Category: Commerce

  • MIL-OSI Security: Northwest Arkansas Man Sentenced to More Than Four Years in Prison for Operating an Illegal Money Transmitting Business Using Pandemic Funds

    Source: Federal Bureau of Investigation (FBI) State Crime News

    FAYETTEVILLE – A Northwest Arkansas man was sentenced on February 20, to 51 months in Federal Prison, followed by three years of supervised release. Additionally, he was ordered to pay restitution of $725,558.00 on one count of operating an Illegal Money Transmitting Business. The Honorable Judge Timothy L. Brooks presided over the sentencing hearing, which took place in the United States District Court in Fayetteville.

    According to court documents, Richard Harold Stone, age 77, waived indictment by a grand jury and pleaded guilty to a criminal information charging him with conducting an unlicensed money transmitting business in the State of Arkansas. Stone was the President or Chief Officer of numerous businesses registered with the Arkansas Secretary of State, including: Partex Oman Corp., Renewable Energy Campus Arkansas, Inc., Stonetek Global Corp., and Tires 2 Energy, LLC. Stone also was associated with Environmental Energy & Finance Corp., a Delaware corporation. The advertised purpose of these businesses was developing technology and facilities to repurpose waste materials, such as tires, into useable fuel sources. None of these businesses were registered with the State of Arkansas as a money transmitting business, as required by Arkansas law (Arkansas Code, Section 23-55-806(b)&(c)).

    Between November 2020 and March 2021, Stone received through various bank accounts associated with the above entities and other accounts under his control, deposits of funds from applications made on behalf of unwitting victims for Paycheck Protection Program (PPP) loans, Economic Impact Disaster Loans (EIDL), and Pandemic Unemployment Assistance (PUA), totaling more than $600,000. After receiving these funds, Stone immediately transferred most of the funds by wire transfer to parties in locations including Berne, Switzerland; London, England; New York, NY; Chennai, India; and Mumbai, India.

    At the conclusion of Thursday’s sentencing hearing, Stone was immediately remanded to the custody of the U.S. Marshals Service.

    U.S. Attorney David Clay Fowlkes of the Western District of Arkansas made the announcement.

    The Internal Revenue Service-Criminal Investigation, Federal Bureau of Investigation, and Department of Labor Office of the Inspector General investigated the case.

    Assistant U.S. Attorney Hunter Bridges is prosecuting the case.

    Related court documents may be found on the Public Access to Electronic Records website at www.pacer.gov.

    MIL Security OSI

  • MIL-OSI: HP Inc. Reports Fiscal 2025 First Quarter Results

    Source: GlobeNewswire (MIL-OSI)

    PALO ALTO, Calif., Feb. 27, 2025 (GLOBE NEWSWIRE) — HP (NYSE: HPQ)

    • First quarter GAAP diluted net earnings per share (“EPS”) of $0.59, within the previously provided outlook of $0.57 to $0.63 per share
    • First quarter non-GAAP diluted net EPS of $0.74, within the previously provided outlook of $0.70 to $0.76 per share
    • First quarter net revenue of $13.5 billion, up 2.4% from the prior-year period
    • First quarter net cash provided by operating activities of $0.4 billion, free cash flow of $0.1 billion
    • First quarter returned $0.4 billion to shareholders in the form of share repurchases and dividends
    • Estimated $300 million increase in Future Ready plan annualized gross run rate structural cost savings, to $1.9 billion by end of fiscal year 2025 and estimated $150 million increase in restructuring and other charges to approximately $1.2 billion by the end of fiscal year 2025
    HP Inc.’s fiscal 2025 first quarter financial performance
      Q1 FY25   Q1 FY24   Y/Y
    GAAP net revenue ($B) $ 13.5     $ 13.2     2.4 %
    GAAP operating margin   6.3 %       7.1 %     (0.8) pts
    GAAP net earnings ($B) $ 0.6     $ 0.6     (9)%
    GAAP diluted net EPS $ 0.59     $ 0.62     (5)%
    Non-GAAP operating margin   7.3 %       8.4 %     (1.1)pts
    Non-GAAP net earnings ($B) $ 0.7     $ 0.8     (13)%
    Non-GAAP diluted net EPS $ 0.74     $ 0.81     (9)%
    Net cash provided by operating activities ($B) $ 0.4     $ 0.1     209 %
    Free cash flow ($B) $ 0.1     $ 0.0     180 %
                       

    Notes to table
    Information about HP Inc.’s use of non-GAAP financial information is provided under “Use of non-GAAP financial information” below.

    Net revenue and EPS results
    HP Inc. and its subsidiaries (“HP”) announced fiscal 2025 first quarter net revenue of $13.5 billion, up 2.4% (up 3.3% in constant currency) from the prior-year period.

    “We are pleased with our Q1 performance, achieving revenue growth for the third straight quarter and advancing our strategy to lead the future of work,” said Enrique Lores, HP President and CEO. “Our progress was fueled by a strong commercial business in Personal Systems and momentum in our key growth areas, including AI PCs. We are focused on taking decisive action to address evolving market conditions in the near-term, while investing in our long-term growth.”

    “In Q1 we drove solid progress against our financial commitments for the year and are raising our Future Ready savings target from $1.6 to $1.9 billion dollars by the end of fiscal year 2025,” said Karen Parkhill, HP CFO. “We are holding our outlook for the year and remain focused on disciplined execution as we continue to invest for the future.”

    First quarter GAAP diluted net EPS was $0.59, down from $0.62 in the prior-year period and within the previously provided outlook of $0.57 to $0.63. First quarter non-GAAP diluted net EPS was $0.74, down from $0.81 in the prior-year period and within the previously provided outlook of $0.70 to $0.76. First quarter non-GAAP net earnings and non-GAAP diluted net EPS excludes after-tax adjustments of $139 million, or $0.15 per diluted share, related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.

    Asset management
    HP’s net cash provided by operating activities in the first quarter of fiscal 2025 was $0.4 billion. Accounts receivable ended the quarter at $4.2 billion, down 5 days quarter over quarter at 28 days. Inventory ended the quarter at $8.4 billion, up 9 days quarter over quarter to 72 days. Accounts payable ended the quarter at $16.5 billion, up 1 day quarter over quarter to 139 days.

    HP generated $70 million of free cash flow in the first quarter. Free cash flow includes net cash provided by operating activities of $374 million adjusted for net investments in leases from integrated financing of $(2) million and net investments in property, plant, equipment and purchased intangible of $302 million.

    HP’s dividend payment of $0.2894 per share in the first quarter resulted in cash usage of $0.3 billion. HP also utilized $100 million of cash during the quarter to repurchase approximately 2.7 million shares of common stock in the open market. HP exited the quarter with $2.9 billion in gross cash, which includes cash and cash equivalents of $2.9 billion, restricted cash of $14 million and short-term investments of $3 million included in other current assets. Restricted cash is related to amounts collected and held on behalf of a third party for trade receivables previously sold.

    Fiscal 2025 first quarter segment results

    • Personal Systems net revenue was $9.2 billion, up 5% year over year (up 5% in constant currency) with a 5.5% operating margin. Consumer PS net revenue was down 7% and Commercial PS net revenue was up 10%. Total units were down 1% with Consumer PS units down 11% and Commercial PS units up 6%.
    • Printing net revenue was $4.3 billion, down 2% year over year (down 1% in constant currency) with a 19.0% operating margin. Consumer Printing net revenue was up 5% and Commercial Printing net revenue was down 7%. Supplies net revenue was down 1% (flat in constant currency). Total hardware units were up 5%, with Consumer Printing units up 7% and Commercial Printing units flat.

    Outlook
    For the fiscal 2025 second quarter, HP estimates GAAP diluted net EPS to be in the range of $0.62 to $0.72 and non-GAAP diluted net EPS to be in the range of $0.75 to $0.85. Fiscal 2025 second quarter non-GAAP diluted net EPS estimates exclude $0.13 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items.

    For fiscal 2025, HP estimates GAAP diluted net EPS to be in the range of $2.86 to 3.16 and non-GAAP diluted net EPS to be in the range of $3.45 to $3.75. Fiscal 2025 non-GAAP diluted net EPS estimates exclude $0.59 per diluted share, primarily related to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets, non-operating retirement-related credits, tax adjustments, and the related tax impact on these items. For fiscal 2025, HP anticipates generating free cash flow in the range of $3.2 to $3.6 billion.

    HP’s outlook reflects the added cost driven by the current U.S. tariff increases on China, and associated mitigations. The company has made significant progress building a globally diverse supply chain, and by the end of fiscal year 2025, expects more than 90 percent of HP products sold in North America will be built outside of China. China will continue to be an important manufacturing hub for the rest of the world.

    More information on HP’s earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at investor.hp.com.

    HP’s FY25 Q1 earnings conference call is accessible via audio webcast at www.hp.com/investor/2025Q1Webcast.

    About HP Inc.
    HP Inc. (NYSE: HPQ) is a global technology leader and creator of solutions that enable people to bring their ideas to life and connect to the things that matter most. Operating in more than 170 countries, HP delivers a wide range of innovative and sustainable devices, services and subscriptions for personal computing, printing, 3D printing, hybrid work, gaming, and more. For more information, please visit http://www.hp.com.

    Use of non-GAAP financial information
    To supplement HP’s consolidated condensed financial statements presented on a generally accepted accounting principles (“GAAP”) basis, HP provides net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt) financial measures. HP also provides forecasts of non-GAAP diluted net EPS and free cash flow. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which HP’s management uses these non-GAAP measures to evaluate its business, the substance behind HP’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP’s management compensates for those limitations, and the substantive reasons why HP’s management believes that these non-GAAP measures provide useful information to investors is included under “Use of non-GAAP financial measures” after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for net revenue, operating expense, operating profit, operating margin, other income and expenses, tax rate, net earnings, diluted net EPS, cash provided by operating activities or cash, cash equivalents, and restricted cash prepared in accordance with GAAP.

    Forward-looking statements
    This document contains forward-looking statements based on current expectations and assumptions that involve risks and uncertainties. If the risks or uncertainties ever materialize or the assumptions prove incorrect, they could affect the business and results of operations of HP Inc. and its consolidated subsidiaries which may differ materially from those expressed or implied by such forward-looking statements and assumptions.

    All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including, but not limited to, projections of net revenue, margins, expenses, effective tax rates, net earnings, net earnings per share, cash flows, benefit plan funding, deferred taxes, share repurchases, foreign currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring and other charges, planned structural cost reductions and productivity initiatives; any statements of the plans, strategies and objectives of management for future operations, including, but not limited to, our business model and transformation, our sustainability goals, our go-to-market strategy, the execution of restructuring plans and any resulting cost savings (including the fiscal 2023 plan), net revenue or profitability improvements or other financial impacts; any statements concerning the expected development, demand, performance, market share or competitive performance relating to products or services; any statements concerning potential supply constraints, component shortages, manufacturing disruptions or logistics challenges; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims, disputes or other litigation matters; any statements of expectation or belief as to the timing and expected benefits of acquisitions and other business combination and investment transactions; and any statements of assumptions underlying any of the foregoing.   Forward-looking statements can also generally be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “will,” “would,” “could,” “can,” “may,” and similar terms.

    Risks, uncertainties and assumptions that could affect our business and results of operations include factors relating to HP’s ability to execute on its strategic plans, including the previously announced initiatives, business model changes and transformation; the development and transition of new products and services and the enhancement of existing products and services to meet evolving customer needs and respond to emerging technological trends, including artificial intelligence; the use of artificial intelligence; the impact of macroeconomic and geopolitical trends, changes and events, including the ongoing military conflict in Ukraine, continued instability in the Middle East or tensions in the Taiwan Strait and South China Sea and the regional and global ramifications of these events; volatility in global capital markets and foreign currency, increases in benchmark interest rates, the effects of inflation and instability of financial institutions; risks associated with HP’s international operations and the effects of business disruption events, including those resulting from climate change; the need to manage (and reliance on) third-party suppliers, including with respect to supply constraints and component shortages, and the need to manage HP’s global, multi-tier distribution network and potential misuse of pricing programs by HP’s channel partners, adapt to new or changing marketplaces and effectively deliver HP’s services; the execution and performance of contracts by HP and its suppliers, customers, clients and partners, including logistical challenges with respect to such execution and performance; the competitive pressures faced by HP’s businesses; the impact of third-party claims of IP infringement; successfully innovating, developing and executing HP’s go-to-market strategy, including online, omnichannel and contractual sales, in an evolving distribution, reseller and customer landscape; successfully competing and maintaining the value proposition of HP’s products, including supplies and services; challenges to HP’s ability to accurately forecast inventories, demand and pricing, which may be due to HP’s multi-tiered channel, sales of HP’s products to unauthorized resellers or unauthorized resale of HP’s products or our uneven sales cycle; the hiring and retention of key employees; the results of our restructuring plans (including the fiscal 2023 plan), including estimates and assumptions related to the cost (including any possible disruption of HP’s business) and the anticipated benefits of our restructuring plans; the protection of HP’s intellectual property assets, including intellectual property licensed from third parties; disruptions in operations from system security risks, data protection breaches, or cyberattacks; HP’s ability to maintain its credit rating, satisfy its debt obligations and complete any contemplated share repurchases, other capital return programs or other strategic transactions; changes in estimates and assumptions HP makes in connection with the preparation of its financial statements; the impact of changes to federal, state, local and foreign laws and regulations, including environmental regulations and tax laws; integration and other risks associated with business combination and investment transactions; our aspirations related to environmental, social and governance matters; potential impacts, liabilities and costs from pending or potential investigations, claims and disputes; the effectiveness of our internal control over financial reporting; and other risks that are described in HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2024 and HP’s other filings with the Securities and Exchange Commission (“SEC”). HP’s fiscal 2023 plan includes HP’s efforts to take advantage of future growth opportunities, including but not limited to, investments to drive growth, investments in our people, improving product mix, driving structural cost savings and other productivity measures. Structural cost savings represent gross reductions in costs driven by operational efficiency, digital transformation, and portfolio optimization. These initiatives include but are not limited to workforce reductions, platform simplification, programs consolidation and productivity measures undertaken by HP, which HP expects to be sustainable in the longer-term. These structural cost savings are net of any new recurring costs resulting from these initiatives and exclude one-time investments to generate such savings. HP’s expectations on the longer-term sustainability of such structural cost savings are based on its current business operations and market dynamics and could be significantly impacted by various factors, including but not limited to HP’s evolving business models, future investment decisions, market environment and technology landscape.

    As in prior periods, the financial information set forth in this document, including any tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be reasonable, these amounts could differ materially from reported amounts in HP’s Annual Report on Form 10-K for the fiscal year ending October 31, 2025, Quarterly Reports on Form 10-Q for the fiscal quarters ending April 30, 2025 and July 31, 2025, and HP’s other filings with the SEC. The forward-looking statements in this document are made as of the date of this document and HP assumes no obligation and does not intend to update these forward-looking statements.

    HP’s Investor Relations website at investor.hp.com contains a significant amount of information about HP, including financial and other information for investors. HP encourages investors to visit its website from time to time, as information is updated, and new information is posted.   The content of HP’s website is not incorporated by reference into this document or in any other report or document HP files with the SEC, and any references to HP’s website are intended to be inactive textual references only.

    Editorial contacts

    HP Inc. Media Relations
    MediaRelations@hp.com

    HP Inc. Investor Relations
    InvestorRelations@hp.com

    HP INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
    (Unaudited)
    (In millions, except per share amounts)
     
      Three months ended
      January 31, 2025   October 31, 2024   January 31, 2024
    Net revenue:          
    Products $ 12,695     $ 13,241     $ 12,419  
    Services   809       814       766  
    Total net revenue   13,504       14,055       13,185  
    Cost of net revenue:          
    Products   10,194       10,593       9,871  
    Services   470       461       426  
    Total cost of net revenue   10,664       11,054       10,297  
    Gross profit   2,840       3,001       2,888  
    Research and development   397       392       399  
    Selling, general and administrative   1,459       1,409       1,383  
    Restructuring and other charges   70       121       63  
    Acquisition and divestiture charges   6       12       27  
    Amortization of intangible assets   63       76       81  
    Total operating expenses   1,995       2,010       1,953  
    Earnings from operations   845       991       935  
    Interest and other, net   (141 )     (129 )     (142 )
    Earnings before taxes   704       862       793  
    (Provision for) benefit from taxes   (139 )     44       (171 )
    Net earnings $ 565     $ 906     $ 622  
               
    Net earnings per share:          
    Basic $ 0.60     $ 0.94     $ 0.63  
    Diluted $ 0.59     $ 0.93     $ 0.62  
               
    Cash dividends declared per share $ 0.58     $     $ 0.55  
               
    Weighted-average shares used to compute net earnings per share:          
    Basic   948       959       995  
    Diluted   957       971       1,002  
    HP INC. AND SUBSIDIARIES
    ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
    OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE
    (Unaudited)
    (In millions, except per share amounts)
     
      Three months ended
      January 31, 2025   October 31, 2024   January 31, 2024
      Amounts   Diluted
    net
    earnings

    per share
      Amounts   Diluted
    net
    earnings

    per share
      Amounts   Diluted
    net
    earnings

    per share
    GAAP net earnings $ 565     $ 0.59     $ 906     $ 0.93     $ 622     $ 0.62
    Non-GAAP adjustments:                      
    Restructuring and other charges   70       0.07       121       0.13       63       0.06
    Acquisition and divestiture charges   6       0.01       12       0.01       27       0.03
    Amortization of intangible assets   63       0.07       76       0.08       81       0.08
    Debt extinguishment costs               3                  
    Non-operating retirement-related credits    (5 )     (0.01 )     (2 )           (2 )    
    Tax adjustments(a)   5       0.01       (216 )     (0.22 )     17       0.02
    Non-GAAP net earnings $ 704     $ 0.74     $ 900     $ 0.93     $ 808     $ 0.81
                           
    GAAP earnings from operations $ 845         $ 991         $ 935      
    Non-GAAP adjustments:                      
    Restructuring and other charges   70           121           63      
    Acquisition and divestiture charges   6           12           27      
    Amortization of intangible assets   63           76           81      
    Non-GAAP earnings from operations  $ 984         $ 1,200         $ 1,106      
                           
    GAAP operating margin   6.3  %         7.1  %         7.1  %    
    Non-GAAP adjustments   1.0  %         1.4  %         1.3  %    
    Non-GAAP operating margin   7.3  %         8.5  %         8.4  %    

    (a)     Includes tax impact on non-GAAP adjustments.

    HP INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED BALANCE SHEETS
    (Unaudited)
    (In millions)
     
      As of
      January 31, 2025   October 31, 2024
    ASSETS      
    Current assets:      
    Cash, cash equivalents and restricted cash $ 2,894     $ 3,253  
    Accounts receivable, net   4,188       5,117  
    Inventory   8,443       7,720  
    Other current assets   4,309       4,670  
    Total current assets   19,834       20,760  
    Property, plant and equipment, net   2,900       2,914  
    Goodwill   8,599       8,627  
    Other non-current assets   7,597       7,608  
    Total assets $ 38,930     $ 39,909  
           
    LIABILITIES AND STOCKHOLDERS’ DEFICIT      
    Current liabilities:      
    Notes payable and short-term borrowings $ 1,418     $ 1,406  
    Accounts payable   16,483       16,903  
    Other current liabilities   9,533       10,378  
    Total current liabilities   27,434       28,687  
    Long-term debt   8,273       8,263  
    Other non-current liabilities   4,295       4,282  
    Stockholders’ deficit   (1,072 )     (1,323 )
    Total liabilities and stockholders’ deficit $ 38,930     $ 39,909  
    HP INC. AND SUBSIDIARIES
    CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
    (Unaudited)
    (In millions)
     
      Three months ended
      January 31, 2025   January 31, 2024
    Cash flows from operating activities:      
    Net earnings $ 565     $ 622  
    Adjustments to reconcile net earnings to net cash provided by operating activities:      
    Depreciation and amortization   197       205  
    Stock-based compensation expense   192       177  
    Restructuring and other charges   70       63  
    Deferred taxes on earnings   (23 )     (5 )
    Other, net   35       (20 )
    Changes in operating assets and liabilities, net of acquisitions:      
    Accounts receivables   966       446  
    Inventory   (751 )     (47 )
    Accounts payable   (397 )     (744 )
    Net investment in lease related to integrated financing   2       (62 )
    Taxes on earnings   12       49  
    Restructuring and other   (74 )     (87 )
    Other assets and liabilities   (420 )     (476 )
    Net cash provided by operating activities   374       121  
    Cash flows from investing activities:      
    Investment in property, plant, equipment and purchased intangible   (302 )     (158 )
    Purchases of available-for-sale securities and other investments   (3 )      
    Maturities and sales of available-for-sale securities and other investments   5        
    Collateral posted for derivative instruments         (70 )
    Net cash used in investing activities   (300 )     (228 )
    Cash flows from financing activities:      
    Proceeds from short-term borrowings with original maturities less than 90 days, net         100  
    Proceeds from debt   82       92  
    Payment of debt and associated costs   (50 )     (49 )
    Stock-based award activities and others   (92 )     (76 )
    Repurchase of common stock   (100 )     (500 )
    Cash dividends paid   (273 )     (275 )
    Net cash used in financing activities   (433 )     (708 )
    Decrease in cash, cash equivalents and restricted cash   (359 )     (815 )
    Cash, cash equivalents and restricted cash at beginning of period   3,253       3,232  
    Cash, cash equivalents and restricted cash at end of period $ 2,894     $ 2,417  

      

    HP INC. AND SUBSIDIARIES
    SEGMENT/BUSINESS UNIT INFORMATION
    (Unaudited)
    (In millions)
     
      Three months ended   Change (%)
      January 31, 2025   October 31, 2024   January 31, 2024   Q/Q   Y/Y
    Net revenue:                  
    Commercial PS $ 6,645     $ 6,522     $ 6,045     2 %     10 %
    Consumer PS   2,579       3,069       2,764     (16)%     (7)%
    Personal Systems   9,224       9,591       8,809     (4)%     5 %
    Supplies   2,826       2,865       2,863     (1)%     (1)%
    Commercial Printing   1,144       1,262       1,227     (9)%     (7)%
    Consumer Printing   299       325       285     (8)%     5 %
    Printing   4,269       4,452       4,375     (4)%     (2)%
    Corporate Investments(a)   11       11       2     NM     NM
    Total segment net revenue   13,504       14,054       13,186     (4)%     2 %
    Other(a)         1       (1 )   NM     NM
         Total net revenue $ 13,504     $ 14,055     $ 13,185     (4)%     2 %
                       
    Earnings before taxes:                  
    Personal Systems $ 507     $ 550     $ 537          
    Printing   810       874       872          
    Corporate Investments   (27 )     (37 )     (37 )        
    Total segment earnings from operations   1,290       1,387       1,372          
    Corporate and unallocated cost and other   (114 )     (102 )     (89 )        
    Stock-based compensation expense   (192 )     (85 )     (177 )        
    Restructuring and other charges   (70 )     (121 )     (63 )        
    Acquisition and divestiture charges   (6 )     (12 )     (27 )        
    Amortization of intangible assets   (63 )     (76 )     (81 )        
    Interest and other, net   (141 )     (129 )     (142 )        
         Total earnings before taxes $ 704     $ 862     $ 793          

    (a)     “NM” represents not meaningful.

    HP INC. AND SUBSIDIARIES
    SEGMENT OPERATING MARGIN SUMMARY
    (Unaudited)
     
      Three months ended   Change (pts)
      January 31, 2025   October 31, 2024   January 31, 2024   Q/Q   Y/Y
    Segment operating margin:                  
    Personal Systems  5.5 %     5.7 %     6.1 %     (0.2)pts   (0.6)pts
    Printing  19.0%     19.6 %     19.9 %     (0.6)pts   (0.9)pts
    Corporate Investments(a) NM     NM     NM     NM   NM
    Total segment  9.6 %     9.9 %     10.4 %     (0.3)pts   (0.8)pts
                             

    (a)     “NM” represents not meaningful.

    HP INC. AND SUBSIDIARIES
    CALCULATION OF DILUTED NET EARNINGS PER SHARE
    (Unaudited)
    (In millions, except per share amounts)
     
      Three months ended
      January 31, 2025   October 31, 2024   January 31, 2024
    Numerator:          
    GAAP net earnings $ 565   $ 906   $ 622
    Non-GAAP net earnings $ 704   $ 900   $ 808
               
    Denominator:          
    Weighted-average shares used to compute basic net earnings per share   948     959     995
    Dilutive effect of employee stock plans(a)   9     12     7
    Weighted-average shares used to compute diluted net earnings per share   957     971     1,002
               
    GAAP diluted net earnings per share $ 0.59   $ 0.93   $ 0.62
    Non-GAAP diluted net earnings per share $ 0.74   $ 0.93   $ 0.81

    (a)     Includes any dilutive effect of restricted stock units, stock options and performance-based awards. 

    Use of non-GAAP financial measures

    To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt). HP also provides forecasts of non-GAAP diluted net EPS and free cash flow.

    These non-GAAP financial measures are not computed in accordance with, or as an alternative to, GAAP in the United States. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables above or elsewhere in the materials accompanying this news release.

    Use and economic substance of non-GAAP financial measures
    Net revenue on a constant currency basis excludes the effect of foreign currency exchange fluctuations calculated by translating current period revenues using monthly exchange rates from the comparative period and excluding any hedging impact recognized in the current period. Non-GAAP operating margin is defined to exclude the effects of any amounts relating to restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets. Non-GAAP net earnings and non-GAAP diluted net EPS consist of net earnings or diluted net EPS excluding those same charges, non-operating retirement related (credits)/charges, debt extinguishment costs (benefit), tax adjustments and the amount of additional taxes or tax benefits associated with each non-GAAP item.

    HP’s management uses these non-GAAP financial measures for purposes of evaluating HP’s historical and prospective financial performance, as well as HP’s performance relative to its competitors. HP’s management also uses these non-GAAP measures to further its own understanding of HP’s segment operating performance. HP believes that excluding the items mentioned above for these non-GAAP financial measures allows HP’s management to better understand HP’s consolidated financial performance in relation to the operating results of HP’s segments, as HP’s management does not believe that the excluded items are reflective of ongoing operating results. More specifically, HP’s management excludes each of those items mentioned above for the following reasons:

    • Restructuring and other charges are (i) costs associated with a formal restructuring plan and are primarily related to employee separation from service and early retirement costs and related benefits, costs of real estate consolidation and other non-labor charges; and (ii) other charges, which includes non-recurring costs including those as a result of information technology rationalization efforts and transformation program management and are distinct from ongoing operational costs. HP excludes these restructuring and other charges (and any reversals of charges recorded in prior periods) for purposes of calculating these non-GAAP measures because HP believes that these costs do not reflect expected future operating expenses and excluding such expenses for purposes of calculating these non-GAAP measures is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • HP incurs cost related to its acquisitions and divestitures, which it would not have otherwise incurred as part of its operations. The charges are direct expenses such as third-party professional and legal fees, integration and divestiture-related costs, as well as non-cash adjustments to the fair value of certain acquired assets such as inventory and certain compensation charges related to cash settlement of restricted stock units and performance-based restricted stock units towards acquisitions. These charges related to acquisitions and divestitures are inconsistent in amount and frequency and are significantly impacted by the timing and nature of HP’s acquisitions or divestitures. HP believes that eliminating such expenses for purposes of calculating these non-GAAP measures is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • HP incurs charges relating to the amortization of intangible assets. Those charges are included in HP’s GAAP earnings, operating margin, net earnings and diluted net EPS. Such charges are significantly impacted by the timing and magnitude of HP’s acquisitions and any related impairment charges. Consequently, HP excludes these charges for purposes of calculating these non-GAAP measures because HP believes doing so is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • HP incurs debt extinguishment (benefit)/costs includes certain (gain)/loss related to repurchase of certain of its outstanding U.S. dollar global notes or termination of commitments under revolving credit facilities. These (gain)/loss resulting from debt redemption transactions are partially or more than offset by costs such as bond repurchase premiums, bank fees, unpaid accrued interests, etc. HP excludes these (benefit)/costs for the purposes of calculating these non-GAAP measures because HP believes doing so is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • Non-operating retirement-related (credits)/charges includes certain market-related factors such as interest cost, expected return on plan assets, amortized actuarial gains or losses, associated with HP’s defined benefit pension and post-retirement benefit plans. The market-driven retirement-related adjustments are primarily due to the changes in the value of pension plan assets and liabilities which are tied to financial market performance and HP considers these adjustments to be outside the operational performance of the business. Non-operating retirement-related (credits)/charges also include certain plan curtailments, settlements and special termination benefits related to HP’s defined benefit pension and post-retirement benefit plans. HP believes that eliminating such adjustments for purposes of calculating non-GAAP measures is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.
    • HP recorded tax adjustments including tax expenses and benefits from internal reorganizations, realizability of certain deferred tax assets, various tax rate and regulatory changes, and tax settlements across various jurisdictions. HP excludes these adjustments for the purposes of calculating these non-GAAP measures because HP believes doing so is useful to management and investors in evaluating HP’s current operating performance and comparing operating performance to other periods.

    Free cash flow is a non-GAAP measure that is defined as cash flow provided by (used in) operating activities adjusted for net investment in leases from integrated financing and net investments in property, plant, equipment and purchased intangible. Gross cash is a non-GAAP measure that is defined as cash, cash equivalents and restricted cash plus short-term investments and certain long-term investments that may be liquidated within 90 days pursuant to the terms of existing put options or similar rights. HP’s management uses free cash flow and gross cash for the purpose of determining the amount of cash available for investment in HP’s businesses, repurchasing stock and other purposes. HP’s management also uses free cash flow and gross cash to evaluate HP’s historical and prospective liquidity. Because gross cash includes liquid assets that are not included in cash, cash equivalents and restricted cash, HP believes that gross cash provides a helpful assessment of HP’s liquidity. Because free cash flow includes net cash provided by (used in) operating activities adjusted for net investment in leases from integrated financing and net investments in property, plant, equipment and purchased intangible. HP believes that free cash flow provides a useful assessment of HP’s liquidity and capital resources. Net cash (debt) is defined as gross cash less gross debt after adjusting the effect of unamortized premium/discount on debt issuance, debt issuance costs and gains/losses on interest rate swaps.

    Key Growth Areas
    Key Growth Areas represent HP’s businesses which management expects to collectively grow at a rate faster than HP’s core business with accretive margins in the longer term. HP’s Key Growth Areas are comprised of:

    Hybrid Systems: Video conferencing solutions, cameras, headsets, voice, and related software capabilities

    Advanced Compute Solutions: Diverse portfolio encompassing high-performance computing, mobile and desktop workstations, retail workstations, retail solutions, and emerging technologies to address complex computational tasks, data-intensive applications, and evolving industry needs.

    AI PC: PCs, excluding Workstations, equipped with dedicated hardware components like Neural Processing Units (NPUs), are designed to facilitate and enhance the execution of AI and machine learning tasks.

    Workforce Solutions: Managed services (Managed Print Service and Device-as-a-Service), digital services and lifecycle services

    Consumer Subscriptions: Instant Ink services, other consumer subscriptions and consumer digital services

    Industrial Graphics: Large Format Industrial, Page Wide Press (PWP), Indigo and Page Wide Industrial packaging solutions and supplies

    3D & Personalization: Portfolio of additive manufacturing solutions and supplies including end-to-end solutions such as moulded fiber, footwear and orthotics

    Material limitations associated with use of non-GAAP financial measures
    These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HP’s results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are:

    • Items such as amortization of intangible assets, though not directly affecting HP’s cash position, represent the loss in value of intangible assets over time. The expense associated with this change in value is not included in non-GAAP operating margin, non-GAAP net earnings and non-GAAP diluted net EPS, and therefore does not reflect the full economic effect of the change in value of those intangible assets.
    • Items such as restructuring and other charges, acquisition and divestiture charges, amortization of intangible assets are excluded from non-GAAP operating margin. In addition, non-operating retirement-related (credits)/charges, debt extinguishment costs (benefit) and tax adjustments are excluded from non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings and non-GAAP diluted net EPS. These items can have a material impact on the equivalent GAAP earnings measure and cash flows.
    • HP may not be able to immediately liquidate the short-term and certain long-term investments included in gross cash, which may limit the usefulness of gross cash as a liquidity measure.

    Other companies may calculate the non-GAAP financial measures differently than HP, limiting the usefulness of those measures for comparative purposes.

    Compensation for limitations associated with use of non-GAAP financial measures
    HP accounts for the limitations on its use of non-GAAP financial measures by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. HP also provides reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure within this news release and in other written materials that include these non-GAAP financial measures, and HP encourages investors to review those reconciliations carefully.

    Usefulness of non-GAAP financial measures to investors
    HP believes that providing net revenue on a constant currency basis, non-GAAP total operating expense, non-GAAP operating profit, non-GAAP operating margin, non-GAAP other income and expenses, non-GAAP tax rate, non-GAAP net earnings, non-GAAP diluted net EPS, free cash flow, gross cash and net cash (debt) to investors in addition to the related GAAP financial measures provides investors with greater insight to the information used by HP’s management in its financial and operational decision making and allows investors to see HP’s results “through the eyes” of management. HP further believes that providing this information better enables HP’s investors to understand HP’s operating performance and financial condition and to evaluate the efficacy of the methodology and information used by HP’s management to evaluate and measure such performance and financial condition. Disclosure of these non-GAAP financial measures also facilitates comparisons of HP’s operating performance with the performance of other companies in HP’s industry that supplement their GAAP results with non-GAAP financial measures that may be calculated in a similar manner.

    The MIL Network

  • MIL-OSI: Compass Diversified Reports Fourth Quarter and Full Year 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    WESTPORT, Conn., Feb. 27, 2025 (GLOBE NEWSWIRE) — Compass Diversified (NYSE: CODI) (“CODI” or the “Company”), an owner of leading middle market branded consumer and industrial businesses, announced today its consolidated operating results for the three months and full year ended December 31, 2024.

    “In 2024, we once again delivered strong financial results, achieving double digit sales growth and over 30% growth in our Adjusted EBITDA for the full year,” said Elias Sabo, CEO of Compass Diversified. “In the fourth quarter, we saw both sales and earnings growth accelerate, driven by continued strong performance from our consumer businesses as well as improving performance in our industrial businesses. Our differentiated business model, strong operating companies, and permanent capital base position us to create long-term value for all stakeholders. I want to take this opportunity to thank the CODI team as well as our subsidiary management teams and employees for their hard work fostering innovation, driving exceptional results, and exceeding expectations.”

    Fourth Quarter 2024 – Financial Highlights (vs Q4 2023)

    • Net sales were $620.3 million, up 13.8%
      • Branded consumer net sales increased 15.2% to $403.0 million
      • Industrial net sales increased 11.4% to $217.2 million
    • Subsidiary Adjusted EBITDA, a non-GAAP financial measure, was $140.9 million, up 25%
      • Branded consumer Adjusted EBITDA increased 29.0%
      • Industrial Adjusted EBITDA increased 5.2%
    • Adjusted EBITDA, a non-GAAP financial measure, was $118.2 million, up 29.0%

    Recent Business Highlights

    • Sold Ergobaby for an enterprise value of $104 million on December 27, 2024
    • In Q4 2024 – raised ~$90 million via issuance of preferred shares
      • More than $115 million for full year 2024
      • Flexible, low-cost source of capital
    • In Q4 2024 – re-purchased more than 400,000 common shares
      • Average price of $23.19 per share
    • In January 2025 – raised $300 million in incremental term loan A
      • Initial funding of $200 million; additional $100 million available with six month delayed draw
      • Matures in July 2027, consistent with existing term loan A

    Fourth Quarter and Full Year 2024 Financial Results

    Net sales in the fourth quarter of 2024 were $620.3 million, up 13.8% compared to $544.9 million in the fourth quarter of 2023. For the full year 2024, net sales were $2.2 billion, up 11.9% compared to $2.0 billion a year ago. Growth was driven by the Company’s acquisition of The Honey Pot Co. in January 2024 and continued strong sales growth at Lugano and BOA. On a pro forma basis, assuming CODI had acquired The Honey Pot Co. on January 1, 2023, net sales were up 7% in the full year 2024.

    Branded consumer net sales increased 8% in the fourth quarter of 2024 to $403.0 million compared to the fourth quarter of 2023. On a pro forma basis, branded consumer net sales increased 10% to $1.5 billion in the full year 2024 compared to a year ago.

    Industrial net sales increased 11% in the fourth quarter of 2024 to $217.2 million compared to the fourth quarter of 2023 and remained relatively flat at $729.4 million in the full year 2024 compared to a year ago.

    Operating income for the fourth quarter of 2024 was $60.6 million compared to operating loss of $4.6 million in the fourth quarter of 2023. The increase was primarily due to a $56.8 million non-cash impairment expense associated with PrimaLoft in the fourth quarter of 2023. For the full year 2024, operating income increased 170% to $230.1 million compared to $85.2 million a year ago. The increase was due to an increase in net sales year-over-year, as well as non-cash impairment charges taken in 2023 of $89.4 million.

    Net income in the fourth quarter of 2024 was $23.8 million compared to net income of $139.4 million in the fourth quarter of 2023. For the full year 2024, net income was $47.4 million compared to $262.4 million a year ago. The decreases in net income were due primarily to the $179.5 million gain on the sale of Marucci Sports in November 2023 and the $98.0 million gain on the sale of Advanced Circuits in February 2023.

    Income from continuing operations in the fourth quarter of 2024 was $22.2 million compared to loss from continuing operations of $37.1 million in the fourth quarter of 2023. For the full year 2024, income from continuing operations was $42.3 million compared to loss from continuing operations of $44.8 million a year ago. The increases in net income from continuing operations were primarily due to the non-cash impairment expenses associated with PrimaLoft and Velocity Outdoor in 2023.

    Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the fourth quarter of 2024 was $46.6 million compared to $34.7 million a year ago. For the full year 2024, Adjusted Earnings was $161.6 million compared to $101.2 million a year ago. CODI’s weighted average number of shares outstanding in the fourth quarter of 2024 was 75.51 million compared to 72.43 million in the prior year fourth quarter. For the full year 2024, CODI’s weighted average number of shares outstanding was 75.45 million compared to 72.11 million in 2023.

    Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) in the fourth quarter of 2024 was $118.2 million, up 29% compared to $91.6 million in the fourth quarter of 2023. For the full year 2024, Adjusted EBITDA was $424.8 million, up 30% compared to $326.5 million a year ago. The increases were primarily due to strong results at Lugano. Management fees incurred during the fourth quarter and full year were $19.5 million and $74.8 million, respectively.

    Liquidity and Capital Resources

    As of December 31, 2024, CODI had approximately $59.7 million in cash and cash equivalents, $113.5 million outstanding on its revolver, $375.0 million outstanding in term loans, $1.0 billion outstanding in 5.250% Senior Notes due 2029 and $300.0 million outstanding in 5.000% Senior Notes due 2032.

    As of December 31, 2024, the Company had no significant debt maturities until 2027 and had net borrowing availability of approximately $486.6 million under its revolving credit facility.

    Fourth Quarter 2024 Distributions

    On January 3, 2025, CODI’s Board of Directors (the “Board”) declared a fourth quarter distribution of $0.25 per share on the Company’s common shares. The cash distribution was paid on January 23, 2025, to all holders of record of common shares as of January 16, 2025.

    The Board also declared a quarterly distribution of $0.453125 per share on the Company’s 7.250% Series A Preferred Shares (the “Series A Preferred Shares”). The distribution on the Series A Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution was paid on January 30, 2025, to all holders of record of Series A Preferred Shares as of January 15, 2025.

    The Board also declared a quarterly distribution of $0.4921875 per share on the Company’s 7.875% Series B Preferred Shares (the “Series B Preferred Shares”). The distribution on the Series B Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution for such period was paid on January 30, 2025, to all holders of record of Series B Preferred Shares as of January 15, 2025.

    The Board also declared a quarterly distribution of $0.4921875 per share on the Company’s 7.875% Series C Preferred Shares (the “Series C Preferred Shares”). The distribution on the Series C Preferred Shares covered the period from, and including, October 30, 2024, up to, but excluding, January 30, 2025. The cash distribution was paid on January 30, 2025, to all holders of record of Series C Preferred Shares as of January 15, 2025.

    CODI expects all cash distributions paid in the 2024 taxable year to be qualified dividends (assuming requisite holding periods are met) since CODI’s earnings and profits in the 2024 taxable year are expected to exceed cash distributions.

    2025 Outlook

    For the full year 2025, CODI expects its current subsidiaries to produce consolidated Subsidiary Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) of between $570 million and $610 million. Of this range, CODI expects its branded consumer vertical to produce $440 million to $465 million and its industrial vertical to produce $130 million to $145 million. This estimate is based on the summation of the Company’s expectations for its current subsidiaries in 2025, and is absent additional acquisitions or divestitures, and excludes corporate expenses such as interest expense, management fees paid by CODI and corporate overhead.

    CODI further expects Adjusted EBITDA (see “Note Regarding Use of Non-GAAP Financial Measures” below) including management fees and corporate expenses to be between $480 million and $520 million for the full year 2025.

    In addition, the Company expects to earn between $170 million and $190 million in Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the full year 2025.

    In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, CODI has not reconciled 2025 consolidated Subsidiary Adjusted EBITDA, 2025 Adjusted EBITDA or 2025 Adjusted Earnings to their comparable GAAP measure because it does not provide guidance on Income (Loss) from Continuing Operations or Net Income (Loss) or the applicable reconciling items as a result of the uncertainty regarding, and the potential variability of, these items. For the same reasons, CODI is unable to address the probable significance of the unavailable information, which could be material to future results.

    Conference Call

    Management will host a conference call on Thursday, February 27, 2025, at 5:00 p.m. E.T. / 2:00 p.m. P.T. with the Company’s Chief Executive Officer, Elias Sabo, the Company’s Chief Financial Officer, Stephen Keller, and Pat Maciariello, the Chief Operating Officer of Compass Group Management. A live webcast of the call will be available on the Investor Relations section of CODI’s website. To access the call by phone, please go to this link (registration link) and you will be provided with dial in details. To avoid delays, we encourage participants to dial into the conference call 15 minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time on the Company’s website.

    Note Regarding Use of Non-GAAP Financial Measures

    Adjusted EBITDA and Adjusted Earnings are non-GAAP measures used by the Company to assess its performance. We have reconciled Adjusted EBITDA to Income (Loss) from Continuing Operations and Adjusted Earnings to Net Income (Loss) on the attached schedules. We consider Income (Loss) from Continuing Operations to be the most directly comparable GAAP financial measure to Adjusted EBITDA and Net Income (Loss) to be the most directly comparable GAAP financial measure to Adjusted Earnings. We believe that Adjusted EBITDA and Adjusted Earnings provides useful information to investors and reflect important financial measures as each excludes the effects of items which reflect the impact of long-term investment decisions, rather than the performance of near-term operations. When compared to Net Income (Loss) and Income (Loss) from Continuing Operations, Adjusted Earnings and Adjusted EBITDA, respectively, are each limited in that they do not reflect the periodic costs of certain capital assets used in generating revenues of our businesses or the non-cash charges associated with impairments, as well as certain cash charges. The presentation of Adjusted EBITDA allows investors to view the performance of our businesses in a manner similar to the methods used by us and the management of our businesses, provides additional insight into our operating results and provides a measure for evaluating targeted businesses for acquisition. The presentation of Adjusted Earnings provides insight into our operating results.

    Pro forma net sales is defined as net sales including the historical net sales relating to the pre-acquisition periods of The Honey Pot Co., assuming that the Company acquired The Honey Pot Co. on January 1, 2023. We have reconciled pro forma net sales to net sales, the most directly comparable GAAP financial measure, on the attached schedules. We believe that pro forma net sales is useful information for investors as it provides a better understanding of sales performance, and relative changes thereto, on a comparable basis. Pro forma net sales is not necessarily indicative of what the actual results would have been if the acquisition had in fact occurred on the date or for the periods indicated nor does it purport to project net sales for any future periods or as of any date.

    In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, we have not reconciled 2025 consolidated Subsidiary Adjusted EBITDA, 2025 Adjusted EBITDA or 2025 Adjusted Earnings to their comparable GAAP measures because we do not provide guidance on Net Income (Loss) from Continuing Operations or Net Income (Loss) or the applicable reconciling items as a result of the uncertainty regarding, and the potential variability of, these items. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.

    Adjusted EBITDA, Adjusted Earnings and pro forma net sales are not meant to be a substitute for GAAP measures and may be different from or otherwise inconsistent with non-GAAP financial measures used by other companies.

