Financial Data and Key Metrics Changes - For Q3 2025, the company reported net income of $37 million or $0.82 per diluted share on revenue of $116 million, reflecting a year-on-year revenue growth of 13.6% [13] - Profitability metrics remained strong with a pretax pre-provision ROA of 2.25%, ROA of 1.5%, and ROTCE of 15.1%, all above the cost of capital [13] - The net interest margin expanded by nine basis points to 4.27%, supported by an improved deposit mix and higher asset yields [13][21] Business Line Data and Key Metrics Changes - Total loans increased by 6% quarter-on-quarter and 11% year-to-date, reaching $7.5 billion, with loan originations of $264 million, up 25% year-on-year [14][17] - Noninterest income totaled $15.9 million, up 9.5% from the previous quarter, primarily due to a $7 million gain from loan sales [22] - Noninterest expense increased by 1.5% to $60.5 million, driven by higher salaries and employee benefits [23] Market Data and Key Metrics Changes - Total deposits were $7.8 billion, slightly up from the prior quarter, with non-interest bearing accounts increasing by $160 million or 9% linked quarter [19] - The company experienced a decline in time deposits due to lower brokered CDs and shifts to money market accounts [19] Company Strategy and Development Direction - The company aims to build a pre-M&A commercial banking franchise in Chicago and is focused on expanding its commercial payments business [28] - The company anticipates crossing the $10 billion asset threshold in Q1 2026, which will delay the impact of Durbin and higher insurance assessments until 2027 [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to continue executing for customers and delivering results for shareholders despite macroeconomic uncertainties [30] - The company remains vigilant over risks, including the federal government shutdown, which could impact SBA loan sales [30][51] Other Important Information - The company was recognized as one of Chicago's best workplaces and received the 2024 SBA 7504 Expert Lender of the Year award [9][10] - Capital levels continued to grow, with CET1 surpassing 12%, and tangible book value per share increased by 5% linked quarter [15][26] Q&A Session Summary Question: What are the assumptions built into the margin and net interest income? - Management indicated that they have been outperforming model assumptions due to competitive rates on deposits and improved analytical capabilities [34][36] Question: What are the thoughts on M&A activity given the recent pickup? - Management remains open to M&A opportunities that are financially and strategically attractive, focusing on transactions that deliver value for shareholders [44][45] Question: How has the government shutdown impacted the SBA business? - The company continues to originate SBA loans but cannot sell and settle loans during the shutdown, which may delay gain on sale income [50][51] Question: What is the expected impact of crossing the $10 billion asset threshold? - The estimated impact from Durbin is between $4.5 million to $5 million, effective in 2027 [46][48] Question: Can you provide insights on the commercial payments business? - The commercial payments business focuses on high-volume ACH transactions and payroll processing, with expectations to see growth in 2026 [71][73]

Financial Data and Key Metrics Changes - GrafTech achieved a 9% year-over-year increase in sales volume, reaching nearly 29,000 metric tons, marking the highest sales volume performance in 12 quarters [6][19] - The company generated positive adjusted EBITDA of $13 million for the quarter, compared to a negative $6 million in the prior year [32] - A net loss of $28 million or $1.1 per share was reported, an improvement from a net loss of $36 million or $1.4 per share in the prior year [32] - Cash costs per metric ton decreased by 10% year-over-year to $3,795, with a full-year guidance for a 10% decline in cash COGS per metric ton [26][28] Business Line Data and Key Metrics Changes - Sales volume in the U.S. grew by 53% year-over-year, contributing significantly to overall sales volume growth [7][20] - The average selling price for the third quarter was approximately $4,200 per metric ton, reflecting a 7% decline compared to the prior year [22] Market Data and Key Metrics Changes - Global steel production outside of China was approximately 206 million tons in 2025, up nearly 2% year-over-year, with a global utilization rate of approximately 66% [11] - In the U.S., steel production grew by 2% year-to-date compared to 2024, while the EU saw a 4% decrease in steel output year-to-date [12] Company Strategy and Development Direction - GrafTech is focused on increasing sales volume and market share, improving average pricing, reducing costs, and enhancing liquidity [38] - The company is strategically shifting its sales mix towards the U.S. market, which has favorable pricing dynamics [8][19] - GrafTech is committed to maintaining a disciplined approach to growth, prioritizing value over volume [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about potential catalysts for a rebound in the steel