Royalty Pharma(RPRX) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements and accompanying notes Condensed Consolidated Balance Sheets This section details the company's assets, liabilities, and shareholders' equity at the end of the reporting periods Key Balance Sheet Metrics | Metric (in thousands) | As of June 30, 2025 | As of December 31, 2024 | Change | | :-------------------- | :------------------ | :---------------------- | :----- | | Total Assets | $18,323,000 | $18,222,715 | +$100,285 | | Total Liabilities | $8,820,060 | $7,880,349 | +$939,711 | | Total Shareholders' Equity | $9,502,940 | $10,342,366 | -$839,426 | | Cash and cash equivalents | $631,908 | $929,026 | -$297,118 | | Financial royalty assets, net | $15,134,291 | $15,127,158 | +$7,133 | | Goodwill | $924,634 | $— | +$924,634 | | Long-term debt | $7,003,063 | $6,614,653 | +$388,410 | Condensed Consolidated Statements of Operations This section outlines revenues, expenses, and net income for the reported three and six-month periods Key Operational Metrics | 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 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total income and other revenues | $578,665 | $537,267 | $1,146,912 | $1,105,245 | | Operating income | $209,799 | $269,630 | $743,980 | $195,856 | | Consolidated net income | $90,635 | $194,377 | $524,068 | $190,104 | | Net income attributable to Royalty Pharma plc | $30,176 | $102,004 | $268,525 | $106,782 | | Basic EPS | $0.07 | $0.23 | $0.63 | $0.24 | | Diluted EPS | $0.07 | $0.23 | $0.62 | $0.24 | - Provision for changes in expected cash flows from financial royalty assets shifted from an expense of $796.0 million in H1 2024 to an income of $331.1 million in H1 2025[17] - Research and development funding expense significantly increased from $1.0 million in H1 2024 to $351.0 million in H1 2025[17] - General and administrative expenses rose from $112.4 million in H1 2024 to $290.5 million in H1 2025[17] Condensed Consolidated Statements of Shareholders' Equity This section presents changes in the company's equity accounts during the reporting periods Key Shareholders' Equity Metrics | Metric (in thousands) | As of June 30, 2025 | As of December 31, 2024 | Change | | :-------------------- | :------------------ | :---------------------- | :----- | | Total Shareholders' Equity | $9,502,940 | $10,342,366 | -$839,426 | | Class A ordinary shares outstanding | 432,288 | 445,985 | -13,697 | | Class B ordinary shares outstanding | 150,881 | 143,128 | +7,753 | | Additional paid-in capital | $4,127,665 | $4,103,482 | +$24,183 | | Retained earnings | $2,222,750 | $2,845,653 | -$622,903 | | Non-controlling interests | $3,155,030 | $3,395,785 | -$240,755 | - Repurchases of Class A ordinary shares amounted to $1.0 billion in H1 2025, significantly higher than $84.4 million in H1 2024[24] - Dividends paid to shareholders were $188.7 million in H1 2025, consistent with H1 2024[24] Condensed Consolidated Statements of Cash Flows This section details the sources and uses of cash from operating, investing, and financing activities Key Cash Flow Metrics | Cash Flow Activity (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change | | :-------------------------------- | :--------------------------- | :--------------------------- | :----- | | Net cash provided by operating activities | $960,060 | $1,322,847 | -$362,787 | | Net cash provided by/(used in) investing activities | $191,935 | $(979,826) | +$1,171,761 | | Net cash (used in)/provided by financing activities | $(1,449,113) | $944,613 | -$2,393,726 | | Net change in cash and cash equivalents | $(297,118) | $1,287,634 | -$1,584,752 | | Cash and cash equivalents, end of period | $631,908 | $1,764,644 | -$1,132,736 | - Development-stage funding payments increased significantly from $1.0 million in H1 2024 to $351.0 million in H1 2025[26] - Repurchases of Class A ordinary shares increased from $79.9 million in H1 2024 to $1.0 billion in H1 2025[26] - Proceeds from issuance of long-term debt, net of discount, was $1.47 billion in H1 2024, with no proceeds in H1 2025[26] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations of the company's accounting policies and financial statement items Note 1. Organization and Purpose This note describes the company's business model and recent organizational changes - Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation[28] - The company completed its internalization on May 16, 2025, integrating its former