,503 | | Total other long-term liabilities | $12,810 | $14,975 | | Discontinued Operations (In millions) | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------------------------ | :------------------------------- | :-------------------------------------- | | Net revenue | $178 | $858 | | Loss from discontinued operations, net of income taxes | $(443) | $(392) | [5. Intangible Assets](index=14&type=section&id=5.%20Intangible%20Assets) Details Broadcom's intangible assets, their gross carrying amounts, accumulated amortization, and expected future amortization expenses | Intangible Assets (In millions) | Gross Carrying Amount (Aug 3, 2025) | Accumulated Amortization (Aug 3, 2025) | Net Book Value (Aug 3, 2025) | | :------------------------------ | :---------------------------------- | :------------------------------------- | :--------------------------- | | Purchased technology | $36,957 | $(17,034) | $19,923 | | Customer contracts and related relationships | $16,043 | $(3,757) | $12,286 | | Trade names | $1,685 | $(446) | $1,239 | | Other | $191 | $(115) | $76 | | Intangible assets subject to amortization | $54,876 | $(21,352) | $33,524 | | In-process research and development | $820 | — | $820 | | Total | $55,696 | $(21,352) | $34,344 | | Fiscal Year | Expected Amortization Expense (In millions) | | :---------- | :---------------------------------------- | | 2025 (remainder) | $2,072 | | 2026 | $7,880 | | 2027 | $6,805 | | 2028 | $5,673 | | 2029 | $4,547 | | Thereafter | $6,547 | | Total | $33,524 | [6. Net Income (Loss) Per Share](index=15&type=section&id=6.%20Net%20Income%20(Loss)%20Per%20Share) Presents the calculation of basic and diluted net income (loss) per share, including weighted-average shares outstanding | Metric (In millions, except per share data) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Net income (loss) | $4,140 | $(1,875) | $14,608 | $1,571 | | Weighted-average shares outstanding - basic | 4,714 | 4,663 | 4,705 | 4,606 | | Weighted-average shares outstanding - diluted | 4,860 | 4,663 | 4,841 | 4,762 | | Basic net income (loss) per share | $0.88 | $(0.40) | $3.10 | $0.34 | | Diluted net income (loss) per share | $0.85 | $(0.40) | $3.02 | $0.33 | [7. Borrowings](index=17&type=section&id=7.%20Borrowings) Details Broadcom's debt structure, including principal outstanding, short-term and long-term debt, and future scheduled principal payments | Debt Type (In millions) | August 3, 2025 | November 3, 2024 | | :---------------------- | :------------- | :--------------- | | Total debt principal outstanding | $66,257 | $69,847 | | Short-term debt | $1,399 | $1,271 | | Long-term debt | $62,830 | $66,295 | - In July 2025, Broadcom issued **$6,000 million** in senior unsecured notes and used the proceeds to repay the remaining **$6,000 million** of its unsecured term facility due November 2028[59](index=59&type=chunk)[60](index=60&type=chunk) - In January 2025, **$3,000 million** in senior unsecured notes were issued, contributing to the repayment of **$5,595 million** of the unsecured term facility due November 2026 and **$2,000 million** of the unsecured term facility due November 2028[59](index=59&type=chunk)[60](index=60&type=chunk) - Broadcom entered into a new **$7.5 billion** unsecured revolving credit facility in January 2025, replacing a previous facility, with no outstanding borrowings as of August 3, 2025[64](index=64&type=chunk) | Fiscal Year | Future Scheduled Principal Payments (In millions) | | :---------- | :---------------------------------------------- | | 2025 (remainder) | $— | | 2026 | $3,152 | | 2027 | $6,137 | | 2028 | $7,120 | | 2029 | $4,655 | | Thereafter | $44,693 | | Total | $65,757 | [8. Stockholders' Equity](index=21&type=section&id=8.%20Stockholders'%20Equity) Provides details on dividends, stock repurchase programs, and stock-based compensation expense and unrecognized costs | Metric (In millions, except per share data) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Dividends per share to common stockholders | $0.590 | $0.525 | $1.770 | $1.575 | | Dividends to common stockholders | $2,786 | $2,452 | $8,345 | $7,330 | - In April 2025, the Board authorized a new **$10 billion** stock repurchase program through December 31, 2025[69](index=69&type=chunk) - During the fiscal quarter ended May 4, 2025, **16 million** shares were repurchased for **$2,450 million**, leaving **$7,550 million** available[69](index=69&type=chunk) | Stock-Based Compensation Expense (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Total stock-based compensation expense | $2,322 | $1,381 | $5,373 | $4,356 | - As of August 3, 2025, total unrecognized compensation cost related to unvested stock-based awards was **$25,057 million**, expected to be recognized over a weighted-average service period of **3.6 years**[73](index=73&type=chunk) [9. Income Taxes](index=22&type=section&id=9.