Emissions Trading – Page 28

MIL-OSI: Silvaco Reports Fourth Quarter and Full Year 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

Achieved record gross bookings of $65.8 million and revenue of $59.7 million in full-year 2024

Signed 46 new customers in 2024 and expanded relationship with existing customers across key markets including power, automotive, memory, foundry, and display

Expanded Product Portfolio with the Acquisition of Cadence’s Process Proximity Compensation Product Line

SANTA CLARA, Calif., March 05, 2025 (GLOBE NEWSWIRE) — Silvaco Group, Inc. (Nasdaq: SVCO) (“Silvaco” or the “Company”), a provider of TCAD, EDA software, and SIP solutions that enable innovative semiconductor design and digital twin modeling through AI software and automation, today announced its fourth quarter and full year 2024 results.

“We are proud to close out the year with strong momentum and growing customer traction, including 46 new customer wins in 2024 and multiple bookings on our AI based, flagship FTCO platform,” said Dr. Babak Taheri, Silvaco’s Chief Executive Officer. Dr. Taheri continued, “Our first acquisition as a public company marks a significant milestone in executing our M&A strategy for talent, technology and expanding through inorganic growth. With a continued focus on innovation and execution, we are well-positioned to build on this success and drive further growth in 2025 for our EDA and TCAD product lines.”

Fourth Quarter 2024 and Recent Business Highlights

Acquired 13 new customers across key markets including Photonics, Power, Automotive, Memory, and Foundry, which represented approximately 9% of gross bookings for the quarter.
Announced a partnership with Micon Global to expand Silvaco’s reach across the EMEA market, leveraging Micon’s expertise to deliver cutting-edge TCAD, EDA, and SIP solutions to new customers.
Joined the SMART USA Institute under the CHIPS Manufacturing USA program to advance digital twin technologies in semiconductor manufacturing, reinforcing Silvaco’s leadership in innovation. We received our first booking from this program.
Received a $5.0 million follow-on order for FTCO™ digital-twin modeling product from a strategic memory customer. This order extends the footprint of our FTCO™ product line and further validates our strategic focus on this unique technology.
Achieved ISO 9001 certification, underscoring Silvaco’s commitment to quality and continuous improvement across its TCAD, EDA, and SIP product portfolio.
On March 4, 2025, Silvaco closed the acquisition of the Process Proximity Compensation (PPC) product line from Cadence Design Systems, Inc. The addition, an optical proximity correction suite of tools, is highly complementary to Silvaco’s EDA and TCAD tool suites.

Full Year 2024 Business Highlights

Acquired 46 new customers across key markets including Power, Automotive, Government/Mil-Aero, Photonics, IOT, 5G/6G, Memory, and Foundry, which represented approximately 10% of gross bookings for the year.
Expanded Victory TCAD and Digital Twin Modeling Platform to Planar CMOS, FinFET and Advanced CMOS Technologies which is a necessary step to enable FTCO for Advanced Process.
Silvaco Announced that the Ninth Circuit Court of Appeals affirmed the dismissal of all claims against Silvaco brought by Aldini AG.
Silvaco was added to the Russell 2000^®, Russell 3000^®, and Russell Microcap^® indexes in September 2024.
Completed initial public offering in May 2024, raising $106 million net of underwriters’ fees.

Fourth Quarter 2024 Financial Results

GAAP Financial Results

Revenue of $17.9 million, up 43% year-over-year and up 63% quarter-over-quarter.
- TCAD revenue of $12.7 million, up 65% year-over-year.
- EDA revenue of $4.2 million, up 57% year-over-year.
- SIP revenue of $0.9 million, down 57% year-over-year.
GAAP gross profit and GAAP gross margin were $15.4 million and 86%, respectively, which includes the impact of $194,000 stock-based compensation expense, $249,000 amortization of acquired intangible assets, and $80,000 payroll taxes from the RSU lockup release, up from $9.8 million and 79% in Q4 2023.
GAAP net income of $4.2 million, compared to a GAAP net loss of $2.2 million in Q4 2023.
GAAP basic and diluted net income per share of $0.14, compared to GAAP basic and diluted net loss per share of $(0.11) in Q4 2023.
As of December 31, 2024, cash and cash equivalents and marketable securities totaled $87.5 million.

Key Operating Indicators and Non-GAAP Financial Results:

Gross bookings were $20.3 million, up 30% year-over-year.
As of December 31, 2024, the remaining performance obligation balance of $34.3 million, 46% of which is expected to be recognized as revenue in the next 12 months.
Non-GAAP gross profit and non-GAAP gross margin were $16.0 million and 89%, respectively, up from $9.8 million and 79% year-over-year.
Non-GAAP net income of $4.3 million, compared to Non-GAAP net loss of $(1.6) million in Q4 2023.
Non-GAAP diluted net income per share of $0.15, compared to Non-GAAP diluted net loss per share of $(0.08) in Q4 2023.

Full Year 2024 Financial Results

GAAP Financial Results

Revenue of $59.7 million, up 10% year-over-year.
- TCAD revenue of $40.2 million, up 25% year-over-year.
- EDA revenue of $14.6 million, up 4% year-over-year.
- SIP revenue of $4.9 million, down 40% year-over-year.
GAAP gross profit and GAAP gross margin were $47.6 million and 80%, respectively, which includes the impact of $3.0 million stock-based compensation expense, $747,000 amortization of acquired intangible assets, and $80,000 payroll taxes from the RSU lockup release, up from $44.9 million and down from 83% in 2023.
GAAP net loss of $(39.4) million, compared to $(0.3) million in 2023.
GAAP basic and diluted net loss per share of $(1.53), compared to $(0.02) in 2023.

Key Operating Indicators and Non-GAAP Financial Results:

Gross bookings were $65.8 million, up 13% year-over-year.
Non-GAAP gross profit and non-GAAP gross margin were $51.4 million and 86%, respectively, up from $44.9 million and 83% year over year.
Non-GAAP net income of $6.7 million, compared to $3.4 million in 2023.
Non-GAAP diluted net income per share of $0.25, compared to $0.17 in 2023.

For a discussion of the non-GAAP metrics presented in this press release, as well as a reconciliation of non-GAAP metrics to the nearest comparable GAAP metric, see “Discussion of Non-GAAP Financial Measures” and “GAAP to Non-GAAP Reconciliation” in the accompanying tables below.

Supplementary materials to this press release, including our fourth quarter 2024 financial results, can be found at https://investors.silvaco.com/financial-information/quarterly-results.

First Quarter and Full Year 2025 Financial Outlook

As of March 5, 2025, Silvaco is providing guidance for its first quarter of 2025 and its full-year 2025, which represents Silvaco’s current estimates on its operations and financial results. The financial information below represents forward-looking financial information and in some instances forward-looking, non-GAAP financial information, including estimates of non-GAAP gross margin, non-GAAP operating income (loss) and non-GAAP diluted net income (loss) per share. GAAP gross margin is the most comparable GAAP measure to non-GAAP gross margin, GAAP operating income (loss) is the most comparable GAAP measure to non-GAAP operating income (loss). GAAP diluted net income (loss) per share is the most comparable GAAP measure to non-GAAP diluted net income (loss) per share. Non-GAAP gross margin differs from GAAP gross margin in that it excludes items such as stock-based compensation expense, amortization of acquired intangible assets, and payroll tax from the IPO lock-up release. Non-GAAP operating income (loss) differs from GAAP operating income (loss) in that it excludes items such as acquisition-related estimated litigation claim and legal costs, stock-based compensation expense, amortization of acquired intangible assets, payroll tax from the IPO lock-up release, IPO preparation costs, and executive severance costs. Non-GAAP diluted net income (loss) per share differs from GAAP diluted net income (loss) per share in that it excludes certain costs, including IPO preparation costs, acquisition-related estimated litigation claim and legal costs, stock-based compensation expense, amortization of acquired intangible assets, payroll tax from the IPO lock-up release, executive severance costs, change in fair value of contingent consideration, foreign exchange (gain) loss, loss on debt extinguishment, and the income tax effect on non-GAAP items. Silvaco is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort. Therefore, Silvaco has not provided guidance for GAAP gross margin, GAAP operating income or GAAP diluted net income (loss) per share or a reconciliation of the forward-looking non-GAAP gross margin or non-GAAP operating income or non-GAAP diluted net income (loss) per share guidance to GAAP gross margin or GAAP operating income or GAAP diluted net income (loss) per share, respectively. However, it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods.

Based on current business trends and conditions, the Company expects for first quarter 2025 the following:

Gross bookings in the range of $16.0 million to $19.0 million, which would compare to $16.1 million in the first quarter of 2024.
Revenue in the range of $14.5 million to $17.0 million, which would compare to $15.9 million in the first quarter of 2024.
Non-GAAP gross margin in the range of 84% to 87%, which would compare to 88% in the first quarter of 2024.
Non-GAAP operating income in the range of ($1.0) million loss to $1.0 million income, compared to $3.3 million in the first quarter of 2024.
Non-GAAP diluted net income per share in the range of ($0.03) loss to $0.03, compared to $0.12 in the first quarter of 2024.

For full year 2025, the Company expects:

Gross bookings in the range of $72.0 million to $79.0 million, which would represent a 9% to 20% increase from $65.8 million in 2024.
Revenue in the range of $66.0 million to $72.0 million, which would represent a 11% to 21% increase from $59.7 million in 2024.
Non-GAAP gross margin in the range of 84.0% to 89.0%, which would compare to 86% in 2024.
Non-GAAP operating income in the range of $2.0 million to $7.0 million, which would compare to $5.5 million in 2024.
Non-GAAP diluted net income per share in the range of $0.07 to $0.19, compared to $0.25 in 2024.

Q4 2024 Conference Call Details

A press release highlighting the Company’s results along with supplemental financial results will be available at https://investors.silvaco.com/ along with an earnings presentation to accompany management’s prepared remarks on the day of the conference call, after market close. An archived replay of the conference call will be available on this website for a limited time after the call. Participants who want to join the call and ask a question may register for the call here to receive the dial-in numbers and unique PIN.

Date: Wednesday, March 5, 2025
Time: 5:00 p.m. Eastern time
Webcast: Here (live and replay)

About Silvaco

Silvaco is a provider of TCAD, EDA software, and SIP solutions that enable semiconductor design and digital twin modeling through AI software and innovation. Silvaco’s solutions are used for semiconductor and photonics processes, devices, and systems development across display, power devices, automotive, memory, high performance compute, foundries, photonics, internet of things, and 5G/6G mobile markets for complex SoC design. Silvaco is headquartered in Santa Clara, California, and has a global presence with offices located in North America, Europe, Brazil, China, Japan, Korea, Singapore, and Taiwan.

Safe Harbor Statement

This press release contains forward-looking statements based on Silvaco’s current expectations. The words “believe”, “estimate”, “expect”, “intend”, “anticipate”, “plan”, “project”, “will”, and similar phrases as they relate to Silvaco are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of Silvaco and are subject to various risks and uncertainties that could cause actual results to differ materially from expectations.

These forward-looking statements include but are not limited to, statements regarding our future operating results, financial position, and guidance, our business strategy and plans, our objectives for future operations, our development or delivery of new or enhanced products, and anticipated results of those products for our customers, our competitive positioning, projected costs, technological capabilities, and plans, and macroeconomic trends.

A variety of risks and factors that are beyond our control could cause actual results to differ materially from those in the forward-looking statements including, without limitation, the following: (a) market conditions; (b) anticipated trends, challenges and growth in our business and the markets in which we operate; (c) our ability to appropriately respond to changing technologies on a timely and cost-effective basis; (d) the size and growth potential of the markets for our software solutions, and our ability to serve those markets; (e) our expectations regarding competition in our existing and new markets; (f) the level of demand in our customers’ end markets; (g) regulatory developments in the United States and foreign countries; (h) changes in trade policies, including the imposition of tariffs; (i) proposed new software solutions, services or developments; (j) our ability to attract and retain key management personnel; (k) our customer relationships and our ability to retain and expand our customer relationships; (l) our ability to diversify our customer base and develop relationships in new markets; (m) the strategies, prospects, plans, expectations, and objectives of management for future operations; (n) public health crises, pandemics, and epidemics and their effects on our business and our customers’ businesses; (o) the impact of the current conflicts between Ukraine and Russia and Israel and Hamas and the ongoing trade disputes among the United States and China on our business, financial condition or prospects, including extreme volatility in the global capital markets making debt or equity financing more difficult to obtain, more costly or more dilutive, delays and disruptions of the global supply chains and the business activities of our suppliers, distributors, customers and other business partners; (p) changes in general economic or business conditions or economic or demographic trends in the United States and foreign countries including changes in tariffs, interest rates and inflation; (q) our ability to raise additional capital; (r) our ability to accurately forecast demand for our software solutions; (s) our expectations regarding the outcome of any ongoing litigation; (t) our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act and as a smaller reporting company under the Exchange Act; (u) our expectations regarding our ability to obtain, maintain, protect and enforce intellectual property protection for our technology; (v) our status as a controlled company; (w) our use of the net proceeds from our initial public offering, and (x) our ability to successfully integrate, retain key personnel, and realize the anticipated benefits of the acquisition of Cadence’s PPC product line.

It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements we may make. Accordingly, you should not rely on any of the forward-looking statements. Additional information relating to the uncertainty affecting the Silvaco’s business is contained in Silvaco’s filings with the Securities and Exchange Commission. These documents are available on the SEC Filings section of the Investor Relations section of Silvaco’s website at http://investors.silvaco.com/. These forward-looking statements represent Silvaco’s expectations as of the date of this press release. Subsequent events may cause these expectations to change, and Silvaco disclaims any obligations to update or alter these forward-looking statements in the future, whether as a result of new information, future events or otherwise.

Discussion of Non-GAAP Financial Measures

We use certain non-GAAP financial measures to supplement the performance measures in our consolidated financial statements, which are presented in accordance with GAAP. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP diluted net income (loss) per share. We use these non-GAAP financial measures for financial and operational decision-making and as a mean to assist us in evaluating period-to-period comparisons.

We define non-GAAP gross profit and non-GAAP gross margin as our GAAP gross profit and GAAP gross margin adjusted to exclude certain costs, including stock-based compensation expense, amortization of acquired intangible assets and payroll tax from the IPO lock-up release. We define non-GAAP operating income (loss), as our GAAP operating income (loss) adjusted to exclude certain costs, including IPO preparation costs, acquisition-related estimated litigation claim and legal costs, stock-based compensation expense, amortization of acquired intangible assets, payroll tax from the IPO lock-up release, and executive severance costs. We define non-GAAP net income (loss) as our GAAP net income (loss) adjusted to exclude certain costs, including IPO preparation costs, acquisition-related estimated litigation claim and legal costs, stock-based compensation expense, amortization of acquired intangible assets, payroll tax from the IPO lock-up release, executive severance costs, change in fair value of contingent consideration, foreign exchange (gain) loss, loss on debt extinguishment, and the income tax effect on non-GAAP items. Our non-GAAP diluted net income (loss) per share is calculated in the same way as our non-GAAP net income (loss), but on a per share basis. We monitor non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP diluted net income (loss) per share as non-GAAP financial measures to supplement the financial information we present in accordance with GAAP to provide investors with additional information regarding our financial results.

Certain items are excluded from our non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP diluted net income (loss) per share because these items are non-cash in nature or are not indicative of our core operating performance and render comparisons with prior periods and competitors less meaningful. We adjust GAAP gross profit, GAAP gross margin, GAAP operating income (loss), GAAP net income (loss), and GAAP diluted net income (loss) per share for these items to arrive at non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP diluted net income (loss) per share because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structure and the method by which the assets were acquired. By excluding certain items that may not be indicative of our recurring core operating results, we believe that non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP diluted net income (loss) per share provide meaningful supplemental information regarding our performance.

We believe these non-GAAP financial measures are useful to investors and others because they allow for additional information with respect to financial measures used by management in its financial and operational decision-making and they may be used by our institutional investors and the analyst community to help them analyze our financial performance and the health of our business. However, there are a number of limitations related to the use of non-GAAP financial measures, and these non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.


SILVACO GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands except share and par value amounts)
	December 31,			December 31,
	2024			2023

ASSETS
Current assets:
Cash and cash equivalents	$	19,606		$	4,421
Short-term marketable securities		63,071			–
Accounts receivable, net		9,211			4,006
Contract assets, net		11,932			8,749
Prepaid expenses and other current assets		3,460			2,549
Deferred transaction costs		–			1,163
Total current assets		107,280			20,888
Non-current assets:
Non-current marketable securities		4,785			–
Property and equipment, net		865			591
Operating lease right-of-use assets, net		1,711			1,963
Intangible assets, net		4,369			342
Goodwill		9,026			9,026
Non-current portion of contract assets, net		12,611			6,250
Other assets		1,698			1,825
Total non-current assets		35,065			19,997
Total assets	$	142,345		$	40,885

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,316		$	2,495
Accrued expenses and other current liabilities		19,801			10,255
Accrued income taxes		1,668			1,626
Deferred revenue, current		7,497			7,882
Operating lease liabilities, current		744			735
Related party line of credit		–			2,000
Vendor financing obligations, current		1,462			–
Total current liabilities		34,488			24,993
Non-current liabilities:
Deferred revenue, non-current		3,593			5,071
Operating lease liabilities, non-current		946			1,198
Vendor financing obligations, non-current		2,928			–
Other non-current liabilities		307			221
Total liabilities		42,262			31,483
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.0001 par value; 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2024; no shares authorized as of December 31, 2023		–			–
Common stock, $0.0001 par value; 500,000,000 shares authorized; 28,526,615 shares issued and outstanding as of December 31, 2024; 25,000,000 shares authorized; 20,000,000 shares issued and outstanding as of December 31, 2023		3			2
Additional paid-in capital		130,360			–
(Accumulated deficit) Retained earnings		(28,012	)		11,392
Accumulated other comprehensive loss		(2,268	)		(1,992	)
Total stockholders’ equity		100,083			9,402
Total liabilities and stockholders’ equity	$	142,345		$	40,885

SILVACO GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited, in thousands except share and per share amounts)

	Three months Ended December 31,						Twelve months Ended December 31,
		2024			2023			2024			2023

Revenue:
Software license revenue	$	13,870		$	8,738		$	43,991		$	39,331
Maintenance and service		3,989			3,748			15,689			14,915
Total revenue		17,859			12,486			59,680			54,246
Cost of revenue		2,422			2,682			12,042			9,354
Gross profit		15,437			9,804			47,638			44,892
Operating expenses:
Research and development		5,283			3,337			20,740			13,170
Selling and marketing		3,983			3,833			18,300			12,707
General and administrative		7,529			4,570			37,571			17,881
Estimated litigation claim		(3,782	)		–			11,306			–
Total operating expenses		13,013			11,740			87,917			43,758
Operating (loss) income		2,424			(1,936	)		(40,279	)		1,134
Loss on debt extinguishment		–			–			(718	)		–
Interest income		1,077			2			2,976			6
Interest and other expenses, net		(67	)		(95	)		(899	)		(630	)
(Loss) income before income tax provision		3,434			(2,029	)		(38,920	)		510
Income tax provision (benefit)		(723	)		218			484			826
Net (loss) income	$	4,157		$	(2,247	)	$	(39,404	)	$	(316	)
(Loss) earnings per share attributable to common stockholders:
Basic and diluted	$	0.14		$	(0.11	)	$	(1.53	)	$	(0.02	)
Weighted average shares used in computing per share amounts:
Basic and diluted		28,734,082			20,000,000			25,672,845			20,000,000

SILVACO GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Year Ended December 31
		2024			2023
Cash flows from operating activities:
Net loss	$	(39,404	)	$	(316	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		1,285			601
Stock-based compensation expense		26,915			–
Provision for credit losses		351			220
Accretion of discount on marketable securities, net		(1,685	)		–
Estimated litigation claim		11,306			–
Loss on debt extinguishment		718			–
Change in fair value of contingent consideration		(27	)		325
Changes in operating assets and liabilities:
Accounts receivable		(5,971	)		1,378
Contract assets		(10,293	)		(5,208	)
Prepaid expense and other current assets		(790	)		133
Other assets		57			(267	)
Accounts payable		1,326			156
Accrued expenses and other current liabilities		(2,160	)		2,015
Accrued income taxes		74			(23	)
Deferred revenue		(1,585	)		2,268
Other non-current liabilities		109			(102	)
Net cash (used in) provided by operating activities		(19,774	)		1,180
Cash flows from investing activities:
Purchases of marketable securities		(99,630	)		–
Maturities of marketable securities		33,600			–
Purchases of property and equipment		(505	)		(339	)
Net cash used in investing activities		(66,535	)		(339	)
Cash flows from financing activities:
Proceeds from initial public offering, net of underwriting fees		106,020			–
Proceeds from issuance of convertible note, net of debt issuance costs		4,852			–
Proceeds from loan facility		4,250			–
Repayment of loan facility		(4,250	)		–
Proceeds from related party line of credit		–			1,000
Repayment of related party line of credit		(2,000	)		(1,000	)
Proceeds from issuance of common stock for share-based awards		315			–
Payroll taxes related to shares withheld from employees		(4,575	)		–
Deferred transaction costs		(2,649	)		(650	)
Contingent consideration		(74	)		(1,002	)
Payments of vendor financing obligation		(588	)		–
Net cash provided by (used in) financing activities		101,301			(1,652	)
Effect of exchange rate fluctuations on cash and cash equivalents		193			(246	)
Net increase (decrease) in cash and cash equivalents		15,185			(1,057	)
Cash and cash equivalents, beginning of period		4,421			5,478
Cash and cash equivalents, end of period	$	19,606		$	4,421

SILVACO GROUP, INC.
REVENUE
(Unaudited)

	2023										2024
	Q1		Q2		Q3		Q4		Year		Q1		Q2		Q3		Q4		Year
Revenue by Region:
Americas	35	%	29	%	31	%	29	%	31	%	27	%	51	%	31	%	40	%	38	%
APAC	51	%	62	%	61	%	63	%	59	%	62	%	41	%	58	%	52	%	53	%
EMEA	14	%	9	%	8	%	8	%	10	%	11	%	8	%	11	%	8	%	9	%
Total revenue	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%

Revenue by Product Line:
TCAD	62	%	62	%	52	%	62	%	59	%	66	%	69	%	59	%	71	%	68	%
EDA	29	%	20	%	31	%	22	%	26	%	30	%	20	%	24	%	24	%	24	%
SIP	9	%	18	%	17	%	16	%	15	%	4	%	11	%	17	%	5	%	8	%
Total revenue	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%

Revenue Item Category:
Software license revenue	75	%	71	%	74	%	70	%	73	%	77	%	74	%	62	%	78	%	74	%
Maintenance and service	25	%	29	%	26	%	30	%	27	%	23	%	26	%	38	%	22	%	26	%
Total revenue	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%

Revenue by Country:
United States	34	%	28	%	28	%	28	%	30	%	51	%	30	%	39	%	39	%	37	%
China	19	%	29	%	16	%	29	%	23	%	17	%	25	%	23	%	23	%	18	%
Other	47	%	43	%	56	%	43	%	47	%	32	%	45	%	38	%	38	%	45	%
Total revenue	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%

SILVACO GROUP, INC.
GAAP to Non-GAAP Reconciliation
(Unaudited, in thousands except per share amounts)

	Three Months Ended						Twelve Months Ended
	12/31/2024			12/31/2023			12/31/2024			12/31/2023

GAAP Cost of revenue	$	2,422		$	2,682		$	12,042		$	9,354
Less: Stock-based compensation expense		(194	)		–			(2,974	)		–
Less: Amortization of acquired intangible assets		(249	)		–			(747	)		–
Less: Payroll tax from the IPO lock-up release		(80	)		–			(80	)		–
Non-GAAP Cost of revenue	$	1,899		$	2,682		$	8,241		$	9,354
GAAP Gross profit	$	15,437		$	9,804		$	47,638		$	44,892
Add: Stock-based compensation expense		194			–			2,974			–
Add: Amortization of acquired intangible assets		249			–			747			–
Add: Payroll tax from the IPO lockup release		80			–			80			–
Non-GAAP Gross profit	$	15,960		$	9,804		$	51,439		$	44,892
GAAP Research and development	$	5,283		$	3,337		$	20,740		$	13,170
Less: Stock-based compensation expense		(535	)		–			(5,091	)		–
Less: Executive severance		(215	)		–			(215	)		–
Less: Payroll tax from the IPO lock-up release		(397	)		–			(397	)		–
Less: Amortization of acquired intangible assets		(43	)		(82	)		(206	)		(339	)
Non-GAAP Research and development	$	4,093		$	3,255		$	14,831		$	12,831
GAAP Sales and marketing	$	3,983		$	3,833		$	18,300		$	12,707
Less: Stock-based compensation expense		(388	)		–			(4,319	)		–
Less: Payroll tax from the IPO lock-up release		(85	)		–			(85	)		–
Less: IPO preparation costs		–			–			(178	)		–
Non-GAAP Sales and marketing	$	3,510		$	3,833		$	13,718		$	12,707
GAAP General and administrative	$	7,529		$	4,570		$	37,571		$	17,881
Less: Stock-based compensation expense		(1,410	)		–			(14,531	)		–
Less: Acquisition-related estimated litigation claim and legal costs		(523	)		(515	)		(4,629	)		(1,707	)
Less: Executive severance		(200	)		–			(200	)		–
Less: Payroll tax from the IPO lock-up release		(163	)		–			(163	)		–
Less: IPO preparation costs		–			(45	)		(695	)		(1,221	)
Non-GAAP General and administrative	$	5,233		$	4,010		$	17,353		$	14,953
GAAP Estimated Litigation claim	$	(3,782	)	$	–		$	11,306		$	–
Add (Less): Acquisition-related estimated litigation claim and legal costs		3,782			–			(11,306	)		–
Non-GAAP Litigation claim	$	–		$	–		$	–		$	–
GAAP Operating expenses	$	13,013		$	11,740		$	87,917		$	43,758
Less: Stock-based compensation expense		(2,333	)		–			(23,941	)		–
Less: Acquisition-related estimated litigation claim and legal costs		3,259			(515	)		(15,935	)		(1,707	)
Less: Executive severance		(415	)		–			(415	)		–
Less: Payroll tax from the IPO lock-up release		(645	)		–			(645	)		–
Less: IPO preparation costs		–			(45	)		(873	)		(1,221	)
Less: Amortization of acquired intangible assets		(43	)		(82	)		(206	)		(339	)
Non-GAAP Operating expenses	$	12,836		$	11,098		$	45,902		$	40,491
GAAP Operating (loss) income	$	2,424		$	(1,936	)	$	(40,279	)	$	1,134
Add: Stock-based compensation expense		2,527			–			26,915			–
Add (Less): Acquisition-related estimated litigation claim and legal costs		(3,259	)		515			15,935			1,707
Add: Payroll tax from the IPO lockup release		725			–			725			–
Add: Executive severance		415			–			415			–
Add: IPO preparation costs		–			45			873			1,221
Add: Amortization of acquired intangible assets		292			82			953			339
Non-GAAP Operating (loss) income	$	3,124		$	(1,294	)	$	5,537		$	4,401
GAAP Net (loss) income	$	4,157		$	(2,247	)	$	(39,404	)	$	(316	)
Add: Stock-based compensation expense		2,527			–			26,915			–
Add: Amortization of acquired intangible assets		292			82			953			339
Add (Less): Acquisition-related estimated litigation claim and legal costs		(3,259	)		515			15,935			1,707
Add: Payroll tax from the IPO lockup release		725			–			725			–
Add: Executive Severance		415			–			415			–
Add: IPO preparation costs		–			45			873			1,221
Add: Loss on debt extinguishment		–			–			718			–
Add (Less): Change in fair value of contingent consideration		(9	)		(7	)		(27	)		325
Add (Less): Foreign exchange (gain) loss		(14	)		(3	)		404			335
Add: Income tax effect of non-GAAP adjustment		(566	)		(27	)		(831	)		(169	)
Non-GAAP Net (loss) income	$	4,268		$	(1,642	)	$	6,676		$	3,442
GAAP Net income (loss) per share:
Basic and diluted:	$	0.14		$	(0.11	)	$	(1.53	)	$	(0.02	)
Non-GAAP Net income (loss) per share:
Basic	$	0.15		$	(0.08	)	$	0.26		$	0.17
Diluted	$	0.15		$	(0.08	)	$	0.25		$	0.17
Weighted average shares used in GAAP and non-GAAP net income (loss) per share:
Basic		28,734,082			20,000,000			25,672,845			20,000,000
Diluted		28,849,041			20,000,000			26,841,901			20,000,000

Investor Contact:
Greg McNiff
investors@silvaco.com

Media Contact:
Farhad Hayat
press@silvaco.com

The MIL Network –

March 6, 2025

MIL-OSI: Climb Global Solutions Reports Record Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

FY 2024 Net Income up 51% to $18.6 Million or $4.06 per share; Adjusted Net Income up 64% to $24.0 Million or $5.26 per share; Adjusted EBITDA up 61% to $39.6 Million

Q4 & FY 2024 Net Sales, Gross Profit, Net Income, EPS and Adjusted EBITDA Increase to Record Levels

EATONTOWN, N.J., March 05, 2025 (GLOBE NEWSWIRE) — Climb Global Solutions, Inc. (NASDAQ:CLMB) (“Climb” or the “Company”), a value-added global IT channel company providing unique sales and distribution solutions for innovative technology vendors, is reporting results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Summary vs. Same Year-Ago Quarter

Net sales increased 51% to $161.8 million.
Net income increased 33% to $7.0 million or $1.52 per diluted share.
Adjusted net income (a non-GAAP financial measure defined below) increased 87% to $10.3 million or $2.26 per diluted share.
Adjusted EBITDA (a non-GAAP financial measure defined below) increased 75% to $16.1 million.
Gross billings (a key operational metric defined below) increased 52% to $605.0 million. Distribution segment gross billings increased 57% to $582.0 million, and Solutions segment gross billings decreased 9% to $23.0 million.

FY 2024 Summary vs. FY 2023

Net sales increased 32% to $465.6 million.
Net income increased 51% to $18.6 million or $4.06 per diluted share.
Adjusted net income (a non-GAAP financial measure defined below) increased 64% to $24.0 million or $5.26 per diluted share.
Adjusted EBITDA (a non-GAAP financial measure defined below) increased 61% to $39.6 million.
Gross billings (a key operational metric defined below) increased 42% to $1.8 billion. Distribution segment gross billings increased 44% to $1.7 billion, and Solutions segment gross billings increased 7% to $89.8 million.

Management Commentary

“Our fourth quarter performance capped off an exceptional 2024, marking another year of record results across all key financial metrics,” said CEO Dale Foster. “Throughout the year, we evaluated over 120 vendors and signed agreements with only 13 of them, demonstrating our commitment to partnering with the most innovative technologies in the market. We also added scale and expertise to our North America operations through the acquisition of Douglas Stewart Software & Services, LLC (“DSS”), which was immediately accretive to earnings. I’m proud of our team’s hard work in generating double-digit organic growth in both the U.S. and Europe, reinforcing our commitment to deepening relationships with our partners across our global footprint.

“Looking ahead, we have a solid foundation in place to continue driving strong organic growth while further improving operating leverage through the implementation of our ERP system. We will also continue to evaluate M&A opportunities that can enhance our service and solutions offerings, as well as expand our geographic footprint in the U.S. and overseas. These initiatives, coupled with our demonstrated track record of execution and a robust balance sheet, will enable us to deliver on our organic and inorganic growth initiatives in 2025.”

Dividend

Subsequent to quarter end, on February 28, 2025, Climb’s Board of Directors declared a quarterly dividend of $0.17 per share of its common stock payable on March 21, 2025, to shareholders of record on March 17, 2025.

Fourth Quarter 2024 Financial Results

Net sales in the fourth quarter of 2024 increased 51% to $161.8 million compared to $106.8 million for the same period in 2023. This reflects organic growth from new and existing vendors, as well as contribution from the Company’s acquisition of DSS on July 31, 2024. In addition, gross billings in the fourth quarter of 2024 increased 52% to $605.0 million compared to $397.0 million in the year-ago period.

Gross profit in the fourth quarter of 2024 increased 48% to $31.2 million compared to $21.1 million for the same period in 2023. The increase was driven by organic growth from new and existing vendors in both North America and Europe, as well as contribution from DSS.

Selling, general, and administrative (“SG&A”) expenses in the fourth quarter of 2024 were $17.1 million compared to $12.4 million in the year-ago period. DSS represented $2.2 million of the increase. SG&A as a percentage of gross billings decreased to 2.8% for the fourth quarter of 2024 compared to 3.1% in the year-ago period.

Net income in the fourth quarter of 2024 increased 33% to $7.0 million or $1.52 per diluted share, compared to $5.2 million or $1.15 per diluted share for the same period in 2023. Net income was impacted by a $2.5 million charge related to a change in fair value of acquisition contingent consideration associated with Spinnakar Limited. Adjusted net income increased 87% to $10.3 million or $2.26 per diluted share, compared to $5.5 million or $1.21 per diluted share for the year-ago period.

Adjusted EBITDA in the fourth quarter of 2024 increased 75% to $16.1 million compared to $9.2 million for the same period in 2023. The increase was primarily driven by organic growth from both new and existing vendors, as well as contribution from the Company’s acquisition of DSS. Effective margin, which is defined as adjusted EBITDA as a percentage of gross profit, increased 780 basis points to 51.5% compared to 43.7% for the same period in 2023.

On December 31, 2024, cash and cash equivalents were $29.8 million compared to $36.3 million on December 31, 2023, while working capital decreased by $9.3 million during this period. The decrease in cash was primarily attributed to $20.4 million of cash paid at closing for the acquisition of DSS, as well as the timing of receivable collections and payables. Climb had $0.8 million of outstanding debt on December 31, 2024, with no borrowings outstanding under its $50 million revolving credit facility.

For more information on the non-GAAP financial measures discussed in this press release, please see the section titled, “Non-GAAP Financial Measures,” and the reconciliations of non-GAAP financial measures to their nearest comparable GAAP financial measures at the end of this press release.

Conference Call

The Company will conduct a conference call tomorrow, March 6, 2025, at 8:30 a.m. Eastern time to discuss its results for the fourth quarter and full year ended December 31, 2024.

Climb management will host the conference call, followed by a question-and-answer period.

Date: Thursday, March 6, 2025
Time: 8:30 a.m. Eastern time
Toll-free dial-in number: (800) 225-9448
International dial-in number: (203) 518-9708
Conference ID: CLIMB
Webcast: Climb’s Q4 & FY 2024 Conference Call

If you have any difficulty registering or connecting with the conference call, please contact Elevate IR at (720) 330-2829.

The conference call will also be available for replay on the investor relations section of the Company’s website at www.climbglobalsolutions.com.

About Climb Global Solutions

Climb Global Solutions, Inc. (NASDAQ:CLMB) is a value-added global IT distribution and solutions company specializing in emerging and innovative technologies. Climb operates across the US, Canada and Europe through multiple business units, including Climb Channel Solutions, Grey Matter and Climb Global Services. The Company provides IT distribution and solutions for companies in the Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM industries.

Additional information can be found by visiting www.climbglobalsolutions.com.

Non-GAAP Financial Measures

Climb Global Solutions uses non-GAAP financial measures, including adjusted net income and adjusted EBITDA, as supplemental measures of the performance of the Company’s business. Use of these financial measures has limitations, and you should not consider them in isolation or use them as substitutes for analysis of Climb’s financial results under generally accepted accounting principles in the United States of America (“U.S. GAAP”). The attached tables provide definitions of these measures and a reconciliation of each non-GAAP financial measure to the most nearly comparable measure under U.S. GAAP.

Key Operational Metric

Gross Billings

Gross billings are the total dollar value of customer purchases of goods and services during the period, net of customer returns and credit memos, sales, or other taxes. Gross billings include the transaction values for certain sales transactions that are recognized on a net basis, and, therefore, includes amounts that will not be recognized as revenue. We use gross billings as an operational metric to assess the volume of transactions or market share for our business as well as to understand changes in our accounts receivable and accounts payable. We believe gross billings will aid investors in the same manner.

Forward-Looking Statements

The statements in this release, other than statements of historical fact, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are intended to come within the safe harbor protection provided by those sections. These forward-looking statements are subject to certain risks and uncertainties. Many of the forward-looking statements may be identified by words such as ”look forward,” “believes,” “expects,” “intends,” “anticipates,” “plans,” “estimates,” “projects,” “forecasts,” “should,” “could,” “would,” “will,” “confident,” “may,” “can,” “potential,” “possible,” “proposed,” “in process,” “under construction,” “in development,” “opportunity,” “target,” “outlook,” “maintain,” “continue,” “goal,” “aim,” “commit,” or similar expressions, or when we discuss our priorities, strategy, goals, vision, mission, opportunities, projections, intentions or expectations. In this press release, the forward-looking statements relate to, among other things, declaring and reaffirming our strategic goals, future operating results, and the effects and potential benefits of the strategic acquisition on our business. Factors, among others, that could cause actual results and events to differ materially from those described in any forward-looking statements include, without limitation, our ability to recognize the anticipated benefits of the acquisitions of Data Solutions Holdings Limited and Douglas Stewart Software & Services, LLC, the continued acceptance of the Company’s distribution channel by vendors and customers, the timely availability and acceptance of new products, product mix, market conditions, competitive pricing pressures, the successful integration of acquisitions, contribution of key vendor relationships and support programs, inflation, interest rate risk and impact thereof, as well as factors that affect the software industry in general. The forward-looking statements contained herein are also subject generally to other risks and uncertainties that are described in the section entitled “Risk Factors” contained in Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and from time to time in the Company’s filings with the Securities and Exchange Commission.

Company Contact

Matthew Sullivan
Chief Financial Officer
(732) 847-2451
MatthewS@ClimbCS.com

Investor Relations Contact
Sean Mansouri, CFA or Aaron D’Souza
Elevate IR
(720) 330-2829
CLMB@elevate-ir.com


CLIMB GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	(Unaudited)
(Amounts in thousands, except share and per share amounts)

		December 31, 2024			December 31, 2023

ASSETS

Current assets
	Cash and cash equivalents	$	29,778		$	36,295
	Accounts receivable, net of allowance for doubtful accounts of $588 and $709, respectively		341,597			222,269
	Inventory, net		2,447			3,741
	Prepaid expenses and other current assets		6,874			6,755
Total current assets			380,696			269,060

Equipment and leasehold improvements, net			12,853			8,850
Goodwill			34,924			27,182
Other intangibles, net			36,550			26,930
Right-of-use assets, net			1,965			878
Accounts receivable long-term, net			1,174			797
Other assets			824			1,077
Deferred income tax assets			193			324

Total assets		$	469,179		$	335,098

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
	Accounts payable and accrued expenses	$	370,397		$	249,648
	Lease liability, current portion		654			450
	Term loan, current portion		560			540
Total current liabilities			371,611			250,638

	Lease liability, net of current portion		1,685			879
	Deferred income tax liabilities		4,723			5,554
	Term loan, net of current portion		191			752
	Non-current liabilities		381			2,505

Total liabilities			378,591			260,328


Stockholders’ equity
	Common stock, $.01 par value; 10,000,000 shares authorized, 5,284,500 shares
	issued, and 4,601,302 and 4,573,448 shares outstanding , respectively		53			53
	Additional paid-in capital		37,977			34,647
	Treasury stock, at cost, 683,198 and 711,052 shares, respectively		(13,337	)		(12,623	)
	Retained earnings		68,787			53,215
	Accumulated other comprehensive loss		(2,892	)		(522	)
Total stockholders’ equity			90,588			74,770
Total liabilities and stockholders’ equity		$	469,179		$	335,098

CLIMB GLOBAL SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(Amounts in thousands, except per share data)

		Year ended						Three months ended
		December 31,						December 31,
			2024			2023			2024			2023

Net Sales		$	465,607		$	352,013		$	161,760		$	106,783

Cost of sales			374,527			287,766			130,513			85,713

Gross profit			91,080			64,247			31,247			21,070

Selling, general and administrative expenses			56,508			44,330			17,075			12,400
Depreciation & amortization expense			4,269			2,798			1,336			864
Acquisition related costs			2,311			629			1,110			352
Total selling, general and administrative expenses			63,088			47,757			19,521			13,616

Income from operations			27,992			16,490			11,726			7,454

Interest, net			917			927			162			168
Foreign currency transaction (loss) gain			(273	)		(636	)		415			(536	)
Change in fair value of acquisition contingent consideration			(3,618	)		–			(2,466	)		–
Income before provision for income taxes			25,018			16,781			9,837			7,086
Provision for income taxes			6,408			4,458			2,847			1,840

Net income		$	18,610		$	12,323		$	6,990		$	5,246

Income per common share – Basic		$	4.06		$	2.72		$	1.52		$	1.15
Income per common share – Diluted		$	4.06		$	2.72		$	1.52		$	1.15

Weighted average common shares outstanding – Basic			4,465			4,401			4,485			4,427
Weighted average common shares outstanding – Diluted			4,465			4,401			4,485			4,427

Dividends paid per common share		$	0.68		$	0.68		$	0.17		$	0.17


Reconciliation of GAAP and Non-GAAP Financial Measures (unaudited)
(Amounts in thousands, except per share data)

The table below presents net income reconciled to adjusted EBITDA (Non-GAAP) (1):

		Year ended						Three months ended
		December 31,			December 31,			December 31,			December 31,
			2024			2023			2024			2023

Net income		$	18,610		$	12,323		$	6,990		$	5,246
	Provision for income taxes		6,408			4,458			2,847			1,840
	Depreciation and amortization		4,269			2,798			1,336			864
	Interest expense		335			264			69			170
EBITDA			29,622			19,843			11,242			8,120
	Share-based compensation		4,070			4,148			1,260			726
	Acquisition related costs		2,311			629			1,110			352
	Change in fair value of acquisition contingent consideration		3,618			–			2,466			–
Adjusted EBITDA		$	39,621		$	24,620		$	16,078		$	9,198


		Year ended						Three months ended
		December 31,			December 31,			December 31,			December 31,
Components of interest, net			2024			2023			2024			2023

	Amortization of discount on accounts receivable with extended payment terms	$	(34	)	$	(50	)	$	(11	)	$	(9	)
	Interest income		(1,218	)		(1,141	)		(220	)		(329	)
	Interest expense		335			264			69			170
Interest, net		$	(917	)	$	(927	)	$	(162	)	$	(168	)

(1) We define adjusted EBITDA, as net income, plus provision for income taxes, depreciation, amortization, share-based compensation, interest, acquisition related costs and change in fair value of acquisition contingent consideration. We define effective margin as adjusted EBITDA as a percentage of gross profit. We provided a reconciliation of adjusted EBITDA to net income, which is the most directly comparable US GAAP measure. We use adjusted EBITDA as a supplemental measure of our performance to gain insight into our businesses profitability, operating performance and performance trends, and to provide management and investors a useful measure for period-to-period comparisons by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results. Adjusted EBITDA is also a component to our financial covenants in our credit facility. Our use of adjusted EBITDA has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under US GAAP. In addition, other companies, including companies in our industry, might calculate adjusted EBITDA, or similarly titled measures differently, which may reduce their usefulness as comparative measures.

The table below presents net income reconciled to adjusted net income (Non-GAAP) (2):

		Year ended				Three months ended
		December 31,		December 31,		December 31,		December 31,
			2024		2023		2024		2023

	Net income	$	18,610	$	12,323	$	6,990	$	5,246
	Acquisition related costs, net of income taxes		1,733		472		833		264
	One-time CEO stock grant		–		1,796		–		–
	Change in fair value of acquisition contingent consideration		3,618		–		2,466		–
	Adjusted net income	$	23,961	$	14,591	$	10,289	$	5,510

	Adjusted net income per common share – diluted	$	5.26	$	3.24	$	2.26	$	1.21

(2) We define adjusted net income as net income excluding acquisition related costs, net of income taxes, the stock compensation expense recognized for the one-time CEO stock grant, and the change in fair value of acquisition contingent consideration. We provided a reconciliation of adjusted net income to net income, which is the most directly comparable U.S. GAAP measure. We use adjusted net income and adjusted net income per common share as supplemental measures of our performance to gain insight into our businesses profitability, operating performance and performance trends, and to provide management and investors a useful measure for period-to-period comparisons by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that adjusted net income and adjust net income per common share provide useful information to investors and others in understanding and evaluating our operating results. Our use of adjusted net income has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. In addition, other companies, including companies in our industry, might calculate adjusted net income, or similarly titled measures differently, which may reduce their usefulness as comparative measures.

The table below presents the operational metric of gross billings by segment (3):

		Year ended				Three months ended
		December 31,		December 31,		December 31,		December 31,
			2024		2023		2024		2023

	Distribution gross billings	$	1,695,538	$	1,176,866	$	581,963	$	371,673
	Solutions gross billings		89,764		83,516		23,045		25,370
	Total gross billings	$	1,785,302	$	1,260,382	$	605,008	$	397,043

(3) Gross billings are the total dollar value of customer purchases of goods and services during the period, net of customer returns and credit memos, sales, or other taxes. Gross billings include the transaction values for certain sales transactions that are recognized on a net basis, and, therefore, include amounts that will not be recognized as revenue. We use gross billings as an operational metric to assess the volume of transactions or market share for our business as well as to understand changes in our accounts receivable and accounts payable. We believe gross billings will aid investors in the same manner.

The MIL Network –

March 6, 2025

MIL-OSI: YieldMax™ ETFs Announces Distributions on FIAT (101.61%), ULTY (82.09%), CONY (79.47%), YMAX (85.55%), YMAG (48.55%) and Others

Source: GlobeNewswire (MIL-OSI)

CHICAGO, MILWAUKEE and NEW YORK, March 05, 2025 (GLOBE NEWSWIRE) — YieldMax™ today announced distributions for the YieldMax™ Weekly Payers and Group C ETFs listed in the table below.

ETF Ticker¹	ETF Name	Distribution Frequency	Distribution per Share	Distribution Rate^2,4	30-Day SEC Yield³	ROC⁵	Ex-Date & Record Date	Payment Date
QDTY	YieldMax™ Nasdaq 100 0DTE Covered Call ETF	*Weekly*	$0.1580	–	–	33.90%	3/6/25	3/7/25
SDTY	YieldMax™ S&P 500 0DTE Covered Call ETF	*Weekly*	$0.1709	–	–	100.00%	3/6/25	3/7/25
GPTY	YieldMax™ AI & Tech Portfolio Option Income ETF	*Weekly*	$0.3094	37.80%	0.00%	0.00%	3/6/25	3/7/25
LFGY	YieldMax™ Crypto Industry & Tech Portfolio Option Income ETF	*Weekly*	$0.4637	61.48%	0.00%	0.00%	3/6/25	3/7/25
YMAX	YieldMax™ Universe Fund of Option Income ETFs	*Weekly*	$0.2405	85.55%	85.03%	48.89%	3/6/25	3/7/25
YMAG	YieldMax™ Magnificent 7 Fund of Option Income ETFs	*Weekly*	$0.1514	48.55%	61.87%	55.46%	3/6/25	3/7/25
CONY	YieldMax™ COIN Option Income Strategy ETF	Every 4 Weeks	$0.5989	79.47%	4.56%	94.78%	3/6/25	3/7/25
FIAT	YieldMax™ Short COIN Option Income Strategy ETF	Every 4 Weeks	$0.6834	101.61%	3.52%	96.91%	3/6/25	3/7/25
MSFO	YieldMax™ MSFT Option Income Strategy ETF	Every 4 Weeks	$0.2845	22.70%	3.53%	83.81%	3/6/25	3/7/25
AMDY	YieldMax™ AMD Option Income Strategy ETF	Every 4 Weeks	$0.2533	40.54%	4.02%	92.00%	3/6/25	3/7/25
NFLY	YieldMax™ NFLX Option Income Strategy ETF	Every 4 Weeks	$0.4008	29.38%	3.23%	0.00%	3/6/25	3/7/25
ABNY	YieldMax™ ABNB Option Income Strategy ETF	Every 4 Weeks	$0.4805	42.34%	2.98%	92.39%	3/6/25	3/7/25
PYPY	YieldMax™ PYPL Option Income Strategy ETF	Every 4 Weeks	$0.3773	35.98%	4.20%	90.73%	3/6/25	3/7/25
ULTY*	YieldMax™ Ultra Option Income Strategy ETF	Every 4 Weeks	$0.4653	82.09%	0.00%	78.20%	3/6/25	3/7/25
CVNY	YieldMax™ CVNA Option Income Strategy ETF	Every 4 Weeks	$3.9149	–	–	96.80%	3/6/25	3/7/25
Weekly Payers & Group D ETFs scheduled for next week: ULTY QDTY SDTY GPTY LFGY YMAX YMAG MSTY YQQQ AMZY APLY AIYY DISO SQY SMCY

Performance data quoted represents past performance and is no guarantee of future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted above. Performance current to the most recent month-end can be obtained by calling (833) 378-0717.

Note: DIPS, FIAT, CRSH and YQQQ are hereinafter referred to as the “Short ETFs.”

Distributions are not guaranteed. The Distribution Rate and 30-Day SEC Yield are not indicative of future distributions, if any, on the ETFs. In particular, future distributions on any ETF may differ significantly from its Distribution Rate or 30-Day SEC Yield. You are not guaranteed a distribution under the ETFs. Distributions for the ETFs (if any) are variable and may vary significantly from period to period and may be zero. Accordingly, the Distribution Rate and 30-Day SEC Yield will change over time, and such change may be significant.

Investors in the Funds will not have rights to receive dividends or other distributions with respect to the underlying reference asset(s).

*Starting March 12, 2025, ULTY intends to distribute weekly income to shareholders. The dates for ULTY ’s future distributions will be those set forth in the YieldMax Distribution Schedule.

¹All YieldMax™ ETFs shown in the table above (except YMAX, YMAG, FEAT, FIVY and ULTY) have a gross expense ratio of 0.99%. YMAX, YMAG and FEAT have a Management Fee of 0.29% and Acquired Fund Fees and Expenses of 0.99% for a gross expense ratio of 1.28%. FIVY has a Management Fee of 0.29% and Acquired Fund Fees and Expenses of 0.59% for a gross expense ratio of 0.88%. “Acquired Fund Fees and Expenses” are indirect fees and expenses that the Fund incurs from investing in the shares of other investment companies, namely other YieldMax™ ETFs. ULTY has a gross expense ratio after the fee waiver of 1.30%. The Advisor has agreed to a fee waiver of 0.10% through at least February 28, 2026.
²The Distribution Rate shown is as of close on March 4, 2025. The Distribution Rate is the annual distribution rate an investor would receive if the most recent distribution, which includes option income, remained the same going forward. The Distribution Rate is calculated by annualizing an ETF’s Distribution per Share and dividing such annualized amount by the ETF’s most recent NAV. The Distribution Rate represents a single distribution from the ETF and does not represent its total return. Distributions may also include a combination of ordinary dividends, capital gain, and return of investor capital, which may decrease an ETF’s NAV and trading price over time. As a result, an investor may suffer significant losses to their investment. These Distribution Rates may be caused by unusually favorable market conditions and may not be sustainable. Such conditions may not continue to exist and there should be no expectation that this performance may be repeated in the future.
³ The 30-Day SEC Yield represents net investment income, which excludes option income, earned by such ETF over the 30-Day period ended February 28, 2025, expressed as an annual percentage rate based on such ETF’s share price at the end of the 30-Day period.
⁴ Each ETF’s strategy (except those of the Short ETFs) will cap potential gains if its reference asset’s shares increase in value, yet subjects an investor to all potential losses if the reference asset’s shares decrease in value. Such potential losses may not be offset by income received by the ETF. Each Short ETF’s strategy will cap potential gains if its reference asset decreases in value, yet subjects an investor to all potential losses if the reference asset increases in value. Such potential losses may not be offset by income received by the ETF.
⁵ ROC refers to Return of Capital. The ROC percentage is the portion of the distribution that represents an investor’s original investment.

Each Fund has a limited operating history and while each Fund’s objective is to provide current income, there is no guarantee the Fund will make a distribution. Distributions are likely to vary greatly in amount.

Standardized Performance

For YMAX, click here. For YMAG, click here. For TSLY, click here. For OARK, click here. For APLY, click here. For NVDY, click here. For AMZY, click here. For FBY, click here. For GOOY, click here. For NFLY, click here. For CONY, click here. For MSFO, click here. For DISO, click here. For XOMO, click here. For JPMO, click here. For AMDY, click here. For PYPY, click here. For SQY, click here. For MRNY, click here. For AIYY, click here. For MSTY, click here. For ULTY, click here. For YBIT, click here. For CRSH, click here. For GDXY, click here. For SNOY, click here. For ABNY, click here. For FIAT, click here. For DIPS, click here. For BABO, click here. For YQQQ, click here. For TSMY, click here. For SMCY, click here. For PLTY, click here. For BIGY, click here. For SOXY, click here. For MARO, click here. For FEAT, click here. For FIVY, click here. For LFGY, click here. For GPTY, click here. For CVNY, click here. For SDTY, click here. For QDTY, click here.

Important Information

This material must be preceded or accompanied by the prospectus. For all prospectuses, click here.

Tidal Financial Group is the adviser for all YieldMax™ ETFs.

THE FUND, TRUST, AND ADVISER ARE NOT AFFILIATED WITH ANY UNDERLYING REFERENCE ASSET.

Risk Disclosures (applicable to all YieldMax ETFs referenced above, except the Short ETFs)

YMAX, YMAG, FEAT and FIVY generally invest in other YieldMax™ ETFs. As such, these two Funds are subject to the risks listed in this section, which apply to all the YieldMax™ ETFs they may hold from time to time.

Investing involves risk. Principal loss is possible.

Referenced Index Risk. The Fund invests in options contracts that are based on the value of the Index (or the Index ETFs). This subjects the Fund to certain of the same risks as if it owned shares of companies that comprised the Index or an ETF that tracks the Index, even though it does not.

Indirect Investment Risk. The Index is not affiliated with the Trust, the Fund, the Adviser, or their respective affiliates and is not involved with this offering in any way. Investors in the Fund will not have the right to receive dividends or other distributions or any other rights with respect to the companies that comprise the Index but will be subject to declines in the performance of the Index.

Russell 2000 Index Risks. The Index, which consists of small-cap U.S. companies, is particularly susceptible to economic changes, as these firms often have less financial resilience than larger companies. Market volatility can disproportionately affect these smaller businesses, leading to significant price swings. Additionally, these companies are often more exposed to specific industry risks and have less diverse revenue streams. They can also be more vulnerable to changes in domestic regulatory or policy environments.

Call Writing Strategy Risk. The path dependency (i.e., the continued use) of the Fund’s call writing strategy will impact the extent that the Fund participates in the positive price returns of the underlying reference asset and, in turn, the Fund’s returns, both during the term of the sold call options and over longer periods.

Counterparty Risk. The Fund is subject to counterparty risk by virtue of its investments in options contracts. Transactions in some types of derivatives, including options, are required to be centrally cleared (“cleared derivatives”). In a transaction involving cleared derivatives, the Fund’s counterparty is a clearing house rather than a bank or broker. Since the Fund is not a member of clearing houses and only members of a clearing house (“clearing members”) can participate directly in the clearing house, the Fund will hold cleared derivatives through accounts at clearing members.

Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes. The Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, imperfect correlation with underlying investments or the Fund’s other portfolio holdings, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions.

Options Contracts. The use of options contracts involves investment strategies and risks different from those associated with ordinary portfolio securities transactions. The prices of options are volatile and are influenced by, among other things, actual and anticipated changes in the value of the underlying instrument, including the anticipated volatility, which are affected by fiscal and monetary policies and by national and international political, changes in the actual or implied volatility or the reference asset, the time remaining until the expiration of the option contract and economic events.

Distribution Risk. As part of the Fund’s investment objective, the Fund seeks to provide current income. There is no assurance that the Fund will make a distribution in any given period. If the Fund does make distributions, the amounts of such distributions will likely vary greatly from one distribution to the next.

High Portfolio Turnover Risk. The Fund may actively and frequently trade all or a significant portion of the Fund’s holdings. A high portfolio turnover rate increases transaction costs, which may increase the Fund’s expenses.

Liquidity Risk. Some securities held by the Fund, including options contracts, may be difficult to sell or be illiquid, particularly during times of market turmoil.

Non-Diversification Risk. Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in the securities of a single issuer or a smaller number of issuers than if it was a diversified fund.

New Fund Risk. The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.

Price Participation Risk. The Fund employs an investment strategy that includes the sale of call option contracts, which limits the degree to which the Fund will participate in increases in value experienced by the underlying reference asset over the Call Period.

Single Issuer Risk. Issuer-specific attributes may cause an investment in the Fund to be more volatile than a traditional pooled investment which diversifies risk or the market generally. The value of the Fund, which focuses on an individual security (ARKK, TSLA, AAPL, NVDA, AMZN, META, GOOGL, NFLX, COIN, MSFT, DIS, XOM, JPM, AMD, PYPL, SQ, MRNA, AI, MSTR, Bitcoin ETP, GDX®, SNOW, ABNB, BABA, TSM, SMCI, PLTR, MARA, CVNA), may be more volatile than a traditional pooled investment or the market as a whole and may perform differently from the value of a traditional pooled investment or the market as a whole.

Inflation Risk. Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the present value of the Fund’s assets and distributions, if any, may decline.

Indirect Investment Risk. The Index is not affiliated with the Trust, the Fund, the Adviser, or their respective affiliates and is not involved with this offering in any way.

Risk Disclosures (applicable only to GPTY)

Artificial Intelligence Risk. Issuers engaged in artificial intelligence typically have high research and capital expenditures and, as a result, their profitability can vary widely, if they are profitable at all. The space in which they are engaged is highly competitive and issuers’ products and services may become obsolete very quickly. These companies are heavily dependent on intellectual property rights and may be adversely affected by loss or impairment of those rights. The issuers are also subject to legal, regulatory and political changes that may have a large impact on their profitability. A failure in an issuer’s product or even questions about the safety of the product could be devastating to the issuer, especially if it is the marquee product of the issuer. It can be difficult to accurately capture what qualifies as an artificial intelligence company.

Technology Sector Risk. The Fund will invest substantially in companies in the information technology sector, and therefore the performance of the Fund could be negatively impacted by events affecting this sector. Market or economic factors impacting technology companies and companies that rely heavily on technological advances could have a significant effect on the value of the Fund’s investments. The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation and competition, both domestically and internationally, including competition from foreign competitors with lower production costs. Stocks of information technology companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Information technology companies are heavily dependent on patent and intellectual property rights, the loss or impairment of which may adversely affect profitability.

Risk Disclosure (applicable only to MARO)

Digital Assets Risk: The Fund does not invest directly in Bitcoin or any other digital assets. The Fund does not invest directly in derivatives that track the performance of Bitcoin or any other digital assets. The Fund does not invest in or seek direct exposure to the current “spot” or cash price of Bitcoin. Investors seeking direct exposure to the price of Bitcoin should consider an investment other than the Fund. Digital assets like Bitcoin, designed as mediums of exchange, are still an emerging asset class. They operate independently of any central authority or government backing and are subject to regulatory changes and extreme price volatility.

Risk Disclosures (applicable only to BABO and TSMY)

Currency Risk: Indirect exposure to foreign currencies subjects the Fund to the risk that currencies will decline in value relative to the U.S. dollar. Currency rates in foreign countries may fluctuate significantly over short periods of time for a number of reasons, including changes in interest rates and the imposition of currency controls or other political developments in the U.S. or abroad.

Depositary Receipts Risk: The securities underlying BABO and TSMY are American Depositary Receipts (“ADRs”). Investment in ADRs may be less liquid than the underlying shares in their primary trading market.

Foreign Market and Trading Risk: The trading markets for many foreign securities are not as active as U.S. markets and may have less governmental regulation and oversight.

Foreign Securities Risk: Investments in securities of non-U.S. issuers involve certain risks that may not be present with investments in securities of U.S. issuers, such as risk of loss due to foreign currency fluctuations or to political or economic instability, as well as varying regulatory requirements applicable to investments in non-U.S. issuers. There may be less information publicly available about a non-U.S. issuer than a U.S. issuer. Non-U.S. issuers may also be subject to different regulatory, accounting, auditing, financial reporting and investor protection standards than U.S. issuers.

Risk Disclosures (applicable only to GDXY)

Risk of Investing in Foreign Securities. The Fund is exposed indirectly to the securities of foreign issuers selected by GDX®’s investment adviser, which subjects the Fund to the risks associated with such companies. Investments in the securities of foreign issuers involve risks beyond those associated with investments in U.S. securities.

Risk of Investing in Gold and Silver Mining Companies. The Fund is exposed indirectly to gold and silver mining companies selected by GDX®’s investment adviser, which subjects the Fund to the risks associated with such companies.

The Fund invests in options contracts based on the value of the VanEck Gold Miners ETF (GDX®), which subjects the Fund to some of the same risks as if it owned GDX®, as well as the risks associated with Canadian, Australian and Emerging Market Issuers, and Small-and Medium-Capitalization companies.

Risk Disclosures (applicable only to YBIT)

YBIT does not invest directly in Bitcoin or any other digital assets. YBIT does not invest directly in derivatives that track the performance of Bitcoin or any other digital assets. YBIT does not invest in or seek direct exposure to the current “spot” or cash price of Bitcoin. Investors seeking direct exposure to the price of Bitcoin should consider an investment other than YBIT.

Bitcoin Investment Risk: The Fund’s indirect investment in Bitcoin, through holdings in one or more Underlying ETPs, exposes it to the unique risks of this emerging innovation. Bitcoin’s price is highly volatile, and its market is influenced by the changing Bitcoin network, fluctuating acceptance levels, and unpredictable usage trends.

Digital Assets Risk: Digital assets like Bitcoin, designed as mediums of exchange, are still an emerging asset class. They operate independently of any central authority or government backing and are subject to regulatory changes and extreme price volatility. Potentially No 1940 Act Protections. As of the date of this Prospectus, there is only a single eligible Underlying ETP, and it is an investment company subject to the 1940 Act.

Bitcoin ETP Risk: The Fund invests in options contracts that are based on the value of the Bitcoin ETP. This subjects the Fund to certain of the same risks as if it owned shares of the Bitcoin ETP, even though it does not. Bitcoin ETPs are subject, but not limited, to significant risk and heightened volatility. An investor in a Bitcoin ETP may lose their entire investment. Bitcoin ETPs are not suitable for all investors. In addition, not all Bitcoin ETPs are registered under the Investment Company Act of 1940. Those Bitcoin ETPs that are not registered under such statute are therefore not subject to the same regulations as exchange traded products that are so registered.

Risk Disclosures (applicable only to the Short ETFs)

Investing involves risk. Principal loss is possible.

Price Appreciation Risk. As part of the Fund’s synthetic covered put strategy, the Fund purchases and sells call and put option contracts that are based on the value of the underlying reference asset. This strategy subjects the Fund to certain of the same risks as if it shorted the underlying reference asset, even though it does not. By virtue of the Fund’s indirect inverse exposure to changes in the value of the underlying reference asset, the Fund is subject to the risk that the value of the underlying reference asset increases. If the value of the underlying reference asset increases, the Fund will likely lose value and, as a result, the Fund may suffer significant losses.

Put Writing Strategy Risk. The path dependency (i.e., the continued use) of the Fund’s put writing (selling) strategy will impact the extent that the Fund participates in decreases in the value of the underlying reference asset and, in turn, the Fund’s returns, both during the term of the sold put options and over longer periods.

Purchased OTM Call Options Risk. The Fund’s strategy is subject to potential losses if the underlying reference asset increases in value, which may not be offset by the purchase of out-of-the-money (OTM) call options. The Fund purchases OTM calls to seek to manage (cap) the Fund’s potential losses from the Fund’s short exposure to the underlying reference asset if it appreciates significantly in value. However, the OTM call options will cap the Fund’s losses only to the extent that the value of the underlying reference asset increases to a level that is at or above the strike level of the purchased OTM call options. Any increase in the value of the underlying reference asset to a level that is below the strike level of the purchased OTM call options will result in a corresponding loss for the Fund. For example, if the OTM call options have a strike level that is approximately 100% above the then-current value of the underlying reference asset at the time of the call option purchase, and the value of the underlying reference asset increases by at least 100% during the term of the purchased OTM call options, the Fund will lose all its value. Since the Fund bears the costs of purchasing the OTM calls, such costs will decrease the Fund’s value and/or any income otherwise generated by the Fund’s investment strategy.

Counterparty Risk. The Fund is subject to counterparty risk by virtue of its investments in options contracts. Transactions in some types of derivatives, including options, are required to be centrally cleared (“cleared derivatives”). In a transaction involving cleared derivatives, the Fund’s counterparty is a clearing house rather than a bank or broker. Since the Fund is not a member of clearing houses and only members of a clearing house (“clearing members”) can participate directly in the clearing house, the Fund will hold cleared derivatives through accounts at clearing members.

Derivatives Risk. Derivatives are financial instruments that derive value from the underlying reference asset or assets, such as stocks, bonds, or funds (including ETFs), interest rates or indexes. The Fund’s investments in derivatives may pose risks in addition to, and greater than, those associated with directly investing in securities or other ordinary investments, including risk related to the market, imperfect correlation with underlying investments or the Fund’s other portfolio holdings, higher price volatility, lack of availability, counterparty risk, liquidity, valuation and legal restrictions.

Options Contracts. The use of options contracts involves investment strategies and risks different from those associated with ordinary portfolio securities transactions. The prices of options are volatile and are influenced by, among other things, actual and anticipated changes in the value of the underlying reference asset, including the anticipated volatility, which are affected by fiscal and monetary policies and by national and international political, changes in the actual or implied volatility or the reference asset, the time remaining until the expiration of the option contract and economic events.

Distribution Risk. As part of the Fund’s investment objective, the Fund seeks to provide current income. There is no assurance that the Fund will make a distribution in any given period. If the Fund does make distributions, the amounts of such distributions will likely vary greatly from one distribution to the next.

High Portfolio Turnover Risk. The Fund may actively and frequently trade all or a significant portion of the Fund’s holdings.

Liquidity Risk. Some securities held by the Fund, including options contracts, may be difficult to sell or be illiquid, particularly during times of market turmoil.

Non-Diversification Risk. Because the Fund is “non-diversified,” it may invest a greater percentage of its assets in the securities of a single issuer or a smaller number of issuers than if it was a diversified fund.

New Fund Risk. The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions.

Price Participation Risk. The Fund employs an investment strategy that includes the sale of put option contracts, which limits the degree to which the Fund will participate in decreases in value experienced by the underlying reference asset over the Put Period.

Single Issuer Risk. Issuer-specific attributes may cause an investment in the Fund to be more volatile than a traditional pooled investment which diversifies risk or the market generally. The value of the Fund, for any Fund that focuses on an individual security (e.g., TSLA, COIN, NVDA), may be more volatile than a traditional pooled investment or the market as a whole and may perform differently from the value of a traditional pooled investment or the market as a whole.

Inflation Risk. Inflation risk is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the present value of the Fund’s assets and distributions, if any, may decline.

Risk Disclosures (applicable only to YQQQ)

Index Overview. The Nasdaq 100 Index is a benchmark index that includes 100 of the largest non-financial companies listed on the Nasdaq Stock Market, based on market capitalization.

Index Level Appreciation Risk. As part of the Fund’s synthetic covered put strategy, the Fund purchases and sells call and put option contracts that are based on the Index level. This strategy subjects the Fund to certain of the same risks as if it shorted the Index, even though it does not. By virtue of the Fund’s indirect inverse exposure to changes in the Index level, the Fund is subject to the risk that the Index level increases. If the Index level increases, the Fund will likely lose value and, as a result, the Fund may suffer significant losses. The Fund may also be subject to the following risks: innovation and technological advancement; strong market presence of Index constituent companies; adaptability to global market trends; and resilience and recovery potential.

