Drug Development and Clinical Trials - The Company has 18 drug candidates in clinical trials, ranging from Phase 1 to Phase 3, with a robust discovery pipeline capable of generating multiple new clinical candidates each year[19] - REDEMPLO (plozasiran) was approved by the FDA in 2025 to reduce triglycerides in adults with Familial Chylomicronemia Syndrome (FCS), marking the Company's first commercial launch[20] - The Company plans to file a supplemental NDA for severe hypertriglyceridemia (sHTG) in 2026, pending successful completion of Phase 3 studies[20] - ARO-DIMER-PA is a dual functional RNAi molecule targeting PCSK9 and APOC3, representing a significant advancement in RNAi therapeutics[48] - The Company is investigating ARO-MAPT, designed to silence the MAPT gene, in a Phase 1/2a clinical trial for Alzheimer's and tauopathies[57] - ARO-CFB is being developed as a potential treatment for complement-mediated kidney diseases, currently in a Phase 1/2a clinical trial[61] - GSK is conducting Phase 2b clinical trials for GSK-4532990 targeting metabolic-dysfunction associated steatohepatitis (MASH) and alcohol-related liver disease (ALD)[65] - GSK received a worldwide exclusive license for daplusiran/tomligisiran (GSK5637608) to develop a potential therapy for chronic hepatitis B virus infection, with a Phase 2 study currently being initiated[66] - Takeda and the Company co-develop the fazirsiran program for liver disease associated with alpha-1 antitrypsin deficiency, with a 50/50 profit-sharing structure in the U.S.[67] - Fazirsiran aims to reduce the production of the mutant Z-AAT protein to prevent liver injury and fibrosis in patients with alpha-1 antitrypsin deficiency[70] - Amgen is responsible for the clinical development of olpasiran, designed to reduce elevated lipoprotein(a), a risk factor for atherosclerotic cardiovascular disease[73] Regulatory and Compliance - The FDA requires a user fee of approximately $4.682 million for NDA submissions requiring clinical data for fiscal year 2026[106] - The FDA's review process for NDAs typically aims for completion within ten months, with priority reviews targeted at six months[108] - The Company must comply with cGMP requirements to ensure consistent production of its products before the FDA approves an NDA[109] - The FDA may require a REMS plan to mitigate serious risks associated with a drug, which can affect market potential and profitability[110] - The FDA may impose conditions on approved products, including post-approval studies and distribution restrictions, which can materially affect market dynamics[113] - The FDA may not approve any other application to market the same drug for the same indication for seven years, except in very limited circumstances[116] - The FDA's interpretation of orphan drug exclusivity may change, potentially limiting the drugs that can receive such exclusivity[117] - Fast Track Designation allows for priority review and rolling review for drugs addressing serious conditions with unmet medical needs[118] - The FDA may approve a drug under the accelerated approval program if it provides a meaningful advantage over existing therapies and demonstrates an effect on a surrogate endpoint[119] - The Breakthrough Therapy designation provides more intensive guidance and expedited review for drugs showing substantial improvement over existing therapies[120] - Post-approval requirements include ongoing regulation by the FDA, including recordkeeping and reporting of adverse experiences[121] - Drug manufacturers must register with the FDA and are subject to periodic inspections to ensure compliance with cGMP requirements[122] - The FDA may withdraw approval if compliance with regulatory requirements is not maintained or if new problems are discovered post-market[123] Intellectual Property and Licensing - The Company controls approximately 643 issued patents and has around 833 pending patent applications worldwide, covering various RNAi technologies[85] - The Company may need to obtain additional patent licenses prior to commercialization of its candidates due to the complex patent landscape in RNAi and drug delivery[89] - The Company acquired RNAi assets and rights from Novartis, including patents related to RNAi therapeutics and delivery technologies[90] - The acquisition from Roche provided the Company with licenses to patents related to modifications of double-stranded oligonucleotides, enhancing its operational freedom in RNAi-trigger formats[91][92] - The Company holds a worldwide, royalty-bearing, exclusive license under the Alnylam-Novartis License to research, develop, and commercialize 30 undisclosed gene targets[90] Market Exclusivity and Orphan Drug Designation - Orphan drug designation can provide the Company with incentives such as grant funding and tax advantages for drugs intended to treat rare diseases[114] - The company is subject to a 10-year market exclusivity for orphan medicinal products, which can be reduced to six years if criteria are not met[165] - Orphan drug designation provides up to ten years of market exclusivity in the EU, contingent on maintaining the designation at the time of marketing authorization review[163] Manufacturing and Workforce - The Company expanded its footprint with a new manufacturing and laboratory facility in Verona, Wisconsin during Q1 fiscal 2025[208] - The new state-of-the-art GMP manufacturing facility in Verona includes over 251,000 total square feet of laboratories and office space[211] - As of September 30, 2025, the Company employed 711 full-time employees across four facilities in the U.S.