    About Compass Diversified

    Since its IPO in 2006, CODI has consistently executed its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the branded consumer, industrial, healthcare, and critical outsourced services sectors. The Company leverages its permanent capital base, long-term disciplined approach, and actionable expertise to maintain controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. CODI utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and has consistently generated strong returns through its culture of transparency, alignment and accountability. For more information, please visit compassdiversified.com.

    Forward Looking Statements

    Certain statements in this press release may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements as to our future performance or liquidity, such as expectations regarding our results of operations and financial condition, our 2025 consolidated Subsidiary Adjusted EBITDA, our 2025 Adjusted EBITDA, our 2025 Adjusted Earnings, our pending acquisitions and divestitures, and other statements with regard to the future performance of CODI. We may use words such as “plans,” “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “seek,” “look,” and similar expressions to identify forward-looking statements. The forward-looking statements contained in this press release involve risks and uncertainties. Actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in CODI’s annual report on Form 10-K for the year ended December 31, 2024 and its quarterly reports on Form 10-Q. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment, including changes in inflation, interest rates and U.S. tariff and import/export regulations; risks associated with possible disruption in CODI’s operations or the economy generally due to terrorism, war, natural disasters, social, civil and political unrest or the COVID-19 pandemic; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); environmental risks affecting the business or operations of our subsidiaries; disruption in the global supply chain, labor shortages and high labor costs; our business prospects and the prospects of our subsidiaries; the impact of, and ability to successfully complete and integrate, acquisitions that we may make; the ability to successfully complete when we’ve executed divestitures agreements; the dependence of our future success on the general economy and its impact on the industries in which we operate; the ability of our subsidiaries to achieve their objectives; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our subsidiaries; and other considerations that may be disclosed from time to time in CODI’s publicly disseminated documents and filings. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. Although, except as required by law, CODI undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that CODI may make directly to you or through reports that it in the future may file with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

    Investor Relations

    Compass Diversified
    irinquiry@compassdiversified.com

    Gateway Group
    Cody Slach
    949.574.3860
    CODI@gateway-grp.com

    Media Relations
    Compass Diversified
    mediainquiry@compassdiversified.com

    The IGB Group        
    Leon Berman
    212-477-8438
    lberman@igbir.com

    Compass Diversified Holdings
    Condensed Consolidated Balance Sheets
           
    (in thousands) December 31, 2024   December 31, 2023
           
    Assets      
    Current assets      
    Cash and cash equivalents $ 59,727   $ 446,684
    Accounts receivable, net   444,386     308,183
    Inventories, net   962,408     723,194
    Prepaid expenses and other current assets   101,129     88,844
    Current assets of discontinued operations       36,915
    Total current assets   1,567,650     1,603,820
    Property, plant and equipment, net   244,746     191,283
    Goodwill   982,253     859,907
    Intangible assets, net   1,049,186     879,078
    Other non-current assets   208,587     195,010
    Non-current assets of discontinued operations       87,883
    Total assets $ 4,052,422   $ 3,816,981
           
    Liabilities and stockholders’ equity      
    Current liabilities      
    Accounts payable $ 104,304   $ 91,089
    Accrued expenses   197,829     151,443
    Due to related parties   18,036     16,025
    Current portion, long-term debt   15,000     10,000
    Other current liabilities   49,617     34,812
    Current liabilities of discontinued operations       8,986
    Total current liabilities   384,786     312,355
    Deferred income taxes   119,948     118,882
    Long-term debt   1,759,290     1,661,879
    Other non-current liabilities   225,334     203,207
    Non-current liabilities of discontinued operations       1,277
    Total liabilities   2,489,358     2,297,600
    Stockholders’ equity      
    Total stockholders’ equity attributable to Holdings   1,296,793     1,326,750
    Noncontrolling interest   266,271     175,875
    Noncontrolling interest of discontinued operations       16,756
    Total stockholders’ equity   1,563,064     1,519,381
    Total liabilities and stockholders’ equity $ 4,052,422   $ 3,816,981
           
    Compass Diversified Holdings
    Consolidated Statements of Operations
            
      Three months ended December 31,   Year ended December 31,
    (in thousands, except per share data)   2024       2023       2024       2023  
    Net revenues $ 620,255     $ 544,915     $ 2,198,233     $ 1,965,017  
    Cost of revenues   349,238       312,972       1,197,873       1,132,014  
    Gross profit   271,017       231,943       1,000,360       833,003  
    Operating expenses:              
    Selling, general and administrative expense   166,256       140,831       587,520       502,013  
    Management fees   19,453       16,784       74,767       67,945  
    Amortization expense   24,735       22,088       99,760       88,396  
    Impairment expense         56,832       8,182       89,400  
    Operating income (loss)   60,573       (4,592 )     230,131       85,249  
    Other income (expense):              
    Interest expense, net   (29,189 )     (24,827 )     (106,683 )     (105,179 )
    Amortization of debt issuance costs   (1,004 )     (1,004 )     (4,018 )     (4,038 )
    Gain (loss) on sale of Crosman             (24,218 )      
    Other income (expense), net   412       (350 )     (3,902 )     1,779  
    Net income (loss) before income taxes   30,792       (30,773 )     91,310       (22,189 )
    Provision for income taxes   8,567       6,290       49,012       22,639  
    Income (loss) from continuing operations   22,225       (37,063 )     42,298       (44,828 )
    Income (loss) from discontinued operations, net of income tax   (7,006 )     (3,026 )     (6,905 )     24,208  
    Gain on sale of discontinued operations   8,612       179,530       11,957       283,025  
    Net income   23,831       139,441       47,350       262,405  
    Less: Net income (loss) attributable to noncontrolling interest   13,631       2,828       37,426       16,423  
    Less: Net income (loss) from discontinued operations attributable to noncontrolling interest   (1,721 )     (824 )     (2,884 )     (304 )
    Net income attributable to Holdings $ 11,921     $ 137,437     $ 12,808     $ 246,286  
                   
    Basic income (loss) per common share attributable to Holdings              
    Continuing operations $ (0.10 )   $ (0.75 )   $ (1.25 )   $ (1.81 )
    Discontinued operations   0.04       2.45       0.11       4.27  
      $ (0.06 )   $ 1.70     $ (1.14 )   $ 2.46  
                   
    Basic weighted average number of common shares outstanding   75,505       72,429       75,454       72,105  
                   
    Cash distributions declared per Trust common share $ 0.25     $ 0.25     $ 1.00     $ 1.00  
                                   
    Compass Diversified Holdings
    Net Income to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA – 2024
    (Unaudited)
           
      Three months ended   Year ended
    (in thousands) March 31, 2024   June 30, 2024   September 30, 2024   December 31, 2024   December 31, 2024
    Net income (loss) $ 5,781     $ (13,723 )   $ 31,461     $ 23,831     $ 47,350  
    Income (loss) from discontinued operations, net of tax   317       872       (1,088 )     (7,006 )     (6,905 )
    Gain on sale of discontinued operations, net of tax   3,345                   8,612       11,957  
    Net income (loss) from continuing operations $ 2,119     $ (14,595 )   $ 32,549     $ 22,225     $ 42,298  
    Less: income from continuing operations attributable to noncontrolling interest   7,765       6,041       9,989       13,631       37,426  
    Net income (loss) attributable to Holdings – continuing operations $ (5,646 )   $ (20,636 )   $ 22,560     $ 8,594     $ 4,872  
    Adjustments:                                      
    Distributions paid – preferred shares   (6,045 )     (6,101 )     (6,345 )     (6,967 )     (25,458 )
    Amortization expense – intangible assets and inventory step-up   27,116       26,642       24,956       26,341       105,055  
    Impairment expense   8,182                         8,182  
    Loss (gain) on sale of Crosman         24,606       (388 )           24,218  
    Tax effect – loss on sale of Crosman         7,254                   7,254  
    Non-controlling shareholder compensation   4,071       3,680       4,537       4,057       16,345  
    Acquisition expense   3,479                   1,872       5,351  
    Integration services fee         875       875       875       2,625  
    Other   274       130       964       11,820       13,188  
    Adjusted earnings $ 31,431     $ 36,450     $ 47,159     $ 46,592     $ 161,632  
    Plus (less):                                      
    Depreciation expense   10,730       10,339       10,180       12,642       43,891  
    Income tax provision   9,996       19,830       10,619       8,567       49,012  
    Interest expense   23,575       26,561       27,358       29,189       106,683  
    Amortization of debt issuance costs   1,005       1,004       1,005       1,004       4,018  
    Income from continuing operations attributable to noncontrolling interest   7,765       6,041       9,989       13,631       37,426  
    Tax effect – loss on sale of Crosman         (7,254 )                 (7,254 )
    Preferred distributions   6,045       6,101       6,345       6,967       25,458  
    Other   2,879       1,375       60       (412 )     3,902  
    Adjusted EBITDA $ 93,426     $ 100,447     $ 112,715     $ 118,180     $ 424,768  
                                           
    Compass Diversified Holdings
    Net Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA – 2023
    (Unaudited)
                       
      Three months ended   Year ended
    (in thousands) March 31, 2023   June 30, 2023   September 30, 2023   December 31, 2023   December 31, 2023
    Net income (loss) $ 109,601     $ 17,123     $ (3,760 )   $ 139,441     $ 262,405  
    Income (loss) from discontinued options, net of tax   10,939       5,437       10,858       (3,026 )     24,208  
    Gain on sale of discontinued operations, net of tax   97,989       4,232       1,274       179,530       283,025  
    Net income (loss) from continuing operations $ 673     $ 7,454     $ (15,892 )   $ (37,063 )   $ (44,828 )
    Less: income (loss) from continuing operations attributable to noncontrolling interest   4,398       3,428       5,769       2,828       16,423  
    Net income (loss) attributable to Holdings – continuing operations $ (3,725 )   $ 4,026     $ (21,661 )   $ (39,891 )   $ (61,251 )
    Adjustments:                  
    Distributions paid – preferred shares   (6,045 )     (6,046 )     (6,045 )     (6,045 )     (24,181 )
    Amortization expense – intangible assets and inventory step-up   23,283       22,111       22,090       22,088       89,572  
    Impairment expense               32,568       56,832       89,400  
    Tax effect – impairment expense               (4,308 )     978       (3,330 )
    Non-controlling interest – impairment expense                     (5,382 )     (5,382 )
    Non-controlling shareholder compensation   1,329       2,895       2,438       2,789       9,451  
    Integration services fee   1,187       1,188                 2,375  
    Other   432       348       349       3,377       4,506  
    Adjusted earnings $ 16,461     $ 24,522     $ 25,431     $ 34,746     $ 101,160  
    Plus (less):                  
    Depreciation expense   11,006       11,958       11,853       11,142       45,959  
    Income tax provision   7,471       4,421       4,457       6,290       22,639  
    Interest expense   26,180       26,613       27,559       24,828       105,180  
    Amortization of debt issuance costs   1,005       1,024       1,005       1,004       4,038  
    Income from continuing operations attributable to noncontrolling interest   4,398       3,428       5,769       2,828       16,423  
    Tax effect – impairment expense               4,308       (978 )     3,330  
    Non-controlling interest – impairment expense                     5,382       5,382  
    Distributions paid – preferred shares   6,045       6,046       6,045       6,045       24,181  
    Other   (1,160 )     75       (1,044 )     349       (1,780 )
    Adjusted EBITDA $ 71,406     $ 78,087     $ 85,383     $ 91,636     $ 326,512  
                                           
    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Three Months Ended December 31, 2024
    (Unaudited)
                                                 
    (in thousands)   Corporate     5.11     BOA   Lugano   PrimaLoft   THP   Velocity Outdoor   Altor Solutions   Arnold   Sterno   Consolidated
    Net income (loss) from continuing operations   $ (8,045 )   $ 2,040     $ 4,543     $ 35,133   $ (5,314 )   $ (1,997 )   $ (1,483 )   $ (441 )   $ (9,138 )   $ 6,927     $ 22,225  
    Adjusted for:                                            
    Provision (benefit) for income taxes     (2,095 )     (266 )     1,042       11,294     (2,010 )     (305 )     (264 )     (912 )     (196 )     2,280       8,568  
    Interest expense, net     29,134       (11 )     (5 )         (55 )     (24 )     (1 )           151             29,189  
    Intercompany interest     (41,740 )     3,252       4,409       15,596     4,390       2,725       1,635       5,159       1,808       2,766        
    Depreciation and amortization     51       5,536       5,343       2,763     5,331       4,163       1,363       9,303       2,511       3,623       39,987  
    EBITDA     (22,695 )     10,551       15,332       64,786     2,342       4,562       1,250       13,109       (4,864 )     15,596       99,969  
    Other (income) expense           (46 )     489       280     176       8       (1,177 )     24             (167 )     (413 )
    Non-controlling shareholder compensation           499       1,331       775     559       517       (153 )     247       5       277       4,057  
    Acquisition expenses                                             1,872                   1,872  
    Integration services fee                                 875                               875  
    Other                                       1,500       696       9,546       78       11,820  
    Adjusted EBITDA   $ (22,695 )   $ 11,004     $ 17,152     $ 65,841   $ 3,077     $ 5,962     $ 1,420     $ 15,948     $ 4,687     $ 15,784     $ 118,180  
                                                                                           
    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Three Months Ended December 31, 2023
    (Unaudited)
                                           
    (in thousands) Corporate     5.11     BOA   Lugano   PrimaLoft   Velocity Outdoor   Altor Solutions   Arnold   Sterno   Consolidated
    Net income (loss) from continuing operations $ (12,982 )   $ 9,840     $ 1,345     $ 20,847     $ (64,383 )   $ (3,183 )   $ 4,260   $ 3,523     $ 3,670     $ (37,063 )
    Adjusted for:                                      
    Provision (benefit) for income taxes   301       1,004       639       4,293       (2,549 )     289       1,797     921       (406 )     6,289  
    Interest expense, net   24,732       (4 )     (9 )           (2 )     120           (11 )           24,826  
    Intercompany interest   (33,291 )     4,546       2,548       10,177       4,780       3,440       2,303     1,728       3,769        
    Depreciation and amortization   366       6,143       5,496       2,258       5,394       3,259       4,183     2,193       4,943       34,235  
    EBITDA   (20,874 )     21,529       10,019       37,575       (56,760 )     3,925       12,543     8,354       11,976       28,287  
    Other (income) expense   (1 )   (412 )   (19 )     (75 )     (66 )     (31 )     1,239     (4 )     (280 )     351  
    Non-controlling shareholder compensation         203       950       162       761       228       186     1       298       2,789  
    Impairment expense                           57,810       (978 )                     56,832  
    Other               3,072                                   305       3,377  
    Adjusted EBITDA $ (20,875 )   $ 21,320     $ 14,022     $ 37,662     $ 1,745     $ 3,144     $ 13,968   $ 8,351     $ 12,299     $ 91,636  
                                           
    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Year ended December 31, 2024
    (Unaudited)
                                                 
    (in thousands)   Corporate     5.11     BOA   Lugano   PrimaLoft   THP   Velocity Outdoor   Altor Solutions   Arnold   Sterno   Consolidated
    Net income (loss) from continuing operations   $ (35,634 )   $ 20,634     $ 20,791     $ 94,390   $ (10,575 )   $ (9,761 )   $ (54,851 )   $ 5,635   $ (2,969 )   $ 14,638     $ 42,298
    Adjusted for:                                            
    Provision (benefit) for income taxes     (2,095 )     4,526       4,962       31,304     (3,741 )     (2,894 )     6,810       2,280     2,986       4,874       49,012
    Interest expense, net     106,414       (14 )     (21 )     3     (70 )     (52 )     52           371             106,683
    Intercompany interest     (157,585 )     13,366       20,125       56,013     17,916       10,552       9,255       10,771     7,121       12,466      
    Depreciation and amortization     677       22,734       21,594       10,334     21,318       18,974       8,042       21,553     9,265       18,473       152,964
    EBITDA     (88,223 )     61,246       67,451       192,044     24,848       16,819       (30,692 )     40,239     16,774       50,451       350,957
    Other (income) expense     462       40       511       219     181       3       24,557       2,746     (9 )     (590 )     28,120
    Non-controlling shareholder compensation           2,129       5,683       2,437     2,382       1,674       403       988     18       631       16,345
    Impairment expense                                     8,182                       8,182
    Acquisition expenses                                 3,479             1,872                 5,351
    Integration services fee                                 2,625                             2,625
    Other                                 90       1,500       696     10,426       476       13,188
    Adjusted EBITDA   $ (87,761 )   $ 63,415     $ 73,645     $ 194,700   $ 27,411     $ 24,690     $ 3,950     $ 46,541   $ 27,209     $ 50,968     $ 424,768
                                                                                       
    Compass Diversified Holdings
    Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
    Year ended December 31, 2023
    (Unaudited)
                                           
    (in thousands) Corporate     5.11     BOA   Lugano   PrimaLoft   Velocity Outdoor   Altor Solutions   Arnold   Sterno   Consolidated
    Net income (loss) from continuing operations $ (60,454 )   $ 21,690     $ 16,496     $ 52,315     $ (69,883 )   $ (40,045 )   $ 16,504   $ 10,434     $ 8,115     $ (44,828 )
    Adjusted for:                                      
    Provision (benefit) for income taxes   301       4,994       2,863       14,589       (5,673 )     (5,616 )     5,890     4,185       1,106       22,639  
    Interest expense, net   104,855       (8 )     (18 )     4       (11 )     352           5             105,179  
    Intercompany interest   (126,240 )     20,244       7,580       32,837       18,123       13,510       10,486     6,806       16,654        
    Depreciation and amortization   1,498       26,009       22,932       9,229       21,478       13,282       16,741     8,441       19,959       139,569  
    EBITDA   (80,040 )     72,929       49,853       108,974       (35,966 )     (18,517 )     49,621     29,871       45,834       222,559  
    Other (income) expense   (128 )     (515 )     98       (80 )     62       (1,210 )     1,440     (5 )     (1,441 )     (1,779 )
    Non-controlling shareholder compensation         1,191       3,019       1,474       980       914       986     27       860       9,451  
    Impairment expense                           57,810       31,590                       89,400  
    Integration services fee                           2,375                             2,375  
    Other               3,072                                   1,434       4,506  
    Adjusted EBITDA $ (80,168 )   $ 73,605     $ 56,042     $ 110,368     $ 25,261     $ 12,777     $ 52,047   $ 29,893     $ 46,687     $ 326,512  
                                                                                 
    Compass Diversified Holdings
    Adjusted EBITDA
    (Unaudited)
                     
        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024       2023       2024       2023  
                     
    Branded Consumer                
    5.11   $ 11,004     $ 21,320     $ 63,415     $ 73,605  
    BOA     17,152       14,022       73,645       56,042  
    Lugano     65,841       37,662       194,700       110,368  
    PrimaLoft     3,077       1,745       27,411       25,261  
    The Honey Pot Co. (1)     5,962             24,690        
    Velocity Outdoor     1,420       3,144       3,950       12,777  
    Total Branded Consumer   $ 104,456     $ 77,893     $ 387,811     $ 278,053  
                     
    Industrial                
    Altor Solutions   $ 15,948     $ 13,968     $ 46,541     $ 52,047  
    Arnold Magnetics     4,687       8,351       27,209       29,893  
    Sterno     15,784       12,299       50,968       46,687  
    Total Industrial   $ 36,419     $ 34,618     $ 124,718     $ 128,627  
    Corporate expense     (22,695 )     (20,874 )     (87,761 )     (80,168 )
    Total Adjusted EBITDA   $ 118,180     $ 91,637     $ 424,768     $ 326,512  
                                     
    (1 )   The above results for The Honey Pot Co. do not include management’s estimate of Adjusted EBITDA, before the Company’s ownership of $3.9 million for the year ended December 31, 2024, and $7.8 million and $28.7 million, respectively, for the three months and year ended December 31, 2023. The Honey Pot Co. was acquired on January 31, 2024.
         
    Compass Diversified Holdings
    Net Sales to Pro Forma Net Sales Reconciliation
    (unaudited)
             
        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024     2023     2024     2023
                     
    Net Sales   $ 620,255   $ 544,915   $ 2,198,233   $ 1,965,017
    Acquisitions (1)         24,905     10,671     107,311
    Pro Forma Net Sales   $ 620,255   $ 569,820   $ 2,208,904   $ 2,072,328
                             
    (1 )   Acquisitions reflects the net sales for The Honey Pot Co. on a proforma basis as if we had acquired this business on January 1, 2023.
         
    Compass Diversified Holdings
    Subsidiary Pro Forma Net Sales
    (unaudited)
                 
        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024     2023     2024     2023
                     
    Branded Consumer                
    5.11   $ 144,768   $ 147,394   $ 532,161   $ 533,089
    BOA     48,141     42,435     190,811     155,825
    Lugano     149,685     104,750     470,666     308,321
    PrimaLoft     12,708     9,434     74,226     67,053
    The Honey Pot (1)     28,697     24,905     115,260     107,311
    Velocity Outdoor     19,008     45,842     96,427     172,190
    Total Branded Consumer   $ 403,007   $ 374,760   $ 1,479,551   $ 1,343,789
                     
    Industrial                
    Altor Solutions     81,322     56,417     239,068     238,030
    Arnold Magnetics     41,292     44,632     171,837     166,679
    Sterno     94,634     94,011     318,448     323,830
    Total Industrial   $ 217,248   $ 195,060   $ 729,353   $ 728,539
                     
    Total Subsidiary Net Sales   $ 620,255   $ 569,820   $ 2,208,904   $ 2,072,328
                             
    (1 )   Net sales for The Honey Pot are pro forma as if we had acquired this business on January 1, 2023.
         


    Compass Diversified Holdings

    Condensed Consolidated Cash Flows

        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024       2023       2024       2023  
                     
    Net cash provided by (used in) operating activities   $ 9,974     $ 21,128     $ (67,636 )   $ 78,080  
    Net cash provided by (used in) investing activities     (70,199 )     466,213       (422,450 )     570,503  
    Net cash provided by (used in) financing activities     49,732       (102,236 )     100,614       (260,163 )
    Foreign currency impact on cash     (1,727 )     636       (1,278 )     786  
    Net increase (decrease) in cash and cash equivalents     (12,220 )     385,741       (390,750 )     389,206  
    Cash and cash equivalents – beginning of the period(1)     71,947       64,736       450,477       61,271  
    Cash and cash equivalents – end of the period   $ 59,727     $ 450,477     $ 59,727     $ 450,477  
                                     
    (1 )   Includes cash from discontinued operations of $3.8 million at January 1, 2024 and $8.5 million at January 1, 2023.
         
    Compass Diversified Holding
    Selected Financial Data – Cash Flows
                     
        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024       2023       2024       2023  
                     
    Changes in operating assets and liabilities   $         (37,286 )   $         (24,390 )   $         (292,884 )   $         (160,281 )
    Purchases of property and equipment   $         (22,858 )   $         (17,239 )   $         (56,701 )   $         (55,016 )
    Distributions paid – common shares   $         (18,913 )   $         (17,955 )   $         (75,490 )   $         (71,967 )
    Distributions paid – preferred shares   $         (6,967 )   $         (6,045 )   $         (25,458 )   $         (24,181 )

    The MIL Network

  • MIL-OSI: Chris Kendall Appointed to Range Resources Board of Directors

    Source: GlobeNewswire (MIL-OSI)

    FORT WORTH, Texas, Feb. 27, 2025 (GLOBE NEWSWIRE) — RANGE RESOURCES CORPORATION (NYSE: RRC) today announced the appointment of Christian S. (Chris) Kendall to its Board of Directors. Mr. Kendall’s appointment is effective February 27 and he will serve on Range’s Governance and Nominating and ESG and Safety Committees.

    Mr. Kendall has more than 30 years of experience in the oil and gas industry, most recently as director, President, and Chief Executive Officer of Denbury Inc. prior to its acquisition by Exxon Mobil Corporation in November 2023.

    Range Chairman, Greg Maxwell, stated, “Chris brings a wealth of technical expertise and a proven record of success as an executive in the energy sector. We are confident Chris’s extensive background in the industry will benefit the Company as we continue strategically developing our extensive Marcellus Shale position and translating that into shareholder value.”

    Prior to joining Denbury, Mr. Kendall was with Noble Energy, serving as the Senior Vice President, Global Operations Services. During his 14-year tenure at Noble Energy, Mr. Kendall held several international and domestic leadership roles. Mr. Kendall began his energy career at Mobil Corporation in 1989.

    Mr. Kendall earned Bachelor of Science in Engineering, Civil Specialty from the Colorado School of Mines and graduated from Harvard Business School’s Advanced Management Program. 

    Mr. Kendall currently serves as a director of NOV Inc. and California Resources Corporation, including its subsidiary, Carbon TerraVault.

    RANGE RESOURCES CORPORATION (NYSE: RRC) is a leading U.S. independent natural gas and NGL producer with operations focused in the Appalachian Basin. The Company is headquartered in Fort Worth, Texas. More information about Range can be found at www.rangeresources.com.

    Range Investor Contact:
    Laith Sando, SVP – Corporate Strategy & Investor Relations
    817-869-4267
    lsando@rangeresources.com

    Range Media Contact:
    Mark Windle, Director of Corporate Communications
    724-873-3223
    mwindle@rangeresources.com

    The MIL Network

  • MIL-OSI: Ponce Bank Re-Designs its Westchester Avenue Bank Branch in the Bronx

    Source: GlobeNewswire (MIL-OSI)

    BRONX, N.Y., Feb. 27, 2025 (GLOBE NEWSWIRE) — Local dignitaries, Ponce Bank officers and administrators, and members of the public will celebrate Ponce Bank’s transformed branch experience at the Grand Re-Opening, set for 12:30 pm, Thursday, February 27, 2025 at Ponce’s Bank Branch, 2244 Westchester Avenue in the Bronx.

    “We incorporated what we’ve learned to be essential in providing service to our customers as well as to our communities. Integrating new technologies and modern design elements yields a branch that is attractive, welcoming, and replete with service options,” says Steve Hamilton, SVP – Designer-in-Residence, who led the project.

    “This branch anchors the new Westchester Banking Development District (BDD) proving daily how critical Community Banks like Ponce are to the neighbors they serve.” explains Carlos P. Naudon, President and Chief Executive Officer of Ponce Bank and Ponce Financial Group, Inc. “This branch re-design is the culmination of decisive internal planning and reflection, as well as concerted outreach to the community at large. The result is nothing short of exemplary, and we are proud to showcase the results of our efforts.” 

    The transformation relaunches a process begun in 2019, and interrupted by the Covid Pandemic, aimed at reinforcing the role of each banking branch as a ‘community hub’ that attracts new depositors and business customers, but anchors Ponce Bank branches as community-centric destinations. The revitalization efforts include Open Tellers that invite a more consultative experience, managers located at a central hub of the branch, private space for sensitive conversations, and meeting spaces as well as open areas with teleconferencing and AV equipment to encourage community-wide gatherings. 

    Steven A. Tsavaris, Chairman of the Board and Executive Chairman of Ponce Bank, notes “We’ve devoted a considerable amount of time, effort and energy to this re-design effort. It’s not simply a new design, but a fresh perspective in the way we interact with our customers and members of the community at large. We feel the success of this endeavor will augur well for our future and we continue to upgrade our branch offices to provide a better experience for customers and feel more open to the overall community. We’re very excited about this effort and look forward to welcoming visitors and friends.” 

    “We are happy to see our investment helping Ponce’s Westchester Avenue Branch reach even more members of the community,” New York State Comptroller Thomas P. DiNapoli said. “Supporting community banking is critically important in creating more access to capital and supporting personal wealth and home ownership. We thank Ponce Bank for their partnership.”

    “Our banks play a crucial role in the economic success of our borough and the well-being of our residents. They are not just places to manage finances—they serve as community hubs, where relationships are built, resources are shared, and local businesses can thrive. I am proud to see institutions like Ponce Bank embody this vision, transforming their branches into vibrant, community-centric destinations that attract new customers and strengthen the ties between the financial sector and the neighborhoods they serve. I want to thank Ponce Bank for being a true partner and good neighbor, especially as they continue to support our borough through their resilience and commitment to helping local residents and businesses grow.” Bronx Borough President Vanessa L. Gibson

    New York State Superintendent of Financial Services Adrienne A. Harris said, “Since joining DFS, my mission has been to ensure that all New Yorkers have access to fair and affordable banking services. The BDD program is an essential tool for DFS to work with banks to enhance the customer experience in the communities they serve.

    “Ponce Bank has been a trusted institution in our neighborhoods, making sure working families and small businesses have access to the financial services they need. This redesigned Westchester Avenue branch is a reflection of their commitment to keeping banking local and rooted in the Bronx. As our communities continue to grow and evolve, it’s great to see institutions like Ponce Bank investing in the people and neighborhoods they serve. I look forward to celebrating this milestone and the opportunities it will bring for Bronxites.” Senator Nathalia Fernandez

    “I am honored to rejoin Ponce Bank on this special occasion for our local depositors in the Southeast Bronx”, said Assembly Member Karines Reyes, R.N., Chair of the NYS Assembly & Senate’s Puerto Rican / Hispanic Task Force. “The reopening and upgrading of Ponce Bank’s Westchester Branch facilities, computer, and customer service systems will help our communities get better access to building wealth and resources. The bank’s leadership, commitment to modernization, and dedication to our community will allow our 21st Century depositors to get 21st Century services, which is a ‘win’ for everyone! I thank Ponce Bank for their hard work on this initiative and look forward to continuing collaboration for the residents of our area.”

    “Ponce Bank has long been a pillar of the Bronx, providing essential financial services and unwavering community support. The newly redesigned Westchester Avenue branch modernizes banking with cutting-edge technology while preserving a welcoming, community-focused approach. Investments like this empower local families and small businesses to thrive, and I congratulate Ponce Bank on this exciting milestone.” New York City Council, Majority Leader Amanda Farías

    “Ponce Bank is an extremely valuable partner and resource for The Bronx, and their reopening of its Westchester Avenue bank branch is a testament to their strong commitment to a borough that has been considered to be a banking desert,” Rob Walsh, President of The Bronx Economic Development Corporation, said. “This will be a tremendous move for the small businesses of The Bronx, as well as the individuals who live and work here in the borough. I look forward to a continued partnership with Ponce Bank.”

     “The Bronx Chamber of Commerce celebrates the grand reopening of Ponce Bank’s Westchester Avenue branch.  Ponce Bank is a true community partner, actively supporting our small businesses, entrepreneurs, and residents. This reimagined branch reflects their commitment to financial empowerment, accessibility, and community building. We look forward to the continued impact of their investment in the Bronx.” Lisa Sorin, President of The Bronx Chamber of Commerce

    “The grand reopening of Ponce Bank’s main branch is an example of this bank’s investment in the community,” Rafael Roger, President of the Business Initiative Corporation of New York, said. “This modernization is Ponce’s investment in the Bronx and the greater New York City Region. The services and capital that Ponce provides creates jobs and housing in our community. Our neighborhoods, small businesses, and non-profits will be the beneficiaries of this facility, and we look forward to our continued partnership with Ponce.”

    “We’re excited to welcome Ponce Bank’s reopening as a Banking Development District in Castle Hill. This new space strengthens access to financial services, empowering local businesses and residents. By fostering economic growth and opportunity, it plays a key role in the continued revitalization of our community.” Sasha Ortiz, Executive Director, Castle Hill BID

    About Ponce Bank … founded in the Bronx in 1960 when most banks fled an area others perceived to be in decline. Our founders saw opportunity in an entrepreneurial community of immigrants and people of color that embodied the diverse cultures that make New York City one of the most innovative and welcoming cities in the world. We focus on supporting small business, providing financial mastery education to our underserved, but highly deserving, communities, and real estate ownership, investment, and development with a particular emphasis on affordable housing. The Bank now has 13 branches and 3 loan production offices throughout the NYC Metro Area, Union City New Jersey and now Coral Gables, Florida and has grown to nearly $3 Billion in assets. Ponce Bank is also now publicly traded (NASDAQ: PDLB). www.poncebank.com

    Media Contact: Fred Yaeger (914) 525-9198

    The MIL Network

  • MIL-OSI: AvePoint Announces Fourth Quarter and Full Year 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    Full year SaaS revenue of $230.7 million, representing 43% year-over-year growth, 44% on a constant currency basis
    Full year Total revenue of $330.5 million, representing 22% year-over-year growth, 22% on a constant currency basis
    Total ARR of $327.0 million, representing 24% year-over-year growth, 25% adjusted for FX

    JERSEY CITY, N.J., Feb. 27, 2025 (GLOBE NEWSWIRE) — AvePoint (NASDAQ: AVPT), the global leader in data security, governance and resilience, today announced financial results for the fourth quarter and full year ended December 31, 2024. 

    “Our fourth quarter was an outstanding close to 2024, and we are pleased with the team’s steady focus and broad-based execution,” said Dr. Tianyi Jiang (TJ), CEO and Co-Founder, AvePoint. “Our results this year – as well as our outlook for 2025 – reflect the growing demand from companies around the world for platform solutions that enable them to prepare, secure and optimize their data for AI, as well as our ongoing improvement in effectively and efficiently delivering on that demand. Today, AvePoint stands at the forefront of addressing the pivotal challenges in data security, governance, and resilience, and we are excited for the many opportunities we see in 2025 and beyond to continue driving shareholder value.”

    Fourth Quarter 2024 Financial Highlights

    • Revenue: Total revenue was $89.2 million, up 20% from the fourth quarter of 2023 and up 20% on a constant currency basis. Within total revenue, SaaS revenue was $64.8 million, up 43% from the fourth quarter of 2023 and up 44% on a constant currency basis.
    • Gross Profit: GAAP gross profit was $67.3 million, compared to $55.0 million for the fourth quarter of 2023. Non-GAAP gross profit was $67.3 million, compared to $56.1 million for the fourth quarter of 2023. Non-GAAP gross margin was 75.5%, compared to 75.2% for the fourth quarter of 2023.
    • Operating Income/(Loss): GAAP operating income was $4.9 million, compared to $0.9 million for the fourth quarter of 2023. Non-GAAP operating income was $14.5 million, compared to $10.3 million for the fourth quarter of 2023.

    Full Year 2024 Financial Highlights

    • Revenue: Total revenue was $330.5 million, up 22% from the full year 2023 and up 22% on a constant currency basis. Within total revenue, SaaS revenue was $230.7 million, up 43% from the full year 2023 and up 44% on a constant currency basis.
    • Gross Profit: GAAP gross profit was $248.0 million, compared to $194.4 million for the full year 2023. Non-GAAP gross profit was $250.2 million, compared to $198.5 million for the full year 2023. Non-GAAP gross margin was 75.7%, compared to 73.0% for the full year 2023.
    • Operating Income/(Loss): GAAP operating income was $7.2 million, compared to a GAAP operating loss of $(15.4) million for the full year 2023. Non-GAAP operating income was $47.6 million, compared to $22.2 million for the full year 2023.
    • Cash and short-term investments: $290.9 million as of December 31, 2024.
    • Cash from operations: For the twelve months ended December 31, 2024, the Company generated $88.9 million of cash from operations, compared to $34.7 million in the prior year period.

    Fourth Quarter 2024 Key Performance Indicators and Recent Business Highlights

    • ARR as of December 31, 2024 was $327.0 million, representing growth of 24% year-over-year. Adjusted for FX, ARR grew 25% year-over-year.
    • Adjusted for FX, dollar-based gross retention rate was 89%, while dollar-based net retention rate was 111%. On an as-reported basis, dollar-based gross retention rate was 88%, while dollar-based net retention rate was 110%.
    • Introduced first-to-market benchmarking capabilities within AvePoint tyGraph for Microsoft 365 Copilot to provide organizations critical insights into their AI adoption and usage patterns.
    • Announced the launch of AvePoint’s AI Lab in Singapore, to advance AI-driven research and innovation that will address global industry challenges and embed AI across the AvePoint Confidence Platform.
    • Named to the inaugural Forbes America’s Best Companies List, which recognizes the top 300 companies in the U.S. across over 60 measures, including financial performance, customer and employee satisfaction, cybersecurity, and more.

    Financial Outlook

    For the first quarter of 2025, the Company expects:

    • Total revenues of $87.8 million to $89.8 million, or year-over-year growth of 18% to 21%. On a constant currency basis, the Company expects revenue growth of 19% to 22%.
    • Non-GAAP operating income of $11.1 million to $12.1 million.

    For the full year 2025, the Company expects:

    • Total ARR of $401.3 million to $407.3 million, or year-over-year growth of 23% to 25%. Adjusted for FX, the Company expects ARR growth of 24% to 26%.
    • Total revenues of $380.0 million to $388.0 million, or year-over-year growth of 15% to 17%. On a constant currency basis, the Company expects revenue growth of 17% to 19%.
    • Non-GAAP operating income of $52.3 million to $55.3 million.

    Quarterly Conference Call

    AvePoint will host a conference call today, February 27, 2025, to review its fourth quarter and full year 2024 financial results and to discuss its financial outlook. The call is scheduled to begin at 4:30pm ET. You may access the call and register with a live operator by dialing 1 (833) 816-1428 for US participants and 1 (412) 317-0520 for outside the US. The passcode for the call is 8306574. Investors can also join by webcast by visiting https://www.avepoint.com/ir/events-and-presentations. The webcast will be available live, and a replay will be available following the completion of the live broadcast for approximately 90 days.

    About AvePoint

    Beyond Secure. AvePoint is the global leader in data security, governance, and resilience, going beyond traditional solutions to ensure a robust data foundation and enable organizations everywhere to collaborate with confidence. Over 25,000 customers worldwide rely on the AvePoint Confidence Platform to prepare, secure, and optimize their critical data across Microsoft, Google, Salesforce, and other collaboration environments. AvePoint’s global channel partner program includes approximately 5,000 managed service providers, value-added resellers, and systems integrators, with our solutions available in more than 100 cloud marketplaces. To learn more, visit www.avepoint.com.

    Non-GAAP Financial Measures and Other Key Metrics

    To supplement AvePoint’s consolidated financial statements presented in accordance with GAAP, the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses (including percentage of revenue figures), non-GAAP operating income and non-GAAP operating margin, and key metrics include annual recurring revenue, dollar-based gross retention rate, and dollar-based net retention rate. The company has included a reconciliation of GAAP to non-GAAP financial measures at the end of this press release. These reconciliations adjust the related GAAP financial measures to exclude stock-based compensation expense and the amortization of acquired intangible assets. The company believes the presentation of its non-GAAP financial measures provides a better representation as to its overall operating performance. The presentation of AvePoint’s non-GAAP financial measures is not meant to be considered in isolation or as a substitute for its financial results prepared in accordance with GAAP, and AvePoint’s non-GAAP measures may be different from non-GAAP measures used by other companies.

    Annual Recurring Revenue. This metric is calculated as the annualized sum of contractually obligated Annual Contract Value (“ACV”) from SaaS, term license and support, and maintenance revenue sources from all active customers at the end of a reporting period. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or replace these items. ARR is not a forecast of future revenue, and the active contracts used in calculating ARR may or may not be extended or renewed by our customers. The company believes this metric further enables measurement of its business performance, is an important metric for financial forecasting and better enables strategic decision making. Because this metric does not have the effect of providing a numerical measure that is different from any comparable GAAP measure, the company does not consider it a non-GAAP measure.

    Dollar-based Gross Retention Rate. This metric is calculated by starting with the ARR from all active customers as of 12 months prior to such period end, or Prior Period ARR. The company then calculates ARR from these same customers as of the current period end, or Current Period ARR. Current Period ARR includes net contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. The company then divides the total Current Period ARR by the total Prior Period ARR to arrive at the dollar-based gross retention rate. The company uses this metric as a measure of its ability to retain existing customers, and believes it is useful to investors for the same reason. Because this metric does not have the effect of providing a numerical measure that is different from any comparable GAAP measure, the company does not consider it a non-GAAP measure.

    Dollar-based Net Retention Rate. This metric is calculated by starting with the ARR from all active customers as of 12 months prior to such period end, or Prior Period ARR. The company then calculates ARR from these same customers as of the current period end, or Current Period ARR. Current Period ARR includes net expansion over the last 12 months but excludes ARR from new customers in the current period. The company then divides the total Current Period ARR by the total Prior Period ARR to arrive at the dollar-based net retention rate. The company uses this metric as a measure of its ability to expand business with existing customers, and believes it is useful to investors for the same reason. Because this metric does not have the effect of providing a numerical measure that is different from any comparable GAAP measure, the company does not consider it a non-GAAP measure.

    Disclosure Information

    AvePoint uses its Investor Relations website (https://avepoint.com/ir) as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

    Forward-Looking Statements

    This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and other federal securities laws including statements regarding the future performance of and market opportunities for AvePoint. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: changes in the competitive and regulated industries in which AvePoint operates, variations in operating performance across competitors, changes in laws and regulations affecting AvePoint’s business and changes in AvePoint’s ability to implement business plans, forecasts, and ability to identify and realize additional opportunities, and the risk of downturns in the market and the technology industry. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of AvePoint’s most recent Annual Report on Form 10-K and its registration statement on Form S-1 and related prospectus and prospectus supplements filed with the SEC. Copies of these and other documents filed by AvePoint from time to time are available on the SEC’s website, www.sec.gov. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and AvePoint does not assume any obligation and does not intend to update or revise these forward-looking statements after the date of this release, whether as a result of new information, future events, or otherwise, except as required by law. AvePoint does not give any assurance that it will achieve its expectations. Unless the context otherwise indicates, references in this press release to the terms “AvePoint”, “the Company”, “we”, “our” and “us” refer to AvePoint, Inc. and its subsidiaries.