Index Level Participation Risk. The Fund employs an investment strategy that includes the sale of put option contracts, which limits the degree to which the Fund will benefit from decreases in the Index level experienced over the Put Period. This means that if the Index level experiences a decrease in value below the strike level of the sold put options during a Put Period, the Fund will likely not experience that increase to the same extent and any Fund gains may significantly differ from the level of the Index losses over the Put Period. Additionally, because the Fund is limited in the degree to which it will participate in decreases in value experienced by the Index level over each Put Period, but has significant negative exposure to any increases in value experienced by the Index level over the Put Period, the NAV of the Fund may decrease over any given period. The Fund’s NAV is dependent on the value of each options portfolio, which is based principally upon the inverse of the performance of the Index level. The Fund’s ability to benefit from the Index level decreases will depend on prevailing market conditions, especially market volatility, at the time the Fund enters into the sold put option contracts and will vary from Put Period to Put Period. The value of the options contracts is affected by changes in the value and dividend rates of component companies that comprise the Index, changes in interest rates, changes in the actual or perceived volatility of the Index and the remaining time to the options’ expiration, as well as trading conditions in the options market. As the Index level changes and time moves towards the expiration of each Put Period, the value of the options contracts, and therefore the Fund’s NAV, will change. However, it is not expected for the Fund’s NAV to directly inversely correlate on a day-to-day basis with the returns of the Index level. The amount of time remaining until the options contract’s expiration date affects the impact that the value of the options contracts has on the Fund’s NAV, which may not be in full effect until the expiration date of the Fund’s options contracts. Therefore, while changes in the Index level will result in changes to the Fund’s NAV, the Fund generally anticipates that the rate of change in the Fund’s NAV will be different than the inverse of the changes experienced by the Index level.

YieldMax™ ETFs are distributed by Foreside Fund Services, LLC. Foreside is not affiliated with Tidal Financial Group, or YieldMax™ ETFs.

The MIL Network –

March 6, 2025

MIL-OSI: Kayne Anderson Energy Infrastructure Fund Provides Unaudited Balance Sheet Information and Announces Its Net Asset Value and Asset Coverage Ratios as of February 28, 2025

Source: GlobeNewswire (MIL-OSI)

HOUSTON, March 04, 2025 (GLOBE NEWSWIRE) — Kayne Anderson Energy Infrastructure Fund, Inc. (the “Company”) (NYSE: KYN) today provided a summary unaudited statement of assets and liabilities and announced its net asset value and asset coverage ratios under the Investment Company Act of 1940 (the “1940 Act”) as of February 28, 2025.

As of February 28, 2025, the Company’s net assets were $2.5 billion, and its net asset value per share was $14.60. As of February 28, 2025, the Company’s asset coverage ratio under the 1940 Act with respect to senior securities representing indebtedness was 623% and the Company’s asset coverage ratio under the 1940 Act with respect to total leverage (debt and preferred stock) was 477%.

STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 28, 2025 // (UNAUDITED)

	(in millions)
Investments	$	3,473.8
Cash and cash equivalents		0.7
Accrued income		2.0
Other assets		1.0
Total assets		3,477.5

Credit facility		92.0
Notes		409.7
Unamortized notes issuance costs		(2.6	)
Preferred stock		153.6
Unamortized preferred stock issuance costs		(1.3	)
Total leverage		651.4

Other liabilities		16.2
Current tax liability, net		1.3
Deferred tax liability, net		340.2
Total liabilities		357.7

Net assets	$	2,468.4

The Company had 169,126,038 common shares outstanding as of February 28, 2025.

Long-term investments were comprised of Midstream Energy Companies (94%), Utility Companies (3%) and Other (3%).

The Company’s ten largest holdings by issuer at February 28, 2025 were:

		Amount (in millions)*	% Long Term Investments
1.	The Williams Companies, Inc. (Midstream Energy Company)	$359.2	10.3	%
2.	Energy Transfer LP (Midstream Energy Company)	358.7	10.3	%
3.	Enterprise Products Partners L.P. (Midstream Energy Company)	346.0	10.0	%
4.	MPLX LP (Midstream Energy Company)	332.1	9.6	%
5.	Cheniere Energy, Inc. (Midstream Energy Company)	261.9	7.5	%
6.	Kinder Morgan, Inc. (Midstream Energy Company)	211.9	6.1	%
7.	Targa Resources Corp. (Midstream Energy Company)	209.1	6.0	%
8.	ONEOK, Inc. (Midstream Energy Company)	204.0	5.9	%
9.	TC Energy Corporation (Midstream Energy Company)	175.7	5.1	%
10.	Western Midstream Partners, LP (Midstream Energy Company)	149.1	4.3	%

*	Includes ownership of common and preferred units.

Portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. You can obtain a complete listing of holdings by viewing the Company’s most recent quarterly or annual report.

Kayne Anderson Energy Infrastructure Fund, Inc. (NYSE: KYN) is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended, whose common stock is traded on the NYSE. The Company’s investment objective is to provide a high after-tax total return with an emphasis on making cash distributions to stockholders. KYN intends to achieve this objective by investing at least 80% of its total assets in securities of Energy Infrastructure Companies. See Glossary of Key Terms in the Company’s most recent quarterly report for a description of these investment categories and the meaning of capitalized terms.

This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of any securities in any jurisdiction in which such offer or sale is not permitted. Nothing contained in this press release is intended to recommend any investment policy or investment strategy or consider any investor’s specific objectives or circumstances. Before investing, please consult with your investment, tax, or legal adviser regarding your individual circumstances.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS: This communication contains statements reflecting assumptions, expectations, projections, intentions, or beliefs about future events. These and other statements not relating strictly to historical or current facts constitute forward-looking statements as defined under the U.S. federal securities laws. Forward-looking statements involve a variety of risks and uncertainties. These risks include but are not limited to changes in economic and political conditions; regulatory and legal changes; energy industry risk; leverage risk; valuation risk; interest rate risk; tax risk; and other risks discussed in detail in the Company’s filings with the SEC, available at www.kaynefunds.com or www.sec.gov. Actual events could differ materially from these statements or our present expectations or projections. You should not place undue reliance on these forward-looking statements, which speak only as of the date they are made. Kayne Anderson undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Company’s investment objectives will be attained.

Contact investor relations at 877-657-3863 or cef@kayneanderson.com.

The MIL Network –

March 5, 2025

MIL-OSI: Medallion Financial Corp. Reports 2024 Fourth Quarter and Full-Year Results

Source: GlobeNewswire (MIL-OSI)

NEW YORK, March 04, 2025 (GLOBE NEWSWIRE) — Medallion Financial Corp. (NASDAQ: MFIN, “Medallion” or the “Company”), a specialty finance company that originates and services loans in various consumer and commercial industries, along with offering loan origination services to fintech strategic partners, announced today its results for the quarter and full-year ended December 31, 2024.

2024 Fourth Quarter Highlights

Net income was $10.1 million, or $0.43 per share, compared to $14.3 million, or $0.60 per share, in the prior year quarter, and included $1.3 million of taxi medallion recoveries in the current quarter compared to $12.5 million in the prior year quarter.
Net interest income grew 6% to $52.0 million from $49.0 million in the prior year quarter.
Net interest margin on net loans was 8.15%, compared to 8.50% in the prior year quarter, and on gross loans it was 7.84%, compared to 8.20% in the prior year quarter.
Loan originations grew 69% to $285.7 million, compared to $169.1 million in the prior year quarter.
Credit loss provision increased to $20.6 million from $10.8 million in the prior year quarter.
The Board of Directors increased the quarterly dividend 10% to $0.11 per share.
In connection with a pending agreement in principle with the SEC’s Division of Enforcement on terms of settlement, the Company recorded a charge of $3.0 million as well as a benefit of $5.5 million related to insurance coverage of legal costs incurred.

2024 Full-Year Highlights

Net income was $35.9 million, or $1.52 per share, compared to $55.1 million, or $2.37 per share, in the prior year, and included $6.9 million of taxi medallion recoveries in the current year compared to $29.6 million in the prior year.
Net interest income grew 8% to $202.5 million from $188.1 million in the prior year.
Net interest margin on net loans was 8.35%, compared to 8.68% in the prior year, and on gross loans it was 8.05%, compared to 8.38% in the prior year.
Loan originations were $1.0 billion, compared to $960.0 million in the prior year.
Total loans, including loans held for sale, grew 12% to $2.5 billion as of December 31, 2024, compared to $2.2 billion a year ago.
Credit loss provision increased to $76.5 million from $37.8 million in the prior year.
The Company repurchased 570,404 shares of common stock at an average cost of $8.07 per share in the year, for a total of $4.6 million.
Total assets grew to $2.9 billion as of December 31, 2024, an 11% increase over December 31, 2023.

Executive Commentary – Andrew Murstein, President of Medallion

“We continue to be pleased with our quarterly and full-year performance. In the fourth quarter of 2023, taxi medallion recoveries added $0.37 to our bottom line compared to only $0.04 this quarter. For the full year, and the first time in our history, we originated over $1 billion of loans, more than half of which were high yielding recreation loans. We are quite pleased with this accomplishment.

Our commercial lending group, Medallion Capital, exited a portfolio investment during the quarter generating net gains of $3.8 million on equity investments, with full year net gains of $6.9 million. Although our equity investments are small, over time they have generated meaningful earnings to our bottom line, with net gains totaling nearly $15 million over the past three years.

Finally, in the quarter we reached an agreement in principle on terms of settlement and recorded a charge of $3.0 million related to the SEC matter as well as recognized a $5.5 million benefit related to insurance coverage of legal costs associated with this matter. The agreement is subject to approval of the Commissioners of the SEC and the court, and we look forward to bringing closure to this matter.

We are quite happy with where we are as a company, especially with the performance we have delivered over the past several years. We finished the year with record total interest income, net interest income, assets, strategic partnership loan volume, and total equity. We believe we are well-positioned for 2025 and the years ahead.”

Business Segment Highlights

Recreation Lending Segment

Originations were $72.2 million during the quarter, compared to $62.7 million a year ago.
Recreation loans, including loans held for investment and loans held for sale, grew 15% to $1.5 billion, or 62% of total loans, as of December 31, 2024, compared to $1.3 billion, or 60% of total loans, a year ago.
Interest income grew 15% to $51.3 million for the quarter, from $44.4 million in the prior year quarter.
The average interest rate was 15.07% at year-end, compared to 14.79% a year ago.
Recreation loans 90 days or more past due were $10.0 million, or 0.67% of gross recreation loans, as of December 31, 2024, compared to $9.1 million, or 0.70%, a year ago.
Allowance for credit loss was 5.00% at year-end for loans held for investment, compared to 4.31% a year ago.
In December 2024, we signed a letter of intent to sell up to $121 million of recreation loans at a premium to par value.

Home Improvement Lending Segment

Originations were $82.5 million during the quarter, compared to $66.0 million a year ago.
Home improvement loans grew 9% to $827.2 million, or 33% of total loans, as of December 31, 2024, compared to $760.6 million, or 34% of total loans, a year ago.
Interest income grew 16% to $19.9 million for the quarter, from $17.2 million in the prior year quarter.
The average interest rate was 9.81% at year-end, compared to 9.51% a year ago.
Home improvement loans 90 days or more past due were $1.4 million, or 0.17% of gross home improvement loans, as of December 31, 2024, compared to $1.5 million, or 0.20%, a year ago.
Allowance for credit loss was 2.48% at year-end, compared to 2.76% a year ago.

Commercial Lending Segment

Commercial loans were $111.3 million at 2024, compared to $114.8 million a year ago.
The average interest rate on the portfolio was 12.97%, compared to 12.87% a year ago.

Taxi Medallion Lending Segment

The Company collected $2.6 million of cash on taxi medallion-related assets during the quarter.
Total net taxi medallion assets declined to $7.7 million, a 37% reduction from a year ago, and represented less than 0.5% of the Company’s total assets, as of December 31, 2024.

Capital Allocation

Quarterly Dividend

The Board of Directors declared a quarterly dividend of $0.11 per share, payable on March 31, 2025, to shareholders of record at the close of business on March 17, 2025.

Stock Repurchase Plan

As of December 31, 2024, the Company had $15.4 million remaining under its $40 million share repurchase program. During 2024, the Company purchased 570,404 shares for $4.6 million.

Conference Call Information

The Company will host a conference call to discuss its fourth quarter and full-year financial results tomorrow, Wednesday, March 5, 2025, at 9:00 a.m. Eastern time.

In connection with its earnings release, the Company has updated its quarterly supplement presentation, which is now available at www.medallion.com.

How to Participate

Date: Wednesday, March 5, 2025
Time: 9:00 a.m. Eastern time
U.S. dial-in number: (833) 816-1412
International dial-in number: (412) 317-0504
Live webcast: Link to Webcast of 4Q24 Earnings Call

A link to the live audio webcast of the conference call will also be available at the Company’s IR website.

Replay Information

The webcast replay will be available at the Company’s IR website until the next quarter’s results are announced.

The conference call replay will be available following the end of the call through Wednesday, March 12

U.S. dial-in number: (844) 512-2921
International dial-in number: (412) 317-6671
Passcode: 1019 6407

About Medallion Financial Corp.

Medallion Financial Corp. (NASDAQ: MFIN) and its subsidiaries originate and service a growing portfolio of consumer loans and mezzanine loans in various industries. Key industries served include recreation (towable RVs and marine) and home improvement (replacement roofs, swimming pools, and windows). Medallion Financial Corp. is headquartered in New York City, NY, and its largest subsidiary, Medallion Bank, is headquartered in Salt Lake City, Utah. For more information, please visit www.medallion.com.

Forward-Looking Statements
Please note that this press release contains forward-looking statements that involve risks and uncertainties relating to business performance, cash flow, net interest income and expenses, other expenses, earnings, growth, and our growth strategy. These statements are often, but not always, made using words or phrases such as “will” and “continue” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These statements relate to future public announcements of our earnings, the impact of the pending SEC litigation, expectations regarding our loan portfolio, including collections on our medallion loans, the potential for future asset growth, and market share opportunities. Medallion’s actual results may differ significantly from the results discussed in such forward-looking statements. For example, statements about the effects of the current economy, whether inflation or the risk of recession, operations, financial performance and prospects constitute forward-looking statements and are subject to the risk that the actual impacts may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond Medallion’s control. In addition to risks relating to the current economy, a description of certain risks to which Medallion is or may be subject, including risks related to the pending SEC litigation, the settlement of which remains subject to SEC and court approval, please refer to the factors discussed under the heading “Risk Factors” in Medallion’s 2023 Annual Report on Form 10-K.

Company Contact:
Investor Relations
212-328-2176
InvestorRelations@medallion.com

MEDALLION FINANCIAL CORP. CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	December 31,
(Dollars in thousands, except share and per share data)	2024			2023
Assets
Cash, cash equivalents, and federal funds sold	$	169,572		$	149,845
Investment and equity securities		64,003			65,712
Loans		2,362,796			2,215,886
Allowance for credit losses		(97,368	)		(84,235	)
Net loans receivable		2,265,428			2,131,651
Loans held for sale, at lower of amortized cost or fair value		128,226			—
Goodwill and intangible assets, net		169,949			171,394
Property, equipment, and right-of-use lease asset, net		13,756			14,076
Accrued interest receivable		15,314			13,538
Loan collateral in process of foreclosure		9,932			11,772
Other assets		32,426			29,839
Total assets	$	2,868,606		$	2,587,827
Liabilities
Deposits	$	2,090,071		$	1,866,657
Long-term debt		232,159			235,544
Short-term borrowings		49,000			8,000
Deferred tax liabilities, net		20,995			21,207
Operating lease liabilities		5,128			7,019
Accrued interest payable		8,231			6,822
Accounts payable and accrued expenses		24,064			30,804
Total liabilities		2,429,648			2,176,053
Total stockholders’ equity		370,170			342,986
Non-controlling interest in consolidated subsidiaries		68,788			68,788
Total equity		438,958			411,774
Total liabilities and equity	$	2,868,606		$	2,587,827
Number of shares outstanding		23,135,624			23,449,646
Book value per share	$	16.00		$	14.63

MEDALLION FINANCIAL CORP.‌ CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)‌

	Three Months Ended December 31,						Years Ended December 31,
(Dollars in thousands, except share and per share data)	2024			2023			2024			2023
Total interest income	$	76,519		$	67,585		$	290,702		$	251,040
Total interest expense		24,507			18,567			88,167			62,946
Net interest income		52,012			49,018			202,535			188,094
Provision for credit losses		20,572			10,764			76,502			37,810
Net interest income after provision for credit losses		31,440			38,254			126,033			150,284
Other income (loss)
Gain on equity investments, net		3,782			2,989			6,917			5,178
Gain on sale of loans and taxi medallions		123			413			1,293			4,992
Write-down of loan collateral in process of foreclosure		(509	)		(1,393	)		(528	)		(1,696	)
Other income		846			979			3,648			2,846
Total other income, net		4,242			2,988			11,330			11,320
Other expenses
Salaries and employee benefits		9,997			9,757			38,344			37,562
Loan servicing fees		2,820			2,459			10,771			9,543
Collection costs		1,581			1,271			6,380			6,000
Regulatory fees		969			710			3,795			3,194
Professional fee costs (benefits), net		(4,806	)		1,663			(1,372	)		5,886
Rent expense		663			617			2,682			2,472
Amortization of intangible assets		361			361			1,445			1,445
Penalties		3,000			—			3,000			—
Other expenses		2,628			2,246			9,382			9,466
Total other expenses		17,213			19,084			74,427			75,568
Income before income taxes		18,469			22,158			62,936			86,036
Income tax provision		6,815			6,328			21,011			24,910
Net income after taxes		11,654			15,830			41,925			61,126
Less: income attributable to the non-controlling interest		1,512			1,512			6,047			6,047
Total net income attributable to Medallion Financial Corp.	$	10,142		$	14,318		$	35,878		$	55,079
Basic net income per share	$	0.45		$	0.63		$	1.59		$	2.45
Diluted net income per share	$	0.43		$	0.60		$	1.52		$	2.37
Weighted average common shares outstanding
Basic		22,455,498			22,608,243			22,546,051			22,510,435
Diluted		23,757,406			23,765,866			23,605,493			23,248,323
Dividends declared per common share	$	0.11		$	0.10		$	0.41		$	0.34

The MIL Network –

March 5, 2025

MIL-OSI Europe: Written question – Position of the Council of the EU on new own resources – E-000474/2025

Source: European Parliament

Question for written answer E-000474/2025/rev.1
to the Council
Rule 144
Jean-Marc Germain (S&D), Sandra Gómez López (S&D)

The Polish Presidency of the Council comes at a key moment. Facing many threats, we have no choice but to build a stronger Europe and we cannot achieve this without substantial financial resources. More than ever, now is the time to honour the promises of the 2020 Interinstitutional agreement[1] (IIA).

Proposals for new resources have been on the table ever since the IIA was reached. The 2020 agreement set a deadline of June 2025. Under the Polish Presidency of the Council, it is up to the Member States to bring this project to a successful conclusion.

During the hearings, Commissioner Piotr Serafin stated that he wanted to start from the Commission’s 2023 adjusted package for the next generation of own resources[2]. By contrast, the Polish Prime Minister, Donald Tusk, questioned the relevance of the new emissions trading system (ETS2) in his speech to Parliament, while it constitutes a decisive part of the new own resources.

1.What steps does the Council intend to take to honour this 2020 promise, which is vital if we are to meet the challenges of the moment of change we are experiencing at the start of this year?
2.What new own resources does the Council of the EU intend to put on the table for discussion during these six months of the Polish Presidency?

Submitted: 4.2.2025

[1] OJ L 433 I, 22.12.2020, p. 28, ELI: http://data.europa.eu/eli/agree_interinstit/2020/1222/oj.
[2] COM(2023)0330.

Last updated: 4 March 2025

MIL OSI Europe News –

March 5, 2025

MIL-OSI: DMG Blockchain Solutions Reports First Quarter 2025 Results and February Operations Update

Source: GlobeNewswire (MIL-OSI)

VANCOUVER, British Columbia, March 03, 2025 (GLOBE NEWSWIRE) — DMG Blockchain Solutions Inc. (TSX-V: DMGI) (OTCQB: DMGGF) (FRANKFURT: 6AX) (“DMG” or the “Company”), a vertically integrated blockchain and data center technology company, today announces its fiscal first quarter 2025 financial results. All financial references are in Canadian Dollars unless specified otherwise. Readers are encouraged to review the Company’s December 31, 2024 quarterly unaudited financial statements and management’s discussion and analysis thereof for a fulsome assessment of the Company’s performance and applicable risk factors, available at www.sedarplus.ca.

Q1 2025 Financial Results Highlights

Revenue: $11.6 million in Q1 2025, up 97% from $5.9 million in Q4 2024 and up 20% from $9.7 million in Q1 2024.
Bitcoin Mined: 97 bitcoin mined in Q1 2025, up 49% from Q4 2024.
Cash Flow from Operations: -$2.7 million in Q1 2025, versus +$1.3 million in Q4 2024, as the Company sold $4 million less bitcoin than it earned.
Hashrate: 1.62 EH/s for Q1 2025, up 65% sequentially and 68% year-over-year; now operating at 1.8 EH/s with the goal to reach 2.1 EH/s in March 2025.
Fleet Efficiency: 22.9 J/TH in Q1 2025, an improvement of 7% from Q4 2024; targeting 21 J/TH when hydro miners are fully energized.
Cash and Digital Assets: $58.2 million as of quarter-end Q1 2025, up 62% from Q4 2024 and up 110% from Q1 2024.
Net Loss: -$0.02 per share in Q1 2025, versus -$0.05 per share in Q4 2024 and $0.04 in Q1 2024.

Preliminary February Operational Results

Bitcoin Mined: 27 BTC (vs 31 BTC in Jan 2025, in line with 28 days and curtailment)
Hashrate: 1.71 EH/s (vs 1.75 EH/s in Jan 2025)
Bitcoin Holdings: 443 BTC (vs 431 BTC in Jan 2025)
Days non-firm power curtailed: 3 (vs 0 in Jan 2025); average hashrate was 1.81 EH/s for period excluding curtailment

DMG’s CEO, Sheldon Bennett, commented: “In addition to growing our hashrate, the first part of our financial year 2025 marks a major step forward in our Core+ strategy and Generative Artificial Intelligence ambitions. With Systemic Trust now a Qualified Digital Asset Custodian, we are focused on onboarding new customers and ramping revenue. Our near-term roadmap to offer Systemic Trust custodial wallets that support DMG’s Petra technology along with the integration of both Helm Data Center Infrastructure Management and Reactor into Terra Pool, position us to fully enable our carbon neutral Bitcoin ecosystem. Furthermore, we have expanded our AI initiatives, with a memorandum of understanding for a 10 MW prefabricated data center in addition to our MOU to establish a joint venture with the Malahat Nation for 30 MW of AI compute capacity. We remain committed to growth in areas that can deliver the most long-term value for our shareholders.”

Financial First Quarter 2025 Financial Results Review

Revenue increased by $1,942,061 in Q1 2025 from $9,690,764 Q1 2024. The increase in revenue is attributable to increases in digital currency mining revenues of $1,489,833 due to increases in the average bitcoin price in the period of $116,580 versus $49,006 during the same period in the prior year. These increases were offset by increases in network difficulty from the same period last year.

Operating and maintenance expenses for Q1 2025 was $6,679,843, up from $5,147,651 in Q1 2024. This increase is primarily attributed to a $1,368,217 rise in utilities expenses, driven by expanded digital currency mining operations related to additional operating miners.

Research costs for Q1 2025 were $553,964, having increased by $115,785 compared to Q1 2024. Research in fiscal 2025 continues to focus on software and relates to work on Systemic Trust, Helm, Reactor and Blockseer Explorer.

General and administrative costs for Q1 2025 was $1,836,680 in comparison to $886,061 for Q1 2024. General and administrative costs consist mostly of wages, professional fees, consulting fees and interest expense. The overall increase of $950,619 is attributable mainly to an increase of $178,958 in consulting fees, $171,595 in wages and $422,645 in interest expense related to the Company’s credit facility with Sygnum Bank.

Depreciation for Q1 2025 was $4,349,470 compared to $4,341,782 in Q1 2024.

Net income decreased by $10,075,491 to a net loss of $3,103,001 for Q1 2025 versus net income of $6,972,490 in Q1 2024. The decrease in net loss is mainly a result of a large unrealized gain on revaluation of digital currencies in the prior year of $8,162,860 in the statement of profit and loss. A gain of $15,319,443 was recorded through other comprehensive income in the current period related to an unrealized gain on the revaluation of the balance held of digital currency. Gains related to the increase in digital currency in the prior year were offset against historical losses incurred in prior periods. Gains are recognized to the extent of any historical losses, after which gains are recognized through other comprehensive income under the accounting policies of IAS 38. Resulting in a large difference in net income between the two periods.

Total assets as of December 31, 2024 were $137,128,716, an increase of $33,259,735 versus September 30, 2024. The increase is mostly attributable to a net increase in digital currency of $19,615,571, due to the revaluation of digital currency balances at an increased price of bitcoin, $132,949 as of December 31, 2024 as compared to $88,673 as of September 30, 2024.

In Q1 2025, DMG sold 78 bitcoin, generating $7,305,976 cash, thus selling 81% of the bitcoin mined versus 143% in the prior quarter.

Future changes in the Bitcoin network-wide mining difficulty or Bitcoin hashrate may materially affect the future performance of DMG’s production of bitcoin, and future operating results could also be materially affected by the price of bitcoin and an increase in hashrate and mining difficulty.

First Quarter 2025 Results Conference Call Details

The Company will host a conference call to review its results and provide a corporate update on Tuesday, March 4, 2025 at 4:30 PM ET. Participants should register for the call via the registration link.

In addition to a live Q&A session via chat, management will also address pre-submitted questions. Those wishing to submit a question may do so via email at investors@dmgblockchain.com, using the subject line ‘Conference Call Question Submission,’ through 2:00 PM ET on March 4, 2025.

About DMG Blockchain Solutions Inc.

DMG is a publicly traded, sustainably-focused and vertically integrated blockchain and data center technology company that develops, manages and operates end–to-end digital solutions to monetize the blockchain and generative artificial intelligence compute ecosystems. DMG’s businesses are segmented into two business lines under the Core (data center infrastructure) and Core+ (software and services) strategies and unified through DMG’s vertical integration.

For more information on DMG Blockchain Solutions visit: www.dmgblockchain.com
Follow @dmgblockchain on X and subscribe to DMG’s YouTube channel.

For further information, please contact:

On behalf of the Board of Directors,

Sheldon Bennett, CEO & Director
Tel: +1 (778) 300-5406
Email: investors@dmgblockchain.com
Web: www.dmgblockchain.com

For Investor Relations:
investors@dmgblockchain.com

For Media Inquiries:
Chantelle Borrelli
Head of Communications
chantelle@dmgblockchain.com

DMG Blockchain Solutions Inc.
Condensed Consolidated Interim Statements of Financial Position
(Expressed in Canadian Dollars)
	Notes	As at December 31, 2024 (unaudited)	As at September 30, 2024 (audited)
ASSETS		$	$
Current
Cash and cash equivalents		4,273,533	1,679,060
Amounts receivable	6	4,802,944	4,910,251
Digital currency	5	53,943,274	34,327,703
Prepaid expense and other current assets		402,787	337,042
Marketable securities	8	359,833	316,803
Short-term investment	9	5,516,500	–
Total current assets		69,298,871	41,570,859

Long-term deposits	10	10,743,511	2,047,682
Property and equipment	12	50,194,530	53,798,978
Intangible asset		276,040	–
Long-term investments	13	45,000	45,000
Amount recoverable	7	6,570,764	6,406,462
Total assets		137,128,716	103,868,981

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Trade and other payables	14	3,748,608	5,183,107
Deferred revenue	19	7,355	–
Current portion of lease liability	15	40,071	43,483
Current portion of loans payable	16	20,020,520	13,928,462
Total current liabilities		23,816,554	19,155,052

Long-term lease liability	15	41,534	51,842
Total liabilities		23,858,088	19,206,894

Shareholders’ Equity
Share capital	17(a)	120,326,738	113,086,455
Reserves	17(b)(c)	55,036,328	45,853,100
Accumulated other comprehensive income		25,736,645	10,448,614
Accumulated deficit		(87,829,083)	(84,726,082)
Total shareholders’ equity		113,270,628	84,662,087
Total liabilities and shareholders’ equity		137,128,716	103,868,981

DMG Blockchain Solutions Inc.
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
(Expressed in Canadian Dollars, except for number of shares)
(Unaudited)
		For the three months ended December 31,
	Notes	2024		2023
		$		$
Revenue	19	11,632,825		9,690,764

Expenses
Operating and maintenance costs	20(a)	6,679,843		5,147,651
General and administrative	20(b)	1,836,680		886,061
Stock-based compensation	17(b)	678,528		368,494
Research	20(c)	553,964		438,179
Bad debt (recovery) expense	6	(4,743)		3,764
Depreciation	12	4,349,470		4,341,782
Total expenses		14,093,742		11,185,931

Operating loss before other items		(2,460,917)		(1,495,167	)

Other income (expense)
Interest and other income	7	164,302		165,781
Impairment of non-current assets		37,819		–
Foreign exchange loss		(909,388)		(94,585)
Loss on fair value of investments	10	–		(609,120)
Provision of sales tax receivable	6	(307,739)		(253,900)
Unrealized revaluation gain on digital currency	5	28,083		8,162,860
Realized gain on sale of digital currency		301,809		851,870
Gain on change in fair value of marketable securities	8	43,030		244,751
Net income (loss)		(3,103,001	)	6,972,490

Other comprehensive income
Items that may be reclassified subsequently to income or loss:
Revaluation gain on digital assets	5	15,319,443		–
Cumulative translation adjustment		(31,412)		10,082
Net income and comprehensive income		12,185,030		6,982,572

Basic earnings (loss) per share	17(d)	$(0.02)		$0.04
Diluted earnings (loss) per share	17(d)	$(0.02)		$0.04
Weighted average number of shares outstanding	17(d)
– basic		185,799,634		168,147,570
– diluted		185,799,634		170,175,939

DMG Blockchain Solutions Inc.
Condensed Consolidated Interim Statements of Cash Flows
(Expressed in Canadian Dollars)
(Unaudited)
For the three months ended December 31,	2024	2023
	$	$
OPERATING ACTIVITIES
Net income (loss) for the period	(3,103,001)	6,972,490
Non-cash items:
Accretion	1,867	11,460
Depreciation	4,349,472	4,338,369
Share-based payments	678,528	368,494
Unrealized gain on revaluation of digital currency	(28,083)	(8,162,861)
Unrealized foreign exchange (gain) loss	926,984	(16,272)
Impairment of non-current assets	(37,819)	–
Unrealized gain on marketable securities	(43,030)	(244,751)
Impairment of investment	–	609,120
Provision for sales tax receivable	307,739	253,900
Bad debt (recovery) expense	(4,743)	3,764
Digital currency related revenue	(11,266,187)	(8,744,492)
Digital currency sold	7,305,976	9,445,176
Realized gain on sale of digital currency	(301,809)	(851,870)
Non-cash interest income	(164,302)	(164,632)
Accrued interest	329,604	–

Changes in non-cash operating working capital:
Prepaid expenses and other current assets	(65,745)	30,629
Amounts receivable	(101,051)	(781,682)
Deferred revenue	7,355	14,302
Trade and other payables	(1,523,145)	668,276
Net cash (used in) provided by operating activities	(2,731,390)	3,749,420

INVESTING ACTIVITIES
Purchase of property and equipment	(343,976)	(381,773)
Purchase of intangible assets	(276,040)	–
Deposits on mining equipment	(9,554,087)	(2,570,515)
Purchase of short-term investment	(5,516,500)	(609,120)
Refund of security deposit	457,325	–
Net cash used in investing activities	(15,233,278)	(3,561,408)

FINANCING ACTIVITIES
Proceeds from issuance of units	17,254,945	–
Share issuance costs	(1,570,875)	–
Proceeds from option exercises	60,913	269,776
Principal lease payments	(15,356)	(45,276)
Repayment of loan payable	(1,000,000)	–
Proceeds from secure loan	5,829,013	–
Net cash provided by financing activities	20,558,640	224,500

Impact of currency translation on cash and cash equivalents	501	(206)
Cash and cash equivalents, change	2,594,473	412,306
Cash and cash equivalents, beginning	1,679,060	1,789,913
Cash and cash equivalents, end	4,273,533	2,202,219

Neither the TSX Venture Exchange nor its Regulation Service Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Note Regarding Forward-Looking Information

This news release contains forward-looking information or statements based on current expectations. Forward-looking statements contained in this news release include statements regarding the planned conference call, DMG’s strategies and plans, increasing hashrate and the anticipated timelines, the expected arrival and operation of the hydro miners and containers, growing the Company’s hashrate to 2.1 EH/s by March 2025, the development of Systemic Trust including generating revenues, the potential for a 10-megawatt prefabricated data center in addition to the MOU to establish a potential joint venture with the Malahat Nation for 30 megawatts of AI compute capacity, improving fleet efficiency and continuing to execute on Core+ software initiatives, onboarding of new clients to Terra Pool, the opportunity and plans to monetize bitcoin transactions, the continued investment in Bitcoin network software infrastructure and applications, developing and executing on the Company’s products and services, increasing self-mining, efforts to improve the operation of its mining fleet, the launch of products and services, events, courses of action, and the potential of the Company’s technology and operations, among others, are all forward-looking information.

Future changes in the Bitcoin network-wide mining difficulty or Bitcoin hashrate may materially affect the future performance of DMG’s production of bitcoin, and future operating results could also be materially affected by the price of bitcoin and an increase in hashrate and mining difficulty.

Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations, or intentions regarding the future. Such information can generally be identified by the use of forwarding-looking wording such as “may”, “expect”, “estimate”, “anticipate”, “intend”, “believe” and “continue” or the negative thereof or similar variations. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company, including but not limited to, market and other conditions, volatility in the trading price of the common shares of the Company, business, economic and capital market conditions; the ability to manage operating expenses, which may adversely affect the Company’s financial condition; the ability to remain competitive as other better financed competitors develop and release competitive products; regulatory uncertainties; access to equipment; market conditions and the demand and pricing for products; the demand and pricing of bitcoin; security threats, including a loss/theft of DMG’s bitcoin; DMG’s relationships with its customers, distributors and business partners; the inability to add more power to DMG’s facilities; DMG’s ability to successfully define, design and release new products in a timely manner that meet customers’ needs; the ability to attract, retain and motivate qualified personnel; competition in the industry; the impact of technology changes on the products and industry; failure to develop new and innovative products; the ability to successfully maintain and enforce our intellectual property rights and defend third-party claims of infringement of their intellectual property rights; the impact of intellectual property litigation that could materially and adversely affect the business; the ability to manage working capital; and the dependence on key personnel. DMG may not actually achieve its plans, projections, or expectations. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the demand for its products, the ability to successfully develop software, that there will be no regulation or law that will prevent the Company from operating its business, anticipated costs, the ability to secure sufficient capital to complete its business plans, the ability to achieve goals and the price of bitcoin. Given these risks, uncertainties, and assumptions, you should not place undue reliance on these forward-looking statements. The securities of DMG are considered highly speculative due to the nature of DMG’s business. For further information concerning these and other risks and uncertainties, refer to the Company’s filings on www.sedarplus.ca. In addition, DMG’s past financial performance may not be a reliable indicator of future performance.

Factors that could cause actual results to differ materially from those in forward-looking statements include, failure to obtain regulatory approval, the continued availability of capital and financing, equipment failures, lack of supply of equipment, power and infrastructure, failure to obtain any permits required to operate the business, the impact of technology changes on the industry, the impact of viruses and diseases on the Company’s ability to operate, secure equipment, and hire personnel, competition, security threats including stolen bitcoin from DMG or its customers, consumer sentiment towards DMG’s products, services and blockchain technology generally, failure to develop new and innovative products, litigation, adverse weather or climate events, increase in operating costs, increase in equipment and labor costs, equipment failures, decrease in the price of Bitcoin, failure of counterparties to perform their contractual obligations, government regulations, loss of key employees and consultants, and general economic, market or business conditions. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement. The reader is cautioned not to place undue reliance on any forward-looking information. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by law, the Company disclaims any intention and assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, the Company undertakes no obligation to comment on the expectations of or statements made by third parties in respect of the matters discussed above.

The MIL Network –

March 4, 2025

MIL-OSI: James River Announces Fourth Quarter 2024 Results

Source: GlobeNewswire (MIL-OSI)

PEMBROKE, Bermuda, March 03, 2025 (GLOBE NEWSWIRE) — James River Group Holdings, Ltd. (“James River” or the “Company”) (NASDAQ: JRVR) today reported the following results for the fourth quarter 2024 as compared to the same period in 2023:

	Three Months Ended December 31,						Three Months Ended December 31,
*($ in thousands, except for share data)*		2024		per diluted share				2023		per diluted share
Net (loss) income from continuing operations available to common shareholders	$	(92,669	)	$	(2.25	)	$	17,431		$	0.46
Net loss from discontinued operations¹		(1,372	)	$	(0.03	)		(170,211	)	$	(3.89	)
Net loss available to common shareholders		(94,041	)	$	(2.28	)		(152,780	)	$	(3.43	)
Adjusted net operating (loss) income²		(40,803	)	$	(0.99	)		12,442		$	0.33

Net loss from continuing operations available to common shareholders was $92.7 million ($2.25 per diluted share). Adjusted net operating loss² was $40.8 million ($0.99 per diluted share) for the fourth quarter of 2024. The decrease to both was largely attributable to the previously announced $52.8 million of consideration paid in connection with the Excess and Surplus Lines (“E&S”) adverse development reinsurance contract with Cavello Bay Reinsurance Limited, a subsidiary of Enstar Group Limited (“Enstar”) (“E&S Top Up ADC”) that closed on December 23, 2024. Net loss from continuing operations available to common shareholders was also negatively impacted by the $27 million deemed dividend resulting from the November 2024 amendment to the Series A Preferred Shares.

Unless specified otherwise, all underwriting performance ratios presented herein are for our continuing operations and business not subject to retroactive reinsurance accounting for loss portfolio transfers (“LPTs”).

Highlights for 2024 included:

During the year we completed several strategic actions including (i) closing the sale of JRG Reinsurance Company Ltd. (“JRG Re”) to focus our business around our U.S. insurance businesses, (ii) entering into a $160.0 million combined loss portfolio transfer and adverse development cover for our E&S business (the “E&S ADC”), (iii) initiating a new strategic partnership with Enstar which, in part, entailed a $12.5 million equity investment in the Company and an additional $75.0 million E&S Top Up ADC, and (iv) amending the Certificate of Designations for our Series A Preferred Shares to, among other things, convert $37.5 million of the outstanding Series A Preferred Shares to common shares (see Amendment of Series A Preferred Shares on page 5). We believe these and other actions meaningfully strengthen our balance sheet and position us to generate attractive returns in the future.
E&S segment gross written premium exceeded $1.0 billion for a second consecutive year, a slight increase compared to the prior year as the Company continued to focus on its leading, wholesale driven franchise. The Company had its highest levels of both new and renewal annual submission growth in five years, and positive renewal rate change of 9.0% for 2024, as compared to 9.3% for 2023.
Full year 2024 net investment income increased 10.8% compared to 2023, with a majority of asset classes reporting higher income.
Specialty Admitted Insurance segment combined ratio was 92.2% for 2024 as compared to 95.9% for 2023. Underwriting profit grew 68.6% compared to the prior year.
Shareholders’ equity per share of $10.10 decreased sequentially from $14.02 at September 30, 2024, due to the net loss from continuing operations and increase in the common shares outstanding.
The Company does not expect any meaningful losses associated with the tragic series of California wildfires.

Frank D’Orazio, the Company’s Chief Executive Officer, commented, “2024 was a costly but transformational year for James River. We have meaningfully de-risked the organization and concluded an extensive strategic review, emerging with a renewed focus. The E&S market remains very healthy, and we believe that 2025 will provide significant opportunities to responsibly grow while taking advantage of the attractive rate environment.”

Fourth Quarter 2024 Operating Results

Gross written premium of $358.3 million, consisting of the following:

	Three Months Ended December 31,
*($ in thousands)*		2024		2023	*% Change*
Excess and Surplus Lines	$	280,287	$	275,171	2	%
Specialty Admitted Insurance		78,005		114,134	(32	)%
	$	358,292	$	389,305	(8	)%

Net written premium of $114.0 million, consisting of the following:

	Three Months Ended December 31,
*($ in thousands)*		2024		2023	*% Change*
Excess and Surplus Lines	$	99,684	$	146,628	(32	)%
Specialty Admitted Insurance		14,307		25,573	(44	)%
	$	113,991	$	172,201	(34	)%

Net earned premium of $105.6 million, consisting of the following:

	Three Months Ended December 31,
*($ in thousands)*		2024		2023	*% Change*
Excess and Surplus Lines	$	87,275	$	153,926	(43	)%
Specialty Admitted Insurance		18,311		28,027	(35	)%
	$	105,586	$	181,953	(42	)%

Lower net retention for the E&S segment reflects the $52.8 million of ceded premium recorded upon closing the E&S Top Up ADC as well as reinstatement premium which reduced net written premiums in the fourth quarter of 2024 compared to the prior year quarter.

E&S Segment Fourth Quarter Highlights:
- The E&S segment grew gross written premium by 1.9% compared to the prior year quarter. Excluding excess casualty, where we have been cautious, the segment grew by 11.2%.
- Total submissions grew 9% compared to the prior year quarter. The E&S segment received over 80,000 new and renewal policy submissions for the fourth consecutive quarter, its third consecutive quarter of 9% submission growth, a level not seen since 2020.
Specialty Admitted Insurance Segment Fourth Quarter Highlights:
- Gross written premium for the fronting and program business declined 11.1% compared to the prior year quarter, excluding the impact of our large workers’ compensation program and Individual Risk Workers’ Compensation book, which were non-renewed in the second quarter of 2023 and sold via a renewal rights transaction in the third quarter of 2023, respectively. Including these two programs, segment gross written premium declined 31.7%.
Pre-tax favorable (unfavorable) reserve development by segment on business not subject to retroactive reinsurance accounting was as follows:

	Three Months Ended December 31,
*($ in thousands)*		2024			2023
Excess and Surplus Lines	$	(8,943	)	$	(25,005	)
Specialty Admitted Insurance		—			(38	)
	$	(8,943	)	$	(25,043	)

The fourth quarter of 2024 reflected $8.9 million of net unfavorable reserve development in the E&S segment. The Company ceded $29.5 million of unfavorable reserve development on business subject to the E&S ADC during the fourth quarter of 2024 and the majority of the $8.9 million of net unfavorable development represents the retained loss corridor on that structure. There remains $116.2 million of aggregate limit on the E&S ADC and E&S Top-Up ADC which cover the overwhelming majority of all E&S reserves from 2010-2023.
Retroactive benefits of $2.7 million were recorded in loss and loss adjustment expenses during the fourth quarter and the total deferred retroactive reinsurance gain on the Balance Sheet is $58.0 million as of December 31, 2024.
Gross fee income was as follows:

	Three Months Ended December 31,
*($ in thousands)*		2024		2023	*% Change*
Specialty Admitted Insurance	$	4,828	$	5,874	(18)%

The consolidated expense ratio was 43.7% for the fourth quarter of 2024, which was an increase from 24.2% in the prior year quarter. The expense ratio increase was primarily the result of $52.8 million of consideration paid in connection with the E&S Top Up ADC that closed on December 23, 2024, which resulted in lower net earned premium.

Investment Results

Net investment income for the fourth quarter of 2024 was $22.0 million, a decrease of 14.2% compared to $25.6 million in the prior year quarter. The decline in income was primarily due to a lower asset base across our fixed income and bank loan portfolios as we managed the portfolio for the payment of the $52.8 million of consideration paid in connection with the E&S Top Up ADC, as well as lower income from private investments, which in the prior year quarter benefited from a one-time payment of approximately $2.5 million related to the sale of certain investments.

The Company’s net investment income consisted of the following:

	Three Months Ended December 31,
*($ in thousands)*		2024		2023	*% Change*
Private Investments		1,334		3,199	(58)%
All Other Investments		20,628		22,389	(8)%
Total Net Investment Income	$	21,962	$	25,588	(14)%

The Company’s annualized gross investment yield on average fixed maturity, bank loan and equity securities for the three months ended December 31, 2024 was 4.7% (versus 4.8% for the three months ended December 31, 2023).

Net realized and unrealized losses on investments of $2.8 million for the three months ended December 31, 2024 compared to net realized and unrealized gains on investments of $8.0 million in the prior year quarter.

Capital Management

The Company announced that its Board of Directors declared a cash dividend of $0.01 per common share. This dividend is payable on March 31, 2025 to all shareholders of record on March 10, 2025.

Amendment of Series A Preferred Shares

As previously disclosed, on November 11, 2024, the Company amended the Series A Preferred Shares. Among other amended terms, this amendment converted $37.5 million of the outstanding Series A Preferred Shares to common shares. The Company accounted for the amendment as an extinguishment due to the significance of qualitative and quantitative changes to the shares.

The Company estimated the fair value of the new Series A Preferred Shares to be $133.1 million on the date of issuance. The Company recorded a deemed dividend of $25.7 million within retained deficit for the difference between the $144.9 million carrying value of the extinguished pre-amendment Series A preferred shares and the combined $133.1 million estimated fair value of the new Series A Preferred Shares and $37.5 million of new common shares. The Company also recorded a deemed dividend of $1.3 million for the difference between the $37.5 million of Series A Preferred Shares converted to common shares in the amendment and the $38.8 million fair value of the common shares issued. The combined $27 million deemed dividend increased the Net Loss to Common Shareholders and reduced tangible common equity for the fourth quarter of 2024 by approximately $0.60 per share.

Tangible Equity

Shareholders’ equity of $460.9 million at December 31, 2024 declined 13.1% compared to shareholders’ equity of $530.3 million at September 30, 2024. Tangible equity³ of $437.7 million at December 31, 2024 decreased 11.0% compared to tangible equity of $491.9 million at September 30, 2024, due to losses from continuing and discontinued operations as well as an increase in unrealized investment losses in accumulated other comprehensive income (“AOCI”). Other comprehensive loss was $27.2 million during the fourth quarter of 2024, due to a decrease in the value of the Company’s fixed maturity securities.

Board of Directors

The Company also announced that Non-Executive Chairman Ollie L. Sherman Jr. has chosen to retire from his leadership role and that the Board has appointed Christine LaSala as its next Non-Executive Chairperson. Following a period of transition, Mr. Sherman will also retire from the Board on April 30, 2025.

Mr. Sherman has served on the Board of Directors since May 2016 and had previously retired as a Managing Principal with Towers Watson in 2010. Ms. LaSala joined the Board of Directors in July 2024. She has over 45 years of management, client leadership and financial experience in the insurance industry in underwriting and insurance broking roles. She currently serves as a director of Sedgwick, a leading provider of claims management, loss adjusting and technology-enabled risk, benefit and business solutions. She served as a director of Beazley plc for eight years, including in a variety of board leadership roles such as Interim Chair, prior to stepping down in April 2024.

Conference Call

James River will hold a conference call to discuss its fourth quarter results tomorrow, March 4, 2025 at 8:30 a.m. Eastern Time. Investors may access the conference call by dialing (800)-715-9871, Conference ID 6424000, or via the internet by visiting www.jrvrgroup.com and clicking on the “Investor Relations” link. A webcast replay of the call will be available by visiting the company website.

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. In some cases, such forward-looking statements may be identified by terms such as believe, expect, seek, may, will, should, intend, project, anticipate, plan, estimate, guidance or similar words. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Although it is not possible to identify all of these risks and uncertainties, they include, among others, the following: the inherent uncertainty of estimating reserves and the possibility that incurred losses may be greater than our loss and loss adjustment expense reserves; inaccurate estimates and judgments in our risk management may expose us to greater risks than intended; downgrades in the financial strength rating or outlook of our regulated insurance subsidiaries impacting our ability to attract and retain insurance business that our subsidiaries write, our competitive position, and our financial condition; the amount of the final post-closing adjustment to the purchase price received in connection with the sale of our casualty reinsurance business and outcome of litigation relating to such transaction; the potential loss of key members of our management team or key employees and our ability to attract and retain personnel; adverse economic factors resulting in the sale of fewer policies than expected or an increase in the frequency or severity of claims, or both; the impact of a higher than expected inflationary environment on our reserves, loss adjustment expenses, the values of our investments and investment returns, and our compensation expenses; exposure to credit risk, interest rate risk and other market risk in our investment portfolio; reliance on a select group of brokers and agents for a significant portion of our business and the impact of our potential failure to maintain such relationships; reliance on a select group of customers for a significant portion of our business and the impact of our potential failure to maintain, or decision to terminate, such relationships; our ability to obtain insurance and reinsurance coverage at prices and on terms that allow us to transfer risk, adequately protect our company against financial loss and that supports our growth plans; losses resulting from reinsurance counterparties failing to pay us on reinsurance claims, insurance companies with whom we have a fronting arrangement failing to pay us for claims, or a former customer with whom we have an indemnification arrangement failing to perform its reimbursement obligations, and our potential inability to demand or maintain adequate collateral to mitigate such risks; inadequacy of premiums we charge to compensate us for our losses incurred; changes in laws or government regulation, including tax or insurance law and regulations; changes in U.S. tax laws (including associated regulations) and the interpretation of certain provisions applicable to insurance/reinsurance businesses with U.S. and non-U.S. operations, which may be retroactive and could have a significant effect on us including, among other things, by potentially increasing our tax rate, as well as on our shareholders; in the event we did not qualify for the insurance company exception to the passive foreign investment company (“PFIC”) rules and were therefore considered a PFIC, there could be material adverse tax consequences to an investor that is subject to U.S. federal income taxation; the Company or its foreign subsidiary becoming subject to U.S. federal income taxation; a failure of any of the loss limitations or exclusions we utilize to shield us from unanticipated financial losses or legal exposures, or other liabilities; losses from catastrophic events, such as natural disasters and terrorist acts, which substantially exceed our expectations and/or exceed the amount of reinsurance we have purchased to protect us from such events; potential effects on our business of emerging claim and coverage issues; the potential impact of internal or external fraud, operational errors, systems malfunctions or cyber security incidents; our ability to manage our growth effectively; failure to maintain effective internal controls in accordance with the Sarbanes-Oxley Act of 2002, as amended; changes in our financial condition, regulations or other factors that may restrict our subsidiaries’ ability to pay us dividends; and an adverse result in any litigation or legal proceedings we are or may become subject to. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those in the forward-looking statements, is contained in our filings with the U.S. Securities and Exchange Commission (“SEC”), including our most recently filed Annual Report on Form 10-K and Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date of this release and the Company does not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Non-GAAP Financial Measures

In presenting James River Group Holdings, Ltd.’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). Such measures, including underwriting (loss) profit, adjusted net operating (loss) income, tangible equity, tangible common equity, adjusted net operating return on tangible equity (which is calculated as annualized adjusted net operating income divided by the average quarterly tangible equity balances in the respective period), and adjusted net operating return on tangible common equity excluding AOCI (which is calculated as annualized adjusted net operating income divided by the average quarterly tangible common equity balances in the respective period, excluding AOCI), are referred to as non-GAAP measures. These non-GAAP measures may be defined or calculated differently by other companies. These measures should not be viewed as a substitute for those measures determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included at the end of this press release.

About James River Group Holdings, Ltd.

James River Group Holdings, Ltd. is a Bermuda-based insurance holding company that owns and operates a group of specialty insurance companies. The Company operates in two specialty property-casualty insurance segments: Excess and Surplus Lines and Specialty Admitted Insurance. Each of the Company’s regulated insurance subsidiaries are rated “A-” (Excellent) by A.M. Best Company.

Visit James River Group Holdings, Ltd. on the web at www.jrvrgroup.com

For more information contact:

Zachary Shytle
Senior Analyst, Investments and Investor Relations
980-249-6848
InvestorRelations@james-river-group.com

James River Group Holdings, Ltd. and Subsidiaries Condensed Consolidated Balance Sheet Data (Unaudited)
*($ in thousands, except for share data)*	December 31, 2024		December 31, 2023
ASSETS
Invested assets:
Fixed maturity securities, available-for-sale, at fair value	$	1,189,733	$	1,324,476
Equity securities, at fair value		86,479		119,945
Bank loan participations, at fair value		142,410		156,169
Short-term investments		97,074		72,137
Other invested assets		36,700		33,134
Total invested assets		1,552,396		1,705,861

Cash and cash equivalents		362,345		274,298
Restricted cash equivalents (a)		28,705		72,449
Accrued investment income		10,534		12,106
Premiums receivable and agents’ balances, net		243,882		249,490
Reinsurance recoverable on unpaid losses, net		1,996,913		1,358,474
Reinsurance recoverable on paid losses		101,210		157,991
Deferred policy acquisition costs		30,175		31,497
Goodwill and intangible assets		214,281		214,644
Other assets		466,635		457,047
Assets of discontinued operations held-for-sale		0		783,393
Total assets	$	5,007,076	$	5,317,250

LIABILITIES AND SHAREHOLDERS’ EQUITY
Reserve for losses and loss adjustment expenses	$	3,084,406	$	2,606,107
Unearned premiums		572,034		587,899
Funds held (a)		25,157		65,235
Deferred reinsurance gain		57,970		20,733
Senior debt		200,800		222,300
Junior subordinated debt		104,055		104,055
Accrued expenses		53,178		56,722
Other liabilities		315,446		333,183
Liabilities of discontinued operations held-for-sale		0		641,497
Total liabilities		4,413,046		4,637,731

Series A redeemable preferred shares		133,115		144,898
Total shareholders’ equity		460,915		534,621
Total liabilities, Series A redeemable preferred shares, and shareholders’ equity	$	5,007,076	$	5,317,250

Tangible equity (b)	$	437,719	$	485,608
Tangible equity per share (b)	$	7.40	$	11.13
Tangible common equity per share (b)	$	6.67	$	9.05
Shareholders’ equity per share	$	10.10	$	14.20
Common shares outstanding		45,644,318		37,641,563

(a) Restricted cash equivalents and the funds held liability includes funds posted by the Company to a trust account for the benefit of a third party administrator handling the claims on the Rasier commercial auto policies in run-off. Such funds held in trust secure the Company’s obligations to reimburse the administrator for claims payments, and are primarily sourced from the collateral posted to the Company by Rasier and its affiliates to support their obligations under the indemnity agreements and the loss portfolio transfer reinsurance agreement with the Company.
(b) See “Reconciliation of Non-GAAP Measures”

James River Group Holdings, Ltd. and Subsidiaries Condensed Consolidated Income Statement Data (Unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
*($ in thousands, except for share data)*		2024			2023			2024			2023
REVENUES
Gross written premiums	$	358,292		$	389,305		$	1,431,772		$	1,508,660
Net written premiums		113,991			172,201			580,854			693,901

Net earned premiums		105,586			181,953			600,196			708,005
Net investment income		21,962			25,588			93,089			84,046
Net realized and unrealized gains (losses) on investments		(2,803	)		7,954			3,625			10,441
Other income		1,968			2,609			10,716			9,517
Total revenues		126,713			218,104			707,626			812,009
EXPENSES
Losses and loss adjustment expenses (a)		144,560			133,162			554,374			500,157
Other operating expenses		47,068			45,734			193,198			193,656
Other expenses		1,563			2,325			6,145			3,792
Interest expense		5,709			6,561			24,666			24,627
Intangible asset amortization and impairment		91			91			363			2,863
Total expenses		198,991			187,873			778,746			725,095
(Loss) income from continuing operations before income taxes		(72,278	)		30,231			(71,120	)		86,914
Income tax (benefit) expense on continuing operations		(8,883	)		10,175			(7,634	)		25,705
Net (loss) income from continuing operations		(63,395	)		20,056			(63,486	)		61,209
Net loss from discontinued operations		(1,372	)		(170,211	)		(17,634	)		(168,893	)
NET LOSS	$	(64,767	)	$	(150,155	)	$	(81,120	)	$	(107,684	)
Dividends on Series A preferred shares		(29,274	)		(2,625	)		(37,149	)		(10,500	)
NET LOSS AVAILABLE TO COMMON SHAREHOLDERS	$	(94,041	)	$	(152,780	)	$	(118,269	)	$	(118,184	)
ADJUSTED NET OPERATING (LOSS) INCOME (b)	$	(40,803	)	$	12,442		$	(41,503	)	$	50,317

(LOSS) INCOME PER COMMON SHARE
Basic
Continuing operations	$	(2.25	)	$	0.46		$	(2.60	)	$	1.35
Discontinued operations	$	(0.03	)	$	(4.52	)	$	(0.46	)	$	(4.49	)
	$	(2.28	)	$	(4.06	)	$	(3.06	)	$	(3.14	)
Diluted (c)
Continuing operations	$	(2.25	)	$	0.46		$	(2.60	)	$	1.34
Discontinued operations	$	(0.03	)	$	(3.89	)	$	(0.46	)	$	(4.47	)
	$	(2.28	)	$	(3.43	)	$	(3.06	)	$	(3.13	)

ADJUSTED NET OPERATING (LOSS) INCOME PER COMMON SHARE
Basic	$	(0.99	)	$	0.33		$	(1.07	)	$	1.34
Diluted (d)	$	(0.99	)	$	0.33		$	(1.07	)	$	1.33

Weighted-average common shares outstanding:
Basic		41,237,480			37,656,268			38,685,003			37,618,660
Diluted		41,237,480			43,744,208			38,685,003			37,810,440
Cash dividends declared per common share	$	0.01		$	0.05		$	0.16		$	0.20

Ratios:
Loss ratio		111.4	%		73.9	%		86.2	%		69.9	%
Expense ratio (e)		43.7	%		24.2	%		31.4	%		26.6	%
Combined ratio		155.1	%		98.1	%		117.6	%		96.5	%
Accident year loss ratio (f)		65.6	%		58.8	%		66.2	%		64.0	%



(a) Losses and loss adjustment expenses include $27.0 million and $37.2 million of expense for deferred retroactive reinsurance gains for the three and twelve months ended December 31, 2024, respectively ($1.3 million of benefit and $5.0 million of expense in the respective three and twelve month prior year periods).
(b) See “Reconciliation of Non-GAAP Measures”.
(c) The outstanding Series A preferred shares were dilutive for the three months ended December 31, 2023. Dividends on the Series A preferred shares were added back to the numerator in the calculation and 5,971,184 common shares from an assumed conversion of the Series A preferred shares were included in the denominator.
(d) The outstanding Series A preferred shares were anti-dilutive for the three months ended December 31, 2023. Dividends on the Series A preferred shares were not added back to the numerator in the calculation and 5,971,184 common shares from an assumed conversion of the Series A preferred shares were excluded from the denominator.
(e) Calculated with a numerator comprising other operating expenses less gross fee income (in specific instances when the Company is not retaining insurance risk) included in “Other income” in our Condensed Consolidated Income Statements of $926,000 and $4.6 million for the three and twelve months ended months ended December 31, 2024, respectively ($1.7 million and $5.3 million in the respective prior year periods), and a denominator of net earned premiums.
(f) Ratio of losses and loss adjustment expenses for the current accident year, excluding development on prior accident year reserves, to net earned premiums for the current year (excluding ceded earned premium associated with adverse development covers covering prior accident years and net earned premium adjustments on certain reinsurance treaties with reinstatement premiums associated with prior years).

James River Group Holdings, Ltd. and Subsidiaries Segment Results
EXCESS AND SURPLUS LINES
	Three Months Ended December 31,								Twelve Months Ended December 31,
*($ in thousands)*		2024			2023		% Change			2024			2023		% Change
Gross written premiums	$	280,287		$	275,171		1.9	%	$	1,017,029		$	1,007,351		1.0	%
Net written premiums	$	99,684		$	146,628		(32.0	)%	$	508,445		$	589,551		(13.8	)%

Net earned premiums	$	87,275		$	153,926		(43.3	)%	$	512,237		$	609,566		(16.0	)%
Losses and loss adjustment expenses excluding retroactive reinsurance		(103,327	)		(112,680	)	(8.3	)%		(448,714	)		(420,044	)	6.8	%
Underwriting expenses		(36,166	)		(32,348	)	11.8	%		(140,978	)		(135,175	)	4.3	%
Underwriting (loss) profit (a)	$	(52,218	)	$	8,898		—		$	(77,455	)	$	54,347		—

Ratios:
Loss ratio		118.4	%		73.2	%				87.6	%		68.9	%
Expense ratio		41.4	%		21.0	%				27.5	%		22.2	%
Combined ratio		159.8	%		94.2	%				115.1	%		91.1	%
Accident year loss ratio (b)		64.1	%		55.5	%				64.3	%		61.9	%

(a) See “Reconciliation of Non-GAAP Measures”.
(b) Ratio of losses and loss adjustment expenses for the current accident year, excluding development on prior accident year reserves, to net earned premiums for the current year (excluding ceded earned premium associated with adverse development covers covering prior accident years and net earned premium adjustments on certain reinsurance treaties with reinstatement premiums associated with prior years).

SPECIALTY ADMITTED INSURANCE

	Three Months Ended December 31,								Twelve Months Ended December 31,
*($ in thousands)*		2024			2023		% Change			2024			2023		% Change
Gross written premiums	$	78,005		$	114,134		(31.7	)%	$	414,743		$	501,309		(17.3	)%
Net written premiums	$	14,307		$	25,573		(44.1	)%	$	72,409		$	104,350		(30.6	)%

Net earned premiums	$	18,311		$	28,027		(34.7	)%	$	87,959		$	98,439		(10.6	)%
Losses and loss adjustment expenses		(14,264	)		(21,752	)	(34.4	)%		(68,423	)		(75,122	)	(8.9	)%
Underwriting expenses		(3,186	)		(4,080	)	(21.9	)%		(12,663	)		(19,240	)	(34.2	)%
Underwriting profit (a), (b)	$	861		$	2,195		(60.8	)%	$	6,873		$	4,077		68.6	%

Ratios:
Loss ratio		77.9	%		77.6	%				77.8	%		76.3	%
Expense ratio		17.4	%		14.6	%				14.4	%		19.6	%
Combined ratio		95.3	%		92.2	%				92.2	%		95.9	%
Accident year loss ratio		77.9	%		77.5	%				78.5	%		77.3	%

(a) See “Reconciliation of Non-GAAP Measures”.
(b) Underwriting results for the three and twelve months ended December 31, 2024 include gross fee income of $4.8 million and $21.0 million, respectively ($5.9 million and $24.2 million in the respective prior year periods).

Underwriting Performance Ratios

The following table provides the underwriting performance ratios of the Company’s continuing operations inclusive of the business subject to retroactive reinsurance accounting. There is no economic impact to the Company over the life of a loss portfolio transfer contract so long as any additional losses subject to the contract are within the limit of the loss portfolio transfer and the counterparty performs under the contract. Retroactive reinsurance accounting is not indicative of our current and ongoing operations. Management believes that providing loss ratios and combined ratios on business not subject to retroactive reinsurance accounting for loss portfolio transfers gives the users of our financial statements useful information in evaluating our current and ongoing operations.

	Three Months Ended December 31,				Twelve Months Ended December 31,
	2024		2023		2024		2023
Excess and Surplus Lines:
Loss Ratio	118.4	%	73.2	%	87.6	%	68.9	%
Impact of retroactive reinsurance	30.9	%	(0.8	)%	7.3	%	0.8	%
Loss Ratio including impact of retroactive reinsurance	149.3	%	72.4	%	94.9	%	69.7	%

Combined Ratio	159.8	%	94.2	%	115.1	%	91.1	%
Impact of retroactive reinsurance	30.9	%	(0.8	)%	7.3	%	0.8	%
Combined Ratio including impact of retroactive reinsurance	190.7	%	93.4	%	122.4	%	91.9	%

Consolidated:
Loss Ratio	111.4	%	73.9	%	86.2	%	69.9	%
Impact of retroactive reinsurance	25.5	%	(0.7	)%	6.2	%	0.7	%
Loss Ratio including impact of retroactive reinsurance	136.9	%	73.2	%	92.4	%	70.6	%

Combined Ratio	155.1	%	98.1	%	117.6	%	96.5	%
Impact of retroactive reinsurance	25.5	%	(0.7	)%	6.2	%	0.7	%
Combined Ratio including impact of retroactive reinsurance	180.6	%	97.4	%	123.8	%	97.2	%

RECONCILIATION OF NON-GAAP MEASURES

Underwriting Profit

The following table reconciles the underwriting profit by individual operating segment and for the entire Company to consolidated income from continuing operations before taxes. We believe that the disclosure of underwriting profit by individual segment and of the Company as a whole is useful to investors, analysts, rating agencies and other users of our financial information in evaluating our performance because our objective is to consistently earn underwriting profits. We evaluate the performance of our segments and allocate resources based primarily on underwriting profit. We define underwriting profit as net earned premiums and gross fee income (in specific instances when the Company is not retaining insurance risk) less losses and loss adjustment expenses on business from continuing operations not subject to retroactive reinsurance accounting and other operating expenses. Other operating expenses include the underwriting, acquisition, and insurance expenses of the operating segments and, for consolidated underwriting profit, the expenses of the Corporate and Other segment. Our definition of underwriting profit may not be comparable to that of other companies.

	Three Months Ended December 31,						Twelve Months Ended December 31,
*($ in thousands)*		2024			2023			2024			2023
Underwriting (loss) profit of the operating segments:
Excess and Surplus Lines	$	(52,218	)	$	8,898		$	(77,455	)	$	54,347
Specialty Admitted Insurance		861			2,195			6,873			4,077
Total underwriting (loss) profit of operating segments		(51,357	)		11,093			(70,582	)		58,424
Other operating expenses of the Corporate and Other segment		(6,790	)		(7,628	)		(34,972	)		(33,940	)
Underwriting (loss) profit (a)		(58,147	)		3,465			(105,554	)		24,484
Losses and loss adjustment expenses – retroactive reinsurance		(26,969	)		1,270			(37,237	)		(4,991	)
Net investment income		21,962			25,588			93,089			84,046
Net realized and unrealized (losses) gains on investments		(2,803	)		7,954			3,625			10,441
Other income (expense)		(521	)		(1,394	)		(14	)		424
Interest expense		(5,709	)		(6,561	)		(24,666	)		(24,627	)
Amortization of intangible assets		(91	)		(91	)		(363	)		(363	)
Impairment of IRWC trademark intangible asset		—			—			—			(2,500	)
(Loss) income from continuing operations before taxes	$	(72,278	)	$	30,231		$	(71,120	)	$	86,914

(a) Included in underwriting results for the three and twelve months ended December 31, 2024 is gross fee income of $4.8 million and $21.0 million, respectively ($5.9 million and $24.2 million in the respective prior year periods).

Adjusted Net Operating Income

We define adjusted net operating (loss) income as income available to common shareholders excluding a) (loss) income from discontinued operations b) the impact of retroactive reinsurance accounting for loss portfolio transfers, c) net realized and unrealized gains (losses) on investments, d) certain non-operating expenses such as professional service fees related to various strategic initiatives, and the filing of registration statements for the offering of securities, e) severance costs associated with terminated employees, and f) deemed dividend related to the conversion of the Series A Preferred Shares. We use adjusted net operating income as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance. Adjusted net operating income should not be viewed as a substitute for net income calculated in accordance with GAAP, and our definition of adjusted net operating income may not be comparable to that of other companies.