[212] - The Company continues to expand its workforce to increase in-house manufacturing capacity and enhance clinical and preclinical research expertise[213] - The Company offers a total compensation package targeting the 50 to 75 percentile of the market, including base salary, cash bonuses, and equity compensation[214] - The Company supports employee development through individualized plans, mentoring, and tuition reimbursement[214] - The Company is committed to fostering an inclusive environment with ongoing programs for awareness and engagement[215] Data Privacy and Security - The company must comply with various data privacy and security laws, including HIPAA and state privacy laws, which impose significant obligations regarding personal information[185] - Failure to comply with data privacy laws can result in substantial civil and criminal penalties, posing financial and reputational risks to the company[188] - The GDPR and UK GDPR impose fines of up to €20 million or 4% of annual global revenues for noncompliance, whichever is greater[191] - The complexity of data protection regulations in the EEA is heightened by varying enforcement and additional national regulations[191] - The transfer of personal data outside the EEA requires appropriate safeguards, such as standard contractual clauses[193] Pricing and Reimbursement - The pricing and reimbursement environment in the EU allows member states to control prices and reimbursement levels, which may affect market access for the company's products[177] - Health technology assessments (HTA) are increasingly influencing pricing and reimbursement decisions in EU member states, focusing on clinical efficacy, safety, and cost-effectiveness[179] - The company may be required to conduct cost-effectiveness studies to obtain favorable pricing and reimbursement conditions in certain EU member states[182] - Orphan pharmaceutical products may be exempted from providing certain clinical and economic data for pricing/reimbursement approval in some EU member states[183] Regulatory Changes in the EU - The UK government enacted the Medicines and Medical Devices Act 2021 to update regulatory frameworks for human medicines and clinical trials, ensuring public health is safeguarded[141] - The centralized procedure for Marketing Authorization (MA) in the EU has a standard evaluation timeframe of 210 days, which can be extended due to additional information requests[152] - New Chemical Entities (NCE) approved in the EU qualify for eight years of data exclusivity and ten years of marketing exclusivity, extendable to eleven years under certain conditions[157] - The European Medicines Agency (EMA) provides scientific advice for drug development, with fees significantly reduced for orphan medicines[149] - The Medical Devices (Amendment) (Great Britain) Regulations 2023 allow CE marked devices to be sold in the UK until 2028 or 2030, depending on the device type[144] - The Medicines and Healthcare products Regulatory Agency (MHRA) plans to implement new 'Pre-Market Regulations' in 2026, extending the sunset period for key EU-derived regulations[144] - The EU Clinical Trials Regulation (CTR) became applicable on January 31, 2022, streamlining the approval process for clinical trials across member states[145] - The current proposal for reforming European pharmaceutical legislation includes shortening data exclusivity from eight to six years, with incentives for developing new antibiotics[161]

Financial Performance - For the three months ended October 31, 2025, revenue was $788.1 million, a 26% increase from $628.0 million in the same period of 2024[121] - GAAP gross profit for the three months ended October 31, 2025, was $603.4 million, with a GAAP gross margin of 77%[139] - Non-GAAP income from operations for the three months ended October 31, 2025, was $171.9 million, resulting in a non-GAAP operating margin of 22%[141] - Annual Recurring Revenue (ARR) as of October 31, 2025, was $3,204 million, up from $2,553 million in 2024, indicating a strong growth in subscription contracts[145] - Free cash flow for the three months ended October 31, 2025, was $413,296 thousand, compared to $291,881 thousand in 2024, reflecting an increase of 42%[144] - The net loss for the three months ended October 31, 2025, was $11.6 million, adjusted for non-cash charges of $297.1 million, which included $188.6 million for stock-based compensation[190] Customer Growth - As of July 31, 2025, the company had over 9,400 customers, up from over 8,650 customers in 2024, representing a growth of approximately 8.6%[125] - The customer base grew by 