%20Income%20Taxes) Discusses Broadcom's income tax provision, the impact of new tax legislation, and unrecognized tax benefits - The 'One Big Beautiful Bill Act' enacted on July 4, 2025, led to a **$1,058 million** valuation allowance against CAMT credits due to immediate expensing of R&D and capital expenditures[76](index=76&type=chunk) | Provision for Income Taxes (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Provision for income taxes | $1,145 | $4,238 | $1,252 | $4,190 | - Unrecognized tax benefits and accrued interest/penalties totaled **$6,930 million** as of August 3, 2025, with an estimated reduction of **$3.1 billion** in Q4 2025 and up to **$3.5 billion** within 12 months due to lapsed statutes of limitations, potentially leading to a **$2.1 billion** discrete tax benefit in Q4 2025[79](index=79&type=chunk) [10. Segment Information](index=22&type=section&id=10.%20Segment%20Information) Presents financial data disaggregated by Broadcom's two reportable segments: semiconductor solutions and infrastructure software - Broadcom operates two reportable segments: semiconductor solutions (AI and enterprise data centers, networking, connectivity, storage, etc., including IP licensing) and infrastructure software (IT environment simplification, private/hybrid cloud, application management, security, FC SAN products)[81](index=81&type=chunk)[82](index=82&type=chunk) | Net Revenue by Segment (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Semiconductor solutions | $9,166 | $7,274 | $25,786 | $21,866 | | Infrastructure software | $6,786 | $5,798 | $20,086 | $15,654 | | Total net revenue | $15,952 | $13,072 | $45,872 | $37,520 | | Operating Income by Segment (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Semiconductor solutions | $5,217 | $4,042 | $14,729 | $12,136 | | Infrastructure software | $5,238 | $3,906 | $15,347 | $9,789 | | Unallocated expenses | $(4,568) | $(4,160) | $(12,100) | $(13,089) | | Total operating income | $5,887 | $3,788 | $17,976 | $8,836 | [11. Commitments and Contingencies](index=24&type=section&id=11.%20Commitments%20and%20Contingencies) Details Broadcom's contractual commitments, legal proceedings, and potential contingent liabilities | Fiscal Year | Purchase Commitments (In millions) | Other Contractual Commitments (In millions) | | :---------- | :------------------------------- | :------------------------------------------ | | 2025 (remainder) | $106 | $264 | | 2026 | $103 | $634 | | 2027 | $12 | $604 | | 2028 | $10 | $530 | | 2029 | $4 | $718 | | Thereafter | $— | $1,027 | | Total | $235 | $3,777 | - Broadcom does not believe any pending legal proceedings, regulatory investigations, or tax disputes will have a material adverse effect on its condensed consolidated financial statements, though outcomes are inherently uncertain[93](index=93&type=chunk) - A securities class action lawsuit against VMware and former officers regarding backlog statements was settled and approved by the California Court in March 2025[91](index=91&type=chunk) [12. Restructuring and Other Charges](index=25&type=section&id=12.%20Restructuring%20and%20Other%20Charges) Provides information on restructuring activities, including employee termination costs and lease impairments, primarily related to acquisitions | Restructuring Liabilities (In millions) | Balance as of Nov 3, 2024 | Restructuring Charges | Utilization | Balance as of Aug 3, 2025 | | :------------------------------------ | :------------------------ | :-------------------- | :---------- | :------------------------ | | Employee Termination Costs | $119 | $302 | $(389) | $32 | | Lease and Impairment Costs | $— | $141 | $(141) | $— | | Total | $119 | $443 | $(530) | $32 | - Restructuring activities, primarily related to the VMware acquisition, are expected to be substantially completed by the end of fiscal year 2025[97](index=97&type=chunk) [13. Subsequent Events](index=26&type=section&id=13.