    Investor Contact
    AvePoint
    Jamie Arestia
    ir@avepoint.com
    (551) 220-5654

    Media Contact
    AvePoint
    Nicole Caci
    pr@avepoint.com  
    (201) 201-8143

    AvePoint, Inc.
    Condensed Consolidated Statements of Income
    (In thousands, except per share amounts)
    (Unaudited)
     
      Three Months Ended     Year Ended  
      December 31,     December 31,  
      2024     2023     2024     2023  
    Revenue:                              
    SaaS $ 64,847     $ 45,260     $ 230,667     $ 160,961  
    Term license and support   9,432       12,270       44,560       52,744  
    Services   12,228       13,788       44,036       44,795  
    Maintenance   2,676       3,306       11,219       13,325  
    Total revenue   89,183       74,624       330,482       271,825  
    Cost of revenue:                              
    SaaS   11,405       9,338       41,544       35,924  
    Term license and support   382       505       1,584       1,946  
    Services   9,980       9,576       38,757       38,807  
    Maintenance   154       199       641       783  
    Total cost of revenue   21,921       19,618       82,526       77,460  
    Gross profit   67,262       55,006       247,956       194,365  
    Operating expenses:                              
    Sales and marketing   32,410       29,127       122,869       112,105  
    General and administrative   17,127       15,592       69,222       61,271  
    Research and development   12,872       9,409       48,699       36,340  
    Total operating expenses   62,409       54,128       240,790       209,716  
    Income (loss) from operations   4,853       878       7,166       (15,351 )
    Other expense, net   (23,458 )     (1,687 )     (31,565 )     (3,263 )
    Loss before income taxes   (18,605 )     (809 )     (24,399 )     (18,614 )
    Income tax (benefit) expense   (1,427 )     (5,245 )     4,743       2,887  
    Net (loss) income $ (17,178 )   $ 4,436     $ (29,142 )   $ (21,501 )
    Net income (loss) attributable to noncontrolling interest   7       167       (52 )     224  
    Net (loss) income available to common stockholders $ (17,185 )   $ 4,269     $ (29,090 )   $ (21,725 )
    Earnings per share:                              
    Basic $ (0.09 )   $ 0.02     $ (0.16 )   $ (0.12 )
    Diluted $ (0.09 )   $ 0.02     $ (0.16 )   $ (0.12 )
    Weighted average shares outstanding:                              
    Basic   186,605       181,152       183,721       182,257  
    Diluted   186,605       198,570       183,721       182,257  

     

    AvePoint, Inc.
    Condensed Consolidated Balance Sheets
    (In thousands, except par value)
     
      December 31,     December 31,  
      2024     2023  
    Assets              
    Current assets:              
    Cash and cash equivalents $ 290,735     $ 223,162  
    Short-term investments   167       3,721  
    Accounts receivable, net   87,365       85,877  
    Prepaid expenses and other current assets   16,528       12,824  
    Total current assets   394,795       325,584  
    Property and equipment, net   5,289       5,118  
    Goodwill   17,715       19,156  
    Intangible assets, net   8,889       10,546  
    Operating lease right-of-use assets   15,954       13,908  
    Deferred contract costs   59,838       54,675  
    Other assets   16,575       13,595  
    Total assets $ 519,055     $ 442,582  
    Liabilities, mezzanine equity, and stockholders’ equity              
    Current liabilities:              
    Accounts payable $ 2,352     $ 1,384  
    Accrued expenses and other current liabilities   76,135       53,766  
    Current portion of deferred revenue   144,468       121,515  
    Total current liabilities   222,955       176,665  
    Long-term operating lease liabilities   9,909       9,383  
    Long-term portion of deferred revenue   8,840       7,741  
    Earn-out shares liabilities         18,346  
    Other liabilities   6,403       5,603  
    Total liabilities   248,107       217,738  
    Commitments and contingencies              
    Mezzanine equity              
    Redeemable noncontrolling interest         6,038  
    Total mezzanine equity         6,038  
    Stockholders’ equity              
    Common stock, $0.0001 par value; 1,000,000 shares authorized, 194,071 and 184,652 shares issued and outstanding as of December 31, 2024 and 2023, respectively   19       18  
    Additional paid-in capital   779,007       667,881  
    Accumulated other comprehensive income   576       3,196  
    Accumulated deficit   (510,448 )     (460,496 )
    Noncontrolling interest   1,794       8,207  
    Total stockholders’ equity   270,948       218,806  
    Total liabilities, mezzanine equity, and stockholders’ equity $ 519,055     $ 442,582  
    AvePoint, Inc.
    Condensed Consolidated Statements of Cash Flows
    (In thousands)
    (Unaudited)
     
      Year Ended  
      December 31,  
      2024     2023  
    Operating activities              
    Net loss $ (29,142 )   $ (21,501 )
    Adjustments to reconcile net loss to net cash provided by operating activities:              
    Depreciation and amortization   5,382       4,687  
    Operating lease right-of-use assets expense   6,270       6,234  
    Foreign currency remeasurement loss   866        
    Stock-based compensation   39,059       36,048  
    Deferred income taxes   498       (864 )
    Other   (67 )     1,068  
    Change in value of earn-out and warrant liabilities   37,276       11,454  
    Changes in operating assets and liabilities:              
    Accounts receivable   (4,898 )     (19,448 )
    Prepaid expenses and other current assets   (3,350 )     (2,773 )
    Deferred contract costs and other assets   (8,482 )     (7,687 )
    Accounts payable, accrued expenses, operating lease liabilities and other current liabilities   16,046       609  
    Deferred revenue   29,436       26,867  
    Net cash provided by operating activities   88,894       34,694  
    Investing activities              
    Maturities of investments   5,353       2,620  
    Purchases of investments   (1,819 )     (3,497 )
    Capitalization of internal-use software   (1,211 )     (1,434 )
    Purchase of property and equipment   (3,044 )     (2,087 )
    Issuance of notes receivables   (1,750 )     (1,250 )
    Other investing activities   (130 )      
    Net cash used in investing activities   (2,601 )     (5,648 )
    Financing activities              
    Repurchase of common stock   (33,053 )     (39,036 )
    Proceeds from warrant exercises   17,182        
    Proceeds from stock option exercises   11,033       5,569  
    Redemption of redeemable noncontrolling interest   (6,130 )      
    Purchase of public warrants   (3,991 )      
    Company earn-out shares settled in cash   (572 )      
    Repayments of finance leases   (6 )     (64 )
    Payments of debt issuance costs         (136 )
    Net cash used in financing activities   (15,537 )     (33,667 )
    Effect of exchange rates on cash   (3,183 )     595  
    Net decrease in cash and cash equivalents   67,573       (4,026 )
    Cash and cash equivalents at beginning of period   223,162       227,188  
    Cash and cash equivalents at end of period $ 290,735     $ 223,162  
    Supplemental disclosures of cash flow information              
    Income taxes paid $ 6,882     $ 6,112  
    Company earn-out shares issuance $ 53,871     $  
    AvePoint, Inc.
    Non-GAAP Reconciliations
    (In thousands)
    (Unaudited)
     
      Three Months Ended     Year Ended  
      December 31,     December 31,  
      2024     2023     2024     2023  
    Non-GAAP operating income                              
    GAAP operating income (loss) $ 4,853     $ 878     $ 7,166     $ (15,351 )
    Stock-based compensation expense   9,252       9,073       39,059       36,048  
    Amortization of acquired intangible assets   356       350       1,420       1,456  
    Non-GAAP operating income $ 14,461     $ 10,301     $ 47,645     $ 22,153  
    Non-GAAP operating margin   16.2 %     13.8 %     14.4 %     8.1 %
                                   
                                   
                                   
    Non-GAAP gross profit                              
    GAAP gross profit $ 67,262     $ 55,006     $ 247,956     $ 194,365  
    Stock-based compensation expense   (201 )     869       1,315       3,161  
    Amortization of acquired intangible assets   239       239       961       964  
    Non-GAAP gross profit $ 67,300     $ 56,114     $ 250,232     $ 198,490  
    Non-GAAP gross margin   75.5 %     75.2 %     75.7 %     73.0 %
                                   
    Non-GAAP sales and marketing                              
    GAAP sales and marketing $ 32,410     $ 29,127     $ 122,869     $ 112,105  
    Stock-based compensation expense   (2,281 )     (2,251 )     (8,965 )     (9,518 )
    Amortization of acquired intangible assets   (117 )     (111 )     (459 )     (492 )
    Non-GAAP sales and marketing $ 30,012     $ 26,765     $ 113,445     $ 102,095  
    Non-GAAP sales and marketing as a % of revenue   33.7 %     35.9 %     34.3 %     37.6 %
                                   
    Non-GAAP general and administrative                              
    GAAP general and administrative $ 17,127     $ 15,592     $ 69,222     $ 61,271  
    Stock-based compensation expense   (5,032 )     (4,787 )     (20,483 )     (19,338 )
    Non-GAAP general and administrative $ 12,095     $ 10,805     $ 48,739     $ 41,933  
    Non-GAAP general and administrative as a % of revenue   13.6 %     14.5 %     14.7 %     15.4 %
                                   
    Non-GAAP research and development                              
    GAAP research and development $ 12,872     $ 9,409     $ 48,699     $ 36,340  
    Stock-based compensation expense   (2,140 )     (1,166 )     (8,296 )     (4,031 )
    Non-GAAP research and development $ 10,732     $ 8,243     $ 40,403     $ 32,309  
    Non-GAAP research and development as a % of revenue   12.0 %     11.0 %     12.2 %     11.9 %

    The MIL Network

  • MIL-OSI: red violet Announces Fourth Quarter and Full Year 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    Fourth Quarter Revenue Increased 30% to a Record $19.6 Million, Producing $6.7 Million of Cash Flow from Operations

    Full Year 2024 Revenue Increased 25% to $75.2 Million, Generating GAAP EPS of $0.50

    BOCA RATON, Fla., Feb. 27, 2025 (GLOBE NEWSWIRE) — Red Violet, Inc. (NASDAQ: RDVT), a leading analytics and information solutions provider, today announced financial results for the fourth quarter and full year ended December 31, 2024.

    “We are proud to announce record-breaking financial results for 2024, including record revenue in the fourth quarter, which marks a significant achievement as we defied the historic seasonality we typically experience during that quarter,” stated Derek Dubner, red violet’s CEO. “The market is recognizing what we have known all along—we have built the leading technology platform with superior solutions and unique capabilities that outperform even our larger competitors. Our ability to consistently deliver value to our customers fuels our exceptional growth and profitability, and we remain committed to pushing the boundaries of innovation and penetrating our markets to further expand our leadership. With strong momentum, we are well-positioned for 2025 and beyond.”

    Fourth Quarter Financial Results

    For the three months ended December 31, 2024 as compared to the three months ended December 31, 2023:

    • Total revenue increased 30% to $19.6 million.
    • Gross profit increased 43% to $13.7 million. Gross margin increased to 70% from 64%.
    • Adjusted gross profit increased 37% to $16.1 million. Adjusted gross margin increased to 82% from 78%.
    • Net income was $0.9 million compared to a net loss of $1.1 million, which resulted in earnings of $0.06 per basic and diluted share. Net income margin was 4% compared to a net loss margin of 7%.
    • Adjusted EBITDA increased 68% to $4.5 million. Adjusted EBITDA margin increased to 23% from 18%.
    • Adjusted net income increased 390% to $1.3 million, which resulted in adjusted earnings of $0.10 and $0.09 per basic and diluted share, respectively.
    • Cash from operating activities increased 59% to $6.7 million.
    • Cash and cash equivalents were $36.5 million as of December 31, 2024.

    Full Year Financial Results

    For the year ended December 31, 2024 as compared to the year ended December 31, 2023:

    • Total revenue increased 25% to $75.2 million.
    • Gross profit increased 33% to $51.8 million. Gross margin increased to 69% from 65%.
    • Adjusted gross profit increased 30% to $61.2 million. Adjusted gross margin increased to 81% from 78%.
    • Net income was $7.0 million compared to $13.5 million (inclusive of a one-time deferred income tax benefit of $10.3 million in 2023), which resulted in earnings of $0.51 and $0.50 per basic and diluted share, respectively. Net income margin decreased to 9% from 22%.
    • Adjusted EBITDA increased 44% to $23.6 million. Adjusted EBITDA margin increased to 31% from 27%.
    • Adjusted net income increased 42% to $11.5 million, which resulted in adjusted earnings of $0.83 and $0.82 per basic and diluted share, respectively.
    • Cash from operating activities increased 59% to $24.0 million.

    Fourth Quarter and Recent Business Highlights

    • Added 183 customers to IDI™ during the fourth quarter, ending the year with 8,926 customers.
    • Added 18,451 users to FOREWARN® during the fourth quarter, ending the year with 303,418 users. Over 525 REALTOR® Associations are now contracted to use FOREWARN.
    • Continued growth in the onboarding of higher-tier customers, with 96 customers contributing over $100,000 of revenue in 2024 compared to 72 customers in 2023.
    • Demonstrating strong operational performance, financial resilience, and a disciplined approach to capital allocation focused on shareholder value, we repurchased 292,744 shares of common stock in 2024 at an average price of $19.81 per share. Additionally, in the fourth quarter, we announced a special cash dividend of $0.30 per share payable February 14, 2025, all while continuing ongoing investments in innovation, infrastructure, and market expansion.      

    Conference Call

    In conjunction with this release, red violet will host a conference call and webcast today at 4:30pm ET to discuss its quarterly and full year results and provide a business update. Please click here to pre-register for the conference call and obtain your dial in number and passcode. To access the live audio webcast, visit the Investors section of the red violet website at www.redviolet.com. Please login at least 15 minutes prior to the start of the call to ensure adequate time for any downloads that may be required. Following the completion of the conference call, an archived webcast of the conference call will be available on the Investors section of the red violet website at www.redviolet.com.

    About red violet®

    At red violet, we build proprietary technologies and apply analytical capabilities to deliver identity intelligence. Our technology powers critical solutions, which empower organizations to operate with confidence. Our solutions enable the real-time identification and location of people, businesses, assets and their interrelationships. These solutions are used for purposes including identity verification, risk mitigation, due diligence, fraud detection and prevention, regulatory compliance, and customer acquisition. Our intelligent platform, CORE™, is purpose-built for the enterprise, yet flexible enough for organizations of all sizes, bringing clarity to massive datasets by transforming data into intelligence. Our solutions are used today to enable frictionless commerce, to ensure safety, and to reduce fraud and the concomitant expense borne by society. For more information, please visit www.redviolet.com.

    Company Contact:
    Camilo Ramirez
    Red Violet, Inc.
    561-757-4500
    ir@redviolet.com

    Investor Relations Contact:
    Steven Hooser
    Three Part Advisors
    214-872-2710
    ir@redviolet.com

    Use of Non-GAAP Financial Measures

    Management evaluates the financial performance of our business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and free cash flow (“FCF”). Adjusted EBITDA is a non-GAAP financial measure equal to net income (loss), the most directly comparable financial measure based on US GAAP, excluding interest income, income tax (benefit) expense, depreciation and amortization, share-based compensation expense, litigation costs, and write-off of long-lived assets and others. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. Adjusted net income is a non-GAAP financial measure equal to net income (loss), the most directly comparable financial measure based on US GAAP, excluding share-based compensation expense, amortization of share-based compensation capitalized in intangible assets, and discrete tax items, and including the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. We define adjusted gross profit as revenue less cost of revenue (exclusive of depreciation and amortization), and adjusted gross margin as adjusted gross profit as a percentage of revenue. We define FCF as net cash provided by operating activities reduced by purchase of property and equipment and capitalized costs included in intangible assets.

    FORWARD-LOOKING STATEMENTS

    This press release contains “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as “expects,” “plans,” “projects,” “will,” “may,” “anticipate,” “believes,” “should,” “intends,” “estimates,” and other words of similar meaning. Such forward looking statements are subject to risks and uncertainties that are often difficult to predict, are beyond our control and which may cause results to differ materially from expectations, including whether we will continue pushing the boundaries of innovation and penetrating our markets to further expand our leadership and whether we are well-positioned for 2025 and beyond. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed above together with the additional factors under the heading “Forward-Looking Statements” and “Risk Factors” in red violet’s Form 10-K for the year ended December 31, 2023 filed on March 7, 2024, as may be supplemented or amended by the Company’s other SEC filings, including the Form 10-K for year ended December 31, 2024 expected to be filed today. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

               
    RED VIOLET, INC.
    CONSOLIDATED BALANCE SHEETS
    (Amounts in thousands, except share data)
               
      December 31, 2024     December 31, 2023  
    ASSETS:              
    Current assets:              
    Cash and cash equivalents $ 36,504     $ 32,032  
    Accounts receivable, net of allowance for doubtful accounts of $188 and $159 as of
    December 31, 2024 and 2023, respectively
      8,061       7,135  
    Prepaid expenses and other current assets   1,627       1,113  
    Total current assets   46,192       40,280  
    Property and equipment, net   545       592  
    Intangible assets, net   35,997       34,403  
    Goodwill   5,227       5,227  
    Right-of-use assets   1,901       2,457  
    Deferred tax assets   7,496       9,514  
    Other noncurrent assets   1,173       517  
    Total assets $ 98,531     $ 92,990  
    LIABILITIES AND SHAREHOLDERS’ EQUITY:              
    Current liabilities:              
    Accounts payable $ 2,127     $ 1,631  
    Accrued expenses and other current liabilities   2,881       1,989  
    Current portion of operating lease liabilities   406       569  
    Deferred revenue   712       690  
    Dividend payable   4,181        
    Total current liabilities   10,307       4,879  
    Noncurrent operating lease liabilities   1,592       1,999  
    Total liabilities   11,899       6,878  
    Shareholders’ equity:              
    Preferred stock—$0.001 par value, 10,000,000 shares authorized, and 0 shares
    issued and outstanding, as of December 31, 2024 and 2023
             
    Common stock—$0.001 par value, 200,000,000 shares authorized, 13,936,329 and
    13,980,274 shares issued, and 13,936,329 and 13,970,846 shares outstanding, as of
    December 31, 2024 and 2023
      14       14  
    Treasury stock, at cost, 0 and 9,428 shares as of December 31, 2024 and 2023         (188 )
    Additional paid-in capital   87,488       94,159  
    Accumulated deficit   (870 )     (7,873 )
    Total shareholders’ equity   86,632       86,112  
    Total liabilities and shareholders’ equity $ 98,531     $ 92,990  
                   
    RED VIOLET, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (Amounts in thousands, except share data)
           
        Year Ended December 31,  
        2024     2023  
    Revenue   $ 75,189     $ 60,204  
    Costs and expenses(1):                
    Cost of revenue (exclusive of depreciation and amortization)     13,997       13,069  
    Sales and marketing expenses     17,835       13,833  
    General and administrative expenses     25,875       22,446  
    Depreciation and amortization     9,562       8,352  
    Total costs and expenses     67,269       57,700  
    Income from operations     7,920       2,504  
    Interest income     1,400       1,334  
    Income before income taxes     9,320       3,838  
    Income tax expense (benefit)     2,317       (9,691 )
    Net income   $ 7,003     $ 13,529  
    Earnings per share:                
    Basic   $ 0.51     $ 0.97  
    Diluted   $ 0.50     $ 0.96  
    Weighted average shares outstanding:                
    Basic     13,864,797       13,974,125  
    Diluted     14,125,825       14,134,021  
                     
                     
    (1) Share-based compensation expense in each category:                
    Sales and marketing expenses   $ 606     $ 462  
    General and administrative expenses     5,342       4,924  
    Total   $ 5,948     $ 5,386  
                     
    RED VIOLET, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (Amounts in thousands)
         
      Year Ended December 31,  
      2024     2023  
    CASH FLOWS FROM OPERATING ACTIVITIES:              
    Net income $ 7,003     $ 13,529  
    Adjustments to reconcile net income to net cash provided by operating activities:              
    Depreciation and amortization   9,562       8,352  
    Share-based compensation expense   5,948       5,386  
    Write-off of long-lived assets   85       6  
    Provision for bad debts   342       1,088  
    Noncash lease expenses   556       576  
    Deferred income tax expense (benefit)   2,018       (9,801 )
    Changes in assets and liabilities:              
    Accounts receivable   (1,268 )     (2,688 )
    Prepaid expenses and other current assets   (514 )     (342 )
    Other noncurrent assets   (656 )     84  
    Accounts payable   496       (598 )
    Accrued expenses and other current liabilities   936       100  
    Deferred revenue   22       20  
    Operating lease liabilities   (570 )     (641 )
    Net cash provided by operating activities   23,960       15,071  
    CASH FLOWS FROM INVESTING ACTIVITIES:              
    Purchase of property and equipment   (169 )     (122 )
    Capitalized costs included in intangible assets   (9,398 )     (9,024 )
    Net cash used in investing activities   (9,567 )     (9,146 )
    CASH FLOWS FROM FINANCING ACTIVITIES:              
    Taxes paid related to net share settlement of vesting of restricted stock units   (4,068 )     (1,992 )
    Repurchases of common stock   (5,853 )     (3,711 )
    Net cash used in financing activities   (9,921 )     (5,703 )
    Net increase in cash and cash equivalents $ 4,472     $ 222  
    Cash and cash equivalents at beginning of period   32,032       31,810  
    Cash and cash equivalents at end of period $ 36,504     $ 32,032  
    SUPPLEMENTAL DISCLOSURE INFORMATION:              
    Cash paid for interest $     $  
    Cash paid for income taxes $ 607     $ 82  
    Share-based compensation capitalized in intangible assets $ 1,627     $ 1,851  
    Retirement of treasury stock $ 10,065     $ 5,559  
    Right-of -use assets obtained in exchange of operating lease liabilities $     $ 1,919  
    Operating lease liabilities arising from obtaining right-of-use assets $     $ 1,919  
    Dividend declared not yet paid $ 4,181     $  
                   

    Use and Reconciliation of Non-GAAP Financial Measures

    Management evaluates the financial performance of our business on a variety of key indicators, including non-GAAP metrics of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF. Adjusted EBITDA is a non-GAAP financial measure equal to net income (loss), the most directly comparable financial measure based on US GAAP, excluding interest income, income tax (benefit) expense, depreciation and amortization, share-based compensation expense, litigation costs, and write-off of long-lived assets and others. We define adjusted EBITDA margin as adjusted EBITDA as a percentage of revenue. Adjusted net income is a non-GAAP financial measure equal to net income (loss), the most directly comparable financial measure based on US GAAP, excluding share-based compensation expense, amortization of share-based compensation capitalized in intangible assets, and discrete tax items, and including the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. We define adjusted gross profit as revenue less cost of revenue (exclusive of depreciation and amortization), and adjusted gross margin as adjusted gross profit as a percentage of revenue. We define FCF as net cash provided by operating activities reduced by purchase of property and equipment and capitalized costs included in intangible assets.

    The following is a reconciliation of net income (loss), the most directly comparable US GAAP financial measure, to adjusted EBITDA:

      Three Months Ended December 31,     Year Ended December 31,  
    (Dollars in thousands) 2024     2023     2024     2023  
    Net income (loss) $ 863     $ (1,070 )   $ 7,003     $ 13,529  
    Interest income   (368 )     (387 )     (1,400 )     (1,334 )
    Income tax (benefit) expense   (124 )     562       2,317       (9,691 )
    Depreciation and amortization   2,481       2,211       9,562       8,352  
    Share-based compensation expense   1,496       1,328       5,948       5,386  
    Litigation costs   117             124       49  
    Write-off of long-lived assets and others   3       19       92       77  
    Adjusted EBITDA $ 4,468     $ 2,663     $ 23,646     $ 16,368  
    Revenue $ 19,565     $ 15,061     $ 75,189     $ 60,204  
                                   
    Net income (loss) margin   4 %     (7 %)     9 %     22 %
    Adjusted EBITDA margin   23 %     18 %     31 %     27 %
                                   

    The following is a reconciliation of net income (loss), the most directly comparable US GAAP financial measure, to adjusted net income:

      Three Months Ended December 31,     Year Ended December 31,  
    (Dollars in thousands, except share data) 2024     2023     2024     2023  
    Net income (loss) $ 863     $ (1,070 )   $ 7,003     $ 13,529  
    Share-based compensation expense   1,496       1,328       5,948       5,386  
    Amortization of share-based compensation
    capitalized in intangible assets
      299       263       1,152       969  
    Discrete tax items(1)                     (10,272 )
    Tax effect of adjustments(2)   (1,336 )     (251 )     (2,587 )     (1,526 )
    Adjusted net income $ 1,322     $ 270     $ 11,516     $ 8,086  
    Earnings per share:                              
    Basic $ 0.06     $ (0.08 )   $ 0.51     $ 0.97  
    Diluted $ 0.06     $ (0.08 )   $ 0.50     $ 0.96  
    Adjusted earnings per share:                              
    Basic $ 0.10     $ 0.02     $ 0.83     $ 0.58  
    Diluted $ 0.09     $ 0.02     $ 0.82     $ 0.57  
    Weighted average shares outstanding:                              
    Basic   13,900,091       13,985,426       13,864,797       13,974,125  
    Diluted(3)   14,366,545       14,307,797       14,125,825       14,134,021  
    (1) During the three months ended September 30, 2023, a one-time income tax benefit of $10.3 million was recognized as a result of the release of the valuation allowance previously recorded on our deferred tax asset and cumulative research and development tax credit, which were excluded to calculate the adjusted net income.
       
    (2) The tax effect of adjustments is calculated using the expected federal and state statutory tax rate. The expected federal and state income tax rate was approximately 26.00% for the three and twelve months ended December 31, 2024, and 25.75% for the three and twelve months ended December 31, 2023.
       
    (3) For the three months ended December 31, 2023, diluted weighted average shares outstanding for adjusted diluted earnings per share are calculated by the inclusion of unvested RSUs, which were not included in US GAAP diluted weighted average shares outstanding due to the Company’s net loss position for such period.
       

    The following is a reconciliation of gross profit, the most directly comparable US GAAP financial measure, to adjusted gross profit:

      Three Months Ended December 31,     Year Ended December 31,  
    (Dollars in thousands) 2024     2023     2024     2023  
    Revenue $ 19,565     $ 15,061     $ 75,189     $ 60,204  
    Cost of revenue (exclusive of depreciation and amortization)   (3,472 )     (3,337 )     (13,997 )     (13,069 )
    Depreciation and amortization of intangible assets   (2,431 )     (2,154 )     (9,349 )     (8,119 )
    Gross profit   13,662       9,570       51,843       39,016  
    Depreciation and amortization of intangible assets   2,431       2,154       9,349       8,119  
    Adjusted gross profit $ 16,093     $ 11,724     $ 61,192     $ 47,135  
                                   
    Gross margin   70 %     64 %     69 %     65 %
    Adjusted gross margin   82 %     78 %     81 %     78 %
                                   

    The following is a reconciliation of net cash provided by operating activities, the most directly comparable US GAAP measure, to FCF:

      Three Months Ended December 31,     Year Ended December 31,  
    (Dollars in thousands) 2024     2023     2024     2023  
    Net cash provided by operating activities $ 6,691     $ 4,204     $ 23,960     $ 15,071  
    Less:                              
    Purchase of property and equipment   (17 )     (24 )     (169 )     (122 )
    Capitalized costs included in intangible assets   (2,280 )     (2,103 )     (9,398 )     (9,024 )
    Free cash flow $ 4,394     $ 2,077     $ 14,393     $ 5,925  
                                   

    In order to assist readers of our consolidated financial statements in understanding the operating results that management uses to evaluate the business and for financial planning purposes, we present non-GAAP measures of adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF as supplemental measures of our operating performance. We believe they provide useful information to our investors as they eliminate the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance. In addition, we use them as an integral part of our internal reporting to measure the performance and operating strength of our business.

    We believe adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF are relevant and provide useful information frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours and are indicators of the operational strength of our business. We believe adjusted EBITDA eliminates the uneven effect of considerable amounts of non-cash depreciation and amortization, share-based compensation expense and the impact of other non-recurring items, providing useful comparisons versus prior periods or forecasts. Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of revenue. We believe adjusted net income provides additional means of evaluating period-over-period operating performance by eliminating certain non-cash expenses and other items that might otherwise make comparisons of our ongoing business with prior periods more difficult and obscure trends in ongoing operations. Adjusted net income is a non-GAAP financial measure equal to net income (loss), excluding share-based compensation expense, amortization of share-based compensation capitalized in intangible assets, and discrete tax items, and including the tax effect of adjustments. We define adjusted earnings per share as adjusted net income divided by the weighted average shares outstanding. Our adjusted gross profit is a measure used by management in evaluating the business’s current operating performance by excluding the impact of prior historical costs of assets that are expensed systematically and allocated over the estimated useful lives of the assets, which may not be indicative of the current operating activity. Our adjusted gross profit is calculated by using revenue, less cost of revenue (exclusive of depreciation and amortization). We believe adjusted gross profit provides useful information to our investors by eliminating the impact of non-cash depreciation and amortization, and specifically the amortization of software developed for internal use, providing a baseline of our core operating results that allow for analyzing trends in our underlying business consistently over multiple periods. Adjusted gross margin is calculated as adjusted gross profit as a percentage of revenue. We believe FCF is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business. FCF is a measure used by management to understand and evaluate the business’s operating performance and trends over time. FCF is calculated by using net cash provided by operating activities, less purchase of property and equipment and capitalized costs included in intangible assets.

    Adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF are not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, financial measures presented in accordance with US GAAP. In addition, FCF is not intended to represent our residual cash flow available for discretionary expenses and is not necessarily a measure of our ability to fund our cash needs. The way we measure adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, adjusted gross profit, adjusted gross margin, and FCF may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various agreements.

    SUPPLEMENTAL METRICS

    The following metrics are intended as a supplement to the financial statements found in this release and other information furnished or filed with the SEC. These supplemental metrics are not necessarily derived from any underlying financial statement amounts. We believe these supplemental metrics help investors understand trends within our business and evaluate the performance of such trends quickly and effectively. In the event of discrepancies between amounts in these tables and the Company’s historical disclosures or financial statements, readers should rely on the Company’s filings with the SEC and financial statements in the Company’s most recent earnings release.

    We intend to periodically review and refine the definition, methodology and appropriateness of each of these supplemental metrics. As a result, metrics are subject to removal and/or changes, and such changes could be material.

         
      (Unaudited)  
    (Dollars in thousands) Q1’23     Q2’23     Q3’23     Q4’23     Q1’24     Q2’24     Q3’24     Q4’24  
    Customer metrics                                                              
    IDI – billable customers(1)   7,256       7,497       7,769       7,875       8,241       8,477       8,743       8,926  
    FOREWARN – users(2)   131,348       146,537       168,356       185,380       236,639       263,876       284,967       303,418  
    Revenue metrics                                                              
    Contractual revenue %(3)   75 %     79 %     79 %     82 %     78 %     74 %     77 %     77 %
    Gross revenue retention %(4)   94 %     94 %     94 %     92 %     93 %     94 %     94 %     96 %
    Other metrics                                                              
    Employees – sales and marketing 61     63     65     71     76     86     93     95  
    Employees – support 10     9     9     9     10     10     11     11  
    Employees – infrastructure 27     26     27     27     29     27     29     28  
    Employees – engineering 47     47     47     51     51     56     58     57  
    Employees – administration 25     25     25     25     25     25     26     25  
    (1) We define a billable customer of IDI as a single entity that generated revenue in the last three months of the period. Billable customers are typically corporate organizations. In most cases, corporate organizations will have multiple users and/or departments purchasing our solutions, however, we count the entire organization as a discrete customer.
       
    (2) We define a user of FOREWARN as a unique person that has a subscription to use the FOREWARN service as of the last day of the period. A unique person can only have one user account.
       
    (3) Contractual revenue % represents revenue generated from customers pursuant to pricing contracts containing a monthly fee and any additional overage divided by total revenue. Pricing contracts are generally annual contracts or longer, with auto renewal.
       
    (4) Gross revenue retention is defined as the revenue retained from existing customers, net of reinstated revenue, and excluding expansion revenue. Revenue is measured once a customer has generated revenue for six consecutive months. Revenue is considered lost when all revenue from a customer ceases for three consecutive months; revenue generated by a customer after the three-month loss period is defined as reinstated revenue. Gross revenue retention percentage is calculated on a trailing twelve-month basis. The numerator of which is revenue lost during the period due to attrition, net of reinstated revenue, and the denominator of which is total revenue based on an average of total revenue at the beginning of each month during the period, with the quotient subtracted from one. Our gross revenue retention calculation excludes revenue from idiVERIFIED, which is purely transactional and currently represents less than 3% of total revenue.
       

    The MIL Network

  • MIL-OSI: PubMatic Announces Fourth Quarter and Fiscal Year Ended 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    FY Revenue of $291.3 million, up 9% over 2023;

    Delivered FY 2024 net income of $12.5 million or 4% margin;

    FY adjusted EBITDA increased 23% over 2023 and was $92.3 million or 32% margin;

    Revenue in Q4 from CTV more than doubled year over year and represented 20% of total revenue;

    Supply Path Optimization represented 53% of total activity in 2024;

    Repurchased 4.3 million shares in 2024, representing 7.9% of fully diluted shares as of December 31, 2024

    NO-HEADQUARTERS/REDWOOD CITY, Calif., Feb. 27, 2025 (GLOBE NEWSWIRE) — PubMatic, Inc. (Nasdaq: PUBM), an independent technology company delivering digital advertising’s supply chain of the future, today reported financial results for the fourth quarter and fiscal year ended December 31, 2024.

    “Revenue growth in the year more than doubled over 2023, driven by strength in CTV, emerging revenue streams, and marquee customers choosing PubMatic to build and scale their ad businesses. Our revenue mix is evolving; in the fourth quarter, CTV more than doubled to 20% of total revenue. These achievements mark an inflection point in our underlying business that highlights critical scale on our platform and a significant shift in ad buying toward channels with the highest consumer engagement such as CTV, mobile app and commerce media,” said Rajeev Goel, co-founder and CEO at PubMatic. “Today, our omnichannel platform serves publishers, media buyers, commerce media networks, and curation/data providers, all of which are turning to sell side technology for critical end-to-end solutions needed to build their ad businesses. As we look to 2025, we expect accelerated growth in our underlying business as ad buyers seek premium, brand safe, curated inventory in the open internet.”

    Fiscal Year 2024 Financial Highlights

    • Revenue for the full year 2024 was $291.3 million, an increase of 9% over $267.0 million in 2023;
    • Gross profit was $190.2 million, or 65% margin, an improvement of 250 basis points over 2023;
    • Revenue from omnichannel video in 2024 grew 37% over the same period last year;
    • Net dollar-based retention1 was 107% for the year ended December 31, 2024;
    • GAAP net income was $12.5 million with a margin of 4%, or $0.23 per diluted share in 2024, an increase over net income2 of $8.9 million with a margin of 3%, or $0.16 per diluted share in 2023;
    • Adjusted EBITDA was $92.3 million, or 32% margin, an increase over adjusted EBITDA of $75.3 million, or 28% margin, in 2023;
    • Non-GAAP net income was $42.5 million, or $0.78 per non-GAAP diluted share in 2024, an increase over non-GAAP net income of $32.0 million, or $0.57 per non-GAAP diluted share in 2023;
    • Net cash provided by operating activities in 2024 was $73.4 million, compared to $81.1 million in the full year 2023;
    • Generated free cash flow of $34.9 million in 2024, down 34% over 2023;
    • Ended 2024 with total cash, cash equivalents, and marketable securities of $140.6 million with no debt, a decrease of 20% over the full year 2023; and
    • Through December 31, 2024, used $134.6 million in cash to repurchase 8.3 million shares of Class A common stock with $40.4 million available from the 2024 repurchase program.

    Fourth Quarter 2024 Financial Highlights

    • Revenue in the fourth quarter of 2024 was $85.5 million, an increase of 1% over $84.6 million in the same period of 2023;
    • GAAP net income was $13.9 million with a margin of 16%, or $0.26 per diluted share in the fourth quarter, compared to GAAP net income of $18.7 million with a margin of 22%, or $0.34 per diluted share in the same period of 2023;
    • Adjusted EBITDA was $37.6 million, or 44% margin, compared to $38.9 million, or 46% margin in the same period of 2023;
    • Non-GAAP net income was $21.4 million, or $0.41 per non-GAAP diluted share in the fourth quarter, compared to non-GAAP net income of $24.4 million, or $0.45 per non-GAAP diluted share in the same period of 2023; and
    • Net cash provided by operating activities was $18.0 million, compared to $28.7 million in the same period of 2023.

    The section titled “Non-GAAP Financial Measures” below describes our usage of non-GAAP financial measures. Reconciliations between historical GAAP and non-GAAP information are contained at the end of this press release following the accompanying financial data.

    “In 2024, we delivered record share of revenue for CTV, mobile app and emerging revenues, and achieved an all-time high of Supply Path Optimization activity. We also significantly expanded our margins, once again, demonstrating the strength of our durable model and our strategic commitment to steward both operational excellence and targeted investments for growth,” said Steve Pantelick, CFO at PubMatic. “In Q4, strong growth in the underlying business helped offset softer spending from the large DSP buyer we previously called out mid year. Going forward, we are taking a conservative approach as it relates to this buyer, and expect total revenues to grow year over year in the second half of the year once we lap this impact at the end of Q2 2025. Our underlying business, which excludes revenue from this DSP and political, is targeted to grow 15%+ and represent over two thirds of total company revenues in 2025.”

    Business Highlights

    Omnichannel platform drives revenue in key secular growth areas

    • Full year revenue from high value formats and channels, mobile and omnichannel video3, grew 17% over 2023.
    • In Q4, revenue from omnichannel video, which includes CTV, grew 37% year-over-year.
    • CTV reached scale, and was 20% of revenue in the fourth quarter, driven by growing inventory supply, SPO relationships, and strength in political advertising.
    • Revenue from mobile app grew 16% over 2023 as we scaled to over 900 mobile app publishers.

    High consumer engagement channels fuel ad demand and sell-side data curation

    • New and expanded partnerships announced in 2024 with premium streaming brands including Roku, Dish Media, Disney+ Hotstar, TCL and Xumo. We now work with 80% of the top 30 streaming publishers.
    • The number of Activate customers grew nearly 6x over 2023.
    • Supply Path Optimization represented 53% of total activity on our platform in 2024, up from 45% in 2023.
    • Connect drives more performant, targeted ad campaigns across the open internet, offering 190 data sets to ad buyers on PubMatic. Connect is a leading platform for data providers and curators to integrate first-party data, package inventory, sell to, and optimize outcomes for ad buyers.

    Focused investments drive long-term growth opportunities

    • More than doubled total addressable market to over $120 billion via products that address four key stakeholders across the digital advertising ecosystem: publishers, media buyers, curators and data providers, and commerce media networks.
    • Contribution from emerging revenue streams, which expand beyond ad monetization services, doubled from 2023.

    Recent product launches

    • Launched CTV Marketplaces, offering ad buyers pre-curated CTV inventory available only on PubMatic, built directly from our sell side technology. CTV Marketplaces allows publishers to unlock more value from their inventory and provides ad buyers off-the-shelf, easy to buy premium content and targeted audiences, including curated live sports inventory.
    • Launched Creative Category Manager, a generative AI solution that scans and classifies each video ad creative on granular criteria. First used to unlock millions of dollars in political ad spend, it drove significant CTV revenue. This gen AI solution will soon expand to other use cases and verticals.
    • Launched PubMatic Assistant, a gen AI powered reporting tool that allows publishers to request any report or data using simple plain language text queries. As a result, publishers can streamline analytics, enhance productivity and unlock new growth opportunities by uncovering insights in big data. This powerful tool removes barriers to adoption and drives increased platform usage.

    2024 operating priorities drove profitable growth

    • Aligned with our growth investments, increased global headcount in 2024 by 11% over 2023, adding new team members across product management, engineering and go-to-market teams to accelerate long-term revenue growth.
    • Infrastructure optimization initiatives and investments drove nearly 263 trillion impressions processed in 2024, an increase of 25% over 2023.
    • Cost of revenue per million impressions processed decreased 18% on a trailing twelve month period, as compared to the prior period.
    • Scaled adoption of generative AI drove increased engineering productivity by 15%+ which led to faster software development, testing and release processes.

    Financial Outlook

    Q1 outlook includes the continued headwind from one of our top DSP buyers that revised its auction approach in late May 2024. Adjusted EBITDA expectation assumes a negative FX impact predominately from Euro and Pound Sterling expenses. It also assumes that general market conditions do not significantly deteriorate as it relates to current macroeconomic and geopolitical conditions.

    Accordingly, we estimate the following:

    For the first quarter of 2025, we expect the following:

    • Revenue to be in the range of $61 million to $63 million.
    • Adjusted EBITDA to be in the range of $5 million to $7 million.

    Although we provide guidance for adjusted EBITDA and free cash flow, we are not able to provide guidance for net income, the most directly comparable GAAP measure. Certain elements of the composition of GAAP net income, including stock-based compensation expenses, are not predictable, making it impractical for us to provide guidance on net income or to reconcile our adjusted EBITDA guidance to net income without unreasonable efforts. For the same reason, we are unable to address the probable significance of the unavailable information.

    Conference Call and Webcast details

    PubMatic will host a conference call to discuss its financial results on Thursday, February 27, 2025 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). A live webcast of the call can be accessed from PubMatic’s Investor Relations website at https://investors.pubmatic.com. An archived version of the webcast will be available from the same website after the call.

    Non-GAAP Financial Measures

    In addition to our results determined in accordance with U.S. generally accepted accounting principles (GAAP), including, in particular operating income, net cash provided by operating activities, and net income, we believe that adjusted EBITDA, adjusted EBITDA margin, non-GAAP net income, non-GAAP earnings per share and free cash flow, each a non-GAAP measure, are useful in evaluating our operating performance. We define adjusted EBITDA as net income adjusted for stock-based compensation expense, depreciation and amortization, unrealized loss and impairment of equity investment, interest income, acquisition-related and other expenses, and provision for income taxes. Adjusted EBITDA margin represents adjusted EBITDA calculated as a percentage of revenue. We define non-GAAP net income as net income adjusted for unrealized loss on equity investments, stock-based compensation expense, acquisition-related and other expenses, and adjustments for income taxes. We define non-GAAP free cash flow as net cash provided by operating activities reduced by purchases of property and equipment and capitalized software development costs.

    In addition to operating income and net income, we use adjusted EBITDA and non-GAAP net income as measures of operational efficiency. We believe that these non-GAAP financial measures are useful to investors for period to period comparisons of our business and in understanding and evaluating our operating results for the following reasons:

    • Adjusted EBITDA and non-GAAP net income are widely used by investors and securities analysts to measure a company’s operating performance without regard to items such as stock-based compensation expense, depreciation and amortization, interest expense, and provision for income taxes that can vary substantially from company to company depending upon their financing, capital structures and the method by which assets were acquired; and,
    • Our management uses adjusted EBITDA and non-GAAP net income in conjunction with GAAP financial measures for planning purposes, including the preparation of our annual operating budget, as a measure of operating performance and the effectiveness of our business strategies and in communications with our board of directors concerning our financial performance; and adjusted EBITDA provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

    Our use of non-GAAP financial measures has limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of our financial results as reported under GAAP. Some of these limitations are as follows:

    • Adjusted EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; (b) the potentially dilutive impact of stock-based compensation; or (c) tax payments that may represent a reduction in cash available to us;
    • Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and
    • Non-GAAP net income does not include: (a) unrealized losses resulting from our equity investment; (b) the potentially dilutive impact of stock-based compensation; (c) income tax effects for stock-based compensation and unrealized losses from our equity investment; or (d) acquisition-related and other expenses.

    Because of these and other limitations, you should consider adjusted EBITDA and non-GAAP net income along with other GAAP-based financial performance measures, including net income and our GAAP financial results.

    Forward Looking Statements

    This press release contains “forward-looking statements” regarding our future business expectations, including our guidance relating to our revenue and adjusted EBITDA for the first quarter of 2025, our expectations regarding our adjusted EBITDA, free cash flow, capital expenditures, future hiring, future market growth, our long-term revenue growth, target revenue and our ability to gain market share. These forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions and may differ materially from actual results due to a variety of factors including: our dependency on the overall demand for advertising and the channels we rely on; our existing customers not expanding their usage of our platform, or our failure to attract new publishers and buyers; our ability to maintain and expand access to spend from buyers and valuable ad impressions from publishers; the rejection of the use of digital advertising by consumers through opt-in, opt-out or ad-blocking technologies or other means; our failure to innovate and develop new solutions that are adopted by publishers; the war between Ukraine and Russia and the resumption of conflict between Israel and Palestine, and the related measures taken in response by the global community; the impacts of inflation as well as fiscal tightening and volatile interest rates; public health crises, including the resulting global economic uncertainty; limitations imposed on our collection, use or disclosure of data about advertisements; the lack of similar or better alternatives to the use of third-party cookies, mobile device IDs or other tracking technologies if such uses are restricted; any failure to scale our platform infrastructure to support anticipated growth and transaction volume; liabilities or fines due to publishers, buyers, and data providers not obtaining consents from consumers for us to process their personal data; any failure to comply with laws and regulations related to data privacy, data protection, information security, and consumer protection; and our ability to manage our growth. Moreover, we operate in a competitive and rapidly changing market, and new risks may emerge from time to time. For more information about risks and uncertainties associated with our business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of our SEC filings, including but not limited to, our annual report on Form 10-K and quarterly reports on From 10-Q, copies of are available on our investor relations website at https://investors.pubmatic.com and on the SEC website at www.sec.gov. All information in this press release is as of February 27, 2025. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

    About PubMatic

    PubMatic is an independent technology company maximizing customer value by delivering digital advertising’s supply chain of the future. PubMatic’s sell-side platform empowers the world’s leading digital content creators across the open internet to control access to their inventory and increase monetization by enabling marketers to drive return on investment and reach addressable audiences across ad formats and devices. Since 2006, PubMatic’s infrastructure-driven approach has allowed for the efficient processing and utilization of data in real time. By delivering scalable and flexible programmatic innovation, PubMatic improves outcomes for its customers while championing a vibrant and transparent digital advertising supply chain.