14% from October 31, 2024, to October 31, 2025, contributing to the revenue increase[166] Operating Expenses - Operating expenses increased to $639,721 thousand in Q3 2025 from $517,160 thousand in Q3 2024, primarily driven by higher sales and marketing expenses[163] - Research and development expenses increased to $200,498 thousand in Q3 2025 from $154,254 thousand in Q3 2024, reflecting ongoing investment in product development[163] - Sales and marketing expenses increased by $67.5 million, or 22%, to $373.6 million, largely due to higher employee-related expenses and marketing costs[169] - General and administrative expenses grew by $8.8 million, or 16%, to $65.7 million, mainly from increased employee-related expenses[172] Cash Flow and Investments - Net cash provided by operating activities for the three months ended October 31, 2025, was $448.3 million, compared to $331.3 million for the same period in 2024, reflecting a year-over-year increase of 35.4%[190][191] - Net cash used in investing activities during the three months ended October 31, 2025, totaled $1,502.2 million, significantly higher than $201.7 million in the same period of 2024, primarily due to $896.4 million in short-term investments and $672.8 million for business acquisitions[192][193] - Net cash provided by financing activities was $3.1 million for the three months ended October 31, 2025, slightly up from $0.9 million in the same period of 2024, mainly from stock option exercises[194] Economic Environment and Future Outlook - The uncertain economic environment is leading to elongated approval processes for transactions, particularly for larger deals[122] - The company expects to continue incurring net losses as it invests in sales, marketing, and research and development[121] - The company expects gross profit to increase in absolute dollars and gross margin to improve slightly over the long term[152] Risk Management - The company has a foreign currency risk management program and uses foreign currency forward contracts to hedge a portion of its forecasted foreign currency-denominated expenses[203][205] - A hypothetical 100 basis point change in interest rates would have changed the fair value of the company's investments in available-for-sale securities by $27.9 million as of October 31, 2025[200] - The effect of a hypothetical 10% change in foreign currency exchange rates would not have a material impact on the company's financial statements for the three months ended October 31, 2025, and 2024[203] Other Financial Metrics - Interest income increased by $3.1 million, or 10%, to $33.2 million, attributed to a higher balance of cash equivalents and short-term investments[173] - Interest expense decreased by $1.0 million, or 32%, to $(2.1) million, primarily due to fair value hedge adjustments[174] - Other expense, net increased by $2.4 million, or 366%, to $(3.0) million, driven by fluctuations in foreign currency transactions[175] - Provision for income taxes decreased by $4.4 million, or 58%, to $3.2 million, mainly due to a tax benefit from the release of a portion of the U.S. valuation allowance[176] - As of October 31, 2025, cash, cash equivalents, and short-term investments totaled $3,321.3 million, supporting working capital and corporate purposes[182] - Deferred revenue amounted to $2,351.3 million, with $1,946.2 million expected to be recognized as revenue in the next 12 months[187] - The company issued $1,725.0 million in 2028 Notes in July 2025, which have a 0.0% interest rate, thus not exposing the company to economic interest rate risk[201][202] - Non-cash charges for the three months ended October 31, 2025, included $188.6 million for stock-based compensation and $48.1 million for amortization of deferred contract acquisition costs[190]

Financial Performance - Arrowhead Pharmaceuticals reported a revenue of $829.448 million for the fiscal year 2025, a significant increase from $3.551 million in 2024[10] - The company achieved an operating income of $98.346 million in 2025, compared to an operating loss of $601.080 million in 2024[10] - Arrowhead's net income attributable to the company was a loss of $1.631 million in 2025, an improvement from a loss of $599.493 million in the previous year[10] - The company has $919.366 million in total cash resources as of September 30, 2025, compared to $680.961 million in 2024[10] - Arrowhead's total assets increased to $1.385 billion in 2025, up from $1.140 billion in 2024[10] Regulatory Approvals and Clinical Trials - The FDA approved REDEMPLO (plozasiran), the first FDA-approved siRNA medicine for familial chylomicronemia syndrome (FCS), which can reduce triglycerides by 80% from baseline[6][11] - The company filed for regulatory clearance to initiate Phase 1/2a clinical trials for ARO-DIMER-PA and ARO-MAPT, targeting atherosclerotic cardiovascular disease and tauopathies, respectively[7] Partnerships and Licensing Agreements - Arrowhead received a $200 million upfront payment from Novartis as part of a global licensing agreement for ARO-SNCA, with potential milestone payments of up to $2 billion[7] - Arrowhead earned $300 million in milestone payments from Sarepta Therapeutics related to the ARO-DM1 clinical study[7] - The company signed an asset purchase agreement with Sanofi, receiving an upfront payment of $130 million and potential milestone payments of up to $265 million for plozasiran in Greater China[8]

