Financial Performance - Net revenue for Q3 2025 was $317.5 million, a decrease of $1.1 million or 0.3% from Q3 2024[3] - U.S. Digital Segment Net revenue increased by $4.0 million or 1.5% to $277.5 million in Q3 2025[3] - Net revenue for the 13 weeks ended October 31, 2025, was $317,487,000, a decrease of 0.4% compared to $318,628,000 for the same period in 2024[21] - Gross profit for the 39 weeks ended October 31, 2025, was $440,618,000, down 2.6% from $452,010,000 in 2024[21] - Operating income increased to $16,767,000 for the 13 weeks ended October 31, 2025, compared to $9,287,000 in 2024, reflecting a 80.5% increase[21] - Net income for the 13 weeks ended October 31, 2025, was $5,164,000, compared to a net loss of $593,000 in the same period of 2024[21] - Adjusted net income for the 13 weeks ended October 31, 2025, was $6,523,000, significantly higher than $1,785,000 in 2024[29] - Adjusted EBITDA increased by 28% to $25.9 million in Q3 2025 compared to $20.3 million in Q3 2024[8] - Adjusted EBITDA for the 39 weeks ended October 31, 2025, was $49,455,000, representing a 5.7% increase compared to $48,909,000 in the prior year[33] Cash and Assets - Cash and cash equivalents increased to $36.3 million as of October 31, 2025, from $30.4 million a year earlier[4] - Total current assets increased to $460,806,000 as of October 31, 2025, compared to $453,495,000 as of November 1, 2024[19] - Cash and cash equivalents increased to $36,344,000 as of October 31, 2025, from $30,401,000 as of November 1, 2024[19] - The company reported a net cash increase of $18,235,000 for the period, ending with cash, cash equivalents, and restricted cash totaling $37,047,000[37] Liabilities and Expenses - Total liabilities stood at $621,647,000 as of October 31, 2025, slightly up from $619,928,000 in 2024[19] - Interest expense for the 39 weeks ended October 31, 2025, was $27,944,000, down from $31,049,000 in the same period last year[33] - Corporate restructuring and other expenses for the 39 weeks ended October 31, 2025, amounted to $7,219,000, compared to $4,482,000 in the previous year[33] Inventory and Cash Flow - Inventories rose by 3% year-over-year to $347.6 million as of October 31, 2025[4] - The company experienced a significant increase in inventories, with a change of $(81,400,000) for the 39 weeks ended October 31, 2025[37] - Cash flows from operating activities for the 39 weeks ended October 31, 2025, resulted in a net cash used of $15,181,000, compared to $12,212,000 in the previous year[37] Future Guidance - The company expects net revenue for Q4 2025 to be between $460.0 million and $490.0 million[12] - The company provided guidance for Q4 Fiscal 2025, projecting adjusted EBITDA between $49,000,000 and $54,000,000[34] - Adjusted net income for Q4 Fiscal 2025 is expected to be between $22,000,000 and $26,000,000, with adjusted diluted earnings per share projected at $0.71 to $0.84[35] Strategic Initiatives - The strategic alternatives process is ongoing, exploring options such as a sale or merger to maximize shareholder value[11] Accumulated Deficit - The company’s accumulated deficit improved to $(101,123,000) as of October 31, 2025, compared to $(112,877,000) in 2024[19]

Washington, D.C. 20549 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 2, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 001-40650 Core & Main, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or or ...