Our (loss) income available to common shareholders reconciles to our adjusted net operating (loss) income as follows:

	Three Months Ended December 31,
		2024						2023
*($ in thousands)*	Income Before Taxes			Net Income			Income Before Taxes			Net Income
Loss available to common shareholders	$	(102,924	)	$	(94,041	)	$	(142,605	)	$	(152,780	)
Loss from discontinued operations		1,372			1,372			170,211			170,211
Losses and loss adjustment expenses – retroactive reinsurance		26,969			21,306			(1,270	)		(1,003	)
Net realized and unrealized investment losses (gains)		2,803			2,214			(7,954	)		(6,284	)
Other expenses		1,563			1,340			2,321			2,298
Series A deemed dividends		27,006			27,006			—			—
Adjusted net operating (loss) income	$	(43,211	)	$	(40,803	)	$	20,703		$	12,442

	Twelve Months Ended December 31,
		2024						2023
*($ in thousands)*	Income Before Taxes			Net Income			Income Before Taxes			Net Income
Loss available to common shareholders	$	(125,903	)	$	(118,269	)	$	(92,479	)	$	(118,184	)
Loss from discontinued operations		17,634			17,634			168,893			168,893
Losses and loss adjustment expenses – retroactive reinsurance		37,237			29,418			4,991			3,943
Net realized and unrealized investment gains		(3,625	)		(2,865	)		(10,441	)		(8,248	)
Other expenses		6,145			5,573			1,588			1,938
Impairment of IRWC trademark intangible asset		—			—			2,500			1,975
Series A deemed dividends		27,006			27,006			—			—
Adjusted net operating (loss) income	$	(41,506	)	$	(41,503	)	$	75,052		$	50,317

Tangible Equity (per Share) and Tangible Common Equity (per Share)

We define tangible equity as shareholders’ equity plus mezzanine Series A preferred shares and the deferred retroactive reinsurance gain less goodwill and intangible assets (net of amortization). We define tangible common equity as tangible equity less mezzanine Series A preferred shares. Our definition of tangible equity and tangible common equity may not be comparable to that of other companies, and it should not be viewed as a substitute for shareholders’ equity calculated in accordance with GAAP. We use tangible equity and tangible common equity internally to evaluate the strength of our balance sheet and to compare returns relative to this measure. The following table reconciles shareholders’ equity to tangible equity and tangible common equity for December 31, 2024, September 30, 2024, December 31, 2023, and September 30, 2023.

	December 31, 2024		September 30, 2024		December 31, 2023		September 30, 2023
*($ in thousands, except for share data)*
Shareholders’ equity	$	460,915	$	530,347	$	534,621	$	562,544
Plus: Series A redeemable preferred shares		133,115		144,898		144,898		144,898
Plus: Deferred reinsurance gain (a)		57,970		31,001		20,733		37,653
Less: Goodwill and intangible assets		214,281		214,372		214,644		214,735
Tangible equity	$	437,719	$	491,874	$	485,608	$	530,360
Less: Series A redeemable preferred shares		133,115		144,898		144,898		144,898
Tangible common equity	$	304,604	$	346,976	$	340,710	$	385,462

Common shares outstanding		45,644,318		37,829,475		37,641,563		37,619,749
Common shares from assumed conversion of Series A preferred shares		13,521,635		6,848,763		5,971,184		5,640,158
Common shares outstanding after assumed conversion of Series A preferred shares		59,165,953		44,678,238		43,612,747		43,259,907

Equity per share:
Shareholders’ equity	$	10.10	$	14.02	$	14.20	$	14.95
Tangible equity	$	7.40	$	11.01	$	11.13	$	12.26
Tangible common equity	$	6.67	$	9.17	$	9.05	$	10.25

(a) Deferred reinsurance gain for the period ending September 30, 2023 includes the deferred retroactive reinsurance gain of $15.7 million related to the former Casualty Reinsurance LPT.

¹ The Company closed the sale of JRG Reinsurance Company Ltd. on April 16, 2024. The full financials for our former Casualty Reinsurance segment have been classified to discontinued operations for all periods.
² Adjusted net operating (loss) income, tangible common equity per share and adjusted net operating return on tangible common equity are non-GAAP financial measures. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.

³ Tangible equity and tangible common equity are non-GAAP financial measures. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” at the end of this press release.

The MIL Network –

March 4, 2025

MIL-OSI: GigaCloud Technology Inc Announces Fourth Quarter and Year Ended December 31, 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

EL MONTE, Calif., March 03, 2025 (GLOBE NEWSWIRE) — GigaCloud Technology Inc (Nasdaq: GCT) (“GigaCloud” or the “Company”), a pioneer of global end-to-end B2B ecommerce technology solutions for large parcel merchandise, today announced financial results for the fourth quarter and fiscal year ended December 31, 2024, including a milestone achievement of surpassing $1 billion in total annual revenues for the first time in 2024, and continued robust growth in GigaCloud Marketplace GMV.

Fourth Quarter 2024 Financial Highlights

Total revenues of $295.8 million, increased 20.9% year-over-year.
Gross profit of $65.0 million, decreased 6.9% year-over-year.
Gross margin was 22.0%, compared to 28.5% in the fourth quarter of 2023.
Net income of $31.0 million, decreased 12.9% year-over-year.
Net income margin was 10.5%, compared to 14.5% in the fourth quarter of 2023.
Diluted EPS decreased 12.6% year-over-year to $0.76.
Adjusted EBITDA¹ decreased 29.5% year-over-year to $30.9 million.
Adjusted EPS – diluted² decreased 29.9% year-over-year to $0.75.
Cash, Cash Equivalents, Restricted Cash, and Investments totaled $303.1 million as of December 31, 2024, a 64.5% increase year-over-year.

Full Year 2024 Financial Highlights

Total revenues of $1,161.0 million, increased 65.0% year-over-year.
Gross profit of $285.2 million, increased 51.2% year-over-year.
Gross margin was 24.6%, compared to 26.8% in 2023.
Net income of $125.8 million, increased 33.7% year-over-year.
Net income margin was 10.8%, compared to 13.4% in 2023.
Diluted EPS increased 32.6% year-over-year to $3.05.
Adjusted EBITDA¹ increased 32.6% year-over-year to $156.9 million.
Adjusted EPS – diluted² increased 31.8% year-over-year to $3.81.

Operational Highlights

GigaCloud Marketplace GMV³ increased 68.9% year-over-year to $1,341.4 million for the 12 months ended December 31, 2024.
3P seller GigaCloud Marketplace GMV⁴ increased 62.8% year-over-year to $693.9 million for the 12 months ended December 31, 2024. 3P seller GigaCloud Marketplace GMV represented 51.7% of total GigaCloud Marketplace GMV for the 12 months ended December 31, 2024.
Active 3P sellers⁵ increased 36.3% year-over-year to 1,111 for the 12 months ended December 31, 2024.
Active buyers⁶ increased 85.7% year-over-year to 9,306 for the 12 months ended December 31, 2024.
Spend per active buyer⁷ was $144,142 for the 12 months ended December 31, 2024.

“2024 was a landmark year for GigaCloud as we surpassed $1 billion in total revenues for the first time, a milestone that underscores the strength and resilience of our B2B Marketplace amid a challenging macroeconomic environment,” said Larry Wu, Founder, Chairman, and Chief Executive Officer. “This achievement reflects the growing recognition for our Supplier Fulfilled Retail (SFR) model and our continued success in expanding our platform, driving robust GMV performance. Our global diversification has been a key strength, with standout progress in Europe, which has experienced 155% GMV growth year over year, further validating the broad appeal for our solutions across diverse markets. Our expanding global footprint, deepening partnerships, and relentless focus on innovation continue to fuel our momentum and position us well for the long term. We remain confident in our ability to adapt and maintain our positive trajectory.

In addition, our Board has approved the appointment of Erica Wei as Chief Financial Officer after serving as Interim CFO since August 2024. She has played a key role in strengthening the Company’s financial strategy, leading compliance efforts, and enhancing financial reporting quality, which will be reflected in the upcoming 10-K. Her leadership will be essential as we continue to scale our business and drive long-term growth.”

“Our results reflect robust top-line performance and the strategic investments we are making to scale operations and position GigaCloud for long-term success,” said Erica Wei, Chief Financial Officer. “Despite a challenging macro environment, our ability to adapt and execute has kept us on a path of sustained, stable growth. At the same time, we are committed to enhancing shareholder value. Since our $46 million share repurchase authorization in September, we have executed approximately $29 million in share repurchases under a Rule 10b5-1 plan as of today. Our strong financial position of over $300 million in cash and cash equivalents, restricted cash, and short-term investments, while remaining debt-free, gives us the financial flexibility to continue investing in our platform, expanding globally, and driving sustained value for our shareholders.”

Business Outlook

The Company expects its total revenues to be between $250 million and $265 million in the first quarter of 2025. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.

Share Repurchase Program

In June 2023, we announced that our board of directors approved a share repurchase program to repurchase up to US$25.0 million of our Class A ordinary shares over the next 12 months, which expired in June 2024. On September 3, 2024, we announced that our board of directors approved a new share repurchase program under which we may purchase up to $46.0 million of our Class A ordinary shares, par value $0.05, over a 12-month period. Under the share repurchase program, we may purchase our ordinary shares through various means, including open market transactions, privately negotiated transactions, block trades, any combination thereof or other legally permissible means. We may effect repurchase transactions in compliance with Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with our working capital requirements, general business conditions and other factors. Our board of directors will review the share repurchase program periodically, and may modify, suspend or terminate the share repurchase program at any time. We plan to fund repurchases from our existing cash balance.

During the fourth quarter of 2024, we have repurchased 1,033,292 of our Class A ordinary shares at a total consideration of approximately $23 million. Subsequent to the fourth quarter of 2024, the Company has repurchased an aggregate of 283,889 Class A ordinary shares in the open market at a total consideration of approximately $6 million pursuant to a repurchase plan under Rule 10b5-1 of the Exchange Act.

Conference Call

The Company will host a conference call to discuss its financial results at 5:30 pm U.S. Eastern Time on March 3, 2025 (6:30 am Hong Kong Time on March 4, 2025). Participants who wish to join the call should pre-register here at https://s1.c-conf.com/diamondpass/10045735-6sh8hd.html. Upon registration, participants will receive the dial-in number and a unique PIN, which can be used to join the conference call. If participants register and forget their PIN or lose their registration confirmation email, they may re-register to receive a new PIN. All participants are encouraged to dial in 15 minutes prior to the start time.

A live and archived webcast of the conference call will be accessible on the Company’s investor relations website at: https://investors.gigacloudtech.com/.

About GigaCloud Technology Inc

GigaCloud Technology Inc is a pioneer of global end-to-end B2B technology solutions for large parcel merchandise. The Company’s B2B ecommerce platform, the “GigaCloud Marketplace,” integrates everything from discovery, payments and logistics tools into one easy-to-use platform. The Company’s global marketplace seamlessly connects manufacturers, primarily in Asia, with resellers, primarily in the U.S., Asia and Europe, to execute cross-border transactions with confidence, speed and efficiency. GigaCloud offers a comprehensive solution that transports products from the manufacturer’s warehouse to the end customer’s doorstep, all at one fixed price. The Company first launched its marketplace in January 2019 by focusing on the global furniture market and has since expanded into additional categories, including home appliances and fitness equipment. For more information, please visit the Company’s website: https://investors.gigacloudtech.com/

Non-GAAP Financial Measures

The Company uses certain non-GAAP financial measures, including Adjusted EBITDA and Adjusted EPS – diluted, to understand and evaluate its core operating performance. Adjusted EBITDA is net income excluding interest, income taxes and depreciation, further adjusted to exclude share-based compensation expense and non-recurring items. Adjusted EPS – diluted is a financial measure defined as our Adjusted EBITDA divided by our diluted weighted-average shares outstanding, respectively. Management uses Adjusted EBITDA and Adjusted EPS – diluted as measures of operating performance, for planning purposes, to allocate resources to enhance the financial performance of our business, to evaluate the effectiveness of our business strategies and in communications with our Board of Directors and investors concerning our financial performance. Non-GAAP financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

For more information on the non-GAAP financial measures, please see the tables captioned “Unaudited Reconciliation of Adjusted EBITDA” and “Unaudited Reconciliation of Adjusted EPS – diluted” set forth at the end of this press release.

Forward-Looking Statements

This press release contains “forward-looking statements”. Forward-looking statements reflect our current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “propose,” “potential,” “continue” or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

For investor and media inquiries, please contact:

GigaCloud Technology Inc

Investor Relations

Email: ir@gigacloudtech.com

PondelWilkinson, Inc.

Laurie Berman (Investors) – lberman@pondel.com

George Medici (Media) – gmedici@pondel.com


GigaCloud Technology Inc UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands except for share data and per share data)

	December 31,
	2024			2023
ASSETS
Current assets
Cash and cash equivalents	$	259,759		$	183,283
Restricted cash		685			885
Investments		42,674			—
Accounts receivable, net		57,313			58,876
Inventories		172,489			132,247
Prepayments and other current assets		14,672			17,516
Total current assets		547,592			392,807
Non-current assets
Operating lease right-of-use assets		451,930			398,922
Property and equipment, net		29,498			24,614
Intangible assets, net		6,198			8,367
Goodwill		12,586			12,586
Deferred tax assets		10,026			1,440
Other non-current assets		12,645			8,173
Total non-current assets		522,883			454,102
Total assets	$	1,070,475		$	846,909



	2024			2023
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable (including accounts payable of VIEs without recourse to the Company of $nil and $11,563 as of December 31, 2024 and 2023, respectively)	$	78,163		$	69,757
Contract liabilities (including contract liabilities of VIEs without recourse to the Company of $nil and $736 as of December 31, 2024 and 2023, respectively)		4,486			5,537
Current operating lease liabilities (including current operating lease liabilities of VIEs without recourse to the Company of $nil and $1,305 as of December 31, 2024 and 2023, respectively)		88,521			57,949
Income tax payable (including income tax payable of VIEs without recourse to the Company of $nil and $3,644 as of December 31, 2024 and 2023, respectively)		13,615			15,212
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of VIEs without recourse to the Company of $nil and $2,774 as of December 31, 2024 and 2023, respectively)		79,594			57,319
Total current liabilities		264,379			205,774
Non-current liabilities
Operating lease liabilities, non-current (including operating lease liabilities, non-current of VIEs without recourse to the Company of $nil and $553 as of December 31, 2024 and 2023, respectively)		395,235			343,511
Deferred tax liabilities		941			3,795
Finance lease obligations, non-current		382			111
Non-current income tax payable		4,321			3,302
Total non-current liabilities		400,879			350,719
Total liabilities	$	665,258		$	556,493
Commitments and contingencies



	2024			2023
Shareholders’ equity
Treasury shares, at cost (609,390 and 294,029 shares held as of December 31, 2024 and 2023, respectively)	$	(11,816	)	$	(1,594	)
Class A ordinary shares ($0.05 par value, 50,673,268 shares authorized, 32,878,735 and 31,738,632 shares issued as of December 31, 2024 and 2023, respectively, 32,269,345 and 31,455,148 shares outstanding as of December 31, 2024 and 2023, respectively)		1,643			1,584
Class B ordinary shares ($0.05 par value, 9,326,732 shares authorized, 8,076,732 and 9,326,732 shares issued and outstanding as of December 31, 2024 and 2023)		403			466
Additional paid-in capital		120,262			111,736
Accumulated other comprehensive income (loss)		(4,136	)		526
Retained earnings		298,861			177,698
Total shareholders’ equity		405,217			290,416
Total liabilities and shareholders’ equity	$	1,070,475		$	846,909


GigaCloud Technology Inc UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands except for share data and per share data)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Revenues
Service revenues	$	97,107		$	69,336		$	350,273		$	199,184
Product revenues		198,675			175,401			810,769			504,647
Total revenues		295,782			244,737			1,161,042			703,831
Cost of revenues
Services		78,188			57,291			284,951			161,215
Product sales		152,604			117,609			590,855			353,983
Total cost of revenues		230,792			174,900			875,806			515,198
Gross profit		64,990			69,837			285,236			188,633
Operating expenses
Selling and marketing expenses		18,041			14,004			70,686			41,386
General and administrative expenses		16,979			13,130			73,944			30,008
Research and development expenses		2,356			2,344			9,791			3,925
Gains (losses) on disposal of property and equipment		(20	)		3,236			193			3,236
Total operating expenses		37,356			32,714			154,614			78,555
Operating income		27,634			37,123			130,622			110,078
Interest expense		(29	)		(108	)		(256	)		(1,240	)
Interest income		2,849			1,293			9,405			3,304
Foreign currency exchange gains (losses), net		(754	)		4,239			(1,233	)		2,086
Government grants		8			438			37			911
Others, net		678			(137	)		2,039			(144	)
Income before income taxes		30,386			42,848			140,614			114,995
Income tax expense		573			(7,273	)		(14,806	)		(20,887	)
Net income	$	30,959		$	35,575		$	125,808		$	94,108
Net income attributable to ordinary shareholders		30,959			35,575			125,808			94,108
Foreign currency translation adjustment, net of nil income taxes		(715	)		232			(1,266	)		(278	)
Net unrealized gains (losses) on available-for-sale investments		(12	)		—			7			—
Intra-entity foreign currency transactions gain (loss)		(2,565	)		—			(2,565	)		—
Release of foreign currency translation reserve related to liquidation of subsidiaries		(838	)		—			(838	)		—
Total other comprehensive income (loss)		(4,130	)		232			(4,662	)		(278	)
Comprehensive Income	$	26,829		$	35,807		$	121,146		$	93,830
Net income per ordinary share
—Basic	$	0.76		$	0.87		$	3.06		$	2.31
—Diluted	$	0.76		$	0.87		$	3.05		$	2.30
Weighted average number of ordinary shares outstanding used in computing net income per ordinary share
—Basic		40,869,106			40,770,882			41,079,672			40,788,448
—Diluted		40,944,311			40,901,772			41,201,026			40,922,590


GigaCloud Technology Inc UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)

	Year Ended December 31,
	2024			2023
Cash flows from operating activities:
Net income	$	125,808		$	94,108
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		8,524			2,873
Share-based compensation		16,825			2,503
Operating lease		29,282			2,485
Changes in accounts receivables, net		(234	)		(5,058	)
Changes in inventories		(46,875	)		(16,514	)
Changes in prepayments and other assets		(1,665	)		(9,249	)
Changes in accounts payable, accrued expenses and other current liabilities		38,188			46,258
Changes in contract liabilities		(992	)		1,473
Changes in income tax payable		(1,023	)		10,977
Changes in deferred income taxes		(11,462	)		398
Other operating activities		1,702			3,198
Net cash provided by operating activities		158,078			133,452
Cash flows from investing activities:
Cash paid for purchase of property and equipment		(15,536	)		(4,380	)
Cash received from disposal of property and equipment		2,103			462
Acquisitions, net of cash acquired		—			(86,629	)
Purchases of investments		(73,831	)		—
Sale and maturities of investments		31,845			—
Net cash used in investing activities		(55,419	)		(90,547	)
Cash flows from financing activities:
Repayment of finance lease obligations		(1,726	)		(2,212	)
Repayment of bank loans		—			(197	)
Repurchases of ordinary shares		(23,243	)		(1,594	)
Net cash used in financing activities		(24,969	)		(4,003	)
Effect of foreign currency exchange rate changes on cash and restricted cash		(1,414	)		190
Net increase in cash and restricted cash		76,276			39,092
Cash and restricted cash at the beginning of the year		184,168			145,076
Cash and restricted cash at the end of the year	$	260,444		$	184,168
Supplemental disclosure of cash flow information
Cash paid for interest expense		256			1,240
Cash paid for income taxes		26,301			9,512
Non-cash investing and financing activities:
Purchase of property and equipment under finance leases		767			—
Reversal of subscription receivable from ordinary shares		—			312
Fair value of assets acquired by acquisition		—			273,086
Cash paid for business combinations and asset purchases		—			87,568
Liabilities assumed by acquisition		—			(185,518	)


GigaCloud Technology Inc UNAUDITED RECONCILIATION OF ADJUSTED EBITDA (In thousands, except for per share data)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
	(In thousands)
Net income	$	30,959		$	35,575		$	125,808		$	94,108
Add: Income tax expense		(573	)		7,273			14,806			20,887
Add: Interest expense		29			108			256			1,240
Less: Interest income		(2,849	)		(1,293	)		(9,405	)		(3,304	)
Add: Depreciation and amortization		2,271			1,723			8,524			2,873
Add: Share-based compensation expense		1,245			429			16,825			2,503
Add: Non-recurring items⁽¹⁾		(180	)		—			128			—
Adjusted EBITDA	$	30,902		$	43,815		$	156,942		$	118,307

_____________________
(1) One of our fulfillment centers in Japan experienced a fire in March 2024. The fire destroyed our inventories located within the fulfillment center. We recognized losses of $2.0 million as a result of the fire in 2024. Based on the provisions of our insurance policies, the gross losses were reduced by the insurance proceeds received $1.9 million from our insurance carrier for the claim. We do not believe such losses to be recurring or frequent in nature.


UNAUDITED RECONCILIATION OF ADJUSTED EPS – DILUTED

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Net income per ordinary share – diluted	$	0.76		$	0.87		$	3.05		$	2.30
Adjustments, per ordinary share:
Add: Income tax expense		(0.01	)		0.18			0.36			0.51
Add: Interest expense		—			—			0.01			0.03
Less: Interest income		(0.07	)		(0.03	)		(0.23	)		(0.08	)
Add: Depreciation and amortization		0.05			0.04			0.21			0.07
Add: Share-based compensation expenses		0.02			0.01			0.41			0.06
Add: Non-recurring items⁽¹⁾		—			—			—			—
Adjusted EPS – diluted	$	0.75		$	1.07		$	3.81		$	2.89

Weighted average number of ordinary shares outstanding – diluted		40,944,311			40,901,772			41,201,026			40,922,590

_____________________
(1) One of our fulfillment centers in Japan experienced a fire in March 2024. The fire destroyed our inventories located within the fulfillment center. We recognized losses of $2.0 million as a result of the fire in 2024. Based on the provisions of our insurance policies, the gross losses were reduced by the insurance proceeds received $1.9 million from our insurance carrier for the claim. We do not believe such losses to be recurring or frequent in nature.

_____________________

¹ Adjusted EBITDA is a non-GAAP financial measure. For more information on the non-GAAP financial measure, please see the section of “Non-GAAP Financial Measures” and the table captioned “Unaudited Reconciliation of Adjusted EBITDA” set forth at the end of this press release.

² Adjusted EPS – diluted is a non-GAAP financial measure. For more information on the non-GAAP financial measure, please see the section of “Non-GAAP Financial Measures” and the table captioned “Unaudited Reconciliation of Adjusted EPS – diluted” set forth at the end of this press release.

³ GigaCloud Marketplace GMV means the total gross merchandise value of transactions ordered through our GigaCloud Marketplace including GigaCloud 3P and GigaCloud 1P, before any deductions of value added tax, goods and services tax, shipping charges paid by buyers to sellers and any refunds.

⁴ 3P seller GigaCloud Marketplace GMV means the total gross merchandise value of transactions sold through our GigaCloud Marketplace by 3P sellers, before any deductions of value added tax, goods and services tax, shipping charges paid by buyers to sellers and any refunds.

⁵ Active 3P sellers means sellers who have sold a product in GigaCloud Marketplace within the last 12-month period, irrespective of cancellations or returns.

⁶ Active buyers means buyers who have purchased a product in the GigaCloud Marketplace within the last 12-month period, irrespective of cancellations or returns.

⁷ Spend per active buyer is calculated by dividing the total GigaCloud Marketplace GMV within the last 12-month period by the number of active buyers as of such date.

The MIL Network –

March 4, 2025

MIL-OSI Europe: Answer to a written question – ETS: Measures to protect the maritime transport sector and Europe’s islands – E-002754/2024(ASW)

Source: European Parliament

All sectors, including maritime transport, need to contribute to the EU’s climate neutrality goal by 2050. The EU Emissions Trading System (ETS) is a key policy to achieve this objective.

The economic and social impacts due to the ETS extension to maritime transport were looked at in the impact assessment[1] that accompanied the legislative proposal in 2021.

Regarding costs, the analysis showed that the estimated impact on commodity prices relevant to European trade was expected to be relatively small (less than one percent price increase by 2030), with a very low effect on demand.

The Commission acknowledges the specific challenges faced by islands. The EU ETS contains derogations allowing Member States to exempt from ETS surrendering obligations until end-2030, voyages by passenger vessels between islands with fewer than 200 000 residents and other ports in the same Member State.

Furthermore, in case of transnational public service contracts established by two Member States, one having no land border with another Member State and the other being the closest, shipping companies do not need to surrender allowances if the Member States decide to exempt such a line.

The Commission will monitor and report biennially on the implementation of the ETS extension to shipping. These reports will analyse possible transport cost increases and impacts on shipping services that constitute essential services of territorial continuity.

The first report will be published in March 2025. If appropriate, the Commission will propose measures to ensure the effective implementation of the system.

Member States can also decide to use their ETS revenues to further encourage the decarbonisation of the maritime sector and may benefit projects connecting islands.

[1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2021:0601:FIN

Last updated: 3 March 2025

MIL OSI Europe News –

March 4, 2025

MIL-OSI: Airship AI Reports Full Year 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

2024 Net Revenue of $23.1 Million, an 87% Increase over FY 2023 Net Revenue of $12.3 Million

No Debt on Balance Sheet Following Conversion of $2.8 million in Senior Secured Convertible Notes

New Pro-U.S. Border Security Administration Provides Additional Macro Tailwinds for 2025 & Beyond

REDMOND, Wash., March 03, 2025 (GLOBE NEWSWIRE) — Airship AI Holdings, Inc. (NASDAQ: AISP) (“Airship AI” or the “Company”), a leader in AI-driven video, sensor, and data management surveillance solutions, today reported its financial and operational results for the quarter and year ended December 31, 2024.

FY 2024 Financial Highlights

Net revenues were $23.1 million.
Gross profit was $10.5 million.
Gross margin was 45.7%.
Operating loss was $3.5 million, which reflected increased stock-based compensation and transactions costs related to the merger and overall sales levels.

FY 2024 Financial Highlights

Dramatic Revenue Growth: In 2024, Airship AI delivered 87% year-over-year (“YoY”) revenue growth, growing from $12.3 million to $23.1 million. Revenue growth was driven mainly by increased sales to federal government customers, with multiple large awards for cloud-based Acropolis offerings and edge-based Outpost AI appliances.
Steady Gross Profit Margin: Full year gross profit as of December 31, 2024 was $10.5 million, flat YoY, primarily due to the continued high percentages of third-party hardware sales as part of turn-key solutions bundled by Airship AI with Outpost AI included. The Company is already seeing the value of these seeding opportunities in awarded business as well as pipeline opportunity growth.
Significant Operational Improvements: Full year operating loss as of December 31, 2024 was $3.5 million as compared to a $6.6 million loss in 2024. Numerous one-time charges were incurred in 2024, resulting from transaction costs associated with the transition to a public company, conversion of a senior secured promissory note, and partial payments to the founders for previous advances.
Strengthened Balance Sheet: Cash and cash equivalents as of December 31, 2024, was $11.4 million, along with $1.2 million in accounts receivable. With the conversion of issued senior secured convertible promissory notes of $2.8 million, Airship AI enters 2025 with no debt on the balance sheet.

Q4 2024 & Subsequent Operational Highlights

Backlog as of December 31, 2024 was $5.5 million, including orders received late in the second half of 2024 that are expected to be delivered and invoiced across Q1 and Q2 of 2025. Backlog is not indicative of future quarterly revenue as approximately 75% of quarterly revenue is transactional and recognized in the same quarter.
Total validated pipeline at the year-end of 2024 was approximately $135 million, consisting of single and multi-year opportunities for AI-driven edge, video, and sensor and data management platform across all our customer verticals. The pipeline includes opportunities at varying stages of progression with expected award timeframes throughout the next 18-24 months.
Due to the sensitive nature of many customers and deployment use cases, the Company is often restricted from publicly disclosing awards and or limited as to the specifics of the customer and use case. Consequently, most awards are executed on closed or restricted contract vehicles, which further limits the sharing of information that might otherwise be available.
Multiple large contracts awarded throughout and/or subsequent to the quarter include but are not limited to:
- $4.0 million firm-fixed price contract for an agency within the U.S. Department of Homeland Security (“DHS”), for advanced integrated solutions supporting real-time intelligence collection operations along the United States’ borders, leveraging the Company’s edge IoT appliance, Outpost AI.
- $1.2 million firm-fixed price support and maintenance contract for our existing deployment of Acropolis Enterprise Video and Data Management Platform supporting a Fortune 100 Transportation and E-Commerce company’ global operations.
- Follow-on seven-figure one (1) year system maintenance and sustainment contract for an existing Fortune 100 customer leveraging the Company’s Acropolis Enterprise Video and Data Management platform supporting operational and physical security requirements.
We began deploying new infrastructure supporting mission critical requirements along the U.S. southern border; follow-on work to our successful completion of a congressionally driven pilot opportunity earlier in the year. This follow-on work is in support of our single-largest opportunity, valued at more than $50 million over the next four (4) years. Estimated total contract value is conservatively based on data points from published market research, including size and scope, and pricing approved via awarded procurement efforts.
Completed $8.0 million at-the-market public offering with net proceeds to the Company of $7.0 million after deducting placement agent fees and offering expenses.
Hired new members of the team, at the C-Suite level and below, and promoted key members of the team to increasingly higher levels of strategic responsibility within the Company. Airship AI expects additional hires in 2025 in the sales and product development teams.
Launched a new routes-to-market strategy targeting business partners and resellers that are looking for differentiated alternatives in new verticals (for Airship AI) as well as partners that can help us scale more rapidly within existing verticals.
Put in place a marketing and branding campaign for 2025. This bifurcated plan is hyper focused on creating brand awareness in several new targeted verticals through a combination of partner and industry events, enabling partners to monetize that awareness through expanded routes to market.
We participated in JIFX, or Joint Interagency Field Exercise, an invite only event led by the Naval Post-Graduate School. The JIFX team leads experimentation in alternative methods to enable rapid technological development by cultivating a community of interest and hosting broadly scoped quarterly collaborative field events which enable the Department of Defense (“DoD”), the U.S. government, and allied stakeholders to identify, influence, and accelerate early-stage technology development that address national and collective security challenges.
We participated in TIDE, or Technology Innovation Discovery Event, an invite only DoD sponsored event that aims to help innovative small businesses and non-traditional DoD performers showcase new hardware and software technologies that can significantly improve existing software or meet new challenges in support of the National Defense Strategy.
We were a primary sponsor of and participant in UTAC, the premier unmanned aerial and robotic systems tactical event for Police, Public Safety, Government, and Defense agencies. UTAC is a fully immersive training event where public safety, government, enterprise, and defense operators gather to learn best practices, establish procedures, and gain experience with the latest innovations in unmanned aerial, ground, and maritime systems along augmenting technical solutions.

Capital Markets Update:

Participated at the 13th Annual ROTH Technology Conference and the Benchmark 13^th Annual Discovery One-on-One Conference.
Benchmark Company initiated coverage of Airship AI on November 13, 2024, with a Buy rating and price target of $6.

2025 Outlook

2025 net revenues of approximately $30 million, reflecting 30% revenue growth YoY, supported by a strong and validated pipeline of ~$135 million, improving gross profit margins, and a strong recurring revenue model.
Positive cash flow from business operations for the full year.
Expand AI offerings at the edge running on our Outpost AI platform and announce new offerings running at the datacenter level or in the cloud that increase customer operational efficiency using existing sources of data.
Continued innovation across our core Acropolis software platform supporting new workflows for on-premises and cloud-based deployments in highly secure operational environments.
Announce new offerings around our Digital Evidence Management System (DEMS) called Evidence Discovery Server (EDS) supporting stand-alone operations as well as integrations with other leading DEMS platforms.
Continue the digital transformation of our back-office operations to improve supply chain management and production-based process efficiencies to help drive continued margin expansion.
Launch new AI based offerings supporting partner engagement, training, and support as part of our larger strategy to provide differentiated offerings to those existing and to be recruited business partners and resellers.
Targeted focus on brand awareness and engagement in new verticals through targeted marketing outreach opportunities, social media platforms, Airship AI hosted technology events, and industry tradeshow events.

Management Commentary

“The past year has been an exciting journey as we completed our first full year as a public company amid significant shifts in domestic and global economic, social, and political landscapes,” said Paul Allen, President of Airship AI. “With this dynamic backdrop, we set ambitious goals for 2024, focusing on substantial revenue growth and strengthening our balance sheet to position the business for positive cash flow operations. The great news is that we made meaningful progress on both the top and bottom lines. We delivered 87% year-over-year revenue growth of $23.1 million at a gross margin of 46%. We ended the year with $11.4 million in cash and cash equivalents and $1.2 million in accounts receivable.

“Our recently completed capital raise has significantly enhanced our ability to execute many of the anticipated large transactions in our pipeline, particularly those involving substantial up-front costs of goods sold. The capital raise has also enabled us to expand our sales, business development, and partner marketing capabilities by bringing in specialized industry expertise and experience in managing these large-scale defense programs. We have already made progress toward this objective with the addition of several high-caliber team members, and we are in the process of bringing on even more talent to further strengthen our capabilities.

“As we entered 2025, we have a new administration in place that has stressed from day one that the focus is going to be on securing the border and strengthening public safety and security across the homeland. While the safety of the homeland has and should always be a bi-partisan issue, the approach to how it is done varies. The new administration has made clear many of its policies and approaches to this problem already, with technology itself and technology-based solutions playing a key role in most if not all of them. Specifically, the January 20th Secure Our Borders Executive Order states that the United States will establish a physical wall and other barriers monitored and supported by adequate personnel and technology.

“To that point, we remain under the cloud of Continuing Resolution, which affects the whole of government to fund its ability to execute daily, at least beyond that which it was approved to do so the prior year. While the budget to fund this and other related activities is being addressed, we remain engaged with our customers already focused on these challenges, engagement which includes already funded efforts or those which are already budgeted.

“While we are heavily focused on the agencies directly tasked to solve these challenges, we also have a larger existing business with other agencies and commercial customers that we remain focused on as well. These customers are involved daily in similarly protecting the homeland, ranging from countering the illegal trafficking of narcotics with a focus on fentanyl, protecting critical infrastructure such as courthouses, office buildings, and sensitive sites, and enforcing the laws of the land on the streets of mainstream America.

“With the work we have already done, and the relationships we have established, we believe we are well positioned in 2025 and for the next several years to be an integral part of providing a solution for a well-defined and challenging problem that impacts every one of our shareholders.

“Lastly, we look forward to seeing some of you at our upcoming Analyst Technology Showcase on Friday, March 14, 2025, in Dripping Springs, Texas,” concluded Mr. Allen.

About Airship AI Holdings, Inc.

Founded in 2006, Airship AI (NASDAQ: AISP) is a U.S. owned and operated technology company headquartered in Redmond, Washington. Airship AI is an AI-driven video, sensor and data management surveillance platform that improves public safety and operational efficiency for public sector and commercial customers by providing predictive analysis of events before they occur and meaningful intelligence to decision makers. Airship AI’s product suite includes Outpost AI edge hardware and software offerings, Acropolis enterprise management software stack, and Command family of visualization tools.

For more information, visit https://airship.ai.

Forward-Looking Statements

The disclosure herein includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “forecast,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, (1) statements regarding estimates and forecasts of financial, performance and operational metrics and projections of market opportunity; (2) changes in the market for Airship AI’s services and technology, expansion plans and opportunities; (3) the projected technological developments of Airship AI; and (4) current and future potential commercial and customer relationships. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of Airship AI’s management and are not predictions of actual performance. These forward-looking statements are also subject to a number of risks and uncertainties, as set forth in the section entitled “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 28, 2025, and the other documents that the Company has filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. In addition, forward looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its assessments to change. However, while it may elect to update these forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Investor Contact:

Chris Tyson/Larry Holub
MZ North America
949-491-8235
AISP@mzgroup.us

AIRSHIP AI HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS As of December 31, 2024 and 2023
	December 31, 2024			December 31, 2023
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	11,414,830		$	3,124,413
Accounts receivable, net of allowance for credit losses of $0		1,226,757			1,648,904
Prepaid expenses and other		17,883			18,368
Income tax receivable		–			7,230
Total current assets		12,659,470			4,798,915

PROPERTY AND EQUIPMENT, NET		–			1,861

OTHER ASSETS
Other assets		165,960			182,333
Operating lease right of use asset		882,024			1,104,804

TOTAL ASSETS	$	13,707,454		$	6,087,913

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES:
Accounts payable – trade	$	759,480		$	2,908,472
Advances from founders		1,300,000			1,750,000
Accrued expenses		51,649			200,531
Senior Secured Convertible Promissory Notes		–			2,825,366
Current portion of operating lease liability		305,178			174,876
Deferred revenue- current portion		3,238,483			4,008,654
Total current liabilities		5,654,790			11,867,899

NON-CURRENT LIABILITIES:
Operating lease liability, net of current portion		638,525			943,702
Warrant liability		34,180,618			667,985
Earnout liability		23,304,808			5,133,428
Deferred revenue- non-current		2,951,850			4,962,126
Total liabilities		66,730,591			23,575,140

COMMITMENTS AND CONTINGENCIES (Note 9)

STOCKHOLDERS’ DEFICIT:
Preferred stock – no par value, 5,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023		–			–
Common stock – $0.0001 par value, 200,000,000 shares authorized, 30,588,413 and 22,812,048 shares issued and outstanding as of December 31, 2024 and 2023		3,056			2,281
Additional paid in capital		21,918,867			–
Accumulated deficit		(74,941,590	)		(17,476,700	)
Accumulated other comprehensive loss		(3,470	)		(12,808	)
Total stockholders’ deficit		(53,023,137	)		(17,487,227	)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	13,707,454		$	6,087,913

AIRSHIP AI HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME For the years ended December 31, 2024 and 2023
	Year Ended			Yar Ended
	December 31, 2024			December 31, 2023
NET REVENUES:
Product	$	18,716,196		$	7,439,045
Post contract support		4,334,017			4,692,487
Other services		–			168,052
Revenues		23,050,213			12,299,584
COST OF NET REVENUES:
Cost of Sales		10,843,766			4,767,159
Post contract support		1,679,692			1,681,267
Other services		–			86,841
Cost of revenue		12,523,458			6,535,267
GROSS PROFIT		10,526,755			5,764,317
RESEARCH AND DEVELOPMENT EXPENSES		2,804,894			2,729,492
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		11,226,974			9,675,190
TOTAL OPERATING EXPENSES		14,031,868			12,404,682
OPERATING LOSS		(3,505,113	)		(6,640,365	)
OTHER (EXPENSE) INCOME:
(Loss) gain from change in fair value of earnout liability		(18,171,380	)		21,976,349
(Loss) gain from change in fair value of warrant liability		(33,512,633	)		1,341,120
Loss from change in fair value of convertible debt		(141,636	)		(240,784	)
Loss on note conversion		(1,144,676	)		–
Interest expense, net		(1,003,096	)		(55,685	)
Other income (expense)		13,644			(9,501	)
Total other (expense) income, net		(53,959,777	)		23,011,499

(LOSS) INCOME BEFORE PROVISON FOR INCOME TAXES		(57,464,890	)		16,371,134

Provision for income taxes		–			–

NET (LOSS) INCOME		(57,464,890	)		16,371,134

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation income (loss), net		9,338			(2,702	)

TOTAL COMPREHENSIVE (LOSS) INCOME	$	(57,455,552	)	$	16,368,432

NET (LOSS) INCOME PER SHARE:
Basic	$	(2.34	)	$	1.20
Diluted	$	(2.34	)	$	0.80

Weighted average shares of common stock outstanding
Basic		24,585,955			13,671,376
Diluted		24,585,955			20,390,663

AIRSHIP AI HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2024 and 2023
	Year Ended			Year Ended
	December 31, 2024			December 31, 2023

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(57,464,890	)	$	16,371,134
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization		1,861			14,879
Stock-based compensation		1,078,344			715,727
Stock-based compensation- warrants		284,478			2,136,115
Amortization of operating lease right of use asset		222,780			596,556
Accelerated amortization of ROU asset – lease termination		–			265,130
Gain from lease termination		–			(344,093	)
Issuance of common stock for services		198,500			–
Noncash interest expense		1,008,419			–
Loss (gain) from change in fair value of warrant liability		33,512,633			(1,341,120	)
Loss (gain) from change in fair value of earnout liability		18,171,380			(21,976,349	)
Loss from change in fair value of convertible note		141,636			240,784
Loss on note conversion		1,144,676			–
Non cash interest, net		–			65,487
Changes in operating assets and liabilities:
Accounts receivable		422,147			(943,152	)
Prepaid expenses and other		485			(2,329	)
Other assets		16,373			(182,333	)
Operating lease liability		(174,875	)		(531,621	)
Payroll and income tax receivable		7,230			960,383
Accounts payable – trade and accrued expenses		(2,294,698	)		666,136
Deferred revenue		(2,780,447	)		(2,667	)
NET CASH USED IN OPERATING ACTIVITIES		(6,503,968	)		(3,291,333	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock and warrants for offering, net		7,290,000			–
Proceeds from convertible promissory note		–			2,584,582
Proceeds from warrant exercise, net		7,704,540			–
Advances from founders, net		(450,000	)		1,150,000
Proceeds from reverse recapitalization		–			2,809,792
Proceeds from stock option exercises		240,507			–
Repayment of small business loan and line of credit		–			(424,540	)

NET CASH PROVIDED BY FINANCING ACTIVITIES		14,785,047			6,119,834

NET INCREASE IN CASH AND CASH EQUIVALENTS		8,281,079			2,828,501

Effect from exchange rate on cash		9,338			(2,702	)

CASH AND CASH EQUIVALENTS, beginning of period		3,124,413			298,614

CASH AND CASH EQUIVALENTS, end of period	$	11,414,830		$	3,124,413

Supplemental disclosures of cash flow information:
Interest paid	$	11,913		$	21,438
Taxes paid	$	2,410		$	17,247

Noncash investing and financing
Elimination of advances to founders in connection with contribution of Zeppelin by shareholders	$	–		$	1,100,000
Elimination of payables to founders in connection with contribution of Zeppelin by shareholders	$	–		$	1,100,000
Issuance of common stock for debt interest payment	$	1,008,442		$	–
Issuance of common stock for debt conversion	$	4,114,831		$	–
Recognition of warrant liability	$	–		$	15,418
Recognition of right-of-use asset	$	–		$	1,162,152
Recognition of operating lease liability	$	–		$	1,162,152
Noncash activity related to Merger-
Recognition of warrant liability	$	–		$	2,009,105
Recognition of earnout liability	$	–		$	27,109,777
Recognition of accounts payable	$	–		$	1,500,000

The MIL Network –

March 4, 2025

MIL-OSI: Monroe Capital Corporation BDC Announces Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

CHICAGO, March 03, 2025 (GLOBE NEWSWIRE) — Monroe Capital Corporation (NASDAQ: MRCC) today announced its financial results for the fourth quarter and full year ended December 31, 2024. The Board of Directors of Monroe also declared its first quarter distribution of $0.25 per share, payable on March 31, 2025 to stockholders of record on March 14, 2025.

Except where the context suggests otherwise, the terms “Company,” “we,” “us,” and “our” refer to Monroe Capital Corporation (together with its subsidiaries).

Fourth Quarter 2024 Financial Highlights

Net Investment Income (“NII”) of $6.0 million, or $0.28 per share
Adjusted Net Investment Income (a non-GAAP measure described below) of $6.2 million, or $0.29 per share
Net increase (decrease) in net assets resulting from operations of $(1.7) million, or $(0.08) per share
Net Asset Value (“NAV”) of $191.8 million, or $8.85 per share
Paid quarterly dividend of $0.25 per share on December 30, 2024
Current annual cash dividend yield to stockholders of approximately 11.4%⁽¹⁾

Full Year 2024 Financial Highlights

NII of $24.5 million, or $1.13 per share
Adjusted Net Investment Income (a non-GAAP measure described below) of $25.0 million, or $1.15 per share
Net increase in net assets resulting from operations of $9.7 million, or $0.45 per share

Chief Executive Officer Theodore L. Koenig commented, “We are pleased to announce that we paid a $0.25 per share dividend during the fourth quarter. Our predominantly first lien portfolio continued to generate attractive risk-adjusted returns during the fourth quarter, with Adjusted Net Investment Income supporting a compelling 11.4% annualized dividend yield. We remain committed to prudent portfolio management, with a focus on maintaining the portfolio’s asset quality across varying economic environments.”

Monroe Capital Corporation is a business development company affiliate of the award-winning private credit investment firm and lender, Monroe Capital LLC.
_______________________
⁽¹⁾ Based on an annualized dividend and closing share price as of February 28, 2025.

Management Commentary

Adjusted Net Investment Income totaled $6.2 million, or $0.29 per share for the quarter ended December 31, 2024, a decrease from $6.6 million, or $0.31 per share for the quarter ended September 30, 2024. NAV decreased by $0.33 per share, or 3.6%, to $191.8 million or $8.85 per share as of December 31, 2024, compared to $198.9 million or $9.18 per share as of September 30, 2024. The decrease in NAV this quarter was primarily the result of net unrealized losses associated with a certain portfolio company, partially offset by NII in excess of the dividend paid during the quarter.

At quarter end, the Company’s debt-to-equity leverage increased from 1.50 times debt-to-equity at September 30, 2024 to 1.53 times debt-to-equity at December 31, 2024 as a result of the timing of certain portfolio company paydowns. These proceeds were used to pay down the revolving credit facility subsequent to year-end. We continue to focus on managing our investment portfolio and selectively redeploying capital resulting from future repayments.

Selected Financial Highlights
(in thousands, except per share data)

	December 31, 2024		September 30, 2024
Consolidated Statements of Assets and Liabilities data:	(audited)		(unaudited)
Investments, at fair value	$	457,048	$	474,259
Total assets	$	490,671	$	501,862
Net assets	$	191,762	$	198,893
Net asset value per share	$	8.85	$	9.18

	For the Quarters Ended
	December 31, 2024			September 30, 2024
Consolidated Statements of Operations data:	(unaudited)
Net investment income	$	6,022		$	6,481
Adjusted net investment income⁽²⁾	$	6,185		$	6,617
Net gain (loss)	$	(7,737	)	$	(1,515	)
Net increase (decrease) in net assets resulting from operations	$	(1,715	)	$	4,966

Per share data:
Net investment income	$	0.28		$	0.30
Adjusted net investment income⁽²⁾	$	0.29		$	0.31
Net gain (loss)	$	(0.36	)	$	(0.07	)
Net increase (decrease) in net assets resulting from operations	$	(0.08	)	$	0.23

_______________________
⁽²⁾ See Non-GAAP Financial Measure – Adjusted Net Investment Income below for a detailed description of this non-GAAP measure and a reconciliation from NII to Adjusted Net Investment Income. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company.

Portfolio Summary

	December 31, 2024			September 30, 2024
	(unaudited)
Investments, at fair value	$	457,048		$	474,259
Number of portfolio company investments		91			94
Percentage portfolio company investments on non-accrual⁽³⁾		3.4	%		3.1	%
Weighted average contractual yield⁽⁴⁾		10.2	%		11.0	%
Weighted average effective yield⁽⁴⁾		10.2	%		11.0	%

Asset class percentage at fair value:
First lien loans		79.1	%		80.0	%
Junior secured loans		6.5	%		6.4	%
Equity securities		14.4	%		13.6	%

_______________________
⁽³⁾ Represents portfolio loans or preferred equity investments on non-accrual status as a percentage of total investments at fair value.
⁽⁴⁾ Portfolio yield is calculated only on the portion of the portfolio that has a contractual coupon and therefore does not account for dividends on equity investments (other than preferred equity investments).

Financial Review

Results of Operations: Fourth Quarter 2024

NII for the quarter ended December 31, 2024 totaled $6.0 million, or $0.28 per share, compared to $6.5 million, or $0.30 per share, for the quarter ended September 30, 2024. Adjusted Net Investment Income was $6.2 million, or $0.29 per share, for the quarter ended December 31, 2024, compared to $6.6 million, or $0.31 per share, for the quarter ended September 30, 2024. Excluding the impact of the incentive fee limitations of $(1.2) million and $(0.7) million for the quarters ended December 31, 2024 and September 30, 2024, respectively, Adjusted Net Investment Income totaled $5.0 million, or $0.23 per share for the quarter ended December 31, 2024, a decrease from $5.9 million, or $0.27 per share for the quarter ended September 30, 2024. Please refer to the Company’s Form 10-K for additional information on the Company’s incentive fee structure and calculation.

Total investment income for the quarter ended December 31, 2024 totaled $14.0 million, compared to $15.7 million for the quarter ended September 30, 2024. Total investment income decreased by $1.7 million primarily due to the declining interest rate environment. The decrease in average invested assets and lower other income also contributed to the decrease in total investment income.

Total expenses for the quarter ended December 31, 2024 were $8.0 million, compared to $9.2 million for the quarter ended September 30, 2024. Excluding the impact of the incentive fee limitations, total expenses decreased by $0.7 million primarily due to lower interest and other debt financing expenses associated with the lower interest rate environment and a decrease in average debt outstanding during the quarter.

Net gain (loss) was $(7.7) million for the quarter ended December 31, 2024, compared to $(1.5) million for the quarter ended September 30, 2024. Unrealized losses associated with the change in fair value for a certain portfolio company was the primary driver of the net loss on investments during the quarter ended December 31, 2024.

The Company’s average portfolio mark decreased by 1.7%, from 93.9% of amortized cost as of September 30, 2024 to 92.2% of amortized cost as of December 31, 2024.

Net increase (decrease) in net assets resulting from operations was $(1.7) million, or $(0.08) per share, for the quarter ended December 31, 2024, compared to $5.0 million, or $0.23 per share, for the quarter ended September 30, 2024.

Results of Operations: Full Year 2024

NII for the year ended December 31, 2024 totaled $24.5 million, or $1.13 per share, compared to $23.2 million, or $1.07 per share, for the year ended December 31, 2023. Adjusted Net Investment Income was $25.0 million, or $1.15 per share, for the year ended December 31, 2024, compared to $24.1 million, or $1.11 per share, for the year ended December 31, 2023. Excluding the impact of the incentive fee limitations of $2.9 million for the year ended December 31, 2024 (no incentive fee limitations for the year ended December 31, 2023), Adjusted Net Investment Income totaled $22.1 million, or $1.01 per share, for the year ended December 31, 2024, a decrease from $24.1 million, or $1.11 per share, for the year ended December 31, 2023. Please refer to the Company’s Form 10-K for additional information on the Company’s incentive fee structure and calculation.

Total investment income for the year ended December 31, 2024 totaled $60.5 million, compared to $64.3 million for the year ended December 31, 2023. The decrease in investment income of $3.8 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, was primarily due to lower interest income and payment-in-kind (“PIK”) interest income. The reduction in interest income and PIK interest income was primarily driven by a decrease in average invested assets and the placement of additional portfolio companies on non-accrual status. Lower effective rates on the portfolio resulting from the declining interest rate environment during the second half of the year ended December 31, 2024 also contributed to the decrease in both interest income and PIK interest income. The decrease in interest income and PIK interest income was partially offset by an increase in other income, primarily driven by the reversal of $1.6 million in previously accrued fees related to the former loan investment in IT Global Holding LLC, which was recognized during the year ended December 31, 2023.

Total expenses for the year ended December 31, 2024 were $36.0 million, compared to $41.0 million for the year ended December 31, 2023. Excluding the impact of the incentive fee limitations, total expenses decreased by $2.1 million primarily due to lower interest and other debt financing expenses associated with a decrease in average debt outstanding during the quarter. Lower base management fees associated with the decline in invested assets during the year also contributed to the decrease in total expenses.

Net gain (loss) was $(14.8) million for the year ended December 31, 2024, compared to $(22.9) million for the year ended December 31, 2023. This net loss for the year ended December 31, 2024 was primarily due to mark-to-market losses from certain portfolio companies that were still held as of December 31, 2024. These unrealized losses were partially offset by mark-to-market gains in the rest of the portfolio, driven by spread tightening in the direct lending markets during the year.

The Company’s average portfolio mark decreased by 3.4%, from 95.6% of amortized cost as of December 31, 2023 to 92.2% of amortized cost as of December 31, 2024.

Net increase (decrease) in net assets resulting from operations was $9.7 million, or $0.45 per share, for the year ended December 31, 2024, compared to $0.4 million, or $0.02 per share, for the year ended December 31, 2023.

Liquidity and Capital Resources

As of December 31, 2024, the Company had $9.0 million in cash and cash equivalents, $163.9 million of debt outstanding on its revolving credit facility and $130.0 million of debt outstanding on its 2026 Notes. As of December 31, 2024, the Company had approximately $91.1 million available for additional borrowings on its revolving credit facility, subject to borrowing base availability.

MRCC Senior Loan Fund

MRCC Senior Loan Fund I, LLC (“SLF”) is a joint venture with Life Insurance Company of the Southwest (“LSW”), an affiliate of National Life Insurance Company. SLF invests primarily in senior secured loans to middle market companies in the United States. The Company and LSW have each committed $50.0 million of capital to the joint venture. As of December 31, 2024, the Company had made net capital contributions of $42.7 million in SLF with a fair value of $32.7 million, as compared to net capital contributions of $42.7 million in SLF with a fair value of $32.9 million as of September 30, 2024. During the quarter ended December 31, 2024, the Company received dividend income from SLF of $0.9 million, consistent with the $0.9 million received during the quarter ended September 30, 2024. SLF’s underlying investments are loans to middle-market borrowers that are generally larger than the rest of MRCC’s portfolio which is focused on lower middle-market companies. SLF’s average mark on the underlying investment portfolio decreased slightly during the quarter, from 87.0% of amortized cost as of September 30, 2024, to 86.8% of amortized cost as of December 31, 2024.

As of December 31, 2024, SLF had total assets of $104.2 million (including investments at fair value of $98.0 million), total liabilities of $38.7 million (including borrowings under the $110.0 million secured revolving credit facility with Capital One, N.A. (the “SLF Credit Facility”) of $38.2 million) and total members’ capital of $65.5 million. As of September 30, 2024, SLF had total assets of $107.8 million (including investments at fair value of $98.7 million), total liabilities of $42.0 million (including borrowings under the SLF Credit Facility of $41.5 million) and total members’ capital of $65.8 million.

Non-GAAP Financial Measure – Adjusted Net Investment Income

On a supplemental basis, the Company discloses Adjusted Net Investment Income (including on a per share basis) which is a financial measure that is calculated and presented on a basis of methodology other than in accordance with generally accepted accounting principles of the United States of America (“non-GAAP”). Adjusted Net Investment Income represents NII, excluding the net capital gains incentive fee and income taxes. The Company uses this non-GAAP financial measure internally in analyzing financial results and believes that this non-GAAP financial measure is useful to investors as an additional tool to evaluate ongoing results and trends for the Company. The management agreement with the Company’s advisor provides that a capital gains incentive fee is determined and paid annually with respect to realized capital gains (but not unrealized capital gains) to the extent such realized capital gains exceed realized and unrealized capital losses for such year. Management believes that Adjusted Net Investment Income is a useful indicator of operations exclusive of any net capital gains incentive fee as NII does not include gains associated with the capital gains incentive fee.

The following tables provide a reconciliation from NII (the most comparable GAAP measure) to Adjusted Net Investment Income for the periods presented (in thousands, except per share data):


	For the Quarters Ended
	December 31, 2024				September 30, 2024
	Amount		Per Share Amount		Amount		Per Share Amount
	(unaudited)
Net investment income	$	6,022	$	0.28	$	6,481	$	0.30
Net capital gains incentive fee		—		—		—		—
Income taxes, including excise taxes		163		0.01		136		0.01
Adjusted Net Investment Income	$	6,185	$	0.29	$	6,617	$	0.31

	For the Years Ended
	December 31, 2024				December 31, 2023
	Amount		Per Share Amount		Amount		Per Share Amount
	(unaudited)
Net investment income	$	24,532	$	1.13	$	23,249	$	1.07
Net capital gains incentive fee		—		—		—		—
Income taxes, including excise taxes		452		0.02		806		0.04
Adjusted Net Investment Income	$	24,984	$	1.15	$	24,055	$	1.11

Adjusted Net Investment Income may not be comparable to similar measures presented by other companies, as it is a non-GAAP financial measure that is not based on a comprehensive set of accounting rules or principles and therefore may be defined differently by other companies. In addition, Adjusted Net Investment Income should be considered in addition to, not as a substitute for, or superior to, financial measures determined in accordance with GAAP.

Fourth Quarter 2024 Financial Results Conference Call

The Company will host a webcast and conference call to discuss these operating and financial results on Monday, March 3, 2025 at 12:00 p.m. Eastern Time. The webcast will be hosted on a webcast link located in the Investor Relations section of the Company’s website at http://ir.monroebdc.com/events.cfm. To participate in the conference call, please dial (800) 715-9871 approximately 10 minutes prior to the call. Please reference conference ID # 7817000.

For those unable to listen to the live broadcast, the webcast will be available for replay on the Company’s website approximately two hours after the event.

For a more detailed discussion of the financial and other information included in this press release, please also refer to the Company’s Form 10-K for the year ended December 31, 2024, which was filed with the SEC (www.sec.gov) on Friday, February 28, 2025.

First Quarter 2025 Distribution

The Board of Directors of the Company declared its first quarter distribution of $0.25 per share, payable on March 31, 2025 to stockholders of record on March 14, 2025. In October 2012, the Company adopted a dividend reinvestment plan that provides for reinvestment of distributions on behalf of its stockholders, unless a stockholder elects to receive cash prior to the record date. When the Company declares a cash distribution, stockholders who have not opted out of the dividend reinvestment plan prior to the record date will have their distribution automatically reinvested in additional shares of the Company’s capital stock. The specific tax characteristics of the distribution will be reported to stockholders on Form 1099 after the end of the calendar year and in the Company’s periodic report filed with the SEC.


MONROE CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (in thousands, except per share data)

	December 31, 2024			September 30, 2024			December 31, 2023
	(audited)			(unaudited)			(audited)
Assets
Investments, at fair value:
Non-controlled/non-affiliate company investments	$	343,835		$	355,273		$	371,723
Non-controlled affiliate company investments		80,483			86,089			83,541
Controlled affiliate company investments		32,730			32,897			33,122
Total investments, at fair value (amortized cost of: $495,797, $505,008 and $510,876 respectively)		457,048			474,259			488,386
Cash and cash equivalents		9,044			4,070			4,958
Interest and dividend receivable		23,511			22,910			19,349
Other assets		1,068			623			493
Total assets	$	490,671		$	501,862		$	513,186
Liabilities
Debt	$	293,900		$	299,000		$	304,100
Less: Unamortized debt issuance costs		(1,925	)		(2,254	)		(3,235	)
Total debt, less unamortized debt issuance costs		291,975			296,746			300,865
Interest payable		2,903			1,351			3,078
Base management fees payable		1,965			2,006			2,100
Incentive fees payable		—			730			1,319
Accounts payable and accrued expenses		2,066			2,090			2,100
Directors’ fees payable		—			46			—
Total liabilities		298,909			302,969			309,462
Net Assets
Common stock, $0.001 par value, 100,000 shares authorized, 21,666, 21,666 and 21,666 shares issued and outstanding, respectively	$	22		$	22		$	22
Capital in excess of par value		297,712			298,127			298,127
Accumulated undistributed (overdistributed) earnings		(105,972	)		(99,256	)		(94,425	)
Total net assets	$	191,762		$	198,893		$	203,724
Total liabilities and total net assets	$	490,671		$	501,862		$	513,186
Net asset value per share	$	8.85		$	9.18		$	9.40

MONROE CAPITAL CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)

	For the Quarters Ended						For the Years Ended
	December 31, 2024			September 30, 2024			December 31, 2024			December 31, 2023
	(unaudited)						(audited)
Investment income:
Non-controlled/non-affiliate company investments:
Interest income	$	8,576		$	10,408		$	40,787		$	46,241
Payment-in-kind interest income		1,379			919			3,877			3,070
Dividend income		237			114			472			305
Other income		310			694			1,306			(679	)
Total investment income from non-controlled/non-affiliate company investments		10,502			12,135			46,442			48,937
Non-controlled affiliate company investments:
Interest income		1,300			1,202			4,963			5,140
Payment-in-kind interest income		1,247			1,402			5,284			6,337
Dividend income		56			56			220			283
Other income		18			—			18			—
Total investment income from non-controlled affiliate company investments		2,621			2,660			10,485			11,760
Controlled affiliate company investments:
Dividend income		900			900			3,600			3,600
Total investment income from controlled affiliate company investments		900			900			3,600			3,600
Total investment income		14,023			15,695			60,527			64,297
Operating expenses:
Interest and other debt financing expenses		5,113			5,517			21,917			22,847
Base management fees		1,965			2,006			8,056			8,603
Incentive fees		—			730			2,449			5,812
Professional fees		196			239			902			719
Administrative service fees		282			270			1,011			940
General and administrative expenses		233			270			964			1,174
Directors’ fees		49			46			244			147
Total operating expenses		7,838			9,078			35,543			40,242
Net investment income before income taxes		6,185			6,617			24,984			24,055
Income taxes, including excise taxes		163			136			452			806
Net investment income		6,022			6,481			24,532			23,249
Net gain (loss):
Net realized gain (loss):
Non-controlled/non-affiliate company investments		283			638			1,431			(38,769	)
Foreign currency forward contracts		—			—			—			1,756
Foreign currency and other transactions		—			—			—			(135	)
Net realized gain (loss)		283			638			1,431			(37,148	)
Net change in unrealized gain (loss):
Non-controlled/non-affiliate company investments		(1,139	)		(2,743	)		(8,211	)		22,154
Non-controlled affiliate company investments		(6,694	)		771			(7,656	)		(3,990	)
Controlled affiliate company investments		(167	)		(201	)		(392	)		(2,387	)
Foreign currency forward contracts		—			—			—			(1,507	)
Foreign currency and other transactions		(20	)		20			—			—
Net change in unrealized gain (loss)		(8,020	)		(2,153	)		(16,259	)		14,270
Net gain (loss)		(7,737	)		(1,515	)		(14,828	)		(22,878	)
Net increase (decrease) in net assets resulting from operations	$	(1,715	)	$	4,966		$	9,704		$	371
Per common share data:
Net investment income per share – basic and diluted	$	0.28		$	0.30		$	1.13		$	1.07
Net increase (decrease) in net assets resulting from operations per share – basic and diluted	$	(0.08	)	$	0.23		$	0.45		$	0.02
Weighted average common shares outstanding – basic and diluted		21,666			21,666			21,666			21,666

Additional Supplemental Information:

The composition of the Company’s investment income was as follows (in thousands):

	For the Quarters Ended				For the Years Ended
	December 31, 2024		September 30, 2024		December 31, 2024		December 31, 2023
	(unaudited)				(audited)
Interest income	$	9,468	$	11,303	$	44,283	$	49,779
Payment-in-kind interest income		2,626		2,321		9,161		9,407
Dividend income		1,193		1,070		4,292		4,188
Other income		328		694		1,324		(679	)
Prepayment gain (loss)		173		109		532		553
Accretion of discounts and amortization of premiums		235		198		935		1,049
Total investment income	$	14,023	$	15,695	$	60,527	$	64,297

The composition of the Company’s interest expense and other debt financing expenses was as follows (in thousands):

	For the Quarters Ended				For the Years Ended
	December 31, 2024		September 30, 2024		December 31, 2024		December 31, 2023
	(unaudited)				(audited)
Interest expense – revolving credit facility	$	3,227	$	3,630	$	14,380	$	15,319
Interest expense – 2026 Notes		1,555		1,555		6,220		6,220
Amortization of debt issuance costs		331		332		1,317		1,308
Total interest and other debt financing expenses	$	5,113	$	5,517	$	21,917	$	22,847

About Monroe Capital Corporation

Monroe Capital Corporation is a publicly-traded specialty finance company that principally invests in senior, unitranche and junior secured debt and, to a lesser extent, unsecured debt and equity investments in middle-market companies. The Company’s investment objective is to maximize the total return to its stockholders in the form of current income and capital appreciation. The Company’s investment activities are managed by its investment adviser, Monroe Capital BDC Advisors, LLC, which is an investment adviser registered under the Investment Advisers Act of 1940, as amended, and an affiliate of Monroe Capital LLC. To learn more about Monroe Capital Corporation, visit www.monroebdc.com.

About Monroe Capital LLC

Monroe Capital LLC (including its subsidiaries and affiliates, together “Monroe”) is a premier asset management firm specializing in private credit markets across various strategies, including direct lending, technology finance, venture debt, alternative credit, structured credit, real estate and equity. Since 2004, the firm has been successfully providing capital solutions to clients in the U.S. and Canada. Monroe prides itself on being a value-added and user-friendly partner to business owners, management, and both private equity and independent sponsors. Monroe’s platform offers a wide variety of investment products for both institutional and high net worth investors with a focus on generating high quality “alpha” returns irrespective of business or economic cycles. The firm is headquartered in Chicago and maintains 11 offices throughout the United States, Asia and Australia.

Monroe has been recognized by both its peers and investors with various awards including Inc’s 2024 Founder-Friendly Investors List; Private Debt Investor as the 2023 Lower Mid-Market Lender of the Decade, 2023 Lower Mid-Market Lender of the Year, 2023 CLO Manager of the Year, Americas; Global M&A Network as the 2023 Lower Mid-Markets Lender of the Year, U.S.A.; DealCatalyst as the 2022 Best CLO Manager of the Year; Korean Economic Daily as the 2022 Best Performance in Private Debt – Mid Cap; Creditflux as the 2021 Best U.S. Direct Lending Fund; and Pension Bridge as the 2020 Private Credit Strategy of the Year. For more information and important disclaimers, please visit www.monroecap.com.

Forward-Looking Statements

This press release may contain certain forward-looking statements. Any such statements, other than statements of historical fact, are likely to be affected by other unknowable future events and conditions, including elements of the future that are or are not under the Company’s control, and that the Company may or may not have considered; accordingly, such statements cannot be guarantees or assurances of any aspect of future performance. Actual developments and results are highly likely to vary materially from these estimates and projections of the future. Such statements speak only as of the time when made, and the Company undertakes no obligation to update any such statement now or in the future.

SOURCE: Monroe Capital Corporation

The MIL Network –

March 4, 2025

MIL-OSI: Ready Capital Corporation Reports Fourth Quarter 2024 Results and Declares First Quarter 2025 Dividends

Source: GlobeNewswire (MIL-OSI)

– GAAP LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS OF $(1.80) –
– DISTRIBUTABLE LOSS PER COMMON SHARE OF $(0.03) –
– DISTRIBUTABLE EARNINGS PER COMMON SHARE BEFORE REALIZED LOSSES OF $0.23 –
– DISTRIBUTABLE RETURN ON AVERAGE STOCKHOLDERS’ EQUITY BEFORE REALIZED LOSSES OF 7.1% –
– DECLARED A QUARTERLY CASH DIVIDEND OF $0.125 PER SHARE OF COMMON STOCK AND OPERATING PARTNERSHIP UNIT FOR THE QUARTER ENDING MARCH 31, 2025 –

NEW YORK, March 03, 2025 (GLOBE NEWSWIRE) — Ready Capital Corporation (“Ready Capital” or the “Company”) (NYSE: RC), a multi-strategy real estate finance company that originates, acquires, finances, and services lower-to-middle-market (“LMM”) investor and owner-occupied commercial real estate loans, today reported financial results for the quarter ended December 31, 2024 and declared dividends for the quarter ending March 31, 2025.

“The fourth quarter closes out a year of mixed results. On one hand, our Small Business Lending segment performed well, with significant origination growth reflecting the benefits of past investments. Meanwhile, our multi-family lending focused business faced challenges from higher rates, inflationary pressures, and lower rent growth,” said Thomas Capasse, Ready Capital’s Chairman and Chief Executive Officer. “Entering 2025, we have taken decisive actions to stabilize and better position our balance sheet going forward by fully reserving for all of our non-performing loans in our CRE portfolio. While this reduces our book value per share in the short term, we believe it provides a path to recovery in our net interest margin through the accelerated resolution of our non-performing loans to generate liquidity for reinvestment in higher-yielding new originations. Additionally, we have adjusted our dividend to $0.125 per share to align with anticipated cash earnings to preserve capital for reinvestment and share repurchases with potential upward bias co-incident with the recovery in earnings. We believe these actions will enable the Company to resume growth in both book value per share and the dividend as we move forward.”