Financial Performance - Record Q3 revenue of $27 billion, up 11% year over year, with record Q3 profitability and strong cash generation [2] - Full-year FY26 revenue expected between $111.2 billion and $112.2 billion, representing a 17% increase year over year [6] - Operating income for Q3 was $2.119 billion, up 23% year over year [7] - Total net revenue for the three months ended October 31, 2025, was $27,005 million, representing an 11% increase compared to $24,366 million for the same period in 2024 [21] - Total consolidated net revenue for the three months ended October 31, 2025, was $27,005 million, an increase of 11% compared to $24,366 million for the same period in 2024 [30] - Infrastructure Solutions Group (ISG) net revenue reached $14,107 million, a 24% increase from $11,368 million year-over-year [30] - Client Solutions Group (CSG) total net revenue was $12,478 million, reflecting a 3% increase from $12,131 million in the prior year [30] Earnings and EPS - GAAP diluted EPS expected to be $8.38 at the midpoint, up 31% year over year, and non-GAAP diluted EPS to be $9.92, up 22% [6] - Non-GAAP diluted EPS for Q3 was $2.59, an increase of 17% year over year [7] - Earnings per share attributable to Dell Technologies Inc. increased by 39% to $2.28 for the three months ended October 31, 2025, and by 26% to $5.34 for the nine months ended [46] - Non-GAAP earnings per share attributable to Dell Technologies Inc. is projected to be $3.50 for the three months ending January 30, 2026, and $9.92 for the fiscal year ending January 30, 2026 [53] Cash Flow and Returns - Capital return to shareholders in Q3 amounted to $1.6 billion, with a total of $5.3 billion returned year to date [3] - Free cash flow decreased by 45% to $506 million for the three months ended October 31, 2025, but increased by 122% to $4.602 billion for the nine months ended [50] - Adjusted free cash flow rose by 133% to $1.67 billion for the three months ended October 31, 2025, and by 145% to $6.42 billion for the nine months ended [50] - Cash flow from operations decreased by 25% to $1.172 billion for the three months ended October 31, 2025, while it increased by 65% to $6.511 billion for the nine months ended [50] Orders and Shipments - AI shipment guidance raised to approximately $25 billion, reflecting over 150% year-over-year growth [2] - Record AI server orders of $12.3 billion in Q3, with total orders year to date reaching $30 billion [2] Expenses and Margins - The gross margin for the three months ended October 31, 2025, was 20.7%, down from 22.0% in the same period last year [21] - Research and development expenses increased by 1% to $752 million for the three months ended October 31, 2025 [21] - Non-GAAP gross margin for the three months ended October 31, 2025, was $5,686 million, a 4% increase from $5,490 million in the same quarter of 2024 [38] - Non-GAAP operating income for the three months ended October 31, 2025, was $2,503 million, an 11% increase from $2,252 million year-over-year [38] - Non-GAAP net income for the three months ended October 31, 2025, was $1,762 million, reflecting an 11% increase from $1,583 million in the prior year [38] Assets and Liabilities - Total assets increased to $87,479 million as of October 31, 2025, up from $79,746 million as of January 31, 2025 [23] - Total liabilities rose to $90,099 million as of October 31, 2025, compared to $81,133 million as of January 31, 2025 [23] Interest and Other Expenses - The company reported a 36% decrease in interest and other net expenses, totaling $(178) million for the three months ended October 31, 2025, compared to $(276) million in the same period last year [21]

Financial Performance - Petco reported Q3 2025 net sales of $1.5 billion, a decrease of 3.1% year over year[4] - Comparable sales declined by 2.2% year over year, indicating a continued challenge in sales performance[4] - Operating income increased by $25.2 million to $29.2 million, reflecting improved profitability[4] - GAAP net income rose by $26.0 million to $9.3 million, marking a significant turnaround[4] - Adjusted EBITDA for Q3 2025 was $98.6 million, an increase of $17.3 million year over year[4] - The company tightened its full year 2025 net sales outlook to a decrease of 2.5% - 2.8%[4] - Full year 2025 adjusted EBITDA guidance was revised upward by $6 million, now projected between $395 million and $397 million[4] - For Q4 2025, net sales are expected to decline in low single digits year over year, with adjusted EBITDA projected between $93 million and $95 million[5] Operational Adjustments - Petco plans to close approximately 20 stores as part of its operational adjustments[4] Year-to-Date Performance - Net income for the 39 weeks ended November 1, 2025, was $11,641, a significant improvement compared to a net