     
     
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In thousands)
    (unaudited)
     
        December 31,
    2024
      December 31,
    2023
    ASSETS        
    Current assets        
    Cash and cash equivalents   $ 100,452     $ 78,509  
    Marketable securities     40,135       96,835  
    Accounts receivable, net     424,814       375,468  
    Prepaid expenses and other current assets     10,145       11,143  
    Total current assets     575,546       561,955  
    Property, equipment and software, net     58,522       60,729  
    Operating lease right-of-use assets     44,402       21,102  
    Acquisition-related intangible assets, net     4,284       5,864  
    Goodwill     29,577       29,577  
    Deferred tax assets     24,864       13,880  
    Other assets, non-current     2,324       2,136  
    TOTAL ASSETS   $ 739,519     $ 695,243  
    LIABILITIES AND STOCKHOLDERS’ EQUITY        
    Current liabilities        
    Accounts payable   $ 386,602     $ 347,673  
    Accrued liabilities     26,365       25,684  
    Operating lease liabilities, current     5,843       6,236  
    Total current liabilities     418,810       379,593  
    Operating lease liabilities, non-current     39,538       15,607  
    Other liabilities, non-current     3,908       3,844  
    TOTAL LIABILITIES     462,256       399,044  
    Stockholders’ Equity        
    Common stock     6       6  
    Treasury stock     (146,796 )     (71,103 )
    Additional paid-in capital     275,304       230,419  
    Accumulated other comprehensive loss     (636 )     (4 )
    Retained earnings     149,385       136,881  
    TOTAL STOCKHOLDERS’ EQUITY     277,263       296,199  
    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 739,519     $ 695,243  
     
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except per share data)
    (unaudited)
     
        Three Months Ended December 31,   Year Ended December 31,
          2024     2023     2024     2023
    Revenue   $ 85,502   $ 84,600   $ 291,256   $ 267,014
    Cost of revenue(1)     24,935     24,208     101,027     99,229
    Gross profit     60,567     60,392     190,229     167,785
    Operating expenses:(1)                
    Technology and development     7,831     6,846     33,263     26,727
    Sales and marketing     23,763     20,353     95,369     82,803
    General and administrative(2)     14,171     12,780     57,670     56,219
    Total operating expenses     45,765     39,979     186,302     165,749
    Operating income     14,802     20,413     3,927     2,036
    Total other income, net     3,618     2,632     13,847     8,469
    Income before income taxes     18,420     23,045     17,774     10,505
    Provision for income taxes     4,521     4,343     5,270     1,624
    Net income   $ 13,899   $ 18,702   $ 12,504   $ 8,881
    Net income per share attributable to common stockholders:                
    Basic   $ 0.29   $ 0.37   $ 0.25   $ 0.17
    Diluted   $ 0.26   $ 0.34   $ 0.23   $ 0.16
    Weighted-average shares used to compute net income per share attributable to common stockholders:                
    Basic     47,993     50,659     49,213     51,760
    Diluted     52,623     54,940     54,294     56,027
     
    (1)Stock-based compensation expense includes the following:
    STOCK BASED COMPENSATION EXPENSE
    (In thousands)
    (unaudited)
     
        Three Months Ended December 31,   Year Ended December 31,
          2024     2023     2024     2023
    Cost of revenue   $         438   $         383   $         1,855   $         1,472        
    Technology and development             1,625             1,137             6,313             4,346        
    Sales and marketing             3,247             2,589             13,407             10,462        
    General and administrative             4,099             3,228             16,101             12,582        
    Total stock-based compensation   $         9,409   $         7,337   $         37,676   $         28,862        
     

    (2)On June 30, 2023, a Demand Side Platform buyer of our platform filed for Chapter 11 bankruptcy. As a result of this bankruptcy, we recorded incremental bad debt expense of $5.7 million which is reflected in our GAAP net income and adjusted EBITDA results for the year ended December 31, 2023.

     
    CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
    (In thousands)
    (unaudited)
     
        December 31,
          2024       2023  
    CASH FLOW FROM OPERATING ACTIVITIES:        
    Net Income   $ 12,504     $ 8,881  
    Adjustments to reconcile net income to net cash provided by operating activities:        
    Depreciation and amortization     45,352       44,770  
    Stock-based compensation     37,676       28,862  
    Provision for doubtful accounts           5,675  
    Deferred income taxes     (10,984 )     (13,406 )
    Accretion of discount on marketable securities     (4,117 )     (4,093 )
    Non-cash lease expense     6,801       6,145  
    Other     (25 )     45  
    Changes in operating assets and liabilities:        
       Accounts receivable     (49,345 )     (75,716 )
       Prepaid expenses and other current assets     (5,826 )     3,918  
       Accounts payable     38,096       79,687  
       Accrued liabilities     9,627       3,035  
       Operating lease liabilities     (6,531 )     (5,789 )
       Other liabilities, non-current     197       (893 )
    Net cash provided by operating activities     73,425       81,121  
    CASH FLOWS FROM INVESTING ACTIVITIES:        
    Purchases of and deposits on property and equipment     (17,592 )     (10,601 )
    Capitalized software development costs     (20,936 )     (17,687 )
    Purchases of marketable securities     (142,016 )     (140,603 )
    Proceeds from sales of marketable securities           18,873  
    Proceeds from maturities of marketable securities     202,858       111,000  
    Net cash provided by (used in) investing activities     22,314       (39,018 )
    CASH FLOWS FROM FINANCING ACTIVITIES:        
    Payment of business combination indemnification claims holdback     (2,148 )      
    Proceeds from issuance of common stock for employee stock purchase plan     2,368       1,869  
    Proceeds from exercise of stock options     1,765       1,549  
    Principal payments on finance lease obligations     (131 )     (126 )
    Payments to acquire treasury stock     (75,332 )     (59,268 )
    Net cash used in financing activities     (73,478 )     (55,976 )
    NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     22,261       (13,873 )
    Effect of foreign currency on cash     (318 )      
    CASH AND CASH EQUIVALENTS – Beginning of year     78,509       92,382  
    CASH AND CASH EQUIVALENTS – End of year   $ 100,452     $ 78,509  
     
    RECONCILIATION OF GAAP NET INCOME TO NON-GAAP ADJUSTED EBITDA AND NON-GAAP NET INCOME
    (In thousands, except per share amounts)
    (unaudited)
     
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    Reconciliation of net income:                
    Net income   $ 13,899     $ 18,702     $ 12,504     $ 8,881  
    Add back (deduct):                
    Stock-based compensation     9,409       7,337       37,676       28,862  
    Depreciation and amortization     11,421       11,039       45,352       44,770  
    Interest income     (1,604 )     (2,515 )     (8,477 )     (8,828 )
    Provision for income taxes     4,521       4,343       5,270       1,624  
    Adjusted EBITDA1   $ 37,646     $ 38,906     $ 92,325     $ 75,309  
                     
    Revenue   $ 85,502     $ 84,600     $ 291,256     $ 267,014  
    Adjusted EBITDA margin     44 %     46 %     32 %     28 %
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    Reconciliation of net income per share:                
    Net income   $ 13,899     $ 18,702     $ 12,504     $ 8,881  
    Add back (deduct):                
    Stock-based compensation     9,409       7,337       37,676       28,862  
    Adjustment for income taxes     (1,865 )     (1,590 )     (7,728 )     (5,695 )
    Non-GAAP net income1   $ 21,443     $ 24,449     $ 42,452     $ 32,048  
    GAAP diluted EPS   $ 0.26     $ 0.34     $ 0.23     $ 0.16  
    Non-GAAP diluted EPS   $ 0.41     $ 0.45     $ 0.78     $ 0.57  
    GAAP weighted average shares outstanding—diluted     52,623       54,940       54,294       56,027  
    Non-GAAP weighted average shares outstanding—diluted     52,623       54,940       54,294       56,027  
     
    SUPPLEMENTAL CASH FLOW INFORMATION
    COMPUTATION OF FREE CASH FLOW, A NON-GAAP MEASURE
    (In thousands)
    (unaudited)
     
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    Reconciliation of cash provided by operating activities:                
    Net cash provided by operating activities   $ 18,048     $ 28,674     $ 73,425     $ 81,121  
    Less: Purchases of property and equipment     (4,324 )     (5,177 )     (17,592 )     (10,601 )
    Less: Capitalized software development costs     (4,868 )     (3,962 )     (20,936 )     (17,687 )
    Free cash flow   $ 8,856     $ 19,535     $ 34,897     $ 52,833  
     

    1 Net income, Adjusted EBITDA, and Non-GAAP net income for the twelve months ended December 31, 2024 include other income of $4.0 million related to our efforts to build and test integrations with the Google Privacy Sandbox.


    1 Net dollar-based retention is calculated by starting with the revenue from publishers in the trailing twelve months ended December 31, 2023 (“Prior Period Revenue”). We then calculate the revenue from these same publishers in the trailing twelve months ended December 31, 2024 (“Current Period Revenue”). Current Period Revenue includes any upsells and is net of contraction or attrition, but excludes revenue from new publishers. Our net dollar-based retention rate equals the Current Period Revenue divided by Prior Period Revenue. Net dollar-based retention rate is an important indicator of publisher satisfaction and usage of our platform, as well as potential revenue for future periods.
    2 Fiscal year 2023 GAAP net income includes approximately $5.7 million of incremental bad debt expense related to the bankruptcy of a Demand Side Platform buyer of our platform.
    3 Omnichannel video spans across desktop, mobile and CTV devices.

    The MIL Network

  • MIL-OSI: American Coastal Insurance Corporation Reports Financial Results for Its Fourth Quarter and Year Ended December 31, 2024

    Source: GlobeNewswire (MIL-OSI)

    Company to Host Quarterly Conference Call at 5:00 P.M. ET on February 27, 2025
    The information in this press release should be read in conjunction with an earnings presentation that is available on the Company’s website at investors.amcoastal.com/Presentations.

    ST. PETERSBURG, Fla., Feb. 27, 2025 (GLOBE NEWSWIRE) — American Coastal Insurance Corporation (Nasdaq: ACIC) (“ACIC” or the “Company”), a property and casualty insurance holding company, today reported its financial results for the fourth quarter and year ended December 31, 2024.

           
    ($ in thousands, except for per share data) Three Months Ended   Year Ended
    December 31,   December 31,
        2024       2023     Change     2024       2023     Change
    Gross premiums written $ 140,739     $ 128,260     9.7 %   $ 647,805     $ 635,709     1.9 %
    Gross premiums earned   162,710       159,094     2.3       638,608       604,683     5.6  
    Net premiums earned   73,492       49,141     49.6       273,990       262,060     4.6  
    Total revenue   79,267       51,251     54.7       296,657       264,400     12.2  
    Income from continuing operations, net of tax   5,868       17,380     (66.2 )     76,319       85,204     (10.4 )
    Income (loss) from discontinued operations, net of tax   (922 )     (3,096 )   70.2       (601 )     224,707     NM
    Consolidated net income $ 4,946     $ 14,284     (65.4 )%   $ 75,718     $ 309,911     NM
                           
    Net income available to ACIC stockholders per diluted share                      
    Continuing Operations $ 0.12     $ 0.38     (68.4 )%   $ 1.55     $ 1.92     (19.3 )%
    Discontinued Operations $ (0.02 )   $ (0.07 )   71.4       (0.01 )     5.06     NM
    Total $ 0.10     $ 0.31     (67.7 )%   $ 1.54     $ 6.98     NM
                           
    Reconciliation of net income to core income:                      
    Plus: Non-cash amortization of intangible assets and goodwill impairment $ 608     $ 811     (25.0 )%   $ 2,639     $ 3,247     (18.7 )%
    Less: Income (loss) from discontinued operations, net of tax   (922 )     (3,096 )   70.2       (601 )     224,707     NM
    Less: Net realized losses on investment portfolio         (2 )   NM     (124 )     (6,789 )   98.2  
    Less: Unrealized gains on equity securities   454       22     NM     1,996       814     NM
    Less: Net tax impact (1)   32       166     (80.7 )%     161       1,937     (91.7 )
    Core income(2)   5,990       18,005     (66.7 )     76,925       92,489     (16.8 )
    Core income per diluted share (2) $ 0.12     $ 0.39     (69.2 )%   $ 1.56     $ 2.08     (25.0 )%
                           
    Book value per share             $ 4.89     $ 3.61     35.5 %
    NM = Not Meaningful
    (1) In order to reconcile net income to the core income measures, the Company included the tax impact of all adjustments using the 21% federal corporate tax rate.
    (2) Core income and core income per diluted share, both of which are measures that are not based on generally accepted accounting principles (“GAAP”), are reconciled above to net income and net income per diluted share, respectively, the most directly comparable GAAP measures. Additional information regarding non-GAAP financial measures presented in this press release can be found in the “Definitions of Non-GAAP Measures” section, below.
       

    Comments from Chief Executive Officer, B. Bradford Martz:

    “American Coastal, our insurance subsidiary, remains a leader in the Florida commercial residential market. The Company remained profitable in the 2024 fourth quarter with a combined ratio of 91.9%, despite the devastating impact and full catastrophe retention from Hurricane Milton, leading to a 67.5% combined ratio for the full year. This underscores the strength of our reinsurance strategy in safeguarding our balance sheet while mitigating the financial impact of catastrophic events.

    Furthermore, American Coastal’s written premium increased 9.7% from the prior year fourth quarter and renewal retention remained steady. In December, we announced the launch of our apartment program, and, to date, we have received hundreds of high-quality submissions from our six broker partners, affirming the strong demand for American Coastal’s products.”

    Return on Equity and Core Return on Equity

    The calculations of the Company’s return on equity and core return on equity are shown below.

           
    ($ in thousands) Three Months Ended   Year Ended
    December 31,   December 31,
        2024       2023       2024       2023  
    Income from continuing operations, net of tax $ 5,868     $ 17,380     $ 76,319     $ 85,204  
    Return on equity based on GAAP income from continuing operations, net of tax (1)   10.4 %     98.6 %     33.7 %     120.8 %
                   
    Income (loss) from discontinued operations, net of tax $ (922 )   $ (3,096 )   $ (601 )   $ 224,707  
    Return on equity based on GAAP income (loss) from discontinued operations, net of tax (1)   (1.6 )%     (17.6 )%     (0.3 )%   NM
                   
    Consolidated net income $ 4,946     $ 14,284     $ 75,718     $ 309,911  
    Return on equity based on GAAP net income (1)   8.7 %     81.0 %     33.5 %   NM
                   
    Core income $ 5,990     $ 18,005     $ 76,925     $ 92,489  
    Core return on equity (1)(2)   10.6 %     102.1 %     34.0 %     131.1 %
    (1) Return on equity for the three months and years ended December 31, 2024 and 2023 is calculated on an annualized basis by dividing the net income or core income for the period by the average stockholders’ equity for the trailing twelve months.
    (2) Core return on equity, a measure that is not based on GAAP, is calculated based on core income, which is reconciled on the first page of this press release to net income, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the “Definitions of Non-GAAP Measures” section below.
       

    Combined Ratio and Underlying Ratio

    The calculations of the Company’s combined ratio and underlying combined ratio on a consolidated basis and attributable to Interboro Insurance Company (“IIC”), now captured within discontinued operations, are shown below.

           
    ($ in thousands) Three Months Ended   Year Ended
    December 31,   December 31,
      2024     2023     Change   2024     2023     Change
    Consolidated                      
    Loss ratio, net(1) 40.5 %   13.7 %   26.8 pts   25.3 %   17.8 %   7.5 pts
    Expense ratio, net(2) 51.4 %   46.2 %   5.2 pts   42.2 %   43.1 %   (0.9) pts
    Combined ratio (CR)(3) 91.9 %   59.9 %   32.0 pts   67.5 %   60.9 %   6.6 pts
    Effect of current year catastrophe losses on CR 27.8 %   (0.8 )%   28.6 pts   9.3 %   4.9 %   4.4 pts
    Effect of prior year favorable development on CR (1.8 )%   (3.0 )%   1.2 pts   (1.4 )%   (4.9 )%   3.5 pts
    Underlying combined ratio(4) 65.9 %   63.7 %   2.2 pts   59.6 %   60.9 %   (1.3) pts
                           
    IIC                      
    Loss ratio, net(1) 73.4 %   78.5 %   (5.1) pts   71.2 %   81.6 %   (10.4) pts
    Expense ratio, net(2) 47.1 %   39.0 %   8.1 pts   43.4 %   50.8 %   (7.4) pts
    Combined ratio (CR)(3) 120.5 %   117.5 %   3.0 pts   114.6 %   132.4 %   (17.8) pts
    Effect of current year catastrophe losses on CR 0.8 %   10.6 %   (9.8) pts   4.1 %   12.6 %   (8.5) pts
    Effect of prior year favorable development on CR (0.7 )%   13.2 %   (13.9) pts   (3.6 )%   2.0 %   (5.6) pts
    Underlying combined ratio(4) 120.4 %   93.7 %   26.7 pts   114.1 %   117.8 %   (3.7) pts
    (1) Loss ratio, net is calculated as losses and loss adjustment expenses (“LAE”), net of losses ceded to reinsurers, relative to net premiums earned.
    (2) Expense ratio, net is calculated as the sum of all operating expenses, less interest expense relative to net premiums earned.
    (3) Combined ratio is the sum of the loss ratio, net and expense ratio, net.
    (4) Underlying combined ratio, a measure that is not based on GAAP, is reconciled above to the combined ratio, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the “Definitions of Non-GAAP Measures” section below.
       

    Combined Ratio Analysis

    The calculations of the Company’s loss ratios and underlying loss ratios are shown below.

           
    ($ in thousands) Three Months Ended   Year Ended
    December 31,   December 31,
      2024       2023     Change     2024       2023     Change
    Loss and LAE $ 29,794     $ 6,710     $ 23,084   $ 69,319     $ 46,678     $ 22,641
    % of Gross earned premiums   18.3 %     4.2 %   14.1 pts     10.9 %     7.7 %   3.2 pts
    % of Net earned premiums   40.5 %     13.7 %   26.8 pts     25.3 %     17.8 %   7.5 pts
    Less:                      
    Current year catastrophe losses $ 20,405     $ (406 )   $ 20,811   $ 25,561     $ 12,783     $ 12,778
    Prior year reserve favorable development   (1,325 )     (1,482 )     157     (3,704 )     (12,694 )     8,990
    Underlying loss and LAE (1) $ 10,714     $ 8,598     $ 2,116   $ 47,462     $ 46,589     $ 873
    % of Gross earned premiums   6.6 %     5.4 %   1.2 pts     7.4 %     7.7 %   (0.3) pts
    % of Net earned premiums   14.5 %     17.5 %   (3.0) pts     17.3 %     17.8 %   (0.5) pts
    (1) Underlying loss and LAE is a non-GAAP financial measure and is reconciled above to loss and LAE, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the “Definitions of Non-GAAP Measures” section, below.
       

    The calculations of the Company’s expense ratios are shown below.

           
    ($ in thousands) Three Months Ended   Year Ended
    December 31,   December 31,
      2024       2023     Change     2024       2023     Change
    Policy acquisition costs $ 26,514     $ 13,138     $ 13,376   $ 70,990     $ 75,436     $ (4,446 )
    General and administrative   11,277       9,561       1,716     44,756       37,559       7,197  
    Total Operating Expenses $ 37,791     $ 22,699     $ 15,092   $ 115,746     $ 112,995     $ 2,751  
    % of Gross earned premiums   23.2 %     14.3 %   8.9 pts     18.1 %     18.7 %   (0.6) pts
    % of Net earned premiums   51.4 %     46.2 %   5.2 pts     42.2 %     43.1 %   (0.9) pts
                                           

    Quarterly Financial Results

    Net income for the fourth quarter of 2024 was $4.9 million, or $0.10 per diluted share, compared to $14.3 million, or $0.31 per diluted share, for the fourth quarter of 2023. Of this income, $5.9 million is attributable to continuing operations for the three months ended December 31, 2024, a decrease of $11.5 million from net income of $17.4 million for the same period in 2023. Quarter-over-quarter revenues increased, driven by a decrease in ceded premiums earned, and an increase in gross premiums earned and net investment income. This was offset by increased expenses quarter-over-quarter, driven by an increase in loss and LAE and policy acquisition costs, as described below. The Company’s loss from discontinued operations, also contributed to this change in net income, with the loss decreasing $2.2 million quarter-over-quarter, as the deconsolidation of the Company’s former subsidiary, United Property and Casualty Insurance Company (“UPC”), is not impacting the Company in 2024.

    The Company’s total gross written premium increased $12.5 million, or 9.7%, to $140.7 million for the fourth quarter of 2024, from $128.3 million for the fourth quarter of 2023. The breakdown of the quarter-over-quarter changes in both direct written and assumed premiums by state and gross written premium by line of business are shown in the table below.

               
    ($ in thousands) Three Months Ended December 31,        
        2024     2023   Change $   Change %
    Direct Written and Assumed Premium by State              
    Florida $ 135,661   $ 128,260   $ 7,401   5.8 %
    New York              
    Total direct written premium by state   135,661     128,260     7,401   5.8  
    Assumed premium   5,078         5,078   100.0  
    Total gross written premium by state $ 140,739   $ 128,260   $ 12,479   9.7 %
                   
    Gross Written Premium by Line of Business              
    Commercial property $ 140,739   $ 128,260   $ 12,479   9.7 %
    Personal property              
    Total gross written premium by line of business $ 140,739   $ 128,260   $ 12,479   9.7 %
                           

    Loss and LAE increased by $23.1 million, or 344.8%, to $29.8 million for the fourth quarter of 2024, from $6.7 million for the fourth quarter of 2023. Loss and LAE expense as a percentage of net earned premiums increased 26.8 points to 40.5% for the fourth quarter of 2024, compared to 13.7% for the fourth quarter of 2023. Excluding catastrophe losses and reserve development, the Company’s gross underlying loss and LAE ratio for the fourth quarter of 2024 would have been 6.6%, a 1.2 point increase from the fourth quarter of 2023.

    Policy acquisition costs increased by $13.4 million, or 102.3%, to $26.5 million for the fourth quarter of 2024, from $13.1 million for the fourth quarter of 2023, primarily due to a decrease in reinsurance commission income attributable to the change in our quota share reinsurance cession rate from 40% to 20% effective June 1, 2024. In addition, our management fees attributable to our commercial property premiums increased as the result of additional premiums written quarter-over-quarter.

    General and administrative expenses increased by $1.7 million, or 17.7%, to $11.3 million for the fourth quarter of 2024, from $9.6 million for the fourth quarter of 2023, driven by increased overhead costs, such as amortization of capitalized software, equipment costs and salaries, and external spend for audit, actuarial and legal services.

    IIC Quarterly Results Highlights

    Net loss attributable to IIC totaled $633 thousand for the fourth quarter of 2024 compared to a net loss of $274 thousand for the fourth quarter of 2023. Drivers of the quarter-over-quarter increase included: an increase in general and administrative expenses of $406 thousand as the result of increased costs such as software licensing costs and salary expenses, offset by increased revenues of $355 thousand, which were driven by an increase in gross earned premiums of $1.4 million, offset by increased ceded premiums earned of $1.0 million.

    Annual Financial Results

    Net income attributable to the Company for the year ended December 31, 2024 was $75.7 million, or $1.54 per diluted share, compared to net income of $309.9 million, or $6.98 per diluted share, for the year ended December 31, 2023. Drivers of net income during 2024 included increased gross premiums earned partially offset by increased ceded premiums earned. Net investment income also increased, driving additional total revenues year-over-year. This increase in revenue was offset by increased expenses year-over-year, driven by increases in losses and LAE incurred and general and administrative expenses, partially offset by decreased policy acquisition costs. During 2024, the Company experienced a net loss attributable to discontinued operations of $601 thousand, compared to $224.7 million of net income attributable to discontinued operations during 2023, as the deconsolidation of the Company’s former subsidiary, UPC, is not impacting the Company in 2024.

    The Company’s total gross written premium increased by $12.1 million, or 1.9%, to $647.8 million for the year ended December 31, 2024, from $635.7 million for the year ended December 31, 2023. The breakdown of the quarter-over-quarter changes in both direct written and assumed premiums by state and gross written premium by line of business are shown in the table below.

               
    ($ in thousands) Year Ended December 31,        
        2024     2023     Change $   Change %
    Direct Written and Assumed Premium by State (1)              
    Florida $ 642,727   $ 635,602     $ 7,125   1.1 %
    New York                
    Texas       (9 )     9   (100.0 )
    Total direct written premium by state   642,727     635,593       7,134   1.1  
    Assumed premium (2)   5,078     116       4,962   4,277.6  
    Total gross written premium by state $ 647,805   $ 635,709     $ 12,096   1.9 %
                   
    Gross Written Premium by Line of Business              
    Commercial property $ 647,805   $ 635,709     $ 12,096   1.9 %
    Personal property                
    Total gross written premium by line of business $ 647,805   $ 635,709     $ 12,096   1.9 %
    (1) The Company ceased writing in Texas as of May 31, 2022.
    (2) Assumed premium written for 2023 and 2024 primarily included commercial property business assumed from unaffiliated insurers.
       

    Loss and LAE increased by $22.6 million, or 48.4%, to $69.3 million for the year ended December 31, 2024, from $46.7 million for the year ended December 31, 2023. Loss and LAE expense as a percentage of net earned premiums increased 7.5 points to 25.3% for the year ended December 31, 2024, compared to 17.8% for the year ended December 31, 2023. Excluding catastrophe losses and reserve development, the Company’s gross underlying loss and LAE ratio for the year ended December 31, 2024, would have been 7.4%, a decrease of 0.3 points from 7.7% for the year ended December 31, 2023.

    Policy acquisition costs decreased by $4.4 million, or 5.9%, to $71.0 million for the year ended December 31, 2024, from $75.4 million for the year ended December 31, 2023, primarily due to an increase in ceding commission income as the result of the Company including quota share reinsurance coverage in their core catastrophe reinsurance programs beginning June 1, 2023. This resulted in ceding commission income for the full year ended December 31, 2024, compared to only seven months of the year ended December 31, 2023. This was partially offset by increased external management fees and premium taxes related to the Company’s increased commercial lines gross written premium.

    General and administrative expenses increased by $7.2 million, or 19.1%, to $44.8 million for the year ended December 31, 2024, from $37.6 million for the year ended December 31, 2023, driven by increased overhead costs, such as amortization of capitalized software and salaries, as well as external spend for audit, actuarial and legal services.

    IIC Annual Results Highlights

    Net loss attributable to IIC totaled $1.3 million for the year ended December 31, 2024, compared to a net loss of $3.0 million for the year ended December 31, 2023. Drivers of the year-over-year decreased loss included: an increase in net premiums earned of $6.5 million, driven by an increase in gross premiums earned of $5.1 million, while ceded premiums earned decreased $1.4 million. This was partially offset by increased expenses of $3.9 million, driven by an increase in loss and LAE incurred of $2.6 million, which was driven by current year non-catastrophe losses, and an increase in general and administrative expenses of $853 thousand as the result of increased costs, such as software licensing costs and salary expenses. IIC’s policy acquisition costs also increased $426 thousand, driven by the increase in premiums described above.

    Reinsurance Costs as a Percentage of Gross Earned Premium

    Reinsurance costs as a percentage of gross earned premium in the fourth quarter of 2024 and 2023 were as follows:

           
      2024   2023
    Non-at-Risk (0.3) %   (0.2) %
    Quota Share (16.2) %   (31.4) %
    All Other (38.3) %   (37.4) %
    Total Ceding Ratio (54.8) %   (69.0) %
           

    Ceded premiums earned related to the Company’s catastrophe excess of loss contracts remained relatively flat quarter-over-quarter. The Company’s utilization of quota share reinsurance coverage resulted in less excess of loss coverage needed for the 2023-2024 catastrophe year; however, the cost savings associated with this reduction in necessary coverage were offset by rate increases on catastrophe excess of loss coverage for the same period. This utilization of quota share reinsurance coverage increased the Company’s ceding ratio overall during 2023. Effective June 1, 2024, the Company decreased its quota share reinsurance coverage from 40% to 20%, lowering the Company’s quota share ceding ratio and overall ceding ratio.

    Reinsurance costs as a percentage of gross earned premium in the fourth quarter of 2024 and 2023 for IIC, captured within discontinued operations, were as follows:

       
      IIC
      2024   2023
    Non-at-Risk (2.4) %   (2.7) %
    Quota Share — %   — %
    All Other (28.4) %   (20.9) %
    Total Ceding Ratio (30.8) %   (23.6) %
           

    Investment Portfolio Highlights

    The Company’s cash, restricted cash and investment holdings increased from $311.9 million at December 31, 2023, to $540.8 million at December 31, 2024. This increase is driven by positive cash flows from operations. The Company’s cash and investment holdings consist of investments in U.S. government and agency securities, corporate debt and investment grade money market instruments. Fixed maturities represented approximately 82.3% of total investments at December 31, 2024, compared to 89.4% of total investments at December 31, 2023. The Company’s fixed maturity investments had a modified duration of 2.2 years at December 31, 2024, compared to 3.4 years at December 31, 2023.

    Book Value Analysis

    Book value per common share increased 35.5% from $3.61 at December 31, 2023, to $4.89 at December 31, 2024. Underlying book value per common share increased 31.2% from $3.97 at December 31, 2023, to $5.21 at December 31, 2024. An increase in the Company’s retained earnings as a result of net income for the year ended December 31, 2024, drove the increase in the Company’s book value per share. As shown in the table below, removing the effect of Accumulated Other Comprehensive Income (“AOCI”), caused by capital market conditions, increases the Company’s book value per common share at December 31, 2024.

           
    ($ in thousands, except for share and per share data) December 31, 2024    December 31, 2023
     
    Book Value per Share      
    Numerator:      
    Common stockholders’ equity $ 235,660     $ 168,765  
    Denominator:      
    Total Shares Outstanding   48,204,962       46,777,006  
    Book Value Per Common Share $ 4.89     $ 3.61  
           
    Book Value per Share, Excluding the Impact of AOCI      
    Numerator:      
    Common stockholders’ equity $ 235,660     $ 168,765  
    Less: Accumulated other comprehensive loss   (15,666 )     (17,137 )
    Stockholders’ Equity, excluding AOCI $ 251,326     $ 185,902  
    Denominator:      
    Total Shares Outstanding   48,204,962       46,777,006  
    Underlying Book Value Per Common Share(1) $ 5.21     $ 3.97  
    (1) Underlying book value per common share is a non-GAAP financial measure and is reconciled above to book value per common share, the most directly comparable GAAP measure. Additional information regarding non-GAAP financial measures presented in this press release can be found in the “Definitions of Non-GAAP Measures” section below.
       

    Conference Call Details

    About American Coastal Insurance Corporation

    American Coastal Insurance Corporation (amcoastal.com) is the holding company of the insurance carrier, American Coastal Insurance Company, which was founded in 2007 for the purpose of insuring Condominium and Homeowner Association properties, and apartments in the state of Florida. American Coastal Insurance Company has an exclusive partnership for distribution of Condominium Association properties in the state of Florida with AmRisc Group (amriscgroup.com), one of the largest Managing General Agents in the country specializing in hurricane-exposed properties. American Coastal Insurance Company has earned a Financial Stability Rating of “A”, “Exceptional” from Demotech, and maintains an “A-” insurance financial strength rating with a Stable outlook by Kroll. ACIC maintains a ‘BB+’ issuer rating with a Stable outlook by Kroll.

    Contact Information:
    Alexander Baty
    Vice President, Finance & Investor Relations, American Coastal Insurance Corp.
    investorrelations@amcoastal.com
    (727) 425-8076

    Karin Daly
    Investor Relations, Vice President, The Equity Group
    kdaly@equityny.com
    (212) 836-9623

    Definitions of Non-GAAP Measures

    The Company believes that investors’ understanding of ACIC’s performance is enhanced by the Company’s disclosure of the following non-GAAP measures. The Company’s methods for calculating these measures may differ from those used by other companies and therefore comparability may be limited.

    Net income (loss) excluding the effects of amortization of intangible assets, income (loss) from discontinued operations, realized gains (losses) and unrealized gains (losses) on equity securities, net of tax (core income (loss)) is a non-GAAP measure that is computed by adding amortization, net of tax, to net income (loss) and subtracting income (loss) from discontinued operations, net of tax, realized gains (losses) on the Company’s investment portfolio, net of tax, and unrealized gains (losses) on the Company’s equity securities, net of tax, from net income (loss). Amortization expense is related to the amortization of intangible assets acquired, including goodwill, through mergers and, therefore, the expense does not arise through normal operations. Investment portfolio gains (losses) and unrealized equity security gains (losses) vary independent of the Company’s operations. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company’s performance. The most directly comparable GAAP measure is net income (loss). The core income (loss) measure should not be considered a substitute for net income (loss) and does not reflect the overall profitability of the Company’s business.

    Core return on equity is a non-GAAP ratio calculated using non-GAAP measures. It is calculated by dividing the core income (loss) for the period by the average stockholders’ equity for the trailing twelve months (or one quarter of such average, in the case of quarterly periods). Core income (loss) is an after-tax non-GAAP measure that is calculated by excluding from net income (loss) the effect of income (loss) from discontinued operations, net of tax, non-cash amortization of intangible assets, including goodwill, unrealized gains or losses on the Company’s equity security investments and net realized gains or losses on the Company’s investment portfolio. In the opinion of the Company’s management, core income (loss), core income (loss) per share and core return on equity are meaningful indicators to investors of the Company’s underwriting and operating results, since the excluded items are not necessarily indicative of operating trends. Internally, the Company’s management uses core income (loss), core income (loss) per share and core return on equity to evaluate performance against historical results and establish financial targets on a consolidated basis. The most directly comparable GAAP measure is return on equity. The core return on equity measure should not be considered a substitute for return on equity and does not reflect the overall profitability of the Company’s business.

    Combined ratio excluding the effects of current year catastrophe losses and prior year reserve development (underlying combined ratio) is a non-GAAP measure, that is computed by subtracting the effect of current year catastrophe losses and prior year development from the combined ratio. The Company believes that this ratio is useful to investors, and it is used by management to highlight the trends in the Company’s business that may be obscured by current year catastrophe losses and prior year development. Current year catastrophe losses cause the Company’s loss trends to vary significantly between periods as a result of their frequency of occurrence and severity and can have a significant impact on the combined ratio. Prior year development is caused by unexpected loss development on historical reserves. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company’s performance. The most directly comparable GAAP measure is the combined ratio. The underlying combined ratio should not be considered as a substitute for the combined ratio and does not reflect the overall profitability of the Company’s business.

    Net loss and LAE excluding the effects of current year catastrophe losses and prior year reserve development (underlying loss and LAE) is a non-GAAP measure that is computed by subtracting the effect of current year catastrophe losses and prior year reserve development from net loss and LAE. The Company uses underlying loss and LAE figures to analyze the Company’s loss trends that may be impacted by current year catastrophe losses and prior year development on the Company’s reserves. As discussed previously, these two items can have a significant impact on the Company’s loss trends in a given period. The Company believes it is useful for investors to evaluate these components both separately and in the aggregate when reviewing the Company’s performance. The most directly comparable GAAP measure is net loss and LAE. The underlying loss and LAE measure should not be considered a substitute for net loss and LAE and does not reflect the overall profitability of the Company’s business.

    Book value per common share, excluding the impact of accumulated other comprehensive loss (underlying book value per common share), is a non-GAAP measure that is computed by dividing common stockholders’ equity after excluding accumulated other comprehensive income (loss), by total common shares outstanding plus dilutive potential common shares outstanding. The Company uses the trend in book value per common share, excluding the impact of accumulated other comprehensive income (loss), in conjunction with book value per common share to identify and analyze the change in net worth attributable to management efforts between periods. The Company believes this non-GAAP measure is useful to investors because it eliminates the effect of interest rates that can fluctuate significantly from period to period and are generally driven by economic and financial factors that are not influenced by management. Book value per common share is the most directly comparable GAAP measure. Book value per common share, excluding the impact of accumulated other comprehensive income (loss), should not be considered a substitute for book value per common share and does not reflect the recorded net worth of the Company’s business.

    Discontinued Operations

    On May 9, 2024, the Company entered into the Sale Agreement with Forza Insurance Holdings, LLC (“Forza”) in which ACIC will sell and Forza will acquire 100% of the issued and outstanding stock of the Company’s subsidiary, IIC. Forza’s application to acquire IIC was approved by the New York Department of Financial Services on February 13, 2025. The Company and Forza have agreed to close on April 1, 2025.

    In addition, on February 27, 2023, the Florida Department of Financial Services was appointed as receiver of the Company’s former subsidiary, UPC. As such, prior year financial results and Consolidated Balance Sheet components have been reclassified to reflect continuing and discontinued operations appropriately.

    Forward-Looking Statements

    Statements made in this press release, or on the conference call identified above, and otherwise, that are not historical facts are “forward-looking statements”. The Company believes these statements are based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions, or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties arise, actual results could differ materially from those expressed in, or implied by, the forward-looking statements. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words such as “may,” “will,” “expect,” “endeavor,” “project,” “believe,” “plan,” “anticipate,” “intend,” “could,” “would,” “estimate” or “continue” or the negative variations thereof or comparable terminology. Factors that could cause actual results to differ materially may be found in the Company’s filings with the U.S. Securities and Exchange Commission, in the “Risk Factors” section in the Company’s most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date on which they are made, and, except as required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements.

           
    Consolidated Statements of Comprehensive Income
    In thousands, except share and per share amounts
           
      Three Months Ended   Year Ended
      December 31,   December 31,
        2024       2023       2024       2023  
    REVENUE:              
    Gross premiums written $ 140,739     $ 128,260     $ 647,805     $ 635,709  
    Change in gross unearned premiums   21,971       30,834       (9,197 )     (31,026 )
    Gross premiums earned   162,710       159,094       638,608       604,683  
    Ceded premiums earned   (89,218 )     (109,953 )     (364,618 )     (342,623 )
    Net premiums earned   73,492       49,141       273,990       262,060  
    Net investment income   5,321       2,075       20,795       8,300  
    Net realized investment losses         (2 )     (124 )     (6,789 )
    Net unrealized gains on equity securities   454       22       1,996       814  
    Other revenue         15             15  
    Total revenues $ 79,267     $ 51,251     $ 296,657     $ 264,400  
    EXPENSES:              
    Losses and loss adjustment expenses   29,794       6,710       69,319       46,678  
    Policy acquisition costs   26,514       13,138       70,990       75,436  
    General and administrative expenses   11,277       9,561       44,756       37,559  
    Interest expense   2,784       2,719       11,996       10,875  
    Total expenses   70,369       32,128       197,061       170,548  
    Income before other income   8,898       19,123       99,596       93,852  
    Other income (loss)   (11 )     1,071       2,063       2,228  
    Income before income taxes   8,887       20,194       101,659       96,080  
    Provision for income taxes   3,019       2,814       25,340       10,876  
    Income from continuing operations, net of tax $ 5,868     $ 17,380     $ 76,319     $ 85,204  
    Income (loss) from discontinued operations, net of tax   (922 )     (3,096 )     (601 )     224,707  
    Net income $ 4,946     $ 14,284     $ 75,718     $ 309,911  
    OTHER COMPREHENSIVE INCOME:              
    Change in net unrealized gains (losses) on investments   (4,049 )     6,696       3,355       5,998  
    Reclassification adjustment for net realized investment losses         2       124       6,808  
    Income tax benefit related to items of other comprehensive income                      
    Total comprehensive income $ 897     $ 20,982     $ 79,197     $ 322,717  
                   
    Weighted average shares outstanding              
    Basic   48,095,488       44,713,148       47,831,412       43,596,432  
    Diluted   49,589,458       45,712,715       49,362,985       44,388,804  
                   
    Earnings available to ACIC common stockholders per share              
    Basic              
    Continuing operations $ 0.12     $ 0.39     $ 1.60     $ 1.96  
    Discontinued operations   (0.02 )     (0.07 )     (0.01 )     5.15  
    Total $ 0.10     $ 0.32     $ 1.59     $ 7.11  
    Diluted              
    Continuing operations $ 0.12     $ 0.38     $ 1.55     $ 1.92  
    Discontinued operations   (0.02 )     (0.07 )     (0.01 )     5.06  
    Total $ 0.10     $ 0.31     $ 1.54     $ 6.98  
                   
    Dividends declared per share $ 0.50     $     $ 0.50     $  
                                   
                                   
           
    Consolidated Balance Sheets
    In thousands, except share amounts
           
      December 31, 2024   December 31, 2023
    ASSETS      
    Investments, at fair value:      
    Fixed maturities, available-for-sale $ 281,001     $ 138,387  
    Equity securities   36,794        
    Other investments   23,623       16,487  
    Total investments $ 341,418     $ 154,874  
    Cash and cash equivalents   137,036       138,930  
    Restricted cash   62,357       18,070  
    Accrued investment income   2,964       1,767  
    Property and equipment, net   5,736       3,658  
    Premiums receivable, net   46,564       45,924  
    Reinsurance recoverable on paid and unpaid losses   263,419       340,820  
    Ceded unearned premiums   160,893       155,301  
    Goodwill   59,476       59,476  
    Deferred policy acquisition costs   40,282       21,149  
    Intangible assets, net   5,908       8,548  
    Other assets   16,816       36,718  
    Assets held for sale   73,243       77,143  
    Total Assets $ 1,216,112     $ 1,062,378  
    LIABILITIES AND STOCKHOLDERS’ EQUITY      
    Liabilities:      
    Unpaid losses and loss adjustment expenses $ 322,087     $ 347,738  
    Unearned premiums   285,354       276,157  
    Reinsurance payable on premiums   83,130        
    Payments outstanding   699       706  
    Accounts payable and accrued expenses   86,140       74,783  
    Operating lease liability   3,323       739  
    Other liabilities   757       672  
    Notes payable, net   149,020       148,688  
    Liabilities held for sale   49,942       44,130  
    Total Liabilities $ 980,452     $ 893,613  
    Commitments and contingencies      
    Stockholders’ Equity:      
    Preferred stock, $0.0001 par value; 1,000,000 authorized; none issued or outstanding          
    Common stock, $0.0001 par value; 100,000,000 shares authorized; 48,417,045 and 46,989,089 issued, respectively; 48,204,962 and 46,777,006 outstanding, respectively   5       5  
    Additional paid-in capital   436,524       423,717  
    Treasury shares, at cost; 212,083 shares   (431 )     (431 )
    Accumulated other comprehensive loss   (15,666 )     (17,137 )
    Retained earnings (deficit)   (184,772 )     (237,389 )
    Total Stockholders’ Equity $ 235,660     $ 168,765  
    Total Liabilities and Stockholders’ Equity $ 1,216,112     $ 1,062,378  

    The MIL Network

  • MIL-OSI: Definitive Healthcare Reports Financial Results for Fourth Quarter and Full Fiscal Year 2024

    Source: GlobeNewswire (MIL-OSI)

    FRAMINGHAM, Mass., Feb. 27, 2025 (GLOBE NEWSWIRE) — Definitive Healthcare Corp. (“Definitive Healthcare” or the “Company”) (Nasdaq: DH), an industry leader in healthcare commercial intelligence, today announced financial results for the quarter and full year ended December 31, 2024. 

    Fourth Quarter 2024 Financial Highlights:

    • Revenue was $62.3 million, a decrease of 6% from $65.9 million in Q4 2023. 
    • Net Loss, inclusive of goodwill impairment charges of $97.1 million, was $(84.7) million, or (136)% of revenue, compared to $(13.4) million or (20)% of revenue in Q4 2023.  
    • Adjusted Net Income was $12.6 million, compared to $10.6 million in Q4 2023.   
    • Adjusted EBITDA was $17.5 million, or 28% of revenue, compared to $19.8 million, or 30% of revenue in Q4 2023.  
    • Cash Flow from Operations was $8.1 million in the quarter.
    • Unlevered Free Cash Flow was $(1.6) million in the quarter.

    Full Year 2024 Financial Highlights:

    • Revenue was $252.2 million, compared to $251.4 million for the full year 2023. 
    • Net Loss, inclusive of goodwill impairment charges of $688.9 million, was $(591.4) million, or (235)% of revenue, compared to $(289.6) million, inclusive of goodwill impairment charges of $287.4 million, or (115)% of revenue for the full year 2023.  
    • Adjusted Net Income was $55.1 million, compared to $46.7 million for the full year 2023.   
    • Adjusted EBITDA was $79.1 million, or 31% of revenue, compared to $74.5 million, or 30% of revenue for the full year 2023.  
    • Cash Flow from Operations was $58.2 million for the full year 2024, up 41% from $41.2 million for the full year 2023.
    • Unlevered Free Cash Flow was $72.5 million for the full year 2024, up 6% from $68.6 million for the full year 2023.

    “Revenue and adjusted EBITDA were above the high end of our guided ranges despite challenging commercial conditions,” said Kevin Coop, CEO of Definitive Healthcare. “We executed on delivering new business growth, securing new logos and expanding relationships with existing customers through upsell and cross-sell opportunities. We are committed to building on this momentum as we move into 2025.

    “I’m also pleased to announce that after a thorough search process, Casey Heller, our Senior Vice President of Finance, will assume the role of Chief Financial Officer, effective on June 2, 2025. We expect a smooth transition as she is already responsible for a significant portion of the company’s financial functions, including all aspects of commercial and operational finance, FP&A, and investor relations. In addition, Rick Booth will continue to serve as CFO until early June to give us time to backfill Casey’s current position and enable her to hit the ground running as CFO with a full team.”