external manager's employees[29] Note 2. Summary of Significant Accounting Policies This note outlines the key accounting principles and estimates used in preparing the financial statements - Financial statements are prepared under GAAP, requiring management estimates and assumptions[30][32] - The company consolidates majority-owned and controlled subsidiaries, including variable interest entities[33] - Goodwill was recorded as a result of the Internalization and is not amortized, but assessed for impairment annually[43] - Vertex accounted for 31% of current financial royalty assets as of June 30, 2025, down from 34% at December 31, 2024[38] Note 3. Internalization This note details the acquisition of the company's external manager and its financial impact - Internalization of RP Manager completed on May 16, 2025[44] Component of Purchase Price | Component of Purchase Price (in thousands) | Amount | | :--------------------------------------- | :----- | | Cash | $81,950 | | Fair value of equity attributable to pre-Internalization service period: | | | RP Holdings Class E Interests | $57,000 | | Employee RSUs | $3,778 | | Employee EPAs | $422,479 | | Total purchase price | $565,207 | - Goodwill of $924.6 million was recorded as part of the Internalization[53] - Acquisition-related costs of $28.7 million were incurred in H1 2025, primarily for legal, advisory, and professional services[54] Note 4. Share-Based Compensation This note provides details on the company's various share-based compensation plans and related expenses Share-Based Compensation Expense | Share-Based Compensation (in thousands) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :------------------------------------ | :--------------------------- | :--------------------------- | | RP Holdings Class E Interests | $44,050 | $44,050 | | Employee EPAs | $45,732 | $45,732 | | Employee and Director RSUs | $1,262 | $1,965 | | Total Share-Based Compensation | $91,044 | $91,747 | - Unrecognized compensation expense for RP Holdings Class E Interests is $711.4 million, vesting over 6.0 years[59] - Unrecognized expense for Employee EPAs is $103.5 million, vesting over 2.1 years[63] Note 5. Shareholders' Equity This note describes changes in share capital, share repurchases, dividends, and non-controlling interests - New share repurchase program authorized for up to $3.0 billion of Class A ordinary shares, expiring June 23, 2027[69] Class A Ordinary Share Repurchases | Class A Ordinary Share Repurchases (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------------------- | :--------------------------- | :--------------------------- | | Shares repurchased | 31,154 | 3,117 | | Cost of repurchases | $1,000,044 | $84,426 | - As of June 30, 2025, $2.0 billion remained available under the share repurchase program[69] - RP Holdings ownership as of June 30, 2025: 74% by Royalty Pharma plc, 22% by Continuing Investors Partnerships, and 4% by Holders of RP Holdings Class E Interests[81] - Quarterly cash dividend of $0.22 per Class A ordinary share paid in H1 2025, totaling $188.7 million[82] Note 6. Available for Sale Debt Securities This note details the company's investments in debt securities, including funding collaborations - Expanded funding collaboration with Cytokinetics in May 2024, totaling up to $525 million for commercial launch and $100 million for development[83] - MorphoSys Development Funding Bonds were sold in January 2025 for approximately $511 million[89] Cytokinetics Funding Arrangements | Cytokinetics Funding Arrangements (in thousands) | Funded (as of June 30, 2025) | Potential Future Draw | Total | | :--------------------------------------------- | :--------------------------- | :-------------------- | :---- | | Commercial Launch Funding | $175,000 | $275,000 | $450,000 | | Development Funding | $100,000 | $— | $100,000 | | R&D Funding Derivative (CK-586) | $50,000 | $150,000 | $200,000 | | Common Stock | $50,000 | $— | $50,000 | | Total | $375,000 | $425,000 | $800,000 | Note 7. Fair Value Measurements and Financial Instruments This note explains the methodologies used to measure the fair value of financial assets and liabilities - Fair value measurements primarily use Level 3 inputs, indicating unobservable inputs requiring significant judgment[111] Level 3 Financial Instruments | Level 3 Financial Instruments (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :----------------------------------------- | :------------------ | :---------------------- | | Available for sale debt securities | $285,100 | $751,700 | | Equity securities | $2,241 | $2,241 | | Cytokinetics R&D Funding Derivative | $9,000 | $12,000 | | Royalty at fair value | $5,323 | $5,323 | | Employee EPAs (liability) | $(467,143) | $— | | Cytokinetics Funding Commitments (liability) | $(27,200) | $(12,080) | - Employee EPAs liability of $467.1 million was recognized in connection with the Internalization[95][117] - Cytokinetics R&D Funding Derivative fair value is estimated using probability-adjusted discounted cash flow calculations with Level 3 inputs, including a risk-adjusted discount rate of 13.7% as of June 30, 2025[113] Note 8. Financial Royalty Assets This note provides a breakdown of the company's portfolio of financial royalty assets - Financial royalty assets are measured at amortized cost using the effective interest method[118] Top Financial Royalty Assets | Top Financial Royalty Assets (in thousands) | Net Carrying Value (as of June 30, 2025) | | :---------------------------------------- | :--------------------------------------- | | Cystic fibrosis franchise | $5,017,659 | | Evrysdi | $1,770,330 | | Trelegy | $1,053,534 | | Voranigo | $970,268 | | Tysabri | $913,435 | | Tremfya | $822,682 | | Other | $5,646,026 | | Total (before credit losses) | $16,193,934 | - Estimated fair value of financial royalty assets was $22.2 billion ($0.8 billion current, $21.4 billion non-current) as of June 30, 2025[120] Note 9. Cumulative Allowance and the Provision for Changes in Expected Cash Flows from Financial Royalty Assets This note details the activity in the allowance for credit losses related to financial royalty assets Cumulative Allowance Activity | Cumulative Allowance Activity (in thousands) | Amount | | :----------------------------------------- | :----- | | Balance at December 31, 2024 | $(3,789,281) | | Increases to allowance | $(358,493) | | Decreases to allowance | $668,154 | | Current period provision for credit losses, net | $21,417 | | Balance at June 30, 2025 | $(3,458,203) | Note 10. Non-Consolidated Affiliates This note discusses the company's investments in and income from non-consolidated entities - Income allocation from Legacy SLP Interest was $10.6 million in H1 2025, compared to a loss allocation of $4.7 million in H1 2024[136] - Distributions from Avillion I were $13.4 million in H1 2025 and H1 2024[138] - Received $27.4 million milestone payment from Avillion II related to Airsupra in Q1 2025[139] - Unfunded commitments related to Avillion Entities totaled $10.3 million as of June 30, 2025[140] Note 11. Research and Development Funding Expense This note details the expenses incurred for funding development-stage biopharmaceutical assets R&D Funding Expense | R&D Funding Expense (in thousands) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :------------------------------- | :--------------------------- | :--------------------------- | | Total R&D funding expense | $300,500 | $351,000 | - H1 2025 R&D funding primarily includes $250.0 million for daraxonrasib and $100.0 million for litifilimab[142] - Unfunded commitment of $150 million for litifilimab as of June 30, 2025[143] Note 12. Borrowings This note provides a summary of the company's outstanding debt and credit facilities Debt Summary | Borrowing Type (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :---------------------------- | :------------------ | :---------------------- | | Senior Unsecured Notes | $7,800,000 | $7,800,000 | | Term Loan | $380,000 | $— | | Unamortized debt discount and issuance costs | $(177,501) | $(187,574) | | Total debt carrying value | $8,002,499 | $7,612,426 | - Assumed a $380 million Term Loan as part of the Internalization, maturing July 2027[144][152] - $1.8 billion Revolving Credit Facility available, with no outstanding borrowings as of June 30, 2025[153] - Future principal payments total $8.18 billion, with $1.0 billion due in the remainder of 2025 and $1.38 billion in 2027[156] Note 13. Earnings per Share This note presents the calculation of basic and diluted earnings per share for Class A ordinary shares Earnings Per Share | EPS (per share) | 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 EPS | $0.07 | $0.23 | $0.63 | $0.24 | | Diluted EPS | $0.07 | $0.23 | $0.62 | $0.24 | - Dilutive effects include assumed exchanges of Class B ordinary shares (138.3 million for Q2 2025) and RP Holdings Class E Interests (0.4 million for Q2 2025)[159] Note 14. Indirect Cash Flow