Financial Data and Key Metrics Changes - Total billings grew by 15% to €1,780,000,000, driven by 21% growth in unified SASE and 31% growth in SecOps [12][13] - Total revenue increased by 14% to €1,630,000,000, with EMEA leading growth at 18% [15] - Non-GAAP operating margin was 33.1%, exceeding guidance by 60 basis points [20] - Free cash flow was $284,000,000, with adjusted free cash flow reaching $428,000,000, up $104,000,000 [21] Business Line Data and Key Metrics Changes - Unified SASE and SecOps now account for 24% and 11% of total billings, respectively, both up one point [12] - ARR for unified SASE increased by 22% to $1,150,000,000, while SecOps increased by 35% to $463,000,000 [14] - Product revenue increased by 13% to $509,000,000, benefiting from upgrade buying and strong growth in operational technology [15][16] Market Data and Key Metrics Changes - The Americas and APAC both grew by 11%, while EMEA led with 18% growth [15] - Among the top five verticals, financial services led with over 30% billings growth [13] - The number of deals greater than $1,000,000 increased by 29%, with total dollar value growing by 51% [13] Company Strategy and Development Direction - The company is focusing on the fast-growing markets of unified SASE and AI-driven secure operations, with investments yielding strong returns [6] - Fortinet aims to maintain its competitive advantage by owning and managing its infrastructure, ensuring better customer experience and cost efficiency [9] - The company is recognized as a leader in the 2025 Gartner Magic Quadrant for SASE platform, highlighting its strong market position [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the cybersecurity market despite macroeconomic uncertainties [24] - The company raised its full-year billings guidance by €100,000,000, reflecting strong performance in the first half of the year [25] - Management noted that ongoing upgrade cycles for firewalls present valuable opportunities for customer engagement [22] Other Important Information - The company announced the expansion of its Forti Cloud offering with three new services: Forti Identity, Forti Drive, and Forti Connect [9] - Total RPO grew by 12% to €6,640,000,000, while current RPO grew by 15% to €3,450,000,000 [14] - The company has invested around $2,000,000,000 in building and operating a global infrastructure [8] Q&A Session Summary Question: Concerns about FortiSASI cannibalizing core appliance business - Management clarified that SASE is enhancing rather than replacing traditional firewalls, with both segments experiencing growth [29][30][32] Question: Specifics on the 2027 product refresh cohort - Management indicated that the 2027 cohort consists of lower-end products, which are significant in unit numbers but less impactful on product revenue [34] Question: Insights on services guidance - Management noted that services billings to revenue conversion takes longer, but they remain confident in product revenue strength for the rest of the year [39][41] Question: Profile of SASE customers - Management stated that over 90% of SASE customers are existing firewall customers, with some displacing competitors [59][60] Question: Margin outlook and investment balance - Management emphasized a long-term strategy, investing in infrastructure for better cost advantages while maintaining healthy margins [62] Question: Growth beyond the upgrade cycle - Management highlighted the new SASE firewall as a significant growth opportunity, addressing new infrastructure security needs [95][96]

Financial Data and Key Metrics Changes - Bumble's Q2 revenue was $248 million, with a year-to-date total of $495 million, reflecting a favorable foreign exchange impact of approximately $2 million [24] - The company reported a GAAP net loss of $367 million, primarily due to an impairment loss of $405 million, while non-GAAP operating expenses were $154 million, a year-over-year decline of approximately 21% [25][26] - Adjusted EBITDA for Q2 was $95 million, representing 38% of revenue, with strong cash flow of $71 million in Q2 and $262 million in cash and cash equivalents at the end of the quarter [26][27] Business Line Data and Key Metrics Changes - Total paying users in Q2 were 3.8 million, with Bumble app paying users at 2.5 million, while the Vadu app and other revenue totaled $47 million [24] - The full-price payer base increased quarter over quarter, now representing approximately 80% of total payers, up from 70% in Q1, indicating a shift towards sustainable subscriptions [6][24] Market Data and Key Metrics Changes - The company has seen improvements in retention and organic registrations, particularly among women and Gen Z demographics, holding the highest favorability among scaled dating apps in the U.S. [19] - Bumble BFF is recognized as a top friend-finding app in the U.S., especially among Gen Z and younger millennial women, highlighting