Manhattan Associates(MANH) - 2025 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial information for the reporting period Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of income, comprehensive income, cash flows, and shareholders' equity, along with detailed notes explaining the basis of presentation, revenue recognition, fair value measurement, equity-based compensation, income taxes, earnings per share, contingencies, reportable segments, and restructuring expenses Condensed Consolidated Balance Sheets This statement provides a snapshot of the company's assets, liabilities, and shareholders' equity at specific points in time Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (vs. Dec 31, 2024) | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------------- | | Cash and cash equivalents | $230,593 | $266,230 | -$35,637 | | Total current assets | $483,346 | $503,264 | -$19,918 | | Total assets | $744,684 | $757,551 | -$12,867 | | Deferred revenue | $299,836 | $277,970 | +$21,866 | | Total current liabilities | $407,165 | $400,304 | +$6,861 | | Total shareholders' equity | $278,759 | $299,126 | -$20,367 | Condensed Consolidated Statements of Income This statement details the company's revenues, expenses, and net income over specific reporting periods Condensed Consolidated Statements of Income (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6 Months) | | :------------------------------------ | :--------------------------- | :--------------------------- | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Cloud subscriptions revenue | $100,422 | $82,361 | +22.0% | $194,728 | $160,388 | +21.4% | | Software license revenue | $1,528 | $3,061 | -50.0% | $10,820 | $5,871 | +84.3% | | Maintenance revenue | $35,057 | $35,273 | -0.6% | $67,201 | $70,245 | -4.3% | | Services revenue | $128,899 | $136,831 | -5.8% | $250,026 | $269,026 | -7.1% | | Hardware revenue | $6,515 | $7,792 | -16.4% | $12,433 | $14,340 | -13.3% | | Total revenue | $272,421 | $265,318 | +2.7% | $535,208 | $519,870 | +2.9% | | Operating income | $73,788 | $68,188 | +8.2% | $136,960 | $125,818 | +8.9% | | Net income | $56,780 | $52,766 | +7.6% | $109,362 | $106,567 | +2.6% | | Basic earnings per share | $0.94 | $0.86 | +9.3% | $1.80 | $1.73 | +4.0% | | Diluted earnings per share | $0.93 | $0.85 | +9.4% | $1.78 | $1.71 | +4.1% | Condensed Consolidated Statements of Comprehensive Income This statement presents net income and other comprehensive income items, reflecting total changes in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Income (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $56,780 | $52,766 | $109,362 | $106,567 | | Foreign currency translation adjustment, net of tax | $3,265 | $11 | $4,597 | -$716 | | Comprehensive income | $60,045 | $52,777 | $113,959 | $105,851 | Condensed Consolidated Statements of Cash Flows This statement categorizes cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | | Net cash provided by operating activities | $149,310 | $128,000 | +$21,310 | | Net cash used in investing activities | -$4,871 | -$4,538 | -$333 | | Net cash used in financing activities | -$186,638 | -$189,546 | +$2,908 | | Net change in cash and cash equivalents | -$35,637 | -$68,032 | +$32,395 | | Cash and cash equivalents at end of period | $230,593 | $202,709 | +$27,884 | - Repurchase of common stock was the principal use of cash for financing activities, totaling $186.6 million in the first six months of 2025[21][145] Condensed Consolidated Statements of Shareholders' Equity This statement outlines changes in the company's equity accounts, including common stock, retained earnings, and comprehensive income Condensed Consolidated Statements of Shareholders' Equity (in thousands) | Metric (in thousands) | Balance, Dec 31, 2024 | Repurchase of common stock (6 months) | Net income (6 months) | Foreign currency translation adjustment (6 months) | Balance, June 30, 2025 | | :------------------------------------ | :-------------------- | :------------------------------------ | :-------------------- | :------------------------------------------------- | :--------------------- | | Common Stock Amount | $609 | -$10 | - | - | $604 | | Retained earnings | $329,439 | -$134,321 | $109,362 | - | $304,480 | | Accumulated other comprehensive loss | -$30,922 | - | - | $4,597 | -$26,325 | | Total Shareholders' Equity | $299,126 | -$186,638 | $109,362 | $4,597 | $278,759 | - The company repurchased 983,828 shares of common stock for $186.6 million during the six months ended June 30, 2025[25] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements 1. Basis of Presentation and Principles of Consolidation This note describes the accounting policies and consolidation principles used in preparing the financial statements - The company expects to adopt ASU 2023-09 (Income Taxes) in its 2025 Annual Report on Form 10-K and ASU 2024-03/2025-01 (Expense Disaggregation Disclosures) in its 2028 Annual Report on Form 10-K[29][30] 2. Revenue Recognition This note details the company's policies and methods for recognizing revenue across its various streams - Cloud subscriptions (SaaS and hosting) revenue is recognized over the contract period[32] - Services revenue is generally billed hourly