DJCO June-Quarter Earnings Rise Y/Y on Tech Growth, Stock Up 1%

Core Viewpoint - Daily Journal Corporation (DJCO) experienced a mixed financial performance in the quarter ended June 30, 2025, with significant revenue growth but a notable decline in net income compared to the previous year [1][2][7]. Financial Performance - DJCO reported quarterly revenues of $23.4 million, a 34% increase from $17.5 million in the prior-year quarter, driven by strong performances in licensing, consulting services, and public service fees [2][3]. - Net income decreased to $10.47 per share, down 38% from $16.96 a year earlier, reflecting lower gains on the securities portfolio [1][2]. Segment Performance - The Journal Technologies segment was the primary growth driver, contributing approximately 79% of total revenues, with segment revenues climbing 44% to $18.5 million from $13.1 million a year ago [3]. - The Traditional Business segment generated $4.9 million in revenues, a modest increase from $4.4 million, but pretax income turned negative, recording a $0.9 million loss due to higher personnel costs [4][6]. Management Insights - Management highlighted that growth was largely due to successful customer project execution at Journal Technologies, focusing on product upgrades and operational efficiencies, although increased staffing and contractor costs pressured operating margins [5][6]. Investment Portfolio Impact - The decline in net income was significantly influenced by the company's investment portfolio, with unrealized securities gains dropping to $11.5 million from $28 million a year earlier, reducing non-operating income contributions [7]. - Operating expenses rose 23% year over year to $20.2 million, primarily due to salary adjustments and increased legal costs, impacting operating income, which grew to $3.2 million from $1.1 million in the previous year [8]. Other Developments - DJCO continued to decrease its reliance on margin borrowings, with the investment margin loan balance at $25 million as of June 30, 2025, down from $27.5 million at the end of fiscal year 2024 [9].