a growing demand for friendship and community [15][56] Company Strategy and Development Direction - The company has reset its strategy to prioritize quality over quantity, streamlining operations and removing over $100 million from its cost base [4][5] - The Beehive Fit framework is being implemented to enhance member quality, focusing on improving profiles and engagement to drive better monetization [8][12] - Future product updates will include trust and safety features, such as phone and ID verification, aimed at creating a safer environment for high-intent users [14][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the focus on quality has weighed on revenue and payer count but is expected to drive sustainable growth in the long term [23][32] - The company anticipates a decrease in revenue for Q3, with guidance of $240 million to $248 million, reflecting the impact of trust and safety initiatives [29][30] - Management remains optimistic about the long-term trajectory, emphasizing the importance of member experience and quality interactions [32] Other Important Information - The company has appointed Kevin Cook as the new CFO, who is expected to bring a technology-first approach to finance and product development [20][84] - The company is being selective with talent investments, focusing on high-performing teams and prioritizing roles that align with its quality strategy [21][28] Q&A Session Summary Question: Update on alternative payment options - Management reported a 30% adoption rate for direct billing tests on iOS, with ongoing evaluations of discount rates [34][35] Question: Growth drivers for Bumble app - The growth was influenced by the exit from a promotional strategy, with deliberate changes in monetization contributing to ARPPU growth [38][39] Question: Size of user categories (approve, improve, remove) - The "improve" category constitutes the majority of the member base, while "remove" accounts for under 10%, indicating a focus on enhancing member profiles [41][42] Question: Metrics for tracking quality improvements - Management is focused on tracking deeper member inputs and signals that lead to successful interactions, although specific metrics are not currently disclosed [45][46] Question: Timing of reinvestments - Reinvestments will be made selectively, with some occurring in the near term and others deferred for strategic marketing around product launches [47][48] Question: Key priorities for the next 12-18 months - The main priorities include product and technology enhancements, particularly in trust and safety, and expanding Bumble for Friends to meet Gen Z demands [52][56] Question: Addressing Gen Z's needs in online dating - The strategy focuses on solving key pain points for Gen Z, emphasizing trust, safety, and meaningful connections [78][80]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $79.2 million, representing a growth of 48% compared to Q2 2024 [21] - U.S. revenue for Q2 was $69.6 million, reflecting a growth of 46% year-over-year [21] - Gross margin for Q2 2025 was 65.4%, an increase of 640 basis points year-over-year [25] - Net loss for Q2 2025 was $19.6 million, compared to a net loss of $25.6 million in Q2 2024 [26] - Adjusted EBITDA loss was $8 million, an improvement from a loss of $18 million in the prior year [26] Business Line Data and Key Metrics Changes - U.S. handpiece and consumable revenue for Q2 2025 was $43.1 million, a growth of 58% compared to Q2 2024 [21] - Approximately 12,750 handpieces were sold in Q2 2025, representing a year-over-year unit growth of 59% [22] - U.S. system revenue was $22.1 million, with 48 new HydroS robotic systems sold [23] - International revenue reached $9.6 million, marking a growth of 69% compared to the prior year [24] Market Data and Key Metrics Changes - The company expects to exit 2025 with an estimated installed base of 715 systems, with only 20% procedural share in the hospital market, indicating significant room for expansion [4] - The 2026 proposed Medicare physician fee schedule includes a category one code for Ag population therapy, which is expected to enhance adoption and reimbursement consistency [14][15] Company Strategy and Development Direction - The company aims to become a global leader in urology, focusing on evidence-based innovation and expanding Hydro's adoption in greenfield accounts [10][34] - A leadership transition is underway, with Larry Wood set to become the new CEO, emphasizing a commitment to innovation and growth [10][36] - The company is eliminating the role of Chief Commercial Officer to strengthen commercial execution, creating two new leadership positions [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve long-term profitability despite current tariff challenges, estimating a potential gross margin headwind of $1 million to $2 million in 2025 [31][92] - The company remains optimistic about the stability