Financial Performance and Strategy - The company plans to drive margin expansion through operational initiatives aimed at increasing net income, cash flow, Adjusted Net Income, and Adjusted EBITDA over the long term[59]. - R&D costs totaled $5.8 million, $3.3 million, and $4.7 million for fiscal years 2025, 2024, and 2023, respectively[77]. - The company purchased approximately $1.4 billion of chassis, direct materials, and other components from outside suppliers in fiscal year 2025, with vehicle chassis representing about 28% of total purchases[78]. - As of October 31, 2025, the company had $40.0 million of principal outstanding under its Amended 2021 ABL Facility at an average rate of 5.6% per annum[298]. - A 100-basis point increase in floating interest rates would increase interest expense by $0.4 million annually, while a decrease would reduce it by the same amount[298]. - The company purchases commodities like aluminum and raw steel, and has implemented general price increases to offset commodity price increases[299]. Operations and Manufacturing - The company operates 16 manufacturing facilities across the U.S., totaling approximately 3.9 million square feet of manufacturing, service, and warehouse space[73]. - The company employs approximately 5,500 employees, with about 75% in production roles[92]. Distribution and Market Expansion - The company aims to enhance its distribution network by selectively adding dealers in new territories and expanding direct sales capabilities in targeted markets[61]. - The company seeks value-enhancing acquisitions to broaden product offerings and geographic reach while achieving targeted financial returns[63]. - The company believes there is international demand for its products and may seek to expand distribution globally[61]. - The company’s distribution network consists of leading dealers that have sold its products for over a decade, fostering strong customer loyalty[65]. Research and Development - The company’s engineering and R&D capabilities are essential for remaining competitive, focusing on new product development and enhancements[75]. - The company’s markets are highly competitive, with key competitors including Thor Industries, Winnebago Industries, and Pierce Manufacturing[88]. Employee Relations and Development - The company conducts annual talent reviews to identify potential successors for key leadership roles and assess development needs[92]. - Employee engagement is driven through structured roundtable discussions, with outcomes shared with senior leadership[92]. - The company has no employees under collective bargaining agreements, indicating generally favorable employee relations[92]. - The Health and Safety Management System is guided by an executive committee to ensure compliance and best practices[92]. - The company provides technical, professional, and leadership training through various learning formats, including partnerships with local educational institutions[92].

Financial Performance - Net sales reached $3.12 billion, an increase of 8.3% year over year[7] - Gross margin improved to 29.8%, up 50 basis points year over year[7] - Net income was $59.2 million, with a net margin of 1.9%, an increase of 180 basis points year over year[7] - Adjusted EBITDA was $180.9 million, reflecting a year-over-year increase of $42.7 million[7] - Adjusted EBITDA margin increased to 5.8%, up 100 basis points year over year[7] - Basic earnings per share rose to $0.14, an increase of $0.13 year over year[7] - Diluted earnings per share also increased to $0.14, up $0.13 year over year[7] - Adjusted net income was $135.7 million, an increase of $50.7 million year over year[7] - Net income for the 39 weeks ended November 2, 2025, was $183.6 million, a decrease of 50.4% from $369.9 million in the prior year[23] - Adjusted EBITDA for the 39 weeks ended November 2, 2025, was $556.9 million, reflecting a 24.9% increase from $446.0 million in 2024[23] - Basic earnings per share for the 39 weeks ended November 2, 2025, was $0.44, down 49.4% from $0.87 in the previous year[23] - The adjusted net income for the 39 weeks ended November 2, 2025, was $425.7 million, a 30.3% increase from $326.8 million in 2024[23] - Net income for the 13 weeks ended November 2, 2025, was $59.2 million, compared to $3.9 million for the same period in 2024, representing a significant increase[24] - Adjusted EBITDA for the 39 weeks ended November 2, 2025, reached $556.9 million, up from $446.0 million in 2024, indicating a growth of approximately 24.7%[24] - Adjusted diluted earnings per share for the 39 weeks ended November 2, 2025, was $1.00, compared to $0.75 in 2024, representing a 33.3% increase[25] - Net sales for the 39 weeks ended November 2, 2025, were $9,336.8 million, compared to $8,613.9 million in 2024, showing a growth of approximately 8.4%[24] - Adjusted EBITDA margin for the 39 weeks ended November 2, 2025, was 6.0%, compared to 5.2% in 2024, indicating an improvement of 0.8 percentage points[24] - The net margin for the 39 weeks ended November 2, 2025, was 2.0%, down from 4.3% in 2024, indicating a decline of 2.3 percentage points[24] Customer