market, including infrastructure spending and easing financing conditions [13][39] - The company remains bullish on the long-term shift towards electric arc furnace steelmaking, which is expected to drive demand for graphite electrodes [39][40] Other Important Information - GrafTech's liquidity position improved to $384 million as of September, consisting of cash and availability under credit facilities [36] - The company is actively engaging with customers to understand their needs for the upcoming year, positioning itself for continued market share growth [15] Q&A Session Summary Question: Should we expect any other kind of deferred revenue benefits? - Management indicated that no further deferred revenue is expected, as there is nothing left on the balance sheet [49][50] Question: What do you think about the current demand and price environment? - Management noted that the market is oversupplied, making it challenging to push pricing, but there are signs of positive momentum in the steel industry [52][54] Question: Is there any way to accelerate commercial applications in the battery-related materials market? - Management stated that they are developing capabilities and have a distinct advantage with vertical integration, but the market is still developing [58][62] Question: Have you seen any material impact from the 50% tariffs on Indian material? - Management expressed confidence in continuing to grow volume in the U.S. market, viewing the tariffs as an opportunity [66][67] Question: Any updates on public-private partnerships? - Management highlighted the importance of a healthy electrode industry to support steelmaking and expressed confidence in GrafTech's role in the domestic supply chain [70][74]

Financial Data and Key Metrics Changes - The company reported a 42% growth in diluted earnings per share as adjusted compared to the previous year [4] - Revenue increased by 9.6%, driven by broad-based volume growth, improved payer mix, and additional revenue from Medicaid supplemental programs [4][10] - Adjusted EBITDA increased significantly, with a net benefit of approximately $240 million from Medicaid supplemental payment programs [11][14] Business Line Data and Key Metrics Changes - Same-facility equivalent admissions increased by 2.4% year-over-year [9] - Surgical volume growth improved, with same-facility inpatient surgical volume up 1.4% and outpatient surgical volume up 1.1% [9] - Same-facility visits increased by 1.3%, with commercial and Medicare visits combined increasing by 4.1% [9][10] Market Data and Key Metrics Changes - The payer mix showed a 3.7% increase in same-facility total commercial equivalent admissions, with exchanges growing by 8% [10] - Medicare admissions increased by 3.4%, while Medicaid admissions grew by 1.4% [10][66] - Self-pay visits declined by 6%, indicating a shift in the payer mix towards more commercial and Medicare patients [9][67] Company Strategy and Development Direction - The company is focused on enhancing care through increased access, investment in digital tools, and staff training [5][7] - There is an emphasis on improving operational efficiency and service offerings, with a strong belief in sustaining high performance levels in the future [7][8] - The company is preparing for potential changes in federal policies and is advocating for the extension of premium tax credits [6][5] Management's Comments on Operating Environment and Future Outlook - Management expects solid demand for healthcare services to continue, with volumes projected to grow within a long-term range of 2 to 3% [6] - Operating costs are anticipated to remain stable, with some pressures in certain areas, but the resiliency plan is expected to provide relief [6][12] - The company is well-positioned to sustain performance levels, supported by a strong balance sheet and increased cash flow [8][13] Other Important Information - The company updated its full-year guidance, expecting revenues between $75 billion and $76.5 billion and net income between $6.50 billion and $6.72 billion [14] - Capital expenditures are projected to be approximately $5 billion, with a focus on long-term value creation [13][14] Q&A Session Summary Question: Can you remind us what states are still pending for grandfathered programs? - Management mentioned several states, including Florida, Georgia, and Virginia, are under review, but no approvals are expected during the shutdown [20][21] Question: Are you seeing early scheduling for elective surgeries? - Management noted that it is difficult to size the potential impact of upcoming enrollment periods and special enrollment provisions until closer to the fourth quarter call [25] Question: Can you provide color on the guidance range for the fourth quarter? - Management indicated that the implied growth rate for the fourth quarter is expected to be in the high single-digits range, around 7% [30] Question: How much in supplemental payments is included in guidance for Tennessee and Texas? - Tennessee was the largest driver of net benefit in the third quarter, while Texas had a minor impact due to its late approval [33][34] Question: How are you managing professional fees and their impact on EBITDA? - Professional fees increased by 11% year-over-year, primarily related to anesthesia and radiology, but management expects continued financial improvement moving into 2026 [74][77]