of the capital environment, with no indications of hospitals slowing or pausing capital spending [91] - Management highlighted the importance of clinical outcomes in driving adoption and utilization of their systems, despite recent reductions in physician fee schedules [60] Other Important Information - The company is actively pursuing operational strategies to mitigate tariff exposure, with a focus on maintaining gross margins and profitability [16][31] - Enrollment in the WATERFORT trial is progressing well, with expectations for full enrollment by 2026 [17] Q&A Session Summary Question: Guidance confidence and system placements - Management confirmed slight increases in guidance, with confidence stemming from strong sales force execution and visibility into the sales funnel [41][46] Question: Disruption from leadership changes - Management reassured that the experienced sales team will maintain focus and execution despite leadership transitions [48][49] Question: CCO role split rationale - The decision to split the CCO role aims to enhance commercial execution and support long-term growth objectives [52] Question: Utilization growth in accounts - Management noted that longer tenure in accounts correlates with increased utilization of aquablation procedures, with examples of it becoming the standard of care [55] Question: Impact of physician fee schedule reductions - Management emphasized that clinical outcomes will drive continued adoption, despite reductions in resective procedure payments [60] Question: System placements and future expectations - Management indicated that replacement sales are expected to pick up in 2026, aligning with the useful life of the systems [62] Question: International market strength - The UK remains the primary driver of international revenue growth, with emerging progress in Japan and Korea [68] Question: Hydros rollout and customer reception - Early feedback on the Hydros system has been positive, with expectations for utilization metrics to improve as accounts ramp up [75]

Financial Data and Key Metrics Changes - Total revenue increased by 11% year-on-year, reaching $195 million, exceeding expectations by $4 million [27][28] - Non-GAAP operating income rose by 34%, amounting to $36 million, surpassing guidance by $3 million [27][33] - GAAP operating margin expanded by seven points to a record high of 10% [33] - Free cash flow outlook improved significantly due to recent tax legislation [27][39] Business Line Data and Key Metrics Changes - Subscription revenue grew by 10% to $148 million, with subscription usage revenue up approximately 40% [28][29] - Marketplace and other revenue increased by 13% to $46 million, with Data Marketplace accounting for 76% of this revenue [32] - Total contracted backlog (RPO) rose by 29% to $690 million, while current RPO increased by 14% to $451 million [29] Market Data and Key Metrics Changes - The selling environment was characterized as generally positive, with strong sales momentum and several million-dollar deals [30][31] - Average deal cycle decreased to nine months, with a higher conversion rate of pipeline into bookings [30] Company Strategy and Development Direction - The company is modernizing its pricing model to offer greater flexibility and align costs with usage, which is expected to enhance growth [13][15] - Focus on AI's transformative potential in digital advertising, positioning the company as a critical partner for clients' AI ambitions [20][22] - Continued investment in the data collaboration platform to support AI-driven advertising and enhance data connectivity [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a robust new business pipeline and good sales momentum across several solutions [4][5] - The company anticipates continued growth in commerce media and CTV, driven by strong customer demand and successful integrations [12][52] - Increased confidence in achieving higher revenue growth in the latter half of the fiscal year [46] Other Important Information - The company repurchased $30 million in stock during the first quarter, with $226 million remaining under the current authorization [34] - The balance sheet remains strong with approximately $370 million in cash and short-term investments and zero debt [34] Q&A Session Summary Question: Can you elaborate on the assumptions behind the revenue growth for the second quarter? - Management noted that while Q1 outperformed expectations, they are conservatively guiding Q2 subscription usage growth to be flat year-on-year [45][46] Question: What gives confidence that the strength in Commerce Media Networks can continue? - Management highlighted the extensive customer networks and partnerships being developed, which are expected to fuel ongoing growth [48][52] Question: Can you provide balance on the momentum across Clean Room, CMI, and Commerce Media? - Management acknowledged some churn events