Acquisition and Expansion - The company completed the acquisition of KCA Deutag for approximately $2.0 billion, which included a share purchase price of $0.9 billion and $1.1 billion to repay KCA Deutag's existing debt[22]. - Following the acquisition, the company expanded its global operations, now maintaining a presence across the Middle East, South America, Europe, and Africa, enhancing its service capabilities in both land and offshore drilling markets[40]. - The acquisition of KCA Deutag expanded the company's land drilling footprint in the Middle East, South America, Europe, and Africa, enhancing offshore management expertise[64]. Fleet and Utilization - As of September 30, 2025, the North America Solutions fleet consisted of 223 available rigs, with 144 contracted, indicating a utilization rate of approximately 64.5%[31]. - The International Solutions fleet had a total of 137 available rigs, with 88 contracted, reflecting a utilization rate of approximately 64.2%[34]. - The Offshore Solutions fleet included 7 total rigs, with 3 contracted, showing a utilization rate of approximately 42.9%[38]. - The company had 208 active rigs under contract as of September 30, 2025, an increase from 170 in 2024 and 164 in 2023[73]. - The company operates 238 super-spec rigs as of September 30, 2025, following the reconfiguration of 78 FlexRig units into super-spec walking rigs[66]. Revenue and Financial Performance - Revenue from North America Solutions segment contributed approximately 63.0% ($2.4 billion) of consolidated operating revenues in fiscal year 2025, down from 88.7% ($2.4 billion) in 2024[50]. - International Solutions segment accounted for approximately 21.4% ($802.4 million) of consolidated operating revenues in fiscal year 2025, compared to 7.0% ($194.0 million) in 2024[51]. - Offshore Solutions segment contributed approximately 13.9% ($520.4 million) of consolidated operating revenues in fiscal year 2025, up from 3.9% ($106.2 million) in 2024[60]. - The contract drilling backlog was $7.0 billion as of September 30, 2025, up from $1.5 billion in 2024, with approximately 22.6% expected to be fulfilled in fiscal year 2026[80]. Customer and Market Insights - Revenue from the largest North America Solutions drilling customer represented approximately 18.2% ($429.4 million) of the North America Solutions segment revenues in fiscal year 2025[50]. - Revenue from the largest International Solutions drilling customer accounted for approximately 32.3% ($259.0 million) of the International Solutions segment revenues in fiscal year 2025[51]. - The company holds approximately 24.0% of the total market share in U.S. land drilling as of September 30, 2025[47]. Operational Risks and Challenges - The company is subject to various risks, including financial condition, cybersecurity threats, and operational risks associated with drilling and technology[15]. - The company’s drilling services and solutions are highly competitive, with potential impacts from new technologies and market volatility in oil and gas prices[15]. - The company has a significant backlog of drilling services and solutions revenue, although it may not be fully realized due to various operational risks[19]. - The company’s operations are subject to various environmental laws, which may require significant capital expenditures for compliance[102]. - The company expects future compliance costs related to environmental regulations may be material[108]. Human Capital and Safety - The company employs approximately 6,200 employees in the United States and 9,500 internationally as of September 30, 2025[81]. - The company has established a human capital strategy aimed at attracting, retaining, and developing a diverse workforce committed to operational excellence[82]. - The company maintains a robust safety culture, focusing on Serious Injury and Fatality (SIF) reduction strategies and proactive safety measures[90]. Financial Instruments and Investments - The company has $2.1 billion in senior unsecured notes with an estimated fair value of $1.9 billion as of September 30, 2025[381]. - The company has $200 million outstanding under the Term Loan Credit Agreement, due in 2027[381]. - The company has $39.8 million in secured term loans due in 2033 and $43.1 million due in 2034[381]. - The total fair value of equity securities in Tamboran Corp. was $26.0 million as of September 30, 2025, compared to $21.0 million in 2024[383]. - A hypothetical 10% decrease in the market price for marketable equity securities of Tamboran Corp. would decrease the fair value by $2.6 million[384]. - The company made a $14.1 million equity investment in Tamboran Resources, which was later converted into shares of Tamboran Corp.[382]. Contracts and Pricing - Performance-based contracts have produced a positive risk-reward outcome, with compensation partly based on meeting predetermined performance targets[79]. - Daywork contracts charge a rate per day, influenced by location, depth, complexity of the well, and market conditions[78]. - The FlexPool agreements allow customers to enter into fixed-term contracts with flexibility in rig utilization, subject to minimum requirements[77]. Innovation and Technology - The company has advanced automation solutions aimed at reducing variability and improving well economics, with several technologies in various stages of commercial testing[72]. - The company emphasizes continuous improvement and innovation as part of its core values, fostering a culture of teamwork and ethical conduct[84]. Currency and Market Risks - A uniform 10% decline in the U.S. dollar relative to foreign currencies would result in an increase in pre-tax loss of approximately $5.6 million[376]. - The company has not entered into any foreign currency forward exchange contracts to hedge against adverse fluctuations in foreign currency exchange rates[376]. - The company anticipates that compliance with current regulations will not significantly change its competitive position or earnings during fiscal year 2026[108].