Financial Performance - Net sales increased 1.2% to $2,062 million compared to $2,038 million in the same quarter last year, driven primarily by acquisitions[7] - Gross profit rose 3.3% to $561 million, with a gross profit margin of 27.2%, up from 26.6% in the prior year[9] - Net income increased 2.1% to $143 million, attributed to a decrease in interest expense[12] - Adjusted EBITDA decreased 1.1% to $274 million, impacted by higher SG&A expenses[14] - Operating income decreased 1.3% to $220 million, primarily due to higher SG&A expenses[11] - Net income attributable to Core & Main, Inc. for the third quarter was $137 million, compared to $133 million in the same quarter last year, resulting in diluted earnings per share of $0.72[40] - Adjusted EBITDA for the nine months ended November 2, 2025, was $764 million, up from $751 million for the same period in 2024, reflecting a 1.7% growth[50] - Adjusted Diluted Earnings Per Share for the three months ended November 2, 2025, was $0.89, compared to $0.86 for the same period in 2024, indicating a 3.5% increase[53] - EBITDA for the three months ended November 2, 2025, was $267 million, slightly down from $269 million for the same period in 2024, a decrease of 0.7%[50] Expenses and Costs - SG&A expenses increased 7.7% to $295 million, representing 14.3% of net sales, up from 13.4% in the previous year[10] - The company reported capital expenditures of $31 million for the nine months ended November 2, 2025, compared to $24 million in the prior year[44] - Equity-based compensation for the nine months ended November 2, 2025, was $14 million, compared to $11 million for the same period in 2024, reflecting a 27.3% increase[50] Debt and Cash Management - Net debt decreased to $2,083 million from $2,420 million as of the same date last year, due to lower borrowings[25] - Long-term debt decreased to $2,129 million from $2,237 million since the beginning of the fiscal year[42] - Total Debt as of November 2, 2025, was $2,172 million, down from $2,430 million as of October 27, 2024[55] - Net Debt decreased to $2,083 million as of November 2, 2025, from $2,420 million as of October 27, 2024, showing a reduction of 14%[55] - Cash and cash equivalents at the end of the period were $89 million, significantly higher than $8 million at the beginning of the period[44] - Net cash provided by operating activities for the nine months ended November 2, 2025, was $382 million, compared to $386 million for the same period last year[44] Strategic Acquisitions - Core & Main completed the acquisition of Canada Waterworks on September 30, 2025[7] - The company continues to focus on strategic acquisitions, with $32 million spent on acquisitions net of cash acquired during the nine months ended November 2, 2025[44] - The company expects variability in acquisition expenses to significantly impact future GAAP financial results, indicating potential unpredictability in earnings[49] Future Outlook - For fiscal 2025, the company expects net sales of $7,600 to $7,700 million, with adjusted EBITDA of $920 to $940 million[30] - Total assets increased to $6,300 million as of November 2, 2025, up from $5,870 million at the end of the previous fiscal year[42] Non-GAAP Measures - The company emphasizes the importance of non-GAAP financial measures like Adjusted EBITDA and Adjusted Diluted Earnings Per Share for evaluating performance, despite their limitations[48] - The amortization of intangible assets for the three months ended November 2, 2025, was $0.19 per share, consistent with the same period in 2024[53]

FORM 10-Q Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-41223 PAPAYA GROWTH OPPORTUNITY CORP. I (Exact name of registrant as specified in its charter) (State or other juris ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 001-41223 PAPAYA GROWTH OPPORTUNITY CORP. I (Exact name of registrant as specified in its charter) (State or other juris ...

Revenue Performance - Total revenue for the three months ended October 31, 2025, was $79.4 million, compared to $79.8 million for the same period in 2024, indicating a slight decline [178]. - For the nine months ended October 31, 2025, total revenue was $239.2 million, up from $238.3 million in 2024, reflecting a year-over-year increase of approximately 0.4% [178]. - Total revenue for the same period was $79,403, a slight decrease of $361 thousand compared to $79,764 in 2024 [210]. - Total revenue for the nine months ended October 31, 2025, was $239.2 million, a slight increase of $958, or 0.4%, compared to the prior year [223]. Customer Metrics - As of October 31, 2025, 80% of annual recurring revenue (ARR) was derived from consumption-based service agreements, with expectations for this percentage to increase [175]. - The company had over 2,400 customers as of October 31, 2025, with enterprise customers accounting for 44% of revenue during the same period [183]. Financial Losses and Profitability - The company incurred net losses of $10.4 million for the three months ended October 31, 2025, compared to $18.8 million for the same period in 2024, indicating a reduction in losses [179]. - The net loss for the three months ended October 31, 2025, was $10,388, compared to a net loss of $18,761 in 2024 [207]. Expenses and Cost Management - Sales and marketing expenses as a percentage of total revenue decreased from 47% in Q3 2024 to 43% in Q3 2025, indicating improved efficiency [191]. - Research and development expenses as a percentage of total revenue increased from 27% in Q3 2024 to 24% in Q3 2025, reflecting ongoing investment in platform functionality [193]. - Total cost of revenue increased to $20,504, up 3% from $19,961 in 2024, with subscription costs rising by 7% to $14,281 [211]. - Operating expenses decreased to $65,829, down 7% from $70,887 in 2024, with sales and marketing expenses dropping by 8% to $34,120 [215]. - Research and development