impacting the million-dollar customer count but expressed confidence in a rebound due to strong sales momentum [61][63] Question: What is the leverage seen from offshoring and automation initiatives? - Management indicated that offshoring and smart cost management are driving low double-digit millions in cost savings, allowing for continued investment in growth areas [68][70] Question: How are pricing changes impacting new deals? - Management reported that the new pricing model is viewed favorably, reducing friction in the new business process and attracting new clients [75][78] Question: What is LiveRamp's right to win in the AI-driven marketing environment? - Management emphasized that the company is an enabler of AI, providing the necessary infrastructure for clients to leverage their proprietary data effectively [81][84]

Financial Data and Key Metrics Changes - In Q1 2026, net sales grew by 9% following a 50% growth in Q1 2025, reaching $354 million [4][34] - Adjusted EBITDA increased by 12% to $87 million, with adjusted net income at $51 million or $0.89 per diluted share, down from $64 million or $1.10 per diluted share a year ago [34][37] - Gross margin for Q1 was 69%, down approximately 215 basis points year-over-year due to tariff costs [35] Business Line Data and Key Metrics Changes - In color cosmetics, e.l.f. holds a 15% unit share, making it the number one brand, with significant growth in market share over the past three years [6][13] - Skincare now accounts for nearly 20% of global consumption, more than double from previous years, with e.l.f. Skin and Naturium being the fastest-growing brands [16][20] - The Halo Glow Skin Tint was the top-selling product in Q1, showcasing the success of innovation strategies [10][13] Market Data and Key Metrics Changes - International net sales grew by 30% in Q1, with significant growth in the UK, where e.l.f. outpaced category growth by three times [26][28] - The company has expanded its presence in new markets, including a successful launch in over 1,200 stores in the Netherlands and Belgium [27][28] - International sales now represent 20% of total sales, up from 10% six years ago, indicating strong growth potential [28] Company Strategy and Development Direction - The acquisition of Rhode is expected to enhance e.l.f.'s position in the beauty market, with plans to accelerate brand awareness and expand distribution [5][30] - The company aims to double its business over the coming years by capitalizing on opportunities in color cosmetics, skincare, and international markets [5][29] - E.l.f. continues to focus on innovation and disruptive marketing to maintain its competitive edge in the beauty industry [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to gain market share despite challenges from tariffs and a competitive landscape [29][41] - The company is monitoring consumer response to recent price increases and expects to see continued growth in the first half of the year [41][80] - Future guidance will depend on clarity regarding tariffs, with expectations for net sales growth above 9% in the first half of the year [41][43] Other Important Information - The company ended Q1 with $170 million in cash, up from $109 million a year ago, and generated $20 million in free cash flow [37][39] - E.l.f. is transitioning to SAP for its ERP system, which is expected to enhance operational efficiency [39][40] Q&A Session Summary Question: Can you talk about how much inventory might be trapped in at the 170% rate versus the 50% rate? - Management indicated that inventory consists of a mix of tariff rates, with expectations for more 170% inventory to flow through in Q2, leading to lower gross margins [46][48] Question: Can you expand on the greater than 9% sales growth for the first half? - Management confirmed that the addition of Rhode will contribute to higher sales growth in Q2, and they are optimistic about the e.l.f. business performance [54][56] Question: What channels or partners have been stronger or weaker in the U.S. market? - Management noted growth across brick-and-mortar and e-commerce channels, but did not provide specific details on weaker channels [90][92] Question: How is the company managing the Road acquisition and its impact on margins? - Management stated that while Road is expected to be accretive in the long term, there will be initial dilution in Q2 margins due to the lack of sell-in to Sephora [124][125] Question: Can you provide context on the gross margin expectations for Q2? - Management acknowledged that Q2 gross margins will be impacted by higher tariff costs, but pricing benefits from recent increases are expected to help offset some of this pressure [130][131]