Fourth Quarter Highlights

LMM commercial real estate originations of $436 million
Small Business Lending (“SBL”) loan originations of $348 million, including $315 million of Small Business Administration 7(a) loans
Book value of $10.61 per share of common stock as of December 31, 2024
Entered into a definitive merger agreement to acquire United Development Funding IV, a real estate investment trust providing capital solutions to residential real estate developers and regional homebuilders
Acquired approximately 5.8 million shares of the Company’s common stock at an average price of $7.35 per share as part of stock repurchase program
Issued $130 million in aggregate principal amount of 9.00% Senior Unsecured Notes due 2029

Full Year Highlights

GAAP Loss per common share from continuing operations of $(2.52)
Distributable earnings per common share before realized losses of $0.97
Distributable return on average stockholders’ equity before realized losses of 7.5%
Total LMM and SBL originations of $2.4 billion, including $1.1 billion of Small Business Administration 7(a) loans
Sold $7.6 billion in mortgage servicing rights in connection with the disposition of its residential mortgage banking segment
Completed the acquisitions of Madison One, a leading originator and servicer of USDA and SBA guaranteed loan product, and Funding Circle USA, Inc., an online lending platform that originates and services small business loans
Acquired approximately 10.3 million shares of the Company’s common stock at an average price of $7.95 per share as part of stock repurchase program

Subsequent Events

On January 16, 2025, the Board approved a new stock repurchase program authorizing the repurchase of up to $150 million of the Company’s common stock
On February 21, 2025, ReadyCap Holdings, LLC, a taxable REIT subsidiary of the Company, closed a private placement of $220 million in aggregate principal amount of its 9.375% Senior Secured Notes due 2028. The Company intends to use the net proceeds from the private placement to repay its indebtedness and for general corporate purposes

Dividends

The Company announced that its Board of Directors declared a quarterly cash dividend of $0.125 per share of common stock and Operating Partnership unit for the quarter ending March 31, 2025. The dividend is payable on April 30, 2025, to shareholders of record as of the close of business on March 31, 2025
Additionally, the Company announced that its Board of Directors declared quarterly cash dividends on its 6.25% Series C Cumulative Convertible Preferred Stock (the “Series C Preferred Stock”), and its 6.50% Series E Cumulative Redeemable Preferred Stock (the “Series E Preferred Stock”)
The Company declared a dividend of $0.390625 per share of Series C Preferred Stock payable on April 15, 2025, to Series C Preferred stockholders of record as of the close of business on March 31, 2025
The Company declared a dividend of $0.40625 per share of Series E Preferred Stock payable on April 30, 2025, to Series E Preferred stockholders of record as of the close of business on March 31, 2025

Use of Non-GAAP Financial Information

In addition to the results presented in accordance with U.S. GAAP, this press release includes distributable earnings, formerly referred to as core earnings, which is a non-U.S. GAAP financial measure. The Company defines distributable earnings as net income adjusted for unrealized gains and losses related to certain mortgage backed securities (“MBS”) not retained by us as part of our loan origination business, realized gains and losses on sales of certain MBS, unrealized gains and losses related to residential mortgage servicing rights (“MSR”) from discontinued operations, unrealized changes in our current expected credit loss reserve, unrealized gains or losses on de-designated cash flow hedges, unrealized gains or losses on foreign exchange hedges, unrealized gains or losses on certain unconsolidated joint ventures, non-cash compensation expense related to our stock-based incentive plan, and one-time non-recurring gains or losses, such as gains or losses on discontinued operations, bargain purchase gains, or merger related expenses.

The Company believes that this non-U.S. GAAP financial information, in addition to the related U.S. GAAP measures, provides investors greater transparency into the information used by management in its financial and operational decision-making, including the determination of dividends. However, because distributable earnings is an incomplete measure of the Company’s financial performance and involves differences from net income computed in accordance with U.S. GAAP, it should be considered along with, but not as an alternative to, the Company’s net income computed in accordance with U.S. GAAP as a measure of the Company’s financial performance. In addition, because not all companies use identical calculations, the Company’s presentation of distributable earnings may not be comparable to other similarly-titled measures of other companies.

In calculating distributable earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains and losses on MBS acquired by the Company in the secondary market but is not adjusted to exclude unrealized gains and losses on MBS retained by Ready Capital as part of its loan origination businesses, where the Company transfers originated loans into an MBS securitization and the Company retains an interest in the securitization. In calculating distributable earnings, the Company does not adjust Net Income (in accordance with U.S. GAAP) to take into account unrealized gains and losses on MBS retained by us as part of the loan origination businesses because the unrealized gains and losses that are generated in the loan origination and securitization process are considered to be a fundamental part of this business and an indicator of the ongoing performance and credit quality of the Company’s historical loan originations. In calculating distributable earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude realized gains and losses on certain MBS securities considered to be non-distributable. Certain MBS positions are considered to be non-distributable due to a variety of reasons which may include collateral type, duration, and size.

In addition, in calculating distributable earnings, Net Income (in accordance with U.S. GAAP) is adjusted to exclude unrealized gains or losses on residential MSRs, held at fair value from discontinued operations. Servicing rights relating to the Company’s small business commercial business are accounted for under ASC 860, Transfer and Servicing. In calculating distributable earnings, the Company does not exclude realized gains or losses on commercial MSRs, as servicing income is a fundamental part of Ready Capital’s business and is an indicator of the ongoing performance.

To qualify as a REIT, the Company must distribute to its stockholders each calendar year at least 90% of its REIT taxable income (including certain items of non-cash income), determined without regard to the deduction for dividends paid and excluding net capital gain. There are certain items, including net income generated from the creation of MSRs, that are included in distributable earnings but are not included in the calculation of the current year’s taxable income. These differences may result in certain items that are recognized in the current period’s calculation of distributable earnings not being included in taxable income, and thus not subject to the REIT dividend distribution requirement until future years.

The table below reconciles Net Income computed in accordance with U.S. GAAP to Distributable Earnings.

(in thousands)	Three Months Ended December 31, 2024			Year Ended December 31, 2024
Net Loss	$	(314,751	)	$	(430,398	)
Reconciling items:
Unrealized loss on MSR – discontinued operations		33,175			40,394
Unrealized gain on joint ventures		(5,015	)		(3,503	)
Increase in CECL reserve		277,277			272,964
Increase (decrease) in valuation allowance		(31,229	)		124,878
Non-recurring REO impairment		31,175			55,686
Non-cash compensation		2,826			8,510
Unrealized loss on preferred equity, at fair value		15,613			15,613
Merger transaction costs and other non-recurring expenses		6,579			17,432
Bargain purchase gain		—			(13,859	)
Realized losses on sale of investments		51,688			183,718
Total reconciling items	$	382,089		$	701,833
Income tax adjustments		(22,825	)		(89,504	)
Distributable earnings before realized losses	$	44,513		$	181,931
Realized losses on sale of investments, net of tax		(44,246	)		(153,571	)
Distributable earnings	$	267		$	28,360
Less: Distributable earnings attributable to non-controlling interests		3,113			8,167
Less: Income attributable to participating shares		2,248			9,125
Distributable earnings attributable to common stockholders	$	(5,094	)	$	11,068
Distributable earnings before realized losses on investments, net of tax per common share – basic and diluted	$	0.23		$	0.97
Distributable earnings per common share – basic and diluted	$	(0.03	)	$	0.07

U.S. GAAP return on equity is based on U.S. GAAP net income, while distributable return on equity is based on distributable earnings, which adjusts U.S. GAAP net income for the items Din the distributable earnings reconciliation above.

Webcast and Earnings Conference Call

Management will host a webcast and conference call on Monday, March 3, 2025 at 8:30am ET to provide a general business update and discuss the financial results for the quarter ended December 31, 2024. During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends that have occurred after quarter-end. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.

The Company encourages use of the webcast due to potential extended wait times to access the conference call via dial-in. The webcast of the conference call will be available in the Investor Relations section of the Company’s website at www.readycapital.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download and install any necessary audio software.

To Participate in the Telephone Conference Call:

Dial in at least five minutes prior to start time.

Domestic: 1-877-407-0792
International: 1-201-689-8263

Conference Call Playback:

Domestic: 1-844-512-2921
International: 1-412-317-6671
Replay Pin #: 13750356

The playback can be accessed through March 17, 2025.

Safe Harbor Statement

This press release contains statements that constitute “forward-looking statements,” as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; the Company can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from the Company’s expectations include, but are not limited to, applicable regulatory changes; general volatility of the capital markets; changes in the Company’s investment objectives and business strategy; the availability of financing on acceptable terms or at all; the availability, terms and deployment of capital; the availability of suitable investment opportunities; changes in the interest rates or the general economy; increased rates of default and/or decreased recovery rates on investments; changes in interest rates, interest rate spreads, the yield curve or prepayment rates; changes in prepayments of Company’s assets; the degree and nature of competition, including competition for the Company’s target assets; and other factors, including those set forth in the Risk Factors section of the Company’s most recent Annual Report on Form 10-K filed with the SEC, and other reports filed by the Company with the SEC, copies of which are available on the SEC’s website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

About Ready Capital Corporation

Ready Capital Corporation (NYSE: RC) is a multi-strategy real estate finance company that originates, acquires, finances and services lower-to-middle-market investor and owner occupied commercial real estate loans. The Company specializes in loans backed by commercial real estate, including agency multifamily, investor, construction, and bridge as well as U.S. Small Business Administration loans under its Section 7(a) program and government guaranteed loans focused on the United States Department of Agriculture. Headquartered in New York, New York, the Company employs approximately 500 professionals nationwide.

Contact
Investor Relations
Ready Capital Corporation
212-257-4666
InvestorRelations@readycapital.com

Additional information can be found on the Company’s website at www.readycapital.com.

READY CAPITAL CORPORATION UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands)	December 31, 2024			December 31, 2023
Assets
Cash and cash equivalents	$	143,803		$	138,532
Restricted cash		30,560			30,063
Loans, net (including $3,533 and $9,348 held at fair value)		3,378,149			4,020,160
Loans, held for sale (including $128,531 and $81,599 held at fair value and net of valuation allowance of $97,620 and $0)		241,626			81,599
Mortgage-backed securities		31,006			27,436
Investment in unconsolidated joint ventures (including $6,577 and $7,360 held at fair value)		161,561			133,321
Derivative instruments		7,963			2,404
Servicing rights		128,440			102,837
Real estate owned, held for sale		193,437			252,949
Other assets		362,486			300,175
Assets of consolidated VIEs		5,175,295			6,897,145
Assets held for sale		287,595			454,596
Total Assets	$	10,141,921		$	12,441,217
Liabilities
Secured borrowings		2,035,176			2,102,075
Securitized debt obligations of consolidated VIEs, net		3,580,513			5,068,453
Senior secured notes, net		437,847			345,127
Corporate debt, net		895,265			764,908
Guaranteed loan financing		691,118			844,540
Contingent consideration		573			7,628
Derivative instruments		352			212
Dividends payable		43,168			54,289
Loan participations sold		95,578			62,944
Due to third parties		1,442			3,641
Accounts payable and other accrued liabilities		188,051			207,481
Liabilities held for sale		228,735			333,157
Total Liabilities	$	8,197,818		$	9,794,455
Preferred stock Series C, liquidation preference $25.00 per share		8,361			8,361

Commitments & contingencies

Stockholders’ Equity
Preferred stock Series E, liquidation preference $25.00 per share		111,378			111,378
Common stock, $0.0001 par value, 500,000,000 shares authorized, 162,792,372 and 172,276,105 shares issued and outstanding, respectively		17			17
Additional paid-in capital		2,250,291			2,321,989
Retained earnings (deficit)		(505,089	)		124,413
Accumulated other comprehensive loss		(18,552	)		(17,860	)
Total Ready Capital Corporation equity		1,838,045			2,539,937
Non-controlling interests		97,697			98,464
Total Stockholders’ Equity	$	1,935,742		$	2,638,401
Total Liabilities, Redeemable Preferred Stock, and Stockholders’ Equity	$	10,141,921		$	12,441,217

READY CAPITAL CORPORATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)	Three Months Ended December 31, 2024			Year Ended December 31, 2024
Interest income	$	203,965		$	896,975
Interest expense		(153,911	)		(696,455	)
Net interest income before provision for loan losses	$	50,054		$	200,520
Provision for loan losses		(285,008	)		(292,759	)
Net interest income after provision for loan losses	$	(234,954	)	$	(92,239	)
Non-interest income
Net realized gain (loss) on financial instruments and real estate owned		(10,934	)		(54,000	)
Net unrealized gain (loss) on financial instruments		(17,025	)		(14,991	)
Valuation allowance, loans held for sale		31,229			(124,878	)
Servicing income, net of amortization and impairment of $7,756 and $21,972		4,112			16,556
Gain on bargain purchase		—			13,859
Income on unconsolidated joint ventures		6,065			10,886
Other income		13,557			50,803
Total non-interest income (expense)	$	27,004		$	(101,765	)
Non-interest expense
Employee compensation and benefits		(23,320	)		(82,522	)
Allocated employee compensation and benefits from related party		(3,350	)		(11,387	)
Professional fees		(7,557	)		(26,887	)
Management fees – related party		(5,518	)		(24,862	)
Loan servicing expense		(12,749	)		(46,656	)
Transaction related expenses		(4,878	)		(10,118	)
Impairment on real estate		(29,876	)		(56,503	)
Other operating expenses		(19,637	)		(63,572	)
Total non-interest expense	$	(106,885	)	$	(322,507	)
Loss from continuing operations before benefit for income taxes		(314,835	)		(516,511	)
Income tax benefit		17,318			104,512
Net loss from continuing operations	$	(297,517	)	$	(411,999	)
Discontinued operations
Loss from discontinued operations before benefit for income taxes		(22,978	)		(24,532	)
Income tax benefit		5,744			6,133
Net loss from discontinued operations	$	(17,234	)	$	(18,399	)
Net loss	$	(314,751	)	$	(430,398	)
Less: Dividends on preferred stock		1,999			7,996
Less: Net income attributable to non-controlling interest		1,389			5,357
Net loss attributable to Ready Capital Corporation	$	(318,139	)	$	(443,751	)

Earnings per common share from continuing operations – basic	$	(1.80	)	$	(2.52	)
Earnings per common share from discontinued operations – basic	$	(0.10	)	$	(0.11	)
Total earnings per common share – basic	$	(1.90	)	$	(2.63	)

Earnings per common share from continuing operations – diluted	$	(1.80	)	$	(2.52	)
Earnings per common share from discontinued operations – diluted	$	(0.10	)	$	(0.11	)
Total earnings per common share – diluted	$	(1.90	)	$	(2.63	)

Weighted-average shares outstanding
Basic		167,434,683			169,107,477
Diluted		168,845,426			170,472,273

Dividends declared per share of common stock	$	0.25		$	1.10

READY CAPITAL CORPORATION UNAUDITED SEGMENT REPORTING
	Three Months Ended December 31, 2024
(in thousands)	LMM Commercial Real Estate			Small Business Lending			Corporate-Other			Consolidated
Interest income	$	170,292		$	33,673		$	—		$	203,965
Interest expense		(131,128	)		(22,783	)		—			(153,911	)
Net interest income before provision for loan losses	$	39,164		$	10,890		$	—		$	50,054
Provision for loan losses		(279,483	)		(5,525	)		—			(285,008	)
Net interest income after provision for loan losses	$	(240,319	)	$	5,365		$	—		$	(234,954	)
Non-interest income
Net realized gain (loss) on financial instruments and real estate owned		(33,206	)		22,272			—			(10,934	)
Net unrealized gain (loss) on financial instruments		(19,629	)		2,604			—			(17,025	)
Valuation allowance, loans held for sale		31,229			—			—			31,229
Servicing income, net		1,761			2,351			—			4,112
Income on unconsolidated joint ventures		6,065			—			—			6,065
Other income		2,279			9,155			2,123			13,557
Total non-interest income (loss)	$	(11,501	)	$	36,382		$	2,123		$	27,004
Non-interest expense
Employee compensation and benefits		(4,741	)		(14,564	)		(4,015	)		(23,320	)
Allocated employee compensation and benefits from related party		(335	)		—			(3,015	)		(3,350	)
Professional fees		(1,639	)		(3,210	)		(2,708	)		(7,557	)
Management fees – related party		—			—			(5,518	)		(5,518	)
Loan servicing expense		(11,592	)		(1,157	)		—			(12,749	)
Transaction related expenses		—			—			(4,878	)		(4,878	)
Impairment on real estate		(29,876	)		—			—			(29,876	)
Other operating expenses		(4,257	)		(12,215	)		(3,165	)		(19,637	)
Total non-interest expense	$	(52,440	)	$	(31,146	)	$	(23,299	)	$	(106,885	)
Income (loss) before provision for income taxes	$	(304,260	)	$	10,601		$	(21,176	)	$	(314,835	)
Total assets	$	8,058,707		$	1,427,281		$	368,338		$	9,854,326

READY CAPITAL CORPORATION UNAUDITED SEGMENT REPORTING
	Year Ended December 31, 2024
(in thousands)	LMM Commercial Real Estate			Small Business Lending			Corporate-Other			Consolidated
Interest income	$	766,354		$	130,621		$	—		$	896,975
Interest expense		(598,846	)		(97,609	)		—			(696,455	)
Net interest income before provision for loan losses	$	167,508		$	33,012		$	—		$	200,520
Provision for loan losses		(283,800	)		(8,959	)		—			(292,759	)
Net interest income after provision for loan losses	$	(116,292	)	$	24,053		$	—		$	(92,239	)
Non-interest income
Net realized gain (loss) on financial instruments and real estate owned		(132,746	)		78,746			—			(54,000	)
Net unrealized gain (loss) on financial instruments		(20,588	)		5,597			—			(14,991	)
Valuation allowance, loans held for sale		(124,878	)		—			—			(124,878	)
Servicing income, net		5,759			10,797			—			16,556
Gain on bargain purchase		—			—			13,859			13,859
Income on unconsolidated joint ventures		10,876			10			—			10,886
Other income		22,605			23,424			4,774			50,803
Total non-interest income (loss)	$	(238,972	)	$	118,574		$	18,633		$	(101,765	)
Non-interest expense
Employee compensation and benefits		(25,821	)		(46,036	)		(10,665	)		(82,522	)
Allocated employee compensation and benefits from related party		(1,139	)		—			(10,248	)		(11,387	)
Professional fees		(4,963	)		(12,681	)		(9,243	)		(26,887	)
Management fees – related party		—			—			(24,862	)		(24,862	)
Loan servicing expense		(44,667	)		(1,989	)		—			(46,656	)
Transaction related expenses		—			—			(10,118	)		(10,118	)
Impairment on real estate		(56,428	)		(75	)		—			(56,503	)
Other operating expenses		(15,212	)		(36,108	)		(12,252	)		(63,572	)
Total non-interest expense	$	(148,230	)	$	(96,889	)	$	(77,388	)	$	(322,507	)
Income (loss) before provision for income taxes	$	(503,494	)	$	45,738		$	(58,755	)	$	(516,511	)
Total assets	$	8,058,707		$	1,427,281		$	368,338		$	9,854,326

The MIL Network –

March 4, 2025

MIL-OSI Global: Lack of justice in Indonesia’s climate plan may backfire, harming people and environment

Source: The Conversation – Indonesia – By Wira A. Swadana, Climate Action Senior Lead, World Resources Institute

Indonesia has developed several climate documents as pathways to curb climate change and adapt to its impacts. These impacts influence many elements of life, including displacement, the spread of infectious diseases, and even fatalities.

Some of these documents include Enhanced Nationally Determined Contributions, Long-Term Strategy for Low Carbon and Climate Resilience 2050 (LTS-LCCR), and Low Carbon Development Indonesia (LCDI).

As a scholar in social development and environmental policy, I conducted a descriptive analysis of more than five Indonesia’s climate documents to learn how the concept of a just transition is being integrated into Indonesia’s climate policies. My analisis reveals that the current narrative in those documents is limited to the outcomes of climate-related approaches.

I found that these climate documents have failed to adequately address the social and environmental aspects that are fundamental to a ‘just transition’ — a global effort to combat climate change and shift towards a sustainable economy while improving the condition of people and the environment.

Indonesia’s climate action is important because the country is home to vast tropical forests and extensive peatlands, which act as important carbon sinks. Yet, it remains one of the world’s largest emitters.

Indonesia’s just transition is essential as it supports global efforts to mitigate climate change while ensuring that the shift is more sustainable and inclusive. Neglecting these factors in the transition can risk equity, justice, and inclusion for affected communities and ecosystems in Indonesia’s climate actions.

The risks it posed

So far, Indonesia’s just transition narrative concentrates mainly on the energy sector. For instance, the government’s white paper on just transition, released in September last year, centres solely on the energy aspect.

Additionally, the use of the word just in the Just Energy Transition Partnership (JETP) — an international partnership aiming at speeding Indonesia’s renewable energy development and coal phase-out — has helped popularise the notion.

A just transition should include broader efforts to limit and adapt to climate change, given these changes directly impact communities. Despite its increasing recognition in the energy sector, just transition remains a long way from being completely integrated into Indonesia’s climate initiatives.

In the forestry sector, Indonesia’s strategy to apply Sustainable Forest Management (SFM) practices, which includes selective logging practices to minimise damage, may lead to the prohibition of traditional slash-and-burn farming in some areas. This threatens local communities that have long practised controlled burning as a sustainable land management method.

Similarly, under FOLU Net Sink 2030 — Indonesia’s plan to reduce emissions from forestry and land-use — the government has introduced community forestry initiatives to improve livelihood. However, the strategy does not yet address the potential consequences for people who rely on forests for their livelihoods and cultural heritage, which could be jeopardised by by SFM practices.

Moreover, Indonesia’s climate resilience strategies for coastal communities overlook the socio-cultural importance of fishing as a key source of income. For example, the government plans to provide business development training to assist fishing families in diversifying their income in response to extreme weather conditions. However, without acknowledging the deep cultural and economic ties these communities have to fishing, such initiatives risk being ineffective.

The cost we bear

The lack of justice in Indonesia’s transition agenda has backfired, with negative consequences for both people and the environment.

For example, the energy shift demands Indonesia to exploit more of its abundant nickel resources for EV batteries, particularly in central and eastern Indonesia. To assist nickel mining and processing, the government has implemented several policies.

While the nickel boom has helped resource-rich provinces like North Maluku and Central Sulawesi boost their economic growth, it has also had serious impacts. Indonesia’s greenhouse gas emissions climbed by 20% between 2022 and 2023, owing to the dependency on coal for nickel processing facilities.

Beyond emissions, nickel mining has also led to deforestation and pollution, affecting local communities who rely on natural resources for their livelihoods and cultural preservation, while also harming biodiversity in mining areas.

The expense of the nickel rush demonstrates how an unjust energy transition can exacerbate challenges faced by vulnerable communities and further degrade the environment.

Next steps

To integrate just transition principles effectively, Indonesia must first redefine the term ‘just transition’ within its own context. Currently, the term has not been properly incorporated into any of Indonesia’s climate-related documents.

A clear and context-specific definition will allow Indonesia to pursue a transition that is both equitable and inclusive.

To accomplish this, the government must engage a wide range of stakeholders in defining and planning the transition to all climate-related initiatives. This encompasses, but is not limited to, all sectors. The goal is to secure broad participation — not only from the public and private sectors, but also from local communities, vulnerable groups including women and Indigenous peoples, as well as other key actors.

A more defined concept and well-structured plan will make it easier to implement, monitor, and evaluate the change. Simultaneously, this inclusive strategy should ensure a fair and equitable distribution of both benefits and burdens. All actors must be able to participate in decision-making and take action prior to and during the transition process.

Indonesia must also have a robust monitoring and evaluation mechanism in place to support its climate actions. The country can learn from Scotland, which has developed a just transition framework with clear outcomes and measurable indicators while ensuring participation and continuous learning from all stakeholders.

Drawing on insights from existing literature and reports will help Indonesia develop a framework that is well-suited to its unique context.

Wira A. Swadana tidak bekerja, menjadi konsultan, memiliki saham, atau menerima dana dari perusahaan atau organisasi mana pun yang akan mengambil untung dari artikel ini, dan telah mengungkapkan bahwa ia tidak memiliki afiliasi selain yang telah disebut di atas.

– ref. Lack of justice in Indonesia’s climate plan may backfire, harming people and environment – https://theconversation.com/lack-of-justice-in-indonesias-climate-plan-may-backfire-harming-people-and-environment-249246

MIL OSI – Global Reports –

March 3, 2025

MIL-Evening Report: Leakage is a risk with carbon storage projects – NZ’s new framework must be clear on how to deal with this liability

Source: The Conversation (Au and NZ) – By David Dempsey, Associate Professor in Natural Resources Engineering, University of Canterbury

Shutterstock/Oksana Bali

The government recently announced a framework to regulate carbon capture, utilisation and storage (CCUS) by New Zealand companies.

Energy and Climate Change Minister Simon Watts outlined new rules that would allow emitters to capture their carbon dioxide (CO₂) emissions and inject them underground for permanent disposal. They would then avoid having to pay for those emissions under the Emissions Trading Scheme.

Globally, CCUS is currently used mostly by coal or gas-fired power stations, liquefied natural gas plants and petroleum refineries. There are 41 commercial operations around the world, and they capture about 40 million tonnes of CO₂ annually.

Our peers (Australia, the United States and the European Union) already have CCUS frameworks and storage projects. The Intergovernmental Panel on Climate Change acknowledges CCUS’s role in curbing emissions, but highlights challenges in scaling and technology readiness.

New Zealand faces the challenge of reducing emissions from strategic industries such as steel, concrete, fossil fuels and their derivatives (methanol, ammonia). CCUS has been tabled as an interim solution, strongly supported by the fossil fuel industry. However, critics warn it could reduce incentives to phase out fossil fuels.

The government argues its CCUS framework aligns New Zealand with international standards. This claim has merit insofar as successful climate action is likely to require international collaboration and technology transfer.

CCUS in New Zealand could enable reinjection of CO₂ produced from the Kapuni gas field in Taranaki, with “utilisation” involving diverting some of the gas for use in the food and beverage or horticulture industries.

However, leakage of CO₂ from long-term disposal sites is a major technical risk and New Zealand’s framework must be clear on how it would deal with this liability.

A bubbling sping near Lake Boehmer emits noxious fumes.
Elizabeth Conley/Houston Chronicle via Getty Images

Lake Boehmer and how things might go wrong

Rules for CCUS projects generally require operators to monitor, report and remedy any leakage of CO₂. But because the industry is young, it is useful to take a broader look at geological leakage in the past to reveal how future challenges play out.

Lake Boehmer, in the the Permian Basin of West Texas, wasn’t always there. But 20 years ago an old irrigation well started leaking saltwater and hasn’t stopped since.

The well was drilled in 1951 by an oil and gas company. No oil was discovered so the well was handed over to the landowner for irrigation. The well produced water, but also poisonous hydrogen sulphide, enough to kill a farmhand in 1953.

In the 1990s, the well started leaking. Water from a deep aquifer had pushed its way up alongside the well through geological layers of salt. The water dissolved the salt, worsening the leak, and emerged from underground three times saltier than seawater.

The Railroad Commission, which regulates the oil and gas industry in Texas, says they are not liable to plug the well because they only have jurisdiction over oil wells. The original operator, which is claimed to have promised to plug the well “any time it becomes polluted with mineral water”, is no longer in business. No one can find the landowner.

After 20 years, Lake Boehmer has grown to 60 acres. Its shore is rimmed in salt crystals and the odd dead bird from hydrogen sulphide exposure. No one can agree who should fix it.

Could something similar happen with CCUS? Exacerbating factors in the Boehmer case include deterioration of an aged well – it’s almost 50 years since leakage started – and the absence of a backstop party as the final holder of liability. Both could happen with CCUS under the wrong circumstances.

Better ways of dealing with leakage

The Decatur CCUS project in the US state of Illinois has been injecting CO₂ produced from corn ethanol two kilometres deep into sandstone. Over about a decade, 4.5 million tonnes of CO₂ has been injected – emissions diverted from the atmosphere.

The US government imposes strict monitoring rules on CCUS projects. Special monitoring wells are drilled into the disposal aquifer to measure pressure changes and how far the CO₂ has travelled.

Unfortunately, one of these wells started to leak, possibly due to corrosion. It allowed about 8,000 tonnes of CO₂ to escape into overlying geological layers.

This is rightly concerning, but to put it into perspective, the size of the leak is 0.2% of the injected CO₂ volume and none of it has escaped to the atmosphere or shallow groundwater. The leak was detected, the US Environmental Protection Agency (EPA) intervened, issuing a notice that the leak be remediated, and the company plugged the well.

This illustrates a functioning CCUS framework. Monitoring requirements ensured the leak was discovered and the regulator was empowered to dictate remedial action.

However, critics have questioned the timeliness of the operator’s disclosure. The site remains on hold but may resume operations if the EPA is satisfied with the fix.

Lessons for New Zealand

A proposal circulated last year suggests the government will model its legislation on Australia and the EU, with CCUS operators being responsible for leaks during disposal operations and for a time after site closure.

This is like the Decatur situation. It makes sense for operators to fix leaks because they have the technical expertise and are the direct financial beneficiaries of emissions disposal.

It gets trickier on generational time frames. Companies can go out of business or might leave the country. In these cases, the government is liable for long-term leakage and may seek financial security from the operator to cover future costs.

A leak arising decades after closure could be more difficult to detect and costly to fix, especially if held up by a protracted fight around liability. This is the Lake Boehmer example.

Some CCUS seems inevitable if the world is to meet climate targets. It is therefore important to prepare for the possibility of a leak by having robust practices and clear responsibility.

Although it may seem unfair to burden future generations with looking after CO₂ disposal sites, we argue it is preferable to a legacy that has those same climate-warming gases in the atmosphere.

David Dempsey receives funding from MBIE for research into carbon dioxide removal.

Andrew La Croix receives funding from MBIE for research into carbon dioxide removal.

– ref. Leakage is a risk with carbon storage projects – NZ’s new framework must be clear on how to deal with this liability – https://theconversation.com/leakage-is-a-risk-with-carbon-storage-projects-nzs-new-framework-must-be-clear-on-how-to-deal-with-this-liability-251006

MIL OSI Analysis – EveningReport.nz –

March 3, 2025

MIL-OSI Asia-Pac: Union Minister Dr. Jitendra Singh hosted a high-level European Union delegation led by Commissioner Andrius Kubilius and Space Sector experts

Source: Government of India (2)

Union Minister Dr. Jitendra Singh hosted a high-level European Union delegation led by Commissioner Andrius Kubilius and Space Sector experts

India – EU interactions in the field of space has a long history and is growing strong, says MoS, Dept. Of Space

Dr. Singh hails India’s achievements in Space as a global benchmark, acknowledging its growth in space sector

India would be a major player in 21st century’s Space exploration announces S&T minister

Dr. Jitendra Singh credits Prime Minister Modi for the Space Vision 2047 which aligns with the objectives of Viksit Bharat@2047

ISRO to host the Global Conference on Space Exploration (GLEX) in association with the International Astronautical Federation in May 2025 in New Delhi informs Dr. Singh

Posted On: 28 FEB 2025 7:07PM by PIB Delhi

NEW DELHI, February 28: Union Minister Dr. Jitendra Singh hosted a high-level European Union delegation led by Commissioner Andrius Kubilius, along with space sector experts, in New Delhi today. The delegation engaged in discussions regarding ongoing and future cooperation between India and Europe in the field of space exploration. On the Indian side, Shri V. Narayanan, Chairman of ISRO and Secretary of the Department of Space, along with other senior space scientists, attended the meeting.

Addressing the EU delegation, Union Minister of State (Independent Charge) for Science and Technology; Earth Sciences and Minister of State for PMO, Department of Atomic Energy, Department of Space, Personnel, Public Grievances and Pensions, Dr. Jitendra Singh said “India – EU interactions in the field of space has a long history and is growing strong”. Tracing India’s space journey, which spans over six decade she hailed India’s achievements in Space as global benchmark, acknowledging its growth in space sector in the last decade.

“India has acquired independent capabilities in building, launching, and operating satellites, as well as deriving applications from these satellites to benefit society,” said Dr. Singh. He further emphasized recent successes, such as the Chandrayaan-3 mission, the SPADEX mission, and the ongoing progress of the Gaganyaan mission. Dr. Singh announced that India would be a major player in 21^st century’s Space exploration.

Highlighting India’s dynamic space vision under the leadership of Prime Minister Narendra Modi, which is aligned with the broader goal of making India a Viksit Bharat@2047. Dr. Singh credited Prime Minister Modi’s leadership for laying the foundation of India’s ambitious space agenda, which includes the continuation of the Gaganyaan program, India’s human spaceflight mission, the establishment of India’s space station – “Bharatiya Antariksh Station,” and an Indian landing on the Moon.

Highlighting the long-standing cooperation between India and Europe in space exploration, Dr. Singh stated that the collaboration has been vast and enriching. The Indian Space Research Organisation (ISRO) collaborates with the European Space Agency (ESA), space agencies of individual European nations, and entities like EUMETSAT. European industries have also contributed to India’s space program, with notable examples of support, including the development of liquid engines, the launch of India’s first experimental communication satellite, and ESA’s assistance in the Aditya and Chandrayaan-3 missions.

Dr. Singh also drew attention to the rapid expansion of India’s space program, noting that from the late 2000s, India’s space missions have included studies of the Moon, Mars, and the Sun, with plans for human spaceflight missions.

Dr. Jitendra Singh informed the delegation that, earlier, the Indian Space Research Organisation (ISRO) was the sole entity responsible for space activities. However, under the leadership of Prime Minister Narendra Modi, space sector reforms were introduced in 2020 to open the sector for private investment. A new entity, the Indian National Space Promotion and Authorization Center (IN-SPACe), was established to promote and authorize space activities by non-governmental entities.

The Science and Technology Minister also highlighted the burgeoning startup revolution in India’s space sector. With more than 200 startups engaging in rocket building, satellite manufacturing, ground segment operations, and application development, the sector is rapidly growing. Many of these startups have also established a presence in Europe, marking a new chapter in global space collaboration.

Reflecting on future missions, Dr. Singh emphasized that India’s expanded space program, which includes human spaceflight, space stations, and advancements in rocket technologies, alongside the emerging private space industry, offers a strong foundation for deepening India-Europe space relations.

Dr. Jitendra Singh informed the delegation that ISRO will be hosting the Global Conference on Space Exploration (GLEX) in association with the International Astronautical Federation in May 2025 in New Delhi. He extended a warm invitation to all stakeholders in the European space ecosystem to participate in this landmark event.

Along with Commissioner Andrius KUBILIUS; Mr. Benjamin HARTMANN, Cabinet Expert;Capt (N) Mr. Fabrizio FALZI, EU Defence Attache were part of the delegation.

The high-level meet also witnessed participation of Dr. Rajiv Jyoti, Director, IN-SPACe; Mr. M. Ganesh Pillai, Scientific Secretary, ISRO; Dr. D. Gowrisankar, Director, Office of International and Inter-agency Cooperation (OIIC), ISRO HQ; Mr. Prashant Jha, OSD, MOS Office; Mr. M. S. Anurup, Director, Space Transportation Programme Office, ISRO HQ.; Dr. Rajeev Jaiswal, OSD, DOS and Ms. Seema Pujani, Deputy Secretary, D&ISA, MEA

Concluding the discussions, Dr. Jitendra Singh expressed his delight at hosting the EU delegation and acknowledged the significant interest shown by Commissioner Andrius Kubilius in strengthening space cooperation. He emphasized that space is the future, and the collaboration between India and Europe will continue to drive progress and innovation in this critical field.

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NKR/PSM

(Release ID: 2107054) Visitor Counter : 51

MIL OSI Asia Pacific News –

March 1, 2025

MIL-OSI Europe: Answer to a written question – Suspension of shipping services in Spanish and European ports – E-000221/2025(ASW)

Source: European Parliament

European ports, as critical gateways for international trade and important hubs of activity, are essential for the success of EU industry and economy as a whole.

This has notably been recognised in the Commission’s priorities through the planning of a new strategy that will highlight the role that European ports and maritime industry will play in the future EU economy.

All sectors, including maritime transport, need to contribute to the EU climate neutrality objective. While there may be many different economic and operational factors influencing shipping companies’ routes decisions, the Commission takes the possible risks of evasive behaviour very seriously.

A specific preventive measure against such risks had already been agreed during co-decision: it consists in disregarding, for the purposes of the EU Emissions Trading System (ETS), stops by containerships at certain neighbouring container transhipment ports that meet specific criteria. Tanger Med and East Port Said have been identified as such ports.

Furthermore, the EU ETS Directive[1] includes a reporting and review clause that obliges the Commission to monitor and to report every two years on the implementation of the ETS extension to maritime transport, notably with the objective to detect evasive behaviours at an early stage and if appropriate, to propose measures to ensure the effective implementation of the directive.

The first report is expected in the coming weeks and the Commission will continue monitoring the situation very closely.

[1] Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a system for greenhouse gas emission allowance trading within the Union and amending Council Directive 96/61/EC (OJ L 275 25.10.2003, p. 32).

Last updated: 28 February 2025

MIL OSI Europe News –

March 1, 2025

MIL-OSI: Fluent Announces Unaudited Fourth Quarter and Full-Year 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

Revenue of $65.4 million for Q4 2024 and $254.6 million for FY 2024
Q4 2024 Commerce Media Solutions revenue grew 139% to $17.2 million (26% of consolidated revenue) from $7.2 million (10% of revenue) in Q4 2023 with gross profit margin (exclusive of depreciation and amortization) of 39% in Q4 2024 compared to 21% for the consolidated business
Commerce Media Solutions annual revenue run rate currently exceeds $60 million, representing a 20% quarter-over-quarter increase, which demonstrates strong traction in executing a strategic pivot to a fast-growing market

NEW YORK, Feb. 28, 2025 (GLOBE NEWSWIRE) — Fluent, Inc. (NASDAQ: FLNT), a commerce media solutions company, today reported unaudited results for the fourth quarter and fiscal year ended December 31, 2024. These results are preliminary and subject to ongoing audit procedures.

Donald Patrick, Fluent’s Chief Executive Officer, commented, “In the fourth quarter and full year 2024 we continued to execute on our strategic pivot into our Commerce Media Solutions business. As part of this repositioning, we discontinued the ACA business in the third quarter of 2024, and due to a change in estimate driven by a higher than anticipated attrition rate partly related to the continuing impacts of regulatory challenges in the marketplace, we recorded a write-down of accounts receivables and an equal offset of revenue of $2.5 million in Q4. The impact of this $2.5 million write-down is reflected equally in consolidated revenue, gross profit, and net loss. Most important, the core driver to our evolving business model – Commerce Media Solutions – is performing exceptionally well, with revenue increasing 139% year-over-year to $17.2 million in the fourth quarter, and 284% over full year 2023 to $41.3 million supported by the addition of top-tier media partners throughout 2024. With our visibility today, we expect to continue the trend of triple-digit year-over-year revenue growth of our Commerce Media Solutions business in 2025.”

Mr. Patrick concluded, “We are pleased with the increasing momentum of our growth strategies this year and are confident about the trajectory of our business as we build a more predictable, profitable and valuable business over time.”

Fourth Quarter Highlights (Unaudited)

Revenue of $65.4 million, a decrease of 10.1% compared to $72.8 million in Q4 2023.
- Owned and Operated revenue decreased 23% to $38.2 million compared to $49.9 million in Q4 2023 as the Company executed its shift in focus and revenue mix to higher margin Commerce Media Solutions
- Commerce Media Solutions revenue increased 139% to $17.2 million compared to $7.2 million in Q4 2023
Net loss of $3.4 million, or $0.19 per share, compared to net loss of $1.9 million, or $0.14 per share, for Q4 2023. Net loss represented 5.2% of revenue for Q4 2024.
Gross profit (exclusive of depreciation and amortization) of $13.9 million, a decrease of 33.3% over Q4 2023 and representing 21% of revenue. The Company’s growing Commerce Media Solutions business reported gross profit (exclusive of depreciation and amortization) of $6.7 million, representing 39% of revenue, for Q4 2024, up from 18% of revenue in Q4 2023.
Media margin of $16.5 million, a decrease of 31.4% over Q4 2023 and representing 25.3% of revenue. The Company’s growing Commerce Media Solutions business reported media margins of 39.3% for Q4 2024, up from 18.5% in Q4 2023.
Adjusted EBITDA of negative $1.7 million, a decrease of $4.2 million compared to Q4 2023 and representing 2.6% of revenue
Adjusted net loss of $3.3 million, or $0.18 per share, compared to adjusted net loss of $0.4 million, or $0.03 per share, for Q4 2023
Revenue, net loss, gross profit, media margin, adjusted EBITDA and adjusted net loss were all impacted by a $2.5 million write-down during the fourth quarter associated with the previously discontinued ACA business. This write-down caused adjusted EBITDA to be negative for the quarter.

Full-Year 2024 Highlights (Unaudited)

Revenue of $254.6 million, a decrease of 14.7% compared to $298.4 million in 2023.
- Owned and Operated revenue decreased 29% to $168.4 million compared to $235.7 million in 2023 as the Company executed its shift in focus and revenue mix to higher margin Commerce Media Solutions
- Commerce Media Solutions revenue increased 284% to $41.3 million compared to $10.7 million in 2023
Net loss of $29.3 million, or $1.80 per share, compared to net loss of $63.2 million, or $4.59 per share, for the prior year. Net loss represented 11.5% of revenue for 2024.
Gross profit (exclusive of depreciation and amortization) of $60.8 million, a decrease of 22.6% over 2023 and representing 24% of revenue. The Company’s growing Commerce Media Solutions business reported gross profit (exclusive of depreciation and amortization) of $14.3 million, representing 35% of revenue, for the twelve months ended December 31, 2024, up from 8% of revenue, for the twelve months ended December 31, 2023.
Media margin of $72.5 million, a decrease of 20.6% over prior year and representing 28.5% of revenue. The Company’s growing Commerce Media Solutions business reported media margins of 35.1% for 2024, up from 8.5% for 2023.
Adjusted EBITDA of negative $5.6 million, a decrease of $12.4 million compared to 2023 and representing 2.2% of revenue
Adjusted net loss of $18.5 million, or $1.14 per share, compared to adjusted net income of $7.2 million, or $0.52 per share, for the prior year

Media margin, adjusted EBITDA, and adjusted net income are non-GAAP financial measures, as defined and reconciled below.

Business Outlook & Goals

Further establish Fluent’s Commerce Media Solutions business as a leader in the performance marketing sector among both media partners and advertisers to capitalize on the growing demand for this advertising channel across numerous high volume market verticals.
Drive double-digit revenue growth, improvement in net loss as compared to 2024, and positive adjusted EBITDA for full-year 2025 supported by the growth of Fluent’s Commerce Media Solutions. These improvements are expected to occur in the second half of 2025 as Commerce Media Solutions continues to scale as a percentage of consolidated revenue.
Leverage 14-year leadership position at the forefront of customer acquisition and robust database of first-party user data to differentiate Fluent from competitors in the commerce media space.

Update on SLR Credit Facility

On January 30, 2025, we entered into a letter agreement with Crystal Financial LLC D/B/A SLR Credit Solutions, as administrative agent, lead arranger and bookrunner (“SLR”), pursuant to which SLR extended the deadline for delivery of the compliance certificate required under the credit agreement for the fiscal month ended December 31, 2024, and the related notice of default, to March 4, 2025, while the parties negotiate a fourth amendment to the credit agreement.

While we expect to enter into a fourth amendment to the credit agreement, there can be no assurance that we will be able to enter into definitive agreements for such amendment prior to March 4, 2025 or that such deadline will be extended if we are unable to enter into any such agreement. We have not always met our projections in recent quarters, and we do not expect to be in compliance with the existing financial covenants during the next twelve months under our current credit agreement. In the near term, we expect we will need to raise additional capital, but there can be no assurance that additional capital will be available when needed.

The financial statements included in our Form 10-Q for the three months ended September 30, 2024 contained a note expressing substantial doubt about our ability to continue as a going concern over the subsequent twelve months. This determination will be reevaluated at the issuance date of our Form 10-K for the fiscal year ended December 31, 2024 based on the status of the credit agreement, as potentially amended, in place at that time, our anticipated ability to satisfy covenants contained in such agreement, and other factors consistent with GAAP.

Conference Call

Fluent, Inc. will host a conference call on Friday, February 28, 2025, at 9:00 AM ET to discuss its 2024 fourth quarter and full-year financial results. The conference call can be accessed by phone after registering online at https://register.vevent.com/register/BI37035592191f4c689c3ed890713040ab. The call will also be webcast simultaneously on the Fluent website at https://investors.fluentco.com/. Following the completion of the earnings call, a recorded replay of the webcast will be available for those unable to participate. To listen to the telephone replay, please connect via https://edge.media-server.com/mmc/p/rudtccas. The replay will be available for one year, via the Fluent website https://investors.fluentco.com.

About Fluent, Inc.

Fluent, Inc. (NASDAQ: FLNT) is a commerce media solutions provider connecting top-tier brands with highly engaged consumers. Leveraging diverse ad inventory, robust first-party data, and proprietary machine learning, Fluent unlocks additional revenue streams for partners and empowers advertisers to acquire their most valuable customers at scale. Founded in 2010, Fluent uses its deep expertise in performance marketing to drive monetization and increase engagement at key touchpoints across the customer journey. For more insights visit http://www.fluentco.com/.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

The matters contained in this press release may be considered to be “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Those statements include statements regarding the intent, belief or current expectations or anticipations of Fluent and members of our management team. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following:

Compliance with a significant number of governmental laws and regulations, including those regarding telemarketing, text messaging, privacy, and data;
The financial impact of compliance changes to our business, including changes to our employment opportunities marketplace and programmatic advertising businesses, and whether and when our competitors will implement similar changes;
The outcome of litigation, regulatory investigations, or other legal proceedings in which we are involved or may become involved;
Failure to safeguard the personal information and other data contained in our database;
Unfavorable publicity and negative public perception about the digital marketing industry;
Failure to adequately protect intellectual property rights or allegations of infringement of intellectual property rights;
Unfavorable global economic conditions, including as a result of health concerns, terrorist attacks or civil unrest;
Dependence on our key personnel and ability to attract or retain employees;
Dependence on and liability related to actions of third-party service providers;
A decline in the supply or increase in the price of media available;
Ability to compete in an industry characterized by rapidly-evolving standards and internet media and advertising technology;
Failure to compete effectively against other online marketing and advertising companies or respond to changing user demands;
Competition for web traffic and dependence on third-party publishers, internet search providers and social media platforms for a significant portion of visitors to our websites;
Dependence on emails, text messages, and telephone calls, among other channels, to reach users for marketing purposes;
Credit risk from certain clients;
Limitations on our or our third-party publishers’ ability to collect and use data derived from user activities;
Ability to remain competitive with the shift to mobile applications;
Failure to detect click-through or other fraud on advertisements;
Fluctuations in fulfillment costs;
Dependence on the gaming industry;
Failure to meet our clients’ performance metrics or changing needs;
Pricing pressure by certain clients and the ability of our marketplace to respond through allocating traffic to higher paying clients;
Compliance with the covenants of our credit agreement in light of current business conditions, the current uncertainty of which raises substantial doubt about our ability to continue as a going concern;
Our likely need to raise capital to address non-compliance with covenants in our credit agreement with SLR and/or otherwise fund our operations;
Ability to timely enter into a fourth amendment to the credit agreement with SLR;
Potential limitations on the use of the revolving credit line under our credit agreement to fund operating expenses based on the amount and character of accounts receivable at any given time and our ability to meet our financial forecast;
Potential for failures in our internal control over financial reporting;
Ability to maintain listing of our securities on the Nasdaq Capital Market; and
Management of the growth of our operations, including international expansion and the integration of acquired business units or personnel.

These and additional factors to be considered are set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and in our other filings with the Securities and Exchange Commission. Fluent undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations.

FLUENT, INC. CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except share and per share data) (unaudited)

	December 31, 2024			December 31, 2023
ASSETS:
Cash and cash equivalents	$	9,439		$	15,804
Accounts receivable, net of allowance for credit losses of $487 and $231, respectively		46,532			56,531
Prepaid expenses and other current assets		8,729			6,071
Restricted cash		1,255			—
Total current assets		65,955			78,406
Property and equipment, net		304			591
Operating lease right-of-use assets		1,570			3,395
Intangible assets, net		21,797			26,809
Goodwill		—			1,261
Other non-current assets		3,991			1,405
Total assets	$	93,617		$	111,867
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Accounts payable	$	8,776		$	10,954
Accrued expenses and other current liabilities		21,905			30,534
Deferred revenue		556			430
Current portion of long-term debt		31,609			5,000
Current portion of operating lease liability		1,836			2,296
Total current liabilities		64,682			49,214
Long-term debt, net		250			25,488
Convertible Notes, at fair value with related parties		3,720			—
Operating lease liability, net		9			1,699
Other non-current liabilities		1			1,062
Total liabilities		68,662			77,463
Contingencies
Shareholders’ equity:
Preferred stock — $0.0001 par value, 10,000,000 Shares authorized; Shares outstanding — 0 shares for both periods		—			—
Common stock — $0.0005 par value, 200,000,000 Shares authorized; Shares issued — 20,791,431 and 14,384,936, respectively; and Shares outstanding — 20,022,836 and 13,616,341, respectively		47			43
Treasury stock, at cost — 768,595 and 768,595 shares, respectively		(11,407	)		(11,407	)
Additional paid-in capital		447,110			427,286
Accumulated deficit		(410,795	)		(381,518	)
Total shareholders’ equity		24,955			34,404
Total liabilities and shareholders’ equity	$	93,617		$	111,867

(1) Debt classification conforms to presentation at September 30, 2024, which was based on the Company not expecting to be in compliance with certain financial covenants under its credit agreement during certain quarters in the twelve months following the issuance date of the September 30, 2024 financial statements. This classification will be reevaluated at the issuance date of the Company’s audited financial statements as of December 31, 2024 and 2023 and for fiscal years then ending.

FLUENT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except share and per share data) (unaudited)

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
Revenue	$	65,407		$	72,761		$	254,623		$	298,399
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization)		51,503			51,924			193,821			219,884
Sales and marketing ⁽¹⁾		3,917			5,122			17,317			18,576
Product development ⁽¹⁾		3,600			4,390			17,281			18,454
General and administrative ⁽¹⁾		9,409			10,343			37,697			35,334
Depreciation and amortization		2,419			2,764			9,926			10,876
Goodwill and intangible assets impairment		—			—			2,241			55,405
Total costs and expenses		70,848			74,543			278,283			358,529
Loss from operations		(5,441	)		(1,782	)		(23,660	)		(60,130	)
Interest expense, net		(1,038	)		(784	)		(4,749	)		(3,204	)
Fair value adjustment of Convertible Notes, with related parties		1,140			—			(1,670	)		—
Loss on early extinguishment of debt		—			—			(1,009	)		—
Loss before income taxes		(5,339	)		(2,566	)		(31,088	)		(63,334	)
Income tax (expense) benefit		1,909			667			1,811			116
Net loss	$	(3,430	)	$	(1,899	)	$	(29,277	)	$	(63,218	)
Basic and diluted loss per share:
Basic	$	(0.19	)	$	(0.14	)	$	(1.80	)	$	(4.59	)
Diluted	$	(0.19	)	$	(0.14	)	$	(1.80	)	$	(4.59	)
Weighted average number of shares outstanding:
Basic		18,352,940			13,827,339			16,259,943			13,770,356
Diluted		18,352,940			13,827,339			16,259,943			13,770,356

(1) Amounts include share-based compensation expense as follows:
Sales and marketing	$	55		$	124		$	218		$	543
Product development		65			141			239			626
General and administrative		360			526			1,506			2,640
Total share-based compensation expense	$	480		$	791		$	1,963		$	3,809

FLUENT, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (unaudited)

	Year Ended December 31,
	2024			2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(29,277	)	$	(63,218	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		9,926			10,876
Non-cash loan amortization expense		1,371			426
Non-cash gain on contingent consideration		(250	)		—
Non-cash loss on early extinguishment of debt		1,009			—
Share-based compensation expense		1,970			3,756
Fair value adjustment of Convertible Notes, with related parties		1,670			—
Goodwill impairment		1,261			55,405
Impairment of intangible assets		980			—
Allowance for credit losses		401			124
Deferred income taxes		(276	)		(145	)
Changes in assets and liabilities, net of business acquisition:
Accounts receivable		9,473			6,509
Prepaid expenses and other current assets		(3,211	)		(2,565	)
Other non-current assets		(51	)		325
Operating lease assets and liabilities, net		(325	)		(330	)
Accounts payable		(2,178	)		4,764
Accrued expenses and other current liabilities		(5,878	)		(6,088	)
Deferred revenue		313			(584	)
Other		(1,032	)		(1,117	)
Net cash provided by (used in) operating activities		(14,104	)		8,138
CASH FLOWS FROM INVESTING ACTIVITIES:
Business acquisition/consolidation, net of cash acquired		—			(1,250	)
Capitalized costs included in intangible assets		(6,198	)		(5,838	)
Acquisition of property and equipment		(13	)		(25	)
Net cash used in investing activities		(6,211	)		(7,113	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt, net of debt financing costs		65,440			—
Repayments of long-term debt		(68,228	)		(10,000	)
Debt financing costs		(1,875	)		(532	)
Proceeds from issuance of warrants		12,627			—
Proceeds from exercise of warrants		2			—
Proceeds from Convertible Notes, with related parties		2,050			—
Proceeds from Direct Offering		5,189			—
Taxes paid related to net share settlement of vesting of restricted stock units		—			(236	)
Net cash provided by (used in) financing activities		15,205			(10,768	)
Net decrease in cash, cash equivalents, and restricted cash		(5,110	)		(9,743	)
Cash, cash equivalents, and restricted cash at beginning of period		15,804			25,547
Cash, cash equivalents, and restricted cash at end of period	$	10,694		$	15,804

Definitions, Reconciliations and Uses of Non-GAAP Financial Measures

The following non-GAAP measures are used in this release:

Media margin is defined as that portion of gross profit (exclusive of depreciation and amortization) reflecting variable costs paid for media and related expenses and excluding non-media cost of revenue. Gross profit (exclusive of depreciation and amortization) represents revenue minus cost of revenue (exclusive of depreciation and amortization). Media margin is also presented as a percentage of revenue.

Adjusted EBITDA is defined as net income (loss), excluding (1) income taxes, (2) interest expense, net, (3) depreciation and amortization, (4) share-based compensation expense, (5) loss on early extinguishment of debt, (6) accrued compensation expense for Put/Call Consideration, (7) goodwill impairment, (8) impairment of intangible assets, (9) loss (gain) on disposal of property and equipment, (10) fair value adjustment of Convertible Notes with related parties, (11) acquisition-related costs, (12) restructuring and other severance costs, and (13) certain litigation and other related costs.

Adjusted net income is defined as net income (loss) excluding (1) Share-based compensation expense, (2) loss on early extinguishment of debt, (3) accrued compensation expense for Put/Call Consideration, (4) goodwill impairment, (5) impairment of intangible assets, (6) loss (gain) on disposal of property and equipment, (7) fair value adjustment of Convertible Notes with related parties (8) acquisition-related costs, (9) restructuring and other severance costs, and (10) certain litigation and other related costs. Adjusted net income is also presented on a per share (basic and diluted) basis.

Below is a reconciliation of media margin from gross profit (exclusive of depreciation and amortization), which we believe is the most directly comparable U.S. GAAP measure.

	Three Months Ended December 31,						Year Ended December 31,
(In thousands, except percentages)	2024			2023			2024			2023
Revenue	$	65,407		$	72,761		$	254,623		$	298,399
Less: Cost of revenue (exclusive of depreciation and amortization)		51,503			51,924			193,821			219,884
Gross Profit (exclusive of depreciation and amortization)		13,904			20,837			60,802			78,515
Gross Profit (exclusive of depreciation and amortization) % of revenue		21	%		29	%		24	%		26	%
Non-media cost of revenue ⁽¹⁾		2,644			3,275			11,710			12,785
Media margin	$	16,548		$	24,112		$	72,512		$	91,300
Media margin % of revenue		25.3	%		33.1	%		28.5	%		30.6	%

(1) Represents the portion of cost of revenue (exclusive of depreciation and amortization) not attributable to variable costs paid for media and related expenses.

Below is a reconciliation of media margin from gross profit (exclusive of depreciation and amortization), which we believe is the most directly comparable U.S. GAAP measure, for Commerce Media Solutions.


	Three Months Ended December 31,						Year Ended December 31,
(In thousands, except percentages)	2024			2023			2024			2023
Revenue	$	17,235		$	7,211		$	41,267		$	10,745
Less: Cost of revenue (exclusive of depreciation and amortization)		10,501			5,921			26,988			9,895
Gross profit (exclusive of depreciation and amortization)	$	6,734		$	1,290		$	14,279		$	850
Gross profit (exclusive of depreciation and amortization) % of revenue		39	%		18	%		35	%		8	%
Non-media cost of revenue ⁽¹⁾		32			43			193			62
Media margin	$	6,766		$	1,333		$	14,472		$	912
Media margin % of revenue		39.3	%		18.5	%		35.1	%		8.5	%

(1) Represents the portion of cost of revenue (exclusive of depreciation and amortization) not attributable to variable costs paid for media and related expenses.

Below is a reconciliation of adjusted EBITDA from net income (loss), which we believe is the most directly comparable U.S. GAAP measure.

	Three Months Ended December 31,						Year Ended December 31,
(In thousands)	2024			2023			2024			2023
Net loss	$	(3,430	)	$	(1,899	)	$	(29,277	)	$	(63,218	)
Income tax expense (benefit)		(1,909	)		(667	)		(1,811	)		(116	)
Interest expense, net		1,038			784			4,749			3,204
Depreciation and amortization		2,419			2,764			9,926			10,876
Share-based compensation expense		480			798			1,970			3,756
Loss on early extinguishment of debt		—			—			1,009			—
Goodwill impairment		—			—			1,261			55,405
Impairment of intangible assets		—			—			980			—
Fair value adjustment of Convertible Notes, with related parties		(1,140	)		—			1,670			—
Acquisition-related costs ⁽¹⁾		833			1,044			2,083			2,745
Restructuring and certain severance costs		—			—			1,821			456
Certain litigation and other related costs		—			(329	)		—			(6,311	)
Adjusted EBITDA	$	(1,709	)	$	2,495		$	(5,619	)	$	6,797

(1) Balance includes compensation expense related to non-competition agreements and earn-out expense incurred as a result of business combinations. The earn-out expense was ($57) and $345 for the three months ended December 31, 2024 and 2023, respectively, and $110 and $434 for the years ended December 31, 2024 and 2023, respectively.

Below is a reconciliation of adjusted net income and the related measure of adjusted net income per share from net income (loss), which we believe is the most directly comparable U.S. GAAP measure.

	Three Months Ended December 31,						Year Ended December 31,
(In thousands, except share and per share data)	2024			2023			2024			2023
Net loss	$	(3,430	)	$	(1,899	)	$	(29,277	)	$	(63,218	)
Share-based compensation expense		480			798			1,970			3,756
Loss on early extinguishment of debt		—			—			1,009			—
Goodwill impairment		—			—			1,261			55,405
Impairment of intangible assets		—			—			980			—
Fair value adjustment of Convertible Notes, with related parties		(1,140	)		—			1,670			—
Acquisition-related costs ⁽¹⁾		833			1,044			2,083			2,745
Restructuring and certain severance costs		—			—			1,821			456
Certain litigation and other related costs		—			(329	)		—			(6,311	)
Adjusted net income (loss)	$	(3,257	)	$	(386	)	$	(18,483	)	$	(7,167	)
Adjusted net income (loss) per share:
Basic	$	(0.18	)	$	(0.03	)	$	(1.14	)	$	(0.52	)
Diluted	$	(0.18	)	$	(0.03	)	$	(1.14	)	$	(0.52	)
Adjusted weighted average number of shares outstanding:
Basic		18,352,940			13,827,339			16,259,943			13,770,355
Diluted		18,352,940			13,827,339			16,259,943			13,770,355

(1) Balance includes compensation expense related to non-competition agreements and earn-out expense incurred as a result of business combinations. The earn-out expense was ($57) and $345 for the three months ended December 31, 2024 and 2023, respectively, and $110 and $434 for the years ended December 31, 2024 and 2023, respectively.

We present media margin, adjusted EBITDA, and adjusted net income as supplemental measures of our financial and operating performance because we believe they provide useful information to investors. More specifically:

Media margin, as defined above, is a measure of the efficiency of the Company’s operating model. We use media margin and the related measure of media margin as a percentage of revenue as primary metrics to measure the financial return on our media and related costs, specifically to measure the degree by which the revenue generated from our digital marketing services exceeds the cost to attract the consumers to whom offers are made through our services. Media margin is used extensively by our management to manage our operating performance, including evaluating operational performance against budgeted media margin and understanding the efficiency of our media and related expenditures. We also use media margin for performance evaluations and compensation decisions regarding certain personnel.

Adjusted EBITDA, as defined above, is another primary metric by which we evaluate the operating performance of our business, on which certain operating expenditures and internal budgets are based and by which, in addition to media margin and other factors, our senior management is compensated. The first three adjustments represent the conventional definition of EBITDA, and the remaining adjustments are items recognized and recorded under U.S. GAAP in particular periods but might be viewed as not necessarily coinciding with the underlying business operations for the periods in which they are so recognized and recorded. These adjustments include certain litigation and other related costs associated with legal matters outside the ordinary course of business. We consider items one-time in nature if they are non-recurring, infrequent or unusual and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules. There were no adjustments for one-time items in the periods presented.

Adjusted net income, as defined above, excludes certain items that are recognized and recorded under U.S. GAAP in particular periods but might be viewed as not necessarily coinciding with the underlying business operations for the periods in which they are so recognized and recorded. We believe adjusted net income affords investors a different view of the overall financial performance of the Company than adjusted EBITDA and the U.S. GAAP measure of net (loss) income.

Media margin, adjusted EBITDA, adjusted net income, and adjusted net income per share are non-GAAP financial measures with certain limitations regarding their usefulness. They do not reflect our financial results in accordance with U.S. GAAP, as they do not include the impact of certain expenses that are reflected in our condensed consolidated statements of operations. Accordingly, these metrics are not indicative of our overall results or indicators of past or future financial performance. Further, they are not financial measures of profitability and are neither intended to be used as a proxy for the profitability of our business nor to imply profitability. The way we measure media margin, adjusted EBITDA, and adjusted net income 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.

Annual Revenue Run Rate

Annual Revenue Run Rate is an operational metric that represents the annualized revenue of the Company’s media partnerships at current monetization levels, as of the end of the reporting period. The Company calculates Annual Revenue Run Rate as follows:

Media partners within Commerce Media Solutions with an active contract are assessed and assigned an annual media volume estimate based on the active term of the contract and the monetization rate at the end of the reporting period. The Company considers a media partner contract to be active when the contractual term commences (the “start date”) until its right to serve the partner’s commerce traffic ends. Even if the contract with the customer is executed before the start date, the contract will not count toward Annual Revenue Run Rate until the media partner’s right to receive the benefit of the services has commenced.
As Annual Revenue Run Rate includes only contracts that are active at the end of the reporting period, it does not reflect assumptions or estimates regarding new business. For contracts expiring within 12 months of the period-end calculation date, Annual Revenue Run Rate does reflect expectations of renewal.
The Company’s Commerce Media Solutions platform provides the technology to effectively monetize the partner’s media by placing relevant ads at a contracted moment of consumer engagement. Although from inception to date, improvements in the platform’s AI-powered technology have consistently driven increased rates of monetization, for the purpose of Annual Revenue Run Rate, the Company assumes a consistent monetization level to that as measured on each media partner at the end of the reporting period.

The way the Company measures Annual Revenue Run Rate may not be comparable to similarly titled measures presented by other companies and should not be viewed as a projection of future revenue.

Contact Information:
Investor Relations
Fluent, Inc.
InvestorRelations@fluentco.com

The MIL Network –

March 1, 2025

MIL-OSI: Oxford Square Capital Corp. Announces Net Asset Value and Selected Financial Results for the Quarter Ended December 31, 2024 and Declaration of Distributions on Common Stock for the Months Ending April 30, May 31, and June 30, 2025

Source: GlobeNewswire (MIL-OSI)

GREENWICH, Conn., Feb. 28, 2025 (GLOBE NEWSWIRE) — Oxford Square Capital Corp. (NasdaqGS: OXSQ) (NasdaqGS: OXSQZ) (NasdaqGS: OXSQG) (the “Company,” “we,” “us” or “our”) announced today its financial results and related information for the quarter ended December 31, 2024.

On February 27, 2025, our Board of Directors declared the following distributions on our common stock:

Month Ending	Record Date	Payment Date	Amount Per Share
April 30, 2025	April 16, 2025	April 30, 2025	$0.035
May 31, 2025	May 16, 2025	May 30, 2025	$0.035
June 30, 2025	June 16, 2025	June 30, 2025	$0.035

Net asset value (“NAV”) per share as of December 31, 2024 stood at $2.30, compared with a NAV per share on September 30, 2024 of $2.35.

Net investment income (“NII”) was approximately $6.0 million, or $0.09 per share, for the quarter ended December 31, 2024, compared with approximately $6.2 million, or $0.10 per share, for the quarter ended September 30, 2024.
Total investment income for the quarter ended December 31, 2024 amounted to approximately $10.2 million, compared with approximately $10.3 million for the quarter ended September 30, 2024.
- For the quarter ended December 31, 2024 we recorded investment income from our portfolio as follows:
  - $5.4 million from our debt investments;
  - $4.1 million from our CLO equity investments; and
  - $0.8 million from other income.
Our total expenses for the quarter ended December 31, 2024 were approximately $4.2 million, which was approximately the same as the quarter ended September 30, 2024.
As of December 31, 2024, the following metrics applied (note that none of these metrics represented a total return to shareholders):
- The weighted average yield of our debt investments was 15.8% at current cost, compared with 14.5% as of September 30, 2024;
- The weighted average effective yield of our CLO equity investments at current (start of quarter for existing investments) cost was 8.8%, compared with 9.6% as of September 30, 2024; and
- The weighted average cash distribution yield of our cash income producing CLO equity investments at current cost was 16.2%, compared with 15.3% as of September 30, 2024.
For the quarter ended December 31, 2024, we recorded a net increase in net assets resulting from operations of approximately $3.3 million, consisting of:
- NII of approximately $6.0 million;
- Net realized losses of approximately $44.8 million; and
- Net unrealized appreciation of approximately $42.1 million.

During the fourth quarter of 2024, we made investments of approximately $25.1 million and received approximately $22.0 million from sales and repayments of investments.
Our weighted average credit rating was 2.3 based on total fair value and 2.4 based on total principal amount as of December 31, 2024, compared with a weighted average credit rating of 2.4 based on total fair value and 2.8 based on total principal amount as of September 30, 2024.
As of December 31, 2024, we had one debt investment in one portfolio company on non-accrual status, with a fair value of approximately $0.5 million. Also, as of December 31, 2024, our preferred equity investments in one of our portfolio companies were on non-accrual status, which had an aggregate fair value of approximately $4.6 million.
For the quarter ended December 31, 2024, we issued a total of approximately 1.8 million shares of common stock pursuant to an “at-the-market” offering. After deducting the sales agent’s commissions and offering expenses, this resulted in net proceeds of approximately $5.0 million. As of December 31, 2024, we had approximately 69.8 million shares of common stock outstanding.

We will hold a conference call to discuss fourth quarter results today, Friday, February 28^th, 2025 at 9:00 AM ET. The toll-free dial-in number is 1-800-549-8228. There will be a recording available for 30 days. If you are interested in hearing the recording, please dial 1-888-660-6264. The replay pass-code number is 06523#.