and recognized over time as performed, or based on proportion performed for fixed-fee contracts[33] - As of June 30, 2025, remaining performance obligations (RPO) were approximately $2.0 billion, with over 98% representing cloud native subscriptions with non-cancelable terms greater than one year[41] 3. Fair Value Measurement This note explains the methodologies used to measure the fair value of financial instruments and assets - Cash and cash equivalents totaled $230.6 million at June 30, 2025, with cash equivalents consisting of highly liquid money market funds classified at Level 1 of the fair value hierarchy[47] 4. Equity-Based Compensation This note outlines the accounting treatment and impact of equity-based compensation plans on the financial statements Equity-Based Compensation (in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | RSUs granted | 8,984 | 8,521 | 495,334 | 547,849 | | Equity-based compensation expense (in thousands) | $24,300 | $24,700 | $53,100 | $46,800 | 5. Income Taxes This note provides information on the company's income tax provisions, effective tax rates, and deferred tax assets and liabilities Effective Tax Rate | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Effective tax rate | 23.8% | 23.6% | 21.3% | 16.6% | - The increase in the effective tax rate for both periods is primarily due to a decrease in excess tax benefits on restricted stock awards that vested[51] 6. Basic and Diluted Net Income Per Share This note presents the calculation of basic and diluted earnings per share for the reporting periods Basic and Diluted Net Income Per Share | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic earnings per share | $0.94 | $0.86 | $1.80 | $1.73 | | Diluted earnings per share | $0.93 | $0.85 | $1.78 | $1.71 | | Basic weighted average shares (in thousands) | 60,612 | 61,421 | 60,741 | 61,523 | | Diluted weighted average shares (in thousands) | 61,074 | 62,118 | 61,300 | 62,305 | 7. Contingencies This note discloses potential liabilities arising from legal proceedings, claims, and other uncertain events - The company is a party to a consolidated class action lawsuit (Prime v. Manhattan Associates, Inc., et al. and City of Orlando Police Officers' Pension Fund v. Manhattan Associates, Inc., et al.) alleging violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5[60] - The company denies the material allegations, intends to defend itself vigorously, and maintains insurance that may cover liability up to policy limits[60] 8. Reportable Segments This note provides financial information about the company's operating segments, including revenue and operating income by geography - The company operates in three geographic segments: Americas, EMEA, and APAC, with the Americas segment charging royalty fees to other segments[61][62] Segment Revenue and Operating Income (in thousands) | Revenue Type | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6 Months) | | :-------------------- | :-------- | :--------------------------- | :--------------------------- | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Cloud subscriptions | Americas | $77,281 | $64,665 | +20% | $151,392 | $125,797 | +20% | | | EMEA | $19,675 | $15,371 | +28% | $36,882 | $29,872 | +23% | | | APAC | $3,466 | $2,325 | +49% | $6,454 | $4,719 | +37% | | Total Revenue | Americas | $206,606 | $205,955 | +0% | $401,221 | $402,267 | +0% | | | EMEA | $52,301 | $46,918 | +11% | $107,843 | $93,538 | +15% | | | APAC | $13,514 | $12,445 | +9% | $26,144 | $24,065 | +9% | | Total Operating Income | Americas | $48,051 | $45,300 | +6% | $81,913 | $81,987 | +0% | | | EMEA | $19,807 | $17,195 | +15% | $43,510 | $33,079 | +32% | | | APAC | $5,930 | $5,693 | +4% | $11,537 | $10,752 | +7% | - International revenue (sales outside the US) was approximately $91.5 million for Q2 2025 and $183.0 million for H1 2025, representing about 34% of total revenue for both periods[64][73] 9. Restructuring Expense This note details the nature and financial impact of restructuring activities undertaken by the company - In January 2025, the company incurred a restructuring expense of approximately $2.9 million pretax ($2.2 million after-tax) due to eliminating about 100 positions[66][138] - The expense was primarily for employee severance and outplacement services, recorded in the Americas segment[66] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations for the three and six months ended June 30, 2025. It covers business overview, future expectations, key performance metrics, detailed revenue analysis by type and segment, product development, cash flow, and a comprehensive discussion of operating results, liquidity, and capital resources Business Overview This section provides an overview of the company's operations, products, and primary revenue sources - The company develops, sells, deploys, services, and maintains software solutions for supply chains, inventory, and omnichannel operations[71] - Principal revenue sources are cloud subscriptions, software licenses, maintenance, professional services, and hardware sales[75] Revenue Mix by Source | Revenue Source | % of Total Revenue (3 Months Ended June 30, 2025) | % of Total Revenue (6 Months Ended June 30, 