expenses fell to $19,062, a 10% decrease from $21,264 in 2024, reflecting lower headcount [216]. - General and administrative expenses increased from 15% to 16% of revenue, with a $1.6 million rise in employee-related costs due to stock-based compensation [218]. Cash Flow and Financing - As of October 31, 2025, the company had $47.9 million in cash and cash equivalents, with a $125.3 million credit facility fully drawn [233]. - For the nine months ended October 31, 2025, net cash provided by operating activities was $10.7 million, with cash collected from customers totaling $232.1 million [242][245]. - During the same period, net cash used in investing activities was $7.6 million, primarily for capitalized development costs related to internal-use software [242][247]. - The company experienced net cash used in financing activities of $1.5 million for the nine months ended October 31, 2025, primarily due to payments on short-term payable financing [242][250]. Debt and Credit Facilities - The company had total debt outstanding of $124.2 million as of October 31, 2025, with a credit facility allowing for term loan borrowings up to $125.3 million [256][257]. - The credit facility was amended in August 2024, extending the maturity date to August 19, 2028, and included the issuance of 1,022,918 fully-vested warrants [239]. Market and Economic Conditions - The company does not believe that inflation has had a material effect on its business, financial condition, or results of operations to date [260]. - The company has foreign currency exchange risks related to revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily the Japanese Yen, British Pound Sterling, and the Australian Dollar [258]. Other Financial Metrics - Remaining performance obligations (RPO) increased from $368.2 million in 2024 to $428.6 million in 2025, with $231.1 million expected to be recognized as revenue in the next twelve months [177]. - The gross retention rate remained stable at 84% for both the trailing twelve months ending October 31, 2024, and 2025, despite macroeconomic challenges [188]. - Subscription revenue for the three months ended October 31, 2025, was $71,879, a 1% increase from $71,113 in 2024, driven by a $3.3 million increase from new customers [210]. - Subscription gross margin was 80% for the three months ended October 31, 2025, down from 81% in 2024, attributed to increased costs from third-party web hosting services [211]. - Income tax provision increased by $52, or 9%, to $634, primarily due to higher taxable income from international subsidiaries [232]. - The company entered into a Controlled Equity Offering Sales Agreement to sell up to $150 million of Class B common stock, with no shares sold to date [236]. - Remeasurement of warrant liability resulted in a $7.5 million net change during the nine months ended October 31, 2025 [231].

Financial Performance - For fiscal 2025, Star reported total revenue of $1.8 billion, a modest increase of approximately 1.0% compared to fiscal 2024, driven by higher volumes sold and increased sales of installations and services [2]. - Star's net income for fiscal 2025 rose by $38.3 million to $73.5 million, primarily due to a favorable change in the fair value of derivative instruments and higher Adjusted EBITDA [3]. - Adjusted EBITDA increased by $24.8 million, or 22.2%, to $136.4 million, driven by higher margins and increased volume sold [4]. - In the fourth quarter of fiscal 2025, total revenue increased by 3.1% to $247.7 million, reflecting higher sales of installations and services [6]. - Total sales for Q3 2025 reached $247.7 million, a 3.5% increase from $240.3 million in Q3 2024 [18]. - Total sales for the twelve months ended September 30, 2025, were $1.78 billion, slightly up from $1.77 billion in the previous year [18]. - EBITDA for the twelve months ended September 30, 2025, was $153.6 million, up 65.9% from $92.6 million in the previous year [23]. Sales Volume - The volume of home heating oil and propane sold increased by 29.2 million gallons, or 11.5%, to 282.6 million gallons, attributed to colder temperatures and acquisitions [2]. - The volume of home heating oil and propane sold in the fourth quarter rose by 1.5 million gallons, or 8.1%, to 20.0 million gallons [6]. - Home heating oil and propane gallons sold in Q3 2025 totaled 20,000, an increase from 18,500 gallons sold in Q3 2024 [21]. Operational Challenges - The fourth quarter Adjusted EBITDA loss was $33.0 million, compared to a loss of $29.7 million in the prior year, due to higher operating expenses and lower margins [8]. - Adjusted EBITDA for Q3 2025 was $(33.0) million, compared to $(29.7) million in Q3 2024, indicating a decline in operational performance [21]. - Net loss for Q3 2025 was $28.7 million, compared to a net loss of $35.1 million in Q3 2024, representing an 18.5% improvement [21]. - The company experienced a net interest expense of $3.2 million in Q3 2025, compared to $1.8 million in Q3 2024, reflecting increased borrowing costs [21]. Strategic Initiatives - Star completed a significant acquisition earlier in the year and maintained disciplined margin management, contributing to overall performance improvements [5]. - The company aims to continue growing and diversifying through further acquisitions and maximizing installation and service profitability [5]. - Star's management expressed optimism about future opportunities to enhance organizational performance in fiscal 2026 [5]. Cash Flow and Costs - Net cash provided by operating activities for the twelve months ended September 30, 2025, was $70.9 million, a decrease from $111.0 million in the previous year [23]. - The cost of product for Q3 2025 was $112.2 million, a slight decrease from $113.8 million in Q3 2024 [18]. - The company reported a weighted average of 33,616 Limited Partner units outstanding for Q3 2025, down from 34,686 units in Q3 2024 [19].