Financial Data and Key Metrics Changes - Revenue increased by 3% in Q3 2025, with organic growth at 1% and a 1% reduction due to strategic product line simplification efforts [3][4] - GAAP EPS reached $2.81, operating income grew by 6% to a record $1.1 billion, and operating margin improved by 90 basis points to 27.4% [3][4][8] - Free cash flow grew by 15% to over $900 million, with a conversion rate of 110% [8] Business Line Data and Key Metrics Changes - Automotive OEM segment revenue increased by 7%, with organic growth of 5%, and operating margin improved by 240 basis points to 21.8% [10] - Food equipment revenue increased by 3%, with 1% organic growth, and operating margins improved by 80 basis points to 29.2% [11] - Test & measurement and electronics revenue was flat, with a 1% decline in organic revenue, but operating margin improved by 260 basis points to 25.4% [12] - Welding segment delivered 3% organic growth, with operating margin at 32.6%, up 30 basis points [12] - Polymers & fluids revenue declined by 2%, with organic revenue down 3%, but operating margin improved by 60 basis points to 28.5% [13] - Construction products revenue decreased by 1%, with organic revenue down 2%, but operating margin improved by 140 basis points to 31.6% [13] Market Data and Key Metrics Changes - North America organic revenue was flat, Europe down 1%, while Asia Pacific saw a 7% increase, including 10% growth in China [6][10] - China automotive business grew significantly, with a 15% increase year-to-date, driven by customer-backed innovation [55] Company Strategy and Development Direction - The company remains focused on above-market organic growth powered by customer-backed innovation, aiming for a yield of 3% plus by 2030 [4][17] - The strategy includes ongoing product line simplification to enhance portfolio quality and profitability [10][66] - The company is committed to increasing annual cash returns to shareholders, with a 7% dividend increase announced [4][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating a challenging macro environment, emphasizing the resilience of the diversified portfolio [17] - The company is narrowing its EPS guidance range to $10.40 to $10.50, reflecting a lower projected tax rate and current demand levels [16][17] - Management noted that while the demand environment remains mixed, they are positioned for above-market growth as the cycle turns [75] Other Important Information - The company has repurchased over $1.1 billion of outstanding shares year-to-date [4] - The effective tax rate for the quarter was 21.8%, influenced by a benefit from the 2024 U.S. tax return filing [8] Q&A Session Summary Question: Insights on construction business margins - Management attributed margin improvements in construction to the quality of the portfolio and effective execution in attractive market segments [22][23] Question: Expectations for test & measurement in Q4 - Management anticipates a cyclical improvement in Q4, with expectations of better order activity and a recovery from previous slowdowns [25] Question: Clarification on organic revenue growth guidance - Management indicated that the guidance remains cautious due to choppy demand, with expectations for a sequential improvement in Q4 driven by test & measurement [29][30] Question: Impact of tariffs on pricing and demand - Management noted that tariffs are no longer the main concern, with the focus shifting to managing costs and demand uncertainties [72][73] Question: Long-term growth outlook and market positioning - Management expressed confidence in long-term market attractiveness and the company's positioning for growth when the cycle turns [75]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net income of $0.53 per share compared to a loss of $0.29 in Q2 2025 [7] - Book value increased to $7.33 at September 30 from $7.21 at June 30 [7] - Total return for Q3 was 6.7%, a significant improvement from negative 4.7% in Q2 [7] - Average portfolio balance rose to $7.7 billion in Q3 from $6.9 billion in Q2 [8] - Liquidity improved to 57.1% at September 30 from 54% at June 30 [8] Business Line Data and Key Metrics Changes - The portfolio remains 100% Agency RMBS with a focus on call-protected specified pools, which help insulate from adverse prepayment behavior [42] - The weighted average coupon increased from 5.45% to 5.53%, and the effective yield rose from 5.38% to 5.51% [43] - The net interest spread expanded from 2.43% to 2.59% [43] Market Data and Key Metrics Changes - The cash treasury curve showed a slight steepening, reflecting market pricing in Fed cuts due to labor market deterioration [10][12] - The current coupon mortgage spread to the ten-year treasury has halved since May 2023, indicating a tightening in the mortgage market [15] - The performance of mortgages remains attractive, with the company noting strong demand despite tight credit