A presentation containing further detail regarding our quarterly results of operations has been posted under the Investor Relations section of our website at www.oxfordsquarecapital.com.


OXFORD SQUARE CAPITAL CORP. STATEMENTS OF ASSETS AND LIABILITIES

	December 31, 2024			December 31, 2023
	(Unaudited)
ASSETS
Non-affiliated/non-control investments (cost: $358,356,496 and $440,069,822, respectively)	$	256,238,759		$	261,614,335
Affiliated investments (cost: $16,836,822 and $16,836,822, respectively)		4,614,100			5,276,092
Cash and cash equivalents		34,926,468			5,740,553
Interest and distributions receivable		2,724,049			3,976,408
Other assets		1,227,598			1,060,384
Total assets	$	299,730,974		$	277,667,772
LIABILITIES
Notes payable – 6.25% Unsecured Notes, net of deferred issuance costs of $309,812 and $543,609, respectively		44,480,938			44,247,141
Notes payable – 5.50% Unsecured Notes, net of deferred issuance costs of $1,381,619 and $1,768,219, respectively		79,118,381			78,731,781
Securities purchased, not settled		12,027,463			—
Base Fee and Net Investment Income Incentive Fee payable to affiliate		1,215,964			1,012,389
Accrued interest payable		1,204,487			1,204,487
Accrued expenses		1,018,261			1,163,349
Total liabilities		139,065,494			126,359,147

NET ASSETS
Common stock, $0.01 par value, 100,000,000 shares authorized; 69,758,938 and 59,300,472 shares issued and outstanding, respectively		697,590			593,005
Capital in excess of par value		487,943,476			458,121,381
Total distributable earnings/(accumulated losses)		(327,975,586	)		(307,405,761	)
Total net assets		160,665,480			151,308,625
Total liabilities and net assets	$	299,730,974		$	277,667,772
Net asset value per common share	$	2.30		$	2.55


OXFORD SQUARE CAPITAL CORP. STATEMENTS OF OPERATIONS
	Year Ended December 31, 2024			Year Ended December 31, 2023			Year Ended December 31, 2022
		(Unaudited)
INVESTMENT INCOME
From non-affiliated/non-control investments:
Interest income – debt investments	$	24,929,287		$	33,592,166		$	25,234,315
Income from securitization vehicles and investments		15,403,586			16,796,699			17,093,203
Other income		2,350,332			1,435,316			790,594
Total investment income from non-affiliated/non-control investments		42,683,205			51,824,181			43,118,112
Total investment income		42,683,205			51,824,181			43,118,112
EXPENSES
Interest expense		7,847,320			10,825,877			12,354,392
Base Fee		4,310,484			4,613,664			5,903,986
Professional fees		1,537,434			1,426,098			1,393,116
Compensation expense		746,762			825,226			915,583
Director’s fees		417,500			429,500			417,500
Insurance expense		308,552			329,892			378,804
Transfer agent and custodian fees		260,330			246,562			231,241
Excise tax		216,528			1,423,686			252,172
General and administrative		597,883			638,350			583,740
Total expenses before incentive fees		16,242,793			20,758,855			22,430,534
Net Investment Income Incentive Fees		—			3,705,387			—
Capital gains incentive fees		—			—			—
Total incentive fees		—			3,705,387			—
Total expenses		16,242,793			24,464,242			22,430,534
Net investment income		26,440,412			27,359,939			20,687,578
NET UNREALIZED APPRECIATION/(DEPRECIATION) AND REALIZED LOSSES ON INVESTMENT TRANSACTIONS
Net change in unrealized appreciation/(depreciation) on investments:
Non-Affiliate/non-control investments		76,337,750			6,198,413			(109,479,985	)
Affiliated investments		(661,992	)		926,274			3,577,327
Total net change in unrealized appreciation/(depreciation) on investments		75,675,758			7,124,687			(105,902,658	)
Net realized losses:
Non-affiliated/non-control investments		(96,236,489	)		(17,056,245	)		(339,819	)
Extinguishment of debt		—			(190,353	)		—
Total net realized losses		(96,236,489	)		(17,246,598	)		(339,819	)
Net unrealized and realized losses		(20,560,731	)		(10,121,911	)		(106,242,477	)
Net increase/(decrease) in net assets resulting from operations	$	5,879,681		$	17,238,028		$	(85,554,899	)
Net increase in net assets resulting from net investment income per common share (Basic and Diluted):	$	0.42		$	0.51		$	0.42
Net increase/(decrease) in net assets resulting from operations per common share (Basic and Diluted):	$	0.09		$	0.32		$	(1.72	)
Weighted average shares of common stock outstanding (Basic and Diluted):		63,465,255			53,919,104			49,757,122


FINANCIAL HIGHLIGHTS

	Year Ended December 31, 2024			Year Ended December 31, 2023			Year Ended December 31, 2022			Year Ended December 31, 2021				Year Ended December 31, 2020
	(Unaudited)
Per Share Data
Net asset value at beginning of year	$	2.55		$	2.78		$	4.92		$	4.55		$	5.12
Net investment income⁽¹⁾		0.42			0.51			0.42			0.32			0.40
Net realized and unrealized gains (losses)⁽²⁾		(0.33	)		(0.19	)		(2.14	)		0.47			(0.36	)
Net change in net asset value from operations		0.09			0.32			(1.72	)		0.79			0.04
Distributions per share from net investment income		(0.42	)		(0.54)			(0.42)			(0.42)			(0.61	)
Distributions based on weighted average share impact		—			(0.01	)		—			—			—
Tax return of capital distributions		—			—			—			—			—
Total distributions⁽³⁾		(0.42	)		(0.55	)		(0.42	)		(0.42	)		(0.61	)
Effect of shares issued, net of offering expenses		0.08			—			—			—			—
Effect of shares issued/repurchased, gross		—			—			—			—			—
Net asset value at end of year	$	2.30		$	2.55		$	2.78		$	4.92		$	4.55
Per share market value at beginning of year	$	2.86		$	3.12		$	4.08		$	3.05		$	5.44
Per share market value at end of year	$	2.44		$	2.86		$	3.12		$	4.08		$	3.05
Total return based on Market Value⁽⁴⁾		(1.64	)%		9.34	%		(14.11	)%		47.38	%		(31.75	)%
Total return based on Net Asset Value⁽⁵⁾		6.67	%		11.15	%		(34.96	)%		17.36	%		0.82	%
Shares outstanding at end of year		69,758,938			59,300,472			49,844,796			49,690,059			49,589,607
Ratios/Supplemental Data⁽⁷⁾
Net assets at end of year (000’s)	$	160,665		$	151,309		$	138,672		$	244,595		$	225,427
Average net assets (000’s)	$	152,362		$	149,944		$	192,785		$	242,589		$	192,137	%
Ratio of expenses to average net assets		10.66	%		16.32	%		11.64	%		8.69	%		8.45	%
Ratio of net investment income to average net assets		17.35	%		18.25	%		10.73	%		6.64	%		10.26	%
Portfolio turnover rate⁽⁶⁾		33.66	%		3.85	%		17.09	%		11.09	%		23.72	%

(1) Represents per share net investment income for the period, based upon weighted average shares outstanding. (2) Net realized and unrealized gains include rounding adjustments to reconcile change in net asset value per share. (3) Management monitors available taxable earnings, including net investment income and realized capital gains, to determine if a tax return of capital may occur for the year. To the extent the Company’s taxable earnings fall below the total amount of the Company’s distributions for that fiscal year, a portion of those distributions may be deemed a tax return of capital to the Company’s stockholders. The ultimate tax character of the Company’s earnings cannot be determined until tax returns are prepared after the end of the fiscal year. (4) Total return based on market value equals the increase or decrease of ending market value over beginning market value, plus distributions, assuming distribution reinvestment prices obtained under the Company’s distribution reinvestment plan, excluding any discounts divided by the beginning market value per share. (5) Total return based on net asset value equals the increase or decrease of ending net asset value over beginning net asset value, plus distributions, divided by the beginning net asset value. (6) Portfolio turnover rate is calculated using the lesser of the annual investment sales and repayments of principal or annual investment purchases over the average of the total investments at fair value. (7) The following table provides supplemental performance ratios measured for the years ended December 31, 2024, 2023, 2022, 2021, and 2020:


	Year Ended December 31, 2024		Year Ended December 31, 2023			Year Ended December 31, 2022			Year Ended December 31, 2021			Year Ended December 31, 2020
	(Unaudited)
Ratio of expenses to average net assets:
Expenses before incentive fees	10.66	%		13.84	%		11.64	%		8.69	%		8.45	%
Net Investment Income Incentive Fees	—	%		2.47	%		—	%		—	%		—	%
Capital Gains Incentive Fees	—	%		—	%		—	%		—	%		—	%
Ratio of expenses, excluding interest expense, to average net assets	5.51	%		9.10	%		5.23	%		4.36	%		4.35	%

About Oxford Square Capital Corp.

Oxford Square Capital Corp. is a publicly-traded business development company principally investing in syndicated bank loans and, to a lesser extent, debt and equity tranches of collateralized loan obligation (“CLO”) vehicles. CLO investments may also include warehouse facilities, which are financing structures intended to aggregate loans that may be used to form the basis of a CLO vehicle.

Forward-Looking Statements

This press release contains forward-looking statements subject to the inherent uncertainties in predicting future results and conditions. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements. These factors are identified from time to time in our filings with the Securities and Exchange Commission. We undertake no obligation to update such statements to reflect subsequent events, except as may be required by law.

Contact:
Bruce Rubin
203-983-5280

The MIL Network –

March 1, 2025

MIL-OSI: TeraWulf Reports Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

Announced strategic expansion into AI-driven HPC hosting with long-term data center leases expected to generate $1 billion in cumulative revenue over initial 10-year contract terms

Annual revenue and non-GAAP adjusted EBITDA increase 102% and 89% year-over-year, respectively

Expanded self-mining operating capacity by 94% year-over-year to 9.7 EH/s as compared to 5.0 EH/s in 2023

Strengthened the Balance Sheet with cash and bitcoin holdings of $275 million as of December 31, 2024

Proactively repaid legacy term loan debt ahead of schedule and financed HPC hosting growth with new 2.75% convertible notes issuance due 2030

Authorized $200 million share repurchase program and executed over $150 million of repurchases equivalent to over 24 million shares of Common Stock to date

EASTON, Md., Feb. 28, 2025 (GLOBE NEWSWIRE) — TeraWulf Inc. (Nasdaq: WULF) (“TeraWulf” or the “Company”), which owns and operates vertically integrated, next-generation digital infrastructure primarily powered by zero-carbon energy, today announced its financial results for the fourth quarter and full year ended December 31, 2024.

Management Commentary

“In 2024, TeraWulf achieved significant financial and operational milestones, further solidifying our leadership in sustainable digital infrastructure,” said Paul Prager, Chief Executive Officer of TeraWulf. “We expanded our self-mining capacity to 9.7 EH/s, secured long-term data center lease agreements with a credit-worthy counterparty that are expected to generate significant recurring revenue, providing a stable foundation for long-term growth, and enhanced our financial flexibility through strategic asset monetization and capital raises. As the scarcity of digital infrastructure intensifies, we believe we are exceptionally well-positioned to scale our high-performance compute (HPC) hosting and colocation services by 100-150 MW annually.”

Patrick Fleury, Chief Financial Officer, added, “Our disciplined financial management was reflected in our $500 million oversubscribed convertible debt offering, which strengthened our liquidity and funded our initial expansion into HPC hosting. The $85 million sale of our 25% equity interest in Nautilus allowed us to monetize an asset with a declining value at peak pricing and reinvest in Lake Mariner’s HPC hosting capabilities. Demonstrating confidence in our long-term growth, we also strategically repurchased over $150 million in shares in late 2024 and early 2025 while maintaining a strong liquidity position.”

Paul Prager concluded, “Looking ahead, our focus is on executing the 72.5 MW of HPC hosting capacity set for delivery in 2025. With strong demand for AI-driven compute infrastructure, we see a significant opportunity to leverage our low-cost, predominantly zero-carbon energy infrastructure platform to meet this growing need. TeraWulf sits at the convergence of bitcoin mining and HPC hosting, reinforcing our role as a leader in next-generation digital infrastructure.”

Full Year 2024 Operational and Financial Highlights

Key financial and operational highlights for the fiscal year ended December 31, 2024 include:

Revenue increased 102% to $140.1 million in 2024, as compared to $69.2 million in fiscal 2023, driven by increased bitcoin production and higher average realized bitcoin prices during the period.
Cost of revenue, exclusive of depreciation, increased 129% to $62.6 million in 2024, as compared to $27.3 million in fiscal 2023, driven by increased bitcoin mining capacity due to infrastructure constructed and placed in service during 2024, a near doubling of network difficulty and the impacts of the bitcoin halving in April 2024, and, to a lesser extent, an increase in realized power prices during 2024 as compared to 2023.
Non-GAAP adjusted EBITDA increased by $28.5 million to $60.4 million in 2024, as compared to $31.9 million in fiscal 2023.
Reported cash and cash equivalents of $274.1 million as of December 31, 2024, as compared to $54.4 million at fiscal year-end 2023.
The Company’s legacy term loan debt was eliminated in 2024, as compared to $139.4 million at fiscal year-end 2023, significantly improving strategic and financial flexibility.

Expansion into HPC Hosting

In 2024, TeraWulf expanded into the rapidly growing digital infrastructure market with a focus on AI and HPC hosting, backed by long-term customer agreements.

A pivotal milestone in this expansion was achieved on December 23, 2024, when TeraWulf signed long-term data center lease agreements with Core42, securing 72.5 MW of hosting capacity at Lake Mariner for GPU cloud compute workloads. These lease agreements are expected to commence at various dates in 2025 and include an option to expand by an additional 135 MW.

To support this diversification of its business, the Company has upgraded its digital infrastructure at Lake Mariner, incorporating advanced liquid cooling systems and Tier 3 redundancy to optimize high-density compute workloads. This cutting-edge infrastructure further strengthens TeraWulf’s ability to attract hyperscale and enterprise customers.

Fiscal Year 2024 Financial Results

Revenue for the year ended December 31, 2024 increased 102% to $140.1 million compared to $69.2 million in fiscal 2023. The increase in revenue is primarily attributable to a 129% increase in the average price of bitcoin year-over-year. The Company increased its mining capacity at Lake Mariner to 195 MW as of December 31, 2024, as compared to 110 MW as of December 31, 2023. Despite industry-wide headwinds from the April 2024 halving and network hashrate increases, TeraWulf maintained strong mining margins, leveraging its low-cost, predominantly zero-carbon infrastructure.

Cost of revenue, exclusive of depreciation, increased 129% to $62.6 million compared to $27.3 million in fiscal 2023. These increases were driven by increased bitcoin mining capacity due to infrastructure constructed and placed in service during 2024, the impacts of the bitcoin halving in April 2024 and, to a lesser extent, an increase in realized power prices during 2024 as compared to 2023.

Non-GAAP adjusted EBITDA for the year ended December 31, 2024 was $60.4 million, as compared to $31.9 million for the year ended December 31, 2023.

Liquidity and Capital Resources

As of December 31, 2024, the Company held $274.5 million in cash and cash equivalents and bitcoin on its balance sheet. As of the same period, the Company had outstanding indebtedness of approximately $500 million related to the 2.75% convertible senior notes due 2030. As of February 26, 2025, TeraWulf had 383,137,722 common shares outstanding.

Investor Conference Call and Webcast

As previously announced, TeraWulf will host its fourth quarter and full year 2024 earnings call and business update for investors today, Friday, February 28, 2025, commencing at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time). Prepared remarks will be followed by a question-and-answer session with management.

The conference call will be broadcast live and will be available for replay via “Events & Presentations” under the “Investors” section of the Company’s website at https://investors.terawulf.com/events-and-presentations/.

About TeraWulf

TeraWulf develops, owns, and operates environmentally sustainable, next-generation data center infrastructure in the United States, specifically designed for bitcoin mining and hosting HPC workloads. Led by a team of seasoned energy entrepreneurs, the Company owns and operates the Lake Mariner facility situated on the expansive site of a now retired coal plant in Western New York. Currently, TeraWulf generates revenue primarily through bitcoin mining, leveraging predominantly zero-carbon energy sources, including hydroelectric and nuclear power. Committed to environmental, social, and governance (ESG) principles that align with its business objectives, TeraWulf aims to deliver industry-leading economics in mining and data center operations at an industrial scale.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements include statements concerning anticipated future events and expectations that are not historical facts. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. In addition, forward-looking statements are typically identified by words such as “plan,” “believe,” “goal,” “target,” “aim,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “seek,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “strategy,” “opportunity,” “predict,” “should,” “would” and other similar words and expressions, although the absence of these words or expressions does not mean that a statement is not forward-looking. Forward-looking statements are based on the current expectations and beliefs of TeraWulf’s management and are inherently subject to a number of factors, risks, uncertainties and assumptions and their potential effects. There can be no assurance that future developments will be those that have been anticipated. Actual results may vary materially from those expressed or implied by forward-looking statements based on a number of factors, risks, uncertainties and assumptions, including, among others: (1) the ability to mine bitcoin profitably; (2) our ability to attract additional customers to lease our HPC data centers; (3) our ability to perform under our existing data center lease agreements (4) changes in applicable laws, regulations and/or permits affecting TeraWulf’s operations or the industries in which it operates; (5) the ability to implement certain business objectives, including its bitcoin mining and HPC data center development, and to timely and cost-effectively execute related projects; (6) failure to obtain adequate financing on a timely basis and/or on acceptable terms with regard to expansion or existing operations; (7) adverse geopolitical or economic conditions, including a high inflationary environment, the implementation of new tariffs and more restrictive trade regulations; (8) the potential of cybercrime, money-laundering, malware infections and phishing and/or loss and interference as a result of equipment malfunction or break-down, physical disaster, data security breach, computer malfunction or sabotage (and the costs associated with any of the foregoing); (9) the availability and cost of power as well as electrical infrastructure equipment necessary to maintain and grow the business and operations of TeraWulf; and (10) other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). Potential investors, stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. TeraWulf does not assume any obligation to publicly update any forward-looking statement after it was made, whether as a result of new information, future events or otherwise, except as required by law or regulation. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Company’s filings with the SEC, which are available at www.sec.gov.

Non-GAAP Measures

We have not provided reconciliations of preliminary and projected Adjusted EBITDA to the most comparable GAAP measure of net income/(loss). Providing net income/(loss) is potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operating items that are included in net income/(loss), including but not limited to asset impairments and income tax valuation adjustments. Reconciliations of this non-GAAP measure with the most comparable GAAP measure for historical periods is indicative of the reconciliations that will be prepared upon completion of the periods covered by the non-GAAP guidance. Please reference the “Non-GAAP financial information” accompanying our quarterly earnings conference call presentations on our website at www.terawulf.com/investors for our GAAP results and the reconciliations of these measures, where used, to the comparable GAAP measures.

Investors:
Investors@terawulf.com

Media:
media@terawulf.com

CONSOLIDATED BALANCE SHEETS
AS OF December 31, 2024 AND 2023
(In thousands, except number of shares, per share amounts and par value)

	December 31, 2024			December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	274,065		$	54,439
Digital currency		476			1,801
Prepaid expenses		2,493			4,540
Other receivables		3,799			1,001
Other current assets		598			806
Total current assets		281,431			62,587
Equity in net assets of investee		—			98,613
Property, plant and equipment, net		411,869			205,284
Operating lease right-of-use asset		85,898			10,943
Finance lease right-of-use asset		7,285			—
Other assets		1,028			679
TOTAL ASSETS		787,511			378,106

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		24,382			15,169
Accrued construction liabilities		16,520			1,526
Accrued compensation		4,552			4,413
Other accrued liabilities		4,973			4,766
Share based liabilities due to related party		—			2,500
Other amounts due to related parties		1,391			972
Current portion of operating lease liability		25			48
Current portion of finance lease liability		2			—
Insurance premium financing payable		—			1,803
Current portion of long-term debt		—			123,465
Total current liabilities		51,845			154,662
Operating lease liability, net of current portion		3,427			899
Finance lease liability, net of current portion		292			—
Long-term debt		—			56
Convertible notes		487,502			—
TOTAL LIABILITIES		543,066			155,617

Commitments and Contingencies (See Note 12)

STOCKHOLDERS’ EQUITY:
Preferred stock, $0.001 par value, 100,000,000 authorized at December 31, 2024 and 2023; 9,566 shares issued and outstanding at December 31, 2024 and 2023; aggregate liquidation preference of $12,609 and $11,423 at December 31, 2024 and 2023, respectively.		9,273			9,273
Common stock, $0.001 par value, 600,000,000 and 400,000,000 authorized at December 31, 2024 and 2023, respectively; 404,223,028 and 276,733,329 issued and outstanding at December 31, 2024 and 2023, respectively.		404			277
Additional paid-in capital		685,261			472,834
Treasury Stock at cost, 18,568,750 and 0 at December 31, 2024 and 2023, respectively		(118,217	)		—
Accumulated deficit		(332,276	)		(259,895	)
Total stockholders’ equity		244,445			222,489
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	787,511		$	378,106

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED December 31, 2024, 2023 AND 2022
(In thousands, except number of shares and loss per common share)

	Year Ended December 31,
		2024			2023			2022
Revenue	$	140,051		$	69,229		$	15,033

Costs and expenses:
Cost of revenue (exclusive of depreciation shown below)		62,608			27,315			11,083
Operating expenses		3,387			2,116			2,038
Operating expenses — related party		4,262			2,773			1,248
Selling, general and administrative expenses		57,883			23,693			22,770
Selling, general and administrative expenses — related party		12,695			13,325			13,280
Depreciation		59,808			28,350			6,667
Gain on fair value of digital currency, net		(2,200	)		—			—
Realized gain on sale of digital currency		—			(3,174	)		(569	)
Impairment of digital currency		—			3,043			1,457
Loss on disposals of property, plant, and equipment, net		17,824			1,209			—
Loss on nonmonetary miner exchange		—			—			804
Total costs and expenses		216,267			98,650			58,778

Operating loss		(76,216	)		(29,421	)		(43,745	)
Interest expense		(19,794	)		(34,812	)		(24,679	)
Loss on extinguishment of debt		(6,300	)		—			(2,054	)
Other income		3,927			231			—
Loss before income tax and equity in net income (loss) of investee		(98,383	)		(64,002	)		(70,478	)
Income tax benefit		—			—			256
Equity in net income (loss) of investee, net of tax		3,363			(9,290	)		(15,712	)
Gain on sale of equity interest in investee		22,602			—			—
Loss from continuing operations		(72,418	)		(73,292	)		(85,934	)
Loss from discontinued operations, net of tax		—			(129	)		(4,857	)
Net loss	$	(72,418	)	$	(73,421	)	$	(90,791	)

Loss per common share:
Continuing operations	$	(0.21	)	$	(0.35	)	$	(0.78	)
Discontinued operations		—			—			(0.04	)
Basic and diluted	$	(0.21	)	$	(0.35	)	$	(0.82	)

Weighted average common shares outstanding:
Basic and diluted		351,315,476			209,956,392			110,638,792

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED December 31, 2024, 2023 AND 2022
(In thousands)

	Year Ended December 31,
		2024			2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(72,418	)	$	(73,421	)	$	(90,791	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of debt issuance costs, commitment fees and accretion of debt discount		11,382			19,515			11,676
Related party expense to be settled with respect to common stock		—			2,917			2,083
Common stock issued for interest expense		—			26			82
Stock-based compensation expense		30,927			5,859			1,568
Depreciation		59,808			28,350			6,667
Amortization of right-of-use asset		1,373			1,001			303
Revenue recognized from digital currency mining and hosting services		(139,278	)		(63,877	)		(10,810	)
Gain on fair value of digital currency, net		(2,200	)		—			—
Realized gain on sale of digital currency		—			(3,174	)		(569	)
Impairment of digital currency		—			3,043			1,457
Proceeds from sale of digital currency		97,559			83,902			9,739
Digital currency paid as consideration for services		370			—			—
Loss on disposals of property, plant, and equipment, net		17,824			1,209			—
Loss on nonmonetary miner exchange		—			—			804
Loss on extinguishment of debt		6,300			—			2,054
Deferred income tax benefit		—			—			(256	)
Equity in net loss of investee, net of tax		(3,363	)		9,290			15,712
Gain on sale of equity interest in investee		(22,602	)		—			—
Loss from discontinued operations, net of tax		—			129			4,857
Changes in operating assets and liabilities:
Decrease (increase) in prepaid expenses		2,047			555			(3,601	)
Decrease in amounts due from related parties		—			—			815
Increase in other receivables		(2,774	)		(1,001	)		—
Decrease (increase) in other current assets		288			(215	)		(46	)
(Increase) decrease in other assets		(466	)		310			(994	)
Increase (decrease) increase in accounts payable		740			(7,272	)		10,197
Increase (decrease) in accrued compensation and other accrued liabilities		694			(931	)		5,916
Increase (decrease) increase in other amounts due to related parties		480			(2,013	)		700
(Decrease) increase in operating lease liability		(11,113	)		(42	)		175
Net cash (used in) provided by operating activities from continuing operations		(24,422	)		4,160			(32,262	)
Net cash (used in) provided by operating activities from discontinued operations		—			103			(1,804	)
Net cash (used in) provided by operating activities		(24,422	)		4,263			(34,066	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in joint venture, including direct payments made on behalf of joint venture		—			(2,845	)		(46,172	)
Reimbursable payments for deposits on plant and equipment made on behalf of a joint venture or joint venture partner		—			—			(11,741	)
Reimbursement of payments for deposits on plant and equipment made on behalf of a joint venture or joint venture partner		—			—			11,716
Proceeds from sale of equity interest in investee		86,086			—			—
Purchase of and deposits on plant and equipment		(267,940	)		(75,168	)		(61,116	)
Proceeds from sales of property, plant and equipment		23,324			—			—
Proceeds from sale of net assets held for sale		—			—			13,266
Proceeds from sale of digital currency		67,371			—			—
Net cash used in investing activities		(91,159	)		(78,013	)		(94,047	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt, net of issuance costs paid of $0, $0 and $38		—			—			22,462
Principal payments on long-term debt		(139,401	)		(6,599	)		—
Payments of prepayment fees associated with early extinguishment of long-term debt		(1,261	)		—			—
Principal payments on finance lease		(941	)		—			—
Proceeds from insurance premium and property, plant and equipment financing		211			2,513			7,041
Principal payments on insurance premium and property, plant and equipment financing		(2,103	)		(2,738	)		(4,924	)
Proceeds from issuance of promissory notes to stockholders		—			—			3,416
Proceeds from issuance of common stock, net of issuance costs paid of $663, $1,051 and $142		188,715			135,917			47,326
Proceeds from exercise of warrants		4,808			2,500			5,700
Purchase of capped call		(60,000	)		—			—
Purchase of treasury stock		(118,217	)		—			—
Payments of tax withholding related to net share settlements of stock-based compensation awards		(23,654	)		(2,013	)		—
Proceeds from issuance of preferred stock		—			—			9,566
Proceeds from issuance of convertible notes, net of issuance costs paid of $12,950, $0, and $0		487,050			—			—
Proceeds from issuance of convertible promissory note		—			1,250			14,700
Principal payments on convertible promissory note		—			—			(15,306	)
Payment of contingent value rights liability related to proceeds from sale of net assets held for sale		—			(10,964	)		—
Net cash provided by financing activities		335,207			119,866			89,981

Net change in cash, cash equivalents and restricted cash		219,626			46,116			(38,132	)
Cash, cash equivalents and restricted cash at beginning of year		54,439			8,323			46,455
Cash, cash equivalents and restricted cash at end of year	$	274,065		$	54,439		$	8,323

Cash paid during the year for:
Interest	$	6,957		$	19,572		$	13,989
Income taxes	$	—		$	—		$	—

Non-GAAP Measure

The Company presents Adjusted EBITDA, which is not a measurement of financial performance under generally accepted accounting principles in the United States (“U.S. GAAP”). The Company defines non-GAAP “Adjusted EBITDA” as net loss adjusted for: (i) impacts of interest, taxes, depreciation and amortization; (ii) stock-based compensation expense, amortization of right-of-use asset and related party expense to be settled with respect to common stock, all of which are non-cash items that the Company believes are not reflective of its general business performance, and for which the accounting requires management judgment, and the resulting expenses could vary significantly in comparison to other companies; (iii) one-time, non-recurring transaction-based compensation expense related to the 2030 Convertible Notes (iv) equity in net income (loss) of investee, net of tax, related to Nautilus and the gain on sale of interest in Nautilus; (v) other income which is related to interest income or income for which management believes is not reflective of the Company’s ongoing operating activities; (vi) loss on extinguishment of debt and net losses on disposals of property, plant and equipment, net, which are not reflective of the Company’s general business performance and (vii) losses from discontinued operations, net of tax, which is not be applicable to the Company’s future business activities. The Company’s Adjusted EBITDA also includes the impact of distributions from investee received in bitcoin related to a return on the Nautilus investment, which management believes, in conjunction with excluding the impact of equity in net income (loss) of investee, net of tax, is reflective of assets available for the Company’s use in its ongoing operations as a result of its investment in Nautilus.

Management believes that providing this non-GAAP financial measure allows for meaningful comparisons between the Company’s core business operating results and those of other companies, and provides the Company with an important tool for financial and operational decision making and for evaluating its own core business operating results over different periods of time. In addition to management’s internal use of non-GAAP Adjusted EBITDA, management believes that adjusted EBITDA is also useful to investors and analysts in comparing the Company’s performance across reporting periods on a consistent basis. Management believes the foregoing to be the case even though some of the excluded items involve cash outlays and some of them recur on a regular basis (although management does not believe any of such items are normal operating expenses necessary to generate the Company’s bitcoin related revenues). For example, the Company expects that share-based compensation expense, which is excluded from Adjusted EBITDA, will continue to be a significant recurring expense over the coming years and is an important part of the compensation provided to certain employees, officers, directors and consultants. Additionally, management does not consider any of the excluded items to be expenses necessary to generate the Company’s bitcoin related revenue.

The Company’s Adjusted EBITDA measure may not be directly comparable to similar measures provided by other companies in the Company’s industry, as other companies in the Company’s industry may calculate non-GAAP financial results differently. The Company’s Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP and should not be considered as an alternative to operating loss or any other measure of performance derived in accordance with U.S. GAAP. Although management utilizes internally and presents Adjusted EBITDA, the Company only utilizes that measure supplementally and does not consider it to be a substitute for, or superior to, the information provided by U.S. GAAP financial results. Accordingly, Adjusted EBITDA is not meant to be considered in isolation of, and should be read in conjunction with, the information contained in the Company’s consolidated financial statements, which have been prepared in accordance with U.S. GAAP.

The following table is a reconciliation of the Company’s non-GAAP Adjusted EBITDA to its most directly comparable U.S. GAAP measure (i.e., net loss) for the periods indicated (in thousands):

	Year Ended December 31,
		2024			2023
Net loss	$	(72,418	)	$	(73,421	)
Adjustments to reconcile net loss to non-GAAP Adjusted EBITDA:
Loss from discontinued operations, net of tax		—			129
Gain on sale of equity interest in investee		(22,602	)		—
Equity in net (income) loss of investee, net of tax, related to Nautilus		(3,363	)		9,290
Distributions from investee, related to Nautilus		22,776			21,949
Income tax benefit		—			—
Other income		(3,927	)		(231	)
Loss on extinguishment of debt		6,300			—
Interest expense		19,794			34,812
Loss on disposals of property, plant, and equipment, net		17,824			1,209
Depreciation		59,808			28,350
Amortization of right-of-use asset		1,373			1,001
Stock-based compensation expense		30,927			5,859
Transaction-based compensation expense		3,885			—
Related party expense to be settled with respect to common stock		—			2,917
Non-GAAP adjusted EBITDA	$	60,377		$	31,864

The MIL Network –

March 1, 2025

MIL-OSI: DIGITALIST GROUP’S FINANCIAL STATEMENT RELEASE, 1 JANUARY–31 DECEMBER 2024

Source: GlobeNewswire (MIL-OSI)

DIGITALIST GROUP’S FINANCIAL STATEMENT RELEASE, 1 JANUARY–31 DECEMBER 2024
(Not audited)

DIGITALIST 2024

SUMMARY

October–December 2024 (comparable figures for 2023 in parentheses):

Turnover: EUR 4.7 million (EUR 4.2 million), change 12.9%.
EBITDA: EUR -0.2 million (EUR -0.4 million*), -4.3% of turnover (-9.1%).
EBIT: EUR -0.3 million (EUR -0.6 million*), -7.1% of turnover (-14.4%).
Net income: EUR -1.0 million (EUR -1.6 million*), -21.3% of turnover (-38.9%).
Earnings per share EUR -0.00 (EUR -0.00).

January–December 2024 (comparable figures for 2023 in parentheses):

Turnover: EUR 16.2 million (EUR 16.7 million), change -3.1%.
EBITDA: EUR -1.5 million (EUR -0.9 million**), -9.4% of turnover (-5.2%).
EBIT: EUR -2.0 million (EUR -1.7 million**), -12.3% of turnover (-10.2%).
Net income: EUR -5.0 million (EUR -4.1 million**), -31.0% of turnover (-24.5%).
Earnings per share: EUR -0.01 (EUR -0.01).
Earnings per share (diluted): EUR -0.01 (EUR -0.01).
Cash flow from operations EUR -1.4 million (EUR -2.9 million).
Number of employees at the end of the review period: 122 (126), decrease of 3.2%.

*) EBIT, EBITDA, and net income for the comparison period were affected by a recorded gain of EUR 0.3 million, resulting from the write-down of Turret accounts payable and an additional purchase price related to the Ticknovate divestment.

**) EBIT, EBITDA, and net income for the period were affected by a one-time gain of EUR 1.0 million, which includes a recorded gain of EUR 0.6 million from the FutureLab Share transaction, EUR 0.3 million from the write-down of Turret accounts payable and an additional purchase price adjustment related to the Ticknovate divestment.

CEO’s review

As we close the year 2024, Digitalist Group stands at the intersection of ongoing market challenges and promising opportunities. While the Finnish economy remained weak, causing clients to hesitate in initiating new projects, we observed steady growth in Sweden. We are committed to coping with the challenges in the Finnish market, but we have increased focus on exploiting opportunities in the Swedish market and have expanded our offering with new applied AI services.

Despite the turnover growth in the last quarter, the Group’s turnover in 2024 slightly declined to EUR 16.2 million (from EUR 16.7 million in 2023) and EBITDA ended at EUR -1.5 million (EUR -0.9 million in 2023 including a one-time gain of EUR 1.0 million). This outcome mirrors both the current market conditions and the positive but not sufficient impact of the strategic measures we implemented throughout the year.

A key driver of our performance has been the Swedish market, where demand remained robust enough to offset weaker activity in Finland. In 2024 Sweden contributed around 70% of our total turnover, up from 61% in the same period last year. We also intensified our cost-saving efforts, reducing personnel costs and streamlining our organizational structure to create a stronger foundation for future improvements.

This year, we enhanced our service portfolio through the full launch of Digitalist Open Cloud AB and the introduction of Digitalist Private AI Hub, offering secure and GDPR-compliant AI capabilities. These new solutions cater to the rising demand for data privacy and advanced digital services, attracting clients who recognize the value of our approach.

Looking ahead, we remain focused on driving operational efficiency, sharpening our service offerings, and capitalizing on growth opportunities. Although the market may remain challenging in the near term, our product innovation and constant focus on cost management, positions Digitalist Group for long-term success.

I extend my sincere gratitude to our employees for their commitment and to our clients for their trust. Together, we have navigated a demanding year, and together we will seize the opportunities that lie ahead.

Magnus Leijonborg
CEO, Digitalist Group

Future prospects

In 2025, it is expected that turnover and EBITDA will improve in comparison with 2024.

SEGMENT REPORTING

Digitalist Group reports its business in a single segment.

TURNOVER

In the fourth quarter, the Group’s turnover was EUR 4.7 million (EUR 4.2 million), reflecting a 12.9% increase compared to the previous year. The increase was due to the strengthening of the Swedish business.

The Group’s turnover for the period totalled EUR 16.2 million (EUR 16.7 million), which is 3.1% lower than the previous year, as a result of the weak market situation in Finland. The turnover for the whole year fell short of the targets, as the economic slowdown and uncertainty have made customers more cautious when starting new projects.

Market conditions in Finland have been challenging. The share of turnover outside Finland rose to 70 percent (61 %), and the increase was mainly due to the strengthening of the Swedish business. The net impact on turnover from the divestment of FutureLab and the acquisition of Open Communications for the review period is EUR 0.1 million compared to the comparison period.

RESULT

In the fourth quarter, EBITDA was EUR -0.2 million (EUR -0.4 million), EBIT was EUR -0.3 million (EUR -0.6 million) and profit before taxes was EUR -0.9 million (EUR -1.6 million). EBITDA was positively affected by improved sales and a EUR 0.3 million reduction in personnel and operating expenses. Net income for the final quarter amounted to EUR -1.0 million (EUR -1.6 million), earnings per share were EUR -0.00 (EUR -0.00).

EBITDA for the financial period amounted to EUR -1.5 million (EUR -0.9 million), EBIT was EUR -2.0 million (EUR -1.7 million) and profit before taxes was EUR -4.9 million (EUR -4.0 million). Expenses were EUR 0.7 million lower compared to the previous year, of which operating expenses were EUR 0.3 million lower and personnel expenses EUR 0.4 million lower. Cost savings improved EBITDA, but the decline in sales weakened the overall impact.

The EBIT was influenced by the decrease of depreciations of balance sheet items by EUR 0.4 million. EBIT, EBITDA and net income of the comparison period were impacted by a booked gain of EUR 0.6 million from the FutureLab Share transaction and EUR 0.3 million is attributed to the write-down of Turret accounts payable and an additional purchase price related to the Ticknovate divestment.

Net financial items amounted to EUR -3.0 million (EUR -2.3 million), mainly comprising external interest expenses related to loans from financial institutions and related parties. External interest expenses were EUR -2.2 million (EUR -2.1 million). Financial items in the comparison period were positively impacted by Business Finland’s non-collection decision on a EUR 0.3 million part of the product development loan and unrealized exchange gains. Net income for the financial period amounted to EUR -5.0 million (EUR -4.1 million), earnings per share totalled EUR -0.01 (EUR -0.01).

RETURN ON EQUITY

The Group’s shareholders’ equity amounted to EUR -37.7 million (EUR -32.7 million). The Group’s equity considering the capital loans was EUR -13.8 million (EUR -15.8 million). Return on equity (ROE) was negative. Return on investment (ROI) was -161.9% (-27.8%).

BALANCE SHEET AND FINANCING

The balance sheet total was EUR 10.1 million (EUR 11.4 million). The solvency ratio was -379.1% (-285.9%).

At the end of the period, the Group’s liquid assets totalled EUR 0.9 million (EUR 0.9 million).

At the end of the financial period the Group’s interest-bearing liabilities amounted to EUR 38.2 million (EUR 35.7 million). The Group’s balance sheet recognised EUR 11.0 million (EUR 11.4 million) in loans from financial institutions, including the overdrafts in use. IFRS 16 leasing debts were EUR 0.6 million (EUR 1.0 million).

In addition, the company has loans from its main owners. The loans from related parties amount to EUR 26.6 million (EUR 23.4 million). EUR 23.9 million (EUR 16.9 million) related party loans were capital loans, EUR 0 million (EUR 5.8 million) were convertible bonds, EUR 2.8 million (EUR 0.8 million) were other related party loans, of which EUR 2.0 million were short term. The changes result from the conversion of convertible bonds into capital loans in accordance with Chapter 12 of the Limited Liability Companies Act and from the new loan installments from Turret. More information about the arrangements can be found in the section of the review: Related party transactions.

CASH FLOW

The Group’s cash flow from operating activities during the review period was EUR -1.4 million (EUR -2.9 million), a change of EUR 1.5 million. The development of the company’s liquid assets was influenced by improved working capital. In order to reduce the rate of turnover of trade receivables, the Group sells part of its trade receivables from Finnish customers. In addition, some Swedish trade receivables are financed through factoring arrangements.

GOODWILL

On 31 December 2024, the Group’s balance sheet included goodwill of EUR 5.2 million (EUR 5.4 million). The company tested goodwill in accordance with IAS 36 on 31 December 2024 and no need for an impairment charge was detected.

PERSONNEL

During the financial period, the Group had an average of 123 employees (139). At the end of the financial period, the total number of employees was 122 (126), with 52 (52) working for the Group’s Finnish companies and 70 (74) employed by its foreign subsidiaries.

SHARES AND SHARE CAPITAL

Share turnover and price

During the financial period, the company’s share price hit a high of EUR 0.02 (EUR 0.03) and a low of EUR 0.01 (EUR 0.01), and the closing price on 31 December 2024 was EUR 0.01 (EUR 0.02). The average price in the financial period was EUR 0.01 (EUR 0.02). During the financial period 78,321,067 (40,711,793) shares were traded, corresponding to 11.3% (6.0%) of the number of shares in circulation at the end of the period. The Group’s market capitalisation at the closing share price on 31 December 2024 was EUR 9,985,399 (EUR 10,236,341).

Share capital

At the beginning of the period under review, the company’s registered share capital was EUR 585,394.16, and there were 693,430,455 shares. At the end of the period, the share capital was EUR 585,394.16, and there were 693,430,455 shares. The company has one class of shares. At the end of the reporting period, the company held a total of 7,664,943 treasury shares corresponding to 1.1% of the total shares.

Option plan 2019 and 2021

The option plan 2019 has expired.

The option rights belonging to the company’s option program 2021 are marked as series 2021A1, 2021A2, 2021B1, 2021B2 and 2021C1. A maximum of 60,000,000 stock options can be issued and they entitle to subscribe for a maximum of 60,000,000 new shares of the Company. A total of 38,450,000 options belonging to the 2021A1 and 2021A2 series have been distributed among the options included in the option program. The last exercise date for the series 2021A1 was 31.12.2024. 28,650,000 of the distributed options have expired, so based on the terms of the option program, it is possible to subscribe for a maximum of 9,800,000 new shares of the Company.

The theoretical market value of the options allocated by the end of the financial period is approximately EUR 0.8 million, which is recognised as an expense in accordance with IFRS 2 for the years 2021-2025. The expense recognition for 2024 is EUR 0.1 million. The expense recognition does not have cash flow impact.

Terms and conditions of option programs can be found at the Company’s web site https://investor.digitalistgroup.com//investor

Shareholders

The number of shareholders on 31 December 2023 was 5,705 (5,578). Private individuals owned 11.8% (10.4%) of the shares, and institutions held 78.4% (79.5%). Foreign nationals or entities held 9.8% (10.0%) of the shares. Nominee-registered shares accounted for 12.6% (6.3%) of the total.

AUTHORIZATIONS OF THE BOARD OF DIRECTORS

Annual General Meeting 25 April 2024

The company held its Annual General Meeting on 25 April 2024. The minutes of the Annual General Meeting and the decisions made are on the company’s website at https://investor.digitalistgroup.com/investor/governance/annual-general-meeting

The financial statements and consolidated financial statements for the financial year ended December 31, 2023, were approved as presented.

The Annual General Meeting resolved that the loss EUR 4,575,895.22 indicated by the financial statements for 2023 be recorded in the Company’s profit and loss account, and that no dividend be paid to shareholders for the financial period 2023.

The Annual General Meeting elected Johan Almquist, Paul Ehrnrooth, Peter Eriksson, Esa Matikainen, and Andreas Rosenlew as ordinary members of the Board of Directors, and Magnus Wetter as a new member of the Board of Directors. At the Board meeting held on 25 April 2024 after the Annual General Meeting, the Board of Directors elected Esa Matikainen as the Chair of the Board and Andreas Rosenlew as the Deputy Chair of the Board. The Board resolved to continue with the Audit Committee. Esa Matikainen was elected as a chairman and Peter Eriksson and Magnus Wetter as members of the Audit Committee.

The Board of Directors evaluated on the date of the financial statement release the independence of the Committee members in compliance with the recommendations of the Finnish Corporate Governance Code 2020 as follows. Esa Matikainen and Magnus Wetter are independent of the company and independent of a significant shareholder. Peter Eriksson is independent of the company and dependent on a significant shareholder.

Audit firm KPMG Oy Ab was appointed as the company’s auditor.

Authorisation of the Board of Directors to decide on share issues and on granting special rights entitling to shares

The Annual General Meeting authorised the Board to decide on a paid share issue and on granting option rights and other special rights entitling to shares that are set out in Chapter 10 Section 1 of the Finnish Limited Liability Companies Act, or on the combination of all or some of the aforementioned instruments in one or more tranches on the following terms and conditions:

The total number of the Company’s treasury shares and new shares to be issued under the authorisation may not exceed 346,715,227, which corresponds to approximately 50 per cent of all the Company’s shares at the time of convening the Annual General Meeting.

Within the limits of the aforementioned authorisation, the Board of Directors may decide on all terms and conditions applied to the share issue and to the special rights entitling to shares, such as that the payment of the subscription price may take place not only by cash but also by setting off receivables that the subscriber has from the Company.

The Board of Directors shall be entitled to decide on crediting the subscription price either to the Company’s share capital or, entirely or in part, to the invested unrestricted equity fund.

The share issue and the issuance of special rights entitling to shares may also take place in a directed manner in deviation from the pre-emptive rights of shareholders if there is a weighty financial reason for the Company to do so, as set out in the Limited Liability Companies Act. In such a case, the authorisation may be used to finance corporate acquisitions or other investments related to the operations of the Company as well as to maintain and improve the solvency of the Group and to carry out an incentive scheme.

The authorisation is proposed to be effective until the Annual General Meeting held in 2025, yet no further than until 30 June 2025.

Authorising the Board of Directors to decide on the acquisition and/or on the acceptance as pledge of the Company’s treasury shares

The Annual General Meeting authorised the Board to decide on acquiring or accepting as pledge, using the Company’s distributable funds, a maximum of 69,343,000 treasury shares, which corresponds to approximately 10 per cent of the Company’s total shares at the time of convening the Annual General Meeting. The acquisition may take place in one or more tranches. The acquisition price shall not exceed the highest market price of the share in public trading at the time of the acquisition.

In executing the acquisition of treasury shares, the Company may enter into derivative, share lending or other contracts customary in the capital market, within the limits set out in laws and regulations. The authorisation entitles the Board to decide on an acquisition in a manner other than in a proportion to the shares held by the shareholders (directed acquisition).

The Company may acquire the shares to execute corporate acquisitions or other business arrangements related to the Company’s operations, to improve its capital structure, or to otherwise further transfer the shares or cancel them.

The authorisation is proposed to include the right for the Board of Directors to decide on all other matters related to the acquisition of shares. The authorisation is proposed to be effective until the Annual General Meeting held in 2025, yet no further than until 30 June 2025.

The Annual General Meeting approved the Board’s proposals to change the terms of the Convertible Bonds 2021/1, 2021/3, and 2022/1 issued to Turret Oy Ab without modifications.

The Annual General Meeting approved the Board’s proposals to change the terms of the Convertible Bonds 2021/2 and 2021/4 issued to Holdix Oy Ab without modifications.

It was noted that the following measures have been taken in the Company after the end of the fiscal year on December 31, 2023:

● Convertible bonds 2021/3 and 2021/4 were partially converted into capital loans as per Chapter 12 of the Companies Act, as announced on March 22, 2024; and
● the General Meeting has decided, following the board’s proposals, to change the terms of the Convertible Bonds 2021/1, 2021/2, 2021/3, 2021/4, and 2022/1, including their maturity extensions until September 30, 2026.

It was noted that these actions have supported and will support the Company’s balance sheet and solvency.

It was resolved to accept the proposition of the Board of Directors of the Company not to implement immediate additional measures to rectify the Company’s financial position, but the Company will actively evaluate other possibilities and means to support the Company’s financial standing.

The stock exchange releases are on the company’s website at https://investor.digitalistgroup.com/investor/releases

CHANGES IN THE GROUP STRUCTURE

Digitalist Open Tech AB sold part of its IT and SaaS business to the newly established Digitalist Open Cloud AB through an internal business transfer agreement 1 April 2024. Digitalist Open Cloud AB is now a subsidiary of Digitalist Open Tech AB, with a 15% minority stake held by the subsidiary management.

Digitalist Group divested its fully-owned subsidiary Open Communications International AB 31 May 2024 to its subsidiary Grow AB, in which it holds a 90% ownership. Sales price was EUR 0.9 million.

In addition, Digitalist Group has closed non-operative companies. Digitalist USA Ltd was formally dissolved in 2024. Grow Finland Oy and Ixonos Estonia have been removed from the trade register in 2024.

EVENTS SINCE THE FINANCIAL PERIOD

There have been no significant events since the end of the financial period.

RELATED-PARTY TRANSACTIONS

Financing arrangements with related parties:

Strengthening Digital Group Plc’s equity, conversion of convertible bonds partly into capital loans

In order to strengthen the Company’s equity, Digital Group decided on 22 March 2024 to utilize the right provided by Turret Oy Ab and Holdix Oy Ab to convert a total of 1,907,175.40+interest 334,513.29 euros of the principal and interest of the convertible bonds 2021/3 and 2021/4 subscribed by Turret and Holdix into a capital loan in accordance with Chapter 12 of the Limited Liability Companies Act.

Amendment of the terms concerning Convertible Bonds 2021/1, 2021/2, 2021/3, 2021/4 and 2022/1 issued by Digitalist Group Plc

Convertible Bonds 2021/1, 2021/3 and 2022/1 directed to Turret Oy Ab

The Annual General Meeting of Digitalist Group 25 April 2024 resolved on the amendments to the Terms of the Convertible Bonds 2021/1, 2021/3, and 2022/1 issued to Turret.

Digitalist Group Plc and Turret Oy Ab signed agreements April 26 2024 to amend the terms of the Convertible Bonds 2021/1, 2021/3, and 2022/1 and the option rights and other special rights pursuant to Chapter 10 section 1(2) of the Limited Liability Companies Act attached to them issued to Turret.

The maturity of the Convertible Bonds was extended to 30 September 2026.

Convertible Bonds 2021/2 and 2021/4 directed to Holdix Oy Ab

The Annual General Meeting of Digitalist Group 25 April 2024 resolved on the amendments to the Terms of the Convertible Bonds 2021/2 and 2021/4 issued to Holdix.

Digitalist Group and Holdix Oy Ab signed agreements April 26 2024 to amend the terms of the Convertible Bonds 2021/2 and 2021/4 and the option rights and other special rights pursuant to Chapter 10 section 1(2) of the Limited Liability Companies Act attached to them issued to Holdix.

The maturity of the Convertible Bonds was extended to 30 September 2026.

Digitalist Group structures its financing

Digitalist Group Plc’s agreed 28.10.2024 with Turret Oy Ab on a loan amounting to EUR 1,000,000 in order to strengthen the Company’s working capital. The Company has the right to withdraw the Loan in instalments by 31 December 2025 at the latest. The Loan was granted on market terms and it will fall due on 31 December 2026.

Strengthening Digitalist Group Plc’s balance sheet position and conversion of convertible bonds 2021/1, 2021/2, 2021/3 and 2021/4 into capital loans

Digitalist Group Plc decided 30.12.2024, in order to strengthen the Company’s balance sheet position, to utilize the right offered by Turret Oy Ab and Holdix Oy Ab to convert a total of 3,860,763.40 + interest 861,271.93 euros of the principal and interest of the convertible bonds 2012/1, 2021/2, 2021/3 and 2021/4 subscribed by Turret and Holdix into a capital loan in accordance with Chapter 12 of the Limited Liability Companies Act.

OTHER EVENTS DURING THE FINANCIAL PERIOD

Digitalist Group decreased its earlier guidance regarding future prospects 17.10.2024. The new guidance was: In 2024, turnover and EBITDA are expected to decrease in comparison with 2023.

Operationally, not including the impact of other operating income (EUR 1.0 million), the current financial year was expected to be stronger than the previous year.

The stock exchange releases for the review period are on the company’s website at https://investor.digitalistgroup.com/investor/releases

RISK MANAGEMENT AND SHORT-TERM UNCERTAINTIES

The objectives of Digitalist Group Plc’s risk management are to ensure the undisrupted continuity and development of the company’s operations, support the achievement of the company’s business objectives and increase the company’s value. For more details about the organisation of risk management, processes and identified risks, see the company’s website at https://investor.digitalistgroup.com/investor

The company has been making a loss despite the efficiency measures it has taken. The company’s loss-making performance directly affects its working capital and the sufficiency of its financing. This risk is managed by maintaining the capacity to use different financing solutions. The company aims to continuously assess and monitor the amount of necessary business financing to ensure that it has sufficient liquid assets to finance its operations and repay maturing loans. Any disruptions in the financial arrangements would weaken Digitalist Group’s financial position.

The company is currently dependent on external financing, most of which has been obtained from related-party companies and financial institutions. Digitalist Group’s ability to finance its operations and reduce the amount of its debt depends on several factors, such as the cash flow from operations and the availability of debt and equity financing, and there is no certainty that such financing will be available in the future. Similarly, there can be no certainty in the long term that Digitalist Group will be able to obtain additional debt or refinance its current debt on acceptable terms, if at all.

During 2024, negotiations regarding the restructuring of maturing convertible bonds held by related parties were concluded, and the maturity date was extended until autumn 2026. The convertible bonds were converted into capital loans in two tranches in accordance with Chapter 12 of the Limited Liability Companies Act in 2024, strengthening the company’s balance sheet.

Any changes to key client accounts could have a substantial impact on Digitalist Group’s operations, earning potential and financial position. If one of Digitalist Group’s largest clients decided to switch to a competing company or drastically altered its operating model, the chances of finding client volumes to replace the shortfall in the near term would be limited.

The Group’s business consists mainly of individual client agreements, which are often relatively short-term. Forecasting the start dates and scopes of new products is occasionally challenging, while the cost structure is largely fixed. The aforementioned aspects can lead to unpredictable fluctuations in turnover and, thereby, in profitability. The Group’s business consists of some fixed-price deliveries (65%). Fixed-price client deliveries carry risks related to timing and content. The company endeavours to manage these risks through contractual and project management measures.

Irrespective of the market situation, there is a shortage of certain experts in the Group’s business sector. Although the aggressive recruitment policies that occasionally arise in the Group’s business sector have decreased significantly, there is still a risk of personnel moving to competitors. There are no guarantees that the company will be able to retain its current personnel and recruit new employees to enable growth. If Digitalist Group loses a significant number of its current personnel, it would be more difficult to complete existing projects and acquire new ones. This could have an adverse impact on Digitalist Group’s business, earnings and financial position.

The cost inflation has decreased significantly but can still exert pressure to raise salaries, so the importance of cost monitoring is emphasised further. Variation in interest rates do not have a significant direct impact on financing costs because most of the company’s debts have fixed interest rates. If the interest rates on the company’s loans from financial institutions rose by 1 per cent, the company’s annual interest costs would rise by approximately EUR 0.1 million.

Part of the Group’s turnover is invoiced in currencies other than the euro – mainly in the Swedish krona. The risk associated with changes in exchange rates can be managed in various ways, including net positioning and currency hedging contracts. In 2024 and 2023, the Group had no hedging contracts.

The Group’s balance sheet contains goodwill that is subject to impairment risk in the event that the Group’s future yield expectations decrease due to internal or external factors. The goodwill is tested for impairment every six months and whenever the need arises.

General economic uncertainty and low growth forecasts in the company’s key markets affected the Group’s business during the financial period, but the future impact is difficult to estimate. Geopolitical uncertainty may affect the business activities of some of the Group’s clients, thereby indirectly affecting the Group’s business. The Group has no business activities in Russia or Ukraine.

LONG-TERM GOALS AND STRATEGY

Digitalist Group aims to achieve a profit margin of at least 10% over the long term. In order to achieve its long-term goals, Digitalist Group strives for profitable, international growth by shaping new forms of thinking, services and technological solutions for a variety of sectors. These sectors include, among others, the technology industry, energy industry, transport and logistics, as well as consumer services in both the public and private sectors. Digitalist Group’s strategy focuses on enhancing its service and solution business and seamlessly integrating user and operational research, branding, design and technology.

PROPOSAL BY THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING

The Board of Directors of Digitalist Group Plc proposes to the Annual General Meeting that the distributable funds be retained in shareholders’ equity and that no dividend be distributed to shareholders for the 2024 financial period. On 31 December 2024, the parent company’s distributable assets were negative.

Digitalist Group Plc’s Annual General Meeting will be held on 29 April 2025.
Digitalist Group’s Financial Statements 2024 will be published and posted on the company’s website on 28 March 2025. Digitalist Group Plc’s Financial Statements will be published in Finnish and English and they are available on the Group’s website https://investor.digitalistgroup.com/investor immediately after publication.

NEXT REVIEW

The Business review for January–March 2025 will be published on Friday 25 April 2025.

DIGITALIST GROUP PLC
Board of Directors

Further information:
Digitalist Group Plc
CEO Magnus Leijonborg, tel. +46 76 315 8422, magnus.leijonborg@digitalistgroup.com
Chairman of the Board Esa Matikainen, tel. +358 40 506 0080, esa.matikainen@digitalistgroup.com

Distribution:
NASDAQ Helsinki

Key media
https://investor.digitalistgroup.com/investor

DIGITALIST GROUP

SUMMARY OF THE FINANCIAL STATEMENTS AND NOTES, 1 JANUARY–31 DECEMBER 2024

CONSOLIDATED INCOME STATEMENT, EUR THOUSAND

	1 Oct – 31 Dec 24	1 Oct – 31 Dec 23	Change (%)	1 Jan – 31 Dec 24	1 Jan – 31 Dec 23	Change (%)
Turnover	4,698.85	4,160.22	12,9 %	16,164.54	16,680.74	-3,1 %
Other operating income	-41.02	280.21	-114,6 %	50.00	1,006.67	-95,0 %

Materials and services	-932.52	-639.82	-45,7 %	-3,102.99	-3,202.01	3,1 %
Expenses from employee benefits	-3,251.70	-3,331.27	2,4 %	-11,874.22	-12,269.02	3,2 %
Depreciation and impairment	-132.28	-218.14	39,4 %	-469.53	-834.41	43,7 %
Other operating expenses	-673.33	-848.57	20,7 %	-2,750.27	-3,077.67	10,6 %
Total expenses	-4,989.83	-5,037.80	1,0 %	-18,197.01	-19,383.11	6,1 %

EBIT	-331.99	-597.37	44,4 %	-1,982.47	-1,695.70	-16,9 %

Financial income	78.27	4.17	1779,2 %	155.41	752.50	-79,3 %
Financial expenses	-695.08	-1,021.72	32,0 %	-3,103.37	-3,026.21	-2,5 %
Total financial income and expenses	-616.81	-1,017.55	39,4 %	-2,947.96	-2,273.71	-29,7 %

Profit before taxes	-948.80	-1,614.92	41,2 %	-4,930.43	-3,969.41	-24,2 %
Income taxes	-50.82	-3.87	-1214,3 %	-87.04	-115.46	24,6 %
PROFIT/LOSS FOR FINANCIAL PERIOD	-999.62	-1,618.78	38,2 %	-5,017.47	-4,084.87	-22,8 %

Distribution:
Parent company shareholders	-875.12	-1,557.64	43,8 %	-4,707.38	-4,042.14	-16,5 %
Non-controlling interests	-124.50	-61.15	-103,6 %	-310.09	-42.73	-625,8 %
Earnings per share:
Undiluted (EUR)	0.00	0.00		-0.01	-0.01
Diluted (EUR)	0.00	0.00		-0.01	-0.01

COMPREHENSIVE INCOME STATEMENT, EUR THOUSAND

	1 Oct – 31 Dec 24	1 Oct – 31 Dec 23	Change (%)	1 Jan – 31 Dec 24	1 Jan – 31 Dec 23	Change (%)
Profit/loss for the financial period	-999.62	-1,618.78	38,2%	-5,017.47	-4,084.87	-22,8%
Other items of comprehensive income
Translation difference	-140.67	663.20	-121,2%	-67.99	229.71	-129,6%
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	-1,140.29	-955.58	-19,3%	-5,085.47	-3,855.45	-31,9%
Parent company shareholders	-1,006.68	-869.23	-15,8%	-4,759.00	-3,807.09	-25,0%
Non-controlling interests	-133.61	-86.35	-54,7%	-327.00	-48.06	-580,4%

CONSOLIDATED BALANCE SHEET, EUR THOUSAND

ASSETS	31 December 2024	31 December 2023
NON-CURRENT ASSETS
Intangible assets	313.78	422.06
Goodwill	5,244.98	5,444.44
Tangible assets	569.43	916.99
Buildings and structures, rights-of-use	528.59	867.73
Machinery and equipment	27.55	34.52
Other tangible assets	13.29	14.74
Investments	6.23	6.28
Other non-current financial assets	88.02	24.35
NON-CURRENT ASSETS	6,222.44	6,814.12

CURRENT ASSETS
Trade and other receivables	2,612.34	3,508.10
Income tax asset	320.88	228.46
Cash and cash equivalents	943.53	893.65
CURRENT ASSETS	3,876.75	4,630.21
ASSETS	10,099.19	11,444.12

SHAREHOLDERS’ EQUITY AND LIABILITIES
SHAREHOLDERS’ EQUITY
Parent company shareholders
Share capital	585.39	585.39
Share premium account	218.73	218.73
Invested non-restricted equity fund	73,916.78	73,916.78
Retained earnings	-107,368.76	-103,343.29
Profit/loss for the financial period	-4,707.38	-4,042.14
Non-controlling interests	-311.28	-53.08
Parent company shareholders	-37,355.24	-32,664.53
SHAREHOLDERS’ EQUITY	-37,666.53	-32,717.43
NON-CURRENT LIABILITIES	25,438.08	3,748.88
CURRENT LIABILITIES	22,327.73	40,412.84
SHAREHOLDERS’ EQUITY AND LIABILITIES	10,099.29	11,444.28

CALCULATION OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY, EUR THOUSAND
A:   Share capital
B:   Share premium account
C: Invested unrestricted equity fund
D: Translation difference
E:   Retained earnings
F:   Total shareholders’ equity attributable to the parent company’s
G: Non-controlling interests
H: Total shareholders’ equity

	A	B	C	D	E	F	G	H
Shareholders’ equity 1 Jan 2023	585.39	218.73	73,662.55	-1,197.92	-104,545.23	-31,276.47	503.13	-30,773.34
Other changes
Profit/loss for the financial period					-4,042.14	-4,042.14	-42.73	-4,084.87
Purchase of own shares				235.05		235.05	-5.33	229.72
Other items of comprehensive income						-3,807.09
Paid in capital			253.98			253.98		253.98
Translation difference					176.44	176.44		176.44
Share-based remuneration					0.00	0.00		0.00
Transactions with non-controlling interests							-508.15	1,480.52
Shareholders’ equity 31 December 2023	585.00	219.00	73,916.78	-1,192.36	-106,192.89	-32,664.35	-53.08	-32,717.43

	A	B	C	D	E	F	G	H
Shareholders’ equity 1 Jan 2024	585.00	219.00	73,916.78	-1,192.36	-106,192.89	-32,664.35	-53.08	-32,717.43
Other changes				0.00	0.00
Profit/loss for the financial period					-4,707.38	-4,707.38	-310.09	-5,017.47
Purchase of own shares				-51.33		-51.33	-16.66	-67.99
Other items of comprehensive income						-4,758.71
Translation difference					54.23	54.23		54.23
Share-based remuneration					-14.40	-14.40		-14.40
Sale of subsidiary					13.81	13.81		13.81
Transactions with non-controlling interests					14.18	14.18	68.55	82.73
Shareholders’ equity 31 December 2024	585.00	219.00	73,916.78	-1,243.69	-110,832.45	-37,355.23	-311.29	-37,666.52

CONSOLIDATED CASH FLOW STATEMENT, EUR THOUSAND

	1 Jan – 31 Dec 24	1 Jan – 31 Dec 23	1 Jul – 31 Dec 24	1 Jul – 31 Dec 23
Cash flow from operations
Earnings before taxes in the period	-5,017.47	-4,084.87	-2,461.65	-2,094.96
Adjustments to cash flow from operations:
Other income and expenses with no payment	-235.55	-76.63	-261.44	-174.25
Depreciation, impairment	469.53	834.41	265.81	417.90
Income taxes	87.04	115.46	42.16	31.37
Unrealised foreign exchange gains and losses	-85.26	-255.59	124.47	-296.11
Financial income and expenses	3,057.58	2,273.71	1,655.67	1,704.54
Other adjustments	4.81	-561.90	3.25	-576.30
Cash flow financing before changes in working capital	-1,719.32	-1,755.41	-631.73	-987.82

Change in working capital	1,290.45	-262.04	936.75	-313.93
Interest received	47.37	0.72	10.04	3.07
Interest paid	-883.89	-710.82	-395.39	-333.90
Taxes paid	-133.04	-149.35	-40.34	-46.81
Net cash flow from operations	-1,398.42	-2,876.89	-120.68	-1,679.39

Cash flow from investments
Acquisition of shares in group companies	0.00		0.00
Proceeds from disposal of shares in group companies	0.00		0.00
Investments in tangible and intangible assets	-15.42	-22.33	-6.49	-9.95
Proceeds from repayment of loans	0.00
Interest received on investments	0.00
Taxes paid on investments	0.00
Cash flow from investments	-15.42	2,447.66	-6.49	1,049.09

Net cash flow before financial items	-1,413.84	-429.23	-127.18	-630.30

Cash flow from financing activities
Transactions with non-controlling interests	19.53	136.18	-6.25	-12.17
Drawdown of long-term loans	2,025.00	750.00	1,275.00	750.00
Drawdown of short-term loans	0.00	736.90	-212.58
Repayment of short-term loans	-129.07		-105.31	-1.81
Repayment of lease liabilities	-429.40	-697.51	-184.02	-354.56
Net cash flow from financing	1,486.06	423.76	766.83	441.83

Change in cash and cash equivalents	72.22	-5.46	639.66	-188.47
Liquid assets, beginning of period	893.44	898.55	308.06	1,041.04
Impact of changes in exchange rates	-22.14	0.36	-4.20	40.88
Liquid assets, end of period	943.53	893.44	943.53	893.44

Accounting principles

This release has been prepared in accordance with IAS 34 – Interim Financial Reporting. The interim report release complies with the same accounting principles and calculation methods as the annual financial statements. The updates to the IFRS standards that entered into force on 1 January 2024 do not have a significant impact on the figures presented.

The preparation of a financial statement release in accordance with IFRS requires the management to use certain estimates and assumptions that affect the amounts recognised in assets and liabilities when the balance sheet was prepared, as well as the amounts of income and expenses in the period. In addition, discretion must be used in applying the accounting policies. As the estimates and assumptions are based on outlooks on the balance sheet date, they contain risks and uncertainties. The realised values may deviate from the original assessments and assumptions.

The original release is in Finnish. The English release is a translation of the original.

Going concern

The Group’s result has remained negative, and the financial situation has been challenging at times but the financial statement release has been prepared in accordance with the principle of the business as a going concern. The assumption of continuity is based management assumptions on several factors, including the following:

The cost-saving programs have improved the Group’s profitability in 2023 and 2024. Operating expenses and personnel expenses have decreased by EUR 0.7 million in comparison with the review period and the cost structure is now lighter.
Additional cost-saving programs started in 2024 will have nearly full effect in 2025.
The Group is finding new growth areas and reinforcing its market position in Sweden, which is expected to have a positive impact on sales trends.
Negotiations regarding the arrangements for related party convertible bonds maturing in 2024 were successfully completed in 2024, resulting in the extension of their maturity to the autumn 2026.

EUR 2.0 million of the Group’s financial institution loans are set to begin repayment on April 30, 2025. As of the publication date of the financial statement release, negotiations to extend the loan’s maturity date are still ongoing. However, management is confident that the outcome will be favorable for the company.