Revenue Composition - Subscription revenue accounted for 93% of total revenue for the three months ended October 31, 2025, compared to 86% for the same period in 2024[118]. - Professional services revenue represented 7% of total revenue for the three months ended October 31, 2025, compared to 14% for the same period in 2024[121]. - Approximately 5% of total revenue for the three months ended October 31, 2025, was derived from international customers, compared to 13% in the same period of 2024[166]. Financial Performance - Total revenue for the three months ended October 31, 2025, was $75,147,000, a decrease of $19,191,000 or 20% compared to $94,338,000 in the same period of 2024[185]. - Subscription revenue accounted for 93% of total revenue for the three months ended October 31, 2025, down from 86% in 2024, with a decrease of $10,920,000 or 13% year-over-year[188]. - Professional services revenue decreased by $8,271,000 or 63% for the three months ended October 31, 2025, primarily due to a decrease in prioritized engineering services[190]. - Gross profit for the three months ended October 31, 2025, was $30,380,000, a decline of $27,460,000 or 47% from $57,840,000 in the same period of 2024[194]. - Net loss for the three months ended October 31, 2025, was $104,668,000, compared to a net loss of $65,972,000 in the same period of 2024[185]. Cost and Expenses - Total cost of revenue for the three months ended October 31, 2025, was $44,767,000, an increase of $8,269,000 or 23% compared to $36,498,000 in 2024[192]. - Operating expenses for the three months ended October 31, 2025, totaled $142,493,000, an increase of $9,365,000 or 7% compared to $133,128,000 in 2024[185]. - Operating expenses for the six months ended October 31, 2025, increased by 14% to $293.8 million compared to $257.9 million in the same period last year[197]. - Sales and marketing expenses rose by 12% to $120.9 million for the six months ended October 31, 2025, primarily due to higher payroll costs of $22.7 million[198]. - Research and development expenses increased by 13% to $123.0 million for the six months ended October 31, 2025, mainly due to higher payroll and contractor costs of $14.5 million[199]. Cash Flow and Investments - Free cash flow for the six months ended October 31, 2025, was $(81.2) million, compared to $(32.4) million in the same period last year[206]. - Cash used in operating activities increased by $49.4 million to $(80.0) million for the six months ended October 31, 2025, primarily due to increased payroll and vendor costs[210]. - Net cash provided by investing activities was $10.9 million for the six months ended October 31, 2025, attributed to maturities and sales of marketable securities[211]. - Net cash provided by financing activities was $8.0 million during the six months ended October 31, 2025, due to proceeds from employee stock purchase and stock options[213]. Strategic Initiatives - The company aims to expand into industries such as telecommunications, smart cities, transportation, and healthcare, where it currently has limited presence[140]. - C3 AI launched 28 domain-specific generative AI offerings in early fiscal year 2024, addressing unique industry needs[146]. - C3 AI introduced the C3 AI Agentic Process Automation in September 2025, enhancing automation with minimal human intervention[148]. - The C3 Generative AI Accelerator Program was launched to help organizations implement generative AI solutions effectively, culminating in working prototype applications[150]. - A new global alliance with Microsoft was established in September 2024 to accelerate the adoption of Enterprise AI across all industries[164]. Market and Economic Conditions - The company does not believe inflation has materially affected its business or financial condition[223]. - Significant inflationary pressures could lead to higher employee compensation costs, which may not be fully offset by price increases[223]. - A hypothetical 10% change in foreign currency exchange rates may have a material impact on the company's unaudited condensed financial statements[222]. - The company's consolidated results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates[222]. - The company may face adverse effects in the future due to changes in foreign exchange rates impacting revenue and cash deposits[222]. Management and Organizational Changes - The restructuring of the sales and services organization has had a disruptive effect on financial performance[143]. - The appointment of a new CEO is expected to impact the execution of the company's business strategy[144]. - The average total subscription contract value is decreasing as the company expands its market-partner ecosystem[141]. - The company expects to continue incurring operating losses and may require additional capital to execute strategic initiatives for growth[207]. - Research and development expenses as a percentage of total revenue are expected to decline over the long term as the company benefits from economies of scale[179].