spreads [13][19] Company Strategy and Development Direction - The company is focused on maintaining a conservative leverage posture while enhancing the carry and prepayment stability of its portfolio [44] - The strategy includes investing in high coupon specified pools and maintaining a bias towards call protection to mitigate risks associated with prepayments [60] - The company anticipates continued Fed rate cuts and the end of quantitative tightening (QT) as potential tailwinds for the Agency RMBS market [61] Management's Comments on Operating Environment and Future Outlook - Management noted a potential crossroads in the economy, with labor market weakness prompting Fed rate cuts, while also observing resilience in consumer spending and government stimulus [64] - The company expects to adjust hedges to lock in lower funding rates and prepare for potential rate hikes following anticipated cuts [66] Other Important Information - The company raised $152 million in equity capital during the quarter, which was fully deployed into high-quality specified pools [41][59] - The funding markets are experiencing friction, particularly during heavy treasury bill issuance, impacting term pricing [46][47] Q&A Session Summary Question: What macro factors might change overall risk positioning? - Management indicated that if rates remain low and the Fed continues to cut, they may consider increasing leverage. Conversely, if the economy strengthens, they would focus on protecting against potential rate sell-offs [68][70] Question: What is the outlook for pay-ups on high coupon spec pools? - Management noted that pay-ups have increased sharply, driven by market dynamics, but they have managed to acquire pools without excessive pay-ups [72][74] Question: Will dollar roll specialists return to the market? - Management expressed skepticism about the return of dollar roll specialists, citing the current market dynamics and the Fed's focus on treasury purchases rather than mortgage-backed securities [84][86] Question: What is the percentage of the portfolio covered with call protection? - Almost 100% of the portfolio has some form of call protection, which is expected to mitigate risks in a declining rate environment [94][96]

Financial Data and Key Metrics Changes - The company reported total assets under management (AUM) of $169 billion as of September 30, which is slightly below the previous quarter level due to net outflows despite favorable market performance [9] - Earnings per share (EPS) increased to $6.69 from $6.25 in the second quarter, marking a 7% increase sequentially, although it decreased 3% year-over-year due to lower average assets [11][19] - The operating margin improved by 170 basis points to 33%, with an adjusted margin of 33.4% excluding discrete items [11][18] Business Line Data and Key Metrics Changes - The ETF business saw significant growth, with AUM reaching $4.7 billion, up 79% year-over-year, and achieving the highest quarterly sales and net flows of $0.9 billion each [5][14] - Fixed income strategies experienced positive net flows, contributing to overall sales growth of 12% to $6.3 billion, driven by higher sales in institutional and ETFs [15][16] - Despite positive flows in fixed income and alternative strategies, the company faced total net outflows of $3.9 billion, unchanged from the prior quarter, primarily due to outflows in quality equity strategies [9][10] Market Data and Key Metrics Changes - The company noted that 77% of ETF AUM outperformed benchmarks over a three-year period, indicating strong investment performance [6] - The equity net outflows were attributed to the company's focus on quality-oriented strategies, which have underperformed in a momentum-driven market environment [10][30] Company Strategy and Development Direction - The company aims to increase retail separate account offerings, expand ETF availability in key channels, and grow its wealth management business [4] - Inorganic growth opportunities remain a focus, with a disciplined approach to adding new capabilities or increasing scale [7][28] - The company is actively working on broadening access to its ETFs and introducing new offerings, including several actively managed funds expected to launch in the coming quarters [6][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term performance of quality-oriented strategies, anticipating a reversion in market favor that could enhance performance and flows [27][30] - The company highlighted the importance of diversifying its offerings to mitigate the impact of current market trends favoring momentum over quality [30][33] Other Important Information - The company completed a debt refinancing, securing a new $400 million term loan and a $250 million revolving credit facility, enhancing financial flexibility [12][20] - The quarterly dividend was increased for the eighth consecutive year, reflecting the company's commitment to returning capital to shareholders [5][12] Q&A Session Summary Question: What are the key strategies attracting interest in ETFs? - Management noted that both the ETF wrapper and specific strategies are driving