    Recent Business and Operating Highlights: 

    Customer Wins

    In the fourth quarter, Definitive Healthcare continued to win new logos across all end-markets, by providing the data, insights, and integrations that drive their critical business use cases. Customer wins for the quarter included:

    • A behavioral and mental health screening company is leveraging our reference, affiliation, and claims data to identify and build stronger relationships with the right doctors and practices. They’ve also created an AI-powered tool that leverages insights from our data to compare physician prescribing habits, helping health systems improve care and drive growth.
    • A leading U.S. supplier of industrial, medical, and specialty gases chose us to gain insights into complex IDN hierarchies, identify high-volume facilities, navigate the Healthcare RFP process, and expand into new markets like surgery centers and post-acute facilities. This partnership also helps them connect with key nursing, procurement, and purchasing executives at both the facility and group purchasing organization (GPO) levels.
    • A large pharmaceutical company is leveraging our data along with their own internal and third-party data inside a robust master data management (MDM) system they have built, to develop a sophisticated patient and provider segmentation machine learning model, along with a next-best action program, to support the launch of a new pain medication. Definitive not only provides critical data and services to enable this integration, but our expertise also increases the value the customer derives from their existing platform investments.

    Business Outlook 

    Based on information as of February 27, 2025, the Company is issuing the following financial guidance.  

    First Quarter 2025:  

    • Revenue is expected to be in the range of $55.5 – $57.0 million. 
    • Adjusted Operating Income is expected to be in the range of $7.5 – $8.5 million. 
    • Adjusted EBITDA is expected to be in the range of $10.5 – $11.5 million, and 19 – 20% adjusted EBITDA margin. 
    • Adjusted Net Income is expected to be $3.0 – $4.0 million. 
    • Adjusted Net Income Per Diluted Share is expected to be approximately $0.02 per share on approximately 153.3 million weighted-average shares outstanding. 

    Full Year 2025:  

    • Revenue is expected to be in the range of $230.0 – $240.0 million.
    • Adjusted Operating Income is expected to be in the range of $49.0 – $53.0 million. 
    • Adjusted EBITDA is expected to be in the range of $61.0 – $65.0 million, for a full-year adjusted EBITDA margin ranging from 26 – 28%. 
    • Adjusted Net Income is expected to be $30.0 – $34.0 million. 
    • Adjusted Net Income Per Diluted Share is expected to be $0.19 – $0.22 per share on approximately 153.9 million weighted-average shares outstanding. 

    We do not provide a quantitative reconciliation of the forward-looking non-GAAP financial measures included in this press release to the most directly comparable GAAP measures due to the high variability and difficulty in predicting certain items excluded from these non-GAAP financial measures; in particular, the effects of equity-based compensation expense, taxes and amounts under the tax receivable agreement, deferred tax assets and deferred tax liabilities, and transaction, integration, and restructuring expenses. We expect the variability of these excluded items may have a significant and potentially unpredictable impact on our future GAAP financial results. 

    Conference Call Information 

    Definitive Healthcare will host a conference call today February 27, 2025, at 5:00 p.m. (Eastern Time) to discuss the Company’s full financial results and current business outlook. Participants may access the call at 1-877-358-7298 or 1-848-488-9244. Shortly after the conclusion of the call, a replay of this conference call will be available through March 29, 2025, at 1-800-645-7964 or 1-757-849-6722. The replay passcode is 1765#. A live audio webcast of the event will be available on Definitive Healthcare’s Investor Relations website at https://ir.definitivehc.com/.

    About Definitive Healthcare 

    At Definitive Healthcare, our passion is to transform data, analytics and expertise into healthcare commercial intelligence. We help clients uncover the right markets, opportunities and people, so they can shape tomorrow’s healthcare industry. Learn more at definitivehc.com.

    Forward-Looking Statements 

    This press release includes forward-looking statements that reflect our current views with respect to future events and financial performance. Such statements are provided under the “safe harbor” protection of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by words or phrases written in the future tense and/or preceded by words such as “likely,” “will,” “should,” “may,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “assumes,” “would,” “potentially” or similar words or variations thereof, or the negative thereof, references to future periods, or by the inclusion of forecasts or projections, but these terms are not the exclusive means of identifying such statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding our outlook, financial guidance, the benefits of our healthcare commercial intelligence solutions, our overall future prospects, customer behaviors and use of our solutions, the market, industry and macroeconomic environment, our plans to improve our operational and financial performance and our business, our ability to execute on our plans, customer growth, including our upsell and cross-sell opportunities, and our ability to successfully transition executive leadership. Forward-looking statements in this press release are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the following: global geopolitical tension and difficult macroeconomic conditions; actual or potential changes in international, national, regional and local economic, business and financial conditions, including trade tensions, recessions, inflation, high interest rates, volatility in the capital markets and related market uncertainty; our inability to acquire new customers and generate additional revenue from existing customers; our inability to generate sales of subscriptions to our platform or any decline in demand for our platform and the data we offer; the competitiveness of the market in which we operate and our ability to compete effectively; the failure to maintain and improve our platform, or develop new modules or insights for healthcare commercial intelligence; the inability to obtain and maintain accurate, comprehensive or reliable data, which could result in reduced demand for our platform; the loss of our access to our data providers; the failure to respond to advances in healthcare commercial intelligence; an inability to attract new customers and expand subscriptions of current customers; our ability to successfully transition executive leadership; the possibility that our security measures are breached or unauthorized access to data is otherwise obtained; and the risks of being required to collect sales or other related taxes for subscriptions to our platform in jurisdictions where we have not historically done so.  

    Additional factors or events that could cause our actual performance to differ from these forward-looking statements may emerge from time to time, and it is not possible for us to predict all of them. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual financial condition, results of operations, future performance and business may vary in material respects from the performance projected in these forward-looking statements. 

    For additional discussion of factors that could impact our operational and financial results, refer to our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 that will be filed following this earnings release, as well as our Current Reports on Form 8-K and other subsequent SEC filings, which are or will be available on the Investor Relations page of our website at ir.definitivehc.com and on the SEC website at www.sec.gov. 

    All information in this press release speaks only as of the date on which it is made. We undertake no obligation to publicly update this information, whether as a result of new information, future developments or otherwise, except as may be required by law. 

    Website 

    Definitive Healthcare intends to use its website as a distribution channel of material company information. Financial and other important information regarding the Company is routinely posted on and accessible through the Company’s website at https://www.definitivehc.com/. Accordingly, you should monitor the investor relations portion of our website at https://ir.definitivehc.com/ in addition to following our press releases, SEC filings, and public conference calls and webcasts. In addition, you may automatically receive email alerts and other information about the Company when you enroll your email address by visiting the “Email Alerts” section of our investor relations page at https://ir.definitivehc.com/. 

    Non-GAAP Financial Measures   

    We have presented supplemental non-GAAP financial measures as part of this earnings release. We believe that these supplemental non-GAAP financial measures are useful to investors because they allow for an evaluation of the Company with a focus on the performance of its core operations, including providing meaningful comparisons of financial results to historical periods and to the financial results of peer and competitor companies. Our use of these non-GAAP terms may vary from the use of similar terms by other companies in our industry and accordingly may not be comparable to similarly titled measures used by other companies and are not measures of performance calculated in accordance with GAAP. Our presentation of these non-GAAP financial measures are intended as supplemental measures of our performance that are not required by, or presented in accordance with, GAAP. These non-GAAP financial measures should not be considered as alternatives to loss from operations, net loss, earnings per share, or any other performance measures derived in accordance with GAAP or as measures of operating cash flows or liquidity. A reconciliation of GAAP to non-GAAP results has been provided in the financial statement tables included at the end of this press release. In evaluating our non-GAAP financial measures, you should be aware that in the future, we may incur expenses similar to those eliminated in these presentations.

    We refer to Unlevered Free Cash Flow, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Profit, Adjusted Gross Margin, Adjusted Operating Income, Adjusted Net Income and Adjusted Net Income Per Diluted Share as non-GAAP financial measures. These non-GAAP financial measures are not required by or prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”). These are supplemental financial measures of our performance and should not be considered substitutes for cash provided by (used in) operating activities, loss from operations, net (loss) income, net (loss) income margin, gross profit, gross margin, or any other measure derived in accordance with GAAP. 

    We define Unlevered Free Cash Flow as net cash provided by operating activities less purchases of property, equipment and other assets, plus cash interest expense, and cash payments related to transaction, integration, and restructuring related expenses, earnouts, and other non-core items. Unlevered Free Cash Flow does not represent residual cash flow available for discretionary expenditures since, among other things, we have mandatory debt service requirements. 

    We define EBITDA as earnings before debt-related costs, including interest expense, net, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude certain items of a significant or unusual nature, including other income, net, equity-based compensation, transaction, integration, and restructuring expenses, goodwill impairments and other non-core expenses. Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of revenue. Adjusted EBITDA and Adjusted EBITDA Margin are key metrics used by management and our board of directors to assess the profitability of our operations. We believe that Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to help investors to assess our operating performance because these metrics eliminate non-core and unusual items and non-cash expenses, which we do not consider indicative of ongoing operational performance. We believe that these metrics are helpful to investors in measuring the profitability of our operations on a consolidated level.  

    We define Adjusted Gross Profit as gross profit excluding acquisition-related amortization and equity-based compensation costs and Adjusted Gross Margin is defined as Adjusted Gross Profit as a percentage of revenue. Adjusted Gross Profit and Adjusted Gross Margin are key metrics used by management and our board of directors to assess our operations. We exclude acquisition-related depreciation and amortization expenses as they have no direct correlation to the cost of operating our business on an ongoing basis. A small portion of equity-based compensation is included in cost of revenue in accordance with GAAP but is excluded from our Adjusted Gross Profit calculations due to its non-cash nature.  

    We define Adjusted Operating Income as loss from operations plus acquisition related amortization, equity-based compensation, transaction, integration, and restructuring expenses, goodwill impairments and other non-core expenses.  

    We define Adjusted Net Income as Adjusted Operating Income less interest (expense), income net, recurring income tax (provision) benefit, foreign currency gain (loss), and tax impacts of adjustments. We define Adjusted Net Income Per Diluted Share as Adjusted Net Income divided by diluted outstanding shares. 

    In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in these presentations. 

    Investor Contact: 
    Brian Denyeau 
    ICR for Definitive Healthcare 
    brian.denyeau@icrinc.com
    646-277-1251 

    Media Contact: 
    Bethany Swackhamer
    bswackhamer@definitivehc.com

     
    Definitive Healthcare Corp.
    Consolidated Balance Sheets
    (amounts in thousands, except number of shares and par value; unaudited)
             
        December 31, 2024   December 31, 2023
    Assets        
    Current assets:        
    Cash and cash equivalents   $ 105,378     $ 130,976  
    Short-term investments     184,786       177,092  
    Accounts receivable, net     53,232       59,249  
    Prepaid expenses and other assets     13,040       13,120  
    Deferred contract costs     13,736       13,490  
    Total current assets     370,172       393,927  
    Property and equipment, net     3,791       4,471  
    Operating lease right-of-use assets, net     7,521       9,594  
    Other assets     2,300       2,388  
    Deferred contract costs     14,389       17,320  
    Intangible assets, net     297,933       323,121  
    Goodwill     393,283       1,075,080  
    Total assets   $ 1,089,389     $ 1,825,901  
    Liabilities and Equity        
    Current liabilities:        
    Accounts payable   $ 10,763     $ 5,787  
    Accrued expenses and other liabilities     40,896       51,529  
    Deferred revenue     93,344       97,377  
    Term loan     13,750       13,750  
    Operating lease liabilities     2,408       2,239  
    Total current liabilities     161,161       170,682  
    Long-term liabilities:        
    Deferred revenue     32       9  
    Term loan     229,368       242,567  
    Operating lease liabilities     7,586       9,372  
    Tax receivable agreements liability     49,511       127,000  
    Deferred tax liabilities     25,088       67,163  
    Other liabilities     9,449       9,934  
    Total liabilities     482,195       626,727  
             
    Equity:        
    Class A Common Stock, par value $0.001, 600,000,000 shares authorized, 113,953,554 and 116,562,252 shares issued and outstanding at December 31, 2024 and 2023, respectively     114       117  
    Class B Common Stock, par value $0.00001, 65,000,000 shares authorized, 39,439,198 and 39,375,806 shares issued and outstanding, respectively, at December 31, 2024, and 39,762,700 and 39,168,047 shares issued and outstanding, respectively, at December 31, 2023            
    Additional paid-in capital     1,085,445       1,086,581  
    Accumulated other comprehensive (deficit) income     (610 )     2,109  
    Accumulated deficit     (640,574 )     (227,450 )
    Noncontrolling interests     162,819       337,817  
    Total equity     607,194       1,199,174  
    Total liabilities and equity   $ 1,089,389     $ 1,825,901  
             
    Definitive Healthcare Corp.
    Consolidated Statements of Operations
    (amounts in thousands, except share amounts and per share data; unaudited)
                     
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    Revenue   $ 62,288     $ 65,932     $ 252,202     $ 251,415  
    Cost of revenue:                
    Cost of revenue exclusive of amortization (1)     10,967       9,447       40,684       34,740  
    Amortization     3,719       3,066       14,049       12,742  
    Gross profit     47,602       53,419       197,469       203,933  
    Operating expenses:                
    Sales and marketing (1)     20,372       23,605       83,807       94,534  
    Product development (1)     8,982       11,569       36,518       42,441  
    General and administrative (1)     8,503       16,567       49,267       58,861  
    Depreciation and amortization     9,413       9,935       37,618       39,008  
    Transaction, integration, and restructuring expenses     2,835       1,823       12,225       11,489  
    Goodwill impairment     97,060             688,854       287,400  
    Total operating expenses     147,165       63,499       908,289       533,733  
    Loss from operations     (99,563 )     (10,080 )     (710,820 )     (329,800 )
    Other (expense) income, net:                
    Interest expense, net     (303 )     (125 )     (245 )     (1,559 )
    Other income (expense), net     9,254       (1,982 )     77,320       23,179  
    Total other income (expense), net     8,951       (2,107 )     77,075       21,620  
    Loss before income taxes     (90,612 )     (12,187 )     (633,745 )     (308,180 )
    Benefit from (provision for) income taxes     5,895       (1,175 )     42,299       18,553  
    Net loss     (84,717 )     (13,362 )     (591,446 )     (289,627 )
    Less: Net loss attributable to noncontrolling interests     (25,642 )     (3,129 )     (178,322 )     (87,239 )
    Net loss attributable to Definitive Healthcare Corp.   $ (59,075 )   $ (10,233 )   $ (413,124 )   $ (202,388 )
    Net loss per share of Class A Common Stock:                
    Basic   $ (0.51 )   $ (0.09 )   $ (3.54 )   $ (1.79 )
    Diluted   $ (0.51 )   $ (0.09 )   $ (3.54 )   $ (1.79 )
    Weighted average Common Stock outstanding:                
    Basic     115,015,489       116,418,495       116,640,183       112,764,537  
    Diluted     115,015,489       116,418,495       116,640,183       112,764,537  
                     
    (1) Amounts include equity-based compensation expense as follows:      
                     
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    Cost of revenue   $ 171     $ 267     $ 839     $ 1,097  
    Sales and marketing     1,449       3,110       6,235       11,407  
    Product development     1,651       3,572       8,579       13,138  
    General and administrative     4,094       6,305       22,432       23,097  
    Total equity-based compensation expense   $ 7,365     $ 13,254     $ 38,085     $ 48,739  
                     
    Definitive Healthcare Corp.
    Consolidated Statements of Cash Flows
    (amounts in thousands; unaudited)
                   
      Three Months Ended December 31,   Year Ended December 31,
        2024       2023       2024       2023  
    Cash flows provided by (used in) operating activities:              
    Net loss $ (84,717 )   $ (13,362 )   $ (591,446 )   $ (289,627 )
    Adjustments to reconcile net loss to net cash provided by operating activities:              
    Depreciation and amortization   526       562       2,245       1,953  
    Amortization of intangible assets   12,606       12,439       49,422       49,797  
    Amortization of deferred contract costs   3,978       3,488       15,441       12,963  
    Equity-based compensation   7,365       13,254       38,085       48,739  
    Amortization of debt issuance costs   175       175       702       702  
    Provision for bad debt expense         554       947       1,374  
    Non-cash restructuring charges   192             1,239       155  
    Goodwill impairment charges   97,060             688,854       287,400  
    Tax receivable agreement remeasurement   (8,758 )     1,507       (76,909 )     (23,470 )
    Changes in fair value of contingent consideration   1,460       302       (1,780 )     302  
    Deferred income taxes   (6,061 )     1,015       (42,670 )     (18,713 )
    Changes in operating assets and liabilities:              
    Accounts receivable   (17,455 )     (18,559 )     5,693       811  
    Prepaid expenses and other assets   (627 )     (1,348 )     (7,832 )     (7,156 )
    Deferred contract costs   (4,481 )     (5,770 )     (12,756 )     (18,790 )
    Contingent consideration               (602 )      
    Accounts payable, accrued expenses, and other liabilities   (285 )     2,919       (5,458 )     1,330  
    Deferred revenue   7,157       7,533       (4,979 )     (6,580 )
    Net cash provided by operating activities   8,135       4,709       58,196       41,190  
    Cash flows (used in) provided by investing activities:              
    Purchases of property, equipment, and other assets   (10,901 )     (594 )     (12,344 )     (2,977 )
    Purchases of short-term investments   (111,634 )     (45,595 )     (304,304 )     (259,208 )
    Maturities of short-term investments   96,265       100,596       303,769       275,426  
    Cash paid for acquisitions and investments, net of cash acquired               (13,530 )     (45,023 )
    Net cash (used in) provided by investing activities   (26,270 )     54,407       (26,409 )     (31,782 )
    Cash flows used in financing activities:              
    Repayments of term loans   (3,437 )     (3,438 )     (13,750 )     (8,594 )
    Taxes paid related to net share settlement of equity awards   (278 )     (1,035 )     (7,548 )     (4,432 )
    Repurchases of Class A Common Stock   (7,329 )           (22,366 )      
    Payments of contingent consideration               (1,000 )      
    Payments under tax receivable agreement               (6,950 )     (246 )
    Payments of equity offering issuance costs                     (30 )
    Member distributions   (2,324 )     (1,589 )     (5,135 )     (12,282 )
    Net cash used in financing activities   (13,368 )     (6,062 )     (56,749 )     (25,584 )
    Net (decrease) increase in cash and cash equivalents   (31,503 )     53,054       (24,962 )     (16,176 )
    Effect of exchange rate changes on cash and cash equivalents   (728 )     462       (636 )     218  
    Cash and cash equivalents, beginning of year   137,609       77,460       130,976       146,934  
    Cash and cash equivalents, end of year $ 105,378     $ 130,976     $ 105,378     $ 130,976  
    Supplemental cash flow disclosures:              
    Cash paid during the period for:              
    Interest $ 3,310     $ 3,684     $ 14,196     $ 14,456  
    Income taxes                     136  
    Acquisitions:              
    Net assets acquired, net of cash acquired $     $     $ 13,675     $ 52,678  
    Working capital adjustment receivable               (145 )     145  
    Contingent consideration                     (7,800 )
    Net cash paid for acquisitions $     $     $ 13,530     $ 45,023  
                   
    Supplemental disclosure of non-cash investing activities:              
    Capital expenditures included in accounts payable and accrued expenses and other liabilities $ 6,870     $ 47     $ 6,870     $ 47  
                   
    Definitive Healthcare Corp.
    Reconciliations of Non-GAAP Financial Measures to Closest GAAP Equivalent
                   
    Reconciliation of GAAP Operating Cash Flow to Unlevered Free Cash Flow
    (in thousands; unaudited)
                   
      Three Months Ended December 31,   Year Ended December 31,
        2024       2023       2024       2023  
    Net cash provided by operating activities $ 8,135     $ 4,709     $ 58,196     $ 41,190  
    Purchases of property, equipment, and other assets   (10,901 )     (594 )     (12,344 )     (2,977 )
    Interest paid in cash   3,310       3,684       14,196       14,456  
    Transaction, integration, and restructuring expenses paid in cash (a)   1,183       1,521       12,766       11,032  
    Earnout payment (b)               602        
    Other non-core items (c)   (3,311 )     1,803       (936 )     4,875  
    Unlevered Free Cash Flow $ (1,584 )   $ 11,123     $ 72,480     $ 68,576  
                   
    (a) Transaction and integration expenses paid in cash primarily represent legal, accounting, and consulting expenses related to our acquisitions. Restructuring expenses paid in cash relate to our restructuring plans announced in the first quarter of 2024 and the first and third quarters of 2023, along with exit costs related to office relocations.
    (b) Earnout payment represents final settlement of contingent consideration included in cash flow from operations.
    (c) Other non-core items represent expenses driven by events that are typically by nature one-time, non-operational, and/or unrelated to our core operations.
                   
    Reconciliation of GAAP Net Loss to Adjusted Net Income and
    GAAP Operating Loss to Adjusted Operating Income
    (in thousands, except per share amounts; unaudited)
                   
      Three Months Ended December 31,   Year Ended December 31,
        2024       2023       2024       2023  
    Net loss $ (84,717 )   $ (13,362 )   $ (591,446 )   $ (289,627 )
    Add: Income tax (benefit) provision   (5,895 )     1,175       (42,299 )     (18,553 )
    Add: Interest expense, net   303       125       245       1,559  
    Add: Other (income) expense, net   (9,254 )     1,982       (77,320 )     (23,179 )
    Loss from operations   (99,563 )     (10,080 )     (710,820 )     (329,800 )
    Add: Amortization of intangible assets acquired through business combinations   11,370       11,510       45,239       46,099  
    Add: Equity-based compensation   7,365       13,254       38,085       48,739  
    Add: Transaction, integration, and restructuring expenses   2,835       1,823       12,225       11,489  
    Add: Goodwill impairment   97,060             688,854       287,400  
    Add: Other non-core items   (3,311 )     1,803       (936 )     4,875  
    Adjusted Operating Income   15,756       18,310       72,647       68,802  
    Less: Interest expense, net   (303 )     (125 )     (245 )     (1,559 )
    Less: Recurring income tax benefit (provision) (a)   60       (1,175 )     669       1,374  
    Less: Foreign currency gain (loss)   496       (475 )     411       (291 )
    Less: Tax impacts of adjustments to net loss   (3,458 )     (5,886 )     (18,341 )     (21,633 )
    Adjusted Net Income $ 12,551     $ 10,649     $ 55,141     $ 46,693  
    Shares for Adjusted Net Income Per Diluted Share (b)   154,404,162       155,560,756       155,853,282       154,836,706  
    Adjusted Net Income Per Diluted Share $ 0.08     $ 0.07     $ 0.35     $ 0.30  
                   
    (a) Recurring income tax benefit (provision) excludes the income tax impact of goodwill impairment charges.
    (b) Diluted Adjusted Net Income Per Share is computed by giving effect to all potential weighted average Class A common stock and any securities that are convertible into Class A common stock, including Definitive OpCo units and restricted stock units. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method assuming proceeds from unrecognized compensation as required by GAAP. Fully diluted shares are 162,498,543 and 163,153,442 as of December 31, 2024 and 2023, respectively.
                   
    Reconciliation of GAAP Gross Profit and Margin to Adjusted Gross Profit and Margin
    (in thousands; unaudited)
                                     
        Three Months Ended December 31,   Year Ended December 31,
          2024       2023       2024       2023  
    (in thousands)   Amount   % of Revenue   Amount   % of Revenue   Amount   % of Revenue   Amount   % of Revenue
    Reported gross profit and margin   $ 47,602   76 %   $ 53,419   81 %   $ 197,469   78 %   $ 203,933   81 %
    Amortization of intangible assets resulting from acquisition-related purchase accounting adjustments     2,483   4 %     2,137   3 %     9,866   4 %     9,044   4 %
    Equity-based compensation costs     171   0 %     267   0 %     839   0 %     1,097   0 %
    Adjusted gross profit and margin   $ 50,256   81 %   $ 55,823   85 %   $ 208,174   83 %   $ 214,074   85 %
                                     
    Reconciliation of GAAP Net Loss to Adjusted EBITDA
    (in thousands; unaudited)
                                   
      Three Months Ended December 31,   Year Ended December 31,
        2024       2023       2024       2023  
      Amount   % of Revenue   Amount   % of Revenue   Amount   % of Revenue   Amount   % of Revenue
    Net loss and margin $ (84,717 )     (136 )%   $ (13,362 )     (20 )%   $ (591,446 )   (235 )%   $ (289,627 )   (115 )%
    Interest expense, net   303       0 %     125       0 %     245     0 %     1,559     1 %
    Income tax (benefit) provision   (5,895 )     (9 )%     1,175       2 %     (42,299 )   (17 )%     (18,553 )   (7 )%
    Depreciation & amortization   13,132       21 %     13,001       20 %     51,667     20 %     51,750     21 %
    EBITDA and margin   (77,177 )     (124 )%     939       1 %     (581,833 )   (231 )%     (254,871 )   (101 )%
    Other (income) expense, net (a)   (9,254 )     (15 )%     1,982       3 %     (77,320 )   (31 )%     (23,179 )   (9 )%
    Equity-based compensation (b)   7,365       12 %     13,254       20 %     38,085     15 %     48,739     19 %
    Transaction, integration, and restructuring expenses (c)   2,835       5 %     1,823       3 %     12,225     5 %     11,489     5 %
    Goodwill impairment (d)   97,060       156 %           0 %     688,854     273 %     287,400     114 %
    Other non-core items (e)   (3,311 )     (5 )%     1,803       3 %     (936 )   (0 )%     4,875     2 %
    Adjusted EBITDA and margin $ 17,518       28 %   $ 19,801       30 %   $ 79,075     31 %   $ 74,453     30 %
                                   
    (a) Primarily represents TRA liability remeasurement and foreign exchange gains and losses.
    (b) Equity-based compensation represents non-cash compensation expense recognized in association with equity awards made to employees and directors.
    (c) Transaction and integration expenses primarily represent legal, accounting, and consulting expenses and fair value adjustments for contingent consideration related to our acquisitions and strategic partnerships. Restructuring expenses relate to the 2024 Restructuring Plan and those we committed to during the first and third quarters of 2023, as well as impairment and restructuring charges related to office closures, relocations, and consolidations.
                                   
     
    Three Months Ended December 31,
      Year Ended December 31,                
    (in thousands)   2024       2023       2024       2023                  
    Merger and acquisition due diligence and transaction costs $ 919     $ 1,309     $ 3,329     $ 5,419                  
    Integration costs   176       129       1,115       934                  
    Fair value adjustment for contingent consideration   1,460       302       (1,780 )     302                  
    Restructuring charges for severance and other separation costs   88       83       8,097       4,679                  
    Office closure and relocation restructuring charges and impairments   192             1,464       155                  
    Total transaction, integration and restructuring expense $ 2,835     $ 1,823     $ 12,225     $ 11,489                  
                                   
    (d) Goodwill impairment charges represent non-cash, pre-tax, goodwill impairment charges. We experienced declines in our market capitalization as a result of sustained decreases in our stock price, which represented triggering events requiring our management to perform quantitative goodwill impairment tests multiple times in 2024 and during the third quarter of 2023. As a result of the impairment tests conducted in each respective period, we determined that the fair value of our single reporting unit was lower than its carrying value and, accordingly, recorded these impairment charges.
    (e) Other non-core items represent expenses driven by events that are typically by nature one-time, non-operational, and/or unrelated to our core operations. These expenses are comprised of non-core legal and regulatory costs isolated to unique and extraordinary litigation, legal and regulatory matters that are not considered normal and recurring business activity, including sales tax accrual adjustments inclusive of penalties and interest for sales taxes that we may have been required to collect from customers in 2024 and in certain previous years, and other non-recurring legal and regulatory matters. Other non-core items also include consulting fees and severance costs associated with strategic transition initiatives, as well as professional fees related to financing, capital structure changes, and other non-core items.
                                   
     
    Three Months Ended December 31,
      Year Ended December 31,                
    (in thousands)   2024       2023       2024       2023                  
    Non-core legal and regulatory $ (3,438 )   $ (60 )   $ (3,439 )   $ 2,370                  
    Consulting and severance costs for strategic transition initiatives   1     $ 1,977       2,219     $ 1,977                  
    Other non-core expenses   126       (114 )     284       528                  
    Total other non-core items $ (3,311 )   $ 1,803     $ (936 )   $ 4,875                  
                                   

    The MIL Network

  • MIL-OSI: SPS Commerce to Present at the Morgan Stanley Technology, Media & Telecom Conference

    Source: GlobeNewswire (MIL-OSI)

    MINNEAPOLIS, Feb. 27, 2025 (GLOBE NEWSWIRE) — SPS Commerce, Inc. (NASDAQ: SPSC), a leader in retail supply chain cloud services, today announced that management will present at the Morgan Stanley Technology, Media & Telecom Conference on Thursday, March 6, 2025, at 8:30 AM P.T.

    A webcast of the presentation will be available on the company’s investor relations website at http://investors.spscommerce.com/events.cfm.

    About SPS Commerce

    SPS Commerce is the world’s leading retail network, connecting trading partners around the globe to optimize supply chain operations for all retail partners. We support data-driven partnerships with innovative cloud technology, customer-obsessed service, and accessible experts so our customers can focus on what they do best. Over 45,000 recurring revenue customers in retail, grocery, distribution, supply, manufacturing, and logistics are using SPS as their retail network. SPS has achieved 96 consecutive quarters of revenue growth and is headquartered in Minneapolis. For additional information, contact SPS at 866-245-8100 or visit www.spscommerce.com.

    SPS COMMERCE, SPS, SPS logo and INFINITE RETAIL POWER are marks of SPS Commerce, Inc. and registered in the U.S. Patent and Trademark Office, along with other SPS marks. Such marks may also be registered or otherwise protected in other countries. 

    Contact:
    Investor Relations
    The Blueshirt Group
    Irmina Blaszczyk & Lisa Laukkanen
    SPSC@blueshirtgroup.com
    415-217-4962

    SPS-F

    The MIL Network

  • MIL-OSI: NOTICE TO DISREGARD — Go SBA Express by Radix

    Source: GlobeNewswire (MIL-OSI)

    SEATTLE, Feb. 27, 2025 (GLOBE NEWSWIRE) — We are advised by Go SBA Express by Radix that journalists and other readers should disregard the news release, “Radix Provides a Unique SBA Loan Designed to Protect Small Business Owners from Predatory Lending,” issued today at 8:31 AM ET over GlobeNewswire.

    The MIL Network

  • MIL-OSI USA: Sen. Moran to Chair the Senate Commerce Subcommittee on Aviation, Space, and Innovation

    US Senate News:

    Source: United States Senator for Kansas – Jerry Moran

    WASHINGTON – The U.S. Senate Committee on Commerce, Science, and Transportation recently announced U.S. Senator Jerry Moran (R-Kan.) will serve as the Chair of the Subcommittee on Aviation, Space, and Innovation.

    “The subcommittee will work on legislation to advance policies that put safety first while bolstering innovation and efficiency,” said Sen. Moran. “Recent tragedies demonstrate that our nation’s aviation system is facing a critical inflection point, and as Chairman, I will work to make certain air travel remains the safest method of transportation. I also look forward to supporting our nation’s rapidly evolving commercial space sector by advancing policies which promote the industry’s growth and capabilities. Kansas is home to the Air Capital of the World, and my work on this subcommittee will be informed by the global aviation and aerospace companies that call our state home and the small businesses that fill critical links in our supply chains.”

    The Senate Commerce Subcommittee on Aviation, Space, and Innovation has jurisdiction over the Federal Aviation Administration (FAA), National Aeronautics and Space Administration (NASA), and the civil aviation and space policy functions of the Department of Transportation, Department of Commerce and National Space Council within the Executive Office of the President.

    Chairman Moran’s Priorities for the 119th Congress:

    • Aviation Safety: Investigating recent aviation accidents and subsequent safety reports to make certain our nation’s aviation safety regulators are equipped and able to effectively manage our air travel equipment and systems.
    • Oversight: Ensuring the proper implementation the FAA Reauthorization Act of 2024, which Sen. Moran helped draft and unanimously pass in both chambers of Congress, to address the current and future demands of the aviation industry.
    • Space Exploration: Supporting critical NASA programs, including the Artemis campaign, and prioritizing STEM education to equip the next generation to further our nation’s space goals.
    • Commercial Space Growth: Enabling growth in the commercial space sector, which is already supporting critical national security missions and bolstering the U.S. in our space race against China and other adversaries.  

    MIL OSI USA News

  • MIL-OSI USA: Warner, Thune, Malliotakis & Peters Introduce Legislation to Address Student Debt Crisis

    US Senate News:

    Source: United States Senator for Commonwealth of Virginia Mark R Warner

    WASHINGTON – Today, U.S. Sens. Mark R. Warner (D-VA) and John Thune (R-SD), alongside U.S. Reps. Nicole Malliotakis (R-NY-11) and Scott Peters (D-CA-50), introduced the Employer Participation in Repayment Act – bipartisan legislation to help Americans tackle their student loan debt by making permanent a provision that allows employers to contribute up to $5,250 tax-free to their employees’ student loans.

    In 2020, Sens. Warner and Thune along with Rep. Peters negotiated the inclusion of a provision in the CARES Act that allowed these contributions temporarily. Later that year, as part of the government spending package, they secured an extension allowing this benefit until January 1, 2026. By making this tax benefit permanent, today’s legislation would provide employees with much-needed relief and employers with a unique and permanent tool to attract and retain talented employees.

    “As the first in my family to graduate from college, I wouldn’t have been able to afford my tuition without the help of student loans,” said Sen. Warner. “Unfortunately as the cost of higher education continues to skyrocket, so has the rate of Americans who turn to student loans to pay for college. Today too many Americans are saddled with tough-to-manage student loan debt, with no end in sight. That’s why I’ve teamed up with Sen. Thune to create an innovative, bipartisan approach to help ease the burden of student loans. By making employer student loan repayments tax-exempt, employers will have a tool to recruit and retain a talented workforce while also helping working Americans manage their financial future.”

    “Incentivizing employers to help repay their employees’ student loans was a common-sense step Congress took to address the high levels of student debt that borrowers face,” said Sen. Thune. “This bill would permanently equip employers with this unique tool to help attract and retain talented employees while protecting American taxpayers from costly burdens. This is a win-win for graduates and their employers, and I hope it will once again garner strong, bipartisan support.”

    “Over the past 20 years, the cost to attend college has risen 45 percent, forcing students to choose between pursuing higher education and taking on tens of thousands of dollars in burdensome student loan debt,” said Rep. Malliotakis. “Our bipartisan legislation enables employers to contribute up to $5,250 per year, tax-free, toward their employees’ student loans—helping those entering the workforce pay down debt faster and build a stronger financial future. This tax incentive will continue to strengthen our workforce, increase our nation’s competitiveness, and provide much-needed economic relief to millions of Americans.”

    “I relied on student loans to get through college when the cost of higher education was much lower than it is today. Now, the collective debt among Americans is $1.7 trillion, which limits our economic growth and the economic prospects of young adults,” said Rep. Peters. “Over the last five years, this program has been a huge success — employers have helped pay off thousands of employees’ loans and it gave employers a tool to compete for the best talent. This public-private collaboration has proven itself as a cost-effective solution to the student debt crisis and it is imperative that we make it permanent.” 

    Americans owe a combined $1.77 trillion dollars in student loan debt, according to the most recent quarterly report from the Federal Reserve. This debt is a significant financial burden that not only influences the way the American workforce saves and spends, but also has a stifling effect on the economy. This legislation would update an existing federal program so that it works better for employees living with the reality of burdensome student loan debt.

    The legislation has support from numerous educational organizations and business groups.

    “The National Association of Independent Colleges and Universities (NAICU) is pleased to support bipartisan legislation that would make permanent the expansion of IRC Sec. 127. This expansion to allow student loan repayment assistance should absolutely be a permanent benefit and not expire next year as currently scheduled.  This assistance helps working students, employers, and ultimately the U.S. economy. Section 127 benefits play a critical role in maintaining U.S. competitiveness and preventing the accumulation of student debt by enabling employers to fund the training, development and education of their employees, without imposing tax burdens on those employees for the education they receive.  Employees use these benefits to pursue their educational and career goals and use amounts provided by their employer to either help pay for the cost of tuition or repay student loans,” said Karin Johns, Director of Tax Policy, National Association of Independent Colleges and Universities.

    “The bipartisan and bicameral Employer Participation in Repayment Act will reduce borrowers’ student loan burdens and encourage successful repayment. In turn, it gives employers a permanent tool with which to attract a stable workforce. EFC is proud to endorse this legislation, and we look forward to collaborating with you to advance public policies that appropriately balance the interests of student loan borrowers, employers, and taxpayers,” said Gail daMota, President, Education Finance Council.

    “The U.S. Chamber supports the Employer Participation in Repayment Act because it allows employers voluntarily to provide a valued employee benefit that helps their employees’ financial well-being,” said Chantel Sheaks, Vice President, Retirement Policy, U.S. Chamber of Commerce

    “Candidly has facilitated more than $100M in tax-free Student Loan Employer Contributions to help employees pay down their debt faster, as a workplace benefit, resulting in a whopping 67% reduction in turnover across participating workers. Permanency is crucial to sustaining and scaling this highly efficacious new category of benefit into a new normal,” said Laurel Taylor, CEO, Candidly.

    “Fidelity Investments commends the bipartisan re-introduction of the Employer Participation in Repayment Act. Permanently extending this important incentive is critical to the American workforce’s financial wellness. As a market leader for student debt workplace benefits since 2016, Fidelity has enabled hundreds of employers across a wide range of industries to seamlessly contribute to and ease the student debt burden for their employees. To date, these employers have helped more than 100k employees save more than $500mn and an average of 3-4 years in payments. The growth and popularity of these benefits have accelerated since the introduction of this provision as part of the 2020 CARES Act, and we look forward to working with Congress to enact this legislation permanently into law,” said Jesse Moore, Senior Vice President, Head of Student Debt at Fidelity Investments.

    “We commend Senators Thune and Warner, along with Representatives Malliotakis and Peters, for their leadership in introducing the Employer Participation in Repayment Act. Making the student loan repayment expansion permanent is a critical step toward easing the financial burden on millions of Americans while empowering businesses to attract and retain top talent. This bipartisan, bicameral effort underscores a shared commitment to workforce development, economic growth, and financial well-being for employees nationwide. We urge Congress to pass this legislation and ensure long-term support for student loan repayment benefits,” said Chatrane Birbal, Vice President of Policy and Government Relations at the HR Policy Association. 

    “SHRM strongly supports the reintroduction of the Employer Participation in Repayment Act, a bipartisan bill that would permanently allow employers to assist employees in repaying their student loans. At SHRM, we have long championed policies that empower employers to provide education assistance programs that align with the evolving needs of the workforce. This legislation is key to strengthening the education-to-employment pipeline—ensuring that individuals can pursue and complete their education without being burdened by overwhelming debt, while also helping employers build a skilled and competitive workforce. This legislation provides a commonsense solution that would benefit workers, workplaces, and the economy,” said Emily M. Dickens, Chief of Staff and Head of Government Affairs at the Society for Human Resource Management.

    “We commend the introduction of bipartisan legislation to permanently extend the student loan repayment benefit under Section 127. Supporting efforts by employers to offer education or debt relief to their employees is both economically and fiscally responsible. This bill is a crucial step towards modernizing Section 127 of the tax code, addressing the evolving needs of employees, and ensuring our workforce remains competitive. InStride is dedicated to reducing the burden of student debt and expanding economic opportunities through innovative employer-sponsored education programs. This legislative effort aligns with our mission and helps create a more financially resilient workforce,” said Craig Maloney, CEO, InStride.

    “The National Association of REALTORS ® (NAR) has long supported efforts to ease the burden of student loan debt. The Employer Participation in Repayment Act is a useful tool in easing the weight of student debt. NAR applauds the leadership from Representatives Peters and Malliotakis and Senators Warner and Thune in making this change permanent. This legislation creates a win-win for both employers in search of attracting and maintaining talented workers and employees who will receive relief on their debt, enabling them to save money for important life decisions like purchasing a home,” said National Association of Realtors® President Kevin Sears.

    “Extending the tax exclusion for employer-provided student loan repayment assistance is crucial for today’s U.S. workforce and is 100% aligned with employer perspectives on these benefits,” said Scott Thompson, CEO of Tuition.io. “As the cost of higher education continues to skyrocket, this benefit enables companies to foster a more educated and skilled workforce, while helping their employees cover basic living expenses, a challenge for so many people today. Since Tuition.io started administering contributions in 2016, employers on our platform have helped pay down student loan debt for hundreds of thousands of employees in key sectors like healthcare, manufacturing, and technology. We at Tuition.io strongly support making these benefits under Section 127 permanent, as their removal would be a significant setback for both corporations and their employees.”

    “The introduction of this bill is a huge step in the right direction and, when passed, will be a major win for companies, employees, and society at large. Tax-free employer contributions to student loans is a great way to help employees pay back student loans while providing a unique incentive for employees to align with company priorities. As the cost of education has and will likely continue to rise, this benefit will help alleviate the financial stress employees have incurred in order to gain employment. Permanently including employer student loan contributions under tax-free educational assistance will help pave the way for more employers to play a massive role in solving the student debt crisis,” said Mick MackLaverty, CEO of Highway Benefits.

    “We are proud to support this initiative and grateful to Congressmember Peters for his dedication to San Diego’s small businesses,” said Jessica Anderson, Interim President and CEO of the San Diego Regional Chamber of Commerce. “The Employer Participation in Repayment Act of 2025 will expand the benefits employers can offer by assisting with student debt repayment, in turn helping small businesses attract and retain talent in a competitive workforce. 

    Full text of the legislation can be found here. A summary of the legislation can be found here.

     

    MIL OSI USA News

  • MIL-OSI Security: Mount Vernon Native Sentenced To 11 Years In Prison For Orchestrating $7.6 Million COVID-19 Fraud Scheme

    Source: Office of United States Attorneys

    Jacob Carter Personally Received Over $1.7 Million in Kickbacks for Obtaining U.S. Small Business Administration Economic Injury Disaster Loans for Over 1,000 Applicants

    Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, announced that JACOB CARTER, who led a scheme to defraud the U.S. Small Business Administration (“SBA”) of more than $7.6 million, was sentenced by U.S. District Judge Nelson S. Román to 11 years in prison.  CARTER and co-defendants Quadri Salahuddin and Anwar Salahuddin were convicted at trial on February 9, 2024, for conspiracy to commit wire fraud, wire fraud, and aggravated identity theft.

    Acting U.S. Attorney Matthew Podolsky said: “Jacob Carter took advantage of a taxpayer-funded program intended to help small businesses in desperate need during the COVID-19 pandemic.  Some small businesses that were eligible for and deserving of this money did not get it because funds ran out.  Carter used his ill-gotten gains for far more selfish pursuits, including expensive jewelry and a Lamborghini.  Thanks to the work of our law enforcement partners at the FBI and the career prosecutors of this Office, Carter has now received just punishment.”

    According to the Indictment, publics filings, public court proceedings and filings, and the evidence presented at trial and in connection with sentencing:

    The SBA is a federal agency of the Executive Branch that administers assistance to American small businesses. This assistance includes making direct loans to applicants through the Economic Injury Disaster Loan (“EIDL”) Program.  In response to the COVID-19 pandemic, Congress expanded SBA’s EIDL Program to provide small businesses with low-interest loans of up to $2 million prior to in or about May 2020 and up to $150,000 beginning in or about May 2020, in order to provide vital economic support to help overcome the loss of revenue small businesses are experiencing due to COVID-19.  Applicants seeking a loan under the EIDL program were also now permitted to request and receive an advance of approximately $1,000 per employee, for an amount up to $10,000, which the SBA has generally provided while the loan application was pending.

    From March through July 2020, CARTER and co-defendants Quadri Salahuddin, Anwar Salahuddin, and Crystal Ransom, used the identities of more than 1,000 other individuals (the “Applicants”) to submit more than 1,000 online applications to the SBA, seeking over $10 million of funds through the SBA’s EIDL Program (the “EIDL Applications”). In connection with the EIDL Applications, CARTER, Quadri Salahuddin, Anwar Salahuddin, and Ransom falsely represented to the SBA that the Applicants were the owners of businesses with 10 or more employees.  However, that was a lie – the individuals did not own businesses or employ people.  Based on the fraudulent EIDL Applications, the SBA made advance payments of more than $7.6 million to the Applicants, who then kicked back a portion of the advance payments to CARTER, Quadri Salahuddin, Anwar Salahuddin, and Ransom.  After the defendants collected millions of dollars in kickback payments, CARTER took photographs of his stacks of cash, purchased expensive jewelry, and leased a Lamborghini.