Engagement and Market Position - The company continues to expand market share and outperform the pet category[4] - Chewy aims to enhance customer engagement through innovative product offerings and services[6] - Active customers increased by 4.9% to 21.155 million compared to 20.160 million in the previous year[23] - Autoship customer sales for the 39 weeks ended November 2, 2025, totaled $7,753.4 million, a 14.4% increase from $6,776.0 million in 2024[23] Cash Flow and Capital Expenditures - Net cash provided by operating activities for the 39 weeks ended November 2, 2025, was $428.2 million, up 10.1% from $388.8 million in 2024[23] - Free cash flow for the 39 weeks ended November 2, 2025, was $330.4 million, an increase of 11.7% compared to $295.9 million in the prior year[23] - Free cash flow for the 39 weeks ended November 2, 2025, was $330.4 million, compared to $295.9 million in 2024, reflecting an increase of about 11.6%[26] - Capital expenditures for the 39 weeks ended November 2, 2025, totaled $97.8 million, compared to $92.9 million in 2024, reflecting an increase of approximately 5.3%[26] - The company anticipates that free cash flow may be affected by the timing of capital investments and fluctuations in growth and working capital[26]

Revenue Performance - Revenue for the fourth quarter of fiscal 2025 was $215.8 million, down 3.1% year-over-year but up 2.6% sequentially[6] - Full year revenue for fiscal 2025 was $849.3 million, a decrease of 2.0% compared to $866.9 million in fiscal 2024[6] - IC revenue for the fourth quarter was $157.4 million, down 4% year-over-year but up 7% sequentially[6] - FPD revenue for the fourth quarter was $58.3 million, down 1% year-over-year and down 7% sequentially[6] - For Q1 fiscal 2026, revenue is expected to be between $217 million and $225 million, with non-GAAP net income projected between $0.51 and $0.59 per diluted share[7] Net Income and Earnings Per Share - GAAP net income for the fourth quarter was $61.8 million, or $1.07 per diluted share, compared to $33.9 million, or $0.54 per diluted share in Q4 2024[6] - Non-GAAP net income for the fourth quarter was $34.6 million, or $0.60 per diluted share, compared to $37.1 million, or $0.59 per diluted share in Q4 2024[6] - U.S. GAAP net income attributable to Photronics, Inc. shareholders for the three months ended October 31, 2025, was $61.8 million, compared to $33.9 million for the same period in 2024, representing an increase of 82.5%[21] - Non-GAAP net income attributable to Photronics, Inc. shareholders for the year ended October 31, 2025, was $120.5 million, slightly down from $127.6 million in 2024, a decrease of 5.4%[21] - U.S. GAAP diluted earnings per share attributable to Photronics, Inc. shareholders for the three months ended October 31, 2025, was $1.07, up from $0.54 in the same period of 2024, an increase of 98.1%[21] - Non-GAAP diluted earnings per share attributable to Photronics, Inc. shareholders for the year ended October 31, 2025, was $2.01, compared to $2.05 in 2024, a decrease of 1.9%[21] Cash Flow and Investments - Cash generated from operating activities for the full year was $247.8 million, with $188.1 million invested in organic growth through capital expenditures[6] - Cash, cash equivalents, and short-term investments at the end of Q4 were $588.2 million, with $422.3 million associated with joint ventures[6] Foreign Exchange and Tax Effects - The estimated tax effects of foreign exchange (FX) gain/loss for the three months ended October 31, 2025, were $4.78 million, compared to $(1.94) million in the same period of 2024[21] - FX gain/loss for the three months ended October 31, 2025, was $(18.62) million, compared to $7.76 million in the same period of 2024[21] - The reversal of deferred tax valuation allowance for the year ended October 31, 2025, was $(16.75) million, consistent with the previous year[21] Shareholder Information - The weighted-average number of diluted common shares outstanding decreased to 57.98 million for the three months ended October 31, 2025, from 62.46 million in the same period of 2024[21] - Non-GAAP adjustments affected diluted earnings per share by $(0.47) for the three months ended October 31, 2025, compared to $0.05 in the same period of 2024[21] - The company reported a noncontrolling interest effect of $3.34 million for the three months ended October 31, 2025, compared to $(2.64) million in the same period of 2024[21] Strategic Outlook - The company anticipates that the extension of its capabilities in Korea will help diversify its geographic revenue mix and increase exposure to leading-edge chip designs[3]

December 10, 2025 NEWS RELEASE FOR IMMEDIATE RELEASE REV Group, Inc. Reports Strong Fiscal 2025 Fourth Quarter and Full Year Results Fiscal 2025 Fourth Quarter and Full Year Results Brookfield, Wis. -- (BUSINESS WIRE) -- REV Group, Inc. (NYSE: REVG) today reported results for the three months ended October 31, 2025 ("fourth quarter 2025"). Consolidated net sales in the fourth quarter 2025 were $664.4 million, compared to $597.9 million for the three months ended October 31, 2024 ("fourth quarter 2024"). Net ...