2025) | | :-------------------- | :------------------------------------------------ | :------------------------------------------------ | | Cloud subscriptions | 37% | 36% | | Software license | 1% | 2% | | Maintenance | 13% | 13% | | Services | 47% | 47% | | Hardware | 2% | 2% | Future Expectations This section outlines the company's strategic goals and outlook amidst the global economic environment - The company remains cautious about the turbulent global macro environment but notes strong demand for cloud solutions and favorable secular tailwinds like digital transformation[74] - Strategic goals include focusing on employees and customer success, investing in innovation to expand products and market, developing cloud business, and expanding global sales and marketing teams[76][85] Cloud Subscription This section discusses the performance and growth trends of the company's cloud subscription revenue - Cloud revenue increased 22% YoY in Q2 2025, representing about 95% of total software revenue[77] - Customers are increasingly adopting Manhattan Active® cloud solutions, with existing customers migrating from on-premise to cloud[77] Global Economic Trends and Industry Factors This section analyzes the impact of global economic conditions and industry trends on the company's business - Approximately 66% of total revenue in Q2 and H1 2025 was generated in the United States[78] - Global geopolitical and economic volatility is expected to continue shaping enterprise software buying decisions, potentially extending sales cycles for large cloud subscriptions[79][80] Key Performance Metrics This section highlights critical financial and operational metrics used to evaluate the company's performance - Cloud subscriptions revenue increased 22% YoY to $194.7 million in H1 2025, driven by strong demand[82] - Remaining Performance Obligations (RPO) were approximately $2.0 billion as of June 30, 2025, a 26% increase YoY, with over 98% from cloud native subscriptions[83] Revenue This section provides a detailed breakdown and analysis of the company's revenue streams Cloud Subscriptions and Software License Revenue This section analyzes the performance and trends of cloud subscriptions and software license revenue by segment Cloud Subscriptions Revenue by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6 Months) | | :-------- | :--------------------------- | :--------------------------- | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Americas | $77,281 | $64,665 | +20% | $151,392 | $125,797 | +20% | | EMEA | $19,675 | $15,371 | +28% | $36,882 | $29,872 | +23% | | APAC | $3,466 | $2,325 | +49% | $6,454 | $4,719 | +37% | | Total | $100,422 | $82,361 | +22% | $194,728 | $160,388 | +21% | Software License Revenue by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6 Months) | | :-------- | :--------------------------- | :--------------------------- | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Americas | $908 | $2,430 | -63% | $2,358 | $4,259 | -45% | | EMEA | $327 | $362 | -10% | $7,863 | $848 | +827% | | APAC | $293 | $269 | +9% | $599 | $764 | -22% | | Total | $1,528 | $3,061 | -50% | $10,820 | $5,871 | +84% | - In H1 2025, 60% of new non-cancelable cloud subscriptions were with new customers, and 40% with existing customers[87] Maintenance Revenue This section discusses the trends and expectations for the company's maintenance revenue Maintenance Revenue by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6 Months) | | :-------- | :--------------------------- | :--------------------------- | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Americas | $27,786 | $28,621 | -3% | $53,701 | $56,497 | -5% | | EMEA | $5,071 | $4,531 | +12% | $9,242 | $9,205 | +0% | | APAC | $2,200 | $2,121 | +4% | $4,258 | $4,543 | -6% | | Total | $35,057 | $35,273 | -1% | $67,201 | $70,245 | -4% | - Maintenance revenue is expected to decline as customers convert to cloud subscriptions, with substantially all customers renewing or converting[90] Services Revenue This section examines the performance and factors influencing the company's professional services revenue Services Revenue by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6 Months) | | :-------- | :--------------------------- | :--------------------------- | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Americas | $94,167 | $102,469 | -8% | $181,664 | $201,584 | -10% | | EMEA | $27,186 | $26,632 | +2% | $53,538 | $53,403 | +0% | | APAC | $7,546 | $7,730 | -2% | $14,824 | $14,039 | +6% | | Total | $128,899 | $136,831 | -6% | $250,026 | $269,026 | -7% | - The decrease in services revenue is primarily due to customer budgetary constraints shifting services work to future periods[110][130] - Approximately 76% of professional services revenue in Q2 2025 and 75% in H1 2025 related to cloud subscriptions[112][130] Hardware Revenue This section reviews the performance and variability of the company's hardware sales revenue Hardware Revenue by Segment (in thousands) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (3 Months) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change (6 Months) | | :-------- | :--------------------------- | :--------------------------- | :-------------------- | :--------------------------- | :--------------------------- | :-------------------- | | Americas | $6,464 | $7,770 | -17% | $12,106 | $14,130 | -14% | | EMEA | $42 | $22 | +91% | $318 | $210 | +51% | | APAC | $9 | - | - | $9 | - | - | | Total | $6,515 | $7,792 | -16% | $12,433 | $14,340 | -13% | - Hardware sales are largely dependent on customer-specific desires and fluctuate[113][131] Product Development This section outlines the company's investments and focus areas in research and development - R&D expenses were $34.9 million for Q2 2025 and $70.2 million for H1 2025[97] - R&D focuses on expanding and integrating new products, including cloud-based solutions, and enhancing existing solutions in supply chain, inventory optimization, omnichannel, and point-of-sale[97][98] Cash Flow and Financial Condition This section summarizes the company's cash generation, liquidity, and capital allocation strategies - Cash flow from operating activities was $74.0 million for Q2 2025 and $149.3 million for H1 2025[100] - Cash and cash equivalents totaled $230.6 million at June 30, 2025, with no debt[100] - Primary uses of cash include R&D investments in Unified Omnichannel Commerce and Digital Supply Chain solutions and share repurchases[100][101] - The Board of Directors approved replenishing the share repurchase authority to an aggregate of $100.0 million in July 2025[100][111] Results of Operations This section provides a comprehensive analysis of the company's financial performance for the reporting periods Condensed Consolidated Financial Summary - Second Quarter 2025 This section presents a detailed financial summary and analysis of the company's performance for the second quarter of 2025 Condensed Consolidated Financial Summary - Second Quarter 2025 (in thousands) | Revenue Type | Q2 2025 | Q2 2024 | YoY Change | % of Total Revenue (Q2 2025) | % of Total Revenue (Q2 2024) | | :-------------------- | :-------- | :-------- | :--------- | :----------------------------- | :----------------------------- | | Cloud subscriptions | $100,422 | $82,361 | +22% | 37% | 31% | | Software license | $1,528 | $3,061 | -50% | 1% | 1% | | Maintenance | $35,057 | $35,273 | -1% | 13% | 13% | | Services | $128,899 | $136,831 | -6% | 47% | 52% | | Hardware | $6,515 | $7,792 | -16% | 2% | 3% | | Total revenue | $272,421 | $265,318 | +3% | 100% | 100% | - Operating income for Q2 2025 was $73.8 million (27.1% margin), up from $68.2 million (25.7% margin) in Q2 2024, primarily due to increased cloud subscriptions revenue[111][121] - Cost of cloud subscriptions, maintenance, and services decreased by $3.8 million due to lower compensation and travel expenses, partially offset by increased computer infrastructure costs[114] - G&A expenses increased by $4.9 million, primarily due to a $3.0 million unusual health insurance claim and $1.8 million in compensation[118] - Effective income tax rate increased slightly to 23.8% in Q2 2025 from 23.6% in Q2 2024 due to decreased excess tax benefits on restricted stock awards[123] Condensed Consolidated Financial Summary – First Six Months of 2025 This section presents a detailed financial summary and analysis of the company's performance for the first six months of 2025 Condensed Consolidated Financial Summary – First Six Months of 2025 (in thousands) | Revenue Type | H1 2025 | H1 2024 | YoY Change | % of Total Revenue (H1 2025) | % of Total Revenue (H1 2024) | | :-------------------- | :-------- | :-------- | :--------- | :----------------------------- | :----------------------------- | | Cloud subscriptions | $194,728 | $160,388 | +21% | 36% | 31% | | Software license | $10,820 | $5,871 | +84% | 2% | 1% | | Maintenance | $67,201 | $70,245 | -4% | 13% | 13% | | Services | $250,026 | $269,026 | -7% | 47% | 52% | | Hardware | $12,433 | $14,340 | -13% | 2% | 3% | | Total revenue | $535,208 | $519,870 | +3% | 100% | 100% | - Operating income for H1 2025 was $137.0 million (25.6% margin), up from $125.8 million (24.2% margin) in H1 2024, primarily due to increased cloud subscriptions revenue[126][139] - Cost of cloud subscriptions, maintenance, and services decreased by $8.4 million due to lower compensation, performance-based compensation, and travel expenses, partially offset by increased computer infrastructure costs[132] - G&A expenses increased by $7.9 million, primarily due to a $3.0 million signing bonus, $0.7 million recruiting fees, and $4.1 million additional stock compensation for a new CEO[136] - Effective income tax rate increased to 21.3% in H1 2025 from 16.6% in H1 2024 due to decreased excess tax benefits on restricted stock vesting[141] Liquidity and Capital Resources This section discusses the company's ability to meet its short-term and long-term financial obligations and manage its capital - The company funded its business exclusively through cash generated from operations in H1 2025[142] - Cash and cash equivalents at June 30, 2025, included $138.4 million in the U.S. and $92.2 million in foreign subsidiaries[142] - Cash flow from operating activities increased by $21.3 million in H1 2025 compared to H1 2024, mainly due to timing of cash collections[143] - Principal use of cash in financing activities was $186.6 million for common stock repurchases in H1 2025[145] - Priorities