At the time of the financial statement release, the company expects its working capital to be sufficient to cover its requirements over the next 12 months based on the financing support provided by the main owner if needed. Negotiations with the main owner to secure financing for the next 12 months are ongoing and are expected to be completed before the publication of the financial statements and based on this the financial statement release has been prepared in accordance with the going concern principle.

Goodwill impairment testing and recognised impairment

Digitalist Group tested its goodwill for impairment on 30 June 2024 and 31 December 2024. The goodwill is allocated to one cash-generating unit. No need to write down goodwill was identified.

The value in use of the tested property exceeded the tested amount by EUR 9.0 million. The tested amount of goodwill in the balance sheet at the end of the review period is EUR 4.9 million.

The company tests its goodwill based on the utility value of the assets. In the testing conducted on 31 December 2024 in conjunction with the financial statements, the cash flow forecasting period was from 2025 to 2029. During the forecast period, average growth in revenue of 15% is expected to be achieved which is supported by the market growth of the group’s industries and the increasingly extensive impact of digitalization in business life. In addition, the rapid development of artificial intelligence (AI) and its integration into service offerings will accelerate growth by offering more efficient and innovative solutions to customers. The efficiency measures and strategic recruitment carried out provide a solid basis for growth. EBITDA is projected to rise to 7% in 2026 and to 12% by the end of the forecasting period, being 9% on average.

The method involves comparing the tested assets with their cash flow over the selected period, taking into account the discount rate and the growth factor of the cash flows after the forecast period. The discount rate is 11.4% (11.4%). The growth factor used to calculate the cash flows after the forecast period is 2.35%.

The average EBITDA margin for the forecast period was used to calculate the value of the terminal period. A significant negative change in individual assumptions used in the calculations can necessitate a goodwill impairment charge. The sensitivity analysis indicates that an impairment charge may be necessary if the average growth in turnover is below 14% in the forecasting period and the fixed cost structure does not change. If the EBITDA falls below 6% in the forecasting period or the WACC surpasses 28%, all else equal, impairment charges may become necessary.

CONSOLIDATED INCOME STATEMENT BY QUARTER, EUR THOUSAND

	Q4/2024	Q3/2024	Q2/2024	Q1/2024	Q4/2023
	1.10.-31.12.24	1.7.-30.9.24	1.4.-30.6.24	1.1.-31.3.24	1.10.-31.12.21
Turnover	4,698.85	3,585.61	4,021.60	3,858.48	4,160.22
Other operating income and expenses	-5,031.05	-3,898.35	-4,749.35	-4,468.49	-4,757.59
EBIT	-331.99	-312.54	-727.84	-610.10	-597.37
Financial income and expenses	-616.81	-1,158.14	-783.20	-389.80	-1,017.55
Profit before taxes	-948.80	-1,470.68	-1,511.03	-999.91	-1,614.92
Income taxes	-50.64	8.66	-1.20	-43.68	-3.87
PROFIT/LOSS FOR COMPARISON PERIOD	-999.62	-1,462.03	-1,512.24	-1,043.59	-1,618.78

CHANGES IN INTANGIBLE AND TANGIBLE ASSETS, EUR THOUSAND

	Goodwill	Intangible assets	Tangible fixed assets	Right-of-use assets	Other investments	Total
Carrying value 1 Jan 2023	4,677.98	109.82	65.08	1,135.06	101.76	6,090.22
Increases		462.69	26.56	416.91	4.70	2,059.07
Decreases
Changes in exchange rates	43.80	6.30	-0.40	-5.85		43.85
Depreciation for the review period		-156.59	-37.63	-640.18		-834.47
Carrying value 31 Dec 2023	5,444.44	422.53	48.47	867.05	6.27	6,789.76


	Goodwill	Intangible assets	Tangible fixed assets	Right-of-use assets	Other investments	Total
Carrying value 1 Jan 2024	5,444.44	422.53	48.47	867.05	6.27	6,789.76
Increases	0.00	0.42	15.97	482.60	0.00	498.99
Decreases	0.00		0.00	-462.23	0.00	-462.23
Changes in exchange rates	-199.68	-22.70	-1.35	-12.90		-236.64
Depreciation for the review period		-85.57	-22.18	-344.61		-452.36
Carrying value 31 Dec 2024	5,244.75	314.67	40.91	529.90	6.27	6,137.51

KEY INDICATORS

	1 Jan – 31 Dec 2024	1 Jan – 31 Dec 2023
Earnings per share (EUR) diluted	-0.01	0.00
Earnings per share (EUR)	-0.01	-0.01
Shareholders’ equity per share (EUR)	-0.05	-0.05
Cash flow from operations per share (EUR) diluted	0.00	0.00
Cash flow from operations per share (EUR)	0.00	0.00
Return on capital employed (%)	-161.86	-27.8
Return on equity (%)	neg.	neg.
Operating profit/turnover (%)	-12.27	-10.2
Gearing as a proportion of shareholders’ equity (%)	-99.00	-106.5
Equity ratio as a proportion of shareholders’ equity (%)	-379.11	-285.9
EBITDA (EUR thousand)	-1,512.94	-861.30

MATURITY OF FINANCIAL LIABILITIES AND INTEREST ON LOANS

31 December 2023	Balance sheet value	Cash flow	Under 1 year	1-5 years	Over 5 years
Loans from financial institutions	2,865.85	3,067.25	340.83	2,726.43
Credit limits	8,525.07	8,525.07	8,525.07
Convertible bonds	5,767.94	6,849.62		0.00
Capital loans	16,865.42	19,265.00		0.00
Other related-party loans	750.00	876.00	0.00
Lease liabilities IFRS 16	973.00	961.00	701.00	260.00
Accounts payable	864.66	864.66	864.66

31 December 2024	Balance sheet value	Cash flow	Under 1 year	1-5 years	Over 5 years
Loans from financial institutions	2,783.19	2,828.47	2,362.78	465.69
Credit limits	8,258.19	8,258.19	8,258.19
Capital loans	23,867.82	29,233.30		29,233.30
Other related-party loans	2,775.00	3,191.33		907.67
Lease liabilities IFRS 16	555.71	562.27	298.30	264.32
Accounts payable	1,124.07	1,124.07	1,124.07	0.00

Credit limits are valid until further notice.

OTHER INFORMATION

	1 Jan – 31 Dec 2024	1 Jan – 31 Dec 2023
NUMBER OF EMPLOYEES, average	123	139
Personnel at the end of the period	122	126

LIABILITIES, EUR THOUSAND
Pledges made for own obligations
Corporate mortgages	13,300.00	13,300.00

Total interest-bearing liabilities
Long-term loans from financial institutions	458.98	2,659.11
Other long-term liabilities	24,902.02	1,007.67
Short-term loans from financial institutions	2,221.92	414.39
Other short-term interest-bearing liabilities	10,657.00	31,665.62
Total	38,239.92	35,746.80

CALCULATION OF KEY FINANCIAL FIGURES

EBITDA = earnings before interest, tax, depreciation and amortisation

Diluted earnings per share = Profit for the financial period / Average number of shares, adjusted for share issues and for the effect of dilution

Earnings per share = Profit for the financial period / Average number of shares adjusted for share issues

Shareholders’ equity per share = Shareholders’ equity / Number of undiluted shares on the balance sheet date

Cash flow from operations per share (EUR) diluted = Net cash flow from operations / Average number of shares, adjusted for share issues and for the effect of dilution

Return on investment (ROI) =
(Profit before taxes + Interest expenses + Other financial expenses) /
(Balance sheet total – non-interest-bearing liabilities (average)) x 100

Return on equity (ROE) = Net income / Total shareholders’ equity (average) x 100

Gearing = interest-bearing liabilities – liquid assets / total shareholders’ equity x 100

Attachment

DIGITALIST GROUP’S FINANCIAL STATEMENT RELEASE, 1 JANUARY–31 DECEMBER 2024

The MIL Network –

February 28, 2025

MIL-OSI: CORRECTION – Global Net Lease Reports Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

In a release issued under the same headline earlier today by Global Net Lease, Inc. (NYSE: GNL), please note that in the Full Year 2025 Guidance and Dividend Update section, the third bullet should read “Reduced quarterly dividend…” and not “Reduced annual dividend…” as previously stated. The corrected release is as follows:

– Completed $835 Million in Dispositions in 2024, Surpassing High-End of Increased Guidance

– Reduced Net Debt by $734 million in 2024; Improved Net Debt to Adjusted EBITDA to 7.6x

– Company Meets and Exceeds its Full-Year 2024 Earnings Guidance

– Recently Announced $1.8 Billion Multi-Tenant Portfolio Sale Would Significantly Reduce Leverage and Improve Liquidity Position

– Proposed Transaction Would Create Pure-Play, Single-Tenant Net Lease Company with Enhanced Portfolio Metrics

– Company Initiates Opportunistic $300 Million Share Repurchase Program

NEW YORK, Feb. 27, 2025 (GLOBE NEWSWIRE) — Global Net Lease, Inc. (NYSE: GNL) (“GNL” or the “Company”), an internally managed real estate investment trust that focuses on acquiring and managing a globally diversified portfolio of strategically-located commercial real estate properties, announced today its financial and operating results for the quarter and year ended December 31, 2024.

Fourth Quarter and Full Year 2024 Highlights

Revenue was $199.1 million in fourth quarter 2024 compared to $206.7 million in fourth quarter 2023, primarily as a result of $835 million of dispositions closed throughout the year
Net loss attributable to common stockholders was $17.5 million in fourth quarter 2024, compared to $59.5 million in fourth quarter 2023
Core Funds From Operations (“Core FFO”) was $68.5 million, or $0.30 per share, in fourth quarter 2024, compared to $48.3 million, or $0.21 per share, in fourth quarter 2023
Adjusted Funds From Operations (“AFFO”)¹ was $78.3 million², or $0.34 per share, in fourth quarter 2024, compared to $71.7 million, or $0.31 per share, in fourth quarter 2023; full-year 2024 AFFO was $303.8 million, or $1.32 per share
Closed $835 million of dispositions in 2024 at a cash cap rate of 7.1% with a weighted average lease term of 4.9 years
Reduced net debt by $734 million in 2024, improving Net Debt to Adjusted EBITDA from 8.4x to 7.6x²
Exceeded projected cost synergies, reaching $85.0 million versus the expected $75.0 million, highlighting the Company’s successful integration efforts and ability to drive value through strategic initiatives
Increased portfolio occupancy from 93% as of the end of first quarter 2024 to 97% as of the end of the fourth quarter of 2024
Leased 1.2 million square feet across the portfolio, resulting in nearly $17.0 million of new straight-line rent
Renewal leasing spread of 6.8% with a weighted average lease term of 9.7 years; new leases completed in the quarter had a weighted average lease term of 6.5 years
Weighted average annual rent increase of 1.3% provides organic rental growth, excluding 14.8% of the portfolio with CPI linked leases that have historically experienced significantly higher rental increase
Sector-leading 61% of annualized straight-line rent comes from investment-grade or implied investment-grade tenants³

Multi-Tenant Portfolio Sale

Entered into a binding agreement to sell its multi-tenant portfolio of 100 non-core properties for approximately $1.8 billion
This strategic transaction would accelerate GNL’s disposition initiative and position the Company for sustained growth and value creation as a pure-play, single-tenant net lease company

“We are incredibly proud of our achievements at GNL in 2024 and even more excited about what lies ahead,” stated Michael Weil, CEO of GNL. “The sale of our multi-tenant portfolio would mark a pivotal moment, reinforcing the strong momentum we have built. This transaction would reshape GNL into a pure-play, single-tenant net lease company, eliminating the operational complexities, G&A expenses and capital expenditures tied to multi-tenant retail properties. More importantly, it would accelerate our deleveraging strategy and fortify our balance sheet. This strategic transformation, including the recently announced share repurchase program, underscores our long-term vision, reinforcing our commitment to prudent management, sustainable growth and driving meaningful shareholder value.”

Full Year 2025 Guidance and Dividend Update⁴
The Company is establishing initial 2025 guidance, which is contingent on the sale of our multi-tenant portfolio with respect to AFFO and Net Debt to Adjusted EBITDA.

AFFO per share range of $0.90 to $0.96
Net Debt to Adjusted EBITDA range of 6.5x to 7.1x
Reduced quarterly dividend to $0.190 per share of common stock beginning with the dividend expected to be declared in April 2025 which would generate $78 million in incremental annual cash flow

Summary Fourth Quarter 2024 Results

	Three Months Ended December 31,
(In thousands, except per share data)	2024			2023
Revenue from tenants	$	199,115		$	206,726

Net loss attributable to common stockholders	$	(17,458	)	$	(59,514	)
Net loss per diluted common share	$	(0.08	)	$	(0.26	)

NAREIT defined FFO attributable to common stockholders	$	64,334		$	43,165
NAREIT defined FFO per diluted common share	$	0.28		$	0.19

Core FFO attributable to common stockholders	$	68,538		$	48,331
Core FFO per diluted common share	$	0.30		$	0.21

AFFO attributable to common stockholders	$	78,297		$	71,656
AFFO per diluted common share	$	0.34		$	0.31

Property Portfolio

At December 31, 2024, the Company’s portfolio consisted of 1,121 net leased properties located in ten countries and territories and comprised of 60.7 million rentable square feet. The Company operates in four reportable segments: (1) Industrial & Distribution, (2) Multi-Tenant Retail, (3) Single-Tenant Retail and (4) Office. The real estate portfolio metrics include:

97% leased with a remaining weighted-average lease term of 6.2 years⁵
81% of the portfolio contains contractual rent increases based on annualized straight-line rent
61% of portfolio annualized straight-line rent derived from investment grade and implied investment grade rated tenants
80% U.S. and Canada, 20% Europe (based on annualized straight-line rent)
34% Industrial & Distribution, 28% Multi-Tenant Retail, 21% Single-Tenant Retail and 17% Office (based on an annualized straight-line rent)

Capital Structure and Liquidity Resources⁶

As of December 31, 2024, the Company had liquidity of $492.2 million and $460.0 million of capacity under the Company’s revolving credit facility. The Company had net debt of $4.6 billion⁷, including $2.3 billion of mortgage debt.

As of December 31, 2024, the percentage of debt that is fixed rate (including variable rate debt fixed with swaps) was 91%, compared to approximately 80% as of December 31, 2023. The Company’s total combined debt had a weighted average interest rate of 4.8% resulting in an interest coverage ratio of 2.5 times⁸. Weighted average debt maturity was 3.0 years as of December 31, 2024 as compared to 3.2 years as of December 31, 2023.

Footnotes/Definitions

¹	While we consider AFFO a useful indicator of our performance, we do not consider AFFO as an alternative to net income (loss) or as a measure of liquidity. Furthermore, other REITs may define AFFO differently than we do. Projected AFFO per share data included in this release is for informational purposes only and should not be relied upon as indicative of future dividends or as a measure of future liquidity. AFFO for the fourth quarter 2024 also contains a number of adjustments for items that the Company believes were non-recurring, one-time items including adjustments for items that were settled in cash such as merger and proxy related expenses.

²	Includes the collection of $4.5 million in past-due funds from Children of America and approximately $3.0 million in termination fees.

³	As used herein, “Investment Grade Rating” includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied Investment Grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. The term “parent” for these purposes includes any entity, including any governmental entity, owning more than 50% of the voting stock in a tenant. Ratings information is as of December 31, 2024. Comprised of 31.4% leased to tenants with an actual investment grade rating and 29.1% leased to tenants with an Implied Investment Grade rating based on annualized cash rent as of December 31, 2024.

⁴	We do not provide guidance on net income. We only provide guidance on AFFO per share and our Net Debt to Adjusted EBITDA ratio and do not provide reconciliations of this forward-looking non-GAAP guidance to net income per share or our debt to net income due to the inherent difficulty in quantifying certain items necessary to provide such reconciliations as a result of their unknown effect, timing and potential significance. Examples of such items include impairment of assets, gains and losses from sales of assets, and depreciation and amortization from new acquisitions and other non-recurring expenses.

⁵	Weighted-average remaining lease term in years is based on square feet as of December 31, 2024.

⁶	During the year ended December 31, 2024, the Company did not sell any shares of Common Stock or Series B Preferred Stock through its Common Stock or Series B Preferred Stock under its “at-the-market” programs.

⁷	Comprised of the principal amount of GNL’s outstanding debt totaling $4.7 billion less cash and cash equivalents totaling $159.7 million, as of December 31, 2024.

⁸	The interest coverage ratio is calculated by dividing adjusted EBITDA for the applicable quarter by cash paid for interest (calculated based on the interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net). Management believes that interest coverage ratio is a useful supplemental measure of our ability to service our debt obligations. Adjusted EBITDA and cash paid for interest are Non-GAAP metrics and are reconciled below.

Conference Call

GNL will host a webcast and conference call on February 28, 2025 at 11:00 a.m. ET to discuss its financial and operating results.

To listen to the live call, please go to GNL’s “Investor Relations” section of the website at least 15 minutes prior to the start of the call to register and download any necessary audio software.

Dial-in instructions for the conference call and the replay are outlined below.

Conference Call Details

Live Call

Dial-In (Toll Free): 1-877-407-0792
International Dial-In: 1-201-689-8263

Conference Replay

For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the GNL website at www.globalnetlease.com.

Or dial-in below:

Domestic Dial-In (Toll Free): 1-844-512-2921
International Dial-In: 1-412-317-6671
Conference Number: 13746750
*Available from 2:00 p.m. ET on February 28, 2025 through May 28, 2025.

Supplemental Schedules

The Company will file supplemental information packages with the Securities and Exchange Commission (the “SEC”) to provide additional disclosure and financial information. Once posted, the supplemental package can be found under the “Presentations” tab in the Investor Relations section of GNL’s website at www.globalnetlease.com and on the SEC website at www.sec.gov.

About Global Net Lease, Inc.

Global Net Lease, Inc. (NYSE: GNL) is a publicly traded internally managed real estate investment trust that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe. Additional information about GNL can be found on its website at www.globalnetlease.com.

Forward-Looking Statements

The statements in this press release that are not historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. The words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “expects,” “estimates,” “projects,” “potential,” “predicts,” “plans,” “intends,” “would,” “could,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the risks that any potential future acquisition or disposition (including the multi-tenant portfolio sale) by the Company is subject to market conditions, capital availability and timing considerations and may not be identified or completed on favorable terms, or at all. Some of the risks and uncertainties, although not all risks and uncertainties, that could cause the Company’s actual results to differ materially from those presented in the Company’s forward-looking statements are set forth in the “Risk Factors” and “Quantitative and Qualitative Disclosures about Market Risk” sections in the Company’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and all of its other filings with the U.S. Securities and Exchange Commission, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

Contacts:

Investors and Media:
Email: investorrelations@globalnetlease.com
Phone: (332) 265-2020

Global Net Lease, Inc. Consolidated Balance Sheets (In thousands)

	December 31,
	2024			2023
ASSETS	(Unaudited)
Real estate investments, at cost:
Land	$	1,172,146		$	1,430,607
Buildings, fixtures and improvements		5,293,468			5,842,314
Construction in progress		4,350			23,242
Acquired intangible lease assets		1,057,967			1,359,981
Total real estate investments, at cost		7,527,931			8,656,144
Less: accumulated depreciation and amortization		(1,164,629	)		(1,083,824	)
Total real estate investments, net		6,363,302			7,572,320
Assets held for sale		17,406			3,188
Cash and cash equivalents		159,698			121,566
Restricted cash		64,510			40,833
Derivative assets, at fair value		2,471			10,615
Unbilled straight-line rent		99,501			84,254
Operating lease right-of-use asset		74,270			77,008
Prepaid expenses and other assets		108,562			121,997
Deferred tax assets		4,866			4,808
Goodwill		51,370			46,976
Deferred financing costs, net		9,808			15,412
Total Assets	$	6,955,764		$	8,098,977

LIABILITIES AND EQUITY
Mortgage notes payable, net	$	2,221,706		$	2,517,868
Revolving credit facility		1,390,292			1,744,182
Senior notes, net		906,101			886,045
Acquired intangible lease liabilities, net		76,800			95,810
Derivative liabilities, at fair value		3,719			5,145
Accounts payable and accrued expenses		75,735			99,014
Operating lease liability		48,333			48,369
Prepaid rent		28,734			46,213
Deferred tax liability		5,477			6,009
Dividends payable		11,909			11,173
Total Liabilities		4,768,806			5,459,828
Commitments and contingencies		—			—
Stockholders’ Equity:
7.25% Series A cumulative redeemable preferred stock		68			68
6.875% Series B cumulative redeemable perpetual preferred stock		47			47
7.50% Series D cumulative redeemable perpetual preferred stock		79			79
7.375% Series E cumulative redeemable perpetual preferred stock		46			46
Common stock		3,640			3,639
Additional paid-in capital		4,359,264			4,350,112
Accumulated other comprehensive loss		(25,844	)		(14,096	)
Accumulated deficit		(2,150,342	)		(1,702,143	)
Total Stockholders’ Equity		2,186,958			2,637,752
Non-controlling interest		—			1,397
Total Equity		2,186,958			2,639,149
Total Liabilities and Equity	$	6,955,764		$	8,098,977

Global Net Lease, Inc. Consolidated Statements of Operations (In thousands, except per share data)

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
	(Unaudited)			(Unaudited)			(Unaudited)
Revenue from tenants	$	199,115		$	206,726		$	805,010		$	515,070

Expenses:
Property operating		35,619			37,037			142,497			67,839
Operating fees to related parties		—			(580	)		—			28,283
Impairment charges		20,098			2,978			90,410			68,684
Merger, transaction and other costs		1,792			4,349			6,026			54,492
Settlement costs		—			—			—			29,727
General and administrative		13,763			16,867			57,734			40,187
Equity-based compensation		2,309			1,058			8,931			17,297
Depreciation and amortization		83,020			98,713			349,943			222,271
Total expenses		156,601			160,422			655,541			528,780
Operating income (loss) before gain on dispositions of real estate investments		42,514			46,304			149,469			(13,710	)
Gain (loss) on dispositions of real estate investments		21,326			(988	)		57,015			(1,672	)
Operating income (loss)		63,840			45,316			206,484			(15,382	)
Other income (expense):
Interest expense		(77,234	)		(83,575	)		(326,932	)		(179,411	)
Loss on extinguishment and modification of debt		(2,412	)		(817	)		(15,877	)		(1,221	)
Gain (loss) on derivative instruments		6,853			(4,478	)		4,229			(3,691	)
Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		1,917			—			3,249			—
Other income		1,476			435			1,720			2,270
Total other expense, net		(69,400	)		(88,435	)		(333,611	)		(182,053	)
Net loss before income tax		(5,560	)		(43,119	)		(127,127	)		(197,435	)
Income tax expense		(962	)		(5,459	)		(4,445	)		(14,475	)
Net loss		(6,522	)		(48,578	)		(131,572	)		(211,910	)
Preferred stock dividends		(10,936	)		(10,936	)		(43,744	)		(27,438	)
Net loss attributable to common stockholders	$	(17,458	)	$	(59,514	)	$	(175,316	)	$	(239,348	)

Basic and Diluted Loss Per Share:
Net loss per share attributable to common stockholders — Basic and Diluted	$	(0.08	)	$	(0.26	)	$	(0.76	)	$	(1.71	)
Weighted Average Shares Outstanding:
Basic and Diluted		230,596			230,320			230,440			142,584

Global Net Lease, Inc. Quarterly Reconciliation of Non-GAAP Measures (Unaudited) (In thousands)

		Three Months Ended												Year Ended
		March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024			December 31, 2024
Adjusted EBITDA
	Net loss	$	(23,751	)	$	(35,664	)	$	(65,635	)	$	(6,522	)	$	(131,572	)
	Depreciation and amortization		92,000			89,493			85,430			83,020			349,943
	Interest expense		82,753			89,815			77,130			77,234			326,932
	Income tax expense		2,388			(250	)		1,345			962			4,445
	EBITDA		153,390			143,394			98,270			154,694			549,748
	Impairment charges		4,327			27,402			38,583			20,098			90,410
	Equity-based compensation		1,973			2,340			2,309			2,309			8,931
	Merger, transaction and other costs ^[1]		761			1,572			1,901			1,792			6,026
	(Gain) loss on dispositions of real estate investments		(5,867	)		(34,102	)		4,280			(21,326	)		(57,015	)
	(Gain) loss on derivative instruments		(1,588	)		(530	)		4,742			(6,853	)		(4,229	)
	Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		(1,032	)		(300	)		—			(1,917	)		(3,249	)
	Loss on extinguishment and modification of debt		58			13,090			317			2,412			15,877
	Other expense (income)		16			(309	)		49			(1,476	)		(1,720	)
	Expenses attributable to European tax restructuring ^[2]		469			16			—			—			485
	Transition costs related to the Merger and Internalization ^[3]		2,826			995			138			527			4,486
	Adjusted EBITDA		155,333			153,568			150,589			150,260			609,750
	General and administrative		16,177			15,196			12,598			13,763			57,734
	Expenses attributable to European tax restructuring ^[2]		(469	)		(16	)		—			—			(485	)
	Transition costs related to the Merger and Internalization ^[3]		(2,826	)		(995	)		(138	)		(527	)		(4,486	)
	NOI		168,215			167,753			163,049			163,496			662,513
	Amortization related to above- and below-market lease intangibles and right-of-use assets, net		2,225			1,901			1,805			1,572			7,503
	Straight-line rent		(4,562	)		(5,349	)		(5,343	)		(3,896	)		(19,150	)
	Cash NOI	$	165,878		$	164,305		$	159,511		$	161,172		$	650,866

Cash Paid for Interest:
	Interest Expense	$	82,753		$	89,815		$	77,130		$	77,234		$	326,932
	Non-cash portion of interest expense		(2,394	)		(2,580	)		(2,496	)		(2,510	)		(9,980	)
	Amortization of discounts on mortgages and senior notes		(15,338	)		(24,080	)		(14,156	)		(15,017	)		(68,591	)
	Total cash paid for interest	$	65,021		$	63,155		$	60,478		$	59,707		$	248,361

[1]	These costs primarily consist of advisory, legal and other professional costs that were directly related to the Merger and Internalization.
[2]	Amounts relate to costs incurred related to the tax restructuring of our European entities. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased Adjusted EBITDA for these amounts.
[3]	Amounts include costs related to (i) compensation incurred for our former Co-Chief Executive Officer who retired effective March 31, 2024; (ii) a transition service agreement with the former Advisor and; (iii) insurance premiums related to expiring directors and officers insurance of former RTL directors. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased Adjusted EBITDA for these amounts.

Global Net Lease, Inc. Quarterly Reconciliation of Non-GAAP Measures (Unaudited) (In thousands, except per share data)

		Three Months Ended												Year Ended
		March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024			December 31, 2024
Funds from operations (FFO):
	Net loss attributable to common stockholders (in accordance with GAAP)	$	(34,687	)	$	(46,600	)	$	(76,571	)	$	(17,458	)	$	(175,316	)
	Impairment charges		4,327			27,402			38,583			20,098			90,410
	Depreciation and amortization		92,000			89,493			85,430			83,020			349,943
	(Gain) loss on dispositions of real estate investments		(5,867	)		(34,102	)		4,280			(21,326	)		(57,015	)
FFO (defined by NAREIT)			55,773			36,193			51,722			64,334			208,022
	Merger, transaction and other costs^[1]		761			1,572			1,901			1,792			6,026
	Loss on extinguishment and modification of debt		58			13,090			317			2,412			15,877
Core FFO attributable to common stockholders			56,592			50,855			53,940			68,538			229,925
	Non-cash equity-based compensation		1,973			2,340			2,309			2,309			8,931
	Non-cash portion of interest expense		2,394			2,580			2,496			2,510			9,980
	Amortization related to above- and below-market lease intangibles and right-of-use assets, net		2,225			1,901			1,805			1,572			7,503
	Straight-line rent		(4,562	)		(5,349	)		(5,343	)		(3,896	)		(19,150	)
	Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		(1,032	)		(300	)		—			(1,917	)		(3,249	)
	Eliminate unrealized (gains) losses on foreign currency transactions^[2]		(1,259	)		(230	)		4,360			(6,289	)		(3,418	)
	Amortization of discounts on mortgages and senior notes		15,338			24,080			14,156			15,017			68,591
	Expenses attributable to European tax restructuring^[3]		469			16			—			—			485
	Transition costs related to the Merger and Internalization^[4]		2,826			995			138			527			4,486
	Forfeited disposition deposit^[5]		—			(196	)		(5	)		(74	)		(275	)
Adjusted funds from operations (AFFO) attributable tocommon stockholders		$	74,964		$	76,692		$	73,856		$	78,297		$	303,809
Weighted average common shares outstanding – Basic and Diluted			230,320			230,381			230,463			230,596			230,440
Net loss per share attributable to common shareholders — Basic and Diluted		$	(0.15	)	$	(0.20	)	$	(0.33	)	$	(0.08	)	$	(0.76	)
FFO per diluted common share		$	0.24		$	0.16		$	0.22		$	0.28		$	0.90
Core FFO per diluted common share		$	0.25		$	0.22		$	0.23		$	0.30		$	1.00
AFFO per diluted common share		$	0.33		$	0.33		$	0.32		$	0.34		$	1.32
Dividends declared to common stockholders		$	81,923		$	63,754		$	63,722		$	63,484		$	272,883

[1]	These costs primarily consist of advisory, legal and other professional costs that were directly related to the Merger and Internalization.
[2]	For the three months ended March 31, 2024, the gain on derivative instruments was $1.6 million which consisted of unrealized gains of $1.3 million and realized gains of $0.3 million. For the three months ended June 30, 2024, the gain on derivative instruments was $0.5 million which consisted of unrealized gains of $0.2 million and realized gains of $0.3 million. For the three months ended September 30, 2024, the loss on derivative instruments was $4.7 million which consisted of unrealized losses of $4.4 million and realized losses of $0.3 million. For the three months ended December 31, 2024, the gain on derivative instruments was $6.9 million, which consisted of unrealized gains of $6.3 million and realized gains of $0.6 million. For the year ended December 31, 2024, the gain on derivative instruments was $4.2 million, which consisted of unrealized gains of $3.4 million and realized gains of $0.8 million.
[3]	Amounts relate to costs incurred related to the tax restructuring of our European entities. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for these amounts.
[4]	Amounts include costs related to (i) compensation incurred for our former Co-Chief Executive Officer who retired effective March 31, 2024; (ii) a transition service agreement with the former Advisor and; (iii) insurance premiums related to expiring directors and officers insurance of former RTL directors. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for these amounts.
[5]	Represents a forfeited deposit from a potential buyer of one of our properties, which is recorded in other income in our consolidated statement of operations. We do not consider this income to be part of our normal operating performance and have, accordingly, decreased AFFO for this amount.

The following table provides operating financial information for the Company’s four reportable segments:

		Three Months Ended December 31,				Year Ended December 31,
(In thousands)		2024		2023 ⁽¹⁾		2024		2023 ⁽¹⁾
Industrial & Distribution:
	Revenue from tenants	$	54,561	$	62,223	$	237,645	$	220,102
	Property operating expense		6,694		5,407		21,820		15,457
	Net operating income	$	47,867	$	56,816	$	215,825	$	204,645

Multi-Tenant Retail:
	Revenue from tenants	$	63,131	$	66,412	$	259,280	$	79,799
	Property operating expense		20,387		22,494		86,025		26,951
	Net operating income	$	42,744	$	43,918	$	173,255	$	52,848

Single-Tenant Retail:
	Revenue from tenants	$	42,648	$	41,288	$	164,514	$	65,478
	Property operating expense		4,012		4,286		15,787		6,045
	Net operating income	$	38,636	$	37,002	$	148,727	$	59,433

Office:
	Revenue from tenants	$	38,775	$	36,803	$	143,571	$	149,691
	Property operating expense		4,526		4,850		18,865		19,386
	Net operating income	$	34,249	$	31,953	$	124,706	$	130,305

(1)	Amounts in the Single-Tenant Retail segment and Office segment reflect changes to the reclassification of one tenant from the Office segment to the Single-Tenant Retail segment to conform to the current year presentation based on a re-evaluation of the property type.

Caution on Use of Non-GAAP Measures

Funds from Operations (“FFO”), Core Funds from Operations (“Core FFO”), Adjusted Funds from Operations (“AFFO”), Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Net Operating Income (“NOI”), Cash Net Operating Income (“Cash NOI”) and cash paid for interest should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures.

Other REITs may not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition (as we do), or may interpret the current NAREIT definition differently than we do, or may calculate Core FFO or AFFO differently than we do. Consequently, our presentation of FFO, Core FFO and AFFO may not be comparable to other similarly-titled measures presented by other REITs in our peer group.

We consider FFO, Core FFO and AFFO useful indicators of our performance. Because FFO, Core FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gain or loss from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO, Core FFO and AFFO presentations facilitate comparisons of operating performance between periods and between other REITs.

As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. However, FFO, Core FFO and AFFO are not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Investors are cautioned that FFO, Core FFO and AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as they exclude certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred.

Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations

Funds From Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP.

We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gain and loss from the sale of certain real estate assets, gain and loss from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling interest to arrive at FFO, Core FFO, AFFO and NOI attributable to stockholders, as applicable. Our FFO calculation complies with NAREIT’s definition.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

Core Funds From Operations

In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as merger, transaction and other costs, as well as certain other costs that are considered to be non-core, such as debt extinguishment or modification costs. The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our core business plan to generate operational income and cash flows in order to make dividend payments to stockholders. In evaluating investments in real estate, we differentiate the costs to acquire the investment from the subsequent operations of the investment. We also add back non-cash write-offs of deferred financing costs, prepayment penalties and certain other costs incurred with the early extinguishment or modification of debt which are included in net income but are considered financing cash flows when paid in the statement of cash flows. We consider these write-offs and prepayment penalties to be capital transactions and not indicative of operations. By excluding expensed acquisition, transaction and other costs as well as non-core costs, we believe Core FFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties.

Adjusted Funds From Operations

In calculating AFFO, we start with Core FFO, then we exclude certain income or expense items from AFFO that we consider more reflective of investing activities, other non-cash income and expense items and the income and expense effects of other activities or items, including items that were paid in cash that are not a fundamental attribute of our business plan or were one time or non-recurring items. These items include, for example, early extinguishment or modification of debt and other items excluded in Core FFO as well as unrealized gain and loss, which may not ultimately be realized, such as gain or loss on derivative instruments, gain or loss on foreign currency transactions, and gain or loss on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent and equity-based compensation from AFFO, we believe we provide useful information regarding income and expense items which have a direct impact on our ongoing operating performance. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. We also include the realized gain or loss on foreign currency exchange contracts for AFFO as such items are part of our ongoing operations and affect our current operating performance.

In calculating AFFO, we also exclude certain expenses which under GAAP are treated as operating expenses in determining operating net income. All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments or modifications and merger related expenses) and certain other expenses, including expenses related to our European tax restructuring and transition costs related to the Merger and Internalization, negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are excluded by us as we believe they are not reflective of our on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income. In addition, as discussed above, we view gain and loss from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gain or loss, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used to, among other things, assess our performance without the impact of transactions or other items that are not related to our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) calculated in accordance with GAAP and presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, Cash Net Operating Income and Cash Paid for Interest

We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for acquisition, transaction and other costs, other non-cash items and including our pro-rata share from unconsolidated joint ventures, is an appropriate measure of our ability to incur and service debt. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments or modifications) and certain other expenses, including expenses related to our European tax restructuring and transition costs related to the Merger and Internalization, negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are not reflective of on-going performance. Adjusted EBITDA should not be considered as an alternative to cash flows from operating activities, as a measure of our liquidity or as an alternative to net income (loss) as calculated in accordance with GAAP as an indicator of our operating activities. Other REITs may calculate Adjusted EBITDA differently and our calculation should not be compared to that of other REITs.

NOI is a non-GAAP financial measure equal to net income (loss), the most directly comparable GAAP financial measure, less discontinued operations, interest, other income and income from preferred equity investments and investment securities, plus corporate general and administrative expense, acquisition, transaction and other costs, depreciation and amortization, other non-cash expenses and interest expense. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Therefore, we believe NOI is a useful measure for evaluating the operating performance of our real estate assets and to make decisions about resource allocations. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition activity on an unlevered basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity.

Cash NOI is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define Cash NOI as net operating income (which is separately defined herein) excluding amortization of above/below market lease intangibles and straight-line rent adjustments that are included in GAAP lease revenues. We believe that Cash NOI is a helpful measure that both investors and management can use to evaluate the current financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Cash NOI should not be considered as an alternative to net income, as an indication of our financial performance, or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present Cash NOI may not be directly comparable to the way other REITs calculate and present Cash NOI.

Cash Paid for Interest is calculated based on the interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net. Management believes that Cash Paid for Interest provides useful information to investors to assess our overall solvency and financial flexibility. Cash Paid for Interest should not be considered as an alternative to interest expense as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.

The MIL Network –

February 28, 2025

MIL-OSI: Infinera Corporation Fourth Quarter and Fiscal 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

FY’24 Highlights:

Year-over-year growth in bookings and backlog; book-to-bill ratio of approximately 1.1x for FY’24 and 1.3x for Q4’24
Record revenue with webscalers – total revenue exposure (direct and indirect) greater than 50% of FY’24 revenue
Significant design wins across the GX systems portfolio with webscalers and Tier 1 Communications Service Providers (CSPs)
Substantial awards for ICE-X 400G and 800G pluggables from webscalers and Tier 1 CSPs
Launched ICE-D to address the projected multi-billion dollar intra-data center opportunity driven by AI workloads
Secured CHIPS & Science Act funding with the potential for greater than $200 million in total federal incentives, in addition to potential state and local incentives
Announced a definitive agreement to be acquired by Nokia (acquisition anticipated to be completed on or about February 28, 2025)

SAN JOSE, Calif., Feb. 27, 2025 (GLOBE NEWSWIRE) — Infinera Corporation (NASDAQ: INFN) has released financial results for its fourth quarter and fiscal year ended December 28, 2024. This press release is also published on Infinera’s Investor Relations website.

GAAP revenue for the quarter was $414.4 million compared to $354.4 million in the third quarter of 2024 and $453.5 million in the fourth quarter of 2023.

GAAP gross margin for the quarter was 38.0% compared to 39.8% in the third quarter of 2024 and 38.6% in the fourth quarter of 2023. GAAP operating margin for the quarter was 0.0% compared to (3.1)% in the third quarter of 2024 and 2.5% in the fourth quarter of 2023.

GAAP net loss for the quarter was $(26.3) million, or $(0.11) per diluted share, compared to net loss of $(14.3) million, or $(0.06) per diluted share, in the third quarter of 2024, and net income of $12.9 million, or $0.06 per diluted share, in the fourth quarter of 2023.

Non-GAAP gross margin for the quarter was 38.4% compared to 40.4% in the third quarter of 2024 and 39.6% in the fourth quarter of 2023. Non-GAAP operating margin for the quarter was 5.4% compared to 3.5% in the third quarter of 2024 and 7.2% in the fourth quarter of 2023.

Non-GAAP net income for the quarter was $8.2 million, or $0.03 per diluted share, compared to $0.3 million, or $0.00 per diluted share, in the third quarter of 2024, and $28.6 million, or $0.12 per diluted share, in the fourth quarter of 2023.

GAAP revenue for the year was $1,418.4 million compared to $1,614.1 million in 2023. GAAP gross margin for the year was 38.4% compared to 38.6% in 2023. GAAP operating margin for the year was (5.9)% compared to (0.3)% in 2023. GAAP net loss for the year was $(150.3) million, or $(0.64) per diluted share, compared to $(25.2) million, or $(0.11) per diluted share, in 2023.

Non-GAAP gross margin for the year was 39.0% compared to 39.9% in 2023. Non-GAAP operating margin for the year was 0.3% compared to 5.4% in 2023. Non-GAAP net loss for the year was $(43.8) million, or $(0.19) per diluted share, compared to net income of $53.4 million, or $0.23 per diluted share, in 2023.

A further explanation of the use of non-GAAP financial information and a reconciliation of each of the non-GAAP financial measures to the most directly comparable GAAP financial measure can be found at the end of this press release.

Infinera CEO, David Heard, said “We exited 2024 with significant momentum in our business, growing Q4’24 bookings sequentially by more than 50% and by approximately 20% compared to Q4’23. The growth in bookings and substantial increase in backlog in 2024, when combined with our strategic wins, position us well in 2025 and beyond for the next wave of optical spend fueled by relentless bandwidth growth, increased fiber deployments, and AI-driven data-center builds.”

“Looking ahead, I remain excited about our pending merger with Nokia, as we prepare to join forces with a recognized industry leader. With greater scale and deeper resources together, we intend to set the pace of innovation as optics take on an increasingly critical role in the era of AI,” continued Mr. Heard.

Pending Merger with Nokia

On June 27, 2024, Infinera, Nokia Corporation, a company incorporated under the laws of the Republic of Finland (“Nokia”) (NYSE: NOK) and Neptune of America Corporation, a Delaware corporation and wholly owned subsidiary of Nokia (“Merger Sub”) entered into an Agreement and Plan of Merger (as it may be amended, modified or waived from time to time, the “Merger Agreement”) that provides for Merger Sub to merge with and into Infinera (the “Merger”), with Infinera surviving the Merger as a wholly owned subsidiary of Nokia. On February 18, 2025, Infinera issued a press release announcing that the Merger is anticipated to be completed on or about February 28, 2025, which date remains subject to the satisfaction of remaining closing conditions.

In light of the proposed transaction with Nokia, and as is customary during the pendency of an acquisition, Infinera will not be providing financial guidance during the pendency of the acquisition.

Fourth Quarter 2024 Investor Slides to be Made Available Online

Investor slides reviewing Infinera’s fourth quarter of 2024 financial results will be furnished to the U.S. Securities and Exchange Commission (“SEC”) on a Current Report on Form 8-K and published on Infinera’s Investor Relations website at investors.infinera.com.

Contacts:

Media:
Anna Vue
Tel. +1 (916) 595-8157
avue@infinera.com

Investors:
Amitabh Passi, Head of Investor Relations
Tel. +1 (669) 295-1489
apassi@infinera.com

About Infinera

Infinera is a global supplier of innovative open optical networking solutions and advanced optical semiconductors that enable carriers, cloud operators, governments, and enterprises to scale network bandwidth, accelerate service innovation, and automate network operations. Infinera solutions deliver industry-leading economics and performance in long-haul, submarine, data center interconnect, and metro transport applications. To learn more about Infinera, visit www.infinera.com, follow us on X and LinkedIn, and subscribe for updates.

Infinera and the Infinera logo are registered trademarks of Infinera Corporation.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements generally relate to future events or Infinera’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” and “would” or the negative of these words or similar terms or expressions that concern Infinera’s expectations, strategy, priorities, plans or intentions. Forward-looking statements in this press release include, but are not limited to, statements regarding the amount Infinera could receive in direct government funding and tax incentives; statements about Infinera’s strategic positioning in 2025 and beyond; and statements related to the Merger, including the timing of completion of the Merger and the future performance and benefits of the combined business.

These forward-looking statements are based on estimates and information available to Infinera as of the date hereof and are not guarantees of actual or future performance; actual results could differ materially from those stated or implied due to risks and uncertainties. The risks and uncertainties that could cause Infinera’s results to differ materially from those expressed or implied by such forward-looking statements include statements related to the Merger, including whether the Merger may not be completed or completion may be delayed, and if the Merger Agreement is terminated, there may be a required payment of a significant termination fee by either party; the receipt of necessary approvals to complete the Merger; the possibility that due to the Merger, and uncertainty regarding the Merger, Infinera’s customers, suppliers or strategic partners may delay or defer entering into contracts or making other decisions concerning Infinera; the significance and timing of costs related to the Merger; the impact on us of litigation or other stockholder action related to the Merger; the effects on us and our stockholders if the Merger is not completed; demand growth for additional network capacity and the level and timing of customer capital spending and excess inventory held by customers beyond normalized levels; delays in the development, introduction or acceptance of new products or in releasing enhancements to existing products; aggressive business tactics by Infinera’s competitors and new entrants and Infinera’s ability to compete in a highly competitive market; supply chain and logistics issues and their impact on our business, and Infinera’s dependency on sole source, limited source or high-cost suppliers; dependence on a small number of key customers; product performance problems; the complexity of Infinera’s manufacturing process; Infinera’s ability to identify, attract, upskill and retain qualified personnel; challenges with our contract manufacturers and other third-party partners; the effects of customer and supplier consolidation; dependence on third-party service partners; Infinera’s ability to respond to rapid technological changes; failure to accurately forecast Infinera’s manufacturing requirements or customer demand; failure to secure the funding contemplated by grants Infinera has or may receive from governments, agencies or research organizations, or failure to comply with the terms of those grants; Infinera’s future capital needs and its ability to generate the cash flow or otherwise secure the capital necessary to meet such capital needs; the effect of global and regional economic conditions on Infinera’s business, including effects on purchasing decisions by customers; the adverse impact inflation and higher interest rates may have on Infinera by increasing costs beyond what it can recover through price increases; the effects of tariffs; restrictions to our operations resulting from loan or other credit agreements; the impacts of any restructuring plans or other strategic efforts on our business; Infinera’s international sales and operations; the impacts of foreign currency fluctuations; the effective tax rate of Infinera, which may increase or fluctuate; potential dilution from the issuance of additional shares of common stock in connection with the conversion of Infinera’s convertible senior notes; Infinera’s ability to protect its intellectual property; claims by others that Infinera infringes on their intellectual property rights; security incidents, such as data breaches or cyber-attacks; Infinera’s ability to comply with various rules and regulations, including with respect to export control and trade compliance, environmental, social, governance, privacy and data protection matters; events that are outside of Infinera’s control, such as natural disasters, acts of war or terrorism, or other catastrophic events that could harm Infinera’s operations; Infinera’s ability to remediate its disclosed material weaknesses in internal control over financial reporting in a timely and effective manner, and other risks and uncertainties detailed in Infinera’s SEC filings from time to time; and statements of assumptions underlying any of the foregoing. More information on potential factors that may impact Infinera’s business are set forth in Infinera’s periodic reports filed with the SEC, including its Annual Report on Form 10-K for the year ended December 28, 2024, as well as subsequent reports filed with or furnished to the SEC from time to time. These SEC filings are available on Infinera’s website at www.infinera.com and the SEC’s website at www.sec.gov. Infinera assumes no obligation to, and does not currently intend to, update any such forward-looking statements.

Use of Non-GAAP Financial Information

In addition to disclosing financial measures prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), this press release and the accompanying tables contain certain non-GAAP financial measures that exclude in certain cases stock-based compensation expense, amortization of acquired intangible assets, restructuring and other related costs, warehouse fire recovery, merger-related charges, foreign exchange (gains) losses, net, and income tax effects. Infinera believes these adjustments are appropriate to enhance an overall understanding of its underlying financial performance and also its prospects for the future and are considered by management for the purpose of making operational decisions. In addition, the non-GAAP financial measures presented in this press release are the primary indicators management uses as a basis for its planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for gross margin, operating expenses, operating margin, net income (loss) and net income (loss) per common share prepared in accordance with GAAP. Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and are subject to limitations.

For a description of these non-GAAP financial measures and a reconciliation to the most directly comparable GAAP financial measures, please see the table titled “GAAP to Non-GAAP Reconciliations” and related footnotes.

Infinera Corporation
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)

	Three months ended						Twelve months ended
	December 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
Revenue:
Product	$	325,123		$	373,172		$	1,103,131		$	1,304,229
Services		89,264			80,284			315,315			309,899
Total revenue		414,387			453,456			1,418,446			1,614,128
Cost of revenue:
Cost of product		212,250			233,693			706,498			810,845
Cost of services		44,882			42,643			166,792			167,532
Amortization of intangible assets		—			—			—			10,621
Restructuring and other related costs		(56	)		2,218			596			2,218
Total cost of revenue		257,076			278,554			873,886			991,216
Gross profit		157,311			174,902			544,560			622,912
Operating expenses:
Research and development		75,214			79,645			300,437			316,879
Sales and marketing		40,504			42,532			158,861			166,938
General and administrative		31,566			35,112			132,680			124,874
Amortization of intangible assets		2,256			2,256			9,025			12,344
Merger-related charges		7,550			—			23,021			—
Restructuring and other related costs		81			4,096			4,186			6,717
Total operating expenses		157,171			163,641			628,210			627,752
Income (loss) from operations		140			11,261			(83,650	)		(4,840	)
Other income (expense), net:
Interest income		594			982			3,383			2,716
Interest expense		(6,746	)		(8,814	)		(32,302	)		(30,609	)
Other gain (loss), net		(11,547	)		4,739			(20,457	)		15,325
Total other income (expense), net		(17,699	)		(3,093	)		(49,376	)		(12,568	)
Income (loss) before income taxes		(17,559	)		8,168			(133,026	)		(17,408	)
Provision for (benefit from) income taxes		8,784			(4,705	)		17,312			7,805
Net income (loss)	$	(26,343	)	$	12,873		$	(150,338	)	$	(25,213	)
Net income (loss) per common share:
Basic	$	(0.11	)	$	0.06		$	(0.64	)	$	(0.11	)
Diluted	$	(0.11	)	$	0.06		$	(0.64	)	$	(0.11	)
Weighted average shares used in computing net income (loss) per common share:
Basic		236,974			230,509			234,672			226,726
Diluted		236,974			233,090			234,672			226,726

Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands, except percentages)
(Unaudited)

	Three months ended														Twelve months ended
	December 28, 2024					September 28, 2024					December 30, 2023				December 28, 2024					December 30, 2023
Reconciliation of Gross Profit and Gross Margin:
GAAP as reported	$	157,311		38.0	%	$	141,214		39.8	%	$	174,902	38.6	%	$	544,560		38.4	%	$	622,912		38.6	%
Stock-based compensation expense⁽¹⁾		1,867		0.4	%		2,084		0.6	%		2,328	0.5	%		7,621		0.6	%		10,000		0.6	%
Amortization of acquired intangible assets⁽²⁾		—		—	%		—		—	%		—	—	%		—		—	%		10,621		0.7	%
Restructuring and other related costs⁽³⁾		(56	)	(0.0)	%		(24	)	—	%		2,218	0.5	%		596		0.0	%		2,218		0.1	%
Warehouse fire recovery⁽⁴⁾		—		—	%		—		—	%		—	—	%		—		—	%		(1,985	)	(0.1)	%
Non-GAAP as adjusted	$	159,122		38.4	%	$	143,274		40.4	%	$	179,448	39.6	%	$	552,777		39.0	%	$	643,766		39.9	%

Reconciliation of Operating Expenses:
GAAP as reported	$	157,171				$	152,212				$	163,641			$	628,210				$	627,752
Stock-based compensation expense⁽¹⁾		10,333					12,305					10,429				43,300					52,150
Amortization of acquired intangible assets⁽²⁾		2,256					2,257					2,256				9,025					12,344
Restructuring and other related costs⁽³⁾		81					(157	)				4,096				4,186					6,717
Merger-related charges⁽⁵⁾		7,550					6,954					—				23,021					—
Non-GAAP as adjusted	$	136,951				$	130,853				$	146,860			$	548,678				$	556,541

Reconciliation of Income (Loss) from Operations and Operating Margin:
GAAP as reported	$	140		0.0	%	$	(10,998	)	(3.1)	%	$	11,261	2.5	%	$	(83,650	)	(5.9)	%	$	(4,840	)	(0.3)	%
Stock-based compensation expense⁽¹⁾		12,200		3.0	%		14,389		4.1	%		12,757	2.8	%		50,921		3.7	%		62,150		3.8	%
Amortization of acquired intangible assets⁽²⁾		2,256		0.5	%		2,257		0.6	%		2,256	0.5	%		9,025		0.6	%		22,965		1.4	%
Restructuring and other related costs⁽³⁾		25		0.0	%		(181	)	(0.1)	%		6,314	1.4	%		4,782		0.3	%		8,935		0.6	%
Warehouse fire recovery⁽⁴⁾		—		—	%		—		—	%		—	—	%		—		—	%		(1,985	)	(0.1)	%
Merger-related charges⁽⁵⁾		7,550		1.9	%		6,954		2.0	%		—	—	%		23,021		1.6	%		—		—	%
Non-GAAP as adjusted	$	22,171		5.4	%	$	12,421		3.5	%	$	32,588	7.2	%	$	4,099		0.3	%	$	87,225		5.4	%

	Three months ended									Twelve months ended
	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
Reconciliation of Net Income (Loss):
GAAP as reported	$	(26,343	)	$	(14,313	)	$	12,873		$	(150,338	)	$	(25,213	)
Stock-based compensation expense⁽¹⁾		12,200			14,389			12,757			50,921			62,150
Amortization of acquired intangible assets⁽²⁾		2,256			2,257			2,256			9,025			22,965
Restructuring and other related costs⁽³⁾		25			(181	)		6,314			4,782			8,935
Warehouse fire recovery⁽⁴⁾		—			—			—			—			(1,985	)
Merger-related charges⁽⁵⁾		7,550			6,954			—			23,021			—
Foreign exchange (gains) losses, net⁽⁶⁾		11,855			(8,039	)		(4,852	)		21,954			(14,755	)
Income tax effects⁽⁷⁾		655			(788	)		(780	)		(3,120	)		1,292
Non-GAAP as adjusted		8,198		$	279		$	28,568		$	(43,755	)	$	53,389

Weighted Average Shares Used in Computing GAAP Net Income (Loss) per Common Share:
Basic		236,974			235,832			230,509			234,672			226,726
Diluted⁽⁸⁾		236,974			235,832			233,090			234,672			226,726

Weighted Average Shares Used in Computing Non-GAAP Net Income (Loss) per Common Share:
Basic		236,974			235,832			230,509			234,672			226,726
Diluted⁽⁹⁾		269,422			240,502			259,210			234,672			255,468

Reconciliation of Adjusted EBITDA ⁽¹⁰⁾:
Non-GAAP net income (loss)	$	8,198		$	279		$	28,568		$	(43,755	)	$	53,389
Add: Interest expense, net		6,152			7,890			7,832			28,919			27,893
Less: Other gain (loss), net		308			446			(113	)		1,497			570
Add: Income tax effects		8,129			4,698			(3,925	)		20,432			6,513
Add: Depreciation		13,333			13,501			17,125			53,308			55,819
Non-GAAP as adjusted	$	35,504		$	25,922		$	49,713		$	57,407		$	143,044

Net Income (Loss) per Common Share: GAAP
Basic	$	(0.11	)	$	(0.06	)	$	0.06		$	(0.64	)	$	(0.11	)
Diluted⁽⁸⁾	$	(0.11	)	$	(0.06	)	$	0.06		$	(0.64	)	$	(0.11	)

Net Income (Loss) per Common Share: Non-GAAP
Basic	$	0.03		$	0.00		$	0.12		$	(0.19	)	$	0.24
Diluted⁽⁹⁾	$	0.03		$	0.00		$	0.12		$	(0.19	)	$	0.23

⁽¹⁾Stock-based compensation expense is calculated in accordance with the fair value recognition provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation effective January 1, 2006. The following table summarizes the effects of stock-based compensation related to employees and non-employees (in thousands):


	Three months ended						Twelve months ended
	December 28, 2024		September 28, 2024		December 30, 2023		December 28, 2024		December 30, 2023
Cost of revenue	$	1,867	$	2,084	$	2,328	$	7,621	$	10,000
Research and development		4,547		4,623		4,917		18,779		22,474
Sales and marketing		3,036		3,241		2,328		12,175		13,699
General and administration		2,750		4,441		3,184		12,346		15,977
Total operating expenses		10,333		12,305		10,429		43,300		52,150
Total stock-based compensation expense	$	12,200	$	14,389	$	12,757	$	50,921	$	62,150

⁽²⁾Amortization of acquired intangible assets consists of developed technology and customer relationships acquired in connection with the acquisitions of Coriant and Transmode AB. GAAP accounting requires that acquired intangible assets are recorded at fair value and amortized over their useful lives. As this amortization is non-cash, Infinera has excluded it from its non-GAAP gross profit, operating expenses and net income measures. Management believes the amortization of acquired intangible assets is not indicative of ongoing operating performance and its exclusion provides a better indication of Infinera’s underlying business performance.

⁽³⁾Restructuring and other related costs are primarily associated with the reduction of headcount and the reduction of operating costs. In addition, this includes accelerated amortization on operating lease right-of-use assets due to the cessation of use of certain facilities. Management has excluded the impact of these charges in arriving at Infinera’s non-GAAP results as they are non-recurring in nature and its exclusion provides a better indication of Infinera’s underlying business performance.

⁽⁴⁾Warehouse fire losses were incurred due to inventory destroyed in a warehouse fire in the third quarter of fiscal year 2022. Recoveries are recorded when they are probable of receipt. Management has excluded the impact of this loss and subsequent recoveries in arriving at Infinera’s non-GAAP results as it is non-recurring in nature and its exclusion provides a better indication of Infinera’s underlying business performance.

⁽⁵⁾Merger-related charges represent costs incurred directly in connection with the pending merger with Nokia. Management has excluded the impact of these charges in arriving at Infinera’s non-GAAP results as they are non-recurring in nature and the exclusion of these charges provides a better indication of Infinera’s underlying business performance.

⁽⁶⁾Foreign exchange (gains) losses, net, have been excluded from Infinera’s non-GAAP results because management believes that this expense is not indicative of ongoing operating performance and its exclusion provides a better indication of Infinera’s underlying business performance.

⁽⁷⁾The difference between the GAAP and non-GAAP tax provision is due to the net tax effects of above non-GAAP adjustments. Management believes the exclusion of these tax effects provides a better indication of Infinera’s underlying business performance.

⁽⁸⁾The GAAP diluted shares include potentially dilutive securities from Infinera’s stock-based benefit plans and convertible senior notes. These potentially dilutive securities are added for the computation of diluted net income per share on a GAAP basis in periods when Infinera has net income on a GAAP basis, as its inclusion provides a better indication of Infinera’s underlying business performance.

For purposes of calculating GAAP diluted earnings per share, we used the following net income (loss) and weighted average common shares outstanding (in thousands, except per share data):


	Three months ended								Twelve months ended
	December 28, 2024			September 28, 2024			December 30, 2023		December 28, 2024			December 30, 2023
GAAP net income (loss) for basic earnings per share	$	(26,343	)	$	(14,313	)	$	12,873	$	(150,338	)	$	(25,213	)
Interest expense related to the convertible senior notes, net of tax		—			—			104		—			—
GAAP net income (loss) for diluted earnings per share	$	(26,343	)	$	(14,313	)	$	12,977	$	(150,338	)	$	(25,213	)

Weighted average basic common shares outstanding		236,974			235,832			230,509		234,672			226,726
Dilutive effect of restricted and performance share units		—			—			682		—			—
Dilutive effect of 2024 convertible senior notes^(a)		—			—			1,899		—			—
Dilutive effect of 2027 convertible senior notes^(b)		—			—			—		—			—
Dilutive effect of 2028 convertible senior notes^(c)		—			—			—		—			—
Weighted average dilutive common shares outstanding		236,974			235,832			233,090		234,672			226,726

GAAP net income (loss) per common share:
Basic	$	(0.11	)	$	(0.06	)	$	0.06	$	(0.64	)	$	(0.11	)
Diluted	$	(0.11	)	$	(0.06	)	$	0.06	$	(0.64	)	$	(0.11	)

^(a)For the three- months ended December 28, 2024 and September 28, 2024, there were zero and 1.4 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect. For the twelve- months ended December 28, 2024 and December 30, 2023, there were 1.3 million and 5.8 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.

^(b)For each of the three- months ended December 28, 2024, September 28, 2024, and December 30, 2023, there were 26.1 million shares excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect. For both the twelve- months ended December 28, 2024, and December 30, 2023, there were 26.1 million shares, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.

^(c)For the three- months ended December 28, 2024, September 28, 2024, and December 30, 2023, there were no shares excluded from the calculation of diluted net income (loss) per share. For the twelve- months ended December 28, 2024, and December 30, 2023, there were zero and 0.9 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.

⁽⁹⁾The non-GAAP diluted shares include the potentially dilutive securities from Infinera’s stock-based benefit plans and convertible senior notes. These potentially dilutive securities are added for the computation of diluted net income per share on a non-GAAP basis in periods when Infinera has net income on a non-GAAP basis as its inclusion provides a better indication of Infinera’s underlying business performance. Refer to the diluted earnings per share reconciliation presented below.

For purposes of calculating non-GAAP diluted earnings per share, we used the following net income (loss) and weighted average common shares outstanding (in thousands, except per share data):


	Three months ended						Twelve months ended
	December 28, 2024		September 28, 2024		December 30, 2023		December 28, 2024			December 30, 2023
Non-GAAP net income (loss) for basic earnings per share	$	8,198	$	279	$	28,568	$	(43,755	)	$	53,389
Interest expense related to the convertible senior notes, net of tax		752		—		1,652		—			5,370
Non-GAAP net income (loss) for diluted earnings per share	$	8,950	$	279	$	30,220	$	(43,755	)	$	58,759

Weighted average basic common shares outstanding		236,974		235,832		230,509		234,672			226,726
Dilutive effect of restricted and performance share units		6,328		4,670		682		—			1,674
Dilutive effect of employee stock purchase plan		—		—		—		—			53
Dilutive effect of 2024 convertible senior notes^(a)		—		—		1,899		—			—
Dilutive effect of 2027 convertible senior notes^(b)		26,120		—		26,120		—			26,210
Dilutive effect of 2028 convertible senior notes^(c)		—		—		—		—			895
Weighted average dilutive common shares outstanding		269,422		240,502		259,210		234,672			255,558

Non-GAAP net income (loss) per common share:
Basic	$	0.03	$	0.00	$	0.12	$	(0.19	)	$	0.24
Diluted	$	0.03	$	0.00	$	0.12	$	(0.19	)	$	0.23

^(a)For the three- months ended December 28, 2024, September 28, 2024, there were zero and 1.4 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect. For the twelve- months ended December 28, 2024, and December 30, 2023, there were 1.3 million and 5.8 million shares, respectively, excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.

^(b)For the three- months ended September 28, 2024, there were 26.1 million shares excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect. For the twelve- months ended December 28, 2024, there were 26.1 million shares excluded from the calculation of diluted net income (loss) per share, due to their anti-dilutive effect.

^(c)For the three- months ended December 28, 2024, September 28, 2024, and December 30, 2023, there were no shares excluded from the calculation of diluted net income (loss) per share. For the twelve- months ended December 28, 2024, there were no shares excluded from the calculation of diluted net income (loss) per share.

⁽¹⁰⁾Adjusted EBITDA is a non-GAAP supplemental measure of operating performance that does not represent and should not be considered an alternative to operating loss or cash flow from operations, as determined by GAAP. Infinera’s adjusted EBITDA is calculated by excluding the above non-GAAP adjustments, interest expense, net, other gain (loss), net, income tax effects and depreciation expenses. Management believes that adjusted EBITDA is an important financial measure for use in evaluating Infinera’s financial performance, as it measures the ability of our business operations to generate cash.

Infinera Corporation
GAAP to Non-GAAP Reconciliations
(In thousands)
(Unaudited)

Free Cash Flow

We define free cash flow as net cash provided by (used in) operating activities in the period minus the purchase of property and equipment made in the period.

Free cash flow is considered a non-GAAP financial measure under the SEC’s rules. Management believes that free cash flow is an important financial measure for use in evaluating Infinera’s financial performance, as it measures our ability to generate additional cash from our business operations. Free cash flow should be considered in addition to, rather than as a substitute for, net loss as a measure of our performance or net cash provided by (used in) operating activities as a measure of our liquidity. Additionally, our definition of free cash flow is limited and does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations. Therefore, we believe it is important to view free cash flow as supplemental to our entire statement of cash flows.


	Three months ended									Twelve months ended
	December 28, 2024			September 28, 2024			December 30, 2023			December 28, 2024			December 30, 2023
Net cash provided by operating activities	$	72,045		$	44,563		$	79,652		$	80,680		$	49,510
Purchase of property and equipment		(28,265	)		(24,090	)		(21,414	)		(75,013	)		(62,314	)
Free cash flow	$	43,780		$	20,473		$	58,238		$	5,667		$	(12,804	)

Infinera Corporation
Consolidated Balance Sheets
(In thousands, except par values)

	December 28, 2024			December 30, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	145,808		$	172,505
Short-term restricted cash		—			517
Accounts receivable, net		336,552			381,981
Inventory		308,213			431,163
Prepaid expenses and other current assets		155,249			129,218
Total current assets		945,822			1,115,384
Property, plant and equipment, net		249,496			206,997
Operating lease right-of-use assets		36,348			39,973
Intangible assets, net		15,794			24,819
Goodwill		224,233			240,566
Long-term restricted cash		420			837
Other long-term assets		61,645			50,662
Total assets	$	1,533,758		$	1,679,238
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	284,992		$	299,005
Accrued expenses and other current liabilities		143,385			110,758
Accrued compensation and related benefits		49,942			85,203
Short-term debt, net		482			25,512
Accrued warranty		13,243			17,266
Deferred revenue		134,727			136,248
Total current liabilities		626,771			673,992
Long-term debt, net		667,930			658,756
Long-term accrued warranty		12,264			15,934
Long-term deferred revenue		29,290			21,332
Long-term deferred tax liability		3,035			1,805
Long-term operating lease liabilities		41,601			47,464
Other long-term liabilities		36,352			43,364
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value Authorized shares – 25,000 and no shares issued and outstanding		—			—
Common stock, $0.001 par value Authorized shares – 500,000 in 2024 and 500,000 in 2023 Issued and outstanding shares – 237,396 in 2024 and 230,994 in 2023		237			231
Additional paid-in capital		2,024,810			1,976,014
Accumulated other comprehensive loss		(33,388	)		(34,848	)
Accumulated deficit		(1,875,144	)		(1,724,806	)
Total stockholders’ equity		116,515			216,591
Total liabilities and stockholders’ equity	$	1,533,758		$	1,679,238

Infinera Corporation
Consolidated Statements of Cash Flows
(In thousands)

	Twelve months ended
	December 28, 2024			December 30, 2023
Cash Flows from Operating Activities:
Net loss	$	(150,338	)	$	(25,213	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		62,333			78,784
Non-cash restructuring charges and other related costs		40			1,200
Amortization of debt issuance costs and discount		3,680			3,862
Operating lease expense		9,252			7,464
Stock-based compensation expense		50,921			62,150
Other, net		(76	)		(823	)
Changes in assets and liabilities:
Accounts receivable		40,218			38,511
Inventory		121,772			(57,864	)
Prepaid expenses and other current assets		(49,159	)		9,683
Accounts payable		(28,258	)		(2,921	)
Accrued expenses and other current liabilities		11,568			(40,063	)
Deferred revenue		8,727			(25,260	)
Net cash provided by operating activities		80,680			49,510
Cash Flows from Investing Activities:
Purchase of property and equipment		(75,013	)		(62,314	)
Net cash used in investing activities		(75,013	)		(62,314	)
Cash Flows from Financing Activities:
Proceeds from issuance of 2028 Notes		—			98,751
Repayment of 2024 Notes		(18,747	)		(83,446	)
Payment of debt issuance cost		—			(2,108	)
Proceeds from asset-based revolving credit facility		50,000			50,000
Repayment of asset-based revolving credit facility		(50,000	)		(50,000	)
Repayment of mortgage payable		(470	)		(510	)
Principal payments on finance lease obligations		(562	)		(1,023	)
Payment of term license obligation		(10,318	)		(10,417	)
Proceeds from issuance of common stock		6			14,931
Tax withholding paid on behalf of employees for net share settlement		(2,129	)		(2,465	)
Net cash (used in) provided by financing activities		(32,220	)		13,713
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(1,078	)		(16,253	)
Net change in cash, cash equivalents and restricted cash		(27,631	)		(15,344	)
Cash, cash equivalents and restricted cash at beginning of period		173,859			189,203
Cash, cash equivalents and restricted cash at end of period⁽¹⁾	$	146,228		$	173,859

Infinera Corporation
Consolidated Statements of Cash Flows
(In thousands)

	Twelve months ended
	December 28, 2024		December 30, 2023
Supplemental disclosures of cash flow information:
Cash paid for income taxes, net	$	21,790	$	14,109
Cash paid for interest, net	$	27,359	$	22,394
Supplemental schedule of non-cash investing and financing activities:
Transfer of inventory to fixed assets	$	—	$	1,847
Property and equipment included in accounts payable and accrued liabilities	$	34,385	$	10,104
Unpaid term licenses (included in accounts payable, accrued liabilities and other long-term liabilities)	$	14,196	$	23,326

⁽¹⁾ Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets (in thousands):


	December 28, 2024		December 30, 2023

Cash and cash equivalents	$	145,808	$	172,505
Short-term restricted cash		—		517
Long-term restricted cash		420		837
Total cash, cash equivalents and restricted cash	$	146,228	$	173,859

Infinera Corporation
Supplemental Financial Information
(Unaudited)

	Q1’23			Q2’23			Q3’23			Q4’23			Q1’24			Q2’24			Q3’24			Q4’24
GAAP Revenue $(Mil)	$	392.1		$	376.2		$	392.4		$	453.5		$	306.9		$	342.7		$	354.4		$	414.4
GAAP Gross Margin %		37.5	%		38.0	%		40.3	%		38.6	%		36.0	%		39.6	%		39.8	%		38.0	%
Non-GAAP Gross Margin %⁽¹⁾		38.8	%		39.3	%		41.9	%		39.6	%		36.6	%		40.3	%		40.4	%		38.4	%
GAAP Revenue Composition:
Domestic %		60	%		58	%		59	%		67	%		54	%		58	%		60	%		62	%
International %		40	%		42	%		41	%		33	%		46	%		42	%		40	%		38	%
Customers >10% of Revenue		—			1			1			1			—			—			2			2
Cash Related Information:
Cash from Operations $(Mil)	$	(1.8	)	$	1.4		$	(29.7	)	$	79.6		$	24.0		$	(59.9	)	$	44.5		$	72.1
Capital Expenditures $(Mil)	$	16.8		$	10.8		$	13.3		$	21.4		$	8.1		$	14.6		$	24.0		$	28.3
Depreciation & Amortization $(Mil)	$	19.6		$	19.8		$	20.0		$	19.4		$	15.4		$	15.6		$	15.7		$	15.6
DSOs⁽²⁾		78			79			76			77			79			76			74			74
Inventory Metrics:
Raw Materials $(Mil)	$	67.6		$	85.4		$	110.4		$	133.6		$	132.5		$	119.4		$	105.2		$	69.7
Work in Process $(Mil)	$	71.8		$	71.9		$	69.9		$	68.4		$	68.6		$	68.7		$	67.6		$	67.9
Finished Goods $(Mil)	$	273.6		$	270.1		$	276.6		$	229.2		$	219.6		$	196.1		$	183.3		$	170.6
Total Inventory $(Mil)	$	413.0		$	427.4		$	456.9		$	431.2		$	420.7		$	384.2		$	356.1		$	308.2
Inventory Turns⁽³⁾		2.4			2.2			2.1			2.5			1.8			2.0			2.3			3.1
Worldwide Headcount		3,351			3,365			3,369			3,389			3,323			3,334			3,340			3,418
Weighted Average Shares Outstanding (in thousands):
Basic		222,393			225,922			228,077			230,509			231,533			234,349			235,832			236,974
Diluted		265,921			262,712			257,219			259,210			260,980			265,591			267,999			269,422

⁽¹⁾Non-GAAP adjustments include stock-based compensation expense, amortization of acquired intangible assets, restructuring and other related costs and warehouse fire recovery. For a description of this non-GAAP financial measure, please see the section titled, “GAAP to Non-GAAP Reconciliations” of this press release for a reconciliation to the most directly comparable GAAP financial measures. For reconciliations of prior periods that are not otherwise provided herein, see the prior period earnings releases available on our Investor Relations webpage.