Financial Performance - Q3 FY25 net sales decreased by 0.5% to $150.5 million compared to $151.3 million in Q3 FY24[4] - Gross margin for Q3 FY25 was 70.9%, down from 71.4% in Q3 FY24[4] - Operating income for Q3 FY25 was $14.9 million, with an operating income margin of 9.9%, down from 12.7% in Q3 FY24[4] - Net income for Q3 FY25 was $9.2 million, compared to $12.3 million in Q3 FY24, resulting in diluted earnings per share of $0.60[4] - Adjusted EBITDA for Q3 FY25 was $24.3 million, with an adjusted EBITDA margin of 16.1%, down from 17.7% in Q3 FY24[7] - For the full fiscal year 2025, the company expects net sales to decline approximately 5% to 7% compared to fiscal 2024[14] - Net income for the thirteen weeks ended November 1, 2025, was $9.205 million, compared to $12.348 million in the prior year, representing a decrease of 25.5%[24] - Net income for the thirty-nine weeks ended November 1, 2025, was $31,412,000, a decrease of 15.1% compared to $37,235,000 for the same period in 2024[37] - Adjusted net income for the thirty-nine weeks ended November 1, 2025, was $37,523,000, compared to $47,260,000 for the same period in 2024, reflecting a decrease of 20.5%[53] Sales and Revenue - Direct to consumer net sales represented 46.8% of total net sales, increasing by 2.0% year-over-year[4] - Net sales for the thirteen weeks ended November 1, 2025, were $150.528 million, a slight decrease of 0.5% compared to $151.260 million for the same period in 2024[24] - For the thirty-nine weeks ended November 1, 2025, net sales totaled $458.139 million, a decrease of 2.1% from $468.015 million in the same period of 2024[27] - Net sales for the thirty-nine weeks ended November 1, 2025, were $458,139,000, a decline of 2.0% from $468,015,000 in the previous year[37] Operating Metrics - Inventory at the end of Q3 FY25 was $66.9 million, up from $61.7 million at the end of Q3 FY24[7] - Adjusted EBITDA for the thirteen weeks ended November 1, 2025, was $24.250 million, down from $26.808 million, with an adjusted EBITDA margin of 16.1%[32] - Adjusted EBITDA for the thirty-nine weeks ended November 1, 2025, was $77,174,000, down 16.7% from $92,642,000 in the prior year[37] - Adjusted EBITDA margin for the thirty-nine weeks ended November 1, 2025, was 16.8%, a decrease from 19.8% in the same period of 2024[37] - Operating income decreased to $14.920 million from $19.227 million, indicating a decline of 22.0% year-over-year[24] - Operating income for the thirty-nine weeks ended November 1, 2025, was $50,765,000, down 28.2% from $70,621,000 in the previous year[42] Cash Flow and Dividends - The company declared a quarterly cash dividend of $0.08 per share, payable on January 7, 2026[11] - The company declared cash dividends of $0.08 per common share for the thirteen weeks ended November 1, 2025, compared to $0.07 in the prior year[24] - Free cash flow for the thirty-nine weeks ended November 1, 2025, was $34,939,000, down 25.5% from $46,900,000 in the prior year[60] - Net cash provided by operating activities for the thirty-nine weeks ended November 1, 2025, was $43,749,000, a decrease of 23.2% compared to $56,947,000 in 2024[58] - The company reported a net cash used in financing activities of $12,360,000 for the thirty-nine weeks ended November 1, 2025, compared to $70,307,000 in the prior year[58] Assets and Liabilities - Total assets increased to $457.997 million as of November 1, 2025, from $417.699 million as of February 1, 2025[29] - Total liabilities rose to $328.948 million as of November 1, 2025, compared to $311.930 million as of February 1, 2025[29] - The company reported an accumulated deficit of $105.230 million as of November 1, 2025, an improvement from $136.642 million as of February 1, 2025[29] Store Expansion - The company opened two new stores in Q3 FY25, bringing the total store count to 249[7]