Financial Data and Key Metrics Changes - Revenue increased by 2.7% compared to 2024, while FFO decreased to $0.37 per share and AFFO decreased to $54,500,000 [15] - Same property cash NOI was down 1.1%, primarily due to a large property tax refund in the prior year creating a tough comparison [15] - G&A expenses remained low at approximately 4.9% of revenue relative to the benchmark group [15] - Guidance for 2025 net income per common share diluted is expected to be between $0.07 and $0.11, with FFO per fully diluted share narrowed to between $1.43 and $1.47 [15] Business Line Data and Key Metrics Changes - The office portfolio leased 973,000 square feet, including over 300,000 square feet of new leases, achieving positive absorption for three of the last four quarters [6][13] - The multifamily portfolio maintained full occupancy with cash NOI growth exceeding 10% [7] - Average leasing costs during the second quarter were $6.06 per square foot per year, remaining below the average for other office REITs [13] Market Data and Key Metrics Changes - The office leasing pipeline is robust, with remaining office expirations in 2025 and 2026 below historical averages [13] - The residential portfolio remained essentially fully leased at 99.3% with strong demand [14] Company Strategy and Development Direction - The company is focused on four key growth strategies: leasing up the office portfolio, redeveloping properties, re-tenanting Studio Plaza, and augmenting the portfolio with best-in-class properties [7] - Plans to convert a recently acquired 10,900 square foot office property into 320 apartments in the Westwood submarket, aiming to enhance property value and reduce office vacancy [8][10] - The company has addressed all 2025 debt maturities and is refinancing 2026 debt maturities at competitive rates [9][12] Management's Comments on Operating Environment and Future Outlook - Management has not seen any impact on leasing from macroeconomic concerns, with strong results in both office and residential portfolios [6] - The company remains optimistic about leasing activity, despite challenges in the market [25] - Management noted that the LA tech scene is primarily driven by the entertainment industry, with expectations for growth in medical research and quantum computing due to significant investments [51][52] Other Important Information - The conversion of the 10,900 Wilshire property is expected to cost approximately $200 million to $250 million, with the first apartments anticipated to be delivered in the next 18 months [10] - The company is experiencing a strong market response to the revitalized Studio Plaza project, with ongoing renovations and tenant occupancy [11] Q&A Session Summary Question: Leasing activity versus occupancy and lease rate - Management acknowledged a wide gap between leased and occupied space, indicating strong leasing activity despite a decrease in occupancy [18][20] Question: Lease rate and timing of NOI contributions from Studio Plaza - Management did not disclose specific leasing stats but expressed satisfaction with the leasing velocity and anticipated NOI contributions over time [29][30] Question: Guidance for full-year occupancy - Management maintained guidance for the full year at $78 million to $80 million, expressing confidence in achieving this range [38] Question: Yield on all-in costs for 10,900 Wilshire - Management indicated confidence in achieving a yield around 10% upon completion of the project [40] Question: LA's overall economic outlook - Management believes the apartment sector is performing better than expected, while office performance remains challenging but on track [49] Question: Impact of California's entertainment tax credits - Management noted limited visibility into the impact of tax credits on demand, as they primarily deal with administrative offices rather than studios [75] Question: Demand from recent catalysts in LA - Management reported a strong leasing pipeline, attributing increased demand to companies returning to office spaces [80]

Financial Data and Key Metrics Changes - Revenue increased by 2.7% compared to 2024, while FFO decreased to $0.37 per share and AFFO decreased to $54,500,000 [14] - Same property cash NOI was down 1.1%, primarily due to a tough comparison with the previous year which included a large property tax refund [14] - G&A expenses remained low at approximately 4.9% of revenue relative to the benchmark group [14] - Guidance for 2025 net income per common share diluted is expected to be between $0.07 and $0.11, with FFO per fully diluted share narrowed to between $1.43 and $1.47 [15] Business Line Data and Key Metrics Changes - The office portfolio leased 973,000 square feet, including over 300,000 square feet of new leases, achieving positive absorption for three of the last four quarters [5][12] - The multifamily portfolio maintained full occupancy with cash NOI growth exceeding 10% [6] - Office rental rates remained steady with low concessions [5] Market Data and Key Metrics Changes - The overall straight-line value of new leases signed increased by 2.4%, while