Employee Information - As of December 31, 2024, the company had 549 employees, a decrease from 959 employees in 2023, primarily due to restructuring and operational strategy adjustments [638]. - The employee distribution by function as of December 31, 2024, includes 71 in Editorial and Production, 254 in Sales and Marketing, 98 in Management and General Administrative, and 126 in Technical and Research [638]. - The company participates in various employee benefit plans mandated by PRC regulations, including housing, pension, medical, and unemployment benefits, making monthly payments based on employee compensation [639]. - The company has not experienced significant labor disputes, attributed to its strong corporate culture and positive career development opportunities [640]. Shareholder Information - As of the date of the annual report, there are 90,357,329 ordinary shares outstanding, consisting of 66,020,679 Class A and 24,336,650 Class B ordinary shares [641]. - The beneficial ownership of shares is calculated based on SEC regulations, including shares that can be acquired within 60 days through options or other rights [642]. - Mr. Vincent Tianquan Mo and his affiliated entities own 30,051,898 Class A ordinary shares, representing 45.5% of the total, and 21,586,290 Class B ordinary shares, representing 88.7% of the voting power [643]. - As of September 22, 2025, approximately 64.65% of the outstanding Class A ordinary shares were in the form of American Depositary Shares (ADSs) [645]. - The company maintains a dual-class share structure, with Class A shares having one vote per share and Class B shares having ten votes per share [646]. Financial Position - As of December 31, 2024, the company had US$94.8 million in cash and cash equivalents, with 82.8% held by financial institutions in the PRC [777]. - The company had US$51.0 million in short-term investments in structured notes, secured by cash collections from underlying RMB-denominated bonds [778]. - The maturity of the structured note was extended to October 2025, with all principal and interest payments required to settle the outstanding amounts [778]. Risk Management - The company is exposed to interest rate risk from variable interest rate borrowings and foreign currency risk due to expenditures in U.S. dollars [771]. - If the Renminbi had weakened by 5.0% against the U.S. dollar, the company's losses for 2022, 2023, and 2024 would have been reduced by US$3.6 million, US$8.6 million, and US$1.4 million, respectively [775]. - The company has not entered into any hedging transactions to mitigate foreign currency exchange risk, which may limit its ability to manage exposure effectively [776]. - The company regularly monitors the credit ratings of financial institutions where it holds deposits to mitigate credit risk [777]. - Accounts receivable are typically unsecured and derived from revenue earned from customers in the PRC, with ongoing credit evaluations to mitigate risk [779]. - Funds receivable represent amounts due from third-party payment service providers, with careful monitoring of their creditworthiness to mitigate associated risks [780]. - The company is exposed to default risk on loans receivable, with quarterly assessments of the allowance for credit loss [781]. - As of December 31, 2024, no single borrower comprised a significant portion of the loan portfolio, indicating a diversified risk [781]. - Creditworthiness of real estate developers is regularly reviewed, with collateral required in certain circumstances for overdue commitment deposits [781].

Financial Performance - Total revenues for the three months ended October 31, 2025, were $811,236,000, representing a 16% increase from $699,207,000 in the same period of 2024[18] - Subscription services revenue reached $682,498,000 for the three months ended October 31, 2025, up 17.5% from $580,850,000 year-over-year[18] - Net income for the three months ended October 31, 2025, was $236,203,000, a 27% increase compared to $185,808,000 in the prior year[18] - Operating income for the nine months ended October 31, 2025, was $670,493,000, up 33% from $503,012,000 in the same period of 2024[18] - For the three months ended October 31, 2025, net income was $236,203,000, an increase from $185,808,000 for the same period in 2024, representing a growth of 27.1%[21] - For the nine months ended October 31, 2025, net income reached $664,702,000, compared to $518,513,000 in 2024, marking a 28.2% increase[24] - Cash provided by operating activities for the nine months ended October 31, 2025, was $1,308,378,000, up from $1,020,507,000 in 2024, reflecting a growth of 28.2%[24] - Total revenues for the nine months ended October 31, 2025, increased by $334 million, with $300 million attributed to growth in subscription services revenue[105] Assets and Equity - Total assets increased to $8,097,151,000 as of October 31, 2025, compared to $7,339,756,000 as of January 31, 2025[15] - Cash and cash equivalents rose to $1,660,137,000 as of October 31, 2025, from $1,118,785,000 as of January 31, 2025[15] - Total stockholders' equity increased to $7,040,631,000 as of October 31, 2025, compared to $5,832,373,000 as of January 31, 2025[15] - The fair value of total financial assets as of October 31, 2025, was $5,490,139, with cash equivalents of $505,249[43] Expenses - Research and development expenses for the three months ended October 31, 2025, were $191,883,000, a 11% increase from $172,411,000 in the same period of 2024[18] - Stock-based compensation expense for the nine months ended October 31, 2025, was $354,444,000, compared