interest, with a focus on expanding access and building track records in various strategies [23][24] Question: Any updates on inorganic opportunities? - Management confirmed that the environment remains active for potential acquisitions, focusing on high-performing capabilities and private market expansion [26][28] Question: How to improve net flows given recent trends? - Management highlighted positive flows in fixed income and alternative strategies, emphasizing the need to grow areas less correlated to quality-oriented equity strategies [30][31] Question: What is the outlook for operating expenses following office consolidation? - Management indicated that the benefits of office consolidation are now reflected in the run rate, with expectations for lower operating expenses moving forward [34][35] Question: Are there any updates on buybacks? - Management reiterated that buybacks remain a core component of their capital strategy, with no specific plans announced for the near term [39][41] Question: What trends are observed in institutional allocations? - Management noted strength in emerging market debt and REITs, particularly in non-U.S. markets, indicating a varied investor profile [42][43]

Financial Data and Key Metrics Changes - The company reported net earnings of $6.8 million and earnings per share of $0.28 for Q3 2025, compared to core income of $2 million and $0.08 per share in Q3 2024 [5] - Return on Assets (ROA) and Return on Tangible Common Equity (ROTCE) improved to 70 basis points and 9.45%, respectively [5] - Core ROA adjusted for certain items is closer to 90 basis points, aligning with the target of 1% ROA [6] - Net interest margin increased to 3.18%, up from 2.86% in the previous quarter and 2.97% year-over-year [20] Business Line Data and Key Metrics Changes - The mortgage division's production increased from approximately $20 million to $100-$120 million per month over the past few years, with pre-tax earnings of about $1.9 million in Q3 [11] - The Mortgage Warehouse division showed average balances of $210 million, ending balances of $327 million, and pre-tax earnings of about $1.6 million [12] - Panacea Financial Division's loan balances rose to $530 million, with deposits growing to $132 million, a 50% increase year-over-year [13] Market Data and Key Metrics Changes - Non-interest-bearing checking accounts grew by about 16% compared to a year ago, improving the deposit mix and reducing the cost of deposits by almost 20% [7] - Average earning assets increased by 10% annualized in Q3 2025 [19] - Non-interest income reached $12 million, up from $10.6 million in the previous quarter, driven primarily by increased mortgage revenue [22] Company Strategy and Development Direction - The company aims to increase the proportion of non-interest-bearing deposits to around 20% of total deposits, focusing on enhancing the deposit mix [34] - The strategy includes leveraging technology and customer relationships to drive down deposit costs while maintaining competitive rates [40][46] - The company is focused on sustainable growth in the mortgage and Panacea divisions, with plans to maintain strong production levels [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 1% ROA goal, citing strong operational momentum and a favorable deposit mix [25] - The company anticipates continued growth in profitability with fewer one-time items affecting core earnings [25] - Management noted that credit quality remains stable, with expectations for resolution of certain non-accrual loans in the coming quarters [50] Other Important Information - The company experienced limited impacts on net interest margin from consumer programs and expects this to continue [20] - The mortgage division's profitability rebounded significantly, with a notable increase in loan funding compared to the previous year [22] Q&A Session Summary Question: Thoughts on overall loan growth for Q4 and into 2026 - Management indicated potential for continued growth in the Mortgage Warehouse division and projected 6-8% growth for the core bank [30][31] Question: Timing for reaching a 3.30% margin - Management expects to approach a 3.30% margin by the first quarter of next year, focusing on increasing non-interest-bearing deposits [34] Question: Impact of interest rate changes on deposit costs - Management noted that while competition may drive rates, their strategy of increasing checking accounts allows for competitive positioning [40] Question: Stickiness of digital banking customers - Management confirmed that digital customers are proving to be stickier than expected, with high retention rates and significant average balances [42][46] Question: Resolution of asset quality issues - Management expressed optimism about resolving certain non-accrual loans within the next few quarters, particularly in the C&I sector [50]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net income of $0.53 per share, a significant improvement from a loss of $0.29 in Q2 2025 [5] - Book value increased to $7.33 as of September 30, 2025, compared to $7.21 on June 30, 2025 [5] - The total return for Q3 was 6.7%, a recovery