cash spreads decreased by 13.3% [12] - The residential portfolio remained nearly fully leased at 99.3% [13] Company Strategy and Development Direction - The company is focused on four key growth strategies: leasing up the office portfolio, redeveloping the Brentwood apartment property, re-tenanting Studio Plaza, and augmenting the portfolio with high-quality properties [6] - Plans to convert a recently acquired 10,900 square foot office property into 320 apartments in the Westwood submarket were announced, aiming to enhance property value and reduce office vacancy [6][9] Management's Comments on Operating Environment and Future Outlook - Management noted no impact on leasing from macroeconomic concerns, with strong results in both office and residential portfolios [5] - The leasing pipeline is robust, with remaining office expirations in 2025 and 2026 below historical averages [12] - Management expressed optimism about leasing activity despite challenges, indicating a strong pipeline and a focus on larger deals [20][25] Other Important Information - The company has addressed all 2025 debt maturities and is refinancing 2026 debt maturities at competitive rates [7] - The total project cost for the conversion of 10900 Wilshire is expected to be approximately $200 million to $250 million [9] Q&A Session Summary Question: Leasing activity versus occupancy and lease rate - Management acknowledged a significant gap between leased and occupied space, indicating strong leasing activity but longer timelines for larger deals [19][20] Question: Lease rate and timing of NOI contributions from Studio Plaza - Management did not disclose specific leasing stats but confirmed positive velocity in leasing and anticipated NOI contributions over time [30] Question: Overall view of LA's economy and demand for real estate - Management noted that while residential rents are high, their specific market segment remains strong, and they expect to meet their performance expectations for the year [44][48] Question: Impact of California's tax credits on demand - Management indicated limited visibility into the impact of tax credits on demand, as they primarily deal with administrative offices rather than studios [75] Question: Timeline and NOI drag from 10900 Wilshire conversion - Management confirmed that there will be a lag between tenant move-outs and new tenant move-ins, but they expect stable NOI contributions from the building [34][90] Question: Decision to convert 10900 Wilshire to residential - Management explained that the decision was based on unique building characteristics and market conditions, making conversion a cost-effective option [88][90]

Financial Data and Key Metrics Changes - The company reported record quarterly returns to shareholders, returning nearly $290 million this quarter, which is more than 260% of its free cash flow [5] - Adjusted EBITDAX for the quarter was $324 million, exceeding consensus expectations, driven by strong commodity price realization, higher than expected production, and lower operating costs [11] - Free cash flow generated was $109 million, or $165 million before changes in working capital, demonstrating the resilience and cash-generating power of the company's assets [11] - Year-to-date costs were down approximately 11% from 2024, reflecting lower general and administrative expenses, non-energy operating costs, and lower taxes other than on income [10] Business Line Data and Key Metrics Changes - Net total production was recorded at 137,000 BOE per day, with average realizations at 97% of Brent before hedges and 100% after hedging [9] - The company has reduced nearly all of its 2025 operating expense items by about 7% compared to the original outlook, despite anticipating higher energy costs and increased activity levels in the second half [10] Market Data and Key Metrics Changes - The California Energy Commission's response to Governor Newsom's directive to ensure fuel reliability during the energy transition was positively received, indicating a collaborative effort with refiners and the industry [7] - The state is actively working to improve the oil and gas permitting process, with expectations for additional details once the legislature reconvenes in mid-August [8] Company Strategy and Development Direction - The company is focused on advancing its carbon and power platforms while returning meaningful capital to shareholders, indicating a commitment to both operational performance and shareholder value [4] - The company is uniquely positioned to support California's energy transition, providing cleaner and more affordable in-state production while advancing decarbonization solutions [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving regulatory environment in California, indicating constructive conversations regarding oil and gas permitting [21] - The company expects to raise full-year production