to $322,146,000 in 2024, an increase of 10.0%[24] - Sales and marketing expenses for the three months ended October 31, 2025 increased to $110,552 thousand, a 12% increase from $98,695 thousand in 2024, maintaining 14% of total revenues[118] - General and administrative expenses for the three months ended October 31, 2025 decreased by 5% to $68,483 thousand from $72,359 thousand in 2024[121] Revenue Sources - R&D Solutions accounted for approximately 53% of total revenues for the nine months ended October 31, 2025, indicating a growing trend in this segment[80] - The geographic mix of subscription services revenues for the three months ended October 31, 2025, was 60% from North America, 28% from Europe, and 12% from other locations[103] - The increase in subscription services revenue for the nine months ended October 31, 2025, included $181 million from R&D Solutions and $119 million from Commercial Solutions[106] Customer and Market Dynamics - The company served 1,477 customers as of January 31, 2025, an increase from 1,432 customers in 2024, with 730 customers using Commercial Solutions and 1,125 using R&D Solutions[82] - Approximately 41% of total revenues in fiscal year 2025 came from customers outside North America, highlighting the company's international exposure[184] - The top 10 customers accounted for 28% of total revenues in fiscal years 2025 and 2024, and 29% in 2023, indicating revenue concentration risks[181] Regulatory and Compliance Risks - The company faces significant competition in the life sciences industry, particularly from Salesforce and IQVIA, which could adversely affect business and operating results[172] - Nearly all revenues are generated from the life sciences industry, making the company vulnerable to adverse factors affecting this sector, such as regulatory changes and government funding[166] - Regulatory changes, including drug pricing reforms from the Inflation Reduction Act, could negatively impact revenues and demand for the company's products[205] - The company is subject to significant data protection obligations under the EU GDPR and UK GDPR, with potential penalties for non-compliance[213] Future Outlook - The company expects revenues from R&D Solutions to increase as a percentage of both subscription services revenues and total revenues in the future[80] - The company anticipates operating expenses to rise in the future, primarily driven by employee compensation-related costs[113] - The company expects cash flows from operating activities to increase in the fiscal year ending January 31, 2026, due to the OBBBA, which restored the option to deduct certain domestic R&D expenditures[141][142]

Merger Agreement and Business Combination - Trailblazer Merger Corporation I entered into a merger agreement with Cyabra Strategy Ltd. on July 22, 2024, with the business combination expected to close by September 30, 2025[144][152] - The merger agreement includes a provision for up to 3,000,000 shares of Holdings Common Stock to be issued as Earnout Shares based on the achievement of certain price targets post-closing[148] - The company plans to raise at least $6,000,000 through a private placement of Holdings Common Stock concurrent with the business combination[150] - Upon the closing of the business combination, Holdings will change its name to "Cyabra, Inc." and is expected to list on Nasdaq[152] - Each Cyabra ordinary share will convert into Holdings Common Stock based on a Conversion Ratio determined by the Aggregate Merger Consideration[147] - The business combination involves a two-step merger process, with Trailblazer merging into Holdings and Merger Sub merging into Cyabra[145] - The merger agreement allows for the issuance of additional shares, which may significantly dilute existing investors' equity interests[142] Financial Performance and Losses - For the three months ended September 30, 2025, the company reported a net loss of $3,693,011, which included general and administrative expenses of $563,783 and a loss on debt extinguishment of $6,222,973[168] - For the nine months ended September 30, 2025, the company had a net loss of $4,384,093, with general and administrative expenses totaling $1,675,074[169] - The company recorded a loss on extinguishment of the promissory note amounting to $6,222,973, which was presented in the condensed consolidated statements of operations[159] - The company currently lacks the liquidity needed to sustain operations for at least one year, raising substantial doubt about its ability to continue as a going concern[191] Trust Account and Promissory Notes - The Sponsor has deposited a total of $2,379,439 into the Trust Account to extend the deadline for completing the business combination to September 30, 2025[154] - The maximum amount available under a non-interest bearing unsecured promissory note issued to the Sponsor has been increased to $3,530,000 as of February 21, 2025[157] - As of September 30, 2025, the outstanding principal balance of the promissory note was $0, down from $2,529,445 as of December 31, 2024[194] - The company intends to use substantially all funds held in the trust account to complete its business combination[188] - A total of 2,046,800 shares were tendered for redemption, resulting in a withdrawal of $23,950,427 from the trust account[187] - On October 22, 2025, the company withdrew $23,950,427 from the trust account to pay redeeming holders, with approximately $11.70 redemption price per share for 2,046,800 shares[166] Stockholder Approvals and Extensions - As of September 29, 2025, stockholders approved an extension