from a negative return of 4.7% in Q2 [5] - The average portfolio balance rose to $7.7 billion in Q3 from $6.9 billion in Q2 [5] - Liquidity improved to 57.1% at September 30, 2025, up from 54% at June 30, 2025 [5] Business Line Data and Key Metrics Changes - The weighted average coupon of the portfolio increased from 5.45% to 5.53% [32] - The effective yield rose from 5.38% to 5.51%, while the net interest spread expanded from 2.43% to 2.59% [32] - The portfolio remains 100% agency RMBS, with a focus on call-protected specified pools [30] Market Data and Key Metrics Changes - The cash Treasury curve showed a slight steepening, reflecting market expectations of Federal Reserve rate cuts due to labor market deterioration [6][9] - The long end of the Treasury curve performed well, with strong demand in the investment-grade corporate market despite tight credit spreads [10] Company Strategy and Development Direction - The company is focused on maintaining a conservative leverage posture while enhancing the carry and prepayment stability of its portfolio [32][39] - The strategy includes investing in high coupon specified pools to provide better income stability and call protection [30][43] - The company anticipates potential tailwinds from Federal Reserve rate cuts and the end of quantitative tightening, which could benefit the agency RMBS market [44] Management's Comments on Operating Environment and Future Outlook - Management noted a potential crossroads for the economy, with labor market weakness prompting possible Federal Reserve rate cuts, while also observing strong consumer resilience [46][47] - The company expects to adjust hedges to lock in lower funding rates and prepare for potential future rate hikes [48] Other Important Information - The company raised $152 million in equity capital during the quarter, which was fully deployed into high-quality specified pools [29][43] - The portfolio's exposure includes 20% backed by credit-impaired borrowers and significant holdings in Florida and New York pools [32] Q&A Session Summary Question: Given the positive developments, is there anything on the horizon that would change overall risk positioning? - Management indicated that if the Federal Reserve continues to cut rates and the economy rebounds, they may consider increasing leverage [51][52] Question: What is the outlook for payouts on high coupon spec pools? - Management noted that payouts have increased sharply, and they have benefited from acquiring pools at historically wide spread levels [54] Question: Are there scenarios where dollar roll specialness would return to the market? - Management expressed skepticism about the return of dollar roll specialness, citing the Federal Reserve's focus on buying Treasuries and bills rather than MBS [62] Question: What is the current supply and availability for longer-dated repo? - Management mentioned that spreads for longer-dated repo are currently too wide, but they are opportunistically looking to lock in funding [64][65] Question: What percentage of the portfolio has call protection? - Almost 100% of the portfolio has some form of call protection, which is crucial in a declining rate environment [72]

Financial Data and Key Metrics Changes - The company reported total assets under management (AUM) of $169 billion as of September 30, which is slightly below the previous quarter due to net outflows despite favorable market performance [10] - Earnings per share (EPS) as adjusted increased to $6.69 from $6.25 in the second quarter, but decreased 3% year-over-year due to lower average assets [13][25] - Operating margin improved by 170 basis points to 33%, with an incremental margin above 50% [13][24] - Total sales increased by 12% to $6.3 billion from $5.6 billion in the second quarter [10][18] Business Line Data and Key Metrics Changes - ETF assets reached $4.7 billion, up 79% year-over-year, with the highest quarterly sales and net flows of $900 million each [6][16] - Fixed income strategies saw positive net flows, while quality equity strategies experienced significant outflows [11][20] - Institutional sales increased to $2 billion, driven by fixed income and multi-asset strategies [18] Market Data and Key Metrics Changes - The company faced net outflows of $3.9 billion, unchanged from the previous quarter, primarily due to outflows in quality equity strategies [10][20] - Positive net flows were observed in fixed income and alternative strategies, indicating a shift in investor preference [11][20] Company Strategy and Development Direction - The company aims to expand its retail separate account offerings, increase ETF availability in key channels, and grow its wealth management business [5][6] - Inorganic growth opportunities remain a focus, with a disciplined approach to acquisitions that align with strategic goals [7][39] Management's Comments on Operating Environment and Future Outlook - Management noted that quality-oriented strategies have underperformed in a momentum-driven market but expect a reversion to favor quality in the future [44][47] - The company is optimistic about the potential for positive flows