Production and Operations - For the three months ended October 31, 2025, the company produced 68,612 pounds of precipitated uranium and dried and drummed U3O8, with a total initial production of 103,545 pounds during Fiscal 2025 [78]. - The Irigaray central processing plant has a licensed production capacity of 4 million pounds of U3O8 per year, serving as the hub for the company's four fully permitted ISR projects in Wyoming [82]. - The company produced 68,612 pounds of precipitated uranium during the three months ended October 31, 2025, as part of ramping up mining activities at the Christensen Ranch Mine [105]. - The company is advancing its Roughrider and Burke Hollow Projects, with major construction milestones at Burke Hollow substantially complete [79]. Financial Performance - For the three months ended October 31, 2025, the company recorded no revenue, compared to $17.09 million in revenue for the same period in 2024 [103]. - The net loss for the three months ended October 31, 2025, was $10.34 million ($0.02 per share), an improvement from a net loss of $20.16 million ($0.05 per share) in the same period in 2024 [104]. - Interest income for the three months ended October 31, 2025, totaled $2.76 million, up from $1.12 million in the same period in 2024 [117]. - The accumulated deficit balance as of October 31, 2025, was $416.90 million, indicating ongoing challenges in achieving profitability [119]. Financing Activities - The company completed a public offering of 15,500,000 shares at $13.15 per share, raising gross proceeds of $203.83 million, intended for the development of a new uranium refining and conversion facility [84]. - The company received net proceeds of $342.76 million during the three months ended October 31, 2025, from various financing activities, compared to $64.65 million in the same period in 2024 [119]. - During the three months ended October 31, 2025, the company issued 10,077,186 shares under the 2024 ATM Offering, generating gross proceeds of $101.97 million [131]. - A public offering on October 6, 2025, resulted in gross proceeds of $203.83 million from 15,500,000 shares sold at $13.15 per share, with an additional $30.57 million from an over-allotment option [132]. - The company completed a private placement of 575,000 flow-through shares for gross proceeds of $8.63 million, aimed at Canadian exploration expenditures [133]. - Net cash used in operating activities for the three months ended October 31, 2025, totaled $34.31 million, primarily due to mineral property expenditures of $20.92 million [134]. - Net cash provided by financing activities during the same period was $339.68 million, mainly from proceeds of the 2024 ATM Offerings and public offering [135]. Market Conditions - Uranium prices averaged $76.78 per pound U3O8 during the three months ended October 31, 2025, a 5.4% decrease from $81.13 per pound in the same period of 2024 [96]. - The uranium market is projected to experience a structural deficit, with a mid-case gap between production and requirements of 51 million pounds U3O8 in 2025 and 2026, accumulating to over 355 million pounds by 2035 [97]. Strategic Initiatives - The company has initiated a feasibility study for a new uranium refining and conversion facility in the U.S., supported by a $234 million public offering [83]. - The company aims to establish additional uranium projects through exploration and acquisitions, focusing on low-cost ISR mining to enhance its competitive position [86]. - The U.S. government has entered a strategic partnership for the construction of new nuclear reactors, with at least $80 billion allocated, indicating strong policy support for the nuclear industry [93]. Asset Management - As of October 31, 2025, the company held 1,356,000 pounds of purchased uranium, with agreements to purchase an additional 300,000 pounds at an average price of approximately $37.05 per pound [89]. - The total estimated reclamation costs for all projects as of October 31, 2025, were $88.53 million, with $60.82 million secured through surety bonds [118]. - As of October 31, 2025, the company had cash and cash equivalents of $454.72 million, significantly higher than $148.93 million as of July 31, 2025 [118]. - The company has a 13.0% equity interest in URC as of October 31, 2025, down from 13.5% as of July 31, 2025, reflecting dilution from additional share issuances [112]. - As of October 31, 2025, the company had 3,735,787 in-the-money stock options and 159,091 in-the-money warrants, representing potential gross proceeds of approximately $10.88 million if exercised [137]. - The company received 200,000 pounds of uranium inventory at a purchase price of $7.49 million subsequent to October 31, 2025 [142].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the quarterly period ended November 1, 2025 OR ☐ 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: 001-33261 AEROVIRONMENT, INC. (Exact name of registrant as specified in its charter) Delaware 95-2705790 (State or other ...