    *               *                *

    In addition to the prison term, CARTER, 39, of Capitol Heights, Maryland, was sentenced to three years of supervised release.  CARTER was also ordered to pay restitution in the amount of $7,737,000 to the SBA and forfeiture in the amount of $1,720,950.

    Ransom pled guilty to conspiracy to commit wire fraud and was sentenced on April 24, 2024, to two years in prison to be followed by three years of supervised release with the first six months under home confinement. The Court also ordered that Ransom pay restitution in the amount of $7,577,000 to the SBA and forfeiture in the amount of $99,000. Quadri Salahuddin and Anwar Salahuddin are scheduled to be sentenced on March 26, 2025.

    Mr. Podolsky praised the outstanding work of the Federal Bureau of Investigation and the Air Force Office of Special Investigations.

    The case is being handled by the Office’s White Plains Division.  Assistant U.S. Attorneys Jeffrey C. Coffman, Courtney L. Heavey, and Jared D. Hoffman are in charge of the prosecution.

    MIL Security OSI

  • MIL-OSI USA: Ricketts, Flood Introduce CRA Legislation to Overturn CFPB’s Regulatory Overreach of Consumer Payment Companies

    US Senate News:

    Source: United States Senator Pete Ricketts (Nebraska)
    WASHINGTON, D.C. – Today, U.S. Senator Pete Ricketts (R-NE) and U.S. Representative Mike Flood (R-NE-01) introduced a bicameral Congressional Review Act resolution to overturn the Consumer Financial Protection Bureau (CFPB)’s latest overreach in the digital consumer payment market. The legislation would nullify the CFPB’s burdensome “Defining Larger Participants of a Market for General-Use Digital Consumer Payment Applications” rule, which took effect on January 9, 2025.
    “Following their election loss, the Biden-Harris CFPB rushed an eleventh-hour rule to attack non-bank digital consumer payment applications,” said Senator Ricketts. “This one-size-fits-all solution in search of a problem unnecessarily expands the CFPB’s authority. Our legislation eliminates barriers to innovation, cuts red tape, and supports our job-creators. Thank you, Congressman Flood, for leading this common-sense effort in the House. I urge my colleagues to consider this legislation without delay.”
    “Over the last four years, progressive activists sought to dramatically expand the regulatory authority of the Consumer Financial Protection Bureau,” said Representative Flood. “One of the tools they used to achieve their goal was the Larger Participants Rule, which has attempted to leverage the agency’s examination authority to regulate non-bank consumer payments firms. Rolling back this regulation is critical to ensuring that the CFPB doesn’t become a barrier to innovation for job creators across America. Thank you to my colleagues in the House who are joining this effort and to Senator Ricketts for leading on this bicameral effort as well.”
    “Technology helps Americans of all backgrounds manage their financial lives. The CFPB’s rule doesn’t benefit consumers or the market, but it would stifle fintech innovation,” said Carl Holshouser, Executive Vice President of TechNet. “The final rule’s one-size-fits-all approach fails to follow applicable law, does not identify any specific consumer harm, and largely ignores stakeholder comments. Instead, the Bureau casts a wide net to turn itself into a general technology regulator instead of a financial one. TechNet is thankful to Representative Flood and Senator Ricketts for introducing this important resolution and looks forward to Congress rescinding the CFPB’s rule.”
    “The final rule was deeply flawed, failed to define a market or identify specific risks to consumers, and conflated diverse uses and products into a one-size-fits-all approach,” said Penny Lee, President and CEO of the Financial Technology Association. “This was an overreach by the CFPB as payment companies are well-regulated at the state and federal levels. We applaud Senator Pete Ricketts and Congressman Mike Flood in leading the Congressional Review Act process.”
    Bill text can be found here.
    BACKGROUND
    On November 21, 2024, the CFPB finalized a rule entitled “Defining Larger Participants of a Market for a General-Use Digital Consumer Payment Applications”— one of the Biden Administration’s many midnight rulemakings at the end of the year. Effective Jan. 9, 2025, the rule stretches CFPB’s powers to establish new supervision and examination authority over nonbank entities identified as “larger participants” in the general-use digital consumer payment applications market. These entities include payment apps, digital wallets, peer-to-peer payment apps, and other entities. “Larger participants” are entities that facilitate at least 50 million consumer payment transactions annually. Payment apps like Paypal or Venmo are examples.
    Many payment companies are already regulated at the federal and state level. Consumers are having positive experiences in engaging with these services. Despite minimal consumer complaints about payment services—accounting for only 1% of the CFPB’s 1.3 million complaints in 2023—the CFPB chose to layer additional oversight on an already well-regulated industry.
    This one-size-fits-all solution in search of a problem expands CFPB’s authority without properly identifying a specific market it seeks to supervise or the risks within a specific market that pose harm to consumers that existing regulation doesn’t already mitigate. It will layer overreaching, duplicative regulation that could stifle innovation and lead to fewer services and increased costs.
    Further, the cost-benefit analysis supporting the rule is insufficient, unrealistic, and notably underestimates a CFPB exam to cost just $25,001.

    MIL OSI USA News

  • MIL-OSI Video: More Support is Available

    Source: United States of America – Federal Government Departments (video statements)

    Recovery takes a team effort, and FEMA isn’t the only source of help. Many organizations are stepping up to support wildfire survivors.

    LA County 211 can help with food, housing assistance, income, employment and more.

    The American Red Cross can also provide financial assistance. And the Small Business Administration is offering low-interest loans to help survivors rebuild.

    To get a more detailed list of organizations that might be able to help…and to get the latest updates on debris removal, rebuilding, and even school operations, you can visit recovery.LACounty.gov. Don’t wait—take action today!

    https://www.youtube.com/watch?v=9B90JwbejmM

    MIL OSI Video

  • MIL-OSI USA: Disaster Recovery Center in Richmond County to Permanently Close Feb. 28

    Source: US Federal Emergency Management Agency 2

    Disaster Recovery Center in Richmond County to Permanently Close Feb. 28

    The Disaster Recovery Center in Richmond County is set to permanently close at 5:30 p.m., Friday, Feb. 28. It is currently open 9 a.m. to 5:30 p.m., Monday through Friday.The recovery center is at this location:Diamond Lakes Branch Library101 Diamond Lakes WayHephzibah, GA 30904There are additional ways to check the status of your application or update your contact information:Online at DisasterAssistance.gov.The FEMA App for mobile devicesCall the FEMA Helpline at 800-621-3362. Survivors can also contact the Georgia Call Center Monday through Saturday at 678-547-2861 for assistance with their application.FEMA Staff will also be available at these Small Business Administration locations:Bulloch County Statesboro-Bulloch County Library124 S. Main St.Statesboro, GA 30458Hours: 9 a.m. to 6 p.m. Monday–Friday; 9 a.m. to 4 p.m. Saturday; closed Sunday.Coffee CountySatilla Regional Library200 S Madison AveDouglas, GA 31533Hours: 10 a.m. to 6 p.m. Monday-Thursday; 10 a.m. to 4 p.m. Friday; 10 a.m. to 2 p.m. Saturday; closed Sunday.Lowndes County  Lowndes County Civic Center Bldg. D 2102 E. Hill Ave. Valdosta, GA 30601 Hours: 9 a.m. to 5 p.m. Monday-Saturday; closed Sunday.Jeff Davis CountyJeff Davis County Recreation Department83 Buford RoadHazlehurst, GA 31539Hours: 9 a.m. to 6 p.m. Monday–Friday; 9 a.m. to 4 p.m. Saturday; closed Sunday.Telfair CountyTelfair Community Service Center91 Telfair Ave # DMcRae-Helena, GA 31055Hours: 8 a.m. to 5 p.m. Monday – Friday, Closed Saturdays and SundaysFEMA provides help to all disaster survivors, regardless of race, color, national origin, sex, sexual orientation,  religion, age, disability, English proficiency or economic status. Our top priority is ensuring that disaster assistance is reaching people in need.
    jakia.randolph
    Thu, 02/27/2025 – 13:14

    MIL OSI USA News

  • MIL-OSI Europe: REPORT on the European Semester for economic policy coordination: employment and social priorities for 2025 – A10-0023/2025

    Source: European Parliament

    MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

    on the European Semester for economic policy coordination: employment and social priorities for 2025

    (2024/2084(INI))

    The European Parliament,

     having regard to Article 3 of the Treaty on European Union (TEU),

      having regard to Articles 9, 121, 148 and 149 of the Treaty on the Functioning of the European Union (TFEU),

     having regard to the European Pillar of Social Rights (EPSR) proclaimed and signed by the Council, Parliament and the Commission on 17 November 2017,

     having regard to the Commission communication of 4 March 2021 entitled ‘The European Pillar of Social Rights Action Plan’ (COM(2021)0102) and its proposed 2030 headline targets on employment, skills and poverty reduction,

     having regard to the Commission communication of 17 December 2024 entitled ‘2025 European Semester – Autumn package’ (COM(2024)0700),

     having regard to the Commission communication of 26 November 2024 entitled ‘2025 European Semester: bringing the new economic governance framework to life’ (COM(2024)0705),

      having regard to the Commission proposal of 17 December 2024 for a joint employment report from the Commission and the Council (COM(2024)0701),

     having regard to the Commission recommendation of 17 December 2024 for a Council recommendation on the economic policy of the euro area (COM(2024)0704),

      having regard to the Commission report of 17 December 2024 entitled ‘Alert Mechanism Report 2025’ (COM(2024)0702),

      having regard to the Commission staff working document of 26 November 2024 entitled ‘Fiscal statistical tables providing relevant background data for the assessment of the 2025 draft budgetary plans’ (SWD(2024)0950),

     having regard to the Commission staff working document of 17 December 2024 on the changes in the scoreboard the Macroeconomic Imbalance Procedure Scoreboard in the context of the regular review process (SWD(2024)0702),

     having regard to its resolution of 22 October 2024 on the Council position on Draft amending budget No 4/2024 of the European Union for the financial year 2024 – update of revenue (own resources) and adjustments to some decentralised agencies[1],

     having regard to Mario Draghi’s report of 9 September 2024 entitled ‘The future of European competitiveness’,

     having regard to Enrico Letta’s report of April 2024 on the future of the single market[2],

     having regard to the La Hulpe Declaration on the Future of the European Pillar of Social Rights signed by Parliament, the Commission, the European Economic and Social Committee and the Council on 16 April 2024,

     having regard to the Regulation (EU) 2023/955 of the European Parliament and of the Council of 10 May 2023 establishing a Social Climate Fund and amending Regulation (EU) 2021/1060[3],

     having regard to the Regulation (EU) 2024/1263 of the European Parliament and of the Council of 29 April 2024 on the effective coordination of economic policies and on multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97[4], and in particular to Articles 3, 4, 13 and 27 thereof,

     having regard to the Commission communication of 17 January 2023 entitled ‘Harnessing talent in Europe’s regions’ (COM(2023)0032),

     having regard to the Commission communication of 20 March 2023 entitled ‘Labour and skills shortages in the EU: an action plan’ (COM(2024)0131),

     having regard to the 2020 European Skills Agenda,

     having regard to the Commission communication of 7 September 2022 on the European care strategy (COM(2022)0440),

     having regard to the Council Recommendation on access to affordable, high-quality long-term care[5],

     having regard to the EU Social Scoreboard and its headline and secondary indicators,

     having regard to the Commission communication of 3 March 2021 entitled ‘Union of Equality: Strategy for the Rights of Persons with Disabilities 2021-2030’ (COM(2021)0101),

     having regard to the Commission report of 19 September 2024 entitled ‘Employment and Social Developments in Europe (ESDE): upward social convergence in the EU and the role of social investment’,

     having regard to the Council Decision on Employment Guidelines, adopted by the Employment, Social Policy, Health and Consumer Affairs Council on 2 December 2024, which establishes employment and social priorities aligned with the principles of the EPSR,

     having regard to the Tripartite Declaration for a thriving European Social Dialogue and to the forthcoming pact on social dialogue,

     having regard to Directive (EU) 2022/2041 of the European Parliament and of the Council of 19 October 2022 on adequate minimum wages in the European Union[6] (Minimum Wage Directive),

     having regard to the European Social Charter, referred to in the preamble of the EPSR,

     having regard to the EU Roma strategic framework for equality, inclusion and participation for 2020-2030,

     having regard to the United Nations Sustainable Development Goals (SDGs),

     having regard to the Gender Equality Strategy 2020-2025,

     having regard to the EU Anti-Racism Action Plan 2020-2025,

     having regard to the LGBTIQ Equality Strategy 2020-2025,

     having regard to Rule 55 of its Rules of Procedure,

     having regard to the report of the Committee on Employment and Social Affairs (A10-0023/2025),

    A. whereas progress has been made towards achieving the EU’s employment targets, namely that at least 78 % of people aged 20 to 64 should be in employment by 2030, despite the uncertainty created by Russia’s war of aggression against Ukraine and the impact of high inflation; whereas, according to the Commission’s 2025 autumn economic forecast, EU employment has reached a rate of 75.3 %; whereas growth in employment in the EU remained robust in 2023; whereas in two thirds of the Member States, employment growth in 2023 was on track to reach the national 2030 target; whereas significant challenges nevertheless persist, such as high unemployment rates in some Member States, particularly among young people and persons with disabilities, as do significant inequalities between sectors and regions, which can negatively affect social cohesion and the well-being of European citizens in the long term;

    B. whereas the European Semester combines various different instruments in an integrated framework for multilateral coordination and surveillance of economic, employment and social policies within the EU and it must become a key tool for fostering upward social convergence; whereas the Social Convergence Framework is a key tool for assessing social challenges and upward convergence within the European Semester and for monitoring social disparities across Member States, while addressing the challenges identified in the Joint Employment Report (JER);

    C. whereas the Union has adopted the 2030 target of reducing the number of people at risk of poverty and social exclusion by at least 15 million compared to 2019, including at least 5 million children; whereas in nearly half of the Member States the trend is heading in the opposite direction; whereas one child in four in the European Union is still at risk of poverty and social exclusion; and whereas the current trend will not make it possible to meet the 2030 target; whereas public spending on children and youth should not be seen only as social expenditure but as an investment in the future; whereas the promotion of strong, sustainable and inclusive economic growth can succeed only if the next generation can develop their full educational potential in order to be prepared for the changing labour market, whereas to meet the 2030 Barcelona targets for early childhood education and care, the EU should invest an additional EUR 11 billion per year[7];

    D. whereas despite a minimal reduction in the number of people at risk of poverty or social exclusion in the EU in 2023, approximately one in five still faces this challenge, with notable disparities for children, young and older people, persons with disabilities, LGTBI, non-EU born individuals, and Roma communities;

    E. whereas significant disparities are observed among children from ethnic or migrant backgrounds and children with disabilities; whereas 83 % of Roma children live in households at risk of poverty; whereas the EU and national resources currently deployed are in no way sufficient for addressing the challenge of child poverty in the EU and, therefore, a dedicated funding instrument for the European Child Guarantee as well as synergies with other European and national funds are of the utmost importance in both the current multiannual financial framework (MFF) and the next one;

    F. whereas the EPSR must be the compass guiding EU social and economic policies, whereas the Commission should monitor progress on the implementation of the EPSR using the Social Scoreboard and the Social Convergence Framework;

    G. whereas poor quality jobs among the self-employed are disproportionately widespread while the rate of self-employment is declining, including among young people;

    H. whereas there are still 1.4 million people residing in institutions in the EU; whereas residents of institutions are isolated from the broader community and do not have sufficient control over their lives and the decisions that affect them; whereas despite the fact that the European Union has long been committed to the process of deinstitutionalisation, efforts are still needed at both European and national level to enable vulnerable groups to live independently in a community environment;

    I. whereas demographic challenges, including an ageing population, low birth rates and rural depopulation, with young people in particular moving to urban areas, profoundly affect the economic vitality and attractiveness of EU regions, the labour markets, and consequently, the sustainability of welfare systems, and further aggravate the regional disparities in the EU, and hence represent a structural challenge for the EU economy; and whereas, as underlined in the Draghi report, sustainable growth and competitiveness in Europe depend to a large extent on adapting education and training systems to evolving skills needs, prioritising adult learning and vocational education and training, and the inclusion of the active population in the labour market and on a robust welfare system;

    J. whereas, as highlighted in the Draghi report, migrant workers have been an important factor in reducing labour shortages and are more likely to work in occupations with persistent shortages than workers born in the EU;

    K. whereas 70 % of workers in Europe are in good-quality jobs, 30 % are in high-strain jobs where demands are more numerous than resources available to balance them leading to overall poor job quality; whereas in many occupations suffering from persistent labour shortages the share of low-quality jobs is higher than 30 %;

    L. whereas the Letta report states that there is a decline in the birth rate, noting the importance of creating a framework to support all families as part of a strategy of inclusive growth in line with the EPSR; whereas the report notes that the free movement of people remains the least developed of the four freedoms and argues for reducing barriers to intra-EU occupational mobility while addressing the social, economic and political challenges facing the sending Member States and their most disadvantaged regions, as well as safeguarding the right to stay; whereas there is a need to promote family-friendly and work-life balance policies, ensuring accessible and professional care systems as well as public quality education, family-related leave and flexible working arrangements in line with the European Care Strategy;

    M. whereas inflation has increased the economic burden on households, having a particularly negative impact on groups in vulnerable situations, such as single parents, large families, older people or persons with disabilities, whereas housing costs and energy poverty remain major problems; whereas housing is becoming unaffordable for those who live in households where housing costs account for 40 % of total disposable income; whereas investment in social services, housing supply – including social housing – and policies that facilitate the accessibility and affordability of housing play a key role in reducing poverty among vulnerable households;

    N. whereas the EU’s micro, small and medium-sized enterprises face particular challenges such as staying competitive against third-country players, maintaining production levels despite rising energy costs and finding the necessary skills for the green and digital transitions; whereas they need financial and technical support to comply with regulatory requirements and take advantage of the opportunities offered by the twin transitions;

    O. whereas labour and skills shortages remain a problem at all levels, and are reported by companies of all sizes and sectors; whereas these shortages are exacerbated by a lack of candidates to fill critical positions in key sectors such as education, healthcare, transport, science, technology, engineering and construction, especially in areas affected by depopulation; whereas these shortages can result from a number of factors, such as difficult working conditions, unattractive salaries, demand for new skill sets and a shortage of relevant training, the lack of public services, barriers of access to medium and higher education and lack of recognition of skills and education;

    P. whereas the Union has adopted the target that at least 60 % of adults should participate in training every year by 2030; whereas the Member States have committed themselves to national targets in order to achieve this headline goal and whereas the majority of Member States lost ground in the pursuit of these national targets; whereas further efforts are needed to ensure the provision of, and access to, quality training policies that promote lifelong learning; whereas upskilling, reskilling and training programmes must be available for all workers, including those with disabilities, and should also be adapted to workers’ needs and capabilities;

    Q. whereas in 2022, the average Programme for International Student Assessment (PISA) score across the OECD on the measures of basic skills (reading, mathematics and science) of 15-year-olds dropped by 10 points compared to the last wave in 2018; whereas underachievement is prevalent among disadvantaged learners, demonstrating a widening of educational inequalities; whereas this worrying deterioration calls for reforms and investments in education and training;

    R. whereas the EU’s capacity to deal with future shocks, crises and ‘polycrises’ while navigating the demographic, digital and green transitions, will depend greatly on the conditions under which critical workers will be able to perform their work; whereas addressing the shortages and retaining all types of talent requires decent working conditions, access to social protection systems, and opportunities for skills development tailored to the needs; and whereas addressing skills shortages is crucial to achieving the digital and green transitions, ensuring inclusive and sustainable growth and boosting the EU’s competitiveness;

    S. whereas it is essential to promote mobility within the EU and consider attracting skilled workers from third countries, while ensuring respect for and enforcement of labour and social rights and channelling third-country nationals entering the EU through legal migration pathways towards occupations experiencing shortages, supported by an effective integration policy, in full complementarity with harnessing talents from within the Union;

    T. whereas gender pay gaps remain considerable in most EU Member States and whereas care responsibilities are an important factor that continue to constrain women into part-time employment or lead to their exclusion from the labour market, resulting in a wider gender employment gap;

    U. whereas the JER highlights the right to disconnect, in particular in the context of telework, acknowledging the critical role of this right in ensuring a work-life balance in a context of increasing digitalisation and remote working;

    V. whereas challenges to several sectors, such as automotive manufacturing and energy intensive industries, became evident in 2024 and a number of companies announced large-scale restructuring;

    W. whereas there are disparities in the coverage of social services, including long-term care, child protection, domestic violence support, and homelessness aid, that need to be addressed through the European Semester;

    X. whereas there is currently no regular EU-wide collection of data on social services investment and coverage; whereas collecting such data is key for an evidence-based analysis of national social policies in the European Semester analysis; whereas this should be addressed through jointly agreed criteria and data collection standards for social services investment and coverage in the Member States; whereas the European Social Network’s Social Services Index is an example of how such data collection can contribute to the European Semester analysis;

    Y. whereas the crisis in generational renewal, demographic changes, and lack of sufficient investment in public services have led to an increased risk of poverty and social exclusion, particularly affecting children and older people, single-parent households and large families, the working poor, persons with disabilities, and people from marginalised backgrounds; whereas an ambitious EU anti-poverty strategy will be essential to reverse this trend and provide responses to the multidimensional phenomenon of poverty;

    Z. whereas Eurofound research shows that suicide rates have been creeping up since 2021, after decreasing for decades; whereas more needs to be done to address causes of mental health problems in working and living conditions (importantly social inclusion), and access to support for people with poor mental health remains a problem;

    AA. whereas there were still over 3 300 fatal accidents and almost 3 million nonfatal accidents in the EU-27 in 2021; whereas over 200 000 workers die each year from work-related illnesses; whereas these data do not include all accidents caused by undeclared work, making it plausible to assume that the true numbers greatly exceed the official statistics; whereas in 2017, according to Eurofound, 20 % of jobs in Europe were of ‘poor quality’ and put workers at increased risk regarding their physical or mental health; whereas 14 % of workers have been exposed to a high level of psychosocial risks; whereas 23 % of European workers believe that their safety or their health is at risk because of their work;

    AB. whereas the results of the April 2024 Eurobarometer survey on social Europe highlight that 88 % of European citizens consider social Europe to be important to them personally; whereas this was confirmed by the EU Post-Electoral Survey 2024, where European citizens cited rising prices and the cost of living (42 %) and the economic situation (41 %) as the main topics that motivated them to vote in the 2024 European elections;

    AC. whereas according to Article 3 TEU, social progress in the EU is one of the aims of a highly competitive social market economy, together with full employment, a high level of protection and improvement of the quality of the environment; whereas Article 3 TEU also states that the EU ‘shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child’;

    AD. whereas the new EU economic governance framework entered into force in April 2024 and aims to promote sustainable and inclusive growth and to give more space for social investment and achievement of the objectives of the EPSR; whereas, for the first time, the revision includes a social convergence framework as an integrated part of the European Semester;

    AE. whereas under the new EU economic governance framework, all Member States have to include reforms and investments in their medium-term plans addressing common EU priorities and challenges identified in country-specific recommendations in the context of the European Semester; whereas the common EU priorities include social and economic resilience, including the EPSR;

    AF. whereas European social partners, during Macroeconomic Dialogue, have denounced the lack of involvement of social partners in the drafting of the medium-term fiscal structural plans and ETUC, SMEUnited and SGIEurope have signed a joint statement for a material and factual involvement of social partners in the economic governance and the European Semester;

    AG. whereas public investment is expected to increase in 2025 in almost all Member States, with a significant contribution from NextGenerationEU’s Recovery and Resilience Facility (RRF) and EU funds and will contribute to social spending, amounting to around 25 % of the total estimated expenditure under the RRF, securing growth and economic resilience[8]; whereas social investments and reforms in key areas can boost employment, social inclusion, competitiveness and economic growth[9]; whereas social partners are essential for designing and implementing policies that promote sustainable and inclusive growth, decent and quality work, and fair transitions and must be involved at all levels of governance in accordance with the TFEU;

    AH. whereas the Member States should implement the Minimum Wage Directive without delay and prepare action plans that increase collective bargaining coverage in line with the directive, where applicable;

    AI. whereas according to the Organization for Economic Co-operation and Development (OECD), on average across OECD countries, occupations at highest risk of automation account for about 28 % of employment[10]; whereas social dialogue and collective bargaining are crucial in this context to ensure a participatory approach to managing change driven by technological developments, addressing potential concerns, while fostering workers’ adaptation (including via skills provision); whereas digitalisation, robotisation, automation and artificial intelligence (AI) must benefit workers and society by improving working conditions and quality of life, ensuring a good work-life balance, creating better employment opportunities, and contributing to socio-economic convergence; whereas workers and their trade unions will play a critical role in anticipating and tackling risks emerging from those challenges;

     

    AJ. whereas social dialogue and collective bargaining are essential for the EU’s competitiveness, labour productivity and social cohesion;

    1. Considers that the Commission and the Council should strengthen their efforts to implement the EPSR, in line with the action plan of March 2021 and the La Hulpe Declaration, to achieve the 2030 headline targets; calls on the Commission to ensure that the JER 2026 analyses the implementation of all the principles of the EPSR in line with Regulation (EU) 2024/1263 and includes an analysis of the social dimension of the national medium-term fiscal structural plans related to social resilience, including the EPSR; welcomes, in this regard, the announcement of a new Action Plan on the implementation of the EPSR[11] for 2025 to give a new impetus to social progress; welcomes the fact that almost all Member States are expected to increase public investment in 2025, which is necessary to ensure access to quality public services and achieve the aims of the EPSR; recalls that the Member States can mobilise the RRF within the scope defined by the Regulation (EU) 2021/241[12] until 31 December 2026 on policies for sustainable and inclusive growth and the young;

    2. Stresses the importance of using the Social Scoreboard and the Social Convergence Framework to identify risks to, and to track progress in, reducing inequalities, strengthening social protection systems and promoting decent working conditions and supportive measures for workers to manage the transitions; stresses that in this regard, it is necessary to ensure a sustainable, fair and inclusive Europe where social rights are fully protected and safeguarded at the same level as economic freedoms; recalls that EU citizens identify social Europe as one of their priorities;

    3. Regrets the lack of data on and analysis of wealth inequality and wealth concentration in the EU as this is one of the main determinants of poverty; points out that according to Distributional Wealth Accounts, a dataset developed by the European System of Central Banks, the share of wealth held by the top 10 % stood at 56 % in the fourth quarter of 2023, while the bottom half held just 5 %;

    4. Welcomes the inclusion of analysis on the positive contribution of the SDGs and the European equality strategies in the JER 2025 and calls on the Commission to ensure that the JER 2026 includes both a section analysing the progress towards the SDGs related to employment and social policy, and another on progress towards eliminating social and labour discrimination in line with the Gender Equality Strategy 2020-2025, the EU Anti-Racism Action Plan 2020-2025, the EU Roma strategic framework for equality, inclusion and participation 2020-2030, the LGBTIQ Equality Strategy 2020-2025, and the Strategy for the rights of persons with disabilities 2021-2030;

    5. Calls on the Member States to implement the updated employment guidelines, with an emphasis on education and training for all, new technologies such as AI, and recent policy initiatives on platform work, affordable and decent housing and tackling labour and skills shortages, with a view to strengthening democratic decision-making;

    6. Reiterates the importance of investing in workforce skills development and occupational training and of ensuring quality employment, with an emphasis on the individual right to training and lifelong learning; urges the Member States to develop upskilling and reskilling measures in collaboration with local stakeholders, including educational and training bodies and the social partners, in order to reinforce the link between the education and training systems and the labour market and to anticipate labour market needs; welcomes the fact that employment outcomes for recent graduates from vocational education and training (VET) continue to improve across the EU; is concerned about young people’s declining educational performance, particularly in basic skills; welcomes, in this regard, the announcement of an Action Plan on Basic Skills and a STEM Education Strategic Plan; calls on the Member States to invest in programmes to equip learners with the basic, digital and transversal skills needed for the world of work and its digitisation as well as to help them to contribute meaningfully to society; recalls the important role that the European Globalisation Adjustment Fund for displaced workers can play in supporting and reskilling workers who were made redundant as a result of major restructuring events;

    7. Welcomes the announcement of a quality jobs roadmap to ensure a just transition for all; calls on the Commission to include in this roadmap considerations for measures linked to the use of AI and algorithmic management in the world of work so that new technologies are harnessed to improve working conditions and productivity while respecting workers’ rights and work-life balance as recognised in the JER[13]; calls on the Commission to propose a directive on the use of AI in the workplace that ensures that workers’ rights are protected and respected;

    8. Stresses that the response to labour shortages in the European Union also involves improving and facilitating labour mobility within the Union; calls on the Member States to strengthen and facilitate the recognition of skills and qualifications in the Union, including those of third-country nationals; calls on the Commission to analyse the effectiveness of the European Employment Services (EURES) platform with a view to a potential revision of its operation;

    9. Notes that the number of early leavers from education and training, people with lower levels of education, young people not in education, employment or training (NEETs) and among them vulnerable groups, including Roma, women, older people, low- and medium-qualified people, persons with disabilities and people with a migrant or minority background, depending on the country-specific context, remains high in several Member States, despite a downward trend in the European Union; calls on the Member States to reinforce the Youth Guarantee as stated in Principle 4 of the EPSR; in order to support young people in need throughout their personal and professional development; reiterates the pivotal role that VET plays in providing the knowledge, skills and competencies necessary for young people entering the labour market; emphasises the need to invest in the quality and attractiveness of VET through the European Social Fund Plus (ESF+); recalls, therefore, the need to address this situation and develop solutions to keep young people in education, training or employment and the importance of ensuring their access to traineeships and apprenticeships, enabling them to gain their first work experience and facilitating their transition from education to employment as well as to create working conditions that enable an ageing workforce to remain in the labour market;

    10. Considers that, although there has been an improvement, persons with disabilities, especially women with disabilities, still face significant obstacles in the labour market, and that there is therefore a need for vocational and digital training, while promoting the inclusion of persons with disabilities, targeting the inactive labour force and groups with low participation in the labour market, including women, young people, older workers and persons with chronic diseases; calls on the Commission to update the EU Disability Strategy with new flagship initiatives and actions from 2025 onwards, such as a European Disability Employment and Skills Guarantee and the sharing of best practices such as the disability card, in particular to address social inclusion and independent living for people with disabilities, also ensuring their access to quality education, training and employment through guidance on retaining disability allowances;

    11. Expresses concern that Roma continue to face significant barriers to employment, with persistent biases limiting their prospects; notes that the EU Roma strategic framework for equality, inclusion, and participation highlights a lack of progress in employment access and a growing share of Roma youth not in employment, education, or training; emphasises the framework’s goal of halving the employment gap between Roma and the general population and ensuring that at least 60 % of Roma are in paid work by 2030; urges the Member States to adopt an integrated, equality-focused approach and to ensure that public policies and services effectively reach all Roma, including those in remote rural areas;

    12. Stresses the need to pay attention to the social and environmental aspects of competitiveness, emphasising the need for investments in education and training for all to ensure universal access to high-quality public education and professional training programmes, as well as sustainable practices to foster inclusive growth; underlines that social partners should play a key role in identifying and addressing skills needs across the EU;

    13. Calls on the Commission and the Member States to include specific recommendations on housing affordability in the European Semester and to promote housing investment; urges the Member States to ensure that housing investments support long-term quality housing solutions that are actually affordable for low-income and middle-income households, highlighting that investments in social and affordable housing are crucial in order to ensure and improve the quality of life for all; stresses the need for a better use of EU funding, such as through European Investment Bank financial instruments, in particular to support investments to increase the energy efficiency of buildings; calls on the Commission and the Member States to take decisive action to provide an EU regulatory framework for the housing sector, together with an assessment of Union policies, funds and bottlenecks that should facilitate the construction, conversion and renovation of accessible, affordable and energy-efficient housing, including social housing, that meets the needs of young people, people with reduced mobility, low- and middle-income groups, families at risk and people in more vulnerable situations, while protecting homeowners and those seeking access to home ownership from a further reduction in supply;

    14. Welcomes the announced European Affordable Housing Plan to support Member States in addressing the housing crisis and soaring rents; calls on the Commission to assess and publish which potential barriers on State aid rules affect housing accessibility; recalls that the Social Climate Fund aims to provide financial aid to Member States from 2026 to support vulnerable households, in particular with measures and investments intended to increase the energy efficiency of buildings, decarbonisation of heating and cooling of buildings and the integration in buildings of renewable energy generation and storage;

    15. Considers that homelessness is a dramatic social problem in the EU; calls for a single definition of homelessness in the EU, which would enable the systematic comparison and assessment of the extent of homelessness across different EU Member States; calls on the Commission to develop a strategy and work towards ending homelessness in the EU by 2030 by promoting access to affordable and decent housing as well as access to quality social services; urges the Member States to better use the available EU instruments, including the ESF+, in this matter[14];

    16. Calls on the Member States to design national homelessness strategies centred around housing-based solutions; welcomes the intention to deliver a Council recommendation on homelessness[15]; urges the Commission to further increase the ambition of the European Platform on Combating Homelessness, in particular by providing it with a dedicated budget;

    17. Considers that EU action is urgently needed to address the persistently high levels of poverty and social exclusion in the EU, particularly among children, young and older people, persons with disabilities, non-EU born individuals, LGTBI and Roma communities; highlights that access to quality social services should be prioritised, with binding targets to reduce homelessness and ensure energy security for vulnerable households; calls on the Commission to adopt the first-ever EU Anti-Poverty Strategy;

    18. Recalls the Union objective of transitioning from institutional to community or family-based care; calls on the Commission to put forward an action plan on deinstitutionalisation; stresses that this action plan should cover all groups still living in institutions, including children, persons with disabilities, people with mental health issues, people affected by homelessness and older people; calls on the Member States to make full use of the ESF+ funds as well as other relevant European and national funds in order to finalise the deinstitutionalisation process so as to ensure that every EU citizen can live in a family or community environment;

    19. Calls on the Commission to deliver a European action plan for mental health, in line with its recent recommendations[16], and to complement it with a directive on psychosocial risks in the workplace; calls on the Member States to strengthen access to mental health services and emotional support programmes for all, particularly children, young people and older people; requests a better use of the Social Scoreboard indicators to address the impact of precarious living conditions and uncertainty on mental health;

    20. Calls on the Commission to address loneliness by promoting a holistic EU strategy on loneliness and access to professional care; calls also for this EU strategy to address the socio-economic impact of loneliness on productivity and well-being by tackling issues such as rural isolation; urges the Member States to continue implementing the Council recommendation on access to affordable, quality long-term care with a view to ensuring access to quality care while ensuring decent working conditions for workers in the care sector, as well as for informal carers;

    21. Recognises that 44 million Europeans are frequent informal long-term caregivers, the majority of whom are women[17];

    22. Recognises the unique role of carers in society, and while the definition of care workers is not harmonised across the EU, the long-term care sector employs 6.4 million people across the EU;

    23. Is concerned that, in 2023, 94.6 million people in the EU were still at risk of poverty or social exclusion; stresses that without a paradigm shift in the approach to combating poverty, the European Union and its Member States will not achieve their poverty reduction objectives; believes that the announcement of the first-ever EU Anti-Poverty Strategy is a step in the right direction towards reversing the trend, but must provide a comprehensive approach to tackling the multidimensional aspects of poverty and social exclusion with concrete actions, strong implementation and monitoring; calls for this Strategy to encompass everybody experiencing poverty and social exclusion, first and foremost the most disadvantaged, but also specific measures for different groups such as persons experiencing in-work poverty, homeless people, people with disabilities, single-parent families and, above all, children in order to sustainably break the cycle of poverty; stresses that the transposition of the Minimum Wage Directive will be key to preventing and fighting poverty risks among workers, while reinforcing incentives to work, and welcomes the fact that several Member States have amended or plan to amend their minimum wage frameworks; is concerned about the rise of non-standard forms of employment where workers are more likely to face in-work poverty and find themselves without adequate legal protections; stresses that an EU framework directive on adequate minimum income and active inclusion, in compliance with the subsidiarity principle, would contribute to the goals of reducing poverty and fostering the integration of people absent from the labour market;

    24. Reiterates its call on the Commission to carefully monitor implementation of the Child Guarantee in all Member States as part of the European Semester and country-specific recommendations; reiterates its call for an increase in the funding of the European Child Guarantee with a dedicated budget of at least EUR 20 billion and for all Member States to allocate at least 5 % of their allocated ESF+ funds to fighting child poverty and promoting children’s well-being; considers that the country-specific recommendations should reflect Member States’ budgetary compliance with the minimum required allocation for tackling child poverty set out in the ESF+ Regulation[18]; calls on the Commission to provide an ambitious budget for the Child Guarantee in the next MFF in order to respond to the growing challenge of child poverty and social exclusion;

    25. Is concerned about national policies that create gaps in health coverage, increasing inequalities both within and between Member States, such as privatisation of public healthcare systems, co-payments and lack of coverage; highlights that these deepen poverty, erode health and well-being, and increase social inequalities within and across EU countries; warns that this also undermines the implementation of principle 16 of the EPSR and of SDG 3.8 on universal health coverage, as well as the EPSR’s overall objective of promoting upward social convergence in the EU, leaving no one behind; believes that the indicators used in the Social Scoreboard do not provide a comprehensive understanding of healthcare affordability;

    26. Underlines that employers need to foster intergenerational links within companies and intergenerational learning between younger and older workers, and vice versa; underlines that an ageing workforce can help a business develop new products and services to adapt to the needs of an ageing society in a more creative and productive way; calls, furthermore, for the creation of incentives to encourage volunteering and mentoring to induce the transfer of knowledge between generations;

    27. Warns that, according to European Central Bank reports, real wages are still below their pre-pandemic level, while productivity was roughly the same; agrees that this creates some room for a non-inflationary recovery in real wages and warns that if real wages do not recover, this would increase the risk of protracted economic weakness, which could cause scarring effects and would further dent productivity in the euro area relative to other parts of the world; believes that better enforcement of minimum wages and strengthening collective bargaining coverage can have a beneficial effect on levels of wage inequality, especially by helping more vulnerable workers at the bottom of the wage distribution who are increasingly left out;

    28. Calls for the Member States to ensure decent working conditions, comprising among other things decent wages, access to social protection, lifelong learning opportunities, occupational health and safety, a good work-life balance and the right to disconnect, reasonable working time, workers’ representation, democracy at work and collective agreements; urges the Member States to foster democracy at work, social dialogue and collective bargaining and to protect workers’ rights, particularly in the context of the green and digital transitions, and to ensure equal pay for equal work by men and women, enhance pay transparency and address gender-based inequality to close the gender pay gap in the EU;

    29. Recalls the importance of improving access to social protection for the self-employed and calls on the Commission to monitor the Member States’ national plans for the implementation of the Council Recommendation of 8 November 2019 on access to social protection for workers and the self-employed[19] as part of the country-specific recommendations; recalls, in this regard, as the rate of self-employed professionals in the cultural and creative sectors is more than double that in the general population, the 13 initiatives laid down in the Commission’s 21 February 2024 response to the European Parliament resolution of 21 November 2023 on an EU framework for the social and professional situation of artists and workers in the cultural and creative sectors[20] and calls on the Commission to start implementing them in cooperation with the Member States;

    30. Stresses that the role of social dialogue and social partners should be systematically integrated into the design and implementation of employment and social policies, ensuring the involvement of social partners at all levels;

    31. Calls for the implementation of policies that promote work-life balance and the right to disconnect, with the aim of improving the quality of life for all families and workers, for ensuring the implementation of the Work-Life Balance Directive[21] and of the European Care Strategy; calls on the Commission to put forward a legislative proposal to address teleworking and the right to disconnect; as well as a proposal for the creation of a European card for all types of large families and a European action plan for single parents, offering educational and social advantages; calls, ultimately, for initiatives to combat workforce exclusion as a consequence of longer periods of sick leave, to adapt the workplace and to promote flexible working conditions and to develop strategies to support workers’ return after longer periods of absence;

    32. Calls for demographic challenges to be prioritised in the EU’s cohesion policy and for concrete action at EU and national levels; calls on the Commission to prioritise the development of the Commission communication on harnessing talent in Europe’s regions and the ‘Talent Booster Mechanism’ in order to promote social cohesion and to step up funding for rural and outermost areas and regions with a high rate of depopulation, supporting quality job creation, public services, local development projects and basic infrastructure that favour the population’s ‘right to stay’, especially in the case of young people; highlights the importance of introducing specific measures to address regional inequalities in education and training, ensuring equal access to high-quality and affordable education for all;

    33. Is concerned that, despite improvements, several population groups are still significantly under-represented in the EU labour market, including women, older people, low- and medium-qualified people, persons with disabilities and people with a migrant or minority background; warns that  educational inequalities have deepened, further exacerbating the vulnerabilities of students from disadvantaged and migrant backgrounds; points out that, according to the JER, people with migrant or minority backgrounds can significantly benefit from targeted measures in order to address skills mismatches, improve language proficiency, combat discrimination and receive tailored and integrated support services; stresses the importance of strengthening efforts in the implementation of the 2021-27 Action Plan on Integration and Inclusion, which provides a common policy framework to support the Member States in developing national migrant integration policies;

    34. Calls on the Commission and the Council to prioritise reducing administrative burdens with the aim of simplification while respecting labour and social standards; believes that better support for SMEs and actual and potential entrepreneurs will improve the EU’s competitiveness and long-term sustainability, boost innovation and create quality jobs; notes that SMEs and self-employed professionals in all sectors are essential for the EU’s economic growth and thus the financing of social policies; urges the implementation of specific recommendations to improve the single market; takes note of the Commission’s publication of the ‘Competitiveness Compass’ on 29 January 2025[22];

    35. Calls on the Commission to conduct competitiveness checks on every new legislative proposal, taking into account the overall impact of EU legislation on companies, as well as on other EU policies and programmes;

    36. Considers that the social economy is an essential component of the EU’s social market economy and a driver for the implementation of the EPSR and its targets, often providing employment to vulnerable and excluded groups; calls on the Commission and the Member States to strengthen their support for all social economy enterprises but especially non-profit ones, as highlighted in the Social Economy Action Plan 2021 and the Liège Roadmap for the Social Economy, in order to promote quality, decent, inclusive work and the circular economy, to encourage the Member States to facilitate access to funding and to enhance the visibility of social economy actors; calls for the Commission to explore innovative funding mechanisms to support the development of the social economy in Europe[23] and to foster a dynamic and inclusive business environment;

    37. Believes that, in this year of transition, with the implementation of the revised economic governance rules, the Member States should align fiscal responsibility with sustainable and inclusive growth and employment, notes that the involvement of social partners, including in the development of medium-term fiscal structural plans, should be enhanced to contribute to the goals of the new economic governance framework;

    38. Welcomes the fact that the national medium-term fiscal structural plans, under the new economic governance framework, have to include the reforms and investments responding to the main challenges identified in the context of the European Semester and also to ensure debt sustainability while investing strategically in the principles of the EPSR with the aim of fostering upward social convergence;

    39. Is concerned that compliance with the country-specific recommendations (CSRs) remains low; reiterates its call, therefore, for an effective implementation of CSRs by the Member States so as to promote healthcare and sustainable pension systems, in line with principles 15 and 16 of the EPSR, and long-term prosperity for all citizens, taking into account the vulnerability of those workers whose careers are segmented, intermittent and subject to labour transitions; insists that the Commission should reinforce its dialogues with the Member States on the implementation of existing recommendations and of the Employment Guidelines as well as on current or future policy action to address identified challenges;

    40. Welcomes the establishment of a framework to identify risks to social convergence within the European Semester, for which Parliament called strongly; recalls that under this framework, the Commission assesses risks to upward social convergence in Member States and monitors progress on the implementation of the EPSR on the basis of the Social Scoreboard and of the principles of the Social Convergence Framework; welcomes the fact that the 2025 JER delivers country-specific analysis based on the principles of the Social Convergence Framework; calls on the Commission to further develop innovative quantitative and qualitative analysis tools under this new Framework in order to make optimal use of it in the future cycles of the European Semester;

    41. Welcomes the fact that the first analysis based on the principles of the Social Convergence Framework points to upward convergence in the labour market in 2023[24]; notes with concern that employment outcomes of under-represented groups still need to improve and that risks to upward convergence persist at European level in relation to skills development, ranging from early education to lifelong learning, and the social outcomes of at-risk-of-poverty and social exclusion rates; calls on the Commission to further analyse these risks to upward social convergence in the second stage of the analysis and to discuss with the Member States concerned the measures undertaken or envisaged to address these risks;

    42. Recognises the cost of living crisis, which has increased the burden on households, and the rising cost of housing, which, in conjunction with high energy costs, is contributing to high levels of energy poverty across the EU; calls, therefore, on the Commission and Member States to comprehensively address the root causes of this crisis by prioritising policies that promote economic resilience, social cohesion, and sustainable development;

    43. Warns of the social risks stemming from the crisis in the automotive sector, which is facing unprecedented pressure from both external and internal factors; calls on the Commission to pay attention to this sector and enhance social dialogue and the participation of workers in transition processes; stresses the urgent need for a coordinated EU response via an emergency task force of trade unions and employers to respond to the current crisis;

    44. Calls on the Commission to monitor data on restructuring and its impact on employment, such as by using the European Restructuring Monitor, to facilitate measures in support of restructuring and labour market transitions, and to consider highlighting national measures supporting a socially responsible way of restructuring in the European Semester;

    45. Calls on the Commission to monitor the development of minimum wages in the Member States following the transposition of the Minimum Wage Directive to determine whether the goal of ‘adequacy’ of minimum wages is being achieved;

    46. Is concerned about the Commission’s revision of the Macroeconomic Imbalance Procedure (MIP) Scoreboard, particularly the reduction in employment and social indicators, which are crucial for assessing the social and labour market situation in the Member States; regrets the fact that youth unemployment is no longer considered as a headline indicator, despite its relevance in identifying and addressing specific labour market challenges and in adopting adequate public policies; stresses that social standards indicators should be given greater consideration in the decision-making process; regrets the fact that the Commission did not duly consult Parliament and reminds the Commission of its obligation to closely cooperate with Parliament, the Council and social partners before drawing up the MIP scoreboard and the set of macroeconomic and macro-financial indicators for Member States; stresses that the implementation of the principles of the EPSR must be part of the MIP scoreboard;

    47. Considers that territorial and social cohesion are essential components of the competitiveness agenda, and legislation such as the European Instrument for Temporary Support to Mitigate Unemployment Risks in an Emergency (SURE) remain a positive example to inspire future EU initiatives;

    48. Considers that the Commission and the Member States should ensure that fiscal policies under the European Semester support investments aligned with the EPSR, particularly in areas such as decent and affordable housing, quality healthcare, education, and social protection systems, as these are critical for social cohesion and long-term economic sustainability and to address the challenges identified through social indicators;

    49. Stresses the need to address key challenges identified in the Social Scoreboard as ‘critical’ and ‘to watch’, including children at risk of poverty or social exclusion, the gender employment gap, housing cost overburden, childcare, and long-term care the disability employment gap, the impact of social transfers on reducing poverty, and basic digital skills[25];

    50. Stresses the negative impacts that the cost of living crisis has had on persons with disabilities;

    51. Urges the Member States to consider robust policies that ensure fair wages and improve working conditions, particularly for low-income and precarious workers;

    52. Calls on the Member States to strengthen social safety nets to provide adequate support to those whose income from employment is insufficient to meet basic living costs;

    53. Stresses the need for timely and harmonised data on social policies to improve evidence-based policymaking and targeted social investments; calls for improvements to be made to the Social Scoreboard in order to cover the 20 EPSR principles with the introduction of relevant indicators reflecting trends and causes of inequality, such as quality employment, wealth distribution, access to public services, adequate pensions, the homelessness rate, mental health and unemployment; recalls that the at-risk-of-poverty-or-social-exclusion (AROPE) indicator fails to reveal the causes of complex inequality; calls on the Commission and the Member States to develop a European data collection framework on social services to monitor the investment in and coverage of social services;

    54. Instructs its President to forward this resolution to the Council and the Commission.

    MIL OSI Europe News

  • MIL-OSI Europe: Meeting of 29-30 January 2025

    Source: European Central Bank

    Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 29-30 January 2025

    27 February 2025

    1. Review of financial, economic and monetary developments and policy options

    Financial market developments

    Ms Schnabel noted that the financial market developments observed in the euro area after October 2024 had reversed since the Governing Council’s previous monetary policy meeting on 11-12 December 2024. The US presidential election in November had initially led to lower euro area bond yields and equity prices. Since the December monetary policy meeting, however, both risk-free yields and risk asset prices had moved substantially higher and had more than made up their previous declines. A less gloomy domestic macroeconomic outlook and an increase in the market’s outlook for inflation in the euro area on the back of higher energy prices had led investors to expect the ECB to proceed with a more gradual rate easing path.