in fixed income and alternative strategies, despite current challenges in equity strategies [43][46] Other Important Information - The company completed a debt refinancing, increasing financial flexibility with a new $400 million term loan and a $250 million revolving credit facility [13][26] - A quarterly dividend increase of 7% was announced, marking the eighth consecutive annual increase [14][27] Q&A Session Summary Question: What are the key strategies driving interest in ETFs? - Management indicated that both the ETF wrapper and specific strategies are driving interest, with a focus on transparency and tax efficiency [30][32] Question: Any updates on inorganic opportunities? - Management confirmed that the environment remains favorable for acquisitions, focusing on high-performing capabilities and private market expansion [36][39] Question: How can the company improve net flows? - Management highlighted positive flows in fixed income and alternative strategies, emphasizing the need to grow non-quality correlated strategies [43][46] Question: What is the outlook for operating expenses following office consolidation? - Management noted that the benefits of office consolidation are reflected in the current run rate, with expectations for lower operating expenses moving forward [49][51] Question: Is the company back in the market for buybacks? - Management stated that buybacks remain a core part of the capital strategy, with no specific announcements at this time [57][58] Question: What trends are observed in institutional allocations? - Management noted strength in emerging market debt and global REITs, particularly in non-U.S. institutional markets [60][62]

Financial Performance - The company achieved consolidated revenue of ₹8,805 crores (approximately $992 million), reflecting a year-over-year growth of 9.8% and a sequential growth of 3% [8][19] - EBITDA margin for the quarter was reported at 26.7%, a decrease of 174 basis points year-over-year, but flat sequentially [13][20] - Profit after tax attributable to equity holders was ₹14.37 crores (approximately $162 million), representing a 14% year-over-year growth [16] Business Line Performance - The North America generic business generated revenues of $373 million, a decline of 16% year-over-year, primarily due to price erosion in key products [27] - The European business reported revenues of €135 million, a growth of 150% year-over-year, driven by contributions from the acquired nicotine replacement therapy portfolio [28] - The emerging market business delivered revenue of ₹16.55 crores, reflecting a growth of 14% year-over-year [30] Market Performance - The India business reported revenues of ₹15.78 crores, achieving a year-over-year growth of 137% [31] - The company's market position in India improved, moving up to the ninth position in the pharmaceutical market as of September [31] - The PSAI business reported revenue of $108 million, registering growth of 8% year-over-year [32] Strategic Direction and Industry Competition - The company is focused on growing its base business, scaling its presence in consumer healthcare, and advancing innovative therapies and biosimilars [19][33] - The integration of the acquired nicotine replacement therapy business is progressing well, with successful integration in key markets [23] - The company aims to enhance cost efficiencies while pursuing business development activities to support sustainable growth [19] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in maintaining double-digit growth in markets outside the U.S. over the next one to two years [10][96] - The company is actively pursuing strategic collaborations and partnerships to enhance its innovation ecosystem and accelerate development timelines [32] - Management acknowledged challenges in the U.S. generics market but remains optimistic about future product launches and pipeline developments [39][86] Other Important Information - The company retained its MSCI ESG rating of A for the second consecutive year, indicating strong sustainability performance [26] - The company has a net cash surplus of approximately $310 million, reinforcing its balance sheet strength [21] Q&A Session Summary Question: What should be expected for the U.S. business in Q3? - Management indicated that some revenue from settlements would still be expected in Q3, but less than in the current quarter [38] Question: How is the product pipeline in the U.S. evolving? - Management confirmed that the focus is on biosimilars and complex generics, with around 100 products in the pipeline [40] Question: What is the status of semaglutide litigation in India? - The company is currently challenging the patents in the Delhi High Court and awaiting the judge's decision [53] Question: What are the growth drivers for the India business? - Management highlighted successful execution of strategy and acquisitions as key factors driving growth in India [65] Question: What is the outlook for EBITDA margins? - Management remains committed to returning to 25% EBITDA margins in the next two years, despite current pressures from product discontinuations [78]