of the termination date for the business combination to March 30, 2026[186] - The company has extended the completion window for the business combination multiple times, with the latest extension approved on June 25, 2024[153] - The investment management trust agreement was amended to allow the company to extend the deadline for consummating a business combination up to six times, each for an additional month, until March 30, 2026[212] Accounting and Reporting Standards - The company has not yet adopted ASU 2023-09, which requires expanded disclosures of income taxes paid, effective for fiscal years beginning after December 15, 2024[219] - The company adopted ASU 2023-07 on January 1, 2024, which requires additional disclosures on segment expenses, with no material effect on financial statements[220] - The company adopted ASU 2016-13 on January 1, 2023, and is delaying the adoption of other new or revised accounting standards[222] - As an "emerging growth company," the company may not be required to provide an auditor's attestation report on internal controls over financial reporting for five years following its Initial Public Offering[223] - The company is evaluating the benefits of relying on reduced reporting requirements provided by the JOBS Act[223] Other Financial Information - The company generated gross proceeds of $69,000,000 from the IPO of 6,900,000 units sold at $10.00 per unit[173] - The fair value of financial instruments is evaluated based on observable and unobservable inputs, with a hierarchy established for classification[217] - The estimated deSPAC stock price decreased from $5.76 on July 29, 2025, to $3.36 on September 30, 2025, with an implied probability of a successful initial business combination increasing from 70.0% to 74.4% during the same period[218] - The company recognized a gain on change in fair value of the promissory note of $2,856,375 during the three and nine months ended September 30, 2025[196] - The maturity date of the promissory note was amended to be the later of September 15, 2025, or the closing of the company's initial business combination[195] - The company will reimburse underwriters for documented costs up to $50,000, with any excess reimbursed upon the consummation of the initial business combination[205] - The underwriters received a cash underwriting discount of $0.15 per Unit, totaling $1,035,000, with an additional deferred underwriting commission of $2,070,000 payable upon completion of a business combination[200]

Financial Performance - As of September 30, 2025, the company reported a net loss of $954,647 for the three months ended, primarily due to a change in the fair value of warrant liability of $668,780 and general and administrative expenses of $291,304 [148]. - The company incurred transaction costs of $3,890,326 related to its Initial Public Offering, including $1,437,500 in underwriting commissions [156]. - For the three months ended September 30, 2025, the company incurred $30,000 in administrative service fees, and for the nine months, it incurred $90,000 [167]. - The company incurred $215,000 in accrued costs and expenses related to administrative service fees [167]. Business Combination - The company has extended its business combination period to February 15, 2026, allowing additional time to complete a business combination [142]. - The company has until February 15, 2026, to complete the proposed Business Combination, raising substantial doubt about its ability to continue as a going concern if not completed by this date [169]. - The company may need to raise additional funds to meet operating expenditures and complete its business combination, which could involve issuing additional securities or incurring debt [165]. - The company has not commenced any operations and will not generate operating revenues until after completing a business combination [147]. - The company had an outstanding balance of $400,000 under the Instinct Note as of September 30, 2025, which is payable upon consummation of a business combination [164]. - Approximately $786,345 remained in the Trust Account as of September 30, 2025, which is intended to be used for the initial business combination [159]. Capital Structure - The company generated gross proceeds of $143,750,000 from its Initial Public Offering of 14,375,000 Units at $10.00 per Unit [153]. - The company had 62,488 Public Shares outstanding as of September 30, 2025, following multiple redemptions by stockholders [159]. - The company will pay A.G.P. a fee of 3.5% of the gross proceeds of the Initial Public Offering, totaling $5,031,250, upon consummation of the initial Business Combination [168]. Financial Position - As of September 30, 2025, the company had a working capital deficit of $2,863,206 and only $21,280 in its operating bank account [153]. - As of September 30, 2025, the company did not have any off-balance sheet arrangements [180]. - The company has not made adjustments to the carrying amounts of assets or liabilities in the event of liquidation after the applicable extension date [169]. Valuation and Accounting - The valuation of Public Warrants is based on a traded market, while Private Placement Warrants are valued using a Monte Carlo options pricing model [175]. - The estimates used to calculate the fair value of derivative assets and liabilities may change significantly based on stock price and other assumptions [176]. - The adoption of ASU 2023-07 has not had a material impact on the company's financial statements and disclosures [178]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements [170].