    A bounce-back of euro area risk appetite had supported equity and corporate bond prices and had contained sovereign bond spreads. While the euro had also rebounded recently against the US dollar, it remained significantly weaker than before the US election.

    In euro money markets the year-end had been smooth. Money market conditions at the turn of the year had turned out to be more benign than anticipated, with a decline in repo rates and counterparties taking only limited recourse to the ECB’s standard refinancing operations.

    In the run-up to the US election and in its immediate aftermath, ten-year overnight index swap (OIS) rates in the euro area and the United States had decoupled, reflecting expectations of increasing macroeconomic divergence. However, since the Governing Council’s December monetary policy meeting, long-term interest rates had increased markedly in both the euro area and the United States. An assessment of the drivers of euro area long-term rates showed that both domestic and US factors had pushed yields up. But domestic factors – expected tighter ECB policy and a less gloomy euro area macroeconomic outlook – had mattered even more than US spillovers. These factors included a reduction in perceived downside risks to economic growth from tariffs and a stronger than anticipated January flash euro area Purchasing Managers’ Index (PMI).

    Taking a longer-term perspective on ten-year rates, since October 2022, when inflation had peaked at 10.6% and policy rates had just returned to positive territory, nominal OIS rates and their real counterparts had been broadly trending sideways. From that perspective, the recent uptick was modest and could be seen as a mean reversion to the new normal.

    A decomposition of the change in ten-year OIS rates since the start of 2022 showed that the dominant driver of persistently higher long-term yields compared with the “low-for-long” interest rate and inflation period had been the sharp rise in real rate expectations. A second major driver had been an increase in real term premia in the context of quantitative tightening. This increase had occurred mainly in 2022. Since 2023, real term premia had broadly trended sideways albeit with some volatility. Hence, the actual reduction of the ECB’s balance sheet had elicited only mild upward pressure on term premia. From a historical perspective, despite their recent increase, term premia in the euro area remained compressed compared with the pre-quantitative easing period.

    Since the December meeting, investors had revised up their expectations for HICP inflation (excluding tobacco) for 2025. Current inflation fixings (swap contracts linked to specific monthly releases in year-on-year euro area HICP inflation excluding tobacco) for this year stood above the 2% target. Higher energy prices had been a key driver of the reassessment of near-term inflation expectations. Evidence from option prices, calculated under the assumption of risk neutrality, suggested that the risk to inflation in financial markets had become broadly balanced, with the indicators across maturities having shifted discernibly upwards. Recent survey evidence suggested that risks of inflation overshooting the ECB’s target of 2% had resurfaced. Respondents generally saw a bigger risk of an inflation overshoot than of an inflation undershoot.

    The combination of a less gloomy macroeconomic outlook and stronger price pressures had led markets to reassess the ECB’s expected monetary policy path. Market pricing suggested expectations of a more gradual easing cycle with a higher terminal rate, pricing out the probability of a cut larger than 25 basis points at any of the next meetings. Overall, the size of expected cuts to the deposit facility rate in 2025 had dropped by around 40 basis points, with the end-year rate currently seen at 2.08%. Market expectations for 2025 stood above median expectations in the Survey of Monetary Analysts. Survey participants continued to expect a faster easing cycle, with cuts of 25 basis points at each of the Governing Council’s next four monetary policy meetings.

    The Federal Funds futures curve had continued to shift upwards, with markets currently expecting between one and two 25 basis point cuts by the end of 2025. The repricing of front-end yields since the Governing Council’s December meeting had been stronger in the euro area than in the United States. This would typically also be reflected in foreign exchange markets. However, the EUR/USD exchange rate had recently decoupled from interest rates, as the euro had initially continued to depreciate despite a narrowing interest rate differential, before recovering more recently. US dollar currency pairs had been affected by the US Administration’s comments, which had put upward pressure on the US dollar relative to trading partners’ currencies.

    Euro area equity markets had outperformed their US counterparts in recent weeks. A model decomposition using a standard dividend discount model for the euro area showed that rising risk-free yields had weighed significantly on euro area equity prices. However, this had been more than offset by higher dividends, and especially a compression of the risk premium, indicating improved investor risk sentiment towards the euro area, as also reflected in other risk asset prices. Corporate bond spreads had fallen across market segments, including high-yield bonds. Sovereign spreads relative to the ten-year German Bund had remained broadly stable or had even declined slightly. Relative to OIS rates, the spreads had also remained broadly stable. The Bund-OIS spread had returned to levels observed before the Eurosystem had started large-scale asset purchases in 2015, suggesting that the scarcity premium in the German government bond market had, by and large, normalised.

    Standard financial condition indices for the euro area had remained broadly stable since the December meeting. The easing impulse from higher equity prices had counterbalanced the tightening impulse stemming from higher short and long-term rates. In spite of the bounce-back in euro area real risk-free interest rates, the yield curve remained broadly within neutral territory.

    The global environment and economic and monetary developments in the euro area

    Starting with inflation in the euro area, Mr Lane noted that headline inflation, as expected, had increased to 2.4% in December, up from 2.2% in November. The increase primarily reflected a rise in energy inflation from -2.0% in November to 0.1% in December, due mainly to upward base effects. Food inflation had edged down to 2.6%. Core inflation was unchanged at 2.7% in December, with a slight decline in goods inflation, which had eased to 0.5%, offset by services inflation rising marginally to 4.0%.

    Developments in most indicators of underlying inflation had been consistent with a sustained return of inflation to the medium-term inflation target. The Persistent and Common Component of Inflation (PCCI), which had the best predictive power of any underlying inflation indicator for future headline inflation, had continued to hover around 2% in December, indicating that headline inflation was set to stabilise around the ECB’s inflation target. Domestic inflation, which closely tracked services inflation, stood at 4.2%, staying well above all the other indicators in December. However, the PCCI for services, which should act as an attractor for services and domestic inflation, had fallen to 2.3%.

    The anticipation of a downward shift in services inflation in the coming months also related to an expected deceleration in wage growth this year. Wages had been adjusting to the past inflation surge with a substantial delay, but the ECB wage tracker and the latest surveys pointed to moderation in wage pressures. According to the latest results of the Survey on the Access to Finance of Enterprises, firms expected wages to grow by 3.3% on average over the next 12 months, down from 3.5% in the previous survey round and 4.5% in the equivalent survey this time last year. This assessment was shared broadly across the forecasting community. Consensus Economics, for example, foresaw a decline in wage growth of about 1 percentage point between 2024 and 2025.

    Most measures of longer-term inflation expectations continued to stand at around 2%, despite an uptick over shorter horizons. Although, according to the Survey on the Access to Finance of Enterprises, the inflation expectations of firms had stabilised at 3% across horizons, the expectations of larger firms that were aware of the ECB’s inflation target showed convergence towards 2%. Consumer inflation expectations had edged up recently, especially for the near term. This could be explained at least partly by their higher sensitivity to actual inflation. There had also been an uptick in the near-term inflation expectations of professionals – as captured by the latest vintages of the Survey of Professional Forecasters and the Survey of Monetary Analysts, as well as market-based measures of inflation compensation. Over longer horizons, though, the inflation expectations of professional forecasters remained stable at levels consistent with the medium-term target of 2%.

    Headline inflation should fluctuate around its current level in the near term and then settle sustainably around the target. Easing labour cost pressures and the continuing impact of past monetary policy tightening should support the convergence to the inflation target.

    Turning to the international environment, global economic activity had remained robust around the turn of the year. The global composite PMI had held steady at 53.0 in the fourth quarter of 2024, owing mainly to the continued strength in the services sector that had counterbalanced weak manufacturing activity.

    Since the Governing Council’s previous meeting, the euro had remained broadly stable in nominal effective terms (+0.5%) and against the US dollar (+0.2%). Oil prices had seen a lot of volatility, but the latest price, at USD 78 per barrel, was only around 3½% above the spot oil price at the cut-off date for the December Eurosystem staff projections and 2.6% above the spot price at the time of the last meeting. With respect to gas prices, the spot price stood at €48 per MWh, 2.7% above the level at the cut-off date for the December projections and 6.8% higher than at the time of the last meeting.

    Following a comparatively robust third quarter, euro area GDP growth had likely moderated again in the last quarter of 2024 – confirmed by Eurostat’s preliminary flash estimate released on 30 January at 11:00 CET, with a growth rate of 0% for that quarter, later revised to 0.1%. Based on currently available information, private consumption growth had probably slowed in the fourth quarter amid subdued consumer confidence and heightened uncertainty. Housing investment had not yet picked up and there were no signs of an imminent expansion in business investment. Across sectors, industrial activity had been weak in the summer and had softened further in the last few months of 2024, with average industrial production excluding construction in October and November standing 0.4% below its third quarter level. The persistent weakness in manufacturing partly reflected structural factors, such as sectoral trends, losses in competitiveness and relatively high energy prices. However, manufacturing firms were also especially exposed to heightened uncertainty about global trade policies, regulatory costs and tight financing conditions. Service production had grown in the third quarter, but the expansion had likely moderated in the fourth quarter.

    The labour market was robust, with the unemployment rate falling to a historical low of 6.3% in November – with the figure for December (6.3%) and a revised figure for November (6.2%) released later on the morning of 30 January. However, survey evidence and model estimates suggested that euro area employment growth had probably softened in the fourth quarter.

    The fiscal stance for the euro area was now expected to be balanced in 2025, as opposed to the slight tightening foreseen in the December projections. Nevertheless, the current outlook for the fiscal stance was subject to considerable uncertainty.

    The euro area economy was set to remain subdued in the near term. The flash composite output PMI for January had ticked up to 50.2 driven by an improvement in manufacturing output, as the rate of contraction had eased compared with December. The January release had been 1.7 points above the average for the fourth quarter, but it still meant that the manufacturing sector had been in contractionary territory for nearly two years. The services business activity index had decelerated slightly to 51.4 in January, staying above the average of 50.9 in the fourth quarter of 2024 but still below the figure of 52.1 for the third quarter.

    Even with a subdued near-term outlook, the conditions for a recovery remained in place. Higher incomes should allow spending to rise. More affordable credit should also boost consumption and investment over time. And if trade tensions did not escalate, exports should also support the recovery as global demand rose.

    Turning to the monetary and financial analysis, bond yields, in both the euro area and globally, had increased significantly since the last meeting. At the same time, the ECB’s past interest rate cuts were gradually making it less expensive for firms and households to borrow. Lending rates on bank loans to firms and households for new business had continued to decline in November. In the same period, the cost of borrowing for firms had decreased by 15 basis points to 4.52% and stood 76 basis points below the cyclical peak observed in October 2023. The cost of issuing market-based debt had remained at 3.6% in November 2024. Mortgage rates had fallen by 8 basis points to 3.47% since October, 56 basis points lower than their peak in November 2023. However, the interest rates on existing corporate and household loan books remained high.

    Financing conditions remained tight. Although credit was expanding, lending to firms and households was subdued relative to historical averages. Annual growth in bank lending to firms had risen to 1.5% in December, up from 1% in November, as a result of strong monthly flows. But it remained well below the 4.3% historical average since January 1999. By contrast, growth in corporate debt securities issuance had moderated to 3.2% in annual terms, from 3.6% in November. This suggested that firms had substituted market-based long-term financing for bank-based borrowing amid tightening market conditions and in advance of increasing redemptions of long-term corporate bonds. Mortgage lending had continued to rise gradually but remained muted overall, with an annual growth rate of 1.1% in December after 0.9% in November. This was markedly below the long-term average of 5.1%.

    According to the latest euro area bank lending survey, the demand for loans by firms had increased slightly in the last quarter. At the same time, credit standards for loans to firms had tightened again, having broadly stabilised over the previous four quarters. This renewed tightening of credit standards for firms had been motivated by banks seeing higher risks to the economic outlook and their lower tolerance for taking on credit risk. This finding was consistent with the results of the Survey on the Access to Finance of Enterprises, in which firms had reported a small decline in the availability of bank loans and tougher non-rate lending conditions. Turning to households, the demand for mortgages had increased strongly as interest rates became more attractive and prospects for the property market improved. Credit standards for housing loans remained unchanged overall.

    Monetary policy considerations and policy options

    In summary, the disinflation process remained well on track. Inflation had continued to develop broadly in line with the staff projections and was set to return to the 2% medium-term target in the course of 2025. Most measures of underlying inflation suggested that inflation would settle around the target on a sustained basis. Domestic inflation remained high, mostly because wages and prices in certain sectors were still adjusting to the past inflation surge with a substantial delay. However, wage growth was expected to moderate and lower profit margins were partially buffering the impact of higher wage costs on inflation. The ECB’s recent interest rate cuts were gradually making new borrowing less expensive for firms and households. At the same time, financing conditions continued to be tight, also because monetary policy remained restrictive and past interest rate hikes were still being transmitted to the stock of credit, with some maturing loans being rolled over at higher rates. The economy was still facing headwinds, but rising real incomes and the gradually fading effects of restrictive monetary policy should support a pick-up in demand over time.

    Concerning the monetary policy decision at this meeting, it was proposed to lower the three key ECB interest rates by 25 basis points. In particular, lowering the deposit facility rate – the rate through which the ECB steered the monetary policy stance – was justified by the updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. The alternative – maintaining the deposit facility rate at the current level of 3.00% – would excessively dampen demand and therefore be inconsistent with the set of rate paths that best ensured inflation stabilised sustainably at the 2% medium-term target.

    Looking to the future, it was prudent to maintain agility, so as to be able to adjust the stance as appropriate on a meeting-by-meeting basis, and not to pre-commit to any particular rate path. In particular, monetary easing might proceed more slowly in the event of upside shocks to the inflation outlook and/or to economic momentum. Equally, in the event of downside shocks to the inflation outlook and/or to economic momentum, monetary easing might proceed more quickly.

    2. Governing Council’s discussion and monetary policy decisions

    Economic, monetary and financial analyses

    As regards the external environment, incoming data since the Governing Council’s previous monetary policy meeting had signalled robust global activity in the fourth quarter of 2024, with divergent paths across economies and an uncertain outlook for global trade. The euro had been broadly stable and energy commodity prices had increased. It was underlined that gas prices were currently over 60% higher than in 2024 because the average temperature during the previous winter had been very mild, whereas this winter was turning out to be considerably colder. This suggested that demand for gas would remain strong, as reserves needed to be replenished ahead of the next heating season, keeping gas prices high for the remainder of the year. In other commodity markets, metal prices were stable – subdued by weak activity in China and the potential negative impact of US tariffs – while food prices had increased.

    Members concurred that the outlook for the international economy remained highly uncertain. The United States was the only advanced economy that was showing sustained growth dynamics. Global trade might be hit hard if the new US Administration were to implement the measures it had announced. The challenges faced by the Chinese economy also remained visible in prices. Chinese inflation had declined further on the back of weak domestic demand. In this context, it was pointed out that, no matter how severe the new US trade measures turned out to be, the euro area would be affected either indirectly by disinflationary pressures or directly, in the event of retaliation, by higher inflation. In particular, if China were to redirect trade away from the United States and towards the euro area, this would make it easier to achieve lower inflation in the euro area but would have a negative impact on domestic activity, owing to greater international competition.

    With regard to economic activity in the euro area, it was widely recognised that incoming data since the last Governing Council meeting had been limited and, ahead of Eurostat’s indicator of GDP for the fourth quarter of 2024, had not brought any major surprises. Accordingly, it was argued that the December staff projections remained the most likely scenario, with the downside risks to growth that had been identified not yet materialising. The euro area economy had seen some encouraging signs in the January flash PMIs, although it had to be recognised that, in these uncertain times, hard data seemed more important than survey results. The outcome for the third quarter had surprised on the upside, showing tentative signs of a pick-up in consumption. Indications from the few national data already available for the fourth quarter pointed to a positive contribution from consumption. Despite all the prevailing uncertainties, it was still seen as plausible that, within a few quarters, there would be a consumption-driven recovery, with inflation back at target, policy rates broadly at neutral levels and continued full employment. Moreover, the latest information on credit flows and lending rates suggested that the gradual removal of monetary restrictiveness was already being transmitted to the economy, although the past tightening measures were still exerting lagged effects.

    The view was also expressed that the economic outlook in the December staff projections had likely been too optimistic and that there were signs of downside risks materialising. The ECB’s mechanical estimates pointed to very weak growth around the turn of the year and, compared with other institutions, the Eurosystem’s December staff projections had been among the most optimistic. Attention was drawn to the dichotomy between the performance of the two largest euro area economies and that of the rest of the euro area, which was largely due to country-specific factors.

    Recent forecasts from the Survey of Professional Forecasters, the Survey of Monetary Analysts and the International Monetary Fund once again suggested a downward revision of euro area economic growth for 2025 and 2026. Given this trend of downward revisions, doubts were expressed about the narrative of a consumption-driven economic recovery in 2025. Moreover, the December staff projections had not directly included the economic impact of possible US tariffs in the baseline, so it was hard to be optimistic about the economic outlook. The outlook for domestic demand had deteriorated, as consumer confidence remained weak and investment was not showing any convincing signs of a pick-up. The contribution from foreign demand, which had been the main driver of growth over the past two years, had also been declining since last spring. Moreover, uncertainty about potential tariffs to be imposed by the new US Administration was weighing further on the outlook. In the meantime, labour demand was losing momentum. The slowdown in economic activity had started to affect temporary employment: these jobs were always the first to disappear as the labour market weakened. At the same time, while the labour market had softened over recent months, it continued to be robust, with the unemployment rate staying low, at 6.3% in December. A solid job market and higher incomes should strengthen consumer confidence and allow spending to rise.

    There continued to be a strong dichotomy between a more dynamic services sector and a weak manufacturing sector. The services sector had remained robust thus far, with the PMI in expansionary territory and firms reporting solid demand. The extent to which the weakness in manufacturing was structural or cyclical was still open to debate, but there was a growing consensus that there was a large structural element, as high energy costs and strict regulation weighed on firms’ competitiveness. This was also reflected in weak export demand, despite the robust growth in global trade. All these factors also had an adverse impact on business investment in the industrial sector. This was seen as important to monitor, as a sustainable economic recovery also depended on a recovery in investment, especially in light of the vast longer-term investment needs of the euro area. Labour markets showed a dichotomy similar to the one observed in the economy more generally. While companies in the manufacturing sector were starting to lay off workers, employment in the services sector was growing. At the same time, concerns were expressed about the number of new vacancies, which had continued to fall. This two-speed economy, with manufacturing struggling and services resilient, was seen as indicating only weak growth ahead, especially in conjunction with the impending geopolitical tensions.

    Against this background, geopolitical and trade policy uncertainty was likely to continue to weigh on the euro area economy and was not expected to recede anytime soon. The point was made that if uncertainty were to remain high for a prolonged period, this would be very different from a shorter spell of uncertainty – and even more detrimental to investment. Therefore the economic recovery was unlikely to receive much support from investment for some time. Indeed, excluding Ireland, euro area business investment had been contracting recently and there were no signs of a turnaround. This would limit investment in physical and human capital further, dragging down potential output in the medium term. However, reference was also made to evidence from psychological studies, which suggested that the impact of higher uncertainty might diminish over time as agents’ perceptions and behaviour adapted.

    In this context, a remark was made on the importance of monetary and fiscal policies for enabling the economy to return to its previous growth path. Economic policies were meant to stabilise the economy and this stabilisation sometimes required a long time. After the pandemic, many economic indicators had returned to their pre-crisis levels, but this had not yet implied a return to pre-crisis growth paths, even though the output gap had closed in the meantime. A question was raised on bankruptcies, which were increasing in the euro area. To the extent that production capacity was being destroyed, the output gap might be closing because potential output growth was declining, and not because actual growth was increasing. However, it was also noted that bankruptcies were rising from an exceptionally low level and developments remained in line with historical regularities.

    Members reiterated that fiscal and structural policies should make the economy more productive, competitive and resilient. They welcomed the European Commission’s Competitiveness Compass, which provided a concrete roadmap for action. It was seen as crucial to follow up, with further concrete and ambitious structural policies, on Mario Draghi’s proposals for enhancing European competitiveness and on Enrico Letta’s proposals for empowering the Single Market. Governments should implement their commitments under the EU’s economic governance framework fully and without delay. This would help bring down budget deficits and debt ratios on a sustained basis, while prioritising growth-enhancing reforms and investment.

    Against this background, members assessed that the risks to economic growth remained tilted to the downside. Greater friction in global trade could weigh on euro area growth by dampening exports and weakening the global economy. Lower confidence could prevent consumption and investment from recovering as fast as expected. This could be amplified by geopolitical risks, such as Russia’s unjustified war against Ukraine and the tragic conflict in the Middle East, which could disrupt energy supplies and further weigh on global trade. Growth could also be lower if the lagged effects of monetary policy tightening lasted longer than expected. It could be higher if easier financing conditions and falling inflation allowed domestic consumption and investment to rebound faster.

    On price developments, members concurred with Mr Lane’s assessment that the incoming data confirmed disinflation was on track and that a return to the target in the course of 2025 was within reach. On the nominal side, there had been no major data surprises since the December Governing Council meeting and inflation expectations remained well anchored. Recent inflation data had been slightly below the December staff projections, but energy prices were on the rise. These two elements by and large offset one another. The inflation baseline from the December staff projections was therefore still a realistic scenario, indicating that inflation was on track to converge towards target in the course of 2025. Nevertheless, it was recalled that, for 2027, the contribution from the new Emissions Trading System (ETS2) assumptions was mechanically pushing the Eurosystem staff inflation projections above 2%. Furthermore, the market fixings for longer horizons suggested that there was a risk of undershooting the inflation target in 2026 and 2027. It was remarked that further downside revisions to the economic outlook would tend to imply a negative impact on the inflation outlook and an undershooting of inflation could not be ruled out.

    At the same time, the view was expressed that the risks to the December inflation projections were now tilted to the upside, so that the return to the 2% inflation target might take longer than previously expected. Although it was acknowledged that the momentum in services inflation had eased in recent months, the outlook for inflation remained heavily dependent on the evolution of services inflation, which accounted for around 75% of headline inflation. Services inflation was therefore widely seen as the key inflation component to monitor during the coming months. Services inflation had been stuck at roughly 4% for more than a year, while core inflation had also proven sluggish after an initial decline, remaining at around 2.7% for nearly a year. This raised the question as to where core inflation would eventually settle: in the past, services inflation and core inflation had typically been closely connected. It was also highlighted that, somewhat worryingly, the inflation rate for “early movers” in services had been trending up since its trough in April 2024 and was now standing well above the “followers” and the “late movers” at around 4.6%. This partly called into question the narrative behind the expected deceleration in services inflation. Moreover, the January flash PMI suggested that non-labour input costs, including energy and shipping costs, had increased significantly. The increase in the services sector had been particularly sharp, which was reflected in rising PMI selling prices for services – probably also fuelled by the tight labour market. As labour hoarding was a more widespread phenomenon in manufacturing, this implied that a potential pick-up in demand and the associated cyclical recovery in labour productivity would not necessarily dampen unit labour costs in the services sector to the same extent as in manufacturing.

    One main driver of the stickiness in services inflation was wage growth. Although wage growth was expected to decelerate in 2025, it would still stand at 4.5% in the second quarter of 2025 according to the ECB wage tracker. The pass-through of wages tended to be particularly strong in the services sector and occurred over an extended period of time, suggesting that the deceleration in wages might take some time to be reflected in lower services inflation. The forward-looking wage tracker was seen as fairly reliable, as it was based on existing contracts, whereas focusing too much on lagging wage data posed the risk of monetary policy falling behind the curve. This was particularly likely if negative growth risks eventually affected the labour market. Furthermore, a question was raised as to the potential implications for wage pressures of more restrictive labour migration policies.

    Overall, looking ahead there seemed reasons to believe that both services inflation and wage growth would slow down in line with the baseline scenario in the December staff projections. From the current quarter onwards, services inflation was expected to decline. However, in the early months of the year a number of services were set to be repriced, for instance in the insurance and tourism sectors, and there were many uncertainties surrounding this repricing. It was therefore seen as important to wait until March, when two more inflation releases and the new projections would be available, to reassess the inflation baseline as contained in the December staff projections.

    As regards longer-term inflation expectations, members took note of the latest developments in market-based measures of inflation compensation and survey-based indicators. The December Consumer Expectations Survey showed another increase in near-term inflation expectations, with inflation expectations 12 months ahead having already gradually picked up from 2.4% in September to 2.8% in December. Density-based expectations were even higher at 3%, with risks tilted to the upside. According to the Survey on the Access to Finance of Enterprises, firms’ median inflation expectations had also risen to 3%. However it was regarded as important to focus more on the change in inflation expectations than on the level of expectations when interpreting these surveys.

    As regards risks to the inflation outlook, with respect to the market-based measures, the view was expressed that there had been a shift in the balance of risks, pointing to upside risks to the December inflation outlook. In financial markets, inflation fixings for 2025 had shifted above the December short-term projections and inflation expectations had picked up across all tenors. In market surveys, risks of overshooting had resurfaced, with a larger share of respondents in the surveys seeing risks of an overshooting in 2025. Moreover, it was argued that tariffs, their implications for the exchange rate, and energy and food prices posed upside risks to inflation.

    Against this background, members considered that inflation could turn out higher if wages or profits increased by more than expected. Upside risks to inflation also stemmed from the heightened geopolitical tensions, which could push energy prices and freight costs higher in the near term and disrupt global trade. Moreover, extreme weather events, and the unfolding climate crisis more broadly, could drive up food prices by more than expected. By contrast, inflation might surprise on the downside if low confidence and concerns about geopolitical events prevented consumption and investment from recovering as fast as expected, if monetary policy dampened demand by more than expected, or if the economic environment in the rest of the world worsened unexpectedly. Greater friction in global trade would make the euro area inflation outlook more uncertain.

    Turning to the monetary and financial analysis, members broadly agreed with the assessment presented by Ms Schnabel and Mr Lane. It was noted that market interest rates in the euro area had risen since the Governing Council’s December monetary policy meeting, partly mirroring higher rates in global financial markets. Overall, financial conditions had been broadly stable, with higher short and long-term interest rates being counterbalanced by strong risk asset markets and a somewhat weaker exchange rate.

    Long-term interest rates had been rising more substantially than short-term ones, resulting in a steepening of the yield curve globally since last autumn. At the same time, it was underlined that the recent rise in long-term bond yields did not appear to be particularly striking when looking at developments over a longer time period. Over the past two years long-term rates had remained remarkably stable, especially when taking into account the pronounced variation in policy rates.

    The dynamics of market rates since the December Governing Council meeting had been similar on both sides of the Atlantic. This reflected higher term premia as well as a repricing of rate expectations. However, the relative contributions of the underlying drivers differed. In the United States, one factor driving up market interest rates had been an increase in inflation expectations, combined with the persistent strength of the US economy as well as concerns over prospects of higher budget deficits. This had led markets to price out some of the rate cuts that had been factored into the rate expectations prevailing before the Federal Open Market Committee meeting in December 2024. Uncertainty regarding the policies implemented by the new US Administration had also contributed to the sell-off in US government bonds. In Europe, term premia accounted for a significant part of the increase in long-term rates, which could be explained by a combination of factors. These included spillovers from the United States, concerns over the outlook for fiscal policy, and domestic and global policy uncertainty more broadly. Attention was also drawn to the potential impact of tighter monetary policy in Japan, the world’s largest creditor nation, with Japanese investors likely to start shifting their funds away from overseas investments towards domestic bond markets in response to rising yields.

    The passive reduction in the Eurosystem’s balance sheet, as maturing bonds were no longer reinvested, was also seen as exerting gradual upward pressure on term premia over longer horizons, although this had not been playing a significant role – especially not in developments since the last meeting. The reduction had been indicated well in advance and had already been priced in, to a significant extent, at the time the phasing out of reinvestment had been announced. The residual Eurosystem portfolios were still seen to be exerting substantial downside pressure on longer-term sovereign yields as compared with a situation in which asset holdings were absent. It was underlined that, while declining central bank holdings did affect financial conditions, quantitative tightening was operating gradually and smoothly in the background.

    In the context of the discussion on long-term yields, attention was drawn to the possibility that rising yields might also lead to financial stability risks, especially in view of the high level of valuations and leverage in the world economy. A further financial stability risk related to the prospect of a more deregulated financial system in the United States, including in the realm of crypto-assets. This could allow risks to build up in the years to come and sow the seeds of a future financial crisis.

    Turning to financing conditions, past interest rate cuts were gradually making it less expensive for firms and households to borrow. For new business, rates on bank loans to firms and households had continued to decline in November. However, the interest rates on existing loans remained high, and financing conditions remained tight.

    Although credit was expanding, lending to firms and households was subdued relative to historical averages. Growth in bank lending to firms had risen to 1.5% in December in annual terms, up from 1.0% in November. Mortgage lending had continued to rise gradually but remained muted overall, with an annual growth rate of 1.1% in December following 0.9% in November. Nevertheless, the increasing pace of loan growth was encouraging and suggested monetary easing was starting to be transmitted through the bank lending channel. Some comfort could also be taken from the lack of evidence of any negative impact on bank lending conditions from the decline in excess liquidity in the banking system.

    The bank lending survey was providing mixed signals, however. Credit standards for mortgages had been broadly unchanged in the fourth quarter, after easing for a while, and banks expected to tighten them in the next quarter. Banks had reported the third strongest increase in demand for mortgages since the start of the survey in 2003, driven primarily by more attractive interest rates. This indicated a turnaround in the housing market as property prices picked up. At the same time, credit standards for consumer credit had tightened in the fourth quarter, with standards for firms also tightening unexpectedly. The tightening had largely been driven by heightened perceptions of economic risk and reduced risk tolerance among banks.

    Caution was advised on overinterpreting the tightening in credit standards for firms reported in the latest bank lending survey. The vast majority of banks had reported unchanged credit standards, with only a small share tightening standards somewhat and an even smaller share easing them slightly. However, it was recalled that the survey methodology for calculating net percentages, which typically involved subtracting a small percentage of easing banks from a small percentage of tightening banks, was an established feature of the survey. Also, that methodology had not detracted from the good predictive power of the net percentage statistic for future lending developments. Moreover, the information from the bank lending survey had also been corroborated by the Survey on the Access to Finance of Enterprises, which had pointed to a slight decrease in the availability of funds to firms. The latter survey was now carried out at a quarterly frequency and provided an important cross-check, based on the perspective of firms, of the information received from banks.

    Turning to the demand for loans by firms, although the bank lending survey had shown a slight increase in the fourth quarter it had remained weak overall, in line with subdued investment. It was remarked that the limited increase in firms’ demand for loans might mean they were expecting rates to be cut further and were waiting to borrow at lower rates. This suggested that the transmission of policy rate cuts was likely to be stronger as the end of the rate-cutting cycle approached. At the same time, it was argued that demand for loans to euro area firms was mainly being held back by economic and geopolitical uncertainty rather than the level of interest rates.

    Monetary policy stance and policy considerations

    Turning to the monetary policy stance, members assessed the data that had become available since the last monetary policy meeting in accordance with the three main elements the Governing Council had communicated in 2023 as shaping its reaction function. These comprised (i) the implications of the incoming economic and financial data for the inflation outlook, (ii) the dynamics of underlying inflation, and (iii) the strength of monetary policy transmission.

    Starting with the inflation outlook, members widely agreed that the incoming data were broadly in line with the medium-term inflation trajectory embedded in the December staff projections. Inflation had been slightly lower than expected in both November and December. The outlook remained heavily dependent on the evolution of services inflation, which had remained close to 4% for more than a year. However, the momentum of services inflation had eased in recent months and a further decrease in wage pressures was anticipated, especially in the second half of 2025. Oil and gas prices had been higher than embodied in the December projections and needed to be closely monitored, but up to now they did not suggest a major change to the baseline in the staff projections.

    Risks to the inflation outlook were seen as two-sided: upside risks were posed by the outlook for energy and food prices, a stronger US dollar and the still sticky services inflation, while a downside risk related to the possibility of growth being lower than expected. There was considerable uncertainty about the effect of possible US tariffs, but the estimated impact on euro area inflation was small and its sign was ambiguous, whereas the implications for economic growth were clearly negative. Further uncertainty stemmed from the possible downside pressures emanating from falling Chinese export prices.

    There was some evidence suggesting a shift in the balance of risks to the upside since December, as reflected, for example, in market surveys showing that the risk of inflation overshooting the target outweighed the risk of an undershooting. Although some of the survey-based inflation expectations as well as market-derived inflation compensation had been revised up slightly, members took comfort from the fact that longer-term measures of inflation expectations remained well anchored at 2%.

    Turning to underlying inflation, members concurred that developments in most measures of underlying inflation suggested that inflation would settle at around the target on a sustained basis. Core inflation had been sticky at around 2.7% for nearly a year but had also turned out lower than projected. A number of measures continued to show a certain degree of persistence, with domestic inflation remaining high and exclusion-based measures proving sticky at levels above 2%. In addition, the translation of wage moderation into a slower rise in domestic prices and unit labour costs was subject to lags and predicated on profit margins continuing their buffering role as well as a cyclical rebound in labour productivity. However, a main cause of stickiness in domestic inflation was services inflation, which was strongly influenced by wage growth, and this was expected to decelerate in the course of 2025.

    As regards the transmission of monetary policy, recent credit dynamics showed that monetary policy transmission was working. Both the past tightening and the subsequent gradual removal of restriction were feeding through to financing conditions, including lending rates and credit flows. It was highlighted that not all demand components had been equally responsive, with, in particular, business investment held back by high uncertainty and structural weaknesses. Companies widely cited having their own funds as a reason for not making loan applications, and the reason for not investing these funds was likely linked to the high levels of uncertainty, rather than to the level of interest rates. Hence low investment was not necessarily a sign of a restrictive monetary policy. At the same time, it was unclear how much of the past tightening was still in the pipeline. Similarly, it would take time for the full effect of recent monetary policy easing to reach the economy, with even variable rate loans typically adjusting with a lag, and the same being true for deposits.

    Monetary policy decisions and communication

    Against this background, all members agreed with the proposal by Mr Lane to lower the three key ECB interest rates by 25 basis points. Lowering the deposit facility rate – the rate through which the monetary policy stance was steered – was justified by the updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission.

    There was a clear case for a further 25 basis point rate cut at the current meeting, and such a step was supported by the incoming data. Members concurred that the disinflationary process was well on track, while the growth outlook continued to be weak. Although the goal had not yet been achieved and inflation was still expected to remain above target in the near term, confidence in a timely and sustained convergence had increased, as both headline and core inflation had recently come in below the ECB projections. In particular, a return of inflation to the 2% target in the course of 2025 was in line with the December staff baseline projections, which were constructed on the basis of an interest rate path that stood significantly below the present level of the forward curve.

    At the same time, it was underlined that high levels of uncertainty, lingering upside risks to energy and food prices, a strong labour market and high negotiated wage increases, as well as sticky services inflation, called for caution. Upside risks could delay a sustainable return to target, while inflation expectations might be more fragile after a long period of high inflation. Firms had also learned to raise their prices more quickly in response to new inflationary shocks. Moreover, the financial market reactions to heightened geopolitical uncertainty or risk aversion often led to an appreciation of the US dollar and might involve spikes in energy prices, which could be detrimental to the inflation outlook.

    Risks to the growth outlook remained tilted to the downside, which typically also implied downside risks to inflation over longer horizons. The outlook for economic activity was clouded by elevated uncertainty stemming from geopolitical tensions, fiscal policy concerns in the euro area and recent global trade frictions associated with potential future actions by the US Administration that might lead to a global economic slowdown. As long as the disinflation process remained on track, policy rates could be brought further towards a neutral level to avoid unnecessarily holding back the economy. Nevertheless, growth risks had not shifted to a degree that would call for an acceleration in the move towards a neutral stance. Moreover, it was argued that greater caution was needed on the size and pace of further rate cuts when policy rates were approaching neutral territory, in view of prevailing uncertainties.

    Lowering the deposit facility rate to 2.75% at the current meeting was also seen as appropriate from a risk-management perspective. On the one hand, it left sufficient optionality to react to the possible emergence of new price pressures. On the other hand, it addressed the risk of falling behind the curve in dialling back restriction and guarded against inflation falling below target.

    Looking ahead, it was regarded as premature for the Governing Council to discuss a possible landing zone for the key ECB interest rates as inflation converged sustainably to target. It was widely felt that even with the current deposit facility rate, it was relatively safe to make the assessment that monetary policy was still restrictive. This was also consistent with the fact that the economy was relatively weak. At the same time, the view was expressed that the natural or neutral rate was likely to be higher than before the pandemic, as the balance between the global demand for and supply of savings had changed over recent years. The main reasons for this were the high and rising global need for investment to deal with the green and digital transitions, the surge in public debt and increasing geopolitical fragmentation, which was reversing the global savings glut and reducing the supply of savings. A higher neutral rate implied that, with a further reduction in policy rates at the present meeting, rates would plausibly be getting close to neutral rate territory. This meant that the point was approaching where monetary policy might no longer be characterised as restrictive.

    In this context, the remark was made that the public debate about the natural or neutral rate among market analysts and observers was becoming more intense, with markets trying to gauge the Governing Council’s assessment of it as a proxy for the terminal rate in the current rate cycle. This debate was seen as misleading, however. The considerable uncertainty as to the level of the natural or neutral interest rate was recalled. While the natural rate could in theory be a longer-term reference point for assessing the monetary policy stance, it was an unobservable variable. Its practical usefulness in steering policy on a meeting-by-meeting basis was questionable, as estimates were subject to significant model and parameter uncertainty, so confidence bands were too large to give any clear guidance. Moreover, the natural rate was a steady state concept, which was hardly applicable in a rapidly changing environment – as at present – with continuous new shocks.

    Moreover, it was mentioned that a box describing the latest Eurosystem staff estimates of the natural rate would be published in the Economic Bulletin and pre-released on 7 February 2025. The box would emphasise the wide range of point estimates, the properties of the underlying models and the considerable statistical uncertainty surrounding each single point estimate. The view was expressed that there was no alternative to the Governing Council identifying, meeting by meeting, an appropriate policy rate path which was consistent with reaching the target over the medium term. Such an appropriate path could only be identified in real time, taking into account a sufficiently broad set of information.

    Turning to communication aspects, it was widely stressed that maintaining a data-dependent approach with full optionality at every meeting was prudent and continued to be warranted. The present environment of elevated uncertainty further strengthened the case for taking decisions meeting by meeting, with no room for forward guidance. The meeting-by-meeting approach, guided by the three-criteria framework, was serving the Governing Council well and members were comfortable with the way markets were interpreting the ECB’s reaction function. It was also remarked that data-dependence did not imply being backward-looking in calibrating policy. Monetary policy was, by definition, forward-looking, as it affected inflation in the future and the primary objective was defined over the medium term. Data took many forms, and all relevant information had to be considered in a timely manner.

    Taking into account the foregoing discussion among the members, upon a proposal by the President, the Governing Council took the monetary policy decisions as set out in the monetary policy press release. The members of the Governing Council subsequently finalised the monetary policy statement, which the President and the Vice-President would, as usual, deliver at the press conference following the Governing Council meeting.

    Monetary policy statement

    Monetary policy statement for the press conference of 30 January 2025

    Press release

    Monetary policy decisions

    Meeting of the ECB’s Governing Council, 29-30 January 2025

    Members

    • Ms Lagarde, President
    • Mr de Guindos, Vice-President
    • Mr Centeno
    • Mr Cipollone
    • Mr Demarco, temporarily replacing Mr Scicluna
    • Mr Dolenc, Deputy Governor of Banka Slovenije
    • Mr Elderson
    • Mr Escrivá*
    • Mr Holzmann
    • Mr Kālis, Acting Governor of Latvijas Banka
    • Mr Kažimír
    • Mr Knot
    • Mr Lane
    • Mr Makhlouf*
    • Mr Müller
    • Mr Nagel
    • Mr Panetta
    • Mr Patsalides*
    • Mr Rehn
    • Mr Reinesch
    • Ms Schnabel
    • Mr Šimkus
    • Mr Stournaras*
    • Mr Villeroy de Galhau
    • Mr Vujčić*
    • Mr Wunsch

    * Members not holding a voting right in January 2025 under Article 10.2 of the ESCB Statute.