Revenue Performance - Revenue for the three months ended October 31, 2025, was $190.8 million, a 25.5% increase from $152.1 million in the same period of 2024[153]. - Revenue for the three months ended October 31, 2025, was $190,842,000, representing a $38,790,000 increase or 25.5% compared to $152,052,000 for the same period in 2024[187]. - Revenue for the nine months ended October 31, 2025, increased by $100.0 million, or 23.1%, to $533.0 million compared to $433.0 million for the same period in 2024, driven primarily by a $92.0 million increase in subscription revenue[194]. Customer Metrics - Monthly active users increased to approximately 7.8 billion as of October 31, 2025, up from approximately 7.2 billion as of January 31, 2025[157]. - The company had 2,528 customers as of October 31, 2025, across various industries[154]. - Total customers grew to 2,528 as of October 31, 2025, from 2,211 as of October 31, 2024, indicating strong customer acquisition[194]. Financial Losses - Net losses for the three months ended October 31, 2025, were $35.8 million, compared to $28.1 million in the same period of 2024[153]. Cash Flow and Liquidity - Non-GAAP free cash flow was $44.2 million for the nine months ended October 31, 2025, compared to $4.4 million for the same period in 2024[153]. - Net cash provided by operating activities was $52.1 million for the nine months ended October 31, 2025, compared to $19.6 million for the same period in 2024[206]. - Free cash flow increased to $44.2 million for the nine months ended October 31, 2025, from $4.4 million in the same period in 2024, reflecting higher collections from new contracts[216]. - Cash, cash equivalents, and marketable securities totaled $387.3 million as of October 31, 2025, providing a solid liquidity position for the company[203]. - The company anticipates that its current cash and marketable securities will be sufficient to meet working capital and capital expenditure requirements for at least the next 12 months[218]. Operating Expenses - Operating expenses are expected to increase as the company expands its operations and personnel headcount[176]. - Sales and marketing expenses rose to $88,596,000, an increase of $13,938,000 or 18.7% compared to $74,658,000 in 2024, driven by higher personnel and promotional costs[190]. - Research and development expenses increased by $11,212,000 or 34.1% to $44,067,000, primarily due to higher personnel costs and an increase in software costs[191]. - General and administrative expenses were $33,093,000, up $1,894,000 or 6.1% from $31,199,000 in 2024, largely due to increased personnel costs[192]. - Operating expenses for sales and marketing rose by $32.3 million, or 15.1%, to $245.3 million, primarily due to increased personnel and overhead costs[198]. - Research and development expenses increased by $21.7 million, or 21.7%, to $122.1 million, driven by higher personnel and software costs[199]. - General and administrative expenses rose by $24.1 million, or 27.9%, to $110.4 million, largely due to increased personnel costs and acquisition-related expenses[200]. Profitability Metrics - Gross profit for the three months ended October 31, 2025, was $128,211,000, a $22,069,000 increase or 20.8% from $106,142,000 in 2024, with a gross margin of 67.2%[188][189]. - Gross profit increased by $62.2 million, or 20.8%, to $361.3 million, while gross margin decreased to 67.8% from 69.1% due to increased costs related to the acquisition of OfferFit and a one-time charge related to a service disruption[197]. Retention and Growth Metrics - The dollar-based net retention rate for the trailing 12 months ended October 31, 2025, was 108%, down from 113% for the same period in 2024[161]. - Subscription revenue increased by $35,400,000, or 24.2%, with 44.8% of this growth coming from existing customers and 55.2% from new customers, bringing total customers to 2,528[187]. Future Outlook and Investments - The company plans to continue investing in research and development to enhance its platform and expand channel offerings[165]. - The company expects to continue investing in sales and marketing to drive growth, anticipating an increase in absolute dollars for these expenses[178]. - Research and development expenses are also expected to rise in absolute dollars as the company enhances its platform to attract new customers[180]. - General and administrative expenses are projected to increase in absolute dollars but decrease as a percentage of revenue over the long term as the company scales its internal support functions[182]. Market and Economic Factors - The company has experienced seasonality