Customer Base and Sales - As of September 30, 2025, Star Group sold home heating oil and propane to approximately 406,400 full-service residential and commercial customers, with 59% located in New York, New Jersey, and Connecticut[19]. - Total sales during fiscal 2025 were comprised of approximately 63% from home heating oil and propane, 18% from other petroleum products, and 19% from installation and repair services[19]. - Star Group is the largest retail distributor of home heating oil in the U.S., with a market share exceeding 5.5%[19]. - The company has approximately 93% of its full-service residential and commercial customers receiving automatic deliveries based on weather conditions[21]. - Approximately 25% of residential customers utilize the "smart pay" budget payment plan for their heating oil and propane deliveries[21]. - As of September 30, 2025, 67.7% of residential home heating oil and propane customers are on variable pricing programs, up from 62.5% in 2024[42]. - The company experienced net customer attrition of (4.7%) in fiscal year 2025, compared to (4.2%) in fiscal year 2024, indicating a trend of increasing customer losses[90]. - Gross customer gains decreased from 12.0% in fiscal year 2023 to 8.8% in fiscal year 2025, while gross customer losses increased from 15.6% to 13.5% in the same period[90]. - Customer losses to natural gas and electricity conversions were estimated at (1.3%) in fiscal year 2025, slightly improved from (1.4%) in fiscal year 2024[98]. - Approximately 80% of annual volume sold occurs during the peak heating season from October through March, making the company vulnerable to warm winters[102]. Financial Performance - Net income for fiscal 2025 increased by $38.3 million, or 108.7%, to $73.5 million, influenced by a favorable change in the fair value of derivative instruments and an increase in Adjusted EBITDA[207]. - For fiscal 2025, Adjusted EBITDA increased by $24.8 million, or 22.2%, to $136.4 million compared to fiscal 2024[208]. - The increase in Adjusted EBITDA in the base business was driven by an $18.5 million increase, attributed to higher home heating oil and propane per gallon margins[208]. - Recent acquisitions contributed an additional $16.9 million to Adjusted EBITDA, partially offset by a $10.6 million increase in expenses related to weather hedge contracts[208]. - Product sales decreased by $11.2 million, or 0.8%, to $1,437.6 million in fiscal 2025, primarily due to a decrease in average selling prices[188]. - Installation and service sales increased by $29.5 million, or 9.3%, to $346.8 million in fiscal 2025, driven by $22.6 million from recent acquisitions[190]. - Total product gross profit increased by $57.2 million, or 12.2%, to $525.2 million in fiscal 2025, due to higher home heating oil and propane volume sold and increased margins[193]. - The cost of product decreased by $68.4 million, or 7.0%, to $912.4 million in fiscal 2025, attributed to a decrease in wholesale product cost[191]. - Delivery and branch expenses increased by $34.4 million to $400.8 million in fiscal 2025, driven by colder temperatures and expenses from recent acquisitions[199]. - Net interest expense rose by $2.7 million, or 23.9%, to $14.3 million in fiscal 2025, due to an increase in average borrowings[203]. Acquisitions and Growth Strategy - The company acquired one heating oil business and three propane businesses for approximately $80.5 million in cash during fiscal 2025[52]. - During fiscal 2024, the company acquired one propane business and four heating oil businesses for approximately $49.4 million in cash[53]. - Star Group's business strategy includes pursuing select acquisitions to grow its customer base and enhance operations[29]. Regulatory and Environmental Challenges - The New York State Climate Leadership and Community Protection Act aims to reduce GHG emissions to 60% of 1990 levels by 2030[61]. - The Fossil Fuel Ban in New York will prohibit the installation of fossil-fuel equipment in new buildings starting December 31, 2025[63]. - The company is facing legal challenges regarding the Fossil Fuel Ban, with a lawsuit filed on October 12, 2023, seeking to declare it invalid based on federal preemption by the Energy Policy and Conservation Act[65]. - Proposed regulations in Massachusetts could require heating energy suppliers to convert approximately 3% of their customers to electric heat each year, potentially impacting the