Revenue Performance - For Q3 2025, ClearSign Technologies recognized approximately $1 million in revenues, a decrease from approximately $1.9 million in Q3 2024, primarily due to a large order shipped in the prior year[7]. - The year-over-year order volume has increased, with Q3 2025 revenue driven by multiple spare parts orders and engineering services, indicating a successful diversification strategy[8]. - Spare parts sales contributed approximately $300,000 to revenue this quarter, indicating a growing and consistent revenue stream as more equipment is installed[78]. - ClearSign expects to see a proportional increase in spare parts revenue as the installed base of equipment grows, contributing to overall profitability[78]. Financial Performance - The net loss for Q3 2025 increased by approximately $274,000 compared to Q3 2024, but the gross margin improved by approximately 6.1 percentage points year-over-year[9]. - Net cash used in operations for Q3 2025 was approximately $1.8 million, up from $1.4 million in Q3 2024, with cash and cash equivalents at approximately $10.5 million as of September 30, 2025[10]. Product Development and Innovation - The company is developing a new burner technology capable of running on 100% natural gas to 100% hydrogen, with significant testing completed at the Zeeco test facility[20][23]. - The DOE SBIR project for developing a range of burners is nearing completion, with validation of scaling criteria underway to support future product lines[23]. - ClearSign is actively promoting its new burner developed from the SBIR program, which is expected to open new market opportunities and enhance customer engagement[69]. - The company is developing a burner capable of operating on a wide range of fuel mixtures, including 100% hydrogen, which positions it well for future market demands[75]. Market Demand and Customer Engagement - ClearSign has seen an uptick in order flow across major product lines, driven by customer trust and ongoing regulatory pressures in key markets like Texas and California[13]. - Regulatory changes in Texas and California are driving increased interest in ClearSign's products, particularly in the US Gulf Coast refining and petrochemical market[79]. - The company has received a testing order from a petrochemical client for a 100% hydrogen-capable burner, indicating strong interest in future deployment[19]. - ClearSign's focus on product development is aimed at addressing customer needs and expanding into new applications within the process field[69]. Strategic Partnerships and Collaborations - The partnership with Zeeco is progressing well, with extensive testing and fabrication support for ClearSign's burners, leading to increased proposals from Zeeco's sales teams[62]. - ClearSign Technologies is manufacturing 26 burners at Zeeco, with a focus on shipping them by year-end, which is expected to generate over $2 million in revenue[64]. Orders and Contracts - ClearSign Technologies received a new order for engineering services from a super major customer for the retrofit of two process heaters, involving a total of 32 ClearSign Core burners[29]. - The company has also secured an order for 36 ClearSign Core burners from an integrated petroleum producer for installation at the US Gold Coast refinery, emphasizing the importance of NOx emissions in the project[38][40]. - ClearSign has received purchase orders from three out of five to seven global super-majors, indicating strong market penetration[44]. - The M-series product line, particularly the M25 burner, is designed for retrofit applications and has received positive reception, with multiple proposals still in the pipeline[48]. - The company has received its fourth order for a flare system, with potential revenue from this order estimated between $150,000 to $500,000, depending on the components supplied[55]. Marketing and Promotion - ClearSign is leveraging social media for promotion and client engagement, indicating a strategic shift towards enhanced communication[82]. - The company is experiencing increased interest in its products, particularly the M-Series and flare products, which are expected to provide quicker revenue recognition compared to larger process burner orders[68].

Financial Performance - The company recorded a net loss of $222.187 million for the three months ended September 30, 2025, compared to a net loss of $77.686 million in the same period of 2024 [632]. - Total operating expenses for the three months ended September 30, 2025, were $172.588 million, significantly higher than $3.763 million in the same period of 2024, largely due to asset impairment and increased operational costs [632]. - Revenue for the three months ended September 30, 2025, increased by $28 thousand (311.1%) to $37 thousand compared to $9 thousand in the same period of 2024, primarily due to higher automotive sales revenue [634]. - For the nine months ended September 30, 2025, revenue increased by $103 thousand (33.9%) to $407 thousand compared to $304 thousand in the same period of 2024, driven by $37 thousand in automotive sales and $370 thousand in leasing revenue [635]. - The company reported a $138.5 million impairment loss related to long-lived assets for the three months ended September 30, 2025, primarily due to updated operational plans and production forecasts [660]. - The company has an accumulated deficit of $4,671.5 million and an unrestricted cash balance of $62.9 million as of September 30, 2025 [690]. Research and Development - Research and development expenses are expected to increase as