Daily Journal(DJCO) - 2025 Q2 - Quarterly Report

Revenue Performance - Consolidated revenues increased by $3,316,000 (10%) to $35,880,000 for the six months ended March 31, 2025, compared to $32,564,000 in the prior year[80]. - Approximately 76% of the Company's revenues during the six months ended March 31, 2025, were derived from Journal Technologies, with $1,753,000 (5%) from foreign countries[81]. - Revenues increased by $2,844,000 (12%) to $27,409,000 from $24,565,000 in the prior fiscal year period[96]. - Consolidated revenues were $18,176,000 and $16,571,000 for the three months ended March 31, 2025 and 2024, respectively, an increase of $1,605,000 (10%)[102]. - Approximately 76% of the Company's revenues during the three months ended March 31, 2025 were derived from Journal Technologies[103]. - Journal Technologies' revenues increased by $1,337,000 (11%) to $13,796,000 from $12,459,000 in the prior fiscal year period[111]. Income and Expenses - Consolidated operating expenses rose by $2,867,000 (9%) to $34,175,000 from $31,308,000, primarily due to increased salaries and employee benefits[82]. - Consolidated operating expenses increased by $1,275,000 (8%) to $17,213,000 from $15,938,000[104]. - Non-operating income increased by $39,356,000 (112%) to $74,460,000, driven by net unrealized gains on marketable securities of $72,799,000[83]. - Non-operating income increased by $40,320,000 (202%) to $60,039,000 from $19,987,000, primarily due to net unrealized gains on marketable securities[105]. - The Company's consolidated pretax income was $76,165,000 for the six months ended March 31, 2025, compared to $36,360,000 in the prior year[84]. - Net income for the six months ended March 31, 2025, was $55,565,000 ($40.34 per share), up from $28,030,000 ($20.36 per share) in the prior year[84]. - Consolidated net income was $44,670,000 ($32.43 per share) for the three months ended March 31, 2025, compared to $15,415,000 ($11.19 per share) in the prior fiscal year period[106]. Marketable Securities - The aggregate fair market value of the Company's marketable securities was $431,490,000, with net unrealized gains of approximately $292,396,000[85]. - Cash and cash equivalents, restricted cash, and marketable security positions increased by $71,853,000 during the three months ended March 31, 2025[114]. Taxation - The effective tax rate for the six months ended March 31, 2025, was 27%, influenced by taxes on unrealized gains on marketable securities[86]. Accounting Policies and Risks - The Company prepares financial statements in accordance with U.S. generally accepted accounting principles, with critical accounting policies including revenue recognition and income taxes[119]. - The critical accounting policies are detailed in the Annual Report on Form 10-K for the year ended September 30, 2024[120]. - The Quarterly Report includes forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from expectations[121]. - Factors that could affect actual results include risks associated with software development, reliance on professional services engagements, and potential declines in subscriber revenues[121]. - The Company disclaims any intention to revise forward-looking statements based on new information or future developments[121]. - Important factors affecting forward-looking statements are discussed in the Form 10-Q and the Annual Report on Form 10-K[121]. - The Company faces risks from disruptive technologies like artificial intelligence and changes in the costs of postage and paper[121]. - Potential security breaches of the Company's software or websites could impact operations[121]. - Changes in accounting guidance and material weaknesses in internal control over financial reporting are also risks[121]. - General economic conditions, particularly in California, may influence the Company's performance[121].