loss of $87,979 for the same period in 2024[17] - Adjusted EBITDA for the 39 weeks ended November 1, 2025, was $301,873, representing an increase of 25.6% from $240,403 in the prior year[21] - Net sales for the 39 weeks ended November 1, 2025, were $4,446,339, down from $4,564,332, a decline of 2.6%[21] Asset and Liability Management - Total current assets increased to $1,007,400, up from $973,619, reflecting a growth of 3.9%[14] - Cash and cash equivalents at the end of the period rose to $249,423, compared to $121,021 at the end of the same period last year, marking a 106.2% increase[17] - Total liabilities decreased to $4,047,528 from $4,080,800, indicating a reduction of 0.8%[14] - Total assets increased slightly to $5,205,124 from $5,194,430, reflecting a growth of 0.2%[14] Cash Flow Analysis - Cash flows from operating activities provided $160,528, a substantial increase from $81,680 in the previous year[17] - The company reported a net decrease in cash, cash equivalents, and restricted cash of $67,758, compared to a decrease of $15,628 in the same period last year[17] - For the 13 weeks ended November 1, 2025, net cash provided by operating activities was $90,090,000, compared to $20,724,000 for the same period in 2024, representing a significant increase[25] - Free Cash Flow for the 13 weeks ended November 1, 2025, was $60,646,000, a recovery from a negative Free Cash Flow of $(10,288,000) in the same period of 2024[25] - For the 39 weeks ended November 1, 2025, net cash provided by operating activities was $160,528,000, up from $81,680,000 in 2024, indicating strong operational performance[25] - Free Cash Flow for the 39 weeks ended November 1, 2025, was $70,568,000, compared to $(9,361,000) in the prior year, showing a positive trend[25] - Cash paid for fixed assets decreased slightly from $(31,012,000) in 2024 to $(29,444,000) in 2025 for the 13-week period[25] - Cash paid for fixed assets for the 39 weeks ended November 1, 2025, was $(89,960,000), a slight decrease from $(91,041,000) in 2024[25] Profitability Metrics - Gross profit margin improved by approximately 75 basis points to 38.9% as a percentage of net sales[4] - The Adjusted EBITDA margin improved to 6.8% for the 39 weeks ended November 1, 2025, compared to 5.3% in the prior year[21]

Revenue and Growth - Third quarter revenue increased 5% year over year to $125 million[1] - Annual Recurring Revenue (ARR) grew 3% year over year to $497 million[1] - Revenue for the three months ended October 31, 2025, was $124.545 million, representing a 4.5% increase from $118.946 million in the same period of 2024[20] - Total paid customers increased to 15,398, up from 15,050 year over year[8] - Customers with ARR over $100 thousand grew 5% to 867 as of October 31, 2025[8] - Remaining performance obligations were $415 million, with an expected revenue recognition of approximately $287 million over the next 12 months[8] - For the fourth quarter of fiscal 2026, total revenue is expected to be between $122 million and $124 million[13] Profitability - Operating income was $8 million, with a non-GAAP operating income of $36 million[1] - Net income per diluted share attributable to common stockholders was $1.69, with a non-GAAP net income per diluted share of $0.33[5] - Net income attributable to PagerDuty, Inc. common stockholders for the three months ended October 31, 2025, was $159.555 million, compared to a net loss of $6.558 million in the same period of 2024[20] - Non-GAAP net income attributable to common stockholders for the three months ended October 31, 2025, was $31.217 million, compared to $23.721 million in the same period of 2024, a growth of 31.5%[49] - Non-GAAP net income per share attributable to PagerDuty, Inc. common stockholders for the three months ended October 31, 2025, was $0.34, compared to $0.26 in the same period of 2024[49] Expenses and Liabilities - Operating expenses for the three months ended October 31, 2025, totaled $98.109 million, a decrease of 10.0% from $108.971 million in the prior year[20] - Research and development expenses for the three months ended October 31, 2025, were $29.418 million, down from $34.267 million in the prior year, a decrease of 14.0%[20] - Total liabilities decreased to $688.446 million as of October 31, 2025, from $779.221 million on January 31, 2025[22] Cash Flow and Assets - Cash and cash equivalents as of October 31, 2025, were $324.260 million, down from $346.460 million at the beginning of the year[22] - Net cash provided by operating activities for the three months ended October 31, 2025, was $24.803 million, compared to $22.073 million in the same period of 2024[24] - Free cash flow for the three months ended October 31, 2025, was $20.929 million, compared to $19.443 million in the same period of 2024, indicating an increase of 7.6%[52] - Free cash flow margin for the three months ended October 31, 2025, was 16.8%, compared to 16.3% in the same period of 2024[52] - Total assets increased to $1.027 billion as of October 31, 2025, compared to $927.266 million on January 31, 2025[22] Margins and Retention - Dollar-based