DJCO's 1H25 Earnings Rise Y/Y on Tech Revenue Growth, Stock Up 3%

Core Insights - Daily Journal Corporation (DJCO) shares increased by 2.8% following the earnings report for the six months ending March 31, 2025, outperforming the S&P 500 index, which declined by 2.5% during the same period [1] - The company reported a significant rise in net income, reaching $40.34 per share, compared to $20.36 per share in the previous year, indicating a strong financial performance [2] Financial Performance - Consolidated revenues for the six months were $35.9 million, a 10.2% increase from $32.6 million year-over-year [2] - Consolidated pretax income more than doubled to $76.2 million from $36.4 million, primarily driven by investment-related gains [2] - Net income surged to $55.6 million, reflecting a 98% year-over-year increase from $28 million [2] Revenue Drivers and Segment Performance - Revenue growth was mainly driven by Journal Technologies, with license and maintenance fees increasing by $1.6 million and public service fees rising by $2.5 million [3] - The Traditional Business segment contributed with a $0.4 million rise in advertising revenues and a $0.1 million increase in other service fees, although consulting fees declined by $1.2 million [3] Segment-Level Profitability - Journal Technologies reported a pretax income of $0.5 million, up from $0.4 million, despite a $2.7 million rise in operating expenses [4] - The Traditional Business segment saw its pretax income grow by $0.3 million to $1.2 million, supported by a modest revenue increase [4] Non-Operating Income Surge - Non-operating income significantly increased to $74.5 million from $35.1 million in the prior year, largely due to net unrealized gains of $72.8 million on marketable securities [5] - Dividend and interest income slightly declined by $0.4 million to $2.4 million [5] Marketable Securities and Tax Impact - As of March 31, 2025, the company held $431.5 million in marketable securities with net pretax unrealized gains of $292.4 million [6] - The income tax provision totaled $20.6 million on pretax income of $76.2 million, with a significant portion stemming from taxes on unrealized gains [7]