company's operations negatively[66]. - The Massachusetts Department of Environmental Protection finalized amendments to the Greenhouse Gas Emissions Regulation, extending registration deadlines for GHG emissions reporting to January 31, 2025, and June 2, 2025, respectively[68]. - Starting July 1, 2025, the minimum biodiesel blending requirement will increase from 5% to 10% in New York and Connecticut, and from 10% to 20% in Rhode Island, which may affect wholesale product costs[70]. - The company is subject to various environmental and safety regulations, including the Clean Air Act and the Resource Conservation and Recovery Act, which impose limitations on pollutant emissions[71]. - The company has incurred costs for soil and groundwater contamination remediation at some locations, although no material issues have arisen with prior owners regarding these obligations[72]. - The company is subject to various federal, state, and local environmental regulations that could increase operational costs due to stricter pollution control requirements[107]. Risks and Market Conditions - Fluctuations in wholesale product costs can adversely affect the company's financial condition, as profitability is sensitive to changes in supply costs and market conditions[75]. - High wholesale product prices can lead to customer conservation and attrition, impacting demand and potentially resulting in reduced profit margins[76]. - Constraints in physical product supplies could negatively impact the company's ability to deliver products, leading to increased costs and potential reputational damage[80]. - The company's hedging strategy may affect liquidity due to cash margin deposits and mark-to-market maintenance margins required for derivatives and futures contracts[84]. - The company faces risks related to customer attrition due to competition and demand for alternative energy products, which could materially affect operating results[94]. - The company’s risk management policies cannot eliminate all commodity price risks, leading to potential financial losses[86]. - Economic conditions, including inflation and recession, may adversely affect customer spending and demand for products[135]. - The company is monitoring the economic effects of a 10% baseline tariff on certain imported products, which could affect costs and availability of assets[171]. Employee and Labor Relations - The company had 3,024 employees as of September 30, 2025, with 40% represented by collective bargaining agreements[58]. - Approximately 40% of the company's employees are covered under 64 different collective bargaining agreements, which may lead to potential labor actions[113]. Cybersecurity and IT Risks - The company experienced a security incident in July 2021, resulting in the encryption of certain IT systems, but it did not materially affect business operations[110]. - The company faces risks related to cybersecurity, including potential future attacks that could disrupt operations and harm financial results[111]. - The company has implemented a cybersecurity program aligned with industry standards to manage risks[138]. - The Board of Directors oversees key risks, including cybersecurity, with quarterly updates from the IT department[144]. Financial Obligations and Credit Facilities - The company has a total of $210 million in senior secured term loans and a $400 million revolving credit facility, both due September 27, 2029[18]. - The company has a $189.0 million term loan outstanding under its revolving credit facility as of September 30, 2025, with availability of $165.0 million[123]. - During the fiscal 2025 heating season, borrowings under the revolver peaked at $75.4 million[123]. - The credit agreement requires maintaining availability of at least $25.7 million or $40 million on a historical pro forma basis[156]. - The company's credit agreement contains covenants that may limit operational flexibility and ability to incur additional debt[126]. Tax and Depreciation - The effective income tax rate increased from 27.5% in fiscal 2024 to 28.6% in fiscal 2025, contributing to a $16.1 million increase in income tax expense[206]. - The new federal income tax legislation reinstated 100% bonus depreciation on fixed assets acquired after January 19, 2025, which may impact cash flow[163]. - The estimated depreciation and amortization expense for fiscal 2025 is $36,420,000 for book purposes and $56,078,000 for tax purposes[165].