%20Subsequent%20Events) Discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On September 3, 2025, the Board of Directors declared a quarterly cash dividend of **$0.59 per share**, payable on September 30, 2025[99](index=99&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 management's perspective on Broadcom's financial condition and results of operations for the fiscal quarter and three fiscal quarters ended August 3, 2025, compared to the prior year. It covers an overview of the business, quarterly highlights, critical accounting estimates, macroeconomic factors, and a detailed analysis of net revenue, gross margin, operating expenses, segment performance, non-operating items, liquidity, capital resources, and capital returns [Overview](index=27&type=section&id=Overview) Describes Broadcom's core business as a global technology leader in semiconductor and infrastructure software solutions - Broadcom is a global technology leader designing, developing, and supplying semiconductor and infrastructure software solutions, with two reportable segments: semiconductor solutions and infrastructure software[102](index=102&type=chunk)[103](index=103&type=chunk) [Quarterly Highlights](index=27&type=section&id=Quarterly%20Highlights) Summarizes key financial achievements and corporate actions during the most recent fiscal quarter - Generated **$7,166 million** of cash from operations during the fiscal quarter ended August 3, 2025[104](index=104&type=chunk) - Paid **$2,786 million** in cash dividends during the fiscal quarter ended August 3, 2025[104](index=104&type=chunk) - Issued **$6,000 million** of senior unsecured notes and used proceeds to repay outstanding floating rate unsecured term loan[104](index=104&type=chunk) [Critical Accounting Estimates](index=28&type=section&id=Critical%20Accounting%20Estimates) Confirms the consistency of critical accounting estimates with prior disclosures, indicating no significant changes - No significant changes in critical accounting estimates during the three fiscal quarters ended August 3, 2025, compared to those previously disclosed in the 2024 Annual Report on Form 10-K[106](index=106&type=chunk) [Macroeconomic Factors](index=28&type=section&id=Macroeconomic%20Factors) Discusses the potential impact of global economic conditions, trade tensions, and market volatility on Broadcom's business - Broadcom is subject to risks from the evolving macroeconomic environment, including financial market uncertainty, trade tensions, and economic volatility, which can impact net revenue and supply chain operations[107](index=107&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Analyzes Broadcom's financial performance, covering net revenue, gross margin, operating expenses, and segment results [Net Revenue](index=30&type=section&id=Net%20Revenue) Details Broadcom's revenue breakdown by product and subscription/services, highlighting customer concentration | Metric (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Products | $9,257 | $7,439 | $25,934 | $22,043 | | Subscriptions and services | $6,695 | $5,633 | $19,938 | $15,477 | | Total net revenue | $15,952 | $13,072 | $45,872 | $37,520 | - Direct sales to one semiconductor solutions customer (a distributor) accounted for **32%** of net revenue for the fiscal quarter and **30%** for the three fiscal quarters ended August 3, 2025[111](index=111&type=chunk)[112](index=112&type=chunk) - Aggregate sales to the top five end customers accounted for approximately **40%** of net revenue for both periods[111](index=111&type=chunk)[112](index=112&type=chunk) [Net Revenue by Segment](index=31&type=section&id=Net%20Revenue%20by%20Segment) Analyzes revenue performance across Broadcom's semiconductor solutions and infrastructure software segments | Segment (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | $ Change | % Change | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | $ Change | % Change | | :-------------------- | :------------------------------- | :------------------------------- | :------- | :------- | :-------------------------------------- | :-------------------------------------- | :------- | :------- | | Semiconductor solutions | $9,166 | $7,274 | $1,892 | 26% | $25,786 | $21,866 | $3,920 | 18% | | Infrastructure software | $6,786 | $5,798 | $988 | 17% | $20,086 | $15,654 | $4,432 | 28% | | Total net revenue | $15,952 | $13,072 | $2,880 | 22% | $45,872 | $37,520 | $8,352 | 22% | - Semiconductor solutions revenue increased due to strong demand for networking products, primarily custom AI accelerators and AI networking solutions[115](index=115&type=chunk) - Infrastructure software revenue increased primarily due to strong demand for VMware Cloud Foundation (VCF) products and the transition to a subscription license model[116](index=116&type=chunk) [Gross Margin](index=31&type=section&id=Gross%20Margin) Explains the factors influencing Broadcom's gross margin, including revenue mix and amortization | Metric (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Gross margin | $10,703 | $8,356 | $31,045 | $23,507 | | Gross margin as % of net revenue | 67% | 64% | 68% | 63% | - Gross margin increases were primarily driven by higher software revenue and strong product demand for AI-related semiconductor solutions, along with a higher software revenue mix and lower amortization of acquisition-related intangible assets as a percentage of revenue[117](index=117&type=chunk)[118](index=118&type=chunk) [Research and Development Expense](index=31&type=section&id=Research%20and%20Development%20Expense) Discusses changes in research and development expenditures, primarily driven by compensation - Research and development expense increased by **$697 million (30%)** for the fiscal quarter and **$920 million (13%)** for the three fiscal quarters ended August 3, 2025, primarily due to higher stock-based compensation[119](index=119&type=chunk) [Selling, General and Administrative Expense](index=31&type=section&id=Selling,%20General%20and%20Administrative%20Expense) Analyzes fluctuations in selling, general, and administrative costs, including impacts from headcount and acquisition-related expenses - Selling, general and administrative expense decreased by **$28 million (3%)** for the fiscal quarter and **$845 million (21%)** for the three fiscal quarters ended August 3, 2025, primarily due to lower compensation from headcount reduction and reduced VMware acquisition-related costs, partially offset by higher stock-based compensation in the fiscal quarter[120](index=120&type=chunk) [Amortization of Acquisition-Related Intangible Assets](index=32&type=section&id=Amortization%20of%20Acquisition-Related%20Intangible%20Assets) Explains the decrease in amortization expense due to the full amortization of certain intangible assets - Amortization of acquisition-related intangible assets in operating expenses decreased by **$305 million (38%)** for the fiscal quarter and **$907 million (37%)** for the three fiscal quarters ended August 3, 2025, mainly due to the full amortization of customer-related intangible assets from prior software acquisitions (excluding VMware)[122](index=122&type=chunk) [Restructuring and Other Charges](index=32&type=section&id=Restructuring%20and%20Other%20Charges) Details the reduction in restructuring charges, mainly from lower employee termination costs related to integration - Restructuring and other charges in operating expenses decreased by **$116 million (38%)** for the fiscal quarter and **$770 million (63%)** for the three fiscal quarters ended August 3, 2025, primarily due to lower employee termination costs from VMware integration[123](index=123&type=chunk) [Stock-Based Compensation Expense](index=32&type=section&id=Stock-Based%20Compensation%20Expense) Discusses the drivers behind changes in stock-based compensation, including equity awards and vesting | Stock-Based Compensation Expense (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :--------------------------------------------- | :------------------------------- | :------------------------------- | :-------------------------------------- | :-------------------------------------- | | Total stock-based compensation expense | $2,322 | $1,381 | $5,373 | $4,356 | - The increase in stock-based compensation was due to Two-Year Equity Awards granted at higher grant-date fair values, partially offset by the full vesting and forfeitures of certain equity awards assumed in the VMware acquisition[125](index=125&type=chunk) | Fiscal Year | Unrecognized Compensation Cost, Net of Expected Forfeitures (In millions) | | :---------- | :---------------------------------------------------------------------- | | 2025 (remainder) | $2,172 | | 2026 | $8,104 | | 2027 | $6,925 | | 2028 | $4,772 | | 2029 | $2,487 | | Thereafter | $597 | | Total | $25,057 | [Segment Operating Results](index=32&type=section&id=Segment%20Operating%20Results) Presents and analyzes the operating income performance of Broadcom's semiconductor solutions and infrastructure software segments | Operating Income by Segment (In millions) | Fiscal Quarter Ended Aug 3, 2025 | Fiscal Quarter Ended Aug 4, 2024 | $ Change | % Change | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | $ Change | % Change | | :---------------------------------------- | :------------------------------- | :------------------------------- | :------- | :------- | :-------------------------------------- | :-------------------------------------- | :------- | :------- | | Semiconductor solutions | $5,217 | $4,042 | $1,175 | 29% | $14,729 | $12,136 | $2,593 | 21% | | Infrastructure software | $5,238 | $3,906 | $1,332 | 34% | $15,347 | $9,789 | $5,558 | 57% | | Unallocated expenses | $(4,568) | $(4,160) | $(408) | 10% | $(12,100) | $(13,089) | $989 | (8)% | | Total operating income | $5,887 | $3,788 | $2,099 | 55% | $17,976 | $8,836 | $9,140 | 103% | - Semiconductor solutions operating income increased due to strong demand for networking products, primarily custom AI accelerators and AI networking solutions[128](index=128&type=chunk) - Infrastructure software operating income increased primarily due to strong demand for VCF products and the transition to a subscription license model[129](index=129&type=chunk) [Non-Operating Income and Expenses](index=33&type=section&id=Non-Operating%20Income%20and%20Expenses) Reviews changes in interest expense, other income, and the provision for income taxes - Interest expense decreased due to an overall reduction in outstanding debt balances and debt refinancing activities[131](index=131&type=chunk) - Other income, net, increased in the fiscal quarter ended August 3, 2025, primarily due to a gain on the sale of a business, but decreased for the three fiscal quarters ended August 3, 2025, due to lower interest income[132](index=132&type=chunk) - The provision for income taxes for the fiscal quarter and three fiscal quarters ended August 3, 2025, was primarily due to a valuation allowance against CAMT credits, income before income taxes, and jurisdictional mix[134](index=134&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses Broadcom's ability to meet its financial obligations, detailing cash sources, working capital, and cash flow activities - Primary liquidity sources as of August 3, 2025, included **$10,718 million** in cash and cash equivalents, expected cash from operations, and available capacity under a **$7.5 billion** unsecured revolving credit facility[137](index=137&type=chunk) - Working capital increased to **$8,294 million** at August 3, 2025, from **$2,898 million** at November 3, 2024, primarily due to increased cash and cash equivalents, trade accounts receivable, and software contract assets[142](index=142&type=chunk)[146](index=146&type=chunk) | Cash Flows (In millions) | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------------------------ | :-------------------------------------- | :-------------------------------------- | | Net cash provided by operating activities | $19,834 | $14,358 | | Net cash used in investing activities | $(213) | $(22,938) |\n| Net cash provided by (used in) financing activities | $(18,251) | $4,343 |\n| Net change in cash and cash equivalents | $1,370 | $(4,237) | - The **$5,476 million** increase in cash from operations was primarily due to **$13,037 million** higher net income, partially offset by lower non-cash adjustments for deferred taxes and changes in operating assets and liabilities[148](index=148&type=chunk) - Cash used in investing activities decreased by **$22,725 million**, primarily due to the VMware acquisition in the prior year fiscal period[149](index=149&type=chunk) - Cash flows from financing activities decreased by **$22,594 million**, mainly due to prior year VMware acquisition financing, debt repayments, and higher dividend payments, partially offset by decreased stock repurchases[150](index=150&type=chunk) [Capital Returns](index=34&type=section&id=Capital%20Returns) Outlines Broadcom's strategies for returning capital to shareholders, including dividends and stock repurchase programs | Metric (In millions, except per share data) | Three Fiscal Quarters Ended Aug 3, 2025 | Three Fiscal Quarters Ended Aug 4, 2024 | | :------------------------------------------ | :-------------------------------------- | :-------------------------------------- | | Dividends per share to common stockholders | $1.770 | $1.575 |\n| Dividends to common stockholders | $8,345 | $7,330 | - A new **$10 billion** stock repurchase program was authorized in April 2025, with **$2,450 million** repurchased and **$7,550 million** remaining as of August 3, 2025[142](index=142&type=chunk) - Employee withholding taxes on equity awards, totaling **$3,860 million** for the three fiscal quarters ended August 3, 2025, are now settled by selling a portion of vested shares, eliminating cash outflow[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses Broadcom's exposure to market risks, specifically focusing on interest rate risk and its potential impact on the fair value of fixed-rate borrowings and interest expense on floating-rate debt - As of August 3, 2025, fixed-rate borrowings had a principal amount of **$65.8 billion** and an estimated fair value of **$62.5 billion**[152](index=152&type=chunk) - A hypothetical **50 basis point** change in market interest rates would alter the fair value by approximately **$1.8 billion**[152](index=152&type=chunk) - Broadcom had no floating-rate term loans outstanding as of August 3, 2025[153](index=153&type=chunk) [Item 4. Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of the effectiveness of Broadcom's disclosure controls and procedures and confirms no material changes in internal control over financial reporting during the reported period - Broadcom's CEO and CFO concluded that disclosure controls and procedures were effective at a reasonable assurance level as of August 3, 2025[154](index=154&type=chunk) - There were no material changes in internal control over financial reporting during the period covered by the report[156](index=156&type=chunk) PART II — OTHER INFORMATION Presents additional non-financial information, including legal proceedings, risk factors, and other required disclosures [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 11, 'Commitments and Contingencies,' for detailed information on legal proceedings and associated risks - Information on legal proceedings is incorporated by reference from Note 11, 'Commitments and Contingencies,' in Part I, Item 1 of this Form 10-Q[158](index=158&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section outlines various material risks that could adversely affect Broadcom's business, operations, financial condition, and stock price, categorized into risks related to business, taxes, indebtedness, and common stock ownership - Broadcom's business, operations, and financial results are subject to risks related to its business, taxes, indebtedness, and owning its common stock[159](index=159&type=chunk)[160](index=160&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk) [Risks Related to Our Business](index=36&type=section&id=Risks%20Related%20to%20Our%20Business) Identifies various operational and external risks that could negatively impact Broadcom's business and financial performance - Adverse global economic conditions, governmental regulations, and geopolitical factors, particularly trade tensions with U.S. trading partners like China, could negatively impact Broadcom's business, supply chain, and financial results[166](index=166&type=chunk)[168](index=168&type=chunk)[171](index=171&type=chunk) - Significant customer concentration, with sales to distributors accounting for **47%** of net revenue and top five end customers for approximately **40%** in the three fiscal quarters ended August 3, 2025, poses a risk of revenue fluctuation and adverse impact from customer demand reduction or loss[174](index=174&type=chunk) - Failure to successfully integrate the VMware acquisition, including customer acceptance of the transition to a subscription licensing model and simplified product portfolio, could adversely affect Broadcom's business and stock value[184](index=184&type=chunk)[185](index=185&type=chunk) - Dependence on contract manufacturing (e.g., TSMC for **95%** of wafers) and a limited number of materials suppliers creates supply chain risks, including capacity allocation, quality issues, and price increases, which could hinder product delivery and impact financial performance[201](index=201&type=chunk)[203](index=203&type=chunk)[206](index=206&type=chunk) - Cybersecurity