net retention rate was 100% as of October 31, 2025, down from 107% a year earlier[8] - Non-GAAP gross margin for the three months ended October 31, 2025, was 86.7%, up from 86.0% in the same period of 2024[47] - Non-GAAP operating margin for the three months ended October 31, 2025, was 28.5%, up from 21.0% in the same period of 2024[49] - Operating cash flow margin for the three months ended October 31, 2025, was 19.9%, compared to 18.6% in the same period of 2024[52] Future Projections and Tax - Non-GAAP net income per diluted share for the full fiscal year 2026 is projected to be between $1.11 and $1.12[13] - PagerDuty's projected non-GAAP tax rate for fiscal 2026 is 22%, aimed at providing consistency across reporting periods[37] Non-GAAP Measures - PagerDuty emphasizes the importance of reviewing GAAP financial measures alongside non-GAAP measures for a comprehensive understanding of financial performance[44] - Non-GAAP operating income for the three months ended October 31, 2025, was $35.546 million, up from $24.991 million in the same period of 2024, reflecting a growth of 42.3%[49] - Non-GAAP gross profit for the three months ended October 31, 2025, was $107,993,000, compared to $102,339,000 for the same period in 2024, representing a 5.2% increase[47] - Non-GAAP operating expenses for the three months ended October 31, 2025, were $19,348,000 in research and development, down from $22,291,000 in 2024, a decrease of 8.7%[47] - Non-GAAP net income for the nine months ended October 31, 2025, was not explicitly stated but reflects adjustments for various non-operational items[41]

Revenue Growth - Net revenues for the third quarter of fiscal 2025 increased by $82.1 million or 4.6%, with comparable company growth of 4.0% driven by strong non-furniture and furniture sales[86] - For the first thirty-nine weeks of fiscal 2025, net revenues increased by $200.4 million or 3.8%, with company comp growth of 3.7%[95] - Pottery Barn, the largest brand, experienced comparable brand revenue growth of 1.3%, supported by large-ticket items and improved store inventory availability[87] - The Williams Sonoma brand saw a significant brand comp growth of 7.3%, driven by strength in kitchen products, particularly electrics and cookware[89] - The retail channel achieved a comp growth of 8.5%, while the e-commerce channel saw a comp growth of 1.9% in the third quarter of fiscal 2025[86] - Emerging brands, including Rejuvenation, Mark and Graham, and GreenRow, delivered double-digit brand comp growth on a combined basis[89] Financial Performance - Gross profit for the third quarter of fiscal 2025 was $867.7 million, a 6.1% increase from $817.6 million in the same quarter of fiscal 2024, with a gross margin of 46.1% compared to 45.4%[104] - For the first thirty-nine weeks of fiscal 2025, gross profit increased by $81.5 million, or 3.4%, totaling $2.5 billion, while gross margin decreased to 45.8% from 46.0%[105] - Selling, general and administrative (SG&A) expenses for the third quarter of fiscal 2025 were $548.6 million, a 7.0% increase from $512.5 million in the same quarter of fiscal 2024, with SG&A as a percentage of net revenues rising to 29.1%[108] - SG&A expenses for the first thirty-nine weeks of fiscal 2025 increased by $43.6 million, or 2.9%, totaling $1.56 billion, while SG&A as a percentage of net revenues decreased to 28.6% from 28.9%[109] - The effective tax rate for the first thirty-nine weeks of fiscal 2025 was 25.4%, up from 24.2% in the same period of fiscal 2024, primarily due to lower excess tax benefits from stock-based compensation[110] Cash Flow and Investments - The company ended the third quarter of fiscal 2025 with $884.7 million in cash and cash equivalents and generated operating cash flow of $718.0 million[90] - The company invested $178.5 million in capital expenditures and returned $792.3 million to stockholders through stock repurchases and dividends in the first thirty-nine weeks of fiscal 2025[90] - Net cash provided by operating activities for the first thirty-nine weeks of fiscal 2025 was $718.0 million, a decrease from $726.7 million in the same period of fiscal 2024[122] - Net cash used in investing activities for the first thirty-nine weeks of fiscal 2025 was $179.7 million, compared to $154.0 million in the same period of fiscal 2024, primarily for technology and supply chain enhancements[123] - Net cash used in financing activities for the first thirty-nine weeks of fiscal 2025 was $870.1 million, a decrease from $1.0 billion in the same period of fiscal 2024, mainly due to reduced stock repurchases[124] Economic and Market Conditions - The tariff rate has increased from 14% in May 2025 to 29% as of the report date, potentially impacting costs for imported materials and finished goods[92] - The company remains focused on returning to growth, enhancing customer service, and driving earnings despite challenges from the macroeconomic environment[92] - Inflation has been experienced due to supply chain disruptions, increased shipping and transportation costs, and rising labor costs, but the impact on financial