Revenue Performance - Quarter-to-date revenue of $411.1 million increased 16% year-over-year[149] - Year-to-date revenue of $1,129.5 million increased 12% year-over-year[149] - Total revenue for the three months ended October 31, 2025, was $411.1 million, a 16% increase from $354.7 million in the same period of 2024, driven by a $40.7 million increase in subscription services revenue and a $12.9 million increase in licenses revenue[174] - Total revenue for the nine months ended October 31, 2025, was $1,129,465,000, an increase of $123,447,000, or 12%, from $1,006,018,000 in 2024, with subscription services revenue growing by $116,513,000, or 20%[184] Customer Metrics - The number of customers with ARR ≥ $1 million increased to 333 from 302 year-over-year[155] - Dollar-based net retention rate was 107% as of October 31, 2025, down from 113% in 2024[155] Profitability and Margins - Gross margin was 83% for the three and nine months ended October 31, 2025, compared to 82% for the same period in 2024[149] - Gross profit for the three months ended October 31, 2025, was $342.3 million, resulting in a gross margin of 83%, compared to 82% in the same period of 2024[176] - Total cost of revenue increased by $5.0 million, or 8%, to $68.8 million for the three months ended October 31, 2025, driven by a $9.4 million increase in costs associated with professional services[175] - Total cost of revenue increased by $14,641,000, or 8%, to $197,049,000 for the nine months ended October 31, 2025, compared to $182,408,000 in 2024, with a gross margin of 83%[185] Operating Expenses - Operating expenses decreased by $5.0 million, or 1.5%, to $329.2 million for the three months ended October 31, 2025, primarily due to a reduction in sales and marketing expenses[177] - Sales and marketing expenses decreased by $8.0 million, or 4%, to $179.2 million, representing 44% of total revenue, down from 53% in Q3 2024[178] - Sales and marketing expenses decreased by $56,507,000, or 10%, to $505,150,000 for the nine months ended October 31, 2025, compared to $561,657,000 in 2024, representing 45% of revenue[187] - Research and development expenses for the three months ended October 31, 2025, were $96,869,000, a slight decrease of $107, or 0%, compared to $96,976,000 in the same period of 2024, representing 23% of revenue[179] - Research and development expenses for the nine months ended October 31, 2025, were $281,012,000, an increase of $9,037,000, or 3%, from $290,049,000 in 2024, accounting for 26% of revenue[188] - General and administrative expenses increased by $3,085,000, or 6%, to $53,175,000 for the three months ended October 31, 2025, compared to $50,090,000 in 2024, accounting for 13% of revenue[180] - General and administrative expenses decreased by $16,376,000, or 9%, to $160,743,000 for the nine months ended October 31, 2025, compared to $177,119,000 in 2024, representing 14% of revenue[189] Net Income and Tax - The company reported a net income of $198.8 million for the three months ended October 31, 2025, compared to a net loss of $10.7 million in the same period of 2024[172] - Benefit from income taxes increased by $162.4 million for the nine months ended October 31, 2025, compared to the same period in 2024, primarily due to the release of valuation allowance associated with U.S. federal and New York City and State DTAs[193] - The effective tax rate was significantly impacted by a benefit from income taxes of $(174.2) million for the three months ended October 31, 2025, compared to $(14.8) million in Q3 2024[172] Cash Flow and Financial Position - Cash flow from operations was $188.9 million for the nine months ended October 31, 2025, compared to $174.5 million for the same period in 2024[149] - Cash and cash equivalents, restricted cash, and marketable securities were $1,520.2 million as of October 31, 2025, down from $1,724.1 million as of January 31, 2025[149] - As of October 31, 2025, the company had cash, cash equivalents, and marketable securities totaling $1,519.8 million, with an accumulated deficit of $1,810.0 million[194] - Net cash provided by operating activities for the nine months ended October 31, 2025, was approximately 1% lower than the $174.5 million reported for the same period in 2024[201] - Net cash provided by investing activities for the nine months ended October 31, 2025, was $20.2 million, driven by $585.1 million in maturities of marketable securities[203] - Net cash used in financing activities for the nine months ended October 31, 2025, was $358.0 million, primarily due to $329.1 million in repurchases of Class A common stock[205] Strategic Initiatives - The company completed a workforce restructuring to streamline operations and focus on AI and innovation[151] - The company expects operating expenses to decrease as a percentage of revenue over the long term[168] - The company anticipates a reasonable possibility of realizing a valuation allowance for U.S. state deferred tax assets within the next 12 months, which could result in an income tax benefit[171] - The company maintained a partial valuation allowance on U.S. state deferred tax assets and a full valuation allowance on Romania deferred tax assets as of October 31, 2025[171] - The company may require additional equity or debt financing in the future to support its operations and innovation efforts[196] Foreign Currency Impact - Approximately 51% of the company's revenues and 40% of its expenses for the nine months ended October 31, 2025, were denominated in non-U.S. dollar currencies, resulting in net foreign currency transaction losses of $6.5 million[215] - The estimated translation impact of a hypothetical 10% change in foreign currency exchange rates would amount to $34.0 million for the nine months ended October 31, 2025[215]