guidance, lower both cost and drilling capital expectations, and increase its adjusted EBITDAX forecast [13] Other Important Information - The company has implemented ERA-related merger synergies ahead of schedule, fulfilling a $235 million target three months early, with a net present value of these synergies estimated at approximately $1.4 billion over the next ten years [6] - The company has slightly over $200 million remaining under its current share repurchase authorization, which was recently extended through June 2026 [13] Q&A Session Summary Question: What is the company's view on the current regulatory changes in California regarding oil and gas permitting? - Management expressed optimism about the dynamic changes in California, indicating that the state is actively looking to resolve the permitting situation and stabilize local production [21][23] Question: What is driving the underlying capital efficiency improvements? - The combination of strong assets with operational leadership has led to exceptional performance, allowing the company to maintain capital efficiency and lower maintenance capital expectations [28] Question: How does the company plan to allocate free cash flow going forward? - The company plans to remain opportunistic with share repurchases while balancing other strategic priorities, including redeeming the remainder of its 2026 notes [42] Question: Can you provide an update on the Class six permitting process? - The company is on track to complete construction by the end of the year and is ready to inject early in 2026, pending final regulatory approvals [46] Question: What is the current status of the Elk Hills power plant and potential power deals? - The company is focused on providing an update before the end of the year, with ongoing interest and conversations regarding power deals [58]

Financial Data and Key Metrics Changes - The company reported adjusted net income of $0.28 per share, distributable earnings of $0.43 per share, and adjusted EBITDA of $20.1 million, all in line with expectations [4][11] - Recurring service revenues were approximately $44 million, a sequential decrease of about $1.5 million, primarily due to lower property management fees at RMR Residential [11] - The company expects service revenues to increase to approximately $45 million next quarter based on favorable trends in managed REITs [11] Business Line Data and Key Metrics Changes - The Managed REITs have seen share price improvements, particularly for DHC and ILPT, which have increased substantially year to date [4] - The private capital business totals over $12 billion, with a focus on retail, residential, credit, and select development opportunities [4] - The retail sector is accumulating a portfolio of value-add multi-tenant retail assets valued at approximately $100 million, with a recent investment of $21 million in a community shopping center [5] Market Data and Key Metrics Changes - DHC's same property cash basis NOI increased by 18.5% year over year, driven by strong sector fundamentals [8] - SVC's RevPAR increased by 40 basis points year over year, outperforming the industry by 90 basis points despite renovation-related revenue displacement [9] - ILPT refinanced $1.2 billion of floating rate debt with new fixed-rate debt at a weighted average interest rate of 6.4% [9] Company Strategy and Development Direction - The company is focused on strategic initiatives for Managed REITs and private capital business, including deleveraging actions through asset sales and refinancings [4] - The residential sector is expected to benefit from decelerating supply growth and favorable migration trends, targeting mid to high teen returns [6] - The company aims to grow private capital AUM over the long term, with recent hiring of a Senior Vice President to enhance capital formation efforts [7] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing economic uncertainty but remains focused on strategic initiatives [4] - The fundraising environment for private capital is challenging but showing signs of improvement, with expectations of continued ramp-up in the next six months [20] - The company anticipates adjusted EBITDA of approximately $20.5 million and distributable earnings between $0.44 and $0.46 per share for the next quarter [15] Other Important Information - The company expects to end the fiscal year with approximately $60 million in cash and no borrowings on its $100 million line of credit [15] - The dividend is funded through two sources: ARMOUR LLC and RMR Inc, with a coverage ratio of 74% from the operating business [45] Q&A Session Summary Question: What is the outlook for the fundraising environment on the private capital side? - Management acknowledged that while the fundraising environment remains challenging, it is improving, with increased meetings with potential capital providers [18][20] Question: Can you elaborate on