for cash use include continued investment in product development, funding global teams for growth, and share repurchases[101][146] Aggregate Contractual Obligations This section outlines the company's significant contractual commitments and their expected payment timelines - Cloud infrastructure obligations are approximately $219.2 million over the next 5 years[147] - Obligations for internal software subscriptions are approximately $28.7 million over the next 7 years[147] Critical Accounting Policies and Estimates This section highlights the accounting policies and estimates that require significant judgment and can materially impact financial results - No significant changes to critical accounting policies and estimates in H1 2025[148] Forward-Looking Statements This section cautions readers about the inherent risks and uncertainties associated with forward-looking business projections - Forward-looking statements are subject to risks and uncertainties, including market volatility, competition, dependence on cloud subscriptions, software defects, IT security, AI risks, litigation, international operations, and geopolitical developments[149][152] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states that there were no material changes to the company's quantitative and qualitative disclosures about market risk compared to its annual report on Form 10-K for the year ended December 31, 2024 - No material changes to market risk disclosures compared to the 2024 Form 10-K[151] Item 4. Controls and Procedures This section details the company's disclosure controls and procedures, confirming their effectiveness as of June 30, 2025, and reports no material changes in internal control over financial reporting during the quarter Disclosure Controls and Procedures This section describes the company's controls designed to ensure timely and accurate disclosure of financial information - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[155] Changes in Internal Control over Financial Reporting This section reports on any material changes in the company's internal control over financial reporting during the period - No material changes in internal control over financial reporting during Q2 2025[156] PART II OTHER INFORMATION This section includes additional information not covered in the financial statements, such as legal proceedings and risk factors Item 1. Legal Proceedings This section addresses the company's involvement in legal proceedings, stating that while it is party to litigation, it does not currently believe any proceeding will have a material adverse impact on its financial position or operations. It refers to Note 7 for details on a specific class action lawsuit - The company is involved in litigation but does not currently believe any legal proceeding will have a material adverse impact on its business, financial position, results of operations, or cash flows[161] - Details of a class action lawsuit are incorporated by reference from Note 7[161] Item 1A. Risk Factors This section directs readers to review the risk factors previously disclosed in the company's annual report on Form 10-K for the year ended December 31, 2024, and its quarterly report on Form 10-Q for the quarter ended March 31, 2025 - Readers should consider risk factors from the 2024 Form 10-K and Q1 2025 10-Q[162] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides details on common stock repurchases made under the company's publicly announced program during the second quarter of 2025 Common Stock Repurchases | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | | :----------------------- | :----------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------- | | May 1 - May 31, 2025 | 161,293 | $188.46 | 161,293 | $69,602,376 | | June 1 - June 30, 2025 | 101,048 | $190.00 | 101,048 | $50,403,673 | | Total | 262,341 | - | 262,341 | - | Item 3. Defaults Upon Senior Securities This section confirms that no events occurred during the quarter ended June 30, 2025, that would require a response regarding defaults upon senior securities - No defaults upon senior securities occurred in Q2 2025[165] Item 4. Mine Safety Disclosures This section states that the disclosure requirements for mine safety are not applicable to the company - Not applicable[166] Item 5. Other Information This section provides other relevant information, specifically addressing Rule 10b5-1 trading plans Rule 10b5-1 Trading Plans This section provides information regarding Rule 10b5-1 trading plans adopted or terminated by company insiders - No Rule 10b5-1 trading plans were adopted or terminated by directors or officers in Q2 2025[167] Item 6. Exhibits This section lists all exhibits filed as part of the Form 10-Q, including various certifications and Inline XBRL documents - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32) and Inline XBRL documents (Exhibits 101.INS, SCH, CAL, DEF, LAB, PRE, 104)[168] Signatures This section contains the required signatures of the company's principal executive and financial officers, certifying the accuracy and completeness of the quarterly report - The report is signed by Eric A. Clark (President and CEO) and Dennis B. Story (EVP, CFO, and Treasurer) on July 25, 2025[172]