threats, security breaches, and vulnerabilities in IT systems or products could lead to information loss, business disruption, reputational damage, and significant financial liabilities[194](index=194&type=chunk)[197](index=197&type=chunk)[214](index=214&type=chunk)[217](index=217&type=chunk) [Risks Related to Our Taxes](index=37&type=section&id=Risks%20Related%20to%20Our%20Taxes) Discusses potential tax liabilities and the impact of tax law changes on Broadcom's financial condition - Broadcom's income taxes are subject to volatility due to business reorganizations, tax structure changes, and new legislation like the 'One Big Beautiful Bill Act' and global minimum tax provisions, which may increase effective tax rates and cash tax costs[246](index=246&type=chunk)[247](index=247&type=chunk) - There are potential tax liabilities from VMware's former controlling ownership by Dell, including indemnification obligations if the spin-off is deemed not tax-free, which could materially affect financial condition[249](index=249&type=chunk)[253](index=253&type=chunk) - Changes or termination of tax incentives or tax holiday arrangements could significantly increase corporate income taxes and reduce profitability, as these incentives decreased the provision for income taxes by approximately **$2,261 million** in fiscal year 2024[250](index=250&type=chunk)[251](index=251&type=chunk) [Risks Related to Our Indebtedness](index=37&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) Highlights the financial implications and constraints associated with Broadcom's substantial debt levels - Broadcom's substantial indebtedness of **$66,257 million** as of August 3, 2025, could adversely affect its financial health by increasing vulnerability to economic conditions, limiting flexibility, creating a competitive disadvantage, and dedicating a significant portion of cash flow to debt payments[254](index=254&type=chunk) [Risks Related to Owning Our Common Stock](index=37&type=section&id=Risks%20Related%20to%20Owning%20Our%20Common%20Stock) Addresses factors that could influence the volatility of Broadcom's stock price and shareholder returns - Broadcom's stock price may be volatile due to factors such as analyst reports, demand for AI-related products, market fluctuations, acquisition announcements, and significant sales by large investors[256](index=256&type=chunk)[257](index=257&type=chunk) - The amount and frequency of stock repurchases may fluctuate based on cash priorities, and there is no assurance that cash dividends will continue to be declared[259](index=259&type=chunk)[260](index=260&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states that there were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[262](index=262&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms that there were no defaults upon senior securities during the reporting period - No defaults upon senior securities to report[263](index=263&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section indicates that there are no mine safety disclosures to report - No mine safety disclosures to report[264](index=264&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - No other information to report[265](index=265&type=chunk) [Item 6. Exhibits](index=57&type=section&id=Item%206.%20Exhibits) This section provides a comprehensive index of exhibits filed with the Form 10-Q, including merger agreements, certificates of incorporation, bylaws, various senior notes indentures, and certifications - The report includes an exhibit index listing various documents such as merger agreements, corporate governance documents, debt instruments, and certifications[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk) SIGNATURES Confirms the official submission of the report through the signature of a principal officer [SIGNATURES](index=60&type=section&id=SIGNATURES) This section contains the signature of Broadcom Inc.'s Chief Financial Officer, Kirsten M. Spears, certifying the filing of the report - The report is signed by Kirsten M. Spears, Chief Financial Officer of Broadcom Inc., on September 10, 2025[272](index=272&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended August 2, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 000-41886 CITI TRENDS, INC. (Exact name of registrant as specified in its charter) Delaware 52-2150697 (State or other jurisdiction of (I.R.S. Employer incorp ...