in revenue costs, with the highest usage typically occurring in the fourth quarter due to holiday season activities[221]. - A hypothetical 10% change in interest rates would not have a material impact on the company's consolidated financial statements as of October 31, 2025[228]. - The company’s revenue is primarily denominated in U.S. dollars, with minimal exposure to foreign currency risk, except for sales in Japan denominated in Yen[229]. - The company uses derivative financial instruments, such as forward exchange contracts, to hedge against foreign currency exchange rate fluctuations[230]. - The company does not believe inflation has materially affected its financial condition, but rising costs could harm its operations if not offset by price increases[226]. Commitments and Obligations - The company has non-cancelable purchase commitments totaling $134.1 million and operating lease obligations of $84.1 million as of October 31, 2025[219]. - The company’s future funding requirements may lead to seeking additional equity or debt if current estimates prove inaccurate[220].

Sales Performance - Sales for the three-month period ended November 1, 2025, increased by $0.5 billion, or 10%, compared to the same period in 2024, driven by a 7% increase in comparable store sales and a $0.2 billion increase in non-comparable store sales [73]. - Comparable store sales growth for the nine-month period ended November 1, 2025, was 3%, reflecting a 2% increase in basket size and a 1% increase in traffic [74]. - The company opened 40 new stores in the third quarter of fiscal 2025, completing a total of 90 new store openings for the fiscal year [68]. Financial Performance - Operating income as a percentage of sales decreased by 35 basis points for the three-month period and 45 basis points for the nine-month period ended November 1, 2025, primarily due to increased cost of goods sold [81]. - Diluted earnings per share for the three-month period ended November 1, 2025, increased by $0.10, or 7%, to $1.58, attributed to a 5% increase in net earnings and a 2% reduction in weighted-average diluted shares outstanding [87]. - The effective tax rate for the three-month period ended November 1, 2025, was approximately 25%, up from 24% in the same period in 2024, primarily due to tax effects associated with stock-based compensation [85]. Cost Management - Cost of goods sold as a percentage of sales for the three-month period ended November 1, 2025, increased by approximately 35 basis points, mainly due to higher distribution costs and tariff-related processing costs [77]. - Selling, general and administrative expenses increased by $0.1 billion for the three-month period ended November 1, 2025, primarily due to higher store-related costs [79]. Cash Flow and Investments - Net cash provided by operating activities was $1.9 billion for the nine months ended November 1, 2025, compared to $1.5 billion for the same period in the prior year, reflecting a $0.4 billion increase [92][93]. - Cash used in investing activities increased to $0.6 billion for the nine months ended November 1, 2025, from $0.5 billion in the prior year, primarily due to higher capital expenditures related to a new distribution center [96][97]. - Net cash used in financing activities was $2.0 billion for the nine months ended November 1, 2025, up from $1.5 billion in the prior year, mainly due to increased Senior Note repayments [99][100]. Debt and Shareholder Returns - As of November 1, 2025, the company had approximately $1.5 billion of outstanding unsecured Senior Notes, with $499 million classified in current liabilities [102]. - The company repurchased 5.6 million shares of common stock for $787.5 million under its stock repurchase program during the nine months ended November 1, 2025 [103]. - The company declared a quarterly cash dividend of $0.4050 per common share on November 19, 2025, with total cash dividends paid of $397.2 million for the nine months ended November 1, 2025 [104]. Inventory and Capital Expenditures - Packaway inventory represented 36% of total inventory as of November 1, 2025, compared to 38% a year earlier, indicating a strategic management of inventory levels [95]. - Capital expenditures for fiscal 2025 are projected to be approximately $800 million, focusing on new stores and supply chain investments [98]. Liquidity - The company ended the third quarter of fiscal 2025 with $4.1 billion of unrestricted cash balances, indicating strong liquidity [106]. - The company expects existing cash, cash equivalents, and credit facilities to meet operational needs for at least the next 12 months [106].