This note provides a reconciliation of net income to net cash provided by operating activities Reconciliation of Net Income to Operating Cash Flow | Adjustment (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | | Consolidated net income | $524,068 | $190,104 | | Income from financial royalty assets | $(1,089,908) | $(1,054,411) | | Provision for changes in expected cash flows from financial royalty assets | $(331,078) | $796,029 | | Cash collected on financial royalty assets | $1,556,262 | $1,414,324 | | Net cash provided by operating activities | $960,060 | $1,322,847 | Note 15. Commitments and Contingencies This note discloses the company's contractual commitments, contingencies, and legal proceedings - $275 million remains available under Cytokinetics Funding Commitments[162] - Entered a $2 billion funding arrangement with Revolution Medicines, including a $1.25 billion royalty purchase and a $750 million term loan[163][165] - Recorded a $92.5 million provision for credit losses on unfunded commitments related to Revolution Medicines[166] - Operating lease liabilities for office spaces total $20.8 million (present value)[168] - Commenced dispute resolution procedures with Vertex regarding Alyftrek royalty receipts[171] Note 16. Related Party Transactions This note details transactions with related parties, including those associated with the Internalization - Internalization completed on May 16, 2025, involving acquisition of RP Manager from related parties[172] - Operating and Personnel Payments to Legacy Manager ceased post-Internalization[173] Distributions Payable to Non-Controlling Interests | Distributions Payable to Non-Controlling Interests (in thousands) | As of June 30, 2025 | As of December 31, 2024 | | :-------------------------------------------------------------- | :------------------ | :---------------------- | | Payable to Founder | $808 | $— | | Payable to Legacy Investors Partnerships | $97,389 | $75,811 | | Total | $98,197 | $75,811 | 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, operational results, and liquidity Business Overview This section describes the company's core business of acquiring biopharmaceutical royalties and funding innovation - Royalty Pharma is the largest buyer of biopharmaceutical royalties and a leading funder of innovation[186] - Portfolio includes royalties on over 35 commercial products and 16 development-stage product candidates[186] Background and Format of Presentation This section explains the company's organizational structure and the impact of its recent Internalization - Royalty Pharma plc holds a controlling equity interest in Royalty Pharma Holdings Ltd (RP Holdings)[185] - The company completed the Internalization of RP Manager on May 16, 2025, integrating former external manager employees[190] Understanding Our Financial Reporting This section clarifies key aspects of the company's financial reporting, including non-GAAP measures - Financial royalty assets are classified as financial assets measured under the effective interest method[191] - Income statement activity can be volatile due to non-cash provisions for changes in expected cash flows from financial royalty assets[193][194] - Management uses "Portfolio Receipts" as a primary measure of operating performance, focusing on cash generation[195] Understanding Our Results of Operations This section breaks down the key components of the company's income statement - Non-controlling interests include Legacy Investors Partnerships, Continuing Investors Partnerships, Founder's Equity, and Holders of RP Holdings Class E Interests[196][197][200] - Equity Performance Awards (EPAs) represent 20% of Net Economic Profit from investments, generally settled in RP Holdings' Class B Interests[198] - Total income and other revenues primarily consist of interest income from financial royalty assets and royalty income from R&D funding arrangements[201] - Provision for changes in expected cash flows includes non-cash adjustments for forecasted royalty payments and credit losses[207] - R&D funding expense covers development-stage funding payments for royalties or milestones on product candidates[211] - General and administrative expenses now primarily consist of employee compensation (cash and share-based) post-Internalization, replacing Operating and Personnel Payments[212][213] Results of Operations This section provides a detailed analysis of the company's operating results for the reported periods Key Operational