the company focuses on the FF 92 and FX Series vehicles, following substantial completion of R&D for the FF 91 [620]. - Research and development expenses for the three months ended September 30, 2025, increased by $1.5 million (28.2%) to $6.640 million compared to $5.180 million in the same period of 2024, driven by higher operating consumables and equipment rental costs [640]. - The company is focusing on final validation and production readiness of the FX Super One vehicle, with ongoing R&D efforts aimed at enhancing vehicle performance and safety systems [641]. Product Development and Launch - The FF 91 series is currently being manufactured at the FF ieFactory California, with ongoing limited deliveries while reallocating resources towards the FF 92 upgrade and FX Super One development [575]. - The FX Super One is designed as the first "First Class AI-MPV," targeting a new market segment with advanced AI features and a goal of delivering "twice the performance at half the price" [575]. - The planned FF 92 upgrade program is in the research and development stage and aims to maintain the company's competitive edge in the ultra-luxury electric vehicle segment [575]. - The FX Super One features advanced AI technologies, including a voice interaction system based on large language models [577]. - The company commenced deliveries of the FF Series, specifically the FF 91 model, and is preparing for full-scale production of the FX Series, including the Super One model [691]. Market Strategy and Expansion - The company has established operations in the UAE to support assembly and sales for FF 91 series vehicles, further expanding its presence in the Middle East [566]. - The company has implemented a dual-home market strategy, integrating U.S. technological innovation with China's supply chain capabilities [569]. - The company is exploring potential manufacturing opportunities in China through joint ventures or other arrangements [565]. - The company aims to leverage its Eco Artificial Intelligence (EAI) mobility ecosystem with blockchain initiatives to create new value channels for users and investors [569]. - The company is expanding its U.S. and Middle East operations, with its Ras Al Khaimah facility ready for occupancy to support FX Super One production [577]. Financing and Capital Management - The Company secured approximately $105 million in new cash financing in July 2025, primarily through unsecured convertible notes and warrants [581]. - The Company raised over $100 million in total capital since September 2024 [585]. - The company expects to fund ongoing operations through various financing alternatives, including equipment financing and equity offerings, until sufficient revenue is generated from product sales [604]. - The anticipated start of FX Series production is expected to generate new revenue streams and enhance operational performance [701]. - The company projects substantial additional funds will be required to continue operations and support production of the FF 91 and FX Series vehicles [701]. Compliance and Governance - The company regained full compliance with Nasdaq's listing requirements in September 2025 [589]. - The Board approved the issuance of up to 61.9 million shares of Class A Common Stock under the March 2025 Securities Purchase Agreement [585]. - The Company confirmed it will not pursue a reverse stock split unless required for Nasdaq compliance [585]. - The company qualifies as a "smaller reporting company" and is not required to provide certain market risk disclosures [728]. Inventory and Revenue Recognition - The company recorded approximately $7.1 million in inventory reserve additions for the three months ended September 30, 2025, increasing the total inventory reserve from approximately $2.8 million in 2024 to approximately $14.2 million in 2025 [637]. - Customer deposits amounted to $4.1 million as of September 30, 2025, up from $3.0 million as of December 31, 2024, reflecting an increase in vehicle reservations driven by the launch of the FX Super One vehicle [613]. - The company recognizes revenue from automotive sales upon delivery, with payments typically received at that point [607]. - Deferred revenue related to products and services was insignificant as of September 30, 2025 [616]. Accounting Estimates and Risks - Management's estimates for financial statements are based on historical experience and reasonable assumptions, affecting reported amounts of assets and liabilities [723]. - Actual results may differ significantly from management's estimates due to changes in accounting estimates and current global macroeconomic conditions [724]. - Critical accounting estimates involve significant estimation uncertainty and may materially impact financial condition or results of operations [725]. - No major changes to critical accounting estimates have occurred that materially impact the financial statements as of the report date [726].