    Other attendees

    • Mr Dombrovskis, Commissioner**
    • Ms Senkovic, Secretary, Director General Secretariat
    • Mr Rostagno, Secretary for monetary policy, Director General Monetary Policy
    • Mr Winkler, Deputy Secretary for monetary policy, Senior Adviser, DG Monetary Policy

    ** In accordance with Article 284 of the Treaty on the Functioning of the European Union.

    Accompanying persons

    • Mr Arpa
    • Ms Bénassy-Quéré
    • Mr Debrun
    • Mr Gavilán
    • Mr Gilbert
    • Mr Kaasik
    • Mr Koukoularides
    • Mr Lünnemann
    • Mr Madouros
    • Mr Martin
    • Mr Nicoletti Altimari
    • Mr Novo
    • Mr Rutkaste
    • Ms Schembri
    • Mr Šiaudinis
    • Mr Šošić
    • Mr Tavlas
    • Mr Ulbrich
    • Mr Välimäki
    • Ms Žumer Šujica

    Other ECB staff

    • Mr Proissl, Director General Communications
    • Mr Straub, Counsellor to the President
    • Ms Rahmouni-Rousseau, Director General Market Operations
    • Mr Arce, Director General Economics
    • Mr Sousa, Deputy Director General Economics

    Release of the next monetary policy account foreseen on 3 April 2025.

    MIL OSI Europe News

  • MIL-OSI Asia-Pac: Dubai ETO greets Year of Snake with gala dinners in Riyadh and Dubai (with photos)

    Source: Hong Kong Government special administrative region

         The Hong Kong Economic and Trade Office in Dubai (Dubai ETO), in collaboration with the Hong Kong Trade Development Council (HKTDC), hosted gala dinners in Riyadh, Saudi Arabia on February 24 (Riyadh time) and in Dubai, the United Arab Emirates (UAE) on February 25 (Dubai time) to celebrate the Year of Snake with Saudi and UAE communities, and promote Hong Kong as well as its unique advantages and culture to locals from various sectors.
          
         A total of over 450 guests from the government, business and cultural sectors as well as the local Hong Kong community attended the two gala dinners. Among them were the Minister of State for Foreign Trade of the UAE, Dr Thani bin Ahmed Al Zeyoudi, the Consul-General of the People’s Republic of China in Dubai, Ms Ou Boqian, and the Chairman of the Saudi Chinese Business Council, Mr Mohammed Al Ajlan.
          
         In his welcoming remarks to the guests, the Director-General of the Dubai ETO, Mr Damian Lee, highlighted the closer-than-ever relations and booming exchanges between Hong Kong and the Middle East region, marked by robust and active trade and economic co-operation as well as deepening collaboration in tourism, culture, education and many areas, since the establishment of the Dubai ETO more than three years ago and successive visits to Gulf countries by the Chief Executive and various Principal Officials.
          
         Mr Lee also shared with guests how Hong Kong’s distinctive advantages of having strong support of the country while maintaining unparalleled connectivity with the world render the city her role as a bridge linking the Mainland China and the rest of the world. He encouraged local business operators to make good use of Hong Kong’s measures dovetailing with national development strategies to expand their business in Hong Kong.
          
         “Like the virtuous snake in the Chinese zodiac, Hong Kong demonstrated her wisdom, flexibility and resilience amidst global uncertainties: in 2024, Hong Kong remained the world’s freest economy and the third-largest global financial centre with a record number of 10 000 non-local firms, a 10 per cent increase on the previous year and a testament to the abundant confidence of people from around the world. Hong Kong also launched the New Capital Investment Entrant Scheme last year, further enhancing our attractiveness to foreign capital and talents. In the Year of Snake ahead, Hong Kong and the Middle East will definitely build upon the strong foundation of our relationship for further collaborations.”
          
         The Dubai ETO also invited Legislative Council Member and Associate Vice-President of Lingnan University, Professor Lau Chi-pang, to deliver a keynote presentation, on Hong Kong’s rich intangible cultural heritage, as guests marvelled at the diversity, openness and the unique mix of Eastern and Western cultures of Hong Kong. During the dinners, representatives from Invest Hong Kong and HKTDC also shared respectively Hong Kong’s promising investment opportunities and the upcoming trade fairs and activities in Hong Kong, and encouraged local businesses to invest and join fairs in Hong Kong.
          
         The events also featured cultural performances, including the ancient Chinese theatrical art form from Sichuan opera – face-changing, as well as fascinating and interactive magic shows with Hong Kong elements by Louis Yan, an internationally renowned champion magician from Hong Kong who has won the Merlin Award, also known as the “Oscars” among professional magicians. The performances received enthusiastic applause from the audience who were deeply impressed by the beauty of the traditional Chinese culture and the authentic local culture of Hong Kong.                                       

    MIL OSI Asia Pacific News

  • MIL-OSI Asia-Pac: India’s Gaming Revolution Goes Global: 20 finalists of Bharat Tech Triumph Program Season 3 to participate in WAVES Summit

    Source: Government of India

    India’s Gaming Revolution Goes Global: 20 finalists of Bharat Tech Triumph Program Season 3 to participate in WAVES Summit

    Groundbreaking Games and Indigenous Gaming IPs to be Presented before a Global Audience of Investors, Publishers and Industry Pioneers during May 1-4, 2025

    Posted On: 27 FEB 2025 6:19PM by PIB Mumbai

    : Mumbai, 27 February 2025

     

    Twenty winning game developers were declared at the end of the Grand Finale of third edition of Bharat Tech Triumph Program (BTTP) on Wednesday (February 26, 2025). The winners will now represent India at GDC 2025 (March 17-21, San Francisco), Start-Up Mahakumbh (April 3-5, India), and the World Audio Visual Entertainment Summit (WAVES) (May 1-4, India), showcasing their groundbreaking games and indigenous gaming IPs to a global audience of investors, publishers, and industry pioneers.

    BTTP is organized in collaboration with the Ministry of Information & Broadcasting (MIB), Government of India, and the Department for Promotion of Industry and Internal Trade (DPIIT), under Ministry of Commerce and Industry, Government of India, for championing India’s game development talent. It is a flagship initiative of Interactive Entertainment and Innovation Council (IEIC) and WinZO Games.

    The Tech Triumph Program’s Third Edition: A Gateway to Global and National Recognition

    Over three Editions, BTTP has witnessed participation from over 1500 of India’s best game developers and students, making it the definitive platform for fostering innovation and entrepreneurship for Made in India for the World technology & IP. This Edition is the most expansive yet, both in terms of participation and in unlocking market access and export opportunities. With an unprecedented pan-India reach, Edition 3 of the BTTP drew diverse participation from over 1000 gaming studios, indie developers, students from top IIT & IIMs, and tech startups across PC, mobile, console, and immersive platforms. For more information, visit www.thetechtriumph.com

    Winning games for Season 3 were evaluated by a jury of stalwarts from India’s top investors and business people, including Dr. Mukesh Aghi (CEO and President, US-India Strategic Partnership Forum), Padma Shri Prashanth Prakash (Founding Partner, Accel Partners), and Archana Jahagirdar (Founder and Managing Partner, Rukam Capital), Shri Sanjiv, Joint Secretary, DPIIT, and Rajesh Raju, Managing Director, Kalaari Capital.

    Find the list of winners from Tech Triumph Program (Bharat Edition) Season 3 here.

    India’s gaming sector is at an inflection point for innovation, growth, and export of technology and IP.

    The growing footprint of the BTTP comes at a critical juncture in the Indian gaming industry, which is witnessing exponential growth. As per a US-India Strategic Partnership Forum (USISPF) report, the Indian gaming opportunity currently stands at ~ USD 4 bn and is poised to breach the market size of USD 60 billion by 2034. BTTP is a direct response to this opportunity, designed to position India as a global leader in interactive entertainment, gaming technology, and indigenous IP creation. The initiative is aligned with Prime Minister Shri Narendra Modi’s vision of “Create in India for the World”, reinforcing his call for Indian creators to seize opportunities in gaming, AVGC (Animation, Visual effects, Gaming, and Comics), and digital storytelling. A programmatic intervention such as BTTP exemplifies the PM’s vision, aspirations, and talent of Indian game developers, and the potential to become a USD 60 billion global gaming market. It is the assimilation of the sector’s collective aspirations.

    The Joint Secretary, Ministry of Information and Broadcasting, Shri C Senthil Rajan said, “India’s AVGC-XR sector, currently employing around 2.6 lakh professionals, is set to expand significantly, with projections estimating a workforce of 23 lakh by 2032. Indian gaming professionals are already contributing to some of the most successful global titles, strengthening India’s reputation as a hub for creativity and technological innovation”. He further informed that the Ministry of Information & Broadcasting (MIB), which is playing a crucial role in shaping the future of India’s AVGC sector, has recognized its potential to drive economic growth and job creation and has launched strategic initiatives like the WAVES and the National Center of Excellence of AVGC-XR, which aims to position India as a global AVGC powerhouse. Through programs like the Create in India Challenge and the Tech Triumph Program, WAVES fosters collaboration between industry and academia, encourages original content creation, and facilitates international partnerships, he added.

    About WAVES 2025:

    The first World Audio Visual & Entertainment Summit (WAVES), a milestone event for the Media & Entertainment (M&E) sector, will be hosted by the Government of India in Mumbai, Maharashtra, from May 1 to 4, 2025.

    Whether you’re an industry professional, investor, creator, or innovator, the Summit offers the ultimate global platform to connect, collaborate, innovate and contribute to the M&E landscape.

    WAVES is set to magnify India’s creative strength, amplifying its position as a hub for content creation, intellectual property, and technological innovation. Industries and sectors in focus include Broadcasting, Print Media, Television, Radio, Films, Animation, Visual Effects, Gaming, Comics, Sound and Music, Advertising, Digital Media, Social Media Platforms, Generative AI, Augmented Reality (AR), Virtual Reality (VR), and Extended Reality (XR).

    Have questions? Find answers here 

    Come, Sail with us! Register for WAVES now (Coming soon!).

    WAVES 2025/ Nikita Joshi/Sriyanka Chatterjee/Preeti 

     

    Follow us on social media: @PIBMumbai     /PIBMumbai     /pibmumbai   pibmumbai[at]gmail[dot]com   /PIBMumbai     /pibmumbai

    (Release ID: 2106685) Visitor Counter : 37

    MIL OSI Asia Pacific News

  • MIL-OSI: Westamerica Bancorporation Announces Stock Repurchase Plan

    Source: GlobeNewswire (MIL-OSI)

    SAN RAFAEL, Calif., Feb. 27, 2025 (GLOBE NEWSWIRE) — The Board of Directors of Westamerica Bancorporation (NASDAQ: WABC) today approved a plan to repurchase, as conditions warrant, up to 2,000,000 shares of the Company’s common stock on the open market or in privately negotiated transactions prior to March 31, 2026. The repurchase plan represents approximately 7.5 percent of the Company’s common stock outstanding as of December 31, 2024.

    Chairman, President and CEO David Payne stated, “This stock repurchase plan recognizes Westamerica’s financial strength, conservative risk profile and reliable earnings stream.”

    Westamerica Bancorporation, through its wholly owned subsidiary, Westamerica Bank, operates banking and trust offices throughout Northern and Central California.

    Westamerica Bancorporation Web Address: www.westamerica.com

    For additional information contact:
    Westamerica Bancorporation
    1108 Fifth Avenue, San Rafael, CA 94901
    Robert A. Thorson – Investment Relations Contact, 707-863-6090
    investments@westamerica.com

    FORWARD-LOOKING INFORMATION:

    The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

    This press release may contain forward-looking statements about the Company, including descriptions of plans or objectives of its management for future operations, products or services, and forecasts of its revenues, earnings or other measures of economic performance. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate,” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.”

    Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors — many of which are beyond the Company’s control — could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. The Company’s most recent reports filed with the Securities and Exchange Commission, including the annual report for the year ended December 31, 2023 filed on Form 10-K and quarterly report for the quarter ended September 30, 2024 filed on Form 10-Q, describe some of these factors, including certain credit, interest rate, operational, liquidity and market risks associated with the Company’s business and operations. Other factors described in these reports include changes in business and economic conditions, competition, fiscal and monetary policies, disintermediation, cyber security risks, legislation including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Sarbanes-Oxley Act of 2002 and the Gramm-Leach-Bliley Act of 1999, and mergers and acquisitions.

    Forward-looking statements speak only as of the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date forward looking statements are made.

    The MIL Network

  • MIL-OSI Economics: Thales signs major contract with Stephanix for remote management of medical equipment

    Source: Thales Group

    Headline: Thales signs major contract with Stephanix for remote management of medical equipment

    Thales, a world leader in cybersecurity for critical environments, has secured a contract with Stephanix, a leader in medical imaging in France, to develop and implement its TrustFleet digital platform on Stephanix’s remotely controlled radiology tables. With ransomware attacks in the medical sector increasing by over 27% in 2023*, cybersecurity has become a key concern for healthcare professionals.

    TrustFleet, developed by Thales, remotely manages medical devices such as mobile radiology units, fluoroscopy tables, and mammography equipment. It enables the optimisation of predictive maintenance operations and remote troubleshooting of these devices, in both hospitals and private institutions.

    Fully cybersecured and hosted in the Cloud, TrustFleet provides immediate access to protected data for quick and effective intervention. This reduces the downtime of medical equipment (updates, reboots, technical issues) while also lowering associated operational costs. This first collaboration with Stephanix will speed up and improve patient care, and represents a significant advancement in the medical sector.

    « This collaboration with Stephanix to deploy TrustFleet in the healthcare sector will ensure the continuous availability of radiology tables and provide optimal protection for health data. The partnership will improve patient care and make healthcare workers’ jobs easier, » said Kaïs Mnif, Vice President, Radiology Business Segment at Thales.

    « This collaboration with Thales allows us to offer our customers enhanced protection for their radiology equipment, combining innovation and reliability, while maintaining the efficiency and responsiveness of our after-sales service. Thanks to TrustFleet, healthcare professionals will have a secure, high-performance solution for managing their radiology equipment, ensuring smooth and uninterrupted daily use. I commend the expertise and know-how of the teams at Thales and Stephanix that have contributed to the success of this project, a 100% French collaboration, » added Florian Haddad, CEO of Stephanix.

    * Thales reveals an increase in ransomware attacks, with non-compliance cases exposing companies to vulnerabilities | Thales Group

    Find out more about Thales’s expertise in the medical imaging field

    MIL OSI Economics

  • MIL-OSI Economics: Verizon announces new savings & VIP benefits for customers who bring together Mobile & Home

    Source: Verizon

    Headline: Verizon announces new savings & VIP benefits for customers who bring together Mobile & Home

    Only Verizon lets you bundle your mobile and home plan and get…

    • Incredible savings, with Verizon Home Internet plans for as low as $35/mo
    • Your favorite entertainment subscriptions like Netflix and Max, the Disney Bundle (Disney+, Hulu and ESPN+), Apple Music Family or YouTube Premium included on us1 (up to $10/mo) with our fastest Verizon Home Internet plans
    • Priority customer support, with benefits like faster access to expert support representatives.

    NEW YORK – Verizon today announced an industry-leading converged offer for Mobile and Home Internet customers, providing savings for myPlan mobility and myHome internet joint customers. Customers who combine their mobile and home services with Verizon can now unlock incredible savings as well as exciting entertainment options and premium customer support in a simplified experience.

    Verizon Consumer CEO Sowmynarayan Sampath shared:

    “We built the Verizon model of convergence to meet the changing habits of our customers’ lives and provide them with the most choice in the industry. Customers deserve an amazing network experience at home and on the go, and value on entertainment they cannot get anywhere else. You get more value from Verizon across our full portfolio of products and services versus anyone else in the industry.”

    Combining Verizon’s Mobile and Home Internet services gives customers $15 off home internet every month, ways to save on entertainment they love and priority customer treatment.

    Here’s how it works:

    • Simplicity and Savings: Customers with Verizon Home Internet will be eligible for a $15/mo discount when combined with any postpaid mobile phone plan. That means access to Verizon Home Internet for as low as $35/mo2. This discount can be combined with the discounts Verizon offers to Military, First Responders, Students, and Teachers to save even more, and Verizon doesn’t reduce the device offers available to these segments like some other carriers do.
    • The best of entertainment, on us: Verizon mobile customers who add a premium home internet plan3 are eligible for a perk credit on us – up to $10/mo toward great entertainment options like Netflix & Max (With Ads). That’s up to $215/year3 in savings when you are a mobile and home customer with Verizon!
    • Priority Care: Mobile + Home customers will receive premium customer care, including personalized greetings and expedited support when they contact us by phone or live messaging/chat.

    Learn more about these benefits at verizon.com/promos/mobile-and-home.

    Enjoy exclusive entertainment experiences with Verizon partners at your local Verizon store, like Max’s new season of HBO Original The White Lotus

    Beginning March 1st through April 4th, select Verizon stores across the country will feature an immersive experience where fans can explore a mini pop-up inspired by the show’s scenic resort and discover their hidden aura colors with a personality quiz.

    For more information on Mobile + Home benefits – including a perk on us (like Max!) – and to participate in the immersive retail experience–please visit your local Verizon retail store.

    Verizon Value Customers get exclusive home internet deals too

    This May, Verizon Value customers who have both an eligible Verizon Fios Home Internet plan and a mobile service plan from Verizon Value brands including Verizon Prepaid, Total Wireless, Straight Talk Wireless, Tracfone, Simple Mobile, Walmart Family, and Visible, will receive a $15/mo discount off of their Fios bill excluding Verizon Forward.


    1 Perk On Us Credit: Availability of each perk is subject to specific terms, and age requirements. Requires one paid perk on eligible Verizon mobile phone line or eligible home internet plan. Up to $10/month credit will be applied to your mobile or Fios Internet bill as long as one paid perk remains active on either account. Perk credit canceled if paid perk removed, mobile line or home internet plan canceled, or home internet moved to ineligible plan. Perk promotional offers are not eligible for the perk discount. Credit applied in 1-2 billing cycles.

    2 Verizon Home Internet: General: Verizon Home Internet includes 5G Home, LTE Home and Fios internet services. Availability varies. Auto Pay & paper-free billing req’d. Subject to credit approval. 5G Home/LTE Home/Fios 300 Mbps: Plans start at $35/mo. when combined with postpaid Verizon mobile phone plan (excludes business and data-only plans). Fios 300 Mbps: Mobile + Home Discount enrollment req’d. $99 setup and other terms apply.

    3 Versus the retail rate for $17.98/month.

    MIL OSI Economics

  • MIL-OSI Russia: Alexander Novak awarded the winners of the educational prize “Knowledge.Award” in the field of economics, business and law

    Translartion. Region: Russians Fedetion –

    Source: Government of the Russian Federation – An important disclaimer is at the bottom of this article.

    Previous news Next news

    Alexander Novak awarded the winners of the educational prize “Knowledge.Award” in the field of economics, business and law

    Deputy Prime Minister Alexander Novak took part in the award ceremony for the winners of the educational prize “Knowledge.Award”. At the site of the National Center “Russia”, he presented awards to the winners in the nomination “For Contribution to Education in the Sphere of “Economics, Business and Law”.

    “Education is the key to the future. Today, in the era of rapid development of science and technology, the value of education and knowledge is only growing. Those who become leaders in education become leaders in the economy. Russia is one of the leading countries in the provision of educational services and ranks fourth among the largest economies in the world,” said Alexander Novak, emphasizing the importance of educational work in the field of economics, entrepreneurship and law.

    The winner in the “Educator” nomination was the Governor of the Lipetsk Region Igor Artamonov for master classes and lectures on working with financial instruments, as well as the implementation of the “I Want to Live Here” project. This is an educational platform for more than 20 thousand participants, where through strategic games and political and economic sessions, residents of the region learned how public policy functions, the budget is formed, and how new technologies are changing the future.

    The winner in the Project nomination was the multi-format Lenta.ru project “You Have the Right” – a guide to state benefits and social payments, which explains what kind of assistance from the state a citizen can count on and how to receive it.

    The educational award was established by the Russian Society “Knowledge” in 2021 to recognize the achievements of teachers, lecturers, authors, bloggers, popularizers of science, as well as educational projects. A total of 19,523 applicants from 89 regions of the country applied for the award in 21 nominations. In all nominations, 31 winners were selected by the decision of the honorary jury and the results of the public vote.

    Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

    MIL OSI Russia News

  • MIL-OSI USA: IAM Union Local 1296 Members at Trane Technologies Ratify Landmark Four-Year Contract

    Source: US GOIAM Union

    Clarksville, Tenn., Feb. 27, 2025 – Members of the International Association of Machinists and Aerospace Workers (IAM Union) Local 1296, who manufacture large commercial heating and air units at Trane Technologies, overwhelmingly ratified a four-year collective bargaining agreement that delivers historic wage increases, enhanced benefits, and stronger workplace protections.

    The agreement, covering over 1300 employees and approximately 1100 IAM Union members at the Clarksville, TN plant, includes an immediate 9.3% wage increase in the first year, amounting to a $2 raise for all employees and an additional $2 skill adder adjustment for maintenance workers. It also includes wage increases over the four years.  

    “This agreement is a major win for IAM Union Local 1296 members, the Clarksville community, and it represents the power of solidarity,” said IAM Union District 1888 Business Representative/Organizer Casey Page. “We secured the highest wage increases our members have ever seen, alongside critical language protections around work-life balance and job security.” 

    Beyond wages, the contract improves bereavement leave, increases paid time off, enhances insurance benefits, and reinforces language protecting workers from mandatory weekend overtime. Additionally, provisions allowing union stewards to conduct union business will ensure they receive proper training to better serve the IAM Union Local 1296 membership.

    “This contract is about more than just numbers—it’s about dignity on the job,” said IAM Union District 1888 Assistant Directing Business Representative Bill Benson. “We fought for these gains at the table, and they will have a lasting impact on the lives of our members and their families.”

    “The strength of this agreement is a testament to our members’ preparation and dedication,” said IAM Union Southern Territory General Vice President Craig Martin. “Their hard work has resulted in a contract that not only raises the standard for wages and benefits but also strengthens the IAM’s presence in the South. 

    “The wages and benefits in this contract are the most we’ve ever seen, and the additional protective language ensures long-term security for our members,” said IAM Union Local 1296 President Brandie Givens. “This agreement empowers workers and will help empower the community together. We are grateful to District 1888 for their leadership in helping us achieve this victory. It was an honor to carry the torch forward and continue the work that began decades ago.” 

    Givens also acknowledged the role of the LEADS program in mentoring future union leaders, noting that she and IAM Local 1296 Recording Secretary Ashley Carpenter are the second generation of women leaders in the local, following in the footsteps of Sandra Threatt, the first female IAM Union Local 1296 vice president to sit at negotiations almost a decade ago. 

    “Solidarity and support for the leadership and the bargaining committee was the key to these successful negotiations,” said IAM Union Collective Bargaining Director Craig Norman. “The ratification of this contract showed the power of the coordinated bargaining committee and demonstrated how important it is to speak with one voice at the negotiating table.”

    IAM Union District 1888 represents members at Trane, military installations, the Tennessee Valley Authority, Bluegrass Station, and more than 60 other worksites throughout Tennessee, Kentucky, Alabama, and Georgia. It continues to advocate for better working conditions across industries in Tennessee and Kentucky.

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    MIL OSI USA News

  • MIL-OSI Economics: New administration can create a stronger AI tech export rule

    Source: Microsoft

    Headline: New administration can create a stronger AI tech export rule

    A high-stakes race is underway that will determine which country will supply the technology that powers the world’s emerging AI economy. Vice President Vance got it right at the recent AI Summit in Paris, emphasizing the need to focus on AI opportunities, pursue lighter regulations, and prioritize bringing American AI to the world. However, a last-minute Biden administration regulation, if left unchanged, risks undermining America’s ability to succeed.  

    The Biden administration’s interim final AI Diffusion Rule caps the export of essential American AI components to many fast-growing and strategically vital markets. As drafted, the rule undermines two Trump administration priorities: strengthening U.S. AI leadership and reducing the nation’s near trillion-dollar trade deficit. Left unchanged, the Biden rule will give China a strategic advantage in spreading over time its own AI technology, echoing its rapid ascent in 5G telecommunications a decade ago.    

    As a company, we support the need to protect national security by preventing adversaries from acquiring advanced AI technology. And there are important elements in the rule that should be retained. For example, the rule’s qualitative provisions would ensure that AI technology components are deployed in certified, secure, and trusted datacenters. This avoids shipments of advanced chips to entities that do not meet these standards and thereby helps reduce the risk of chip diversion to China. Similarly, the rule rightly imposes strict requirements on these trusted datacenter operators to protect against chip diversion and to ensure that advanced AI services cannot be used by adversaries.  

    There is an important opportunity to further strengthen these provisions, including by ensuring the Commerce Department has the resources it will need to put the Rule into effect. This can help both expedite approval processes for companies and strengthen enforcement, including against unlawful chip diversion. 

    But a significant problem remains. Namely, the Biden rule goes beyond what’s needed. It puts many important U.S. allies and partners in a Tier Two category and imposes quantitative limits on the ability of American tech companies to build and expand AI datacenters in their countries. This includes many American friends, such as Switzerland, Poland, Greece, Singapore, India, Indonesia, Israel, the UAE, and Saudi Arabia. These are countries where we and many other American companies have significant datacenter operations.  

    This Tier Two status is undermining one of the essential requirements needed for a business to succeed—namely, confidence by our customers that they will be able to buy from us the AI computing capacity that they will need in the future. Customers in Tier Two countries now worry that an insufficient supply of critical American AI technology will restrict their opportunities for economic growth.  

    The unintended consequence of this approach is to encourage Tier Two countries to look elsewhere for AI infrastructure and services. And it’s obvious where they will be forced to turn. If left unchanged, the Diffusion Rule will become a gift to China’s rapidly expanding AI sector.  

    All this comes at precisely the time when the American tech sector wants to invest in AI computing capacity at an unprecedented level. Our own company’s plans are illustrative. This year alone, Microsoft will spend $80 billion to build AI infrastructure around the world, with more than half of this total on U.S. soil. As this reflects, the solid majority of our computing power will remain in the United States.   

    But our ability to continue growing and investing at this level, including in the United States, depends in important part on exporting our technology services. This requires building AI infrastructure in other countries, so AI services can be accessed and used with low latency by local enterprises and consumers. Ironically, the Diffusion Rule discourages what should be regarded as an American economic opportunity—the export of world-leading chips and technology services. 

    The potentially negative impact on American economic growth doesn’t stop there. As the tech sector invests billions of dollars to build datacenters around the world, we are developing global supply chains that combine international and American suppliers of more traditional manufactured goods. I saw this first-hand when I was in Warsaw last week to announce with Prime Minister Donald Tusk a $700 million expansion of Microsoft’s datacenter infrastructure in Poland. Among the beneficiaries are American workers manufacturing advanced electrical generators in Lafayette, Indiana, so they can be shipped to Poland. 

    The irony could not be clearer. At the very moment when the Trump administration is pressing Europe to buy more American goods, the Biden Diffusion Rule leaves the leaders of partners like Poland asking why they have been relegated to Tier Two status and an uncertain ability to buy more American AI chips in the future. 

    This puts the opportunity for the Trump administration in bold relief. It can take an overly complex rule that requires 41 pages in the Federal Register and right-size it. Make it simpler. Stop relegating American friends and allies into a second tier that undermines their confidence in ongoing access to American products. Eliminate the quantitative caps that would interfere with a well-functioning economic market. And keep what matters most, such as the qualitative security standards and AI use restrictions that protect national security. 

    We need to recognize the obvious. America’s AI race with China begins at home. It’s founded on the ability of innovative American firms to bring manufactured goods and technology services to like-minded countries around the world. We’re prepared to invest. What we need now is an AI diffusion rule that gives us the ability to do so. 

    Tags: AI diffusion rule, AI economy, supply chains

    MIL OSI Economics

  • MIL-OSI USA: Warren, Blumenthal, Duckworth Ramp Up Investigation Into MOHELA’s Predatory Website Terms of Use

    US Senate News:

    Source: United States Senator for Massachusetts – Elizabeth Warren

    February 27, 2025

    Lawmakers hit loan servicer for efforts to infringe on borrowers’ legal rights 

    With Education Department’s future uncertain, MOHELA’s behavior raises concerns about ability to keep student loan servicers in check

    “MOHELA has imposed an exploitative set of Terms upon all borrowers that set up an account on its website…(Y)our response indicates a worrying disregard for borrowers’ rights.” 

    Text of Letter (PDF) | MOHELA Response to November 2024 Letter (PDF)

    Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.), Tammy Duckworth (D-Ill.), and Richard Blumenthal (D-Conn.) wrote to the student loan servicer Missouri Higher Education Loan Authority (MOHELA) with continued concerns over its website’s Terms of Use (TOU), which appear to be written with the intent to relieve MOHELA of liability for severe misconduct and may infringe upon student loan borrowers’ legal rights.  

    MOHELA has repeatedly shirked its basic responsibilities as a federal student loan servicer and has been repeatedly penalized by ED for doing so. In November 2024, the Senators wrote to MOHELA to raise their initial concerns about the company’s tactics. The loan servicer’s response evaded questions, failed to provide a reasonable justification for the predatory provisions in its TOU, and made multiple false assertions. 

     In its response, MOHELA: 

    • Falsely claimed its TOU are in line with industry standards, even though MOHELA appears to have written its TOU to absolve it of much more severe wrongdoing compared to other major federal loan servicers’ TOU;
    • Provided unconvincing explanations for its TOU provisions disclaiming any responsibility that its website contain “accurate or reliable” information and disclaiming any responsibility for correcting any “defects” on the website; and
    • Failed to justify exploitative TOU sections that appear to undermine borrowers’ rights to hold MOHELA accountable for financial harms, including by limiting its liability to $100 “for all claims arising” from use of its website and making borrowers’ “sole (legal) remedy” for dissatisfaction with MOHELA’s website to stop using the website.  

    “MOHELA’s explanations fail to provide persuasive justifications for these provisions…(and the t)erms are clearly written and designed to absolve MOHELA of wide swaths of damages even in the cases of significant wrongdoing,” wrote the senators

    MOHELA’s terms may also violate federal consumer protection law. The Consumer Financial Protection Act (CFPA) prohibits abusive contracts, including those that take “unreasonable advantage” of “unequal bargaining power.” That could apply to MOHELA’s TOU, since borrowers assigned to MOHELA have no choice but to sign the TOU and cannot choose a different loan servicer. MOHELA did not address the senators’ concerns in this area. 

    The lawmakers urged the loan servicer to remove all predatory provisions from its TOU and asked MOHELA to provide clarity on its decision to impose it on borrowers by March 13, 2025.   

    Senator Warren has led the fight to reform our higher education system, cancel student loan debt, and hold student loan servicers accountable:

    • In February 2025, Senators Elizabeth Warren and Andy Kim (D-N.J.) released responses to Committee questions for the record from Donald Trump’s pick for Secretary of Education, Linda McMahon, in which McMahon states that she “wholeheartedly” agrees with Trump’s plans to abolish the Department of Education.
    • In February 2025, during the Senate’s consideration of the Republican budget resolution, Senators Elizabeth Warren and Ed Markey (D-Mass.) proposed an amendment to protect higher education funding in Massachusetts.   
    • In February 2025, Senators Elizabeth Warren, Jeff Merkley (D-Ore.), Ron Wyden (D-Ore.), and Amy Klobuchar (D-Minn.), led 32 Democratic senators in writing to President Donald Trump, demanding that he reject Congressional Republicans’ legislative plans to increase the cost of living, including education costs, for Americans after pledging to lower costs on “Day One” of his presidency.
    • In February 2025, in advance of her confirmation hearing, Senators Elizabeth Warren and Andy Kim (D-N.J.), sent Linda McMahon, Secretary-Designate for the U.S. Department of Education, a 12-page letter with 65 questions on her policy views. 
    • In February 2025, following Elon Musk and DOGE forcing their way into the Department of Education, Senator Elizabeth Warren and Minority Leader Schumer (D-N.Y.) led a coalition of Democrats in demanding the Department of Education launch an investigation into Musk and DOGE’s access to federal student loan data. 
    • In January 2025, Senator Elizabeth Warren sent Elon Musk, Chair of the Department of Government Efficiency (DOGE), a letter detailing over 30 proposals that would cut at least $2 trillion of wasteful government spending over the next decade, including through saving on education programs. 
    • In December 2024, Senators Elizabeth Warren, Richard Blumenthal (D-Conn.), Jeff Merkley (D-Ore.), and Ron Wyden (D-Ore.) revealed the alarming findings of a Senate investigation into millions of consumer credit reporting errors that occurred during the transfer of student loan accounts from Nelnet to MOHELA in 2023. The senators urged the CFPB and ED to investigate these errors and use their supervisory and enforcement authority to hold the appropriate parties accountable.
    • In December 2024, Senator Elizabeth Warren (D-Mass.) and Congresswoman Madeleine Dean (D-PA) led 24 lawmakers in sending a bicameral letter to Consumer Financial Protection Bureau Director Rohit Chopra and Federal Trade Commission Chair Lina Khan, revealing the results of their investigation into Navient regarding its cancellation process for the predatory, for-profit student loans in its portfolio and urging the agencies to hold the student loan servicer accountable for any violations of federal law. 
    • In November 2024, Senators Elizabeth Warren (D-Mass.), Richard Blumenthal (D-Conn.), Chris Van Hollen (D-Md.), and Tammy Duckworth (D-Ill.) sent a letter blasting MOHELA for abusing borrowers with potentially illegal, exploitative terms of use.
    • In October 2024, Senator Elizabeth Warren (D-Mass.) Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.), and Raphael Warnock (D-Ga.) sent a letter to the Department of Justice (DOJ) and Department of Education (ED) commending the agencies on their progress in helping borrowers who are struggling financially to discharge their student loans in bankruptcy and asking them to continue expanding awareness of the Biden-Harris administration’s new policy.
    • In October 2024, Senator Elizabeth Warren (D-Mass.) celebrated new federal student debt relief, bringing the total number of Americans who have had their debt canceled under the Public Service Loan Forgiveness (PSLF) program during the Biden-Harris Administration to a historic 1 million people and counting.
    • In September 2024, Senators Warren (D-Mass.) and Merkley (D-Ore.) released a new report examining the impact of the Biden-Harris administration’s new Higher Education Act rule, finding that low- and middle-income borrowers, seniors, women, and Black borrowers will receive enormous benefits from the new rule.
    • In August 2024, Senator Warren joined Senators Jeff Merkley, Ron Wyden (D-Ore.), and Richard Blumenthal (D-Conn.) to launch an investigation into the reported mishandling of student loan transfers by MOHELA, Nelnet and credit reporting agencies.
    • In August 2024, Senator Warren (D-Mass.) and Representative Madeleine Dean (D-Pa.) led over 30 lawmakers in a letter urging student loan servicer Navient to reform its flawed process to cancel the private student loans of borrowers who attended fraudulent, for-profit colleges.
    • In July 2024, Senators Warren, Ron Wyden, Chris Van Hollen, and Bernie Sanders, sent a letter to Secretary of Education Miguel Cardona, cautioning the Department of Education on Federal Student Aid’s transition to the Unified Servicing and Data Solution system.
    • In July 2024, Senators Warren, Schumer, and Sanders released a joint statement on the American Federation of Teachers’ lawsuit against MOHELA for allegedly overcharging and misleading student loan borrowers.
    • In May 2024, Senators Warren and King led their colleagues in a letter to Education Secretary Miguel Cardona, urging them to provide guidance and communication to borrowers as the Public Service Loan Forgiveness program transfers from MOHELA to the Department of Education. 
    • In May 2024, Senator Warren led a growing coalition of senators in urging the Department of Education to hold student loan servicer MOHELA accountable for its failures.
    • In May 2024, Senator Warren and 24 members of the U.S. Senate sent a letter to Senator Tammy Baldwin, Chair of the Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies, and Senator Shelley Moore Capito, Ranking Member of the Subcommittee, encouraging them to provide $2.7 billion in funding to the Office of Federal Student Aid (FSA) in fiscal year (FY) 2025.
    • In May 2024, Senators Warren, Carper, Kaine, and Representative Don Davis (D-N.C.) called on the Department of Defense (DoD) to release data on the Postsecondary Education Complaint System (PECS), a centralized database to track complaints against schools who participate in the Tuition Assistance (TA) and My Career Advancement Account Scholarship (MyCAA) program.
    • In April 2024, Senator Warren led eight of her colleagues in sending a letter to David L. Yowan, President and Chief Executive Officer of student loan servicer Navient, urging the servicer to cancel decades-old private student loans pushed onto borrowers attending fraudulent, for-profit colleges.
    • In April 2024, Senators Warren, Blumenthal, Markey, and Van Hollen released a new report: Servicing Scandals: Student Loan Servicers’ Failures During Return to Repayment, which reveals a decades-long pattern of student loan servicer incompetence and misconduct that has affected millions of borrowers nationwide.
    • In April 2024, Senator Elizabeth Warren led a hearing on student loan servicer Higher Education Loan Authority of the State of Missouri (MOHELA) and its failures during borrowers’ return to repayment, including MOHELA’s mismanagement of the Public Service Loan Forgiveness program. 
    • In March 2024, Senators Elizabeth Warren and Ron Wyden (D-Ore.), Chair of the Senate Finance Committee, along with U.S. Representatives Ayanna Pressley (D-Mass.), Pramila Jayapal (D-Wash.), Raúl Grijalva (D-Ariz.), and John Larson (D-Conn.), led their colleagues in calling on the Social Security Administration (SSA), the U.S. Department of the Treasury (Treasury), and the U.S. Department of Education to end the practice of offsetting Social Security benefits to pay off defaulted student loans. 
    • In February 2024, Senator Warren, Majority Leader Chuck Schumer (D-N.Y.), and Senator Bernie Sanders (I-Vt.) released a statement calling for an investigation into student loan mismanagement by MOHELA.
    • In January 2024, Senators Warren, Schumer, Sanders, Senator Raphael Warnock (D-Ga.), and Senator Alex Padilla (D-Calif.), along with Representative Ayanna Pressley, Assistant Democratic Leader Jim Clyburn (D-S.C.), Representative Frederica Wilson (D-Fla.), and Representative Ilhan Omar (D-Minn.), led their colleagues in calling on the Secretary of Education Miguel Cardona to host a fourth session of the student debt negotiated rulemaking to consider relief for borrowers experiencing financial hardship.
    • In December 2023, U.S. Senators Warren, Richard Blumenthal, Ed Markey,, and Chris Van Hollen (D-Md.) sent follow-up letters to student loan servicers – MOHELA, EdFinancial, Nelnet, and Maximus – raising concerns about borrowers’ problems with return to repayment, requesting information about the borrower experience, and pushing back on the servicers’ claim that budget shortfalls limit their ability provide quality customer service to millions of borrowers.
    • In December 2023, Senators Warren, Schumer, Sanders, Alex Padilla (D-CA), and Representatives Ayanna Pressley (D-Mass.), Ilhan Omar (D-Minn.), and Frederica Wilson (D-Fla.) sent a letter to the U.S. Secretary of Education Miguel Cardona, urging him to leverage his existing and full authority under the Higher Education Act to provide expanded student debt relief to working and middle-class borrowers.
    • In August 2023, Senator Warren, Congresswoman Ayanna Pressley, Senate Majority Leader Chuck Schumer (D-N.Y.), Senators Alex Padilla and Raphael Warnock (D-Ga.) and U.S. Representatives Ilhan Omar, Jim Clyburn, and Frederica Wilson led 79 other lawmakers in a letter to President Joe Biden, urging him to swiftly deliver on his promise to deliver student debt cancellation to working and middle class families by early 2024.
    • In October 2022, Senator Warren and Representative Ayanna Pressley (D-Mass.) visited communities across Massachusetts to celebrate the Biden administration’s student debt cancellation plan and help residents sign up for student loan relief. 
    • In March 2022, Senator Warren, along with Senate Democratic Whip Dick Durbin (D-Ill.), Senator Brown and Representatives Pramila Jayapal (D-Wash.) and Mark Takano (D-Calif.), urged Secretary of Education Miguel Cardona to swiftly discharge the loans of borrowers defrauded by predatory for-profit colleges and universities, including those operated by Corinthian College. 
    • In January 2022, Senator Warren, along with Senate Majority Leader Charles E. Schumer (D-N.Y.) and Representatives Jayapal, Pressley, Ilhan Omar (D-Minn.), and Katie Porter (D-Calif.) led more than 80 colleagues in a bicameral letter to the Department of Education calling for it to release the memo outlining the Biden administration’s legal authority to cancel federal student loan debt and immediately cancel up to $50,000 of debt for Federal student loan borrowers.
    • In April 2021, Senators Warren and Raphael Warnock (D-Ga.) led a group of colleagues in a letter to Education Secretary Miguel Cardona urging the Department of Education to take swift action to automatically remove all federally-held student loan borrowers from default.

    MIL OSI USA News

  • MIL-OSI Security: Inland Empire Man Pleads Guilty to Possessing Trade Secrets Belonging to U.S. Employer to Build Business with China Company

    Source: Office of United States Attorneys

    LOS ANGELES – A San Bernardino County man pleaded guilty today to illegally possessing sensitive technologies that he downloaded from his Southern California-based employers and used them to market his own competing company to a China-based company.   

    Liming Li, 66, of Rancho Cucamonga, pleaded guilty to one count of possession of trade secrets.

    “Protecting U.S. companies’ sensitive intellectual property is critical to our country’s success in a global economy,” said Acting United States Attorney Joseph T. McNally. “The defendant here stole intellectual property in order to benefit companies in China. Stealing proprietary information undermines our economic security and the U.S. Attorney’s Office will aggressively prosecute individuals that engage in this conduct.” 

    “Mr. Li’s greed allowed him to be used by a Chinese company without regard for the negative implications to the economy or national security of the United States,” said Akil Davis, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “The FBI is well-aware that China is actively seeking and stealing American intellectual property at a rapid pace and those who willingly hand it over, as Mr. Li has done and now acknowledged, will face serious consequences.”

    According to his plea agreement, from 1996 to 2013, Li worked for a Southern California-based business identified in court documents as “U.S. Company #1,” which specialized in precision measuring instruments and metrological technology and equipment. The company designed and sold a range of products such as micrometers, calipers, coordinate measuring machines (CMMs), and optical measurement systems.

    Li worked at U.S. Company #1 as a senior software engineer, then as a program manager. From 2013 to 2018, Li worked as chief technologist at a wholly-owned subsidiary of U.S. Company #1. During his employment at U.S. Company #1 and its subsidiary, Li worked on the development of the source code for one of the company’s software programs, which was considered its proprietary information.

    In July 2013, Li signed an employee handbook and confidentiality agreement with U.S. Company #1 that required him to turn over all writings, records, files, technology, trade secrets or data containing any proprietary information belonging to the company. The agreement also prohibited Li from copying the company’s proprietary information without written permission.

    Li admitted in his plea agreement that he occasionally downloaded the company’s proprietary information onto his personal devices without permission. Li failed to return all the proprietary information belonging to U.S. Company #1 after its subsidiary terminated him in January 2018. 

    In February 2018, Li operated a consulting company named JSL Innovations Inc. and in March 2020, he signed an employment agreement with Suzhou Universal Group Technology Co. Ltd., a China-based chain-and-bearing manufacturer. Li continued to work for Suzhou Universal until his arrest in May 2023. During this period, Li continued to knowingly possess U.S. Company #1’s proprietary information and – more than once – accessed this information without that company’s authorization. 

    Li admitted that he used the proprietary information for his own economic benefit and that it would injure U.S. Company #1’s interests.

    United States District Judge John A. Kronstadt scheduled a May 8 sentencing hearing, at which time Li will face a statutory maximum sentence of 10 years in federal prison. 

    The FBI investigated this matter with substantial assistance from the Department of Commerce, Office of Export Enforcement, Bureau of Industry and Security.

    The case against Li was brought under the auspices of the Disruptive Technology Strike Force, which is co-led by the Departments of Justice and Commerce. The Strike Force seeks to counter efforts by hostile nation-states to illicitly acquire sensitive U.S. technology to advance their authoritarian regimes and facilitate human rights abuses. 

    Assistant United States Attorney Aaron B. Frumkin of the Cyber and Intellectual Property Crimes Section, Solomon D. Kim of the Major Frauds Section, and David T. Ryan of the National Security Division are prosecuting this case.

    MIL Security OSI