Metrics | 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 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total income and other revenues | $578,665 | $537,267 | $1,146,912 | $1,105,245 | | Operating income | $209,799 | $269,630 | $743,980 | $195,856 | | Consolidated net income | $90,635 | $194,377 | $524,068 | $190,104 | | Net income attributable to Royalty Pharma plc | $30,176 | $102,004 | $268,525 | $106,782 | - Income from financial royalty assets increased by 7.3% in Q2 2025 and 3.4% in H1 2025, primarily due to the Voranigo royalty acquisition[222][223] - Provision for changes in expected cash flows from financial royalty assets shifted from an expense of $212.4 million in Q2 2024 to an income of $203.9 million in Q2 2025, driven by increases in sales forecasts for Evrysdi and Xtandi[228] - R&D funding expense increased by $300.0 million in Q2 2025 and $350.0 million in H1 2025, mainly for daraxonrasib and litifilimab[234][235] - G&A expenses increased by 228.6% in Q2 2025 and 158.5% in H1 2025, primarily due to higher share-based compensation and Internalization-related costs[236][237] - Interest expense increased by 40.1% in Q2 2025 and 43.6% in H1 2025, due to new senior unsecured notes and the assumed term loan[240][241] Portfolio Overview This section reviews the performance of the company's royalty portfolio, a key non-GAAP measure - Portfolio Receipts increased by 19.7% in Q2 2025 and 18.2% in H1 2025[257] Portfolio Receipts by Product | Product (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Cystic fibrosis franchise | $443,548 | $413,230 | $30,318 | 7.3% | | Trelegy | $141,853 | $119,074 | $22,779 | 19.1% | | Tysabri | $116,910 | $132,909 | $(15,999) | (12.0)% | | Xtandi | $94,339 | $79,628 | $14,711 | 18.5% | | Imbruvica | $89,435 | $99,191 | $(9,756) | (9.8)% | | Evrysdi | $85,550 | $69,879 | $15,671 | 22.4% | | Promacta | $76,828 | $73,045 | $3,783 | 5.2% | | Tremfya | $72,606 | $66,072 | $6,534 | 9.9% | | Voranigo | $46,036 | $— | $46,036 | n/a | | Cabometyx/Cometriq | $41,033 | $34,565 | $6,468 | 18.7% | | Spinraza | $24,894 | $16,236 | $8,658 | 53.3% | | Trodelvy | $22,557 | $20,656 | $1,901 | 9.2% | | Erleada | $21,031 | $18,205 | $2,826 | 15.5% | | Other products | $183,364 | $166,927 | $16,437 | 9.8% | | Royalty Receipts | $1,459,984 | $1,309,617 | $150,367 | 11.5% | | Milestones and other contractual receipts | $106,772 | $15,361 | $91,411 | n/a | | Portfolio Receipts | $1,566,756 | $1,324,978 | $241,778 | 18.2% | - Milestones and other contractual receipts increased by $91.4 million in H1 2025, driven by a one-time distribution from Legacy SLP Interest and a $27.4 million Airsupra milestone payment[265] Key Developments Relating to Our Portfolio This section highlights recent clinical and regulatory updates for key products in the portfolio - Vertex received EC approval for Kaftrio label expansion for CF patients aged 2 years and older[262] - Gilead announced positive Phase 3 results for Trodelvy in previously untreated PD-L1+ mTNBC[263] - Johnson & Johnson received EC approval for Tremfya in ulcerative colitis and Crohn's disease[264][265] - Cytokinetics announced positive topline results from MAPLE-HCM Phase 3 trial for aficamten[270] - Roche expects to initiate a Phase 3 program for trontinemab at the end of 2025[270] Investments Overview This section summarizes the company's recent investment activities and funding arrangements - Invested $696.3 million in royalties, milestones, and other contractual receipts in H1 2025[271] - Entered a $2 billion funding arrangement with Revolution Medicines for daraxonrasib, including a $250 million upfront payment for a synthetic royalty[272] - Entered an R&D funding arrangement with Biogen for litifilimab, providing $50 million upfront out of $250 million[272] - Acquired synthetic royalties on Rytelo for $125 million and Niktimvo for $350 million in November 2024[272] - Acquired a royalty interest in Voranigo for $905 million upfront in May 2024, following FDA approval in August 2024[272] Liquidity and Capital Resources This section analyzes the company's cash flows, debt, and overall financial position - Net cash provided by operating activities was $960.1 million in H1 2025, down from $1.3 billion in H1 2024[273][278] - Total debt carrying value was $8.0 billion as of June 30, 2025, including $380 million Term Loan assumed from Internalization[283][285] - $1.8 billion Revolving Credit Facility available, with no outstanding