statements has been immaterial to date[132] - The company acknowledges the potential future impact of inflation on its financial condition and results of operations[132] Foreign Currency Exposure - The majority of inventory purchases are made in U.S. dollars, minimizing foreign currency impact during Q3 fiscal 2025 and Q3 fiscal 2024[130] - Foreign operations in Canada, Australia, the UK, and parts of Asia and Europe expose the company to foreign currency exchange rate fluctuations, but the impact has been immaterial[131] - A hypothetical 10% change in foreign currency exchange rates would not materially affect the company's financial statements[131] Credit Facilities - As of November 2, 2025, the company held $884.7 million in cash and cash equivalents, with $64.2 million held by international subsidiaries[117] - The company amended its credit facility in June 2025, increasing the unsecured revolving line of credit to $600 million, with the option to increase it by up to $250 million[118]

Financial Performance - The Company reported net sales of $394.6 million for Q2 fiscal 2026, a decrease of 12.8% compared to $452.5 million in Q2 fiscal 2025[99] - Gross profit for Q2 fiscal 2026 was $59.9 million, representing a gross profit margin of 15.2%, down from 18.9% in the same period last year[102] - Adjusted EBITDA for the second quarter of fiscal 2026 was $39.6 million, or 10.0% of net sales, down from $60.2 million, or 13.3% of net sales, in the same quarter of the prior fiscal year[117] - Net income for the three months ended October 31, 2025, was $6.1 million, compared to $27.7 million for the same period in the prior year[119] - Adjusted EPS per diluted share for the three months ended October 31, 2025, was $0.76, compared to $2.08 for the same period in the prior year[119] - Adjusted EBITDA for the first six months of fiscal 2026 was $81.9 million, or 10.3% of net sales, down from $123.1 million, or 13.5% of net sales, in the same period of the prior fiscal year[117] Expenses and Charges - The Company incurred $1.5 million in pre-tax restructuring charges during Q2 fiscal 2026, related to workforce reductions and facility closures[97] - General and administrative expenses increased by 20.4% in Q2 fiscal 2026, primarily due to expenses associated with the pending Merger and digital transformation initiatives[104] - The effective income tax rates for the three- and six-month periods ended October 31, 2025, were 31.5% and 27.6%, compared to 21.9% and 23.5% in the prior year periods[105] Market Conditions - Builder sales decreased by 19.7% in Q2 fiscal 2026 compared to the same period last year, reflecting challenges in the new construction market[100] - Remodeling sales decreased by 7.0% in Q2 fiscal 2026, driven by lower in-store traffic and a shift towards more affordable products[99] - The unemployment rate increased to 4.4% as of September 2025, impacting consumer sentiment and spending[101] - The company expects a softer repair and remodel market and a decline in larger ticket remodel purchases for the remainder of fiscal 2026[120] Cash Flow and Debt - Cash and cash equivalents totaled $52.1 million at October 31, 2025, representing a $3.9 million increase from April 30, 2025[125] - Total long-term debt (including current maturities) was $370.8 million as of October 31, 2025[125] - Cash provided by operations in the first six months of fiscal 2026 was $44.3 million, down from $52.7 million in the same period of the prior year[125] - Cash flow from operations and accumulated cash are expected to be sufficient to support working capital requirements and fund capital expenditures for the remainder of fiscal 2026[133] - Cash flow from operations is expected to be sufficient to support working capital requirements and service existing debt obligations for the remainder of fiscal 2026[133] Strategic Initiatives - The Company entered into a Merger Agreement with MasterBrand on August 5, 2025, which is expected to affect its operational focus[91] - The company will continue to invest in digital transformation and automation during fiscal 2026[121] - The company will not be providing or updating previously issued financial guidance due to the proposed merger[122] - The company has authorized an additional stock repurchase program of up to $125 million, although it does not currently expect to repurchase additional shares due to the terms of the merger agreement[132] Tariff Impact - The Company estimates that the unmitigated tariff impact represents approximately 4-4.5% of annualized net sales, with variations by product category[92]

Exhibit 99.1 Zscaler Reports First Quarter Fiscal 2026 Financial Results First Quarter Highlights SAN JOSE, California - November 25, 2025 - Zscaler, Inc. (Nasdaq: ZS), the leader in cloud security, today announced financial results for its first quarter of fiscal year 2026, ended October 31, 2025. "Our outstanding Q1 results demonstrate the strong demand we are experiencing for our Zero Trust and AI Security platform. With over $3.2B in Annual Recurring Revenue, growing over 25% year-over-year, and Rule-of ...