the RMR Residential Enhanced Growth Venture? - The venture will include five assets, with a total equity investment of just under $100 million, aimed at attracting committed capital from investors [22][24] Question: What is the expected size of the fundraising on the residential side? - The goal is to raise about $300 million of equity for the residential venture, seeded with just under $100 million of assets [29] Question: How does the company view the performance of RMR Residential? - The current run rate is expected to remain steady until the fundraising environment normalizes, with AUM currently at about $4.6 billion [35][55] Question: What is the rationale behind the dividend coverage? - The dividend is funded through operating business contributions and cash reserves, with a focus on maintaining coverage as the business grows [45][47]

Financial Data and Key Metrics Changes - The company reported record quarterly returns to shareholders, returning nearly $290 million this quarter, which is more than 260% of its free cash flow [5] - Adjusted EBITDAX for the quarter was $324 million, exceeding consensus expectations, driven by strong commodity price realization, higher than expected production, and lower operating costs [12] - Free cash flow generated was $109 million, demonstrating the resilience and cash-generating power of the company's assets [12] - Year-to-date, the company has returned nearly $422 million to shareholders, with a record $287 million returned in the second quarter [13] Business Line Data and Key Metrics Changes - The company recorded net total production of 137,000 BOE per day, with average realizations at 97% of Brent before hedges and 100% after hedging [10] - First half 2025 costs were down approximately 11% from 2024, reflecting lower general and administrative expenses, lower non-energy operating costs, and lower taxes other than on income [11] - Total capital was $56 million, with 60% allocated to high return workovers and sidetracks [11] Market Data and Key Metrics Changes - The California Energy Commission is actively working to improve the oil and gas permitting process, which could provide greater flexibility for the company to access its extensive inventory [8] - The state is collaborating with refiners and the industry to ensure fuel reliability during the energy transition [7] Company Strategy and Development Direction - The company is focused on advancing its carbon and power platforms while returning meaningful capital to shareholders [4] - The company is strategically positioned to support California's energy transition, providing cleaner and more affordable in-state production while advancing decarbonization solutions [18] - The company plans to get California's first CCS project into operation, with construction authorization received from the EPA [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving regulatory environment in California and the potential for new oil and gas permits [22] - The company expects to raise full-year production guidance, lower both cost and drilling capital expectations, and increase its adjusted EBITDAX forecast [14] - Management highlighted the importance of local production to address California's energy challenges, emphasizing the need for affordable and clean energy [23] Other Important Information - The company has slightly over $200 million remaining under its current share repurchase authorization, which was recently extended through June 2026 [14] - The company is committed to driving long-term shareholder value and providing shareholder returns, having returned about $1.5 billion in dividends and share repurchases since the inception of its program [38] Q&A Session Summary Question: What is the company's view on the regulatory changes in California regarding oil and gas permitting? - Management is optimistic about the changes and believes the state is actively looking to resolve the permitting situation to stabilize local production [22][24] Question: What is driving the underlying capital efficiency improvements? - The combination of strong assets and operational leadership has led to improved performance, with maintenance capital expected to be at the lower end of the previously guided range [28] Question: How does the company plan to allocate free cash flow going forward? - The company plans to remain opportunistic with share repurchases while balancing other strategic priorities, including redeeming the remainder of its 2026 notes [40] Question: What is the status of the Class six permitting process? - The company is encouraged by the progress and expects to receive incremental Class six permits in the near term [72] Question: How does the company view the potential Elk Hills power deal? - The company is focused on making the right deal that adds significant value to shareholders and is optimistic about the interest in clean power solutions [50][54]