⁽²⁾Infinera calculates DSO based on 91 days.

⁽³⁾Infinera calculates non-GAAP inventory turns as annualized non-GAAP cost of revenue, which is calculated as GAAP cost of revenue less stock-based compensation expense, amortization of acquired intangible assets, restructuring and other related costs and warehouse fire recovery, as illustrated in the reconciliation of gross profit above, divided by the average inventory for the quarter.

The MIL Network –

February 28, 2025

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

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 –

February 28, 2025

MIL-OSI: Global Net Lease Reports Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

– Completed $835 Million in Dispositions in 2024, Surpassing High-End of Increased Guidance

– Reduced Net Debt by $734 million in 2024; Improved Net Debt to Adjusted EBITDA to 7.6x

– Company Meets and Exceeds its Full-Year 2024 Earnings Guidance

– Recently Announced $1.8 Billion Multi-Tenant Portfolio Sale Would Significantly Reduce Leverage and Improve Liquidity Position

– Proposed Transaction Would Create Pure-Play, Single-Tenant Net Lease Company with Enhanced Portfolio Metrics

– Company Initiates Opportunistic $300 Million Share Repurchase Program

NEW YORK, Feb. 27, 2025 (GLOBE NEWSWIRE) — Global Net Lease, Inc. (NYSE: GNL) (“GNL” or the “Company”), an internally managed real estate investment trust that focuses on acquiring and managing a globally diversified portfolio of strategically-located commercial real estate properties, announced today its financial and operating results for the quarter and year ended December 31, 2024.

Fourth Quarter and Full Year 2024 Highlights

Revenue was $199.1 million in fourth quarter 2024 compared to $206.7 million in fourth quarter 2023, primarily as a result of $835 million of dispositions closed throughout the year
Net loss attributable to common stockholders was $17.5 million in fourth quarter 2024, compared to $59.5 million in fourth quarter 2023
Core Funds From Operations (“Core FFO”) was $68.5 million, or $0.30 per share, in fourth quarter 2024, compared to $48.3 million, or $0.21 per share, in fourth quarter 2023
Adjusted Funds From Operations (“AFFO”)¹ was $78.3 million², or $0.34 per share, in fourth quarter 2024, compared to $71.7 million, or $0.31 per share, in fourth quarter 2023; full-year 2024 AFFO was $303.8 million, or $1.32 per share
Closed $835 million of dispositions in 2024 at a cash cap rate of 7.1% with a weighted average lease term of 4.9 years
Reduced net debt by $734 million in 2024, improving Net Debt to Adjusted EBITDA from 8.4x to 7.6x²
Exceeded projected cost synergies, reaching $85.0 million versus the expected $75.0 million, highlighting the Company’s successful integration efforts and ability to drive value through strategic initiatives
Increased portfolio occupancy from 93% as of the end of first quarter 2024 to 97% as of the end of the fourth quarter of 2024
Leased 1.2 million square feet across the portfolio, resulting in nearly $17.0 million of new straight-line rent
Renewal leasing spread of 6.8% with a weighted average lease term of 9.7 years; new leases completed in the quarter had a weighted average lease term of 6.5 years
Weighted average annual rent increase of 1.3% provides organic rental growth, excluding 14.8% of the portfolio with CPI linked leases that have historically experienced significantly higher rental increase
Sector-leading 61% of annualized straight-line rent comes from investment-grade or implied investment-grade tenants³

Multi-Tenant Portfolio Sale

Entered into a binding agreement to sell its multi-tenant portfolio of 100 non-core properties for approximately $1.8 billion
This strategic transaction would accelerate GNL’s disposition initiative and position the Company for sustained growth and value creation as a pure-play, single-tenant net lease company

“We are incredibly proud of our achievements at GNL in 2024 and even more excited about what lies ahead,” stated Michael Weil, CEO of GNL. “The sale of our multi-tenant portfolio would mark a pivotal moment, reinforcing the strong momentum we have built. This transaction would reshape GNL into a pure-play, single-tenant net lease company, eliminating the operational complexities, G&A expenses and capital expenditures tied to multi-tenant retail properties. More importantly, it would accelerate our deleveraging strategy and fortify our balance sheet. This strategic transformation, including the recently announced share repurchase program, underscores our long-term vision, reinforcing our commitment to prudent management, sustainable growth and driving meaningful shareholder value.”

Full Year 2025 Guidance and Dividend Update⁴
The Company is establishing initial 2025 guidance, which is contingent on the sale of our multi-tenant portfolio with respect to AFFO and Net Debt to Adjusted EBITDA.

AFFO per share range of $0.90 to $0.96
Net Debt to Adjusted EBITDA range of 6.5x to 7.1x
Reduced annual dividend to $0.190 per share of common stock beginning with the dividend expected to be declared in April 2025 which would generate $78 million in incremental annual cash flow

Summary Fourth Quarter 2024 Results

	Three Months Ended December 31,
(In thousands, except per share data)	2024			2023
Revenue from tenants	$	199,115		$	206,726

Net loss attributable to common stockholders	$	(17,458	)	$	(59,514	)
Net loss per diluted common share	$	(0.08	)	$	(0.26	)

NAREIT defined FFO attributable to common stockholders	$	64,334		$	43,165
NAREIT defined FFO per diluted common share	$	0.28		$	0.19

Core FFO attributable to common stockholders	$	68,538		$	48,331
Core FFO per diluted common share	$	0.30		$	0.21

AFFO attributable to common stockholders	$	78,297		$	71,656
AFFO per diluted common share	$	0.34		$	0.31

Property Portfolio

At December 31, 2024, the Company’s portfolio consisted of 1,121 net leased properties located in ten countries and territories and comprised of 60.7 million rentable square feet. The Company operates in four reportable segments: (1) Industrial & Distribution, (2) Multi-Tenant Retail, (3) Single-Tenant Retail and (4) Office. The real estate portfolio metrics include:

97% leased with a remaining weighted-average lease term of 6.2 years⁵
81% of the portfolio contains contractual rent increases based on annualized straight-line rent
61% of portfolio annualized straight-line rent derived from investment grade and implied investment grade rated tenants
80% U.S. and Canada, 20% Europe (based on annualized straight-line rent)
34% Industrial & Distribution, 28% Multi-Tenant Retail, 21% Single-Tenant Retail and 17% Office (based on an annualized straight-line rent)

Capital Structure and Liquidity Resources⁶

As of December 31, 2024, the Company had liquidity of $492.2 million and $460.0 million of capacity under the Company’s revolving credit facility. The Company had net debt of $4.6 billion⁷, including $2.3 billion of mortgage debt.

As of December 31, 2024, the percentage of debt that is fixed rate (including variable rate debt fixed with swaps) was 91%, compared to approximately 80% as of December 31, 2023. The Company’s total combined debt had a weighted average interest rate of 4.8% resulting in an interest coverage ratio of 2.5 times⁸. Weighted average debt maturity was 3.0 years as of December 31, 2024 as compared to 3.2 years as of December 31, 2023.

Footnotes/Definitions

¹	While we consider AFFO a useful indicator of our performance, we do not consider AFFO as an alternative to net income (loss) or as a measure of liquidity. Furthermore, other REITs may define AFFO differently than we do. Projected AFFO per share data included in this release is for informational purposes only and should not be relied upon as indicative of future dividends or as a measure of future liquidity. AFFO for the fourth quarter 2024 also contains a number of adjustments for items that the Company believes were non-recurring, one-time items including adjustments for items that were settled in cash such as merger and proxy related expenses.

²	Includes the collection of $4.5 million in past-due funds from Children of America and approximately $3.0 million in termination fees.

³	As used herein, “Investment Grade Rating” includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied Investment Grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. The term “parent” for these purposes includes any entity, including any governmental entity, owning more than 50% of the voting stock in a tenant. Ratings information is as of December 31, 2024. Comprised of 31.4% leased to tenants with an actual investment grade rating and 29.1% leased to tenants with an Implied Investment Grade rating based on annualized cash rent as of December 31, 2024.

⁴	We do not provide guidance on net income. We only provide guidance on AFFO per share and our Net Debt to Adjusted EBITDA ratio and do not provide reconciliations of this forward-looking non-GAAP guidance to net income per share or our debt to net income due to the inherent difficulty in quantifying certain items necessary to provide such reconciliations as a result of their unknown effect, timing and potential significance. Examples of such items include impairment of assets, gains and losses from sales of assets, and depreciation and amortization from new acquisitions and other non-recurring expenses.

⁵	Weighted-average remaining lease term in years is based on square feet as of December 31, 2024.

⁶	During the year ended December 31, 2024, the Company did not sell any shares of Common Stock or Series B Preferred Stock through its Common Stock or Series B Preferred Stock under its “at-the-market” programs.

⁷	Comprised of the principal amount of GNL’s outstanding debt totaling $4.7 billion less cash and cash equivalents totaling $159.7 million, as of December 31, 2024.

⁸	The interest coverage ratio is calculated by dividing adjusted EBITDA for the applicable quarter by cash paid for interest (calculated based on the interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net). Management believes that interest coverage ratio is a useful supplemental measure of our ability to service our debt obligations. Adjusted EBITDA and cash paid for interest are Non-GAAP metrics and are reconciled below.

Conference Call

GNL will host a webcast and conference call on February 28, 2025 at 11:00 a.m. ET to discuss its financial and operating results.

To listen to the live call, please go to GNL’s “Investor Relations” section of the website at least 15 minutes prior to the start of the call to register and download any necessary audio software.

Dial-in instructions for the conference call and the replay are outlined below.

Conference Call Details

Live Call

Dial-In (Toll Free): 1-877-407-0792
International Dial-In: 1-201-689-8263

Conference Replay

For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the GNL website at www.globalnetlease.com.

Or dial-in below:

Domestic Dial-In (Toll Free): 1-844-512-2921
International Dial-In: 1-412-317-6671
Conference Number: 13746750
*Available from 2:00 p.m. ET on February 28, 2025 through May 28, 2025.

Supplemental Schedules

The Company will file supplemental information packages with the Securities and Exchange Commission (the “SEC”) to provide additional disclosure and financial information. Once posted, the supplemental package can be found under the “Presentations” tab in the Investor Relations section of GNL’s website at www.globalnetlease.com and on the SEC website at www.sec.gov.

About Global Net Lease, Inc.

Global Net Lease, Inc. (NYSE: GNL) is a publicly traded internally managed real estate investment trust that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe. Additional information about GNL can be found on its website at www.globalnetlease.com.

Forward-Looking Statements

The statements in this press release that are not historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause the outcome to be materially different. The words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “expects,” “estimates,” “projects,” “potential,” “predicts,” “plans,” “intends,” “would,” “could,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include the risks that any potential future acquisition or disposition (including the multi-tenant portfolio sale) by the Company is subject to market conditions, capital availability and timing considerations and may not be identified or completed on favorable terms, or at all. Some of the risks and uncertainties, although not all risks and uncertainties, that could cause the Company’s actual results to differ materially from those presented in the Company’s forward-looking statements are set forth in the “Risk Factors” and “Quantitative and Qualitative Disclosures about Market Risk” sections in the Company’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q, and all of its other filings with the U.S. Securities and Exchange Commission, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

Contacts:

Investors and Media:
Email: investorrelations@globalnetlease.com
Phone: (332) 265-2020

Global Net Lease, Inc. Consolidated Balance Sheets (In thousands)

	December 31,
	2024			2023
ASSETS	(Unaudited)
Real estate investments, at cost:
Land	$	1,172,146		$	1,430,607
Buildings, fixtures and improvements		5,293,468			5,842,314
Construction in progress		4,350			23,242
Acquired intangible lease assets		1,057,967			1,359,981
Total real estate investments, at cost		7,527,931			8,656,144
Less: accumulated depreciation and amortization		(1,164,629	)		(1,083,824	)
Total real estate investments, net		6,363,302			7,572,320
Assets held for sale		17,406			3,188
Cash and cash equivalents		159,698			121,566
Restricted cash		64,510			40,833
Derivative assets, at fair value		2,471			10,615
Unbilled straight-line rent		99,501			84,254
Operating lease right-of-use asset		74,270			77,008
Prepaid expenses and other assets		108,562			121,997
Deferred tax assets		4,866			4,808
Goodwill		51,370			46,976
Deferred financing costs, net		9,808			15,412
Total Assets	$	6,955,764		$	8,098,977

LIABILITIES AND EQUITY
Mortgage notes payable, net	$	2,221,706		$	2,517,868
Revolving credit facility		1,390,292			1,744,182
Senior notes, net		906,101			886,045
Acquired intangible lease liabilities, net		76,800			95,810
Derivative liabilities, at fair value		3,719			5,145
Accounts payable and accrued expenses		75,735			99,014
Operating lease liability		48,333			48,369
Prepaid rent		28,734			46,213
Deferred tax liability		5,477			6,009
Dividends payable		11,909			11,173
Total Liabilities		4,768,806			5,459,828
Commitments and contingencies		—			—
Stockholders’ Equity:
7.25% Series A cumulative redeemable preferred stock		68			68
6.875% Series B cumulative redeemable perpetual preferred stock		47			47
7.50% Series D cumulative redeemable perpetual preferred stock		79			79
7.375% Series E cumulative redeemable perpetual preferred stock		46			46
Common stock		3,640			3,639
Additional paid-in capital		4,359,264			4,350,112
Accumulated other comprehensive loss		(25,844	)		(14,096	)
Accumulated deficit		(2,150,342	)		(1,702,143	)
Total Stockholders’ Equity		2,186,958			2,637,752
Non-controlling interest		—			1,397
Total Equity		2,186,958			2,639,149
Total Liabilities and Equity	$	6,955,764		$	8,098,977

Global Net Lease, Inc. Consolidated Statements of Operations (In thousands, except per share data)

	Three Months Ended						Year Ended
	December 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
	(Unaudited)			(Unaudited)			(Unaudited)
Revenue from tenants	$	199,115		$	206,726		$	805,010		$	515,070

Expenses:
Property operating		35,619			37,037			142,497			67,839
Operating fees to related parties		—			(580	)		—			28,283
Impairment charges		20,098			2,978			90,410			68,684
Merger, transaction and other costs		1,792			4,349			6,026			54,492
Settlement costs		—			—			—			29,727
General and administrative		13,763			16,867			57,734			40,187
Equity-based compensation		2,309			1,058			8,931			17,297
Depreciation and amortization		83,020			98,713			349,943			222,271
Total expenses		156,601			160,422			655,541			528,780
Operating income (loss) before gain on dispositions of real estate investments		42,514			46,304			149,469			(13,710	)
Gain (loss) on dispositions of real estate investments		21,326			(988	)		57,015			(1,672	)
Operating income (loss)		63,840			45,316			206,484			(15,382	)
Other income (expense):
Interest expense		(77,234	)		(83,575	)		(326,932	)		(179,411	)
Loss on extinguishment and modification of debt		(2,412	)		(817	)		(15,877	)		(1,221	)
Gain (loss) on derivative instruments		6,853			(4,478	)		4,229			(3,691	)
Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		1,917			—			3,249			—
Other income		1,476			435			1,720			2,270
Total other expense, net		(69,400	)		(88,435	)		(333,611	)		(182,053	)
Net loss before income tax		(5,560	)		(43,119	)		(127,127	)		(197,435	)
Income tax expense		(962	)		(5,459	)		(4,445	)		(14,475	)
Net loss		(6,522	)		(48,578	)		(131,572	)		(211,910	)
Preferred stock dividends		(10,936	)		(10,936	)		(43,744	)		(27,438	)
Net loss attributable to common stockholders	$	(17,458	)	$	(59,514	)	$	(175,316	)	$	(239,348	)

Basic and Diluted Loss Per Share:
Net loss per share attributable to common stockholders — Basic and Diluted	$	(0.08	)	$	(0.26	)	$	(0.76	)	$	(1.71	)
Weighted Average Shares Outstanding:
Basic and Diluted		230,596			230,320			230,440			142,584

Global Net Lease, Inc. Quarterly Reconciliation of Non-GAAP Measures (Unaudited) (In thousands)

		Three Months Ended												Year Ended
		March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024			December 31, 2024
Adjusted EBITDA
	Net loss	$	(23,751	)	$	(35,664	)	$	(65,635	)	$	(6,522	)	$	(131,572	)
	Depreciation and amortization		92,000			89,493			85,430			83,020			349,943
	Interest expense		82,753			89,815			77,130			77,234			326,932
	Income tax expense		2,388			(250	)		1,345			962			4,445
	EBITDA		153,390			143,394			98,270			154,694			549,748
	Impairment charges		4,327			27,402			38,583			20,098			90,410
	Equity-based compensation		1,973			2,340			2,309			2,309			8,931
	Merger, transaction and other costs ^[1]		761			1,572			1,901			1,792			6,026
	(Gain) loss on dispositions of real estate investments		(5,867	)		(34,102	)		4,280			(21,326	)		(57,015	)
	(Gain) loss on derivative instruments		(1,588	)		(530	)		4,742			(6,853	)		(4,229	)
	Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		(1,032	)		(300	)		—			(1,917	)		(3,249	)
	Loss on extinguishment and modification of debt		58			13,090			317			2,412			15,877
	Other expense (income)		16			(309	)		49			(1,476	)		(1,720	)
	Expenses attributable to European tax restructuring ^[2]		469			16			—			—			485
	Transition costs related to the Merger and Internalization ^[3]		2,826			995			138			527			4,486
	Adjusted EBITDA		155,333			153,568			150,589			150,260			609,750
	General and administrative		16,177			15,196			12,598			13,763			57,734
	Expenses attributable to European tax restructuring ^[2]		(469	)		(16	)		—			—			(485	)
	Transition costs related to the Merger and Internalization ^[3]		(2,826	)		(995	)		(138	)		(527	)		(4,486	)
	NOI		168,215			167,753			163,049			163,496			662,513
	Amortization related to above- and below-market lease intangibles and right-of-use assets, net		2,225			1,901			1,805			1,572			7,503
	Straight-line rent		(4,562	)		(5,349	)		(5,343	)		(3,896	)		(19,150	)
	Cash NOI	$	165,878		$	164,305		$	159,511		$	161,172		$	650,866

Cash Paid for Interest:
	Interest Expense	$	82,753		$	89,815		$	77,130		$	77,234		$	326,932
	Non-cash portion of interest expense		(2,394	)		(2,580	)		(2,496	)		(2,510	)		(9,980	)
	Amortization of discounts on mortgages and senior notes		(15,338	)		(24,080	)		(14,156	)		(15,017	)		(68,591	)
	Total cash paid for interest	$	65,021		$	63,155		$	60,478		$	59,707		$	248,361

[1]	These costs primarily consist of advisory, legal and other professional costs that were directly related to the Merger and Internalization.
[2]	Amounts relate to costs incurred related to the tax restructuring of our European entities. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased Adjusted EBITDA for these amounts.
[3]	Amounts include costs related to (i) compensation incurred for our former Co-Chief Executive Officer who retired effective March 31, 2024; (ii) a transition service agreement with the former Advisor and; (iii) insurance premiums related to expiring directors and officers insurance of former RTL directors. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased Adjusted EBITDA for these amounts.

Global Net Lease, Inc. Quarterly Reconciliation of Non-GAAP Measures (Unaudited) (In thousands, except per share data)

		Three Months Ended												Year Ended
		March 31, 2024			June 30, 2024			September 30, 2024			December 31, 2024			December 31, 2024
Funds from operations (FFO):
	Net loss attributable to common stockholders (in accordance with GAAP)	$	(34,687	)	$	(46,600	)	$	(76,571	)	$	(17,458	)	$	(175,316	)
	Impairment charges		4,327			27,402			38,583			20,098			90,410
	Depreciation and amortization		92,000			89,493			85,430			83,020			349,943
	(Gain) loss on dispositions of real estate investments		(5,867	)		(34,102	)		4,280			(21,326	)		(57,015	)
FFO (defined by NAREIT)			55,773			36,193			51,722			64,334			208,022
	Merger, transaction and other costs^[1]		761			1,572			1,901			1,792			6,026
	Loss on extinguishment and modification of debt		58			13,090			317			2,412			15,877
Core FFO attributable to common stockholders			56,592			50,855			53,940			68,538			229,925
	Non-cash equity-based compensation		1,973			2,340			2,309			2,309			8,931
	Non-cash portion of interest expense		2,394			2,580			2,496			2,510			9,980
	Amortization related to above- and below-market lease intangibles and right-of-use assets, net		2,225			1,901			1,805			1,572			7,503
	Straight-line rent		(4,562	)		(5,349	)		(5,343	)		(3,896	)		(19,150	)
	Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness		(1,032	)		(300	)		—			(1,917	)		(3,249	)
	Eliminate unrealized (gains) losses on foreign currency transactions^[2]		(1,259	)		(230	)		4,360			(6,289	)		(3,418	)
	Amortization of discounts on mortgages and senior notes		15,338			24,080			14,156			15,017			68,591
	Expenses attributable to European tax restructuring^[3]		469			16			—			—			485
	Transition costs related to the Merger and Internalization^[4]		2,826			995			138			527			4,486
	Forfeited disposition deposit^[5]		—			(196	)		(5	)		(74	)		(275	)
Adjusted funds from operations (AFFO) attributable tocommon stockholders		$	74,964		$	76,692		$	73,856		$	78,297		$	303,809
Weighted average common shares outstanding – Basic and Diluted			230,320			230,381			230,463			230,596			230,440
Net loss per share attributable to common shareholders — Basic and Diluted		$	(0.15	)	$	(0.20	)	$	(0.33	)	$	(0.08	)	$	(0.76	)
FFO per diluted common share		$	0.24		$	0.16		$	0.22		$	0.28		$	0.90
Core FFO per diluted common share		$	0.25		$	0.22		$	0.23		$	0.30		$	1.00
AFFO per diluted common share		$	0.33		$	0.33		$	0.32		$	0.34		$	1.32
Dividends declared to common stockholders		$	81,923		$	63,754		$	63,722		$	63,484		$	272,883

[1]	These costs primarily consist of advisory, legal and other professional costs that were directly related to the Merger and Internalization.
[2]	For the three months ended March 31, 2024, the gain on derivative instruments was $1.6 million which consisted of unrealized gains of $1.3 million and realized gains of $0.3 million. For the three months ended June 30, 2024, the gain on derivative instruments was $0.5 million which consisted of unrealized gains of $0.2 million and realized gains of $0.3 million. For the three months ended September 30, 2024, the loss on derivative instruments was $4.7 million which consisted of unrealized losses of $4.4 million and realized losses of $0.3 million. For the three months ended December 31, 2024, the gain on derivative instruments was $6.9 million, which consisted of unrealized gains of $6.3 million and realized gains of $0.6 million. For the year ended December 31, 2024, the gain on derivative instruments was $4.2 million, which consisted of unrealized gains of $3.4 million and realized gains of $0.8 million.
[3]	Amounts relate to costs incurred related to the tax restructuring of our European entities. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for these amounts.
[4]	Amounts include costs related to (i) compensation incurred for our former Co-Chief Executive Officer who retired effective March 31, 2024; (ii) a transition service agreement with the former Advisor and; (iii) insurance premiums related to expiring directors and officers insurance of former RTL directors. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for these amounts.
[5]	Represents a forfeited deposit from a potential buyer of one of our properties, which is recorded in other income in our consolidated statement of operations. We do not consider this income to be part of our normal operating performance and have, accordingly, decreased AFFO for this amount.

The following table provides operating financial information for the Company’s four reportable segments:

		Three Months Ended December 31,				Year Ended December 31,
(In thousands)		2024		2023 ⁽¹⁾		2024		2023 ⁽¹⁾
Industrial & Distribution:
	Revenue from tenants	$	54,561	$	62,223	$	237,645	$	220,102
	Property operating expense		6,694		5,407		21,820		15,457
	Net operating income	$	47,867	$	56,816	$	215,825	$	204,645

Multi-Tenant Retail:
	Revenue from tenants	$	63,131	$	66,412	$	259,280	$	79,799
	Property operating expense		20,387		22,494		86,025		26,951
	Net operating income	$	42,744	$	43,918	$	173,255	$	52,848

Single-Tenant Retail:
	Revenue from tenants	$	42,648	$	41,288	$	164,514	$	65,478
	Property operating expense		4,012		4,286		15,787		6,045
	Net operating income	$	38,636	$	37,002	$	148,727	$	59,433

Office:
	Revenue from tenants	$	38,775	$	36,803	$	143,571	$	149,691
	Property operating expense		4,526		4,850		18,865		19,386
	Net operating income	$	34,249	$	31,953	$	124,706	$	130,305

(1)	Amounts in the Single-Tenant Retail segment and Office segment reflect changes to the reclassification of one tenant from the Office segment to the Single-Tenant Retail segment to conform to the current year presentation based on a re-evaluation of the property type.

Caution on Use of Non-GAAP Measures

Funds from Operations (“FFO”), Core Funds from Operations (“Core FFO”), Adjusted Funds from Operations (“AFFO”), Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), Net Operating Income (“NOI”), Cash Net Operating Income (“Cash NOI”) and cash paid for interest should not be construed to be more relevant or accurate than the current GAAP methodology in calculating net income or in its applicability in evaluating our operating performance. The method utilized to evaluate the value and performance of real estate under GAAP should be construed as a more relevant measure of operational performance and considered more prominently than the non-GAAP measures.

Other REITs may not define FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition (as we do), or may interpret the current NAREIT definition differently than we do, or may calculate Core FFO or AFFO differently than we do. Consequently, our presentation of FFO, Core FFO and AFFO may not be comparable to other similarly-titled measures presented by other REITs in our peer group.

We consider FFO, Core FFO and AFFO useful indicators of our performance. Because FFO, Core FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gain or loss from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO, Core FFO and AFFO presentations facilitate comparisons of operating performance between periods and between other REITs.

As a result, we believe that the use of FFO, Core FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance including relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. However, FFO, Core FFO and AFFO are not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Investors are cautioned that FFO, Core FFO and AFFO should only be used to assess the sustainability of our operating performance excluding these activities, as they exclude certain costs that have a negative effect on our operating performance during the periods in which these costs are incurred.

Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations

Funds From Operations

Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a measure known as FFO, which we believe to be an appropriate supplemental measure to reflect the operating performance of a REIT. FFO is not equivalent to net income or loss as determined under GAAP.

We calculate FFO, a non-GAAP measure, consistent with the standards established over time by the Board of Governors of NAREIT, as restated in a White Paper approved by the Board of Governors of NAREIT effective in December 2018 (the “White Paper”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding depreciation and amortization related to real estate, gain and loss from the sale of certain real estate assets, gain and loss from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to exclude the proportionate share of the non-controlling interest to arrive at FFO, Core FFO, AFFO and NOI attributable to stockholders, as applicable. Our FFO calculation complies with NAREIT’s definition.

The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, and straight-line amortization of intangibles, which implies that the value of a real estate asset diminishes predictably over time. We believe that, because real estate values historically rise and fall with market conditions, including inflation, interest rates, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting for depreciation and certain other items may be less informative. Historical accounting for real estate involves the use of GAAP. Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP. Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.

Core Funds From Operations

In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as merger, transaction and other costs, as well as certain other costs that are considered to be non-core, such as debt extinguishment or modification costs. The purchase of properties, and the corresponding expenses associated with that process, is a key operational feature of our core business plan to generate operational income and cash flows in order to make dividend payments to stockholders. In evaluating investments in real estate, we differentiate the costs to acquire the investment from the subsequent operations of the investment. We also add back non-cash write-offs of deferred financing costs, prepayment penalties and certain other costs incurred with the early extinguishment or modification of debt which are included in net income but are considered financing cash flows when paid in the statement of cash flows. We consider these write-offs and prepayment penalties to be capital transactions and not indicative of operations. By excluding expensed acquisition, transaction and other costs as well as non-core costs, we believe Core FFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management’s analysis of the investing and operating performance of our properties.

Adjusted Funds From Operations

In calculating AFFO, we start with Core FFO, then we exclude certain income or expense items from AFFO that we consider more reflective of investing activities, other non-cash income and expense items and the income and expense effects of other activities or items, including items that were paid in cash that are not a fundamental attribute of our business plan or were one time or non-recurring items. These items include, for example, early extinguishment or modification of debt and other items excluded in Core FFO as well as unrealized gain and loss, which may not ultimately be realized, such as gain or loss on derivative instruments, gain or loss on foreign currency transactions, and gain or loss on investments. In addition, by excluding non-cash income and expense items such as amortization of above-market and below-market leases intangibles, amortization of deferred financing costs, straight-line rent and equity-based compensation from AFFO, we believe we provide useful information regarding income and expense items which have a direct impact on our ongoing operating performance. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. We also include the realized gain or loss on foreign currency exchange contracts for AFFO as such items are part of our ongoing operations and affect our current operating performance.

In calculating AFFO, we also exclude certain expenses which under GAAP are treated as operating expenses in determining operating net income. All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments or modifications and merger related expenses) and certain other expenses, including expenses related to our European tax restructuring and transition costs related to the Merger and Internalization, negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are excluded by us as we believe they are not reflective of our on-going performance. Further, under GAAP, certain contemplated non-cash fair value and other non-cash adjustments are considered operating non-cash adjustments to net income. In addition, as discussed above, we view gain and loss from fair value adjustments as items which are unrealized and may not ultimately be realized and not reflective of ongoing operations and are therefore typically adjusted for when assessing operating performance. Excluding income and expense items detailed above from our calculation of AFFO provides information consistent with management’s analysis of our operating performance. Additionally, fair value adjustments, which are based on the impact of current market fluctuations and underlying assessments of general market conditions, but can also result from operational factors such as rental and occupancy rates, may not be directly related or attributable to our current operating performance. By excluding such changes that may reflect anticipated and unrealized gain or loss, we believe AFFO provides useful supplemental information. By providing AFFO, we believe we are presenting useful information that can be used to, among other things, assess our performance without the impact of transactions or other items that are not related to our portfolio of properties. AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) calculated in accordance with GAAP and presented in our consolidated financial statements. AFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions.

Adjusted Earnings before Interest, Taxes, Depreciation and Amortization, Net Operating Income, Cash Net Operating Income and Cash Paid for Interest

We believe that Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization adjusted for acquisition, transaction and other costs, other non-cash items and including our pro-rata share from unconsolidated joint ventures, is an appropriate measure of our ability to incur and service debt. We also exclude revenue attributable to the reimbursement by third parties of financing costs that we originally incurred because these revenues are not, in our view, related to operating performance. All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments or modifications) and certain other expenses, including expenses related to our European tax restructuring and transition costs related to the Merger and Internalization, negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are not reflective of on-going performance. Adjusted EBITDA should not be considered as an alternative to cash flows from operating activities, as a measure of our liquidity or as an alternative to net income (loss) as calculated in accordance with GAAP as an indicator of our operating activities. Other REITs may calculate Adjusted EBITDA differently and our calculation should not be compared to that of other REITs.

NOI is a non-GAAP financial measure equal to net income (loss), the most directly comparable GAAP financial measure, less discontinued operations, interest, other income and income from preferred equity investments and investment securities, plus corporate general and administrative expense, acquisition, transaction and other costs, depreciation and amortization, other non-cash expenses and interest expense. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Therefore, we believe NOI is a useful measure for evaluating the operating performance of our real estate assets and to make decisions about resource allocations. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates, rental rates, operating costs and acquisition activity on an unlevered basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property’s results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization, because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity.

Cash NOI is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define Cash NOI as net operating income (which is separately defined herein) excluding amortization of above/below market lease intangibles and straight-line rent adjustments that are included in GAAP lease revenues. We believe that Cash NOI is a helpful measure that both investors and management can use to evaluate the current financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Cash NOI should not be considered as an alternative to net income, as an indication of our financial performance, or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present Cash NOI may not be directly comparable to the way other REITs calculate and present Cash NOI.

Cash Paid for Interest is calculated based on the interest expense less non-cash portion of interest expense and amortization of mortgage (discount) premium, net. Management believes that Cash Paid for Interest provides useful information to investors to assess our overall solvency and financial flexibility. Cash Paid for Interest should not be considered as an alternative to interest expense as determined in accordance with GAAP or any other GAAP financial measures and should only be considered together with and as a supplement to our financial information prepared in accordance with GAAP.

The MIL Network –

February 28, 2025

MIL-OSI: Intchains Group Limited Reports Fourth Quarter and Full Year 2024 Unaudited Financial Results

Source: GlobeNewswire (MIL-OSI)

NEW YORK, Feb. 27, 2025 (GLOBE NEWSWIRE) — Intchains Group Limited (Nasdaq: ICG) (“we,” or the “Company”), a company that engages in the provision of altcoin mining products, the strategic acquisition and holding of Ethereum-based cryptocurrencies, and the active development of innovative Web3 applications, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Operating and Financial Highlights

Sales Volume of Altcoin Mining Products Measured by Number of Embedded ASIC Chips: Since we offer a wide range of altcoin mining products, with each unit incorporating anywhere from tens to thousands of ASIC chips, it is more meaningful to measure the sales of our altcoin mining products by the number of embedded ASIC chips. Our sales volume of ASIC chips for Q4 2024 was 1,705,408 units, compared to 423,040 units for the same period last year, representing an increase of 303.1%.
Revenue: Our revenue for Q4 2024 reached RMB74.2 million (US$10.2 million), reflecting a significant increase of 109.2% from RMB35.5 million for the same period of 2023. For the fourth quarter of 2024, revenue derived from mainland China and overseas countries and regions accounted for 67.0% and 33.0% of our total revenue, respectively.
Net Income: Our net income for Q4 2024 was RMB12.8 million (US$1.8 million), reflecting an increase of 58.2% from RMB8.1 million for the same period in 2023.
Non-GAAP Adjusted Net Income: Non-GAAP adjusted net income in the fourth quarter of 2024 was RMB14.8 million (US$2.0 million), reflecting an increase of 54.2% from RMB9.6 million for the same period in 2023. Non-GAAP adjusted net income excludes share-based compensation expenses. For further information, please refer to “Use of Non-GAAP Financial Measures” in this press release.
Cryptocurrency Assets: As of December 31, 2024, the fair value of our cryptocurrency assets other than stablecoins such as USDT and USDC was RMB148.8 million (US$20.4 million), primarily comprised of approximately 5,702 ETH-based cryptocurrencies, valued at RMB141.2 million (US$19.3 million).

Full Year 2024 Operating and Financial Highlights

Sales Volume of Altcoin Mining Products Measured by Number of Embedded ASIC Chips: Our sales volume of ASIC chips achieved 2,681,500 units for the year ended December 31, 2024, representing a year-over-year increase of 84.0% from 1,457,373 units for 2023.
Revenue: Our revenue was RMB281.8 million (US$38.6 million) for the year ended December 31, 2024, representing a year-over-year increase of 242.7% from RMB82.2 million for 2023. For the year ended December 31, 2024, revenue derived from mainland China and overseas countries and regions accounted for 45.5% and 54.5% of our total revenue, respectively.
Net Income: Our net income was RMB51.5 million (US$7.1 million) for the year ended December 31, 2024, compared to a net loss of RMB26.8 million for 2023.
Non-GAAP Adjusted Net Income: Non-GAAP adjusted net income for the year ended December 31, 2024 was RMB60.5 million (US$8.3 million), compared to a net loss of RMB23.3 million for 2023. Non-GAAP adjusted net income excludes share-based compensation expenses. For further information, please refer to “Use of Non-GAAP Financial Measures” in this press release.

Intchains Group Achieves Milestones in Innovative Solutions and Cryptocurrency Strategy

Mr. Qiang Ding, Chairman of the Board of Directors and Chief Executive Officer, commented, “The cryptocurrency market showed strong performance in Q4 2024, with growing optimism from major financial institutions about its prospects for 2025. Riding this momentum, Dogecoin saw solid price growth during the quarter. As a leading supplier of Dogecoin mining machines, the Company also delivered satisfactory operational results in Q4 2024. The growth rate of net profit in Q4 was slower than that of revenue, primarily due to the Company’s research and development expenses for the launch of new projects in 2025. the Company expects that the increased investment in research and development will better drive the Company’s operational performance in 2025. Throughout this quarter, the Company continued its Ethereum treasury strategy, increasing its ETH holdings by 37% compared to Q3 2024 in terms of units of ETH held at the end of the quarter, The combination of rising Ethereum prices and an expanded ETH portfolio had a positive impact on net profit, further strengthening the company’s financial position.

Looking ahead to 2025, the Company remains committed to expanding its presence in altcoin development. In February 2025, the Company introduced the AE BOX series of mining products, positioning itself as an early mover in Aleo mining. The Company will also continue upgrading its Dogecoin mining machines, reinforcing its industry leadership. Additionally, it will maintain its Ethereum treasury strategy throughout the year. On the application front, the Company took a significant step in Web3 payments with the launch of Goldshell Wallet in February 2025. This expansion reflects the Company’s commitment to broadening its Web3 ecosystem.”

Fourth Quarter 2024 Financial Results

Revenue

Revenue was RMB74.2 million (US$10.2 million) for the fourth quarter of 2024, representing an increase of 109.2% from RMB35.5 million for the same period in 2023. The substantial growth was primarily driven by a significant increase in demand for our altcoin mining products, fueled by improved cryptocurrency market performance.

Cost of Revenue

Cost of revenue was RMB54.8 million (US$7.5 million) for the fourth quarter of 2024, representing an increase of 287.4% from RMB14.1 million for the same period of 2023. The percentage increase in cost of revenue was higher than the percentage increase in our revenue, which was primarily due to the lower gross margins for the series of mining products we primarily sold in the fourth quarter of 2024, compared to the same period last year.

Operating Expenses

Total operating expenses were RMB56.0million (US$7.7 million) for the fourth quarter of 2024, representing an increase of 145.8% from RMB22.8 million for the same period of 2023. The increase was primarily due to an increase in research and development expenses.

Research and development expenses increased by 228.7% to RMB45.9 million (US$6.3 million) for the fourth quarter of 2024 from RMB14.0 million for the same period of 2023. The increase was primarily due to higher expenses related to preliminary research costs conducted for new projects, as well as increased personnel-related expenses.
Sales and marketing expenses increased by 62.1% to RMB2.9 million (US$0.4 million) for the fourth quarter of 2024 from RMB1.8 million for the same period of 2023, mainly driven by increased personnel-related expenses.
General and administrative expenses remained relatively steady at RMB7.0 million and RMB7.2 million (US$1.0 million), respectively, for the fourth quarter of 2023 and 2024.

Interest Income

Interest income decreased by 11.1% to RMB3.8 million (US$0.5 million) for the fourth quarter of 2024 from RMB4.2 million for the same period of 2023, mainly due to a reduced cash balance resulting from our strategy of using part of our operating cash flow to acquire and hold ETH-based cryptocurrencies.

Gain on fair value of cryptocurrency, net

Gain on fair value of cryptocurrency, net, for the fourth quarter of 2024 was RMB29.2 million (US$4.0 million), compared to nil in the same period of 2023. The gain was primarily due to an approximately 31.5% increase in the price of ETH and an approximately 37.4% increase in the number of ETH-based cryptocurrency units held from the end of the third quarter of 2024 to the end of the fourth quarter of 2024.

Other Income, Net

Other income, net, decreased by 29.8% to RMB5.2 million (US$0.7 million) for the fourth quarter of 2024 from RMB7.5 million for the same period of 2023, primarily due to the decrease in grants received from the local government, which have no repayment obligations.

Net Income

As a result of the foregoing, our net income increased by 58.2% to RMB12.8 million (US$1.8 million) for the fourth quarter of 2024 from RMB8.1 million for the same period of 2023.

Non-GAAP Adjusted Net Income

Non-GAAP adjusted net income increased by 54.2% to RMB14.8 million (US$2.0 million) for the fourth quarter of 2024 from RMB9.6 million for the same period of 2023.

Basic and Diluted Net Earnings Per Ordinary Share

Basic and diluted net earnings per ordinary share both increased by 57.1% to RMB0.11 (US$0.01) for the fourth quarter of 2024 from RMB0.07 for the same period of 2023.

Non-GAAP Basic and Diluted Net Earnings Per Ordinary Share

Non-GAAP adjusted basic and diluted net earnings per ordinary share increased by 50.2% to RMB0.12 (US$0.02) for the fourth quarter of 2024 from RMB0.08 for the same period of 2023. Each ADS represents two of the Company’s Class A ordinary shares.

Full Year 2024 Financial Results

Revenue

Revenue was RMB281.8 million (US$38.6 million) in 2024, representing an increase of 242.7% from RMB82.2 million in 2023. The substantial growth was primarily driven by a significant increase in the average selling price of our new products launched in March 2024, compared to older products, as well as improved cryptocurrency market performance, which led to higher demand for our products.

Cost of Revenue

Cost of revenue was RMB130.5 million (US$17.9 million) for the year ended December 31, 2024, representing an increase of 78.3% from RMB73.1 million for 2023. The percentage increase in cost of revenue was substantially lower than the percentage increase in our revenue, which was primarily due to the higher gross margins for our new products launched in March 2024 compared to the older products.

Operating Expenses

Total operating expenses were RMB148.2 million (US$20.3 million) for 2024, representing an increase of 100.1% from RMB74.0 million for 2023. The increase was primarily due to an increase in research and development expenses.

Research and development expenses increased by 158.7% to RMB109.4 million (US$15.0 million) for 2024 from RMB42.3 million for 2023. The increase was primarily due to more products launched in 2024, as well as increased personnel-related expenses.
Sales and marketing expenses increased by 29.6% to RMB8.5 million (US$1.2 million) for 2024 from RMB6.5 million for 2023, mainly driven by increased personnel-related expenses.
General and administrative expenses increased by 20.0% to RMB30.2 million (US$4.1 million) for 2024 from RMB25.2 million for 2023, primarily due to increased personnel-related expenses and increased amortization expenses of trademarks.

Interest Income

Interest income remained relatively steady at RMB16.8 million and RMB16.2 million (US$2.2 million), respectively, for the year ended December 31, 2023 and 2024.

Gain on fair value of cryptocurrency, net

Gain on fair value of cryptocurrency, net, for 2024 was RMB21.3 million (US$2.9 million), compared to nil for 2023. The gain was primarily due to ETH closing price rising approximately 48.6% from the end of 2023 to the end of 2024, as well as units of ETH-based cryptocurrencies held increased from approximately 60 from the end of 2023 to 5,702 from the end of 2024.

Other Income, Net

Other income, net, decreased by 38.7% to RMB8.1 million (US$1.1 million) for 2024 from RMB13.2 million for 2023, primarily due to the decrease in grants received from the local government, which have no repayment obligations.

Net Income/(loss)

As a result of the foregoing, we recorded a net income of RMB51.5 million (US$7.1 million) for the year ended December 31, 2024, compared to a net loss of RMB26.8 million for the year ended December 31, 2023.

Basic and Diluted Net Earnings/(Losses) Per Ordinary Share

Basic and diluted net earnings per ordinary share were both RMB0.43 (US$0.06) for the year ended December 31, 2024, compared to basic and diluted net loss per ordinary share of RMB0.22 for the year ended December 31, 2023.

Non-GAAP Basic and Diluted Net Earnings/(Losses) Per Ordinary Share

Non-GAAP adjusted basic and diluted net income per ordinary share was RMB0.50 (US$0.07) for the year ended December 31, 2024, compared to Non-GAAP adjusted basic and diluted net loss per ordinary share of RMB0.20 for the year ended December 31, 2023. Each ADS represents two of the Company’s Class A ordinary shares.

Recent Development

Aleo Mining: On February 7, 2025, the Company launched AE BOX series of cutting-edge mining products for Aleo, establishing itself as a pioneer in Aleo mining solutions. This marks the Company’s first venture into the zero-knowledge proof sector, further reinforcing its deep expertise and innovation in the altcoin space.

Goldshell Wallet: On February 26, 2025, the Company introduced the Goldshell Wallet, an air-gapped, triple-secured wallet designed for maximum security and seamless user experience. Currently in their trial stage, Goldshell Wallet is not expected to contribute materially to our profits during this phase. However, we believe they represent an important step toward becoming a company with a stable application development pipeline and the ability to navigate across the crypto cycle.

Conference Call Information

The Company’s management team will host an earnings conference call to discuss its financial results at 8:00 PM U.S. Eastern Time on February 27, 2025 (9:00 AM Beijing Time on February 28, 2025). Details for the conference call are as follows:

All participants must use the link provided above to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of dial-in numbers and a personal access PIN, which will be used to join the conference call.

Additionally, a live and archived webcast of the conference call will also be available at the Company’s website at https://intchains.com/.

About Intchains Group Limited

Intchains Group Limited is a company that engages in the provision of altcoin mining products, the strategic acquisition and holding of Ethereum-based cryptocurrencies, and the active development of innovative Web3 applications. For more information, please visit the Company’s website at: https://intchains.com/.

Exchange Rate Information

The unaudited United States dollar (“US$”) amounts disclosed in the accompanying financial statements are presented solely for the convenience of the readers. Translations of amounts from RMB into US$ for the convenience of the reader were calculated at the noon buying rate of US$1.00=RMB7.2993 on the last trading day of the fourth quarter of 2024 (December 31, 2024). No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about: (i) our goals and strategies; (ii) our future business development, formed condition and results of operations; (iii) expected changes in our revenue, costs or expenditures; (iv) growth of and competition trends in our industry; (v) our expectations regarding demand for, and market acceptance of, our products; (vi) general economic and business conditions in the markets in which we operate; (vii) relevant government policies and regulations relating to our business and industry; (viii) fluctuations in the market price of ETH-based cryptocurrencies; gains or losses from the sale of ETH-based cryptocurrencies; changes in accounting treatment for the Company’s ETH-based cryptocurrencies holdings; a decrease in liquidity in the markets in which ETH-based cryptocurrencies are traded; security breaches, cyberattacks, unauthorized access, loss of private keys, fraud, or other events leading to the loss of the Company’s ETH-based cryptocurrencies; impacts to the price and rate of adoption of ETH-based cryptocurrencies associated with financial difficulties and bankruptcies of various participants in the industry; and (viii) assumptions underlying or related to any of the foregoing. Investors can identify these forward-looking statements by words or phrases such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.

Use of Non-GAAP Financial Measures

In evaluating Company’s business, the Company uses non-GAAP measures, such as adjusted income (loss) from operations and adjusted net income (loss), as supplemental measures to review and assess its operating performance. The Company defines adjusted income (loss) from operations as income (loss) from operations excluding share-based compensation expenses, and adjusted net income (loss) as net income (loss) excluding share-based compensation expenses. The Company believes that the non-GAAP financial measures provide useful information about the Company’s results of operations, enhance the overall understanding of the Company’s past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools and investors should not consider them in isolation, or as a substitute for net income, cash flows provided by operating activities or other consolidated statements of operations and cash flows data prepared in accordance with U.S. GAAP. One of the key limitations of using adjusted net income is that it does not reflect all of the items of income and expense that affect the Company’s operations. Share-based compensation expenses have been and may continue to be incurred in Company’s business and are not reflected in the presentation of adjusted net income. Further, the non-GAAP financial measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.

For investor and media inquiries, please contact:

Intchains Group Limited

Investor relations
Email: ir@intchains.com

Redhill

Belinda Chan
Tel: +852-9379-3045
Email: belinda.chan@creativegp.com


INTCHAINS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share and per share data, or as otherwise noted)

	As of December 31,
	2023		2024
	RMB		RMB		US$
ASSETS
Current Assets：
Cash and cash equivalents	694,750		322,252		44,148
USDC	—		1,690		232
Cryptocurrency-current	—		30,079		4,121
Inventories, net	41,767		98,614		13,510
Prepayments and other current assets, net	47,403		69,703		9,549
Short-term investments	13,596		198,562		27,203
Total current assets	797,516		720,900		98,763
Non-current Assets:
Cryptocurrency-non-current	645		148,790		20,384
Long-term investments	—		20,569		2,818
Property, equipment, and software, net	49,184		157,065		21,518
Intangible assets, net	3,425		3,552		487
Right-of-use assets	1,735		272		37
Deferred tax assets	12,899		28,942		3,965
Prepayments on long-term assets	113,425		—		—
Other non-current assets	421		9,419		1,290
Total non-current assets	181,734		368,609		50,499
Total assets	979,250		1,089,509		149,262
LIABILITIES, AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	195		14,847		2,034
Contract liabilities	9,828		37,447		5,129
Income tax payable	1,634		2,023		277
Lease liabilities	1,103		272		37
Provision for warranty	40		161		22
Accrued liabilities and other current liabilities	15,364		21,692		2,971
Total current liabilities	28,164		76,442		10,470
Non-current Liabilities:
Deferred tax liabilities	—		—		—
Lease liabilities	761		—		—
Total non-current liabilities	761		—		—
Total liabilities	28,925		76,442		10,470
Shareholders’ Equity:
Ordinary shares (US$0.000001 par value; 50,000,000,000 shares authorized, 119,876,032 and 120,081,456 shares issued, 119,876,032 and 119,962,962 shares outstanding as of December 31, 2023 and December 31, 2024, respectively)	1		1		—
Subscriptions receivable from shareholders	(1	)	(1	)	—
Additional paid-in capital	186,262		195,236		26,747
Statutory reserve	48,265		51,762		7,091
Accumulated other comprehensive income	1,838		3,777		518
Retained earnings	713,960		762,292		104,436
Total equity	950,325		1,013,067		138,792
Total liabilities and shareholders’ equity	979,250		1,089,509		149,262

INTCHAINS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
(All amounts in thousands, except share and per share data, or as otherwise noted)

	For the Three Months ended December 31,
	2023		2024
	RMB		RMB		US$
Products revenue	35,454		74,177		10,162
Cost of revenue	(14,132	)	(54,752	)	(7,501	)
Gross profit	21,322		19,425		2,661
Operating expenses:
Research and development expenses	(13,962	)	(45,887	)	(6,286	)
Sales and marketing expenses	(1,787	)	(2,897	)	(397	)
General and administrative expenses	(7,040	)	(7,237	)	(991	)
Total operating expenses	(22,789	)	(56,021	)	(7,674	)
Loss from operations	(1,467	)	(36,596	)	(5,013	)
Interest income	4,248		3,778		518
Foreign exchange gains/(losses), net	(971	)	2,264		310
Gain on fair value of cryptocurrency, net	—		29,228		4,004
Other income, net	7,458		5,237		717
Income before income tax expenses	9,268		3,911		536
Income tax (expense)/benefit	(1,190	)	8,870		1,215
Net Income	8,078		12,781		1,751
Foreign currency translation adjustment, net of nil tax	(826	)	4,127		565
Total comprehensive income	7,252		16,908		2,316

Weighted average number of shares used in per share calculation
— Basic	119,876,032		119,962,962		119,962,962
— Diluted	119,921,358		119,980,895		119,980,895
Net earnings per share
— Basic	0.07		0.11		0.01
— Diluted	0.07		0.11		0.01

INTCHAINS GROUP LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
(All amounts in thousands, except share and per share data, or as otherwise noted)

	For the Year ended December 31,
	2023		2024
	RMB		RMB		US$
Products revenue	82,225		281,767		38,602
Cost of revenue	(73,147	)	(130,452	)	(17,872	)
Gross profit	9,078		151,315		20,730
Operating expenses:
Research and development expenses	(42,304	)	(109,443	)	(14,994	)
Sales and marketing expenses	(6,532	)	(8,468	)	(1,160	)
General and administrative expenses	(25,210	)	(30,248	)	(4,144	)
Total operating expenses	(74,046	)	(148,159	)	(20,298	)
Income/(loss) from operations	(64,968	)	3,156		432
Interest income	16,750		16,235		2,224
Foreign exchange gains/(losses), net	(524	)	1,382		189
Gain on fair value of cryptocurrency, net	—		21,322		2,921
Other income, net	13,191		8,082		1,107
Income/(loss) before income tax expenses	(35,551	)	50,177		6,873
Income tax benefit	8,756		1,320		181
Net Income/(loss)	(26,795	)	51,497		7,054
Foreign currency translation adjustment, net of nil tax	1,838		1,939		266
Total comprehensive income/(loss)	(24,957	)	53,436		7,320

Weighted average number of shares used in per share calculation
— Basic	119,387,937		119,932,051		119,932,051
— Diluted	119,387,937		120,011,806		120,011,806
Net earnings/(losses) per share
— Basic	(0.22	)	0.43		0.06
— Diluted	(0.22	)	0.43		0.06

INTCHAINS GROUP LIMITED
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except per share data)

	For the Three Months ended December 31,
	2023		2024
	RMB		RMB		US$
Loss from operations	(1,467	)	(36,596	)	(5,013	)
Add:
Share-based compensation expense	1,501		1,992		273
Non-GAAP adjusted operating income/(loss)	34		(34,604	)	(4,740	)
Net income	8,078		12,781		1,751
Add:
Share-based compensation expense	1,501		1,992		273
Non-GAAP adjusted net income	9,579		14,773		2,024

Non-GAAP adjusted net earnings per share
— Basic	0.08		0.12		0.02
— Diluted	0.08		0.12		0.02

INTCHAINS GROUP LIMITED
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except per share data)

	For the Year ended December 31,
	2023		2024
	RMB		RMB	US$
Income/(loss) from operations	(64,968	)	3,156	432
Add:
Share-based compensation expense	3,474		8,973	1,229
Non-GAAP adjusted operating income/(loss)	(61,494	)	12,129	1,661
Net income/(loss)	(26,795	)	51,497	7,054
Add:
Share-based compensation expense	3,474		8,973	1,229
Non-GAAP adjusted net income/(loss)	(23,321	)	60,470	8,283

Non-GAAP adjusted net earnings/(losses) per share
— Basic	(0.20	)	0.50	0.07
— Diluted	(0.20	)	0.50	0.07

INTCHAINS GROUP LIMITED
UNAUDITED CRYPTOCURRENCY-ADDITIONAL INFORMATION

As of Quarter Ended	Cryptocurrency	Approximate Number of Cryptocurrency Held at End of Quarter	Original Cost Basis	Approximate Average Cost Price Per Unit of Cryptocurrency	Lowest Market Price Per Unit of Cryptocurrency During Quarter (a)	Market Value of Cryptocurrency Held at End of Quarter Using Lowest Market Price (b)	Highest Market Price Per Unit of Cryptocurrency During Quarter (c)	Market Value of Cryptocurrency Held at End of Quarter Using Highest Market Price (d)	Market Price Per Unit of Cryptocurrency at End of Quarter (e)	Market Value of Cryptocurrency Held at End of Quarter Using Ending Market Price (f)
		Unit	USD	USD	USD	USD	USD	USD	USD	USD
December 31, 2024	ETH	5,075	15,102,524	2,976	2,309	11,718,175	4,109	20,853,175	3,414	17,326,050
	ETH-Coinbase Staked	627	1,800,713	2,872	2,487	1,559,349	4,450	2,790,150	3,701	2,320,527
	Bitcoin	10.29	720,567	70,026	58,864	605,711	108,389	1,115,323	95,285	980,483
	USDT&USDC	4,425,484	4,428,159	1	1	4,384,335	1	4,469,357	1	4,419,574
	Others	Multiple *	78,298	Multiple *	Multiple *	30,694	Multiple *	101,589	Multiple *	69,389
	Total		22,130,261			18,298,264		29,329,594		25,116,023

September 30, 2024	ETH	3,522	10,115,116	2,872	2,116	7,452,552	3,563	12,548,886	2,596	9,143,112
	ETH-Coinbase Staked	627	1,800,713	2,872	2,290	1,435,830	3,926	2,461,602	2,807	1,759,989
	Bitcoin	8.47	549,364	64,860	49,050	415,454	70,000	592,900	63,552	538,285
	USDT&USDC	9,847,687	9,849,266	1	1	9,814,682	1	9,857,395	1	9,845,929
	Others	Multiple *	105,405	Multiple *	Multiple *	36,415	Multiple *	72,441	Multiple *	53,661
	Total		22,419,864			19,154,933		25,533,224		21,340,976

June 30, 2024	ETH	1,937	6,179,744	3,190	2,814	5,450,718	3,974	7,697,638	3,394	6,574,178
	ETH-Coinbase Staked	480	1,301,108	2,711	2,954	1,417,920	4,243	2,036,640	3,645	1,749,600
	Bitcoin	3.95	265,883	67,312	56,500	223,175	72,777	287,469	61,613	243,371
	USDT&USDC	10,422,648	10,423,276	1	1	10,386,315	1	10,458,980	1	10,404,063
	Others	Multiple *	107,484	Multiple *	Multiple *	54,226	Multiple *	122,435	Multiple *	64,202
	Total		18,277,495			17,532,354		20,603,162		19,035,414

March 31, 2024	ETH	346	999,180	2,888	2,100	726,600	4,094	1,416,524	3,618	1,251,828
	ETH-Coinbase Staked	479	1,297,687	2,709	2,236	1,071,044	4,341	2,079,339	3,842	1,840,318
	Bitcoin	0.67	44,995	67,157	38,501	25,796	73,836	49,470	70,407	47,173
	USDT&USDC	99,583	99,583	1	1	99,583	1	99,583	1	99,583
	Others	Multiple *	81,571	Multiple *	Multiple *	67,814	Multiple *	124,481	Multiple *	91,346
	Total		2,523,016			1,990,837		3,769,397		3,330,248

^{* The ‘Others’ category encompasses various cryptocurrencies that are not reported individually due to their lower significance. This category is labeled as ‘Multiple’ to indicate the presence of diverse prices associated with different type of cryptocurrency. Due to their immaterial nature, detailed price listings are not provided.}
^{(a) The “Lowest Market Price Per Unit of Cryptocurrency During Quarter” represents the lowest market price for a single unit of cryptocurrency reported on the Coinbase exchange during the respective quarter, without regard to when we obtained any of the cryptocurrency.}
^{(b) The “Market Value of Cryptocurrency Held at End of Quarter Using Lowest Market Price” represents a mathematical calculation consisting of the lowest market price for a single unit of cryptocurrency reported on the Coinbase exchange during the respective quarter multiplied by the number of cryptocurrency we held at the end of the applicable period.}
^{(c) The “Highest Market Price Per Unit of Cryptocurrency During Quarter” represents the highest market price for a single unit of cryptocurrency reported on the Coinbase exchange during the respective quarter, without regard to when we obtained any of the cryptocurrency.}
^{(d) The “Market Value of Cryptocurrency Held at End of Quarter Using Highest Market Price” represents a mathematical calculation consisting of the highest market price for a single unit of cryptocurrency reported on the Coinbase exchange during the respective quarter multiplied by the number of cryptocurrency we held at the end of the applicable period.}
^{(e) The “Market Price Per Unit of Cryptocurrency at End of Quarter” represents the market price of a single unit of cryptocurrency on the Coinbase exchange at midnight UTC+8 time on the last day of the respective quarter, which aligns with the our revenue recognition cut-off.}
^{(f) The “Market Value of Cryptocurrency Held at End of Quarter Using Ending Market Price” represents a mathematical calculation consisting of the market price of a single unit of cryptocurrency on the Coinbase exchange at midnight UTC+8 time on the last day of the respective quarter multiplied by the number of cryptocurrency we held at the end of the applicable period.}

The MIL Network –

February 28, 2025

MIL-OSI: dLocal Reports 2024 Fourth Quarter Financial Results

Source: GlobeNewswire (MIL-OSI)

Full Year 2024 results
US$25.6 billion Total Payment Volume, up 45% year-over-year
Revenue of US$746 million, up 15% year-over-year
113% Net Revenue Retention Rate
Gross Profit of US$295 million, up 6% year-over-year
Adjusted EBITDA of US$189 million, down 7% year-over-year

Fourth Quarter 2024
US$7.7 billion Total Payment Volume, up 51% year-over-year and 18% quarter-over-quarter
Revenue of US$204 million, up 9% year-over-year and 10% quarter-over-quarter
106% Net Revenue Retention Rate
Gross Profit of US$84 million, up 20% year-over-year and 7% quarter-over-quarter
Adjusted EBITDA of US$57 million, up 16% year-over-year and 9% quarter-over-quarter

Record TPV of $26 billion, a strong growth to 45% YoY with mix continuing to move to newer more attractive markets, while core markets rebounded from Q3 softness;

Revenue and gross profits hitting record highs of $746 million and $295 million, respectively;

Adjusted EBITDA to GP margins closing out the year at 64%, but improving consistently as the year progressed.

dLocal reports in US dollars and in accordance with IFRS as issued by the IASB

MONTEVIDEO, Uruguay, Feb. 27, 2025 (GLOBE NEWSWIRE) — DLocal Limited (“dLocal”, “we”, “us”, and “our”) (NASDAQ:DLO), a technology – first payments platform today announced its financial results for the fourth quarter ended December 31, 2024..

As we walk through a review of our performance over the past quarter and year, and as we have repeatedly mentioned, we think of five pillars underpinning dLocal’s investment thesis:

A massive addressable market, given the untapped potential of emerging and frontier markets as they digitize payments and merchants go to market throughout the Global South. 85% of the world’s population resides in emerging markets¹, and two thirds of global growth by 2035 will come from there².
Consistent high top line growth, driven by a proven track record of delivering value to the world’s most sophisticated global digital merchants that has allowed us to capture a market leading share of this expanding TAM.
Attractive margin business with potential to deliver operational leverage once we have laid the foundational blocks and further scale benefits kick in.
Strong cash generating financial model as Net Income converts well into FCF.
Investment in product development capabilities to drive growth through new categories, products, feature innovations, and potential M&A activity.

Our FY 2024 results affirm the investment thesis, highlighted by a record TPV of $26 billion, a strong TPV growth of 45% year-over-year, driven by a shift towards newer, more attractive markets, while core markets rebounded from Q3 softness. Additionally, revenue and gross profits reached record highs of $746 million and $295 million, respectively, with an adjusted EBITDA to GP margins closing the year at 64%, showing consistent improvement throughout the year. Furthermore, Net Income to FCF of Own funds³ conversion exited the year at a rate above 100%.

These strong 2024 results should be seen in the context of a weak first quarter followed by progressively stronger quarter-over-quarter performance, and the continuation of an investment cycle aimed at achieving greater scalability for our business.

Building on last quarter’s positive trend, our TPV grew over 50% year-over-year, despite a strong Q4 2023 comparison. Quarter-over-quarter, TPV growth accelerated to nearly 20%, driven by commerce seasonality, and strength in remittances and ride-hailing. In constant currency³, given general weakness in Emerging Markets currencies, those growth rates are even more impressive, about 30 points higher year-over-year.

Revenues surpassed the milestone of over $200 million in Q4, representing a 9% year-over-year growth. In constant currencies⁴, revenue growth for the period would have been around 40% year-over-year.

Our growth continues to reinforce our position as a trusted partner for global companies seeking to do business across emerging markets, with performance coming from a well diversified list of countries, with notable contributions from Argentina, Egypt, Other LatAm and Other Africa and Asia markets. As a result of our expansion into more frontier markets, we also continue to see solid growth in our cross-border volumes.

In terms of profitability, we reached a record gross profit of $84 million, with a net take rate at 1.1%, reflecting the market dynamic where higher volumes drive lower take rates, increase in the payouts share, and the depreciation of emerging market currencies. To offset this, we are driving cost efficiencies through processor and broker renegotiations and improvements in our hedging strategy. We also continue our push into higher take rate markets and verticals, which over the long term, should partially offset the take rate compression.

Despite the ongoing step up in investments in our engineering team, operational capabilities, and license portfolio to support our long-term growth ambitions, our Adjusted EBITDA hit a record $57 million in the quarter, with an adjusted EBITDA over gross profit margin improving quarter-over-quarter to 68%.

Cash generation was also solid, as we continue to increase free cash available to deploy behind our capital allocation strategy. This sustained cash generation increases our flexibility when thinking through M&A, buybacks or re-investing in a disciplined manner back into the business.

In 2024, we added 9 licenses and registrations, including the UK FCA’s Authorised Payment Institution license, which enhances our competitive edge and demonstrates our commitment to compliant practices and regulatory oversight.

To sum up, Q4 marked the successful end to 2024 in terms of consistent TPV growth, controlled take rate decline, and balance of investment for future growth with a healthy margin and free cash profile.