Financial Performance - Revenues decreased by $42.7 million, or 3.8%, to $1,080.4 million for the year ended September 30, 2025, compared to $1,123.1 million for the year ended September 30, 2024[228]. - Gross profit decreased by $58.4 million to $676.8 million, with gross profit as a percentage of revenue at 62.6%, down from 65.5% in the prior year[230]. - Operating income increased by $75.3 million to $242.1 million from $166.8 million[230]. - Net income increased by $17.1 million to $95.4 million from $78.3 million[230]. Expenses - Research and development expenses decreased by $41.5 million, or 52.7%, to $37.3 million due to the discontinuation of the patch pump program[233]. - Selling and administrative expenses decreased by $33.1 million, or 9.1%, to $332.0 million, primarily driven by lower costs with BD and reduced compensation expenses[232]. - Cost of products sold increased by $15.7 million, or 4.0%, to $403.6 million, with cost of products sold as a percentage of revenues at 37.4% compared to 34.5% in the prior year[229]. - Other operating expenses decreased to $65.4 million from $124.5 million, with significant reductions in costs related to the separation and the patch pump program[234]. Debt and Interest - Interest expense, net decreased to $107.3 million from $112.3 million, primarily due to lower debt levels and interest rates[235]. - As of September 30, 2025, total principal debt issued amounted to $1,416.8 million, with long-term debt standing at $1,388.7 million after accounting for current debt obligations and debt issuance costs[244]. - The company has outstanding $200.0 million of senior secured notes with a 6.75% interest rate due in February 2030, and $500.0 million of 5.00% senior secured notes due in February 2030[242][244]. - The weighted average cost of total debt as of September 30, 2025, was 6.4%, with short-term debt representing 0.7% of total debt[245]. - The company paid an aggregate principal amount of approximately $184.6 million on the Term Loan during the year ended September 30, 2025[246]. - The company is in compliance with all financial covenants related to its credit agreements and senior secured notes as of September 30, 2025[245]. Cash Flow - Cash and equivalents and restricted cash decreased to $228.6 million as of September 30, 2025, from $274.2 million as of September 30, 2024, reflecting a $45.6 million decrease[252][253]. - Net cash provided by operating activities was $191.7 million, primarily driven by a net income of $95.4 million and non-cash adjustments totaling $120.0 million[253]. - The company entered into a trade receivables sale agreement, resulting in the sale of $63.2 million of trade receivables during fiscal year 2025[250][251]. Taxation - The income tax provision increased to $40.9 million for the year ended September 30, 2025, compared to $(34.1) million for the year ended September 30, 2024, primarily due to the absence of prior tax benefits and higher overall earnings in 2025[238]. - The company has established a reserve for uncertain tax positions unless they are more likely than not to be sustained upon examination[264]. - The company’s policy includes recognizing interest and penalties related to income taxes as part of income tax expense[264]. Risks and Challenges - The company is exposed to risks from changes in foreign currency exchange rates, which could adversely affect its financial condition and cash flows[269]. - As of September 30, 2025, a 100 basis points change in interest rates would impact interest expense on the Term Loan by $7.1 million annually[273]. - The company anticipates potential impacts from new tariffs instituted by the U.S. government on raw materials and products, which could increase operating costs[270]. - The company is subject to risks related to the inability to replace services currently provided by BD on similar terms, which could affect operations[266]. - The company faces competitive pressures from new drug therapies for diabetes treatment and new product introductions by competitors[266]. - The company is undergoing a brand transition, which includes regulatory challenges and potential customer confusion[270]. Strategic Initiatives - The company has entered into foreign currency forward exchange contracts to manage currency exposures, partially offsetting gains and losses[271]. - The company is evaluating strategic collaborative partnerships and acquisition opportunities to accelerate growth and access innovative technologies[270].