borrowings as of June 30, 2025[286] - Cash used in financing activities was $1.4 billion in H1 2025, primarily due to $1.0 billion in Class A ordinary share repurchases[281] - The company was in compliance with all financial covenants under its debt agreements as of June 30, 2025[287] Non-GAAP Liquidity Measures | Non-GAAP Liquidity Measures (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------------- | :--------------------------- | :--------------------------- | | Portfolio Receipts | $1,566,756 | $1,324,978 | | Adjusted EBITDA | $1,371,035 | $1,216,406 | | Portfolio Cash Flow | $1,252,104 | $1,157,552 | Critical Accounting Policies and Use of Estimates This section discusses the accounting policies that require the most significant management judgment - Most critical accounting policies relate to financial royalty assets, measured at amortized cost using the prospective effective interest method[311] - Significant judgment is required for forecasting expected future cash flows and royalty durations[311] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section states there have been no material changes in market risk since the last annual report - No material changes in market risk exposures reported[312] Item 4. Controls and Procedures This section provides management's conclusion on the effectiveness of the company's disclosure controls - Disclosure controls and procedures were effective as of June 30, 2025[313] - No material changes in internal control over financial reporting in Q2 2025[314] - Cash employee compensation for RP Manager (acquired in Q2 2025) will be excluded from the 2025 internal control assessment[315] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section discloses ongoing legal actions, including a dispute with Vertex regarding Alyftrek royalties - The company is a party to legal actions in the ordinary course of business[171] - A dispute with Vertex regarding Alyftrek royalty receipts commenced in Q2 2025[171] - No accruals for legal proceedings have been established as of June 30, 2025, due to indeterminable probability of loss or damages[171] Item 1A. Risk Factors This section outlines risks related to product sales, competition, leverage, accounting volatility, and the recent Internalization - Sales of biopharmaceutical products on which royalties are received are subject to various risks, including pricing pressures, competition, and regulatory changes[322] - Acquisitions of development-stage product candidates carry uncertainties regarding regulatory approval, market acceptance, and funding[324][330] - The company uses leverage, which magnifies potential losses if royalties do not generate sufficient income[333] - GAAP results of operations can be volatile and unpredictable due to the effective interest method for financial royalty assets[351] - The Internalization exposes the company to new and additional costs and risks, including increased direct overhead for employee compensation[413] - The company expects to be classified as a PFIC for U.S. federal income tax purposes, which could subject U.S. holders to adverse tax consequences[451] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's share repurchase activity during the second quarter of 2025 - No unregistered sales of equity securities[461] Class A Ordinary Share Repurchases | Class A Ordinary Share Repurchases (in thousands, except per share amounts) | Q2 2025 (Total) | | :---------------------------------------------------------------------- | :-------------- | | Total Number of Shares Purchased | 8,499 | | Average Price Paid Per Share | $32.58 | | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program | $2,010,004 | - The share repurchase program, authorized in January 2025 for up to $3.0 billion, expires on June 23, 2027[463] Item 3. Defaults Upon Senior Securities This item is not applicable to the company for the reported period - Not applicable[464] Item 4. Mine Safety Disclosures This item is not applicable to the company for the reported period - Not applicable[465] Item 5. Other Information This section confirms no changes to director or officer trading plans during the quarter - No Rule 10b5-1 trading arrangements were adopted, modified, or terminated by directors or Section 16 officers in Q2 2025[466] Item 6. Exhibits This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q - The report includes various exhibits such as amended articles of association, loan agreements, and equity incentive plans[467]