Financial Performance - Total revenue for the third quarter of fiscal 2026 was $67.6 million, representing a 4% year-over-year increase, primarily driven by growth in Ooma Business[94] - GAAP net income for the quarter was $1.4 million, compared to a net loss of $2.4 million in the prior year quarter, indicating operational improvement[94] - Adjusted EBITDA for the third quarter was $8.6 million, an increase from $5.7 million in the prior year quarter[94] - Total revenue for the three months ended October 31, 2025, was $67,625,000, representing a 4% increase from $65,127,000 in the same period of 2024[116] - Net income for the three months ended October 31, 2025, was $1,393,000, compared to a net loss of $2,364,000 in the same period of 2024[115] - For the nine months ended October 31, 2025, the company reported a net income of $2.5 million, a significant improvement from a net loss of $6.6 million in the same period of 2024[135] Revenue Breakdown - Subscription and services revenue from Ooma Business grew 6% year-over-year, mainly due to user growth[94] - Subscription and services revenue increased by $1,818,000 or 3% year-over-year, primarily due to an increase in AirDial lines and average revenue per core user[117] - Product and other revenue rose by $680,000 or 14% year-over-year, mainly driven by an increase in AirDial shipments[118] - Annualized exit recurring revenue (AERR) increased to $242.7 million, up from $234.0 million year-over-year, driven by a higher average revenue per core user[95] - The gross margin for subscription and services remained consistent at 70% year-over-year[122] Cash and Liquidity - As of October 31, 2025, total cash and cash equivalents were $21.7 million, up from $17.9 million as of January 31, 2025[94] - Cash provided by operating activities decreased by $1.8 million year-over-year to $16.99 million, primarily due to working capital impacts from the timing of payments[135] - Cash used in investing activities was $4.0 million, a decrease of $0.7 million year-over-year, mainly due to reduced fixed asset additions[137] - Cash used in financing activities was $9.1 million, down $5.8 million year-over-year, reflecting no repayments of borrowings under the 2023 Credit Agreement in the current period[138] - As of October 31, 2025, the company had zero outstanding borrowings under the 2023 Credit Agreement, which allows for borrowing up to $30.0 million, potentially increasing to $50.0 million[139] Expenses and Cost Management - Total operating expenses decreased by 5% to $39,437,000 for the three months ended October 31, 2025, compared to $41,556,000 in 2024[126] - Research and development expenses decreased by $2,133,000 or 15% year-over-year, primarily due to a reduction in personnel and contractor-related costs[128] Acquisitions and Growth Strategy - Ooma completed the acquisition of FluentStream for approximately $45.0 million in cash, expected to accelerate growth in Ooma Business[91] - The company anticipates subscription and services revenue growth as it expands its user base, particularly through the FluentStream acquisition[104] - The initial term loan of $45.0 million was used to finance the FluentStream acquisition, with future borrowings intended for other acquisitions and working capital[139] Customer Metrics - Core users decreased to 1,233 as of October 31, 2025, down from 1,242 a year earlier, primarily due to a decline in Ooma Residential users[95] - The net dollar subscription retention rate remained stable at 99% year-over-year, reflecting strong customer retention[95] Non-Cash Charges and Working Capital - Non-cash charges for the nine months ended October 31, 2025, totaled $21.1 million, primarily related to stock-based compensation and depreciation[135] - The company experienced an increase of $0.8 million in accounts receivable and $2.3 million in inventories due to the timing of cash collections and inventory costs[136] - Deferred revenue increased by $0.4 million, indicating growth in future revenue recognition[136]