Looking ahead to our 2025 guidance⁵, we expect a strong TPV growth of 35% – 45% year-over-year, with a revenue growth of 25% – 35% year-over-year that shows this sustained momentum of our top line. We see gross profit growth of 20% – 25% year-over-year, and Adjusted EBITDA growth between 20% and 30% year-over-year.

Considering those assumptions, we should expect a net take rate compression while delivering high TPV growth even at our scale. Over the midterm, we will work to maintain strong TPV while recognizing that given the extremely strong levels of TPV retention we deliver, our larger merchants will continue to attain lower pricing tiers. We will strive to offset this effect through growth in higher take rate new verticals, natural mix shift towards higher take rate frontier markets, and new revenue streams through product launches.

This guidance highlights that our combination of revenue growth, margin structure and free cash generation is not that common. There are not that many companies today who are as profitable as we are, growing revenues at the pace we are growing, and consistently generating free cash.

As known, our business thrives in fast-growing, dynamic markets with massive opportunities in digital payments across emerging markets, driven by strong demand and long-term growth trends. However, these markets also bring volatility from macroeconomic shifts, regulatory changes, and currency fluctuations. While we are confident in our long-term high-growth potential, providing mid-term guidance may not accurately reflect the predictability over a multi-year timeframe. For this reason, we have made the decision to discontinue mid-term guidance. We will continue to focus on delivering strong operational execution so as to hit the annual targets we disclose.

Looking ahead to 2025, we are confident in our ability to sustain momentum. Our investments in technology, product innovation, and market expansion position us well for growth. Despite the volatility of emerging markets, our disciplined scaling, local expertise, and commitment to delivering value to merchants will differentiate us. Our strategy focuses on capturing the potential of digital payments in high-growth regions, driving operational efficiencies, and reinforcing market leadership. We are excited about the opportunities ahead and committed to executing with the same rigor and discipline that have defined our success.

¹ Source: Euromonitor International: Reaching the emerging middle class beyond BRIC; ² Source: S&P Global Market Intelligence. ³ Please see Reconciliation of TPV and Revenue constant currency measures to reported results of Q4 2024 Earnings Presentation; ⁴ Please see Reconciliation of TPV and Revenue constant currency measures to reported results of Q4 2024 Earnings Presentation; ⁵ please see Full year 2025 outlook on slide 23 of Q4 2024 Earnings Presentation.

Fourth quarter 2024 financial highlights

Total Payment Volume (“TPV”) reached a record US$7.7 billion in the fourth quarter, up 51% year-over-year compared to US$5.1 billion in the fourth quarter of 2023 and up 18% compared to US$6.5 billion in the third quarter of 2024. In constant currencies¹, TPV growth for the period would have been 81% year-over-year.

Revenues amounted to US$204.5 million, up 9% year-over-year compared to US$188.0 million in the fourth quarter of 2023 and up 10% compared to US$185.8 million in the third quarter of 2024. This quarter-over-quarter increase was mostly driven by volume increase in Egypt, as well as positive results in Other LatAm and Other Africa and Asia, with notable performance in South Africa, Turkey, Colombia and Ecuador. In constant currencies1, revenue growth for the period would have been 42% year-over-year.

Gross profit was US$83.7 million in the fourth quarter of 2024, up 20% compared to US$69.7 million in the fourth quarter of 2023 and up 7% compared to US$78.2 million in the third quarter of 2024. The improvement in gross profit quarter-over-quarter was primarily due to volume growth in Argentina, Egypt, Nigeria and Turkey. These positive factors were partially offset by (i) Mexico, given the higher growth of Tier 0 merchants coupled with a shift in the payment mix; (ii) Brazil, given the lower take rates from the new Payment Orchestration option launched in the third quarter of 2024 (which positively allowed for volume recovery versus the prior quarter) and shift in the payment mix; and (iii) Other LatAm markets, that despite delivering positive volume performance, on a quarter-over-quarter comparison was impacted by the strong growth in Q3 from wider FX spreads in certain smaller markets, as disclosed in the previous quarterly results.

As a result, gross profit margin was 41% in this quarter, compared to 37% in the fourth quarter of 2023 and 42% in the third quarter of 2024.

Gross profit over TPV was at 1.1% decreasing from 1.4% in the fourth quarter of 2023 and from 1.2% compared to the third quarter of 2024.

Operating income was US$42.3 million, up 3% compared to US$41.0 million in the fourth quarter of 2023 and up 3% compared to US$41.1 million in the third quarter of 2024, as we resumed the pace of certain investments in building out our capabilities. In this context, operating expenses grew by 44% year-over-year, with most of the growth allocated to Product Development & IT capabilities, with these expenses increasing by 70% year-over-year while combined Sales and Marketing (S&M) and G&A expenses grew by 29%. On the sequential comparison, operating expenses increased 12% quarter-over-quarter, a reflection of (i) growth in combined S&M and G&A expenses, driven by continued investment in operating capabilities and marketing investments; and (ii) slightly down tech and development expenses as increases in headcount were offset by reductions in other IT expenditures.

As a result, Adjusted EBITDA was US$56.9 million, up 16% compared to US$49.2 million in the fourth quarter of 2023 and up 9% compared to US$52.4 million in the third quarter of 2024.

Adjusted EBITDA margin was 28%, compared to the 26% recorded in the fourth quarter of 2023 and 28% in the third quarter of 2024. On the annual comparison, the increase is explained by investments in core areas to drive efficiency and ensure future growth while maintaining our lean and disciplined structure. Adjusted EBITDA over gross profit of 68% decreased compared to 71% in the fourth quarter of 2023 and increased compared to 67% in the third quarter of 2024.

Net financial cost was US$1.1 million, compared to a finance income of US$1.0 million in the fourth quarter of 2023 and a cost of US$10.1 million in the third quarter of 2024, as explained in the Net Income section.

Our effective income tax rate increased to 27% from 8% last quarter, and stands at 20% on a year-to-date basis. In the fourth quarter of 2024, effective income tax rate was impacted by an income tax settlement related to previous periods. Excluding this tax settlement, our effective income tax rate stood at 16% for the fourth quarter and 17% for the year compared to 16% in 2023, as a result of slightly higher local-to-local share of pre-tax income.

Net income for the fourth quarter of 2024 was US$29.7 million, or US$0.10 per diluted share, up 4% compared to a profit of US$28.5 million, or US$0.10 per diluted share, for the fourth quarter of 2023 and up 11% compared to a profit of US$26.8 million, or US$0.09 per diluted share for the third quarter of 2024. During the current period, net income was mostly affected by the positive non-cash mark to market effect related to our Argentine bond investments, lower finance costs partially offset by higher taxes. Adjusted net income for the fourth quarter of 2024 was US$45.8 million, up 13% compared to US$40.6 million for the fourth quarter of 2023 and up 6% compared to US$43.4 million for the third quarter of 2024.

As of December 31, 2024, dLocal had US$425.2 million in cash and cash equivalents, including US$189.0 million of own funds and US$236.1 million of merchants’ funds. The consolidated cash position decreased by US$111.0 million from US$536.2 million as of December 31, 2023. When compared to the US$560.5 million cash position as of September 30, 2024, it decreased by US$135.4 million. The variation quarter-over-quarter is primarily explained by changes in merchant working capital, driven by: (i) increase in trade receivables due to temporary settlement delays before year-end; coupled with (ii) decrease in trade payables due to a shift in settlement periods with certain merchants and higher settlement of accumulated merchant balances.

¹Please see Reconciliation of TPV and Revenue constant currency measures to reported results of Q4 2024 Earnings Presentation.

The following table summarizes our key performance metrics:

	Three months ended December 31			Twelve months ended December 31
	2024	2023	% change	2024	2023	% change
Key Performance metrics	(In millions of US$ except for %)
TPV	7,714	5,111	51%	25,575	17,677	45%
Revenue	204.5	188.0	9%	746.0	650.4	15%
Gross Profit	83.7	69.7	20%	294.7	276.9	6%
Gross Profit margin	41%	37%	4p.p	40%	43%	-3p.p
Adjusted EBITDA	56.9	49.2	16%	188.7	202.3	-7%
Adjusted EBITDA margin	28%	26%	2p.p	25%	31%	-6p.p
Adjusted EBITDA/Gross Profit	68%	71%	-3p.p	64%	73%	-9p.p
Profit	29.7	28.5	4%	120.5	149.1	-19%
Profit margin	15%	15%	-1p.p	16%	23%	-7p.p

Fourth quarter 2024 business highlights

During the fourth quarter of 2024, pay-ins TPV increased 44% year-over-year and 15% quarter-over-quarter to US$5.3 billion, accounting for 69% of the TPV.

Pay-outs TPV increased by 68% year-over-year and 26% quarter-over-quarter to US$2.4 billion, accounting for the remaining 31% of the TPV.

Cross-border TPV increased by 67% year-over-year and 23% quarter-over-quarter to US$3.7 billion. Cross-border volume accounted for 48% of the TPV in the fourth quarter of 2024.

Local-to-local TPV increased by 38% year-over-year and 14% quarter-over-quarter to US$4.0 billion. Local-to-local volume accounted for 52% of the TPV in the fourth quarter of 2024.

LatAm revenue increased 16% year-over-year to US$152.9 million, accounting for 75% of total revenue. On the annual comparison, the growth was primarily driven by (i) volume growth in Argentina; and (ii) strong performance of Other LatAm, particularly in Colombia. This result was partially offset by Brazil due to (i) lower take rates from the new Payment Orchestration option launched in the third quarter of 2024; and (ii) shift in the payment mix. Sequentially, LatAm revenue grew by 5%, mainly driven by the performance of Other LatAm, especially in Colombia and Ecuador. The positive result was offset by (i) Argentina, impacted by the lower FX spreads; (ii) Brazil, as previously explained; and (iii) Mexico, due to higher growth of Tier 0 merchants coupled with a shift in the payment mix.

In the Africa and Asia region, revenue decreased by 9% year-over-year, primarily driven by Nigeria due to the Naira devaluation in February of 2024; partially offset by (i) the strong growth performance in Egypt; and (ii) in Other Africa and Asia, particularly the performance in South Africa in the commerce vertical. Those regions are also the main drivers of the sequential increase.

LatAm gross profit increased by 3% year-over-year and 1% quarter-over-quarter to US$56.4 million, accounting for 67% of total gross profit. Most of the year-over-year increase is explained by the volume growth in Argentina, Mexico, and other LatAm markets, which were mostly offset by Brazil as just explained, and currency devaluations. Sequentially, the growth was mainly driven by Argentina’s positive performance; offset by drivers in Mexico and Brazil, as explained previously. Other Latam markets, which continue to grow TPV, were negatively impacted quarter-over-quarter due to the strong Q3 growth from wider FX spreads in smaller markets, as previously disclosed.

Africa and Asia gross profit increased by 82% year-over-year to US$27.3 million, accounting for the remaining 33% of total gross profit. This annual comparison is explained by TPV growth in Egypt, ramp-up of commerce merchants in South Africa, and positive performance in Other Africa and Asia markets, including Turkey and Vietnam. Sequentially, gross profit increased by 21%, attributable to the positive performance in Egypt, Nigeria and Turkey in categories such as remittances, financial services, ads and streaming.

During the quarter, Revenue from Existing Merchants reached US$198.3 million compared to US$ 179.9 million in the third quarter of 2024. On the annual comparison, Revenue from Existing Merchants increased by 13% and the net revenue retention rate, or NRR, reached 106%.

Revenue from New Merchants accounted for US$6.1 million in the fourth quarter of 2024 compared to US$11.8 million in the same quarter of the prior year.

The tables below present the breakdown of dLocal’s TPV by product and type of flow:

In millions of US$ except for %	Three months ended December 31				Twelve months ended December 31
	2024	*% share*	2023	*% share*	2024	*% share*	2023	*% share*
Pay-ins	5,340	69%	3,701	72%	17,902	70%	12,823	73%
Pay-outs	2,373	31%	1,410	28%	7,673	30%	4,855	27%
Total TPV	7,714	*100*%	5,111	*100*%	25,575	*100*%	17,677	*100*%

In millions of US$ except for %	Three months ended December 31				Twelve months ended December 31
	2024	*% share*	2023	*% share*	2024	*% share*	2023	*% share*
Cross-border	3,740	48%	2,235	44%	11,902	47%	8,670	49%
Local-to-local	3,974	52%	2,876	56%	13,673	53%	9,007	51%
Total TPV	7,714	*100*%	5,111	*100*%	25,575	*100*%	17,677	*100*%

The tables below present the breakdown of dLocal’s revenue by geography:

In millions of US$ except for %	Three months ended December 31				Twelve months ended December 31
	2024	*% share*	2023	*% share*	2024	*% share*	2023	*% share*
Latin America	152.9	75%	131.5	70%	562.2	75%	492.7	76%
Brazil	33.7	16%	50.2	27%	152.0	20%	159.0	24%
Argentina	25.1	12%	10.5	6%	85.5	11%	75.1	12%
Mexico	40.5	20%	35.6	19%	149.2	20%	116.8	18%
Chile	13.5	7%	14.9	8%	51.2	7%	55.7	9%
Other LatAm	40.1	20%	20.3	11%	124.4	17%	86.1	13%

Africa & Asia	51.6	25%	56.5	30%	183.8	25%	157.7	24%
Nigeria	2.9	1%	28.4	15%	13.3	2%	84.0	13%
Egypt	21.4	10%	18.4	10%	94.0	13%	36.7	6%
Other Africa & Asia	27.4	13%	9.7	5%	76.5	10%	37.0	6%

Total Revenue	204.5	*100*%	188.0	*100*%	746.0	*100*%	650.4	*100*%

The tables below present the breakdown of dLocal’s gross profit by geography:

In millions of US$ except for %	Three months ended December 31				Twelve months ended December 31
	2024	*% share*	2023	*% share*	2024	*% share*	2023	*% share*
Latin America	56.4	67%	54.7	79%	214.2	73%	228.7	83%
Brazil	14.8	18%	25.5	37%	67.3	23%	78.8	28%
Argentina	9.2	11%	4.0	6%	28.7	10%	48.7	18%
Mexico	10.9	13%	9.3	13%	42.5	14%	34.7	13%
Chile	9.2	11%	9.1	13%	33.1	11%	34.0	12%
Other LatAm	12.4	15%	7.0	10%	42.6	14%	32.6	12%

Africa & Asia	27.3	33%	15.0	21%	80.5	27%	48.1	17%
Nigeria	2.4	3%	1.5	2%	6.6	2%	5.8	2%
Egypt	16.0	19%	9.6	14%	48.4	16%	26.1	9%
Other Africa & Asia	8.9	11%	3.9	6%	25.5	9%	16.2	6%

Total Gross Profit	83.7	*100*%	69.7	*100*%	294.7	*100*%	276.9	*100*%

Special note regarding Adjusted EBITDA and Adjusted EBITDA Margin

dLocal has only one operating segment. dLocal measures its operating segment’s performance by Revenues, Adjusted EBITDA and Adjusted EBITDA Margin, and uses these metrics to make decisions about allocating resources.

Adjusted EBITDA as used by dLocal is defined as the profit from operations before financing and taxation for the year or period, as applicable, before depreciation of property, plant and equipment, amortization of right-of-use assets and intangible assets, and further excluding the finance income and costs, impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges,other operating gain/loss,other non-recurring costs, and inflation adjustment. dLocal defines Adjusted EBITDA Margin as the Adjusted EBITDA divided by consolidated revenues.

Although Adjusted EBITDA and Adjusted EBITDA Margin may be commonly viewed as non-IFRS measures in other contexts, pursuant to IFRS 8, (“Operating Segments”), Adjusted EBITDA and Adjusted EBITDA Margin are treated by dLocal as IFRS measures based on the manner in which dLocal utilizes these measures. Nevertheless, dLocal’s Adjusted EBITDA and Adjusted EBITDA Margin metrics should not be viewed in isolation or as a substitute for net income for the periods presented under IFRS. dLocal also believes that its Adjusted EBITDA and Adjusted EBITDA Margin metrics are useful metrics used by analysts and investors, although these measures are not explicitly defined under IFRS. Additionally, the way dLocal calculates operating segment’s performance measures may be different from the calculations used by other entities, including competitors, and therefore, dLocal’s performance measures may not be comparable to those of other entities. Finally, dLocal is unable to present a quantitative reconciliation of forward-looking guidance for Adjusted EBITDA because dLocal cannot reliably predict certain of their necessary components, such as impairment gains/(losses) on financial assets, transaction costs, and inflation adjustment.

The table below presents a reconciliation of dLocal’s Adjusted EBITDA to net income:

$ in thousands	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Profit for the period	29,701	28,481	120,469	149,086
Income tax expense	11,090	7,476	30,550	29,428
Depreciation and amortization	4,888	3,604	17,177	12,225
Finance income and costs, net	1,085	(996)	(17,174)	(11,394)
Share-based payment non-cash charges	6,339	4,850	23,780	11,922
Other operating loss¹	1,307	–	5,257	–
Impairment loss / (gain) on financial assets	533	(657)	440	(3,136)
Inflation adjustment	392	6,040	6,655	12,537
Other non-recurring costs²	1,571	434	1,571	1,663
Adjusted EBITDA	56,906	49,232	188,725	202,332

Note: ¹ The company wrote-off certain amounts related to merchants/processors off-boarded by dLocal. 2 Other non-recurring costs consist of costs not directly associated with our core business activities, including costs associated with addressing the allegations made by a short-seller report and certain class action and other legal and regulatory expenses (which include fees from counsel, global expert services and a forensic accounting advisory firm) in 2023 and 2024.

Special note regarding Adjusted Net Income

Adjusted Net Income is a non-IFRS financial measure. As used by dLocal, Adjusted Net Income is defined as the profit for the period (net income) excluding impairment gains/(losses) on financial assets, transaction costs, share-based payment non-cash charges, and other operating (gain)/loss, in line with our Adjusted EBITDA calculation (see detailed methodology for Adjusted EBITDA on page 13). It further excludes the accounting non-cash charges related to the fair value gain from the Argentine dollar-linked bonds, the exchange difference loss from the intercompany loan denominated in USD that we granted to our Argentine subsidiary to purchase the bonds, and the hedging cost associated with the Argentina treasury notes. In addition, it excludes the inflation adjustment based on IFRS rules for hyperinflationary economies. We believe Adjusted Net Income is a useful measure for understanding our results of operations while excluding certain non-cash effects such as currency devaluation, inflation, and hedging costs. Our calculation for Adjusted Net Income may differ from similarly-titled measures presented by other companies and should not be considered in isolation or as a replacement for our measure of profit for the period as presented in accordance with IFRS.

The table below presents a reconciliation of dLocal’s Adjusted net income:

$ in thousands	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Net income as reported	29,701	28,481	120,469	149,086
Inflation adjustment	392	6,040	6,655	12,537
Loan – exchange difference	2,332	51,858	22,602	81,024
Argentina Treasury Notes Hedging Costs	5,536	–	9,808	–
Fair value loss / (gain) of financial assets at FVTPL	(5,115)	(50,754)	(38,609)	(78,640)
Impairment loss / (gain) on financial assets	533	(657)	440	(3,135)
Share-based payment non-cash charges	6,339	4,850	23,780	11,922
Other operating loss¹	1,307	–	5,257	–
Other non-recurring costs³	1,571	434	1,571	1,663
Tax effect on adjustments	(1,310)	386	(899)	834
Adjusted net income	45,828	40,638	155,616	175,291

Unaudited quarterly results.

Note: ¹ The company wrote-off certain amounts related to merchants/processors off-boarded by dLocal. ² In Q4 2024, income tax was impacted by an income tax settlement related to previous periods, as disclosed in the Note 12 – Income Tax. ³ Other non-recurring costs consist of costs not directly associated with our core business activities, including costs associated with addressing the allegations made by a short-seller report and certain class action and other legal and regulatory expenses (which include fees from counsel, global expert services and a forensic accounting advisory firm) in 2023 and 2024.

Earnings per share

We calculate basic earnings per share by dividing the profit attributable to owners of the group by the weighted average number of common shares outstanding during the three-month and twelve-month periods ended December 31, 2024 and 2023.

Our diluted earnings per share is calculated by dividing the profit attributable to owners of the group of dLocal by the weighted average number of common shares outstanding during the period plus the weighted average number of common shares that would be issued on conversion of all dilutive potential common shares into common shares.

The following table presents the information used as a basis for the calculation of our earnings per share:

	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Profit attributable to common shareholders (USD)	29,682,000	28,515,000	120,416,000	148,964,000
Weighted average number of common shares	280,443,489	290,657,015	290,014,019	291,982,305
Adjustments for calculation of diluted earnings per share	14,417,466	5,008,261	15,122,271	10,976,123
Weighted average number of common shares for calculating diluted earnings per share	294,860,956	295,665,276	305,136,290	302,958,428
Basic earnings per share	0.11	0.10	0.42	0.51
Diluted earnings per share	0.10	0.10	0.39	0.49

This press release does not contain sufficient information to constitute an interim financial report as defined in International Accounting Standards 34, “Interim Financial Reporting” nor a financial statement as defined by International Accounting Standards 1 “Presentation of Financial Statements”. The quarterly financial information in this press release has not been audited, whereas the annual results for the year ended December 31, 2024 and 2023 are audited.

Conference call and webcast
dLocal’s management team will host a conference call and audio webcast on February 27, 2025 at 5:00 p.m. Eastern Time. Please click here to pre-register for the conference call and obtain your dial in number and passcode.

The live conference call can be accessed via audio webcast at the investor relations section of dLocal’s website, at https://investor.dlocal.com/. An archive of the webcast will be available for a year following the conclusion of the conference call. The investor presentation will also be filed on EDGAR at www.sec.gov.

About dLocal
dLocal powers local payments in emerging markets, connecting global enterprise merchants with billions of emerging market consumers in more than 40 countries across Africa, Asia, and Latin America. Through the “One dLocal” platform (one direct API, one platform, and one contract), global companies can accept payments, send pay-outs and settle funds globally without the need to manage separate pay-in and pay-out processors, set up numerous local entities, and integrate multiple acquirers and payment methods in each market.

Definition of selected operational metrics
“API” means application programming interface, which is a general term for programming techniques that are available for software developers when they integrate with a particular service or application. In the payments industry, APIs are usually provided by any party participating in the money flow (such as payment gateways, processors, and service providers) to facilitate the money transfer process.

“Cross-border” means a payment transaction whereby dLocal is collecting in one currency and settling into a different currency and/or in a different geography.

“Local payment methods” refers to any payment method that is processed in the country where the end user of the merchant sending or receiving payments is located, which include credit and debit cards, cash payments, bank transfers, mobile money, and digital wallets.

“Local-to-local” means a payment transaction whereby dLocal is collecting and settling in the same currency.

“Net Revenue Retention Rate” or “NRR” is a U.S. dollar-based measure of retention and growth of dLocal’s merchants. NRR is calculated for a period or year by dividing the Current Period/Year Revenue by the Prior Period/Year Revenue. The Prior Period/Year Revenue is the revenue billed by us to all our customers in the prior period. The Current Period/Year Revenue is the revenue billed by us in the current period to the same customers included in the Prior Period/Year Revenue. Current Period/Year Revenue includes revenues from any upselling and cross-selling across products, geographies, and payment methods to such merchant customers, and is net of any contractions or attrition, in respect of such merchant customers, and excludes revenue from new customers on-boarded in the preceding twelve months. As most of dLocal revenues come from existing merchants, the NRR rate is a key metric used by management, and we believe it is useful for investors in order to assess our retention of existing customers and growth in revenues from our existing customer base.

“Pay-in” means a payment transaction whereby dLocal’s merchant customers receive payment from their customers.

“Pay-out” means a payment transaction whereby dLocal disburses money in local currency to the business partners or customers of dLocal’s merchant customers.

“Revenue from New Merchants” means the revenue billed by us to merchant customers that we did not bill revenues in the same quarter (or period) of the prior year.

“Revenue from Existing Merchants” means the revenue billed by us in the last twelve months to the merchant customers that we billed revenue in the same quarter (or period) of the prior year.

“TPV” dLocal presents total payment volume, or TPV, which is an operating metric of the aggregate value of all payments successfully processed through dLocal’s payments platform. Because revenue depends significantly on the total value of transactions processed through the dLocal platform, management believes that TPV is an indicator of the success of dLocal’s global merchants, the satisfaction of their end users, and the scale and growth of dLocal’s business.

Rounding: We have made rounding adjustments to some of the figures included in this interim report. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Forward-looking statements
This press release contains certain forward-looking statements. These forward-looking statements convey dLocal’s current expectations or forecasts of future events, including guidance in respect of total payment volume, revenue, gross profit and Adjusted EBITDA. Forward-looking statements regarding dLocal and amounts stated as guidance are based on current management expectations and involve known and unknown risks, uncertainties and other factors that may cause dLocal’s actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. Certain of these risks and uncertainties are described in the “Risk Factors,” “Forward-Looking Statements” and “Cautionary Statement Regarding Forward-Looking Statements” sections of dLocal’s filings with the U.S. Securities and Exchange Commission. Unless required by law, dLocal undertakes no obligation to publicly update or revise any forward-looking statements to reflect circumstances or events after the date hereof. In addition, dLocal is unable to present a quantitative reconciliation of forward-looking guidance for Adjusted EBITDA, because dLocal cannot reliably predict certain of their necessary components, such as impairment gains/(losses) on financial assets, transaction costs, and inflation adjustment.

dLocal Limited
Certain financial information
Consolidated Condensed Interim Statements of Comprehensive Income for the three-month and twelve-month periods ended December 31, 2024 and 2023
(All amounts in thousands of U.S. Dollars except share data or as otherwise indicated)

	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Continuing operations
Revenues	204,491	188,005	745,974	650,351
Cost of services	(120,780)	(118,286)	(451,301)	(373,492)
Gross profit	83,711	69,719	294,673	276,859

Technology and development expenses	(6,822)	(4,024)	(25,625)	(12,650)
Sales and marketing expenses	(5,598)	(4,710)	(21,626)	(17,120)
General and administrative expenses	(27,183)	(20,641)	(101,225)	(70,568)
Impairment (loss)/gain on financial assets	(533)	657	(440)	3,136
Other operating (loss)/gain	(1,307)	–	(5,257)	–
Operating profit	42,268	41,001	140,500	179,657
Finance income	12,036	57,913	66,875	128,228
Finance costs	(13,121)	(56,917)	(49,701)	(116,834)
Inflation adjustment	(392)	(6,040)	(6,655)	(12,537)
Other results	(1,477)	(5,044)	10,519	(1,143)
Profit before income tax	40,791	35,957	151,019	178,514
Income tax expense	(11,090)	(7,476)	(30,550)	(29,428)
Profit for the period	29,701	28,481	120,469	149,086

Profit attributable to:
Owners of the Group	29,682	28,515	120,416	148,964
Non-controlling interest	19	(34)	53	122
Profit for the period	29,701	28,481	120,469	149,086

Earnings per share (in USD)
Basic Earnings per share	0.11	0.10	0.42	0.51
Diluted Earnings per share	0.10	0.10	0.39	0.49

Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange difference on translation on foreign operations	(4,417)	(9,054)	(11,188)	(7,713)
Other comprehensive income for the period, net of tax	(4,417)	(9,054)	(11,188)	(7,713)
Total comprehensive income for the period, net of tax	25,284	19,427	109,281	141,373

Total comprehensive income for the period
Owners of the Group	25,311	19,463	109,290	141,255
Non-controlling interest	(27)	(36)	(9)	118
Total comprehensive income for the period	25,284	19,427	109,281	141,373

dLocal Limited
Certain financial information
Consolidated Condensed Interim Statements of Financial Position as of December 31, 2024 and December 31, 2023
(All amounts in thousands of U.S. dollars)

	December 31, 2024	December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents	425,172	536,160
Financial assets at fair value through profit or loss	129,319	102,677
Trade and other receivables	496,713	363,374
Derivative financial instruments	2,874	2,040
Other assets	18,805	11,782
Total Current Assets	1,072,883	1,016,033

Non-Current Assets
Financial assets at fair value through profit or loss	–	1,710
Trade and other receivables	18,044	–
Deferred tax assets	5,367	2,217
Property, plant and equipment	3,377	2,917
Right-of-use assets	3,645	3,689
Intangible assets	63,318	57,887
Other assets	4,695	–
Total Non-Current Assets	98,446	68,420
TOTAL ASSETS	1,171,329	1,084,453

LIABILITIES
Current Liabilities
Trade and other payables	597,787	602,493
Lease liabilities	1,137	626
Tax liabilities	21,515	20,800
Derivative financial instruments	6,227	948
Financial liabilities	50,455	–
Provisions	500	362
Total Current Liabilities	677,621	625,229

Non-Current Liabilities
Deferred tax liabilities	1,858	753
Lease liabilities	2,863	3,331
Total Non-Current Liabilities	4,721	4,084
TOTAL LIABILITIES	682,342	629,313

EQUITY
Share Capital	570	591
Share Premium	186,769	173,001
Treasury Shares	(200,980)	(99,936)
Capital Reserve	33,438	21,575
Other Reserves	(20,934)	(9,808)
Retained earnings	490,024	369,608
Total Equity Attributable to owners of the Group	488,887	455,031
Non-controlling interest	100	109
TOTAL EQUITY	488,987	455,140
TOTAL EQUITY AND LIABILITIES	1,171,329	1,084,453

dLocal Limited
Certain interim financial information
Consolidated Statements of Cash flows for the three-month and twelve-month periods ended December 31, 2024 and 2023
(All amounts in thousands of U.S. dollars)

	Three months ended December 31		Twelve months ended December 31
	2024	2023	2024	2023
Cash flows from operating activities
Profit before income tax	40,791	35,957	151,019	178,514
Adjustments:
Interest Income from financial instruments	(6,921)	(7,159)	(28,266)	(49,588)
Interest charges for lease liabilities	370	110	501	578
Other interests charges	739	2,503	3,758	5,623
Finance expense related to derivative financial instruments	(627)	5,497	19,462	28,013
Net exchange differences	5,914	50,100	24,787	82,620
Fair value loss/(gain) on financial assets at FVPL	(3,922)	(50,754)	(37,416)	(78,640)
Amortization of Intangible assets	4,364	3,251	15,511	10,816
Depreciation and disposals of PP&E and right-of-use	652	353	1,884	1,409
Share-based payment expense, net of forfeitures	6,339	4,850	23,780	11,922
Other operating gain	786	–	4,736	–
Net Impairment loss/(gain) on financial assets	533	2,796	440	318
Inflation adjustment and other financial results	(5,704)	9,041	(17,063)	9,041
	43,313	56,546	163,133	200,626
Changes in working capital
Increase in Trade and other receivables	(109,487)	(51,154)	(162,645)	(123,246)
Decrease / (Increase) in Other assets	4,128	13,258	5,427	45,007
Increase / (Decrease) in Trade and Other payables	(70,700)	52,654	(6,957)	194,619
Increase / (Decrease) in Tax Liabilities	(3,835)	(6,591)	(3,184)	(10,967)
Increase / (Decrease) in Provisions	222	(275)	138	(1,111)
Cash (used) / generated from operating activities	(136,359)	64,438	(4,088)	304,928
Income tax paid	(4,773)	(2,996)	(28,696)	(11,475)
Net cash (used) / generated from operating activities	(141,132)	61,442	(32,784)	293,453

Cash flows from investing activities
Acquisitions of Property, plant and equipment	(427)	21	(1,705)	(965)
Additions of Intangible assets	(5,699)	(4,758)	(20,942)	(17,260)
Acquisition of financial assets at FVPL	(14,852)	(15,847)	(121,468)	(117,517)
Collections of financial assets at FVPL	–	3,721	108,097	1,487
Interest collected from financial instruments	6,921	7,159	28,266	49,588
Payments for investments in other assets at FVPL	(10,000)	–	(10,000)	–
Net cash (used in) / generated investing activities	(24,057)	(9,704)	(17,752)	(84,667)

Cash flows from financing activities
Repurchase of shares	–	–	(101,067)	(97,929)
Share-options exercise paid	358	–	1,853	153
Interest payments on lease liability	(370)	(110)	(501)	(578)
Principal payments on lease liability	(112)	(315)	(552)	(1,103)
Finance expense paid related to derivative financial instruments	(8)	(7,640)	(15,017)	(28,443)
Net proceeds from financial liabilities	33,653	–	50,428	–
Interest payments on financial liabilities	(1,633)	–	(2,281)	–
Other finance expense paid	(327)	(2,851)	(1,450)	(5,971)
Net cash used in by financing activities	31,561	(10,916)	(68,587)	(133,871)
Net increase in cash flow	(133,628)	40,822	(119,123)	74,915

Cash and cash equivalents at the beginning of the period	560,533	498,165	536,160	468,092
Net (decrease)/increase in cash flow	(133,628)	40,822	(119,123)	74,915
Effects of exchange rate changes on inflation and cash and cash equivalents	(1,732)	(2,827)	8,135	(6,847)
Cash and cash equivalents at the end of the period	425,172	536,160	425,172	536,160

Investor Relations Contact:
investor@dlocal.com

Media Contact:
media@dlocal.com

The MIL Network –

February 28, 2025

MIL-OSI: Talen Energy Reports Full Year 2024 Results, Exceeds 2024 Guidance and Reaffirms 2025 Guidance

Source: GlobeNewswire (MIL-OSI)

Earnings Release Highlights

Full year GAAP Net Income (Loss) Attributable to Stockholders of $998 million.
Full year Adjusted EBITDA of $770 million and Adjusted Free Cash Flow of $283 million, exceeding the 2024 guidance midpoints.
Reaffirming 2025 guidance; 2026 outlook unchanged.
Reached reliability-must-run (“RMR”) settlement agreement with PJM and key stakeholders to run Brandon Shores and H.A. Wagner generation facilities through May 31, 2029.
Repurchased approximately 13 million shares in 2024 (22% of total outstanding shares).

HOUSTON, Feb. 27, 2025 (GLOBE NEWSWIRE) — Talen Energy Corporation (“Talen,” the “Company,” “we,” or “our”) (NASDAQ: TLN), an independent power producer dedicated to powering the future, today reported its full year 2024 financial and operating results.

“Talen had an exciting year focused on unlocking value from existing assets. Our fleet ran well this year, earning $770 million of Adjusted EBITDA and $283 million of Adjusted Free Cash Flow. We sold our data center campus to AWS and announced a major agreement providing power directly to them, making Talen the first power company to do so. We are actively executing under this arrangement and pursuing commercial and regulatory solutions for the Susquehanna ISA amendment,” said Talen President and Chief Executive Officer Mac McFarland.

“We sold our ERCOT assets earlier in the year, realizing significant value that was largely returned to our shareholders, and in Q4, we reached a settlement with PJM and other stakeholders to continue running our Brandon Shores and H.A. Wagner generation facilities through May 2029, supporting grid reliability in Maryland.” McFarland continued. “We have simplified our capital structure and prioritized shareholder returns, repurchasing 22% of our outstanding shares this year. We remain focused on maximizing value and cash flow per share.”

Summary of Financial and Operating Results (Unaudited)

_{(Millions of Dollars)}	Year Ended December 31, 2024
GAAP Net Income (Loss) Attributable to Stockholders		$998
Adjusted EBITDA		770
Adjusted Free Cash Flow		283

	Year Ended December 31, 2024		Year Ended December 31, 2023
Total Generation (TWh) ^(a)	36.3		32.5
Carbon-Free Generation	50	%	55	%
OSHA TRIR ^(b)	0.34		0.58
Fleet EFOF ^(c)	2.2	%	5.5	%

__________________
^{(a) Total generation is net of station use consumption, where applicable, includes volumes produced by Susquehanna in support of Nautilus operations and includes generation from ERCOT assets through April 2024.}
^{(b) OSHA Total Recordable Incident Rate (“OSHA TRIR”) is the number of recordable incidents x 200,000 / total number of manhours worked. Only includes Talen-operated generation facilities (i.e., excludes Conemaugh and Keystone).}
^{(c) Fleet Equivalent Forced Outage Factor (“Fleet EFOF”) is the percentage of a given period in which a generating unit is not available due to forced outages and forced de-rates. Represents all generation facilities, including our portion of partially-owned facilities.}

For the year ended December 31, 2024, we reported GAAP Net Income (Loss) Attributable to Stockholders of $998 million, Adjusted EBITDA of $770 million and Adjusted Free Cash Flow of $283 million. 2024 Adjusted EBITDA and Adjusted Free Cash Flow exceeded the 2024 guidance midpoints of $765 million and $275 million, respectively.

Given the impacts of fresh start accounting and the implementation of the plan of reorganization in the second quarter 2023, our full year 2024 results are not comparable to 2023.

Full year 2024 results were supported by strong operational performance across the generation fleet, the benefits from hedging activities, the impact of the Nuclear PTC, and disciplined cost management, despite the absence of earnings from the ERCOT generation portfolio that was sold in May 2024.

Our generation fleet continued to run reliably and safely, with a Fleet EFOF of 2.2% and an OSHA TRIR of 0.34. Total generation was 36.3 TWh, with 50% contributed from carbon-free nuclear generation at our Susquehanna nuclear facility. Also, our PJM gas-fired assets were dispatched more frequently during times of peak load than they were in 2023.

Reaffirming 2025 Guidance; 2026 Outlook Unchanged

_{(Millions of Dollars)}	Range
2025E Adjusted EBITDA	$925 – $1,175
2025E Adjusted Free Cash Flow	$395 – $595

_{(Millions of Dollars)}	Range
2026E Adjusted EBITDA	$1,130 – $1,530
2026E Adjusted Free Cash Flow	$535 – $895

RMR Arrangements

In December 2024, we reached an agreement with PJM, FERC staff, Maryland PSC and public utilities on the terms of RMR arrangements for our Brandon Shores and H.A. Wagner generation facilities. On January 27, 2025, we filed with FERC the resulting Joint Offers of Settlement regarding both facilities’ RMR Continuing Operations Rates Schedules, and they remain subject to FERC approval. If approved, the proposed RMR arrangements will extend the operating life of these facilities through May 31, 2029, or until such time as the necessary transmission upgrades are placed into service. Beginning June 1, 2025, we expect to receive $145 million annually for Brandon Shores and $35 million for H.A. Wagner with some performance incentives. Additionally, we expect to receive reimbursement for variable costs and approved project investments.

Update on Share Repurchase Program

Since the start of 2024, we have repurchased approximately 22% of our outstanding shares for a total of $1.95 billion, with $1.1 billion of remaining share repurchase program capacity through year-end 2026. During the fourth quarter 2024, we repurchased approximately 5 million shares of stock from our largest shareholder. All share repurchase amounts are excluding transaction costs.

Balance Sheet and Liquidity

We are focused on maintaining net leverage below our target of 3.5x net debt-to-Adjusted EBITDA, along with ample liquidity. As of February 21, 2025, we had total available liquidity of approximately $1.2 billion, comprised of $474 million of unrestricted cash and $700 million of available capacity under the revolving credit facility. Our current net leverage ratio, utilizing the 2024 Adjusted EBITDA and net debt balance as of February 21, 2025, is approximately 3.3x.

Update on Hedging Activities

As of December 31, 2024, including the impact of the Nuclear PTC, we had hedged approximately 89% of our expected generation volumes for 2025 and 33% for 2026. The Company’s hedging program is a key component of our comprehensive risk policy and supports the objective of increasing cash flow stability while maintaining upside optionality.

As an update on nuclear fuel supply activities, the nuclear fuel cycle is fully contracted through the 2027 fuel load, almost entirely contracted through 2028, and over 70% contracted through 2029. These percentages are based on total nuclear fuel costs across all phases and assume current market pricing for the portion not yet under contract.

Earnings Call

The Company will hold an earnings call on Thursday, February 27, 2025, at 4:30 p.m. EST (3:30 p.m. CST). To listen to the earnings call, please register in advance for the webcast here. For participants joining the call via phone, please register here prior to the start time to receive dial-in information. For those unable to participate in the live event, a digital replay of the earnings call will be archived for approximately one year and available on Talen’s Investor Relations website at https://ir.talenenergy.com/news-events/events.

About Talen

Talen Energy (NASDAQ: TLN) is a leading independent power producer and energy infrastructure company dedicated to powering the future. We own and operate approximately 10.7 gigawatts of power infrastructure in the United States, including 2.2 gigawatts of nuclear power and a significant dispatchable fossil fleet. We produce and sell electricity, capacity, and ancillary services into wholesale U.S. power markets, with our generation fleet principally located in the Mid-Atlantic and Montana. Our team is committed to generating power safely and reliably and delivering the most value per megawatt produced. Talen is also powering the digital infrastructure revolution. We are well-positioned to capture this significant growth opportunity, as data centers serving artificial intelligence increasingly demand more reliable, clean power. Talen is headquartered in Houston, Texas. For more information, visit https://www.talenenergy.com/.

Investor Relations:

Ellen Liu
Senior Director, Investor Relations
InvestorRelations@talenenergy.com

Media:

Taryne Williams
Director, Corporate Communications
Taryne.Williams@talenenergy.com

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties. These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this communication, or incorporated by reference into this communication, are forward-looking statements. Throughout this communication, we have attempted to identify forward-looking statements by using words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecasts,” “goal,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” or other forms of these words or similar words or expressions or the negative thereof, although not all forward-looking statements contain these terms. Forward-looking statements address future events and conditions concerning, among other things, capital expenditures, earnings, litigation, regulatory matters, hedging, liquidity and capital resources and accounting matters. Forward-looking statements are subject to substantial risks and uncertainties that could cause our future business, financial condition, results of operations or performance to differ materially from our historical results or those expressed or implied in any forward-looking statement contained in this communication. All of our forward-looking statements include assumptions underlying or relating to such statements that may cause actual results to differ materially from expectations, and are subject to numerous factors that present considerable risks and uncertainties.

TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS

	Successor						Predecessor
_{(Millions of Dollars, except share data)}	Year Ended December 31, 2024			May 18 through December 31, 2023			January 1 through May 17, 2023
Capacity revenues	$	192		$	133		$	108
Energy and other revenues		1,881			1,156			1,042
Unrealized gain (loss) on derivative instruments		42			55			60
Operating Revenues		2,115			1,344			1,210

Fuel and energy purchases		(694	)		(424	)		(176	)
Nuclear fuel amortization		(123	)		(108	)		(33	)
Unrealized gain (loss) on derivative instruments		20			(3	)		(123	)
Energy Expenses		(797	)		(535	)		(332	)

Operating Expenses
Operation, maintenance and development		(592	)		(358	)		(285	)
General and administrative		(163	)		(93	)		(51	)
Depreciation, amortization and accretion		(298	)		(165	)		(200	)
Impairments		(1	)		(3	)		(381	)
Other operating income (expense), net		(38	)		(30	)		(37	)
Operating Income (Loss)		226			160			(76	)
Nuclear decommissioning trust funds gain (loss), net		178			108			57
Interest expense and other finance charges		(238	)		(176	)		(163	)
Reorganization income (expense), net		—			—			799
Gain (loss) on sale of assets, net		884			7			50
Other non-operating income (expense), net		61			95			10
Income (Loss) Before Income Taxes		1,111			194			677
Income tax benefit (expense)		(98	)		(51	)		(212	)
Net Income (Loss)		1,013			143			465
Less: Net income (loss) attributable to noncontrolling interest		15			9			(14	)
Net Income (Loss) Attributable to Stockholders (Successor) / Member (Predecessor)	$	998		$	134		$	479
Per Common Share (Successor)
Net Income (Loss) Attributable to Stockholders – Basic	$	18.40		$	2.27		N/A
Net Income (Loss) Attributable to Stockholders – Diluted	$	17.67		$	2.26		N/A
Weighted-Average Number of Common Shares Outstanding – Basic (in thousands)		54,254			59,029		N/A
Weighted-Average Number of Common Shares Outstanding – Diluted (in thousands)		56,486			59,399		N/A

TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

	Successor
_{(Millions of Dollars, except share data)}	December 31, 2024			December 31, 2023
Assets
Cash and cash equivalents	$	328		$	400
Restricted cash and cash equivalents		37			501
Accounts receivable		123			137
Inventory, net		302			375
Derivative instruments		66			89
Other current assets		184			52
Total current assets		1,040			1,554
Property, plant and equipment, net		3,154			3,839
Nuclear decommissioning trust funds		1,724			1,575
Derivative instruments		5			6
Other noncurrent assets		183			147
Total Assets	$	6,106		$	7,121

Liabilities and Equity
Long-term debt, due within one year	$	17		$	9
Accrued interest		18			32
Accounts payable and other accrued liabilities		266			344
Derivative instruments		—			32
Other current liabilities		154			69
Total current liabilities		455			486
Long-term debt		2,987			2,811
Derivative instruments		7			11
Postretirement benefit obligations		305			368
Asset retirement obligations and accrued environmental costs		468			469
Deferred income taxes		362			407
Other noncurrent liabilities		135			35
Total Liabilities	$	4,719		$	4,587
Commitments and Contingencies

Stockholders’ Equity
Common stock ($0.001 par value 350,000,000 shares authorized) ^(a)	$	—		$	—
Additional paid-in capital		1,725			2,346
Accumulated retained earnings (deficit)		(326	)		134
Accumulated other comprehensive income (loss)		(12	)		(23	)
Total Stockholders’ Equity		1,387			2,457
Noncontrolling interests		—			77
Total Equity		1,387			2,534
Total Liabilities and Equity	$	6,106		$	7,121

__________________

^{(a) 45,961,910 and 59,028,843 shares issued and outstanding as of December 31, 2024 (Successor) and December 31, 2023 (Successor), respectively.}

TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

	Successor						Predecessor
_{(Millions of Dollars)}	Year Ended December 31, 2024			May 18 through December 31, 2023			January 1 through May 17, 2023
Operating Activities
Net income (loss)	$	1,013		$	143		$	465
Non-cash reconciliation adjustments:
(Gain) loss on AWS Data Campus Sale and ERCOT Sale		(886	)		—			—
Depreciation, amortization and accretion		285			157			208
NDT funds (gain) loss, net (excluding interest and fees)		(130	)		(78	)		(43	)
Nuclear fuel amortization		123			108			33
Unrealized (gains) losses on derivative instruments		(69	)		(40	)		65
Deferred income taxes		(46	)		55			195
Impairments		1			3			381
(Gain) loss on sales of assets, net		—			(7	)		(50	)
Reorganization (income) expense, net		—			—			(933	)
Other		(26	)		7			7
Changes in assets and liabilities:
Inventory, net		67			(68	)		10
Accounts receivable		14			8			261
Other assets		(61	)		147			98
Accounts payable and accrued liabilities		(69	)		(49	)		(69	)
Accrued interest		(15	)		28			(124	)
Other liabilities		55			(12	)		(42	)
Net cash provided by (used in) operating activities		256			402			462
Investing Activities
NDT funds investment purchases		(2,295	)		(1,290	)		(959	)
NDT funds investment sale proceeds		2,263			1,265			949
Proceeds from AWS Data Campus Sale and ERCOT Sale		1,398			—			—
Nuclear fuel expenditures		(104	)		(45	)		(49	)
Property, plant and equipment expenditures		(85	)		(116	)		(138	)
Equity investments in affiliates		(10	)		(5	)		(8	)
Proceeds from the sale of assets		2			8			46
Other investing activities		2			12			2
Net cash provided by (used in) investing activities		1,171			(171	)		(157	)

TALEN ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

	Successor						Predecessor
_{(Millions of Dollars)}	Year Ended December 31, 2024			May 18 through December 31, 2023			January 1 through May 17, 2023
Financing Activities
Share repurchases		(1,958	)		—			—
TES debt issuance		849			—			—
TES debt repayments		(479	)		—			—
Cumulus Digital TLF repayment		(182	)		(15	)		—
Repurchase of noncontrolling interest		(125	)		(19	)		—
Cash settlement of restricted stock units		(32	)		—			—
Exercise or repurchase of warrants		(16	)		(40	)		—
Deferred financing costs		(13	)		(7	)		(74	)
LMBE-MC TLB payments		—			(294	)		(7	)
TLB-1 proceeds, net		—			288			—
Repayment of prepetition secured indebtedness		—			—			(3,898	)
Financing proceeds at Emergence, net of discount		—			—			2,219
Contributions from member		—			—			1,393
Payment of make-whole premiums on prepetition secured indebtedness		—			—			(152	)
Derivatives with financing elements		—			—			(20	)
Other		(7	)		3			—
Net cash provided by (used in) financing activities		(1,963	)		(84	)		(539	)
Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash and Cash Equivalents		(536	)		147			(234	)
Beginning of period cash and cash equivalents and restricted cash and cash equivalents		901			754			988
End of period cash and cash equivalents and restricted cash and cash equivalents	$	365		$	901		$	754

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted Free Cash flow, which we use as measures of our performance and liquidity, are not financial measures prepared under GAAP. Non-GAAP financial measures do not have definitions under GAAP and may be defined and calculated differently by, and not be comparable to, similarly titled measures used by other companies. Non-GAAP measures are not intended to replace the most comparable GAAP measures as indicators of performance. Generally, a non-GAAP financial measures is a numerical measure of financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP. Management cautions readers not to place undue reliance on the following non-GAAP financial measures, but to also consider them along with their most directly comparable GAAP financial measures. Non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as a substitute for analyzing our results as reported under GAAP.

Adjusted EBITDA

We use Adjusted EBITDA to: (i) assist in comparing operating performance and readily view operating trends on a consistent basis from period to period without certain items that may distort financial results; (ii) plan and forecast overall expectations and evaluate actual results against such expectations; (iii) communicate with our Board of Directors, shareholders, creditors, analysts, and the broader financial community concerning our financial performance; (iv) set performance metrics for our annual short-term incentive compensation; and (v) assess compliance with our indebtedness.

Adjusted EBITDA is computed as net income (loss) adjusted, among other things, for certain: (i) nonrecurring charges; (ii) non-recurring gains; (iii) non-cash and other items; (iv) unusual market events; (v) any depreciation, amortization, or accretion; (vi) mark-to-market gains or losses; (vii) gains and losses on the nuclear facility decommissioning trust (“NDT”); (viii) gains and losses on asset sales, dispositions, and asset retirement; (ix) impairments, obsolescence, and net realizable value charges; (x) interest expense; (xi) income taxes; (xii) legal settlements, liquidated damages, and contractual terminations; (xiii) development expenses; (xiv) noncontrolling interests, except where otherwise noted; and (xv) other adjustments. Such adjustments are computed consistently with the provisions of our indebtedness to the extent that they can be derived from the financial records of the business. Pursuant to TES’s debt agreements, Cumulus Digital contributes to Adjusted EBITDA beginning in the first quarter 2024, following termination of the Cumulus Digital credit facility and associated cash flow sweep.

Additionally, we believe investors commonly adjust net income (loss) information to eliminate the effect of nonrecurring restructuring expenses and other non-cash charges, which can vary widely from company to company and from period to period and impair comparability. We believe Adjusted EBITDA is useful to investors and other users of our financial statements to evaluate our operating performance because it provides an additional tool to compare business performance across companies and between periods. Adjusted EBITDA is widely used by investors to measure a company’s operating performance without regard to such items described above. These adjustments can vary substantially from company to company and period to period depending upon accounting policies, book value of assets, capital structure, and the method by which assets were acquired.

Adjusted Free Cash Flow

Adjusted Free Cash Flow is utilized by our chief operating decision makers to evaluate cash flow activities. Adjusted Free Cash Flow is computed as Adjusted EBITDA reduced by capital expenditures (including nuclear fuel but excluding development, growth, and (or) conversion capital expenditures), cash payments for interest and finance charges, cash payments for taxes (excluding income taxes paid from the NDT, taxes paid or deductions taken as a result of strategic asset sales, and benefits of the Nuclear PTC utilized to reduce taxes paid), and pension contributions.

We believe Adjusted Free Cash Flow is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to determine a company’s ability to meet future obligations and to compare business performance across companies and across periods. Adjusted Free Cash Flow is widely used by investors to measure a company’s levered cash flow without regard to items such as ARO settlements; nonrecurring development, growth and conversion expenditures; and cash proceeds or payments for the sale or purchase of assets, which can vary substantially from company to company and from period to period depending upon accounting methods, book value of assets, capital structure, and the method by which assets were acquired.

Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation

The following table presents a reconciliation of the GAAP financial measures of “Net Income (Loss)” presented on the Consolidated Statements of Operations to the non-GAAP financial measures of Adjusted EBITDA and Adjusted Free Cash Flow:

	Successor						Predecessor
_{(Millions of Dollars)}	Year Ended December 31, 2024			May 18 through December 31, 2023			January 1 through May 17, 2023
Net Income (Loss)	$	1,013		$	143		$	465
Adjustments
Interest expense and other finance charges		238			176			163
Income tax (benefit) expense		98			51			212
Depreciation, amortization and accretion		298			165			200
Nuclear fuel amortization		123			108			33
Reorganization (gain) loss, net ^(a)		—			—			(799	)
Unrealized (gain) loss on commodity derivative contracts		(62	)		(52	)		63
Nuclear decommissioning trust funds (gain) loss, net		(178	)		(108	)		(57	)
Stock-based compensation expense		33			19			—
Long-term incentive compensation expense		21			2			—
(Gain) loss on asset sales, net ^(b)		(884	)		(7	)		(50	)
Non-cash impairments ^(c)		1			3			381
Legal settlements and litigation costs ^(d)		(10	)		(84	)		1
Unusual market events ^(d)		(1	)		(19	)		14
Net periodic defined benefit cost		14			2			(3	)
Operational and other restructuring activities ^{(e) (f)}		76			48			17
Development expenses		1			7			10
Non-cash inventory net realizable value, obsolescence, and other charges ^(g)		20			4			56
Noncontrolling interest		(21	)		(42	)		(14	)
Other		(10	)		10			3
Total Adjusted EBITDA	$	770		$	426		$	695

Capital expenditures, net		(177	)		(112	)		(96	)
Interest and finance charge payments		(252	)		(132	)		(173	)
Tax payments		(4	)		(5	)		(5	)
Pension contributions		(54	)		(8	)		(3	)
Total Adjusted Free Cash Flow	$	283		$	169		$	418

_______________

^{(a) See Note 4 to the FY 2024 Financial Statements for additional information.}
^{(b) See Note 20 to the FY 2024 Financial Statements for additional information.}
^{(c) See Note 10 to the FY 2024 Financial Statements for additional information.}
^{(d) See Note 12 to the FY 2024 Financial Statements for additional information.}
^{(e) The year ended December 31, 2024 (Successor) primarily includes the effects of nonrecurring ERCOT hedge settlements that occurred after the ERCOT Sale and severance payments associated with cost reduction initiatives.}
^{(f) The periods from May 18 through December 31, 2023 (Successor) and from January 1 through May 17, 2023 (Predecessor) include the effects of nonrecurring costs associated with exit from the Restructuring, severance costs associated with cost reduction initiatives, and nonrecurring post-Restructuring strategic initiative costs.}
^{(g) See Note 8 to the FY 2024 Financial Statements for additional information.}

Adjusted EBITDA / Adjusted Free Cash Flow Reconciliation: 2025 Guidance

	2025E
_{(Millions of dollars)}	Low			High
Net Income (Loss)	$	155		$	375

Adjustments
Interest expense and other finance charges		235			245
Income tax (benefit) expense		60			80
Depreciation, amortization and accretion		295			295
Nuclear fuel amortization		105			105
Unrealized (gain) loss on commodity derivative contracts		75			75
Adjusted EBITDA	$	925		$	1,175

Capital expenditures, net	$	(195	)	$	(205	)
Interest and finance charge payments		(215	)		(225	)
Tax payments		(50	)		(70	)
Pension contributions		(70	)		(80	)
Adjusted Free Cash Flow	$	395		$	595

_______________

^{Note: Figures are rounded to the nearest $5 million.}

The MIL Network –

February 28, 2025

MIL-OSI: Inuvo Reports Record Fourth Quarter 2024 Revenue of $26.2 Million, 26% Year-Over-Year Growth and Net Income

Source: GlobeNewswire (MIL-OSI)

Q4 2024 Net Income of $141 thousand and Adjusted EBITDA of $1.2 million

Inuvo management to host conference call today at 4:15 PM ET

LITTLE ROCK, Ark., Feb. 27, 2025 (GLOBE NEWSWIRE) — Inuvo, Inc. (NYSE American: INUV), a leading provider of artificial intelligence AdTech solutions, today provided a business update and announced its financial results for the fourth quarter and full year ended December 31, 2024.

Fourth Quarter 2024 Financial Highlights:

Revenue was a record $26.2 million, a 26% increase compared to $20.8 million in Q4 2023
Gross profit increased 20% to $21.8 million, compared to $18.2 million in Q4 2023
Net income was $141 thousand, compared to net loss of $2.4 million for Q4 2023
Adjusted EBITDA was $1.2 million, compared to a loss of $1.2 million for Q4 2023

Full Year 2024 Financial Highlights:

Revenue increased 13% to $83.8 million, compared to $73.9 million in 2023
Gross profit increased 13% to $71.8 million, compared to $63.4 million in 2023
Net loss decreased by 45% to a loss of $5.8 million, compared to a net loss of $10.4 million in 2023
Adjusted EBITDA loss improved sixfold to $816,000 compared to $5.3 million in 2023
$230,000 in Net Cash from Operating activities was generated in 2024

2024 Operational Highlights:

Secured a Master Services Agreement with one of the largest retailers in the world
Signed 33 new agencies/brands and one new platform during the year
Secured a $10.0 million credit line in July
Launched enhancements to the IntentKey Self-Serve Platform, an advanced AI agent specifically designed for audience modeling

Richard Howe, CEO of Inuvo, stated, “Q4 2024 was a record-breaking quarter, delivering 26% year-over-year growth and generating $26.2 million in revenue—our largest quarter ever. This strong performance contributed to a 13% revenue increase for the full fiscal year. Over the past 18 quarters, we have sustained an approximately 7% compounded quarterly growth rate. This year, all our key financial metrics had strong year-over-year improvements. Notably, in Q4, we achieved positive net income and adjusted EBITDA.”

Mr. Howe continued, “We made a number of significant technological advancements in 2024, most notably the enhancements to the IntentKey Self-Serve Platform. This groundbreaking innovation democratizes advertising by allowing anyone of any caliber to describe and then immediately execute targeting, giving the AI nothing other than some simple audience descriptions.”

Financial Results for the Fourth Quarter and Full Year Ended December 31, 2024

Net revenue for the fourth quarter of 2024 totaled $26.2 million, compared to $20.8 million for the same period last year, a 26% year-over-year increase. The higher revenue was due to increasing demand within both Platforms and Agencies & Brands. Net revenue for the year ended December 31, 2024 totaled $83.8 million, compared to $73.9 million during the same period in 2023, a 13% year-over-year increase.

Cost of revenue for the fourth quarter of 2024, totaled $4.4 million compared to $2.6 million for the same period last year. Cost of revenue for the full year ended December 31, 2024, totaled $12.0 million, as compared to $10.5 million for the same period last year. The increase in the cost of revenue for the three months and full year ended December 31, 2024, as compared to the same period last year, was due to higher revenue within a Platform client this year.

Gross profit for the fourth quarter of 2024 and full year ended December 31, 2024 totaled $21.8 million and $71.8 million, respectively, as compared $18.2 million and $63.4 million, respectively, for the same periods last year. Gross profit margin for the fourth quarter of 2024 and the full year ended December 31, 2024 was approximately 83.1% and 85.6%, respectively, as compared to 87.3% and 85.8%, respectively, for the same periods last year.

Operating expenses for the fourth quarter of 2024 totaled $21.5 million, compared to $20.6 million for the same period last year. Operating expenses for the full year ended December 31, 2024 totaled $77.3 million, compared to $73.8 million for the same period last year. The higher operating expenses for the year ended December 31, 2024 was primarily driven by a 14.8% increase in Marketing costs compared to the same period in 2023. This increase was largely attributable to higher revenue from Platform advertisers.

Net interest expense/income for the fourth quarter of 2024 and the full year ended December 31, 2024 was approximately an expense of $103 thousand and an income of $267 thousand, respectively, compared to an income of approximately $8 thousand and an expense of $30 thousand for the same periods last year, respectively. The higher interest expense this year was due to increased borrowing from our line of credit.

Other expense/income for both the fourth quarter of 2024 and the full year ended December 31, 2024 was income of approximately $27 thousand, respectively, compared to income of approximately $0 and $15 thousand for the same periods last year, respectively. The income for this year was due to setup charges for new Platform partners. Last year’s income was due to unrealized and realized gains on trading securities.

Net income for the fourth quarter of 2024 was $141 thousand, or $0.00 per basic and diluted share, as compared to net loss of $2.4 million, or $0.02 per basic and diluted share, for the same period last year. Net loss for the full year ended December 31, 2024 totaled $5.8 million, or $0.04 per basic and diluted share, as compared to net loss of $10.4 million, or $0.08 per basic and diluted share, for the same period last year.

Adjusted EBITDA [see reconciliation table below] was approximately $1.2 million in the fourth quarter of 2024, compared to an Adjusted EBITDA loss of approximately $1.2 million for the same period last year. Adjusted EBITDA was a loss of approximately $816 thousand for the full year ended December 31, 2024, compared to a loss of approximately $5.3 million for the same period last year.

Liquidity and Capital Resources:

On December 31, 2024, Inuvo had $2.5 million in cash and cash equivalents, an unused working capital facility of $10.0 million and no debt.

As of February 21, 2025, Inuvo had 142,795,483 common shares issued and outstanding.

Conference Call Details:
Date: Thursday, February 27, 2025
Time: 4:15 p.m. Eastern Standard Time
Toll-free Dial-in Number: 1-800-717-1738
International Dial-in Number: 1-646-307-1865
Conference ID: 11158080
Webcast Link: HERE

A telephone replay will be available through Thursday, March 13, 2025. To access the replay, please dial 1- 844-512-2921 (domestic) or 1-412-317-6671 (international). At the system prompt, please enter the code 11158080 followed by the # sign. You will then be prompted for your name, company, and phone number. Playback will then automatically begin.

About Inuvo

Inuvo^®, Inc. (NYSE American: INUV) is a market leader in Artificial Intelligence built for advertising. Its IntentKey AI solution is a first-of-its-kind proprietary and patented technology capable of identifying and actioning to the reasons why consumers are interested in products, services, or brands, not who those consumers are. To learn more, visit www.inuvo.com.

Safe Harbor / Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, without limitation risks detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), and represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” in Inuvo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 as filed on February 27, 2025, and our other filings with the SEC. Inuvo cannot provide assurances that the assumptions upon which these forward-looking statements are based will prove to have been correct. Should one of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied in any forward-looking statements, and investors are cautioned not to place undue reliance on these forward-looking statements, which are current only as of this date. Inuvo does not intend to update or revise any forward-looking statements made herein or any other forward-looking statements as a result of new information, future events or otherwise. Inuvo further expressly disclaims any written or oral statements made by a third-party regarding the subject matter of this press release. The information which appears on our websites and our social media platforms is not part of this press release.

Inuvo Company Contact:
Wally Ruiz
Chief Financial Officer
Tel (501) 205-8397
wallace.ruiz@inuvo.com

Investor Relations:
David Waldman / Natalya Rudman
Crescendo Communications, LLC
Tel: (212) 671-1020
inuv@crescendo-ir.com

(tables follow)

INUVO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended						Twelve Months Ended
	December 31			December 31			December 31			December 31
		2024			2023			2024			2023
Net revenue	$	26,189,924		$	20,842,095		$	83,793,859		$	73,911,528
Cost of revenue		4,433,905			2,643,543			12,033,777			10,477,272
Gross profit		21,756,019			18,198,552			71,760,082			63,434,256
Operating expenses:		83.1	%		87.3	%		85.6	%		85.8	%
Marketing costs		17,122,706			15,212,600			59,663,061			51,982,572
Compensation		2,703,309			3,591,109			12,065,783			13,793,309
General and administrative		1,709,887			1,821,821			5,545,049			8,050,590
Total operating expenses		21,535,902			20,625,530			77,273,893			73,826,771
Operating income (loss)		220,117			(2,426,978	)		(5,513,811	)		(10,392,515	)
Interest expense (income), net		102,910			(7,884	)		266,772			29,570
Other income		26,812			–			26,812			14,668
Income tax expense (benefit)		2,678			(17,764	)		8,030			(17,764	)
Net income (loss)		141,341			(2,401,330	)		(5,761,801	)		(10,389,653	)
Other comprehensive income:
Unrealized loss on marketable securities		–			–			–			84,868
Comprehensive income (loss)	$	141,341		$	(2,401,330	)	$	(5,761,801	)	$	(10,304,785	)

Net loss per share, basic and diluted	$0.00			($0.02		)	($0.04		)	($0.08		)
Weighted average shares outstanding:
Basic		140,494,192			127,381,051			139,968,374			131,116,370
Diluted		140,494,192			127,381,051			139,968,374			131,116,370

INUVO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS


	December 31		December 31
	2024		2023
Assets

Cash and cash equivalent	$	2,459,245	$	4,440,454
Accounts receivable, net		12,545,771		9,226,956
Prepaid expenses and other current assets		639,805		1,076,121
Total current assets		15,644,821		14,743,531

Property and equipment, net		1,792,903		1,680,788

Goodwill		9,853,342		9,853,342
Intangible assets, net of accumulated amortization		3,897,875		4,664,791
Other assets		1,006,990		1,431,692

Total assets	$	32,195,931	$	32,374,144

Liabilities and Stockholders’ Equity

Current liabilities
Accounts payable	$	8,422,351	$	6,432,120
Accrued expenses and other current liabilities		9,463,537		8,100,354
Total current liabilities		17,885,888		14,532,474

Long-term liabilities		835,271		859,484

Total stockholders’ equity		13,474,772		16,982,186
Total liabilities and stockholders’ equity	$	32,195,931	$	32,374,144

RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE TAXES TO ADJUSTED EBITDA
(unaudited)

	Three Months Ended					Twelve Months Ended
		December 31	December 31			December 31			December 31
		2024		2023			2024			2023
Net income (loss)		141,341		(2,401,330	)	$	(5,761,801	)	$	(10,389,653	)
Interest expense (income), net		102,910		(7,884	)		266,772			29,570
Income tax expense (benefit)		2,678		(17,764	)		8,030			(17,764	)
Depreciation and amortization on PP&E		446,608		425,106			1,745,261			1,670,868
Amortization		123,412		264,523			824,272			1,080,690
EBITDA		816,949		(1,737,349	)		(2,917,466	)		(7,626,289	)
Stock-based compensation		413,911		514,613			1,501,444			1,986,296
Non recurring items:
Unrealized loss on marketable securities										14,668
Doubtful account reserve										361,097
Impairment & amortization of services agreement							600,000
Adjusted EBITDA		1,230,860		(1,222,736	)		(816,022	)		(5,264,228	)

Reconciliation of Operating Loss to EBITDA and Adjusted EBITDA

We present EBITDA and Adjusted EBITDA as a supplemental measure of our performance. We defined EBITDA as Net loss plus (i) interest expense, (ii) income tax expense, (iii) depreciation, and (iv) amortization. We further define Adjusted EBITDA as EBITDA plus (v) stock-based compensation and (vi) certain identified expenses that are not expected to recur or be representative of future ongoing operation of the business. These adjustments are itemized above. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same or similar to some of the adjustments in the presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

The MIL Network –

February 28, 2025

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 –

February 28, 2025

Category: Emissions Trading

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The cost we bear

Next steps

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Lessons for New Zealand

Union Minister Dr. Jitendra Singh hosted a high-level European Union delegation led by Commissioner Andrius Kubilius and Space Sector expertsIndia – EU interactions in the field of space has a long history and is growing strong, says MoS, Dept. Of Space

Union Minister Dr. Jitendra Singh hosted a high-level European Union delegation led by Commissioner Andrius Kubilius and Space Sector experts

India – EU interactions in the field of space has a long history and is growing strong, says MoS, Dept. Of Space