Financial Performance - ARR increased by 10% to $2.48 billion in FY'25 compared to FY'24, with an 8.5% growth on a constant currency basis[149] - Revenue grew by 19% to $2.74 billion in FY'25, reflecting an 18% increase on a constant currency basis[151] - Operating income rose by 67% to $982.4 million in FY'25, with a non-GAAP operating income increase of 46% to $1.30 billion[157] - Diluted earnings per share surged by 95% to $6.08 in FY'25, with non-GAAP diluted earnings per share increasing by 56% to $7.94[157] - Total recurring revenue increased by 22% to $2.60 billion in FY'25, with a 21% increase on a constant currency basis[157] - License revenue grew by 44% to $1.16 billion, while support and cloud services revenue increased by 8% to $1.47 billion[164] - Income before income taxes surged by 96% to $920.2 million in FY'25 compared to $469.0 million in FY'24[184] - Non-GAAP net income for FY'25 was $958.8 million, up from $613.4 million in FY'24, which is an increase of approximately 56.2%[226] Cash Flow and Expenses - Cash provided by operating activities grew by 16% to $868 million in FY'25, with free cash flow also increasing by 16% to $857 million[150] - Total operating expenses increased by 4% to $1,311.9 million in FY'25 from $1,265.6 million in FY'24[177] - Research and development expenses rose by 6% to $457.7 million, accounting for 17% of total revenue in FY'25, down from 19% in FY'24[177] - Cash provided by operating activities increased by $118 million to $867.7 million in FY'25, attributed to higher collections and lower interest payments[195] - Free cash flow for FY'25 was reported at $856.7 million, compared to $735.6 million in FY'24, reflecting an increase of approximately 16.5%[226] Debt and Shareholder Returns - Total debt decreased to $1,200.0 million in FY'25 from $1,752.6 million in FY'24, reflecting a reduction in outstanding debt[198] - The company repurchased 1.65 million shares for $300 million in FY'25, with plans to repurchase approximately $150 to $250 million per quarter in FY'26[201] Tax and Future Obligations - Future contractual obligations include approximately $188.8 million, with $91.9 million expected to be paid in FY'26[205] - The company expects material positive cash impact from changes in U.S. tax law starting in FY'26 and FY'27[190] - As of September 30, 2025, the company has unrecognized tax benefits amounting to $157.7 million, with a reduction of $109.2 million expected within the next 12 months[242] Interest and Currency Exposure - Interest expense decreased by 36% to $77.0 million in FY'25, driven by lower debt balances and interest rates[179] - A 100 basis point change in interest rates would impact annual earnings and cash flows by approximately $7 million[268] - Approximately 50% of the company's revenue and 35% of its expenses were transacted in currencies other than the U.S. Dollar[261] - A $0.10 change in the USD to EUR exchange rate would impact operating income by approximately $44 million[261] - The company uses foreign currency forward contracts primarily denominated in Euro, Japanese Yen, and Indian Rupee to manage foreign currency exposure[263] Other Financial Metrics - Gross margin improved by 24% to $2.29 billion, with total gross margin percentage rising to 84% in FY'25[172] - The GAAP operating margin improved to 35.9% in FY'25 from 25.6% in FY'24, showing a notable increase of 10.3 percentage points[228] - Non-GAAP operating margin for FY'25 was 47.5%, compared to 38.9% in FY'24, indicating a rise of 8.6 percentage points[228] - Stock-based compensation expense for FY'25 was $216.2 million, slightly down from $223.5 million in FY'24[226] - The company recognized a $13.1 million gain related to contingent consideration in FY'25, associated with the sale of a portion of its PLM services business[226] Foreign Currency Impact - The company experienced an unfavorable impact of $2.4 million from foreign currency exchange rates on consolidated cash balances in FY'25[270] - In FY'24, the company had a favorable impact of $3.2 million from foreign currency exchange rates on consolidated cash balances[270] - Changes in foreign currencies, particularly the Japanese Yen, Indian Rupee, and Swedish Krona, significantly influenced cash balances[270] - Interest income is subject to fluctuations based on market interest rates and levels of cash available for investment[270] - The company noted that interest income would decrease in a declining interest rate environment and increase in a rising interest rate environment[270] - The U.S. Federal Reserve Board, European Central Bank, and Bank of England have altered benchmark interest rates, affecting market interest rates[270] - Fluctuations in interest income earned on cash and cash equivalents are expected to continue[270]

Financial Performance - Net income for the third quarter of fiscal 2025 was $48.7 million, or $0.97 per share, compared to $44.2 million, or $0.89 per share for the same quarter last year, representing an increase of 10.1% in net income [3][6]. - Net sales for the 13-week fiscal quarter ended November 1, 2025, increased by 9.3% to $320.8 million from $293.6 million in the prior year [4]. - Comparable store net sales for the same quarter increased by 8.3% compared to the prior year [4]. - For the 39-week fiscal period ended November 1, 2025, net sales increased by 7.2% to $898.7 million from $838.5 million in the prior year [5]. - Comparable store net sales for the 39-week period increased by 6.3% compared to the previous year [5]. Online Sales - Online sales for the quarter rose by 13.6% to $53.0 million, up from $46.6 million in the previous year [4]. - Online sales for the 39-week period rose by 11.6% to $142.9 million, compared to $128.0 million in the prior year [5]. Assets and Cash Position - Total assets as of November 1, 2025, were $1,078.4 million, an increase from $976.3 million at the end of the previous fiscal year [13]. - Cash and cash equivalents increased to $316.2 million from $301.9 million in the previous year [13]. Store Operations - The company operated 444 retail stores in 42 states as of the end of the fiscal quarter, a decrease from 445 stores in the same period last year [9].

