Value Line's Q4 Earnings Fall Y/Y on Print Revenue Decline

Core Insights - Value Line, Inc. (VALU) shares have declined 2% since the earnings report for the quarter ended April 30, 2025, underperforming the S&P 500 index, which grew by 2.4% during the same period [1] - The company's earnings per share (EPS) for Q4 fiscal 2025 decreased to 42 cents from 51 cents in the prior year, with net income falling 17.4% to $4 million [2] - For the full fiscal year 2025, EPS increased by 8.9% to $2.20, driven by a 37.9% rise in non-voting revenues from EULAV Asset Management Trust (EAM) [3] Financial Performance - Net income for Q4 fiscal 2025 was $4 million, down from $4.8 million in the same quarter last year, while operating income decreased to $0.8 million from $1.5 million [2] - For the full year, income from operations fell 34.5% to $6 million, down from $9.1 million the previous year [3] - Operating expenses rose by 2.6% year over year to $29.1 million, but this was offset by a 17.1% increase in investment gains to $3.2 million [4] Management Commentary - Management attributed the decline in operational income to decreased copyright revenues and cost pressures, while highlighting the strong contribution from EAM [5] - The company is focused on digital transformation to counteract the long-term decline in print revenue [5] EAM Performance - EAM's assets under management (AUM) grew to $4.7 billion, a 12% increase from $4.2 billion the previous year, contributing to improved earnings from Value Line's non-voting economic interests in EAM [6] Revenue Trends - Declines in subscription-based and copyright-related income negatively impacted operational results, with continued pressure on retail print subscriptions expected to persist [7] - Digital revenue streams are growing but not yet sufficient to fully replace lost print revenues [7] - The increase in non-voting revenues and profits from EAM helped improve net income, attributed to rising AUM and better investment performance [8] Macroeconomic Context - Management cited geopolitical uncertainties, trade tensions, and a cooling U.S. economy as headwinds, but noted a resilient job market and easing inflation in spring 2025, which supported broader equity markets [9] Share Repurchase Program - During the fiscal quarter, Value Line repurchased 4,961 shares at an average price of $36.40, with approximately $0.8 million remaining under the $3 million buyback authorization approved in October 2022 [11]