Financial Performance - In fiscal 2025, consolidated sales reached $1,795,737,000, a decrease of 4.5% from $1,880,896,000 in 2023[15] - The Memorialization segment generated sales of $809,514,000 in 2025, down from $842,997,000 in 2023, reflecting a decline of 3.9%[15] - Industrial Technologies sales were $342,229,000 in 2025, a significant drop of 32.3% from $505,751,000 in 2023[15] - Brand Solutions segment sales decreased to $345,946,000 in 2025 from $532,148,000 in 2023, marking a decline of 34.9%[15] - The Company generated approximately 30% of its sales from international markets in fiscal 2025, indicating a strong reliance on non-U.S. revenue sources[67] - Adjusted EBITDA for fiscal 2025 was $187.5 million, compared to $205.2 million in fiscal 2024, reflecting declines across segments[174] - The net loss for fiscal 2025 was $24.5 million, an improvement from a net loss of $59.7 million in fiscal 2024[184] - Gross profit for fiscal 2025 was $507.6 million, down from $529.7 million in fiscal 2024, influenced by lower sales and higher material costs[171] - Selling and administrative expenses for fiscal 2025 were $467.2 million, a decrease from $488.3 million in fiscal 2024, but as a percentage of sales, they increased to 31.2% from 27.2%[173] Segment Performance - The Memorialization segment is a leading manufacturer of caskets and related funeral home products, with a comprehensive product line to meet diverse customer needs[21][32] - The Industrial Technologies segment includes high-tech custom energy storage solutions and warehouse automation technologies, catering to major vehicle producers and tier 1 battery manufacturers[35][36] - Memorialization segment adjusted EBITDA increased to $169.5 million in fiscal 2025 from $162.6 million in fiscal 2024, driven by improved price realization[174] - Industrial Technologies segment adjusted EBITDA decreased to $27.9 million in fiscal 2025 from $39.7 million in fiscal 2024, primarily due to lower sales[174] - Brand Solutions segment adjusted EBITDA dropped to $40.3 million in fiscal 2025 from $61.6 million in fiscal 2024, impacted by the divestiture of the SGK Business[174] Market and Economic Conditions - The U.S. government announced a 10% tariff on product imports from almost all countries effective April 2, 2025, which could adversely affect the Company's operating results[76] - Changes in mortality and cremation rates may impact the Company's cash flows and revenues, with an expected increase in cremation rates benefiting the Memorialization segment[80] - The Company faces competitive pressures, including increased offshore manufacturing, primarily from China, which may affect future results[81] - The Company is subject to various risks related to economic conditions, which could negatively impact sales volume and revenues due to factors like consumer confidence and global pandemics[109] Legal and Regulatory Risks - The Company is facing significant legal challenges from Tesla, including allegations of trade secret misappropriation and breach of contract, which could adversely affect its financial condition and operating results[93] - The Company does not expect ongoing legal matters to have a material adverse effect on its financial condition or results of operations[142] - The Company is subject to extensive environmental laws and regulations, which may lead to unforeseen expenses and liabilities that could materially affect its business[96] - Compliance with data privacy laws such as GDPR and CCPA may incur substantial operational costs and could result in significant penalties if not adhered to[101] - The Company operates in a regulated environment, and non-compliance with laws could result in sanctions that materially affect its business[103] Supply Chain and Operational Challenges - The Company relies on limited suppliers for critical components, which may lead to supply chain disruptions and increased costs[83] - Customer delays in the energy storage business have impacted project timing and invoicing delays[211] - Labor shortages and increased labor costs could adversely affect the Company's operations and financial results[111] - The Company relies on third-party providers for critical IT services, and any failure in these services could disrupt operations and harm its business[99] Intellectual Property and Technology - The Company holds over 100 domestic and foreign patents, continuously assessing and expanding its intellectual property portfolio[48] - The Company is actively pursuing additional patent filings and developing processes to safeguard its trade secrets and intellectual property assets[48] - The Company must keep pace with technological changes to maintain its competitive position, and failure to do so may hinder its ability to develop and market new products[100] - The Company has established an Artificial Intelligence Council to ensure ethical and effective use of AI across its business[128] Financial Position and Capital Management - The Company has $300.0 million in 8.625% senior secured second lien notes due October 1, 2027, which may face refinancing challenges due to higher interest rates[74] - Cash used in financing activities for the year ended September 30, 2025, was $144.3 million, significantly higher than $35.0 million in 2024 and $50.2 million in 2023, primarily due to long-term debt repayments of $67.0 million[190] - The Company has a stock repurchase program with an authorization for an additional 5,000,000 shares during fiscal year 2025, with 5,043,567 shares remaining available for repurchase as of September 30, 2025[153] - The Company has 1,250,000 shares remaining for sale under its At-The-Market equity offering program, with no near-term intention to utilize this program[210] Cybersecurity and Risk Management - The Company has implemented a comprehensive cybersecurity program to protect its information systems and manage risks from cybersecurity threats[117] - Matthews maintains a cybersecurity Incident Response Plan to handle incidents effectively, involving multiple departments[127] - The Chief Information Officer and Chief Information Security Officer are responsible for managing cybersecurity risks and report directly to the Chief Financial Officer[132] - The Company maintains cybersecurity insurance coverage to protect against losses from cyber incidents, reviewing it annually for adequacy[129] - The Company has experienced cyber-attacks in the past, but none have resulted in material disruption to its business[130]